ORD 2017-21 Adopted ORDINANCE NO. 2017-21
AN ORDINANCE AUTHORIZING THE CITY TO ENTER INTO AGREEMENTS TO
PROVIDE FOR THE SALE OF REAL PROPERTY TO ACKERMAN GREENSTONE
NORTH AUGUSTA, LLC (THE "HOTEL DEVELOPER"), A GROUND LEASE FROM
THE HOTEL DEVELOPER TO THE CITY, AND A SUBLEASE WITH RESPECT TO
THE CONFERENCE FACILITIES FROM THE CITY TO THE HOTEL DEVELOPER;
AND OTHER MATTERS RELATED THERETO
WHEREAS, the City of North Augusta, South Carolina (the "City") has
previously entered into a Master Development Agreement dated March 15, 2017 (the
"Master Development Agreement"), by and among the City, GreenJackets Baseball, LLC,
the Hotel Developer and Greenstone Hammond's Ferry, LLC ("Greenstone") to provide for
the development of Project Jackson; and
WHEREAS, by the authority of and provisions contained in Ordinance No.
2017-05 of the City Council of the City of North Augusta (the "City Council"), the
governing body of the City, enacted on May 15, 2017 ("Ordinance 2017-05"), the City
purchased from Greenstone a portion of real property consisting of approximately 1.78 acres
(the "Hotel Land") to provide for the construction of a portion of Project Jackson on such
land (such land as more particularly described at Exhibit "A" attached hereto); and
WHEREAS, the City and other parties entered into various financing
documents, including a Trust Agreement dated May 16, 2017, by and between the North
Augusta Public Facilities Corporation and U.S. Bank National Association (the "Trust
Agreement"), to provide for financing of a portion of the costs of Project Jackson; and
WHEREAS, with the current development of Project Jackson and to fulfill
the requirements under both the Master Development Agreement and the Trust Agreement,
the City intends to (i) sell the Hotel Land to the Hotel Developer, (ii) enter into a Ground
Lease Agreement with the Hotel Developer (the "Ground Lease") to provide for the Hotel
Developer to ground lease an interest in the Hotel Land back to the City together with the
conveyance of ownership of the Conference Facilities (as defined in the Master
Development Agreement), (iii) enter into a Sublease Agreement with the Hotel Developer
(the "Sublease" and together with the Ground Lease, the "Leases") to sublease to the Hotel
Developer the space comprised of the Conference Facilities and to provide for terms and
conditions relating to the operation of the Conference Facilities, along with certain basic
terms related to the operation of the Hotel (as defined in the Master Development
Agreement) in which such Conference Facilities are located, and (iv) enter into an Owner-
Developer Agreement (Development and Construction of Conference Facilities) among the
Corporation, the City and the Hotel Developer, with respect to the development and
construction of the Conference Facilities, as separately approved by City Council pursuant
to Resolution No. 2017-44 (the "Conference Facilities Agreement"); and
WHEREAS, the City Council has received and reviewed (i) the Ground
Lease, which is attached hereto, marked Exhibit `B" and incorporated herein by this
reference, and (ii) the Sublease, which is attached hereto, marked as Exhibit "C" and
incorporated herein by this reference; and
WHEREAS, pursuant to the requirements of the Master Development
Agreement, the Mayor and the City Administrator have reviewed the Leases and the
Conference Facilities Agreement, specifically in relation to any terms set forth in Exhibits G
and H attached to the Master Development Agreement and have determined that any
deviations from details and material terms as set forth in such Exhibits G and H are
satisfactory and they recommend the approval of any such deviations; and
WHEREAS, the City is mindful of the criteria set forth by the South Carolina
Supreme Court in Byrd v. Florence County in determining when an economic development
project constitutes a public purpose; in that case, as further developed in Nichols v. South
Carolina Research Authority, the Court set forth a four-point standard for local governments
providing economic development incentives: (1) the ultimate goal or benefit to the public;
(2) whether public or private parties will be the primary beneficiaries; (3) the speculative
nature of the project; and (4) the probability that the public interest will be served
(collectively, the"Nichols Test"); and
WHEREAS, the City has determined that (i) the sale of the Hotel Land from
the City to the Hotel Developer, and (ii) the entering into and execution of the Leases will
allow the City to fulfill obligations under the terms of the Master Development Agreement
and that it is in the best interest of the City to sell the Hotel Land and enter into the Leases.
NOW, THEREFORE, BE IT ORDAINED by the Mayor and City Council of
the City of North Augusta, in meeting duly assembled and by the authority thereof, that:
1. The City approves the sale of the Hotel Land to the Hotel Developer and, in
accordance with the Nichols Test, in the negotiation of the consideration for the
conveyance thereof, the Mayor and City Administrator are directed to take into
account that the ultimate goal in the conveyance is the development of a Hotel in
accordance with the Master Development Agreement to benefit the City and
stimulate economic development in the City, that the public is the ultimate
beneficiary of the conveyance through the stimulation of economic development
and the overall consummation of Project Jackson, that the conveyance is part of a
definite and concrete plan of public and private development and the success of
the Hotel will in large measure drive the overall benefit to the public from
Project Jackson which the City finds to be substantial, and that the public interest
will be served through the transformational redevelopment of the City's river
front through the development of the Hotel as part of Project Jackson. The City
authorizes the Mayor and the City Administrator to value such considerations at
not more than $500,000 in negotiating the consideration of the Hotel Land.
2. The City approves the Leases, and in regard to the consideration for the Leases,
and in accordance with the Nichols Test, the City finds that it has taken into
account that the ultimate goal of the Leases is the development of a Hotel and a
vibrant conference facility in accordance with the Master Development
Agreement to benefit the City and stimulate economic development in the City,
that the public is the ultimate beneficiary of the Leases through the availability of
the conference center and the stimulation of economic activity in the City and the
overall success of Project Jackson, that the Leases are part of a definite and
concrete plan of public and private development and the success of the
conference facility will in large measure drive the overall benefit to the public
from Project Jackson which the City finds to be substantial, and that the public
interest will be served through the transformational redevelopment of the City's
river front through the development of the Hotel and conference facilities as part
of Project Jackson.
3. The Leases and the Conference Facilities Agreement collectively constitute a
"Hotel Project Agreement" and/or a "Conference Facilities Agreement", as
applicable, as such terms are defined in the Master Development Agreement,
and, except as specifically provided therein, are consistent with the details and
material terms set forth in Exhibits G and H attached to the Master Development
Agreement, but it is specifically acknowledged and confirmed by this ordinance
that (a) any deviations from such details and material terms have been reviewed
and approved by the Mayor and the City Administrator and (b) this provision of
this ordinance satisfies the requirement under the Master Development
Agreement that such approval of such deviations by the Mayor and City
Administrator be manifested by adoption of a resolution of the City Council at a
meeting duly called.
4. The City Administrator and the Mayor are each hereby authorized to (a) make
such arrangements to provide for the sale of the Hotel Land to the Hotel
Developer, including the negotiation, entering into and execution of any
documents, agreements or instruments that may be required to finalize such sale,
(b) provide for the further revisions and/or amendments to the Leases as either or
both of them shall deem necessary or prudent, so long as the substance of such
documents remains consistent with the forms presented at this meeting, and (c)
execute the Leases on behalf of the City.
5. The City Administrator and Mayor are each hereby authorized to approve,
execute and deliver (or cause to be duly executed and delivered) such further
documents, agreements or instruments and do or cause to be done such further
acts as either or both of them may deem, upon the advice of counsel, to be
reasonably necessary or proper to carry out more effectively the provisions and
purposes of this ordinance, the Leases and the sale of the Hotel Land.
DONE, RATIFIED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE
CITY OF NORTH AUGUSTA, SOUTH CAROLINA,ON THIS THE 20TH DAY OF NOVEMBER, 2017.
FIRST READING: SC 11/13/17
SECOND READING: SC 11/13/17 ROBER A.PETTIT,MAYOR
THIRD READING: 11/20/17 ATTEST:
DONNA B. YOUNG,C Y CLE
Exhibit "A"
Legal Description of Hotel Land
All that tract or parcel of land lying and being situate in the City of North Augusta, Aiken
County, South Carolina and being more particularly described as follows:
Commencing at a #5 rebar found at the intersection of the southern right of way (r/w) of
Railroad Avenue (66' r/w) and the eastern r/w of Esplanade Avenue (50' r/w), said point being the
POINT OF BEGINNING;
Thence along the southern r/w of Railroad Avenue South 69 degrees 52 minutes 06 seconds
East for a distance of 307.88 feet to a #5 rebar found; thence South 20 degrees 07 minutes 54
seconds West for a distance of 23197 feet to a #5 rebar found on the northern r/w of Brissie Drive
(unopened); thence along the northern r/w of Brissie Drive (62' nominal r/w) North 69 degrees 51
minutes 36 seconds West for a distance of 307.88 feet to a #5 rebar found on the eastern r/w of
Esplanade Avenue; thence along the eastern r/w of Esplanade Avenue North 20 degrees 07 minutes
54 seconds East for a distance of 231.93 feet to a #5 rebar found on the southern r/w of Railroad
Avenue, said point being the POINT OF BEGINNING,
Containing 1.64 Acres and is more fully shown on a plat prepared for Ackeunan Greenstone
North Augusta, LLC by Cranston Engineering Group, P.C. dated June 6, 2017, last revised
11/08/2017.
