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3276 To authorize an agreement with The Tillsonburg Golf and Country Club for the : leasing of land. :THE CORPORATION OF THE TOWN OF TILLSONBURG BY-LAW NUMBER 3276 A BY-LAW to authorize an agreement with The Tillsonburg Golf and Country Club for the leasing of land. WHEREAS The Town of Tillsonburg is desirous of entering into a ]case agreement with the Tillsonburg Golf and Country Club.; THEREFORE the Council of the Town of Tillsonburg enacts as follows: 1. TI -IAT Schedule "A" attached hereto forms part of this by-law; 2. THAT the Mayor and Clerk be hereby authorized to execute the attached agreement marked as Schcdulc'"A" on behalf of the Corporation of the Town of.'Tillsonburg. READ A FIRST AND SECOND TIME THIS 9"' DAY OF July, 2007. READ ATijIRq-AND FINAL TIME AND PASSED THIS 10th DAY OF December, 2007. AYOR-Stephen Molnar CLERK -Michael Graves UNDERTAKING & INDEMNITY TO: The Tillsonburg Golf and Country Club, Limited AND TO: D. Bradley Bennett, Solicitor RE: The Tillsonburg Golf and Country Club, Limited lease from The Corporation of the Town of Tillsonburg OUR FILE #1307-066 IN CONSIDERATION of the closing of the above -noted transaction, and in consideration of The Tillsonburg Golf and Country Club, Limited entering into a Lease Agreement with the Corporation of the Town of Tillsonburg, in accordance with Schedule "A" attached, the Corporation of the Town of Tillsonburg, being the undersigned herein, hereby undertakes and agrees to obtain, within twelve (12) months of the date of this Undertaking, clear and absolute title to all lands described in Schedule "B" of said Lease Agreement attached hereto. The Corporation of the Town of Tillsonburg further undertakes and agrees to indemnify and save harmless The Tillsonburg Golf and Country Club, Limited, from and against any and all losses, diminution of value, costs, expenses, claims, suits, demands, actions, causes of action and liability, (including but not limited to, purchase costs and legal fees associated with securing clear and absolute title to all the lands described in Schedule "B" of said Lease Agreement attached hereto), that may be sustained by The Tillsonburg Golf and Country Club, Limited, should the Corporation of the Town of Tillsonburg fail to comply with this Undertaking. DATED at Tillsonburg, Ontario this day of April, 2008. The Corporat' of the Town of Tillsonburg F, ti per: Stephen Molnar, Mayor Michael G es, Clerk (We have authority to bind the Corporation.) ["Type text] LEASE Made this day of , 2008. BETWEEN THE CORPORATION OF THE TOWN OF TILLSONBURG Of the First Part Hereinafter referred to as the "Lessor" - and - THE TILLSONBURG GOLF AND COUNTRY CLUB LIMITED Of the Second Part Hereinafter referred to as the "Lessee" WHEREAS the Lessor owns property (collectively referred to as the "Property") shown as: Parts 1,2,3,4,5,6,7,8,9,10,11, 12, 13, 14, 15 and Part 16 of draft Reference Plan 41R- , attached hereto as Schedule B. AND WHEREAS the Parties have entered into a Letter of Intent attached as Schedule "A" whereby the Lessor shall lease to the Lessee certain lands on the Property. AND WHEREAS the Parties have agreed to enter into this agreement (the "Lease") to fulfill the terms of the Letter of Intent whereby the Lessor will grant a lease to the Lessee over the Property (the "Premises") as outlined in yellow and described on Schedule "B". AND WHEREAS the Lessor will grant a lease over the adjacent property (the "Adjacent Property") as outlined in red and described on Schedule "B". AND WHEREAS the Parties have agreed to enter into this Lease on the understanding and intention that upon the expiry of the Term of this Lease the Lessee shall purchase the Premises and the Adjacent Property from the Lessor in accordance with the terms and conditions contained in this Lease and its attached Schedules. AND WHEREAS the Lessee desires to use the Premises and Adjacent Property to expand its existing 9 hole golf course. The existing golf course is a 9 hole course with club house, pro shop and associated buildings (the "Existing Golf Course") and carries on business as the Tillsonburg Golf & Country Club (the "Golf Club"). AND WHEREAS the Lessor may, at the option of the Lessor, use a portion of the Premises and Adjacent Property for the purpose of constructing and maintaining freely accessible and public trails (the "Trails"), such Trails being compatible with golf course design and playability. In consideration of the covenants, agreements, warranties and payments herein set forth and provided for, the Parties hereto respectively covenant and agree as follows: A. GRANT OF LEASE 1. (i) The Lessor leases the Premises to the Lessee: -2- (a) at the Rent set forth in Schedule "C"; (b) for the Term set forth in Section C; and (ii) the Lessor further leases the Adjacent Property to the Lessee in accordance with section S.(7) and schedule G herein; (iii) subject to the conditions and in accordance with the covenants, obligations and agreements herein. (2) The Lessor covenants that it has the right to grant the leasehold interest in the Premises and Adjacent Property free from encumbrances. B. RENT (1) Rent means the amounts payable by the Lessee to the Lessor pursuant to this Section. (2) The Lessee covenants to pay to the Lessor during the Term of this Lease rent as calculated pursuant to Schedule "C", and any other applicable services tax which may accrue on account of the Lessor collecting rent, month) in advance on the 1st da of each and eve month. payable Y Y _ rY Rent shall be aid b the Lessee on the 1Stda of each and eve month (3) p Y Y every during the Term. (4) The Lessee further covenants to pay all other sums required by this Lease to be paid by it and agrees that all amounts, payable by the Lessee to the Lessor or to any