SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities and Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
May 20, 1996
FAMILY GOLF CENTERS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-25098 11-3223246
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) No.)
225 Broadhollow Road
Melville, New York 11747
(Address of principal executive offices)
Registrant's Telephone Number, including
area code: (516) 694-1666
(Former Address, if changed since last report)
<PAGE>
Item 5. Other Events
On May 20, 1996, Family Golf Centers, Inc. (the "Company"),
pursuant to a purchase agreement, acquired certain assets from Indian River
Golf-O-Rama, Inc. (the "Seller"). The acquired assets included (i) a lease of
approximately 14 acres of real property in Virginia Beach, Virginia on which
there is a driving range, pro shop and related facilities used and operated as
the "Golf-O-Rama" golf center, and (ii) certain equipment, fixtures and
personal property used in connection with the operation of the golf center
(the "Acquired Assets").
Pursuant to the purchase agreement, dated as of May 20, 1996, among
the Seller, the landlord of the lease, Lenrich Associates, L.L.C. and a
wholly-owned subsidiary of the Company (the "Purchase Agreement"), the Company
purchased the Acquired Assets in exchange for $1,400,000 in cash, all of which
was derived from working capital.
As part of the acquisition, the Seller placed $700,000 in escrow
(either in cash or as a letter of credit) to satisfy indemnification claims of
the Company, if any, under the Purchase Agreement and the transactions related
thereto.
The Company intends to continue operating the "Golf-O-Rama" golf
center as a golf center and to make various capital improvements to it.
The foregoing summary of the acquisition and related transactions
is incomplete and is qualified in its entirety by reference to the copies of
the agreements filed as Exhibits 1 and 2 annexed hereto.
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<PAGE>
Exhibits
1. Purchase Contract, dated May 20, 1996, between
Indian River Golf-O-Rama, Inc., Lenrich Associates, L.L.C., and Indian River
Family Golf Centers, Inc., a wholly owned subsidiary of Family Golf Centers,
Inc.
2. Sublease, dated May 20, 1996, by Lenrich Associates,
L.L.C. to Indian River Family Golf Centers, Inc., a wholly owned subsidiary of
Family Golf Centers, Inc.
- 3 -
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized. June 4, 1996
FAMILY GOLF CENTERS, INC.
By: /s/ Dominic Chang
Dominic Chang,
President and Chief Executive Officer
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EXHIBIT INDEX
EXHIBIT NO. EXHIBIT DESCRIPTION
- ----------- --------------------
1 Purchase Contract, dated May 20, 1996, between Indian River
Golf-O-Rama, Inc., Lenrich Associates, L.L.C., and Indian River
Family Golf Centers, Inc., a wholly owned subsidiary of Family
Golf Centers, Inc.
2 Sublease, dated May 20, 1996, by Lenrich Associates, L.L.C. to
Indian River Family Golf Centers, Inc., a wholly owned
subsidiary of Family Golf Centers, Inc.
PURCHASE AGREEMENT
PURCHASE AGREEMENT, made as of the 20th day of May, 1996 (this
"Agreement"), by and between INDIAN RIVER GOLF-0-RAMA, INC., a Virginia
corporation, having an address at 560 Sylvan Avenue, Englewood Cliff, New Jersey
07632 ("Seller"), LENRICH ASSOCIATES, L.L.C., a New York limited liability
company, having an address of 560 Sylvan Avenue, Englewood Cliffs, New Jersey
07632 ("Sublandlord") and INDIAN RIVER FAMILY GOLF CENTERS, INC., a Delaware
corporation having an address at 225 Broadhollow Road, Suite 106E, Melville, New
York 11747 ("Purchaser").
W I T N E S S E T H :
WHEREAS, Sublandlord is the tenant under that certain Indenture of
Lease, dated April 30, 1996, as amended (the "Ground Lease"), between Landlord
and Webb Realty Company, Inc. (successor to Ella L. Webb, the "Landlord"),
relating to certain real property located in the City of Virginia Beach, State
of Virginia and more particularly described on Exhibit A attached hereto and
made a part hereof (the "Land"); and
WHEREAS, Seller is (i) the subtenant under that certain Ground Lease,
dated May 1, 1992 (the "Sublease"), between Sublandlord and Seller relating to
the Land and (ii) the owner of certain buildings and improvements located on the
Land; and
WHEREAS, Seller operates a driving range and related facilities on the
Land under the name "Golf-O-Rama" (the "Business"); and
WHEREAS, Purchaser desires to lease from Landlord a portion of the Land,
as more particularly described on Exhibit B attached hereto and made a part
hereof (hereinafter "Parcel C-1"), and to purchase and own the buildings and
improvements on Parcel C-1 (the "Improvements") and the Business, on the terms,
and subject to the conditions, set forth herein (Parcel C-1 together with the
Improvements thereon shall be collectively referred to as the "Premises"); and
WHEREAS, Upon the terms and conditions set forth herein, Sublandlord
desires (i) to terminate the Sublease as to Parcel C-1, (ii) to modify the
Ground Lease pursuant to the terms thereof in order to create two (2) separate
ground leases between Landlord and Sublandlord: one ground lease shall be
applicable to Parcel C-1 and the Improvements (the "Lease") and the other shall
be applicable to the remaining Land (hereinafter "Parcel C-2"), and (iii) to
assign to Purchaser the Lease; and
WHEREAS, Seller desires to sell the Improvements and Business to
Purchaser and to terminate the Sublease as to Parcel C-1, on the terms, and
subject to the conditions, set forth herein.
NOW, THEREFORE, in consideration of TEN ($10.00) DOLLARS, the terms and
conditions set forth herein, and other good and valuable consideration, the
mutual receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree to the foregoing and as follows:
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1. Agreement to Sell and Purchase.
1.1 Assets to be Purchased by Purchaser. Seller agrees to sell and
convey, or cause to be sold or conveyed, and Purchaser agrees to purchase and
acquire, upon the terms and conditions hereinafter set forth, the following
property (collectively, the "Property"):
1.1.1 the Lease in accordance with the terms and provisions
of Section 1.5 hereof; the Improvements; the easements, rights of way, and
other rights and benefits appurtenant thereto; and any consents,
authorizations, variances, waivers, licenses, certificates, permits and
approvals held by or granted to Seller and/or Sublandlord in connection with
the occupancy of the Premises (collectively, the "Permits");
1.1.2 all furnishings, fixtures, machinery, equipment,
vehicles and personalty attached or appurtenant to or used in connection with
the Premises that are owned by Seller and located at the Premises, and all
inventories, supplies, sales, marketing and instructional materials of every
kind and description relating to the Business that are owned by Seller,
wherever located, including without limitation, the items described on Exhibit
C attached hereto and made a part hereof (the "Personal Property");
1.1.3 the files, books, notices and other correspondence from
any governmental agencies, and other records used or employed by Seller or its
affiliates in connection with
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the ownership and/or operation of the Premises and the Business (collectively,
the "Records");
1.1.4 the contracts, leases, orders and other agreements of
or relating to the Business or the Premises described on Exhibit D-1 attached
hereto and made a part hereof (the "Assumed Contracts");
1.1.5 any unliquidated rights under manufacturers' and
vendors, warranties and guarantees, except to the extent the same relate solely
to any Retained Assets or Retained Liabilities (as hereinafter defined) (the
"Claims").
1.2 Assets to be Retained by Seller. Anything herein to the
contrary notwithstanding, Seller shall not sell, and Purchaser shall not
acquire, the following assets of Seller (the "Retained Assets"):
1.2.1 all accounts receivable existing on the Closing Date
(as hereinafter defined) arising out of the sale of goods or services prior to
the Closing Date;
1.2.2 all claims of Seller for refunds or credits with
respect to credits with respect to (i) real estate taxes attributable to the
period prior to the Closing Date, and (ii) federal, state or local income taxes
or foreign income taxes of whatever nature or taxable period involved;
1.2.3 any rights of Seller with respect to insurance policies
owned by Seller or for which Seller is the named insured;
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1.2.4 all cash, funds in bank accounts and cash equivalents
existing as of the Closing Date;
1.2.5 all properties and assets that are the subject of any
Contracts (as hereinafter defined) that are not Assumed Contracts;
1.2.6 any patents, trademarks, trademark registrations,
copyrights, copyright registrations, trade names and all registrations thereof
and all applications for any of the foregoing, whether issued or pending, if
any, and all goodwill associated with any of the foregoing (the "Intangible
Assets"); and
1.2.7 the contracts, leases, orders and other agreements of
or relating to the Business described on Exhibit D-2 attached hereto and made a
part hereof (the "Retained Contract").
1.3 Assumption of Certain Liabilities. Purchaser shall assume and
agree to pay and discharge when due the following liabilities to the extent the
same arise from and after the Closing Date (the "Assumed Liabilities"):
1.3.1 all liabilities and obligations of Sublandlord under
the Lease and with respect to the Premises; and
1.3.2 all liabilities and obligations of Seller under the
Assumed Contracts and with respect to the Business.
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1.4 Liabilities to be Retained by Purchaser. Seller shall retain,
and Purchaser shall not assume, perform, discharge or pay, and shall not be
responsible for, any and all liabilities or obligations of any nature
whatsoever in connection with or relating to the Sublease, the Property, Seller
or the Business or any predecessor owner of the Property or the Business
arising prior to the Closing Date other than the Assumed Liabilities
(collectively, the "Retained Liabilities").
1.5 Lease Terms and Provisions. At Closing, Seller and Sublandlord
shall cause the Ground Lease to be modified and severed to create two (2)
separate ground leases, one of which shall be the Lease. Sublandlord and
Purchaser agree that the Lease shall be on the same terms and conditions as set
forth in the Ground Lease, except as follows:
1.5.1 The premises demised under the Lease shall include
Parcel C-1, the Improvements thereon and the appurtenances thereunto belonging,
and the rights described in Sections 1.5.2 and 1.5.3 below.
1.5.2 During the term of the Lease and all renewals thereof,
Purchaser shall have a nonexclusive right and easement to install, maintain,
repair and replace, at Purchaser's expense, pumps, underground waterlines and
other equipment on, over and across Parcel C-2 for the purpose of pumping water
from the pond located on Parcel C-2 to Parcel C-1 for irrigation.
1.5.3 During the term of the Lease and all renewals thereof,
Purchaser shall have all of the rights,
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easements and privileges of Sublandlord as to Parcel C-1 under that certain
Declaration of Easements, dated August 7, 1967, recorded in the Clerk's Office,
Circuit Court, City of Virginia Beach, Virginia, in Deed Book 1024, page 272,
as amended by Declaration, dated February 1, 1978, recorded in the aforesaid
Clerk's Office in Deed Book 1789, page 555, as further amended by agreement
dated June 15, 1990 and recorded in the aforesaid Clerk's Office in Deed Book
2919, page 1031 (collectively, the "Declaration of Easements"). Purchaser
shall enjoy such rights, easements and privileges irrespective of the
termination of any of the other leases benefited or burdened by the Declaration
of Easements.
1.6 Sublease of Part of Tract B.
1.6.1 Within one hundred eighty (180) days after the Closing
Date (the "Completion Date"), Seller and Sublandlord shall use their best
efforts to obtain from the Tract B Tenant (as defined in the agreement recorded
in Deed Book 2919, page 1031 (the "Amended Declaration"), an executed and
acknowledged agreement (in form and substance reasonably satisfactory to
Purchaser) from the Tract B Tenant that the current use by Purchaser, its
successors and assigns of the real property identified as "Exhibit D (page 2 of
2)" of the Amended Declaration (the "Parcel") shall not be disturbed by the
Tract B Tenant, its successors or assigns throughout the term of the Tract B
Tenant's ground lease as the same may be renewed, extended or modified (the
"Tract B Agreement"). The terms and
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provisions of the Tract B Agreement shall bind the Tract B Tenant, its
successors and assigns if the Tract B Tenant acquires the fee interest in the
Parcel.
1.6.2 If a search of the title to the Parcel reveals the
existence of any mortgages or deeds of trust encumbering the leasehold interest
of the Tract B Tenant, Seller and Sublandlord shall use reasonable efforts to
obtain from the holder of any such mortgage or deed of trust a nondisturbance
agreement (a "Nondisturbance") in form and substance reasonably acceptable to
Purchaser which provides that in the event of any foreclosure, sale under power
of sale, or transfer in lieu of any of the foregoing or the exercise of any
other remedy pursuant to any such mortgage or deed of trust, Purchaser's use,
possession and enjoyment of the Parcel shall not be disturbed. Seller and/or
Sublandlord's failure to deliver the Nondisturbance shall not in any way affect
Seller's rights to receive a refund of the Escrow Fund (as defined below).
1.6.3 As security for the faithful and timely performance by
Seller and Sublandlord of their obligations under Section 1.6.1, Seller shall
deposit One Hundred Thousand Dollars ($100,000) of the Purchaser Price (the
"Escrow Fund") with Lawyers Title Insurance Corporation (the "Escrow Agent")
pursuant to the terms and provisions of the Escrow Agreement, in the form
attached hereto as Exhibit E-2 (the "Escrow Agreement"). if Seller and
Sublandlord do not satisfy their obligations under Section 1.6.1 and obtain a
fully-executed and acknowledged Tract
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B Agreement by the Completion Date, Purchaser shall have the right to cause the
Escrow Agent to refund the Escrow Fund to Purchaser. If Seller and Sublandlord
fully comply with their obligations hereunder, Seller and Sublandlord shall
have the right to cause the Escrow Agent to pay the Escrow Fund to them. The
Escrow Fund and the disposition thereof shall be governed by the terms and
provisions of the Escrow Agreement. This Section 1.6 and the obligations of
the parties hereunder shall survive the Closing Date.
1.7 Right of First Refusal. At Closing, Seller, Sublandlord and
Purchaser shall execute and acknowledge a right of first refusal agreement (the
"Right of First Refusal Agreement"), in the form attached hereto as Exhibit G-
7. The Right of First Refusal Agreement shall give Purchaser a right of first
refusal with respect to any future lease or subletting of Parcel C-2.
Purchaser shall have the right to record the Right of First Refusal Agreement,
at its expense, after the Closing Date.
2. Purchase Price. In consideration for the Property, Purchaser
shall pay to Seller the sum of One Million Four Hundred Thousand and 00/100
Dollars ($1,400,000.00) (the "Purchase Price"), subject to adjustment as
hereinafter provided, payable in cash, certified or official bank check or wire
transfer on the Closing Date.
3. Title; Permitted Exceptions.
3.1 Seller will convey the Property to Purchaser, free and clear of
any and all liens, charges, encumbrances, mortgages, pledges, security
interests, easements, agreements and other interests and adverse claims
(collectively, "Encumbrances"), other than the matters set forth in Exhibit F
attached hereto and made a part hereof (the "Permitted Exceptions").
3.2 Purchaser shall order an examination of title from a title
company licensed or authorized to issue title insurance in the State of
Virginia ("Title Company"), and shall cause a copy of any title report to be
forwarded to Seller's attorney.
3.3 If a search of the title discloses judgments, bankruptcies or
other returns against other persons having names the same as or similar to that
of Seller, Seller will on request deliver to the Title Company or Purchaser an
affidavit showing that such judgments, bankruptcies or other returns are not
against Seller, in form sufficient to permit deletion of such exception from
the title policy.
