EXECUTION COPY
BASIC LEASE INFORMATION
Second Amended and Restated Lease Agreement dated as of January 1, 2008,
amending
and restating the Amended and Restated Lease Agreement dated as of April 14,
2006

     
Landlord:
  MHC TT Leasing Company, Inc., a Delaware corporation, together with any
successor or assign.
 
   
Tenant:
  Thousand Trails Operations Holding Company, L.P., a Delaware limited
partnership, together with any successor or assign permitted by this Lease.

Commencement Date: November 10, 2004.
Effective Date of Restatement: January 1, 2008
     Lease Expiration Date: January 15, 2020, which is the date which is fifteen
(15) days after the last day of the 181st full calendar month following the
Commencement Date, unless extended pursuant to paragraph 4(b) of the Lease.
     Primary Term and any Extension Term Fixed Rent: The initial annual “Fixed
Rent” during the Primary Term and any applicable Extension Term of the Lease
shall be defined as and equal to and shall be payable monthly in advance (unless
specifically set forth to be paid at a different time below) as follows:

(a)   Rent accruing prior to the Effective Date of Restatement shall be paid in
accordance with the Original Lease.   (b)   From the Effective Date of
Restatement through December 31, 2008 (which period is herein referred to as the
“First Restated Lease Period”): at the annual rate of $22,190,000.00, 1/12 of
which shall be payable in advance on the first day of each calendar month,
commencing on the Effective Date of Restatement.   (c)   Subject to further
adjustments as set forth in paragraph 5(e), beginning with January 1, 2009 and
every January 1 thereafter (each, an “Adjustment Month”) during the Primary Term
and any Extension Term, the annual Fixed Rent payable during the next twelve
(12) full calendar month period commencing with the Adjustment Month shall be
the greater of (i) the Rent determined in accordance with paragraph 5(e) of this
Lease and (ii) the Fixed Rent payable during the twelve (12) full calendar
months immediately preceding the Adjustment Month, increased (but not decreased)
by the percentage increase in the Consumer Price Index from the fourteenth
(14th) calendar month preceding such Adjustment Month through the second
calendar month preceding such Adjustment Month, 1/12th of which shall be payable
in advance on the first day of each calendar month in such Lease Year,
commencing with the Adjustment Month in such Lease Year. Any period of the Lease
less than a full year after the last full Lease Year shall accrue Rent equal to
the pro rata amount of Rent accrued for each equal period of time in the last
Lease Year.

 

--------------------------------------------------------------------------------

 

EXECUTION COPY

Landlord address for payment by wire transfer to:

     
 
  Bank of America NT & SA
Chicago, IL
ABA# 071000039
MHC Operating Limited Partnership
Account # 7366901095
Notify: Karen Mancuso @ 312-279-1408 upon receipt.

 
   
Tenant Address:
  Thousand Trails Operations Holding Company, L.P.
c/o Thousand Trails, L.P.
3801 Parkwood Blvd., Suite 100
Frisco, TX 75034

 

--------------------------------------------------------------------------------

 

EXECUTION COPY
SECOND AMENDED AND RESTATED
LEASE AGREEMENT
Between
MHC TT Leasing Company, Inc.,
as Landlord
and
Thousand Trails Operations Holding Company, L.P.,
as Tenant
Effective Date of Restatement: January 1, 2008

 

--------------------------------------------------------------------------------

 

     THIS SECOND AMENDED AND RESTATED LEASE AGREEMENT is made and entered into
as of the Effective Date of Restatement set forth in the attached Basic Lease
Information (this lease agreement, as amended and restated, together with all
amendments and supplements hereto, this “Lease”), by and between MHC TT Leasing
Company, Inc., a Delaware corporation, having an address at c/o Equity LifeStyle
Properties, Inc., Two North Riverside Plaza, Suite 800, Chicago, IL 60606
(together with any successor or assign, hereinafter called “Landlord”) and
Thousand Trails Operations Holding Company, L.P., a Delaware limited
partnership, having an address at c/o Thousand Trails, L.P., 3801 Parkwood
Blvd., Suite 100, Frisco, Texas 75034 (together with any successor or assign
permitted by this Lease, hereinafter collectively called “Tenant”).
     WHEREAS, Landlord and Tenant entered into a Lease, dated as of November 10,
2004, and an Amended and Restated Lease dated as of April 14, 2006, pursuant to
which Tenant leased the Premises set forth on Exhibit A-1(a) attached hereto
from Landlord (collectively, the “Original Lease”) all upon the terms and
subject to the conditions set forth therein; and
     WHEREAS, Tenant and Landlord desire to amend the Original Lease to, among
other things: (i) to increase the Fixed Rent payable hereunder and eliminate the
payment of percentage rent payable hereunder, (ii) to change the distributions
permitted hereunder to a fixed amount and eliminate the distributions based on
an increase in the incremental value of Tenant and (iii) to make certain other
amendments to the Original Lease all as set forth herein;
     NOW, THEREFORE, for good and valuable consideration and Landlord’s consent
to the aforesaid change in control, the receipt thereof is hereby acknowledged,
the Lease is hereby amended and restated in its entirety as set forth above and
as follows:
1. DEFINITIONS
     Capitalized terms used herein shall have the following meanings for all
purposes of this Lease and shall be equally applicable to both the singular and
plural forms of the terms herein defined.
     “Account Collateral” is defined in paragraph 31(k) of this Lease.
     “Accounts” means the Collection Account, the Concentration Account, the
Chase Accounts and the Reserve Accounts.
     “Additional Rent” means all amounts, liabilities and obligations other than
Fixed Rent which Tenant assumes or agrees to pay under this Lease to Landlord or
others.
     “Adjustment Month” is defined and shall have the meaning specified in the
Basic Lease Information.
     “Affiliates” means Persons (other than individuals) Controlled by,
Controlling or under Common Control with Tenant.
     “After-Tax Basis” means, with respect to any payment required to be made to
any Person, the amount of such payment after giving effect to any additional
amount or amounts which, after deduction of all Federal, state and local taxes
required to be paid by such Person

 

--------------------------------------------------------------------------------

 

EXECUTION COPY
(determined utilizing an effective marginal tax rate of forty percent (40%)),
shall be equal to such payment.
     “AICPA” means the American Institute of Certified Public Accountants
     “Alternative Credit Rating Agency” means if either or both of S&P and
Moody’s no longer exist or no longer assign Credit Ratings, such other
nationally recognized statistical credit rating agency designated by Landlord,
acting in its sole discretion.
     “Ancillary Income” means any point of sale income generated by Tenant or
any direct or indirect Subsidiary of Tenant in connection with the rendering of
services, the rental of trailers, equipment, boats or other items, the sale of
food, supplies or products or the providing of other amenities incidental or
complementary to the operation of the campgrounds, together with any other Gross
Revenue. All income received or revenue generated by any of Tenant’s
Subsidiaries in connection with the conduct of business shall be deemed, for
purposes of this Agreement, to be Ancillary Income. Ancillary Income shall not
include Membership Dues or Membership Contract Receivables payments.
     “Available Cash” means all cash that would have been available to Tenant on
the third (3rd) anniversary of the Effective Date of Restatement if the Fixed
Rent payable under this Lease during the period from the Effective Date of
Restatement through the third (3rd) anniversary of the Effective Date of
Restatement had been $19,500,000.
     “Bank” means Union Bank of California, N.A., a national banking
association, in its capacity as the bank or the securities intermediary (as
defined in the UCC) with respect to any Account and any successor to Union Bank
of California, N.A.
     “Basic Lease Information” means the page(s) preceding this Lease which are
hereby incorporated by reference.
     “Budget” is defined in paragraph 30 of this Lease.
     “Buffer Zone” means a 100 foot perimeter of land around all Campsite Land.
     “Business Days” or “Business Day” means any day excluding Saturday, Sunday
and any day which is a legal holiday under the laws of the State of Illinois or
is a day on which banking institutions located in such state are closed.
     “Campsite Land” means only that portion of the Premises which is necessary
for the Tenant to operate in accordance with the Permitted Use, including any
easement necessary to connect such portion to a public road. Campsite Land shall
include all improved amenities generally used in the operation of a campground,
such as swimming pools, club houses and camp stores.
     “Canadian Accounts” means all deposit accounts of Tenant located and
maintained at the Bank of Montreal as more specifically identified on Exhibit I
attached hereto, together with any replacements, substitutions or new accounts
located thereat and which are disclosed to Landlord in writing.

2

--------------------------------------------------------------------------------

 

EXECUTION COPY
     “Cash Management Bank” means Union Bank of California, N.A. or another
financial institution selected by Tenant and approved by Landlord (such approval
not to be unreasonably withheld or delayed).
     “Casualty” means any damage or destruction caused to any Site by any
reason, including fire.
     “Casualty Repair” is defined in paragraph 10 of this Lease.
     “Casualty Threshold” is defined in paragraph 10 of this Lease.
     “Chase Accounts” means all deposit accounts of Tenant located and
maintained at Chase Bank USA, N.A., as more specifically identified on Exhibit I
attached hereto, together with any replacements, substitutions or new accounts
located thereat and which are disclosed to Landlord in writing.
     “Claims” or “claims” shall mean Liens (including lien removal and bonding
costs), liabilities, obligations, damages, losses, demands, penalties,
assessments, payments, fees of any Mortgagee, fines, claims, actions, suits,
judgments, settlements, costs, expenses and disbursements (including legal fees
incurred and expenses and costs of investigation and environmental remedial
action) of any kind and nature whatsoever.
     “Collection Account” is defined in paragraph 31(b)(i) of this Lease.
     “Commencement Date” is defined and shall have the meaning specified in the
Basic Lease Information.
     “Concentration Account” is defined in paragraph 31(b)(ii) of this Lease.
     “Consumer Price Index” means the Consumer Price Index-U.S. City Average for
All Urban Consumers (all items) (1982–84=100) prepared by the Bureau of Labor
Statistics of the United States Department of Labor. In the event that such
Consumer Price Index shall no longer be published with a base year of
1982–84=100, Landlord shall compute, by reference to data available from such
Bureau of Labor Statistics, the actual percentage increase in consumer prices
during the period or periods in question. If said Consumer Price Index shall
cease to be published, Landlord shall use the most comparable index published by
the United States Government. Where the Consumer Price Index is required for a
given month, and if the Consumer Price Index is not published for such month,
then the Consumer Price Index published for the month closest and prior to the
designated month shall be used.
     “Contingent Obligation” means, as applied to any Person, any direct or
indirect liability of that Person: (i) with respect to any indebtedness, lease,
dividend or other obligation of another Person if the purpose or intent of the
Person incurring such liability, or the effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the
holders of such liability will be protected (in whole or in part) against loss
with respect thereto; (ii) with respect to any letter of credit issued for the
account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings; (iii) under any foreign exchange contract, currency
swap agreement, interest rate swap agreement or other similar agreement or

3

--------------------------------------------------------------------------------

 

EXECUTION COPY
arrangement designed to alter the risks of that Person arising from fluctuations
in currency values or interest rates; (iv) to make take-or-pay or similar
payments if required regardless of nonperformance by any other party or parties
to an agreement; or (v) pursuant to any agreement to purchase, repurchase or
otherwise acquire any obligation or any property constituting security therefor,
to provide funds for the payment or discharge of such obligation or to maintain
the solvency, financial condition or any balance sheet item or level of income
of another. The amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if not a fixed and
determined amount, the maximum amount so guaranteed.
     “Control” (including with correlative meanings the terms “Controlling,”
“Controlled by” and “under Common Control with”) means the possession directly
or indirectly of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
     “Corporate Control Event” means any of the following: (i) a merger or
consolidation of Tenant, PATT or PA with another entity which results in a
change in Control of Tenant, (ii) the sale of all or substantially all the
assets of Tenant, PATT or PA to another Person, or (iii) any Person acquiring,
directly or indirectly, any shares of any class of equity securities of Tenant,
PATT or PA or other interest of Tenant, PATT or PA.
     “Credit Rating” means the senior unsecured debt rating issued by S&P and
Moody’s or if either or both no longer exist or no longer issue ratings then,
for either or both as so applicable, an Alternative Credit Rating Agency. All
references to specific levels of a Credit Rating mean such rating with a
“stable” or “positive” outlook, but not a “negative” outlook or “on watch”
associated with such rating.
     “Disability” means the failure of the relevant person to perform his
material duties with respect to Tenant by reason of injury, illness, disease or
other permanent condition, from which he is unlikely to recover, for a period of
ninety (90) consecutive days.
     “Eligible Account” means a segregated account maintained at a financial
institution reasonably acceptable to Landlord. An Eligible Account shall not be
evidenced by a certificate of deposit, passbook or other instrument.
     “Environmental Laws” is defined in paragraph 26(b) of this Lease.
     “Environmental Reports” is defined in paragraph 26(c) of this Lease.
     “Equipment” means the equipment generally described on Exhibit B attached
hereto.
     “Event of Default” is defined in paragraph 15 of this Lease.
     “Excess Land” means all land now or hereafter owned by Landlord or its
Affiliates in or near the Premises which is not Campsite Land or a Buffer Zone.
When Landlord has physically

4

--------------------------------------------------------------------------------

 

EXECUTION COPY
developed (i.e., Landlord has begun actual construction), in its sole
discretion, any parcel of Excess Land on which Property Taxes are billed on
Excess Land and Campsite Land and the Buffer Zones in a single tax bill,
Landlord shall apply for separate tax bills and upon approval thereof from
appropriate tax authorities, Property Taxes on the Excess Land shall no longer
be paid by Tenant, and any parcel of Excess Land will cease to be considered
part of the Underlying Premises once Landlord has applied for, and received, a
separate tax bill on such land.
     “Excess Land Owner” is defined in paragraph 33(a) of this Lease.
     “Excluded Taxes” means (i) any income or franchise taxes based upon,
measured by, or calculated with respect to net income or profits (but not
including any franchise tax or sales tax based upon gross receipts with respect
to the Rent or amounts required to ensure that a payment is made on an After-Tax
Basis), inheritance, estate, succession, transfer or any similar taxes and
(ii) any property taxes attributable to the Excess Land, after Landlord has
applied for, and received separate tax bills from the appropriate tax authority.
     “Existing Merrick Accounts” is defined in paragraph 31(b)(ii) of this
Lease.
     “Extension Terms” is defined in paragraph 4(b) of this Lease.
     “Extension Term Commencement Date” is defined in paragraph 4(b) of this
Lease.
     “Fee Sites” means those Sites listed on Exhibit L attached hereto, each of
which is owned by affiliates of Landlord in fee simple and leased to Landlord
pursuant to the Master Lease.
     “First Restated Lease Period” is defined and shall have the meaning
specified in the Basic Lease Information.
     “Fixed Rent” is defined and shall have the meaning specified in the Basic
Lease Information.
     “Frisco Accounts” means those certain deposit accounts maintained at Wells
Fargo Bank, N.A. located in Frisco, Texas, as more particularly described on
Exhibit I attached hereto.
     “Frisco Lease” means that certain Office Lease Agreement dated entered into
in 2002 between Sealy Parkwood, L.P., a Georgia limited partnership and Tenant
or Tenant’s Affiliate.
     “GAAP” means generally accepted accounting principles recognized as such in
the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and the Financial Accounting
Standards Board.
     “Governmental Authorization” means any approval, consent, license, permit,
waiver or other authorization issued, granted, given or otherwise made available
by or under the authority of any governmental body or pursuant to any Legal
Requirement.
     “Gross Revenues” means, for the applicable period, without duplication, all
income (including all Ancillary Income), revenues, issues, profits, deposits,
proceeds of insurance (including business interruption insurance), Membership
Dues, Membership Contract Receivables payments, Membership Contract termination
or similar payments and all other

5

--------------------------------------------------------------------------------

 

EXECUTION COPY
payments received by or for the benefit of Tenant and any direct or indirect
Subsidiary of Tenant (including by Resort Parks International, LLC., a Georgia
limited liability company (“RPI”), and by Thousand Trails Management Services,
Inc., a Nevada corporation (“TTMS”)), in cash or current funds, together with
any other consideration from any source whatsoever in connection with such
Person’s ownership, operation and management of its assets and business,
including all concession and rental income or income otherwise realized in
connection with the provision of any other service or conduct of any other
business by such Person. For avoidance of doubt, Gross Revenues shall include
all income received in connection with the businesses of providing third party
management services for campgrounds or like facilities and/or the cross-selling,
time share management, brokerage or marketing services for campground facilities
or like businesses by RPI or TTMS, as applicable.
     “Guarantors” means, collectively, all Persons holding partnership interests
in Tenant, together with any successor or assign permitted by this Lease, and
each such person individually is herein called a “Guarantor.”
     “Guarantor Pledges” means that certain Pledge Agreement by all Guarantors
in favor of Landlord, dated as of November 10, 2004, pursuant to which
Guarantors pledged one hundred percent (100%) of the ownership interests in
Tenant to Landlord.
     “Guaranty” means that certain Secured Limited Guaranty dated as of
November 10, 2004 herewith from all Guarantors to Landlord, pursuant to which,
among other things, Guarantors unconditionally guarantee the payment and
performance of Tenant’s obligations under this Lease, jointly and severally, all
upon the terms and subject to the conditions set forth therein, as such Guaranty
is amended, modified or restated from time to time. The Guaranty is secured by
the Guarantor Pledges and Landlord’s sole recourse under such Guaranty shall be
to foreclose upon the Guarantor Pledges as further set forth therein.
     “Hazardous Materials” is defined in paragraph 26(b) of this Lease.
     “Imposition” means the various taxes and other charges referred to in
paragraph 6 of this Lease and the present and future governmental laws and
regulations more specifically described in paragraph 6(b) of this Lease.
     “Improvements” means all of the buildings, structures, improvements,
Equipment, Personal Property, heating, ventilation, air conditioning, plumbing,
electrical, mechanical, utility and life safety systems, and all building
fixtures therein (including parking areas and driveways) now or hereafter
located on the Campsite Land or the Buffer Zone and generally described on
Exhibits A-2(a) and A-2(b) attached hereto, other than and specifically
excluding Tenant’s Trade Fixtures.
     The words “include,” “includes,” “including” and any other derivation of
“include” means “including but not limited to” unless specifically set forth to
the contrary.
     “Indemnified Party” is defined in paragraph 26(c) of this Lease.
     “Indebtedness” means, as applied to any Person, without duplication,
(a) any indebtedness of such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of any property or asset of
such Person to another Person subject to an

6

--------------------------------------------------------------------------------

 

EXECUTION COPY
understanding or agreement, contingent or otherwise, to repurchase such property
from such Person), (b) any obligation under any lease (a “synthetic lease”)
treated as an operating lease under GAAP and as a loan or financing for United
States income tax purposes or creditors rights purposes, (c) notes payable and
drafts accepted representing extensions of credit whether or not representing
obligations for borrowed money and any obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments, (d) any obligations of
such Person for the deferred purchase price of property or services, (e) any
obligations of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (f) any obligations of such Person as lessee under leases that have
been or should be, in accordance with GAAP, recorded as capital leases or that
portion of obligations with respect to capital leases that is properly
classified as a liability on a balance sheet in conformity with GAAP, (g) any
obligations of such Person as a result of any final judgment rendered against
such Person or any settlement agreement entered into by such Person with respect
to any litigation unless such obligations are stayed upon appeal (for so long as
such appeal shall be maintained) or are fully discharged or bonded within thirty
(30) days after the entry of such judgment or execution of such settlement
agreement, (h) any obligations, contingent or otherwise, of such Person in
respect of acceptances, letters of credit or similar extensions of credit,
(i) any Contingent Obligations, (j) any Indebtedness of others referred to in
clauses (a) through (i) above or clause (k) below guaranteed directly or
indirectly in any manner by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (1) to pay or purchase such
Indebtedness or to advance or supply funds for the payment or purchase of such
Indebtedness, (2) to purchase, sell or lease (as lessee or lessor) property, or
to purchase or sell services, primarily for the purpose of enabling the debtor
to make payment of such Indebtedness or to assure the holder of such
Indebtedness against loss, (3) to supply funds to or in any other manner invest
in the debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are rendered)
or (4) otherwise to assure a creditor against loss, and (k) any Indebtedness
referred to in clauses (a) through (j) above secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including accounts and contract rights) owned
by such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness.
     “IT Assets” is defined on Exhibit A-1(c).
     “Land” means the title and interest of Landlord in and to the fifty-nine
(59) locations of real estate described on Exhibit A-1(a) attached hereto, and
any land lying in the bed of any existing dedicated street, road or alley
adjoining thereto, all strips and gores adjoining thereto, and all rights, ways,
easements, privileges and appurtenances thereunto belonging, including all of
Landlord’s right, title and interest in and to all other property rights,
tangible or otherwise, arising out of or connected with Landlord’s ownership
thereof, but excluding the Improvements thereon.
     “Landlord” is defined in the first paragraph of this Lease.
     “Landlord Capital Improvements” means those improvements made to the
Improvements by Landlord, or paid for by Landlord, pursuant to paragraph 34 of
this Lease.

7

--------------------------------------------------------------------------------

 

EXECUTION COPY
     “Landlord Parties” is defined in paragraph 6(a) of this Lease.
     “Lease” is defined in the first paragraph of this Lease.
     “Lease Expiration Date” is defined and shall have the meaning specified in
the Basic Lease Information.
     “Leasehold Mortgage” means a leasehold mortgage, leasehold deed to secure
debt, leasehold deed of trust or other security instrument of like nature on
Tenant’s interest under this Lease given by Tenant to a Leasehold Mortgagee.
     “Leasehold Mortgagee” means any holder of a Leasehold Mortgage with respect
to Tenant’s interest under this Lease, which Leasehold Mortgagee must also hold
a lien on and security interest in all directly and indirectly owned assets of
Tenant, including all Membership Contracts (subject to Landlord’s interest in
such assets).
     “Lease Year” means each Calendar Year commencing with 2008, which shall be
the “first lease year” and each twelve full calendar month period thereafter
commencing with an Adjustment Month.
     “Legal Requirements” is defined in paragraph 12(a) of this Lease.
     “Licenses” is defined in paragraph 12(a) of this Lease.
     “Lien” means any lien, mortgage, pledge, charge, security interest or
encumbrance of any kind, or any other type of preferential arrangement that has
the practical effect of creating a security interest, including any arising
under any conditional sale agreement, capital lease or other title retention
agreement.
     “Loan Account” is defined in paragraph 31(c)(ii) of this Lease.
     “Local Accounts” means (i) those deposit accounts maintained at banks in
close proximity to a campground and into which Ancillary Income derived from
such campground is deposited, as identified and more particularly described in
Exhibit I attached hereto, together with any additions thereto, replacements or
substitutions thereof, which are disclosed to Landlord in writing, (ii) the
Frisco Accounts and (iii) the RPI Accounts. Such term shall not include the
Canadian Accounts.
     “Lockboxes” is defined in paragraph 31(c)(ii) of this Lease.
     “Master Lease” means those certain lease agreements listed on Exhibit Q
attached hereto pursuant to which Landlord leases or subleases all the Sites
from affiliates of Landlord.
     “Master Lease Additional Obligations” is defined in paragraph 6(h) of this
Lease.
     “Member” or “Members” means an owner or holder of a Membership as defined
in and pursuant to a Membership Contract.

8

--------------------------------------------------------------------------------

 

EXECUTION COPY
     “Membership” means any “Membership” as such term is defined in any
Membership Contract.
     “Membership Contract(s)” means any contract (including a retail installment
contract), agreement or other arrangement of Tenant’s Subsidiaries (whether
entered into before, on or after the date of this Lease), as such may be
amended, supplemented or modified from time to time in accordance with the
provisions of this Lease, pursuant to which Tenant’s Subsidiaries sell
Memberships to individuals or other consumers, thereby entitling such individual
or other consumer to access and use, or providing for an ownership interest in,
one or more of the campgrounds and associated facilities and amenities included
in the Premises.
     “Membership Contract Receivables” means all of Tenant’s accounts and the
proceeds thereof (as defined under the UCC) eligible for recording as an asset
in the financial statements in which a Member is the account debtor or obligor
and which represent the unpaid portion of the purchase price of Memberships, as
provided in the applicable Membership Contracts, excluding, however, any
Membership Dues or proceeds thereof.
     “Membership Dues” means any annual or periodic dues or use fees due and
payable by a Member in accordance with the terms of a Membership Contract, other
than retail installment or lump sum payments made in connection with Membership
Contract Receivables.
     “Member Uses” means any existing use of Members, including (1) the use of
trails for hiking, horseback riding, cross-country skiing, ATVs and snowmobiles
and (2) the use of waters for fishing, swimming, boating, boat launching and
related activities and (3) the use of open areas for picnicking and games.
     “Merger Transaction” means the transaction evidenced by that certain
Agreement and Plan of Merger, as amended, pursuant to which Thousand Trails
Acquisition, Inc., merged into KTTI Holding Company, Inc.
     “MHC Trust” means MHC Trust, a Maryland real estate investment trust.
     “MHC TT Master Lease” is defined in paragraph 6(h) of this Lease.
     “Mid-Atlantic Lease” means that certain Amended and Restated Lease
Agreement dated January 1, 2008 between Mid-Atlantic Resorts, LLC and MHC
Operating Limited Partnership
     “Moody’s” means Moody’s Investors Services, Inc. and its successors.
     “Mortgage” means a mortgage, deed to secure debt, deed of trust or other
security instrument of like nature or any ground or underlying lease or other
document of like nature on all or any portion of the Premises or the Underlying
Premises given by Landlord or an affiliate of Landlord to a Mortgagee.
     “Mortgagee” means any holder of a Mortgage with respect to the Premises,
Underlying Premises, or any part thereof and which has been identified as a
Mortgagee pursuant to a written notice from Landlord to Tenant, which notice
shall contain an executed copy of the Mortgage.

9

--------------------------------------------------------------------------------

 

EXECUTION COPY
     “Net Casualty Proceeds” means the compensation and/or insurance payments
net of the reasonable expenses of collecting such amounts incurred by Landlord,
any Mortgagee (but only in its capacity as Proceeds Trustee) or Tenant, and
received by any Mortgagee, Landlord or Tenant in respect of any portion of the
Premises by reason of and on account of a fire or other Casualty.
     “Non-Fee Occupancy Agreements” means those leases or other occupancy
agreements for Non-Fee Sites described opposite each such Non-Fee Site listed on
Exhibit M attached hereto.
     “Non-Fee Rent” means all sums which are due and payable by Landlord, as
subtenant pursuant to the Non-Fee Occupancy Agreements.
     “Non-Fee Sites” means those Sites shown on Exhibit M attached hereto, which
Sites are leased by affiliates of Landlord pursuant to the Non-Fee Occupancy
Agreements and leased to Landlord pursuant to the Master Lease.
     “Oakzanita Site” is defined in paragraph 9(a) of this Lease.
     “Option Agreement” means that certain Amended and Restated Option Agreement
dated as of January 1, 2008, by and among Privileged Access, LP, (as Grantor),
PATT Holding Company, LLC, Outdoor World Resorts, LLC, PA-Trails Plus, LLC,
Mid-Atlantic Resorts, LLC, and Trust (as Optionee).
     “Original Lease” is defined in the first WHEREAS clause of this Lease.
     “Other Taxes” is defined in paragraph 6(b) of this Lease.
     “Outdoor World Lease” means that certain Amended and Restated Lease
Agreement dated January 1, 2008 by and between Outdoor World Resorts, LLC and
MHC Operating Limited Partnership.
     “Overdue Rate” means the greater of: (i) twelve percent (12%) per annum or
(ii) the sum of five percent (5%) plus the prime interest rate as reported from
time to time in The Wall Street Journal, but in any event, if lower, the maximum
annual interest rate allowed by law for business loans (not primarily for
personal, family or household purposes); provided, however, if The Wall Street
Journal is no longer in existence or ceases to publish such information,
Landlord shall use the prime interest rate as reported in a comparable publicly
available publication selected by Landlord in its sole discretion.
     “PA” means Privileged Access, L.P.
     “PA Option” means that certain option agreement, dated as of January 1,
2008, by and among Privileged Access, LP, (as Grantor), PATT Holding Company,
LLC, Outdoor World Resorts, LLC, PA-Trails Plus, LLC, Mid-Atlantic Resorts, LLC,
and PA-DC, LLC, a Delaware limited liability company (as Optionee).
     “PATT” means PATT Holding Company, LLC.
     “PCAOB” means the Public Company Accounting Oversight Board.
     “Per Diem Late Charge” means an amount equal to 0.1042% of the aggregate
annual Fixed Rent for the then current Lease Year. By way of example, the Per
Diem Late Charge

10

--------------------------------------------------------------------------------

 

EXECUTION COPY
which would be payable on Fixed Rent during the First Restated Lease Period
would be $23,122 per day.
     “Permitted Distribution” is defined in paragraph 38(f) of this Lease.
     “Permitted Encumbrances” means for each Site:
     (a) Any of the following, which are not yet due and payable at the time in
question: (i) liens for water, sewer and other utility services and (ii) taxes,
assessments and other governmental charges (whether federal, state, local or
foreign) and Property Taxes;
     (b) The easements, rights-of-way, encroachments, encumbrances, restrictive
covenants and other matters affecting the title to the Premises or any part
thereof (i) set forth on Exhibit C attached hereto and (ii) which Landlord may,
from time to time, place against the Premises pursuant to paragraphs 2(c) and 33
of this Lease;
     (c) Any Subordination, Non-Disturbance and Attornment Agreement(s),
recorded or otherwise, which are provided to Tenant pursuant to paragraph 17 of
this Lease or as otherwise entered into by and among Landlord, Tenant and any
Mortgagee;
     (d) Liens for taxes (whether federal, state, local or foreign) attributable
to any taxable period whether before, on or after the Commencement Date which
are being contested in good faith in accordance with the terms of this Lease by
Tenant and for which Tenant has established adequate reserves;
     (e) This Lease and the rights, privileges and entitlements of Tenant
hereunder;
     (f) The Master Lease; and
     (g) Any Leasehold Mortgage granted in accordance with paragraph 19 of this
Lease.
     “Permitted Investments” means any one or more of the following obligations
or securities: (a) having a predetermined fixed dollar amount of principal due
at maturity that cannot vary or change; (b) bearing interest that may either be
fixed or variable but which is tied to a single interest rate index plus a
single fixed rate spread (if any) and moves proportionately with that index; and
(c) having the required ratings, if any, provided for in this definition:
          (i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America or any
agency or instrumentality of the United States of America, the obligations of
which are backed by the full faith and credit of the United States of America,
that mature in thirty (30) calendar days or less after the date of issuance and
that do not have a “r” highlighter affixed to its rating;
          (ii) time deposits, unsecured certificates of deposit, or bankers’
acceptances that mature in thirty (30) calendar days or less after the date of
issuance and are issued or held by any depository institution or trust company
incorporated or organized under the laws of the United States of America or any
State thereof and subject to supervision and examination by federal or state
banking authorities, so long as the commercial paper or other short-term debt
obligations of such depository institution or trust company are rated at least
“A1” and “P1” by

