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EXHIBIT 10.16
S U B L E A S E
PRESIDIO GOLF LIMITED PARTNERSHIP
SUBLANDLORD
AND
_________________________________________________
SUBTENANT
DATED AS OF __________________________, 199__
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TABLE OF CONTENTS
ARTICLE PAGE
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1 SUBLEASED PROPERTY .................................................... 5
2 TERM .................................................................. 5
2.1 Initial Term ................................................... 5
2.2 Extended Terms ................................................. 5
3 RENT .................................................................. 6
3.1 Rent ........................................................... 6
3.2 Base Rent ...................................................... 6
3.3 Additional Rent ................................................ 6
3.3.1 Quarterly Calculation and Payment of Additional Rent .... 6
3.3.2 Annual Reconciliation ................................... 7
3.3.3 Record-keeping .......................................... 7
3.3.4 Audits .................................................. 8
3.4 Additional Charges ............................................. 8
3.5 Late Payment of Rent ........................................... 9
3.6 Net Sublease ................................................... 9
4 IMPOSITIONS ........................................................... 10
4.1 Payment of Impositions ......................................... 10
4.2 Information and Reporting ...................................... 10
4.3 Assessment Challenges .......................................... 10
4.4 Prorations ..................................................... 10
4.5 Refunds ........................................................ 11
4.6 Utility Charges ................................................ 11
4.7 Assessment Districts ........................................... 11
5 SUBTENANT WAIVERS ..................................................... 11
5.1 No Termination, Abatement, Etc ................................. 11
5.2 Condition of the Subleased Property ............................ 12
6 OWNERSHIP OF PROPERTY ................................................. 13
6.1 Subleased Property ............................................. 13
6.2 Sublandlord's Personal Property ................................ 13
6.3 Subtenant's Personal Property .................................. 13
6.4 Purchase of Subtenant's Personal Property ...................... 14
6.5 Removal of Personal Property ................................... 14
6.6 Sublandlord's Waivers .......................................... 15
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ARTICLE PAGE
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6.7 Collateral Agreements ........................................ 15
7 USE OF SUBLEASED PROPERTY ........................................... 16
7.1 Use .......................................................... 16
7.2 Specific Prohibited Uses ..................................... 16
7.3 Sublandlord to Grant Easements, Etc........................... 17
8 HAZARDOUS MATERIALS ................................................. 17
8.1 Subtenant Representations .................................... 17
8.1.1 Reports ............................................... 17
8.2 Remediation .................................................. 18
8.3 Subtenant's Indemnification of Sublandlord and Others ........ 18
8.4 Survival of Indemnification Obligations ...................... 19
9 MAINTENANCE AND REPAIR .............................................. 19
9.1 Subtenant's Sole Obligation - General ........................ 19
9.2 Clubhouse Facility Maintenance ............................... 19
9.3 Golf Course Maintenance ...................................... 20
9.4 Waiver of Statutory Obligations .............................. 20
9.5 Mechanic's Liens ............................................. 20
9.6 Surrender of Subleased Property .............................. 21
9.7 Transfer of Operating Permits ................................ 21
10 SUBTENANT'S IMPROVEMENTS ............................................ 21
10.1 Subtenant's Right to Construct ............................... 21
10.2 Scope of Right ............................................... 21
10.3 Cooperation of Sublandlord ................................... 22
10.4 Commencement of Construction ................................. 22
10.5 Rights in Subtenant Improvements ............................. 23
11 LIENS, ENCROACHMENTS AND OTHER TITLE MATTERS ........................ 24
11.1 Liens ........................................................ 24
11.2 Encroachments and Other Title Matters ........................ 25
12 PERMITTED CONTESTS .................................................. 26
13 INSURANCE ........................................................... 27
13.1 General Insurance Requirements ............................... 27
13.1.1 All Risk ............................................. 27
13.1.2 Liability ............................................ 27
13.1.3 Flood ................................................ 28
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ARTICLE PAGE
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13.1.4 Worker's Compensation ................................. 28
13.1.5 Rent Loss ............................................. 28
13.1.6 Other Insurance ....................................... 28
13.2 Replacement Cost .............................................. 28
13.3 Waiver of Subrogation ......................................... 28
13.4 Form Satisfactory, Etc ........................................ 28
13.5 Change in Limits .............................................. 29
13.6 Blanket Policy ................................................ 29
14 APPLICATION OF INSURANCE PROCEEDS ..................................... 30
14.1 Insurance Proceeds ............................................ 30
14.1.1 Disbursement of Proceeds .............................. 30
14.1.2 Excess Proceeds ....................................... 31
14.2 Reconstruction Covered by Insurance ........................... 31
14.2.1 Destruction Rendering Facility Unsuitable for its
Primary Use ........................................... 31
14.2.2 Destruction Not Rendering Facility Unsuitable for
its Primary Use ....................................... 31
14.2.3 Costs of Repair ....................................... 32
14.3 Reconstruction Not Covered by Insurance ....................... 32
14.4 No Abatement of Rent .......................................... 32
14.5 Waiver ........................................................ 32
14.6 Damage Near End of Term ....................................... 32
15 CONDEMNATION .......................................................... 33
15.1 Total Taking .................................................. 33
15.2 Partial Taking ................................................ 33
15.3 Restoration ................................................... 33
15.4 Award Distribution ............................................ 33
15.5 Temporary Taking .............................................. 33
16 EVENTS OF DEFAULT ..................................................... 34
16.1 Events of Default ............................................. 34
16.2 Payment of Costs .............................................. 36
16.3 Exceptions .................................................... 37
16.4 Certain Remedies .............................................. 37
16.5 Damages ....................................................... 37
16.6 Additional Remedies ........................................... 38
16.7 Appointment of Receiver ....................................... 38
16.8 Waiver ........................................................ 38
16.9 Application of Funds .......................................... 38
17 SUBLANDLORD'S RIGHT TO CURE SUBTENANT'S DEFAULT ....................... 38
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ARTICLE PAGE
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18 OPERATIONS/CAPITAL EXPENDITURES........................................ 39
18.1 Annual Plan..................................................... 39
18.2 Funding of Capital Expenditure Reserve Account.................. 40
19 LEGAL REQUIREMENTS..................................................... 41
20 HOLDING OVER........................................................... 41
21 UPREIT UNITS/REIT SHARES/LETTER OF CREDIT/SECURITY DEPOSIT............. 41
21.1 Security Deposit................................................ 41
21.2 Officer's Certificate/Audit..................................... 42
21.3 Terms of Letter of Credit....................................... 42
21.4 Draws Against Letter of Credit/Alternative Security;
Application of Proceeds......................................... 43
21.5 Renewal of Letter of Credit..................................... 43
21.6 Other Security.................................................. 43
22 IMPOUNDS............................................................... 44
23 INDEMNIFICATION; RISK OF LOSS.......................................... 44
23.1 Subtenant's Indemnification..................................... 44
23.2 Sublandlord's Indemnification of Subtenant...................... 45
23.3 Mechanics of Indemnification.................................... 45
23.4 Survival of Indemnification Obligations......................... 46
23.5 Risk of Loss.................................................... 46
24 SUBSUBLETTING AND ASSIGNMENT........................................... 46
24.1 Prohibition Against Subsubletting and Assignment................ 46
24.2 Changes in Control.............................................. 47
24.2.1 Financial Covenants..................................... 47
24.2.2 Operating Standards..................................... 47
24.2.3 Commitment to the Golf Industry......................... 48
24.3 Subsubleases.................................................... 48
24.3.1 Permitted Subsubleases.................................. 48
24.3.2 Terms of Subsublease.................................... 48
24.3.3 Copies.................................................. 48
24.3.4 Assignment of Rights in Subsubleases.................... 49
24.3.5 Licenses, Etc........................................... 49
24.4 Assignment...................................................... 49
24.5 REIT Limitations................................................ 49
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ARTICLE PAGE
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25 OFFICER'S CERTIFICATES AND OTHER STATEMENTS......................... 50
25.1 Officer's Certificates....................................... 50
25.2 Financial Reporting.......................................... 51
25.2.1 Monthly Financial Information........................ 51
25.2.2 Quarter Financial Information........................ 51
25.2.3 Annual Financial Statements.......................... 52
25.2.4 Other Information.................................... 52
25.2.5 Standard Reporting Format............................ 53
25.3 Environmental Statements..................................... 53
26 SUBLANDLORD MORTGAGES............................................... 53
26.1 Sublandlord May Grant Liens.................................. 53
26.2 Subtenant's Non-Disturbance Rights........................... 53
26.3 Breach by Sublandlord........................................ 54
26.4 Facility Mortgage Protection................................. 54
26.5 Attornment................................................... 54
26.6 Facility Mortgagee or Successor Owner as Sublandlord......... 55
26.7 Prepayments and Modifications of the Sublease................ 55
27 MISCELLANEOUS....................................................... 56
27.1 Sublandlord's Right to Inspect............................... 56
27.2 No Waiver.................................................... 56
27.3 Remedies Cumulative.......................................... 56
27.4 Acceptance of Surrender...................................... 56
27.5 No Merger of Title........................................... 56
27.6 Conveyance by Sublandlord.................................... 56
27.7 Quiet Enjoyment.............................................. 57
27.8 Notices...................................................... 57
27.9 Survival of Claims........................................... 57
27.10 Invalidity of Terms or Provisions............................ 57
27.11 Prohibition Against Usury.................................... 57
27.12 Amendments to Sublease....................................... 57
27.13 Successors and Assigns....................................... 57
27.14 Titles....................................................... 57
27.15 Governing Law................................................ 58
27.16 Memorandum of Sublease....................................... 58
27.17 Attorneys' Fees.............................................. 58
27.18 Non-Recourse as to Sublandlord............................... 58
27.19 No Relationship.............................................. 58
27.20 Signs; Reletting............................................. 58
27.21 Golf Course Name............................................. 58
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ARTICLE PAGE
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28 SUBTENANT MORTGAGES ................................................. 59
29 MASTER LEASE ........................................................ 59
29.1 Subtenant's Obligation to Comply with Master Lease ........... 59
29.2 Subordination and Estoppel ................................... 59
29.3 Lessor's Rights under Master Lease ........................... 59
30 TENANT'S STRUCTURE .................................................. 60
31 RIGHT OF FIRST OFFER ................................................ 60
31.1 Exercise of First Offer Right ................................ 60
31.2 Further Documentation ........................................ 61
31.3 Purchase Price ............................................... 61
31.4 Mechanics of Purchase ........................................ 61
31.5 REIT Qualification Limitation ................................ 62
31.6 Effectiveness of First Offer Right ........................... 62
EXHIBITS:
EXHIBIT A - Defined Terms: Interpretation
EXHIBIT B - Legal Description of the Land
EXHIBIT C - Other Leased Property
EXHIBIT D - Operating Standards
EXHIBIT E - Standard Reporting Format
EXHIBIT F - Base Rent Schedule
EXHIBIT G - Baseline Revenue Schedule
EXHIBIT H - Master Lease
EXHIBIT I - Construction Budget - Preapproved Subtenant Improvements
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SUBLEASE
THIS SUBLEASE ("Sublease"), dated ______________________, 199__ , is
entered into by and between PRESIDIO GOLF LIMITED PARTNERSHIP, a Delaware
limited partnership ("Sublandlord"), and ___________________________________, a
Delaware limited liability company ("Subtenant"). This Sublease consists of
the recitals below, the Basic Sublease Provisions, the Detailed Sublease
Provisions, the Joinder and Exhibits A through I, all of which are incorporated
herein by this reference. Capitalized terms used herein have the meanings
assigned to such terms in Exhibit A.
W I T N E S S E T H:
WHEREAS, Sublandlord, as tenant, and Xxxxxxxx-Xxxxxxxx, X.X., a Tennessee
limited partnership, as landlord (Xxxxxxxx-Xxxxxxxx, X.X. and its successors
and assigns from time to time being defined as the "Lessor"), have heretofore
entered into that certain Agreement of Lease and Option to Purchase dated May
23, 1997 (as amended from time to time, the "Master Lease"), providing for the
leasing of (i) that certain 36-hole golf course commonly known as Memphis
National Golf Club located in Collierville, Tennessee and comprising the Land
(as hereinafter defined), and (ii) certain improvements and other personal
property located thereon, all as more particularly described in the Master
Lease for a lease term ending June 30, 2042 (a copy of the Master Lease is
attached hereto as Exhibit H);
WHEREAS, Sublandlord desires to sublease the Land together with the
balance of the Subleased Property (as hereinafter defined) to Subtenant, and
Subtenant desires to sublease same from Sublandlord, upon the terms and subject
to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby covenant
and agree as follows:
BASIC SUBLEASE PROVISIONS
1. ADDITIONAL RENT: Means the amount, if any, by which (a) the sum of:
(i) the Applicable Percentage of the amount by which Golf Course
Revenue for any Fiscal Year exceeds the Baseline Golf Course Revenue; and
(ii) the Applicable Percentage of the amount by which Other Revenue
for any Fiscal Year exceeds the Baseline Other Revenue
exceeds (b) the Base Rent Escalation for such Fiscal Year. (See Section
3.3 of the Detailed Sublease Provisions.)
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2. ADDRESS FOR PAYMENTS:
Sublandlord:
Presidio Golf Limited Partnership
c/o Xxxxxx Xxxxxx Golf Management
Xxxxxxxx 000, Xxxxxxxxxx Xxxxxx
Presidio Main Post, X.X. Xxx 00000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
(See Section 3.1 of the Detailed Sublease Provisions.)
3. ADDRESSES FOR NOTICES:
Subtenant:
c/o Xxxxxx Xxxxxx Golf Management LLC
Xxxxxxxx 000, Xxxxxxxxxx Xxxxxx
Presidio Main Post, X.X. Xxx 00000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn:
---------------------------------
Fax: (000) 000-0000
Sublandlord:
Presidio Golf Limited Partnership
c/o Xxxxxx Xxxxxx Golf Management
Xxxxxxxx 000, Xxxxxxxxxx Xxxxxx
Presidio Main Post, X.X. Xxx 00000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxxx Xxxxxxx
FAX: (000)000-0000
(See Section 27.8 of the Detailed Sublease Provisions.)