4. Apportionments.
4.1 The following items shall be apportioned as of 11:59 PM of the
day immediately preceding the Closing Date:
4.1.1 fixed rents, additional rents and all other sums and
credits due or payable under the Lease, subject to Section 4.2 hereof;
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4.1.2 real estate taxes attributable to the Premises, on the
basis of the fiscal year for which the same are levied, imposed or assessed,
subject to Section 4.3 hereof,
4.1.3 charges for water, sewer rents, electricity, steam, gas
and telephone attributable to the Premises, which are not metered; provided
that if the consumption of any of such utilities is measured by meters, at the
Closing (as hereinafter defined) Seller shall furnish a current reading of each
meter; and further provided that if there is not a meter or if the current bill
for any of such utilities has not been issued prior to the Closing Date, the
charges therefore shall be adjusted at the Closing on the basis of the charges
for the prior period for which bills were issued and shall be further adjusted
when the bills for the current period are issued;
4.1.4 fuel at the Premises, if any, at Seller's cost
therefore (as determined by Seller's fuel supplier);
4.1.5 amounts paid or payable under the Assumed Contracts;
and
4.1.6 the credit described in Section 6.1.21 hereof.
4.2 If, on the Closing Date, any items of additional rent under the
Lease shall not have been ascertained, then such items shall be adjusted as and
when the same are ascertained. The provisions of this Section 4.2 shall
survive the Closing.
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4.3 If the Closing shall occur before the real estate tax rate is
fixed, the apportionment of real estate taxes shall be based upon the tax rate
for the next preceding year applied to the latest assessed valuation.
4.4 If on the Closing Date the Premises shall be affected by any
special or other assessment for public improvements or otherwise which is or
may become payable by Seller in annual installments, of which the first
installment is then a charge or lien, or has been paid, then, Seller shall pay
and discharge, at or prior to the Closing, all such installments of any such
assessments which are due and payable on or prior to the Closing Date, and
Purchaser shall be responsible for payment of any such assessments which are
due and payable after the Closing Date, and take title to the Property subject
to the lien or liens therefor.
4.5 Seller and Purchaser shall maintain and make available to each
other any books or records necessary for the adjustment of any item pursuant to
this Article. The provisions of this Section 4.5 shall survive the Closing.
5. The Closing.
5.1 The closing of the transaction provided for in this Agreement
(the "Closing") shall take place on May 20, 1996, or as soon as practical after
the conditions set forth in Section 5.2 hereof have been satisfied or waived by
Purchaser if the same have not been satisfied or waived by Purchaser prior to
such date
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(the actual date of the Closing being referred to herein as the "Closing
Date").
5.2 The obligation of Purchaser to complete the Closing is subject
to the fulfillment on or prior to the Closing Date of the following conditions,
any one or more of which may be waived by it in its sole discretion:
5.2.1 the representations and warranties of Seller contained
in this Agreement shall be true and correct on and as of the Closing Date with
the same force and effect as though made on and as of the Closing Date;
5.2.2 Seller shall have performed and complied with all
covenants and agreements required by this Agreement to be performed or complied
with by Seller on or prior to the Closing Date;
5.2.3 all consents, Permits and approvals from any
governmental or regulatory body or from parties to any contracts or other
agreements which may be required in connection with the performance by Seller
of this Agreement shall have been obtained; and
5.2.4 no action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body to restrain or
prevent the carrying out of the transactions contemplated hereby or to seek
damages in connection with such transactions, or which has or may have any
adverse effect on Purchaser, the Business or the Property.
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5.3 The obligation of Seller to complete the Closing is subject to
the fulfillment on or prior to the Closing Date of the following conditions,
any one or more of which may be waived by it in its sole discretion:
5.3.1 the representations and warranties of Purchaser
contained in this Agreement shall be true and correct on and as of the Closing
Date with the same force and effect as though made on and as of the Closing
Date;
5.3.2 Purchaser shall have performed and complied with all
covenants and agreements required by this Agreement to be performed or complied
with by Purchaser on or prior to the Closing Date;
5.3.3 all consents, Permits and approvals from any
governmental or regulatory body or from parties to any contracts or other
agreements which may be required in connection with the performance by
Purchaser of this Agreement shall have been obtained; and
5.3.4 no action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body to restrain or
prevent the carrying out of the transactions contemplated hereby or to seek
damages in connection with such transactions.
5.4 At the Closing, Seller shall deliver or cause to be delivered
to Purchaser physical possession of the Property (receipt of which may be
actual or constructive) and the following:
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5.4.1 a sublease termination agreement, executed and
acknowledged by Sublandlord and Seller, terminating the Sublease as to Parcel
C-1 as of the Closing Date (the "Sublease Termination Agreement"), in the form
attached hereto as Exhibit G-1.
5.4.2 The Lease of Parcel C-1 duly executed and acknowledged
by Landlord and Sublandlord.
5.4.3 an assignment and assumption agreement (the "Lease
Assignment and Assumption Agreement") assigning to Purchaser all of
Sublandlord's right, title and interest in and to the Lease and Improvements,
duly executed and acknowledged by Sublandlord in the form attached hereto as
Exhibit G-2;
5.4.4 a bill of sale conveying, transferring and selling to
Purchaser all right, title and interest of Seller in and to all of the Personal
Property (the "Bill of Sale"), which Bill of Sale shall contain a warranty that
such property is free and clear of all Encumbrances other than the Permitted
Exceptions, duly executed and acknowledged by Seller in the form attached
hereto as Exhibit G-3;
5.4.5 an assignment and assumption agreement (the "Contract
Assignment and Assumption Agreement") assigning to Purchaser all of Seller's
right, title and interest in and to the Assumed Contracts, the Permits, the
Records and the Claims, duly executed and acknowledged by Seller in the form
attached hereto as Exhibit G-4;
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5.4.6 a settlement statement (the "Settlement Statement")
setting forth the amounts paid by or on behalf of and/or credited to each of
Purchaser and Seller pursuant to this Agreement;
5.4.7 an owner's affidavit of title reasonably acceptable to
the Title Company;
5.4.8 a Certificate or Certificates of Occupancy for all
Improvements;
5.4.9 original counterparts (or copies certified to be true
and complete) of each of the Assumed Contracts;
5.4.10 an estoppel certificate with respect to the Ground
Lease (the "Estoppel Certificate") in the form of Exhibit G-5 attached hereto
duly executed and acknowledged by Landlord and dated not more than thirty (30)
days prior to the Closing Date;
5.4.11 a certificate, dated as of the Closing Date, duly
executed and acknowledged by Seller, stating that the conditions set forth in
Sections 5.2.1, 5.2.2 and 5.2.3 hereof have been satisfied;
5.4.12 any transfer tax or other return required by any
applicable governmental authority in connection with the sale of the Property
("Tax Forms"), duly executed and acknowledged by Seller;
5.4.13 an affidavit (the "FIRPTA Affidavit") duly executed and
acknowledged by Seller pursuant to Section 1445
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(b)(2) of the Internal Revenue Code of 1986, as amended, stating that Seller is
not a foreign person within the meaning of such provision;
5.4.14 keys to all locks relating to the Property,
appropriately labeled;
5.4.15 the environmental indemnification agreement, duly
executed and acknowledged by Seller, and Golf-O-Rama of America, Inc. (the
"Environmental Indemnification Agreement", in the form attached hereto as
Exhibit G-6;
5.4.16 an unconditional and irrevocable letter of credit (the
"Letter of Credit") in the form attached hereto as Exhibit E-1 in favor of
Purchaser in the amount of Five Hundred Thousand Dollars ($500,000) as security
for the performance by the Indemnitors (as herein defined) under the
Environmental Indemnification Agreement;
5.4.17 the Escrow Agreement;
5.4.18 the Right of First Refusal Agreement;
5.4.19 all other instruments and documents to be
executed, acknowledged where appropriate and/or delivered by Seller to
Purchaser pursuant to any of the other provisions of this Agreement; and
5.4.20 such other documents as may be reasonably required by
Purchaser's counsel in connection with this transaction.
5.5 At the Closing, Purchaser shall deliver to Seller the
following:
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5.5.1 the Purchase Price;
5.5.2 the Lease Assignment and Assumption Agreement, duly
executed and acknowledged by Purchaser;
5.5.3 the Environmental Indemnification Agreement, duly
executed and acknowledged by Purchaser;
5.5.4 the Contract Assignment and Assumption Agreement, duly
executed and acknowledged by Purchaser;
5.5.5 the Settlement Statement, duly executed and
acknowledged by Purchaser;
5.5.6 a certificate, dated as of the Closing Date, duly
executed and acknowledged by Purchaser, stating that the conditions set forth
in Sections 5.3.1, 5.3.2 and 5.3.3 hereof have been satisfied;
5.5.7 all other instruments and documents to be executed,
acknowledged where appropriate and/or delivered by Purchaser to Seller pursuant
to any of the other provisions of this Agreement;
5.5.8 Tax Forms, duly executed and acknowledged by Purchaser;
5.5.9 the Escrow Agreement;
5.5.10 the Right of First Refusal Agreement; and
5.5.11 such other documents as may be reasonably
required by Seller's counsel in connection with this transaction.
6. Representations and Warranties.
6.1 Seller (and Sublandlord with respect to Sections 6.1.6, 6.1.7,
6.1.12 and 6.1.13 only) hereby represents and
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warrants to Purchaser as of the date hereof and as of the Closing Date as
follows (any representation made to the best of a party's knowledge is made
herein without independent inquiry or investigation):
6.1.1 Organization; Power and Authority. Seller is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Virginia, and has all requisite power and authority to
carry on its business as it is now being conducted, to execute, deliver and
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby.
6.1.2 Due Authorization and Execution; Effect of Agreement.
The execution, delivery and performance by Seller of this Agreement and the
consummation by Seller of the transactions contemplated hereby have been duly
authorized by all necessary corporate action required to be taken on the part
of Seller. This Agreement has been duly and validly executed and delivered by
Seller and constitutes the valid and binding obligation of Seller, enforceable
in accordance with its terms, except to the extent that such enforceability may
be limited by bankruptcy, insolvency, or other similar laws relating to
creditors, rights generally. The execution, delivery and performance by Seller
of this Agreement and the consummation by Seller of the transactions
contemplated hereby will not, with or without the giving of notice or the lapse
of time, or both, (i) violate any provision of any law, rule or regulation to
which
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Seller is subject; (ii) violate any order, judgment or decree applicable to
Seller; or (iii) conflict with or result in a breach of or a default under any
term or condition of Seller's Certificate of Incorporation or By-Laws or any
agreement or other instrument to which Seller is a party or by which it or its
assets may be bound, except in each case, for violations, conflicts, breaches
or defaults which in the aggregate would not materially hinder or impair the
consummation of the transactions contemplated hereby.
6.1.3 Consents. No consent, approval or authorization of,
exemption by, or filing with, any governmental or regulatory authority or any
third party is required in connection with the execution, delivery and
performance by Seller of this Agreement, except for consents, approvals,
authorizations, exemptions and filings, if any, which have been, or by the
Closing Date will be, obtained;
6.1.4 Compliance with Applicable Laws. Except as set forth
in Section 6.1.10, to the best of Seller's knowledge, Seller is not engaging in
any activity or omitting to take any action as a result of which Seller is in
violation of any law, rule, regulation, ordinance, statute, order, injunction
or decree, or any other requirement of any court or governmental or
administrative body or agency, applicable to the Property or the Business, and
neither the execution and delivery by Seller of this Agreement or of any of the
other agreements and instruments to be executed and delivered by it pursuant
hereto, the
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performance by Seller of its obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby will result in
any such violation. To the best Of Seller's knowledge, Seller is in compliance
with all material requirements imposed in writing by any insurance carrier of
Seller to the extent such carrier is an insurer or indemnitor of the Property.
With respect to the Premises, Seller has not received any notice of violation
of law, municipal ordinance, orders or requirements issued by any building
department or other governmental agency or subdivision having jurisdiction over
the Premises, and to the best of Seller's knowledge, there are no current or
outstanding violations of law, municipal ordinance, orders or requirements
issued by any building apartment or other governmental agency or subdivision
applicable to the Premises.
6.1.5 Permits. Except as set forth in Section 6.1.10, and to
the best of Seller's knowledge, all Permits (except for Seller's business
license from the City of Virginia Beach, which has expired) required by any
federal, state, or local law, rule or regulation and necessary for the
operation of the Property and the Business as currently being conducted have
been obtained and are currently in effect. To the Seller's best knowledge, no
registrations, filings, applications, notices, transfers, consents, approvals,
orders, qualifications, waivers or other actions of any kind are required by
virtue of the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby (i) to avoid the loss of any
21
Permit or the violation of any law, regulation, order or other requirement of
law, or (ii) to enable Purchaser to continue the operation of the Property and
the Business as presently conducted after the Closing. To the best of Seller's
knowledge, the current use and occupation of any portion of the Property does
not violate any of, and, where applicable, is in material compliance with, the
Permits, any applicable deed restrictions or other covenants, restrictions or
agreements including without limitation, any of the Permitted Exceptions, site
plan approvals, zoning or subdivision regulations or urban redevelopment plans
applicable to the Premises.
6.1.6 Title to Assets. Seller has good and marketable title
to the Improvements and Personal Property free and clear of all Encumbrances
other than the Permitted Exceptions and Sublandlord has good and marketable
title to the Lease.
6.1.7 The Ground Lease. Attached hereto as Exhibit H is a
true and correct copy of the Ground Lease, and all amendments and modifications
thereto. The Ground Lease is in full force and effect and Sublandlord, as the
tenant thereunder, is not in default and has not received any notice of default
in respect of the Ground Lease. Neither Landlord nor Sublandlord has exercised
any right or option, or stated in writing its intent, to terminate or cancel
the Ground Lease. Landlord's consent is not required in connection with the
transactions contemplated by this Agreement. Sublandlord has not assigned,
transferred or conveyed the Ground Lease or any interest therein,
22
or sublet the premises demised thereby, or granted any right or option with
respect thereto, to any party other than Seller.
6.1.8 Contracts. Except as set forth on Exhibits D-1 and D-
2, Seller is not a party to any leases, contracts, orders or agreements
relating to the Property or the Business (written or otherwise) (collectively,
"Contracts"). Exhibits D-1 and D-2 sets forth a full and complete description
of the Contracts described therein, and none of such Contracts have been
amended or modified except as reflected on said Exhibits. Seller is not
holding any security deposits under any of said Contracts. Each of the Assumed
Contracts is in full force and effect and no party under any such Assumed
Contract, including Seller, is in default, or has sent or received notice of
default, in any respect of any such Assumed Contract. Seller shall terminate
or cancel all of the Contracts,other than the Assumed Contracts, including
without limitation those described on Exhibit D-2 prior to Closing.
6.1.9 Condition of Personal Property. The Personal Property
is in good operating condition and repair, and as of the Closing Date shall
remain in such condition, ordinary wear and tear excepted.
6.1.10 Environmental Matters.
6.1.10.1 Purchaser, Seller and Sublandlord are
aware of the environmental conditions described generally in the report
entitled, "Phase II Environmental Assessment Report, Indian River Golf-O-Rama,
Virginia Beach, Virginia," dated
23
April 5, 1996, prepared by Aquaterra, Inc., Raleigh, North Carolina, a copy of
which has been provided to Seller, Purchaser and Sublandlord (the
"Environmental Condition").
6.1.10.2 Notwithstanding the existence of the
Environmental Condition, Purchaser shall purchase the Property on the Closing
Date, provided that on the Closing Date (a) Seller and Seller's parent company
(collectively, the "Indemnitors") execute and deliver the Environmental
Indemnification Agreement which shall set forth the Indemnitors, obligations
with respect to the Environmental Condition, including the Indemnitors'
indemnification of Purchaser with respect to the Environmental Condition, and
(b) Seller delivers to Purchaser the Letter of Credit to secure the
Indemnitors' obligations under the Environmental Indemnification Agreement.