Exhibit"B"
Copy of Ground Lease
Exhibit "C"
Copy of Sublease
GROUND LEASE AGREEMENT
between
ACKERMAN GREENSTONE NORTH AUGUSTA, LLC
as lessor
and
CITY OF NORTH AUGUSTA, SOUTH CAROLINA
as lessee
Dated as of , 2017
Exhibit B
Page 1
INDEX
ITO BE COMPLETED WHEN FORM OF DOCUMENT IS FINAL1
Page
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Definitions of Words and Terms
Section 1.2. Rules of Construction
Section 1.3. Accounting Terms
ARTICLE II
REPRESENTATIONS
Section 2.1. Representations by the Lessor
Section 2.2. Representations by the Lessee
ARTICLE III
LEASE OF THE 2017 REAL PROPERTY AND CONVEYANCE OF IMPROVEMENTS
Section 3.1. Transfer of Facilities and Lease of the Real Property; Easements
Section 3.2. Construction of the Facilities
Section 3.3. Assignments, Subleases and Mortgages
Section 3.4. Rent and Other Consideration
Section 3.5. Taxes and Insurance
Section 3.6. Operation
Section 3.7. Subordination and Attornment
Section 3.8. Estoppel Certificate
ARTICLE IV
TERMINATION
Section 4.1. Termination
Section 4.2. Default by the Lessee
Section 4.3. Quiet Enjoyment
Section 4.4. No Merger
Section 4.5. Maintenance of Premises
ARTICLE V
CONTROL OF 2017 Real Property AND
FACILITIES DURING GROUND LEASE TERM
Section 5.1. Control of Real Property and Facilities During Ground Lease Term
Exhibit B
Page 2
ARTICLE VI
MISCELLANEOUS
Section 6.1. Covenants Running with the Real Property
Section 6.2. Binding Effect
Section 6.3. Severability
Section 6.4. Amendment, Changes and Modifications
Section 6.5. Execution in Counterparts
Section 6.6. Applicable Law
Section 6.7. Captions
Section 6.8. Notices
Section 6.9. Compliance
Section 6.10. Memorandum of Lease
EXHIBIT A—Legal Description of the Hotel Property and the Real Property A-1
EXHIBIT A-1 —Floor Plan Depicting the Conference Facilities A-1-1
EXHIBIT B—Form of Supplement to Ground Lease Agreement B-1
EXHIBIT C—Form of Memorandum of Lease C-1
Exhibit B
Page 3
GROUND LEASE AGREEMENT
THIS GROUND LEASE AGREEMENT dated as of , 2017 (this
"Ground Lease") made and entered into by and between ACKERMAN GREENSTONE
NORTH AUGUSTA, LLC, a limited liability company duly organized and existing under the
laws of the State of Georgia (the "Lessor"), as lessor, and the CITY OF NORTH AUGUSTA,
SOUTH CAROLINA, a political subdivision of the State of South Carolina (the "Lessee"), as
lessee,
WITNESSETH:
WHEREAS, the Lessor is the owner in fee simple of that certain tract of real property
described on Exhibit A attached hereto (the"Real Property"); and
WHEREAS, pursuant to Sections 31-6-10 to 31-6-120, inclusive, Code of Laws of South
Carolina, 1976, as amended (being known as the "Tax Increment Financing Law", and
hereinafter referred to as the "TIF Act"), the Lessee has previously designated certain areas along
the Savannah River (the "TIF District") to be a "blighted area" or a "conservation area" within
the meaning of the TIF Act, entitling the Lessee to take certain actions with respect to the
development and associated financing of the TIF District as more fully set forth in the TIF Act;
and
WHEREAS, the Real Property is located within the TIF District; and
WHEREAS, the legislature of the State of South Carolina has enacted the "South
Carolina Local Government Development Agreement Act" as set forth in Sections 6-31-10
through 6-31-160 of the Code of Laws of South Carolina, 1976, as amended (the "Act"); and
WHEREAS, the Act recognizes that "The lack of certainty in the approval of
development can result in a waste of economic and land resources, can discourage sound capital
improvement planning and financing, can cause the cost of housing and development to escalate,
and can discourage commitment to comprehensive planning." S.C. Code Ann. § 6-31-10(B)(1);
and
WHEREAS, the Act also states: "Development agreements will encourage the vesting of
property rights by protecting such rights from the effect of subsequently enacted local legislation
or from the effects of changing policies and procedures of local government agencies which may
conflict with any term or provision of the Development Agreement or in any way hinder, restrict,
or prevent the development of the project. Development Agreements will provide a reasonable
certainty as to the lawful requirements that must be met in protecting vested property rights,
while maintaining the authority and duty of government to enforce laws and regulations which
promote the public safety, health, and general welfare of the citizens of our State." S.C. Code
Ann. § 6-31-10 (B)(6); and
WHEREAS, the Act further authorizes local governments, including city governments, to
enter into Development Agreements with owners of real property to accomplish these and other
Exhibit B
Page 4
goals as set forth in Section 6-31-10 of the Act; and
WHEREAS, the Lessor and the Lessee, together with Greenjackets Baseball LLC and
Greenstone Hammond's Ferry, LLC, have, pursuant to the Act, entered into that certain Master
Development Agreement dated March 15, 2017 and recorded on March 28, 2017 in Book 4654,
Page 723 in the Aiken County, South Carolina records, with respect to certain property located
within the TIF District, including the Real Property(the "Master Development Agreement"); and
WHEREAS, the Master Development Agreement contemplates that the Lessee will cause
the issuance from time to time of obligations to finance the City Financed Projects, as such tem'
is defined in the Master Development Agreement (the "Bonds"), which Bonds shall be payable,
directly or indirectly, in whole or in part, from the incremental tax revenues derived from the TIF
District and deposited to the special tax allocation fund in accordance with and pursuant to the
TIF Act; and
WHEREAS, the Master Development Agreement contemplates that the Lessor and the
Lessee will enter into one or more development agreements with respect to the ownership,
financing and operation of a conference center to be constructed upon the Real Property in
conjunction with the construction of a hotel building on the Hotel Property and with respect to
the ownership, financing and operation of the Facilities (as such term is hereinafter defined); and
WHEREAS, pursuant to the Master Development Agreement, the Lessor and the Lessee
have entered into that certain Owner-Developer Agreement (Lump Sum Agreement) dated
, 2017 with respect to the development and construction of the
Facilities (the "Conference Center Development Agreement"; the Master Development
Agreement and the Conference Center Development Agreement are sometimes collectively
referred to hereinafter as the "Development Agreements"); and
WHEREAS, the Development Agreements contemplate that the Facilities are a City
Financed Project and that the proceeds of the Bonds will be used to fund the construction of the
Facilities; and
WHEREAS, the Lessor desires to lease the Real Property to the Lessee as provided
herein, and the Lessee desires to lease the Real Property from the Lessor;
WHEREAS, the parties desire to enter into this Ground Lease in order to achieve the
foregoing purposes;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements, including the payment of the Ground Lease Rent herein set forth, the Lessor and the
Lessee do hereby covenant and agree as follows:
Exhibit B
Pane 5
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.1. Definitions of Words and Terms. Capitalized terms not otherwise
defined herein are used with the meanings provided therefor in the Development Agreements,
unless some other meaning is plainly intended. In addition, the following terms shall have the
meanings set forth below, unless some other meaning is plainly intended:
"Conference Center" means the Real Property and the Facilities combined.
"Conference Center Sublease and Operating Agreement" means that certain space lease
pursuant to which Lessee leases to Lessor the Conference Center for the Ground Lease Term and
provides for the operation of the Conference Center by Lessor.
"Council" means the City Council of the Lessee, as the governing body of the Lessee,
and any successor body.
"Facilities" means the conference facilities, meeting spaces and related facilities
consisting of approximately 9,859 gross square feet to be constructed by the Lessor as agent for
the Lessee in accordance with the terms of the Conference Center Sublease and Operating
Agreement on the first floor of the Hotel, as more specifically shown as cross-hatched on Exhibit
A-1 hereto. The Facilities shall consist of the space, and the content of the space, hounded by
and contained within the lower, upper and vertical boundaries thereof, which lower, upper and
vertical boundaries are, for the purposes of this Ground Lease, more particularly defined as
follows: (a) the lower horizontal boundary of the Facilities shall be the plane fowled by the
exterior surface of the floor located within the Real Estate and shall include all foundations and
footings within the Real Estate; (b) the upper horizontal boundary of the Facilities shall be the
plane formed by the unfinished surface of the flooring on the second floor of the Hotel (i.e., the
ceiling structure above the Real Estate up to the unfinished flooring on the second floor shall be
part of the Facilities); and (c) the vertical boundaries of the Facilities shall be the planes formed
by boundaries of the Real Estate, including any exterior walls, doors, and windows located
within, or immediately adjacent to, the boundaries of the Real Estate, to the point of intersection
with the upper and lower horizontal boundaries.
"Ground Lease Rent" means the amount set forth in Section 3.4 of this Ground Lease.
"Ground Lease Term" means the term of this Ground Lease, which commences on the
date of this Ground Lease and ends on the earlier to occur of(a) midnight on November 1, 2048,
or(b) the date the Bonds are fully repaid.
"Hotel" means the hotel building to be constructed on the Hotel Property.
"Hotel Property" means the real property described as the Hotel Property in Exhibit A
hereto.
"Lessee" means the City of North Augusta, South Carolina, and its successors and
assigns.
Exhibit B
Page 6
"Lessor" means Ackerman Greenstone North Augusta, LLC, a limited liability company
duly organized and existing under the laws of the State of Georgia, and its successors and
assigns.
"Memorandum of Lease" means a memorandum of this Ground Lease substantially in
the form attached hereto as Exhibit C executed by the Lessor and the Lessee and to be recorded
in the Office of the Aiken County, South Carolina RMC Office.
"Ordinance" means the Ordinance enacted by the Council on
201 , authorizing the Lessee's execution and delivery of this Ground Lease.
"Real Property" means the real property described as the Real Property in Exhibit A
hereto.
"State" means the State of South Carolina.
SECTION 1.2. Rules of Construction. Words of the masculine gender shall be deemed
and construed to include correlative words of the feminine and neuter genders. Unless the
context shall otherwise indicate, the words importing the singular number shall include the plural
and vice versa, and words importing person shall include firms, associations and corporations,
including public bodies, as well as natural persons.
The table of contents hereto and the headings and captions herein are not a part of this
document.
SECTION 1.3. Accounting Terms. Accounting terms used herein and not otherwise
specifically defined shall have the meaning ascribed to such terms by accounting principles
generally accepted in the United States as from time to time in effect.
[END OF ARTICLE I]
Exhibit B
Page 7
ARTICLE II
REPRESENTATIONS
SECTION 2.8' Representations by the Lessor. The Lessor represents, warrants and
covenants as follows:
(a) The Lessor is a limited liability company duly organized and existing under the
laws of the State of Georgia.
(b) The Lessor has full power and authority to enter into the transactions
contemplated by this Ground Lease and to carry out its obligations hereunder.
(c) Neither the execution and delivery of this Ground Lease, nor the fulfillment of or
compliance with the terms and conditions hereof, nor the consummation of the transactions
contemplated hereby, conflicts with or results in a breach of the terms, conditions or provisions
of any restriction or any agreement or instrument to which the Lessor is now a party or by which
the Lessor is bound.
(d) The Lessor is the fee owner of the Real Property, subject to all matters of record
as of the date of this Ground Lease.
SECTION 2.2. Representations by the Lessee. The Lessee represents, warrants and
covenants as follows:
(a) The Lessee is a political subdivision of the State.
(b) The Council has full power and authority to enact the Ordinance and the Lessee
has full power and authority to enter into the transactions contemplated by this Ground Lease and
to carry out its obligations hereunder.
(c) Neither the execution and delivery of this Ground Lease, nor the fulfillment of or
compliance with the terms and conditions hereof, nor the consummation of the transactions
contemplated hereby, conflicts with or results in a breach of the terms, conditions or provisions
of any restriction or any agreement or instrument to which the Lessee is now a party or by which
the Lessee is bound.
(d) The Lessee has not made, done, executed or suffered, and warrants that it will not
make, do, execute or suffer, any act or thing whereby the Lessor's interests in the Real Property
and the Facilities shall be or may be impaired, changed or encumbered in any manner whatsoever
except as permitted by this Ground Lease.
[END OF ARTICLE II]
Exhibit B
Page 8
ARTICLE III
LEASE OF THE REAL PROPERTY AND CONVEYANCE OF IMPROVEMENTS
SECTION 3,1' Lease of the Real Property; Easements. The Lessor hereby demises
and leases to the Lessee and the Lessee hereby leases from the Lessor the Real Property for a
term which ends on the expiration of the Ground Lease Tenn for the rentals and other
consideration set forth in Section 3.4 hereof and in accordance with the provisions of this Ground
Lease; provided however, that the Lessor reserves an easement for the use of(i) all air rights and
improvements above the ceiling of the Facilities, together with an easement for the support of
such floors, including without limitation all floors of the Hotel that are located above the
Facilities, and neither the Facilities nor the Real Property shall include any such air rights or
improvements and (ii) any other portions of the Hotel that are not part of the Facilities. The
parties hereto agree, if either so requests following the completion of the construction of the
Facilities, to amend Exhibit A to this Ground Lease by the execution of a Supplement to Ground
Lease Agreement, in substantially the form of Exhibit B attached hereto, to describe more
specifically the as-built location of the Rea Property and the Facilities. Further, for the Ground
Lease Term, Lessor and Lessee each grant to the other a reci easement for access to and
through the Hotel and the Facilities and over the lobbies, entrances, stairs, corridors, and other
public portions of the Hotel and the Facilities, as reasonably necessary for the use, operation and
enjoyment of the Hotel ond the Facilities, as well a reci nncui easement for the installation, use,
maintenance, repair and replacement of any necessary utility lines for the use, operation and
enjoyment of tbcBo{c{ uodihcFocilidcm, pcovidcdtboaameobaUbc |ocatcduhove the finished
ceiling, within finished walls and/or below the finished surface of any floors unless otherwise
mutually agreed by Lessor and Lessee in writing.