4. ANNUAL BASE RENT: Means, with respect to the Fiscal Year commencing on
the Commencement Date and ending on December 31st of such calendar year (the
"First Fiscal Year"), the Initial Base Rent. On January 1 of the Fiscal Year
following the First Fiscal Year, and on January 1 of each successive Fiscal
Year during the Term, the Annual Base Rent shall be equal to the lower of (a)
the Annual Base Rent applicable to the immediately preceding Fiscal Year
multiplied by 103% or (b) the sum of (i) the Annual Base Rent applicable to the
immediately preceding Fiscal Year plus (ii) the product of the Annual Base Rent
applicable to
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the immediately preceding Fiscal Year multiplied by 200% of the annual
percentage increase in the Consumer Price Index from January 1 of the
immediately preceding Fiscal Year.
5. APPLICABLE PERCENTAGE: Means 30% with respect to Golf Course Revenue
and 5% with respect to Other Revenue.
6. BASE RENT ESCALATION: Means, for any Fiscal Year, the amount by which
the Annual Base Rent for such Fiscal Year exceeds the Initial Base Rent.
7. BASELINE GOLF COURSE REVENUE: Means, for any Fiscal Year during the
Term, $3,161,861.00.
8. BASELINE OTHER REVENUE: Means, for any Fiscal Year during the Term,
$1,405,786.00.
9. COMMENCEMENT DATE: Means ____________________, 199__.
10. EXTENDED TERMS: Five (5) five-year terms (each, an "Extended Term"
and collectively, the "Extended Terms").
11. FACILITY: Means the Subleased Property consisting of a 36-hole golf
course, clubhouse and related facilities located on the Land.
12. FISCAL YEAR: Means the 12-month period from January 1 through
December 31 of each year of the Term, or the applicable portions of the first
and last Fiscal Years.
13. INITIAL BASE RENT: Means $1,057,000.00.
14. INITIAL TERM: 15 years commencing on the Commencement Date.
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LIST OF EXHIBITS:
Exhibit A Defined Terms; Interpretation
Exhibit B Legal Description of the Land
Exhibit C Other Leased Property
Exhibit D Operating Standards
Exhibit E Standard Reporting Format
Exhibit F Base Rent Schedule
Exhibit G Baseline Revenue Schedule
Exhibit H Master Lease
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DETAILED SUBLEASE PROVISIONS
ARTICLE 1
SUBLEASED PROPERTY
Upon and subject to the terms and conditions set forth in this Sublease,
Sublandlord subleases to Subtenant and Subtenant rents from Sublandlord all of
Sublandlord's rights and interest in and to the following real property,
improvements and related rights (collectively the "Subleased Property"):
(a) the land described in Exhibit B attached hereto (collectively,
the "Land");
(b) all buildings, structures, Fixtures and other improvements of
every kind including, but not limited to, alleyways and connecting
tunnels, sidewalks, utility pipes, conduits and lines (on-site and
off-site), parking areas, roadways, cart paths, bridges, lakes,
irrigation systems, and course markers presently situated upon the Land,
but not including any Subtenant Improvements (collectively, the
"Subleased Improvements");
(c) all easements, rights and appurtenances (including, without
limitation, all water rights) relating to the Land and the Subleased
Improvements (collectively, the "Related Rights"); and
(d) all personal property owned by Sublandlord and located on the
Land or in the Subleased Improvements ("Sublandlord's Personal
Property").
ARTICLE 2
TERM
2.1 INITIAL TERM. The initial Term of this Sublease shall commence on the
Commencement Date.
2.2 EXTENDED TERMS. Sublandlord grants Subtenant the right to extend the
Term of this Sublease for the Extended Terms provided for in the Basic Sublease
Provisions commencing upon the expiration of the Initial Term or the applicable
Extended Term. Subtenant may exercise such right solely by giving written
notice to Sublandlord of such extension at least 270 days prior to the
termination of the then-current Term (time being of the essence). The exercise
of such right shall be valid only if at the time of the giving of such notice
and at the time of the commencement of the applicable Extended Term no Event of
Default shall have occurred and be continuing. During the Extended Term, all
of the terms and conditions of this Sublease shall continue in full force and
effect, as the same may be amended, supplemented or modified.
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ARTICLE 3
RENT
3.1 RENT.
3.1.1 RENT GENERALLY. Subtenant will pay to Sublandlord in lawful
money of the United States of America the Base Rent and Additional Rent
during the Term. Payment of Base Rent and Additional Rent shall be paid
at Sublandlord's address set forth in the Basic Sublease Provisions or at
such other place or to such other Person as Sublandlord from time to time
may designate in writing. If any payment owing hereunder shall otherwise
be due on a day that is not a Business Day, such payment shall be due on
the next succeeding Business Day. Subtenant's covenant to pay Base Rent,
Additional Rent and any other sums due under this Sublease shall be
independent of all other covenants contained in this Sublease.
3.1.2 MASTER LEASE RENT. Without limiting any other provisions of
this Article 3 or Article 29 below, Subtenant hereby agrees to pay, on or
before the date which is five (5) Business Days prior to the due date
under the Master Lease, any and all amounts due under the Master Lease
(including, without, limitation, "Base Term Rent", as defined in the
Master Lease) (collectively, the "Master Lease Rent") and to
simultaneously mail evidence thereof to Sublandlord. The date which is
five (5) Business Days prior to the due date of any amounts due under the
Master Lease is hereinafter defined as the "Master Lease Rent Due Date".
3.2 BASE RENT. Subtenant shall pay Base Rent to Sublandlord in advance
on the first day of each calendar month (which Base Rent shall, for accounting
purposes, consist of Annual Base Rent accruing during the respective Fiscal
Year in equal monthly installments, but which Base Rent shall be payable for
each month in the respective proportions described in Exhibit F); provided,
however, that the first monthly installment shall be payable on the
Commencement Date and the first and last month's payments shall be prorated as
to any partial month.
3.3 ADDITIONAL RENT. In addition to the Base Rent, Subtenant shall pay
to Sublandlord Additional Rent in quarterly installments as provided in Section
3.3.1.
3.3.1 QUARTERLY CALCULATION AND PAYMENT OF ADDITIONAL RENT.
Subtenant shall calculate and pay Additional Rent for each Fiscal
Quarter. The amount of the Additional Rent for the Second, Third and
Fourth Fiscal Quarters shall account for any interim reconciliations made
with respect to prior Fiscal Quarters in such Fiscal Year as certified by
Subtenant to Sublandlord as provided by this Section 3.3.1, but subject
to a final reconciliation as provided by Section 3.3.2. Within thirty
(30) days after the end of each Fiscal Quarter, Subtenant shall deliver
to Sublandlord an Officer's Certificate setting forth the calculation of
Additional Rent for such Fiscal Quarter. If the Additional Rent for the
period beginning on the first day of the current Fiscal Year and ending
on the last day of the Fiscal Quarter just ended exceeds the sum of
quarterly payments on account thereof previously made by Subtenant,
Subtenant shall pay such deficiency to Sublandlord along with the
Officer's Certificate. If the Additional Rent
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for the period beginning on the first day of the current Fiscal Year and
ending on the last day of the Fiscal Quarter just ended is less than the
sum of quarterly payments on account thereof previously made by
Subtenant, Subtenant shall be entitled to deduct from its next Additional
Rent payment(s) an amount equal to such difference. In calculating
Additional Rent for any Fiscal Quarter, the Golf Course Revenue or Other
Revenue, as the case may be, for the period beginning on the first day of
the current Fiscal Year and ending on the last day of such Fiscal Quarter
shall be compared to the Baseline Golf Course Revenue or Baseline Other
Revenue for the same period as scheduled on Exhibit G attached hereto
(which Exhibit G baseline period calculation shall be prorated based upon
the actual number of days in any partial Fiscal Quarter occurring at the
beginning or end of the Term).
3.3.2 ANNUAL RECONCILIATION. Within 60 days after the end of each
Fiscal Year, or after the expiration or termination of this Sublease,
Subtenant shall deliver to Sublandlord an Officer's Certificate setting
forth (i) the Golf Course Revenue and the Other Revenue for the Fiscal
Year just ended, and (ii) a comparison of the amount of Additional Rent
actually paid during such Fiscal Year versus the amount of Additional
Rent actually owing on the basis of the annual calculation of the Golf
Course Revenue and the Other Revenue. If the Additional Rent for such
Fiscal Year exceeds the sum of the quarterly payments previously paid by
Subtenant on account thereof, Subtenant shall pay such deficiency to
Sublandlord along with such Officer's Certificate. If the Additional
Rent for such Fiscal Year is less than the amount previously paid by
Subtenant on account thereof, Sublandlord shall, at Sublandlord's option,
either (i) remit to Subtenant its check in an amount equal to such
difference, or (ii) grant Subtenant a credit against the payment of
Additional Rent next coming due; provided, however, that if the amount of
Additional Rent due for the next Fiscal Quarter is insufficient to
exhaust such credit, Sublandlord shall remit to Subtenant its check in
the amount of any remaining excess. The amount of the reconciliation
payment, whether in favor of Sublandlord or Subtenant, shall bear
interest at a rate equal to the rate payable on 90-day U.S. Treasury
Bills as of January 1 of the year following the close of such Fiscal Year
until the amount of such difference shall be paid or otherwise
discharged.
3.3.3 RECORD-KEEPING. Subtenant shall utilize an accounting system
for the Subleased Property in accordance with its usual and customary
practices and in accordance with accrual basis accounting principles
applied on a basis consistent with the Other Leased Property which will
accurately record all Golf Course Revenue and Other Revenue. Subtenant
shall retain reasonably adequate records for each Fiscal Year conforming
to such accounting system until at least five years after the expiration
of such
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Fiscal Year (and in any event until the reconciliation described in
Section 3.3.2 above for such Fiscal Year has been made).
3.3.4 AUDITS. Sublandlord, at its own expense except as provided
hereinbelow, shall have the right from time to time directly or through
its accountants to audit the information set forth in the Officer's
Certificate referred to in Section 3.3.2 and in connection with such
audits to examine Subtenant's books and records with respect thereto
(including supporting data, sales tax returns and Subtenant's work
papers); provided, however, that any audit of the information contained
in an Officer's Certificate referred to in Section 3.3.2 must be
conducted, and the results thereof delivered to Subtenant, on or before
one (1) year after delivery to Sublandlord of such Officer's Certificate.
At the end of such one (1) year period, the information contained in the
Officer's Certificate shall be final and binding upon Sublandlord and
Subtenant, except with respect to any amount therein which Sublandlord
has challenged in writing delivered to Subtenant on or before expiration
of such one (1) year period and except that in the event that any audit
by Sublandlord discloses that Subtenant has understated any revenue item
by more than Fifty Thousand and no/100 Dollars ($50,000.00) and such
understatement results in Golf Course Revenue and Other Revenue,
collectively, being understated by more than five percent (5%) of the
actual amount thereof, then Sublandlord shall have the right to audit all
prior years' information which has not theretofore been audited by
Sublandlord. If any such audit discloses a deficiency in the payment of
Additional Rent, Subtenant shall forthwith pay to Sublandlord the amount
of the deficiency, as finally agreed or determined, together with
interest at the Overdue Rate from the date when said payment should have
been made to the date of payment thereof; provided, however, that as to
any audit that is commenced more than 12 months after the date Golf
Course Revenue or Other Revenue for any Fiscal Year is reported by
Subtenant to Sublandlord (i.e., to the extent permitted above), the
deficiency, if any, with respect to such Golf Course Revenue or Other
Revenue shall bear interest as permitted herein only from the date such
determination of deficiency is made unless such deficiency is the result
of gross negligence or willful misconduct on the part of Subtenant. If
any such audit discloses that the Golf Course Revenue or Other Revenue
for any Fiscal Year exceeds the Golf Course Revenue or Other Revenue
reported by Subtenant by more than five percent (5%), Subtenant shall pay
the reasonable cost of such audit and examination. Subtenant shall
maintain, throughout the term of this Sublease, all books and records
relating to Golf Course Revenue and Other Revenue received during such
term.
3.4 ADDITIONAL CHARGES. In addition to the Base Rent, Additional Rent
and Master Lease Rent, (1) Subtenant shall also pay and discharge when due and
payable all other amounts, liabilities, obligations and Impositions which
Subtenant assumes or agrees to pay under this Sublease, and (2) in the event of
any failure on the part of Subtenant to pay any of those items referred to in
clause (1) above, Subtenant shall also pay and discharge every fine, penalty,
interest and cost which may be added for non-payment or late payment of such
items (the items referred to in clauses (1) and (2) above being referred to
herein collectively as the "Additional
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Charges"). Except as otherwise provided in this Sublease or as otherwise
required by any third party entitled to receipt of Additional Charges, all
Additional Charges shall be due and payable thirty (30) days after either
Sublandlord or the applicable third party who may be billing Subtenant therefor
shall deliver an invoice to Subtenant therefor. To the extent that Subtenant
pays any Additional Charges to Sublandlord pursuant to any requirements of this
Sublease, which charges are due and payable to a third party, Sublandlord shall
pay such charges to such third party and, in any event, Subtenant shall be
relieved of its obligation to pay such Additional Charges to the entity to
which they would otherwise be due. Alternatively, with respect to Additional
Charges payable to a third party, Subtenant may pay such charges directly to
such third party and thereby be relieved of any obligation to pay such charges
to Sublandlord.