11

--------------------------------------------------------------------------------

 

EXECUTION COPY
S&P and Moody’s, respectively, or such other rating as would not result in the
downgrading, withdrawal or qualification of the then-current Credit Rating to
pass-through certificates, as evidenced in writing, and that do not have a “r”
highlighter affixed to its rating;
          (iii) repurchase agreements or obligations with respect to any
security described in clause (i) above where such security has a remaining
maturity of thirty (30) calendar days or less and where such agreement or
repurchase obligation has been entered into with a depository institution or
trust company (acting as principal) described in clause (ii) above;
          (iv) money market funds that (i) are rated AAA by S&P and Aaa by
Moody’s and (ii) have portfolio assets of at least $3,000,000,000;
          (v) debt obligations bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States of America or
any state thereof which mature in thirty (30) calendar days or less from the
date of issuance, which debt obligations have ratings from Moody’s and S&P in
the highest category possible, or such other rating as would not result in the
downgrading, withdrawal or qualification of the then-current Credit Rating to
any pass-through certificate and that do not have a “r” highlighter affixed to
its rating; provided, however, that securities issued by any particular
corporation will not be Permitted Investments to the extent that investment
therein will cause the then-outstanding principal amount of securities issued by
such corporation and held in the accounts established hereunder to exceed ten
percent (10%) of the sum of the aggregate principal balance and the aggregate
principal amount of all Permitted Investments in such accounts; and
          (vi) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations) payable on demand or on a
specified date maturing in thirty (30) days or less after the date of issuance
thereof and which is rated in the highest category possible by Moody’s and S&P
and that does not have a “r” highlighter affixed to such rating.
     “Permitted Use” is defined in paragraph 3 of this Lease.
     “Person” means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, trustee(s) of a
trust, unincorporated organization, or government or governmental authority,
agency or political subdivision thereof.
     “Personal Property” means the personal property described on Exhibit A-1(c)
attached hereto.
     “PPSA” is defined in paragraph 41(n)(xv) of this Lease.
     “Premises” is defined in paragraphs 2(a) and 2(b) of this Lease.
     “Premises Condition Standard” is defined in paragraph 9(a) of this Lease.
     “Primary Term” is defined in paragraph 4(a) of this Lease.
     “Proceeds Trustee” means a federally insured bank or trust company
designated by Landlord, subject to the prior approval of Tenant, such approval
not to be unreasonably withheld,

12

--------------------------------------------------------------------------------

 

EXECUTION COPY
delayed or conditioned; provided, however, if a Mortgage encumbers the Premises
or Underlying Premises, the Mortgagee thereunder may, at its option, be
appointed Proceeds Trustee for so long as such Mortgage remains outstanding and
such Mortgagee does not control Landlord and is not controlled by or under
common control with Landlord.
     “Promotions and Discounts Reserve” is defined in paragraph 39 of this
Lease.
     “Promotions and Discounts Reserve Account” is defined in paragraph
31(b)(ii)(B) of this Lease.
     “Property Taxes” is defined in paragraph 6(a) of this Lease.
     “Protest Notice” is defined in paragraph 5(e)(i) of this Lease.
     “Renegotiated Rent” is defined in paragraph 5(e) of this Lease.
     “Rent” is defined in paragraph 5(a)(iii) of this Lease.
     “Reserve Account” is defined in paragraph 31(b)(ii)(A) of this Lease.
     “Reserve Accounts” is defined in paragraph 31(b)(ii) of this Lease.
     “Restoration Fund” is defined in paragraph 10 of this Lease.
     “Restricted Holders” is defined in paragraph 38(h) of this Lease.
     “Restricted Junior Payment” means: (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock or other
equity security of, or ownership interest in, Tenant or any of its Subsidiaries
now or hereafter outstanding, except a dividend payable solely in shares of that
class of stock to the holders of that class; (ii) any redemption, conversion,
exchange, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
or other equity security of, or ownership interest in, Tenant or any of its
Subsidiaries now or hereafter outstanding; and (iii) any payment made to retire,
or to obtain the surrender of, any outstanding warrants, options or other rights
to acquire shares of any class of stock or other equity security of, or
ownership interest in, Tenant or any of its Subsidiaries now or hereafter
outstanding.
     “RPI” is defined in the definition of Gross Revenues in this Lease.
     “RPI Accounts” means those certain deposit accounts nos. 0042024190,
0042850552 and 7190001584, captioned the “RPI Accounts Payable Account,” the
“RPI Receipts Account” and the “PRV Receipts Account,” respectively, each
maintained at the Bank and all as more particularly described on Exhibit I
attached hereto.
     “S&P” means Standard & Poor’s Rating Service and its successors or assigns.
     “Securities” means, collectively, all outstanding equity interests in
Tenant and all options, warrants or other rights of any kind to acquire such
equity interests.
     “Site” is defined in paragraph 2(b) of this Lease.

13

--------------------------------------------------------------------------------

 

EXECUTION COPY
     “Site Assessments” is defined in paragraph 26(d) of this Lease.
     “Site Reviewers” is defined in paragraph 26(d) of this Lease.
     “Subleased Sites” means those Sites leased to Landlord pursuant to the
Master Lease.
     “Subleasing Subsidiaries” means those Subsidiaries listed on Exhibit H
attached hereto, which Subsidiaries sublease the Sites or portions thereof from
Tenant pursuant to the Tenant Subleases.
     “Subordination, Non-Disturbance and Attornment Agreement” is defined in
paragraph 17(a) of this Lease.
     “Subsidiaries” means those corporations, partnerships, limited liability
companies, associations or other business entities which are wholly owned and
controlled by Tenant. A true, accurate and complete list of the Subsidiaries on
the date hereof is set forth on Exhibit E attached hereto. Exhibit E may be
amended from time to time in accordance with the terms hereof. Each of the
Subsidiaries is herein individually called a “Subsidiary.”
     “Subsidiary Guaranty” means that certain Secured Guaranty dated as of
November 10, 2004 from each Subsidiary marked with an asterisk on Exhibit E
attached hereto, including the Subleasing Subsidiaries, together with any
additional Subsidiaries permitted in paragraph 38(a) of this Lease, to Landlord,
pursuant to which, among other things, each such Subsidiary unconditionally
guarantees the payment and performance of Tenant’s obligations under this Lease,
all upon the terms and subject to the conditions set forth therein, as such
Subsidiary Guaranty is amended, modified or restated from time to time. The
Subsidiary Guaranty is secured by a lien on the assets of each Subsidiary,
including each Subsidiary’s right, title and interest in and under the
Membership Contracts.
     “Subsidiary Pledge” means all of those certain Pledge Agreements by all
Subsidiaries marked with an asterisk on Exhibit E attached hereto, including the
Subleasing Subsidiaries, together with any additional Subsidiaries permitted in
paragraph 38(a) of this Lease, in favor of Landlord, dated as of November 10,
2004, pursuant to which each such Subsidiary has pledged one hundred percent
(100%) of its assets to Landlord, including each such Subsidiary’s right, title
and interest in and under the Membership Contracts.
     “Tenant” is defined in the first paragraph of this Lease.
     “Tenant’s Business” is defined in paragraph 38(a) of this Lease.
     “Tenant’s Equity Interest” means all of the equity interests in Tenant.
     “Tenant’s Maintenance, Repair and Replacement Items” is defined in
paragraph 9(a) of this Lease.
     “Tenant’s Manner of Operation” is defined in paragraph 39 of this Lease.
     “Tenant Pledge” means that certain Pledge Agreement by Tenant in favor of
Landlord, dated of even date herewith, pursuant to which Tenant pledged to
Landlord one hundred percent

14

--------------------------------------------------------------------------------

 

EXECUTION COPY
(100%) of the ownership interests in each Subsidiary marked with an asterisk on
Exhibit E attached hereto, including the Subleasing Subsidiaries, together with
any additional Subsidiaries permitted in paragraph 38(a) of this Lease.
     “Tenant Subleases” means those sublease between the Subleasing Subsidiaries
and Tenant; the form of such sublease agreements is attached hereto as
Exhibit H.
     “Tenant’s Trade Fixtures” means all personal property of Tenant in or on
the Premises, affixed or not, which is not necessary for the operation of the
Improvements, including tire racks and handling equipment, pallets, fork lift
trucks, lift racks, tools, office computers, and other equipment or machines
owned or leased from/by Tenant, and specifically excludes the Equipment.
     “Term” is defined in paragraph 4(b) of this Lease.
     “Transfer Event” means the direct or indirect acquisition of all or
substantially all of the equity interests in PA and PATT in an acquisition
pursuant to which, upon consummation thereof, none of Joe McAdams, any member of
his immediate family or any Affiliate of Joe McAdams or any such family member
holds any equity interest, directly or indirectly, in the acquiror.
     “Treasury Rate” means the yield to maturity of a debt obligation of the
United States Treasury having a maturity date closest to but not earlier than
the then-existing remaining Term of this Lease (excluding any then-unexercised
options for any Extension Terms) and, if more than one have been issued with
such maturity date, then using the debt obligation first issued on or closest to
the date of any termination by Landlord under this Lease.
     “Trust” means MHC T1000 Trust, a Maryland real estate investment trust.
     “TTMS” is defined in the definition of Gross Revenues in this Lease.
     “UCC” means the Uniform Commercial Code as in effect in the State of
Illinois.
     “Underlying Premises” means, collectively, the interest in the Land, the
Equipment, the Personal Property and the Improvements, together with any
easements, rights and appurtenances in connection therewith or belonging to said
Land and Improvements which is leased by an affiliate of Landlord to Landlord
under the Master Lease. When Landlord has physically developed (i.e., Landlord
has begun actual construction), in its sole discretion, any parcel of Excess
Land on which Property Taxes are billed on Excess Land and Campsite Land and the
Buffer Zones in a single tax bill, Landlord shall apply for separate tax bills
and upon approval thereof from appropriate tax authorities, Property Taxes on
the Excess Land shall no longer be paid by Tenant, and Excess Land shall cease
to be part of the Underlying Premises under this Lease at the time that Landlord
shall have received authorization for separate property tax bills from the
appropriate tax authority.
     “Variance Program” is defined in paragraph 39 of this Lease.
     “Variance Program Deposit” is defined in paragraph 39 of this Lease.

15

--------------------------------------------------------------------------------

 

EXECUTION COPY
     “Working Capital Indebtedness” means the Working Capital Loan incurred by
Tenant owing to Working Capital Lender pursuant to and in accordance with the
Working Capital Loan Documents or pursuant to any extensions, amendments,
replacements or refinancings of the Indebtedness evidenced by the Working
Capital Loan Documents and any replacement or substitution for the Working
Capital Loan, provided, however, that such replacement or substitution shall not
exceed the original principal amount of the Working Capital Loan.
     “Working Capital Lender” means LaSalle Bank, N.A., as maker of the Working
Capital Loan, or any successor lender under the Working Capital Loan Documents.
     “Working Capital Loan” means that certain $10,000,000 loan from LaSalle
Bank, N.A. to Tenant.
     “Working Capital Loan Documents” means that certain loan agreement between
Tenant and the Working Capital Lender, and any notes issued in connection
therewith by Tenant or any of its Subsidiaries payable to the Working Capital
Lender relating to a working capital loan facility of Tenant, and all other
instruments, documents and agreements executed and delivered by any Affiliate
to, for or in favor of the Working Capital Lender in connection with the
transactions contemplated under any of the foregoing documents and includes all
documents that evidence or secure extensions, amendments, replacements and
refinancings of the Working Capital Indebtedness.
2. DEMISE OF PREMISES AND OTHER RIGHTS
     (a) Landlord hereby demises and leases to Tenant and Tenant hereby leases
and rents from Landlord the Premises, IN ITS “AS IS” CONDITION, SUBJECT TO THE
EXISTING STATE OF TITLE (WITHOUT EXPRESS OR IMPLIED WARRANTY OF LANDLORD WITH
RESPECT TO THE CONDITION, QUALITY, REPAIR OR FITNESS OF THE PREMISES FOR A
PARTICULAR USE OR TITLE THERETO, ALL SUCH WARRANTIES BEING HEREBY DISCLAIMED BY
LANDLORD AND WAIVED AND RENOUNCED BY TENANT). The “Premises” consists of,
collectively, Landlord’s interest in the Campsite Land and Buffer Zones, the
Equipment, the Personal Property and the Improvements, together with any
easements, rights and appurtenances in connection therewith or belonging to said
Campsite Land and Buffer Zones and Improvements. The foregoing disclaimer in
this paragraph 2(a) has been negotiated by Landlord and Tenant, each being
represented by independent counsel, and is intended as a complete negation of
any representation or warranty by Landlord, express or implied, with respect to
the condition, quality, repair, or fitness of the Premises for a particular use,
or title thereto.
     (b) The Premises includes the Land, Equipment, Improvements and the
Personal Property located at each separate location; each individually is herein
called a “Site,” and together are herein called the “Sites.”
     (c) Landlord may, in its sole discretion, (1) encumber any of the Premises
or any Excess Land with such cross easements, reciprocal easements, agreements,
covenants, restrictions and other encumbrances, and (2) at Landlord’s expense,
connect to any sewer, water, waste water, electric, gas, telephone, or any other
system or service then existing on or servicing the Premises, in each case as
Landlord may deem necessary, desirable or advisable to facilitate

16

--------------------------------------------------------------------------------

 

EXECUTION COPY
future development of the Excess Land adjacent to such Premises, and nothing
contained herein shall limit or restrict such right, provided that (i) if any
such easement, agreement, covenant, restriction or other encumbrance impairs the
value of the Premises, Landlord shall (a) first attempt to mitigate such
impairment and, if such cannot be mitigated, then (b) pay to Tenant an amount
equal to such impairment for the remaining Term of the Lease, as Landlord and
Tenant may agree, and (ii) with respect to any such connection to any sewer,
water or waste water system then existing on or servicing the Premises that if
sufficient capacity does not exist for such connection, Landlord shall increase
such capacity and provided that Landlord shall, on demand, pay Tenant for
Landlord’s pro rata share of ongoing expenses related to such utility hook-up.
Tenant acknowledges and agrees that this Lease shall be subject and subordinate
to all such instruments and no further instrument of subordination shall be
required for its operation.
     (d) Tenant may, from time to time, request that Landlord grant or obtain
easements over the Excess Land for water, electricity, gas and telephone lines
to serve and benefit the Premises adjacent to the Excess Land, at such locations
and containing such provisions as Landlord may approve in its sole discretion.
All costs and expenses for any such utility easements shall be paid by Tenant.
     (e) Tenant may, from time to time, request that Landlord grant or obtain
for Tenant and its employees, invitees and guests of the Premises a temporary
license, which shall be revocable by Landlord at any time upon ten (10) days’
notice, to establish, maintain and use any Member Uses on the Excess Land
adjacent thereto, at such locations and subject to such rules and agreements
(including insurance requirements) as Landlord may approve in its sole
discretion. All costs and expenses for such temporary licenses shall be paid for
by Tenant as Additional Rent. Effective as of the Commencement Date, Landlord
hereby grants to Tenant and its employees, invitees and guests a temporary
license, which shall be revocable by Landlord at any time upon ten (10) days’
notice, to use and maintain in the locations on the Excess Land used and
maintained as of the Commencement Date, all existing Member Uses in effect as of
the Commencement Date. Tenant agrees to extend the insurance coverage otherwise
required by this Lease to include all uses by Tenant and its employees, invitees
and guests of the Excess Land.
3. USE
     Tenant shall, subject to applicable zoning restrictions and any recorded
covenants or restrictions in the public records on the Commencement Date, use
and occupy the Premises, including each Site, only (i) predominantly as a
membership campground, together with minimal daily stay campground uses,
(ii) for cabin rentals, (iii) pursuant to Tenant’s extended vacation, stay and
storage programs, (iv) in connection with lease arrangements entered into with
farmers prior to the date hereof and (v) for other lawful purposes which are
both associated with and related thereto (including the following ancillary
uses: ATM machines, cafeteria/food service and laundry facilities)
(collectively, the “Permitted Use”). Tenant shall not use, suffer or permit the
Premises, or any portion thereof, to be used by Tenant, any third party or the
public, as such, without restriction or in such manner as would be reasonably
likely to materially adversely affect Landlord’s title to or interest in the
Premises, or in such manner as would be reasonably likely to make possible a
material claim or claims of adverse possession by the public, as such, or third
parties, or of implied dedication of the Premises, or any portion thereof.

17

--------------------------------------------------------------------------------

 

EXECUTION COPY
4. TERM
     (a) The primary term of this Lease (the “Primary Term”) shall be for a
period of approximately fifteen (15) years, beginning on the Commencement Date
and ending on the Lease Expiration Date.
     (b) Tenant shall have the right, at its option, to extend the Primary Term
of this Lease for two (2) consecutive extension terms (the “Extension Terms”),
each being five (5) years in length. Each Extension Term shall commence on the
day after the expiration of the preceding term (each, the “Extension Term
Commencement Date”) and shall expire on the fifth (5th) anniversary of the Lease
Expiration Date in the case of the first (1st) Extension Term, and on the tenth
(10th) anniversary of the Lease Expiration Date in the case of the second (2nd)
Extension Term. The options to extend the Term of this Lease as described above
shall not be deemed exercised by Tenant unless at least twenty-four (24) months
prior to the Lease Expiration Date for the Primary Term or at least twenty-four
(24) months prior to the expiration of the Extension Term for the first (1st)
Extension Term, Tenant shall have delivered written notice to Landlord of
Tenant’s irrevocable election to so extend this Lease at the end of the Primary
Term or the first (1st) Extension Term, as applicable. Tenant’s failure to
deliver one (1) such timely notice to Landlord shall terminate all future
Extension Terms, if any, following the Extension Term to which such notice
specifically relates. Subject to the provisions of paragraph 5 of this Lease,
the terms and conditions of this Lease shall apply to each Extension Term with
the same force and effect as if such Extension Term had originally been included
in the Primary Term of the Lease. The right of Tenant to exercise its rights
with respect to the Extension Terms shall be conditioned upon (i) this Lease
being in full force and effect and no Event of Default then existing as of the
Lease Expiration Date (for the first (1st) Extension Term), or expiration of the
first (1st) Extension Term (for the second (2nd) Extension Term), and (ii) the
effective extension of the term under the Mid-Atlantic Lease and Outdoor World
Lease in accordance with the respective terms of the Mid-Atlantic Lease and
Outdoor World Lease through the first (1st) Extension Term (for the first (1st)
Extension Term) and through the second (2nd) Extension Term (for the second
(2nd) Extension Term). The Primary Term, together with any Extension Term with
respect to which Tenant properly exercises its option, and for which the
conditions related thereto are satisfied, shall constitute the “Term” of this
Lease.
     (c) Notwithstanding the foregoing, the Term of this Lease with respect to
the Non-Fee Sites shall terminate upon the expiration of the applicable Non-Fee
Occupancy Agreements and Tenant shall not be entitled to any abatement or
reduction of Rent, nor shall the obligations of Tenant under this Lease be
affected, by reason of such expiration of the applicable Non-Fee Occupancy
Agreements. Landlord shall not without Tenant’s consent amend the Non-Fee
Occupancy Agreements such that Tenant would be materially adversely affected.
5. RENTAL; GUARANTY
     (a) Tenant shall pay to Landlord the following amounts as Rent for the
Premises:
          (i) During the Term of this Lease, Tenant shall pay to Landlord as
fixed annual rent, the amount of annual fixed rent specified in the Basic Lease
Information (as defined therein, “Fixed Rent”).

18

--------------------------------------------------------------------------------

 

EXECUTION COPY
          (ii) During the Term of this Lease, Tenant shall pay, as a portion of
Additional Rent, all sums, including Non-Fee Rent, due and payable by the tenant
under the Non-Fee Occupancy Agreements. Simultaneously with its payment of
Non-Fee Rent, Tenant shall give to Landlord evidence, satisfactory to Landlord,
of having done so.
          (iii) Throughout the Term of this Lease, Tenant shall pay, as
Additional Rent, all other amounts of money and charges required to be paid by
Tenant under this Lease, whether or not such amounts of money or charges are
designated Additional Rent. As used in this Lease, “Rent” shall mean and include
all Fixed Rent and Additional Rent payable by Tenant in accordance with this
Lease.
     (b) It is the intention of Landlord and Tenant that the Fixed Rent payable
by Tenant to Landlord during the entire Term of this Lease shall be absolutely
net of all costs and expenses incurred in connection with the management,
operation, maintenance, repair and replacement of the Premises and Underlying
Premises in accordance with this Lease. Landlord shall have no obligations or
liabilities whatsoever with respect to the management, operation, maintenance,
repair or replacement of the Premises and Underlying Premises during the Term of
this Lease, and Tenant shall manage, operate, maintain, repair and replace the
Premises and Underlying Premises in accordance with this Lease and shall pay all
costs and expenses incurred in connection therewith before such costs or
expenses become delinquent other than Landlord’s obligations for Landlord
Capital Improvements. Without limiting the generality of the foregoing,
throughout the entire Term of this Lease, Tenant shall pay, as Additional Rent,
all premiums for all property and liability insurance covering the Premises and
Underlying Premises required under this Lease, all Property Taxes and all Other
Taxes that accrue during or are allocable to the Term of this Lease, and all
Property Taxes and Other Taxes allocable to any period of time prior to the Term
of this Lease. As part of the annual Budget submitted to Landlord pursuant to
paragraph 30 hereof, Tenant shall provide Landlord a schedule of all such
premiums, Property Taxes and Other Taxes payable in the relevant fiscal year and
simultaneously with the payment of such premiums, Property Taxes and Other
Taxes, Tenant shall give to Landlord evidence, satisfactory to Landlord, of
having done so.
     (c) Tenant shall pay all Fixed Rent to Landlord, in advance, on or before
the first Business Day of each and every calendar month during the Term of this
Lease (other than the payment due on the Commencement Date which is due as set
forth in the Basic Lease Information) without notice, demand, deduction or
offset, in lawful money of the United States of America, to the wire transfer
address of Landlord specified in the Basic Lease Information, or to such other
accounts and/or Person or Persons or at such other place or places as Landlord
may from time to time designate in writing (or otherwise so there are collected
funds available to Landlord on the due date). If the Fixed Rent is paid more
than five (5) Business Days after its due date, the Per Diem Late Charge shall
be due and payable for each day thereafter until the Fixed Rent is paid in full.
Tenant shall pay all Additional Rent when due. Tenant shall pay all Fixed Rent
to Landlord without notice.
     (d) Tenant acknowledges and agrees that it was a condition precedent to
Landlord entering into this Lease that Landlord receive the Guaranty from
Guarantors and the Subsidiary Guaranty from the Subsidiaries marked with an
asterisk on Exhibit E attached hereto, which Guaranty and Subsidiary Guaranty
are being entered into contemporaneously with the execution of this Lease.
Tenant hereby represents and warrants to Landlord as of the date hereof and

19

--------------------------------------------------------------------------------

 

EXECUTION COPY
covenants to Landlord that throughout the Term of this Lease, Guarantors shall
be bound by the terms of the Guaranty to Landlord and the Subsidiaries marked
with an asterisk on Exhibit E attached hereto shall be bound by the terms of the
Subsidiary Guaranty to Landlord.
     (e) On the day after the last day of the First Restated Lease Period, and,
thereafter, on every one (1) year anniversary thereof, the Fixed Rent payable
hereunder (the “Renegotiated Rent”) shall be adjusted and Tenant shall make
payments of Rent as so adjusted beginning with each such anniversary. Landlord
and Tenant shall renegotiate the Fixed Rent payable hereunder, and in accordance
with this paragraph 5(e).
          (i) On January 1, 2009 or on any one (1) year anniversary of such
date, Landlord shall be entitled to provide tenant with written notice of
Renegotiated Rent. The Renegotiated Rent as set forth in such notice shall be an
amount equal to the fair rental value of the Premises as reasonably determined
by Landlord based on (I) a review of recent sales and/or rentals of comparable
properties (which, for the avoidance of doubt, may include properties purchased,
sold or rented by Landlord or one or more of its affiliates) and/or (II) the
methodology employed by Landlord in valuing RV parks and similar properties
generally (it being understood that such methodology shall not be based, in
whole or in part, upon the actual income or profits of Tenant, any sublessee or
any affiliate thereof from the Premises). Such written notice shall be
accompanied by all relevant data upon which the Renegotiated Rent is based.
Within thirty (30) days following such delivery, Tenant shall deliver to
Landlord a copy of a written resolution of its board of directors either
accepting or protesting the Renegotiated Rent. In the event such notice
indicates disagreement as to the Renegotiated Rent (a “Protest Notice”), such
Protest Notice shall set forth in reasonable detail the basis of such
disagreement. If the Tenant shall fail to deliver a written resolution of its
board of directors either accepting or protesting the Renegotiated Rent within
the prescribed period, then Landlord may give Tenant written notice of such
failure, and if a written resolution is not delivered within five (5) days of
such written notice, Tenant shall be deemed to have accepted the Renegotiated
Rent determination delivered by Landlord and all Fixed Rent hereunder shall be
equal to the Renegotiated Rent as determined by Landlord.
          (ii) If Tenant timely delivers a Protest Notice and Tenant and
Landlord are unable to resolve any disagreement as to the Renegotiated Rent
within fifteen (15) days following Landlord’s receipt of the Protest Notice,
Landlord and Tenant agree to submit the matter to the following appraisal
process. Within ten (10) days after the expiration of the fifteen (15) day
period following Landlord’s receipt of the Protest Notice, the parties shall
each appoint an appraiser to determine the Renegotiated Rent based on the fair
rental value of the Premises determined on the basis described in clause (i)
above. Each appraiser so selected shall be either an MAI appraiser or a licensed
real estate broker, each having at least ten (10) years’ prior experience in the
appraisal or leasing of comparable property and with a working knowledge of
current rental rates and practices. If the two appraisers cannot agree upon the
Renegotiated Rent for the Premises within twenty (20) days after their
appointment, then, within ten (10) days after the expiration of such twenty
(20)-day period, the two appraisers shall select a third appraiser meeting the
above criteria. Once the third appraiser has been selected as provided for
above, then such third appraiser shall within ten (10) days after appointment
make its determination of the Renegotiated Rent. The average of the two closest
determinations of the Renegotiated Rent shall be used as the Fixed Rent and
shall be binding on both Landlord and Tenant. Landlord and Tenant shall each
bear the cost of its appraiser and shall share the cost of the third. If the
Renegotiated Rent is not determined until after the beginning of the Lease Year
to which it applies pursuant to this Lease, the Tenant shall, within five
(5) days of the final determination of Renegotiated Rent, make payment to
Landlord of any shortfall in the amount of Fixed Rent due under this Lease.
6. TAXES
     (a) Tenant shall pay, as Additional Rent, all Property Taxes prior to the
assessment of any interest or penalty for late payment and shall indemnify and
hold harmless Landlord, its affiliates, officers, directors, stockholders,
employees, representatives, members, partners and agents, and the successors and
assigns of each of the foregoing (collectively, the “Landlord Parties”), on an
After-Tax Basis from and against any such Property Taxes (including any

20

--------------------------------------------------------------------------------

 

EXECUTION COPY
penalties and interest with respect thereto) (subject to Tenant’s rights under
this paragraph 6(a) to make payment thereof in installments or under paragraph
6(e) of this Lease to protest Property Taxes); provided, however, if and to the
extent Landlord or Mortgagee is holding Tenant’s estimated payments thereof
pursuant to paragraph 6(f) of this Lease and provided no Event of Default then
exists, Landlord, pursuant to paragraph 31(e)(iii), or Mortgagee shall instead
make such payments timely on Tenant’s behalf; provided, further, if any such
Property Taxes may legally be paid in installments, Tenant may, at its option,
pay such Property Taxes in such installments together with any interest due
thereon provided that Tenant shall have paid all such installments, or provided
to Landlord or Mortgagee such amounts as are necessary for the payment of all
such installments, prior to the expiration or earlier termination of this Lease.
“Property Taxes” shall mean all taxes, assessments, excises, levies, fees and
charges (and any tax, assessment, excise, levy, municipal service fee, fee or
charge levied wholly or partly in lieu thereof or as a substitute therefor or as
an addition thereto) of every kind and description, general or special, ordinary
or extraordinary, foreseen or unforeseen, secured or unsecured, whether or not
now customary or within the contemplation of Landlord and Tenant, that are
levied, assessed, charged, confirmed or imposed by any public or government
authority on or against, or otherwise with respect to, the Premises and
Underlying Premises, or any part thereof or any personal property used in
connection with the Premises and Underlying Premises, including Landlord’s
franchise taxes based upon gross receipts with respect to the receipt of Rent
(but not including Excluded Taxes). Property Taxes shall not include any Other
Taxes or Excluded Taxes arising out of or levied in connection with this Lease,
in each case, of Landlord, unless and only to the extent levied or assessed
against Landlord in whole or in part in lieu of, as a substitute for, or as an
addition to any Property Taxes. When Landlord has physically developed (i.e.,
Landlord has begun actual construction), in its sole discretion, any parcel of
Excess Land on which Property Taxes are billed on Excess Land and Campsite Land
and the Buffer Zones in a single tax bill, Landlord shall apply for separate tax
bills and upon approval thereof from appropriate tax authorities, Property Taxes
on the Excess Land shall no longer be paid by Tenant.
     (b) Tenant shall pay, as Additional Rent, all Other Taxes prior to the
assessment of any interest or penalty for late payment and shall indemnify and
hold harmless Landlord and the Landlord Parties on an After-Tax Basis from and
against any such Other Taxes (including any penalties and interest with respect
thereto) (subject to Tenant’s rights under this paragraph 6(b) and paragraph
6(e) of this Lease to make payment in installments or to protest Other Taxes);
provided, however, if Landlord or Mortgagee is holding Tenant’s estimated
payments thereof pursuant to paragraph 6(f) of this Lease and provided no Event
of Default then exists, Landlord, pursuant to paragraph 31(e)(iii), or Mortgagee
shall instead make such payments timely on Tenant’s behalf; provided, further,
if any such Other Taxes may legally be paid in installments, Tenant may, at its
option, pay such Other Taxes in such installments together with any interest due
thereon provided that Tenant shall have paid all such installments, or provided
to Landlord or Mortgagee such amounts as are necessary for the payment of all
such installments, prior to the expiration or earlier termination of this Lease.
“Other Taxes” shall mean all taxes, assessments, excises, levies, fees and
charges, including all payments related to the cost or occupation of providing
facilities or services, whether or not now customary or within the contemplation
of Landlord and Tenant, that are levied, assessed, charged, confirmed or imposed
by any public or government authority upon, or measured by, or reasonably
attributable to (i) the Premises and Underlying Premises, (ii) the cost or value
of Tenant’s equipment, furniture, fixtures and other personal property located
in the Premises or the cost or value of any leasehold improvements

21

--------------------------------------------------------------------------------

 

EXECUTION COPY
made in or to the Premises by or for Tenant, regardless of whether title to such
improvements is vested in Tenant or Landlord, (iii) any amount payable under
this Lease, including any gross receipts tax or excise tax levied by any public
or government authority with respect to the receipt of any such amount, (iv) the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises, or (v) this transaction or any document
to which Tenant is a party creating or transferring an interest or an estate in
the Premises or Underlying Premises. “Other Taxes” shall not include any
Property Taxes or any Excluded Taxes arising out of or levied in connection with
this Lease, in each case, of Landlord, unless and only to the extent levied or
assessed against Landlord in whole or in part in lieu of, as a substitute for,
or as an addition to any Other Taxes.
     (c) Except for any Excluded Taxes imposed on or with respect to the Rent,
if at any time during the Term any method of taxation shall be such that there
shall be levied, assessed or imposed on Landlord, or on the Rent, or on the
Premises, Underlying Premises, or any portion thereof, a capital levy, gross
receipts tax on the Rent, occupational license tax or franchise tax, based upon
gross receipts with respect to the Rent, but not including any income or
franchise taxes based upon, measured by or calculated with respect to net income
or profits, Tenant, to the extent permitted by law, covenants to pay and
discharge the same, it being the intention of the parties hereto that the Fixed
Rent to be paid hereunder shall be paid to Landlord absolutely net without
deduction or charge of any nature whatsoever, foreseeable or unforeseeable,
ordinary or extraordinary, or of any nature, kind or description, except for
Excluded Taxes and as otherwise expressly provided in this Lease.
Notwithstanding the foregoing, to the extent Landlord incurs any tax liability
pursuant to the Trails Reorganization (as defined in the Merger Transaction) or
for a Pre-Closing Taxable Period (as defined in the Merger Transaction), payment
of such tax liabilities, if any, shall not be governed by this Lease but shall
be governed by the Merger Transaction.
     (d) Tenant covenants to furnish Landlord, within fifteen (15) calendar days
after written request by Landlord, official receipts of the appropriate taxing
authority, if any, or other appropriate proof reasonably satisfactory to
Landlord, evidencing the payment of all Impositions.
     (e) Tenant shall have the right to contest the amount or validity, in whole
or in part, of any Property Tax or Other Tax or to seek a reduction in the
valuation of the Premises and/or Underlying Premises, as assessed for real
estate property tax purposes, by appropriate proceedings diligently conducted in
good faith (but only after the deposit or payment (whether under protest or
otherwise) of any amounts required by applicable law to stay or prevent
collection activities). Landlord shall not be required to join in any proceeding
referred to in this paragraph 6(e) except to the extent required by law, in
which event Landlord shall, upon written request by Tenant, join in such
proceedings or permit the same to be brought in its name, all at Tenant’s
expense. Landlord agrees to provide, at Tenant’s expense, whatever assistance
Tenant may reasonably require in connection with any such contest. Tenant
covenants that Landlord shall not suffer or sustain any costs or expenses
(including counsel fees) or any liability in connection with any such
proceeding. No such consent shall subject Landlord to any civil liability or the
risk of any criminal liability or forfeiture.
     (f) Intentionally Omitted..

