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UNIVERSITY OF SOUTH ALABAMA
BOARD OF TRUSTEES
Executive Committee Meeting
August 4, 2006
11:30 a.m.
The Executive Committee of the University of South Alabama Board of Trustees was duly convened by Ms.
Bettye Maye on behalf of Chairman Donald L. Langham on Friday, August 4, 2006, at 11:34 a.m. in the
Frederick P. Whiddon Administration Building.
Members Present:
Trustees Samuel Jones, Bettye Maye, Mayer Mitchell, and James Nix.
Members Absent:
Trustees Donald Langham and Steven Stokes.
Administration
and Others:
President Gordon Moulton; Drs. Dale Adams and Robert Shearer; Messrs. Ken and
Wayne Davis; Mss. Kathryn Drey, Vicki Tate (Faculty Senate) and Jean Tucker.
Press:
Ms. Rhoda Pickett (Press Register).
President Moulton welcomed Trustees and guests, and asked Ms. Maye to preside in the absence of Chairman
Langham. He introduced Ms. Vicki Tate, Vice Chair of the Faculty Senate, and reported on enrollment, saying
that figures show an increase of at least 300 students above last year’s total at this time. Classes begin on
August 21. President Moulton said that occupancy of existing student housing is approximately 98 percent.
President Moulton introduced ITEMS 1 and 2 as follows:
RESOLUTION
GROUND LEASE FOR PARCEL TO THE USA RESEARCH AND TECHNOLOGY CORPORATION
FOR STUDENT APARTMENTS
WHEREAS, the University of South Alabama (“University”) owns certain real property which it
utilizes to further its educational mission, and
WHEREAS, the USA Research and Technology Corporation (“Corporation”), a not-for-profit,
supporting organization of the University, was incorporated to further the educational and scientific
mission of the University, to promote the University and its schools and departments, to promote the
development of and to facilitate funding for the infrastructure and services in Mobile, Alabama, and to
attract high technology and scientific enterprises, and
WHEREAS, in order for said Corporation to fulfill its above-stated mission, it is recommended
that the University lease approximately twelve acres of land near the northwest corner of the intersection
of Old Shell Road and Cleverdon Parkway to the Corporation for the development, construction, and
support of the park and its buildings for the sum of ONE AND NO/100 DOLLAR ($1.00) per annum, and
a term of approximately forty years with extension terms available for a maximum extension of thirty-five
years, provided, however, that any sub-lease by the Corporation shall be subject to prior approval of the
Executive Committee of the University’s Board of Trustees, and
WHEREAS, should said Corporation cease to exist for any reason, land and improvements
thereon will revert to University consistent with the terms of the lease, and
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WHEREAS, the University has determined that leasing the real property described above
is in the best interest of the University in that it will allow the University to continue and enhance its
valued missions of education, research, and service,
THEREFORE, BE IT RESOLVED, that the Board of Trustees of the University of South
Alabama, by and through its Executive Committee, approves and hereby authorizes the President
of the University to proceed with the execution of the attached negotiated land lease agreement with
the USA Research and Technology Corporation, for the lease of approximately twelve acres of land
near the northwest corner of the intersection of Old Shell Road and Cleverdon Parkway to the
Corporation for development, support, and operation of the Corporation, with the understanding that
any sub-lease by the Corporation shall be subject to prior approval of the Executive Committee of
the Board of Trustees of the University of South Alabama.
RESOLUTION
GROUND LEASE OF PARCEL TO CAMPUS CREST OF MOBILE, LLC, FOR STUDENT APARTMENTS
WHEREAS, the USA Research and Technology Corporation (“Corporation”), an Alabama
not for profit corporation, a supporting organization of the University of South Alabama
(“University”), was incorporated to further the educational and scientific mission of the University,
to promote the University and its schools and departments, to promote the development of and to
facilitate funding for the infrastructure and services in Mobile, Alabama, and to attract high
technology and scientific enterprises, and
WHEREAS, the Corporation currently leases approximately twelve acres of land near the
northwest corner of the intersection of Old Shell Road and Cleverdon Parkway from the University
to fulfill its above-stated mission, and
WHEREAS, the Corporation has been approached by Campus Crest of Mobile, LLC, for
a ground lease of approximately twelve acres of land near the northwest corner of the intersection
of Old Shell Road and Cleverdon Parkway for the development and construction of student
apartments thereon, and
WHEREAS, in furtherance of said Corporation in its above-stated mission, it was approved
by the Board of Directors of the Corporation, subject to the approval by the Executive Committees
of the Board of Directors of the Corporation and the Board of Trustees of the University of the
ground lease document, that the Corporation sublease approximately twelve acres of land near the
northwest corner of the intersection of Old Shell Road and Cleverdon Parkway to Campus Crest
of Mobile, LLC, or its affiliate for the development and construction of student apartments thereon
at a fair market value rent, for an initial term of forty years with extension terms available for a
maximum extension of thirty-five years,
THEREFORE, BE IT RESOLVED, that the Executive Committee of the University of South
Alabama Board of Trustees approves the ground lease agreement attached hereto for the sublease
of approximately twelve acres of land near the northwest corner of the intersection of Old Shell
Road and Cleverdon Parkway, from the Corporation to Campus Crest, LLC, or its affiliate for the
development and construction of student apartments thereon.
President Moulton discussed finance strategies and design trends for construction of student housing.
Current consumer trends indicate apartment-style student housing is in demand. President Moulton assured
the Committee that considerable discussion and due diligence had been put forth to determine the best
approach for providing additional housing. He explained the recommended action would entail leasing
land to a third party, the USA Research and Technology Corporation, which would sublease the land to
a private firm, Campus Crest of Mobile, LLC, to construct and manage student housing. The use of the
land and apartments would be restricted for student use only. He detailed a map showing the proposed
location with access off Old Shell Road, north of the intramural fields.
GROUND LEASE AGREEMENT
between
UNIVERSITY OF SOUTH ALABAMA
as Lessor
and
USA RESEARCH & TECHNOLOGY CORPORATION
as Lessee
Dated as of August 4, 2006
GROUND LEASE AGREEMENT (this “Agreement”) is entered into and effective
as of the _________of __________, 2006 between UNIVERSITY OF SOUTH ALABAMA (the
“Lessor”), and USA RESEARCH & TECHNOLOGY CORPORATION (the “Lessee”), a notfor-profit corporation organized under the laws of the State of Alabama.
R E C I T A L S:
WHEREAS, the University has had under consideration for several months the possibility of
promoting its educational mission through activities to be constructed on land owned by the
University and part of the University campus in Mobile, Alabama;
WHEREAS, the University has determined that it is in the best interests of the University to
provide for certain activities through the USA Research &Technology Corporation, an Alabama notfor-profit corporation organized for the benefit of and to support the educational initiatives of the
University:
WHEREAS, the Board of Trustees has determined to lease the Site to the Lessee upon the
conditions herein stated; and
WHEREAS, the Board of Trustees is of the opinion that it is necessary and desirable and in
the interests of the University that this Ground Lease be entered into between the University and the
Lessee.
NOW, THEREFORE, in consideration of the respective representations and agreements
hereinafter contained, Lessor and Lessee agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions. In addition to the words and terms elsewhere defined in this
Agreement, the following words and terms as used in this Agreement shall have the following
meanings, and such definitions shall be equally applicable to both the singular and plural forms of
the words and terms herein defined:
“Facilities” means any structure, improvement or equipment at anytime located on the Site,
whether constructed or located thereon by the Lessee or any other Person acting pursuant to
authority given by the Lessee in furtherance of the Purposes.
“Lease Term” means the period specified in Section 5.1 hereof.
“Lessee” means USA Research & Technology Corporation and its successor and assignee.
“Lessor” means the University of South Alabama.
“Person” means any corporation, natural person, firm, joint venture, partnership, trust,
unincorporated organization, state or local government or any department, corporation or agency of
any government.
“Purposes” means activities conducted on the Site by Lessee or by any tenant of Lessee or
any other Person acting pursuant to rights granted by Lessee with respect to the Site in furtherance
of any one or more of the following activities:
(i)
To further the educational and scientific mission of the University
through support of its academic programs, scientific research and development
initiatives, and other related activities and to enhance the educational and training
opportunities available to the University=s faculty and students;
(ii)
To promote the University and its colleges, schools and departments
and to assist them in the development and improvement of curricula, academic
programs and physical facilities for the benefit of the University=s students and
faculty and the attainment of greater educational opportunities and a more
comprehensive learning experience;
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(iii) To further the development of and facilitate funding for infrastructure
and services in Mobile, Alabama to attract high-technology enterprises to the local
community that will offer students and faculty a practical, real-world learning
experience and enhance the educational and professional opportunities available to
them;
(iv)
To promote the development, growth and retention of high technology
industries and research in Alabama that will provide professional and career
opportunities attractive to the University=s students and faculty and serve as an
inducement for them to remain in Alabama;
(v)
To advance the scientific education and training of the University=s
students and to promote scientific research and development in the State of Alabama;
(vi)
To attract nationally prominent scientists, researchers, and faculty to
the University;
(vii) To provide fellowship and internship opportunities for the
University=s faculty and students in the scientific research and high-technology areas;
(viii) To create, develop, construct, operate, manage and finance one or
more research and technology parks, technology enterprise centers and other
facilities and operations which further scientific research activities of the University
and contribute to the development of high-technology businesses in the State of
Alabama;
(ix)
To further the University=s scientific research and development
activities and to facilitate the efficient transfer and utilization of University
developed technology, patents, processes, copyrights, formulae and other know-how
for the maximum public benefit; and
(x)
To further the University=s efforts to publish and disseminate the
results of scientific research and development conducted by its faculty and students.
“Site” shall mean the real property described in Exhibit A hereto.
Section 1.2
Rules of Interpretation.
(a)
A reference to any document or agreement shall include such document or
agreement as amended, restated, substituted, modified or supplemented from time to time in
accordance with its terms.
(b)
The singular includes the plural and the plural includes the singular.
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(c)
A reference to any law includes any amendment or modification to such law.
(d)
A reference to any Person includes its permitted successors and permitted assigns.
(e)
The words “include”, “includes” and “including” are not limiting.
(f)
Any reference to an Article number (e.g., Article IV) or a Section number without
further qualification shall be construed to be a reference to the designated Article number or
Section number hereof unless the use or context clearly indicates otherwise.
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ARTICLE II
DEMISING CLAUSES
Section 2.1 Demising Clauses. Lessor hereby demises and leases to Lessee, and Lessee
hereby rents from Lessor, for and during the Lease Term, the following described properties and
related rights:
EXHIBIT “A”
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ARTICLE III
REPRESENTATIONS, WARRANTIES AND AGREEMENTS;
LIMITATIONS ON USE, LEASE AND MORTGAGING
Section 3.1 Representations of Lessee. Lessee makes the following representations,
warranties and agreements as the basis for the undertakings on its part herein contained:
(a)
Organization and Authority of Lessee. Lessee (i) is a not-for-profit corporation
duly organized, validly existing and in good standing under the laws of the State of Alabama, and
(ii) has all requisite power and authority and all material licenses and permits to own, lease and
operate its properties and to carry on its activities as now being conducted and as presently proposed
to be conducted and to enter into and to perform and observe the agreements on its part contained in
herein.
(b)
Enforceability. This Agreement is the legal, valid and binding obligation of Lessee
enforceable in accordance with its terms, except to the extent the enforceability hereof may be
subject to (i) the exercise of judicial discretion in accordance with general principles of equity, and
(ii) bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting creditors'
rights heretofore or hereinafter enacted to the extent constitutionally applicable.
(c)
Purposes.
Lessee will use the Site and all improvements thereon solely for the
Purposes of construction and maintenance of USA student housing, unless otherwise agreed to by
Lessor and Lessee.
Section 3.2 Limitations On Use of Site; Support of University. Lessee may from time
to time sub-lease all or any portion of the Site to one or more Persons for the purposes of carrying
out the Purposes with the written consent of Landlord. Accordingly,
(a)
Persons desiring to locate facilities on the Site must engage in
the operation of student housing for the benefit of the University and its students and must abide by
all USA Housing Policies and Procedures and the and USA Student Code of Conduct as these
documents exist from time to time.
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ARTICLE IV
SITE MANAGEMENT; REVENUES; IMPROVEMENTS
Section 4.1 Lessee to Operate and Manage. During the Lease Term, Lessee shall
manage and operate, or caused to be managed and operated, all Facilities and the assets, properties
and operations comprising the Facilities located on the Site.
Section 4.2 Revenues. All revenues and income derived from or with respect to the
Facilities shall be the property of the Lessee.
Section 4.3 Improvements to Site; Removal. Lessor and Lessee recognize and agree
that from time to time Facilities will be constructed on the Site by Lessee or by other Persons
pursuant to arrangements with Lessee in furtherance of the Purposes. Fee title to all Facilities
constructed on the Site by Lessee or by any other Person and all additions, alterations and
improvements thereto, even though a part of the realty, shall be and remain in Lessee or such other
Persons or their assigns during the Lease Term but shall vest in Lessor upon expiration of the Lease;
provided, however that Lessor shall have the right to have Tenant remove all additions, alterations
and improvements upon the Premises at Tenant’s sole cost upon the expiration of the Lease.
In the event Lessee fails to remove or cause to be removed the Facilities from the Site
following the expiration of the Lease Term, Lessor shall be entitled to specific performance
requiring such removal, or damages, or both.
Section 4.4 Certificates; Subordination. Lessor recognizes that, in order for Lessee to
provide for the acquisition and construction of Facilities on the Site in furtherance of the Purposes, it
will be necessary for Lessee, or other Persons who are tenants of Lessee, to incur Indebtedness and
to assign, mortgage and pledge the rights of Lessee or such other Persons in and to the Facilities and
to the leasehold interest of Lessee or such other Person in the Site or portion thereof. Accordingly,
Lessor hereby consents to the assignment and mortgage by Lessee of its rights under this Lease, or
the assignment and mortgage of the rights of any other Person claiming an interest in the Site by and
through Lessee, in connection with the incurring of Indebtedness in connection with the acquisition
of Facilities in furtherance of the Purposes, subject however to the provisions of Article. Lessor
agrees to execute and deliver such certificates as may be reasonably requested by lenders to confirm
the foregoing in connection with Indebtedness incurred by Lessee or any other Person to any such
lender. Further, Lessor hereby agrees that the obligations of Lessee to apply the income and receipts
derived by Lessee from the Facilities to the payment of Indebtedness or to satisfy obligations of
Lessee to any Person occupying the Facilities shall be prior and superior to any obligations of Lessee
to Lessor hereunder, and Lessor hereby expressly consents to the subordination of its rights
hereunder to payment of such obligations of Lessee. It is the intent of Lessor and Lessee that any
leasehold mortgagee of any part of the Site under a leasehold mortgage entered into by or with the
consent of Lessee shall be a third-party beneficiary of this Section 4.4.
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Section 4.5 Taxes. Throughout the Lease Term, Lessee shall pay and assume liability for
all Taxes which may be levied or assessed against the Site, the interests of Lessor and Lessee therein
and all other improvements and personal property thereon, whether belonging to Lessor or Lessee,
or to which either of them may become liable. Lessee hereby agrees to protect, indemnify, defend
and hold Lessor and the Site harmless from all liability for any and all such Taxes, together with any
interest, penalties or other sums thereby imposed and from any sale or other proceeding to enforce
payment thereof. During the Lease Term, Lessee shall cause all Taxes levied or imposed upon any
personal property situated in, on or about the Site to be taxed or assessed separately from the Site
and not allow such Taxes to become a lien on or against the Site.
For the purpose of this Agreement, ATaxes@ shall mean and include the amount of all taxes,
assessments, water rents, rates and charges, sewer rents, and other governmental and quasigovernmental impositions and charges of every kind and nature whatsoever, extraordinary as well as
ordinary, including fire district and library dues and assessments, if any, gross receipts, rent and
privilege or use taxes assessed to or paid by Lessor with respect to the Site, the Facilities and all
other buildings, appurtenances, equipment, machinery, personal property and any other
improvements or additions thereto. Taxes shall also mean and include all impositions charged, laid,
levied, assessed or imposed in lieu of or in addition to the foregoing under or by virtue of all present
or future laws, ordinances, requirements, orders, directives, rules or regulations of applicable federal,
state, county or municipal governments; provided, however, that in no event shall Lessee be
obligated to pay income, franchise or other similar taxes payable by Lessor.
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ARTICLE V
EFFECTIVE DATE OF THIS LEASE AGREEMENT;
DURATION OF LEASE TERM; RENTAL PROVISIONS
Section 5.1 Term.
(a)
First Renewal Term. If this Lease shall be in force and effect and there shall
be no Event of Default (as defined in Section 19 hereof) on the date for the expiration of the Initial
Term, and provided the Renewal Conditions (as defined below) have been satisfied to the reasonable
satisfaction of Lessor, Lessee shall be entitled to a renewal of the term of this Lease for a period of
twenty (20) years beginning immediately upon the expiration of the Initial Term (the “First Renewal
Term”). The First Renewal Term shall be upon the same terms, conditions and covenants contained
herein for the Initial Term.
(b)
Second Renewal Term. If this Lease shall be in force and effect and there
shall be no Event of Default on the date for the expiration of the First Renewal Term, and provided
the Renewal Conditions have been satisfied to the reasonable satisfaction of Lessor, Lessee shall be
entitled to a renewal of the term of this Lease for a period of fifteen (15) years beginning
immediately upon the expiration of the First Renewal Term (the “Second Renewal Term”). The
Second Renewal Term shall be upon the same terms, conditions and covenants contained herein for
the Initial Term and the First Renewal Term.