3.5 LATE PAYMENT OF RENT. Subtenant hereby acknowledges that late payment
by Subtenant to Sublandlord of Base Rent, Additional Rent or Additional Charges
will cause Sublandlord to incur costs not contemplated under the terms of this
Sublease, the exact amount of which is presently anticipated to be extremely
difficult to ascertain. Such costs may include processing and accounting
charges and late charges which may be imposed on Sublandlord by the terms of
any mortgage, deed of trust or lease covering the Subleased Property and other
expenses of a similar or dissimilar nature. Accordingly, if any installment or
payment of Base Rent, Additional Rent or Additional Charges (but only as to
those Additional Charges which are payable directly to Sublandlord) shall not
be paid or made within five (5) Business Days after its due date, Subtenant
will pay Sublandlord on demand, as Additional Charges, a late charge equal to
three percent (3%) of such installment or payment; provided, however, that if
such payment or installment is not paid or made within ten (10) Business Days
after its due date, the late charge shall be five percent (5%) of such
installment or payment. The parties agree that this late charge represents a
fair and reasonable estimate of the costs that Sublandlord will incur by reason
of late payment by Subtenant. In addition to said late charge, if any
installment or payment of Base Rent, Additional Rent or Additional Charges (but
only as to those Additional Charges which are payable directly to Sublandlord)
shall not be paid on, or made by, its due date, the amount unpaid shall bear
interest, from the date such installment or payment was due until the date of
payment thereof, computed at the Overdue Rate on the amount of such delinquent
installment or payment, and Subtenant will pay such interest to Sublandlord on
demand, as Additional Charges. The payment of such late charge or such
interest, or both (as the case may be), shall not constitute a waiver, nor
excuse or cure, of any default under this Sublease, nor prevent Sublandlord
from exercising any other rights and remedies available to Sublandlord.
3.6 NET SUBLEASE. The Base Rent, Additional Rent and Additional Charges
shall be paid absolutely net to Sublandlord and without notice or demand and
without set-off, counterclaim, recoupment, abatement, suspension, determent,
deduction or defense, so that this Sublease shall yield to Sublandlord the full
amount of the installments of Base Rent, Additional Rent and, subject to
Section 3.4 above, Additional Charges throughout the Term. The Master Lease
Rent shall be paid to Lessor without notice or demand and without set-off,
counterclaim,
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recoupment, abatement, suspension, determent, deduction or defense, except as
otherwise expressly permitted in the Master Lease.
ARTICLE 4
IMPOSITIONS
4.1 PAYMENT OF IMPOSITIONS. Subject to the terms of Article 22 hereof,
Subtenant will pay, or cause to be paid, all Impositions before any fine,
penalty, interest or cost may be added for non-payment, such payments to be
made directly to the taxing authorities where feasible. All payments of
Impositions shall be subject to Subtenant's right of contest pursuant to the
provisions of Article 12. Without limitation of the foregoing, no later than
fifteen (15) days prior to the due date of any Impositions, Subtenant shall
furnish to Sublandlord copies of the xxxx(s) or invoices(s) for such
Impositions and copies of Subtenant's check or other evidence of payment, and
as soon as reasonably available after the payment of said Impositions,
Subtenant shall promptly furnish to Sublandlord copies of official receipts, if
available, or other satisfactory third party evidence of such payments, such as
canceled checks.
4.2 INFORMATION AND REPORTING. Sublandlord shall give prompt notice to
Subtenant of all Impositions payable by Subtenant hereunder of which
Sublandlord at any time has knowledge, but Sublandlord's failure to give any
such notice shall in no way diminish Subtenant's obligations hereunder to pay
such Impositions. Sublandlord and Subtenant shall, upon request of the other,
provide such data as is maintained by the party to whom the request is made
with respect to the Subleased Property as may be necessary to prepare any
required returns and reports. In the event any applicable governmental
authorities classify any property covered by this Sublease as personal
property, Subtenant shall file all personal property tax returns in such
jurisdictions where it must legally so file. Each party, to the extent it
possesses the same, will provide the other party, upon request, with cost and
depreciation records necessary for filing returns for any property so
classified as personal property.
4.3 ASSESSMENT CHALLENGES. In addition to Subtenant's rights under
Article 12, Subtenant may, upon notice to Sublandlord and otherwise in
compliance with Article 12, at Subtenant's option and at Subtenant's sole cost
and expense, protest, appeal, or institute such other proceedings as Subtenant
may deem appropriate to effect a reduction of real estate or personal property
assessments and Sublandlord, at Subtenant's expense as aforesaid, shall
reasonably cooperate with Subtenant in such protest, appeal, or other action.
4.4 PRORATIONS. Impositions imposed in respect of the tax-fiscal period
during which the Term terminates shall be adjusted and prorated between
Sublandlord and Subtenant, whether or not such Imposition is imposed before or
after such termination, and Subtenant's obligation to pay its prorated share
thereof shall survive such termination. If any Imposition may, at the option
of the taxpayer, lawfully be paid in installments (whether or not interest
shall accrue on the unpaid balance of such Imposition), Subtenant may elect to
pay in installments, in which
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event Subtenant shall pay all installments (and any accrued interest on the
unpaid balance of the Imposition) that are due during the Term hereof before
any fine, penalty, premium, further interest or cost may be added thereto.
4.5 REFUNDS. If any refund shall be due from any taxing authority in
respect of any Imposition paid by Subtenant, the same shall be paid over to or
retained by Subtenant if no Event of Default shall have occurred hereunder and
be continuing. Any such funds retained by Sublandlord due to an Event of
Default shall be applied as provided in Article 16.
4.6 UTILITY CHARGES. Subtenant shall pay or cause to be paid prior to
delinquency charges for all utilities and services, including, without
limitation, electricity, telephone, trash disposal, gas, oil, water, sewer,
communication and all other utilities used in the Subleased Property during the
Term.
4.7 ASSESSMENT DISTRICTS. Sublandlord shall not voluntarily consent to or
agree in writing to (i) any special assessment or (ii) the inclusion of any
material portion of the Subleased Property into a special assessment district
or other taxing jurisdiction unless Subtenant shall have consented thereto,
which consent shall not be unreasonably withheld.
ARTICLE 5
SUBTENANT WAIVERS
5.1 NO TERMINATION, ABATEMENT, ETC.. Except as otherwise specifically
provided in this Sublease, and except for those causes resulting solely from
the gross negligence or willful misconduct of Sublandlord, (i) Subtenant, to
the extent permitted by law, shall remain bound by this Sublease in accordance
with its terms and shall neither take any action without the consent of
Sublandlord to modify, surrender or terminate the same, nor be entitled to any
abatement, deduction, deferment or reduction of Rent, or set-off against the
Rent by reason of, and (ii) the respective obligations of Sublandlord and
Subtenant shall not be otherwise affected by reason of:
(a) any damage to, or destruction of, any Subleased Property or any
portion thereof from whatever cause or any taking of the Subleased
Property or any portion thereof;
(b) the lawful or unlawful prohibition of, or restriction upon,
Subtenant's use of the Subleased Property, or any portion thereof, the
interference with such use by any Person, or by reason of eviction by
paramount title;
(c) any claim which Subtenant has or might have against Sublandlord
or by reason of any default or breach of any warranty by Sublandlord
under this Sublease or
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any other agreement between Sublandlord and Subtenant, or to which
Sublandlord and Subtenant are parties;
(d) any bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding up or other proceedings
affecting Sublandlord or any assignee or transferee of Sublandlord; or
(e) for any other cause whether similar or dissimilar to any of the
foregoing other than a discharge of Subtenant from any such obligation as
a matter of law.
Subtenant hereby specifically waives all rights, arising from any occurrence
whatsoever, which may now or hereafter be conferred upon it by law (i) to
modify, surrender or terminate this Sublease or quit or surrender the Subleased
Property or any portion thereof, or (ii) to entitle Subtenant to any abatement,
reduction, suspension or deferment of the Rent or other sums payable by
Subtenant hereunder, except as otherwise specifically provided in this
Sublease. The obligations of Sublandlord and Subtenant hereunder shall be
separate and independent covenants and agreements and the Rent and all other
sums payable by Subtenant hereunder shall continue to be payable in all events
unless the obligations to pay the same shall be terminated pursuant to the
express provisions of this Sublease or by termination of this Sublease other
than by reason of any Event of Default.
5.2 CONDITION OF THE SUBLEASED PROPERTY. Subtenant acknowledges receipt
and delivery of possession of the Subleased Property and that Subtenant has
examined and otherwise has knowledge of the condition of the Subleased Property
prior to the execution and delivery of this Sublease and has found the same to
be in good order and repair and satisfactory for its purposes hereunder.
Regardless of any inspection made by Subtenant of the Subleased Property and
whether or not any patent or latent defect or condition was revealed or
discovered thereby, Subtenant is leasing the Subleased Property "as is" in its
present condition. Subtenant waives and releases any claim or action against
Sublandlord in respect of the condition of the Subleased Property including any
defects or adverse conditions, latent or patent, matured or unmatured, known or
unknown by Subtenant or Sublandlord as of the date hereof. SUBTENANT
ACKNOWLEDGES THAT SUBLANDLORD (WHETHER ACTING AS SUBLANDLORD HEREUNDER OR IN
ANY OTHER CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL SUBLANDLORD BE
DEEMED TO HAVE MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH
RESPECT TO THE SUBLEASED PROPERTY, INCLUDING ANY WARRANTY OR REPRESENTATION AS
TO (i) ITS FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii)
THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY
DEFECT, LATENT OR PATENT, (iv) SUBLANDLORD'S TITLE THERETO, (v) VALUE, (vi)
COMPLIANCE WITH SPECIFICATIONS, (vii) LOCATION, (viii) USE, (ix) CONDITION, (x)
MERCHANTABILITY, (xi) QUALITY, (xii) DESCRIPTION, (xiii) DURABILITY, (xiv)
OPERATION, (xv) THE EXISTENCE OF ANY HAZARDOUS MATERIAL OR (xvi) COMPLIANCE OF
THE SUBLEASED
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PROPERTY WITH ANY LAW (INCLUDING ENVIRONMENTAL LAWS) OR LEGAL REQUIREMENTS.
SUBTENANT ACKNOWLEDGES THAT THE SUBLEASED PROPERTY IS OF ITS SELECTION AND TO
ITS SPECIFICATIONS AND THAT THE SUBLEASED PROPERTY HAS BEEN INSPECTED BY
SUBTENANT AND IS SATISFACTORY TO IT. IN THE EVENT OF ANY DEFECT OR DEFICIENCY
IN THE SUBLEASED PROPERTY OF ANY NATURE, WHETHER LATENT OR PATENT, AS BETWEEN
SUBLANDLORD AND SUBTENANT, SUBLANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR
LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES
(INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF THIS SECTION 5.2 HAVE
BEEN NEGOTIATED, AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF
ANY WARRANTIES BY SUBLANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO THE
SUBLEASED PROPERTY, ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY
OTHER LAW NOW OR HEREAFTER IN EFFECT OR ARISING OTHERWISE.
ARTICLE 6
OWNERSHIP OF PROPERTY
6.1 SUBLEASED PROPERTY. Subtenant acknowledges that the Subleased
Property is the property of Sublandlord, that Sublandlord is the paramount
owner of the Subleased Property and that Subtenant has only the right to the
possession and use of the Subleased Property during the Term of and upon the
terms and conditions of this Sublease.
6.2 SUBLANDLORD'S PERSONAL PROPERTY. Subtenant shall maintain
Sublandlord's Personal Property in the same manner as Subtenant maintains
Subtenant's Personal Property. Upon the loss, destruction, or obsolescence of
any of the Sublandlord's Personal Property, Subtenant shall replace such
property with Subtenant's Personal Property, which Personal Property shall be
owned by Subtenant; provided, however, that in the case of loss or destruction
to any of Sublandlord's Personal Property, if insurance proceeds are available,
Subtenant shall use such proceeds to replace such Personal Property, and the
replacement Personal Property shall be owned by Sublandlord and shall
constitute Sublandlord's Personal Property hereunder.
6.3 SUBTENANT'S PERSONAL PROPERTY. Subtenant may (and shall as provided
below), at its expense, install, affix or assemble or place on any parcel of
the Land or in any of the Subleased Improvements, any items of Subtenant's
Personal Property. Subtenant shall provide and maintain during the entire Term
all such Subtenant's Personal Property as shall be necessary in order to
operate the Facility in compliance with all applicable Legal Requirements and
Insurance Requirements and otherwise in accordance with customary practice in
the industry for the Primary Intended Use and in accordance with its past
practices.
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6.4 PURCHASE OF SUBTENANT'S PERSONAL PROPERTY. Upon the expiration or
sooner termination of this Sublease, Sublandlord shall have the right (but not
the obligation) to purchase from Subtenant all or any portion of the tangible
Subtenant's Personal Property (which shall not include software):
(i) if owned by Subtenant and not subject to any secured financing,
at the fair market value thereof;
(ii) if owned by Subtenant, but subject to a secured financing, at
the greater of the fair market value thereof or the amount of the debt
owing under such financing; and
(iii) if leased by Subtenant and the applicable lease provides for
termination of the lease as to such Subtenant's Personal Property upon
the payment of a given sum, at the greater of the fair market value
thereof or the amount of the payment so provided; provided, however, that
at Subtenant's option and if the lessor of Subtenant's Personal Property
will permit Sublandlord to assume the obligations under the applicable
lease with respect to such Subtenant's Personal Property (separate from
the obligations under a master lease if in effect), Subtenant shall, upon
the request of Sublandlord, assign the applicable lease (or portion
thereof) to Sublandlord;
provided, further, however, that if Sublandlord's purchase right arises because
of a termination of this Sublease as a result of an Event of Default, the fair
market value under clauses (i) through (iii) above shall be deemed to be the
depreciated net book value of Subtenant's Personal Property. Sublandlord may
elect to purchase Subtenant's Personal Property by giving notice to Subtenant
not later than, as the case may be, 60 days prior to the expiration of this
Sublease or 60 days after the termination of this Sublease upon any Event of
Default. Subtenant shall transfer title to such Property by a xxxx of sale
without warranty (except as to ownership) upon concurrent payment in cash by
Sublandlord; provided, however, if Sublandlord has any unpaid damages in an
ascertainable amount resulting from any Event of Default, Sublandlord may make
payment by delivery of an offset against such damages.