SECTION 3'2' Construction and Ownership of the FmciKitiem. Pursuant to the terms
of the Development Agreements, the Lcosor, as agent for the Leaxce, will design, acquire,
construct and equip the Facilities, subject to Lessee's obligation to pay the Conference Center
Cost (as defined below). Subject to Section 4.6 hereof, the Lessee shall own all materials and
equipment acquired for the Facilities from and after the date of the purchase thereof and shall
own the Facilities from and after the construction tbcreo[ Until any acquisition by the Lessor
pursuant to the option under Article D/ hereof, title to the Facilities at all times sbu|l be in the
Lessee, and the Lessor shall have no ownership interest therein.
SECTION 3.3. Assignments, Subleases and Mortgages. Contemporaneously with the
execution and delivery of this Ground Lease, Lessor and Lessee have entered into the Conference
Facilities Sublease and Operating Agreement, pursuant to which Lessor will operate and manage
the Conference Center following completion of construction of the same. Except for the
Conference Facilities Sublease and Operating Agreement and except as specifically provided
below in this Section 3.3, the Lessee may not (a) mortgage or otherwise encumber or assign its
rights under this Ground Lease, (b) lease, assign, transfer or otherwise dispose of its interest in
the Real Property or the Facilities or any portion thereof or (c) remove, modify or alter the Real
Property or the Facilities, without the written consent of both the Lessor and any Mortgagee,
which consent shall not be unreasonably withheld. In the event that the Conference Facilities
Sublease and Operating Agreement expires or is terminated prior to the expiration of the Ground
Lease Term for any reason other than the default of Lessee hereunder, then, subject to any rights
Exhibit B
Page 9
set forth in the Conference Facilities Sublease and Operating Agreement for the benefit of any
lender to the sublessee under the Conference Facilities Sublease and Operating Agreement,
Lessee may freely (a) mortgage or otherwise encumber or assign its rights under this Ground
Lease, or (b) lease, assign, transfer or otherwise dispose of its interest in the Real Property or the
Facilities or any portion thereof, without the consent of the Lessor. Except for the assignment of
Lessor's interest in this Ground Lease to a Mortgagee or in conjunction with the transfer of fee
simple title to the Hotel Property, Lessor may not assign its interest in this Ground Lease without
the prior written consent of Lessee and any Mortgagee, which consents shall not be unreasonably
withheld. In the event that the Conference Facilities Sublease and Operating Agreement expires
or is terminated prior to the expiration of the Ground Lease Term, then, subject to any rights set
forth in the Conference Facilities Sublease and Operating Agreement for the benefit of any lender
to the sublessee under the Conference Facilities Sublease and Operating Agreement, Lessee shall
have the right to secure the Conference Center, and the Lessor shall have the right to secure the
remainder of the Hotel Property, by locking doors and constructing reasonably attractive
barricades, subject to the easements granted or reserved in this Ground Lease and further subject
to compliance with all life-safety codes and other governmental ordinances and requirements.
SECTION 3.4. Rent and Other Consideration. As and for rental hereunder and in
consideration for the leasing of the Real Property to the Lessee hereunder, the Lessee agrees to
pay to the Lessor an annual amount of Ground Lease Rent of One Dollar per year. The Lessor
hereby acknowledges receipt from the Lessee, on the date hereof, of the Ground Lease Rent due
with respect to the Ground Lease Term.
SECTION 3.5. Taxes. The Lessor shall pay and have responsibility for all taxes on the
Real Property and the Facilities, including, without limitation, any special assessments which
may be levied on the Real Property by the Municipal Improvement District overlaying all or a
portion of the Real Property.
SECTION 3.6. Operation. Except as otherwise agreed by Lessor and Lessee in each
party's reasonable discretion, the Facilities shall be used only for the hosting of conferences,
meetings and other gatherings typically held in hotel conference facilities and for no other
purpose. Management and catering with respect to the Facilities shall be subject to terms and
conditions set forth in the Conference Facilities Sublease and Operating Agreement. The
Facilities shall always be operated in compliance with all applicable governmental rules,
regulations and orders.
SECTION 3.7. Subordination and Attornment. This Ground Lease and all rights of
the Lessee hereunder are and shall be subject and subordinate to any mortgage, deed of trust or
other instrument in the nature thereof (each, a "Mortgage") which may now or hereafter affect
the Lessor's fee title to the Real Property, provided that (i) the holder (each, a "Mortgagee") of
any Mortgage agrees that in the event that such holder forecloses such Mortgage or becomes the
fee simple owner of the Real Property pursuant to a deed in lieu of foreclosure, then, subject to
the terms of this Ground Lease, this Ground Lease shall continue in full force and effect and the
Lessee's possession of the Real Property shall not be disturbed, and (ii) Lessee agrees that if the
Mortgagee also has a first priority mortgage, deed of trust or other instrument in the nature
thereof on the Lessor's interests under the Conference Facilities Sublease and Operating
Exhibit B
Page 10
Agreement, the Conference Facilities Sublease and Operating Agreement shall continue in full
force and effect as a sublease between Lessee and the Mortgagee and the Mortgagee's rights
under the Conference Facilities Sublease and Operating Agreement shall not be disturbed. The
foregoing subordination shall be self-operative, but the Lessee shall, within ten (10) days of the
Lessee's recei of a written request from the Lessor, execute, acknowledge and deliver to the
Lessor and/or the Mortgagee a subordination, and attornment agreement on such
a form reasonably acceptable tnde Lessee to evidence such subordination. If the Mortgagee, or
any other person or entity succeeding to the interest of the Mortgagee, or the purchaser at a
foreclosure sale, shall hereafter succeed to the rights of the Lessor under this Ground Lease, the
Lessee shall uttocutn and recognize such successor as the Lessee's landlord under this Ground
Lease without any change in the terms or provisions of this Ground Lease and, if the Mortgagee
also has a first priority mortgage, deed of trust or other instrument in the nature thereof on the
Lessor's interests under the Conference Facilities Sublease and Operating Agreement and the
Mortgagee, or any other person or entity succeeding to the interest of the Mortgagee, or the
purchaser at a foreclosure sale, shall hereafter succeed to the rights of the Lessor under this
Ground Lease, such successor shall attorn to and recognize Lessee as such successor's landlord
under the Conference Facilities Sublease and Operating Agreement without any change in the
terms or provisions of the Conference Facilities Sublease and Operating Agreement.
Notwithstanding the foregoing provisions of this Section 3.7 to the contrary, Lessor
acknowledges and agrees that Lessor shall not have the right to (i) enter into any so-called "open-
ended" Mortgages secured by the Real Property, (ii) pledge its interest in this Ground Lease as
security for any Mortgage which is also secured by any real property other than the Real
Property, or(iii) encumber the Real Property with any Mortgages which, in the aggregate, exceed
the sum of(x) the full insurable replacement value of the Hotel and (y) the Conference Center
Cost, as defined below.
SECTION 3.8. Estoppel Certificate. Within ten (10) days after request by the Lessor,
the Lessee agrees to execute and deliver to the Lessor an estoppel certificate addressed to the
Lessor and any Mortgagee (or proposed Mortgagee) or assignee of the Lessor's interest in, or any
purchaser of, the Real Property or any part thereof, certifying (if such be the case) that this
Ground Lease is unmodified and is in full force and effect (and if there have been modifications,
that the same is in full force and effect as modified and stating said modifications); certifying that
there are no defenses or offsets against the enforcement thereof or stating those claimed by the
Lessee; stating the date to which Ground Lease Rent and other charges have been paid; and
certifying that there are no events of default or events or conditions which, with the giving of
notice or passage of time, would be an event of default under this Ground Lease. Such certificate
shall also include such other information as may reasonably be required by the Lessor. Any such
certificate may be relied upon by the Lessor and any Mortgagee, proposed Mortgagee, assignee,
purchaser and any other party to whom such certificate is addressed.
Within ten (10) days after request by the Lessee, the Lessor agrees to execute and deliver
to the Lessee an estoppel certificate addressed to the Lessee or its designee, certifying (if such be
the case) that this Ground Lease is unmodified and is in full force and effect (and if there have
been modifications, that the same is in full force and effect as modified and stating said
modifications); certifying that there are no defenses or offsets against the enforcement thereof or
Exhibit B
Page 11
stating those claimed by the Lessor; stating the date to which Ground Lease Rent and other
charges have been paid; and certifying that there are no events of default or events or conditions
which, with the giving of notice or passage of time, would be an event of default under this
Ground Lease. Such certificate shall also include such other information as may reasonably be
required by the Lessee. Any such certificate may be relied upon by the Lessee and any other
party to whom such certificate is addressed.
SECTION 3.9. Commercial General Liability Insurance. During the Ground Lease
Tenn, the Lessor shall carry and maintain, at its sole cost and expense, commercial general
liability insurance on an occurrence form, including contractual liability, personal and bodily
injury, and property damage insurance, on the Conference Center, with a combined single limit in
an amount sufficient to protect the Lessor and the Lessee, but in no event will such insurance be
in an amount less than a combined single limit of $2,000,000 per occurrence and an aggregate
limit of $4,000,000. The Lessee, it successors and assigns, shall be named as an additional
insured under said insurance. The Lessor shall provide the Lessee with a certificate of insurance
evidencing such coverage at the execution of this Ground Lease and thereafter no less than thirty
(30) days prior to each policy's expiration. Said insurance shall contain a clause stating that
there shall be no reduction, cancellation, or non-renewal of coverage without giving the Lessee
thirty (30) days prior written notice, and in the event it is not possible to obtain such a clause,
Lessor shall provide Lessee with not less than thirty (30) days prior written notice of any
reduction, cancellation, or non-renewal of coverage with respect to Lessor's insurance. Such
insurance shall also be endorsed to provide that the insurance shall be primary to and not
contributory to any similar insurance carried by Lessee and which relate to Lessor's negligence
and/or obligations hereunder, and shall contain a severability of interest clause. The Lessor's
insurer shall have an A.M. Best rating of at least A- VII.
SECTION 3.10. Property Insurance. During the Ground Lease Term, the Lessor shall,
at its sole cost and expense, maintain property insurance ("Property Insurance") as described in
this Section.