(c)
Renewal Conditions. The renewal of the Initial Term or the First Renewal
Term by Lesee pursuant to Section 2(a) or 2(b), respectively, hereof shall require that Lessee
demonstrate to the reasonable satisfaction of Lessor that the following conditions (collectively, the
“Renewal Conditions”) will be satisfied as set forth below:
(i)
That Lesee has given written notice (the “Renewal Notice”) to Lessor
stating Lesee’s desire to renew the term of this Lease upon the expiration of the Initial Term or the
First Renewal Term, as the case may be, at least one hundred eighty (180) days prior to the date for
the expiration of the Initial Term or the First Renewal Term, as the case may be. Within thirty (30)
days of its receipt of the Renewal Notice, Lessor shall provide Lessee with a detailed schedule of
items it requires to satisfy the Renewal Condition described in (ii) below. If, after receipt of the
schedule, Lessee desires to continue with a renewal of the Lease, it shall notify Lessor within thirty
(30 days of its intent to continue, and shall immediately proceed with plans to complete the
scheduled items as soon as practicable.
(ii)
The Improvements on the Premises are to be maintained, repaired,
upgraded, refurbished and renovated as necessary or appropriate in order to preserve and enhance
the original quality and aesthetic appearance of the student housing structures, club house and pool
area, parking, landscaping, common areas and other appurtenances, amenities and improvements on
or about the Premises. Lessee hereby agrees and acknowledges that the satisfaction of this Renewal
Condition involves a subjective determination on the part of Lessor and hereby waives any claim,
right or cause of action against Lessor provided that Lessor acts in good faith in making a
determination that Lessee has failed to satisfy this Renewal Condition. If Lesee determines to
proceed with the renewal, it shall diligently pursue completion of the scheduled items and complete
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the same prior to the end of the first year of the Renewal Term. Failure to do so shall constitute a
default hereunder.
Section 5.2 Delivery and Acceptance of Possession. . Lessor hereby delivers sole and
exclusive possession of the Site to Lessee, and Lessee hereby accepts possession of the Site. The
Site shall be used by Lessee in furtherance of the Purposes and for no other purpose.
Section 5.3 Rental Payments. Lessee shall pay as rental (the “Rent”) for the use of the
Facilities in advance on the 1st day of each year throughout the term hereof the sum of $100.00.
Section 5.4 Obligations of Lessee Hereunder Absolute and Unconditional. The
obligations of Lessee to pay the Rent and to perform and observe the other agreements on its part
contained herein shall be absolute and unconditional.
Section 5.5 Certain Actions by Lessee. Lessee may, at its own cost and expense and in
its own name or in the name of Lessor, prosecute or defend any action or proceeding or take any
other action involving third persons which Lessee deems reasonably necessary in order to ensure the
acquisition, construction and completion of the Facilities or to secure or protect its right of
possession, occupancy and use hereunder, and in such event, provided that Lessee notifies Lessor in
writing of any such proposed action, Lessor hereby agrees to cooperate fully with Lessee and to take
all lawful action which is required to effect the substitution of Lessee for Lessor in any such action
or proceeding at the request of Lessee.
Section 5.6 Easements. Lessee shall have the right to grant easements over, upon and
under the Site for utilities, sewers, ingress and egress, and similar purposes to service the
development thereof and the improvements thereon; and Lessor agrees, from time to time upon
request by Lessee, without any compensation being paid therefor, to join in the granting of such
easements and to take any other action necessary to effectuate the same, all at the expense of Lessee.
Lessor agrees to cooperate with Lessee in granting easements to Lessee over property owned by
Lessor and outside the boundaries of the Site as shall be necessary to provide ingress and egress to
the Site and to provide utilities to the Site to the full extent necessary to make the Site suitable for
the Purposes herein described.
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ARTICLE VI
SPECIAL COVENANTS, REPRESENTATIONS
AND WARRANTIES
Section 6.1 No Warranty of Condition or Suitability by Lessor. Lessor makes no
warranty, either express or implied, as to the suitability of the Site or the Facilities or as to the
condition of the Site or the Facilities or that either is or will be suitable for Lessee's purposes or
needs.
Section 6.2 Inspection of the Site; Access of Lessor to Site. Lessee agrees that Lessor
or any of its duly authorized agents shall have the right at reasonable times to examine and inspect
the Site and the Facilities, subject to the rights of owners or tenants of the Lessee with respect to any
of the Facilities.
Section 6.3 Lessee to Maintain Its Corporate Existence and Tax-Exempt Status.
Lessee agrees that throughout the Lease Term it shall maintain its corporate existence and shall
remain duly qualified to do business in the State of Alabama. Lessee shall preserve and keep in full
force and effect all licenses and permits necessary to the proper conduct of its business in the State
of Alabama and to operate the Facilities. Lessee will maintain its exempt status under Section
501(c)(3) of the Internal Revenue Code of 1986 as a supporting organization of Lessor.
Section 6.4 Indemnification of Lessor; Release and Indemnification Covenants; No
Indemnification by Lessor. (a) Indemnification by Lessee. To the extent permitted by law, Lessee
agrees to indemnify Lessor for and to hold it harmless against any loss, liability or expense
(including reasonable attorneys' fees) arising out of or in connection with any activities conducted on
the Site by Lessee. Lessee hereby releases Lessor from, and shall indemnify and hold Lessor (and
its officers, directors, employees and agents) harmless against, any and all claims and liabilities of
any character or nature whatsoever asserted by or on behalf of any Person arising out of, resulting
from, and in any way connected with the Site, including, without limiting the generality of the
foregoing,
(i)
obligations for the payment of any costs of the Facilities;
(ii)
any loss, destruction of or damage to property of any Person or
Persons or any injury to or death of any natural person or persons occasioned by any
cause whatsoever pertaining to or related to the Site or the Facilities;
(iii) any claims relating to the acquisition, construction and installation of
the Facilities; and
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(iv)
the leasing of the Site or the Facilities to Lessee, or its subtenants or
assigns, and the condition, use, possession or management of the Facilities during the
Lease Term.
Lessee will also pay or reimburse all legal or other expenses reasonably incurred by Lessor (and its
officers, directors, employees and agents) in connection with the investigation or defense of any
action or proceeding, whether or not resulting in liability, with respect to any claim, liability or loss
in respect of which indemnity may be sought against Lessee under the provisions of this Section 6.4.
Anything to the contrary herein contained notwithstanding, the covenants of Lessee
contained in this Section 6.4 shall, with respect to any claim, liability, or loss for which Lessee is
obligated to provide indemnity, remain in full force and effect after the termination of this
Agreement. In the event any action or proceeding arguably barred by the applicable statute of
limitations is brought against any indemnifiable party hereunder, Lessee shall be obligated to defend
such indemnifiable party with respect to such action or proceeding, all to the end that the bar of the
statute of limitations may be asserted by Lessee against the party bringing such action or
proceedings but may not be asserted by Lessee against the indemnifiable party in order to avoid
performing any of Lessee's obligations under this Section 6.4.
(b)
No Indemnification By Lessor. Lessor shall not be liable for any loss, injury, death
or damage to persons or property, which at any time may be suffered or sustained by Lessee, or by
any persons who may at any time by using or occupying or visiting the Site or any Facilities located
thereon, or may be in, on or about the same, whether such loss, injury, death or damage shall be
caused by or in any way result from or arise out of any act, omission, or negligence of Lessee or of
an occupant, subtenant, visitor or user of any portion of the Site or the Facilities, or shall result from
or be caused by any other matter or thing, whether of the same kind as or of a different kind than the
matters or things above set forth, and Lessee shall indemnify Lessor from and against all claims,
liability, loss or damage whatsoever, including attorneys fees, on account of any such loss, injury,
death or damage. Lessee hereby waives all claims against Lessor for damages to the Facilities and
improvements that are hereafter placed or built on the Site, and to the property of Lessee or any
other Person in, on, or about the Site, from any cause arising at any time. The foregoing provisions
shall not apply to loss, injury, death or damage to the extent of the negligence or misconduct of
Lessor, or its respective invitees, licensees, agents or employees.
Section 6.5 Access to Site and Records. Lessee will maintain financial records enabling
the preparation of financial statements in accordance with generally accepted accounting principles;
permit representatives of Lessor or its agents to have access to such financial records and Lessee's
business and other records and the Site of Lessee respecting the activities of Lessee at the Site.
Section 6.6 Further Assurances. Lessee will duly execute and deliver, or cause to be
duly executed and delivered, at the cost and expense of Lessee, such further instruments or
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documents as may be necessary or proper, in the reasonable judgment of the Agent, to carry out the
provisions and purposes of this Agreement.
Section 6.7 Defend Facilities. Lessee will do or cause to be done all things necessary to
defend the Site against any action, suit, proceeding or claim.
Section 6.8 Environmental Matters. Lessee shall comply in all respects with all federal,
state, local and other statutes, ordinances, judgments, rulings and regulations relating to
environmental pollution or environmental regulation or control and shall cause the Site and the
Facilities to be operated and maintained in accordance with all such statues, ordinances, judgments,
rulings and regulations.
Section 6.9 No Waivers. Lessee will not waive any material right under any material
contract or other agreement without the prior written consent of Lessor.
Section 6.10 Amendments to Articles of Incorporation. Lessee will not amend its
Articles of Incorporation or Bylaws without the consent of Lessor except for such amendments as do
not alter the Purposes.
Section 6.11 Other Agreements. Lessee will not enter into any agreement to do anything
prohibited in this Agreement or enter into any agreement which would in any way impair the ability
of Lessee to faithfully perform the affirmative covenants of Lessee contained herein.
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ARTICLE VII
SUBLEASING OR MORTGAGING PERMITTED
Section 7.1 Transfers, Encumbrances and Dispositions by Lessee. Lessee shall have
the right, in furtherance of the Purposes, to sublease its leasehold interest in the Site or any part
thereof or other interest therein with Lessor’s prior consent.
ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.1 Default. Any of the following shall constitute an Event of Default (“Event
of Default”) under this Agreement:
(a)
a default by Lessee in the payment of any Rent when such payment becomes due
and payable, which default shall continue for ten (10) days;
(b)
Lessee shall fail to observe or perform any of the provisions, promises, terms,
covenants, agreements or obligations under this Agreement including but not limited to, Lessee
and/or Sub-Lessee failing to adhere to USA Housing Policies and Procedures and USA Student
Code of Conduct as determined by Lessor, and such failure shall not have been cured within ten
(10) days after written notice of such failure has been delivered to Lessee, or any representation
or warranty made by Lessee herein shall prove to have been false as of the time made, confirmed
or furnished;
(c)
default shall occur (and remain uncured beyond any applicable grace periods) in
the due observance or performance of any material covenant, condition or agreement to be
observed or performed by Lessee pursuant to the terms of any other loan document, contract or
agreement to which it is a party, including any such loan document, contract or agreement
between Lessor and Lessee.
Section 8.2 Remedies. Lessor shall, upon default of Lessee, be entitled to exercise any
and all remedies available to it by law, including specific performance. Each remedy or right of
Lessor shall not be exclusive of but shall be in addition to every other remedy or right now or
hereafter existing at law or in equity. No delay in the exercise or omission to exercise any
remedy or right accruing on any default or Event of Default shall impair any such remedy or
right or be construed to be a waiver of any such default or Event of Default or acquiescence
therein, nor shall it affect any subsequent default or Event of Default of the same or a different
nature. Every such remedy or right may be exercised concurrently or independently and when and
as often as may be deemed expedient by Lessor.
ARTICLE IX
14
MISCELLANEOUS
Section 9.1 No Waiver. Neither Lessee nor any other Person now or hereafter obligated
for the payment when due or the performance when required of the whole or any part of Lessee's
obligations hereunder shall be relieved of such obligation by reason of the failure of Lessor to
comply with any request of Lessee or of any other Person so obligated to enforce any of the
provisions of this Agreement or by reason of any agreement or stipulation between any subsequent
tenant and Lessor extending the time of payment or modifying the terms of any obligations of Lessee
hereunder without first having obtained the consent of Lessor or such other person, and in the latter
event, Lessee shall continue liable to make such payments according to the terms of this Agreement.
Section 9.2 Notices. All notices, requests, demands, consents or other communications
hereunder shall be given in writing at the following addresses:
If to Lessee:
USA Research & Technology Corporation
M. Wayne Davis, Secretary/Treasurer
307 University Boulevard, AD 338
Mobile, Alabama 36688-0002
If to Lessor:
University of South Alabama
V. Gordon Moulton, President
307 University Boulevard, AD 121
Mobile, Alabama 36688-0002
Lessee shall provide Lessor with prompt written notice of any actual or threatened rezoning,
resubdivision, casualty, event of loss, eminent domain or condemnation action or proceeding,
litigation or claim affecting title, revocation of any permit, or any other claim or action adversely
affecting title or use of the or any part thereof or interest therein.
Section 9.3 Successors and Assigns. This Agreement and all of the representations,
warranties, promises, covenants and agreements herein contained shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns. Nothing in this Section
9.3 shall be interpreted to permit any assignment or transfer otherwise limited, prohibited or in any
way regulated hereunder.
Section 9.4 Captions. The captions of this Agreement are for convenience and reference
only and in no way define, limit or describe the scope or intent of this Agreement or in any way
affect this Agreement.
Section 9.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when so executed and delivered, shall be an original; but such
counterparts shall together constitute but one and the same agreement.
15
Section 9.6 Severability. If any clause, provision or section of this Agreement shall, for
any reason, be held illegal or invalid, such illegality or invalidity shall not affect any other provision
of this Agreement, and this Agreement shall be construed and enforced as if such illegal or invalid
provisions had not been contained herein.
Section 9.7
of the parties.
No Amendment. This Agreement may be amended only by written consent
Section 9.8
No Partnership or Joint Venture. Anything in this Agreement to the
contrary notwithstanding, Lessor shall not be deemed a partner, joint venturer or participant in
venture with Lessee in any activity, and Lessee hereby indemnifies and agrees to defend and hold
Lessor harmless (including payment of reasonable attorneys' fees) from any and all damages
resulting from such a construction of the parties' relationship. The requirements herein and the
restrictions imposed in this Agreement are for the sole protection and benefit of Lessor.
Section 9.9
No Third-Party Beneficiaries. Except as expressly set forth in this
Agreement. here are no third-party beneficiaries to this Agreement. All conditions to Lessor's
obligations under this Agreement are imposed solely and exclusively for the benefit of Lessor.
Neither Lessee nor any other person or entity shall have standing to require satisfaction of any such
condition, and neither Lessee nor any other person or entity shall, under any circumstances, be
deemed to be a beneficiary of any conditions hereof, any or all of which conditions may be waived
freely, in whole or in part by Lessor at any time if, in its sole discretion, Lessor deems it advisable so
to do. Lessor make no representations or warranties and assumes no obligation or responsibility with
respect to the quality of the construction of the improvements or any part of the Facilities. Except as
expressly set forth in this Agreement, his Agreement shall not benefit, and may not be relied upon
by, any person or entity other than Lessor and Lessee.
Section 9.10 Governing Law. The laws of the State of Alabama shall govern the
construction and enforcement of this Agreement.
16
IN WITNESS WHEREOF, Lessor and Lessee have caused this Agreement to be executed
in their respective corporate names and their respective corporate seals to be hereunto affixed and
attested by their duly authorized officer.
ATTEST:
UNIVERSITY OF SOUTH ALABAMA
By:____________________________
By:
Its:____________________________
Its: ______________________________________
ATTEST:
USA RESEARCH & TECHNOLOGY
CORPORATION
By:____________________________
By:
Its:____________________________
Its:
17
STATE OF ALABAMA
___________ COUNTY
)
:
)
I, the undersigned, a Notary Public in and for said County in said State, hereby certify that
_____________________, whose name as ____________ of UNIVERSITY OF SOUTH
ALABAMA, an Alabama corporation, is signed to the foregoing Ground Lease Agreement, and who
is known to me, acknowledged before me on this day that, being informed of the contents of the
Ground Lease Agreement, (s)he as such officer, and with full authority, executed the same
voluntarily for and as the act of said corporation.
Given under my hand and seal of office this
day of ____________________, 2006.
Notary Public
[NOTARIAL SEAL]
My commission expires:
STATE OF ALABAMA
__________ COUNTY
)
:
)
I, the undersigned, a Notary Public in and for said County in said State, hereby certify that
________________________, whose name as __________________ of USA RESEARCH &
TECHNOLOGY CORPORATION is signed to the foregoing Ground Lease Agreement, and who
is known to me, acknowledged before me on this day that, being informed of the contents of the
Ground Lease Agreement, (s)he as such officer, and with full authority, executed the same
voluntarily for and as the act of USA RESEARCH & TECHNOLOGY CORPORATION.
Given under my hand and seal of office this
day of ____________________, 2006.
Notary Public
[NOTARIAL SEAL]
My commission expires:
18
EXHIBIT A
Legal Description of the Land
The Land consists of approximately eleven and one-half (11 ½) acres as more particularly described
in Section 1 of the Lease. The exact legal description of the Land will be established by the Survey,
as described in the Lease, and when established Landlord and Tenant shall execute an amendment to
the Lease setting forth such legal description.
1
GROUND LEASE
This GROUND LEASE (this “Lease”) is entered into as of the ____ day of _____, 2006,
by and between the USA RESEARCH AND TECHNOLOGY CORPORATION, an Alabama
non-profit corporation (hereinafter called “Landlord”), and CAMPUS CREST AT MOBILE,
L.L.C., an Alabama limited liability company (hereinafter called “Tenant”);
WITNESSETH:
1.