22

--------------------------------------------------------------------------------

 

EXECUTION COPY
     (g) Landlord will, within thirty (30) calendar days after receipt,
reimburse Tenant for any refund of Property Taxes or Other Taxes received by
Landlord or Mortgagee as a result of any tax contest relating to the Term.
     (h) In addition to the forgoing (and without duplication), if (x) Landlord
or any affiliate of Landlord incurs any tax, assessment, excise, lien, fee,
charge or liability, including franchise, lease and income taxes, arising from
the Master Lease from MHC TT, Inc., a Delaware corporation, as landlord, to
Landlord, as tenant (the “MHC TT Master Lease”) (including the items described
in clause (i) of the definition of Excluded Taxes, but excluding property taxes
attributable to the Excess Land, collectively, the “Master Lease Additional
Obligations”) and (y) Landlord and its Affiliates would not have incurred the
Master Lease Additional Obligations had Landlord owned the fee interest in the
Fee Sites owned by MHC TT, Inc. and the MHC TT Master Lease not existed, then
Tenant shall pay the Master Lease Additional Obligations on an After-Tax Basis,
as Additional Rent, prior to the assessment of any interest or penalty for late
payment and shall indemnify and hold harmless Landlord and the Landlord Parties
on an After-Tax Basis from and against any claims for payment thereof.
7. NET LEASE; NON-TERMINABILITY
     (a) This is an absolutely net lease and the Fixed Rent, Additional Rent and
all other sums payable hereunder by Tenant shall be paid without notice (except
as expressly provided herein), demand, set-off, counterclaim, abatement,
suspension, deduction or defense. It is the intention of the parties hereto that
the Fixed Rent shall be an absolutely net return to Landlord throughout the Term
of this Lease. In order that such Rent shall be absolutely net to Landlord,
Tenant shall pay when due, and save and hold harmless Landlord and the Landlord
Parties on an After-Tax Basis from and against, any and all costs, charges and
expenses attributable to the Premises or Underlying Premises, including all
fines, fees, penalties, charges (including governmental charges), assessments,
sewer rents, Impositions, insurance premiums as may be required from time to
time by Landlord or Mortgagee pursuant to this Lease, utility expenses, carrying
charges, costs, expenses and obligations of every kind and nature whatsoever,
general and special, ordinary and extraordinary, foreseen and unforeseen, the
payment for which Landlord or Tenant is, or shall become, liable by reason of
any rights or interest of Landlord or Tenant in, to or under the Premises or
Underlying Premises or this Lease or in any manner relating to the ownership,
leasing, operation, management, maintenance, repair, rebuilding, use or
occupation of the Premises or Underlying Premises, or of any portion thereof;
provided, however, that nothing herein contained shall be construed as imposing
upon Tenant any obligation to pay any Excluded Taxes of Landlord arising out of,
or levied in connection with, this Lease or Landlord’s right or interest in the
Premises or the Rent or require Tenant to make the Landlord Capital
Improvements. All fees and expenses incurred in connection with the negotiation
and execution of this Lease, including all legal, accounting, financial
advisory, title insurance, environmental inspection, consulting and all other
fees and expenses of third parties incurred by a Person in connection with the
negotiation of the terms and conditions of this Lease shall be the obligation of
the respective Person incurring such fees and expenses; provided, however that
Tenant, on the one hand, and Landlord, on the other hand, shall share equally
the costs related to preparation of surveys of the Sites listed on Exhibit F
attached hereto.
     (b) This Lease shall not terminate, nor shall Tenant have any right to
terminate this Lease, except as expressly provided in paragraph 14 of this
Lease, nor shall Tenant be entitled to

23

--------------------------------------------------------------------------------

 

EXECUTION COPY
any abatement or reduction of Rent hereunder except as required by paragraph 14
of this Lease, nor shall the obligations of Tenant under this Lease be affected,
by reason of (i) any damage to or destruction of all or any part of the Premises
from whatever cause; (ii) subject to paragraph 14 of this Lease, the taking of
the Premises, Underlying Premises, or any portion thereof by condemnation,
requisition or eminent domain proceedings; (iii) the prohibition, limitation or
restriction of Tenant’s use of all or any part of the Premises, or any
interference with such use; (iv) any eviction by paramount title or otherwise;
(v) Tenant’s acquisition or ownership of all or any part of the Premises or
Underlying Premises otherwise than as expressly provided herein; (vi) any
default on the part of Landlord under this Lease, or under any other agreement
to which Landlord and Tenant may be parties; (vii) Landlord becoming
dispossessed of any portion of the Premises subleased by Landlord pursuant to
the Non-Fee Occupancy Agreements; or (viii) any other cause whether similar or
dissimilar to the foregoing, any present or future law to the contrary
notwithstanding. It is the intention of the parties hereto that the obligations
of Tenant hereunder shall be separate and independent covenants and agreements,
that the Fixed Rent, the Additional Rent and all other sums payable by Tenant
hereunder shall continue to be payable in all events and that the obligations of
Tenant hereunder shall continue unaffected unless the requirement to pay or
perform the same shall have been terminated pursuant to any express provision of
this Lease. Tenant agrees that Tenant shall not be relieved of the obligations
to pay the Fixed Rent or any Additional Rent in case of damage to or destruction
of or condemnation (except as expressly provided in paragraph 14 of this Lease)
of the Premises or the Underlying Premises.
     (c) Tenant agrees that it shall remain obligated under this Lease in
accordance with its terms, and that it shall not take any action to terminate,
rescind or void this Lease, notwithstanding (i) any bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution or
winding-up or other proceeding affecting Landlord or its successor in interest,
or (ii) any action with respect to this Lease which may be taken by any trustee
or receiver of Landlord or its successor in interest or by any court in any such
proceeding.
     (d) Tenant waives all rights which may now or hereafter be conferred by law
(i) to quit, terminate or surrender this Lease or the Premises or any part
thereof, or (ii) to any abatement, suspension, deferment or reduction of the
Fixed Rent, Additional Rent or any other sums payable under this Lease, except
as otherwise expressly provided herein.
8. SERVICES
     Tenant shall, at Tenant’s sole cost and expense, be responsible for
supplying the Premises with electricity, heating, ventilating and air
conditioning, water, natural gas, lighting, replacement for all lights, restroom
supplies, telephone service, window washing, security service, janitor, pest
control and disposal services (including, if applicable, hazardous and
biological waste disposal), and such other services as Tenant determines to
furnish to the Premises. Landlord shall not be in default hereunder or be liable
for any damage or loss directly or indirectly resulting from, nor shall the
Fixed Rent, or Additional Rent be abated or a constructive or other eviction be
deemed to have occurred by reason of, the installation, use or interruption of
use of any equipment in connection with the furnishing of any of the foregoing
services, any failure to furnish or delay in furnishing any such services,
whether such failure or delay is caused by accident or any condition beyond the
control of Landlord or Tenant or by the making of repairs or improvements to the
Premises, or any limitation, curtailment, rationing or

24

--------------------------------------------------------------------------------

 

EXECUTION COPY
restriction on use of water, electricity, gas or any form of energy serving the
Premises, whether such results from mandatory governmental restriction or
voluntary compliance with governmental guidelines. Tenant shall pay the full
cost of all of the foregoing services and all other utilities and services
supplied to the Premises as Additional Rent.
9. REPAIRS AND MAINTENANCE; REPLACEMENT
     (a) Tenant shall, at its own sole cost and expense, keep the Premises,
including each Site therein, in substantially the same order and condition as
existed on the Commencement Date (provided that the order and condition existing
on the Commencement Date shall be deemed to include all repairs to the Site
commonly known as Oakzanita Springs in San Diego County, California (the
“Oakzanita Site,” which Tenant shall use its best efforts to complete promptly),
have been completed) (the “Premises Condition Standard”), at all times on and
after the Commencement Date to and including the date of the termination of the
Term, by lapse of time or otherwise. Tenant shall timely and properly maintain,
repair and replace all of the Premises and all of its component parts (the
“Tenant’s Maintenance, Repair and Replacement Items”), including parking
surfaces and stripes, driveways, roads, private streets, picnic tables,
campground sites and/or pads, pedestals, campground and recreational vehicle
infrastructure, all landscaping, mechanical systems, electrical and lighting
systems, plumbing and sewage systems, wastewater systems, water plants and
related facilities, septic system facilities, fixtures and appurtenances,
interior and exterior walls, roofs, foundations, floor slabs, columns and
structural elements so as to maintain each Site in accordance with the Premises
Condition Standard and to preserve and protect the useful life, utility and
value of such components, and in all events so as to preserve the effectiveness
of any warranty relating thereto. Tenant shall deliver to Landlord a written
statement showing all removals and replacements of such systems or components
with a cost exceeding $100,000.00 during the preceding calendar year. Landlord
may cause independent private inspectors to make inspections of any building and
building systems on the Premises or segments thereof to determine Tenant’s
compliance under this paragraph 9. Tenant shall pay all reasonable costs of each
inspection at each Site by or on behalf of Landlord in each calendar year; and,
if such inspection by Landlord reveals that the Premises, or any material
portion thereof, including any equipment thereon, is not substantially in the
condition required by this Lease, then Tenant shall pay for such additional
inspections performed by Landlord through the inspection approving the condition
of such Premises as being substantially in conformity with this Lease.
     (b) Landlord may, but is not required to, enter the Premises at any time
during normal business hours and make such repairs, alterations, improvements,
additions, replacements or maintenance as Landlord deems necessary to cure any
Event of Default of Tenant hereunder which remains uncured after the expiration
of any notice and cure period provided under this Lease, as applicable, in a
diligent fashion, and Tenant shall pay Landlord as Additional Rent forthwith
(and in any event within thirty (30) days) after being billed for same by
Landlord the cost thereof plus an administrative fee of five percent (5%) of
such cost, which bill shall be accompanied by reasonable supporting
documentation. Such amounts shall bear interest at the Overdue Rate from the
date of expenditure by Landlord to the date of repayment by Tenant.
     (c) It is intended by Tenant and Landlord that Landlord shall have no
obligation, in any manner whatsoever, to repair or maintain the Premises (or any
fixture or equipment therein), whether structural or nonstructural, all of which
obligations are intended, as between Landlord

25

--------------------------------------------------------------------------------

 

EXECUTION COPY
and Tenant, to be those of Tenant, except for Landlord’s obligations with
respect to Landlord Capital Improvements. Tenant expressly waives the benefit of
any statute now or in the future in effect which would otherwise afford Tenant
the right to make repairs at Landlord’s expense or to terminate this Lease
because of Landlord’s failure to keep the Premises in good order, condition and
repair.
     (d) Tenant shall use commercially reasonable efforts to maintain on each
Site, and deliver to Landlord upon expiration or termination of this Lease, then
current operating manuals and original warranties (to the extent applicable) for
the Equipment and Personal Property then located on such Site, specifically
excluding, in all cases, Tenant’s Trade Fixtures at the Premises which may be
and which are subsequently removed by Tenant upon expiration or earlier
termination of this Lease.
10. DESTRUCTION OF OR DAMAGE TO PREMISES
     If any Site is damaged by fire or other Casualty during the Term of this
Lease, Tenant shall (a) repair such damage and restore such Site to
substantially the same or better condition as existed before the occurrence of
such fire or other Casualty, using materials of the same or better grade than
that of the materials being replaced (herein, a “Casualty Repair”), and this
Lease shall remain in full force and effect. Such repair and replacement by
Tenant shall be done in accordance with paragraph 23 of this Lease and the
standards of paragraph 9 of this Lease and Tenant shall, at its expense, obtain
all permits required for such work. An architect or engineer selected by
Landlord shall review (except with respect to the existing damage at the
Oakzanita Site), at Tenant’s expense, all plans and specifications for any
Casualty Repair with a cost equal to or greater than $50,000 and all draw
requests related thereto. In no event shall Fixed Rent or Additional Rent abate,
nor shall this Lease terminate by reason of such damage or destruction. Provided
that no Event of Default by Tenant shall then exist under this Lease (and no
event has occurred which, with the passage of time, the giving of notice, or
both, would constitute an Event of Default), and provided Tenant has:
(i) delivered to Landlord plans and specifications and a budget for such
Casualty Repair (all of which Landlord shall have approved), and (ii) deposited
with Landlord or the Proceeds Trustee cash in the sum equal to the excess, if
any, of the total cost set forth in such approved budget over the amount of
insurance proceeds received on account of such Casualty, then to the extent such
proceeds are made available to Landlord from Mortgagee, Landlord shall make
available to Tenant all insurance proceeds actually received by Landlord on
account of such Casualty, for application to the costs of such approved repair
and restoration, as set forth below.
     For all Casualty Repairs, the following shall apply:
     As used herein the “Casualty Threshold” means $50,000; provided, however
that the Casualty Threshold shall not apply to the existing damage at the
Oakzanita Site. If the Net Casualty Proceeds are less than the Casualty
Threshold at the time of the applicable fire or other Casualty, such Net
Casualty Proceeds shall be paid to Tenant to apply to the cost of restoration.
If the Net Casualty Proceeds are equal to or greater than the Casualty Threshold
at the time of the applicable fire or other casualty, such Net Casualty Proceeds
shall be paid to the Proceeds Trustee (herein called the “Restoration Fund”) for
release to Tenant as restoration progresses, subject to and in accordance with
paragraph 23(c) of this Lease. If Landlord encumbers the Premises or the
Underlying Premises with a Mortgage, the Mortgagee thereunder may, at its

26

--------------------------------------------------------------------------------

 

EXECUTION COPY
option, be appointed Proceeds Trustee for so long as such Mortgage remains
outstanding and such Mortgagee does not Control Landlord and is not Controlled
by or under Common Control with Landlord. Insurance proceeds shall be deposited
in an interest bearing account and interest shall be distributed to Tenant upon
completion of said installation, repair, replacement or rebuilding, provided no
default has occurred and is continuing hereunder. All checks drawn on said
account shall be signed by the Proceeds Trustee. Insurance proceeds shall be
disbursed to Tenant by the Proceeds Trustee under the following procedure:
          (i) No more frequently than once per calendar month, Tenant may
request that Landlord disburse to Tenant such insurance proceeds as are
requested by Tenant to pay for all costs incurred by Tenant for repair and
restoration work on the damaged Site that was performed during the immediately
preceding calendar month. Tenant’s request shall certify that all work for which
reimbursement is requested was performed in substantial compliance with the
plans and specifications approved by Landlord pursuant to paragraph 23 of this
Lease and all applicable laws, and shall include reasonably satisfactory
evidence of the costs incurred by Tenant and unconditional partial (as to the
amount received compared to percentage of completion) or final lien releases, as
applicable, in form and substance required by applicable law executed by all
mechanics, materialmen, laborers, suppliers and contractors who performed any
portion of the repair and restoration work or supplied materials; and
          (ii) Within ten (10) Business Days after receiving Tenant’s request,
Landlord shall approve or disapprove Tenant’s request, which approval shall not
be unreasonably withheld, delayed or conditioned, by written notice to Tenant.
If Landlord approves all or any portion of a request and Landlord has received
(and not previously disbursed) insurance proceeds for such costs, then
Landlord’s approval shall include a check in the amount approved by Landlord. If
Landlord disapproves all or any portion of a request, then Landlord’s notice
shall state the reasons for that disapproval. Landlord’s failure to deliver a
notice approving or disapproving a request shall be conclusively deemed
Landlord’s disapproval of the request.
11. INSURANCE, HOLD HARMLESS AND INDEMNIFICATION
     (a) To the fullest extent permitted by law, Landlord and the Landlord
Parties shall not be liable to Tenant or any Affiliate for any damage to or loss
or theft of any property or for any bodily or personal injury, illness or death
of any Person in, on or about the Premises arising at any time and from any
cause whatsoever, unless and to the extent due to the gross negligence or
willful misconduct of the Landlord Parties. Except as provided in this paragraph
11(a), Tenant waives all claims against Landlord and the Landlord Parties
arising from any liability described in this paragraph 11(a).
     (b) Tenant hereby agrees to indemnify and defend Landlord and the Landlord
Parties against and hold each such Person harmless on an After-Tax Basis from
all claims, demands, liabilities, damages, losses, costs and expenses, including
attorneys’ fees and disbursements, arising from or related to any use or
occupancy of the Premises, or any condition of the Premises, or any default in
the performance of Tenant’s obligations hereunder, or any damage to any property
(including property of employees and invitees of Tenant) or any bodily or
personal injury, illness or death of any person (including employees and
invitees of Tenant) occurring in, on or about the Premises or any part thereof
or any part of the buildings or the land constituting a part of the Premises
arising on or after the date hereof from any cause whatsoever, or occurring

27

--------------------------------------------------------------------------------

 

EXECUTION COPY
outside the Premises when such damage, bodily or personal injury, illness or
death is caused by any act or omission of Tenant or its agents, officers,
employees, contractors, invitees or licensees or any default in the performance
of Tenant’s obligations under the Frisco Lease. This paragraph 11(b) shall
survive the termination of this Lease with respect to any damage, bodily or
personal injury, illness or death or any default in the performance of Tenant’s
obligations under the Frisco Lease occurring prior to such termination.
     (c) Tenant shall at all times provide, maintain and keep in force or cause
to be provided, maintained and kept in force, at no expense to Landlord, the
following policies of insurance with respect to the Premises, Underlying
Premises and Tenant, as applicable (collectively, the “Policies”):
          (i) Property insurance on an “all risk” and “special perils” basis
(special form cause of loss) for one hundred percent (100%) of the replacement
value of each Site, as applicable, with customary deductibles as approved by
Landlord. The policy shall contain the following endorsements: (a) Replacement
Cost (without any deduction made for depreciation); (b) Agreed Amount (waiving
co-insurance penalties); (c) a standard landlord clause acceptable to Landlord;
and (d) a standard mortgagee clause acceptable to Mortgagee, if any. Each such
policy shall also include the following coverage if applicable:
(i) comprehensive boiler and machinery coverage in amounts as determined by
Landlord; (ii) earthquake and earth movement for the full replacement cost of
the subject Site, or the amount as would (in light of the risks insured and the
cost of premiums for such insurance) in Landlord’s judgment be maintained by a
prudent operator of property similar in use and locale; and (iii) flood
insurance if the Improvements located on a Site are located in a special flood
hazard area as designated by the Director of the Federal Emergency Management
Agency, in sufficient amounts as reasonably determined by Landlord, provided
that such coverage in such amounts is generally available at commercially
reasonable costs.
          (ii) Insurance against rent loss, extra expense or business
interruption, in amounts satisfactory to Landlord. The perils covered by this
policy shall be the same as those accepted on each Site including flood,
earthquake and earth movement.
          (iii) Commercial general liability insurance covering bodily injury
and property damage occurring on, in or about each Site and, to the extent
applicable, any adjoining streets, sidewalks, and passageways arising out of or
connected with the possession, use, leasing, operation, or condition of any
Site. Policy limits shall be not less than $1,000,000 per occurrence, $2,000,000
per location in the aggregate with respect to a Site and $1,000,000 per
occurrence, $2,000,000 per location in the aggregate with respect to Tenant.
Such coverage shall include but not be limited to premises, operations,
products/completed operations, personal injury and liquor liability (if
applicable).
          (iv) Umbrella excess liability insurance for not less than $25,000,000
per occurrence with respect to Tenant, subject to an aggregate cap of not less
than $25,000,000.
          (v) Worker’s Compensation and other statutory coverage as required by
the state where each Site is located to protect Tenant, Landlord and any
Mortgagee against claims for injuries sustained in the course of employment at
such Site.

28

--------------------------------------------------------------------------------

 

EXECUTION COPY
          (vi) When and to the extent required by Landlord, fidelity insurance
and insurance against loss or damage by any other risk commonly insured against
by Persons (or which would be insured against by a reasonably prudent Person)
occupying or using like properties in the locality or localities in which a Site
is situated.
     (d) All insurance policies required pursuant to this Lease shall be
endorsed to provide that: (i) Landlord is named as an additional insured with
respect to the all risk property coverage; as a loss payee with respect to all
rent/business interruption/extra expense coverage; as additional insured on all
liability coverage, with the understanding that any obligation imposed upon the
insureds (including the liability to pay premiums) shall be the sole obligation
of Tenant and not of any other insured; (ii) Mortgagee, its successors and/or
assigns, is named as mortgagee with respect to the all risk property coverage;
as a loss payee with respect to all rent/business interruption/extra expense
coverage; and as additional named insured on all liability coverage, with the
understanding that any obligation imposed upon the insureds (including the
liability to pay premiums) shall be the sole obligation of Tenant and not of any
other insured; (iii) the interests of Landlord or any Mortgagee shall not be
invalidated by any action or inaction of Tenant or any other Person, and such
policies shall insure Landlord and any Mortgagee regardless of any breach or
violation by Tenant or any other Person of any warranties, declarations or
conditions in such policies; (iv) the insurer under each such policy shall waive
all rights of subrogation against Landlord or any Mortgagee, any right to
set-off and counterclaim and any other right to deduction, whether by attachment
or otherwise; (v) such insurance shall be primary and without right of
contribution of any other insurance carried by or on behalf of Landlord or any
Mortgagee with respect to its interest in the Premises or Underlying Premises;
(vi) if such insurance is canceled for any reason whatsoever, including
nonpayment of premium or, if any substantial modification, change or reduction
is made in the coverage which affects the interests of Landlord or any
Mortgagee, such cancellation, modification, change or reduction in coverage
shall not be effective as to Landlord or Mortgagee until thirty (30) days after
receipt by Landlord and Mortgagee of written notice sent by registered mail from
such insurer; (vii) any such insurance shall be endorsed to provide inasmuch as
the policy is written to cover more than one insured, all terms, conditions,
insuring agreements and endorsements with the exception of limits of liability,
shall operate in the same manner as if there were a separate policy covering
each insured; and (viii) if required by Landlord or Mortgagee and available on
commercially reasonable terms, such insurance shall contain “cut-through”
endorsements providing Landlord and Mortgagee with direct access to any
re-insurers.
     (e) Tenant shall deliver to Landlord and Mortgagee a copy of each insurance
policy with further evidence of such insurance acceptable to Landlord and
Mortgagee, together with a copy of the declaration page for each such policy. If
requested by Landlord or Mortgagee, binders for renewal policies shall be
provided no later than fifteen (15) days prior to the expiration of each policy
and, when available and requested by Landlord or Mortgagee, copies of such
policies. Tenant shall deliver a renewed policy or policies, or duplicate
original or originals thereof, marked “premium paid,” or accompanied by such
other evidence of payment satisfactory to Landlord and Mortgagee with standard
non-contributory mortgagee clause in favor of and acceptable to Landlord and
Mortgagee. Upon request of Landlord or Mortgagee, Tenant shall cause its
insurance underwriter or broker to certify to Landlord or Mortgagee in writing
that all the requirements of this Lease applicable to Tenant governing insurance
have been satisfied. Tenant shall comply promptly with and conform, in all
material respects, to (i) all provisions of each such insurance policy and (ii)
all requirements of the insurers applicable to Tenant as

29

--------------------------------------------------------------------------------

 

EXECUTION COPY
respects use, occupancy, possession, operation, maintenance, alteration or
repair of a Site. Tenant shall not use or permit the use of any Site in any
manner that would permit any insurer to cancel any insurance policy or void
coverage required to be maintained by this Lease. No insurance policy may
provide for assessments to be made against Landlord or Mortgagee. If a policy
permits assessments against others, such policy must waive any right to a Lien
upon a Site and no such assessments may result in a Lien against such Site. The
insurance coverage required under this paragraph 11 may be effected under a
blanket policy or policies covering the Underlying Premises and other properties
and assets not constituting a part of the Underlying Premises; provided that any
such blanket policy shall specify the portion of the total coverage of such
policy that is allocated to the Underlying Premises, and any sublimits in such
blanket policy applicable to the Underlying Premises, which amounts shall not be
less than the amounts required pursuant to this paragraph 11 and which shall in
any case comply in all other respects with all of the requirements of this
paragraph 11. Tenant shall comply in all material respects with all insurance
requirements and shall not bring or keep or permit to be brought or kept any
article upon any Site or cause or permit any condition to exist thereon (subject
to and to the extent within Tenant’s control, exercising commercially reasonable
measures consistent with prudent business practice to ensure compliance herewith
by members of the public, including Members, having access to the Premises)
which would be prohibited by any insurance requirement, or would invalidate
insurance coverage required hereunder to be maintained by Tenant on or with
respect to any part of any Site pursuant to this paragraph 11. Notwithstanding
anything to the contrary contained herein, it is expressly understood and agreed
that any insurance which Tenant shall cause any tenant to provide that shall
otherwise be in compliance with all of the terms and conditions of this
paragraph 11 shall satisfy Tenant’s obligations with respect thereto hereunder.
Tenant shall not take out separate insurance contributing in the event of loss
with that required to be maintained pursuant to this paragraph 11 unless such
insurance complies with this paragraph 11. All insurance policies shall be in
form, with endorsements, risk coverages, deductibles and amounts and maintained
with companies approved by Landlord and Mortgagee, such approval not to be
unreasonably withheld or delayed. Without limiting Landlord’s and Mortgagee’s
ability to approve the aforementioned, an insurance company shall be reasonably
satisfactory if such insurance company (a) has a rating of at least A with
financial size of Class X or better as specified in Best’s Key Rating Guide,
(b) is licensed or authorized to do business, as required under applicable law,
in the State where the applicable Sites are located and (c) a claims-paying
ability rating by S&P of not less than “AA” and an equivalent rating by another
Rating Agency. Tenant shall not settle or accept any payment of any claims under
any insurance policy insuring against casualty, rent loss and business
interruption without twenty (20) days’ advance written notice to Landlord and
Mortgagee, if any. Landlord and Mortgagee shall not, by the fact of approving,
disapproving, accepting, preventing, obtaining or failing to obtain any
insurance, incur any liability for or with respect to the amount of insurance
carried, the form or legal sufficiency of insurance contracts, solvency of
insurance companies, or payment or defense of lawsuits, and Tenant hereby
expressly assumes full responsibility therefor and all liability, if any, with
respect thereto. If Tenant fails to provide to Landlord or Mortgagee the
policies of insurance required by this paragraph 11, Landlord or Mortgagee may
(but shall have no obligation to), upon written notice to Tenant, procure such
insurance or single-interest insurance for such risks covering Landlord’s and
Mortgagee’s interest and Tenant shall pay all premiums thereon promptly upon
demand by Landlord and Mortgagee, and until such payment is made by Tenant, the
amount of all such premiums shall bear interest at the Overdue Rate and shall
constitute Additional Rent. Any such insurance purchased by Landlord or
Mortgagee may, but need not, protect Tenant’s interests. The coverage purchased
by Landlord or Mortgagee may

30

--------------------------------------------------------------------------------

 