6.5 REMOVAL OF PERSONAL PROPERTY. All items of Subtenant's Personal
Property not removed by Subtenant within 14 days following the expiration or
earlier termination of this Sublease shall be considered abandoned by Subtenant
and may, at Sublandlord's discretion and without any obligation, be
appropriated, sold, destroyed or otherwise disposed of by Sublandlord without
first giving notice thereof to Subtenant and without any payment to Subtenant
and without any obligation to account therefor. Subtenant shall, at its
expense, restore the Subleased Property to the condition required by Section
9.1, including repair of all damage to the Subleased Property caused by the
removal of Subtenant's Personal Property, whether affected by Subtenant or
Sublandlord. Sublandlord shall not be responsible for any loss or damage to
Subtenant's Personal Property, or any other property of Subtenant, by virtue of
Sublandlord's removal thereof at any time subsequent to the 14-day period
provided for herein.
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6.6 SUBLANDLORD'S WAIVERS. Any lessor of Subtenant's Personal Property or
other party with a security interest therein may, upon notice to Sublandlord
and during reasonable hours, enter the Facility and take possession of any of
Subtenant's Personal Property without liability for trespass or conversion.
Sublandlord shall, upon the request of Subtenant, execute and deliver to
Subtenant "landlord's waivers" as may be reasonable and customary in connection
with the financing or leasing of personal property. Such "landlord's waiver"
shall limit to 30 days the amount of time the lessor or lender of Subtenant's
Personal Property has to enter upon the Subleased Property after notice from
Sublandlord that the Term has expired or otherwise terminated. If Subtenant
requests a "landlord's waiver," Subtenant shall attempt to secure from any
financing source or lessor the right on the part of Sublandlord to cure the
defaults of Subtenant and to use any such Subtenant's Personal Property upon
providing such cure.
6.7 COLLATERAL AGREEMENTS. During the Term, Subtenant shall have the
right and obligation to enter into agreements and service contracts on behalf
of the Facility which are necessary or reasonably required in connection with
the operation of the Subleased Property for its Primary Intended Use including,
without limitation, membership agreements. Subtenant (or its affiliate) has
also entered into various agreements and service contacts in connection with
its operation of the Facility prior to the Commencement Date. All such
agreements and service contracts, whether entered into prior to or during the
Term and whether entered into by Subtenant or by Xxxxxx Management (as defined
in Article 30 below), are hereinafter collectively referred to as the
"Collateral Agreements." For good and valuable consideration, the receipt of
which is hereby acknowledged, and subject to the terms and conditions
hereinafter set forth, Subtenant and Xxxxxx Management hereby assign to
Sublandlord all of Subtenant's and Xxxxxx Management's right, title and
interest in the Collateral Agreements; provided, however, that Subtenant and
Xxxxxx Management shall continue to have all rights under said Collateral
Agreements at all times during the Term hereof when an Event of Default is not
then existing hereunder (subject, however, to the terms set forth below
relative to restrictions with respect to membership agreements). Upon the
occurrence and during the continuance of an Event of Default (and in addition
to any other rights and remedies available to Sublandlord), and upon the
expiration or earlier termination of this Sublease, Sublandlord shall have the
right, but not the obligation, by itself or by a designee, to take the place of
Subtenant or Xxxxxx Management, as the case may be, under any or all of the
Collateral Agreements, to proceed to perform any and all obligations of the
owner or operator contained in any such Collateral Agreements and exercise any
and all rights of the owner or operator therein contained as fully as the
Subtenant or Xxxxxx Management itself could, and to take possession of all
documents reasonably required by Sublandlord to exercise its rights and perform
its obligations under the Collateral Agreements. Subtenant and Xxxxxx
Management each hereby appoints Sublandlord its attorney-in-fact to take such
action and execute such documents as are necessary or deemed appropriate by
Sublandlord to effectuate the transfer of Subtenant's or Xxxxxx Management's,
as the case may be, right, title and interest in those Collateral Agreements
which Sublandlord designates for such transfer. This power of attorney granted
hereby shall be irrevocable and coupled with an interest. Subtenant and Xxxxxx
Management each acknowledges that the foregoing assignment of Collateral
Agreements described above is an integral part of Sublandlord's consideration
for
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entering into this Sublease and that neither Subtenant nor Xxxxxx Management
shall be entitled to any additional consideration relative to such assignment.
Subtenant and Xxxxxx Management hereby each represents that, with the exception
of consents of equipment lessors, it has the full right and authority to assign
the Collateral Agreements as described in this Section 6.7, and no consent to
such assignment is required from any other party which has not been obtained
prior to the date hereof.
With respect to membership agreements included as part of the foregoing
Collateral Agreements, Subtenant shall have the right to determine all matters
relating to the sale and classification of memberships, including the right to
set initiation fees, dues and other charges, and the number of memberships
sold; provided that Subtenant agrees not to exercise such right in a manner
which would be detrimental to Sublandlord in any material respect upon the
expiration of the Sublease.
ARTICLE 7
USE OF SUBLEASED PROPERTY
7.1 USE. After the Commencement Date and during the Term, Subtenant shall
use or cause to be used the Subleased Property and the improvements thereon for
its Primary Intended Use and for such other uses as may be necessary or
incidental to such use. Subtenant shall not use the Subleased Property or any
portion thereof for any other use without the prior written consent of
Sublandlord, which consent may be withheld in Sublandlord's sole discretion.
No use shall be made or permitted to be made of the Subleased Property, and no
acts shall be done, which will cause the cancellation of any insurance policy
covering the Subleased Property or any part thereof, nor shall Subtenant sell
or otherwise provide to patrons, or permit to be kept, used or sold in or about
the Subleased Property any article which may be prohibited by law or by the
standard form of fire insurance policies, or any other insurance policies
required to be carried hereunder, or fire underwriters regulations. Subtenant
shall, at its sole cost, comply with all of the requirements pertaining to the
Subleased Property or other improvements of any insurance board, association,
organization or company necessary for the maintenance of insurance, as herein
provided, covering the Subleased Property and Subtenant's Personal Property.
7.2 SPECIFIC PROHIBITED USES. Subtenant shall not use or occupy or permit
the Subleased Property to be used or occupied, nor do or permit anything to be
done in or on the Subleased Property, in a manner which would (i) violate or
fail to comply with any law, rule or regulation or Legal Requirement, (ii)
cause structural injury to any of the Subleased Improvements, or (iii)
constitute a public or private nuisance or waste. Subtenant shall not allow
any Hazardous Material to be located in, on or under the Subleased Property, to
migrate from the Subleased Property to any adjacent property, or to be
incorporated in the Facility or any improvements thereon, except in compliance
with applicable law (including any Environmental Law). Subtenant shall not
allow the Subleased Property to be used as a landfill or a waste
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disposal site, or a manufacturing, distribution or disposal facility for any
Hazardous Materials. Subtenant shall neither suffer nor permit the Subleased
Property or any portion thereof, including Subtenant's Personal Property, to be
used in such a manner as (i) might reasonably tend to impair Sublandlord's
title thereto or to any portion thereof, or (ii) may reasonably make possible a
claim or claims of adverse usage or adverse possession by the public, as such,
or of implied dedication of the Subleased Property or any portion thereof, or
(iii) is in violation of any applicable Environmental Law. Subtenant shall own
and use Subtenant's Personal Property in material compliance with all Legal
Requirements.
7.3 SUBLANDLORD TO GRANT EASEMENTS, ETC. Sublandlord shall, from time to
time so long as no Event of Default has occurred and is continuing, at the
request of Subtenant and at Subtenant's cost and expense (but subject to the
approval of Sublandlord, which approval shall not be unreasonably withheld or
delayed and which approval shall not be deemed unreasonably withheld or delayed
if Sublandlord must obtain either a Facility Mortgagee's consent and if such
Facility Mortgagee elects not to consent or a consent from Lessor or a
mortgagee of Lessor and such Lessor or mortgagee elects not to consent): (i)
grant easements and other rights in the nature of easements; (ii) release
existing easements or other rights in the nature of easements which are for the
benefit of the Subleased Property; (iii) dedicate or transfer unimproved
portions of the Subleased Property for road, highway or other public purposes;
(iv) execute petitions to have the Subleased Property annexed to any municipal
corporation or utility district; (v) execute amendments to any covenants and
restrictions affecting the Subleased Property; and (vi) execute and deliver to
any Person any instrument appropriate to confirm or effect such grants,
releases, dedications and transfers (to the extent of its interest in the
Subleased Property), but only upon delivery to Sublandlord of an Officer's
Certificate (which Certificate, if contested by Sublandlord, shall not be
binding on Sublandlord) stating that such grant, release, dedication, transfer,
petition or amendment is not detrimental to the proper conduct of the business
of Subtenant on the Subleased Property and does not reduce its value or
usefulness for the Primary Intended Use and describing in reasonable detail the
nature of such proposed grant, release, dedication, transfer, petition or
amendment. Sublandlord shall not grant, release, dedicate or execute any of
the foregoing items in this Section 7.3 without obtaining Subtenant's approval,
which approval shall not be unreasonably withheld or delayed.
ARTICLE 8
HAZARDOUS MATERIALS
8.1 SUBTENANT REPRESENTATIONS. Subtenant hereby represents and warrants
to Sublandlord as follows:
8.1.1 REPORTS. All material reports of environmental surveys,
audits, investigations and assessments relating to the Subleased Property
in the possession or
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control of Subtenant or its Affiliates (herein, the "Existing
Environmental Reports") have been disclosed to Sublandlord.
8.2 REMEDIATION. If any Hazardous Material in a quantity sufficient to
require remediation or reporting under any Environmental Law is released, or
disposed of, in, on or under the Subleased Property at any time during the Term
hereof or was released, or disposed of, in, on or under the Subleased Property
at any time prior to the Commencement Date (i.e., irrespective of whether the
same occurred during Subtenant's or Subtenant's affiliate's ownership or
possession of the Subleased Property), or if Subtenant, Sublandlord, or the
Subleased Property becomes subject to any order of any federal, state or local
agency to investigate, remove, remediate, repair, close, detoxify,
decontaminate or otherwise clean up the Subleased Property as a result of any
release or disposal in, on or under the Subleased Property occurring at any
time prior to the Commencement Date (i.e., irrespective of whether the same
occurred during the Term hereof or during Subtenant's or Subtenant's
affiliate's ownership or possession of the Subleased Property), Subtenant
shall, at its sole expense, carry out and complete any required investigation,
removal, remediation, repair, closure, detoxification, decontamination or other
cleanup of the Subleased Property in material compliance with all applicable
Environmental Laws; provided, however, that Subtenant shall have no
responsibility for any investigation, removal, remediation, repair, closure,
detoxification, decontamination or other cleanup of the Subleased Property
necessitated by actions of Sublandlord. Subject to Subtenant's rights to
contest pursuant to Article 12 hereof, if Subtenant fails to implement and
diligently pursue any such repair, closure, detoxification, decontamination or
other cleanup of the Subleased Property in a timely manner and in material
compliance with all applicable Environmental Laws, Sublandlord shall have the
right, but not the obligation, to carry out such action and to recover all of
the reasonable costs and expenses from Subtenant as Additional Charges.
8.3 SUBTENANT'S INDEMNIFICATION OF SUBLANDLORD AND OTHERS. Except for
matters arising out of the actions of Sublandlord, Subtenant shall pay,
protect, indemnify, save, hold harmless and defend Sublandlord, Lessor and any
Facility Mortgagee from and against all liabilities, obligations, claims,
damages (including consequential and punitive damages), penalties, causes of
action, demands, judgments, costs and expenses (including reasonable attorneys'
fees and expenses), to the extent permitted by law, imposed upon or incurred by
or asserted against Sublandlord, Lessor, any Facility Mortgagee or the
Subleased Property by reason of any Hazardous Material released or disposed of
at, in or by the Subleased Property either during the Term or prior to the
Commencement Date in violation of any Environmental Law, howsoever arising,
without regard to fault on the part of Subtenant, including (a) liability for
response costs and for costs of removal and remedial action incurred by the
United States Government, any state or local governmental unit to any other
Person, or damages from injury to or destruction or loss of natural resources,
including the reasonable costs of assessing such injury, destruction or loss,
incurred pursuant to any Environmental Law, (b) liability for costs and
expenses of abatement, investigation, removal, remediation, correction or
clean-up, fines, damages, response costs or penalties which arise from the
provisions of any Environmental Law,
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(c) liability for personal injury or property damage arising under any
statutory or common-law tort theory, including damages assessed for the
maintenance of a public or private nuisance or for carrying on of a dangerous
activity, or (d) by reason of a breach of a representation or warranty in
Section 8.1.
8.4 SURVIVAL OF INDEMNIFICATION OBLIGATIONS. Subtenant's remediation and
indemnification obligations and liabilities under this Article 8 arising during
the Term hereof shall survive any termination of this Sublease for a period of
one (1) year (i.e., meaning that Sublandlord must give notice to Subtenant of
such claim prior to the expiration of said 1-year period).