Premises and Term. In consideration of the obligation of Tenant to pay rent as
hereinafter provided, and in further consideration of the other terms, provisions and covenants
hereof, Landlord hereby demises and leases to Tenant, and Tenant hereby takes and leases from
Landlord, that certain tract or parcel of land containing approximately eleven and one-half acres
(11.5), as such land is more particularly described on Exhibit “A”, attached hereto and made a
part hereof by this reference (hereinafter called the “Land”), and together with any buildings and
other improvements erected or placed thereon by Tenant or its successors or assigns (hereinafter
collectively called the “Improvements”) (the Land and the Improvements being hereinafter
collectively called the “Premises”). TO HAVE AND TO HOLD the same for an initial term of
forty (40) years (hereinafter called the “Initial Term”), plus the Interim Term (as hereinafter
defined). Rent Commencement Date shall be the earlier of October 31, 2006 or the date Tenant
receives all permits necessary to construct the Improvements, but the Initial Term shall begin the
earlier of August 2007 or issuance of a Certificate of Occupancy. Initial Term and rent due
thereunder shall expire the last day of the month in which the fortieth (40th) anniversary of the
Rent Commencement Date occurs. “Interim Term” means the period of time from the execution
of this Lease until the beginning of the Initial Term.
2.
Lease Term Renewal Options.
(a)
First Renewal Term. If this Lease shall be in force and effect and there
shall be no Event of Default (as defined in Section 19 hereof) on the date for the expiration of
the Initial Term, and provided the Renewal Conditions (as defined below) have been satisfied to
the reasonable satisfaction of Landlord, Tenant shall be entitled to a renewal of the term of this
Lease for a period of twenty (20) years beginning immediately upon the expiration of the Initial
Term (the “First Renewal Term”). The First Renewal Term shall be upon the same terms,
conditions and covenants contained herein for the Initial Term, except as to the annual rent
payable by Tenant to Landlord during the First Renewal Term. The annual rent payable by
Tenant to Landlord during the First Renewal Term for the lease of the Premises and the
Improvements shall be determined in accordance with Section 3 hereof.
(b)
Second Renewal Term. If this Lease shall be in force and effect and there
shall be no Event of Default on the date for the expiration of the First Renewal Term, and
provided the Renewal Conditions have been satisfied to the reasonable satisfaction of Landlord,
Tenant shall be entitled to a renewal of the term of this Lease for a period of fifteen (15) years
beginning immediately upon the expiration of the First Renewal Term (the “Second Renewal
Term”). The Second Renewal Term shall be upon the same terms, conditions and covenants
contained herein for the Initial Term and the First Renewal Term, except as to the annual rent
2
payable by Tenant to Landlord during the Second Renewal Term. The annual rent payable by
Tenant to Landlord during the Second Renewal Term for the lease of the Premises and the
Improvements shall be determined in accordance with Section 3 hereof.
(c)
Renewal Conditions. The renewal of the Initial Term or the First Renewal
Term by Tenant pursuant to Section 2(a) or 2(b), respectively, hereof shall require that Tenant
demonstrate to the reasonable satisfaction of Landlord that the following conditions
(collectively, the “Renewal Conditions”) will be satisfied as set forth below:
(i)
That Tenant has given written notice (the “Renewal Notice”) to
Landlord stating Tenant’s desire to renew the term of this Lease upon the expiration of the Initial
Term or the First Renewal Term, as the case may be, at least one hundred eighty (180) days prior
to the date for the expiration of the Initial Term or the First Renewal Term, as the case may be.
Within thirty (30) days of its receipt of the Renewal Notice, Landlord shall provide Tenant with
a detailed schedule of items it requires to satisfy the Renewal Condition described in (ii) below.
If, after receipt of the schedule, Tenant desires to continue with a renewal of the Lease, it shall
notify Landlord within thirty (30 days of its intent to continue, and shall immediately proceed
with plans to complete the scheduled items as soon as practicable.
(ii)
The Improvements on the Premises are to be maintained, repaired,
upgraded, refurbished and renovated as necessary or appropriate in order to preserve and
enhance the original quality and aesthetic appearance of the student housing structures, club
house and pool area, parking, landscaping, common areas and other appurtenances, amenities
3
and improvements on or about the Premises. Tenant hereby agrees and acknowledges that the
satisfaction of this Renewal Condition involves a subjective determination on the part of
Landlord and hereby waives any claim, right or cause of action against Landlord provided that
Landlord acts in good faith in making a determination that Tenant has failed to satisfy this
Renewal Condition. If Tenant determines to proceed with the renewal, it shall diligently pursue
completion of the scheduled items and complete the same prior to the end of the first year of the
Renewal Term. Failure to do so shall constitute a default hereunder.
(d)
Landlord and Tenant shall execute, in recordable form, a written
(i) Memorandum of Lease in the form attached hereto and incorporated
herein by reference as Exhibit “B” and
(ii) Statement of Commencement of Lease Term in the form attached
hereto and incorporated herein by reference as Exhibit “C”.
All of the terms, provisions and covenants of this Lease applicable to the Initial Term shall apply
to the Renewal Terms, except that the base rent (as hereinafter defined) shall be adjusted as
provided in Section 3, and the execution of any additional documentation shall not be required.
Tenant must exercise such option for a Renewal Term by delivering to Landlord written notice
of its election to extend no later than one hundred eighty (180) days prior to the expiration of the
Initial Term, or of the First Renewal Term, as the case may be. Failure to timely deliver such
written notice shall constitute a waiver of such right to extend the term of this Lease.
4
3.
Rent.
(a)
Tenant, in consideration of the leasing of the Premises to Tenant by
Landlord, hereby covenants and agrees to pay to Landlord the following base rent (hereinafter
called the “Base Rent”) as, when and in the manner herein provided and subject to the terms,
provisions and conditions herein set forth: Commencing on the execution of this Lease, and
during the Term of the Lease, including the Renewal Terms (if Tenant shall elect to extend the
Initial Term), Tenant shall pay Base Rent as follows:
Annual Base Rent from the Rent Commencement Date and for the first five years of the Initial
Term shall be an amount equal to 8½ % of appraised fair market value of the Land determined
by taking the average of the values established by an MAI appraiser selected by Landlord, an
MAI appraiser selected by Tenant, and an MAI appraiser selected by the other two MAI
appraisers, each appraiser licensed in the State of Alabama and with local knowledge, such Base
Rent to be paid in quarterly installments annually with one quarter of the annual payment due
each quarter.
Beginning with the sixth year from the Rent Commencement Date, and every five years
thereafter until termination of this Lease, the annual Base Rent will be adjusted to an amount
equal to the product of (a) the annual Base Rent paid during the immediately preceding five-year
period and (b) the Consumer Price Index (CPI) for the last month of the immediately preceding
five-year period divided by the CPI for July 2006. However, the amount by which the annual
5
Base Rent will be adjusted at the beginning of every sixth year will be limited to the annual Base
Rent for the immediately preceding five-year period multiplied by a minimum of 5.0% and a
maximum of 7.5%. The CPI will be calculated using information from the U.S. city average CPI
for all items, base period 1982-1984 = 100, series id CUUR0000SA0 (or equivalent series if the
series id changes). Rent to be paid in quarterly installments with one quarter of the total annual
payment due each quarter. For example, assume the annual Base Rent at the end of the fifth year
was $82,000 per year, the CPI for July 2006 was 200, and the CPI for the last month of the fifth
year was 212. The annual Base Rent for the next five years would be $86,920 ($82,000
multiplied by 212 divided by 200). If the CPI for the last month of the fifth year was 216, then
the maximum increase of 7.5% would apply, such that the annual Base Rent for the next five
years would be $88,150 ($82,000 multiplied by 107.5%).
Base Rent for the first five years of the First Renewal Term (if such option is exercised by
Tenant) shall be an amount equal to 8½ % of appraised fair market value of the Land determined
by taking the average of the values established by an MAI appraiser selected by Landlord, an
MAI appraiser selected by Tenant, and an MAI appraiser selected by the other two MAI
appraisers, each appraiser licensed in the State of Alabama and with local knowledge. Beginning
with the sixth year of such Renewal Term, and every five years thereafter until termination of
this Lease, the annual Base Rent will be adjusted to an amount equal to the product of (a) the
annual Base Rent paid during the immediately preceding five-year period and (b) the CPI for the
last month of the immediately preceding five-year period divided by the CPI for the last month
of the Initial Term of this Lease. However, the amount by which the annual Base Rent will be
adjusted at the beginning of every sixth year will be limited to the annual Base Rent for the
6
immediately preceding five-year period multiplied by a minimum of 5.0% and a maximum of
7.5%. The CPI will be calculated using information from the U.S. city average CPI for all items,
base period 1982-1984 = 100, series id CUUR0000SA0 (or equivalent series if the series id
changes). Rent to be paid in quarterly installments with one quarter of the total annual payment
due each quarter.
(b)
All Base Rent shall be payable in equal quarterly installments in advance
on the first day of each quarter, with the date of execution of this lease serving as day 1 of
quarter 1 and each subsequent quarter beginning exactly three (3) months from the prior date.
(c)
All payments of Base Rent or any other sums due hereunder shall be
made to Landlord at the same address provided herein for notices to Landlord or to such other
address as Landlord may direct by written notice to Tenant.
4.
Timber Proceeds. Tenant agrees to utilize all reasonable care to preserve timber
and vegetation not encompassed within the footprint of the Improvements. Landlord and Tenant
agree that Tenant shall be entitled to keep all money from timber cleared off the Land pursuant
to approval of Tenant’s design plans and specifications and landscape plans. In the event Tenant
clears unapproved Land, Landlord shall be entitled to keep all timber proceeds from all
unapproved clearings.
5.
Construction.
7
(a)
Tenant agrees to construct a student housing facility on the Premises
consisting of one hundred ninety-two (192) units with five hundred four (504) beds and
amenities and clubhouse facilities subject to all applicable building and zoning regulations and
subject to building design specifications and landscaping plan approval by Landlord. Tenant
must submit all building design specifications and landscaping plans to Landlord at least thirty
(30) days prior to beginning construction. Landlord shall have ten business (10) days to review
the building design specifications and landscaping plans and notify Tenant in writing if
Landlord does not approve said specifications and/or landscaping plans. Tenant may not begin
construction until Landlord has approved building design specifications and landscaping plans.
If Landlord fails to respond to any submitted building design specifications and landscaping
plans within ten (10) business days of submission to Landlord, such failure to respond shall be
considered approval by Landlord. Tenant agrees to substantially commence construction on or
before October 31, 2006 and be completed and ready for student occupancy, including receipt of
a Certificate of Occupancy (or equivalent approval that allows residents to occupy the Premises)
(“Certificate of Occupancy”), on or before the general move-in date for University students for
the Fall 2007 semester, from appropriate governmental authorities, subject to extension only if
delays are caused by Landlord or by force majeure (as hereinafter defined).
Failure to
commence construction by October 31, 2006, shall constitute a default under this lease and
Landlord shall be entitled to retain all payments made by Tenant to Landlord prior to November
1, 2006 as liquidated damages.
8
(b)
Tenant agrees to construct a “Jag Tran” (i.e. the University’s on campus
transportation system) stop at a location on the Premises mutually agreed to by Tenant and
Landlord.
(c)
Landlord and Tenant agree to work together to obtain all applicable
permits necessary to build a 192 unit, 504 bed student housing facility together with the amenity
package and clubhouse. Landlord shall have no obligation to assist with any costs associated
with obtaining any applicable permits.
(d)
In connection with the construction, repair or maintenance of the
Improvements, Tenant covenants and agrees with Landlord that Tenant will not permit or suffer
to be filed or claimed against Landlord or against the Premises or any building or improvement
constructed thereon any mechanics’, materialmen’s or similar lien. In the event any such lien
shall be filed, Tenant shall, at its own expense, cause the same to be canceled or bonded and
discharged of record within thirty (30) days after it receives notice of said filing from Landlord,
provided that Tenant shall have the right to contest the validity or amount thereof so long as
such lien is discharged of record by bonding or any other method permitted by law. In the event
Tenant fails to timely discharge any such liens by payment or bond, Landlord may, at its option,
declare Tenant in default and exercise all rights provided in this Lease in the event of Tenant’s
default. Landlord may (but shall not be obligated to and such payment shall not constitute a
waiver of any and all other default options available to Landlord pursuant to this Lease) pay the
amount of such lien or discharge the same by bonding, and the amount so paid or the costs of
such bond shall be deemed to be additional rent due hereunder and shall be due and payable with
9
the next installment of Base Rent thereafter becoming due. Tenant hereby indemnifies and
agrees to hold Landlord harmless from any loss, liability or expense, including reasonable
attorneys’ fees, incurred or suffered by Landlord as a result of any such lien. Nothing contained
herein shall be deemed or construed as an agreement by Landlord to be responsible for the costs
of the construction, repair or maintenance of any Improvements to be made to the Premises by
the Tenant hereunder or to subject the interest of the Landlord in the Premises to any mechanics’
or materialmen’s lien or liens resulting from such costs; and the Tenant shall not have the power
to subject the interest of Landlord in the Premises to any such lien.
(e)
6.
Tenant must provide a guarantee of completion suitable to Landlord.
Signage.
Subject to compliance with applicable governmental rules and
regulations, and further subject to the written approval of Landlord, Tenant may, at Tenant’s
sole cost and expense, install signage on and about the Premises. Tenant shall submit said
signage request, including detailed descriptions and/or drawings of signage to Landlord.
Landlord shall have ten (10) business days to approve said signage. After the expiration of ten
(10) business days, Landlord’s failure to deliver notice of approval of signage shall constitute
approval of the submitted signage. Tenant shall be responsible for all costs associated with
constructing, operating and maintaining such signage. Tenant shall maintain in good condition
and repair all such signage. Landlord shall cooperate with Tenant to obtain all necessary
governmental approvals for Tenant’s signage, but Landlord shall have no financial obligation
toward Tenant’s signage, including government approvals. Landlord shall be able to install any
signage on or about the Premises that Landlord deems necessary.
10
7.
Taxes.
(a)
Tenant shall pay, including any interest or penalties thereon, all real estate
taxes and general and special assessments (hereinafter collectively referred to in this paragraph
as “Taxes”) levied against the Premises (including without limitation, any taxes levied on
personal property and the leasehold interest of the Tenant) and on each and every building and
improvement thereon to the full extent of installments assessed due during the Lease Term.
Should the Premises be taxed as a part of a larger parcel, Tenant shall remit to Landlord
Tenant’s Proportionate Share (hereinafter defined) of such Taxes within fifteen (15) days
following Tenant’s receipt of an invoice for such amount. For these purposes, “Proportionate
Share” is defined as a fraction, the numerator of which is the square footage of the land and the
denominator of which is the total square footage of the larger parcel on which the Taxes are
based.
(b)
All payments of Taxes shall be prorated for the initial lease year and for
the year in which the Lease terminates. For permitted installment payments, Tenant shall pay
only the installments assessed during the period of tenancy before the expiration of the term, but
Tenant shall remain liable to Landlord for the prorated share of all taxes due between the
aforesaid installment and the end of the Lease. Tenant agrees to pay such taxes before the same
become delinquent.
11
(c)
Tenant shall have the right to contest, at Tenant’s expense, in Landlord’s
name and with Landlord’s prior knowledge and consent, such consent not to be unreasonably
withheld or delayed, the amount of taxes for which Tenant is responsible. To the extent allowed
by law, Landlord agrees to reasonably cooperate with Tenant in order for Tenant to carry out the
purpose of this paragraph.
(d)
Tenant shall use its best efforts to cause the assessor’s office to issue a
separate tax bill for the Premises, and either Landlord or Tenant may direct the taxing authority
to send the statements directly to Tenant. Tenant shall provide proof of payment to Landlord
within ten (10) business days of payment of the same. If Landlord pays the real estate taxes,
upon written request of Tenant, Landlord will provide within ten (10) business days proof of
said payment and Tenant shall have ten (10) business days to reimburse Landlord for the
payment made by Landlord pursuant to this section.
(e)
Tenant agrees to pay to Landlord with each quarterly installment of Base
Rent any sales, use, excise, or privilege tax (but excluding income, franchise, corporate, estate,
inheritance, succession, transfer, profits, or revenue tax) imposed upon or against or measured
by the Base Rent or additional rent.
(f)
In the event that during any term of this Lease, any of the aforementioned
tax systems shall change in mechanism, collection or any other form, Tenant shall be
responsible for and obligated to pay any taxes which may be substituted in whole or in part for
any of the aforementioned taxes.
12
8.
Liability and Indemnification.
(a)
Landlord shall not be liable to Tenant or to Tenant’s subtenants or their
respective employees, agents, patrons or invitees, or any person whomsoever, for any injury or
damage to persons or property on or about the Premises from any cause whatsoever, except for
injury or damage caused or contributed to by the intentional act of Landlord, its agents or
employees acting within the line and scope of their employment.
(b)
Tenant covenants and agrees with Landlord that from the date hereof and
continuing during the Initial Term and any Renewal Term, Tenant will indemnify and save
Landlord harmless from and against any and all claims, actions, demands, damages, liabilities or
expenses (except those arising out of Landlord’s intentional act as hereinabove stated) which
may be made against Landlord or Landlord’s title in the Premises arising by reason of, or in
connection with, any act or omission of Tenant or any subtenant of the Premises or other person
claiming under, by or through Tenant in connection with the use, occupation or control of the
Premises pursuant to or by virtue of this Lease; and if it becomes necessary for the Landlord to
defend any action seeking to impose any such liability, Tenant shall pay to Landlord all court
costs and reasonable attorneys’ fees incurred by Landlord in such defense, in addition to any
other sums which Landlord may be called upon to pay by reason of the entry of a judgment
against Landlord in the litigation in which such claim is asserted.
(c)
Tenant, throughout the term hereof, at its sole cost and expense, shall
cause to be maintained public liability insurance by a carrier with a Best rating not less than A+
naming Landlord as an additional insured against any and all claims and demands made by any
13
person or persons whomsoever for injuries received or damages incurred in connection with the
construction, operation or maintenance of the Premises or for any other risks normally and
customarily insured against by such policies, with such policies to have limits of not less than
five million ($5,000,000.00) dollars for damages incurred or claimed by one or more persons for
bodily injury and not less than five million ($5,000,000.00) dollars for damages to property. All
such policies shall be subject to the approval of Landlord and shall name Landlord as an
additional insured thereon. Tenant shall cause to be furnished to Landlord a duplicate original or
certified copy of the policy described herein. The aforementioned insurance may not be canceled
without fifteen (15) days advance written notice to Landlord.