EXECUTION COPY
not pay any claim made by Tenant or any claim that is made against Tenant in
connection with the Premises or Underlying Premises. Tenant may later cancel any
insurance purchased by Landlord or Mortgagee, but only after providing Landlord
and Mortgagee with evidence that Tenant has obtained insurance as required by
this Lease. If Tenant fails to obtain any such insurance and Landlord or
Mortgagee purchase such insurance for the Premises and/or Underlying Premises,
Tenant will be responsible for the costs of that insurance, including interest
and other charges imposed by Landlord or Mortgagee in connection with the
placement of the insurance, until the effective date of the cancellation or
expiration of the insurance. The costs of the insurance may be added as
Additional Rent. The costs of the insurance may be more than the cost of
insurance Tenant is able to obtain on its own.
     (f) Landlord acknowledges that, notwithstanding anything to the contrary
contained herein, Tenant’s existing insurance and insurance carriers as of the
Commencement Date meet the requirements set forth in this paragraph 11; provided
each Subleasing Subsidiary is and shall remain a named insured on all insurance
policies. In no event shall Landlord or any Mortgagee require any additional
insurance pursuant to this paragraph 11 that is not commercially reasonable with
respect to similarly situated properties.
12. COMPLIANCE WITH LAWS, COVENANTS AND NON-FEE OCCUPANCY AGREEMENTS
     (a) Tenant shall, and shall cause its Subsidiaries to, throughout the Term
promptly comply or cause compliance with or remove or cure any violation of any
and all present and future laws, including the Americans with Disabilities Act
of 1990, as the same may be amended from time to time (“ADA”), ordinances
(zoning or otherwise), orders, rules, regulations and requirements of all
federal, state, municipal and other governmental bodies having jurisdiction over
the Premises and the Membership Contracts and the appropriate departments,
commissions, boards and officers thereof, and the orders, rules and regulations
of each Board of Fire Underwriters where the Premises are situated, or any other
body now or hereafter constituted exercising lawful or valid authority over the
Premises and the Membership Contracts (collectively, “Legal Requirements”), any
portion thereof, or the sidewalks, curbs, roadways, alleys or entrances adjacent
or appurtenant to the Premises, or exercising lawful authority with respect to
(1) the use or manner of use of the Premises, or such adjacent or appurtenant
facilities, and (2) the sale of and continuing obligations under the Membership
Contracts, and whether the compliance, curing or removal of any such violation
and the costs and expenses necessitated thereby shall have been foreseen or
unforeseen, ordinary or extraordinary, and whether or not the same shall be
presently within the contemplation of Landlord, Tenant or any Tenant Subsidiary
or shall involve any change in governmental policy, or require structural or
extraordinary repairs, alterations or additions by Tenant or any Tenant
Subsidiary and irrespective of the amount of the costs thereof. Tenant, at its
sole cost and expense, shall comply and shall cause its Subsidiaries to comply
with all agreements, contracts, easements, restrictions, reservations or
covenants, including the Membership Contracts, if any, running with the land or
hereafter created by Tenant or any Tenant Subsidiary or consented to by Tenant
or any Tenant Subsidiary or requested by Tenant or any Tenant Subsidiary. Tenant
shall also comply and shall cause its Subsidiaries to comply with, observe and
perform all provisions and requirements of all policies of insurance at any time
in force with respect to the Premises and required to be obtained and maintained
by Tenant or any Tenant Subsidiary under the terms of paragraph 11 of this
Lease. Tenant shall and shall cause its Subsidiaries to comply with all licenses
and permits issued by governmental

31

--------------------------------------------------------------------------------

 

EXECUTION COPY
authorities in connection with the Premises (including licenses and permits
relating to all waste water, storm water, water processing and other similar
facilities, franchise agreements, Membership Contracts and any conditional use
permits (collectively, “Licenses”)); provided, however, Landlord agrees, upon
request of Tenant, to sign promptly and without a charge therefor (except as
provided in the final sentence of this subparagraph) any applications or filings
(1) for such licenses and permits as may be required by Legal Requirements for
the conduct, operation or restoration of the Premises and the business to be
conducted therein in accordance with the terms hereof, and (2) for the
maintenance of the existing zoning for each Site to continue to permit Tenant’s
use thereof, in both cases where the signature of Landlord is required by Legal
Requirements in force at the time. All reasonable costs incurred by Landlord in
connection with obtaining any such licenses and permits and zoning matters shall
be borne by Tenant. With respect to the Site commonly known as Pio Pico, Tenant
shall use commercially reasonable efforts to cause the use permit benefiting the
north side of the Site to be renewed or reissued.
     (b) If Tenant shall at any time fail to pay any Imposition in accordance
with the provisions of paragraphs 6 or 26 of this Lease, or to take out, pay
for, maintain and deliver any of the insurance policies or certificates of
insurance provided for in paragraph 11 of this Lease, or shall fail to make any
other payment or perform any other act on its part to be made or performed
hereunder, then Landlord, after five (5) Business Days’ prior written notice to
Tenant (or without notice in situations where Landlord determines that delay is
likely to cause harm to Landlord’s interest in the Premises), and without
waiving or releasing Tenant from any obligation of Tenant contained in this
Lease, may (but shall be under no obligation to do so):
          (i) pay any Imposition payable by Tenant pursuant to this Lease; or
          (ii) make any other payment or perform any other act on Tenant’s part
to be paid or performed hereunder which Tenant shall not have paid or performed
within the time required therefor, except that any time permitted to Tenant to
perform any act required by this paragraph shall be extended for such reasonable
period not to exceed three hundred sixty-five (365) days as may be necessary to
effectuate such performance, provided throughout such time Tenant is
continuously, diligently and in good faith prosecuting such performance.
     (c) Tenant acknowledges that (1) Landlord’s interest in the Non-Fee Sites
is that of the subtenant under the Non-Fee Occupancy Agreements, true, correct
and complete copies of which have been delivered to Tenant, (2) Landlord’s
interest in all of the Sites is that of the tenant under the Master Lease, a
true, correct and complete copy of which has been delivered to Tenant and (3)
pursuant to this Lease, Tenant is effectively subleasing Landlord’s interest as
the subtenant under the Non-Fee Occupancy Agreements and the tenant under the
Master Lease. Tenant hereby covenants and agrees to perform and comply in all
material respects with all of the obligations of the tenant under the Non-Fee
Occupancy Agreements during the Term of this Lease.
     (d) Landlord hereby grants to Tenant an exclusive license and authority
solely to enforce Landlord’s rights as the tenant or subtenant of the Premises,
as applicable, under the terms and conditions of the Non-Fee Occupancy
Agreements and the Licenses. Tenant shall comply with Landlord’s obligations as
tenant, subtenant or licensee of the Premises, as applicable, under the Non-Fee
Occupancy Agreements and the Licenses; provided, however,

32

--------------------------------------------------------------------------------

 

EXECUTION COPY
Landlord agrees, upon request of Tenant, to sign promptly and without a charge
therefor (except as provided in the final sentence of this subparagraph) any
documents, applications or filings for the Non-Fee Occupancy Agreements and/or
Licenses as may be required from time to time for the conduct, operation or
restoration of the Premises and the business to be conducted therein in
accordance with the terms hereof. All reasonable costs incurred by Landlord in
connection with obtaining any such documents, licenses and permits shall be
borne by Tenant.
     (e) Landlord may enter upon the Premises for any such cure purpose set
forth in this paragraph 12 and take all such action in or on the Premises as may
be necessary therefor pursuant to this paragraph 12. All sums, reasonable under
the circumstances, actually paid by Landlord and all costs and expenses,
including attorney’s fees, incurred by Landlord in connection with the
performance of any such act, together with interest thereon at the Overdue Rate
and an amount equal to five percent (5%) of all such costs and expenses, shall
be paid by Tenant to Landlord on demand and submission of reasonable evidence of
such expenditures. Landlord shall not be limited in the proof of any damages
which Landlord may claim against Tenant arising out of or by reason of Tenant’s
failure to provide and keep in force insurance as aforesaid, to the amount of
the insurance premium or premiums not paid or incurred by Tenant, and which
would have been payable upon such insurance, but Landlord shall also be entitled
to recover, as damages for any such breach, the uninsured amount of any loss,
damages, costs and expenses of suit, including attorney’s fees, suffered or
incurred by reason of damage to or destruction of the Premises or Underlying
Premises, or any portion thereof or other damage or loss which Tenant is
required to insure against hereunder, occurring during any period when Tenant
shall have failed or neglected to provide insurance as aforesaid.
     (f) Tenant shall have the right under this Lease to abandon any Site or
Sites subject to this Lease, provided such abandonment does not violate any
Membership Contracts or applicable Legal Requirements, and so long as during
such period of abandonment, (i) Tenant continues to pay Rent and maintain the
Premises at such Sites in accordance with this Lease, (ii) Tenant maintains a
security system and performs regular inspections of such Sites and (iii) Tenant
provides Landlord with the right to inspect such Sites on an annual basis and
Tenant pays for the costs of such inspections.
     (g) Tenant hereby covenants and agrees to perform and comply in all
material respects with all of the obligations of the tenant under any equipment
lease or other agreement affecting the Personal Property during the Term of this
Lease. Landlord hereby grants to Tenant an exclusive license and authority
solely to enforce Landlord’s rights as the obligor or obligee, as applicable,
under the terms and conditions of any equipment lease or other agreement
affecting the Personal Property. Tenant shall comply with Landlord’s obligations
as obligor or obligee, as applicable, under any such agreement affecting the
Personal Property; provided, however, Landlord agrees, upon request of Tenant,
to sign promptly and without a charge therefor (except as provided in the final
sentence of this paragraph 12(g)) any documents, applications or filings
required for the conduct, operation or restoration of the Personal Property and
the business to be conducted therein in accordance with the terms hereof. All
reasonable costs incurred by Landlord in connection with obtaining any such
documents, licenses and permits shall be borne by Tenant.

33

--------------------------------------------------------------------------------

 

EXECUTION COPY
13. PARTIAL TAKING
     If less than substantially all of any Site shall be taken for public or
quasi-public purposes, Tenant shall promptly, at its sole cost and expense,
restore, repair, replace or rebuild the improvements so taken in conformity with
the requirements of paragraph 9 of this Lease as nearly as practicable to the
condition, size, quality of workmanship and market value thereof immediately
prior to such taking, without regard to the adequacy of any condemnation award
for such purpose. There shall be no abatement of Rent during any such period of
restoration. In performing its obligations, Tenant shall be entitled to all
condemnation proceeds made available to Landlord for restoration or repair of
the Premises under the same terms and conditions for disbursement set forth for
casualty proceeds in paragraph 10 of this Lease, including such proceeds being
made available by Mortgagee. Tenant shall, at its sole cost and expense,
negotiate and, if necessary, litigate, the amount of the award, and Landlord
shall have the right to participate in such process, and if Tenant fails to
diligently prosecute such efforts, Landlord may (at its option) take control of
the process. Any condemnation proceeds in excess of the amounts as are made
available to Tenant for restoration or repair of the Premises shall be the sole
and exclusive property of Landlord. Tenant shall have the right to participate
in condemnation proceedings with Landlord, and shall be entitled to receive any
award made by the condemning authority in respect of business loss or, if
available, business relocation and any other claim permitted by law which does
not, in any such case, diminish Landlord’s recovery.
14. SUBSTANTIAL TAKING
     If an entire Site or a substantial part of a Site, or access thereto, shall
be taken or condemned by any competent authority for any public or quasi-public
use or purpose, or, as a result of such taking, the use of such Site shall be
materially adversely affected, the Term of this Lease (with respect to such
affected Site only) shall end upon and not before the date when the possession
of the part so taken shall be required for such use and, except as otherwise
provided herein, without any modification or adjustment of Rent in connection
therewith. Landlord shall be entitled to receive the entire award or payment in
connection therewith, except that Tenant shall have the right to file any claim
available to Tenant under applicable Law for any taking of leasehold
improvements paid for by Tenant and any Tenant’s personal property and fixtures
belonging to Tenant and removable by Tenant upon expiration of the Term and for
moving expenses, provided that such separate award shall not reduce the award or
judgment recoverable by Landlord; provided, further, that Landlord shall be
permitted, at its sole discretion, to apportion a portion of any award received
to Tenant as consideration for losses suffered by Tenant as a result of a
taking.
     In the event that an entire Site is taken, Landlord shall have the option,
at its sole discretion, of designating a replacement Site which shall replace
the taken Site, in every instance, in this Lease. In the event that Landlord
designates a replacement Site subsequent to a taking of an entire Site, the
value of such replacement Site shall be taken into consideration in determining
the portion of any award apportioned to Tenant by Landlord in consequence of
such taking (as provided for herein).
     Notwithstanding the foregoing, if Tenant is required by applicable law to
provide a replacement Site for Members, Landlord shall use proceeds from the
taking to purchase a replacement Site that satisfies the applicable Legal
Requirements.

34

--------------------------------------------------------------------------------

 

EXECUTION COPY
     If the temporary use or occupancy of all or any part of any Site shall be
taken by condemnation during the Term, this Lease shall be and remain unaffected
by such condemnation, and Tenant shall continue to pay in full the Rent payable
hereunder. In the event of any such temporary taking for use or occupancy of all
or any part of such Site, Tenant shall be entitled to appear, claim, prove and
receive the portion of the award for such taking that represents compensation
for use or occupancy of such Site during the period of such temporary taking and
Landlord shall be entitled to appear, claim, prove and receive the portion of
the award that represents the costs of restoration of such Site and the use or
occupancy of such Site after the end of the period of such temporary taking.
15. DEFAULT; EVENTS OF DEFAULT
     The occurrence of any one or more of the following events (“Event of
Default”) shall constitute a breach of this Lease by Tenant:
     (a) Tenant fails to pay any Fixed Rent as and when such Fixed Rent becomes
due, and such failure continues for five (5) Business Days after Landlord gives
written notice thereof to Tenant; provided, however, that no more than once per
twelve month period, such five (5) Business Day cure period that follows the
receipt of Landlord’s notice of non-payment of Fixed Rent shall be extended to
the final Business Day of the calendar quarter in which such non-payment of
Fixed Rent occurred; or
     (b) Tenant fails to pay any Additional Rent as and when such Additional
Rent becomes due and payable and such failure continues for more than five
(5) Business Days after Landlord gives written notice thereof to Tenant; or
     (c) The entering of a non-appealable final judgment that Tenant has
breached its indemnification obligations under the Merger Transaction; provided
however, that prior to the appeal by Tenant of any judgment holding that Tenant
has breached an indemnification obligation under the Merger Transaction, Tenant
shall be required to post bond in the amount of such judgment or, at the
election of Tenant, provide a letter of credit in favor of Landlord for such
amount; or
     (d) Tenant fails to perform its obligations under or breaches any agreement
or covenant contained in any part of paragraph 25, paragraph 31 and
subparagraphs 38(a) through (k) of this Lease; and, even if not specifically so
provided therein, a breach by any Subsidiary of the aforementioned shall
constitute an Event of Default; or
     (e) Tenant or any of Tenant’s Subsidiaries fails to perform or breaches any
agreement or covenant of this Lease not separately covered in this paragraph 15
to be performed or observed by Tenant or any of Tenant’s Subsidiaries as and
when performance or observance is due and such failure or breach continues for
more than thirty (30) calendar days after Landlord gives written notice thereof
to Tenant; provided, however, that if, by the nature of such agreement or
covenant, such failure or breach cannot reasonably be cured within such period
of thirty (30) calendar days, an Event of Default shall not exist as long as
Tenant or such Tenant Subsidiary commences with due diligence and dispatch the
curing of such failure or breach within such period of thirty (30) calendar days
and, having so commenced, thereafter prosecutes with diligence and dispatch and
completes the curing of such failure or breach within a

35

--------------------------------------------------------------------------------

 

EXECUTION COPY
reasonable time not to exceed one hundred eighty (180) calendar days, except
with respect to regulatory compliance matters, when such cure must be completed
within three hundred sixty-five (365) calendar days; or
     (f) Tenant, any Guarantor or any of Tenant’s Subsidiaries (i) files, or
consents by answer or otherwise to the filing against Tenant, any Guarantor or
any of Tenant’s Subsidiaries of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy or for liquidation or to take
advantage of any bankruptcy, insolvency or other debtors’ relief law of any
jurisdiction, (ii) makes an assignment for the benefit of Tenant’s, any
Guarantor’s or any of Tenant’s Subsidiaries’ creditors, (iii) consents to the
appointment of a custodian, receiver, trustee or other officer with similar
powers of Tenant, any Guarantor, any of Tenant’s Subsidiaries or of any
substantial part of Tenant’s, any Guarantor’s or any of Tenant’s Subsidiaries’
property, or (iv) takes any action for the purpose of any of the foregoing; or
     (g) A court or government authority enters an order, and such order is not
stayed or vacated within sixty (60) calendar days, (i) appointing a custodian,
receiver, trustee or other officer with similar powers with respect to Tenant,
any Guarantor, any Tenant Subsidiary or with respect to any substantial part of
Tenant’s or any Tenant Subsidiary’s property, or (ii) constituting an order for
relief or approving a petition for relief or reorganization or arrangement or
any other petition in bankruptcy, insolvency or other debtors’ relief law of any
jurisdiction, or (iii) ordering the dissolution, winding-up or liquidation of
Tenant, Guarantor or any Tenant Subsidiary; or
     (h) Tenant fails to pay any insurance premiums when due or otherwise fails
to continuously maintain all insurance required to be maintained by Tenant in
accordance with the terms and conditions of this Lease; or
     (i) Any Guarantor or Tenant or anyone claiming on behalf of either party
asserts any claim that the Guaranty is not then in full force and effect; or
     (j) An “Event of Default” occurs and is continuing under the Guaranty, the
Option Agreement, the Subsidiary Guaranty, the Guarantor Pledge, the Subsidiary
Pledge or the Tenant Pledge; or
     (k) Tenant, any Guarantor or any of Tenant’s Subsidiaries shall be in
default under the terms of any of its Indebtedness; or
     (l) An “Event of Default” occurs and is continuing under and as defined in
the Outdoor World Lease; or
     (m) An “Event of Default” occurs and is continuing under and as defined in
the Mid-Atlantic Lease.
     Landlord may treat the occurrence of any one or more of the foregoing
Events of Default as a breach of this Lease. For so long as such Event of
Default continues, Landlord, at its option and with or without notice or demand
of any kind to Tenant or any other Person, shall have only the remedies provided
in paragraph 16 of this Lease.

36

--------------------------------------------------------------------------------

 

EXECUTION COPY
16. REMEDIES
     (a) Upon the occurrence of an Event of Default, Landlord shall, in addition
to, and not in derogation of, any remedies for any preceding breach, with or
without notice or demand (except as otherwise expressly provided herein) and
without limiting Landlord in the exercise of any right or remedy which Landlord
may have by reason of such Event of Default under this Lease, have the right to
cause all of the assets directly or indirectly owned by Tenant and the equity
interests in Tenant to be transferred and assigned to Landlord through
appropriate judicial remedies, including pursuant to the following available
remedies:
          (i) Landlord shall have the right to terminate Tenant’s right to
possession of the Premises and repossess the Premises by any lawful means
without terminating this Lease.
          (ii) Landlord shall have the right at any time to give a written
termination notice to Tenant and, on the date specified in such notice, Tenant’s
right to possession of the Premises shall terminate and this Lease shall
terminate. Upon such termination, Landlord shall have the right to recover from
Tenant:
     (A) The worth at the time of determination of all unpaid Rent which had
been earned at the time of termination;
     (B) The worth at the time of determination of the amount of all unpaid Rent
for the balance of the then-Term of this Lease after the time of termination
excluding the potential Lease term under any unexercised options for any
Extension Terms, reduced only to the extent of net rental proceeds actually
received from any subsequent replacement tenant(s) for any Site; provided,
however, except to the extent the state statutes or common law applicable to any
Site requires Landlord to mitigate its damages arising from an Event of Default
by Tenant under this Lease, from and after any such Event of Default, Landlord
shall have no duty to mitigate its damages by re-letting, or attempting to
re-let, any Site to any replacement tenant(s); and
     (C) All other amounts necessary to compensate Landlord for all of the
detriment proximately caused by Tenant’s failure to perform all of Tenant’s
obligations under this Lease or which in the ordinary course of events would be
likely to result therefrom. The “worth at the time of determination” of the
amounts referred to in clause (A) above shall be computed by allowing interest
at the Per Diem Late Charge. The “worth at the time of determination” of the
amount referred to in clause (B) above shall be computed by discounting such
amount to present value by using the discount rate equal to the then Treasury
Rate. For the purpose of determining unpaid Rent under clauses (A) and
(B) above, the Rent reserved in this Lease shall be deemed to be the total Rent
payable by Tenant under paragraph 5 of this Lease.
          (iii) Even if Landlord terminates Tenant’s right to possession under
this Lease, this Lease shall continue in effect and Landlord shall have the
right to enforce all its rights and remedies under this Lease, including the
right to recover all Rent as it becomes due under this

37

--------------------------------------------------------------------------------

 

EXECUTION COPY
Lease. Landlord shall be entitled to an administrative fee of five percent (5%)
of all amounts expended under this paragraph 16(a).
          (iv) All amounts owed by Tenant to Landlord following an Event of
Default can be used by Landlord in pursuing its claims against Guarantors under
the Guaranty and enforcement of all obligations, rights and remedies under
(1) the Guaranty, (2) the Guarantor Pledges, (3) the Subsidiary Guaranties,
(4) the Subsidiary Pledges, and (5) the Tenant Pledge, including realizing on
all collateral set forth in any such documents in accordance with the terms of
such documents.
          (v) If Landlord commences any remedy under this paragraph 16(a),
Landlord shall continually prosecute such remedy to the fullest extent permitted
under this Lease, the Guaranty, the Guarantor Pledges, the Subsidiary
Guaranties, the Subsidiary Pledges, the Tenant Pledge and all applicable laws,
such that Landlord or Landlord’s affiliate shall become the sole owner of the
assets of Tenant.
     (b) In addition, upon the occurrence of an Event of Default, (1) Landlord
shall be entitled to receive and Tenant shall pay the Per Diem Late Charge for
each day such Event of Default remains outstanding, payable promptly, and in any
event within three (3) Business Days following Landlord’s written demand to
Tenant for payment thereof, and (2) Landlord shall have all other rights set
forth in paragraph 31(g) of this Lease.
     (c) All agreements and covenants to be performed or observed by Tenant
under this Lease shall be at Tenant’s sole cost and expense and without any
abatement of Fixed Rent or Additional Rent. If Tenant fails to pay any sum of
money to be paid by Tenant or to perform any other act to be performed by Tenant
under this Lease as and when due or required to be performed, Landlord shall
have the right, but shall not be obligated, and without waiving or releasing
Tenant from any obligations of Tenant, to, upon five (5) Business Days’ prior
notice to Tenant, make any such payment or perform any such other act on behalf
of Tenant in accordance with this Lease. All sums so paid by Landlord and all
necessary incidental costs shall be deemed Additional Rent hereunder and shall
be payable by Tenant to Landlord on demand, together with interest on all such
sums from the date of expenditure by Landlord to the date of repayment by Tenant
at the Overdue Rate. Landlord shall have, in addition to all other rights and
remedies of Landlord, the same rights and remedies in the event of the
nonpayment of such sums (plus interest at the Overdue Rate) by Tenant as in the
case of default by Tenant in the payment of Rent.
     (d) Landlord shall be entitled to collect from Tenant Landlord’s reasonable
costs and expenses, including attorneys’ fees and expenses, in connection with
the enforcement of its remedies and/or the defense of any matter, including
during an appeal and whether suit is actually filed or not.
     (e) Upon the occurrence of and during the continuance of an Event of
Default, Landlord shall have the right to commence an action in any court of
competent jurisdiction located in the State of Illinois for the purpose of
adjudicating the Event of Default and any or all of Landlord’s rights and
remedies under this Lease related to each. Tenant hereby consents to the
exercise of personal jurisdiction over Tenant in any such court in Illinois and
consents to Illinois as the choice of venue. Upon adjudication of Landlord’s
rights under this Lease,

38

--------------------------------------------------------------------------------

 

EXECUTION COPY
Landlord, at its option, shall have the right to file additional actions in any
and all States or Canadian Provinces in which the Sites are located for the
purpose of enforcing Landlord’s rights under this Lease, including obtaining
orders of possession for the Site or Sites located in such States or Canadian
Provinces.
17. SUBORDINATION
     (a) Subordination, Non-Disturbance. Tenant agrees at any time hereafter,
and from time to time within ten (10) Business Days of written request of
Landlord, to execute and deliver to Landlord a subordination, non-disturbance
and attornment agreement substantially in the form attached hereto as Exhibit D
(such instrument, release, document or agreement is herein called the
“Subordination, Non-Disturbance and Attornment Agreement”), subjecting and
subordinating this Lease to the lien of any Mortgage which at any time may be
placed upon the Premises or Underlying Premises, or any portion thereof, by
Landlord, and to any replacements, renewals, amendments, consolidations,
modifications, extensions or refinancings thereof. It is agreed, nevertheless,
that so long as there exists no Event of Default under paragraphs 15(f) or 15(g)
of this Lease, such Subordination, Non-Disturbance and Attornment Agreement
shall not interfere with, hinder or reduce the right of Tenant to continue to
occupy the Premises, and all portions thereof, and to conduct its business
thereon in accordance with the covenants, conditions, provisions, terms and
agreements of this Lease. The costs of preparing and recording any such document
shall be borne by Landlord, but Tenant shall be responsible for its own counsel
fees.
     (b) Mortgagee Protection Clause. In the event of any act or omission of
Landlord constituting a default by Landlord hereunder, Tenant shall not exercise
any remedy until Tenant has given Landlord and any Mortgagee of the Premises or
Underlying Premises written notice of such act or omission, and until a
reasonable period of time (not less than ten (10) Business Days) to allow
Landlord or Mortgagee to remedy such act or omission shall have elapsed
following receipt of such notice. However, if such act or omission cannot, with
due diligence and in good faith, be remedied within such period or cannot be
cured simply by the payment of money, Landlord and Mortgagee shall be allowed
such further period of time as may be reasonably necessary provided that either
such party commences remedying the same with due diligence and in good faith and
thereafter diligently prosecutes such cure, provided such cure period shall not
extend beyond two hundred seventy (270) calendar days after the receipt of
notice of such default. Nothing herein contained shall be construed or
interpreted as requiring any Mortgagee receiving such notice to remedy such act
or omission.
     (c) Attornment. If any Mortgagee shall succeed to the rights of Landlord
under this Lease or to ownership of the Premises or Underlying Premises, whether
through possession or foreclosure or the delivery of a deed to the Premises or
Underlying Premises in lieu of foreclosure, then such Mortgagee shall
automatically be deemed to have recognized this Lease and to assume the
obligations of Landlord hereunder accruing on and after the date such Mortgagee
acquires title to the Premises or Underlying Premises, and Tenant shall attorn
to and recognize such Mortgagee as Tenant’s landlord under this Lease and shall
promptly execute and deliver any instrument consistent with the Subordination,
Non-Disturbance and Attornment Agreement that such Mortgagee may reasonably
request to evidence such attornment (whether before or after the making of the
Mortgage). In the event of any other transfer of Landlord’s interest hereunder,
such transferee shall automatically be deemed to have recognized this Lease

39

--------------------------------------------------------------------------------

 

EXECUTION COPY
and to assume the obligations of Landlord hereunder accruing on and after the
date of such transfer, and Tenant shall attorn to and recognize such transferee
as Tenant’s landlord under this Lease and shall promptly execute and deliver any
instrument consistent with the Subordination, Non-Disturbance and Attornment
Agreement that such transferee and Landlord may reasonably request to evidence
such attornment.
     (d) Acknowledgement. Upon ten (10) calendar days’ advance written notice,
Tenant agrees to execute, acknowledge and deliver a document acknowledging the
assignment by Landlord of this Lease to a Mortgagee, in a commercially
reasonable form then approved by institutional lenders, with such changes
therein as may be reasonably requested by the Mortgagee.
18. LANDLORD’S RIGHT OF ENTRY; INDEMNIFICATION
     (a) Landlord, Mortgagee, and their respective designees shall have the
right to enter the Premises, and any part thereof, at any time during normal
business hours and to inspect the same, post notices of non-responsibility,
monitor construction, perform appraisals, perform environmental site assessments
and engineering studies, and, during the last twenty-four (24) months of the
Term or at any time after an Event of Default, exhibit the Premises or any Site
to prospective purchasers and mortgagees, and examine Tenant’s books and records
pertaining to the Premises, insurance policies, certificates of occupancy and
other documents, records and permits in Tenant’s possession with respect to the
Premises, all of which shall be customary and adequate and reasonably
satisfactory to Landlord.
     (b) Landlord hereby indemnifies and agrees to defend and hold harmless
Tenant and its partners or members, partners or members of such partners and
members, and their respective heirs, executors, administrators, personal or
legal representatives, successors and assigns from and against any and all
claims, expenses, costs, damages, losses and liabilities (including reasonable
attorneys’ fees), on an After-Tax Basis, with respect to physical damage or
personal injury to the extent resulting from Landlord’s or its agents’ or
representatives’ action on the Premises, which may at any time be asserted
against or suffered by Tenant as a result of, on account of, or arising from
Landlord or its agents or representatives entering the Premises pursuant to the
terms of this Lease.
19. LEASEHOLD MORTGAGES.
     Tenant shall not, without Landlord’s consent, which Landlord may grant or
withhold in its sole and absolute discretion, mortgage Tenant’s interest under
this Lease by any means whatsoever.
20. ESTOPPEL CERTIFICATE; FINANCIAL DATA
     (a) At any time and from time to time, Tenant shall, within ten
(10) Business Days after written request by Landlord, execute, acknowledge and
deliver to Landlord a certificate certifying: (a) that this Lease is unmodified
and in full force and effect (or, if there have been modifications, that this
Lease is in full force and effect as modified, and stating the date and nature
of each modification); (b) the Commencement Date and the Lease Expiration Date
determined in accordance with paragraph 4 of this Lease and the Basic Lease
Information, and the date, if any, to which all Rent and other sums payable
hereunder have been paid; (c) the

40

--------------------------------------------------------------------------------

 