other Party pursuant to the provisions of this Lease shall be deemed to be additional rent ("Additional Rent") whether or not specifically designated as such in this Lease and shall be paid by the Lessee at the prescribed due date; (5) The Lessor and the Lessee agree that it is their mutual intention that this Lease shall be a completely carefree triple net lease for the Lessor, and that the Lessor shall not, during the Term of this Lease, be required to make any payments in respect the Premises: (a) and to effect the said intention of the Parties the Lessee promises to pay the following expenses related to the Premises to the Lessor as Additional Rent; (i) business taxes and licenses; (ii) all utilities, if any (including but not limited to gas, electricity, water, heat, air-conditioning). Save and except if caused by the negligent act or omission of the Lessor, its servants, employees, agents, customers or invitees, the Lessor shall not be liable for any loss of business by the Lessee or for any injury to the Lessee, its servants, employees, agents, customers and invitees or for any injury or damage to the Premises or to any property of the Lessee or to any property of any other person, firm or corporation on or about the Premises caused by an interruption or failure in the supply of utilities to the Premises; (iii) services supplied to the Premises, provided that this does not in any way oblige the Lessor to provide any services, unless otherwise agreed in this Lease; (iv) property taxes and rates, duties and assessments. Such taxes shall include all municipal, provincial and/or federal levies of -3 - whatever kind and include, but are not limited to, all special levies, rates, improvements and school taxes (including separate schools) but exclude any personal income taxes of the Lessor (collectively the "Taxes"). The Lessor hereby warrants that during the Term it will abate the incremental increased taxes for local purposes on the Premises in the amount of $100,000.00. By way of example, if the property taxes increase from $2,000 to $10,000 the $8,000 increase will be abated until the abatements total $100,000. This abatement shall apply only in respect of taxes due to the Corporation of the Town of Tillsonburg, and shall not apply in respect of County, school, or other taxes. (v) maintenance in accordance with the terms of Section F; (vi) insurance premiums with respect to insuring the Premises in accordance with Section H; (vii) sales tax, and any other taxes imposed on the Lessor respecting the Rent; (viii) landscaping; (ix) snow removal and yard maintenance as required; and, (x) recycling and garbage collection and/or removal; (b) and for greater certainty, Additional Rent shall not include: (i) depreciation and allcosts that are capital costs in general accounting practice; (ii) interest or penalties on ..late payments charged by Lessor, and costs caused by a negligent or unreasonable act of the Lessor or a person for whom the Lessor is responsible; and, (iii) costs the. Lessor has the right to recover under a contract to which Lessee is. no a Party; (c) and it is the intention of the Parties that unless the preceding costs will be invoiced directly to the Lessee and paid directly by the Lessee without involvement of the Lessor (unless otherwise appropriate or required given the public status of the Lessor) and the Lessee shall pay such accounts as and when they become due and shall produce proof of payment to the Lessor promptly if requested to do so; (i) but the Lessee may contest or appeal any such charges at the Lessee's own expense provided that such appeal or contestation does not adversely affect the business, reputation or credit of the Lessor. (d) and the Lessee hereby agrees to indemnify and protect the Lessor from any liability accruing to the Lessor in respect of the expenses payable by the Lessee as provided for herein; (e) and if the Lessee fails to make any of the payments required by this Lease then the Lessor may make such payments and charge to the Lessee as Additional Rent the amounts paid by the Lessor; (i) and if such charges are not paid by the Lessee on demand the Lessor shall be entitled to the same remedies and may take the same steps for recovery of the unpaid charges as in the event of Rent in arrears. -4- C. TERMS AND POSSESSION (1) The Lessee shall have possession of the Premises for a period of twenty-five years, commencing on the 1 st day of September, 2007 and ending on the 31 St day of August, 2032 (the "Term"). The Parties hereby agree that the Term does not violate the Planning Act by virtue of section 50(3)(c). The lease payments Shall commence May 1, 2009 as outlined in Schedule C. (2) The Parties agree that at the end of the Term the Lessee shall purchase the Premises in accordance with Schedule "D" as attached to this Lease. (3) Subject to the Lessor's rights under this Lease, and as long as the Lessee is in good standing, the Lessor covenants that the Lessee shall have quiet enjoyment of the Premises during the Term without any interruption or disturbance from the Lessor or any other person or persons lawfully claiming through the Lessor, with the exception of the use of the Trails and the development of the Trails, which shall be designed, constructed, and maintained in a manner compatible with golf course design and playability. The timing of construction of the trails will be done in consultation with the Golf Course representatives. (4) The Parties agree that the Lessee's possession of the Premises is subject to the Lessee permitting members of the public to gain access to and use the Trails. At no time shall the Lessee restrict the use of the Trails except with the permission of the Lessor. Such right of the Lessor shall survive termination of this Lease. D. ASSIGNMENT (1) The Lessee shall not