(a) During the period of construction of the Facilities during Ground Lease Term, the
Lessor shall carry and maintain, or cause its contractor to carry and maintain, at its sole cost and
expense, builder's risk property insurance insuring the Conference Center, including any
permanent improvements installed affixed to the Conference Center, for perils covered by the
causes of loss - special form (all risk) and flood. Such insurance shall be written on a
replacement cost basis with an agreed value equal to the full insurable replacement value of the
foregoing. Said policy shall name the Lessor (or any Mortgagee of Lessor) and Lessee as loss
payees, as their interests may appear. The Lessor shall provide the Lessee with a certificate of
insurance evidencing such coverage prior to the execution of this Ground Lease and thereafter no
less than ten (10) days prior to said policy's expiration. Said insurance shall contain a clause
stating that there shall be no reduction, cancellation, or non-renewal of coverage without giving
the Lessee thirty (30) days prior written notice, and in the event it is not possible to obtain such a
clause, Lessor shall provide Lessee with not less than thirty (30) days prior written notice of any
reduction, cancellation, or non-renewal of coverage with respect to Lessor's insurance. The
Lessor's insurers shall have an A.M. Best rating of at least A- VII.
Exhibit B
Page 12
(h) After construction and during the Ground Lease Term, the Lessor shall carry and
maintain, at its sole cost and expense, property insurance insuring the Conference Center,
including any permanent improvements installed or affixed to the Conference Center, for perils
covered by the causes of loss - special form (all risk) including loss of rents and flood. Such
insurance shall be written on a replacement cost basis with an agreed value equal to the full
insurable replacement value of the foregoing. Said policy shall name the Lessor (or any
Mortgagee of Lessor) and Lessee as loss payees, as their interests may appear. The Lessor shall
provide the Lessee with a certificate of insurance evidencing such coverage prior to the execution
of this Ground Lease and thereafter no less than ten (10) days prior to said policy's expiration.
Said insurance shall contain a clause stating that there shall be no reduction, cancellation, or non-
renewal of coverage without giving the Lessee thirty (30) days prior written notice, and in the
event it is not possible to obtain such a clause, Lessor shall provide Lessee with not less than
thirty (30) days prior written notice of any reduction, cancellation, or non-renewal of coverage
with respect to Lessor's insurance. The Lessor's insurers shall have an A.M. Best rating of at
least A- VII.
(c) Anything in this Ground Lease to the contrary notwithstanding, the Lessor and the
Lessee each hereby waives any and all rights of recovery, claim, action or cause of action against
the other for any loss or damage that may occur to the Conference Center or any improvements
thereto, or any personal property of the Lessor or the Lessee, arising from any cause that (a)
would be insured against under the terms of any property insurance required to be carried this
Ground Lease; or (b) is insured against under the terms of any property insurance actually
carried, regardless of whether the same is required this Ground Lease. The foregoing waiver
shall apply regardless of the cause or origin of such claim, including but not limited to the
negligence of a party, or such party's agents, officers, employees or contractors. The foregoing
waiver shall not apply if it would have the effect, but only to the extent of such effect, of
invalidating any insurance coverage of the Lessor or the Lessee. Each party shall cause its
property insurer to include a waiver of subrogation within its property policy consistent with the
foregoing.
SECTION 3.11. Damage or Destruction. In the event of fire or other cause or casualty
damage to the Conference Center, provided this Ground Lease is not terminated pursuant to the
terms of this Section and is otherwise in full force and effect, the Lessor shall proceed diligently
to restore the Conference Center to substantially its condition prior to the occurrence of the
damage and, subject to the terms of any Mortgage, may use the property insurance proceeds
carried pursuant to this Article for such restoration. If the damage or destruction is of such nature
or extent that, in the Lessor's reasonable judgment, more than two hundred forty(240) days from
the date of the event that caused the damage or destruction referred to in this Section would be
required (with normal work crews and hours) to repair and restore the part of the Conference
Center which has been damaged or destroyed, or in the event the damage or destruction to the
Hotel is of such a nature or extent that Lessor has elected not to rebuild or restore the Hotel, then
in either event Lessor shall have the right to terminate this Ground Lease by written notice to the
Lessee delivered within ninety(90) days after the event that caused said damage or destruction.
In the event this Ground Lease is terminated pursuant to this Section or in any other event
the Conference Center is not restored for any other reason, all proceeds of the Property Insurance
Exhibit B
Page 13
described in this Article shall first be paid to any Mortgagee to the extent of the remaining
balance on any Mortgage, and then EIGHT MILLION AND NOV)UO DOLLARS (S8,O00,O0O.00)
(the "Conference Center Cost") of the remaining proceeds shall be paid to the Lessee as
compensation for the damage or destruction of the Facilities owned by the Lessee, and any
remaining balance of any proceeds from the Property Insurance shall be paid to Lessor.
In the event that the Lessor elects to rebuild the Conference Center after damage or
destruction, and is entitled to use the insurance proceeds for such purpose under the terms of the
Mortgage, all proceeds of the Property Insurance shall be paid to any Mortgagee to be made
available to Lessor pursuant to the terms of the Mortgage for the purpose of restoring the Hotel
and Conference Center. If there shall be no Mnrtgugce, then all proceeds of the Property
Insurance shall be paid to Lessor for the purpose of restoring the Hotel and Conference Center.
In the event of such restoration, insurance proceeds shall be held in trust and disbursed for
restoration in accordance with procedures reasonably acceptable to Lessee to assure restoration of
the Conference Center to its substantially pre-disturbed condition.
This Section 3.1 1 shall survive any termination of this Ground Lease.
[END OF ARTICLE HI]
Exhibit B
Page 14
ARTICLE IV
TERMINATION
SECTION 4.1. Termination.
(a) This Ground Lease shall terminate upon the completion of the Ground Lease
Tenn.
(b) The Lessee agrees, upon any termination or completion of the Ground Lease
Term, to quit and surrender the Real Property and vacate the Facilities.
SECTION 4.2. Default by the Lessee. The Lessor shall not have the right to exclude
the Lessee from the Real Property or the Facilities or to take possession of the Real Property or
the Facilities (except pursuant to the Development Agreements and any sublease or management
agreement in favor of the Lessor) or, except as provided in Section 3.11, to terminate this Ground
Lease prior to the termination of the Ground Lease Term notwithstanding any default by the
Lessee hereunder. However, in the event of any default by the Lessee hereunder, the Lessor may
maintain any action permitted in equity, including any action for specific performance.
SECTION 4.3. Quiet Enjoyment. Subject to the Development Agreements, the
Conference Facilities Sublease and Operating Agreement and matters of record as of the date
hereof, the Lessee at all times during the term of this Ground Lease shall peaceably and quietly
have and enjoy the Real Property and the Facilities.
SECTION 4.4. No Merger. Except as expressly provided herein, no union of the
interests of the Lessor and the Lessee herein or in the Development Agreements shall result in a
merger of this Ground Lease and the title to the Facilities.
SECTION 4.5. Maintenance of Premises. Subject to the provisions of the Conference
Facilities Sublease and Operating Agreement, the Lessee covenants that it will maintain or cause
to be maintained the Real Property and the Facilities, and will not cause, permit or suffer to be
caused or permitted waste thereto. At the conclusion of the Ground Lease Term, the Real
Property shall be returned to the Lessor, together with the Facilities and any other improvements
thereto, in substantially the condition thereof as of the date the Real Property and the Facilities
are delivered to the Lessee, subject to normal wear and tear. The Lessee shall not make or
consent to any other improvements, modifications or alterations to the Real Property or the
Facilities or any portion thereof, or remove any part thereof without the prior written consent of
both the Lessor and any Mortgagee.
SECTION 4.6. Option to Purchase. The Lessee does hereby grant and convey to the
Lessor an exclusive and irrevocable option to purchase the Facilities for a purchase price of One
Dollar. Said option may be exercised by the Lessor in writing at any time after the expiration of
the Ground Lease Term (including a termination under Section 3.11). Upon the Lessor's
exercise of said option, the Lessee shall execute and deliver to the Lessor a Bill of Sale granting
to the Lessor fee simple title and ownership of the Facilities in a form reasonably acceptable to
the Lessor; provided, however, the only warranties in said Bill of Sale shall be the due authority
Exhibit B
Page 15
of the signer and a limited warranty of title with respect to any person claiming by, thorough, and
under the Lessee.
This Section 4.6 shall survive any termination of this Ground Lease.
[END OF ARTICLE IV]
Exhibit B
Page 16
ARTICLE V
CONTROL OF REAL PROPERTY AND
FACILITIES DURING GROUND LEASE TERM
SECTION 5.1. Control of Real Property and Facilities During Ground Lease Term.
Subject to the provisions of this Ground Lease (including the easements granted herein) and the
Conference Facilities Sublease and Operating Agreement, during the Ground Lease Term, the
Lessee shall have complete control over the Facilities.
[END OF ARTICLE V]
Exhibit B
Page 17
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Covenants Running with the Real Property. All covenants, promises,
conditions and obligations herein contained or implied by law are covenants running with the Real
Property and shall attach and bind and inure to the benefit of the Lessor and the Lessee and their
respective heirs, legal representatives, and permitted successors and assigns, except as otherwise
provided herein.
SECTION 6.2. Binding Effect. This Ground Lease shall inure to the benefit of and
shall be binding upon the Lessor, the Lessee and their respective permitted successors and
assigns.
SECTION 6.3. Severability. In the event any provision hereof shall be determined to
be invalid or unenforceable, the validity and effect of the other provisions hereof shall not be
affected thereby.
SECTION 6.4. Amendment, Changes and Modifications. Except as otherwise
expressly set forth herein, this Ground Lease may not be effectively amended, changed, modified,
altered or terminated without the prior written consent of the Lessor and the Lessee and any
Mortgagee.
SECTION 6.5. Execution in Counterparts. This Ground Lease may be executed
simultaneously in two or more counterparts, each of which shall be deemed to be an original and
all of which together shall constitute but one and the same instrument.
SECTION 6.6. Applicable Law. This Ground Lease shall be governed by and
construed in accordance with the laws of the State.
SECTION 6.7. Captions. The Section and Article headings herein are for convenience
only and in no way define, limit or describe the scope or intent of any of the provisions hereof.
SECTION 6.8. Notices. It shall be sufficient service of any notice, request, complaint,
demand or other paper required by this Ground Lease to be given to or filed with the Lessor or
the Lessee if the same is given or filed in the manner and at the addresses specified in the
Conference Center Development Agreement. Further, if Lessor shall mortgage its interest in this
Ground Lease, Lessee shall give to each Mortgagee, at the address of such Mortgagee provided
to Lessee by Lessor or any Mortgagee, a copy of each notice of default given by Lessee at the
same time as and whenever any such notice of default shall thereafter be given by Lessee to
Lessor.
SECTION 6.9. Compliance. Notwithstanding anything in this Ground Lease to the
contrary, during the term of this Ground Lease, neither the Lessee nor any assignee of the
Lessee's interest hereunder nor any sublessee of the Lessee shall operate the Facilities for any
purpose which is not in compliance with all applicable governmental rules, regulations and
orders.
Exhibit B
Page 18
SECTION 6.10. Memorandum of Lease. Simultaneously with the execution of this
Ground Lease, the parties shall execute the Memorandum of Lease, and the Lessor shall
promptly record the Memorandum of Lease in the Aiken County, South Carolina RMC Office.
[END OF ARTICLE VI]
Exhibit B
Page 19
WITNESS the due execution of this Ground Lease Agreement effective as of the date
first above written.
ACKERMAN GREENSTONE NORTH
AUGUSTA,LLC,a Georgia limited liability
Witness company(Seal)
By:
Witness
Print Name:
Title:
State of )
) Acknowledgment
County of )
I, , a notary public for the State and County aforesaid, do hereby
certify that , as , of Ackerman Greenstone North Augusta, LLC, a
Georgia limited liability company,personally appeared before me this day and acknowledged the due
execution of the foregoing instrument.