EXECUTION COPY
amount of Fixed Rent currently payable monthly; (d) that no notice has been
received by Tenant of any default by Tenant hereunder which has not been cured,
except as to defaults specified in such certificate; (e) that to Tenant’s actual
knowledge, Landlord is not in default under this Lease, except as to defaults
specified in such certificate; and (f) such other matters as may be reasonably
requested by Landlord or any actual or prospective purchaser or mortgage lender.
Any such certificate may be relied upon by Landlord and any actual or
prospective purchaser or mortgage lender of the Premises, Underlying Premises,
or any part thereof.
     (b) Tenant shall deliver to Landlord and to any actual or prospective
purchaser or mortgage lender designated by Landlord the following information
(A) (i) within ten (10) days after the end of each fiscal year of Tenant: (a) an
unaudited consolidated and consolidating balance sheet of PA, Tenant and
Tenant’s Subsidiaries, an unaudited consolidated and consolidating statement of
profits and losses of PA, Tenant and Tenant’s Subsidiaries for such fiscal year
and an unaudited statement of cash flows of PA, Tenant and Tenant’s Subsidiaries
for such fiscal year, setting forth in each case, in comparative form, the
corresponding figures for the preceding fiscal year in reasonable detail and
scope, certified to be complete and accurate by a senior financial officer of PA
and Tenant having knowledge thereof and reviewed in accordance with PCAOB and
AICPA standards by independent certified public accountants of recognized
national standing selected by PA and Tenant; (b) a detailed explanation of any
variance from the Budget for such period and (c) a complete list of all Members
and Membership Dues paid as at the end of such fiscal year and (ii) within
thirty (30) days after the end of each fiscal year of Tenant: (a) an audited
consolidated and consolidating balance sheet of PA, Tenant and Tenant’s
Subsidiaries, an audited consolidated and consolidating statement of profits and
losses of PA, Tenant and Tenant’s Subsidiaries for such fiscal year, and an
audited statement of cash flows of PA, Tenant and Tenant’s Subsidiaries for such
fiscal year, setting forth in each case, in comparative form, the corresponding
figures for the preceding fiscal year in reasonable detail and scope and
certified by independent certified public accountants of recognized national
standing selected by Tenant and (b) a detailed explanation of any variance from
the Budget for such period; (B) within five (5) days after the end of each of
the first three (3) fiscal quarters of Tenant, (i) a balance sheet of PA, Tenant
and Tenant’s Subsidiaries as at the end of such fiscal quarter, a statement of
profits and losses of PA, Tenant and Tenant’s Subsidiaries and a statement of
cash flows of PA, Tenant and Tenant’s Subsidiaries for such fiscal quarter,
setting forth in each case, in comparative form, the corresponding figures for
the similar quarter of the preceding fiscal year (or in the case of an interim
balance sheet, to the end of the prior fiscal year), in reasonable detail and
scope, and certified to be complete and accurate by a senior financial officer
of PA and Tenant having knowledge thereof and reviewed in accordance with PCAOB
and AICPA standards by independent certified public accountants of national
standing selected by PA and Tenant and (ii) a detailed explanation of any
variance from the Budget for such period; (C) within five (5) days after the end
of each month, consolidated balance sheets of PA, Tenant and Tenant’s
Subsidiaries and the related consolidated statements of income and cash flow for
such month and for the period from the beginning of the then current fiscal year
of Tenant to the end of such month, the foregoing financial statements in each
case being prepared in accordance with GAAP together with a detailed explanation
of any variance from the Budget for such period; (D) fifteen (15) days before
the end of each quarter, a “flash” report showing results in such quarter to
date and estimated results of PA, Tenant and Tenant’s Subsidiaries for the
balance of such quarter, including a cash flow statement and income statement
for such quarter together with a detailed explanation of any variance from the
Budget for such quarter and (E) as requested, a complete list of all Members and
Membership Dues paid for any time period

41

--------------------------------------------------------------------------------

 

EXECUTION COPY
requested. The financial reports shall be in the form of Exhibit Z attached
hereto. Tenant’s obligation to disclose information to an actual or prospective
purchaser or a mortgage lender pursuant to this paragraph 20(b) is subject to
Tenant’s receipt of a confidentiality agreement in form and substance reasonably
acceptable to Tenant. Tenant shall deliver to Landlord (i) together with the
annual audited financial statements described above, an annual Site operating
expense statement for each Site in detail reasonably satisfactory to Landlord
and certified to be complete and accurate by a senior officer of Tenant or
Guarantor, and (ii) together with each quarterly financial statement described
above, a Compliance Certificate duly executed by Tenant, in form and substance
reasonably acceptable to Landlord, demonstrating compliance with the financial
performance covenants contained in paragraph 38 of this Lease and setting forth
the basis for such calculations with reasonable detail and specificity. Upon the
occurrence of any Casualty or injury to any person on any Site, Tenant shall
immediately notify Landlord of such event.
     (c) Upon ten (10) Business Days’ prior written notice, Tenant shall permit
Landlord and its professional representatives to visit Tenant’s offices, and
discuss Tenant’s affairs and finances with Tenant’s senior management, and shall
make available such information as Landlord may reasonably request bearing on
Tenant, the Premises or this Lease as Tenant may maintain in the ordinary course
of business. Landlord shall agree to maintain the confidentiality of (i) all
nonpublic information provided to Landlord under this paragraph 20 and (ii) any
other information designated by Tenant or Guarantor as “nonpublic.”
21. MECHANICS’ LIENS
     (a) Except for liens created through the act of Landlord, Tenant shall not
suffer or permit any mechanic’s lien or other lien to be filed or recorded
against the Premises or Underlying Premises, equipment or materials supplied or
claimed to have been supplied to the Premises or Underlying Premises at the
request of Tenant, or anyone holding the Premises, Underlying Premises, or any
portion thereof, through or under Tenant. If any such mechanic’s lien or other
lien shall at any time be filed or recorded against the Premises or Underlying
Premises, or any portion thereof, Tenant shall cause the same to be discharged
of record or bonded over within thirty (30) calendar days after the date of
filing or recording of the same.
     (b) All materialmen, contractors, artisans, engineers, mechanics, laborers
and any other Person now or hereafter furnishing any labor, services, materials,
supplies, skill, machinery, fixtures or equipment to Tenant with respect to the
Premises, or any portion thereof, are hereby charged with notice that they must
look exclusively to Tenant to obtain payment for the same. Notice is hereby
given that Landlord shall not be liable for any labor, services, materials,
supplies, skill, machinery, fixtures or equipment furnished or to be furnished
to Tenant upon credit, and that no mechanic’s lien or other lien for any such
labor, services, materials, supplies, skill, machinery, fixtures or equipment
shall attach to or affect the estate or interest of Landlord’s affiliates in and
to the Underlying Premises or the estate or interest of Landlord in and to the
Premises, or any portions thereof.
22. END OF TERM
     (a) Unless Landlord exercises its rights provided in paragraph 22(f), upon
the expiration or earlier termination of the Term of this Lease, Tenant shall
surrender the Premises to

42

--------------------------------------------------------------------------------

 

EXECUTION COPY
Landlord in the Premises Condition Standard, except as repaired, rebuilt or
altered as required or permitted by this Lease (or, in the case of termination
pursuant to paragraph 14 of this Lease, as condemned). Except as otherwise
provided herein, Tenant shall at such time remove all of its personal property
(including Tenant’s Trade Fixtures) therefrom and all alterations and
improvements placed thereon by Tenant and not consented to by Landlord. Tenant
shall repair any damage to the Premises caused by such removal, and any and all
such property not so removed when required shall, at Landlord’s option, become
the exclusive property of Landlord or be disposed of by Landlord, at Tenant’s
cost and expense, without further notice to or demand upon Tenant.
     (b) Unless Landlord exercises its rights provided in paragraph 22(f), if
the Premises are not surrendered as above set forth, Tenant shall indemnify,
defend and hold Landlord and the Landlord Parties harmless on an After-Tax Basis
from and against loss or liability resulting from the delay by Tenant in so
surrendering the Premises, including any claim made by any succeeding occupant
founded on such delay. Tenant’s obligation to observe or perform this covenant
shall survive the expiration or other termination of this Lease for six
(6) years. The provisions of this paragraph 22(b) shall not be deemed to limit
or constitute a waiver of any other rights or remedies of Landlord provided
herein.
     (c) Unless Landlord exercises its rights provided in paragraph 22(f), all
property of Tenant not removed on or before the last day of the Term of this
Lease shall be deemed abandoned. Tenant hereby agrees that Landlord may remove
all property of Tenant, including Tenant’s Trade Fixtures, from the Premises
upon termination of this Lease and may cause its transportation and storage, all
at the sole cost and risk of Tenant. Landlord shall not be liable for damage,
theft, misappropriation or loss thereof and Landlord shall not be liable in any
manner in respect thereto, and Landlord shall be entitled to dispose of such
property, as Landlord deems fit, without the requirement of an accounting.
Tenant shall pay all reasonable costs and expenses of such removal,
transportation and storage. Tenant shall reimburse Landlord upon demand for any
expenses reasonably and actually incurred by Landlord with respect to removal,
transportation or storage of any such abandoned property and with respect to
restoring the Premises in accordance with the terms and conditions of this
Lease.
     (d) Except for surrender upon the expiration or earlier termination of the
Term hereof as expressly provided herein, no surrender to Landlord of this Lease
or of the Premises shall be valid or effective unless agreed to and accepted in
writing by Landlord.
     (e) Unless Landlord exercises its rights provided in paragraph 22(f), upon
the expiration of the Term or Tenant’s right to possession of the Premises or
any Site in accordance with the terms of this Lease, Tenant agrees to cooperate
with Landlord to transfer any and all Licenses to Landlord, at Landlord’s
request.
     (f) At the end of the Term, Tenant shall cooperate with Landlord in
transferring only those Membership Contracts that are Camping Resort Contracts
(as defined in paragraph 40(f)(ii) of this Lease) to an unrelated third party
(who is not, for the avoidance of doubt, affiliated with Landlord) identified by
Landlord as a new Tenant for no additional consideration.

43

--------------------------------------------------------------------------------

 

EXECUTION COPY
23. ALTERATIONS
     (a) Tenant may, without Landlord’s consent, make, in any fiscal year,
alterations, additions or improvements to any Site (including rental units,
improvements, alterations and additions in the ordinary course of business)
costing less than $20,000.00 (provided, however, alterations performed to repair
the existing damage at the Oakzanita Site are not subject to paragraph 23(a),
(b) or (c)) only if (i) such alterations, additions or improvements will be in
compliance with all applicable laws, codes, rules, regulations and ordinances,
(ii) such alterations, additions or improvements will not reduce the fair market
value or utility of such Site for its Permitted Use, considered as unencumbered
by this Lease, and (iii) such alterations, additions or improvements will not
materially and adversely affect in any way the structural, exterior or roof
elements of such Site or mechanical, electrical, plumbing, waste water systems
and facilities, water plants and facilities and septic facilities, utility or
life safety systems of such Site. In all other cases, Landlord’s prior written
consent shall be required, which consent shall not be unreasonably withheld,
conditioned or delayed. At Landlord’s option, any improvement requiring
Landlord’s consent but made without Landlord’s consent shall be removed and the
area repaired at Tenant’s expense at the termination of the Term.
     (b) In no event shall Tenant be permitted to install underground storage
tanks or fuel systems on the Premises, or any portion thereof, except that
Tenant may replace existing underground storage tanks with above-ground storage
tanks which comply with all applicable Legal Requirements.
     (c) All alterations, additions or improvements requiring Landlord’s consent
shall be made at Tenant’s sole cost and expense as follows:
          (i) Tenant shall submit to Landlord, for Landlord’s written approval,
complete plans and specifications for all work to be done by or for Tenant. Such
plans and specifications shall be prepared by a licensed architect(s) and
engineer(s) approved in writing by Landlord, shall comply with all applicable
codes, ordinances, rules and regulations, shall not adversely affect the
structural elements of any Site, shall be in a form sufficient to secure the
approval of all government authorities with jurisdiction over such Site, and
shall be otherwise satisfactory to Landlord in Landlord’s reasonable discretion.
          (ii) Landlord shall notify Tenant in writing within thirty
(30) calendar days whether Landlord approves, approves on the condition that
Tenant reverse the alteration at Tenant’s expense at the termination or
expiration of this Lease, or disapproves such plans and specifications. Tenant
may submit to Landlord revised plans and specifications for Landlord’s prior
written approval, which approval shall not be withheld or delayed if (a) the
work to be done would not, in Landlord’s reasonable judgment, adversely affect
the value, character, rentability or usefulness of any Site or any part thereof,
or (b) the work to be done shall be required by any Legal Requirement. Tenant
shall pay all costs, including the fees and expenses of the licensed
architect(s) and engineer(s), in preparing such plans and specifications.
          (iii) All changes (other than field changes for which no change order
is proposed and which will be reflected in the final “as built” plans) in the
plans and specifications approved by Landlord shall be subject to Landlord’s
prior written approval. If Tenant wishes to make any such change in the approved
plans and specifications, Tenant shall have such

44

--------------------------------------------------------------------------------

 

EXECUTION COPY
architect(s) and engineer(s) prepare plans and specifications for such change
and submit them to Landlord for Landlord’s written approval. Landlord shall
notify Tenant in writing whether Landlord approves, approves on the condition
that Tenant reverses the alteration at Tenant’s expense at the termination or
expiration of this Lease, or disapproves such change. Tenant may submit to
Landlord revised plans and specifications for any such change for Landlord’s
written approval. After Landlord’s written approval of such change, such change
shall become part of the plans and specifications approved by Landlord.
          (iv) Tenant shall obtain and comply with all building permits and
other government permits and approvals required in connection with the work.
Tenant shall, through Tenant’s licensed contractor, perform the work
substantially in accordance with the plans and specifications approved in
writing by Landlord. Tenant shall pay, as Additional Rent, the entire cost of
all work (including the cost of all utilities, permits, fees, taxes, and
property and liability insurance premiums in connection therewith) required to
make the alterations, additions or improvements. Under no circumstances shall
Landlord be liable to Tenant for any damage, loss, cost or expenses incurred by
Tenant on account of any plans and specifications, contractors or
subcontractors, design of any work, construction of any work, or delay in
completion of any work.
          (v) Tenant shall give at least ten (10) calendar days’ prior written
notice to Landlord of the date on which construction of any work to be done by
outside contractors which requires Landlord’s consent will commence. Landlord
shall have the right to post and keep posted on any Site any notices that may be
provided by law or which Landlord may deem to be proper for the protection of
Landlord and such Site, or any portion thereof, from Liens, and to take any
other action Landlord deems necessary to remove or discharge Liens, at the
expense of Tenant.
          (vi) All alterations, additions, improvements and fixtures, whether
temporary or permanent in character, made in or to any Site by Tenant, shall
become part of such Site and Landlord’s property, except those which are readily
removable without causing material damage to such Site (which shall be and
remain the property of Tenant). Upon termination or expiration of this Lease,
Tenant shall, at Tenant’s expense, remove all movable furniture, equipment,
trade fixtures, office machines and other personal property (including Tenant’s
Trade Fixtures) from each Site (but not the Improvements, Personal Property or
Equipment) and repair all damage caused by such removal. Termination of this
Lease shall not affect the obligations of Tenant pursuant to this paragraph
23(c) to be performed after such termination.
          (vii) Promptly following the completion of any alteration, addition or
improvement to the Premises which costs more than $1,000,000.00 to complete,
Tenant shall furnish Landlord with a copy in electronic form acceptable to
Landlord of the complete plans and specifications for such work (including, if
available, so-called “as-built” plans and specifications).
     (d) In connection with the renovations and alterations to the existing
damage at the Oakzanita Site, Tenant shall deliver to Landlord complete plans
and specifications (and any change orders) for all work to be done by or for
Tenant. Such plans and specifications shall be prepared by licensed architect(s)
and engineer(s), shall comply with all applicable codes, ordinances, rules and
regulations, shall not adversely affect the structural elements of the

45

--------------------------------------------------------------------------------

 

EXECUTION COPY
Oakzanita Site, and shall be in a form sufficient to secure the approval of all
government authorities with jurisdiction over the Oakzanita Site. Tenant shall
obtain and comply with all building permits and other government permits and
approvals required in connection with the work. All alterations, additions,
improvements and fixtures, whether temporary or permanent in character, made in
or to the Oakzanita Site by Tenant, shall become part of the Oakzanita Site and
Landlord’s property. Promptly following the completion of any alteration,
addition or improvement to the Oakzanita Site, Tenant shall furnish Landlord
with a copy in electronic form of the complete plans and specifications for such
work (including, if available, so-called “as-built” plans and specifications).
24. MEMORANDUM OF LEASE
     The parties agree to promptly execute a Memorandum of Lease with respect to
each Site in recordable form and Landlord shall record each such Memorandum of
Lease. Landlord and Tenant shall execute such customary amendments and
terminations related thereto as may be required or reasonably requested by
Landlord or Tenant within five (5) Business Days of receipt thereof.
25. SUBLETTING/ASSIGNMENT
     (a) Except as otherwise permitted in paragraphs 25(f) and 25(g) of this
Lease, Tenant shall not, directly or indirectly, without the prior written
consent of Landlord and Mortgagee (which consent may be withheld or conditioned
in Landlord’s and/or Mortgagee’s sole and absolute discretion), assign this
Lease or any interest herein, or any interest in Tenant, or permit the use or
occupancy of the Premises by any Person other than Tenant or the Members or
other persons entitled to occupancy of the Premises pursuant to arrangements
entered into in the ordinary course of Tenant’s business (e.g., day rentals and
extended vacation programs). Except as otherwise expressly permitted in
paragraph 25 of this Lease, this Lease shall not, nor shall any interest herein,
be assignable as to the interest of Tenant involuntarily or by operation of law
without the prior written consent of Landlord and Mortgagee. Under no
circumstances shall Tenant be permitted to sublease the Premises or any part
thereof, except as expressly permitted in paragraph 25(g) of this Lease.
     For purposes of this paragraph 25(a), the occurrence of a Corporate Control
Event, or the public announcement thereof, shall be deemed to be an assignment
of this Lease which is prohibited by the preceding paragraph unless Tenant
obtains Landlord’s and Mortgagee’s prior written consent as set forth above
(which consent may be denied by Landlord in Landlord’s sole discretion).
     Any of the foregoing prohibited acts (including, any purported assignment,
sublease or Corporate Control Event) without the prior written consent of
Landlord and Mortgagee, as required in accordance with the terms hereof, shall
be void ab initio and shall, at the option of Landlord or Mortgagee, constitute
an immediate Event of Default under paragraph 15(d).
     (b) The acceptance of Rent by Landlord from any other Person shall not be
deemed to be a waiver by Landlord of any provision of this Lease. Consent to one
Corporate Control Event shall not be deemed consent to any subsequent Corporate
Control Event.

46

--------------------------------------------------------------------------------

 

EXECUTION COPY
     (c) (i) Tenant shall have no right to mortgage, grant a lien upon, encumber
or otherwise finance its interest under this Lease or record a lien upon its
interest in the Premises under this Lease; (ii) Tenant shall not permit, cause
or suffer to be recorded in the real estate records of any county in which the
Premises are located any mortgage, deed to secure debt, deed of trust,
assignment, UCC financing statement or any other document granting, perfecting
or recording a lien upon Tenant’s interest in this Lease or interest in the
Premises under this Lease; (iii) Tenant shall not give any notice, or permit or
cause any other party to give any notice, to Landlord of any existing lien on or
security interest in Tenant’s interest in this Lease or interest in the Premises
under this Lease; and (iv) Tenant shall not request that Landlord execute (nor
shall Landlord have any obligation to execute) any non-disturbance, attornment
or any other agreement in favor of any party transacting any business or
transaction with or related to Tenant, other than non-disturbance agreements
with Members, as required by law.
     (d) Tenant shall pay all of Landlord’s and Mortgagee’s reasonable
attorneys’ fees and costs incurred in connection with any Corporate Control
Event and in connection with any request made by Tenant pursuant to this
paragraph 25.
     (e) Tenant agrees to give notice to Mortgagee of any request for consent to
any Corporate Control Event simultaneously with delivery of notice thereof to
Landlord.
     (f) Execution of Membership Contracts by any Subleasing Subsidiary shall
not be deemed to constitute an assignment or sublease, as contemplated by this
paragraph 25.
     (g) Landlord hereby consents to the Tenant Subleases. Tenant shall cause
each Subleasing Subsidiary to perform all of the covenants to be performed by
Tenant under this Lease (in the case of a partial sublease, only insofar as such
covenants relate to the portion of the Premises subject to such partial
sublease) as and when performance is due after the effective date of the
sublease and Landlord will have the right, but shall not be obligated, to
enforce such covenants directly against such subtenant and failure of any such
subtenant to perform such covenants shall be deemed a failure of Tenant to
perform such covenants. Tenant shall cause each Subleasing Subsidiary to
(1) comply with the SPE Requirements contained in the Subsidiary Guaranty and
(2) hold the Membership Contracts relating to Tenant’s Business assigned to such
Subleasing Subsidiary pursuant to the Merger Transaction or otherwise entered
into by such Subleasing Subsidiary. Tenant shall in any case remain primarily
liable (and not liable merely as a guarantor or surety) for the performance by
any subtenant, including the Subleasing Subsidiaries, of all such covenants, as
if no sublease had been made. No sublease, including the Tenant Subleases, shall
release Tenant from Tenant’s obligations and liabilities under this Lease (which
shall continue as the obligations of a principal and not of a guarantor or
surety) or alter the primary liability of Tenant to pay all Rent and to perform
all obligations to be paid and performed by Tenant. Consent to the Tenant
Subleases shall not be deemed consent to any subsequent sublease. If any
subtenant of Tenant, including the Subleasing Subsidiaries, defaults in the
performance of any obligation to be performed by Tenant under this Lease,
Landlord may proceed directly against Tenant without the necessity of pursuing
or exhausting remedies against such subtenant. Tenant shall not amend, terminate
or otherwise modify the Tenant Subleases without Landlord’s prior written
consent, which may be withheld in its sole discretion. Tenant and Landlord
hereby agree to execute any additional documents reasonably required to
effectuate the terms, provisions and conditions contained in this paragraph
25(g).

47

--------------------------------------------------------------------------------

 

EXECUTION COPY
26. HAZARDOUS MATERIAL
     (a) Tenant (i) shall comply, and cause the Premises to comply, with all
Environmental Laws applicable to the Premises (including the making of all
submissions to governmental authorities required by Environmental Laws and the
carrying out of any remediation program specified by any such authority),
(ii) shall prohibit the use of the Premises for the generation, manufacture,
refinement, production or processing of any Hazardous Materials or for the
storage, handling, transfer or transportation of any Hazardous Materials (other
than in connection with the operation, business and maintenance of the Premises
and in commercially reasonable quantities in compliance with Environmental
Laws), (iii) shall not permit to remain, install or permit the installation on
the Premises of any surface impoundments, underground storage tanks,
pcb-containing transformers or asbestos-containing materials, except in
compliance with Environmental Laws and (iv) shall cause any alterations of the
Premises to be done in a way so as to not expose in an unsafe manner the persons
working on or visiting the Premises to Hazardous Materials and in connection
with any such alterations Tenant shall remove any Hazardous Materials present
upon the Premises which are not in compliance with Environmental Laws or which
present a danger to persons working on or visiting the Premises.
     (b) “Environmental Laws” means the Resource Conservation and Recovery Act
of 1976, as amended, 42 U.S.C. §§6901, et seq. “RCRA,” the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§9601,
et seq. “CERCLA,” as amended, the Toxic Substance Control Act, as amended, 15
U.S.C. §§2601, et seq., the Federal Insecticide, Fungicide and Rodenticide Act,
as amended, 7 U.S.C. §§136, et seq., and all applicable federal, state and local
environmental laws, ordinances, rules and regulations, as any of the foregoing
may have been or may be from time to time amended, supplemented or supplanted,
and any other federal, state or local laws, ordinances, rules and regulations
now or hereafter existing relating to regulation or control of Hazardous
Materials. The term “Hazardous Materials” as used in this Lease shall mean
substances defined as “hazardous substances,” “hazardous materials.” “hazardous
wastes” or “toxic substances” in any applicable federal, state or local statute,
rule, regulation or determination, including CERCLA; the Hazardous Materials
Transportation Act, 49 U.S.C. §§1801, et seq.; RCRA; and, asbestos, pcb’s,
radioactive substances, methane, volatile hydrocarbons, petroleum or
petroleum-derived substances or wastes, radon, industrial solvents or any other
material as may be specified in applicable laws or regulations.
     (c) Tenant agrees to protect, defend, indemnify and hold harmless Landlord,
its affiliates, members, partners, directors, officers, employees and agents,
and any successors to Landlord’s interest in the chain of title to the Premises,
their direct or indirect shareholders, members, partners, directors, officers,
employees and agents (collectively, the “Indemnified Party”), on an After-Tax
Basis, from and against any and all liability, including all foreseeable and all
unforeseeable damages including attorney’s and consultant’s fees, fines,
penalties and civil or criminal damages, directly or indirectly arising out of
the use, generation, storage, treatment, release, threatened release, discharge,
spill, presence or disposal of Hazardous Materials from, on, at, to or under the
Premises or the Underlying Premises during the Term of this Lease, and including
for all matters disclosed in the environmental reports listed on Exhibit J,
copies of which have been delivered to Tenant (collectively, the “Environmental
Reports”), and the cost of any required or necessary repair, response action,
remediation,

48

--------------------------------------------------------------------------------

 

EXECUTION COPY
investigation, cleanup or detoxification and the preparation of any closure or
other required plans in connection therewith, whether such action is required or
necessary prior to or following transfer of title to the Underlying Premises.
This agreement to indemnify and hold harmless shall (i) exclude matters to the
extent caused by an Indemnified Party and (ii) be in addition to any other
obligations or liabilities Tenant may have to Landlord at common law and under
all statutes and ordinances or otherwise, and shall survive following the date
of expiration or earlier termination of this Lease for six (6) years, except
where the event giving rise to the liability for which indemnity is sought
arises out of Tenant’s acts, in which case the agreement to indemnify and hold
harmless shall survive the expiration or termination of this Lease without limit
of time. Tenant expressly agrees that the representations, warranties and
covenants made and the indemnities stated in this Lease are not personal to
Landlord, and the benefits under this Lease may be assigned to subsequent
parties in interest to the chain of title to the Premises, which subsequent
parties in interest may proceed directly against Tenant to recover pursuant to
this Lease. Tenant, at its expense, may institute appropriate legal proceedings
with respect to environmental matters of the type specified in this paragraph
26(c) or any lien for such environmental matters, not involving Landlord or its
Mortgagee as a defendant (unless Landlord or its Mortgagee is the alleged cause
of the damage), conducted in good faith and with due diligence, provided that
such proceedings shall not in any way impair the interests of Landlord or
Mortgagee under this Lease or contravene the provisions of any Mortgage. Counsel
to Tenant in such proceedings shall be reasonably approved by Landlord if
Landlord is a defendant in the same proceeding. Landlord shall have the right to
appoint co-counsel, which co-counsel will cooperate with Tenant’s counsel in
such proceedings. The fees and expenses of such co-counsel shall be paid by
Landlord, unless such co-counsel is appointed because the interests of Landlord
and Tenant in such proceedings, in such counsel’s opinion, are or have become
adverse, or Tenant or Tenant’s counsel is not conducting such proceedings in
good faith or with due diligence.
     (d) Tenant, upon three (3) Business Days’ prior notice, shall permit such
Persons as Landlord or any assignee of Landlord may designate and (unless an
Event of Default has occurred and is continuing) approved by Tenant, which
approval shall not be unreasonably withheld or delayed (“Site Reviewers”), to
visit the Premises from time to time and perform environmental site
investigations and assessments (“Site Assessments”) on the Premises for the
purpose of determining whether there exists on the Premises any environmental
condition which may result in any liability, cost or expense to Landlord or any
other owner or occupier of the Premises. Such Site Assessments may include both
above and below the ground testing for environmental damage or the presence of
Hazardous Material on the Premises and such other tests on the Premises as may
be necessary to conduct the Site Assessments in the reasonable opinion of the
Site Reviewers. Tenant shall supply to the Site Reviewers such historical and
operational information regarding the Premises as may be reasonably requested by
the Site Reviewers to facilitate the Site Assessments (other than information
previously supplied in writing to Landlord by Tenant) and shall make available
for meetings with the Site Reviewers appropriate personnel having knowledge of
such matters. The cost of performing and reporting all Site Assessments shall be
paid by Landlord unless the Site Reviewers discover a material environmental
condition causing the Premises not to be in compliance with applicable
Environmental Laws, in which event such cost shall be paid by Tenant within ten
(10) calendar days after demand by Landlord with interest to accrue at the
Overdue Rate. Landlord, promptly after written request by Tenant and payment by
Tenant to the extent required as aforesaid, shall deliver to Tenant copies of
reports, summaries or other compilations of the results of such Site

49

--------------------------------------------------------------------------------

 

EXECUTION COPY
Assessments. Tenant’s sole remedy for Landlord’s breach of the preceding
sentence shall be a mandatory injunction, and not a termination of this Lease or
a withholding or reduction of Rent.
     (e) Tenant shall notify Landlord in writing, promptly upon Tenant’s
learning thereof, of any:
          (i) notice or claim to the effect that Tenant is or may be liable to
any Person as a result of the release or threatened release of any Hazardous
Materials into the environment from the Premises;
          (ii) notice that Tenant is subject to investigation by any
governmental authority evaluating whether any remedial action is needed to
respond to the release or threatened release of any Hazardous Materials into the
environment from the Premises;
          (iii) notice that the Premises are subject to an environmental lien;
and
          (iv) notice of violation to Tenant or awareness by Tenant of a
condition which might reasonably result in a notice of violation of any
applicable Environmental Law that could, in either case, have a material adverse
effect upon the Premises or any portion thereof.
27. FINANCING
     (a) Landlord may assign this Lease to any Person, including any Mortgagee.
Tenant shall execute, acknowledge and deliver any documents reasonably requested
by Landlord, any such transferee or Mortgagee relating to any such assignment of
this Lease by Landlord or the Mortgage financing.
     (b) If Landlord proposes to finance or refinance any Mortgage, Tenant shall
co-operate in the process, and, during the last twenty-four (24) months of the
term of any Mortgage, Tenant shall, upon Landlord’s written request, exhibit the
Premises to prospective mortgagees, and permit such prospective mortgagees to
examine all materials and records which shall be customary for a mortgagee’s
inspection, subject at all times to Landlord’s indemnity set forth in paragraph
18 of this Lease and the confidentiality requirements set forth in this Lease.
Tenant agrees to execute, acknowledge and deliver documents reasonably requested
by any prospective Mortgagee (such as a consent to the financing (without
encumbering any assets directly or indirectly owned by Tenant), a consent to
assignment of lease, and a subordination, non-disturbance and attornment
agreement meeting the standards set forth in paragraph 17 of this Lease)
customary for tenants to sign in connection with mortgage loans to their
landlords, so long as such documents are in form then customary among
institutional lenders (provided the same do not adversely affect Tenant’s rights
or obligations in a way not previously affected by loan documents previously
executed by Tenant in connection with an earlier Mortgage).
     (c) Tenant shall permit Landlord and any Mortgagee or prospective Mortgagee
and any representatives or agents of Landlord, any Mortgagee or prospective
Mortgagee, at their expense, to meet with senior management personnel of Tenant
and/or Guarantor at Tenant’s and/or Guarantor’s offices and to discuss Tenant’s
and/or Guarantor’s business and finances. On request of Landlord, Tenant agrees
to use commercially reasonable efforts to provide any Mortgagee or prospective
Mortgagee the information to which Landlord is entitled hereunder. If any such
information is non-public, each party requesting such information shall sign a