assign this Lease or'sublet the whole or any part of the Premises without the consent of the Lessor, which shall not be unreasonably withheld. The consent of the Lessor to any assignment or subletting shall not operate as a waiver of the necessity for consent to any subsequent assignment or subletting.. (2) Any, consent granted by the Lessor shall be conditional upon the assignee, sublessee or occupant executing a written agreement directly with the Lessor agreeing to be bound by all the terms of this Lease as if the assignee, sublessee or occupant had originally executed this Lease as Lessee. (3) Any consent given by the Lessor to any assignment or other disposition of the lessee's interest in this Lease or in the Premises to a related Party shall not relieve the Lessee from its obligations under this lease, including the obligation to pay Rent and Additional Rent as provided for herein. E. USE (1) During the Term the Premises shall not be used by the Lessee for any purpose other than for a golf course without the express consent of the Lessor given in writing. Specifically the Lessee shall only use the Premises to expand its operations of the Golf Club by building more golf holes on the Premises thereby increasing the Golf Club from a 9 -hole course to a 18 -hole course. (2) The Lessee shall not do or permit to be done at the Premises, other than the permitted uses or ancillary to the uses, anything which may: (a) constitute a nuisance; (b) cause damage to the Premises or the Property; -5- (c) make void or voidable any insurance upon the Premises or Property; (d) cause injury or annoyance to occupants of neighbouring premises with the exception of regular golf play during regular hours; (e) constitute a breach of any by-law, status, order or regulation of any municipal, provincial or other competent authority relating to the Premises. The Lessee shall comply promptly with and conform to the requirements of all applicable statutes, laws, by-laws, regulations, ordinances and orders in force at any time during the Term and affecting the condition, equipment, maintenance, use or occupation of the Premises; (f) keep or have on the Premises any article or thing of a dangerous, flammable, or explosive character that might unreasonably increase the danger of fire on the Premises or not in compliance with applicable environmental permits and regulations; (g) release any pollutant or noxious substance that may or will drain or enter the Big Otter Creek or any tributary thereof; (h) no part of the Premises shall be used for any dangerous, noxious or offensive trade or business; (i) It shall not do anything or permit anything to be brought on the Premises which the Lessor may reasonably deem to be a nuisance or environmental hazard; (j) It shall not allow any,ashes, refuse, garbage or other loose objectionable material to accumulate in, or about the Premises and will at all times keep them in a clean and wholesome condition; (k) It shall not carry on any business or operation or permit anything to be done on the Premises which contravenes any provision of the Environmental Protection Act, its amending or successor legislation or any similar legislation whether such legislation is municipal, provincial or federal; and, (I) It shall not store on the Premises or discharge any pollutant, noxious substance, biological hazard or contaminant into the natural environment, as those terms are defined in the Environmental Protection Act, its successor legislation protects and./or policies the environment. F. REPAIR AND MAINTENANCE or any similar legislation that (1) The Lessee covenants that during the Term the Lessee shall keep the Premises in good condition including all alterations made thereto. (2) Upon any determination of this Lease whereby the Lessee must surrender the Premises or the Lessee agrees to surrender peaceably the Premises then it shall vacate the Premises, including any alterations or additions made thereto, to the Lessor in a state of good repair. (3) The Lessee shall immediately give written notice to the Lessor of any substantial damage that occurs to the Premises or Property from any cause. (4) At no time is the Lessor responsible for any repairs, alterations, maintenance, work or services to the Premises for any reason whatsoever other than in accordance with Schedule "E" to this Lease. _ 6 _ G.ALTERATIONS (1) During the Term the Lessee shall not be permitted to make any alterations to the Premises other than for the construction of a golf course and any necessary construction and/or improvement required for the use of the Premises as a golf course provided that Lessee may do so at its own expense if the following conditions are met: (a) before undertaking any alteration or addition which would require a building permit or town approval the Lessee shall submit to the Lessor a plan showing the proposed alterations and the Lessee shall not proceed to make any alteration or addition unless the Lessor has approved the plan; (b) before undertaking any construction, alteration or addition to the Trails the Lessee shall do so only in accordance with Section S(4) and Schedule "E"; and, (c) any and all alterations or additions to the Premises made by the Lessee must comply with all applicable building code standards and by-laws. (2) The Lessee shall be responsible for and pay the cost of any alterations, installations or improvements that any governing authority, municipal, provincial or otherwise, may require to be made in, on or to the Premises with the exception of the gas wells covered under Q1 (b). (3) The Lessee acknowledges that it is solely responsible for the development costs to design and construct the golf course, and any expense to obtain such approvals, which shall include, but are not limited to, the following: all walkways, tunnels, drainage, slope