6.1.10.3 Section 6.1.10 shall survive the
Closing.
6.1.11 Tax Proceedings. There are no proceedings pending
regarding the reduction of real estate taxes or assessments in respect of the
Premises.
6.1.12 Utilities. All water, storm and sanitary sewer, gas,
electricity, telephone and other utilities adequately service the Premises.
Except for water and sewer, all utilities are furnished by facilities of public
utilities and the cost of installation of such utilities has been fully paid.
Public water service is provided to the Premises from an adjacent property to
the north of the Premises ("Tract B") and the tenant
24
or operator of Tract B collects from Seller for water usage at the Premises at
regular public rates.
6.1.13 Access. To the best of Seller's knowledge, there are
no federal, state, county, municipal or other governmental plans to change the
highway or road system in the vicinity of the Premises which could materially
restrict or change access from any such highway or road to the Premises or any
pending or threatened condemnation or eminent domain proceedings relating to or
affecting the Premises. To the best of Seller's knowledge, all roads bounding
the Premises are public roads and Purchaser shall have access to such public
roads pursuant to the terms of the Lease.
6.1.14 Insurance Requirements. All material requirements or
recommendations imposed in writing by any insurer or by any board of fire
underwriters or similar body in respect of the Property have been satisfied.
6.1.15 Litigation. To the best of Seller's knowledge, there
is no action or proceeding (zoning or otherwise) or governmental investigation
pending, or threatened against, or relating to, Seller (insofar as it relates
to the Premises or the Business), the Premises, the Business or the
transactions contemplated by this Agreement.
6.1.16 Assessments. To the best of Seller's knowledge, there
are no special or other assessments for public improvements or otherwise now
affecting the Premises, and to the best of Seller's knowledge there are no (a)
pending or threatened
25
special assessments affecting the Premises or (b) any contemplated improvements
affecting the Premises that may result in special assessments affecting the
Premises.
6.1.17 Employee Agreements. There are no union or employment
contracts or agreements (written or oral) involving employees of Seller or its
affiliates affecting the Property or the Business which will survive the
Closing. All employees of Seller will have been terminated as of the Closing
Date.
6.1.18 Work at the Premises. Within one hundred twenty (120)
days prior to the Closing Date, no services, material or work have been
supplied to the Premises for which payment has not been made in full.
6.1.19 Financial Condition. Seller has delivered to Purchaser
true and correct copies of audited financial statements consisting of balance
sheets and income statements of Seller as of December 31, 1995 and 1994.
6.1.20 Full Disclosure. To the best of Seller's knowledge,
none of the information supplied by Seller herein or in the exhibits hereto
contains any untrue statement of a material fact or omits to state a material
fact required to be stated herein or necessary in order to make the statements
herein, in light of the circumstances under which they are made, not
misleading.
6.1.21 Storm Damage. Seller represents that an ice storm in
February 1996 and a wind storm in January 1996 caused certain damage (the
"Storm Damage") to the Property and
26
Seller has made a claim with its insurance company with respect to the Storm
Damage. Purchaser and Seller agree that Seller shall be permitted to retain
all right, title and interest in and to such insurance proceeds, that Purchaser
shall repair the Storm Damage after Closing, and that Seller shall have no
further obligation with respect to such repairs. In consideration of the
foregoing, Purchaser shall receive a credit against the Purchase Price payable
at Closing in the amount of One Hundred Forty Thousand Dollars ($140,000.00).
6.2 Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller as of the date hereof and as of the Closing
Date as follows:
6.2.1 Organization; Power and Authority. Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has all requisite power and authority to
carry on its business as it is now being conducted, to execute, deliver and
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby.
6.2.2 Due Authorization and Execution; Effect of Agreement.
The execution, delivery and performance by Purchaser of this Agreement and the
consummation by Purchaser of the transactions contemplated hereby have been
duly authorized by all necessary corporate action required to be taken on the
part of Purchaser. This Agreement has been duly and validly executed and
delivered by Purchaser and constitutes the valid and binding
27
obligation of Purchaser, enforceable in accordance with its terms, except to
the extent that such enforceability may be limited by bankruptcy, insolvency,
or other similar laws relating to creditors, rights generally. The execution,
delivery and performance by Purchaser of this Agreement and the consummation by
Purchaser of the transactions contemplated hereby will not, with or without the
giving of notice or the lapse of time, or both, (i) violate any provision of
any law, rule or regulation to which Purchaser is subject; (ii) violate any
order, judgment or decree applicable to Purchaser; or (iii) conflict with or
result in a breach of or a default under any term or condition of Purchaser's
Certificate of Incorporation or By-Laws or any agreement or other instrument to
which Purchaser is a party or by which it or its assets may be bound, except in
each case, for violations, conflicts, breaches or defaults which in the
aggregate would not materially hinder or impair the consummation of the
transactions contemplated hereby.
6.3 Survival. It shall be a condition to each party's obligation
to close hereunder that the representations and warranties of the parties made
in this Article 6 and the factual matters represented to Seller's knowledge
shall be true and correct as of the Closing Date. Except as otherwise
provided, the representations and warranties of the parties made in this
Article 6 shall survive the Closing for a period of twelve (12) months.
28
7. Seller's Covenants. Seller hereby covenants and agrees with Purchaser
as follows:
7.1 Access to Information. From the date hereof through the
Closing Date, Seller shall afford to Purchaser and Purchaser's accountants,
counsel and other representatives full and complete access to the Property,
upon reasonable notice at reasonable times and in such a manner as will not
unreasonably interfere with the conduct of the Business.
7.2 Cooperation by Seller. Seller will use its reasonable efforts
to secure all necessary consents, approvals, authorizations, exemptions and
waivers from third parties as shall be required in order to enable Seller to
effect the transactions contemplated hereby, and will otherwise use its
reasonable efforts to cause the consummation of the transactions contemplated
hereby in accordance with the terms and conditions hereof.
7.3 Operation of the Premises Prior to Closing. During the period
from the date hereof through the Closing Date, Seller agrees that (except as
expressly contemplated or permitted by this Agreement or to the extent that
Purchaser shall otherwise consent in writing);
7.3.1 Seller shall operate the Business in the usual, regular
and ordinary course in substantially the same manner as heretofore conducted,
as such operation may be limited by the Storm Damage;
29
7.3.2 Seller shall maintain all existing insurance policies
in respect of the Property in full force and effect;
7.3.3 Seller shall not commit a breach of, or default under,
any Permit or violate any applicable law, regulation, ordinance, order,
injunction or decree or any other requirement of any governmental body or
court, relating to the Property;
7.3.4 Seller shall maintain its inventory at the levels in
existence as the date hereof, subject to sale in the ordinary course of
business;
7.3.5 Seller shall maintain the Property in as good a state
of operating condition and repair as they are on the date of this Agreement,
except for ordinary wear and tear; and
7.3.6 Seller shall not enter into any lease or occupancy
agreement with respect to any of the Property.
7.4 Employees. All employees at the Premises will be terminated by
Seller prior to the Closing.
7.5 Contracts. Seller will terminate all Contracts
other than the Assumed Contracts, such termination to be effective as of the
Closing Date.
8. Further Assurances. At any time and from time to time after the
Closing Date, Seller, Sublandlord and Purchaser shall, at the request of any
party, execute and deliver any further instruments or documents and take all
such further action as such party may reasonably request to further consummate
the
30
transactions contemplated by this Agreement. This Section 8 shall survive the
Closing.
9. Brokers. Seller and Purchaser warrant and represent to each other that
they dealt with no broker, finder or similar agent or party who or which might
be entitled to a commission or compensation on account of introducing the
parties, the negotiation or execution of this Agreement and/or the closing of
the transaction provided for herein. Purchaser and Seller hereby respectively
agree to indemnify and hold harmless the other party from and against all loss,
liability, damage and expense (including, without limitation, attorneys' fees)
imposed upon or incurred by the other party by reason of any claim for
commissions or other compensation for bringing about this transaction by any
broker, finder or similar agent or party who claims to have dealt with the
indemnifying party in connection with this transaction. The provisions of this
Article 9 shall survive the Closing or any termination of this Agreement.
10. "As Is". Purchaser represents that it has inspected the Property and
is familiar with the physical condition thereof, and that it agrees to accept
the Property "as is", in its condition at the date of this Agreement subject to
reasonable wear and tear and the provisions of Section 6.1.10, Section 6.1.21
and Section 11. Neither Seller nor any agent, partner, employee, broker or
representative of Seller has made any representation whatsoever regarding the
Business, the Property or any part thereof, or anything relating to the subject
matter of
31
this Agreement, except as expressly set forth in this Agreement; and Purchaser,
in executing, delivering and performing this Agreement, has not and does not
rely upon any statement, information, or representation to whomsoever made or
given, whether to Purchaser or others, and whether directly or indirectly,
verbally or in writing, made by any person, firm or corporation, except as
expressly set forth in this Agreement.
11. Condemnation; Fire or Other Casualty. Between the date hereof and the
Closing, the risk of ownership and loss of the Property shall belong solely to
Seller. If, between the date hereof and the Closing, all or any portion of the
Property is condemned, taken by eminent domain, damaged by fire or other
casualty or by any other cause of nature, Seller shall promptly give Purchaser
notice thereof. After receipt of notice of such condemnation, taking or damage
(from Seller or otherwise), Purchaser shall have the option either:
(a) to require Seller to assign, transfer and/or convey the
Property in accordance with the terms and provisions hereof on the date of the
Closing to Purchaser in its damaged condition upon and subject to all of the
other terms and conditions of this Agreement, including payment of the purchase
price without adjustment on account of such condemnation, taking or damage, and
to assign to Purchaser all of Seller's right, title and interest in and to any
claims Seller may have under the casualty insurance policies, condemnation
awards and/or any causes of action with respect to such condemnation or taking
of
32
or damage to the Property and to pay to Purchaser by certified or bank check
all payments theretofore made under such insurance policies plus any deductible
amount under its insurance policies, or by such condemning or taking
authorities; Seller shall not settle any fire, casualty, condemnation or
eminent domain claim without the prior written consent of Purchaser; or
(b) to terminate this Agreement by giving notice to Seller,
whereupon this Agreement shall be terminated, and neither party shall have any
further rights, claims, liabilities or obligations to the other except for
those rights, claims, liabilities and obligations specifically surviving the
termination of this Agreement.
12. Default. If Seller shall default in the performance of its obligations
under this Agreement, the sole right and remedy of Purchaser shall be to
terminate this Agreement and seek reimbursement of the actual reasonable costs
incurred by Purchaser for any title search and/or survey, and Purchaser shall
not seek or obtain any money or other judgment (except with respect to such
reimbursement) against Seller or Sublandlord for any disclosed or undisclosed
33
parent, principal, officer or employee of Seller or against the assets or
estate of Seller or Sublandlord. If Purchaser shall default in the performance
of its obligations under this Agreement, the sole right and remedy of Seller
and Sublandlord shall be to terminate this Agreement, and Seller and
Sublandlord shall not seek or obtain any money or other judgment against
Purchaser or any disclosed or undisclosed parent, principal, officer or
employee of Purchaser or against the assets or estate of Purchaser. This
Section 13 shall not apply to any agreements that expressly survive the
Closing,, including without limitation, those agreements contained in this
Agreement or pursuant to a separate instrument.
13. Costs and Fees. Recording fees for the Lease or a memorandum of the
Lease, and the Lease Assignment and Assumption Agreement shall be payable by
Purchaser. Purchaser shall also pay the expenses incurred in connection with
(a) the examination of title, (b) the issuance of a policy of title insurance
for Purchaser, and (c) a survey of the Property, if obtained by Purchaser. Any
other similar costs not expressly provided for elsewhere in this Agreement
shall be divided and borne in accordance with the usual practices in the
jurisdiction where the Premises are located. It is agreed that no portion of
the consideration paid by Purchaser hereunder shall be allocated toward items
of personal property conveyed hereunder. The provisions of this Article shall
survive the Closing.
14. Indemnification.
14.1 Subject to the further provisions of this Article, Seller shall
protect, defend, hold harmless and indemnify Purchaser, its officers,
directors, shareholders, employees, agents and affiliates, and their respective
successors and assigns, from, against and in respect of any and all losses,
liabilities, deficiencies, penalties, fines, costs, damages and expenses
whatsoever (including without limitation, reasonable
34
professional fees and costs of investigation, litigation, settlement, and
judgment and interest) ("Losses") that may be suffered or incurred by any of
them arising from or by reason of (i) any Retained Liability or other liability
or obligation of Seller which is not an Assumed Liability; (ii) the breach of
any representation, warranty, covenant or agreement of Seller contained in this
Agreement or in any document or other writing delivered pursuant to this
Agreement; and (iii) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses (including without limitation,
interest, penalties, reasonable legal fees and accounting fees) incident to the
foregoing and the enforcement of the provisions of this Section 14.1.
14.2 Subject to the further provisions of this Article, Purchaser
shall protect, defend, hold harmless and indemnify Seller, its officers,
directors, shareholders, employees, agents, and affiliates, and their
respective successors and assigns from, against and in respect of any and all
Losses that may be suffered or incurred by any of them arising from or by
reason of (i) any of the Assumed Liabilities on and after the Closing Date,
(ii) the breach of any representation, warranty, covenant or agreement of
Purchaser contained in this Agreement or in any document or other writing
delivered pursuant to this Agreement; and (iii) any and all actions, suits,
proceedings, claims, demands, assessments, judgments, costs and expenses
(including without limitation, interest, penalties, reasonable legal fees and
35
accounting fees) incident to the foregoing and the enforcement of the
provisions of this Section 14.2.
14.3 Whenever a party hereto (such party and each its affiliates
which is entitled to indemnification pursuant to any provision of this
Agreement, an "Indemnified Party") shall learn after the Closing of a claim
that, if allowed (whether voluntarily or by judicial or quasi-judicial tribunal
or agency), would give rise to an obligation of another party (the
"Indemnifying Party") to indemnify the Indemnified Party under any provision of
this Agreement, before paying the same or agreeing thereto, the Indemnified
Party shall promptly notify the Indemnifying Party in writing of all such facts
within the Indemnified Party's knowledge with respect to such claim and the
amount thereof (a "Notice of Claim") amount thereof (a "Notice of Claim"). If,
prior to the expiration of fifteen (15) days from the mailing of a Notice of
Claim, the Indemnifying Party shall request, in writing, that such claim not be
paid, the Indemnified Party shall not pay the same, provided the Indemnifying
Party proceeds promptly, at its or their own expense (including employment of
counsel reasonably satisfactory to the Indemnified Party), to settle,
compromise or litigate, in good faith, such claim. After notice from the
Indemnifying Party requesting the Indemnified Party not to pay such claim and
the Indemnifying Party's assumption of the defense of such claim at its or
their expense, the Indemnifying Party shall not be liable to the Indemnified
Party for any legal or other expense subsequently incurred by the Indemnified
Party in
36
connection with the defense thereof. However, the Indemnified Party shall have
the right to participate at its expense and with counsel of its choice in such
settlement, compromise or litigation. The Indemnified Party shall not be
required to refrain from paying any claim which has matured by a court judgment
or decree, unless an appeal is duly taken therefrom and execution thereof has
been stayed, nor shall the Indemnified Party be required to refrain from paying
any claim where the delay in paying such claim would result in the foreclosure
of a lien upon any of the property or assets then held by the Indemnified
Party. The failure to provide a timely Notice of Claim as provided in this
Section 14.3 shall not excuse the Indemnifying Party from its or their
continuing obligations hereunder; however, the Indemnified Party's claim shall
be reduced by any damages to the Indemnifying Party resulting from the
Indemnified Party's delay or failure to provide a Notice of Claim as provided
in this Section 14.3.
