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ASSIGNMENT, CONSENT, SUBORDINATION AND NONDISTURBANCE AGREEMENT

NonDisturbance Attornment Agreement

ASSIGNMENT, CONSENT, SUBORDINATION AND NONDISTURBANCE
AGREEMENT | Document Parties: GOLF TRUST OF AMERICA INC | GTA-IB, LLC,  | GOLF TRUST OF AMERICA, L.P.,  | WESTIN MANAGEMENT COMPANY SOUTH, You are currently viewing:
This NonDisturbance Attornment Agreement involves

GOLF TRUST OF AMERICA INC | GTA-IB, LLC, | GOLF TRUST OF AMERICA, L.P., | WESTIN MANAGEMENT COMPANY SOUTH,

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Title: ASSIGNMENT, CONSENT, SUBORDINATION AND NONDISTURBANCE AGREEMENT
Governing Law: Florida     Date: 7/29/2004
Industry: Real Estate Operations    

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EXHIBIT 10.5

 

When Recorded Return To:

 

 

O’Melveny & Myers LLP

Embarcadero Center West

275 Battery Street, Suite 2600

San Francisco, California 94111

Attention:  Peter T. Healy, Esq.

 

 

ASSIGNMENT, CONSENT, SUBORDINATION AND NONDISTURBANCE
AGREEMENT

 

This ASSIGNMENT, CONSENT, SUBORDINATION AND NONDISTURBANCE AGREEMENT (this “ Agreement ”) is made and entered as of this 15 th day of July, 2004 (the “ Effective Date ”), by and among GTA-IB, LLC, a Florida limited liability company (“ Owner ”), (ii) GOLF TRUST OF AMERICA, L.P., a Delaware limited partnership (the “ Lender ”) and (iii) WESTIN MANAGEMENT COMPANY SOUTH, a Delaware corporation (“ Westin ”).

 

THE PARTIES ENTER THIS AGREEMENT on the basis of the following facts, understandings and intentions:

 

A.                                    Westin has entered into a Management Agreement dated as of July 15, 2004 (the “ Management Agreement ”) with Owner, regarding the management and marketing of the resort currently known as the Innisbrook Resort, located near Tarpon Springs, Florida, and more fully described in the Management Agreement (the “ Resort ”).  The legal description of the real property on which the Resort is located is set forth on Exhibit A hereto.

 

B.                                      Lender acknowledges its receipt of a duly executed copy of the Management Agreement.

 

C.                                      Lender made a loan (the “ Loan ”) to Owner’s predecessor, Golf Host Resorts, Inc. (“ Golf Host ”) pursuant to that certain Loan Agreement between Lender and Golf Host as of June 20, 1997.  The Loan was dispersed in two tranches and is evidenced by two separate promissory notes (collectively, the “ Notes ”) and is secured by security documents creating liens on and security interests in the Resort, which security documents are identified in Exhibit B hereto and are hereinafter collectively referred to as the “Mortgage.”  Owner has succeeded to Golf Host’s ownership interest in the Resort subject to the Loan and the Mortgage.

 

D.                                     Westin and Lender desire to provide that any interest in the Resort created by the Management Agreement is subordinate and subject to the Mortgage, to provide for Westin’s

 



 

continued management of the Resort pursuant to the Management Agreement in the event of a transfer of ownership of the Resort on foreclosure of the Mortgage or a conveyance in lieu of foreclosure and to give Lender certain rights respecting Westin’s obligations under the Management Agreement.

 

NOW, THEREFORE , in consideration of the mutual promises contained in this Agreement and for other good and valuable consideration, the receipt and adequacy of which the parties hereby acknowledge, the parties agree as follows:

 

1.                                        Recitals Part of Agreement .  The Recitals form a part of this Agreement and are fully incorporated herein by this reference.  Any capitalized terms not otherwise specified or defined herein shall have the meanings set forth in the Management Agreement.