50

--------------------------------------------------------------------------------

 

EXECUTION COPY
confidentiality agreement (in a form reasonably satisfactory to Tenant) prior to
such Mortgagee or prospective Mortgagee receiving such information.
     (d) In the event Mortgagee elects to record a Mortgage in connection with
any Mortgage financing, said Mortgage shall contain the language set forth in
Exhibit N attached hereto, or such other language as may be required from time
to time under applicable laws in effect in any state (1) in which a Site is
located or (2) in which Memberships are offered for sale.
28. MISCELLANEOUS PROVISIONS
     (a) This Lease and all of the covenants and provisions hereof shall inure
to the benefit of, and be binding upon, the parties hereto and the heirs,
personal representatives, successors and permitted assigns of the parties.
     (b) The titles and headings appearing in this Lease are for reference only
and shall not be considered a part of this Lease or in any way to modify, amend
or affect the provisions thereof.
     (c) This Lease, the documents and agreements referenced herein and any
intercreditor or tri-party agreement among Landlord, Tenant and Working Capital
Lender (as such agreement may be amended or replaced from time to time) contain
the complete agreement of the parties with reference to the leasing of the
Premises, and may not be amended except by an instrument in writing signed by
Landlord and Tenant.
     (d) Any provision or provisions of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision hereof, and the remaining provisions hereof shall nevertheless remain
in full force and effect.
     (e) This Lease may be executed in one or more counterparts, and may be
signed by each party on a separate counterpart, each of which, taken together,
shall be an original, and all of which shall constitute one and same instrument.
     (f) The term “Landlord” as used in this Lease shall mean only the tenant or
subtenant under the Master Lease at the time in question, and in the event of
any transfer of such title or interest, the Landlord named in this Lease (and in
case of any subsequent transfers, then the grantor) shall be relieved from and
after the date of such transfer of all liability as respects Landlord’s
obligations thereafter to be performed hereunder, provided that any funds in the
hands of Landlord or the then grantor at the time of such transfer, in which
Tenant has an interest, shall be delivered to the grantee. The obligations
contained in this Lease to be performed by Landlord shall, subject as aforesaid,
be binding on Landlord’s successors and assigns only during their respective
periods of ownership.
     (g) For all issues which are Site-specific, this Lease shall be governed by
and construed and enforced in accordance with and subject to the laws of the
state where the applicable Site is located, and for all issues which are not
Site-specific, the internal laws, without regard to conflicts of laws principles
of the State of Illinois shall govern.
     (h) Any claim based on or in respect of any liability of Landlord under
this Lease shall be enforced only against the Premises and Landlord’s insurance
covering the Premises and

51

--------------------------------------------------------------------------------

 

EXECUTION COPY
not against any other assets, properties or funds of (1) Landlord or any
Landlord Parties, or (2) any predecessor or successor partnership, corporation
or limited liability company (or other entity) of Landlord or any of its
members, stockholders or partners, either directly or through Landlord or its
predecessor or successor partnership, corporation or limited liability company
(or other Person) of Landlord or its members, stockholders or partners, or
(3) any other Person.
     (i) Without the written approval of Landlord and Tenant, no Person other
than Landlord (including any Landlord Parties), Mortgagee, Tenant, Leasehold
Mortgagee, and their respective permitted successors and assigns shall have any
rights under this Lease.
     (j) There shall be no merger of the leasehold estate created hereby by
reason of the fact that the same Person may own, directly or indirectly, (1) the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate and (2) the fee estate in the Premises. Notwithstanding any such combined
ownership, this Lease shall continue in full force and effect until terminated
by an instrument executed by both Landlord and Tenant.
     (k) Whenever in this Lease either party is required to take an action
within a particular time period, delays caused by acts of God, war, major
casualty, strike, labor shortage or other cause beyond the reasonable control of
such party shall not be counted in determining the time in which such
performance must be completed (except in the case of the obligation to pay
money) so long as such party, promptly after becoming aware of the commencement
of such delay, shall give the other party notice thereof and estimating the
duration thereof.
     (l) If at any time a dispute shall arise as to any amount to be paid by one
party to the other hereunder, the obligor may make payment “under protest,” and
such payment shall not be deemed a voluntary payment, and the right of the
obligor to contest its liability for such payment shall survive such payment
without prejudice to the obligor’s position.
     (m) Landlord and Tenant each represent that they have dealt with no broker,
finder or other Person who could legally charge a commission in connection with
this Lease and the documents and agreements referenced herein.
     (n) Intentionally Omitted.
     (o) The parties hereto specifically acknowledge and agree that,
notwithstanding any other provision contained in this Lease, it is the intent of
the parties that their relationship hereunder is and shall at all times be that
of landlord and tenant, and not that of partners, joint venturers, lender and
borrower, or any other relationship other than that of a landlord and tenant.
The parties specifically acknowledge and agree that this Lease shall be treated
as a “true lease,” and that Landlord’s affiliates shall be considered the owner
of the Underlying Premises for U.S. federal, state and local income and
franchise tax purposes, and any Canadian tax purposes, and each party agrees not
to take any position on any U.S. federal, state, local or Canadian income or
franchise tax return inconsistent with such treatment.
     (p) The parties hereto specifically acknowledge and agree that time is of
the essence with regard to all obligations under this Lease.
     (q) TO THE EXTENT PERMITTED BY APPLICABLE LAW, LANDLORD AND TENANT HEREBY
WAIVE TRIAL BY JURY IN ANY ACTION OR

52

--------------------------------------------------------------------------------

 

EXECUTION COPY
PROCEEDING, AND WITH RESPECT TO ANY CLAIM ASSERTED IN ANY SUCH ACTION OR
PROCEEDING, BROUGHT BY EITHER OF THE PARTIES AGAINST THE OTHER ON ANY MATTER
WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE
RELATIONSHIP OF LANDLORD AND TENANT, TENANT’S USE OR OCCUPANCY OF THE PREMISES,
ANY CLAIM OF INJURY OR DAMAGE, OR ANY EMERGENCY OR OTHER STATUTORY REMEDY WITH
RESPECT THERETO.
29. INTENTIONALLY OMITTED
30. BUDGET
     Tenant’s 2008 budget has been delivered to Landlord. Not later than
September 15 of every Lease Year, Tenant shall deliver a detailed operating
budget, and a capital plan, both of which shall be acceptable to Landlord in its
sole discretion, for the following fiscal year for Tenant’s Business to Landlord
substantially in the same form as the budget for fiscal year 2008. Not later
than October 1, and not later than seven (7) days after the end of each fiscal
quarter, of each Lease Year, Landlord and Tenant shall meet to discuss all
aspects of the budget. At the end of each fiscal quarter, Tenant shall prepare a
“forecast” providing an updated income statement and cash flow statement for the
balance of such Lease Year. Such budget from time to time in effect is herein
called the “Budget.” If Tenant’s actual EBITDA (computed in the same manner as
in the Budget) is below Budget by more than three percent (3%) on a quarterly
basis, Landlord has the right to increase the Reserve Account including
additional restrictions on Tenant’s operating account. The preceding shall not
affect the calculation or permitted distribution of Available Cash for purposes
of paragraph 38(f) of this Lease except to the extent such cash was spent prior
to the calculation.
31. ACCOUNTS AND CASH MANAGEMENT
     (a) Establishment of Lockbox and Cash Management System. Tenant shall
maintain in effect at all times during the Term a system of accounts and
procedures reasonably satisfactory to Landlord for the collection and deposit of
payments in respect to Tenant’s Gross Revenues, and the transfer of amounts so
deposited or collected to the Collection Account and/or the Concentration
Account. Without limiting the generality of the foregoing, but subject to the
provisions of paragraph 31(c) of this Lease, Tenant shall maintain one or more
lockboxes pursuant to arrangements reasonably satisfactory to Landlord and shall
deliver notices to all Members and all other debtors of Tenant, directing such
Persons to make all payments with respect to Membership Dues, Membership
Contract Receivables or other amounts directly to such lockboxes or directly to
the Chase Accounts, if such payment is made by wire transfer or other electronic
means.
     (b) Establishment of Accounts.
          (i) Collection Account. Tenant hereby confirms that Tenant has
established, and agrees that Tenant shall maintain, at Bank, a segregated
collection account with the account number 0042084673 (the “Collection
Account”). The Collection Account shall be and hereby is pledged to Landlord as
additional security for the payment, performance and observance of Tenant’s
obligations under this Lease and Landlord shall have sole and exclusive dominion
and

53

--------------------------------------------------------------------------------

 

EXECUTION COPY
control over the Collection Account, to be administered in accordance with this
Lease. Funds on deposit in the Collection Account shall be automatically
transferred each day to the Concentration Account described below.
          (ii) Other Accounts. Tenant hereby confirms that Tenant has
established, and agrees that Tenant shall maintain at Cash Management Bank, the
following segregated securities account or deposit account, as the case may be
(collectively, the “Reserve Accounts”):
               (A) Account No. 4770001590, captioned “Reserve” for the payment
of expenses relating to the Property or its operations as approved by Landlord
(“Reserve Account”).
               (B) Account No. 4770001612, captioned “Promotions and Discounts
Reserve” for the retention of collateral in respect of any promotions and
discounts as provided in paragraph 39 of this Lease (“Promotions and Discounts
Reserve Account”).
     In addition to the foregoing, Landlord and Tenant have established, and
Tenant and Landlord shall maintain at Cash Management Bank, the “Concentration
Account,” namely Account No. 4770001582 captioned “Concentration”.
     In addition to the foregoing, Landlord and Tenant have established, and
Tenant and Landlord shall maintain, the Chase Accounts. Funds in the Chase
Accounts shall be automatically transferred each day to the Collection Account.
     The Chase Accounts, Reserve Account, Promotions and Discounts Reserve
Account, and Concentration Account each shall be pledged to Landlord as
additional security for the payment, performance and observance of Tenant’s
obligations under this Lease, and Landlord shall have sole and exclusive
dominion and control over said Accounts to be administered in accordance with
this Lease. Except as provided in paragraph 31(e)(iii) the funds in the Accounts
(other than the Chase Accounts and the Concentration Account) shall not be drawn
down and shall at all times remain fully funded as a reserve. The amounts in
such Accounts (other than the Chase Accounts and the Concentration Account)
shall increase or decrease as the purposes for which they are funded shall
increase or decrease at Landlord’s reasonable determination. At the end of the
Term, all amounts in all Accounts, including the Concentration Account, shall be
distributed to a successor Tenant to whom the Membership Contracts are
transferred pursuant to paragraph 22(f) of this Lease.
     The Frisco Accounts have been, and shall continue to be, pledged to
Landlord as additional security for the payment, performance and observance of
Tenant’s obligations under this Lease, and Landlord has, and until the end of
the Term, shall have, control (as defined in Sections 9-104 or 8-106 of the UCC)
over said Accounts for purposes of perfecting Landlord’s security interests
therein.
     Tenant shall continue to maintain the tri-party deposit account control and
intercreditor agreement (the “Replacement Merrick Control Agreement”), among
Merrick Bank Corporation, Landlord, and Tenant and/or one or more of its
Subsidiaries, as applicable, (the “Existing Merrick Accounts”)
          (iii) Type and Control of Accounts. Tenant represents, warrants,
covenants and agrees that (i) each of the Accounts is and shall be maintained
either as a “deposit account” (as defined in Section 9-102(a)(29) of the UCC) or
as a “securities account” (as defined in Section 8-501(a) of the UCC);
(ii) Tenant is entitled to exercise the rights that comprise any financial asset
credited to any such Accounts constituting a securities account; (iii) Tenant
shall have no right to give entitlement orders with respect to the Collection
Account, the

54

--------------------------------------------------------------------------------

 

EXECUTION COPY
Concentration Account, the Chase Account or the Reserve Accounts and, except as
expressly provided in this Agreement, no Account Collateral shall be released to
Tenant from any Accounts or Local Accounts; and (iv) all securities or other
property underlying any financial assets credited to the Accounts shall be
registered in the name of Bank or indorsed to Bank or in blank and in no case
will any financial asset credited to the Accounts be registered in the name of
Tenant, payable to the order of Tenant or specially indorsed to Tenant.
          (iv) Eligible Accounts. Each of the Accounts and each of the Local
Accounts shall be an Eligible Account.
          (v) Account Control Agreements. Tenant agrees that: (i) the Accounts
and the Local Accounts shall be maintained in accordance with the terms hereof;
(ii) Landlord and Tenant (for itself or on behalf of Tenant’s Subsidiaries)
shall enter into such cash management agreements and tri-party account control
agreements with applicable banks and/or depositories as necessary to effectuate
the terms and conditions of this paragraph 31; and (iii) prior to the Lease
Expiration Date (provided no Event of Default shall have occurred), no tri-party
account control agreement entered into in connection with any Account (or, to
the extent applicable, any Local Account) shall be amended, supplemented or
modified without the prior written consent of Landlord, which consent Landlord
may grant or withhold in its sole and absolute discretion.
          (vi) No Other Accounts. Tenant represents and warrants that Exhibit I
attached hereto lists all deposit, securities or other similar accounts owned or
maintained by Tenant and its Subsidiaries and that other than (a) the Accounts
and the Chase Accounts maintained by Tenant with respect to the collection of
Membership Contract Receivables or Membership Dues, (b) the Local Accounts with
respect to Ancillary Income and (c) the Canadian Accounts, there are no accounts
into which any Gross Revenue (including payments of Membership Contract
Receivables or Membership Dues or any material Ancillary Income) is or shall be
deposited, collected or held. Tenant agrees that, until the Lease Expiration
Date, neither Tenant nor any other Person shall open any accounts for the
collection or holding of Membership Dues or Membership Contract Receivable
proceeds, other than the Accounts and the Chase Accounts (and the Local Accounts
and the Canadian Accounts, to the extent expressly permitted hereunder). Tenant
represents and covenants to Landlord that Tenant shall not direct any Membership
Dues or payments with respect to Membership Contract Receivables to be made by
any Member in any manner other than as set forth in paragraph 31(c)(ii) of this
Lease and that Tenant shall use commercially reasonable efforts to prevent,
discourage and minimize payment of Membership Dues at campgrounds and, except
for de minimis amounts consistent with past practices, Tenant shall not deposit
any Membership Dues into the Local Accounts (other than the Chase Accounts).
          (vii) Miscellaneous Account Provisions. The Accounts shall be subject
to such applicable laws, and such applicable regulations of the Board of
Governors of the Federal Reserve System and of any other banking or governmental
authority, as may now or hereafter be in effect. Interest accruing on the
Accounts, if any, shall be periodically added to the principal amount of the
applicable Account and shall be held, disbursed and applied in accordance with
the provisions of this Agreement. All statements relating to the Accounts shall
be issued simultaneously by Bank to Landlord and Tenant. Tenant shall be the
beneficial owner of the Accounts and the Local Accounts for federal and state
income tax purposes and shall report all

55

--------------------------------------------------------------------------------

 

EXECUTION COPY
income on the Accounts and the Local Accounts. Returned items in the Collection
Account will be charged against Tenant in the succeeding month or, if later,
when actually returned.
     (c) Deposits into Accounts.
          (i) Intentionally Deleted.
          (ii) Payments Under Membership Contracts. Tenant represents and
warrants that it has now or heretofore instructed, with respect to all
Membership Contracts in effect on the date hereof, and hereby agrees that with
respect to all future Membership Contracts it shall, irrevocably instruct and
direct all Members to send or otherwise remit all Membership Dues and proceeds
from Membership Contract Receivables (i) directly into the Chase Accounts by ACH
or wire transfer, (ii) by check sent to the Lockboxes, (iii) by debit or credit
card (including internet or telephone charge authorizations) to Equiant
Financial Services, Inc. for the account of Tenant, (iv) in person by check or
by debit or credit card (including telephonic charge authorizations) at Tenant’s
offices located either at Gautier, Mississippi or Frisco, Texas, or (v) in the
case of Members with respect to campgrounds located in or near Canada, for
deposit into designated Canadian Accounts. Tenant shall not permit payments
pursuant to Membership Contracts to be paid to any other Person or direct or
cause any Members to pay in any manner other than as specifically provided
herein. Nothing herein is intended or shall be construed to prohibit Tenant or
Tenant’s Subsidiaries from accepting payment of Membership Dues or Membership
Contract Receivables, as and when tendered by a Member at a campground,
consistent with past practice. For purposes of this paragraph, “Lockboxes” shall
mean those certain lockbox accounts maintained by Equiant Financial Services,
Inc. for the accounts of its clients, including Tenant and Tenant’s
Subsidiaries, at Chase Bank USA, N.A. bearing the designation P.O. Box 78843, or
such other replacement lockbox accounts as consented to by Landlord in writing.
          (iii) Continuing Deposits. Without limiting or qualifying the
provisions of paragraph 31(c)(ii) of this Lease, Tenant agrees that all
Membership Dues, proceeds from Membership Contract Receivables and any other
Gross Revenue (excluding interest and other earnings on deposits and other
income on accounts other than the Accounts) shall be deposited into the
Collection Account within five (5) Business Days after receipt thereof by
Tenant. Until so deposited, any such Gross Revenues (including all Membership
Dues, Membership Contract Receivables payments or proceeds from any property
disposition) that are held by Tenant shall be deemed to be Account Collateral
and shall be held in trust by Tenant for the benefit of Landlord, as secured
party, and shall not be commingled with any other funds or property of Tenant.
Subject to the provisions of paragraph 30, without limiting or qualifying any
other provision of this Agreement, Tenant hereby agrees to transfer to the
Collection Account, not less frequently than once per week, funds from time to
time on deposit in any Canadian Account.
     (d) Transfers From the Concentration Account; Funding of Reserve Accounts.
          (i) Authorization (Reserve Account). Subject to paragraph 31(d)(ii)
below, Tenant hereby irrevocably authorizes and directs Landlord, from time to
time and at any time during the period beginning on January 1st through and
including December 31st of each year, commencing on the Effective Date of
Restatement, to transfer (to the extent of available funds on

56

--------------------------------------------------------------------------------

 

EXECUTION COPY
deposit), and Landlord shall, commencing on such date, transfer, from the
Concentration Account on each Business Day), funds in the following amounts and
in the following order of priority, as such amounts may be adjusted by Landlord
from time to time in its reasonable discretion:
     (A) Twelve Million Dollars ($12,000,000) to the Reserve Account; and
     (B) funds into the Promotions and Discounts Reserve Account in an amount
specified in paragraph 39 of this Lease; and
     (C) the balance, if any, of all funds shall remain in the Concentration
Account in such deposit or securities account designated by Tenant, which
accounts need not be Permitted Investments.
          (ii) Concentration Account. All funds deposited into the Concentration
Account shall remain in such Account as security for the performance of Tenant’s
obligations under the Lease, except that so long as no Event of Default has
occurred hereunder, on the last day of each month or more frequently, Landlord,
after confirming that all payments and adjustments required to be made have been
made under the Lease, shall make payments therefrom into Tenant’s operating
account to enable Tenant to pay for expenses in accordance with, and in amounts
provided by, the current budget approved by Landlord in accordance with
paragraph 30.
          (iii) Rent and Indebtedness and Interest Payments. Tenant hereby
irrevocably authorizes Landlord to pay (1) Fixed Rent due hereunder, using any
funds on deposit in the Reserve Account and (2) any amounts due on the Working
Capital Loan using any funds on deposit in the Reserve Account, and Landlord
shall pay such amounts due and payable in Landlord’s sole and absolute
discretion.
     (e) Payments and Disbursements from Accounts.
          (i) No Event of Default. Except as set forth in paragraphs 31(d)(ii)
and 31(e)(iii) hereof, no payment shall be made from the applicable Accounts and
the Accounts shall remain fully funded for the duration of the Term, as the Term
may be extended.
          (ii) Event of Default Exists. If an Event of Default exists, Tenant
hereby irrevocably authorizes Landlord to make any and all withdrawals from, and
transfers between, any Accounts as Landlord shall determine in Landlord’s sole
and absolute discretion.
          (iii) If Tenant does not have funds available, either in the
Concentration Account or otherwise, to pay Property Taxes, Other Taxes, income
taxes, premiums on the Policies or Promotions and Discounts, it may request
Landlord to make distributions from the Accounts for such purposes. Any such
request shall be accompanied by evidence, satisfactory to Landlord, that such
funds are required, and that there are no funds available to Tenant either in
the Concentration Account or elsewhere. Thereupon, Landlord shall, provided no
Event of Default is then existing, direct that such payments be made, provided,
however, that any Account from which such payment is made shall be promptly
replenished from any revenues received by the Tenant prior to any revenue being
allocated to any other use.

57

--------------------------------------------------------------------------------

 

EXECUTION COPY
     (f) Accounts. Tenant shall not, without the prior written consent of
Landlord, change the account location of any Account and, as a condition
precedent to any such change, the bank to which Tenant proposes to relocate any
such Account shall have executed an appropriate account control agreement, in
accordance with the provisions set forth above. Tenant shall not, without giving
prior written notice to Landlord, change the account location of any Local
Account. Tenant hereby authorizes Landlord to direct the Bank and Cash
Management Bank to take all actions authorized hereunder without notice of any
kind to Tenant. With respect to the Account Collateral, Landlord shall not be
liable for any acts, omissions, errors in judgment or mistakes of fact or law,
except for those arising as a result of Landlord’s investment of such Account
Collateral in other than Permitted Investments or from Landlord’s gross
negligence or willful misconduct.
     (g) Certain Matters Regarding Landlord following an Event of Default.
Tenant agrees that the Bank and Cash Management Bank, as applicable, shall pay
over to Landlord all amounts deposited in the Accounts and the Local Accounts on
demand, without notice to Tenant, if, in making such demand, Landlord shall give
notice, in writing, signed by Landlord or an authorized agent thereof, that an
Event of Default exists. Landlord may exercise in respect of the Account
Collateral all rights and remedies available to Landlord hereunder, or otherwise
available at law or in equity. If an Event of Default exists, Landlord may
exercise in respect of the Account Collateral, in addition to any other rights
and remedies provided for herein or otherwise available to it, all of the rights
and remedies of a secured party upon default under the UCC then in effect in the
applicable jurisdiction. Without limiting the generality of the foregoing,
Tenant agrees that, upon the occurrence and during the continuance of an Event
of Default, it will have no further right to request or otherwise require
Landlord to disburse funds from any Account in accordance with the terms of this
Lease, it being agreed that Landlord may, at its option, (i) direct the Bank or
Cash Management Bank, as applicable, to continue to hold the funds in the
Accounts, (ii) continue, from time to time, to apply all or any portion of the
funds held in the Accounts to any payment(s) which such funds could have been
applied to prior to such Event of Default (or to pay expenses directly), to the
extent and in such order and manner as Landlord in its sole discretion may
determine, and/or (iii) direct the Bank or Cash Management Bank, as applicable,
to disburse all or any portion of the funds held in the Reserve Accounts or
other Account Collateral then or thereafter held by the Bank or Cash Management
Bank to Landlord, in which event Landlord may apply the funds held in the
Accounts, the Local Accounts (to the extent not yet transferred to the Accounts)
or other Account Collateral to Tenant’s obligations under this Lease, in any
order and in such manner as Landlord may determine in its sole discretion. If an
Event of Default exists, Landlord may, at any time or from time to time:
(1) collect, appropriate, redeem, realize upon or otherwise enforce its rights
with respect to the Account Collateral, or any part thereof, without notice to
Tenant and without the need to institute any legal action, make demand to or
upon Tenant or any other Person, exhaust any other remedies or otherwise proceed
to enforce its rights; (2) execute (in the name, place and stead of Tenant) any
endorsements, assignments or other instruments of conveyance which may be
required for the withdrawal and negotiation of the Account Collateral; and/or
(3) exercise all other rights and remedies available to Landlord hereunder.
Notwithstanding anything to the contrary contained herein: (x) the exercise by
Landlord of any of its rights hereunder shall not release Tenant from its
obligations under this Lease, nor shall it constitute an election of remedies by
Landlord or a waiver by Landlord of any of its rights and remedies under this
Lease; (y) except as expressly set forth in this Lease, Landlord shall not have
any obligation or liability by reason of this Lease, nor shall Landlord be
obligated to perform any of the obligations or

58

--------------------------------------------------------------------------------

 

EXECUTION COPY
duties of Tenant hereunder or to take any action, in each case, to collect or
enforce any claim for payment assigned hereunder; and (z) Landlord shall not
have to resort to using the Account Collateral before making demand upon or
bringing an action against Tenant under any guaranty given in connection with
this Lease. No failure on the part of Landlord to exercise, and no delay in
exercising, any right under this Lease shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right under this Lease.
The remedies provided in this Lease are cumulative and not exclusive of any
remedies provided at law or in equity.
     (h) Representations and Warranties Regarding Account Collateral. . In
addition to any other representations or warranties contained in this Lease,
Tenant represents and warrants as follows: (a) Tenant is the legal and
beneficial owner of the Account Collateral, free and clear of any Liens, except
for the Liens in favor of Landlord created by this Lease and Liens on the
Membership Contract Receivables arising under the Working Capital Loan
Documents; (b) upon execution by Tenant of this Lease, the pledge and assignment
of the Account Collateral pursuant to this Lease will create a valid, first
priority security interest in the Account Collateral (subject to the Liens on
the Membership Contract Receivables arising under the Working Capital Loan
Documents), securing the payment and performance of Tenant’s obligations under
this Lease, specifically excluding receivables held by the Canadian debtor, for
which no representation is made; and (c) Tenant is not a party to any credit
agreement or other borrowing facility including, but not limited to, a line of
credit or overdraft line, with the Bank (other than with respect to the Working
Capital Indebtedness).
     (i) Covenants Regarding Account Collateral and Finances of Tenant. Tenant
shall not, without the prior written consent of Landlord which may be granted or
withheld in Landlord’s sole and absolute discretion, (a) sell, assign (by
operation of law or otherwise), pledge or grant any option with respect to, any
of the Gross Revenues or any interest in the Account Collateral or (b) create or
permit to exist any assignment, lien, security interest, option or other charge
or encumbrance upon or with respect to any of the Gross Revenues or any Account
Collateral, except for the Liens in favor of Landlord under this Lease and Liens
on Membership Contract Receivables under the Working Capital Loan Documents or
(c) except as otherwise permitted by paragraph 38(d), make or receive or allow
another party than Landlord or its designee to make or receive any distribution
from the Accounts or (d) except as otherwise permitted by paragraphs 38(d),
38(f) and 38(j), receive, or allow any party other than Landlord or its designee
to receive, any revenues derived from the Premises. Tenant shall give Landlord
not less than fifteen (15) days’ prior written notice of any change in the
address of the chief executive office or principal office of Tenant. Tenant
agrees that all records of Tenant with respect to the Account Collateral shall
be kept at the principal office of Tenant and shall not be removed therefrom
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld. Tenant shall not make or consent to any amendment or
other modification or waiver with respect to any Account Collateral, or enter
into any agreement, or permit to exist any restriction, with respect to any
Account Collateral. Tenant shall, at its expense, defend Landlord’s right, title
and security interest in and to the Account Collateral against the claims of any
Person. Tenant shall not take any action which would impair the enforceability
of this Lease or the security interests created hereby. Tenant shall not enter
into any credit agreement or other borrowing facility including a line of credit
or overdraft line, without Landlord’s consent which Landlord may grant or
withhold in its sole and absolute discretion. Nothing contained in this
paragraph shall impair or otherwise limit Tenant’s

59

--------------------------------------------------------------------------------

 

EXECUTION COPY
obligations to timely make the payments required by this Lease, it being
understood that such payments shall be so timely made in accordance with this
Lease, regardless of the amounts on deposit in any Account. With respect to the
powers conferred on Landlord hereunder, Landlord shall not have any duty as to
the Accounts or the other Account Collateral, or any responsibility for (i)
ascertaining or taking action with respect to any matters relative to the
Accounts or the other Account Collateral, whether or not Landlord has or is
deemed to have knowledge of such matters (except with respect to Landlord’s
obligations relating to the payment of Property Taxes and Other Taxes as
expressly provided herein) or (ii) taking any necessary steps to preserve rights
against prior parties or any other rights pertaining to the Accounts or the
other Account Collateral.
     (j) Cash Management Fees. All reasonable third party fees, costs and
expenses associated with the Account Collateral shall be paid by Tenant when
due.
     (k) Security Interest. Tenant hereby pledges, transfers and assigns to
Landlord, and grants to Landlord, as additional security for Tenant’s
obligations under this Lease, a continuing perfected first priority security
interest in and to, and a first lien upon: (i) the Accounts and Local Accounts
owned by it from time to time, now existing or hereafter arising, and all
amounts which may from time to time be on deposit in each of such Accounts and
Local Accounts (such first lien is subject to the Lien on Membership Contract
Receivables under the Working Capital Loan Documents); (ii) all of Tenant’s
right, title and interest in and to all cash, property or rights transferred to
or deposited in each Account and each Local Account from time to time; (iii) all
certificates and instruments, if any, from time to time representing or
evidencing the Accounts or Local Accounts or any amount on deposit in any
thereof, or any value received as a consequence of possession thereof, including
all interest, dividends, cash, instruments and other property from time to time
received or otherwise distributed in respect of, or in exchange for, any or all
of such Accounts or Local Accounts; (iv) all monies, chattel paper, checks,
notes, bills of exchange, negotiable instruments, documents of title, money
orders, commercial paper, and other security instruments, documents, deposits
and credits from time to time in the possession of Landlord representing or
evidencing such Accounts or Local Accounts; (v) all other property, held in,
credited to or constituting part of any of the Accounts or Local Accounts;
(vi) all earnings and investments held in any Account or Local Account in
accordance with this Lease; and (vii) to the extent not described above, any and
all proceeds of the foregoing (collectively, the “Account Collateral”). This
Lease and the pledge, assignment and grant of security interest made hereby
secure payment of all of Tenant’s obligations under this Lease in accordance
with the provisions set forth herein. This Lease shall be deemed a security
agreement within the meaning of the UCC.
     (l) Bank Accounts. Tenant shall not establish any new bank accounts without
prior written notice to Landlord and, except with respect to Local Accounts
(other than the Chase Accounts and the Frisco Accounts), unless Landlord, such
Tenant and the bank at which the account is to be opened enter into a tri-party
agreement regarding such bank account pursuant to which such bank, among other
things, acknowledges the security interest of Landlord in such bank account,
agrees to comply with instructions originated by Landlord directing disposition
of the funds in the bank account without further consent from Tenant, and agrees
to subordinate and limit any security interest the bank may have in the bank
account on terms satisfactory to Landlord.