(d)
In case Landlord, or any successor to Landlord’s interest in the Premises,
shall convey or otherwise dispose of the entire Premises, all liabilities and obligations on the part
of such Landlord or its successor as Landlord under this Lease accruing subsequent to such
conveyance or disposal shall terminate upon such conveyance or disposal, and thereupon all such
liabilities and obligations occurring thereafter shall be binding upon any such new owner of
Landlord’s interest in the Premises. None of the officers, directors, or owners of Landlord or
Tenant shall have any personal liability in connection with the performance or failure of
performance of any of the covenants, conditions or provisions of this Lease.
(e)
Tenant shall at all times maintain worker’s compensation insurance which
complies with Alabama law for all of its employees performing work functions pursuant to this
Lease.
14
9.
Property Insurance.
(a)
Tenant shall, at all times during the Lease Term, keep insured all of the
Improvements, to the extent insurable, against all loss or damage thereto caused by fire or other
casualty insured by what is commonly known as a fire and extended coverage policy issued by a
carrier with a Best rating not less than A+, in amounts equal to the full replacement value of the
Improvements. Landlord shall be named as an additional insured on such policy, provided that
the terms of this Paragraph 9 shall govern the disbursement and use of any proceeds payable
under such policy. Tenant shall cause to be furnished to Landlord a duplicate original or certified
copy of the policy described herein. The aforementioned insurance may not be canceled without
fifteen (15) days advance written notice to Landlord.
(b)
It is agreed that the excess money received from insurance remaining
after the reconstruction or repair of any of the Improvements shall belong to Tenant.
(c)
It is agreed that in the event of destruction of any part or the whole of
Improvements, Tenant shall be obligated to rebuild the Improvements with construction to begin
within sixty (60) days after the later of (i) the receipt of insurance proceeds, (ii) completion of
plans and specifications for the reconstruction project, and (iii) all required permits have been
obtained; and Tenant shall diligently complete such reconstruction in a timely manner. The new
premises or part thereof shall be subject to all terms of this Lease, provided however, that if any
such damage or destruction is in excess of fifty (50%) of the total replacement cost of the
Improvements during the final sixty (60) months of the Initial Term or a Renewal Term, Tenant
15
may terminate this Lease within ninety (90) days after such damage by delivering written notice
of such termination to Tenant. If this Lease is so terminated, (i) Tenant shall release the
insurance proceeds to Landlord except, for the portion received by reason of the loss of Tenant’s
equipment, trade and business fixtures, signs and other personal property which portion will be
paid to Tenant, and (ii) Base Rent shall be payable through the date of casualty, and Landlord
will refund to Tenant any prepaid unaccrued Base Rent, less sums, if any, Tenant owes to
Landlord.
(d)
It is agreed that in the event of loss or damages by fire or other casualty
described herein, the Premises may be rebuilt only for use as its original purpose, specifically
student housing.
10.
Repairs and Repairs Reserve Fund.
(a)
Tenant shall take or cause to be taken good care of the Improvements
during the term of this Lease, it being understood that Landlord shall not be required to make
any repairs to the Improvements during the term hereof. At the expiration of the term hereof or
earlier termination of this Lease, except as otherwise decided by Landlord, Tenant shall deliver
to Landlord the Land with any Improvements thereon in good repair and condition, ordinary
wear and tear, depreciation, obsolescence and casualty and condemnation loss being excepted.
(b)
Upon receipt of a Certificate of Occupancy for the building, Tenant shall
be required to establish a Repairs Reserve Fund at a bank or other financial institution
16
acceptable to Landlord an account in Tenant’s name in an amount equal to $100 per bed,
without regard to whether the bed is occupied.
This account shall be used to assist in
maintaining the property in good repair and for major capital repairs; provided, however, that
Tenant’s obligation to maintain the property in good repair and to undertake all necessary major
capital repairs exists without regard to whether sufficient monies are available in the Repairs
Reserve Fund to pay these costs. Each subsequent year of the Lease, upon the anniversary of
receipt of the Certificate of Occupancy, Tenant shall pay into the Repairs Reserve Fund an
amount equal to $100 per bed, without regard to whether the bed is occupied. After the first
three (3) years’ payment into the Repairs Reserve Fund, the Repairs Reserve Fund must have
and maintain a minimum balance at all times of at least one hundred thousand ($100,000)
dollars, provided that if the balance in the Repairs Reserve Fund is below the minimum because
of expenditures for repairing the Premises, Tenant shall restore the fund to its minimum balance
within two years of the deficit first arising. The Repairs Reserve Fund shall be available to
Tenant for any necessary repairs to the Premises. Tenant shall have the option to maintain the
Repairs Reserve Funds in accordance with Tenant’s financing agreement, provided, however,
that said financing agreement is consistent with the terms contained herein. All interest earnings
from the Repairs Reserve Fund shall remain in the Repairs Reserve Fund. Tenant shall have the
right to withdraw funds as necessary for maintenance of the building in good repair and/or major
capital repairs. Landlord shall have the right to inspect all records relating to said Repairs
Reserve Fund with ten (10) days prior notice to Tenant. If Tenant sells or assigns the Premises,
the value of the Repairs Reserve Fund on the date of such sale, sublease or assignment must be
placed into a new Repairs Reserve Fund held by the new owner, sublessee or assignee on the
same terms specified herein. In the event of sale, sublease or assignment, Landlord shall have
17
the right to collect the Repairs Reserve Funds identified above from Tenant should Tenant fail to
ensure establishing of a new Repairs Reserve Fund as defined above.
11.
Alterations. Tenant shall have the right to make any alterations, additions or
improvements to the Premises which Tenant deems necessary or appropriate, with the prior
written approval of Landlord as to all exterior alterations, additions or improvements; provided,
however, that Tenant shall not be entitled to make any alterations which reduce the value of the
improvements. Such approval shall not be unreasonably withheld. Tenant shall submit in
writing all plans and specifications for any alterations, additions or improvements proposed for
the Premises to Landlord at lease thirty (30) days prior to beginning the same. Landlord shall
have ten (10) business days to approve said plans and/or specifications. Failure of Landlord to
respond to Tenant’s proposed plans and/or specifications within ten (10) days shall constitute
acceptance of the same. Approved alterations, additions or improvements may be made without
the payment of any additional Base Rent or any other rent. Notwithstanding anything to the
contrary contained herein, if Tenant shall be required by any governmental authority to make
any alterations, additions or improvements to the Premises, Tenant shall be entitled to make such
alterations, additions or improvements without the necessity of obtaining the prior written
consent of Landlord.
12.
Title to Improvements. The title to the Improvements and all changes, additions
and alterations therein, and all renewals and replacements thereof, unless paid for by Landlord,
when made, erected, constructed, installed or placed upon the Premises by Tenant, shall be and
remain in Tenant until the expiration of the Lease term of this Lease (including all exercised
18
Renewal Terms), unless sooner terminated as provided herein. Upon the expiration of the lease
term or earlier termination of this Lease, title to all such property shall automatically pass to,
vest in and belong to Landlord without further action on the part of either party.
13.
Personal Property, Subordination of Landlord’s Lien. Any personal property,
furniture and furnishings and installed by Tenant on the Premises during the term hereof shall
remain Tenant’s property and may be removed by Tenant, provided that Tenant repairs, at its
sole cost and expense, any damage to the Premises caused by such removal and provided that
such removal does not diminish the Premises’s value or usefulness as student housing. For so
long as this Lease is in effect, Landlord hereby subordinates any landlord’s lien for rent against
any and all such personal property, trade fixtures, furniture, furnishings and equipment of Tenant
on the Premises available to Landlord under applicable law in favor of any first lien or security
interest granted by Tenant to a lender financing the cost of acquisition of such property.
Landlord will execute such instruments as may be required at any time and from time to time to
subordinate the rights and interests of Landlord in the Tenant’s improvements on the Premises to
the lien of any mortgage or deed of trust now or hereafter at any time placed on the Premises by
Tenant. Such mortgage or deed of trust shall not affect the Landlord’s leasehold ownership
interest and shall be paid in full prior to the expiration of the Term in which said mortgage or
deed of trust is executed.
14.
Mortgage of Leasehold. In addition to any other right herein granted, Tenant shall
at all times have the right, without any consent on the part of the Landlord being required, to
convey or encumber by mortgage its leasehold interest in and to the Premises or any part thereof,
19
together with its rights and interests in and to all buildings and improvements whether now
existing or hereafter constructed or placed thereon, and to assign this Lease or any interest
therein as collateral for any such mortgage or mortgages; but any and all such conveyances,
mortgages, or assignments shall be subject to this Lease and the right, title and interest of
Landlord in the Premises. Landlord agrees, if required by the holder of such mortgage, to
execute a consent to mortgage in order for Tenant to obtain funds for the construction or
remodeling of improvements on the Premises.
If any such leasehold mortgage shall be
foreclosed or the leasehold estate sold under any power contained therein, the leasehold
mortgagee or other purchaser at such sale shall immediately succeed to all rights of Tenant
hereunder. Such mortgagee may at its option at any time before the rights of the Tenant shall
have been forfeited to Landlord, or within the time permitted for curing or commencing to cure
defaults as herein provided, pay any of the rents due, pay any other governmental charges, or
insurance premiums, make any deposits, or do any other act or thing required of Tenant by the
terms of this Lease to prevent the forfeiture hereof. A leasehold mortgagee shall not become
personally liable for any of the Tenant’s obligations under this Lease unless and until such
mortgagee becomes the owner of the leasehold estate by foreclosure, assignment in lieu of
foreclosure or otherwise, and thereafter such mortgagee shall remain liable for such obligations
only so long as it remains the owner of the leasehold estate. If the holder of the indebtedness
secured by this Lease (“Mortgagee”) notifies Landlord of the execution of such leasehold
mortgage, and the name and place for service of notices upon such Mortgagee, then and in such
event Landlord hereby agrees for the benefit of Tenant and such Mortgagee from time to time:
20
(a)
That Landlord will give to any Mortgagee simultaneously with service on
Tenant a duplicate of any and all notices or demands given by Landlord to Tenant;
(b)
Mortgagee shall have the privilege of performing any of Tenant’s
covenants or of curing any defaults by Tenant or of exercising any election, option or privilege
conferred upon Tenant by the terms of this Lease;
(c)
Landlord shall not terminate this Lease or Tenant’s right of possession for
any default of Tenant if, within the period of time within which Tenant might cure such default,
such default is cured or caused to be cured by Mortgagee; and
(d)
No liability for the payment of Base Rent, additional rent, or the
performance of any of Tenant’s covenants and obligations of this Lease shall attach to or be
imposed upon any Mortgagee while not in possession of the Premises.
(e)
Landlord shall not exercise Landlord's right to terminate this Lease or
exercise any other remedies hereunder during the time that any Mortgagee shall be allowed to
exercise its rights under its mortgage, provided that (a) the Mortgagee proceeds within thirty (30)
days to exercise its rights and remedies under its Mortgage and thereafter prosecutes the same
with diligence to completion (subject to such stays and other delays as may be imposed in
bankruptcy or other proceedings), and (b) the Mortgagee shall within ten (10) days (i) pay when
due to Landlord and other persons all payments required to be paid by Tenant hereunder which
have accrued and, as they accrue, all payments required to be paid by Tenant hereunder which
21
shall become due and payable during such period of time, and (ii) perform when required all
other obligations of Tenant hereunder during such period of time which are reasonably
susceptible of being performed by the Mortgagee, it being acknowledged that some obligations
cannot be performed by the Mortgagee until possession or legal title is acquired and other
obligations cannot ever be performed or cured by the Mortgagee.
The obligations of the
Mortgagee under this Section 14(f) shall not deprive the Mortgagee of its various rights to notice
and cure as provided above.
(f)
Should Landlord exercise Landlord's right to Terminate this Lease as
provided in Section 19 after giving a Mortgagee the protections provided above, Landlord shall
give notice thereof to the Mortgagee and offer to the Mortgagee the right to lease the Property
from the date of such Termination of this Lease for the remainder of the scheduled Term of this
Lease, at the Rent and otherwise upon the same terms, covenants, and conditions, as are herein
set forth, with the same relative priority as this Lease and having the benefit of vesting in the
Mortgagee or its designee or nominee (provided, however, that no designee or nominee may be
appointed pursuant to the terms of this paragraph of this Lease without the prior written approval
of Landlord which approval shall not be unreasonably withheld) thereof all the rights, title,
interest, powers and privileges of Tenant hereunder.
The Mortgagee must give notice to
Landlord of its election to accept the new lease within thirty (30) days after receipt of the notice
from Landlord offering the new lease. If the Mortgage accepts the new lease, the Mortgagee
shall be obligated, within ten (10) days after delivery to Landlord of notice of such election
(subject to automatic extension for the period of any stays or other delays as may be imposed in
bankruptcy or other proceedings), to: (i) cure the Event of Default on which such termination
22
was based or, in respect of any Event of Default not capable of cure within such thirty (30) days
or which cannot be cured without entry into possession, to proceed to effect cure with due
diligence following delivery of such possession; (ii) pay to Landlord all Base Rent due under this
Lease up to and including the date of commencement of the term of such new lease; and (iii) pay
to Landlord all expenses and reasonable attorney's fees incurred by Landlord in connection with
any such Event of Default and termination and with the preparation, execution and delivery of
such new lease. Upon such performance by the Mortgagee (or the designee or nominee thereof)
within such time, Landlord shall thereupon execute and deliver such new lease to the Mortgagee
or the designee or nominee thereof, having the same relative priority as this Lease and having the
benefit of all right, title, interest, powers and privileges of Tenant hereunder until the expiration
of the scheduled Term of this Lease, unless the new lease shall thereafter be sooner terminated.
Notwithstanding anything contained herein, Landlord shall have the right to manage the
Premises during any interval in which transfer of interest from Tenant or Mortgagee or its
designee or nominee, pursuant to the terms of this Lease, is being made.
(g)
Anything else herein contained to the contrary notwithstanding, Landlord
and Tenant mutually covenant and agree that so long as there exists any unpaid leasehold
Mortgage, this Lease shall not be modified, amended or altered (unless such change is mandated
by law) and that Landlord shall not accept a surrender of the Property or a termination,
cancellation or release of this Lease from Tenant (except pursuant to the exercise of Landlord's
remedies should an Event of Default occur after first complying with the requirements of this
Section 14) prior to the expiration of the Term, without the prior written consent of the
Mortgagee.
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(h)
Mortgagee as Tenant.
The Mortgagee, or its designee or nominee
(provided, however, that no designee or nominee may be appointed pursuant to the terms of this
paragraph of this Lease without the prior written approval of the Landlord, which approval shall
not be unreasonably withheld), acquiring the leasehold estate under this Lease or a new lease
shall be obligated under this Lease or the new lease only so long as it shall be vested (other than
as security for a debt) with title to all, or any estate or interest in, the leasehold estate under this
Lease or the new lease.
15.
Condemnation.
(a)
If all the Premises (or if less than all, but, in the reasonable judgment of
Tenant, the remaining portion cannot be feasibly operated as then used or intended to be used)
shall be acquired by the right of condemnation or eminent domain for any public or quasi-public
use or purpose, or be sold to a condemning authority under threat of condemnation, then the
term of this Lease shall cease and terminate as of the date of title vesting pursuant to such
proceeding (or sale), and all rental shall be paid up to that date.
(b)
In the event of a partial taking or condemnation which takes less than all
of the Premises and the Lease is not terminated as set forth in subparagraph 15(a), then Tenant
shall, subject to the exceptions provided below, promptly restore the Premises to an architectural
whole, and this Lease shall continue in full force and effect; provided, however, that the Base
24
Rent shall thereafter be abated and decreased in proportion to the fair rental value of the Land
after such taking bears to the fair rental value of the Land immediately prior to such taking.
(c)
Landlord and Tenant each covenant and agree to seek separate awards in
any condemnation proceedings and to use their respective best efforts to see that such separate
awards are made at all stages of all proceedings. If the order or decree in any condemnation or
similar proceeding shall fail to separately state the amount to be awarded to Landlord and
Tenant by way of compensation, damages, rent, the costs of demolition, removal or restoration,
or otherwise, then the award should be divided as follows:
(i)
First, to the payment of all demolition and construction costs
associated with restoration if the Improvements are to be restored by Tenant and/or all costs of
removal of rubble and debris if Tenant is obligated to remove the same; and then
(ii)
The remaining proceeds shall be applied as follows:
(1) the
Landlord shall receive the fair market value of the Land; and (2) Tenant shall be entitled to all
remaining proceeds.
16.
Right of First Refusal. If at any time during the Initial Term or any Renewal
Terms, or any tenancy after either, Tenant shall decide to accept a bona fide offer to purchase its
interest in the Premises, Landlord and/or its assignee shall have the right to purchase said
Premises for the purchase price and on the same terms and conditions as contained in such offer
to purchase. Landlord and/or its assignee must agree in writing within thirty (30) days of receipt
25
of written notice from Tenant detailing the terms of such bona fide offer to purchase the
Premises. Landlord and/or its assignee must close sale of such Purchase within one hundred and
eighty (180) days of its written notification to Tenant of Landlord’s and/or its assignee’s intent
to purchase. The foregoing right of Landlord shall not apply to any transfer by Tenant to an
affiliated entity owned or controlled by the same owning or controlling interest as Tenant.
17.
Assignment and Subletting.