stability, erosion, bridges, archaeological studies, archaeological digs, fish studies, wildlife studies, environmental studies and surveys of any kind. (4) At no time shall the lessor be responsible in any manner for additional expense with respect to the golf course other than that which was agreed to by the Lessor and Lessee except for any damage or expense caused by negligence or intentional actions of the Lessor or its agents members invitees, officers, counsellors, employees or contractees. (5) At no time shall the Lessee alter the Trails, if and when built, without the express written permission of the Lessor. HANSURANCE 1 During the term of the lease the Lessor shall and must maintain with respect to the trail system insurance coverage insuring against liability for bodily harm, death or property damage sustained by third parties in the same amount as required by the lessee in H(2). a. The Lessor covenants to keep the Lessee indemnified and save the Lessee harmless against all claims and demands whatsoever by any person, whether in respect of damage to person or property, arising out of or occasioned by the maintenance, the Use or occupancy of the trail system or any part thereof including all legal costs on a substantial indemnity basis. This indemnity shall include any and all claims by third parties on any part of the trail system provided such third party was or had been intending to be on the trail system for the permitted Use. This indemnity shall not apply if the third party was on the Property for purposes other than the permitted Use. The Lessor further covenants to indemnify the Lessee with respect to any encumbrance on or damage to the trail system occasioned by or arising from the act, default, or negligence of the Lessor, its officers, agents, servants, employees, -7 - contractors, customers, invitees or licensees. The Lessor agrees that the terms contained in this Article shall survive the termination of this Lease notwithstanding any provisions of the Lease to the contrary. (1) During the term the Lessee shall and must maintain with respect to the Premises, insurance coverage insuring against liability for bodily injury, death or property damage sustained by third parties in the amount of ten million ($10,000,000.00) dollars or such other amount that the Lessor deems advisable. (2) The Lessee covenants to keep the Lessor indemnified and save the Lessor harmless against all claims and demands whatsoever by any person, whether in respect of damage to person or property, arising out of or occasioned by the maintenance, the Use or occupancy of the Premises or any part thereof including all legal costs on a substantial indemnity basis. This indemnity shall include any and all claims by third parties on any part of the Property provided such third party was or had been intending to be on the Premises or use the Property or Premises for the permitted Use. This indemnity shall not apply if the third party was on the Property for purposes other than the permitted Use. The Lessee further covenants to indemnify the Lessor with respect to any encumberance on or damage to the Premises occasioned by or arising from the act, default, or negligence of the Lessee, its officers, agents, servants, employees, contractors, customers, invitees or licensees. The Lessee agrees that the terms contained in this Article shall survive the termination of this Lease notwithstanding any provisions of the Lease to the contrary. (3) All insurance policies in this Section shall name the Lessor, where applicable, as an additional insured and he policy shall include a cross -liability endorsement. (4) Upon demand of the Lessor, the Lessee shall provide a copy of any and all policies of insurance including renewals and terms of such policies to the Lessor. If any policy of insurance is cancelled the Lessee shall inform the Lessor without delay of such cancellation and shall obtain a replacement policy without delay on the same term as set out in this Section. (5) The lessee shall save harmless the lessor from any environmental issues that should arise from the regular maintenance and upkeep of the golf course. 1. TERMINATION AT END of TERM (1) (a) At the end of the Term, the Lessee shall purchase the Premises in accordance with Schedule "D" to this Lease; and (b) the Lessee shall purchase the Adjacent Land as described in Schedule T" to this Lease on the terms and conditions as contained in Section S(7) and Schedule "G" to this Lease. J. DEFAULT (1) An Act of Default has occurred when: (a) the Lessee has failed to pay Rent for a period of 90 consecutive days, regardless of whether demand for payment has been made or not:: or (b) the Lessee has breached its covenants (other than the payment of Rent) or failed to perform any of its obligations under this Lease; and (c) the Lessor has given 60 days prior written notice specifying the nature of the default and the steps required to correct it: and -8- (d) the Lessee has failed to correct or take the appropriate action to correct the default as required by the notice; or the Lessee has: (a) become bankrupt or insolvent or made an assignment for the benefit of creditors; (b) had its property seized or attached in satisfaction of a judgment; (c) had a receiver appointed; (d) committed any act or neglected to do anything with the result that a Construction Lien or other encumbrance is registered against the Lessor's property; and the club fails to rectify the situation with in three months; (e) without the consent of the Lessor, made ore ntered into an agreement to make a sale of its assets to which the Bulk Sales Act applies; (f)taken action if the Lessee is a corporation with a( view to its winding up, dissolution or liquidation; an insurance policy is cancelled or not renewed by reason of the use (g) Y