Witness my hand and official seal this the day of , 2017.
Notary Public (Notarial Seal)
My Commission Expires:
Exhibit B
Page 20
CITY OF NORTH AUGUSTA, SOUTH CAROLINA, a
municipal corporation organized and existing under the
Witness laws of the State of South Carolina (Seal)
By:
Witness
Print Name:
Title:
State of South Carolina )
Acknowledgment
County of Aiken
I, , a notary public for the State and County aforesaid, do hereby certify that
, as of the City of North Augusta, South Carolina, personally appeared
before me this day and acknowledged the due execution of the foregoing instrument.
Witness my hand and official seal this the day of , 2017.
Notary Public (Notarial Seal)
My Commission Expires:
Exhibit B
Page 21
EXHIBIT A
LEGAL DESCRIPTION OF THE HOTEL PROPERTY AND THE REAL PROPERTY
The"Hotel Property" is the following tract of real property:
All that tract or parcel of land lying and being situate in the City of North Augusta, Aiken
County, South Carolina and being more particularly described as follows:
Commencing at a#5 rebar found at the intersection of the southern right of way (r/w) of
Railroad Avenue (66' r/w) and the eastern r/w of Esplanade Avenue (50' r/w), said point being
the POINT OF BEGINNING;
Thence along the southern r/w of Railroad Avenue South 69 degrees 52 minutes 06
seconds East for a distance of 307.88 feet to a #5 rebar found; thence South 20 degrees 07
minutes 54 seconds West for a distance of 231.97 feet to a#5 rebar found on the northern r/w of
Brissie Drive (unopened); thence along the northern r/w of Brissie Drive (62' nominal r/w)North
69 degrees 51 minutes 36 seconds West for a distance of 307.88 feet to a #5 rebar found on the
eastern r/w of Esplanade Avenue; thence along the eastern r/w of Esplanade Avenue North 20
degrees 07 minutes 54 seconds East for a distance of 231.93 feet to a #5 rebar found on the
southern r/w of Railroad Avenue, said point being the POINT OF BEGINNING,
Containing 1.64 Acres and is more fully shown on a plat prepared for Ackerman
Greenstone North Augusta, LLC by Cranston Engineering Group, P.C. dated June 6, 2017, last
revised 11/08/2017.
The "Real Property"is that portion of the Hotel Property lying underneath the Facilities as shown
as cross-hatched on the plan attached as Exhibit A-1 to this Ground Lease, together with
easements granted for the benefit of and appurtenant to the Real Property described in Section
3.1 of this Ground Lease.
The Real Property does not include, and the Lessor hereby reserves the use of, (i) all air rights
and improvements above the ceiling of the Facilities, including without limitation all floors of
the Hotel that are located above the Facilities and (ii) any portions of the Hotel that are not part
of the Facilities.
The Real Property is also subject to the easements appurtenant to the portions of the Hotel lying
outside of the Facilities and burdened by certain easements benefitting the Hotel, all as described
in Section 3.1 of this Ground Lease.
Exhibit B
Page 22
EXHIBIT A-1
FLOOR PLAN DEPICTING THE CONFERENCE FACILITIES
ill
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Exhibit B
Page 23
EXHIBIT B
FORM OF SUPPLEMENT TO GROUND LEASE AGREEMENT
THIS SUPPLEMENT TO GROUND LEASE AGREEMENT (this "Supplement") dated
, 20 , by and between ACKERMAN GREENSTONE NORTH AUGUSTA, LLC, a
limited liability company duly organized and existing under the laws of the State of Georgia, as
lessor (the "Lessor"), and the CITY OF NORTH AUGUSTA, SOUTH CAROLINA, a political
subdivision duly existing under the laws of the State of South Carolina, as lessee (the "Lessee").
WITNESSETH
WHEREAS, the Lessor and the Lessee have entered into that certain Ground Lease
Agreement dated , 20 (the "Ground Lease"), and pursuant to Section 3.1
thereof, enter into this Supplement for the purposes set forth herein (with all capitalized terms
used in this Supplement having the meanings set forth in the Ground Lease).
NOW, THEREFORE, for and inconsideration of the mutual promises and covenants
herein contained, the parties hereto hereby agree as follows:
The Ground Lease is hereby amended to delete Exhibit A attached thereto and replace it
in its entirety with Exhibit A-1 attached hereto. [Note: this amendment must also be approved by
any Mortgagee.]
Except as amended herein, the Ground Lease shall remain in full force and effect.
[Signatures Appear on Following Pages]
Exhibit B
Page 24
WITNESSES:
ACKERMAN GREENSTONE NORTH
AUGUSTA, LLC, a Georgia limited
Witness liability company (Seal)
By:
Witness
Print Name:
Title:
State of
Acknowledgment
County of
, a notary public for the State and County aforesaid, do
hereby certify that , as , of Ackerman Greenstone North
Augusta, LLC, a Georgia limited liability company, personally appeared before me this day
and acknowledged the due execution of the foregoing instrument.
Witness my hand and official seal this the day of , 2017.
Notary Public (Notarial Seal)
My Commission Expires:
Exhibit B
Page 25
CITY OF NORTH AUGUSTA, SOUTH
CAROLINA, a municipal corporation organized and
Witness existing under the laws of the State of South Carolina
(Seal)
Witness By:
Print Name:
Title:
State of South Carolina )
) Acknowledgment
County of Aiken )
I, , a notary public for the State and County aforesaid, do hereby
certify that , as of the City of North Augusta, South Carolina,
personally appeared before me this day and acknowledged the due execution of the foregoing
instrument.
Witness my hand and official seal this the day of , 2017.
Notary Public (Notarial Seal)
My Commission Expires:
Exhibit B
Page 26
EXHIBIT C
FORM OF MEMORANDUM OF LEASE
THIS MEMORANDUM OF GROUND LEASE AGREEMENT (this "Memorandum")
dated , 2017, by and between ACKERMAN GREENSTONE NORTH AUGUSTA,
LLC, a limited liability company duly organized and existing under the laws of the State of
Georgia, as lessor(the "Lessor"), and the CITY OF NORTH AUGUSTA, SOUTH CAROLINA,
a political subdivision duly existing under the laws of the State of South Carolina, as lessee (the
"Lessee").
WITNESSETH
WHEREAS, the Lessor and the Lessee have entered into that certain Ground Lease
Agreement dated , 2017 (the "Ground Lease"), and pursuant to Section 6.11
thereof, enter into this Memorandum for the purposes set forth herein (with all capitalized terms
used in this Memorandum having the meanings set forth in the Ground Lease).
NOW, THEREFORE, for and inconsideration of the mutual promises and covenants
herein contained, the parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms used but not otherwise defined herein shall
have the meanings set forth in the Ground Lease.
2. Leased Premises. The premises leased pursuant to the Ground Lease is located in
the City of North Augusta, South Carolina and consist of the "Real Property"
more particularly described on Exhibit A attached hereto and incorporated herein
by reference [Note: use same Exh. A that is attached to the Ground Lease so as to
be sure to make clear that the Real Property is a portion of the Hotel Property],
together with certain conference center improvements constructed or to be
constructed on such real property(collectively, the "Facilities").
3. Term. The Term of the Ground Lease shall commences on the date of the Ground
Lease and end on the earlier to occur of(a) midnight on November 1, 2048, or(b)
the date the Bonds are fully repaid.
4. Lessee Covenants. Lessee has not made, done, executed or suffered, and warrants
that it will not make, do, execute or suffer, any act or thing whereby the Lessor's
interests in the Real Property and the Facilities shall be or may be impaired,
changed or encumbered in any manner whatsoever except as permitted by the
Ground Lease.
5. Purchase Option. Pursuant to Section 4.6 of the Ground Lease, Lessor has an
exclusive and irrevocable option to purchase the Facilities for a purchase price of
One Dollar. Said option may be exercised by the Lessor in writing at any time
after the expiration of the Ground Lease Term.
Exhibit B
Page 27
Nothing herein contained is intended to or shall be deemed to change, modify, or affect
any of the terms or provisions of the Ground Lease or the rights, duties, and obligations created
thereby, all of which remain in full force and effect. In the event of a conflict between the terms
of the Ground Lease and the terms of this Memorandum of Lease, the terms of the Ground Lease
shall control.
[Signatures Appear on Following Pages]
Exhibit B
Page 28
WITNESSES:
ACKERMAN GREENSTONE NORTH
AUGUSTA, LLC, a Georgia limited
Witness liability company(Seal)
By:
Witness
Print Name:
Title:
State of )
) Acknowledgment
County of
I, , a notary public for the State and County aforesaid, do
hereby certify that , as , of Ackerman Greenstone North
Augusta, LLC, a Georgia limited liability company, personally appeared before me this day
and acknowledged the due execution of the foregoing instrument.
Witness my hand and official seal this the day of , 2017.
Notary Public (Notarial Seal)
My Commission Expires:
Exhibit B
Page 29
CITY OF NORTH AUGUSTA, SOUTH
CAROLINA, a municipal corporation organized and
Witness existing under the laws of the State of South Carolina
(Seal)
Witness By:
Print Name:
Title:
State of South Carolina )
Acknowledgment
County of Aiken )
I, , a notary public for the State and County aforesaid, do hereby
certify that , as of the City of North Augusta, South Carolina,
personally appeared before me this day and acknowledged the due execution of the foregoing
instrument.
Witness my hand and official seal this the day of , 2017.
Notary Public (Notarial Seal)
My Commission Expires:
Exhibit B
Page 30
CONFERENCE CENTER SUBLEASE AND OPERATING AGREEMENT
between
CITY OF NORTH AUGUSTA, SOUTH CAROLINA
as sublessor
and
ACKERMAN GREENSTONE NORTH AUGUSTA, LLC
as sublessee
Dated as of , 2017
Exhibit C
Page 1
INDEX
ITO BE COMPLETED WHEN FORM OF DOCUMENT IS FINALI
Page
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Definitions of Words and Terms
Section 1.2. Rules of Construction
Section 1.3. Accounting Terms
ARTICLE II
REPRESENTATIONS
Section 2.1. Representations by the Sublessee
Section 2.2. Representations by the Sublessor
ARTICLE III
SUBLEASE OF THE REAL PROPERTY AND FACILITIES; HOTEL DEVELOPMENT
AGREEMENT; OPERATION OF FACILITIES; LEASEHOLD MORTGAGES
Section 3.1. Transfer of Facilities and Lease of the Real Property; Easements
Section 3.2. Compliance with Ground Lease
Section 3.3. Assignments, Subleases and Mortgages
Section 3.4. Rent and Other Consideration
Section 3.5. Taxes and Insurance
Section 3.6. Hotel Development Agreement; Operation of Facilities
Section 3.7. Leasehold Mortgages
Section 3.8. Limitations on Right to Terminate Sublease
Section 3.9. No Modifications
Section 3.10. No Merger
Section 3.11. Additional Lender Protection Provisions
Section 3.12. Estoppel Certificate
ARTICLE IV
TERMINATION
Section 4.1. Termination
Section 4.2. Default by the Sublessee
Section 4.3. Quiet Enjoyment
Section 4.4. No Merger
Section 4.5. Maintenance of Premises
Exhibit C
Page 2
ARTICLE V
CONTROL OF REAL PROPERTY AND
FACILITIES DURING SUBLEASE TERM
Section 5.1. Control of Real Property and Facilities During Sublease Term
ARTICLE VI
MISCELLANEOUS
Section 6.1. Covenants Running with the Real Property
Section 6.2. Binding Effect
Section 6.3. Severability
Section 6.4. Amendment, Changes and Modifications
Section 6.5. Execution in Counterparts
Section 6.6. Applicable Law
Section 6.7. Captions
Section 6.8. Notices
Section 6.9. Compliance
Section 6.10. Memorandum of Sublease
EXHIBIT A— Legal Description of the Hotel Property and the Real Property A-1
EXHIBIT A-1 - Floor Plan Depicting the Conference Facilities A-1-1
EXHIBIT B—Form of Supplement to Sublease Agreement B-1
EXHIBIT C — Form of Memorandum of Sublease C-1
Exhibit C
Page 3
CONFERENCE CENTER SUBLEASE AND OPERATING AGREEMENT
THIS CONFERENCE CENTER SUBLEASE AND OPERATING AGREEMENT dated
as of , 2017 (this "Sublease") made and entered into by and between the
CITY OF NORTH AUGUSTA, SOUTH CAROLINA, a political subdivision of the State of
South Carolina (the "Sublessor"), as lessor, and ACKERMAN GREENSTONE NORTH
AUGUSTA, LLC, a limited liability company duly organized and existing under the laws of the
State of Georgia(the"Sublessee"), as lessee.