(a) Tenant shall be entitled to assign this Lease or sublease the Premises, in
whole or in part, to any person or entity provided, however, that prior to any assignment and/or
sublease to a third party other than an entity owned or controlled by the same owning or
controlling interest as Tenant or a current USA student who qualifies for USA housing and is
leasing a portion of the Premises for said housing, Tenant must first offer Landlord the
opportunity to lease the Premises under the same terms as those offered to or by the third party,
provided, however, that Landlord and USA’s rights under this Paragraph 17 shall not apply to a
foreclosure sale by a leasehold mortgagee or to a subsequent sale by such mortgagee who was
the successful bidder at the foreclosure sale (provided, however, that no subsequent sale by a
successful bidder may be made pursuant to the terms of this paragraph of this Lease without the
prior written approval of Landlord which approval shall not be unreasonably withheld).
Landlord shall have thirty (30) days from Tenant’s notification of potential assignment or
sublease to a third party to lease the Premises pursuant to this Paragraph 17. No assignment by
Tenant shall operate to release Tenant of its future obligations under this Lease, unless Landlord
shall agree in writing to the contrary. As long as all rent and other obligations due are being
26
timely paid to Landlord, Tenant shall be solely entitled to any consideration paid by the
assignee, including, but not limited to, compensation for the Improvements or equipment located
thereon, goodwill and rent in excess of the amounts set forth by this Lease.
(b) Landlord shall be entitled to assign this Lease, in whole or in part, to any person or
entity.
18.
Management. Tenant and Manager agree to manage consistent with the USA
Code of Student Conduct and all USA Housing Rules in effect during the term of this Lease.
Landlord agrees to give Tenant and Manager reasonable prior notice of any changes to the USA
Code of Student Conduct and USA Housing Rules before Tenant is asked to apply them to its
management of the Premises. Tenant will not be subject to any rules or regulations which do
not apply to USA Housing and/or USA Students. Premises may only be rented to USA students
who otherwise would be eligible for USA student housing; provided, however that Landlord and
Tenant agree that any USA student who leases from Tenant will be permitted to remain until the
expiration of his/her lease, even if said student ceases to be a USA student, unless said student is
expelled or suspended from USA for disciplinary reasons in which event said student will be
subject to eviction pursuant to USA policies and procedures. Within ten (10) days of the
beginning of each semester, Tenant shall provide Landlord a resident list listing all residents of
the Premises. Tenant will maintain a minimum of 7 community advisors for the Premises who
will perform among other tasks all tasks normally performed by USA Resident Advisors as
attached hereto as Exhibit “D.” All community advisors will be required to participate in USA
programs for training USA Resident Advisors.
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19.
Default.
(a)
The following events shall be “Events of Default” under this Lease:
(i)
Tenant shall fail to pay any installment of Base Rent or other
monetary payment required to be paid under this Lease within five (5) days after written notice
of delinquency is given by Landlord to Tenant.
(ii)
Tenant shall fail to comply with any term, provision or covenant
of this Lease (other than a monetary default) and shall not cure such failure within thirty (30)
days after written notice thereof is given by Landlord to Tenant; provided, however, with respect
to a non-monetary default not susceptible of being cured within thirty (30) days, Tenant shall not
be in default unless it fails to commence all work required to cure such default within said thirty
(30)-day period or fails to diligently prosecute the same to effect such cure within a reasonable
time thereafter;
(iii)
Tenant shall be adjudged insolvent, makes a transfer in fraud of
creditors, or makes a general assignment for the benefit of creditors;
28
(iv)
A petition shall be filed by Tenant under any chapter of the United
States Bankruptcy Code, or any similar proceeding is filed by Tenant under any state law; or a
petition under any chapter of the United States Bankruptcy Code or any similar state law is filed
against Tenant and Tenant fails to have the same dismissed within sixty (60) days from date of
filing; or
(v)
A receiver or trustee (other than a bankruptcy trustee or receiver)
shall be appointed for all or substantially all of the assets of Tenant, and Tenant shall fail to have
such receivership or trusteeship terminated within sixty (60) days after appointment.
(vi)
Tenant shall fail to maintain premises in a manner physically
consistent with USA student housing and shall not cure such failure within thirty (30) days after
written notice thereof is given by Landlord to Tenant; provided, however, Tenant shall not be in
default unless it fails to commence all work required to cure such default within said thirty (30)day period or fails to diligently prosecute the same to effect such cure within a reasonable time
thereafter.
(b)
Upon the occurrence of an Event of Default and after the expiration of all
notice and cure periods to which Tenant or Tenant’s mortgagee is entitled, Landlord shall have
the option to pursue any one or more of the following remedies without any further notice or
demand whatsoever:
29
(i)
Terminate this Lease, in which event Tenant and anyone claiming
through Tenant shall immediately surrender the Premises to Landlord, and if Tenant or anyone
claiming through Tenant fails to do so, Landlord may, without prejudice to any other remedy
which it may have for possession or arrearages in rent, enter upon and take possession of the
Premises and expel or remove Tenant and any other person who may be occupying the Premises,
or any part thereof (excepting lawful unit tenants who are defined as those persons currently
enrolled at USA and eligible for USA student housing who are leasing a portion of said Premises
as housing), without being liable to prosecution or for any claim for damages. Upon such
termination, Landlord shall also be entitled to receive all rental and other income of and from the
Premises. Tenant agrees to pay Landlord on demand the amount of all loss and damage which
Landlord may suffer by reason of such termination, whether through inability to relet the
Premises on satisfactory terms or otherwise, provided that Landlord agrees to use its good faith,
best efforts to relet the Premises under the same terms as conditions as apply to USA student
housing rentals so as to mitigate such damages.
(ii)
Not terminate this Lease and enter upon and take possession of the
Premises and expel or remove Tenant and, at Landlord’s discretion, any other persons who may
be occupying the Premises, or any part thereof, without being liable to prosecution or for any
claim for damages except gross negligence or intentional, wanton acts, and relet the Premises, as
Tenant’s agent, and receive the rent therefore as well as all rental and other income derived from
the Premises; and Tenant agrees to pay Landlord on demand any deficiency in the rents
provided for herein that may arise by reason of such reletting, with such deficiency to be
reduced to its present value, using the then current prime rate as published in the Wall Street
30
Journal as a discount factor and future annual Base Rents being increased by 1% per year from
the Base Rent for the year at default.
(iii) Enter upon the Premises without being liable to prosecution or for
any claim of damages except gross negligence or intentional, wanton acts, and do whatever
Tenant is obligated to do under the terms of this Lease; and Tenant agrees to reimburse
Landlord on demand for any reasonable expenses which Landlord may incur in thus effecting
compliance with Tenant’s obligations hereunder.
(iv) Enter upon the Premises without being liable to prosecution or any
claim of damages except gross negligence or intentional, wanton acts, and remove all of
Tenant’s property and have the same stored at Tenant’s expense.
Pursuit of any of the foregoing remedies shall not preclude pursuit of any of the other
remedies herein provided or any other remedies provided by law or in equity, nor shall pursuit of
any remedy herein provided constitute a forfeiture or waiver of any rent due to Landlord
hereunder or of any damage accruing to Landlord by reason of the violation of any of the terms,
provisions and covenants herein contained. Forbearance by Landlord to enforce one or more of
the remedies herein provided upon the occurrence of an Event of Default shall not be deemed or
construed to constitute a waiver of such default.
20.
Warranty of Title and Covenant of Quiet Enjoyment.
31
(a)
Landlord represents and warrants that (i) it is the lessee from owner of the
fee simple interest in the Land subject to the easements, restrictions, covenants and other matters
of record as of the date hereof or as would be disclosed by current survey and inspection of the
Premises and will have the full right to lease the Land for the term set out herein, and (ii) it has
no knowledge of any condemnation or threat of condemnation affecting any portion of the
Premises.
(b)
Landlord further covenants and warrants that so long as Tenant keeps and
performs all of the agreements, covenants and conditions by the Tenant to be kept and
performed, Tenant shall have quiet, undisturbed and continued possession of the Premises, free
from any claims of Landlord and all persons claiming by, through or under Landlord, except
with respect of such portion of the Premises as may be taken under the power of eminent
domain.
21.
Subordination, Nondisturbance and Attornment Agreement. With respect to its
existing mortgage, Landlord shall obtain a subordination, nondisturbance and attornment
agreement (“Subordination Nondisturbance and Attornment Agreement”), in recordable form,
from the holder of such mortgage in form and substance reasonably satisfactory to Tenant and
the holder of such mortgage. Further, this Lease is not to be subordinated to the lien of any
future mortgages by Landlord unless Tenant is provided with an executed Subordination,
Nondisturbance and Attornment Agreement in form and substance reasonably satisfactory to
Tenant.
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22.
Landlord’s Right of Entry. Landlord and its agents and representatives shall have
the right upon reasonable prior notice to Tenant to enter upon the Premises at all reasonable
times to examine the condition and use thereof, provided that such right shall be exercised in
such manner as not to interfere with Tenant in the conduct of its business on the Premises.
23.
Personal Property and Fixtures. Tenant and its subtenants shall have the right to
erect, install, maintain, store and operate within the Premises such equipment, appliances,
furnishings, inventory, equipment, signs, trade and business fixtures and other personal property
as may be deemed necessary or appropriate by such parties, and such property shall not be
deemed to be part of the Premises, but shall remain the property of Tenant or its subtenants, as
the case may be until the conclusion of the Lease, and may be removed by Tenant, provided that
Tenant repairs, at its sole cost and expense, any damage to the Premises caused by such removal.
All personal property and/or fixtures remaining shall become the property of Landlord.
Improvements at the end of this Lease and title to such systems shall automatically pass to, vest
in and belong to Landlord without further action on the part of either party hereto.
24.
Holding Over By Tenant. Should Tenant or any assignee or subtenant holdover
the Premises or any part thereof after the expiration or termination of this Lease, such holdover
shall not constitute a renewal of this Lease and shall constitute and be construed as a tenancy
from month to month only, for which Tenant shall pay rental equal to the greater of (1) current
market rental value for the property as determined by a real estate appraiser hired by Landlord or
(2) 125% of the Base Rent paid or to be paid to Landlord hereunder for the last month of the
term immediately preceding such holdover period, and otherwise subject to all of the conditions,
33
provisions and obligations of this Lease insofar as the same are applicable to a month-to month
tenancy.
25.
Hazardous Materials.
(a)
Tenant agrees that its operations on the Premises will not violate any
federal, state or local laws, rules or ordinances for environmental protection, including, but not
limited to, the following: Federal Clean Air Act, 42 U.S.C. 1857, et seq.; Federal Clean Water
Act, 33 U.S.C. 1151, et seq.; Resource Conservation and Recovery Act, 42 U.S.C. 6903, 6921,
et seq.; Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”
or “SUPERFUND”), 42 U.S.C. 901, et seq.; and the National Environmental Protection Agency
(40 C.F.R., Chapters 373, 380 and 403);
(b)
Tenant shall not cause or permit to continue any intentional or
unintentional release of hazardous materials other than those licensed or permitted by
governmental agencies or by applicable law or regulations. Should Tenant cause or permit any
intentional or unintentional release of hazardous materials onto the surface or into the subsurface
of the Premises resulting in damage to soil, surface water, ground water, flora or fauna on the
Premises, within waters of the state or the United States, or on adjacent properties, Tenant shall
notify Landlord and the appropriate jurisdictional government agencies. Any underground
storage tanks used on or under the Land shall be manufactured, constructed and installed in strict
compliance with all applicable environmental and other laws and regulations.
34
(c)
Tenant shall indemnify and save Landlord and/or harmless from any
fines, suits, claims, demands, losses and actions (including attorneys’ fees) that (i) arise from
any violation by Tenant of the foregoing provisions of this Paragraph 25, or (ii) allege or are
based upon any violation by Tenant of any federal, state or local laws, rules or ordinances for
environmental protection, including but not limited to those itemized above in this section, or
upon the existence of hazardous materials in the possession or control of Tenant, or upon any
other threatened or actual damage to the environment by Tenant; provided that such
indemnification shall not extend to any independent acts or omissions of Landlord and/or USA.
(d)
Landlord represents to Tenant that as of the date hereof, to the best of
Landlord’s knowledge, there currently does not exist on the Premises any hazardous materials or
conditions which violate any environmental protection, federal, state or local laws, ordinances,
rules or regulations, specifically including those described by Paragraph 25(a), provided that
should Tenant discover any such materials or conditions during construction, Landlord shall be
fully responsible for the costs of remediation and shall indemnify and hold Tenant harmless
from any fines, suits, claims, demands, losses and actions (including attorney’s fees) that arise
from the existence of such existing material or conditions.
26.
Waiver of Subrogation. Landlord and Tenant severally waive any and every claim
which arises or may arise in its favor and against the other during the term of this Lease for any
and all loss of, or damage to, any of its property located within or upon, or constituting a part of,
the Premises, which loss or damage is covered by valid and collectible insurance policies to the
extent that such loss or damage is recoverable thereunder. Inasmuch as the above mutual
35
waivers will preclude the assignment of any aforesaid claim by way of subrogation (or
otherwise) to an insurance company (or any other person), Landlord and Tenant severally agree
immediately to give each insurance company which has issued its policies of insurance written
notice of the terms of said mutual waivers and to have said insurance policies properly endorsed,
if necessary, to prevent the invalidation of said insurance coverages by reason of said waivers.
27.
Force Majeure. In the event performance of any of their respective covenants,
agreements or obligations under this Lease by the Landlord or the Tenant is prevented,
interrupted or delayed by causes beyond its control, including but not restricted to strike, riot,
storm, flood, act of God, or of the public enemy or of the government, acts of the other party,
fires, epidemics, quarantine restrictions, freight embargoes and unusually severe weather, or
delays of contractors and subcontractors due to such causes, such prevention, interruption or
delay of performance shall not constitute a default and the date or time or times for the
performance of such covenant, agreement or obligation by the Landlord or the Tenant shall be
extended for a period of time equal to the number of days the performance of such covenant,
agreement or obligation by the Landlord or the Tenant is so prevented, interrupted or delayed,
and, in such case, neither the Landlord nor the Tenant shall be liable for any costs, losses,
damages, injuries or liabilities caused to or suffered or incurred by the Landlord or the Tenant in
connection with, or as the result of, any such delay in, or non-performance of, such covenant,
agreement or obligation; provided, however that party claiming force majeure must use its best
efforts to overcome the delay.. In the event that the Landlord or the Tenant intends to avail
themselves of the provisions of this section, the Landlord or the Tenant shall give written notice
of such intent to the other; such notice to be given within fifteen (15) days from the date
36
performance of such covenant, agreement or obligation was so prevented, interrupted, or
delayed. Force majeure shall not operate to excuse Tenant of any rent or other monetary
payments due under this Lease, and Tenant will remain fully liable to Landlord for all rent due
and other monetary payments due under this Lease.
28.
Notices. Any notice or document required or permitted to be delivered hereunder
or by law shall be deemed to be delivered, whether actually received or not, when delivered
personally, by U.S. certified or registered mail, postage prepaid, return receipt requested or by
guaranteed overnight air courier, addressed to the parties hereto at the respective addresses
below, or at such other address as theretofore specified by written notice delivered in accordance
herewith:
29.
Landlord:
USA Research and Technology
Corporation
Administration Building, Room 200
Mobile, Alabama 36688-0002
Attention: Director
Tenant:
Campus Crest at Mobile, L.L.C.
3 Centerview Drive
Greensboro, North Carolina 27407
Miscellaneous.
(a)
This Lease contains the entire agreement of the parties hereto with respect
to the subject matter hereof and can be altered, amended or modified only by written instrument
executed by all such parties.
37
(b)
This Lease shall be governed by and construed in accordance with the
laws of the State of Alabama.
(c)
This Lease shall be binding upon and shall inure to the benefit of the
undersigned parties and their respective heirs, legal representatives, successors and assigns;
provided, however that no assignments may be made under this Lease other than in accordance
with the provisions governing assignment of the Lease.
(d)
Words of any gender used in this Lease shall be construed to include any
other gender, and words in the singular shall include the plural and vice versa, unless the context
requires otherwise.
(e)
The captions used in this Lease are for convenience of reference only and
shall not be deemed to amplify, modify or limit the provisions hereof.
(f)
The relationship between Landlord and Tenant at all times shall remain
solely that of Landlord and Tenant and shall not be deemed a partnership or joint venture.
(g)
In case any one or more of the provisions contained in this Lease shall for
any reason be held invalid, illegal or unenforceable in any respects, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, and this Lease shall be construed as
if such invalid, illegal or unenforceable provision had never been contained herein.
38
(h)
The rights and remedies provided by this Lease are cumulative, and the
use of any one right or remedy by either party shall not preclude or waive its right to use any or
all other available remedies. Said rights and remedies are given in addition to any other rights
the parties may have by law, statute, ordinance or otherwise.
(i)
This Lease shall not be recorded unless required by applicable law.
However, the parties hereto shall execute a short form memorandum of this Lease in recordable
form setting forth a description of the Land, the term hereof, the extension options, and upon
such other provisions hereof as Landlord and Tenant shall agree. Either party may record same,
and, after recording, a photocopy of the recorded document shall be delivered to the other party.
(j)
Landlord and Tenant each warrant and represent to the other party that
they have not dealt with any real estate broker, agent or finder in connection with this
transaction. To the extent allowed by law, Landlord and Tenant agree to hold each other
harmless from and against any and all claims for brokerage commissions arising by virtue of this
Lease and claimed by any broker, agent or finder claiming under and through the indemnitor.
(k)
Landlord and Tenant agree to execute and deliver to each other, within
fifteen (15) business days after requested by the other party, a certificate evidencing:
(i)
whether or not this Lease is in full force and effect;
39
(ii)
whether or not this Lease has been modified or amended in any
respect, and submitting copies of such modifications or amendments, if any;
(iii)
whether or not there are existing defaults hereunder to the
knowledge of the party executing such certificate, and specifying the nature of such defaults, if
any; and
(iv)
such other matters as may be reasonably requested by the other
party.
IN WITNESS WHEREOF, the parties hereto have executed this Lease under seal as of
the day and year first above written.