14.4 For purposes of this Article, any assertion of fact and/or law
by a third party that, if true, would constitute a breach of a representation
or warranty made by a party to this Agreement or make operational an
indemnification obligation hereunder, shall, on the date that such assertion is
made, immediately invoke the Indemnifying Party's obligation to protect,
defend, hold harmless and indemnify the Indemnified Party pursuant to this
Article. The provisions of this
37
Article 14 shall survive Closing for a period of twelve (12) months.
15. Notices.
15.1 All notices, demands, requests, consents or other
communications ("Notices") which either party may desire or be required to give
to the other hereunder shall be in writing and shall be delivered by hand,
overnight express carrier, or sent by registered or certified mail, return
receipt requested, postage prepaid, in either event, addressed to the parties
at their respective addresses first above set forth in the case of Seller, to
the attention of David R. Rogol, President. A copy of any Notice given by
Seller to Purchaser shall simultaneously be given in either manner provided
above to Williams, Mullen, Christian & Dobbins, 1021 East Cary Street, 16th
Floor, Richmond, Virginia 23219, Attention: Channing J. Martin, Esq. A copy of
any Notice given by Purchaser to Seller shall simultaneously be given in either
manner provided above to Kronish, Lieb, Weiner and Hellman, 1114 Avenue of the
Americas, New York, New York 10036, Attention: Mark Lipschutz, Esq. Notices
given in the manner aforesaid shall be deemed to have been given three (3)
business days after the day so mailed, the day after delivery to any overnight
express carrier and on the day so delivered by hand. Either party shall have
the right to change its address(es) for the receipt of Notices by giving Notice
to the other party in either manner aforesaid. Any Notice required or
permitted to be given by either party may be given by that party's attorney.
38
16. Miscellaneous.
16.1 This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
16.2 This Agreement shall be governed by, interpreted under and
construed and enforced in accordance with, the laws of the State of Virginia.
16.3 The captions or article headings in this Agreement are for
convenience only and do not constitute part of this Agreement.
16.4 This Agreement has been fully negotiated by the parties and
rules of construction construing ambiguities against the party responsible for
drafting agreements shall not apply;
16.5 It is agreed that, except where otherwise expressly provided in
particular Articles or Sections of this Agreement, none of the provisions of
this Agreement shall survive the Closing.
16.6 This Agreement (including the Exhibits annexed hereto) contains
the entire agreement between the parties with respect to the subject matter
hereof and supersedes all prior understandings, if any, with respect thereto.
16.7 This Agreement may not be modified, changed, supplemented or
terminated, nor may any obligations hereunder be waived, except by written
instrument signed by the party to be charged or by its agent duly authorized in
writing or as otherwise expressly permitted herein.
39
16.8 No waiver of any breach of any agreement or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach
thereof or of any other agreement or provision herein contained. No extension
of the time for performance of any obligations or acts shall be deemed an
extension of the time for performance of any other obligations or acts.
16.9 This Agreement may be executed in one or more counterparts,
each of which when so executed and delivered shall be deemed an original, but
all of which taken together shall constitute but one and the same original.
40
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
INDIAN RIVER GOLF-O-RAMA, INC.
By: /s/ David R. Rogol
-----------------------------
Name: David R. Rogol
Title: President
INDIAN RIVER FAMILY GOLF
CENTERS, INC.
By: /s/ Robert J. Krause
-----------------------------
Name: Robert J. Krause
Title: Vice President
LENRICH ASSOCIATES, L.L.C.
By: /s/ Richard M. Cohen
------------------------------
Richard M. Cohen, a Member
by David R. Rogol
as attorney-in-fact
41
STATE OF NEW YORK
CITY/COUNTY OF NEW YORK, to wit
The foregoing instrument was acknowledged before me in the City/County
of New York, State of New York, this 19th day of May, 1996 by David R. Rogol,
as President of Indian River Golf-O-Rama, Inc., a Virginia corporation, on
behalf of the corporation.
My commission expires:_________________
/s/ Roseann Marrali
______________________________
Notary Public
STATE OF NEW YORK
CITY/COUNTY OF NEW YORK, to wit
The foregoing instrument was acknowledged before me in the City/County
of New York, State of New York, this 20th day of May, 1996 by Robert J. Krause,
as Vice President of Indian River Family Golf Centers, Inc., a Delaware
corporation, on behalf of the corporation.
My commission expires:_________________
/s/ Roseann Marrali
_____________________________
Notary Public
STATE OF NEW YORK
CITY/COUNTY OF NEW YORK, to wit
The foregoing instrument was acknowledged before me in the City/County
of New York, State of New York, this 19th day of May, 1996 by David R. Rogol,
to me known to be the person described in and appointed attorney-in-fact in and
by a certain power of attorney dated February 26, 1996, and executed by Richard
M. Cohen, a Member of Lenrich Associates, L.L.C., a New York limited liability
company, on behalf of the limited liability company.
/s/ Roseann Marrali
______________________________
Notary Public
INDEX OF EXHIBITS AND SCHEDULES
EXHIBIT A LEGAL DESCRIPTION OF LAND (not included)
EXHIBIT B LEGAL DESCRIPTION OF PARCEL C-1
EXHIBIT C PERSONAL PROPERTY
EXHIBIT D-1 ASSUMED CONTRACTS (not included)
EXHIBIT D-2 RETAINED CONTRACTS (not included)
EXHIBIT E-1 LETTER OF CREDIT (not included)
EXHIBIT E-2 ESCROW AGREEMENT (not included)
EXHIBIT F PERMITTED EXCEPTIONS
EXHIBIT G-1 SUBLEASE TERMINATION AGREEMENT (not included)
EXHIBIT G-2 LEASE ASSIGNMENT AND ASSUMPTION AGREEMENT (not included)
EXHIBIT G-3 BILL OF SALE (not included)
EXHIBIT G-4 CONTRACT ASSIGNMENT AND ASSUMPTION AGREEMENT (not included)
EXHIBIT G-5 ESTOPPEL CERTIFICATE (not included)
EXHIBIT G-6 ENVIRONMENTAL INDEMNIFICATION AGREEMENT (not included)
EXHIBIT G-7 RIGHT OF FIRST REFUSAL AGREEMENT (not included)
EXHIBIT H GROUND LEASE (not included)
May 17, 1996
EXHIBIT B
LEGAL DESCRIPTION OF LEASEHOLD C - 1
BEGINNING AT A PIN FOUND on the easterly right-of-way line of Military Highway
and the common boundary line of Leasehold C-1 and Leasehold D as shown on
"ALTA/ACSM LAND TITLE SURVEY OF A PORTION OF TRACT "A" AS DESCRIBED IN (D.B.
3089, PG. 0333) FOR INDIAN RIVER FAMILY GOLF CENTERS, INC., KEMPSVILLE BOROUGH,
VIRGINIA BEACH, VIRGINIA" dated 5/16/96; thence along the easterly right-of-way
line of Military Highway North 30 degrees 28' 42" East, 41.94' to a point;
thence leaving the right-of-way line of Military Highway, South 59 degrees 31'
18" East, 138.42' to a point; thence South 13 degrees 12' 32" West, 207.36' to
a point; thence South 59 degrees 32' 58" East, 40.00' to a point; thence South
05 degrees 59' 38" East, 250.00' to a point; thence North 84 degrees 00' 22"
East, 150.00' to a point; thence North 05 degrees 59' 38" West, 63.29' to a
point; thence North 84 degrees 00' 22" East, 533.61' to a point; thence South
08 degrees 32' 34" East, 66.75' to a point; thence South 58 degrees 55' 01"
East, 190.88' to a point; thence South 15 degrees 58' 59" East, 172.26' to a
point on the southerly right-of-way line of Old Providence Road; thence along
the southerly right-of-way of Old Providence Road the following courses and
distances, South 72 degrees 34' 51" West, 50.19" to a point; thence South 39
degrees 16' 51" West, 206.36 to a point; thence along a curve to the right
having a central angle of 38 degrees 47' 05", a radius of 268.18', an arc
length of 181.54', and a chord bearing of South 58 degrees 40' 24" West to a
point; thence South 78 degrees 03' 56" West, 494.57' to a point; thence leaving
the southerly right-of-way line of Old Providence Road, North 54 degrees 09'
37" West, 56.74' to a point; thence along a curve to the right having a central
angle of 72 degrees 54' 43", a radius of 100.00', an arc length of 127.26', and
a chord bearing of North 61 degrees 02' 34" West to a point; thence North 24
degrees 35' 13" West, 189.24' to a point; thence North 10 degrees 09' 22" West,
251.38' to a point; thence North 08 degrees 07' 02" West, 36.13' to a point;
thence North 05 degrees 30' 00" West, 45.67' to a point; thence North 12
degrees 06' 32" West, 35.76' to a point; thence North 14 degrees 46' 16" West,
88.15' to a point; thence North 06 degrees 45' 05" West, 39.14' to a point;
thence North 00 degrees 41' 38" West, 40.21' to a point; thence North 06
degrees 17' 39" East, 65.80' to a point; thence along a curve to the left
having a central angle of 73 degrees 05' 39", a radius of 13.01', an arc length
of 16.59', and a chord bearing of North 30 degrees 15' 09" West to a point;
thence continuing along a curve to the left having a central angle of 18
degrees 04' 48", a radius of 39.31', an arc length of 12.40', and a chord
bearing of North 75 degrees 50' 23" West to a point; thence North 05 degrees
07' 14" East, 39.28' to a point on the easterly right-of-way line of-Military
Highway; thence leaving the easterly right-of-way line of Military Highway,
South 47 degrees 28' 09" East, 95.35' to a point; thence South 59 degrees 31'
18" East, 66.00' to a point; thence North 72 degrees 10' 42" East, 47.00' to a
point; thence North 13 degrees 12' 32" East, 176.79 to a point; thence North 59
degrees 31' 18" West, 138.02' to a point on the easterly right-of-way line of
Military which marks the POINT OF BEGINNING.
The above described parcel contains 13.825 acres.
EXHIBIT C
PERSONAL PROPERTY
Vehicles/Attachments
o Kubota Tractor, Loader, Mower, Grading Box, Fertilizer Spreader
o Kawasaki Mule Golf Cart
o EZGO Golf Cart
o 2 Ball Pickers
Range Equipment
o Ball Dispensers
o Mats, Baskets, Trays, Crates
o Automated Ball Washing System
o Golf Balls, Bats, Helmets, Clubs
Tools
o Various Power Tools, Mowers, Hand Tools
Golf School
o Video Units and Monitor
o Misc Regripping and Repair Supplies
Snack Bar
o Drink Machine, FCB Machine, Refrigerator, Freezer, Display Units
Office
o Computer Registers
o Phones
o Copier
o Fax
o Desks
o Files
o Safe
o Security Monitoring System
EXHIBIT F
PERMITTED EXCEPTIONS
1. Declaration of Easements made by Ella L. Webb, Trustee under
Trust "All of the Will of Lloyd L. Webb, deceased, dated August 7, 1967,
recorded in Deed Book 1024, page 272, as amended by Declaration dated February
1, 1978, recorded in Deed Book 1789, page 555 and Agreement, dated August 16,
1990, recorded in Deed Book 2919, page 1031.
2. Easement granted Virginia Electric and Power Company by
instrument dated February 24, 1953, and recorded in Deed Book 334, Page 442
along Military Highway. (Map Book 35, Page 119)
3. Easement granted Virginia Electric and Power Company by
instrument dated October 26, 1953, and recorded in Deed Book 344, Page 334
through acreage.
4. Easement granted Virginia Electric and Power Company by
instrument dated April 14, 1955, and recorded in Deed Book 412, Page 445
through acreage.
5. Easement granted Virginia Electric and Power Company by
instrument dated February 14, 1955, and recorded in Deed Book 500, Page 253
along Providence Road.
6. Easement granted Virginia Electric and Power Company by
instrument dated September 4, 1958, and recorded in Deed Book 563, Page 25
through acreage.
7. Possible easement granted Chesapeake and Potomac Telephone
Company by instrument dated April 13, 1979, and recorded in Deed Book 1889,
page 637 five feet in width adjacent to bank on Leasehold D.
8. Easement granted Commonwealth of Virginia by instrument
dated March 24, 1942, recorded in Deed Book 211, Page 133.
9. Permanent drainage and traffic control easement taken by the
Commonwealth Transportation Commissioner of Virginia by instrument dated
october 2, 1992, recorded in Deed Book 3138, Page 24.
10. Forty foot road easement granted in favor of Bruce Flournay
Motor Corp. as shown on plat recorded in Plat Book 34, page 53.
11. Rights of others thereto entitled in and to the continued
uninterrupted flow of the creek shown as running along the easterly line of the
insured property as shown on "PLAT OF LEASEHOLD BOUNDARIES OF PROPERTY OF WEBB
REALTY CO., INC." recorded in Plat book 127, Page 3, as shown on the Survey.
12. Terms and conditions set forth in lease to Goodrich Associates
from Ella L. Webb, Trustee, as evidenced by a Memorandum of Lease dated April
30, 1966, recorded in Deed Book 985, page 190. Corrected Memorandum of Lease
dated May 31, 1967, recorded in Deed Book 1012, page 251. Modified by
Agreement dated August 7, 1967, recorded in Deed Book 1024, page 265. Assigned
by Goodrich Associates to Lenrich Associates by Assignment of Lease dated June
9, 1969, recorded in Deed Book" 56, page 436.
13. Terms and conditions of Agreement by and among Webb Realty
Company, Inc., Lenrich Associates, Earle W. Kazis, The United States Life
Insurance Company in the City of New York and Lawyers Title Insurance
Corporation, successor Trustee, dated August 16, 1990, recorded in Deed Book
2919, page 1031.
14. Terms and conditions set forth in sublease from Lenrich
Associates, L.L.C. to Indian River Family Golf Centers, Inc. as evidenced by
Memorandum of Sublease dated May 20, 1996, recorded in the aforesaid Clerk's
Office.
SUBLEASE
LENRICH ASSOCIATES, L.L.C.
TO
INDIAN RIVER FAMILY GOLF CENTERS, INC.