WITNESSETH:
WHEREAS, the Sublessor and the Sublessee, together with Gree jackets Baseball LLC
and Greenstone Hammond's Ferry, LLC, have, pursuant to the Act, entered into that certain
Master Development Agreement dated March 15, 2017 and recorded on March 28, 2017 in Book
4654, Page 723 in the Aiken County, South Carolina records (the "Master Development
Agreement"); and
WHEREAS, pursuant to the Master Development Agreement Sublessee has agreed to
construct an approximately 100 key, full service hotel (the "Hotel") on an approximately 1.64
acre tract of land located in the City of North Augusta, South Carolina owned by Sublessee
which is more particularly described on Exhibit A attached hereto (the"Hotel Property"); and
WHEREAS, the Sublessor is the lessee of that certain tract of real property also described
on Exhibit A attached hereto (the "Real Property'`), which is a portion of the Hotel Property,
pursuant to the terms of that certain Ground Lease Agreement dated of even date herewith (the
"Ground Lease") by and between Sublessor, as lessee, and Sublessee, as lessor; and
WHEREAS, pursuant to the terms of the Ground Lease, Sublessee, as lessor thereunder,
has agreed to construct for Sublessor, as lessee thereunder, a conference facility containing no
less than 7,000 gross square feet (as defined in the Ground Lease, the "Facilities"), which
Facilities shall be integrated into the Hotel's site plan and floor plan design, pursuant to plans
and specifications to be mutually agreed upon by Sublessor and Sublessee; and
WHEREAS, the Sublessor desires to sublease the Real Property and lease the Facilities to
the Sublessee as provided herein, and the Sublessee desires to sublease the Real Property and
lease the Facilities from the Sublessor; and
WHEREAS, the Sublessee desires to operate the Facilities located or tube located on the
Real Property in accordance with the term of this Sublease; and
WHEREAS, the parties desire to enter into this Sublease in order to achieve the foregoing
purposes; and
Exhibit C
Page 4
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements, including the payment of the Sublease Rent herein set forth, the Sublessor and the
Sublessee do hereby covenant and agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.1. Definitions of Words and Terms. Capitalized terms not otherwise
defined herein are used with the meanings provided therefor in the Ground Lease, unless some
other meaning is plainly intended. In addition, the following terms shall have the meanings set
forth below, unless some other meaning is plainly intended:
"Memorandum of Sublease" means a memorandum of this Sublease substantially in the
form attached hereto as Exhibit C executed by the Sublessor and the Sublessee and to be
recorded in the Office of the Aiken County, South Carolina RMC Office.
"Sublease Rent" means the amount set forth in Section 3.4 of this Sublease.
"Sublease Term" means the term of this Sublease, which commences on the date of this
Sublease and ends on the expiration of the Ground Lease Term.
SECTION 1.2. Rules of Construction. Words of the masculine gender shall be deemed
and construed to include correlative words of the feminine and neuter genders. Unless the
context shall otherwise indicate, the words importing the singular number shall include the plural
and vice versa, and words importing person shall include firms, associations and corporations,
including public bodies, as well as natural persons.
The table of contents hereto and the headings and captions herein are not a part of this
document.
SECTION 1.3. Accounting Terms. Accounting terms used herein and not otherwise
specifically defined shall have the meaning ascribed to such terms by accounting principles
generally accepted in the United States as from time to time in effect.
[END OF ARTICLE I]
Exhibit C
Page 5
ARTICLE II
REPRESENTATIONS
SECTION 2.1. Representations by the Sublessee. The Sublessee represents, warrants
and covenants as follows:
(a) The Sublessee is a limited liability company duly organized and existing under the
laws of the State of Georgia.
(b) The Sublessee has full power and authority to enter into the transactions
contemplated by this Sublease and to carry out its obligations hereunder.
(c) Neither the execution and delivery of this Sublease, nor the fulfillment of or
compliance with the terms and conditions hereof, nor the consummation of the transactions
contemplated hereby, conflicts with or results in a breach of the terms, conditions or provisions
of any restriction or any agreement or instrument to which the Sublessee is now a party or by
which the Sublessee is bound.
SECTION 2.2. Representations by the Sublessor. The Sublessor represents, warrants
and covenants as follows:
(a) The Sublessor is a political subdivision of the State.
(b) The Council has full power and authority to enact the Ordinance and the Sublessor
has full power and authority to enter into the transactions contemplated by this Sublease and to
carry out its obligations hereunder.
(c) Neither the execution and delivery of this Sublease, nor the fulfillment of or
compliance with the terms and conditions hereof, nor the consummation of the transactions
contemplated hereby, conflicts with or results in a breach of the terms, conditions or provisions
of any restriction or any agreement or instrument to which the Sublessor is now a party or by
which the Sublessor is bound.
[END OF ARTICLE II]
Exhibit C
Page 6
ARTICLE III
SUBLEASE OF THE REAL PROPERTY AND FACILITIES; HOTEL DEVELOPMENT
AGREEMENT; OPERATION OF FCILITIES; LEASEHOLD MORTGAGES
SECTION 3.1. Lease of the Real Property; Easements. The Sublessor hereby
demises and subleases to the Sublessee the Real Property and demises and leases to the Sublessee
the Facilities, and the Sublessee hereby subleases from the Sublessor the Real Property and
leases from the Sublessor the Facilities for a term which ends on the expiration of the Sublease
Term for the rentals and other consideration set forth in Section 3.4 hereof and in accordance
with the provisions of this Sublease. The parties hereto agree, if either so requests following the
completion of the construction of the Facilities, to amend Exhibit A to this Sublease by the
execution of a Supplement to Sublease Agreement, in substantially the form of Exhibit B
attached hereto, to describe more specifically the as-built location of the Real Property and the
Facilities. Sublessor also assigns to Sublessee, until the expiration of the Sublease Term, the
easements granted to Sublessor under the Ground Lease.
SECTION 3.2. Compliance with Ground Lease. Sublessor and Sublessee acknowledge
and agree that this Sublease is subject and subordinate to the Ground Lease. Sublessee shall
comply with all of the terms and conditions of the Ground Lease and shall not commit any other act
or omission which would constitute a default by Sublessor as lessee under the terms of the
Ground Lease, which default continues beyond any applicable notice or cure period set forth in
the Ground Lease. Notwithstanding anything contained herein to the contrary, so long as the
terms of this Sublease do not create a breach or default of the Ground Lease, in the event that any
term or provision of this Sublease shall conflict with the terms of the Ground Lease, the terms of
this Sublease shall control as between Sublessor and Sublessee.
SECTION 3.3. Assignments and Subleases. Except as specifically set forth in Section
3.7 below and except in connection with any assignment of the Ground Lease by Sublessee as
lessor thereunder pursuant to a sale of the Hotel, Sublessee may not sublease, assign, transfer or
otherwise dispose of its interest in this Sublease, without the written consent of the Sublessor and
any Lender, which consents shall not be unreasonably withheld.
SECTION 3.4. Rent and Other Consideration. As and for rental hereunder and in
consideration for the subleasing of the Real Property and the lease of the Facilities to the
Sublessee hereunder, the Sublessee agrees to pay to the Sublessor an annual amount of Sublease
Rent of One Dollar per year. The Sublessor hereby acknowledges receipt from the Sublessee, on
the date hereof, of the Sublease Rent due with respect to the Sublease Term.
SECTION 3.5. Taxes. To the extent the same are the responsibility of Sublessor under
the Ground Lease, the Sublessee shall pay and have responsibility for all taxes on the Real
Property and the Facilities, including, without limitation, any special assessments which may be
levied on the Real Property by the Municipal Improvement District overlaying all or a portion of
the Real Property.
Exhibit C
Page 7
SECTION 3.6. Hotel Development Agreement; Operation of Facilities.
The Sublessee has agreed with the Sublessor to construct the Hotel on the Hotel Property,
which Hotel will initially be a full service hotel containing a minimum of 180 rooms. All costs
associated with the construction of the Hotel, other than certain infrastructure improvements to
be provided by the Sublessor and other than the costs to construct the Facilities which shall be
paid by the Sublessor all as more particularly set forth in the Master Development Agreement
and the Conference Center Development Agreement, will be borne by the Sublessee. The
Sublessee shall construct the Facilities at the same time and in conjunction with the construction
of the Hotel, which Facilities shall be integrated into the Hotel's site plan and floor plan design,
pursuant to plans and specifications to be mutually agreed upon by the Sublessor and the
Sublessee. The Hotel shall also include appropriate and mutually agreed upon amenities such as
a restaurant, bar and certain retail operations. The Hotel and the Facilities shall share a common
kitchen, other support functions, common furnishings, fixtures and equipment. The Sublessee
agrees that the Hotel design and layout, including the Facilities, will be subject to the review and
approval of the Sublessor, which approval shall not be unreasonably withheld. The Sublessee
will enter into a franchise agreement with a suitable hotel franchisor and the form of such
franchise agreement shall be in form and substance acceptable to the Sublessor in the Sublessor's
reasonable discretion and the Sublessor shall have the right, but not the obligation, in its sole
discretion, to become a party to or a third-party beneficiary of any such franchise agreement if
permitted by the franchisor. It is anticipated by the Sublessor and the Sublessee that the Hotel
will initially be operated as a Crowne Plaza, which the parties agree is a nationally-recognized
full-service hotel brand acceptable to Sublessor. Upon request from any Lender providing
financing to Sublessee for the construction of the Hotel and/or the Facilities, Sublessor will
confirm in writing to such Lender the plans for the Hotel and the Facilities and the franchise
agreement for the Hotel that have been approved by the City.
Except as otherwise agreed by the Sublessor and the Sublessee in each party's reasonable
discretion, following their construction by the Sublessee as a part of the construction of the
Hotel, the Facilities shall be used only for the hosting of conferences, meetings and other
gatherings typically held in hotel conference facilities and for no other purpose. The Sublessee
will operate and manage the Facilities as an integrated part of the Hotel operations and in
compliance with the requirements of any franchise agreement governing the operation of the
Hotel. The Sublessee may modify, alter and repair the Facilities from time to time during the
Sublease Term, including any modifications, alterations or repairs required by the Hotel
franchisor; provided, however, the Sublessee may not make any structural changes to the
Facilities without the Sublessor's approval, which shall not be unreasonably withheld,
conditioned or delayed. All net revenues generated by the Facilities will belong to the Sublesee.