ARTICLE 9
MAINTENANCE AND REPAIR
9.1 SUBTENANT'S SOLE OBLIGATION - GENERAL. Subtenant, at its expense,
will keep the Subleased Property and Subtenant's Personal Property in good
order, repair and appearance (whether or not the need for such repairs occurs
as a result of Subtenant's use, any prior use, the elements or the age of the
Subleased Property, or any portion thereof) and maintain the Subleased Property
in accordance with any applicable Legal Requirements, and, except as otherwise
provided in Article 14, with reasonable promptness, make all necessary and
appropriate repairs thereto of every kind and nature, whether interior or
exterior, structural or non-structural, ordinary or extraordinary, foreseen or
unforeseen or arising by reason of a condition existing prior to the
commencement of the Term of this Sublease (concealed or otherwise). Subtenant
shall operate and maintain the Subleased Property in accordance with the
Operating Standards set forth in Exhibit D; provided, however, that Subtenant
may make such modifications to such Operating Standards as Subtenant may
reasonably determine to be appropriate for the prudent management of the
Subleased Property so long as the maintenance and operation of the Subleased
Property shall be in a first class condition, which modifications, to the
extent they are material to the operating results of the Subleased Property,
shall be subject to the approval of Sublandlord (not to be unreasonably
withheld or delayed); provided further, however, that Subtenant shall make such
changes to the Operating Standards as may be appropriate to comply with Legal
Requirements. Subtenant will not take or omit to take any action the taking or
omission of which could reasonably be expected to impair the value or the
usefulness of the Subleased Property or any part thereof for its Primary
Intended Use. Nothing in this Article 9 shall obligate Subtenant to make any
capital improvement or replacements to the Subleased Property if the Subleased
Property can be repaired to the standard required by this Section 9.1.
9.2 CLUBHOUSE FACILITY MAINTENANCE. Subtenant, at its expense, will
repair, paint and keep in a clean and sanitary condition the interior and
exterior of all clubhouse facilities at the Subleased Improvements, including
all landscaping and parking areas located adjacent thereto, all in a
first-class condition and in accordance with such other reasonable standards as
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may be established by Sublandlord from time to time. Without limitation of the
foregoing, Subtenant, at its expense, will replace or refurbish all floor
covering, tile, carpeting, wall coverings, light fixtures, curtains, blinds,
shades, furniture, room furnishings, wall paper, wall hangings, signs, fixtures
and other decor items when they become worn-out, soiled or in disrepair. All
security systems, ventilation, heating, air-conditioning, electrical, plumbing,
refrigeration and mechanical equipment shall be kept in good working order by
Subtenant at all times during the Term hereof, and shall meet all reasonable
quality standards established from time to time by Sublandlord.
9.3 GOLF COURSE MAINTENANCE. Subtenant, at its expense, will replace,
repair and maintain the golf course portion of the Subleased Property in a
first-class condition and otherwise in accordance with reasonable standards
established from time to time by Sublandlord. Without limitation of the
foregoing, Subtenant will, at its expense, replace or refurbish all tee box
signs, pins, flags, markers, benches and related golf course equipment as the
same becomes worn-out, soiled or in disrepair. All grounds-keeping and
landscaping for the golf course will be maintained in a first-class condition
by Subtenant and otherwise in accordance with reasonable standards established
by Sublandlord from time to time during the Term hereof.
9.4 WAIVER OF STATUTORY OBLIGATIONS. Sublandlord shall not under any
circumstances be required to build or rebuild any improvements on the Subleased
Property, or to make any repairs, replacements, alterations, restorations or
renewals of any nature or description to the Subleased Property, whether
ordinary or extraordinary, structural or non-structural, foreseen or
unforeseen, or to make any expenditure whatsoever with respect thereto, in
connection with this Sublease, or to maintain the Subleased Property in any
way. Subtenant hereby waives, to the extent permitted by law, the right to
make repairs at the expense of Sublandlord pursuant to any law in effect at the
time of the execution of this Sublease or hereafter enacted.
9.5 MECHANIC'S LIENS. Nothing contained in this Sublease and no action or
inaction by Sublandlord shall be construed as (i) constituting the consent or
request of Sublandlord, expressed or implied, to any contractor, subcontractor,
laborer, materialman or vendor to or for the performance of any labor or
services or the furnishing of any materials or other property for the
construction, alteration, addition, repair or demolition of or to the Subleased
Property or any part thereof; or (ii) giving Subtenant any right, power or
permission to contract for or permit the performance of any labor or services
or the furnishing of any materials or other property, in either case, in such
fashion as would permit the making of any claim against Sublandlord in respect
thereof or to make any agreement that may create, or in any way be the basis
for, any right, title, interest, lien, claim or other encumbrance upon the
estate of Sublandlord in the Subleased Property, or any portion thereof (it
being acknowledged and agreed that Subtenant has no authority or power to cause
any lien or encumbrance of any kind whatsoever to attach or be placed upon
Sublandlord's interest in the Subleased Property, and any and all liens and
encumbrances created or permitted by Subtenant shall attach to Subtenant's
subleasehold interest only).
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9.6 SURRENDER OF SUBLEASED PROPERTY. Unless this Sublease shall have been
terminated pursuant to the provisions of Article 14, Subtenant shall, upon the
expiration or prior termination of the Term, vacate and surrender the Subleased
Property to Sublandlord in the condition in which the Subleased Property was
originally received from Sublandlord, except as repaired, rebuilt, restored,
altered or added to as permitted or required by the provisions of this Sublease
and except for ordinary wear and tear (subject to the obligation of Subtenant
to maintain the Subleased Property in good order and repair during the entire
Term of this Sublease).
9.7 TRANSFER OF OPERATING PERMITS. Upon the expiration or earlier
termination of the Term, Subtenant and Xxxxxx Management shall each assign to
Sublandlord all of each such respective party's right, title and interest in
and to any and all licenses, permits and other authorizations or approvals
which then exist relative to the operation of the Subleased Property, and
Subtenant and Xxxxxx Management shall cooperate with Sublandlord to effectuate
such transfers, including, without limitation, executing and delivering any
petitions, applications or other documentation required by applicable
governmental authorities in connection with such transfers.
ARTICLE 10
SUBTENANT'S IMPROVEMENTS
10.1 SUBTENANT'S RIGHT TO CONSTRUCT. During the Term of this Sublease,
Subtenant may not make any material alterations, additions, changes and/or
other capital improvements to the Subleased Property (individually, a
"Subtenant Improvement," and collectively, "Subtenant Improvements") without
the prior written consent of Sublandlord, which consent shall not be
unreasonably withheld or delayed and which consent shall not be deemed
unreasonably withheld or delayed if Sublandlord must obtain Lessor's or any
Facility Mortgagee's consent and if such Lessor or Facility Mortgagee elects
not to consent. As used in this Section 10.1, "material" shall mean a
Subtenant Improvement the cost of which is estimated to exceed Fifty Thousand
Dollars ($50,000.00) in any one instance. Except as otherwise agreed to by
Sublandlord in writing, any such Subtenant Improvement shall be made at
Subtenant's sole expense and shall become the property of Sublandlord upon
termination of this Sublease. Unless made on an emergency basis to prevent
injury to Person or property, Subtenant will submit plans for any Subtenant
Improvement with a cost of more than $50,000 to Sublandlord for Sublandlord's
prior approval, such approval not to be unreasonably withheld or delayed.
10.2 SCOPE OF RIGHT. To the extent Sublandlord has consented to any
Subtenant Improvement, and subject to Section 10.1 above, Subtenant shall have
the right, at Subtenant's cost and expense, to:
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(a) seek any governmental approvals, including building permits,
licenses, conditional use permits and any certificate of need that
Subtenant requires to construct any Subtenant Improvement;
(b) demolish, remove or otherwise dispose of any of the Subtenant
Improvements;
(c) erect upon the Subleased Property such Subtenant Improvement as
Subtenant deems desirable;
(d) make additions, alterations, changes and improvements in any
Subtenant Improvement so erected;
(e) raze and demolish any Subtenant Improvement together with the
right to salvage therefrom; and
(f) engage in any other lawful activities that Subtenant determines
are necessary or desirable for the development of the Subleased Property
in accordance with its Primary Intended Use;
it being understood and agreed, however, that Subtenant shall not, in any
event, make any Subtenant Improvement which would, in Sublandlord's reasonable
judgment, impair the value or Primary Intended Use of the Subleased Property or
otherwise violate the terms of the Master Lease.
10.3 COOPERATION OF SUBLANDLORD. To the extent Sublandlord has consented
to any Subtenant Improvement, Sublandlord shall cooperate with Subtenant and
take such actions, including the execution and delivery to Subtenant of any
applications or other documents, reasonably requested by Subtenant in order to
obtain any governmental approvals sought by Subtenant to construct such
Subtenant Improvement within ten (10) Business Days following the later of (a)
the date Sublandlord receives Subtenant's request, or (b) the date of delivery
of any such application or document to Sublandlord, so long as the taking of
such action, including the execution of said applications or documents, shall
be without cost to Sublandlord (or if there are costs to Sublandlord, such
reasonable out-of-pocket costs shall be reimbursed by Subtenant), and will not
cause Sublandlord to be in violation of any law, ordinance or regulation.
10.4 COMMENCEMENT OF CONSTRUCTION. Subtenant agrees that:
(a) Subtenant shall diligently seek all governmental approvals
relating to the construction of any Subtenant Improvement;
(b) Once Subtenant begins the construction of any Subtenant
Improvement, Subtenant shall diligently prosecute any such construction
to completion in accordance
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with applicable insurance requirements and the laws, rules and
regulations of all governmental bodies or agencies having jurisdiction
over the Subleased Property;
(c) Sublandlord shall have the right at any time and from time to
time to post and maintain upon the Subleased Property such notices as may
be necessary to protect Sublandlord's interest from mechanics' liens,
materialmen's liens or liens of a similar nature;
(d) Subtenant shall not suffer or permit any mechanics' liens or any
other claims or demands arising from the work or construction of any
Subtenant Improvement to be enforced against the Subleased Property or
any part thereof, and Subtenant agrees to hold Sublandlord, Lessor and
said Subleased Property free and harmless from all liability from any
such liens, claims or demands, together with all costs and expenses in
connection therewith; and
(e) All work shall be performed in a good and workmanlike manner.
10.5 RIGHTS IN SUBTENANT IMPROVEMENTS. Notwithstanding anything to the
contrary in this Sublease, all Subtenant Improvements constructed pursuant to
Section 10.1, and any and all subsequent additions thereto and alterations and
replacements thereof, shall be the sole and absolute property of Subtenant
during the Term of this Sublease. Upon the expiration or early termination of
this Sublease, all such Subtenant Improvements shall become the property of
Sublandlord. Without limiting the generality of the foregoing, Subtenant shall
be entitled to all federal and state income tax benefits associated with any
Subtenant Improvement during the Term of this Sublease.
10.6 PRE-APPROVED SUBTENANT IMPROVEMENTS. Without limitation of the terms
set forth above in this Article 10, it is hereby acknowledged that Subtenant
shall diligently perform, from and after the Commencement Date, those certain
improvements to the Subleased Property generally described in the construction
budget attached hereto as Exhibit I (herein, the "Pre-Approved Subtenant
Improvements"). Such Pre-Approved Subtenant Improvements will be performed in
accordance with the terms and the conditions and other requirements set forth
above in this Article 10. Without limitation of the foregoing, it is
acknowledged that Sublandlord has retained the sum of $____________ (herein,
the "Retained Funds") from sums otherwise due and owing from Sublandlord to
Subtenant (or Subtenant's affiliates) at the time of Sublandlord's acceptance
of its leasehold interest in the Subleased Property. The foregoing Retained
Funds shall be held in trust and shall be made available for costs incurred by
Subtenant in connection with performance of the Pre-Approved Subtenant
Improvements, and shall be disbursed in accordance with the following
requirements: (i) at the time of any disbursement, subject to Article 12, no
mechanics' or materialmen's liens shall have been filed against any of the
Subleased Property and remain undischarged, unless a satisfactory bond shall
have been posted in accordance with the laws of the State; (ii) disbursement
shall be made from time to time in an amount not exceeding the cost of the work
completed since the last disbursement,
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upon receipt of (A) satisfactory evidence of the stage of completion, the
estimated total cost of completion, and performance of the work to date in a
good and workmanlike manner in accordance with contracts, plans and
specifications heretofore delivered to Sublandlord, (B) waiver of liens
covering the amount to be disbursed, (C) satisfactory bringdown of title
insurance, and (D) other evidence of costs and payments so that Sublandlord can
verify that the amounts disbursed from time to time are represented by work
that is completed, in place and free and clear of mechanics' and materialmen's
lien claims; (iii) each request for disbursement shall be accompanied by a
certificate of Subtenant, signed by a duly authorized representative of
Subtenant, describing the work for which payment is requested, stating the cost
incurred in connection therewith, stating that Subtenant has not previously
received payment for such work, and upon completion of the work, also stating
that the work has been fully completed and complies with the applicable
requirements of this Sublease; and (iv) such other reasonable conditions as
Sublandlord may reasonably impose.
Any excess Retained Funds remaining after completion of the Pre-Approved
Subtenant Improvements shall, within sixty (60) days following Subtenant's
written request therefor delivered to Sublandlord (which request shall include
reasonably supporting documentation regarding the final cost and completion of
the Pre-Approved Subtenant Improvements, and payment of all sums due and owing
in connection therewith) be paid, from Sublandlord to Subtenant.
ARTICLE 11
LIENS, ENCROACHMENTS AND OTHER TITLE MATTERS
11.1 LIENS. Subject to the provisions of Article 12 relating to permitted
contests, Subtenant will not directly or indirectly create or allow to remain,
and will promptly discharge at its expense any lien, encumbrance, attachment,
title retention agreement or claim upon the Subleased Property or any
attachment, levy, claim or encumbrance in respect of the rent, not including,
however:
(a) the matters, if any, that existed as of the Commencement Date
and that were disclosed on the Sublandlord's title policy issued as of
such date;
(b) restrictions, liens and other encumbrances which are consented
to in writing by Sublandlord, or any easements granted pursuant to the
provisions of Section 7.3 of this Sublease;
(c) liens for franchise, income or other taxes of Sublandlord which
Subtenant is not required to pay hereunder;
(d) subsubleases permitted by Article 24;
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(e) liens for Impositions or for sums resulting from noncompliance
with Legal Requirements so long as (1) the same are not yet payable or
are payable without the addition of any fine or penalty or (2) such liens
are in the process of being contested as permitted by Article 12;
(f) liens of mechanics, laborers, materialmen, suppliers or vendors
for sums either disputed (provided that such liens are in the process of
being contested as permitted by Article 12) or not yet due; and
(g) any liens which are the responsibility of Sublandlord pursuant
to the provisions of Article 26.