920 South Military Highway
Virginia Beach, Virginia 23464
May 20, 1996
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
SECTION 1: THE PREMISES. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2: THE PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2A: THE GROUND LEASE . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3: THE LEASEHOLD IMPROVEMENTS. . . . . . . . . . . . . . . . . . . . 3
SECTION 4: THE GRANT AND THE TERM. . . . . . . . . . . . . . . . . . . . . . 4
SECTION 5: RENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 6: RENT TO BE NET TO LANDLORD. . . . . . . . . . . . . . . . . . . . 4
SECTION 7: USE OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 8: TAXES AND UTILITY EXPENSES. . . . . . . . . . . . . . . . . . . . 4
SECTION 9: IMPROVEMENTS, REPAIRS, ADDITIONS, REPLACEMENTS. . . . . . . . . . 7
SECTION 10: REQUIREMENTS OF PUBLIC AUTHORITY . . . . . . . . . . . . . . . . 8
SECTION 11: COVENANT AGAINST LIENS . . . . . . . . . . . . . . . . . . . . . 9
SECTION 12: ACCESS TO PREMISES . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 13: ASSIGNMENT AND SUBLETTING. . . . . . . . . . . . . . . . . . . . 9
SECTION 14: SIGNS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 15: DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 16: BANKRUPTCY AND INSOLVENCY. . . . . . . . . . . . . . . . . . . 13
SECTION 17: INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 18: INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 19: WAIVER OF SUBROGATION. . . . . . . . . . . . . . . . . . . . . 15
SECTION 20: WAIVERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 21: LIMITATION OF LIABILITY. . . . . . . . . . . . . . . . . . . . 16
SECTION 22: CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 23: PARTIAL INVALIDITY . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 24: SHORT FORM OF LEASE. . . . . . . . . . . . . . . . . . . . . . 18
SECTION 25: INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 26: ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 27: PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 28: QUIET ENJOYMENT. . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 29: GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 30: NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 31: DESTRUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 32: EMINENT DOMAIN . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 33: UTILITY EASEMENTS. . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 34: MORTGAGES. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 35: SUBLEASES. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 36: LEASEHOLD MORTGAGES. . . . . . . . . . . . . . . . . . . . . . 28
SECTION 37: FORCE MAJEURE. . . . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
SUBLEASE
Sublease dated the 20th day of May, 1996, by and between Lenrich
Associates, L.L.C., having an address of c/o Goodrich Associates Management
Company, Inc., 560 Sylvan Avenue, Englewood Cliffs, New Jersey 07632, as
"Landlord" and Indian River Family Golf Centers, Inc., having an address of 225
Broadhollow Road, Suite 106E, Melville, New York 11747, as "Tenant". Landlord
and Tenant agree as follows:
SECTION 1. THE PREMISES:
This Sublease (hereinafter referred to as the "Lease") concerns a parcel
of land (referred to below as "the property") that is situated near the
intersection of South Military Highway and Old Providence Road in the Town of
Virginia Beach, Virginia, more commonly known by the street address 920 South
Military Highway, Virginia Beach, Virginia 23462. Tenant takes the property
subject to all covenants, conditions, encumbrances, and easements of record,
including a certain reciprocal cross-operating easement by and between Goodrich
Associates and Ella L. Webb affecting the property (attached hereto as Exhibit
B). The property and all other easements and rights appurtenant to the property
are referred to below as the "Premises". The property is described by metes and
bounds in Exhibit A.
Landlord hereby leases and rents the Premises to Tenant together with
the existing improvements and buildings thereon and the appurtenances thereunto
belonging, and the rights described in Exhibit C attached hereto and made a part
hereof.
SECTION 2. THE PARTIES:
(a) Identification - The parties to this Lease are Lenrich
Associates, L.L.C. and Indian River Family Golf Centers, Inc.
(b) Description -
(i) Lenrich Associates, L.L.C. is a New York Limited
Liability company with an address of c/o Goodrich Associates Management Company,
Inc., 560 Sylvan Avenue, Englewood Cliffs, New Jersey 07632. Lenrich
Associates, L.L.C. is referred to in this Lease as "Landlord" unless and until
it transfers the "Reversionary
1
Estate" (as defined in Section 4(b)).
(ii) Indian River Family Golf Centers, Inc. is a
Virginia Corporation with an address of 225 Broadhollow Road, Suite 106E,
Melville, New York 11747. Indian River Family Golf Centers, Inc. is referred
to in this Lease as "Tenant" unless and until it assigns the "Leasehold Estate"
(as defined in Section 4(b)) validly in accordance with Section 13. After a
valid assignment in accordance with Section 13, the assignee shall become the
"Tenant" under this Lease, and the assignor shall no longer be the "Tenant".
SECTION 2A. THE GROUND LEASE
This Lease is subject and subordinate to the lease dated April 30, 1966
between Ella L. Webb ("Webb") as landlord and Goodrich Associates ("Goodrich")
as tenant, as amended by that certain three page (exclusive of acknowledgements
and exhibits) agreement dated August 7, 1967 between Webb and Goodrich
(hereinafter collectively referred to as the "Ground Lease").
Landlord covenants and agrees that it will not cause or permit the
Ground Lease to be terminated or forfeited, and will indemnify and save
harmless Tenant from all loss, liability, damage or claims of any kind
(including reasonable attorney's fees and expenses of litigation) by reason of
any breach on the part of Landlord of this Lease or of the obligations under
the Ground Lease that Landlord is required to perform. If Landlord defaults in
the performance or compliance of any provision of this Lease and such default
of Landlord continues uncured for thirty (30) days after written notice from
Tenant to Landlord, or if Landlord defaults in the performance or compliance of
any provision of the Ground Lease and such default of Landlord continues
uncured for thirty (30) days after written notice from Tenant to Landlord,
then, in addition to all of the rights and remedies provided by law and in
equity, Tenant shall have the right to cure such default and offset the cost of
such cure against the rent and other charges due under this Lease.
Notwithstanding the foregoing, if such default is not reasonably capable of
being cured within thirty (30) days, then the period for curing such default
shall be extended for so long as
2
Landlord is proceeding with reasonable diligence to cure such default.
SECTION 3. THE LEASEHOLD IMPROVEMENTS:
This Lease and the rights of Tenant hereunder, shall include, without
limitation, the existing buildings and other improvements presently on, under
and over the Premises. During the term of this Lease, Tenant shall have the
right to construct additional buildings and improvements on, under and over the
Premises in Tenant's sole discretion. The construction of the buildings and
the other improvements to the property is governed by Section 9. The Building
and other improvements situated on, over or under the property from time to
time are referred to below as the "Leasehold Improvements". Tenant can finance
the development of the Leasehold Improvements by securing loans with one or
more mortgages of the "Leasehold Estate" (as defined in Section 4 (b) ) . A
mortgage of the Leasehold Estate is referred to below as a "Leasehold
Mortgage", a holder of a Leasehold Mortgage is referred to below as a
"Leasehold Mortgagee", and debt secured by a Leasehold Mortgage is referred to
below as "Leasehold Mortgage Debt".
SECTION 4. THE GRANT AND THE TERM:
(a) Landlord leases the property to Tenant.
(b) The rights granted to Tenant under this Lease are referred to
in this Lease as the "Leasehold Estate". The rights of Landlord in the
Premises after giving effect to the Leasehold Estate are referred to in this
Lease as the "Reversionary Estate". The "Reversionary Estate" includes all of
Landlord's rights pursuant to this Lease.
(c) The term of this Lease shall commence on the date hereof
(herein called the "Commencement Date").
(d) The term of this Lease shall be co-terminus with the term of
the Ground Lease, unless sooner terminated or extended as herein provided.
(e) Landlord shall deliver actual and exclusive possession of the
property to Tenant on the first day of the term; Tenant shall surrender
possession of the property to Tenant on the date the term
3
of the Ground Lease, as the same may be extended, is terminated (the
"Expiration Date"). During the term of this Lease, Landlord covenants and
agrees that it will not exercise its right to cancel the Ground Lease pursuant
to Section 2(c) thereof.
SECTION 5. RENT:
Tenant covenants and agrees to pay Landlord for leasing the property,
without offset or deduction, and without previous demand therefor, basic rent
at the rate per annum equal to the sum of Nine Thousand ($9,000.00) Dollars
during the term of this Lease. In addition to the foregoing, Tenant also
covenants and agrees to pay Landlord all increases in basic rent as set forth
in the Ground Lease. All basic rent per annum shall be payable by Tenant in
equal monthly installments, on the first day of each and every calendar month
during the term of this Lease and each extension, if any, and shall be payable
at the office of the Landlord first above set forth or at such other place of
which Landlord shall have given Tenant written notice at least thirty (30) days
in advance. As hereinafter used, the term "rent" shall be deemed to include
the basic rent and the additional rent, if any, payable by Tenant to Landlord
hereunder.
SECTION 6. RENT TO BE NET TO LANDLORD:
It is the intention of the parties that the rent payable hereunder
shall be net to Landlord, so that this Lease shall yield to Landlord the net
annual rent specified herein during the term of this Lease, and that all costs,
expenses and obligations of every kind and nature whatsoever relating to the
Premises shall be paid by Tenant.
SECTION 7. USE OF PREMISES:
The Premises may be used for any lawful purpose.
SECTION 8. TAXES AND UTILITY EXPENSES:
(a) (1) Tenant shall, during the term of this Lease, as
additional rent, pay and discharge punctually, as and when the same shall
become due and payable, without penalty, all taxes, special and general
assessments, water rents,, rates and charges, sewer rents and other
governmental impositions and charges of every kind
4
and nature whatsoever, extraordinary as well as ordinary (hereinafter called
the "Taxes"), and each and every installment thereof, which shall or may during
the term of this Lease be charged, levied, laid, assessed, imposed, become due
and payable, or liens upon or for or with respect to the Premises or any part
thereof, or any buildings, appurtenances or equipment owned by Tenant thereon
or therein or any part thereof, and all taxes charged, laid, levied, assessed
or imposed in lieu of or in addition to the foregoing, together with all
interest and penalties thereon, under or by virtue of all present or future
laws, ordinances, requirements, orders, directives, rules or regulations of the
Federal, State, County, Town and City Governments and of all other governmental
authorities whatsoever (all of which shall also be included in the term "Taxes"
as heretofore defined) and all water rents, rates and charges, sewer rents and
charges for water, steam, heat, gas, hot water,, electricity, light and power,
and other service or services,, furnished to the Premises or the occupants
thereof during the term of this Lease (hereinafter called "Utility Expenses").
(2) To the extent that the same may be permitted by law,
Tenant orits designees shall have the right to apply for the conversion of any
assessment for local improvements in order to cause the same to be payable in
annual installments, and upon such conversion Tenant shall pay and discharge
punctually said installments as they shall become due and payable during the
term of this Lease.
(3) Tenant shall be deemed to have complied with the
covenants of this subparagraph (a) if payment of such Taxes shall have been
made either within any period allowed by law or by the governmental authority
imposing the same during which payment is permitted without penalty or interest
or before the same shall become a lien upon the Premises, and Tenant shall
produce and exhibit to Landlord satisfactory evidence of such payment, if
Landlord shall demand the same in writing.
(b) All such Taxes, including assessments which have been
5
converted into installments as set forth in the preceding subparagraph (a),
which shall become payable during each of the calendar or fiscal tax years, as
the case may be, in which the term of this Lease terminates, shall be
apportioned pro rata between Landlord and Tenant in accordance with the
respective portions of such year during which such term shall be in effect.
(c) (1) Tenant or its designees shall have the right to contest
or review by legal proceedings, or in such other manner as it may deem suitable
(which, if instituted, Tenant or its designees shall conduct promptly at its
own cost and expense, and free of any expense to Landlord, and, if necessary,
in the name and with the cooperation of Landlord) cooperation of Landlord) .
all such Taxes and assessments. Notwithstanding the foregoing, Tenant shall
promptly pay all such items if at any time the Premises or any part thereof
shall be in danger of being forfeited or lost, or if Landlord shall be subject
to any criminal liability.
(2) The legal proceedings referred to in the preceding
subparagraph (1) shall include appropriate certiorari proceedings and appeals
from orders therein and appeals from any judgments, decrees or orders. In the
event of any reduction, cancellation or discharge, Tenant shall pay the amount
finally levied or assessed against the Premises or adjudicated to be due and
payable on any such contested items and if there shall be any refund with
respect thereto, Tenant shall be entitled to the same.
(d) Nothing herein shall require or be construed to require Tenant
to pay any inheritance, estate, succession, transfer, gift, franchise, income
or profit taxes, that are or may be imposed upon Landlord, its successors or
assigns.
(e) Notwithstanding anything to the contrary contained herein,
Tenant acknowledges and understands that Landlord owns additional property
adjacent to the Premises. In the event Landlord receives one bill for- Taxes
covering both its adjacent property and the Premises., then the amount payable
by Tenant hereunder shall be a pro-rata share of the entire bill received by
Landlord, so that the allocation paid by Tenant shall be solely
6
attributable to the Premises; or, if any improvements on the Premises result in
the Premises being taxed at a higher rate relative to Landlord's adjacent
property, then Tenant's pro-rata share shall be adjusted to include any
additional Taxes by reason of said improvements and/or higher rate. Landlord
shall provide Tenant with a copy of the tax bill, together with Landlord's
computations of Tenant's pro-rata share of such tax bill in accordance with the
terms of this Section 8(e).
SECTION 9. IMPROVEMENTS, REPAIRS, ADDITIONS, REPLACEMENTS:
(a) Tenant shall have the right, at its own cost and expense, to
construct on any part or all of the Premises, at any time and from time to
time, such buildings, parking areas, driveways, walks, gardens and other
similar and dissimilar improvements as Tenant shall from time to time
determine, provided that the same shall be in compliance with all applicable
building codes and ordinances.
(b) Tenant shall, at all times during the term of this Lease, and
at its own cost and expense, keep and maintain or cause to be kept and
maintained in repair and good condition (ordinary wear and tear and casualty
excepted) all buildings and improvements at any time erected on the Premises,
both inside and outside, structural and non-structural, extraordinary and
ordinary; and shall use all reasonable precaution to prevent waste, damage or
injury. Landlord shall not be required to furnish any services or facilities
or to make any improvements, repairs or alterations in or to the Premises
during the term of this Lease.
(c) Tenant may, at its option and at its own cost and expense, at
any time and from time to time, make such alterations, changes, decorations,
replacements, improvements and additions in and to the Premises, and the
buildings and improvements thereon, as it may deem desirable.
(d) On the last day or sooner termination of the term of this
Lease, Tenant shall quit and surrender the Premises, and the buildings and
improvements then thereon, broom clean and in good condition and repair
(reasonable wear and tear excepted).
(e) Until the expiration or sooner termination of this Lease,
7
title to any new building or buildings or improvements erected on the premises
and the building equipment, and other items installed thereon by Tenant and any
alteration, change or addition made by Tenant shall remain in Tenant; and
Tenant alone shall be entitled all depreciation on Tenant's income tax returns
f or any such building, building equipment and/or other items improvements,
additions, changes or alterations. Tenant may, at any time and from time to
time without the prior written consent of Landlord demolish any existing
building upon the Premises in order to replace the same with another building
or improvement permitted pursuant to the terms of this Lease.
(f) Any contractors, materialmen, or other potential lienors may
look only to the Tenant's interest in the property for satisfaction of any
claims for payment; Tenant covenants and agrees that the Landlord's interest
shall not be subject to any mechanic's or similar liens.
SECTION 10. REQUIREMENTS OF PUBLIC AUTHORITY:
(a) During the term of this Lease, Tenant shall, at its own cost
and expense, promptly observe and comply with all present and future laws,
ordinances, requirements, orders, directives, rules and regulations of the
Federal, State, County, Town, Village and City Governments and of all other
governmental authorities affecting the Premises or appurtenances or any part
thereof whether the same are in force at the commencement of the term of this
Lease or may in the future be passed, enacted or directed, and Tenant shall pay
all costs, expenses, liabilities, losses, damages, fines, penalties, claims and
demands, including reasonable counsel fees, that may in any manner arise out of
or be imposed because of the failure of Tenant to comply with the covenants of
this SECTION 10.
(b) Tenant shall have the right to contest by appropriate legal
proceedings diligently conducted in good faith, in the name of the Tenant, or
Landlord, or both, without cost or expense to Landlord, the validity or
application of any law,
8
ordinance, rule, regulation or requirement of the nature referred to in
paragraph (a) of this SECTION 10 and if by the terms of any such law,
ordinance, order, rule, regulation or requirement, compliance therewith pending
the prosecution of any such proceeding may be legally delayed, Tenant may delay
such compliance therewith until the final determination of such proceeding.
(c) Landlord agrees to execute and deliver any appropriate papers
or other instruments which may be necessary or proper to permit Tenant so to
contest the validity or application of any such law, ordinance, order, rule,
regulation or requirement.