All expenses for the operation of the Facilities will fall to the Sublessee. Further, in the event
any future capital expenses are required during the Sublease Term for the continued operation of
the Facilities, the same shall be the responsibility of the Sublessee. The Facilities shall always be
operated in compliance with all applicable governmental rules, regulations and orders.
SECTION 3.7. Leasehold Mortgages. Subject to the terms of this Section 3.7, and
Section 3.8, Section 3.9, Section 3.10 and Section 3.11 below, the Sublessee shall have the right
to enter into a leasehold mortgage or similar instrument (together with any amendments,
Exhibit C
Page 8
revisions, modifications, renewals, extensions or replacements thereof, a"Leasehold Mortgage")
with a lender ("Lender") pursuant to which the Sublessee may assign to the Lender, as security
for the obligations of Sublessee under such Leasehold Mortgage its interest (i) this Sublease and
any interest of the Sublessee in the premises described in this Sublease (including, without
limitation, the Facilities), and (ii) in any personal property situated on the Real Property that is
owned by Sublessee (items (i) and (ii) being referred to collectively herein as the "Leasehold
Interest"). The Sublessor does hereby assent to any such Leasehold Mortgage and to any
subsequent sale or transfer under any Leasehold Mortgage by foreclosure or assignment (or
transfer)-in-lieu of foreclosure. The Sublessor agrees that if Lender succeeds to Sublessee's
Leasehold Interest, Lender may freely assign the Leasehold Interest.
SECTION 3.8. Limitations on Right to Terminate Sublease. Until all obligations of
Sublessee to the Lender under the Leasehold Mortgage (the "Loan Obligations") have been
completely paid and performed, and the Leasehold Mortgage has been released, Sublessor may
not terminate this Sublease without first complying with the requirements of Section 3.11 hereof.
Until all the Loan Obligations have been completely paid and performed, and the Leasehold
Mortgage has been released, Sublessee may not terminate this Sublease without Lender's prior
written consent, which consent may be granted or withheld in Lender's sole and absolute
discretion for any reason or no reason whatsoever.
SECTION 3.9. No Modifications. Until the Loan Obligations have been completely
paid and performed by Sublessee, and the Leasehold Mortgage has been released, neither
Sublessor nor Sublessee shall amend or modify this Sublease ("Sublease Modification") without
the Lender's prior written consent, such consent not to be unreasonably withheld, delayed or
conditioned. Any attempted Sublease Modification which is not entered into in compliance with
this Section 3.9 shall be null and void and of no further force and effect.
SECTION 3.10. No Merger. If the ownership of the fee interest in the Real Property
and Leasehold Interest become vested in the same person or entity, then as long as the Leasehold
Mortgage shall remain outstanding, such occurrence shall not result in a merger of title unless
consented to in writing by the person or entity having such common ownership and by any
Lender, which consent may be granted or withheld in Lender's sole and absolute discretion for
any reason or no reason whatsoever. Unless Lender in writing grants its consent to any such
merger of title, this Sublease and the Leasehold Mortgage lien on the Leasehold Interest shall
remain in full force and effect.
SECTION 3.11. Additional Lender Protection Provisions. To the extent of any
inconsistency between the other terms and provisions contained in this Sublease and the terms
and conditions set forth below in this Section 3.11, the terms and conditions in this Section 3.11
shall govern and control:
(a) Notices to Lender; Lender's Right to Cure.
(i) Sublessor shall send to any Lender a true, correct and complete copy of
any notice to Sublessee of a default by Sublessee under this Sublease, at the same time as and
whenever any such notice of default shall be given by Sublessor to Sublessee, in accordance with
Exhibit C
Page 9
the notice instructions provided to Sublessor by Sublessee or Lender. No notice by Sublessor
shall be deemed to have been given unless and until a copy thereof sha } have been so given to
the Lender. Sublessee irrevocably directs that Sublessor accept, and Sublessor agrees to accept,
performance and compliance by Lender of and with any term, covenant, agreement, provision,
condition or limitation on Sublessee's part to be kept, observed or performed under this Sublease
with the same force and effect as though kept, observed or performed by Sublessee.
(ii) Notwithstanding anything provided to the contrary in this Sublease
(including, without limitation, Section 4.2 below), this Sublease may not be terminated because
of a default thereunder on the part of Sublessee until and unless:
(A) Notice of any such default shall have been given to Lender in
accordance with the provisions of Section 3.11(a)(i) above; and
(B) Lender has not cured such default within thirty(30) days following
the expiration of Sublessee's notice and/or cure periods as set forth in this Sublease or, if such
default is non-monetary and cannot reasonably be cured within such thirty (30) day period,
Lender has not commenced to cure such default within such thirty (30) day perio and diligently
prosecuted such cure to completion (the -Non-Monetary Default Cure Period").
Notwithstanding anything contained in this Agreement to the contrary, in no event shall the Non-
Monetary Default Cure Period exceed ninety (90) days following the expiration of the applicable
notice and cure period afforded to Sublessee for non-monetary defaults under this Sublease.
(b) New Sublease to Lender. If this Sublease is terminated for any reason
whatsoever including, without limitation, because of Sublessee's default hereunder, Sublessor
shall give the Lender written notice thereof. The Lender shall have sixty(60) days after receipt o[
such notice to elect by written notice to Sublessor to enter into a new sublease of the Real
Property and the Facilities (the "New Sublease-). Upon any such election, the following
provisions shall apply:
(i) The New Sublease shall be for the remainder of the term of this Sublease,
effective on the date of execution, and shall provide for the same amounts of rent and contain the
same covenants, agreements, conditions, provisions, restrictions and limitations as are then
contained in this Sublease (with appropriate changes to reflect that the Lender, and not
Sublessee, is the new tenant under the New Sublease).
(ii) The New Sublease shall be executed by Sublessor and the Lender within
thirty (30) days after receipt by Sublessor of notice of the Lender's election to enter into a New
Sublease with Sublessor.
(iii) The New Sublease shall require the Lender to perform all of Sublessee's
unfulfilled monetary obligations under this Sublease through the date of termination (the
"Delinquent Amounts") as well as any other of Sublessee's unfilled obligations as of the date of
termination that are capable of being cured by Lender using reasonable commercial efforts.
Exhibit C
Page 10
Within five (5) business days after execution of the New Sublease, Lender will pay all
Delinquent Amounts.
SECTION 3.12. Estoppel Certificate. Within ten (10) days after request by the
Sublessor, the Sublessee agrees to execute and deliver to the Sublessor an estoppel certificate
addressed to the Sublessor certifying (if such be the case) that this Sublease is unmodified and is
in full force and effect (and if there have been modifications, that the same is in full force and
effect as modified and stating said modifications); certifying that there are no defenses or offsets
against the enforcement thereof or stating those claimed by the Sublessee; stating the date to
which Sublease Rent and other charges have been paid; and certifying that there are no events of
default or events or conditions which, with the giving of notice or passage of time, would be an
event of default under this Sublease. Such certificate shall also include such other information as
may reasonably be required by the Sublessor. Any such certificate may be relied upon by the
Sublessee and any other party to whom such certificate is addressed.
Within ten (10) days after request by the Sublessee, the Sublessor agrees to execute and
deliver to the Sublessee an estoppel certificate addressed to the Sublessee and any Lender (or
proposed Lender) or assignee of the Sublessee's interest in, or any purchaser of, the Leasehold
Interest or any part thereof, certifying (if such be the case) that this Sublease is unmodified and is
in full force and effect (and if there have been modifications, that the same is in full force and
effect as modified and stating said modifications); certifying that there are no defenses or offsets
against the enforcement thereof or stating those claimed by the Sublessor; stating the date to
which Sublease Rent and other charges have been paid; and certifying that there are no events of
default or events or conditions which, with the giving of notice or passage of time, would be an
event of default under this Sublease. Such certificate shall also include such other information as
may reasonably be required by the Sublessee. Any such certificate may be relied upon by the
Sublessor and any Lender, proposed Lender, assignee, purchaser and any other party to whom
such certificate is addressed.
[END OF ARTICLE III]
Exhibit C
Page 11
ARTICLE IV
TERMINATION
SECTION 4.1. Termination.
(a) This Sublease shall terminate upon the completion of the Sublease Term.
(b) The Sublessee agrees, upon any termination or completion of the Sublease Term,
to quit and surrender the Real Property and vacate the Facilities, unless Sublessee, as the lessor
under the Ground Lease, shall become the owner of the Facilities pursuant to the terms of the
Ground Lease.
SECTION 4.2. Default by the Sublessee. Subject to the terms of Section 3.8 above, in
the event of any default by Sublessee under this Sublease, which default is not cured within thirty
(30) days following receipt of written notice of such default from Sublessor (or such longer
period as may be reasonably required in the event such default is not reasonably susceptible of
cure within thirty (30) days as long as Sublessee promptly commences to cure any such default
and diligently pursues the same to completion), the Sublessor shall have the right to terminate
this Sublease prior to the termination of the Sublease Term, or Sublessor may maintain any
action permitted in equity, including any action for specific performance.
SECTION 4.3. Quiet Enjoyment. Subject to the Development Agreements, the terms
and conditions of this Sublease and matters of record as of the date hereof, the Sublessee at all
times during the term of this Sublease shall peaceably and quietly have and enjoy the Real
Property and the Facilities.
SECTION 4.4. No Merger. Except as expressly provided herein, no union of the
interests of the Sublessor and the Sublessee herein or in the Development Agreements shall result
in a merger of this Sublease and the title to the Facilities.
SECTION 4.5. Maintenance of Premises. Sublessee covenants that it will, at its sole
cost and expense, maintain or cause to be maintained the Real Property and the Facilities in
substantially the same condition as such improvements were initially constructed, normal wear
and tear and changes approved by Sublessor excepted, and will not cause, permit or suffer to be
caused or permitted waste thereto. Unless Sublessee, as the lessor under the Ground Lease, shall
become the owner of the Facilities pursuant to the terms of the Ground Lease, at the conclusion
of the Sublease Term, the Real Property, together with the Facilities and any other improvements
thereto, shall be in substantially the condition thereof, as to the Real Property, as of the date the
Real Property is delivered to the Sublessee and, as to the Facilities, as of the date the construction
of the Facilities is completed, subject to normal wear and tear and changes permitted under this
Sublease or that may otherwise be approved by Sublessor, such approval not to be unreasonably
withheld, delayed or conditioned.
[END OF ARTICLE IV]
Exhibit C
Page 12
ARTICLE V
CONTROL OF REAL PROPERTY AND
FACILITIES DURING SUBLEASE TERM
SECTION 5.1. Control of Real Property and Facilities During Sublease Term.
Subject to the provisions of this Sublease, during the Sublease Term, the Sublessee shall have
complete control over the Real Property and the Facilities.
[END OF ARTICLE V]
Exhibit C
Page 13
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Covenants Running with the Real Property. All covenants, promises,
conditions and obligations herein contained or implied by law are covenants running with the Real
Property and shall attach and bind and inure to the benefit of the Sublessor and the Sublessee and
their respective heirs, legal representatives, and permitted successors and assigns, except as
otherwise provided herein.
SECTION 6.2. Binding Effect. This Sublease shall inure to the benefit of and shall be
binding upon the Sublessor, the Sublessee and their respective permitted successors and assigns.