11.2 ENCROACHMENTS AND OTHER TITLE MATTERS. Except for any matters deemed
to be "Permitted Title Exceptions" when Sublandlord accepted its leasehold
interest in the Subleased Property and any matters granted or created by
Sublandlord after the Commencement Date, if any of the Subleased Improvements
shall, at any time, encroach upon any property, street or right-of-way adjacent
to the Subleased Property, or shall violate the agreements or conditions
contained in any lawful restrictive covenant or other agreement affecting the
Subleased Property, or any part thereof, or shall impair the rights of others
under any easement or right-of-way to which the Subleased Property is subject,
or the use of the Subleased Property is impaired, limited or interfered with by
reason of the exercise of the right of surface entry or any other rights under
a lease or reservation of any oil, gas, water or other minerals, then promptly
upon the request of Sublandlord or at the behest of any Person affected by any
such encroachment, violation or impairment, Subtenant, at its sole cost and
expense (subject to its right to contest the existence of any such
encroachment, violation or impairment), shall protect, indemnify, save harmless
and defend Sublandlord, Lessor, each Facility Mortgagee and any mortgagee of
Lessor from and against all losses, liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including reasonable
attorneys' fees and expenses) based on or arising by reason of any such
encroachment, violation or impairment and in such case, in the event of an
adverse final determination, either (i) obtain valid and effective waivers or
settlements of all claims, liabilities and damages resulting from each such
encroachment, violation or impairment, whether the same shall affect
Sublandlord or Subtenant; or (ii) make such changes in the Subleased
Improvements, and take such other actions, as Subtenant in the good faith
exercise of its judgment deems reasonably practicable, to remove such
encroachment, and to end such violation or impairment, including, if necessary,
the alteration of any of the Subleased Improvements, and in any event take all
such actions as may be necessary in order to be able to continue the operation
of the Subleased Improvements for the Primary Intended Use substantially in the
manner and to the extent the Subleased Improvements were operated prior to the
assertion of such violation or encroachment. Subtenant's obligations under
this Section 11.2 shall be in addition to and shall in no way discharge or
diminish any obligation of any insurer under any policy of title or other
insurance and Subtenant shall be entitled to a credit for any sums recovered by
Sublandlord under any such policy of title or other insurance.
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ARTICLE 12
PERMITTED CONTESTS
Subtenant, on its own or on Sublandlord's behalf (or in Sublandlord's
name) but at Subtenant's expense, may contest, by appropriate legal proceedings
conducted in good faith and with due diligence, the amount or validity or
application, in whole or in part, of any Imposition or any Legal Requirement or
any lien, attachment, levy, encumbrance, charge or claim not otherwise
permitted by Section 11.1, provided that:
(a) in the case of an unpaid Imposition, lien, attachment, levy,
encumbrance, charge or claim, the commencement and continuation of such
proceedings shall suspend the collection thereof from Sublandlord and
from the Subleased Property, and neither the Subleased Property nor any
Rent therefrom nor any part thereof or interest therein would be in any
danger of being sold, forfeited, attached or lost pending the outcome of
such proceedings;
(b) in the case of a Legal Requirement, neither Sublandlord, Lessor,
any Facility Mortgagee nor any mortgagee of Lessor would be subject to
criminal or civil liability for failure to comply therewith pending the
outcome of such proceedings. Nothing in this Article 12(b), however,
shall permit Subtenant to delay compliance with any requirement of any
Environmental Law to the extent such non-compliance poses an immediate
threat of injury to any Person or to the public health or safety or of
material damage to any real or personal property;
(c) in the case of a Legal Requirement and/or an Imposition, lien,
encumbrance or charge, Subtenant shall give such reasonable security, if
any, as may be demanded by Sublandlord to insure ultimate payment of the
same and to prevent any sale or forfeiture of the affected Subleased
Property or the Rent by reason of such non-payment or noncompliance,
provided, however, the provisions of this Article 12 shall not be
construed to permit Subtenant to contest the payment of Rent (except as
to contests concerning the method of computation or the basis of levy of
any Imposition or the basis for the assertion of any other claim) or any
other sums payable by Subtenant to Sublandlord hereunder, and provided
further that any such security remaining after the final resolution of
such matter shall be returned to Subtenant;
(d) no such contest shall interfere in any material respect with the
use or occupancy of the Subleased Property;
(e) in the case of an Insurance Requirement, the coverage required
by Article 13 shall be maintained; and
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(f) if such contest be finally resolved against Sublandlord or
Subtenant, Subtenant shall, as Additional Charges due hereunder, promptly
pay the amount required to be paid, together with all interest and
penalties accrued thereon, or comply with the applicable Legal
Requirement or Insurance Requirement, and Sublandlord, at Subtenant's
expense, shall execute and deliver to Subtenant such authorization and
other documents as may reasonably be required in any such contest, and,
if reasonably requested by Subtenant or if Sublandlord so desires,
Sublandlord shall join as a party therein. Subtenant shall indemnify and
save Sublandlord, Lessor, each Facility Mortgagee and any mortgagee of
Lessor harmless against any liability, cost or expense of any kind that
may be imposed upon Sublandlord, Lessor, any Facility Mortgagee or any
mortgagee of Lessor in connection with any such contest and any loss
resulting therefrom.
ARTICLE 13
INSURANCE
13.1 GENERAL INSURANCE REQUIREMENTS. Subject to the terms of Article 22
hereof, during the Term of this Sublease, Subtenant shall at all times keep the
Subleased Property, and all property located in or on the Subleased Property,
including all Subtenant's Personal Property and any Subtenant Improvements,
insured with the kinds and amounts of insurance described below and any other
or additional insurance required by Lessor or by any Facility Mortgagee or
mortgagee of Lessor. This insurance shall be written by companies authorized
to do insurance business in the State in which the Subleased Property is
located. The policies must name Sublandlord and Lessor as an additional
insured. Losses shall be payable to Sublandlord and/or Subtenant as provided
in Article 14. In addition, the policies shall name as an additional insured
(i) the holder of any mortgage, deed of trust or other security agreement
securing any indebtedness or any other Sublandlord's Encumbrance placed on the
Subleased Property in accordance with the provisions of Article 26 ("Facility
Mortgage"), and (ii) any mortgagee of Lessor, by way of a standard New York
Mortgage clause or other applicable form of mortgagee's loss payable
endorsement. Any loss adjustment shall require the written consent of
Sublandlord, Subtenant, and each Facility Mortgagee. Evidence of insurance
shall be deposited with Sublandlord and, if requested, with any Facility
Mortgagee(s) or mortgagee(s) of Lessor. The policies on the Subleased
Property, including the Subleased Improvements, Fixtures, Subtenant's Personal
Property and any Subtenant Improvements, shall insure against the following
risks:
13.1.1 ALL RISK. Loss or damage by all risks perils including, but
not limited to, fire, vandalism, malicious mischief and extended
coverages, including sprinkler leakage, in an amount not less than 100%
of the then Full Replacement Cost thereof.
13.1.2 LIABILITY. Claims for personal injury or property damage
under a policy of comprehensive general public liability insurance with
amounts not less than $10,000,000 per occurrence and in the aggregate.
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13.1.3 FLOOD. Flood (when the Subleased Property is located in
whole or in material part in a designated flood plain area) and such
other hazards and in such amounts as may be customary for comparable
properties in the area; provided, however, that Subtenant shall not be
required to participate in the National Flood Insurance Program.
13.1.4 WORKER'S COMPENSATION. Adequate worker's compensation
insurance coverage for all Persons employed by Subtenant on the Subleased
Property in accordance with the requirements of applicable federal, state
and local laws.
13.1.5 RENT LOSS. Rent loss Insurance payable to Sublandlord
covering payment of the then applicable Annual Base Rent for a twelve
(12) month period.
13.1.6 OTHER INSURANCE. Such other kinds and amounts of insurance
on or in connection with any of the Subleased Property, including all
Subtenant's Personal Property and any Subtenant Improvements, as
Sublandlord or any Facility Mortgagee may reasonably require, which at
the time is usual and commonly obtained in connection with properties
similar in type of building size and use to the Subleased Property and
located in the geographic area where the Subleased Property is located.
13.2 REPLACEMENT COST. In the event either party believes that the Full
Replacement Cost of the insured property has increased or decreased at any time
during the Term, it shall have the right to have such Full Replacement Cost
redetermined by the fire insurance company which is then carrying the largest
amount of fire insurance carried on the Subleased Property (the "Impartial
Appraiser"). The party desiring to have the Full Replacement Cost so
redetermined shall forthwith, on receipt of such determination by such
Impartial Appraiser, give written notice thereof to the other party hereto.
The determination of such Impartial Appraiser shall be final and binding on the
parties hereto, and Subtenant shall forthwith increase, or may decrease, the
amount of the insurance carried pursuant to this Section 13.2, as the case may
be, to the amount so determined by the Impartial Appraiser. Each party shall
pay one-half of the fee, if any, of the Impartial Appraiser.
13.3 WAIVER OF SUBROGATION. All insurance policies carried by either
party covering the Subleased Property including contents, fire and casualty
insurance, shall expressly waive any right of subrogation on the part of the
insurer against the other party (including any Facility Mortgagee and mortgagee
of Lessor). The parties hereto agree that their policies will include such
waiver clause or endorsement so long as the same are obtainable without extra
cost, and in the event of such an extra charge the other party, at its
election, may pay the same, but shall not be obligated to do so.
13.4 FORM SATISFACTORY, ETC. All of the policies of insurance referred to
in Section 13.1 shall be written in a form reasonably satisfactory to
Sublandlord and by insurance companies rated not less than AVIII by A.M. Best's
Insurance Guide. Subtenant shall pay all
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premiums for the policies of insurance referred to in Section 13.1 and shall
deliver certificates thereof and copies of said policies to Sublandlord prior
to their effective date (and with respect to any renewal policy, at least 10
days prior to the expiration of the existing policy). In the event Subtenant
fails to satisfy its obligations under this Section 13.4, Sublandlord shall be
entitled, but shall have no obligation, to effect such insurance and pay the
premiums therefor, which premiums (together with interest thereon accruing at
the Overdue Rate until repaid) shall be repayable to Sublandlord upon written
demand as Additional Charges. Each policy of insurance required by Section
13.1 shall, by endorsement on the policy or policies, or by independent
instrument furnished to Sublandlord, provide that the insurer thereunder will
give to Sublandlord not less than 30 days' written notice before the policy or
policies in question shall be altered, allowed to expire or canceled. Each
such policy shall also provide that any loss otherwise payable thereunder shall
be payable notwithstanding (i) any act or omission of Sublandlord, Subtenant or
Lessor which might, absent such provision, result in a forfeiture of all or a
part of such insurance payment, (ii) the occupation or use of the Subleased
Property for purposes more hazardous than those permitted by the provisions of
such policy, (iii) any foreclosure or other action or proceeding taken by any
Facility Mortgage or any mortgagee of Lessor pursuant to any provision of a
mortgage, note, assignment or other document evidencing or securing a loan upon
the happening of an event of default therein or (iv) any change in title to or
ownership of the Subleased Property.
13.5 CHANGE IN LIMITS. In the event that Sublandlord shall at any time
reasonably determine on the basis of prudent industry practice that the
liability insurance carried by Subtenant pursuant to Section 13.1.2 is either
excessive or insufficient, the parties shall endeavor to agree on the proper
and reasonable limits for such insurance to be carried; and such insurance
shall thereafter be carried with the limits thus agreed on until further
changed pursuant to the provisions of this Section 13.5; provided, however,
that the deductibles for such insurance or the amount of such insurance which
is self-retained by Subtenant shall be as reasonably determined by Subtenant so
long as Subtenant can reasonably demonstrate its ability to satisfy such
deductible or amount of such self-retained insurance.
13.6 BLANKET POLICY. Notwithstanding anything to the contrary contained
in this Article 13, Subtenant's obligations to carry the insurance provided for
herein may be brought within the coverage of a so-called blanket policy or
policies of insurance carried and maintained by Subtenant; provided, however,
that the coverage afforded Sublandlord, Lessor, each Facility Mortgagee and any
mortgagee of Lessor will not be reduced or diminished or otherwise be different
from that which would exist under a separate policy meeting all other
requirements of this Sublease by reason of the use of such blanket policy of
insurance, and provided further that the requirements of this Article 13 are
otherwise satisfied. The amount of the total insurance allocated to the
Subleased Property, which amount shall be not less than the amounts required
pursuant to Section 13.1, shall be specified either (i) in each such "blanket"
policy or (ii) in a written statement, which Subtenant shall deliver to
Sublandlord and Facility Mortgagee, from the insurer thereunder. A certificate
and copy of each such "blanket" policy shall promptly be delivered to
Sublandlord and Facility Mortgagee.
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ARTICLE 14
APPLICATION OF INSURANCE PROCEEDS
14.1 INSURANCE PROCEEDS. All proceeds of insurance payable by reason of
any loss or damage to the Subleased Property, or any portion thereof, and
insured under any policy of insurance required by Article 13 shall (i) if
greater than or equal to $250,000, be paid to and held by Sublandlord and (ii)
if less than such amount, be paid to Subtenant and held by Subtenant. All such
proceeds shall be held in trust and shall be made available for reconstruction
or repair, as the case may be, of any damage to or destruction of the Subleased
Property, or any portion thereof.