LANDLORD:
USA RESEARCH AND TECHNOLOGY
CORPORATION
By:
Title:
TENANT:
CAMPUS CREST AT MOBILE, L.L.C.
By:
Title:
40
EXHIBIT A
Legal Description of the Land
The Land consists of approximately eleven and one-half (11 ½) acres as more particularly
described in Section 1 of the Lease. The exact legal description of the Land will be established
by the Survey, as described in the Lease, and when established Landlord and Tenant shall
execute an amendment to the Lease setting forth such legal description.
41
EXHIBIT B
Form of Memorandum of Lease
MEMORANDUM OF GROUND LEASE
This Memorandum of Ground Lease is made and entered into effective the ____ day of
_________________, 2006 by and between the USA RESEARCH AND TECHNOLOGY
CORPORATION, an Alabama non-profit corporation (“Landlord”), and CAMPUS CREST
AT MOBILE, L.L.C., an Alabama limited liability company (“Tenant”).
W I T N E S S E T H:
WHEREAS, Landlord has leased certain real property located in Mobile, Alabama, as
further described in Exhibit “A”, attached hereto and made a part hereof (the “Premises”), to the
Tenant pursuant to a Ground Lease dated effective ________________, which is incorporated
herein by reference as if appearing in full (the “Lease”); and
WHEREAS, the parties wish to provide record notice of certain of the terms and
conditions of the Lease.
NOW, THEREFORE, Landlord and Tenant do hereby state the following:
1.
Lease of the Premises. Landlord does hereby lease the Premises to the Tenant,
and the Tenant hereby leases the Premises from Landlord, upon the terms and conditions
stipulated in the Lease.
42
2.
Term. The initial term of this Lease is forty (40) years from the Commencement
Date, as defined in the Lease, unless extended or sooner terminated as provided by the Lease.
3.
Option to Extend. The terms of the Lease provide Tenant with one (1) First
Renewal Term of twenty (20) years and one (1) Second Renewal Term of fifteen (15) years
which may only be exercised if First Renewal Term is exercised by Tenant.
4.
Binding Effect. The Lease and this Memorandum shall inure to the benefit of and
shall be binding upon the Landlord, its successors and assigns, and upon the Tenant and its
permitted successors and assigns.
5.
Notices. All notices, certificates or other communications hereunder shall be
sufficiently given and shall be deemed given when mailed by registered or certified mail, postage
prepaid, or overnight mail or courier addressed as follows:
To Landlord:
USA Research and Technology Corporation
Administration Building, Room 200
Mobile, Alabama, 36688-0002
Attn: Director
To Tenant:
Campus Crest at Mobile, L.L.C.
3 Centerview Drive
Greensboro, North Carolina 27407
The Landlord or Tenant may, by notice given to the other, designate any further or
different addresses to which subsequent notices, certificates or communications shall be sent.
43
6.
Conflict. In the event of a conflict between the terms and provisions of this
Memorandum and the Lease, the Lease shall govern and control.
IN WITNESS WHEREOF, the Landlord and Tenant have executed this Memorandum as
of the date and year first above written.
LANDLORD:
USA RESEARCH AND TECHNOLOGY
CORPORATION
an Alabama non-profit corporation
By:
Name:
Title:
TENANT:
CAMPUS CREST AT MOBILE, L.L.C.
an Alabama limited liability company
By:
Name:
Title:
State of Alabama
County of Mobile
I, the undersigned notary public in and for said state and county, hereby certify that
_______________________, whose name as _________________ of the USA Research and
Technology Corporation, an Alabama non-profit corporation, is signed to the foregoing
instrument and who is known to me, acknowledged before me on this day that, being informed of
44
the contents of the instrument he, as such __________________ and with full authority executed
the same voluntarily for and as the act of said University on the day the same bears date.
Given under my hand and official seal on this the
day of
, 2006.
_____________________________________
Notary Public,
My Commission Expires: ________________
State of Alabama
County of Mobile
I, the undersigned notary public in and for said state and county, hereby certify that
_________________________, whose name as Member of Campus Crest at Mobile, L.L.C.,
an Alabama limited liability company, is signed to the foregoing instrument and who is known to
me, acknowledged before me on this day that, being informed of the contents of the instrument
he, as such member and with full authority executed the same voluntarily for and as the act of
said company on the day the same bears date.
Given under my hand and official seal on this the
day of
, 2006.
____________________________________
Notary Public,
My Commission Expires:________________
45
EXHIBIT C
Form of Statement of Commencement of Lease Term
CERTIFICATE OF COMMENCEMENT
The undersigned hereby certify that the Commencement Date of the certain Ground
Lease with an Effective Date of ________________ (the “Lease”) between the USA Research
and Technology Corporation, as Landlord, and Campus Crest at Mobile, L.L.C., as Tenant, for
property located in Mobile, Alabama, is _______________ and that the expiration date of the
Initial Term of the Ground Lease is ________________________.
In witness whereof the parties have hereunto set their respective hands the day and year
below written.
LESSOR:
LESSEE:
USA RESEARCH AND TECHNOLOGY
CORPORATION
CAMPUS CREST AT MOBILE, L.L.C.
By:_______________________________
Name:____________________________
Title:_____________________________
By:________________________________
Name:______________________________
Title:_______________________________
Date:_____________________________
Date:_______________________________
46
CAMPUS SERVICES
April 20, 2006
Mr. T.G. Emmons, III,
Director of Auxiliary Services
University of South Alabama
307 University Boulevard
Mobile, AL 36688
Dear Mr. Emmons:
This Letter Amendment shall confirm the understanding between you and our representatives
that effective as of -Q.Qtq_~~I-~2-00fi._the Food Services Management Agreement between
UNIVERSITY OF SOUTH ALABAMA ("Client") and ARAMARK EDUCATIONAL SERVICES,
INC. ("ARAMARK"), dated June 4, 1997, as amended (the "Agreement"), shall be further
amended as follows:
1.
Paragraph 4, CLEANING RESPONSIBILITIES, Subparagraph A, "ARAMARK's
Responsibilities," shall be deleted in its entirety, and in its place shall be inserted the following:
"4.
CLEANING RESPONSIBILITIES:
A.
ARAMARK's Responsibilities:
ARAMARK shall maintain high
standards of sanitation and shall be responsible for routine cleaning and housekeeping
in the food preparation and service areas (including food service equipment, kitchen
floors, hoods and grease filters) and for the routine cleaning of cafeteria tables and
chairs. ARAMARK shall be responsible for periodic waxing and buffing of floors, mats
and periodic cleaning required for all existing areas, including the kitchen exit at the east
hallway, the exit from the elevator on the west hallway, and carpeted areas in all office
space occupied by ARAMARK.
ARAMARK shall comply with all applicable Mobile
County Health Department standards with ratings no less than ninety-five (95).
As a general rule, ARAMARK shall comply with the general cleaning
standards and guidelines set forth on Schedule 4.A attached hereto.
2.
Paragraph 5, FOOD SERVICE AND MENUS, shall be deleted in its entirety, and
in its place shall be inserted the following:
"5.
FOOD SERVICE AND MENUS: ARAMARK shall manage the Campus
Food Service Program for Client and Client's students, faculty, staff and guests at such
hours and locations as Client and ARAMARK shall mutually determine. ARAMARK shall
submit menus to such person as Client shall designate at least two (2) weeks in advance
of implementation.
The services to be provided by ARAMARK hereunder may include the
service and sale of alcoholic beverages at the Multipurpose Room in the University
Center, Client's Laidlaw Building and the field house in Stanky Field.
980 HAMMOND DRIVE, SUITE 1400
ATLANTA, GA 30328
678 587 4020
FAX 770 393 1192
MZC-213243.03
April 20, 2006
April 20, 2006
Page 2
ARAMARK's Food Service Program shall comply with the general service
standards and guidelines, including the guidelines with respect to energy conservation,
set forth on Schedule 5 attached hereto."
3.
Paragraph
13, FINANCIAL
Program", and C, "Commissions",
inserted the following:
"13.
TERMS,
shall be deleted
Subparagaphs
in their entirety,
B, "Declining
Balance
and in their places shall be
FINANCIAL TERMS:
B.
Meal Plans:
1)
Board Plans: ARAMARK agrees to prepare and serve
meals to Client for Client to resell to its students participating in the Board Plan at the
following rates per semester:
Meal Plan
6 meals per week plus $600 Bonus Bucks
Rate Der Semester
$1,080
At the beginning of each semester, Client shall furnish ARAMARK
with a list of all persons entitled to meals at Board Plan rates and shall advise
ARAMARK weekly in advance of any changes in the list. Billings to Client will be based
on the number of persons listed each Monday morning before breakfast. No allowance
will be made for meals or days which contract patrons miss, and partial days will be
considered full days for billing purposes.
2)
Declining Balance Programs:
Client's students, faculty
and staff will be permitted to deposit monies with ARAMARK to establish a Declining
Balance Account to be used to make purchases at any ARAMARK operation on Client's
campus. Unused account balances remaining at the end of each semester shall be
carried forward to the immediately succeeding semester.
Client's students will also be permitted to use their University
account, which is maintained by Client, to make purchases at any ARAMARK operation
on Client's campus.
ARAMARK will pay to Client a transaction fee of two percent (2%)
of all purchases made with University accounts or Declining Balance Accounts.
3)
Value Meal Options:
ARAMARK shall provide, at each
point of sale, a "value meal" option for breakfast and lunch, with such meals to be priced
as follows: breakfast -$2.99 per value meal and lunch -$5.99 per value mea.!.
4)
shall provide. breakfast
Retail/" All You Can Eat" Dining Options:
ARAMARK
and lunch as retail operations (subject to the additional
MZC-213243.03
April 20, 2006
April 20, 2006
Page 3
requirement set forth in Paragraph 13.B(3), above) and dinner as an "all you can eat"
operation."
5)
Review of Meal Plans:
Representatives of ARAMARK
and Client shall meet in January 2007 to review the meal plans provided by ARAMARK
pursuant to this Agreement and shall recommend and approve any changes thereto."
C.
Commissions:
ARAMARK shall pay to Client the following
commissions, calculated, in each case, as a percentage of Net Receipts from the
applicable category of services. With respect to any category of services upon which
ARAMARK pays an incremental commission, the applicable commission shall be paid
upon the respective incremental portion of Net Receipts:
Commission
CateGOry of Sales
Residential (Board Plan and Declining Balance) Sales
Retail Sales, Including Catering
10% of Net Receipts
5% of Net Receipts
Mitchell Center Concessions
-$0 to $75,000 in operating year
Mitchell Center Concessions
-$75,001
to $150,000 in operating year
Mitchell Center Concessions
-$150,001
and over in operating year
18% of Net Receipts
20% of Net Receipts
22% of Net Receipts
Commencing October 1, 2006, in the event that commissions paid
to Client during any operating year commencing October 1 and ending September 30
are less than a stipulated amount (the "Guaranteed Commission Amount"), then
ARAMARK shall, within 30 days after the end of such operating year, pay to Client an
amount equivalent to the difference of (i) the Guaranteed Commission Amount minus (ii)
the actual amount of commissions paid to Client for such operating year, calculated as
set forth above.
The Guaranteed Commission Amount (i) for the operating year
commencing October 1, 2006 shall be One Hundred Sixty-Nine Thousand Five Hundred
Sixty-One Dollars ($169,561), (ii) for the operating year commencing October 1, 2007
shall be One Hundred Eighty-One Thousand Four Hundred Five Dollars ($181,405) and
(iii) for the operating year commencing October 1, 2008 shall be One Hundred NinetyThree Thousand Four Hundred Ninety Dollars ($193,490) and (iv) thereafter, shall be
increased, effective on October 1 of each subsequent operating year, by an amount
equivalent to the product of (i) 0.02 multiplied by (ii) the Guaranteed Commission
Amount for the previous operating year."
4.
A new Subparagraph H, "ARAMARK-Provided Funds and Programs", shall be
added to Paragraph 13, FINANCIAL TERMS and shall read in its entirety as follows:
"13.
FINANCIAL TERMS:
H.
ARAMARK-Provided
Funds and Programs:
1)
Complimentary
Catering
Credits:
ARAMARK shall
provide Client with an annual fund in the amount of $2,500 for use at Client's discretion
for catering services. The pricing for any such catering services shall be based upon
ARAMARK's retail pricing as contained in ARAMARK's catering guides. Any remaining
MZC-213243.03
April 20, 2006
April 20, 2006
Page 4
balance at the end of an operating year shall accrue for potential use in subsequent
years. Any remaining balance upon expiration or termination of this Agreement shall be
retained by Client.
2)
Meal Plan Scholarships:
ARAMARK shall provide Client
with two meal plan scholarships per operating year for award at Client's discretion.
3)
Complimentary
Catering
Services
-Mitchell
Center:
ARAMARK shall provide complimentary catering services in the President's Suite at
Client's Mitchell Center location. Such catering services shall include items available
from ARAMARK's menus at Mitchell Center."
5.
Paragraph 16, FORCE MAJEURE, shall be deleted in its entirety, and in its place
shall be inserted the following:
"16.
FORCE MAJEURE:
Neither party shall be responsible to the other for
any losses resulting from the failure to perform any terms or provisions of this
Agreement, except for the payments of monies owed, if the party's failure to perform is
attributable to war, riot, or other disorder; strike or other work stoppage; fire; flood; or any
other act not within the control of the party whose performance is interfered with, and
which, by reasonable diligence, such party is unable to prevent. Any such occurrence
shall be referred to as a "Force Majeure."
In the event of a Force Majeure which
interferes with the Campus Food Service Program, upon request, ARAMARK shall take
all reasonable steps to continue to provide service upon terms and conditions
satisfactory to ARAMARK and Client.
The parties hereby agree that, with respect to disaster preparedness, the
guidelines and policies set forth on Schedule 16 attached hereto shall apply."
6
Paragraph 22, TERM, shall be deleted and replaced in its entirety as follows:
"22.
TERM:
This Agreement
shall expire on_~~~~2Q16.-Notwithstanding the foregoing, this Agreement shall at all times be subject to termination
pursuant to Paragraphs 23 and 24 hereof"
7.
Paragraph 27, ADDITIONAL
the Agreement as follows:
"27.
ADDITIONAL
FINANCIAL
COMMITMENTS,
shall be added to
FINANCIAL COMMITMENTS:
A.
2006 Financial
Commitment:
In consideration
of Client's
agreement to extend the term of this Agreement for a period of ten (10) years, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, ARAMARK shall make a financial commitment to Client in an amount up
to Two Hundred Fifty Thousand Dollars ($250,000) (the "2006 Financial Commitment") for
food service facility renovations and for the purchase and installation of food service
equipment, area treatment, signage and marketing materials and other costs associated
with the Campus Food Service Program on Client's premises. Client shall hold title to all
MZC-213243.03
April 20, 2006
April 20, 2006
Page 5
such equipment at all times. The 2006 Financial Commitment shall be amortized on a
straight-line basis over a period of ten (10) years, commencing in August 2006 and ending
in July 2016. The amortization will not be charged to Client as a Direct Cost or an Allocated
Charge. Notwithstanding the foregoing, the amortization expense of the 2006 Financial
Commitment shall be included as a Direct Cost solely for purposes of determining
ARAMARK's Entitlement as set forth herein.
Upon expiration or termination of this Agreement by either party
for any reason whatsoever prior to the complete amortization of the 2006 Financial
Commitment, Client shall reimburse ARAMARK for the unamortized balance of the 2006
Financial Commitment as of the date of expiration or termination.
In the event such
amounts owing to ARAMARK are not paid to ARAMARK within 30 days of expiration or
termination, Client agrees to pay interest on such amounts at the Prime Rate plus two
percentage points per annum, compounded monthly from the date of expiration or
termination, until the date paid.
B.
2007 Renovation Financial Commitment:
In consideration of
Client's agreement to extend the term of this Agreement for a period of ten (10) years,
and other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, ARAMARK shall make a financial commitment to Client in an
amount up to Four Hundred Fifty Thousand Dollars ($450,000) (the "2007 Renovation
Financial Commitment") for food service facility renovations and for the purchase and
installation of food service equipment, area treatment, signage and marketing materials
and other costs associated with the Campus Food Service Program on Client's
premises. Client shall hold title to all such equipment at all times. The parties hereby
agree that the 2007 Renovation Financial Commitment shall be committed in various
segments (each, a "Financial Commitment Segment") as follows:
Period
October
October
October
October
October
October
October
October
October
1, 2007
1, 2008
1, 2009
1, 2010
1, 2011
1, 2012
1, 2013
1,2014
1, 2015
-September
-September
-September
-September
-September
-September
-September
-September
-September
Amount of Seament
30, 2008
30, 2009
30, 2010
30, 2011
30, 2012
30, 2013
30,2014
30,2015
30, 2016
$50, 000
$50, 000
$50, 000
$50, 000000
$50,
$50, 000000000000
$50,
$50,
$50,
ARAMARK shall only be obligated to commit a Financial
Commitment Segment if this Agreement is in full force and effect as of the date on which
such Financial Commitment Segment is to be committed. Each Financial Commitment
Segment shall be amortized on a straight-line basis over a period of twelve (12) months,
commencing,
in each case, upon final expenditure of the applicable Financial
Commitment Segment. The amortization will not be charged to Client as a Direct Cost or
an Allocated Charge. Notwithstanding the foregoing, the amortization expense of each
MZC-213243.03
April 20, 2006
April 20, 2006
Page 6
Financial Commitment Segment shall be included as a Direct Cost solely for purposes of
determining ARAMARK's Entitlement as set forth herein.
Upon expiration or termination of this Agreement by either party
for any reason whatsoever prior to the complete amortization of the 2007 Renovation
Financial Commitment, Client shall reimburse ARAMARK for the unamortized balance of
the 2007 Renovation Financial Commitment as of the date of expiration or termination.