SECTION 11. COVENANT AGAINST LIENS:
Tenant shall not do any act or make any contract which may create or be
the foundation for any lien or other encumbrance upon any interest of Landlord
in the Premises. If, because of any act or omission (or alleged act or
omission) of Tenant, any mechanic's lien or other lien, charge or order for the
payment of money shall be filed against Landlord or any portion of the Premises
(whether or not such lien, charge or order is valid or enforceable as such),
Tenant shall, at its own cost and expense, cause the same to be discharged of
record or bonded within sixty (60) days after written notice from Landlord to
Tenant of the filing thereof; and Tenant shall indemnify and save harmless
Landlord against and from all costs, liabilities, suits, penalties, claims and
demands, including reasonable counsel fees, resulting therefrom.
SECTION 12. ACCESS TO PREMISES:
Landlord or Landlord's agents and designees shall have the right, but
not the obligation to enter upon the Premises at all reasonable times and in
emergencies at all times to examine same and to exhibit the Premises to
prospective tenants, mortgagees and/or purchasers. Landlord shall be permitted
to affix a "To Let" or "For Sale" sign on the Premises during the last sixty
(60) days of the term of this Lease in such place as shall not interfere with
the business then being conducted at the Premises.
SECTION 13. ASSIGNMENT AND SUBLETTING:
Provided Tenant is not then in default under this Lease, or, if Tenant
is in default under this Lease, provided Tenant's time to cure such default has
not expired, Tenant may assign, sublease (in
9
whole or in one or more parts) , mortgage or otherwise encumber this Lease and
may permit its sub-tenant or sub-tenants to assign or sublease the same,
without requiring Landlord's consent therefor. No assignment shall be
effective unless Landlord shall be furnished written notice of such assignment
within thirty (30) days thereafter, together with the name and address of the
assignee. Upon the giving of such notice, Tenant shall be relieved of all
further obligations hereunder and shall no longer have any liability under this
Lease or with respect to the Premises, provided, that simultaneously with the
giving of such notice Tenant delivers to Landlord an instrument in writing
executed by such assignee pursuant to which such assignee shall have assumed
all of the obligations of Tenant hereunder.
SECTION 14. SIGNS:
Tenant and Tenant's sub-tenants shall have the right to install,
maintain and replace in, on or over or in front of the Premises such signs and
advertising matter as Tenant may desire, and Tenant shall comply with any
applicable requirements of governmental authorities having jurisdiction and
shall obtain any necessary permits. As used in this SECTION 14, the word
"sign" shall be construed to include any placard, light or other advertising
symbol or object, irrespective of whether same be temporary or permanent.
SECTION 15. DEFAULTS:
(a) If: (1) any of the events set forth in SECTION 16 hereof shall
occur; or (2) Tenant shall fail to pay any installment of rent or additional
rent when the same shall be due and payable and shall allow such default to
continue for forty-five (45) days after receipt of notice in writing of such
default given by or in behalf of Landlord; or (3) Tenant shall fail to perform
any of the other covenants,, conditions or agreements herein contained on
Tenant's part to be kept or performed, and shall allow any such default to
continue for sixty (60) days after receipt of notice in writing of such default
given by or in behalf of Landlord, or shall not cure the same as in the next
paragraph provided; or (4) any action or
10
omission by Tenant hereunder constitutes a default under the Ground Lease,
provided Landlord gives Tenant written notice of such omission and Tenant fails
to correct or remedy such omission within forty-five (45) days after receipt of
Landlord's written notice; then, upon the happening or occurrence of any one or
more or all of the items, defaults and events referred to in clauses (1) to
(4), inclusive, of this subparagraph (a) , and upon the date specified in a
notice from Landlord to Tenant sent by registered or certified mail, return
receipt requested, which date shall be not less than ten business days
(Saturdays, Sundays and legal holidays excluded) after the date of receipt of
such notice, the term and estate hereby vested in Tenant shall cease and any
and all other right, title and interest of Tenant hereunder shall cease and
expire, without further notice or lapse of time, as fully and with like effect
as if the entire term of this Lease herein provided for had elapsed, but Tenant
shall continue to be liable to Landlord as hereinafter provided.
(b) In the event that Landlord gives notice of a default of a
nature such that it cannot be cured within such sixty (60) day period, then,
such default shall not be deemed to continue so long as Tenant, after receiving
such notice, proceeds to cure the default as soon as reasonably possible and
continues to take all steps necessary to complete the same within a period of
time which, under all prevailing circumstances,, shall be reasonable. No
default shall be deemed to continue if and so long as Tenant shall be so
proceeding to cure the same in good faith or be delayed in or prevented from
remedying the same by strikes or other 'Labor disturbances, by shortage of
labor, materials or equipment, by act of God or the public enemy, by order,
direction or other interference by any Municipal, State or Governmental
official or agency, or by delays in transportation or bad weather, or by any
other cause beyond Tenant's control.
(c) Notwithstanding any termination of the term of this Lease and
the estate hereby vested in Tenant and of Tenant's rights hereunder, pursuant
to paragraph (a) of this SECTION 15, Tenant
11
shall nonetheless continue to remain liable under this Lease for the payment of
rent and the observance and performance of all other covenants on its part to
be performed; and upon any such termination or at any time thereafter, Landlord
may, in addition to and without prejudice to any other rights and remedies
Landlord shall have at law or in equity or hereunder: (1) re-enter the
Premises, and dispossess any or all occupants of the Premises, either by force
or otherwise, and have the possession of the same as of Landlord's former
estate; and/or (2) recover possession thereof and dispossess any or all
occupants of the Premises in the manner prescribed by the statute relating to
summary proceedings, or similar statutes; but Tenant in either such case shall
remain liable to Landlord as hereinafter provided.
(d) In case of any such default, re-entry, expiration and/or
dispossess by summary proceedings or otherwise: (1) the rent shall become due
thereupon and be paid up to the time of such re-entry, expiration and/or
dispossess; (2) Landlord may re-let the premises or any part or parts thereof,
either in the name of Landlord or otherwise, for a term or terms which may at
Landlord's option be less than or exceed the period which would otherwise have
constituted the balance of the term of this Lease and may grant concessions or
free rent; and (3) Tenant or the legal representatives of Tenant shall also pay
Landlord as liquidated damages for the failure of Tenant to observe and perform
Tenant's covenants herein contained, any deficiency between the rent hereby
reserved and/or covenanted to be paid and the net amount, if any, of the rents
collected on account of the lease or leases of the Premises for each month of
the period which would otherwise have constituted the balance of the term of
this Lease. In computing such liquidated damages, there shall be added to the
said deficiency such reasonable expenses as Landlord may incur in connection
with re-letting, such as brokerage and preparing the same for re-letting. Any
such liquidated damages shall be paid in monthly installments by Tenant on the
rent day specified in this Lease and any suit brought to collect the amount of
the deficiency
12
for any month shall not prejudice in any way the rights of Landlord to collect
the deficiency for any subsequent month by a similar proceeding. Landlord at
Landlord's option may make such alterations, repairs, replacements and/or
decorations in the Premises as Landlord, in Landlord's sole judgment, considers
advisable and necessary for the purpose of re-letting the Premises; and the
making of such alterations and/or decorations shall not operate or be construed
to release Tenant from liability hereunder as aforesaid. Landlord agrees to
use its best efforts to mitigate all damages and to relet the Premises in the
event of any default specified herein.
SECTION 16. BANKRUPTCY AND INSOLVENCY:
If, after the commencement of the term of this Lease: (a) Tenant shall
be adjudicated a bankrupt or adjudged to be insolvent; (b) a receiver or
trustee shall be appointed for Tenant's property and affairs; (c) Tenant shall
make an assignment for the benefit of creditors or shall file a petition in
bankruptcy or insolvency or for reorganization or shall make application for
the appointment of a receiver; or (d) any execution or attachment shall be
issued against Tenant or any of Tenant's property, whereby the Premises or any
building or buildings or any improvements thereon shall be taken or occupied or
attempted to be taken or occupied by someone other than Tenant, except as may
herein be permitted, and such adjudication, appointment, assignment, petition.,
execution or attachment shall not be set aside, vacated, discharged or bonded
within one hundred and twenty (120) days after the issuance of the same, then,
an event of default hereunder shall be deemed to have occurred so that the
provisions of SECTION 15 hereof shall become effective and Landlord shall have
the rights and remedies provided for therein.
The terms and provisions of this SECTION 16 shall not apply, in any
event or situation, if Tenant has an outstanding mortgage against Tenant's
interest and estate hereunder, or as against an institutional investor within
the meaning of SECTION 38, provided, only, that any such institutional investor
shall have made all
13
payments of rent hereunder on a current basis within thirty (30) days after
notice given to such institutional investor by Landlord.
SECTION 17. INDEMNITY:
(a) Tenant shall indemnify and save harmless Landlord from and
against any and all liability, damage, penalties or judgments arising from
injury to person or property sustained by anyone in and about the Premises
arising from any act or acts or omission or omissions of Tenant or Tenant's
officers, agents, servants, employees, contractors, or sub-lessees. Tenant
shall, at its own cost and expense, defend any and all suits or actions (just
or unjust) which may be brought against Landlord or in which Landlord may be
impleaded with others upon any such above-mentioned matter, claim or claims.
(b) Except for its affirmative acts or negligence or the
affirmative acts or negligence of her officers, agents, servants,, employees or
contractors, Landlord shall not be responsible or liable for any damage or
injury to any property, fixtures, buildings or other improvements, or to any
person or persons, at any time on the Premises, including any damage or injury
to Tenant or to any of Tenant's officers,, agents, servants, employees,
contractors, customers or sub-lessees.
SECTION 18. INSURANCE:
(a) Tenant shall provide at its expense, and keep in force during
the term of this Lease, general liability insurance in a good and solvent
insurance company or companies licensed to do business in the State of
Virginia, selected by Tenant, and reasonably satisfactory to the holder of any
mortgage on Tenant's interest in this Lease (as described in Section 36
hereof), or, if there shall not be such a leasehold mortgage, to Landlord,
covering bodily injury, property damage, and personal injury in the amount of
at least ONE MILLION ($1,000,000.00) DOLLARS combined single limit per
occurrence, and umbrella liability insurance in the amount of FIVE MILLION
($5,000,000.00) DOLLARS. Such policy or policies shall include Landlord and
each such leasehold mortgagee as additional insureds. Tenant agrees to deliver
certificates of
14
such insurance to Landlord at the beginning of the term of this Lease and
thereafter not less than ten (10) days prior to the expiration of any such
policy. Such insurance shall be noncancellable without ten (10) days' written
notice to Landlord, and to each such leasehold mortgagee.
(b) During the term of this Lease, Tenant shall keep all buildings
and improvements erected by Tenant on the Premises at any time insured for the
benefit of Landlord and Tenant and the holder of any such leasehold mortgage
(as described in Section 36 hereof) as their respective interests may appear,
against loss or damage by fire and customary extended coverage in a minimum
amount necessary to avoid the effect of co-insurance provisions of the
applicable policies. All such policies, with receipts evidencing payment of
the premiums thereon, shall be held by such leasehold mortgagee, if any, or by
Landlord, so long as there shall be no such leasehold mortgagee. All proceeds
payable at any time and from time to time by any insurance company under such
policies shall be payable to such leasehold mortgagee, if any, or, if none, to
Tenant. If any such proceeds are paid to such leasehold mortgagee, Tenant
shall be entitled to receive the full amount thereof in accordance with the
terms of such leasehold mortgage, and Landlord shall not be entitled to, and
shall have no interest in, such proceeds or any part thereof. Any proceeds
paid directly to Tenant shall be retained by Tenant and Landlord shall not be
entitled to, and shall have no interest in, such proceeds or any part thereof.
Landlord shall, at Tenant's cost and expense, cooperate fully with Tenant in
order to obtain the largest possible recovery and execute any and all consents
and other instruments and take all other actions necessary or desirable in
order to effectuate the same and to cause such proceeds to be paid as
hereinbefore provided, and Landlord hereby appoints Tenant its attorney-in-fact
to execute the same and to take such actions in the name of Landlord.
SECTION 19. WAIVER OF SUBROGATION:
All insurance policies carried by either party covering the Premises,
including but not limited to contents, fire and casualty
15
insurance, shall expressly waive any right on the part of the insurer against
the other party. The parties agree that their policies will include such
waiver clause or endorsement so long as the same shall be obtainable without
extra cost, or if extra cost shall be charged therefor, so long as the other
party pays such extra cost. If extra cost shall be chargeable therefor, each
party shall advise the other thereof and of the amount of the extra cost, and
the other party, at its election, may pay the same, but shall not be obligated
to do so.
SECTION 20. WAIVERS:
Failure of Landlord to complain of any act or omission on the part of
Tenant, no matter how.long the same may continue, shall not be deemed to be a
waiver by Landlord of any of its rights hereunder. No waiver by Landlord at
any time, express or implied, of any breach of any provision of this Lease
shall be deemed a waiver of a breach of any other provision of this Lease or a
consent to any subsequent breach of the same or any other provision. If any
action by Tenant shall require Landlord's consent or approval, Landlord's
consent to or approval of such action on any one occasion shall not be deemed a
consent to or approval of any other action on the same or any subsequent
occasion. Any and all rights and remedies which Landlord may have under this
Lease or by operation of law, either at law or in equity, upon any breach,
shall be distinct, separate and cumulative and shall not be deemed inconsistent
with each other; and no one of them, whether exercised by Landlord or not,
shall be deemed to be in exclusion of any other; and such rights and remedies
may be exercised at the same time, or separately, as may be desired. No
acceptance by landlord of any partial payment shall constitute an accord or
satisfaction but shall only be deemed a part payment on account.
SECTION 21. LIMITATION OF LIABILITY:
Notwithstanding anything to the contrary herein provided in Section 15
hereof, or elsewhere, if Landlord or any successor in interest of Landlord,
shall be a leasehold mortgagee, or an
16
individual, joint venture, tenancy in common, firm or partnership, general or
limited, or corporation, it is specifically understood and agreed that there
shall be absolutely no personal liability on the part of such leasehold
mortgagee or such individual or on the part of the members, partners,
directors, officers, or shareholders of such firm, partnership, corporation, or
joint venture with respect to any of the terms, covenants and conditions of
this Lease, and that Tenant shall look solely to the equity of Landlord or such
successor in interest in the leasehold estate of Landlord in the Premises for
the satisfaction of each and every remedy of Tenant's in the event of any
breach by Landlord or by such successor in interest of any of the terms,
covenants and conditions of this Lease to be performed by Landlord, such
exculpation of personal liability to be absolute and without any exception
whatsoever.
Furthermore, notwithstanding anything to the contrary herein provided
in Section 15 hereof, or elsewhere, if Tenant or any successor in interest of
Tenant, shall be a leasehold mortgagee, or an individual, joint venture,
tenancy in common, firm or partnership, general or limited, or corporation, it
is specifically understood and agreed that there shall be absolutely no
personal liability on the part of such leasehold mortgagee or such individual
or on the part of the members, partners, directors, officers, or shareholders
of such firm, partnership, corporation, or joint venture with respect to any of
the terms, covenants and conditions of this Lease, and that Landlord shall look
solely to the equity of Tenant or such successor in interest in the leasehold
estate of Tenant in the Premises for the satisfaction of each and every remedy
of Landlord's in the event of any breach by Tenant or by such successor in
interest of any of the terms, covenants and conditions of this Lease to be
performed by Tenant, such exculpation of personal liability to be absolute and
without any exception whatsoever.