60

--------------------------------------------------------------------------------

 

EXECUTION COPY
     (m) As part of Tenant’s cooperation with Landlord’s financing set forth in
paragraph 27 of this Lease and the granting of any Mortgage to any Mortgagee,
Tenant agrees that the Accounts and each management system in place under this
Lease may be assigned to and controlled by Mortgagee so long as Tenant’s rights
under this paragraph 31 are not diminished or obligations increased and Tenant
shall cooperate with such efforts and execute such documents as are required
thereby.
32. NOTICES
     Notices, statements, demands or other communications required or permitted
to be given, rendered or made by either party to the other pursuant to this
Lease or pursuant to any applicable law or requirement of public authority,
shall be in writing (whether or not so stated elsewhere in this Lease) and shall
be deemed to have been properly given, rendered or made when received by
personal delivery or overnight delivery or overnight courier delivery (or, if
such delivery is refused, upon the date that delivery would have occurred but
for such refusal) or facsimile transmission (with electronic confirmation
therefor) with a confirmation copy of the entire original transmittal sent by
overnight delivery or by overnight courier delivery addressed to the other
parties as follows:

         
 
  To Landlord:   MHC TT Leasing Company, Inc.
 
      c/o Equity LifeStyle Properties, Inc.
 
      Two North Riverside Plaza, Suite 800
 
      Chicago, IL 60606
 
      Attention: General Counsel
 
      Telephone: (312) 279-1400
 
      Facsimile: (312) 279-1715
 
       
 
  With a copy to:   Equity LifeStyle Properties, Inc.
 
      Two North Riverside Plaza, Suite 800
 
      Chicago, IL 60606
 
      Attention: Chief Executive Officer
 
      Telephone: (312) 279-1400
 
      Facsimile: (312) 279-1710
 
       
 
  With a copy to:   Paul, Hastings, Janofsky & Walker LLP
 
      191 N. Wacker Drive, 30th Floor
 
      Chicago, IL 6-6-6
 
      Attention: Daniel J. Perlman, Esq.
 
      Telephone: (312) 499-6090
 
      Facsimile: (312) 499-6190
 
       
 
  To Tenant:   Thousand Trails Operations Holding Company, L.P.
 
      c/o Thousand Trails, LP
 
      3801 Parkwood Blvd., Suite 100
 
      Frisco, TX 75034
 
      Attention: Chief Financial Officer
 
      Telephone: (214) 618-7273
 
      Facsimile: (214) 618-7285

61

--------------------------------------------------------------------------------

 

EXECUTION COPY

         
 
       
 
  With a copy to:   Thousand Trails Operations Holding Company, L.P.
 
      c/o Thousand Trails, L.P.
 
      3801 Parkwood Blvd., Suite 100
 
      Frisco, TX 75034
 
      Attention: Legal Department
 
      Telephone: (214) 618-7217
 
      Facsimile: (214) 618-7230

Any party listed in this paragraph 32 may, by notices as aforesaid, designate a
different address for notices, statements, demands or other communications
intended for it.
33. EXCESS LAND
     (a) Landlord and Tenant acknowledge and agree that Landlord, or an
affiliate of Landlord (the “Excess Land Owner”) is the owner of the Excess Land,
and, except for the revocable license provided in paragraph 2(e), Tenant
disclaims any right, title or interest in the Excess Land. Landlord has advised
Tenant that Excess Land Owner may, in its sole and absolute discretion, develop
any or all of such Excess Land in any manner and for any reason whatsoever.
     (b) Tenant agrees and acknowledges that it has a good faith obligation to
cooperate with Landlord (or Landlord’s affiliate) in Landlord’s (or Landlord’s
affiliate’s) development of the Excess Land, including the execution of releases
or quit claims affecting such Excess Land and participation and cooperation in
any zoning or other land use petitions. Tenant agrees that failure to so
cooperate with Landlord shall constitute a material breach of this Lease. Tenant
hereby agrees and acknowledges that Landlord or Landlord’s affiliate may
transfer or sell the Excess Land or any portion thereof at any time to another
affiliate of Landlord or to any third party without Tenant’s consent.
     (c) Determination of whether any portion of the Premises consists of Excess
Land shall be made by Landlord in its sole and absolute discretion.
34. CAPITAL IMPROVEMENTS
     (a) Landlord Capital Improvements. Landlord shall have the right, in its
sole and absolute discretion, to make improvements to the Improvements at
Landlord’s expense. Landlord shall perform such improvements in a good and
workmanlike manner. Landlord shall consult with Tenant regarding such
improvements.
     (b) Capital Improvement Fund. During the Term of the Lease, Landlord shall
reimburse Tenant up to $5,000,000 (in the aggregate) for the cost of
improvements made to the Improvements by Tenant during the Term of the Lease,
provided that Tenant complies with the requirements of this Section 34(b) with
respect to all such improvements to the Improvements. Such improvements shall
require Landlord’s prior written consent; shall be capitalizable in accordance
with GAAP and shall be made by Tenant in accordance with the procedures set
forth in paragraph 23. Landlord shall fund the cost of such improvements on a
weekly basis upon presentation by Tenant of invoices for the work performed. All

62

--------------------------------------------------------------------------------

 

EXECUTION COPY
improvements to the Improvements paid for by Landlord under this Section 34
shall be the property of Landlord.
35. RESTATMENT BONUS.
     Upon the Effective Date of Restatement, Landlord shall deposit $1,000,000
into Tenant’s operating account as partial consideration for Tenant’s agreement
to the amendment and restatement of this Lease. The parties agree that Tenant
may use such funds for working capital purposes.
36. REPLACEMENT OF SITES.
     Landlord shall have the option, in its sole and absolute discretion, to
remove any Site from this Lease (the “Removed Site”) on the following terms:
     (i) Landlord provides sixty (60) days prior written notice to Tenant;
     (ii) If required by law or a Membership Contract to withdraw and substitute
a membership campground, Landlord will substitute a property for the Removed
Site which (i) is suitable for the purpose of running a membership campground,
(ii) is in the same general area and has reasonably comparable amenities as the
Removed Site, (iii) is equally as desirable a location for selling Memberships
as the Removed Site, and (iv) satisfies any requirements imposed by law relating
to the withdrawal and substitution of a membership campground;
     (iii) If Landlord sells the Removed Site to a third party, Landlord shall
have the right, at its sole discretion, to apportion a portion of the proceeds
received in such sale to Tenant as consideration for the right to remove the
Removed Site from the Lease;
     (iv) There shall be no modification to the payment of Rent hereunder;
provided that, (i) if Landlord fails to substitute a property for the Removed
Site, Landlord and Tenant will negotiate a fair and equitable reduction of Rent
hereunder;
     (v) Landlord agrees to enter into an indemnification agreement with Tenant
whereby Landlord agrees to indemnify Tenant for any loss or expense incurred in
connection with such removal of a Site solely as a result of a claim by either a
Member or a government agency that such removal of a Site was a violation of a
Membership Contract or a violation of law; and
     (vi) the Budget shall be adjusted in an equitable manner.
37. MCADAMS RESTRICTIONS
     Joe McAdams, irrespective of his affiliation with Landlord, shall have no
authority, on behalf of Landlord or its affiliates, to enter into any agreement
with any entity controlling, controlled by or affiliated with Tenant, PA or any
of their affiliates including, without limitation, any amendment, alteration or
modification of this Lease.

63

--------------------------------------------------------------------------------

 

EXECUTION COPY
38. AFFIRMATIVE, NEGATIVE AND FINANCIAL COVENANTS OF TENANT
     (a) During the Term of this Lease, all of the business and operations of
Tenant and its Subsidiaries as conducted prior to the date hereof by such
entities and their predecessors (“Tenant’s Business”) shall continue to be
operated by Tenant and its Subsidiaries after the date hereof, and Tenant and
Tenant’s Subsidiaries, as applicable, shall not engage in any business other
than Tenant’s Business. Tenant’s Business is the operation and management of
(i) membership campgrounds, (ii) reciprocal use and affiliation programs for use
of campgrounds, (iii) management of campgrounds and membership programs for
third parties, including the United States Forest Service and affiliates of
Equity Lifestyle Properties, Inc. and (iv) other business related and ancillary
to the businesses described in clauses (i), (ii) and (iii), above. Without
limiting the generality of the foregoing, Tenant shall not operate any portion
of Tenant’s Business other than directly itself or through its Subsidiaries. In
furtherance thereof, except as otherwise expressly provided herein, Tenant shall
not and shall not permit its Subsidiaries to authorize, issue or enter into any
agreement providing for the issuance (contingent or otherwise) of (x) any notes
or debt securities containing equity features, including any notes or debt
securities convertible into or exchangeable for equity securities, issued in
connection with the issuance of equity securities or containing profit
participation features, (y) any equity securities (or any securities convertible
into or exchangeable for any equity securities), or (z) any capital appreciation
or profit participation rights. Subject to the provisions of paragraph 25 of
this Lease, at no time shall Tenant (1) cease to, directly or indirectly, own
and control one hundred percent (100%) of each class of the outstanding equity
interests of each Subsidiary or (2) own any asset, directly or indirectly, other
than its ownership interests in the Subsidiaries and its membership interest in
Thousand Trails Insurance Group, LLC. Tenant may not acquire or form any
corporations, partnerships, limited liability companies, associations or other
business entities unless such entities are wholly owned and controlled by Tenant
and Landlord shall have received (x) a Subsidiary Pledge, by which such entity
pledges one hundred percent (100%) of its assets to Landlord, (y) a joinder to
the Subsidiary Guaranty, in the form attached thereto and (z) a replacement
Tenant Pledge, by which Tenant shall pledge to Landlord one hundred percent
(100%) of the ownership interest in each Subsidiary, including the entity or
entities contemplated by this paragraph 38(a).
     (b) Tenant shall not directly or indirectly create, incur, assume or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness except for (i) the obligations of Tenant under this Lease, (ii) the
Working Capital Indebtedness, and (iii) any other Indebtedness approved by
Landlord, which approval shall be granted or withheld in Landlord’s sole and
absolute discretion.
     (c) Tenant shall not permit any of its Subsidiaries directly or indirectly,
to create, incur or otherwise become or remain, directly or indirectly, liable
with respect to any Indebtedness except for (i) ordinary and customary trade
payables which are incurred in the ordinary course of its business provided that
not more than $1,000,000 of which, in the aggregate at any time outstanding, are
more than ninety (90) days overdue, (ii) the obligations of the Subleasing
Subsidiaries under the Tenant Subleases, and (iii) any other Indebtedness
incurred as a co-borrower with or guarantor of Tenant (provided such other
Indebtedness is permitted by paragraph 38(b), above).

64

--------------------------------------------------------------------------------

 

EXECUTION COPY
     (d) Tenant shall not nor shall it permit any of its Subsidiaries directly
or indirectly to convey, sell, lease, sublease, transfer or otherwise dispose
of, or grant to any Person an option (other than the Option Agreement and the PA
Option) to acquire, in one transaction or a series of related transactions, any
of its property, business or assets, or the capital stock of or other equity
interests in any of its Subsidiaries, whether now owned or hereafter acquired
except as otherwise consented to by Landlord in advance in writing in its sole
and absolute discretion.
     (e) Tenant shall not nor shall it permit any of its Subsidiaries to acquire
any assets except as specifically permitted in this Lease and as may otherwise
by permitted by Landlord in its sole and absolute discretion.
     (f) Tenant shall not nor shall Tenant permit any of its Subsidiaries
directly or indirectly to declare, order, pay, make or set apart any sum for any
Restricted Junior Payment, except (i)  for distributions in cash from Tenant’s
operating account to Tenant’s equity holders in an aggregate amount each
calendar year equal to (x)(1) the amount of taxable income of Tenant allocated
to its equity holders for such calendar year multiplied by (2) the combined
maximum federal and state income tax rate to be applied to such taxable income
(calculated by using the highest maximum combined marginal federal and state
income tax rates for an individual resident of the relevant state of residence
of Tenant’s principal indirect individual equity holder and taking into account
the deductibility of state income tax for federal income tax purposes) and
(y) an additional aggregate amount of $200,000 in any twelve month period;
(ii) a distribution or loan to PA, at the sole discretion of PA, as of the date
hereof in an amount equal to $4,000,000; and (iii) a distribution or loan to PA,
at the sole discretion of PA, on the third (3rd) anniversary of the Date of
Restatement in an amount equal to $2,000,000, but only to the extent that such
amount does not exceed the Available Cash, provided that Landlord hereby permits
Tenant to set apart an amount equal to $55,555 per month for the thirty six
(36) months ending 12/31/2010 into a separate account which funds shall be
usable for the purpose of making such $2,000,000 distribution to PA (each
distribution contained in clauses (i), (ii) and (iii) being a “Permitted
Distribution”). Landlord and Tenant acknowledge and agree that the Permitted
Distributions are not intended to be compensation to the owners of Tenant’s
parent. Conditions precedent to a Permitted Distribution are (i) no Event of
Default is existing at the time of the Permitted Distribution and (ii) prior
approval of the Permitted Distribution by the Board of Directors (or other
governing bodies) of PA and Tenant has been obtained.
     (g) Guarantor shall at all times continue to, directly or indirectly, own
and control one hundred percent (100%) of the outstanding equity interests of
Tenant. Additionally, Guarantor shall cause Tenant to not own any assets,
directly or indirectly, other than the assets in existence on the date of this
Lease or otherwise acquired in accordance with this Lease and Tenant’s Business.
     (h) None of Tenant, any direct or indirect holder of any Tenant Equity
Interest or any Affiliate of Tenant (together, the “Restricted Holders”) shall
own, individually or collectively with any other Restricted Holders, ten percent
(10%) or more of any class or series of equity interest of Equity LifeStyle
Properties, Inc., MHC Trust or the Trust.
     (i) Tenant agrees to cause the equity holders of PA and PATT to take all
action necessary including, but not limited to, the voting of their equity
interests, the execution of written consents, the calling of special meetings,
the removal of directors, the filling of vacancies

65

--------------------------------------------------------------------------------

 

EXECUTION COPY
on the Board of Directors (or other governing body), the waiving of notice and
the attending of meetings, so as to cause, at Landlord’s sole discretion, up to
two (2) designees of Landlord to be members of each of such Boards of Directors
(or other governing bodies) at all times.
     (j) INTENTIONALLY OMITTED.
     (k) Except for the distribution permitted by paragraph 38(f) of this Lease,
Tenant shall not allow Joe McAdams to be paid, in the aggregate, either by
itself or any Affiliate of Tenant, any salary, bonus or other payments.
     (l) Upon the death of or Disability of the then active chief executive of
Tenant, or if the then active chief executive of Tenant ceases to be an active
chief executive of Tenant for any other reason, Tenant shall appoint a
substitute executive within ninety (90) days, whom Landlord shall have the right
to approve.
     (m) Notwithstanding anything to the contrary contained herein, in the event
of a Corporate Control Event to which Landlord grants its consent as provided in
this Lease, this Lease shall be renegotiated at Landlord’s option upon terms and
conditions satisfactory to Landlord.
39. PROMOTIONS AND DISCOUNTS RESERVE ACCOUNT
     Tenant recognizes Landlord’s interest in continued annual dues payable
under Membership Contracts in order for proceeds to be available for the
maintenance and delivery of services at the Premises for the benefit of the
holders of all Membership Contracts. As a result, Tenant agrees to endeavor to
continue to operate and to cause Tenant’s Subsidiaries to continue to operate
Tenant’s Business in a manner which remains consistent with the relationship
between usage benefits and annual membership dues currently in existence as of
the date of this Lease (such manner of operation being referred to herein as
“Tenant’s Manner of Operation”). If Tenant or any of Tenant’s Subsidiaries
pursue any marketing effort that would cause Tenant to materially and adversely
deviate from Tenant’s Manner of Operation, taking into account Tenant’s business
as a whole (such deviation shall be referred to herein as a “Variance Program”),
then Tenant shall, within five (5) Business Days after instituting such
marketing effort, notify Landlord of such Variance Program. Promptly thereafter,
Landlord and Tenant shall use good faith efforts to determine whether or not and
to what extent Tenant shall be obligated to make a deposit into the Promotions
and Discount Reserve in connection with such Variance Program (“Variance Program
Deposit”) and upon such agreement, Tenant shall make such Variance Program
Deposit into the Promotions and Discount Reserve Account. Within ninety
(90) days following the expiration of each fiscal year of Tenant, Tenant shall
furnish to Landlord a certificate of Tenant’s Chief Financial Officer stating
that in such officer’s good faith judgment, Tenant has not commenced and has not
permitted any of Tenant’s Subsidiaries to commence any Variance Programs during
the preceding fiscal year of Tenant other than those which Tenant has disclosed
to Landlord. Variance Program Deposits made into the Promotions and Discounts
Reserve Account shall be made for the purposes of establishing and maintaining a
reserve (the “Promotions and Discounts Reserve”) for the payment of any
deficiencies in Tenant’s payment of Rent under this Lease. If Tenant or Tenant’s
Subsidiaries revise its marketing efforts in a manner that reinstitutes Tenant’s
Manner of Operation (or otherwise positively affects the relationship between
usage benefits and annual membership dues), then

66

--------------------------------------------------------------------------------

 

EXECUTION COPY
Tenant shall be entitled to withdraw funds from the Promotions and Discount
Reserve, in amounts and at times approved by Landlord, such approval not to be
unreasonably withheld, delayed or conditioned.
40. LANDLORD SUBORDINATION AND NON-DISTURBANCE
     (a) Notwithstanding anything in this Lease to the contrary, Landlord hereby
covenants and agrees that:
          (i) Its rights in each Resort (as hereinafter defined) shall be
subordinate to the rights of Purchasers (as hereinafter defined) from and after
the date of this instrument;
          (ii) In the event of the termination of this Lease or of Tenant’s
possession of the Premises, Landlord shall take each Resort subject to the use
rights of Purchasers;
          (iii) In the event of termination of this Lease or of Tenant’s
possession of the Premises, Landlord shall fully honor all rights of Purchasers
to occupy and use any Resort as provided in the Purchasers’ Camping Resort
Contracts (as hereinafter defined);
          (iv) In the event of termination of this Lease or of Tenant’s
possession of the Premises, Landlord shall fully honor all rights of Purchasers
to cancel their Camping Resort Contracts and receive appropriate refunds; and
          (v) In the event of the termination of this Lease or of Tenant’s
possession of the Premises, Landlord shall not discontinue use of any Resort or
cause or permit any Resort to be used in a manner which would prevent or
materially prevent or interfere with Purchasers from using or occupying the
Resort in the manner contemplated by the Purchasers’ Camping Resort Contracts.
However, except as required by applicable law, Landlord shall have no obligation
or liability to assume the responsibilities or obligations of Tenant or any of
its Affiliates under the Camping Resort Contracts.
     (b) In the event of the termination of this Lease or of Tenant’s possession
of the Premises and Landlord does not continue to operate the Resort upon
conditions no less favorable to Purchasers than existed prior to the change of
title or possession, Landlord and its successors and assigns shall either:
          (i) Offer the title to or possession of the Resort to an association
of Purchasers to operate the Resort; or
          (ii) Obtain a commitment from another entity (which obtains title or
possession to the Resort) to undertake the responsibility of operating the
Resort.
     (c) The covenants contained herein may be enforced by each Purchaser of a
Camping Resort Contract, provided that the Purchaser is not in default under the
terms of the Purchaser’s Camping Resort Contract.
     (d) The covenants contained herein shall be effective as between each
Purchaser and Landlord despite any rejection or cancellation of the Purchaser’s
Camping Resort Contract during any bankruptcy proceedings of Tenant or any of
its present or future Affiliates.

67

--------------------------------------------------------------------------------

 

EXECUTION COPY
     (e) The covenants and agreements contained herein shall inure to the
benefit of and be binding upon the successors and assigns of Tenant and
Landlord.
     (f) When used in this Section, each of the following terms shall be defined
as set forth below:
          (i) “Purchaser” shall mean a person who enters into a Camping Resort
Contract, whether before or after the date hereof, and thereby obtains title to,
an estate or interest in, or license or the right to use the Resort.
          (ii) “Camping Resort Contract” shall mean an agreement between
(1) Tenant or any of its present or future Affiliates or any predecessor in
interest to Tenant or such Affiliates and (2) a Purchaser evidencing the
Purchaser’s title to, estate or interest in, or right or license to use the
Resort.
          (iii) “Resort” means any campground located on or forming a part of
the Premises.
The covenant of non-disturbance contained herein is made for the benefit of
Tenant and Landlord and each Purchaser and shall be binding upon and inure to
the benefit of Tenant and Landlord and their respective successors and permitted
assigns and shall be binding upon and inure to the benefit of each Purchaser and
his or her respective successors and permitted assigns. On Tenant’s request,
Landlord shall cause to be delivered under the Master Leases a nondisturbance
agreement to Subleasing Subsidiaries, or their successors or assigns.
41. STATE SPECIFIC PROVISIONS
     (a) The following provisions shall apply with respect to any Site(s)
located in the State of Arizona:
          (i) The following language is added to the definition of “Land” in
paragraph 1 of this Lease, following the phrase “all other property rights”:
               “water rights”
          (ii) The word “for,” is hereby inserted in the Lease as follows:
     (A) In paragraphs 6(a) and 6(b) of this Lease after the phrase “on an
After-Tax Basis” and before the phrase “from and against any such Taxes.”
     (B) In paragraph 6(h) of this Lease, after the phrase “on an After-Tax
Basis” and before the phrase “from and against any claims for payment thereof.”
     (C) In paragraph 7(a) of this Lease, after the phrase “on an After-Tax
Basis” and before the phrase “from and against, any and all costs, charges and
expenses attributable to the Premises or Underlying Premises.”
     (D) In paragraph 18(b) of this Lease, after the phrase “successors and
assigns” and before the phrase “from and against any and all claims.”

68

--------------------------------------------------------------------------------

 

EXECUTION COPY
     (E) In paragraph 22(b) of this Lease, after the phrase “on an After-Tax
Basis” and before the phrase “from and against loss or liability.”
     (F) In paragraph 26(c) of this Lease, after the phrase “on an After-Tax
Basis” and before the phrase “from and against any and all liability.”
          (iii) The following language is added to paragraph 16(a)(ii)(B) of
this Lease, following the phrase “from and after any such Event of Default”:
               “and to the extent such statute or common law can be waived,”
          (iv) With regard to any Site located in the State of Arizona, Tenant
expressly waives the benefit of any statute now or in the future in effect which
would otherwise afford Tenant the right to terminate this Lease due to casualty
or damage to the Site including, without limitation, Arizona Revised Statutes
§33-343.
     (b) The following provisions shall apply with respect to any Site(s)
located in the State of California:
          (i) The following language is added at the end of paragraph 6(a) of
this Lease:
“In addition, “Property Taxes” shall include any taxes as a result in any change
in ownership with respect to the Premises pursuant to Proposition 13 as adopted
by the voters of the State of California in the June 1978 election, and the
costs of any transit impact development fees, housing and child care
contributions or other similar or dissimilar impositions required of Landlord
with respect to the Premises or otherwise imposed by the local governmental or
quasi-governmental instrumentalities. In no event shall Tenant be responsible
for any taxes relating to Landlord’s sale of the Premises.”
          (ii) Except to the extent specifically provided in this Lease, Tenant
hereby waives, to the maximum extent permitted by applicable laws, any rights
that it may now or in the future have to quit or surrender or vacate the
Premises, to terminate this Lease, or to any abatement, diminution, offset,
reduction or suspension of Rent on account of Landlord’s failure to timely or in
a satisfactory manner deliver possession of the Premises to Tenant or on account
of any other event or circumstance, including any rights it might otherwise have
under the provisions of sections 1932, 1933, 1941 and/or 1942 of the California
Civil Code, it being the express intention of the parties, and therefore it
being agreed by the parties, that the terms of this paragraph shall control
under any circumstances in which said statutes might otherwise apply, and govern
and replace any rights covered by said statutes.
          (iii) The following language is added at the end of the first
grammatical paragraph of paragraph 10 of this Lease:
“The provisions of Sections 1932(2) and 1933(4) of the California Civil Code are
hereby waived by Tenant, it being the intention of

69

--------------------------------------------------------------------------------

 

EXECUTION COPY
the parties that the express terms of this Lease shall control under any
circumstances in which those provisions might otherwise be applicable.”
          (iv) The following language is added to the first sentence of
paragraph 12 of this Lease, following the defined term “ADA”:
“and California Civil Code Section 3110.5,”
          The following language is added to paragraph 12 of this Lease,
following the phrase “with respect to the use or manner of use” and before the
phrase “of the Premises, or such adjacent or appurtenant facilities”:
“maintenance, operation, repair, alteration or construction”
          (v) The following language is added at the end of paragraphs 13 and 14
of this Lease:
“The provisions of Sections 1265.110, 1265.120, 1265.130 and 1265.140 of the
California Code of Civil Procedure are hereby waived by Tenant, it being the
intention of the parties that the express terms of this Lease shall control
under any circumstances in which those provisions might otherwise be
applicable.”
          (vi) The following language is added at the end of paragraph 16(a) of
this Lease:
     “(vi) With respect to any Site(s) located in the State of California,
terminate Tenant’s right to possession of the Premises by any lawful means, in
which case this Lease shall terminate and Tenant immediately shall surrender
possession of the Premises to Landlord. In such event Landlord shall be entitled
to recover from Tenant all damages incurred by Landlord by reason of Tenant’s
default including (i) the cost of recovering possession of the Premises;
(ii) the worth at the time of the award of any unpaid Rent which had been earned
at the time of termination; (iii) the worth at the time of the award of the
amount by which the unpaid Rent which would have been earned after the
termination until the time of the award exceeds the amount of such rental loss
that Tenant proves could reasonably have been avoided; (iv) reasonable expenses
of placing the Premises in good order, condition and repair; (v) reasonable
expenses of relating, including necessary renovation and alteration of the
Premises; (vi) reasonable and actual attorneys’ fees; (vii) the worth at the
time of award of the amount by which the unpaid Rent required to be paid by
Tenant pursuant to this Lease for the balance of the Term after the time of such
award exceeds the amount of such rental loss for the same period that Tenant
proves reasonably could be avoided; (viii) that portion of any leasing
commission paid by Landlord and

70

--------------------------------------------------------------------------------

 

EXECUTION COPY
applicable to the unexpired Term of this Lease; and (ix) any other amount
necessary to compensate Landlord for all the detriment proximately caused by
Tenant’s failure to perform its obligations under this Lease or which in the
ordinary course of things would be likely to result therefrom, including damages
for diminution in the value of the Premises. As used in subparagraphs (ii) and
(iii), above, the “worth at the time of award” is computed by allowing interest
at the Overdue Rate. As used in subparagraph (vii), above, the “worth at the
time of award” is computed by discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%). Unpaid installments of Rent or other sums shall bear interest from the
date due at the Overdue Rate;
     (vii) With respect to any Site(s) located in the State of California,
maintain Tenant’s right to possession, in which case this Lease shall continue
in full force and effect whether or not Tenant shall have abandoned the
Premises. In such event Landlord shall be entitled to enforce all of Landlord’s
rights and remedies under this Lease, including the right to recover the Rent as
may become due hereunder, for which purposes Landlord may exercise the remedy
described in California Civil Code section 1951.4 (lessee may continue lease in
effect after lessee’s breach and abandonment and recover rent as it becomes due,
if lessee has the right to sublet or assign, subject only to reasonable
limitations);
     (viii) With respect to any Site(s) located in the State of California, seek
specific performance by Tenant, in the case of breach by Tenant of one or more
of its covenants herein, below;
     (ix) With respect to any Site(s) located in the State of California,
exercise the remedy described in California Civil Code section 1954 (and for
such purposes, Tenant hereby waives any rights or benefits that may be available
to it under said California Civil Code section 1954); and/or
     (x) With respect to any Site(s) located in the State of California, pursue
any and every other remedy or right now or hereafter available to Landlord under
the laws or judicial decisions of the State of California.”
          (vii) The following is added to paragraph 23(c)(i) of this Lease,
following the phrase “rules and regulations” and before the phrase “shall not
adversely affect the structural elements”:
“, including, to the extent applicable, California Civil Code Section 3110.5,
and shall otherwise comply with paragraph 12 hereof”

71

--------------------------------------------------------------------------------

 

EXECUTION COPY
          (viii) The following is added to the definition of “Environmental
Laws” in paragraph 26(b) of this Lease:
“to the extent applicable, (i) the Porter-Cologne Water Quality Control Act
(California Water Code Section 13000, et seq.), (ii) the California Hazardous
Waste Control Law (Division 20, Chapter 6.5 of the California Health and Safety
Code), (iii) The Carpenter-Presley-Tanner Hazardous Substance Account Act
(California Health and Safety Code Section 25300 et seq.), (iv) Division 20,
Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory) of the
California Health and Safety Code, (v) the Safe Drinking Water and Toxic
Enforcement Act of 1986 (California Health and Safety Code Section 25249.5
et seq.), (vi) the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.), (vii) the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 et seq.), and (viii) the
Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et seq.)”
     (c) The following provisions shall apply with respect to the Site(s)
located in the State of Florida:
          (i) The following language is added at the end of paragraph 6(c) of
this Lease:
“Without limiting the foregoing, Tenant shall pay to Landlord any sales, excise
and other tax (excluding however, Landlord’s income taxes) levied, imposed or
assessed by the State of Florida or any political subdivision thereof or other
taxing authority upon any rent payable hereunder, including Fixed Rent or
Additional Rent.”
          (ii) The following language is hereby added at the end of paragraph
16(a) of this Lease:

  “(vi)   Landlord shall have all remedies available under Florida law including
the following:        (a)   Landlord shall have the right to recover the
Premises and repossess the Premises by any lawful means without terminating this
Lease.        (b)   Landlord shall have the right at any time to give a written
termination notice to Tenant and, on the date specified in such notice, Tenant’s
right to possession shall terminate and this Lease shall terminate. Upon such
termination, Landlord shall have the right to recover from Tenant all unpaid
Rent and other charges due under this Lease which had been earned at the time of
termination.

72

--------------------------------------------------------------------------------

 

EXECUTION COPY

  (c)   In addition and without limiting the foregoing, Landlord shall have the
right to accelerate and declare immediately due and payable all rents and other
charges to be paid by Tenant hereunder. Acts of maintenance or preservation or
efforts to relent the Premises or the appointment of a receiver upon initiative
of Landlord to protect Landlord’s interest under this Lease shall not constitute
a termination of this Lease unless written notice of such termination is given
by Landlord to Tenant.”