p Y or occupation of the Premises, or by reason of non-payment of premiums; or, the Premises are used b an other person or persons, or for any other (h) Y Y purpose than as provided. for in this Lease without the written consent of the Lessor. (3) When an Act of Default on the part of the Lessee has occurred: (a) the current month's Rent if not already paid, together with the next three months' Rent shall become due and payable immediately; the Lessor shall have the ri htto terminate this Lease and to re-enter (b) g the Premises and deal with them as it may choose; and, (c) the Lessor shall have the right to offer to re -let the Premises. The Parties a ree that to rotect the Lessor's rights in event of an Act of (4) g p Default then the Lessee shall, upon signing this Lease, grant the Lessor a Collateral Mortgage and Collateral General Security Agreement securing the performance of the terms of the Lease against the properties owned by the Lessee as described in Schedule "H" to this Lease being the lands used as the Existing Golf Course and the assets used in the operations of the Golf Club. The security shall be subordinate to all institutional and first mortgage lenders that are currently registered or required to build on the Premises. The security shall be discharged upon the end of the Term. If the Lessee commits an Act of Default the Lessee agrees that the Lessor shall have, at its sole option, the right to enter the Premises along with any other lands used asp art of the Golf Club, including the Existing Golf Course, and enforce the security. The Lessee shall provide vacant possession of the Premises, Existing Golf Course and Adjacent Property. The Lessor then shall pay to the Lessee the values as set out in paragraph S(3). The leased lands will not be encumbered at this time and any future financing will require approval of both parties (5) If, because an Act of Default has occurred, the Lessor exercises its right to terminate this Lease and re-enter the Premises prior to the end of the Term the Lessee shall nevertheless be liable for payment of Rent and all other amounts payable by the Lessee in accordance with the provisions of the Lease until the Lessor has re -let the Premises or otherwise dealt with the -9 - Premises 9 - Premises in such manner that the cessation of payments by the Lessee will not result in loss to the Lessor, and the Lessee agrees to be liable to the Lessor, until the end of the Term of this Lease for payment of any difference between the amount of Rent hereby agreed to be paid for the Term hereby granted and the Rent any new Lessee pays to the Lessor. (6) The Lessee covenants that notwithstanding any present or future Act of the Legislature of the Province of Ontario, the Personal property of the Lessee during the term of this Lease shall not be exempt from levy by distress for Rent in arrears: (a) and the Lessee acknowledges that it is upon the express understanding that there should be no such exemption that this Lease is entered into, and by executing this Lease: (b) the Lessee waives the benefit of any such legislative provisions which might otherwise be available to the Lessee in the absence of this agreement; and, (c) the Lessee agrees that the Lessor may plead this covenant as an estoppel against the Lessee if an action is brought to test the Lessor's right to levy distress against the Lessee's property. (7) If and when an Act of Default has occurred, the Lessor chooses not to terminate the Lease and re-enter the Premises, the Lessor shall have the right to take any and all necessary steps to rectify any or all Acts of Default of the Lessee and to charge the costs of such rectification to the Lessee and to recover the costs as Rent. (8) If and when an Act of Default has occurred, the Lessor chooses to waive its right to exercise the remedies available to it under this Lease or at law the waiver shall not constitute condonation of the Act of Default, nor shall the waiver be pleaded as an estoppel against the Lessor to prevent its exercising its remedies with respect to a subsequent Act of Default. No covenant, term, or condition of this Lease shall be deemed to have been waived by the Lessor unless the waiver is in writing and signed by the Lessor. (9) If the Lessor brings an action for collection of Rent or other sums payable under this Lease, or if such sums shall be collected on the demand of a solicitor, or if the Lessor brings an action to compel performance for failure of the Lessee top erform any of them, or if they are performed on the demand of a solicitor then, unless the Lessor shall lose such action, the Lessor shall collect from the Lessee and the Lessee shall pay to the Lessor all reasonable solicitor's fees for such action on a substantial indemnity basis. (10) In addition to any other right, when an Act of Default on the part of the Lessee has occurred, the Lessor may purchase from the Lessor all the Lessor's assets as outlined in S(3). K. ACKNOWLEDGMENT BY LESSEE (1) The Lessee agrees that it will at any time or times during the Term, upon being given at least seventy-two (72) hours prior written notice, execute and deliver to the Lessor a statement in writing certifying: (a) that this Lease is unmodified and is in full force and effect (or if modified stating the modifications and confirming that the Lease is in full force and effect as modified); (b) the amount of Rent being paid; (c) the dates to which Rent has been paid; -10- (d) other charges payable under this Lease which have been paid; (e) particulars of any prepayment of Rent or security deposits; and, (f) particulars of any subtenancies. L. SUBORDINATION AND POSTPONEMENT (1) This Lease and all the rights of the Lessee under this Lease are subject and subordinate to any and all charges against the land, buildings or improvements of