SECTION 22. CERTIFICATES:
Either party shall, without charge, at any time and from time
17
to time thereafter, within ten (10) days after written request of the other,
certify by a written instrument duly executed and acknowledged to any mortgagee
or purchaser, or proposed mortgagee or proposed purchaser, or any other person,
firm or corporation specified in such request:
(a) as to the validity and force and effect of this Lease, in
accordance with its tenor as then constituted;
(b) as to the existence of any default thereunder;
(c) as to the existence of any offsets, counterclaims or defenses
thereto on the part of such other party;
(d) as to the commencement and expiration dates of the term of this
Lease; and
(e) as to any other matters as may reasonably be so requested.
SECTION 23. PARTIAL INVALIDITY:
If any term, covenant, condition or provision of this Lease or the
application thereof to any person or circumstance shall, at any time or to any
extent, be invalid or unenforceable, the remainder of this Lease,, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby; and each term, covenant, condition and provision of this Lease shall
be valid and be enforced to the fullest extent permitted by law.
SECTION 24. SHORT FORM OF SUBLEASE:
The parties will, at any time, at the request of either one, promptly
execute duplicate originals of an instrument, in recordable form, which will
constitute a short form of sublease,, setting forth a description of the
Premises, the term of this Lease and any other portions thereof, excepting the
rental provisions, as either party may request.
SECTION 25. INTERPRETATION:
Wherever herein the singular number is used, the same shall include the
plural, and the masculine gender shall include the feminine and neuter genders,
and vice versa, as the context shall require. The section headings used herein
are for reference and convenience only and shall not enter into the
interpretation
18
hereof. Each and every term and provision of this Lease which requires any
performance (whether affirmative or negative) by Tenant, shall be deemed to be
both a covenant and a condition. The terms "Landlord" and "Tenant" whenever
used herein, shall mean only the owner at the time of Landlord's or Tenant's
interest herein, and upon any sale or assignment of the interest of either
Landlord or Tenant herein, their respective successors in interest and/or
assigns, shall., during the term of their ownership of their respective estates
herein, be deemed to be Landlord or Tenant, as the case may be.
SECTION 26. ENTIRE AGREEMENT:
No oral statement or prior written matter shall have any force
or effect. Tenant agrees that it is not relying on any representations or
agreements other than those contained in this Lease. This agreement shall not
be modified or cancelled except by writing subscribed by all parties.
SECTION 27. PARTIES:
The covenants, conditions and agreements contained in this Lease shall
bind and inure to the benefit of Landlord and Tenant and their respective
successors and assigns.
SECTION 28. QUIET ENJOYMENT:
Tenant, upon paying the rent and additional rent and all other sums and
charges to be paid by it as herein provided, and observing and keeping all
covenants, warranties, agreements and conditions of this Lease on its part to
be kept, shall quietly have and enjoy the Premises during the term (as the same
shall be extended) of this Lease, without hindrance or molestation by Landlord
or anyone claiming by or through Landlord. Landlord represents and warrants
that it has the power and authority to execute and deliver this Lease and to
carry out and perform all covenants to be performed by it hereunder.
SECTION 29. GOVERNING LAW:
This Lease and the performance thereof shall be governed, interpreted,
construed and regulated by the laws of the State of Virginia.
19
SECTION 30. NOTICES:
Every notice, approval, consent or other communication authorized or
required by this Lease shall not be effective unless served in writing and sent
by United States registered or certified mail, return receipt requested,
directed to the other party at its address hereinabove first mentioned or such
other address as either party may designate by notice given from time to time
in accordance with this SECTION 30. The rent payable by Tenant hereunder shall
be paid to Landlord at the same place where a notice to Landlord is herein
required to be directed.
SECTION 31. DESTRUCTION:
(a) In the event that, at any time during the term of this Lease,
the buildings and improvements on the Premises shall be destroyed or damaged in
whole or in part by f ire or other cause within the extended coverage of the f
ire insurance policies carried by Tenant in accordance with this Lease, then,
Tenant, at its own cost and expense, shall, subject to the provisions of
paragraph (b) of this SECTION 31, cause the same to be repaired, replaced or
rebuilt within a period of time which, under all prevailing circumstances,
shall be reasonable.
(b) In the event that at any time during the term of this Lease any
one or more of the buildings on the Premises shall have been damaged or
destroyed by fire or any other cause whatsoever, and that, as a result of such
damage or destruction, any one or more of the subleases covering such buildings
shall be terminated by the sub-tenant thereunder or by Tenant (each such
building being hereinafter called a "Vacated Building") , then, notwithstanding
the provisions of paragraph (a) of this SECTION 31 or any other provisions of
this Lease:
(1) If the aggregate ground floor area of the Vacated
Building or Vacated Buildings, as the case may be, resulting from such fire or
other cause shall exceed fifteen (15%) per cent of the aggregate ground floor
area of all buildings on the Premises immediately prior to such
20
damage or destruction, or in the event any such damage or destruction occur
within the last three (3) years of the term of this Lease, Tenant shall have
the right, but not the obligation, to elect not to repair, replace or rebuild
such Vacated Building or Vacated Buildings, as the case may be, and to
terminate this Lease by giving written notice of termination to Landlord on or
prior to the date one hundred and eighty (180) days after the occurrence of
such damage or destruction, and upon the giving of such a notice of termination
the term of this Lease shall expire and come to an end on the last day of the
calendar month in which such notice shall be given, with the same force and
effect as if said day had been originally fixed herein as the expiration date
of the term of this Lease, and neither party shall have any further rights or
liabilities hereunder.
(2) If Tenant shall not have the right to terminate this Lease pursuant
to sub-paragraph (1) of this paragraph, or, having such right, shall not elect
to terminate this Lease, Tenant shall not be required to repair, replace or
rebuild any Vacated Building until such time as Tenant shall re-sublet the same
to a new sub-tenant; provided, however, that Tenant shall so proceed after the
expiration of one hundred and eighty (180) days following such damage or
destruction even if the Vacated Building shall not yet have been re-sublet.
(3) In the event of a termination of this Lease as provided for in this
section, Tenant covenants and agrees, upon notice from the Landlord, to remove
all debris (including the remaining portion of any building so destroyed)
remaining upon the Premises as a result of such fire or destruction. All such
work shall be done at the cost and expense of the Tenant.
SECTION 32. EMINENT DOMAIN:
(a) If the whole of the Premises shall be taken for any public or
quasi-public use under any statute or by right of eminent
21
domain or by private purchase in lieu thereof, then this Lease shall
automatically terminate as of the date that possession has been taken. If only
a part of the Premises shall be taken (or so purchased) and as a result thereof
one or more subleases covering more than fifteen (15%) per cent of the total
aggregate ground floor area in the buildings on the Premises shall be
terminated automatically or by the sub-tenant thereunder or by Tenant, then
Tenant shall have the right, but not the obligation, to terminate this Lease by
giving written notice of termination to Landlord on or prior to the date one
hundred and eighty (180) days after the date of such taking (or purchase), and
upon the giving of such a notice of termination the term of this Lease shall
expire and come to an end on the last day of the calendar month in which such
notice shall be given, with the same force and effect as if said day had been
originally fixed herein as the expiration date of the term of this Lease. In
the event the Lease shall terminate or shall be terminated, the rental shall,
if and when necessary, be adjusted to the day of the taking (or purchase) and
neither party shall have any further rights or liabilities hereunder.
(b) In the event of such a taking (or purchase) whereby this Lease
shall terminate or shall be terminated under the provisions of paragraph (a) of
this SECTION 32, then, the parties hereto agree to cooperate in applying for
and in prosecuting any claim for such taking and further agree that the
aggregate award, net after deducting all expenses and costs, including
attorney's fees, incurred in connection therewith, payable to both Landlord and
Tenant as their interests shall be determined in the manner hereinafter set
forth (or, if required, to any leasehold mortgagee who shall be the holder of a
leasehold mortgage in accordance with the provisions of SECTION 36 hereof) and
distributed as follows:
(1) The net award available for distribution (herein called
the "Fund") shall be divided between Landlord and Tenant as follows:
(A) Landlord shall be paid an amount out of the
Fund equal to "Landlord's Minimum Share" (as
22
defined in part (B) of this subparagraph (1)) and Tenant shall, subject to the
rights of Leasehold Mortgagee, be paid an amount out of the Fund equal to
"Tenant's Minimum Share" (as defined in part (C) of this subparagraph (1));
provided, however, that if the Fund shall be less than the sum of Tenant's
Minimum Share and Landlord's Minimum Share, then, Landlord shall be paid a
fraction of the Fund, the numerator of which shall be Landlord's Minimum Share,
and the denominator of which shall be the sum of Landlord's Minimum Share and
Tenant's Minimum Share, and Tenant shall be paid the balance of the Fund
remaining after such payment to Landlord.
(B) The term "Landlord's Minimum Share", as used in
this subparagraph (1), shall mean an amount equal to Landlord's total amount of
capital invested in the property, including but not limited to costs of
acquisition, improvements,- and other expenses, less the total net proceeds, if
any, therefore received by Landlord, of any (and all) prior partial takings (or
purchases or deeds of dedication in lieu of any such takings or purchase).
(C) The term "Tenant's Minimum Share", as used in
this subparagraph (1) , shall mean an amount equal to Tenant's total costs and
expenses, of every kind and nature, not compensated for by insurance, incurred
and paid in connection with and for the construction, repair and replacement
(if any) of all buildings and other improvements on the Premises at any time
and from time to time (herein called "Tenant's building costs") , less the
total net proceeds, if any, theretofore received by Tenant, (or any Leasehold
Mortgagee) of any (and
23
all) prior partial takings (or purchases). In the event that Tenant shall at
the time of such taking (or purchase) be unable to certify and establish the
amount of Tenant's building costs or shall, in its sole discretion, elect not
to attempt to certify or otherwise establish the same, Tenant's building costs
shall, at Tenant's sole option, be either: (i) deemed to be an amount equal to
Twenty ($20.00) Dollars multiplied by the aggregate number of square feet of
floor space at any time and from time to time constructed (including major
repairs and replacements not compensated for by insurance or condemnation
proceeds) on the Premises by Tenant; or (ii) determined by arbitration in
accordance with the rules then obtaining of the American Arbitration
Association.
(D) If the Fund shall exceed the sum of the
Landlord's Minimum Share and the Tenant's minimum Share, the amount of such
excess shall be divided between Landlord and Tenant as follows:
(i) Landlord shall receive that percentage of
such excess as shall be determined by multiplying one (1%) per cent times the
number of years (or a major fraction thereof) elapsed under this Lease as of
the date that possession has been taken by the condemning authority; and
(ii) Tenant shall receive the balance of such
excess.
(c) (1) If any part of the Premises shall be so taken (or so
purchased) and this Lease shall not terminate or shall not be terminated under
the provisions of paragraph (a) of this SECTION 32, then Tenant shall,, at its
own cost and expense, make all repairs to the affected buildings and
improvements on the Premises to the extent necessary to restore the same to a
complete
24
architectural unit, provided, however, that Tenant shall not be obligated to
spend an amount in excess of the proceeds of the award available to Tenant for
such purposes as hereinafter provided.
(2) All compensation available or paid to Landlord and
Tenant upon such a partial taking (or purchase) shall be paid to Tenant for the
purpose of paying towards the cost of such restoration, or, in the event that
the parties hereto agree that only a portion of the aggregate award is
sufficient to so restore, then only such portion as agreed upon shall be paid
to Tenant for such portion as agreed upon shall be paid to Tenant for such
purpose and the balance shall be distributed pursuant to subparagraph (3)
hereof.
(3) All compensation available or paid to Landlord and
Tenant upon such a partial taking (or purchase) in excess of the amount thereof
needed by Tenant to repair and restore the buildings and improvements shall be
distributed in the same manner as is provided in subparagraph (1) of paragraph
(b) of this SECTION 32, except that Landlord's Minimum Share shall be reduced
by a proportion corresponding to the proportion of the total square footage of
land of the Premises so taken (or purchased) and Tenant's Minimum Share shall
be reduced by a proportion corresponding to the proportion of the total floor
area of all buildings on the Premises so taken (or so purchased) . In the event
that any payment out of such compensation shall be paid to Landlord, then the
rent payable hereunder shall be adjusted by a fraction equivalent to the square
footage of the property taken divided by the total square footage of the
original property, plus any amounts paid to Landlord pursuant to subparagraph
(D) of paragraph (b) of this SECTION 32, less the total net proceeds,
theretofore received by Landlord, of any (and all) prior partial takings (or
purchases or credits applicable to Landlord deeds of dedication in lieu of any
such partial takings or purchases).
SECTION 33. UTILITY EASEMENTS:
Tenant shall have the right to enter into reasonable agreements with
utility companies creating easements in favor of
25
such companies as are required in order to service the subtenants of buildings
on the Premises, and Landlord covenants and agrees to consent thereto and to
execute any and all documents, agreements and instruments, and to take all
other actions,, in order to effectuate the same, all at Tenant's cost and
expense.
SECTION 34. MORTGAGES:
Landlord hereby covenants and agrees that during the term of this Lease
(and extensions thereof), Landlord shall not have the right or power to
mortgage or otherwise create any security interest in or other liens or
encumbrances upon or affecting the fee interest in the Premises, or the
buildings, improvement, fixtures, equipment or other.property thereon, or any
part thereof superior to the Tenant's leasehold estate created pursuant to the
terms of this Lease, and any such mortgage shall be subject to all of the
terms, covenants and conditions in this Lease set forth.
SECTION 35. SUB-SUBLEASES:
(a) If for any reason this Lease and the leasehold estate of Tenant
hereunder is terminated by Landlord by summary proceedings or otherwise in
accordance with the terms of this Lease, Landlord covenants and agrees that
such termination of this Lease shall not result in a termination of any sub-
sublease affecting the Premises and that they shall all continue for the
duration of their respective terms and any extensions thereof as a direct lease
between Landlord hereunder and the sub-sublessee thereunder, with the same
force and effect as if Landlord hereunder had originally entered into such sub-
sublease as Landlord thereunder, provided that any such sub-sublease will not
place upon the landlord thereof, any obligations or liabilities which are
substantially more onerous than those commonly placed on landlords of sub-
subleases of similar premises in similar locations for similar use. Such Non-
Disturbance Agreement shall not cover any period beyond the term of this Lease.
Any such sub-sublessee shall not be named or joined in any action or
proceedings by Landlord under this Lease to recover possession of the Premises
or any part thereof, unless there shall be a default under such sub-sublease
and Tenant's time
26
to cure has expired. Landlord agrees that, upon request, it will execute such
Non-Disturbance or Attornment Agreements as required pursuant to the provisions
of this SECTION 35.
(b) Notwithstanding the generality of the foregoing, Landlord shall
only be required to execute, acknowledge and deliver the agreements referred to
in paragraph (a) of this SECTION 35 upon request by the respective sub-
sublessees, if at the time of each such request the sum total of all annual
rentals and other annual charges then provided for in all such sub-subleases in
force at the time of each such request (including, but not limited to, annual
charges and payments for or in lieu of taxes or tax increases,, parking
maintenance charges and the like) sh,all be at least equal to the annual rent
and additional rent, taxes and other charges then payable under this Lease.
(c) Notwithstanding the provision (a) of this SECTION 35, Tenant
agrees that each and every sub-sublease as to which Tenant shall request
Landlord hereunder to execute an agreement of the nature set forth in
subparagraph (a) hereof (hereinafter referred to as "non-disturbance
agreement") shall be submitted to Landlord and Landlord shall have the right to
approve or disapprove said sub-sublease, provided, however, that Landlord
agrees to approve any such sub-sublease meeting the tests set forth in (a) of
this SECTION 35, and in any event Landlord agrees not to unreasonably withhold
or delay its approval as to any other sub-sublease so submitted for approval.