 

2.                                        Security Interests; No Impairment of Lender’s Rights .  Westin acknowledges the security interests granted to Lender as set forth in the Security Agreement attached hereto as Exhibit C .  Westin agrees, for the benefit of Lender, that upon its receipt (the “ Receipt Date ”) of a written notice from Lender stating that an Event of Default (as defined in Mortgage) has occurred and is continuing under the Mortgage and that the obligations owing by Owner to Lender have been accelerated, Westin shall not apply the Funds (as defined in Section 3 below) to or otherwise make any loans or payments of any kind or nature to Owner or any affiliate of Owner until the applicable Event of Default is cured or waived in writing by Lender in each instance.  The foregoing shall not be interpreted to prevent Westin from paying the management fees under the Management Agreement or from paying bills properly incurred in connection with its operation of the Resort from operating accounts as the same become due and payable, or disbursing reserve funds for the purposes intended in the creation of the reserve, but only pursuant to and subject to the terms of the Management Agreement.  This Agreement shall not be deemed to impair or to constitute a condition precedent to the exercise by Lender of any of Lender’s rights against Owner and/or Westin under this Agreement which are not expressly conditioned upon the existence of a default under this Agreement or an Event of Default under the Mortgage.  Owner hereby acknowledges its consent to the foregoing and releases Westin from any liability arising out of any action or inaction by Westin which was based on the direction of Lender and undertaken in good faith by Westin.

 

3.                                        Application of Funds .  During the term of the Management Agreement and notwithstanding any default by Owner under the Mortgage:

 

3.1                                  Westin shall have the right, subject to the terms and conditions hereof and the Management Agreement only, to use those funds and proceeds of Owner (including income derived from Resort operations and all proceeds of Business Interruption Insurance), in Westin’s custody, possession or control, and to which Westin has the right of access pursuant to the Management Agreement (collectively, the “ Funds ”), in furtherance of the performance of the services Westin is to provide in the future only and in furtherance of Owner’s obligations, including payments of Operating Expenses, payment of fees and expenses to Golf Manager under the Golf Management Agreement, and payments of the Management Fee and Reimbursable Expenses, all as specified in the Management Agreement;

 



 

3.2                                  If the Funds are insufficient to cover all of Owner’s or Westin’s obligations under the Management Agreement, Westin shall apply the Funds in accordance with the terms of the Management Agreement and not otherwise.

 

4.                                        Foreclosure .  During the term of the Management Agreement:

 

4.1                                  No action or proceeding to foreclose the Mortgage, no conveyance in lieu of foreclosure, and no election by Lender to exercise its rights under the Mortgage or other succession by Lender to Owner’s interest in the Resort shall result in the cancellation, termination, or modification of the Management Agreement.

 

4.2                                  If Lender elects to exercise its rights under the Mortgage or otherwise succeeds to Owner’s interest in the Resort, or if the Resort is sold as a result of any conveyance in lieu of foreclosure or any action or proceeding to foreclose the Mortgage, Lender or the purchaser of the Resort at foreclosure, as the case may be (“ Subsequent Owner ”), shall be bound by the terms and provisions of the Management Agreement (as amended by this Agreement) as of the Event of Transfer.  Notwithstanding anything to the contrary contained herein or in the Management Agreement, any Subsequent Owner other than Lender or an affiliate of Lender shall not be (1) bound by any waiver or modification to the Management Agreement or by any waiver or forbearance as to Westin’s obligations thereunder not approved in writing by Lender or Subsequent Owner; (2) liable for any act or omission of Owner arising prior to the Event of Transfer or for the cure of any alleged defaults by Owner which occurred prior to Event of Transfer; (3) subject to any offsets or defenses which Westin may be entitled to assert against Owner; or (4) liable for any or bound by any covenant or undertaking under the Management Agreement with respect to any matter arising during any period when the Subsequent Owner does not own the Resort.  Furthermore, upon an Event of Transfer if on the date thereof Westin is not then considered a first-class upscale hotel operator with relevant experience in the operation and management of first-class golf facilities, the Subsequent Owner at its election by notice given within thirty (30) days of the date it becomes a Subsequent Owner, shall not be bound by the terms and conditions of the Management Agreement.  For purpo


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