          (iii) The following language is substituted for the first sentence of
paragraph 21(b) of this Lease:
“Landlord’s interest in the Premises shall not be subject to liens for
improvements made by Tenant, and Tenant shall have no power or authority to
create any lien or permit any lien to attach to the Premises or to the present
estate, reversion or other estate of Landlord in the Premises herein demised or
on the Improvements or the Property or other improvements thereon as a result of
improvements made by Tenant or for any other cause or reason. All materialmen,
contractors, artisans, mechanics and laborers and other persons contracting with
Tenant with respect to the Premises or any part hereof, or any such party who
may avail himself of any lien against realty (whether same shall proceed in law
or in equity), are hereby charged with notice that such liens are expressly
prohibited and that they must look solely to Tenant to secure payment for any
work done or material furnished for improvements by Tenant or for any other
purpose during the Term of this Lease. Tenant shall indemnify Landlord again any
loss or expenses incurred as a result of the assertion of any such lien.”
          (iv) The following provision is added at the end of paragraph 28 of
this Lease:
“(r) Wherever this Lease requires Tenant to pay any of landlord’s legal or
attorney fees, such fees shall include any and all reasonable legal fees and
expenses of Landlord, including any and all such fees and expenses incurred in
connection with litigation, mediation, arbitration, other alternative dispute
processes, administrative proceedings and bankruptcy proceedings, and any and
all appeals from any of the foregoing.”
“(s) As required by Section 404.056, Florida Statutes, Landlord notes the
following disclosure:
RADON GAS: Radon is a naturally occurring radioactive gas that, when it has
accumulated in a building in sufficient quantities may present health risks to
persons who are exposed to it over time. Levels of radon that exceed federal and
state guidelines have been

73

--------------------------------------------------------------------------------

 

EXECUTION COPY
found in buildings in Florida. Additional information regarding radon and radon
testing may be obtained from your county health department.”
“(t) ENERGY: Tenant may have the energy efficiency rating of any building
determined. A copy of the State brochure is attached as Exhibit X.”
          (v) The following language is substituted for the first sentence of
paragraph 21(b) of the Lease:
“Landlord’s interest in the Premises shall not be subject to liens for
improvements made by Tenant, and Tenant shall have no power or authority to
create any lien or permit any lien to attach to the Premises or to the present
estate, reversion or other estate of Landlord in the Premises herein demised or
on the Improvements or the Property or other improvements thereon as a result of
improvements made by Tenant or for any other cause or reason. All materialmen,
contractors, artisans, mechanics and laborers and other persons contracting with
Tenant with respect to the Premises or any part hereof, or any such party who
may avail himself of any lien against realty (whether same shall proceed in law
or in equity), are hereby charged with notice that such liens are expressly
prohibited and that they must look solely to Tenant to secure payment for any
work done or material furnished for improvements by Tenant or for any other
purpose during the Term of this Lease. Tenant shall indemnify Landlord again any
loss or expenses incurred as a result of the assertion of any such lien.”
     (d) The following provisions shall apply with respect to the Site(s)
located in the State of Indiana:
          (i) Where any provision of this Lease is inconsistent with any
provision of Indiana statutory or case law that may not be waived (“Applicable
Law”), the provisions of Applicable Law shall take precedence over the
provisions of this Lease, but shall not invalidate or render unenforceable any
other provisions of this Lease that can be construed in a manner consistent with
Applicable Law. Should Applicable Law confer any rights or impose any duties
inconsistent with or in addition to any of the provisions of this Lease, the
affected provisions of this Lease shall be considered amended to conform to such
Applicable Law, but all other provisions hereof shall remain in full force and
effect without modification.
          (ii) To the extent that Applicable Law limits (i) the availability of
the exercise of any of the remedies set forth in this Lease, and the right of
Landlord to exercise self-help in connection with the enforcement of the terms
of this Lease, or (ii) the enforcement of waivers and indemnities made by
Tenant, such remedies, waivers, or indemnities shall be exercisable or
enforceable, any provisions in this Lease to the contrary notwithstanding, if,
and to the extent, permitted by Applicable Law in force at the time of the
exercise of such remedies or the

74

--------------------------------------------------------------------------------

 

EXECUTION COPY
enforcement of such waivers or indemnities without regard to the enforceability
of such remedies, waivers or indemnities at the time of the execution and
delivery of this Lease.
          (iii) The following language is added at the end of paragraph 16(a) of
this Lease:
“(vi) With respect to any Site located in the State of Indiana, Tenant covenants
and agrees with Landlord that if Landlord, upon an Event of Default by Tenant,
elects to file a suit to enforce this Lease and protect Landlord’s rights
thereunder, Landlord may in such suit apply to any court having jurisdiction,
for the appointment of a receiver of the Premises and Tenant hereby consents to
such appointment, and thereupon it is expressly covenanted and agreed that the
court shall, without notice forthwith, appoint a receiver with the usual powers
and duties of receivers in like cases pursuant to Ind. Code 32-30-5, and such
appointment shall be made by such court as a matter of strict right to Landlord
and without reference to the adequacy or inadequacy of the value of the Premises
that is subject this Lease, or to the solvency or insolvency of Tenant, and
without reference to the commission of waste.”
          (iv) Tenant waives, to the fullest extent permitted by Applicable Law,
any notice to quit as a condition precedent to Landlord’s remedies under
paragraph 16 of this Lease, for and on behalf of itself and all persons claiming
through or under Tenant, and Tenant, further waives any and all right of
redemption or re-entry or repossession in case Tenant shall be dispossessed by a
judgment or by warrant of any court or judge, or in case of re-entry or
repossession by Landlord or in case of any expiration or termination of this
Lease.
          (v) Environmental Laws, as defined in this Lease, includes, to the
extent applicable, all of the Environmental Management Laws, as defined in Ind.
Code 13-11-2-71.
          (vi) Tenant hereby waives, to the fullest extent permitted by
Applicable Law, relief from valuation and appraisement laws and Tenant covenants
and agrees that any judgment obtained by Landlord against Tenant may be executed
in the State without relief from such valuation and appraisement laws.
          (vii) To the fullest extent permitted by Applicable Law, Tenant hereby
waives and surrenders, for itself and all those claiming under it, including
creditors of all kinds, (i) any right and privilege which it or any of them may
have under any present or future Applicable Law to redeem any of the Premises or
to have a continuance of this Lease after termination of this Lease or of
Tenant’s right of occupancy or possession pursuant to any court order or any
provision hereof, and (ii) the benefits of any present or future Applicable Law
which exempts property from liability for debt or for distress for rents.
          (viii) Landlord and Tenant agree to execute and record a memorandum of
lease satisfying the requirements of Ind. Code 36-2-11-20, in the office of the
County Recorder in which the Premises is located.

75

--------------------------------------------------------------------------------

 

EXECUTION COPY
     (e) The following provisions shall apply with respect to the Site(s)
located in the State of Michigan:
          (i) the words “single business tax” are hereby inserted between the
phrases “gross receipts tax” and “excise tax” in paragraph 6(b)(iii).
          (ii) The following language is added to the definition of
Environmental Laws in paragraph 26(b), immediately following the phrase “the
Federal Insecticide, Fungicide and Rodenticide Act, as amended, 7 U.S.C. §§ 136,
et seq.”:
“the State of Michigan Natural Resources and Environmental Protection Act, MCL
324.101 et seq., and any rules and regulations promulgated thereunder,”
          (iii) The following language is added to the definition of Hazardous
Materials in paragraph 26(b), immediately following the phrase “the Resource,
Conservation and Recovery Act of 1976, 42 U.S.C. §§6901, et seq.”:
“the State of Michigan Natural Resources and Environmental Protection Act, MCL
324.101 et seq., and any rules and regulations promulgated thereunder,”
     (f) The following provisions shall apply with respect to the Site(s)
located in the State of Nevada:
          (i) The following language is added to paragraph 15 of this Lease:
“All time periods set forth in this paragraph 15 shall run concurrently with any
and all applicable statutory time periods.”
          (ii) The following language is added to paragraph 21 of this Lease:
“Tenant shall not commence any permitted work of improvement within the Site
that is reasonably expected to cost more than $50,000 without having first given
Landlord prior written notice at least three (3) days prior to the commencement
of work to enable Landlord to record a Notice of Nonresponsibility pursuant to
Section 108.234 of the Nevada Revised Statutes (“NRS”). Such notification of the
commencement of work shall not be deemed given until actually received by
Landlord.”
          (iii) The following is added to the definition of “Environmental Laws”
in paragraph 26 of this Lease:
“The applicable provisions of NRS Chapters 444, 445A, 445B, 445C. 459, 477, 590
and 618; and the Uniform Fire Code (1988 Edition), each as hereafter amended
from time to time, and the present and future rules, regulations and guidance
documents promulgated under any of the foregoing.”

76

--------------------------------------------------------------------------------

 

EXECUTION COPY
     (g) The following provisions shall apply with respect to the Site(s)
located in the State of New Jersey:
          (i) The following shall supplement and, to the extent of any
inconsistency, specifically amends paragraph 26 of this Lease:
     “(a) For purposes of this Lease, Environmental Laws shall include, but not
be limited to, the New Jersey Industrial Site Remediation Act (N.J.S.A. 13:1K-6
et seq.) (“ISRA”). Tenant shall not generate, store, manufacture, refine,
transport, treat, dispose of, or otherwise permit to be present on or about the
Premises any “hazardous chemical,” “hazardous substance” or similar material or
substance as defined in any Environmental Laws or in any rules or regulations
promulgated thereunder, or in any other applicable federal, state or local law,
rule or regulation dealing with environmental protection (other than in
connection with the operation, business and maintenance of the Premises and in
commercially reasonable quantities in compliance with Environmental Laws).
Tenant represents to Landlord that it does not and shall not conduct any
activity in the Premises located in New Jersey which shall cause it to be
considered an “industrial establishment” under ISRA, or otherwise subject the
Premises to the requirements of compliance with ISRA and Tenant does not and
shall not conduct any operations that shall subject the Premises located in New
Jersey to ISRA.
     (b) If at any time during the Term or any Extension Term, the Premises
shall be determined to be an industrial establishment under ISRA, Tenant shall
comply with the provisions of ISRA, or other similar applicable laws, prior to
its termination of any activities in the Premises or the expiration of the Term
of this Lease, or the occurrence of a “triggering event” under ISRA, whichever
is earlier.
     (c) If in connection with a sale, transfer, or mortgage of the Premises
permitted in accordance with the terms of this Lease, by Landlord or other
transaction by Landlord where Landlord is required to comply with ISRA, Tenant
will cooperate with Landlord and provide any information reasonably requested by
Landlord for Landlord to comply with ISRA or to obtain a Letter of
Non-Applicability, at Landlord’s sole cost and expense. Tenant shall execute
such documents as Landlord reasonably deems necessary and make such applications
as Landlord reasonably requires to assure compliance with ISRA; and without
limiting the generality of the foregoing will provide Landlord within ten
(10) business days of Landlord’s request for the same, an affidavit in support
of a request for a non-applicability letter by Landlord in the form required
under ISRA. Notwithstanding the foregoing,

77

--------------------------------------------------------------------------------

 

EXECUTION COPY
that if, at the time that Landlord is required to comply with ISRA, an Event of
Default hereunder has occurred and is continuing after applicable notice and
cure periods, all reasonable costs and expenses incurred by Landlord to comply
with ISRA shall be the obligation of and recoverable against and from Tenant.
     (d) Tenant shall bear all reasonable costs and expenses incurred by
Landlord associated with any required ISRA compliance resulting from Tenant’s
occupancy or use of the Premises, including state agency fees, engineering fees,
cleanup costs, filing fees, and surety ship expenses. The foregoing undertaking
shall survive the termination or sooner expiration of this Lease and surrender
of the Premises and shall also survive sale, or lease or assignment of the
Premises by Landlord. Tenant shall as soon as practicable provide Landlord with
copies of all written correspondence, reports, notices, orders, findings,
declarations and other materials pertinent to Tenant’s compliance with the NJDEP
requirements under ISRA as they are issued or received by Tenant.”
          (ii) If at any time prior to commencement of the Term or at anytime
during the Term or any Extension Term, the municipality in which a Site is
located requires any permit, approval, license or certificate for the occupancy,
operation or use of the Premises and/or Tenant’s business at the Premises,
Tenant, at Tenant’s sole cost and expense, shall obtain such permit, approval,
license or certificate before any fine, penalty or right of the municipality to
legally preclude the use and occupancy of the applicable Premises attaches and
is effective, even if the applicable law, statute, ordinance, rule or regulation
provides that the obligation to obtain such permit, approval, license or
certificate is that of the property owner or landlord, including Landlord. In no
event shall the failure of Tenant to obtain or the failure of the municipality
to issue any required permit, approval, license or certificate nor the
imposition of any fine or penalty or the legal closure of the Premise for use
and occupancy by the municipality relieve Tenant from its obligation to pay Rent
or otherwise perform its obligations under this Lease. Tenant shall indemnify,
defend, save and hold harmless Landlord of, from and against any and all
liability, cost (including any and all attorneys’ fees, costs and expenses),
damages, expenses, suits or other legal actions or proceedings suffered,
incurred by or imposed upon Landlord as a result of the failure of Tenant to
obtain such permits, approvals, licenses or certificates or the failure of the
municipality to issue any required permit, approval, license or certificate.
          (iii) Paragraph 21(a) of this Lease is deleted and replaced with the
following:
     “(a) Except for liens created through the act of Landlord, Tenant shall not
suffer or permit any construction lien, notice of construction lien, or other
lien to be filed or recorded against the Premises, equipment or material
supplied or claimed to have been supplied to the Premises at the request of
Tenant, or anyone holding the Premises, or any portion thereof, through or under
Tenant. If any such construction lien, notice of construction lien or other lien
shall at any time be filed or recorded against the

78

--------------------------------------------------------------------------------

 

EXECUTION COPY
Premises, or any portion thereof, Tenant shall cause the same to be discharged
of record or bonded over within thirty (30) calendar days after the date of
filing or recording of the same.”
     (h) The following provisions shall apply with respect to any Site(s)
located in the State of Ohio:
          (i) With respect to any agreement by Tenant in this Lease to pay
Landlord’s attorneys’ fees and disbursements incurred in connection with the
enforcement therewith, Tenant agrees that this Lease is a “contract of
indebtedness” and that the attorneys’ fees and disbursements referenced are
those which are a reasonable amount, all as contemplated by Ohio Revised Code
Section 1301.21, as the same may hereafter be amended. Tenant further agrees
that the indebtedness incurred in connection with this Lease is not incurred for
purposes that are primarily personal, family or household and confirms that the
total amount owed under this Lease exceeds One Hundred Thousand and No/100
Dollars ($100,000.00).
          (ii) Prior to commencement of any work or labor at the Premises or the
furnishing of any materials to the Premises, which could result in a lien
against the Premises under Chapter 1311 of the Ohio Revised Code, Tenant shall
cause a timely notice of commencement to be filed in accordance with the
provisions of Section 1311.04 of the Ohio Revised Code and shall therein
describe Tenant’s interest in the Premises as limited to Tenant’s leasehold
estate under this Lease.
          (iii) Tenant hereby expressly waives, and Landlord expressly
disclaims, Landlord’s duty to mitigate Tenant’s damages by re-letting, or
attempting to re-let, any Site in Ohio to any replacement tenant(s) from and
after any Event of Default.
     (i) Notwithstanding anything contained in this Lease to the contrary, the
following provisions shall apply with respect to any Site(s) located in the
State of Oregon:
          (i) The following language is hereby added to the definition of
Environmental Laws in paragraph 25(b) of this Lease:
“Oregon State Hazardous Waste and Hazardous Materials I-II as codified at ORS
Chapters 465-466.”
     (j) The following provisions shall apply with respect to any Site(s)
located in the State of Pennsylvania:
          (i) The following language is hereby added at the end of paragraph
16(a) of this Lease:
     “(vi) At its option, upon notice to Tenant, to take possession of the
Premises and its contents, either directly or by means of a receiver, without
terminating this Lease, and to operate the Premises directly or by means of a
designee in such a manner as Landlord may deem appropriate under the
circumstances, including as a membership campground, for cabin rentals, pursuant
to Tenant’s extended vacation, stay and storage programs, in

79

--------------------------------------------------------------------------------

 

EXECUTION COPY
connection with lease arrangements entered into with farmers prior to the date
hereof, and for any other lawful purpose which are both associated with and
related thereto;
     (vii) To accelerate Rent through the balance of the Term, provided that
Landlord shall refund to Tenant, and Tenant shall not be liable for, Rent
collected by Landlord from any replacement tenant or tenants at the Premises,
after deducting the expenses incurred in relenting, including real estate
commissions, attorney’s fees and the costs of relating; and
     (viii) At its option, following the expiration of five (5) Business Days
after Landlord gives written notice thereof to Tenant, to make such payments, do
such work and take such actions as may be necessary to cure such default,
including entry upon the Premises, and the prosecution or defense of any legal
action which may have been commenced or threatened against Landlord, Tenant, or
the Premises in violation of this Lease; and all sums so expended by Landlord
shall be paid by Tenant upon demand.”
          (ii) The following shall supplement and, to the extent of any
inconsistency, specifically amend paragraph 26 of this Lease:
For purposes of this Lease, Hazardous Materials shall include, but not be
limited to, “hazardous substances” or “contaminants” as defined pursuant to the
Pennsylvania Hazardous Sites Cleanup Act, Pa. Stat. Ann. Tit. 35 §§6020.101 to
1305 (Purdon Supp. 1989), or any other substances which may be the subject of
liability pursuant to Sections 316 or 401 of the Pennsylvania Clean Streams Law,
Pa. Stat. Ann. Tit. 35, §§691.1 to .1001 (Purdon 1977 and Supp. 1989), and
asbestos, urea formaldehyde, polychlorinated biphenyls and petroleum products.
          (iii) The following provision is added as new paragraph 21(c) of this
Lease:
     Tenant acknowledges that any construction work at the Premises is not being
undertaken at the request of or for the benefit of Landlord and any mechanic’s
liens that may be filed against the Premises shall not affect Landlord’s fee
interest in the Premises.
     (k) The following provisions shall apply with respect to any Site(s)
located in the State of Texas.
          (i) Waiver of Certain Rights. Tenant hereby waives any and all liens
(whether statutory, contractual or constitutional) it may have or acquire as a
result of a breach by Landlord under this Lease. Tenant also waives and releases
any statutory lien and offset rights it may have against Landlord, including the
rights conferred upon Tenant pursuant to Section 91.004 of the Texas Property
Code, or other applicable law.

80

--------------------------------------------------------------------------------

 

EXECUTION COPY
          (ii) NOTICES. TO THE FULLEST EXTENT PERMITTED BY LAW, TENANT WAIVES
ALL NOTICES AND DEMANDS (INCLUDING NOTICE OF BREACH OR DEFAULT, NOTICE OF
NON-PAYMENT OR NON-PERFORMANCE, DEMAND FOR PAYMENT OR PERFORMANCE, DEMAND FOR
POSSESSION, NOTICE OF ANY CHANGE IN LOCKS OR ACCESS CONTROL DEVICES, REENTRY, OR
REPOSSESSION, AND NOTICE TO VACATE), EXCEPT FOR THOSE NOTICES AND DEMANDS
EXPRESSLY REQUIRED IN THIS LEASE.
          (iii) DTPA. AFTER CONSULTING WITH AN ATTORNEY OF TENANT’S OWN
SELECTION, TENANT VOLUNTARILY WAIVES ITS RIGHTS AGAINST LANDLORD PARTIES UNDER
THE DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT, SECTION 17.41 ET SEQ.,
TEXAS BUSINESS & COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND
PROTECTIONS. TENANT REPRESENTS AND WARRANTS THAT ITS ATTORNEY WAS NOT, DIRECTLY
OR INDIRECTLY, IDENTIFIED, SUGGESTED, OR SELECTED BY ANY LANDLORD PARTY.
     (l) The following provisions shall apply with respect to any Site(s)
located in the State of Virginia:
          (i) The following provision is added at the end of paragraph 2(a) of
this Lease:
“With respect to the sixty-two lots located at the Site commonly known as
Virginia Landing subject to the association known as the Oceanside Conservation
Co., Inc., Landlord grants to Tenant a temporary license to exercise all of
Landlord’s rights with respect to the association known as the Oceanside
Conservation Co., Inc., including, but not limited to, voting rights in such
association. All costs and expenses, if any, associated with Landlord’s grant of
said temporary license shall be paid by Tenant.”
     (m) The following provisions shall apply with respect to any Site(s)
located in the State of Washington:
          (i) The following language is added as new paragraph 11(g) of this
Lease:
“Solely for the purpose of effectuating Tenant’s indemnification obligations
under this Lease, and not for the benefit of any third parties (including
employees of Tenant), Tenant specifically and expressly waives any immunity that
may be granted it under the Washington State Industrial Insurance Act, Title 51
RCW. Furthermore, the indemnification obligations under this Lease shall not be
limited in any way by any limitation on the amount or type of damages,
compensation or benefits payable to or for any third party under Worker
Compensation Acts, Disability Benefit Acts or other employee benefit acts. The
parties acknowledge that the

81

--------------------------------------------------------------------------------

 

EXECUTION COPY
foregoing provisions of this paragraph have been specifically and mutually
negotiated between the parties.”
          (ii) The following language is added at the end of paragraph 16(a)(i)
of this Lease:
“Should Landlord have reentered the Premises under the provisions of this
paragraph 16, Landlord shall not be deemed to have terminated this Lease, or the
liability of Tenant to pay the Rent thereafter accruing, or to have terminated
Tenant’s liability for damages under any of the provisions of this Lease, by any
such reentry or by any action, in unlawful detainer or otherwise, to obtain
possession of the Premises, unless Landlord shall have notified Tenant in
writing that Landlord had elected to terminate this Lease. Tenant further
covenants that the service by Landlord of any notice pursuant to the unlawful
detainer statutes of the State of Washington and the surrender of possession
pursuant to such notice shall not (unless Landlord elects to the contrary at the
time of or at any time subsequent to the serving of such notices and such
election is evidenced by a written notice to Tenant) be deemed to be a
termination of this Lease.”
          (iii) The following language is added after the end of paragraph 21(b)
of this Lease:
“Tenant shall have no right or authority to cause or allow the Premises or
Landlord’s estate or interest therein or in and to this Lease to be subjected to
any such lien.”
          (iv) The following language is added to the definition of
“Environmental Laws” in paragraph 26(b) of this Lease:
“... the State of Washington Model Toxics Control Act, codified at
Chapter 70.105D, RCW; ...”
     (n) The following provisions shall apply with respect to the Site located
in the Province of British Columbia, Canada:
          (i) the word “, provincial” is added after the word “state” in the
third line of the definition of “After-Tax Basis” in paragraph 1 of this Lease;
          (ii) the phrase “or the province of British Columbia” is added after
the phrase “State of Illinois” in the second line of the definition of “Business
Days” in paragraph 1 of this Lease and the phrase “or province” is added after
the word “state” in the third line of such definition;

82

--------------------------------------------------------------------------------

 

EXECUTION COPY
          (iii) the following paragraphs are added to the definition of
“Permitted Encumbrances” in paragraph 1 of this Lease:
“(g) statutory liens incurred in the ordinary course of business in connection
with workers compensation, employment insurance and similar Legal Requirements;
(h) any discrepancies or encroachments that an up-to-date survey of the Site
might reveal; and
(i) the subsisting conditions, provisos, restrictions, exceptions and
reservations, including royalties, contained in the original grant or contained
in any other grant or disposition from the crown.”;
          (iv) the word “provincial,” is added after the word “state,” in the
third line of paragraph (a) of the definition of “Permitted Encumbrances” in
paragraph 1 of this Lease;
          (v) the phrase “or charges” is added after the word “taxes” in the
first line of paragraph (d) of the definition of “Permitted Encumbrances” in
paragraph 1 of this Lease and the word “provincial,” is added after the word
“state,” in the first line of such paragraph;
          (vi) the word “and” at the end of paragraph (e) of the definition of
“Permitted Encumbrances” is deleted;
          (vii) the “.” at the end of paragraph (f) of the definition of
“Permitted Encumbrances” is replaced with “;”;
          (viii) the phrase “, goods and services tax” is added after the phrase
“gross receipts tax” in the twenty-second line of paragraph 6(b) of this Lease;
          (ix) the phrase “or other applicable governmental authority” is added
after the phrase “Director of the Federal Emergency Management Agency” in the
thirteenth line of sub-paragraph 11(c)(i) of this Lease;
          (x) the phrase “or province” is added after the word “state” in the
second line of subparagraph 11(c)(v) of this Lease;
          (xi) the word “provincial,” is added after the word “state,” in the
fifth line of paragraph 12(a) of this Lease;
          (xii) the phrase “or provincial” is added after the word “state” in
the sixth line of subparagraph 16(a)(ii)(B) of this Lease;
          (xiii) the following paragraph is added as new paragraph 21(c) of this
Lease:
“Tenant acknowledges that Landlord has or will file a notice pursuant to the
Builders’ Lien Act (British Columbia) against title

83

--------------------------------------------------------------------------------

 

EXECUTION COPY
to the Site located in British Columbia in order to give effect to the
provisions of paragraph 21(b) of this Lease.”;
          (xiv) the phrase “or province” is added after the word “county” in the
fourth line of paragraph 25(c) of this Lease;
          (xv) the phrase “financing statement under the Personal Property
Security Act (British Columbia) (“PPSA”)” is added after the phrase “UCC
financing statement” in the fifth line of paragraph 25(c) of this Lease;
          (xvi) the definitions of “Environmental Laws” and “Hazardous
Materials” in paragraph 26(b) are deleted and replaced by the following:
“Environmental Laws” means all applicable federal, provincial and local
environmental laws, ordinances, rules, regulations, orders, bylaws, standards,
guidelines, permits, and other lawful requirements, as any of the foregoing may
have been or may be from time to time amended, supplemented or supplanted and
any other federal, provincial or local laws, ordinances, rules, regulations,
orders, bylaws, standards, guidelines, permits and other lawful requirements now
or hereafter existing relating to regulation or control of Hazardous Materials
or materials. The term “Hazardous Materials” as used in this Lease shall mean
hazardous substances, hazardous materials, hazardous wastes, toxic substances,
radioactive materials, asbestos, urea formaldehyde, pollutants, contaminants,
deleterious substances, dangerous substances or goods, hazardous, corrosive, or
toxic substances, special waste or wastes, PCBs, methane, volatile hydrocarbons,
petroleum or petroleum derived substances or wastes, radon, industrial solvents
or any other material or substances the storage, manufacture, disposal,
treatment, generation, use, transport, remediation or release into the
environment of which is now or hereafter regulated, controlled or prohibited
under Environmental Laws.”;
          (xvii) the phrase “or province” is added after the word “state” in the
fourth line of paragraph 27(d) of this Lease;
          (xviii) the phrase “or province” is added after the word “state” in
the second line of paragraph 28(g) of this Lease;
          (xix) the phrase “or PPSA” is added after the phrase “the UCC” in the
tenth line of paragraph 31(g) of this Lease; and
          (xx) the phrase “or PPSA” is added after the phrase “the UCC” in the
last line of paragraph 31(k) of this Lease.

84

--------------------------------------------------------------------------------

 

EXECUTION COPY
42. ADDITIONAL REPRESENTATION AND WARRANTY
     Tenant represents and warrants as follows: Schedule 1 sets forth, as of the
date hereof: (i) the authorized number of securities of each class of securities
of PA and the parent of PA and (ii) the number of securities of each class of
securities of PA and the parent of PA issued to and outstanding as of the date
of this Agreement. All such securities are held of record by the securityholders
as set forth on Schedule 1 and no other Person is the record or beneficial owner
of any securities of PA or the parent of PA as of the date hereof. As of the
date hereof, there are no dividends declared or dividends or other payments
accrued, but not paid, in respect of any of the securities of PA or the parent
of PA. There are no options (other than the Option Agreement and the PA Option),
warrants, calls, rights, commitments or agreements of any character, written or
oral, to which PA or the parent of PA is a party or by which PA or the parent of
PA is bound obligating PA or the parent of PA to issue, deliver, sell,
repurchase or redeem, or cause to be issued, delivered, sold, repurchased or
redeemed, any securities of PA or the parent of PA or obligating PA or the
parent of PA to grant, extend, accelerate the vesting of, change the price of,
otherwise amend or enter into any such option, warrant, call, right, commitment
or agreement. There are no outstanding or authorized stock appreciation, phantom
stock, profit participation, or other similar equity-related rights with respect
to PA or the parent of PA. There are no voting trusts, proxies or other
agreements or understandings to which any PA or the parent of PA is a party with
respect to the voting stock of PA or the parent of PA.
43. RESTATEMENT
     This Lease is a restated and amended version of the Original Lease, between
the parties hereto and all changes to such Lease are effective as of the
Effective Date of Restatement. Any disputes related to this Lease, arising, in
whole or in part, after the Effective Date of Restatement shall be governed by
this Lease, as so restated and amended.
[SIGNATURE PAGE FOLLOWS]

85

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties have hereunto set their hands under seal on
the day and year first above written.

                              LANDLORD:
 
                WITNESS:       MHC TT LEASING COMPANY, INC.,             a
Delaware corporation
 
               
 
          By:   /s/ Marguerite Nader
 
               
 
          Name:   Marguerite Nader              
Name:
          Title:   Vice President
 
               
 
                             
Name:
               
 
               
 
                            TENANT:
 
                            THOUSAND TRAILS OPERATIONS HOLDING COMPANY, L.P.,  
          a Delaware limited partnership WITNESS:                         By:
KTTI GP, LLC             Its: General Partner              
Name:
               
 
               
 
          By:   /s/ Walter B. Jaccard              
Name:
          Name:   Walter B. Jaccard
 
                            Its: Authorized Signatory

86

--------------------------------------------------------------------------------

 

EXECUTION COPY
Solely with respect to paragraphs 38(f) and 38(g) of this Lease, Guarantors
hereby acknowledge, agree with and consent to the terms and provisions contained
in paragraphs 38(f) and 38(g) of this Lease

                              KTTI GP, LLC, WITNESS:       a Delaware limited
liability company
 
               
 
          By:   /s/ Walter B. Jaccard              
Name:
          Name:   Walter B. Jaccard
 
               
 
          Title:   Authorized Signatory
 
                             
Name:
               
 
               
 
                            PATT HOLDING COMPANY, LLC, WITNESS:       a Delaware
limited liability company
 
               
 
          By:   /s/ Walter B. Jaccard              
Name:
          Name:   Walter B. Jaccard
 
               
 
          Title:   Authorized Signatory
 
                             
Name:
               
 
               

87

--------------------------------------------------------------------------------

 

EXECUTION COPY

Z-1