In the event Landlord shall disapprove any such sub-sublease presented to it
and Tenant shall, within ten (10) days after receipt of any such disapproval
object thereto, either Landlord or Tenant may submit the matter to arbitration
in accordance with the rules of the American Arbitration Association then
prevailing (except that all of the arbitrators shall be residents of or have
their principal place of business within the greater Virginia Beach area), and
the decision of the American Arbitration Association with reference thereto
shall be binding upon both parties. Nothing herein shall be construed to
prevent or prohibit Tenant from entering into any sub-subleases with any sub-
27
subtenants in its sole discretion from time to time; this paragraph (c) of this
SECTION 35 being applicable only to those situations where Tenant requests a
non-disturbance agreement from Landlord with reference to any sub-subtenant.
(d) Landlord shall, upon request, execute, acknowledge and deliver
such agreements evidencing the non-disturbance agreement as required and
approved pursuant to subparagraph (a) and subparagraph (c) of this SECTION 35,
and if Landlord shall fail to do so within ten (10) days after submission
thereof by Tenant, Landlord hereby irrevocably appoints Tenant its attorney in
fact so as to execute, acknowledge and deliver same in Landlord's place and
stead.
(e) Nothing contained in this SECTION 35 shall require Landlord to
initially construct for the benefit of Tenant o r any sub-subtenant a new
building, its appurtenances or parking lot upon the demised Premises, and the
obligation of Landlord (in the event any such sub-sublease shall become a
direct lease between Landlord hereunder and the sub-sublessee under any such
sub-sublease) to reconstruct, replace or repair shall be limited to the amount
of fire insurance proceeds as may be available for such purpose.
SECTION 36. LEASEHOLD MORTGAGES:
Tenant and every successor and assign of Tenant is hereby given the
right by Landlord, without Landlord's prior written consent, to mortgage its
interest in this Lease and all sub-subleases under a first leasehold mortgage,
and/or under a purchase money first or second leasehold mortgage in connection
with any sale of such interest, and assign this Lease and all sub-subleases as
collateral security for such mortgage, upon condition that all rights acquired
under such mortgage shall be subject to each and all of the covenants,
conditions and restrictions set forth in this Lease, and to all rights and
interests of Landlord herein, none of which covenants, conditions or
restrictions is or shall be waived by Landlord by reason of the right given so
to mortgage such interest in this Lease, except as expressly provided herein.
If Tenant and/or Tenant's successors and assigns shall mortgage this leasehold
and if the holder of such mortgage shall, within twenty
28
(20) days of its execution send to Landlord a true copy thereof, together with
written notice specifying the name and address of the mortgagee and the
pertinent recording date with respect to such mortgage, Landlord agrees that so
long as any such leasehold mortgage shall remain unsatisfied of record or until
written notice of satisfaction is given by the holder to Landlord, the
following provisions shall apply:
(a) There shall be no cancellation, surrender or modification of
this Lease by joint action of Landlord and Tenant without the prior consent in
writing of the leasehold mortgagee;
(b) Landlord shall, upon serving the Tenant with any notice of
default, simultaneously serve a copy of such notice upon the holder of such
leasehold mortgage. The leasehold mortgagee shall thereupon have the same
period, after service of such notice upon it, to remedy or cause to be remedied
the defaults complained of, and Landlord shall accept such performance by or at
the instigation of such leasehold mortgagee as if the same had been done by
Tenant;
(c) Anything herein contained notwithstanding, while such leasehold
mortgage remains unsatisfied of record, or until written notice of satisfaction
is given by the holder to the Landlord, if an event or events of default shall
occur which under any provision of this Lease shall entitle Landlord to
terminate this Lease, and if before the expiration of ten (10) days from the
date of service of notice of termination upon such leasehold mortgagee such
leasehold mortgagee shall have notified Landlord of its desire to nullify such
notice and shall have paid to Landlord all rent and additional rent and other
payments herein provided for, and then in default, and shall have complied or
shall commence the work of complying with all of the other requirements of this
Lease,, except as provided in paragraph (f) of this SECTION 36, if any are
29
then in default,, and shall prosecute the same to completion with reasonable
diligence, then in such event Landlord shall not be entitled to terminate this
Lease and any notice of termination theretofore given shall be void and of no
effect;
(d) If the Landlord shall elect to terminate this Lease by reason
of any default of Tenant, the leasehold mortgagee shall not only have the right
to nullify any notice of termination by curing such default, as aforesaid, but
shall also have the right to postpone and extend the specified date for the
termination of this Lease as fixed by Landlord.in its notice of termination,
for a period of not more than six (6) months, provided that such leasehold
mortgagee shall cure or cause to be cured any then existing money defaults and
meanwhile pay the rent, additional rent and comply with and perform all of the
other terms, conditions and provisions of this Lease on Tenant's part to be
complied with and performed, other than past nonmonetary defaults, and provided
further that the leasehold mortgagee shall forthwith take steps to acquire or
sell Tenant's interest in this Lease by foreclosure of the mortgage or
otherwise and shall prosecute the same to completion with all due diligence.
If at the end of said six (6) month period the leasehold mortgagee shall be
actively engaged in steps to acquire or sell Tenant's interest herein, the time
of said mortgagee to comply with the provisions of this SECTION 36 shall be
extended for such period as shall be reasonably necessary to complete such
steps with reasonable diligence and continuity;
(f) Landlord agrees that in the event of termination of this Lease
by reason of any default by Tenant other than for nonpayment of rent or
additional rent and other payments herein provided for, that Landlord will
enter into a new lease of the Premises with the holder of the mortgage on this
Lease, or its nominee or purchaser, for the remainder of the term, effective as
of the date of such
30
termination, at the rent and additional rent and upon the terms, provisions,
covenants and agreements as herein contained and subject only to the same
conditions of title as this Lease is subject on the date of the execution
hereof, and to the rights, if any, of any parties then in possession of any
part of the leased premises, provided:
(1) Said mortgagee shall make written request upon Landlord
for such new lease within fifteen (15) days after the date of such termination
and such written request is accompanied by payment to Landlord of sums then due
to Landlord under this Lease;
(2) Said mortgagee shall pay to Landlord at the time of the
execution and delivery of said new lease any and all sums which would at the
time of the execution and delivery thereof be due under this Lease but for such
termination, and in addition thereto any expenses, including reasonable legal
and attorneys' fees, to which Landlord shall have been subjected by reason of
such default;
(3) Said mortgagee or its nominee or purchaser shall
perform and observe all covenants herein contained on Tenant's part to be
performed and shall further remedy any other conditions which the prior Tenant
was obligated to perform under the terms of this Lease; and upon execution and
delivery of such new lease, any sub-subleases which may have theretofore been
assigned and transferred by Tenant to Landlord as security under this Lease,,
shall thereupon be deemed to be held by Landlord as security for the
performance of all of the obligations of Tenant under the new lease;
(4) Landlord shall not warrant possession of the leased
premises to Tenant under the new lease;
(5) Such new lease shall be expressly made subject to the
rights, if any, of Tenant under the terminated
31
lease aforesaid;
(6) The tenant under such new lease shall have the same
right, title and interest in and to the buildings and improvements on the
leased premises as Tenant had under this Lease;
(g) Nothing herein contained shall require the leasehold mortgagee
or its nominee or purchaser to cure any default of Tenant referred to in
SECTION 16 hereof.
(h) Landlord agrees to promptly after submission execute,
acknowledge and deliver any agreements modifying this Lease requested by any
leasehold mortgagee, provided that such modification does not decrease Tenant'
s obligations or decrease Landlord's rights hereunder.
(i) Landlord shall, upon request, execute, acknowledge and deliver
to each leasehold mortgagee an agreement, prepared at the sole cost and expense
of Tenant, in form satisfactory to such leasehold mortgagee, between Landlord,
Tenant and leasehold mortgagee, agreeing to all of the provisions of this
SECTION 36.
(j) Any proceeds from insurance policies or arising from a
condemnation are to be held and distributed by any leasehold mortgagee at such
time and shall be distributed by it pursuant to the provisions of this Lease,
with its rights, as against Tenant, to apply to the mortgage debt all or any
part of Tenant's share of such proceeds pursuant to such mortgage, subject,
however, to Tenant's obligations as set forth in (3) of (b) of SECTION 31.
SECTION 37. FORCE MAJEURE:
In the event that Landlord or Tenant shall be delayed or hindered in or
prevented from the performance of any act (other than the payment of rent)
required hereunder by reason of strikes, lock-outs, labor troubles, inability
to procure materials, failure of power, restrictive governmental laws or
regulations, riots, insurrection, war or other reason beyond their control,
then performance of such act shall be excused for the period of the delay and
the period for the performance of any such act shall be extended for a period
equivalent to the period of such delay.
IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands and seals the day and year first above written.
WITNESS LENRICH ASSOCIATES, L.L.C.
/s/ M.W. Lipschutz /s/ Richard M. Cohen
- ------------------------- ------------------------------------
BY: Richard M. Cohen, a Member by
David R. Rogol, as attorney-in-fact
INDIAN RIVER FAMILY GOLF CENTERS, INC.
/s/ John M. Mercer /s/ Robert J. Krause
- ------------------------- ------------------------------------
John M. Mercer BY: Robert J. Krause
Vice President
STATE OF NEW YORK
CITY/COUNTY OF NEW YORK, to wit
The foregoing instrument was acknowledged before me in the City/County
of New York, State of New York, this 19th day of May, 1996 by David R. Rogol,
to me known to be the person described in and appointed attorney-in-fact in and
by a certain power of attorney dated February 26, 1996, and executed by Richard
M. Cohen, a Member of Lenrich Associates, L.L.C., a New York limited liability
company, on behalf of the limited liability company.
My commission expires: Roseann Maralli
Notary Public State of New York
Commission Expires May 30, 1996
/s/ Roseann Marrali
----------------------------------
Notary Public
STATE OF NEW YORK
CITY/COUNTY OF NEW YORK, to wit
The foregoing instrument was acknowledged before me in the City/County
of New York, State of New York, this 20th day of May, 1996 by Robert J. Krause,
as vice President of Indian River Family Golf Centers, Inc., a Delaware
corporation, on behalf of the corporation.
My commission expires: Roseann Maralli
Notary Public State of New York
Commission Expires May 30, 1996
/s/ Roseann Marrali
----------------------------------
Notary Public
EXHIBIT "A"
LEGAL DESCRIPTION OF LEASEHOLD C - 1
BEGINNING AT A PIN FOUND on the easterly right-of-way line of Military Highway
and the common boundary line of Leasehold C-1 and Leasehold D as shown on
"ALTA/ACSM LAND TITLE SURVEY OF A PORTION OF TRACT "A" AS DESCRIBED IN (D.B.
3089, PG. 0333) FOR INDIAN RIVER FAMILY GOLF CENTERS, INC., KEMPSVILLE BOROUGH,
VIRGINIA BEACH, VIRGINIA" dated 5/16/96; thence along the easterly right-of-way
line of Military Highway North 30 degrees 28' 42" East, 41.94' to a point;
thence leaving the right-of-way line of Military Highway, South 59 degrees 31'
18" East, 138.42' to a point; thence South 13 degrees 12' 32" West, 207.36' to
a point; thence South 59 degrees 32' 58" East, 40.00' to a point; thence South
05 degrees 59' 38" East, 250.00' to a point; thence North 84 degrees 00' 22"
East, 150.00' to a point; thence North 05 degrees 59' 38" West, 63.29' to a
point; thence North 84 degrees 00' 22" East, 533.61' to a point; thence South
08 degrees 32' 34" East, 66.75' to a point; thence South 58 degrees 55' 01"
East, 190.88' to a point; thence South 15 degrees 58' 59" East, 172.26' to a
point on the southerly right-of-way line of Old Providence Road; thence along
the southerly right-of-way of Old Providence Road the following courses and
distances, South 72 degrees 34' 51" West, 50.19" to a point; thence South 39
degrees 16' 51" West, 206.36 to a point; thence along a curve to the right
having a central angle of 38 degrees 47' 05", a radius of 268.18', an arc
length of 181.54', and a chord bearing of South 58 degrees 40' 24" West to a
point; thence South 78 degrees 03' 56" West, 494.57' to a point; thence leaving
the southerly right-of-way line of Old Providence Road, North 54 degrees 09'
37" West, 56.74' to a point; thence along a curve to the right having a central
angle of 72 degrees 54' 43", a radius of 100.00', an arc length of 127.26', and
a chord bearing of North 61 degrees 02' 34" West to a point; thence North 24
degrees 35' 13" West, 189.24' to a point; thence North 10 degrees 09' 22" West,
251.38' to a point; thence North 08 degrees 07' 02" West, 36.13' to a point;
thence North 05 degrees 30' 00" West, 45.67' to a point; thence North 12
degrees 06' 32" West, 35.76' to a point; thence North 14 degrees 46' 16" West,
88.15' to a point; thence North 06 degrees 45' 05" West, 39.14' to a point;
thence North 00 degrees 41' 38" West, 40.21' to a point; thence North 06
degrees 17' 39" East, 65.80' to a point; thence along a curve to the left
having a central angle of 73 degrees 05' 39", a radius of 13.01', an arc length
of 16.59', and a chord bearing of North 30 degrees 15' 09" West to a point;
thence continuing along a curve to the left having a central angle of 18
degrees 04' 48", a radius of 39.31', an arc length of 12.40', and a chord
bearing of North 75 degrees 50' 23" West to a point; thence North 05 degrees
07' 14" East, 39.28' to a point on the easterly right-of-way line of-Military
Highway; thence leaving the easterly right-of-way line of Military Highway,
South 47 degrees 28' 09" East, 95.35' to a point; thence South 59 degrees 31'
18" East, 66.00' to a point; thence North 72 degrees 10' 42" East, 47.00' to a
point; thence North 13 degrees 12' 32" East, 176.79 to a point; thence North 59
degrees 31' 18" West, 138.02' to a point on the easterly right-of-way line of
Military which marks the POINT OF BEGINNING.
The above described parcel contains 13.825 acres.
EXHIBIT "B"
Refer to Exhibit C, Paragraph B
EXHIBIT C
The Premises are hereby rented and leased by Landlord to Tenant
together with the following rights and easements:
A. During the term of the Lease and all renewals thereof, Tenant
shall have a nonexclusive right and easement to install, maintain, repair and
replace,, at Tenant's expense, pumps, underground water lines and other
equipment on, over and across the real property adjacent to the Premises to the
west ("Parcel C-2") for the purpose of pumping water from the pond located on
Parcel C-2 to the Premises for irrigation. Landlord shall cause the lease
and/or sublease of Parcel C-2 to contain the terms of this easement.
B. During the term of this Lease and all renewals thereof, Tenant
shall have all of the rights, easements and privileges of Landlord (as to the
Premises) under that certain Declaration of Easements, dated August 7, 1967,
recorded in the Clerk's Office, Circuit Court, City of Virginia Beach,
Virginia, in Deed Book 1024, page 272, as amended by Declaration, dated
February 1, 1978, recorded in the aforesaid Clerk's Office in Deed Book 1789,
page 555 (collectively, the "Declaration of Easements"). Tenant shall enjoy
such rights, easements and privileges under the Declaration of Easements
irrespective of the termination of any of the other leases or subleases
benefitted or burdened by the Declaration of Easements.