In the event such amounts owing to ARAMARK are not paid to ARAMARK within 30
days of expiration or termination, Client agrees to pay interest on such amounts at the
Prime Rate plus two percentage points per annum, compounded monthly from the date
of expiration or termination, until the date paid."
In all other respects, the Agreement shall remain in full force and effect.
Amendment shall be attached to, and become part of, the Agreement.
This Letter
MZC-213243.03
April 20, 2006
April 20, 2006
Page 7
If the foregoing is in accordance with your understanding,
the enclosed copy of this Letter Amendment at your convenience.
please sign, date, and return
Very truly yours,
ARAMARK
EDUCATIONAL
INC. ("ARAMARK")
_//
~"
~~'-!4
SERVICES,
)
~\..9-
orer
Vice President
The aboveis acceptedthis~
day of April, 2006.
MZC--213243.03
April 20, 2006
Schedule 4.A
Sanitation
!
All food in the walk.in
alJminum
refrigerators
Guidelines
and freezers
will be covered
with
plastic wrap or
foil.
I
Walls. ceilings. windows. ducts, fan blades, and screens will be kept clean and free from
dir]!. dust, and grease.
Floors will be cleaned by vacuuming, washing, or mopping. Spray wax and buff floors as
necessary to maintain their appearance.
At least quarterly, thoroughly strip and wax all tile floors
as! necessary to maintain their appearance.
At least semi-annually steam clean all carpets.
All woodwork and walls should be cleaned and/or polished as necessary. All accessible
air duct grills should be cleaned, and the area around the loading docks and dumpsters should
be policed at least daily.
Steam tables, meat grinders, knives, etc. will be cleaned and sanitized after each use.
Dining room tables, beverage counters and salad bars will be constantly wiped and kept
in spotless condition throughout each meal.
Cooking surfaces of grills, griddles and similar cooking devices shall be cleaned at least
once a day and shall be free from encrusted matter.
M2C--213243.03
April 20. 2006
Schedule 5
Service Standards and Guidelines
Service excellence needs to be maintained through programs of standardized
preparation serving and cleaning. All foods must be garnished when practical. Serving lines are
to be well stocked throughout the entire service. The last customer is to be offered the same
range or choice as the first.
Display in serving areas shall be clean, orderly and attractive at all times. Specifically,
the quality, quantity and appearance of food shall be observed by the Contractor prior to the
st$rt of each peak traffic or meal period, and as frequently thereafter as necessary for the
, duration of the high traffic period. Any spillage or soil spots shall be removed promptly from the
! counter, steam table pans and general serving area. Salads and other pre-dished items shall be
frequently replenished or regrouped to prevent a sparse or disheveled counter appearance.
II Excessive perishing should De avoid~d. Partially used, broken or spilled items shall be removed
from the area promptly. Food serving areas are to be well stocked throughout the posted
serving hours.
I
The successful Contractor, by working with authorized members of the institution and
st~dent committees shall arrange to provide a variety of programs and special dinners for the
contract students at no extra charge. These shall range from holiday dinners to special theme
dinners, complete with costumes and decorations in which nationality or other themes are used
(i.e. Hawaiian Luau, Mexican Fiesta, Night in Merry aide England, etc.).
Each daily lunch and dinner menu shall contain a minimum choice of one solid meat
entree such as roast, steak, chop, chicken or fish. An alternate to the solid meat entree of an
acceptable non-solid meat entree may be provided with prior approval of the institution.
All foods served shall be wholesome and free from spoilage and decay. Uncooked
items, such as fresh fruits, shall be clean and free from blemish. All foods shall, when served,
be attractive in appearance and correct in temperature and consistency. They shall all be crisp,
moist, dry, and tender as may be appropriate in each case. Preference will be for fresh food
over frozen food and all frozen food over canned food.
i
The Contractor agrees to exercise care to keep these energy services to a minimum,
and comply with established energy conservation practices, regulations and policies and
m!utually endeavor to conserve the use of energies. In addition, the Contractor shall effectively
manage energy conservation in all food operations and shall conduct frequent training sessions.
To facilitate cooperation, the institution and or its designated rep!esentative shall meet
with the Contractor prior to the start of each quarter to plan the mutual goals for programming in
food service and food service related areas. The Contractor shail designate a program
coordinator who shall serve as a liaison to the institution on program matters, and provide some
assistance in the implementation of the programs.
MZC-213243.03
Aoril 20. 2006
Schedule16
Disaster Preparedness
Guidelines
Currently, the Dining Services requires several tractor-trailer sized deliveries of meat,
produce, dairy, groceries, breads, etc. to sustain the existing operation on a weekly basis.
Menus can be substantially altered to ease production and to accommodate a larger number of
pe!ople but without adequate re-supply services will be finite. These limitations should be
considered in any emergency planning.
The D~ning Services could most realistically feed about 300-400 people a meal three
tinites daily for about three days presuming that item #1-7A.were met prior to an emergency,. .I
'r 0',\ -th~ ~~~~e.d
I-\.,.)r("II:.c<.I\e.
Pr"t,tltr".?or\e.S-.s
..j-40'" Sery-i('e.
d C<7.11
!y,~,,'t()11!\
After that, the program would be able to offer progressively
less
until
supplies were
/<-{Q)
exhausted, etc.
~
The Director of Campus Dining, or designee, will coordinate with the Assistant Vice
President for Auxiliary Enterprises to provide the nutritional needs of University students and
University staff during a disaster period.
Campus Dining will insure that food supplies such as bologna, salami, luncheon meat,
breads, fruits, dehydrated or concentrated drink mixes, cookies, snacks, utensils and individual
condiments are at the proper stock level to last 3 days for 300-400 people.
The Campus Dining van should be fueled and ready ahead of the approaching storm.
Prepare building to adequately and sanitarily serve students and staff. All windows
sh,ould be closed and all movable objects near windows, inside or out, should be moved.
Notify all personnel in the cafeteria to report all injuries and explain that the phone is for
emeraencies only.
Fill all steam kettles and stock pots with fresh water, cover and secure them. This should
be done in case of a shortage or contamination of the water supply.
Work with University Physical Plant to secure at least 21 days of fuel for generator.
Procedure DurinG Hurricane
Instruct all personnel to remain indoors.
Implement three-day menu
Secure water supply if possible
Maintain constant communication with VP Auxiliary Enterprises
Distribute food at proper time
MZC--213243.03
April 20, 2006
J~
6.
~4/2!51
14:~b
~!j!jb
.j~q-qb~b.j(O
U:=JH
HURRICANE PR~PAREDNESS-FOOD SERVICg
It is rE;cornmended that for
followiJ1g
items are taken
an effective
hurricane
:pl~tha.t
the
into
consideration
prior
to. such an
emergen<:y.
Items
t:o consider
1. The ability
law is
are as follows:
of ARAMARKpersonnel
declared
2. Living
to get
to
c~mpus if
martial
or roads are impassable.
arrangements
for
these personnel
at
the
student
centE~r
3. A supply
of elect)~icity
cool.ers
and freezers
MitC:]lel1
Center
at
to operate
lighting,
the
Student
Center
4. If
no back up power exists
at the
~ssj.stance
in tra-Tlsporting
perishable
Mitc:bel1 Center prior to a storm.
.,
5. Safe and secure su~)ply of potable
for sanitary qualities.
A uninterrupted
7
sl'z;:ed
sustain
supply
of
.Adequate
notice
of a declaration
that products
might be trucked
Mitchell'
i ten'.s
water that
cooking
,3ubstantial1y
altered
to
center,
;from
the
, ,
can b~ verified
fuel
in
of impending
emergency
and staff
notified.
currently,
the Dining
Senrices
requires
several
deli'\reries
of meat,
produce,
dairy,
groceries,
the
existing
operation
on a weekly
basis.
J.1U~er
finite.
a.ppliances,
a~~..~ at the
ease production
and to
of people
but
without
adequate
These
limitations
should
be
re-supply
considered
tract9r~trailer
breads,
etc
Menus
can
so
to
be
a~commodat~ ,a larger
services
will
be
in
any:emergency
planningThe Dining
Services
could
most realistically
feed about. 300 -400
people
a meal three
times daily
for about three days presuming
that
items
# 1- 7 were met prior
to an emergency.
.
.i
After
until
that,
the program wc,uld be able
supplies
were exhaust.ed,
etc.
to
offer
progressiv~ly
I.!, .
less
~4/25"2~~o
,Preparation
14: t1b
jj'4-'4b~b~(O
U;:1H HU",
Before
TfJe JJire,:tor
t.h(~ Assi~tant
"
needs of
a disa.ster
Campus Dining
Strikes
will
coordinate
with
Enterprises
to, pro'V'ide
students
and Univers:;j,ty staffiduring
university
period.
I
will
insure
that
lunch.eon meat, breads,
mixes, cookies,
snacks,
the
Hurricane
of Campus Dining,
or designee,
Vice Presideilt
for Auxiliary
;trLe nutritional
at
c:.I'IIt:."'J.;;Jt:.;:1
p:t'oper
stock
le'vel
van
~hould
Tl~e Campus Dining
a}?proa ching storm.
PY'epare building
to
food supplies
such as bologna,Isalalui,
dehydrated
or concentrated:drin:~.
and individual
condimentsia.::-e
fruits,
utensils
to
last
3 days
be fueled
adequately
and
al+ :t:1ersonnel
in the cafeteria
to
that the phone is for emergencies
Fill
..all ste!am kettles
and stockpots
s.'!cure them.
This should. be done
contamination
of the water supply.
proCedtlre
Instruc1:
all
Implement
Secure
personnel
three-day
'lTater
Maintai,n
Distrib".lte
food
if
!II
indoors.
possible
at proper
60S-4J.93
the
et~dents
and
obj'~cts
near
.,~,,~-.
injuries
.:1:;
and
,/.;
~:...
.
comtT\unication
-460-6481
460-2932
ahead of
."
with
VP Auxilia~
time
Phone Numbers
Direetor
Production
Convenience Store
Admirt Snack Bar
EmmOn!3,
all
Hurricane
remain
Campus Dining
",C'.G.
report
only,
menu
supply
constant
serve
moveable
peopie.
with fresh water,
.'cover and
in case of a shortage
or
During
to
300-400
ready
and sanitarily
'[.ta~:f.
A+.1.,wj.ndows should be closed
and all
windows,
linsj.de
or out,
should be moved.
~rotify
explain
for
7378
6946
7902
6021
(Office)
(Home)
(Cell)
Enterprises
., .
Revised:
~4f2?f2fJ~&
lq:~b
::I::I4-qb~b~/~
:Tim McWilliams
U'uA
-460-7378
Howard,
Annie
Lewis,
Manager,
Manager,
Noe Funes, Executive
Melissa
Brisbane,
t""'A\.21:.
(Home)
(oe11 phone)
Mitchell
Center
Delta Deli
The Market
Chef
Catering
t:.NIt:.~.L:Jt:.:J
(Office)
342-7748
709-2641
Trent
RUA
344-2981
753-4836
471-2177
(Home)
(cell phone)
(Home)
850-478-2543
Manager
709-2643
(cell
phd~e)
460-7117 (Office)
Jan.30,2006
I':~
tj4ftl4
ARAMARK
.,
CoRPORATION
CAMPUS SERVICES
May3,2001
Mr. T. G. EmmonsIII
AssistantVice Presidentfor Auxiliary Enterprises
University of SouthAlabama
StudentCenter142
307 University Blvd.
Mobile, AL 36688
Mr. Emmons:
This ExtensionAgreementshall confirm the understandingbetweenyou and our representatives
thateffectiveas
of May 1,2001, the Food ServicesManagementAgreementbetweenUNIVERSITY OF SOUTH ALABAMA ("Client")
and ARAMARK EDUCATIONAL SERVICES, INC. ("ARAMARK") datedJune4,1997 (the "Agreement")shallbe
extendedas follows:
1
Paragraph22, TERM, shallbe deletedandreplacedin its entiretywith the following:
"Term: This Agreementshallcommenceon the Effective Date and expire on August17,2006.
Notwithstanding the foregoing, this Agreement shall at all times be subjectto termination
pursuantto Paragraphs23 and 24 hereof."
:
In all otherrespects,the Agreementshall remainin full force and effect. This ExtensionAgreementshallbe
a~ched to, andbecomepart of, the Agreement.
00-139117
ARAMARK TOWER
1101 MARKET STREET
PHILADELPHIA,
PA 19107-2988
215 2383000
~. G. EmmonsIII
May 30,2001
P~ge2
If the foregoingis in accordancewith your understanding,
pleasesignanddatethe three (3) copiesof this
ExtensionAgreement.Pleaseretainone copy and returnthe remainingtwo (2) copiesof this ExtensionAgreementat your
convenience.
Very truly yours,
ARAMARK EDUCATIONAL SERVICES, INC.
("ARAMARK")
By:
~cceptedthis~io/day of J
~\'\C--
, 2001
"-'"
By:
M.
Vice Presidentfor FinancialAffairs
00-138753
Matter 21 126
,
FOOD SERVICES MANAGEMENT AGREEMENT
("ARAMARK').
WITNESSETH THAT:
Agreement is-6~g-l;!§t17,1996,
I
2.
DEFINITIONS:
Agreement,
The following words and phrases when used in this
or any amendment hereto, shall have the meanings given to them in this
Paragraph
A.
"Accounting
Periods":
The two (2) Accounting Periods of four (4)
weeks each and one (1) Accounting Period of five (5) weeks which occur in each quarter.
The September Accounting Period in 1997 shall consist of six (6) weeks.
B.
"Agreement": This Food Services ManagementAgreement.
C.
"Allocated
Charge": A charge established by ARAMARK which is
reasonably allocated to Client, for certain services provided by ARAMARK to clien
locations,
D.
program,
cash, catering, alcoholic beverage service, and other related food service
operations to be managed by ARAMARK under this Agreement.
E.
J'
"Direct Costs": Costs incurred by ARAMARK directly attributable to
I
services provided under this Agreement.
F
"Food
Service
property and facilities made available
Facilities":
The areas, improvements,
by Client to ARAMARK
for the provision
personal
of the fooq
services as more fully described in Paragraph 3.A. below.
G.
"General and Administrative
I
I
I
Expense Allowance":
ARAMARK'$
I
allowance
financial
of an amount equivalent to Four Percent (4%) of Gross Receipts for th~
reporting,
legal,
tax and
audit services
I
1
operational
accountability
and
management oversight provided to cl)ent locations by ARAMARK at the district, regional
and corporate tevels
H.
"Gross
Receipts":
All receipts
received
by ARAMARK
in operating
the Campus Food Servtce Program, including, without limitation, amounts received for
declining balance account purchases, receipts from cash operations, and receipts from
catering sales
"Net Receipts":
Gross Receipts less all applicable state and local
I
sales taxes.
J.
"Prime
Interest Rate": The interest rate published in The Walt
Street Journal as the base rate on corporate loans posted by at least seventy-Five!
Percent (75%) of the thirty (30) largest U.S. banks, such rate to be adjus.ted on the las~
day of each Accounting Period.
K.
I
"Reimbursable
General and Administrative
Costs":
Direct Costs,
Allocated
Charges
and
Expense Allowance to be charged to Client under this
Agreement.
L.
"Request
for Proposal":
University of South Alabama's Request
for Proposal dated May 24, 1996.
M.
such as chinaware,
"Servicewares":
glassware
Items used in the serving of food and beverages
and silverware.
I
1
N.
"Small Expendable Equipment":
I
food such as pots, pans and kitchen utensils
-2University of South Alaboma
Items used in the preparation of:
3.
A.
B.
4.
FACILITIES AND EQUIPMENT:
Food Service Facilities:
Client shall make available to ARAMARK
suitable Food Service Facilities as defined in the Request for Proposal,
completely
equipped (including C-Bord point of sale equipment) and ready to operate, together with
such heat, refrigeration,
local telephone
service,
and utilities service as may be
,
reasonably required for the efficient performance of this Agreement. The Food Servic~
Facilities
shall include adequate dressing
I
rooms and rest rooms for ARAMARK's
employees and appropriate office space and office equipment including, but not limited to.!
desks, chairs, tables, filing cabinets and safe, for the exclusive use of ARAMARK in thJ
performance
distance
of this Agreement.
telephone
ARAMARK
shall be responsible
for the cost of long! I
I
calls. Client shall have full access to the Food Service Facilities at all,
times. Prior to the submission of the Proposal by ARAMARK, ARAMARK performed a
site visit to the Food SeNice Facilities and same meet the requirements of ARAMARK.
Repair,
Replacement
and
Maintenance:
Client
shall
furnish
building maintenance services for the Food Service Facilities, shall promptly make all
equipment repairs and replacements, and shall be responsible for compliance with all
federal, state and local safety and health laws and regulations with respect to the Food
Service Facilities
;
C.
Servicewares
and Small
Expendable
Equipment:
Client shal~
I
furnish an adequate initial inventory of Servicewares and Small Expendable Equipment!
I
At the commencement of operations hereunder, ARAMARK and Client shall jointly tak~
an opening inventory of such Servicewares and Small Expendable Equipment, a copy o~
which shall become part of this Agreement, as well as any purchases made by the Clien,
I
over the term of this Agreement. ARAMARK shall maintain such inventory as a Direc1
Cost.
CLEANING RESPONSIBILITIES:
A.
standards
ARAMARK's
of sanitation
the food preparation
Responsibilities:
and shall be responsible
and service areas (including
ARAMARK
shall maint.ain high
for routine cleaning and housekeeping
food service equipment,
-3-
University of SouthAlabama
kitchen floors
in
i
B.
hoods and grease filters) and for the routine cleaning of cafeteria tables and chairs
ARAMARK
shall be responsible for periodic waxing and buffing of floors.