14.1.1 DISBURSEMENT OF PROCEEDS. Any proceeds held by Sublandlord
or Subtenant shall be paid out by Sublandlord or Subtenant from time to
time for the reasonable costs of such reconstruction or repair; provided,
however, that Sublandlord shall disburse proceeds subject to the
following requirements:
(i) prior to commencement of restoration, (A) the architects,
contracts, contractors, plans and specifications for the
restoration shall have been approved by Sublandlord, which approval
shall not be unreasonably withheld or delayed, (B) if legally
permitted (and, if waivers can be obtained at such time without
payment of additional funds to the contractors at such time),
appropriate waivers of mechanics' and materialmen's liens shall
have been filed and (C) Subtenant shall have obtained and delivered
to Sublandlord all required governmental and private approvals
necessary to complete the reconstruction or repair (including
building permits, licenses and other necessary approvals);
(ii) at the time of any disbursement, subject to Article 12,
no mechanics' or materialmen's liens shall have been filed against
any of the Subleased Property and remain undischarged, unless a
satisfactory bond shall have been posted in accordance with the
laws of the State;
(iii) disbursements shall be made from time to time in an
amount not exceeding the cost of the work completed since the last
disbursement, upon receipt of (A) satisfactory evidence of the
stage of completion, the estimated total cost of completion and
performance of the work to date in a good and workmanlike manner in
accordance with the contracts, plans and specifications, (B)
waivers of liens, (C) a satisfactory bringdown of title insurance
and (D) other evidence of cost and payment so that Sublandlord and
Facility Mortgagee can verify that the amounts disbursed from time
to time are represented by work that is completed, in place and
free and clear of mechanics' and materialmen's lien claims;
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(iv) each request for disbursement shall be accompanied by a
certificate of Subtenant, signed by a duly authorized
representative of Subtenant, describing the work for which payment
is requested, stating the cost incurred in connection therewith,
stating that Subtenant has not previously received payment for such
work and, upon completion of the work, also stating that the work
has been fully completed and complies with the applicable
requirements of this Sublease;
(v) to the extent actually held by Sublandlord and not by a
Facility Mortgagee or mortgagee of Lessor, (1) the proceeds shall
be held in a separate account and shall not be commingled with
Sublandlord's other funds, and (2) interest shall accrue on funds
so held at the money market rate of interest and such interest
shall constitute part of the proceeds; and
(vi) such other reasonable conditions as Sublandlord or
Facility Mortgagee may reasonably impose, including, without
limitation, payment by Subtenant of reasonable costs of
administration imposed by or on behalf of Facility Mortgagee should
the proceeds be held by Facility Mortgagee and including a deposit
of funds by Subtenant if reasonably determined by Sublandlord or
Facility Mortgagee that the insurance proceeds are insufficient to
complete the restoration.
14.1.2 EXCESS PROCEEDS. Any excess proceeds of insurance remaining
after the completion of the restoration or reconstruction of the
Subleased Property (or in the event neither Sublandlord nor Subtenant is
required or elects to repair and restore) shall be paid to Sublandlord
and Subtenant in like proportions to the value of Sublandlord's interests
in the Subleased Property and Subtenant's interest in Subtenant's
Personal Property and the Subtenant Improvements, or any portion thereof
upon completion of any such repair and restoration except as otherwise
specifically provided below in this Article 14. All salvage resulting
from any risk covered by insurance shall belong to Sublandlord.
14.2 RECONSTRUCTION COVERED BY INSURANCE.
14.2.1 DESTRUCTION RENDERING FACILITY UNSUITABLE FOR ITS PRIMARY
USE. If during the Term the Subleased Property is totally or partially
destroyed from a risk covered by the insurance described in Article 13
and the Facility thereby is rendered Unsuitable For Its Primary Intended
Use, Subtenant shall diligently restore the Facility to substantially the
same condition as existed immediately before the damage or destruction.
Such damage or destruction shall not terminate this Sublease.
14.2.2 DESTRUCTION NOT RENDERING FACILITY UNSUITABLE FOR ITS
PRIMARY USE. If during the Term, the Subleased Property is totally or
partially destroyed from a risk covered by the insurance described in
Article 13, but the Facility is not thereby rendered Unsuitable For Its
Primary Intended Use, Subtenant shall diligently restore the Facility
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to substantially the same condition as existed immediately before the
damage or destruction; provided, however, Subtenant shall not be required
to restore Subtenant's Personal Property and/or any Subtenant
Improvements if failure to do so does not adversely affect the amount of
Additional Rent payable hereunder. Such damage or destruction shall not
terminate this Sublease.
14.2.3 COSTS OF REPAIR. If the cost of the repair or restoration
exceeds the amount of proceeds received by Sublandlord or Subtenant from
the insurance required under Article 13, Subtenant shall pay for such
excess cost of repair or restoration.
14.3 RECONSTRUCTION NOT COVERED BY INSURANCE. If during the Term, the
Facility is totally or materially destroyed from a risk not covered by the
insurance described in Article 13, whether or not such damage or destruction
renders the Facility Unsuitable For Its Primary Intended Use, Subtenant shall
diligently restore the Facility to substantially the same condition as existed
immediately before the damage or destruction.
14.4 NO ABATEMENT OF RENT. This Sublease shall remain in full force and
effect and Subtenant's obligation to make rental payments and to pay all other
charges required by this Sublease shall remain unabated during the period
required for repair and restoration; provided, however, that if there is no
Event of Default, Subtenant shall be entitled to retain any proceeds of rental
value or business interruption insurance coverage maintained by Subtenant
(which amounts shall be deemed Golf Course Revenue for purposes hereof).
14.5 WAIVER. Subtenant hereby waives any statutory or other rights of
termination which may arise by reason of any damage or destruction of the
Facility which Sublandlord or Subtenant is obligated to restore or may restore
under any of the provisions of this Sublease.
14.6 DAMAGE NEAR END OF TERM. Notwithstanding any other provision to the
contrary in this Article 14, if damage to or destruction of the Subleased
Property occurs during the last 24 months of the Term of this Sublease, and if
such damage or destruction cannot reasonably be expected to be fully repaired
or restored prior to the date that is 12 months prior to the end of the
then-applicable Term, then either Sublandlord or Subtenant shall have the right
to terminate this Sublease on not less than 30 days' prior notice to the other
party by giving notice thereof to the other party within 60 days after the date
of such damage or destruction. Upon any such termination, Sublandlord shall be
entitled to retain all insurance proceeds, grossed up by Subtenant to account
for the deductible or any self-insured retention; provided, however, that
Subtenant shall be entitled to retain or receive all insurance proceeds
relating to Subtenant's Personal Property. If Sublandlord shall give Subtenant
a notice under this Section 14.6 that it seeks to terminate this Sublease at a
time when Subtenant has a remaining Extended Term, then such termination notice
shall be of no effect if Subtenant shall exercise its rights to extend the Term
not later than the earlier of the time required by Section 2.2 or within 30
days after Sublandlord's notice of termination given under this Section 14.6.
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ARTICLE 15
CONDEMNATION
15.1 TOTAL TAKING. If at any time during the Term the Subleased Property
is totally and permanently taken by Condemnation, this Sublease shall terminate
on the Date of Taking and Subtenant shall promptly pay all outstanding Rent and
other charges through the date of termination.
15.2 PARTIAL TAKING. If a portion of the Subleased Property is taken by
Condemnation, this Sublease shall remain in effect if the Facility is not
thereby rendered Unsuitable For Its Primary Intended Use, but if the Facility
is thereby rendered Unsuitable For Its Primary Intended Use, this Sublease
shall terminate on the Date of Taking.
15.3 RESTORATION. If there is a partial taking of the Subleased Property
and this Sublease remains in full force and effect pursuant to Section 15.2,
Sublandlord at its cost shall accomplish all necessary restoration up to but
not exceeding the amount of the Award payable to Sublandlord, as provided
herein; provided, however, that at Sublandlord's option, Sublandlord may
require Subtenant to perform such restoration, in which event Sublandlord shall
make Sublandlord's Award available for such purpose, subject to disbursement
requirements substantially similar to those set forth in Section 14.1.1 (it
being understood that Subtenant shall be responsible for completion of such
restoration, at its cost, irrespective of whether the condemnation proceeds are
sufficient to pay all of the costs of such restoration work). If Subtenant
receives an Award under Section 15.4, Subtenant shall repair or restore any
Subtenant Improvements up to but not exceeding the amount of the Award payable
to Subtenant therefor.
15.4 AWARD DISTRIBUTION. The entire Award shall belong to and be paid to
Sublandlord, except that, subject to the rights of the Facility Mortgagee and
any mortgagee of Lessor, Subtenant shall be entitled to receive from the Award,
if and to the extent such Award specifically includes such items, or to
otherwise pursue a separate Award (but only to the extent such separate Award
does not reduce the amount of the Award to which Sublandlord would otherwise be
entitled hereunder) for, a sum attributable to the value, if any, of: (i) any
Subtenant's Personal Property and (ii) the leasehold interest of Subtenant
under this Sublease; provided, however, that if the amount received by
Sublandlord, Lessor, the Facility Mortgagee and any mortgagee of Lessor is less
than the Condemnation Threshold, then the amount of the Award otherwise payable
to Subtenant for the value of its leasehold interest under this Sublease (and
not any other funds of Subtenant) shall instead be paid over to Sublandlord up
to the amount of the shortfall.
15.5 TEMPORARY TAKING. The taking of the Subleased Property, or any part
thereof, by military or other public authority shall constitute a taking by
Condemnation only when the use and occupancy by the taking authority has
continued for longer than six months. During any such six month period or
less, which shall be deemed a temporary taking, all the provisions of
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this Sublease shall remain in full force and effect with no abatement of Rent
payable by Subtenant hereunder. In the event of any such temporary taking, the
entire amount of any such Award made for such temporary taking allocable to the
Term of this Sublease, whether paid by way of damage, rent or otherwise, shall
be paid to Subtenant.
ARTICLE 16
EVENTS OF DEFAULT
16.1 EVENTS OF DEFAULT. If any one or more of the following events
(individually, an "Event of Default") shall occur:
(a) if Subtenant shall fail to make payment of the Rent payable by
Subtenant under this Sublease when the same becomes due and payable and
such failure is not cured by Subtenant within a period of 10 days after
receipt by Subtenant of notice thereof from Sublandlord; provided,
however, that such notice shall be in lieu of and not in addition to any
notice required under applicable law;
(b) if Subtenant shall fail to obtain, maintain or replace the
security deposit as required by Article 21 or the capital expenditure
reserve deposits required by Section 18.2;
(c) if, other than as a result of Unavoidable Delays, Subtenant
shall fail to observe or perform any material term, covenant or condition
of this Sublease and such failure is not cured by Subtenant within a
period of 30 days after receipt by Subtenant of notice thereof from
Sublandlord, unless such failure cannot with due diligence be cured
within a period of 30 days, in which case such failure shall not be
deemed to continue if Subtenant proceeds promptly and with due diligence
to cure the failure and diligently completes the curing thereof, and in
any event cures such failure within an additional ninety (90) day period
following the foregoing 30-day cure period; provided, however, that such
notice shall be in lieu of and not in addition to any notice required
under applicable law; provided further, however, that the cure period
shall not extend beyond 30 days as otherwise provided by this Section
16.1(c) if the facts or circumstances giving rise to the default are
creating a further harm to Sublandlord or the Subleased Property and
Sublandlord makes a good faith determination that Subtenant is not
undertaking remedial steps that Sublandlord would cause to be taken if
this Sublease were then to terminate.
(d) if Subtenant shall:
(i) admit in writing its inability to pay its debts generally
as they become due;
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(ii) file a petition in bankruptcy or a petition to take
advantage of any insolvency act;
(iii) make an assignment for the benefit of its creditors;
(iv) consent to the appointment of a receiver of itself or of
the whole or any substantial part of its property;
(v) file a petition or answer seeking reorganization or
arrangement under the Federal bankruptcy laws or any other
applicable law or statute of the United States of America or any
state thereof; or
(vi) be unable to pay its debts as they mature.
(e) if Subtenant shall, on a petition in bankruptcy filed against
it, be adjudicated as bankrupt or a court of competent jurisdiction shall
enter an order or decree appointing, without the consent of Subtenant, a
receiver of Subtenant or of the whole or substantially all of its
property, or approving a petition filed against it seeking reorganization
or arrangement of Subtenant under the federal bankruptcy laws or any
other applicable law or statute of the United States of America or any
state thereof, and such judgment, order or decree shall not be vacated or
set aside or stayed within 60 days from the date of the entry thereof;
(f) if Subtenant shall be liquidated or dissolved, or shall begin
proceedings toward such liquidation or dissolution;
(g) if the estate or interest of Subtenant in the Subleased Property
or any part thereof shall be levied upon or attached in any proceeding
and the same shall not be vacated or discharged within the later of 90
days after commencement thereof or 30 days after receipt by Subtenant of
notice thereof from Sublandlord (unless Subtenant shall be contesting
such lien or attachment in accordance with Article 12); provided,
however, that such notice shall be in lieu of and not in addition to any
notice required under applicable law;
(h) if, except as a result of damage, destruction or a partial or
complete Condemnation or other Unavoidable Delays, Subtenant voluntarily
ceases operations on the Subleased Property for a period in excess of 45
consecutive days;
(i) any representation or warranty made by Subtenant herein or in
any certificate, demand or request made pursuant hereto proves to have
been incorrect when made in any material respect, and any adverse effect
on Sublandlord of any such misrepresentation or breach of warranty has
not been corrected to Sublandlord's
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satisfaction within 20 days after Subtenant becomes aware of, or is
notified by Sublandlord of the fact of, such misrepresentation or breach
of warranty;
(j) if an Event of Default under any of the Other Property Leases
occurs, provided, however, that if such Event of Default (other than for
the failure to pay money or post the requisite security) arose from
occurrences beyond the reasonable control of Subtenant, such Event of
Default shall not constitute an Event of Default under this Section
16.1(j);
(k) with respect to two (2) or more of the Other Property Leases,
either an Event of Default has occurred and is continuing or such leases
have been terminated by reason of an Event of Default;
(l) a default by Subtenant in any payment of principal or interest
on any obligations for borrowed money having a principal balance of
$5,000,000 or more in the aggregate (excluding obligations which are
limited in recourse to specific property of Subtenant provided that such
property is not a substantial portion of the assets of Subtenant), or in
the performance of any other provision contained in any instrument under
which any such obligation is created or secured (including the breach of
any covenant thereunder), if an effect of such default is that the
holder(s) of such obligation cause such obligation to become due prior to
its stated maturity;
(m) a final, non-appealable judgment or judgments for the payment of
money in excess of $3,000,000 in the aggregate not fully covered
(excluding deductibles) by insurance shall be rendered against Subtenant
and the same shall remain undischarged, unvacated, unbonded, or unstayed
for a period of 60 consecutive days; or
(n) if Subtenant shall default with respect to any of the provisions
of the Master Lease that Subtenant is obligated to comply with pursuant
to Section 29.1 below and Subtenant fails to cure such default within the
applicable cure period (if any) under the Master Lease;
THEN, Sublandlord may terminate this Sublease by giving Subtenant not less than
10 days' notice (or no notice for clauses (d), (f) and (g)) of such termination
and upon the expiration of the time fixed in such notice, the Term shall
terminate and all rights of Subtenant under this Sublease shall cease. Without
limitation of the foregoing, Sublandlord shall have all other rights at law and
in equity available to Sublandlord as a result of any Event of Default under
this Sublease.