which the Premises form part, whether the charge is in the nature of a mortgage, trust deed, lien or any other form of charge arising from the financing or re -financing, including extensions or renewals, of the Lessor's interest in the property. (2) Upon the request of the Lessor the Lessee will execute any form required to subordinate this Lease and the Lessee's rights to any such charge, and will, if required, attorn to the holder of the charge. (3) No subordination by the Lessee shall have the effect of permitting the holder of any charge to disturb the occupation, possession and purchase of the Premises and Adjacent Property by the Lessee as long as the Lessee performs his obligations under this Lease. M. NOTICE An notice re uired or er�mitted tobe given by one party to the other (1) Y q p pursuant to the terms of this Lease shall be in _writing and may be given: To the Lessee to: Club Manager 59 John Pound Road P.O. Box 54 Tillsonburg, Ontario 842-4822 and Club President 59 John Pound Road P.O. Box 54 Tillsonburg, Ontario 842-8184 To the Lessor at: Chief Administrative Officer (currently David Morris) 200 Broadway Second Floor, Suite 204 Tillsonburg, Ontario N4G 5A7 688-3009 ext. 4232 and Treasurer (currently Darrell Eddington 200 Broadway Second Floor, Suite 204 Tillsonburg, ON N4G 5A7 688-3009 ext 4245 (2) The above addresses may be changed at any time by giving ten (10) days written notice. (3) Any notice given by one party to the other in accordance with the provisions of this Lease shall be deemed conclusively to have been received on the date delivered if the notice is served personally or seventy-two (72) hours after mailing if the notice is mailed. N. REGISTRATION (1) The Lessee shall not at any time register notice of or a copy of this Lease on title to the Property of which the Premises form part without consent of the Lessor. (2) The Lessor may, at the Lessor's sole discretion, register notice of or a copy of the Lease on title to the Property of which the Premises form a part. O. HAZARDOUS MATERIALS (1) Environmental Matters The Lessor warrants and represents to the Lessee: a That no hazardous waste or substance has been stored, treated or disposed of, and that there are no underground storage tanks on the property; and b That the property is in full compliance with all applicable laws, rules, regulations, notices, approvals, orders and other requirements. of the Ministry of the Environment, and of any other body g Jurisdiction. havin Compliance shall include environment, health and safety requirements; and c The Lessor has no notice, and is not aware of any actual pg endin or threatened action or proceeding relating to the cond'ition of the - property, or to the violation, actual or alleged, of any environmental, health and safety statutes, regulations or other lawful requirements. (2) At no time shall the Lessor be responsible for any environmental hazard, work order issued by any level of government, department or crown agency relatingto the environment, storage or release of any pollutant, hazard or g noxious substance as stored, caused or brought on the Premises, either intentionally or negligently, by the Lessee or its agents, employees, g contractors, invitees or customers order, judgment or demand for monies made against the Lessor by any court, governmental authority of any kind at any level including municipal and crown agencies or any person corporation, entity or partnership. (3) Each Party agrees to indemnify and hold the other party harmless from and against all claims, causes of action, orders, writs, judgements, work orders, levies, assessments, damages, loss, costs , expense, penalties, fines, law suits, liabilities, legal fees, engineering, remediation costs and consulting fees, arising out of or in any manner connected with hazardous substances, which are caused or created by the indemnifying party on or after the date of this Lease and during any term of this Lease, including, but not limited to, injury or death to person or damage to property. P. INTERPRETATION (1) The words importing the singular number only shall include the plural, and vice versa, and words importing the masculine gender shall include the -12 - feminine gender, and words importing persons shall include firms and corporations and vice versa. (2) Unless the context otherwise requires, the word "Lessor' and the word "Lessee" wherever used herein shall be construed to included the executors, administrators, successors and assigns of the Lessor and Lessee, respectively. (3) When there are two or more Lessees bound by the same covenani:s herein contained, their obligations shall be joint and several. (4) The headings appearing in this Lease have been inserted as a matter of convenience and for reference only and in no way define, limit or enlarge the scope or meaning of this Lease or of any of its provisions. Q. LESSOR'S WORK The Parties a ree the Lessor shall be responsible for the following (the (1) g Lessor's Work): rezonin the Premises to ermit the Premises to be used as a golf (a) g p course; ca in the existin oil wells'on the remises. Any environmen(b) capping g p . problems caused solely by the oil wells or capping the oil wells shall be paid by the Lessor. (c) removal of surface debris. R. DISPUTE RESOLUTION (1) All disputes arisingunder this Lease shall be settled, if possible, by good faith negotiations between the Parties. Notwithstanding anything herein to the contrary, this Article and the dispute resolution contained therein shall not apply l with respect to the payment or Lack of payment of Rent. (2) g an If such negotiations fail to resolve dispute within 30 days after a Party _ Y p hasg iven written notice of the dispute to the other Party or Parties, then such dispute shall be resolved, if possible, by a process of mediation