ARAMAR1
shall comply with all applicable Mobile County Health Department standards with ratings:
no less than ninety-five (95)
Client's
cleaning
blinds.
service
for cafeteria
Responsibilities:
walls, windows,
Client, at its cost, shall provide regular
floors,
In addition, Client, at its cost, shall be responsible
light fixtures,
and draperies
for routine cleaning
and
of all grease
traps, duct work, plenum chambers and roof fans. Client shall be responsible for trash
and garbage removal and extermination service
5.
FOOD SERVICE AND MENUS: ARAMARK shall manage the Campus
Food Service Program for Client and Client's students, faculty, staff and guests at such
I
hours and locations as Client and ARAMARK shall mutually determine. ARAMARK shall:
submit menus to such person as Client shall designate at least two (2) weeks in advance:
of implementation
The services to be provided by ARAMARK hereunder may include the!
service and sale of alcoholic beverages at Client Brookley Center, Multipurpose Room in!
!
the University Center, the field house in Stanky Field, and on Client's yacht,
6.
PERSONNEL:
A.
ARAMARK shall provide and pay a staff of its employees on duty on
Client's premises for the efficient management of the Campus Food Service Program.
Employees of ARAMARK will be subject to the rules and regulations of Client while on
Client's premises
Compensation and related payroll costs for ARAMARK employees
assigned to duty on Client's premises shall be charged as Direct Costs.
In addition, ani
i
I
Allocated Charge shall be charged for fringe benefits and human resource services fori
such employees,
ARAMARK is the employer of all food service employees utilized by1
I
ARAMARK
in the Campus Food Service Program.
ARAMARK will comply with alii
applicable state, federal and local laws and regulations regarding employment of such!
-4-
University of South Alabama
D.
employees
B.
ARAMARK shall assign to duty on Client's premises only employees
acceptab1e to Client.
Client will have authority to request ARAMARK to remove any
employee of ARAMARK from the Campus Food Service Program.
c.
ARAMARK
1
will employ on a ninety (90) day fair trial period, without 81
reduction in hourly wages or benefits, present food service full-time, non-managemen~
employees.
employees
F~rthermor~,
ARAMARK
m~y not,.Without prior approval of.Client,
during the ninety (90) day trIal period.
(90) day trial period shall not limit ARAMARK's
employee following the trial period
Successful
completion
ability to terminate
term~natel
of the ninety!
or lay-off any such!
This provision does not apply to part-time student!
employees
employees
and non-student
per week.
Client presently has one employee on the Brookley Center campus classified
as a Food Service Work II. This
I
who regularly work less than twenty
,
(20) hours
employee will be assigned to work for ARAMARK, but
will remain on Client's payroll. ARAMARK will reimburse Client for each hour worked by
this employee at the rate of $8.33 per hour, and will reimburse Client for benefits provided
by Client to this employee at the rate of thirty percent (30%) of the employee's wages.
Any and all costs not covered by the amount to be reimbursed by ARAMARK hereunde~
shall be borne by Client.
I
Client shall furnish ARAMARK with student labor to an exten11
mutually
agreed upon.
E.
If ARAMARK
incurs any costs, including
legal fees, retroactiv~
I
wages and damages, as a result of any personnel action taken by Client or by ARAMARKI
at the direction of Client, which action ARAMARK would not have taken but for Client's'
direction,
Client shall reimburse ARAMARK for reasonable costs associated with the
defense of those actions; provided, however, that prior to incurring cost of a significani
nature, ARAMARK will obtain approval from Client in the defense strategy and wil J
maintain an ongoing review with Client of potential costs, including potential settlements,
so that Client will have an opportunity to minimize costs related to such occurrence..
-5-
Universilyoj SouthAlabama
7.
HEALTH EXAMINATIONS:
ARAMARK shall cause all of its employees
assigned to duty on Client's premises to submit to periodic health examinations as
required .by law, and shall submit satisfactory evidence of compliance with all healthi
regulations to Client upon request. The cost of such examinations shall be a Direct Cost.
8.
ARAMARK,
as an authorized
agent of Client, shall[
purchase and pay for, as a Direct Cost, all food, supplies and services utilized in the
Campus Food Service Program. ARAMARK will credit local trade discounts to Client's,
account. Cash discounts.I or discounts not exclusively related to ARAMARK's operation at!
the Client's facilities shall not be credited to Client's account.
Client shall be billed for
!
purchases made hereunder.
I
In the event an affiliated company or division of ARAMARK furnishes
products or ancillary services necessary to the efficient operation of the Campus Food
Service Program, charges to Client for such products or ancillary services shall be
competitive with the cost of obtaining such products or services from an independent
source in the open market.
9.
Agreement,
INVENTORY OF FOOD AND SUPPLIES:
Client shall, if requested by ARAMARK,
At the termination
of this
purchase ARAMARK's usable!
inventory of all food and related supplies. The purchase price shall be determined bY!
ARAMARK's
10.
invoice cost.
LICENSES, PERMITS AND TAXES: ARAMARK shall obtain all federal,
state and local licenses and permits required for the Campus Food Service Program
including any and all licenses or permits required for the sale of alcoholic beverages at
Client's Brookley Center, Multipurpose Room in the University Center, and field house in
Stanky Field, and on Client's yacht, and shall be responsible for all sales, use, excise,
state and local business and income taxes attributable to the Campus Food Service
Program. The cost of licenses, permits and taxes, including an estimated amount for state
income taxes based on the operating unit's income, shall be charged as Direct Costs.
In the event that a determination is made by a government authority that!
any sales, purchases, payments, or use of property made to or by ARAMARK under this!
PURCHASING:
-7-
University ofSouth Alabama
A.
related services.
Client and ARAMARK waive any and all right of recovery from each othe~i
I
for property damage or loss of use thereof, howsoever occurring.
This waiver Shall!!
include, but not be limited to, losses covered by policies of fire, extended coverage, boile1
explosion and sprinkler leakage. This waiver shall not apply to claims for personal inju~
or death.
12.
INDEMNIFICATION:
ARAMARK
agrees to indemnify
Client,
its agents andl I
employees, against all claims for loss, damage or injury arising solely out of the negligent
acts or omissions of ARAMARK, or that of its employees, in ARAMARK's performance of
this Agreement.
In addition, ARAMARK will indemnify Client against any claims, causes
of action, judgments, demands, and reasonable attorneys' fees arising out of the sale,
distribution,
or dispensing of alcoholic beverages by ARAMARK on Client's premises.
However, in no event shall ARAMARK's indemnification obligation hereunder extend to
any claim for loss, damage or injury arising, in whole or in part, out of the negligent acts or!
omissions
of Client, its employees, agents, Board of trustees, or other independen~
I
contractors.
13.
FINANCIAL TERMS:
Client Responsibilities:
provided
by Client under this Agreement
j
B.
Declining
All facilities,
equipment
and services to be:
i
shall be at Client's expense,
Balance Program:
Client's students, faculty and staff will
be permitted to deposit monies with ARAMARK to establish a Declining Balance Accoun1
to be used to make purchases at any ARAMARK operation on Client's campus. Unused
account balances remaining at the end of each quarter shall be carried forward to the
immediately
system.
succeeding quarter, until such time as Client changes to the semester
At that time, the term "quarter' when used herein will be replaced with the term
"semester',
Client's students will also be permitted to use their universit,yl
account, which is maintained by Client, to make purchases at any ARAMARK operation l
on Client's campus.
-9-
University ofSouthAlabama
any year
exceed ARAMARK's
ARAMARK
Entitlement
for such year,
plus
i
reimbursement to;
I
for deficits in its Entitlement from prior years, if any, then ARAMARK andi
Client shall share such excess as follows: Sixty Percent (60%) to Client and Forty Percen~
(40%) to ARAMARK.
14.
ACCOUNTING:
A.
Accounting
Period Billing: Within twenty (20) days after the end 0;
each Accounting Period, ARAMARK will submit to Client an invoice for the amounts due
ARAMARK pursuant to Paragraph 13 for such period.
I
B.
Commission
and Transaction
days after the end of each Accounting
Fee Payments:
Period, ARAMARK
Within twenty (20)
will pay to Client the
transaction fee due Client pursuant to Paragraph 13.8 and the commission due Client
pursuant
to Paragraph
commissions
payment
13.C. ARAMARK
shall prepare a statement
of sales and
for each Accounting Period and shall submit such statement with any
due to the following
addresses:
For the Main Campus:
For Brookley Center:
Auxiliary Enterprises
University of South Alabama
142 University Center
Mobile, Alabama 36688
USA Brookley Center
Mobile, Alabama 36688
C.
Billing
Adjustment:
ARAMARK
Accounting
Period
Operating
Statement
and
Notification
of
Within thirty (30) days after the end of each Accounting Period I
will submit to Client separate 9perating statements for such period for the
main campus and for the Brookley Center.. Any difference between the amount of the
invoice previously submitted for the Accounting Period (as referred to in Paragraph 14.A.)
and the amount shown on the operating statement as owing to ARAMARK for the
Accounting Period will be reflected in the subsequent Accounting Period billing.
D.
Annual Reconciliation:
Within thirty (30) days following the close 0 :
for the main campus and for the Brookley Center for the year and shall pay to Client the
amount, if any. owed to Client pursuant to Paragraph 13.E
-11University oJ South .41abama
i 1
E.
Payment
Terms:
All invoices submitted
by ARAMARKto
Client shall
be paid within fifteen (15) days of Client's receipt of the invoice.
In the event that ARAMARK
incurs
legal expense
in enforcing
its
right to receive timely payment of invoices, Client agrees to pay reasonable attorneY'$
fees and other costs.
15.
RENEGOTIATION:
The financial
terms
set forth
in this Agreement
and:
other obligations assumed by ARAMARK hereunder are based on conditions in existenc~ i
on the date ARAMARK commences operations, including by way of example, Client'~
student populatjon; labor, food and supply costs; and federal, state and local sales, use!
and excise taxes.
I
In addition, ARAMARK has relied on representations regarding!
I
existing and future conditions made by Client in connection with the negotiation andl
execution of this Agreement.
I
In the event of a significant change in the conditions or the
inaccuracy or breach of, or the failure to fulfill, any representations by Client, the parties
will work toward renegotiating the financial terms and other obligations, in accordance
with the laws of the State of Alabama, on a mutually agreeable basis to reflect such
change,
inaccuracy or breach; provided, however,
notwithstanding
the above and
foregoing, in the event that a mutual agreement cannot be reached or in the event state
law prohibits
such mutual agreement,
this Agreement
may be terminated under[
I
Paragraph 23.A or Paragraph 24.A by giving at least ninety (90) days' prior written notice. ;
I
16.
losses
FORCE MAJEURE: Neither party shall be responsible to the other for anyl
resulting
from the failure to perform
except for payments
any terms
diligence,
of the party whose performance
fire; flood; or any other act not within I
is interfered
with, and which,
such party is unable to prevent. Any such occurrence
"Force Majeure".
Service Program,
of this Agreement ,I
of monies owed, if the party's failure to perform is attributable to war .~
riot, or other disorder; strike or other work stoppage;
the control
or provisions
In the event of a Force Majeure which interferes
upon request, ARAMARK
by reasonable:
shall be referred to as C):
with the Campus Foal
shall take all reasonable
steps to continue tc>
provide service upon terms and conditions satisfactory to ARAMARK and Client.
-12University of South Alabama
A.
17.
ACCURATE BOOKS AND RECORDS: ARAMARK shall maintain accuratd
books and records in connection
with the Campus Food Service Program
and shall retai~
such records for a period of two (2) years following the year of performance.
18.
.:
CONFIDENTIAL INFORMATION AND PROPRIETARY MATERIALS:
J
personnel materials and information, including, but not limited to, technical manuals,
recipes, menus and meal plans, policy and procedure manuals and computer software
programs,
supplied
including
information,
subsidiary
those
software
programs
created
by Client
relative to or utilized in ARAMARK's
or affiliate" of ARAMARK,
business
shall be the property
based
on ARAMARK
or the business of any
of ARAMARK
and shall be
confidential. ARAMARK will be responsible for notifying Client of those specific materials!
and data considered to be confidential information.
Client shall keep such informatioH
confidential and shall so instruct its agents, employees, and independent
contractorsj
provided, however, that Client will not be responsible for maintaining confidentiality O
information
manner
as confidentia J
and materials that have not specifically been designated
information by ARAMARK.
shall
not affect
The use of such confidential information by Client in any!
ARAMARK's
ownership
or the
confidential
I
nature
I
of such!
information. Client shall not photocopy or otherwise duplicate any such materials without
the prior written consent of ARAMARK.
B.
Proprietary
Materials:
Client agrees that all computer software
programs, signage and marketing and promotional literature and material (collectively
referred to as "Proprietary Materials"),
used by ARAMARK
on Client's campus in
connection with the food services provided by ARAMARK under this Agreement, shall,
remain the property of ARAMARK notwithstanding the fact that Client may have received!
an Allocated Charge for the use of such Proprietary Materials in connection with the!
Campus
trademarks,
Food
Service
Program.
Upon
termination
service marks, and logos owned
of this Agreement,
by ARAMARK
all use
or licensed to ARAMARK
of 1
by
third parties shall be discontinued by Client, and Client shall immediately return to
ARAMARK all Proprietary Materials,
-13-
University of SouthAlabalna
!
1
19.
NOTICE: Notices required to be provided under this Agreement shall be in
writing and shall be deemed to have been duly given if mailed first class as follows:
To ARAMARK:
ARAMARK Educational Services, Inc.
ARAMARK Tower
1101 Market Street
Philadelphia, PA 19107
Attn: President
To Client:
University of South Alabama
Purchasing Department
362 Administration Building
Mobile, AL 36688
20.
ENTIRE AGREEMENT AND AMENDMENTS:
This Agreement, together
with the Request for Proposal, represents the entire agreement between the parties and
supersedes any and all prior agreements. All prior negotiations have been merged into
this Agreement, and there are no understandings, representations, or agreements, oral or
written, express or implied other than those set forth herein and/or in the Request for,
Proposal.
In the event of a conflict between this Agreement and the Request for'
Proposal,
this Agreement
shall prevail. Obligations
of the parties set forth in this
Agreement arising out of events occurring during the life of this Agreement shall survive!
the termination of this Agreement.
1.
The terms of this Agreement may not be changed, modified or amended
except by a writing signed by both parties.
1
remedy
21.
WAIVER:
available
under
The failure
of ARAMARK
this Agreement
or Client
to exercise
upon the other party's
breach
any right
or
of the terms,
representations, covenants or conditions of this Agreement or the failure to demand th~
prompt performance
of any obligation
underthis
Agreement
shall not be deemed a waiver
of (i) such right or remedy; (ii) the requirement of punctual performance; or (iii) any right oil
-14-
Ulliversily of South Alabama
as
remedy in connection with subsequent breach or default on the part of the other party.Iff:1
22.
TERM:
The initial term of this Agreement shall be for one (1) year
!
commencing on the effective date hereof. Following the initial one-year term, the term of!
this Agreement will automatically renew for up to four (4) successive one-year periods
and, thereafter, the term of this Agreement may be extended for up to two (2) terms of
one (1) year each,
mutually agreed upon I.
Notwithstanding
the foregoing, this
Agreement shall at all times be subject to termination pursuant to Paragraphs 23 and 24
hereof.
23.
TERMINATION BY ARAMARK:
A.
Without Cause:
ARAMARK may terminate this Agreement without:
I
cause by giving Client at least one hundred twenty (120) days' prior written notice.
B.
With
Cause:
In the
event
ARAMARK
determines
that
Client
i
is in
I
default of any of its obligations hereunder, ARAMARK shall provide Client with written
notice of such default.
In the event Client fails to cure the alleged default within twenty!
I
I
(20) calendar days after receiving ARAMARK's notice, ARAMARK shall have the right tol
terminate this Agreement by giving Client sixty (60) days' written notice of its intention to
terminate the Agreement as of the date specified.
24.
TERMINATION BY CLIENT:
A.
Without Cause:
Client may terminate this Agreement without cause
by giving ARAMARK at least ninety (90) days' prior written notice.
B.
default
With Cause:
of any of its obligations
notice
of such default.
twenty
(20) calendar
terminate
intention
f
In the event Client determines that ARAMARK is in
hereunder,
In the event ARAMARK
days after receiving
this Agreement
by giving
to terminate the Agreement
IN WITNESS
Client shall provide ARAMARK
WHEREOF,
Client's
ARAMARK
fails to cure the alleged
notice,
with written,
default within!
Client shall have the right tol
sixty (60) days'
written
notice of its
as of the date specified.
the parties hereto have caused this Agreement
-15University of So/lth Alabama
1
to bel
signed by their duly authorized
representatives
the day and year first above written,
UNIVERSITY
OF SOUTH ALABAMA
("Client");
-{ A e-.m:
-J~
~--~.I
,
/"
By:
Title:
I
.(
JUf~0 5 1997
P
(""
'1,'
\I, 'J -'I;;
....,.;, "."
i (~;
rv I~L"~""' 0' '"'i~n
n!ng
'
'
r,ai;...
,
Contract Officer
ARAMARK EDUCATIONAL SERVICES,
INC. ("ARAMARK') --
Comp#
CS# 16767
DoC# 78523.03
-16-
University of South Alabama
I
To:
T. G. Emmons, III
From:
John
Packer
~
Subject:
InsuranceCoverage
Date:
June 4, 1997
The following letter is in responseto the University of South Alabama's request for additional
insurance coverage. As we have discussedARAMARK standardshave beenused through out
Article 11 of the contract. These currently acceptablelevels of coverage are to deal specifically
with the listed areas in Article 11 and to maximize coverage at $2,000,000/4,000,000 respectfully.
As per your request, ARAMARK will update any or all of the coverage that is applicableto the
University of South Alabama ifARAM ARK standardlevels of coveragewere to increase.
Please let me know that this letter will suffice as an attachmentto the signed contract in regards
to any and all issuesto be resolved with insurancecoverage.
cc:
RussellMellette