SECTION 6.3. Severability. In the event any provision hereof shall be determined to
be invalid or unenforceable, the validity and effect of the other provisions hereof shall not be
affected thereby.
SECTION 6.4. Amendment, Changes and Modifications. Subject to Sections 3.8, 3.9
and 3.11, this Sublease may not be effectively amended, changed, modified, altered or terminated
without the prior written consent of the Sublessor and the Sublessee.
SECTION 6.5. Execution in Counterparts. This Sublease may be executed
simultaneously in two or more counterparts, each of which shall be deemed to be an original and
all of which together shall constitute but one and the same instrument.
SECTION 6.6. Applicable Law. This Sublease shall be governed by and construed in
accordance with the laws of the State.
SECTION 6.7. Captions. The Section and Article headings herein are for convenience
only and in no way define, limit or describe the scope or intent of any of the provisions hereof.
SECTION 6.8. Notices. It shall be sufficient service of any notice, request, complaint,
demand or other paper required by this Sublease to be given to or filed with the Sublessor or the
Sublessee if the same is given or filed in the manner and at the addresses specified in the
Conference Center Development Agreement. Further, pursuant to Section 3.11 copies of any
notices of default given by Sublessor to Sublessee shall also be given to Lender.
SECTION 6.9. Compliance. Notwithstanding anything in this Sublease to the contrary,
during the term of this Sublease, neither the Sublessee nor any assignee of the Sublessee's
interest hereunder nor any sublessee of the Sublessee shall operate the Facilities for any purpose
which is not in compliance with all applicable governmental rules, regulations and orders.
SECTION 6.10. Memorandum of Sublease. Simultaneously with the execution of this
Sublease, the parties shall execute the Memorandum of Sublease, and the Sublessee shall
promptly record the Memorandum of Sublease in the Aiken County, South Carolina RMC
Office.
[END OF ARTICLE VI]
Exhibit C
Page 14
WITNESS the due execution of this Sublease effective as of the date first above written.
ACKERMAN GREENSTONE NORTH
AUGUSTA,LLC, a Georgia limited liability
Witness company(Seal)
By:
Witness
Print Name:
Title:
State of )
Acknowledgment
County of )
I, , a notary public for the State and County aforesaid, do hereby
certify that , as , of Ackerman Greenstone North Augusta, LLC, a
Georgia limited liability company,personally appeared before me this day and acknowledged the due
execution of the foregoing instrument.
Witness my hand and official seal this the day of , 2017.
Notary Public (Notarial Seal)
My Commission Expires:
Exhibit C
Page 15
CITY OF NORTH AUGUSTA, SOUTH CAROLINA, a
municipal corporation organized and existing under the
Witness laws of the State of South Carolina (Seal)
By:
Witness
Print Name:
Title:
State of South Carolina
Acknowledgment
County of Aiken )
I, , a notary public for the State and County aforesaid,do hereby certify that
, as of the City of North Augusta, South Carolina, personally appeared
before me this day and acknowledged the due execution of the foregoing instrument.
Witness my hand and official seal this the day of , 2017.
Notary Public (Notarial Seal)
My Commission Expires:
Exhibit C
Page 16
EXHIBIT A
LEGAL DESCRIPTION OF THE HOTEL PROPERTY AND THE REAL PROPERTY
The "Hotel Property"is the following tract of real property:
All that tract or parcel of land lying and being situate in the City of North Augusta, Aiken
County, South Carolina and being more particularly described as follows:
Commencing at a #5 rebar found at the intersection of the southern right of way (r/w) of
Railroad Avenue (66' r/w) and the eastern r/w of Esplanade Avenue (50' r/w), said point being
the POINT OF BEGINNING;
Thence along the southern r/w of Railroad Avenue South 69 degrees 52 minutes 06
seconds East for a distance of 307.88 feet to a #5 rebar found; thence South 20 degrees 07
minutes 54 seconds West for a distance of 231.97 feet to a#5 rebar found on the northern r/w of
Brissie Drive (unopened); thence along the northern r/w of Brissie Drive (62' nominal r/w)North
69 degrees 51 minutes 36 seconds West for a distance of 307.88 feet to a #5 rebar found on the
eastern r/w of Esplanade Avenue; thence along the eastern r/w of Esplanade Avenue North 20
degrees 07 minutes 54 seconds East for a distance of 231.93 feet to a #5 rebar found on the
southern r/w of Railroad Avenue, said point being the POINT OF BEGINNING,
Containing 1.64 Acres and is more fully shown on a plat prepared for Ackerman
Greenstone North Augusta, LLC by Cranston Engineering Group, P.C. dated June 6, 2017, last
revised 11/08/2017.
The "Real Property" is that portion of the Hotel Property lying underneath the Facilities as shown
as cross-hatched on the plan attached as Exhibit A-1 to this hereto, together with easements
granted for the benefit of and appurtenant to the Real Property as described in Section 3.1 of the
Ground Lease.
The Real Property does not include (i) all air rights and improvements above the ceiling of the
Facilities, including without limitation all floors of the Hotel that are located above the Facilities
and (ii) any portions of the Hotel that are not part of the Facilities.
The Real Property is also subject to the easements appurtenant to the portions of the Hotel lying
outside of the Facilities and burdened by certain easements benefitting the Hotel, all as described
in Section 3.1 of this Ground Lease.
Exhibit C
Page 17
EXHIBIT A-1
FLOOR PLAN DEPICTING THE CONFERENCE FACILITIES iv 1 7 iiy 4!re.,,o4 4 4 Otv• ' a m a -- FT i i I I-1L_ LEI�0i��.VIi'147.1' ��i�'.� I�'Ii 4 i:.— ,...- 10, J
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.
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Exhibit C
Page 18
EXHIBIT B
FORM OF SUPPLEMENT TO SUBLEASE AGREEMENT
THIS SUPPLEMENT TO GROUND LEASE AGREEMENT (this "Supplement") dated
, 20 , by and between ACKERMAN GREENSTONE NORTH AUGUSTA, LLC, a
limited liability company duly organized and existing under the laws of the State of Georgia, as
lessor (the "Sublessor"), and the CITY OF NORTH AUGUSTA, SOUTH CAROLINA, a
political subdivision duly existing under the laws of the State of South Carolina, as lessee (the
"Sublessee").
WITNESSETH
WHEREAS, the Sublessor and the Sublessee have entered into that certain Sublease
Agreement dated , 20 (the "Sublease"), and pursuant to Section 3.1 thereof,
enter into this Supplement for the purposes set forth herein(with all capitalized terms used in this
Supplement having the meanings set forth in the Sublease).
NOW, THEREFORE, for and inconsideration of the mutual promises and covenants
herein contained, the parties hereto hereby agree as follows:
The Sublease is hereby amended to delete Exhibit A-1 attached thereto and replace it in
its entirety with Exhibit A-1 attached hereto. [Note: this amendment must also be approved by
any Lender.]
Except as amended herein, the Sublease shall remain in full force and effect.
[Signatures Appear on Following Pages]
Exhibit C
Page 19
WITNESSES:
ACKERMAN GREENSTONE NORTH
AUGUSTA, LLC, a Georgia limited
Witness liability company(Seal)
By:
Witness
Print Name:
Title:
State of )
) Acknowledgment
)
County of
I, , a notary public for the State and County aforesaid, do
hereby certify that , as , of Ackerman Greenstone North
Augusta, LLC, a Georgia limited liability company, personally appeared before me this day
and acknowledged the due execution of the foregoing instrument.
Witness my hand and official seal this the day of , 2017.
Notary Public (Notarial Seal)
My Commission Expires:
Exhibit C
Page 20
CITY OF NORTH AUGUSTA, SOUTH
CAROLINA, a municipal corporation organized and
Witness existing under the laws of the State of South Carolina
(Seal)
Witness By:
Print Name:
Title:
State of South Carolina
Acknowledgment
County of Aiken
I, , a notary public for the State and County aforesaid, do hereby
certify that , as of the City of North Augusta, South Carolina,
personally appeared before me this day and acknowledged the due execution of the foregoing
instrument.
Witness my hand and official seal this the day of , 2017.
Notary Public (Notarial Seal)
My Commission Expires:
Exhibit C
Page 21
EXHIBIT C
FORM OF MEMORANDUM OF SUBLEASE
THIS MEMORANDUM OF SUBLEASE (this "Memorandum") dated , 2017,
by and between the CITY OF NORTH AUGUSTA, SOUTH CAROLINA, a political
subdivision duly existing under the laws of the State of South Carolina, as sublessor (the
"Sublessor"), and ACKERMAN GREENSTONE NORTH AUGUSTA, LLC, a limited liability
company duly organized and existing under the laws of the State of Georgia, as sublessee (the
"Sublessee").
WITNESSETH
WHEREAS, the Sublessor and the Sublessee have entered into that certain Conference
Center Sublease and Operating Agreement dated _, 2017 (the "Sublease"), and
pursuant to Section 6.10 thereof, enter into this Memorandum for the purposes set forth herein
(with all capitalized terms used in this Memorandum having the meanings set forth in the
Sublease).
NOW, THEREFORE, for and inconsideration of the mutual promises and covenants
herein contained, the parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms used but not otherwise defined herein shall
have the meanings set forth in the Sublease.
2. Leased Premises. The premises subleased pursuant to the Sublease is located in
the City of North Augusta, South Carolina and consist of the "Real Property"
more particularly described on Exhibit A attached hereto and incorporated herein
by reference [Note: use same Exh. A that is attached to this Sublease so as to be
sure to make clear that the Real Property is a portion of the Hotel Property],
together with certain conference center improvements constructed or to be
constructed on such real property(collectively, the "Facilities").
3. Term. The Term of the Sublease shall commences on the date of the Sublease and
end on the earlier to occur of(a) midnight on November 1, 2048, or (b) the date
the Ground Lease terminates.
Nothing herein contained is intended to or shall be deemed to change, modify, or affect
any of the terms or provisions of the Sublease or the rights, duties, and obligations created
thereby, all of which remain in full force and effect. In the event of a conflict between the terms
of the Sublease and the terms of this Memorandum, the terms of the Sublease shall control.
[Signatures Appear on Following Pages]
Exhibit C
Page 22
WITNESSES:
ACKERMAN GREENSTONE NORTH
AUGUSTA, LLC, a Georgia limited
Witness liability company(Seal)
By:
Witness
Print Name:
Title:
State of )
Acknowledgment
County of
I, , a notary public for the State and County aforesaid, do
hereby certify that , as , of Ackerman Greenstone North
Augusta, LLC, a Georgia limited liability company, personally appeared before me this day
and acknowledged the due execution of the foregoing instrument.
Witness my hand and official seal this the day of , 2017.
Notary Public (Notarial Seal)
My Commission Expires:
Exhibit C
Page 23
CITY OF NORTH AUGUSTA, SOUTH
CAROLINA, a municipal corporation organized and
Witness existing under the laws of the State of South Carolina
(Seal)
Witness By:
Print Name:
Title:
State of South Carolina )
Acknowledgment
County of Aiken )
I, , a notary public for the State and County aforesaid, do hereby
certify that , as of the City of North Augusta, South Carolina,
personally appeared before me this day and acknowledged the due execution of the foregoing
instrument.
Witness my hand and official seal this the day of , 2017.
Notary Public (Notarial Seal)
My Commission Expires:
Exhibit C
Page 24