agreed upon by the Parties (acting reasonably) which mediation shall be conducted by a mediator agreed upon by the Parties (acting reasonably). Such mediator shall be an individual with significant experience in and understanding of commercial leases. Such mediation shall be held within 30 days after cessation of negotiations as described in Section R(1). (3) If a dispute cannot be settled within 10 days of the commencement of the mediation described in Section R(2) then the dispute shall be finally settled by arbitration. The Parties shall attempt to agree to an arbitrator but if they cannot then each party shall select one arbitrator and the two arbitrCators shall select a third. The third arbitrator shall solely hear and decide the case and the Parties agree to be bound by the decision. The arbitrator shall have the power to award costs and such arbitration shall occur in Oxford County. S. MISCELLANEOUS 1 ( The parties acknowledge that the Lessee hereby warrants, covenants and ) represents that During the Term the Golf Course and the operations of the p g Lessee shall remain semi -private and maintain its current policies with p respect to permitting non-members to use the Golf Course. In particular, at p ,-. no time during this Lease shall the Lessee restrict the use of the olf Club, Existing Golf Course, Premises or Adjacent Property to members only with -13 - the exception of member events including tournaments or leagues The Lessor acknowledges that any member or non-member is subject to the rules of dress and conduct as set out by the board of directors of the clolf club, failure to do so can result in the expulsion from the property The current golf club is a semi -private club being that members pay dues and receive benefits for being members. There are also open tee -times where non-members can attend and utilize the facilities of the course. If, during the courr►e of the Lease the Lessee changes the status of the course to a private course all debts and payments due to the Lessor shall become due. This section does not apply to the use by the public of the Trail system, which is governed by schedule E. (2) The Parties agree that during the Term and after the termination of the Lease the Parties shall continue to renew the Tobogganing Lease in similar form as Attached as Schedule "I" to this Lease. The terms of this paragraph shall survive termination and the end of the Term. (3)At any time during the Term, if the Lessee decides to sell the Existing Golf Course, the Golf Club, substantially all of the assets of the Lessee, or lease the lands used as the Existing Golf Course, the `Parties hereby agree that the Lessor shall have the first right to purchase all assets of the Lessee including an and all lands and buildings used for the existing Golf Club as described Y g in Schedule "H" for the sum of one million, four hundred and fifty thousand dollars $1,450,000.00 ,and said amount shall not be indexed annually by the consumer price index or otherwise altered in any manner except as contained herein. The Lessor shall terminate the Lease and reimburse the Lessee for all costs paid by the Lessee to improve the Premises , Adjacent Property and existing Golf Club. To calculate the costs of improvement the p Y g Lessee shallp rovide audited financial statements to the Lessor for the improvements to the Premises ,Adjacent Property and existing Golf Club. The costs will also include all principal payments made on the lease to own that have been made by the Lessee to the Lessor to the date of termination. Irrespective of when the right to purchase and reimburse is exercised by the p g Lessor, the purchase price, terms and formula as created by this Arl:icle shall not be adjusted in any manner for any reason, including but not limited to the passage of time, the increase in value of the lands, interest or inflation. (4) The Parties agree that a committee shall be formed with equal representation from both Parties. The purpose of the committee is to examine the details of the Trail , develo mentimpact on the Golf Club and cost sharing between the p p Parties as stipulated in Schedule "E". If the Committee is unable to resolve a matter, recourse will be had according to the Dispute Resolution provisions of Article R to this Lease. The Parties hereb a ree that at no time shall the Lessee unreasonably (5) Y g block, hinder or oppose the development of the Trails. (6) The Lessee hereby covenants and warrants that it shall supply the Lessor its annual audited financial statements within 60 days of its receipt if requested by the Lessor. (7) During the Term, the Lessee shall purchase the Adjacent Property as stipulated in Schedule "G" to this Lease and the Parties shall enter into an Agreement of Purchase and Sale pursuant to the terms of Schedule "G". If the Lessee fails to purchase the Adjacent Property pursuant to thE: terms of Schedule "G" then the Parties agree that the Lessee shall be in default under the terms of the Lease and the Lessor may exercise its rights and remedies pursuant to Article J. (8) In the event that any clause herein should be unenforceable or be declared invalid for any reason whatsoever, such unenforceability or invalidity shall not affect the enforceability or validity of the remaining portions of the covenants -14 - and such unenforceable or invalid portions shall be severable from the remainder of this Lease. (9) This Lease shall be construed and enforced in accordance with thE� laws of the Province of Ontario. Any proceeding commenced in the Superior Court of Justice, or its successor court, between the Parties shall be brought in the County of Oxford at the City of Woodstock. (10) Should any provision of this Lease require judicial interpretation or arbitration, it is agreed that the court or arbitrator interpreting or construing the same shall not apply a presumption that the terms thereof shall be more strictly construed against one party by reason of the rule of construction that a document is to be construed more strictly against the party who itself or through its agent prepared the same, it be agreed that both parties have participated in the preparation hereof. (11) This Lease constitutes the entire agreement between the Parties hereto pg ertainin to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, of the parties and there are no warranties, representations or other agreements between the Parties in connection with the subject matter hereof, except as specifically set forth herein. No supplement, modification, waiver or termination of this Lease shall be binding unless executed in writing by the Parties. Unless due to the negligent act or omission of the Lessor, its agents; officers, (12) employees, contractors, invitees and licensees, the Lessor shall not in any event whatsoever be liable or responsible in any way for any personal injury or death that may be suffered or sustained by the Lessee or any employees of the Lessee or any other person who may be on the Premises or for any loss or injury J damage or in'u to any property belonging to the Lessee or to its employees or to any other person while such. property is on the Premises. In Witness of the foregoing covenants the Lessor and the Lessee have executed g _g this Lease. Signed at Y this da of , 2008 g The Corpor `on o 1=ie Town of Tillsonburg Per: Stephen Molnar, Mayor I have authority to bind the Corporation. Per: f � r Michael Graves, Clerk have authority to bind the Corporation. Signed at Tillsonburg this day of , 2008 The Tillsonburg Golf & Country Club, Limited Per: - 15 - have authoritv to bind the Corporation. Name: Title: feC��AlAWA4,e4 The Corporation of the Town of Tillsonburg December 20. 2005 LETTER OF INTENT The parties listed below agree to the following lease to purchase terms that are subject to formal approval by Council and the Tillsonburg Golf and Country Club membership (TGCC), appropriate zoning and TGCC financing: • A clause to be incorporated into the lease that the golf course will be a semi -private golf course and that there will be an ongoing commitment to public play for the duration of the lease. • A clause to be incorporated into the lease and a separate initial lease agreement to be entered into to allow tobogganing on the existing golf premises. • The golf course will be responsible for development related costs, including walkways, tunnels, slope stability and archaeological costs. • The Town will be responsible for getting the property properly zoned, remove surface debris, capping the 5-6 existing oil wells, incur 2006 carrying costs, real estate commission, legal fees, environmental assessment studies and 50% of the cost of the feasibility study. The Town will be responsible for these costs and for purposes of the lease, the lease cost will be capped at a maximum of $600,000 and will be recovered through the lease calculation. • The Town will abate the municipal portion of the incremental increased tax assessment to a value of S 10000. 0 A separate committee, with equal representation from the Town and TGCC, will be struck at the time the Town is in a position to proceed with trail development to work out the details including the approach to cost sharing. • The lease will incorporate a default clause (Town takes ownership of all land improvements and related debt) at the current fair market value at the time of default. • The lease will incorporate a first right of refusal on the sale of the existing golf course at the current appraised value of S 1.45 million plus the cost of improvements. CORPORATE OFFICE 200 Rroadway. TilNonhurv, Ontario. N4G 5A7, Telephone # (519) 842-6428, Fax # (519) 842-9431 \'Vcb: u-,,\,,.x-.to\\,ii.tillsonbur;;.orLca I O,U.lIXl.. Ill 11'N I II -I) L:1 I)I Wt H L I"I1 '111 1WI1I.IIUlI gIIII ILII ISI t.I 11111911 doe The interest rate, and hence the lease to purchase payment amount, will be adjusted for the OSIFA loan application that was preliminarily approved on October 19, 2005. The current OSIFA interest rate is now 4.74% at a fixed rate for 25 years. The rate will change prior to debenture issuance. The resulting maximum lease to purchase payment, using the current interest rate and a maximum property value of $600,000, would then be approximately 53,456 per month for 25 years. • For the additional acreage, TGCC will lease to purchase the approximate 66 acres at $1 per year for ten years. At the end of 10 years TGCC will purchase the acreage at a cost of $3,500 per acre for the 56 acres, $12,000 per acre for 10 acres. Total purchase price is $316,000 and will not be indexed annually by CPI. • Lease to begin approximately January 1, 2007. Annual audited financial statements are required. Signed at Tillsonburg this the 20th day of December, 2005 The Corporation of the Town of Tillsonburg Davi orris, CAO 1 have authority to bind the Corporation. Per: Michael raves, erk I have authority to bind the Corporation. Signed at Tillsonburg this the 20`h day of December, 2005 The Tillsonburg Golf & Country Club, Limited Per: 1 have aut ii y to bi the,,'Corporation, Name: Title: X t ,� j :-ql �7 CORPORATE OFFICE 200 Broad ay. Tilisonburg, Ontario, N4G 5A7, Telephone # (519) 542-6428, Fax # (519) 542-9431 Web: NvxvN%- _to",-ii.tillsonbur� t)n.ca ( Documents and ti."ttnvs I)l ddw,,i(+r. %h I)nii,i ie s I tc.tsw% L!olt Iotci (,I intent 122005.doc I have authority to bind the Corporation. ,4f Name: 41 Title: CORPORATE OFFICE 200 Broadway, Tillsonburg, Ontario, N4G 5A7, Telephone # (519) 842-6428, Fax # (519) 842-9431 Web: ww%k.-.towii.tlll,,c)iibtirg.oii.ca C Documents and Servings DEddingion MN Documents f ieasur� golf fetter of intent 122005 doc