16.2 PAYMENT OF COSTS. Subtenant shall, to the extent permitted by law,
pay as Additional Charges all costs and expenses incurred by or on behalf of
Sublandlord, including reasonable attorneys' fees and expenses, as a result of
any Event of Default hereunder.
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16.3 EXCEPTIONS. No Event of Default (other than a failure to make
payment of money or post a required letter of credit) shall be deemed to exist
under clause 16.1(c) or clause 16.1(j) during any time the curing thereof is
prevented by an Unavoidable Delay; provided that, upon the cessation of such
Unavoidable Delay, Subtenant shall remedy such default without further delay.
16.4 CERTAIN REMEDIES. If an Event of Default shall have occurred (and
the event giving rise to such Event of Default has not been cured within the
curative period relating thereto as set forth in Section 16.1) and be
continuing, whether or not this Sublease has been terminated pursuant to
Section 16.1, Subtenant shall, to the extent permitted by law, if required by
Sublandlord so to do, immediately surrender to Sublandlord the Subleased
Property pursuant to the provisions of Section 16.1 and quit the same and
Sublandlord may enter upon and repossess the Subleased Property by reasonable
force, summary proceedings, ejectment or otherwise, and may remove Subtenant
and all other Persons and any and all Subtenant's Personal Property from the
Subleased Property subject to any requirement of law.
16.5 DAMAGES. None of (a) the termination of this Sublease pursuant to
Section 16.1, (b) the repossession of the Subleased Property, (c) the failure
of Sublandlord, notwithstanding reasonable good faith efforts, to relet the
Subleased Property, (d) the reletting of all or any portion thereof, nor (e)
the failure of Sublandlord to collect or receive any rentals due upon any such
reletting, shall relieve Subtenant of its liability and obligations hereunder,
all of which shall survive any such termination, repossession or reletting. In
the event of any such termination, Subtenant shall forthwith pay to Sublandlord
all Rent due and payable with respect to the Subleased Property to, and
including, the date of such termination. Thereafter, Subtenant shall forthwith
pay to Sublandlord, at Sublandlord's option, as and for liquidated and agreed
current damages for Subtenant's default, either:
(a) the sum of:
(i) the worth at the time of award of the amount by which the
unpaid Rent which would have been earned after termination until
the time of award exceeds the amount of such rental loss that
Subtenant proves could have been reasonably avoided,
(ii) the worth at the time of award of the amount by which the
unpaid Rent for the balance of the Term after the time of award
exceeds the amount of such rental loss that Subtenant proves could
be reasonably avoided, and
(iii) any other amount necessary to compensate Sublandlord for
all the detriment proximately caused by Subtenant's failure to
perform its obligations under this Sublease or which in the
ordinary course of things would be likely to result therefrom.
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In making the above determinations, the worth at the time of the award
shall be determined by the court having jurisdiction thereof using, as a
discount factor for determining present value, a rate equal to the Prime
Rate at the time of the Event of Default, and the Additional Rent shall
be deemed to be the same as for the then-current Fiscal Year or, if not
determinable, the immediately preceding Fiscal Year, for the remainder of
the Term, or such other amount as either party shall prove reasonably
could have been earned during the remainder of the Term or any portion
thereof; or
(b) without termination of Subtenant's right to possession of the
Subleased Property, each installment of said Rent and other sums payable
by Subtenant to Sublandlord under the Sublease as the same becomes due
and payable, which Rent and other sums shall bear interest at the maximum
annual rate permitted by the law of the State from the date when due
until paid, and Sublandlord may enforce, by action or otherwise, any
other term or covenant of this Sublease.
16.6 ADDITIONAL REMEDIES. In addition to and without limitation of the
foregoing, Sublandlord shall have all other remedies that may be available
under applicable law.
16.7 APPOINTMENT OF RECEIVER. Upon the occurrence of an Event of Default,
and upon filing of a suit or other commencement of judicial proceedings to
enforce the rights of Sublandlord hereunder, Sublandlord shall be entitled, as
a matter of right, to the appointment of a receiver or receivers acceptable to
Sublandlord (i) of the Subleased Property and the Facility and (ii) of the
revenues, earnings, income, products and profits thereof, pending such
proceedings, with such powers as the court making such appointment shall
confer.
16.8 WAIVER. If this Sublease is terminated pursuant to Section 16.1,
Subtenant waives, to the extent permitted by applicable law (a) any right of
redemption, re-entry or repossession and (b) any right to a trial by jury in
the event of summary proceedings to enforce the remedies set forth in this
Article 16.
16.9 APPLICATION OF FUNDS. Any payments received by Sublandlord under any
of the provisions of this Sublease during the existence or continuance of any
Event of Default shall be applied to Subtenant's obligations in such order as
Sublandlord may determine or as may be prescribed by the laws of the State.
ARTICLE 17
SUBLANDLORD'S RIGHT TO CURE SUBTENANT'S DEFAULT
If Subtenant shall fail to make any payment or to perform any act required
to be made or performed under this Sublease, and to cure the same within the
relevant time periods in Section 16.1, Sublandlord, after notice to and demand
upon Subtenant, and without waiving or releasing any obligation or default, may
(but shall be under no obligation to) at any time
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thereafter make such payment or perform such act for the account and at the
expense of Subtenant. Sublandlord may, to the extent permitted by law, enter
upon the Subleased Property for such purpose and take all such action thereon
as, in Sublandlord's good faith judgment, may be necessary or appropriate
therefor. No such entry shall be deemed an eviction of Subtenant. All sums so
paid by Sublandlord and all costs and expenses (including reasonable attorneys'
fees and expenses, to the extent permitted by law) so incurred, together with a
late charge thereon at the Overdue Rate from the date on which such sums or
expenses are paid or incurred by Sublandlord, shall be paid by Subtenant to
Sublandlord on demand. The obligations of Subtenant and rights of Sublandlord
contained in this Article 17 shall survive the expiration or earlier
termination of this Sublease.
ARTICLE 18
OPERATIONS/CAPITAL EXPENDITURES
18.1 ANNUAL PLAN. On or before the Commencement Date (i.e., with respect
to the calendar year in which the Commencement Date occurs), and thereafter on
or before November 30th of each year during the Term hereof, Subtenant shall
deliver to Sublandlord a report with respect to the next succeeding calendar
year (herein, an "Annual Plan"), setting forth the plans and prospects for
Subtenant's business operations at the Subleased Property, which shall include
(i) a forecast or budget of revenues (including, without limitation, Golf
Course Revenues and Other Revenues) and expenses for such period, (ii) a
projection on a month-by-month basis of cash in-flow and working capital, (iii)
proposed plans for marketing, sales, promotion, membership development and
advertising, (iv) a proposed schedule of all fees and charges to be imposed at
the Subleased Property, including, but not limited to, membership fees, greens
fees and cart rental charges, charges for the use of practice range facilities,
food and beverages charges, and fees and charges for other services, amenities
and products that Subtenant intends to offer at the Subleased Property, (v) a
forecast or budget of Capital Expenditures for such period, together with a
plan for the improvement of the golf course and related facilities and a plan
for the improvement of the clubhouse and other buildings at the Subleased
Property, and (vi) description of any other material action concerning the
management, operation or marketing of the Subleased Property contemplated for
the period at issue. Sublandlord shall have the right to request reasonable
modifications to the components of the Annual Plan described in subclause (v)
above with respect to additions or improvements made or to be made to the
Subleased Property, by notice thereof to Subtenant, and Subtenant shall
thereafter so modify such items as reasonably requested by Sublandlord, and
shall submit the revised components of the Annual Plan to Sublandlord within
thirty (30) days following Sublandlord's request for such modifications.
Subtenant shall utilize good faith efforts to implement the Annual Plan for the
respective period or periods covered thereby and shall promptly notify
Sublandlord of any action taken by Subtenant which materially deviates from the
matters set forth in the current Annual Plan. Without limitation of the
foregoing, it is agreed by Subtenant that the Annual Plan shall provide for an
annual budget for Capital Expenditures
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of not less than three percent (3%) of the Golf Course Revenues and Other
Revenues budgeted for such annual period.
18.2 FUNDING OF CAPITAL EXPENDITURE RESERVE ACCOUNT. Within twenty (20)
days after the end of each Fiscal Quarter during the Term hereof, Subtenant
shall deposit into an account at an institution designated by Sublandlord
(herein, the "Capital Expenditure Reserve Account"), the aggregate "Capital
Expenditure Reserve Amounts" (as defined below) required for the immediately
preceding Fiscal Quarter. Such amounts shall be invested as directed by
Subtenant, subject to Sublandlord's reasonable approval. As further security
for the payment and performance of all obligations of Subtenant hereunder,
Subtenant hereby grants to Sublandlord and, if so requested by Sublandlord, to
any Facility Mortgagee designated by Sublandlord, a security interest in and to
the Capital Expenditure Reserve Account and all sums on deposit therein. All
such sums, together with any interest thereon, shall belong to Subtenant and
will be held in the Capital Expenditure Reserve Account and released and
applied in accordance with the terms of this Sublease. Subtenant may make
withdrawals from the Capital Expenditure Reserve Account with respect to
Capital Expenditures that are reflected in the Annual Plan and which pertain to
Subtenant Improvements approved by Sublandlord pursuant to Article 10 hereof,
to the extent such withdrawals are made to reimburse Subtenant for sums paid or
incurred with respect to such Subtenant Improvements. Notwithstanding the
foregoing, upon the occurrence of an Event of Default hereunder, Subtenant
shall have no further rights with respect to any amounts on deposit in the
Capital Expenditure Reserve Account, and such amounts shall be deemed to be
held by Sublandlord as further security for Subtenant's obligations hereunder,
to be disbursed or applied in accordance with the same terms and conditions as
set forth in Article 21 hereof with respect to the balance of the security then
on deposit with Sublandlord. For purposes hereof, the term "Capital
Expenditure Reserve Amount" shall mean, for any Fiscal Quarter, an amount equal
to the excess (if any) of (i) three percent (3%) of the Golf Course Revenues
and Other Revenues accruing from the beginning of the "Capital Expenditure
Period" (as defined below) in which such Fiscal Quarter occurs through and
including the end of such Fiscal Quarter (herein, the "Calculation Period")
over (ii) the sum of all Capital Expenditures expended during such Calculation
Period with respect to the Subleased Property, which Capital Expenditures were
made pursuant to an Annual Plan and otherwise pursuant to the terms of Article
10 hereof. For purposes hereof, the term ""Capital Expenditure Period" shall
mean (a) the period from and the Commencement Date and through the fourth (4th)
full Fiscal Quarter thereafter and (b) each successive period of four (4) full
Fiscal Quarters thereafter occurring during the Term thereof. Any amounts
remaining in the Capital Expenditure Reserve Account at the expiration or prior
termination of the Term shall become the sole property of Sublandlord, without
further action by either party.
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ARTICLE 19
LEGAL REQUIREMENTS
Subject to Article 12 regarding permitted contests, Subtenant, at its
expense, shall promptly (a) comply with all Legal Requirements and Insurance
Requirements in respect of the use, operation, maintenance, repair and
restoration of the Subleased Property, whether or not compliance therewith
shall require structural changes in any of the Subleased Improvements or
interfere with the use and enjoyment of the Subleased Property; and (b)
procure, maintain and comply with all licenses, permits, approvals and
authorizations required for any use of the Subleased Property then being made,
and for the proper erection, installation, operation and maintenance of the
Subleased Property or any part thereof.
ARTICLE 20
HOLDING OVER
If Subtenant shall for any reason remain in possession of the Subleased
Property after the expiration of the Term or earlier termination of the Term
hereof, such possession shall be as a tenancy at sufferance during which time
Subtenant shall pay as rental each month or partial month, 125% of the
aggregate of (i) one-twelfth of the aggregate Annual Base Rent and Additional
Rent payable with respect to the last Fiscal Year of the preceding Term; (ii)
all Additional Charges accruing during the month; and (iii) all other sums, if
any, payable by Subtenant pursuant to the provisions of this Sublease with
respect to the Subleased Property. In addition to and without limiting any
other rights or remedies which Sublandlord may have on account of such holding
over, Subtenant shall indemnify Sublandlord and Lessor from and against all
damages suffered by Sublandlord or Lessor, as the case may be, on account of
such holding over, including any damages and claims by tenants or subtenants
entitled to future possession. During such period of tenancy at sufferance,
Subtenant shall be obligated to perform and observe all of the terms, covenants
and conditions of this Sublease, but shall have no rights hereunder other than
the right, to the extent given by law to such tenancies at sufferance, to
continue its occupancy and use of the Subleased Property. Nothing contained
herein shall constitute the consent, express or implied, of Sublandlord to the
holding over of Subtenant after the expiration or earlier termination of this
Sublease.
ARTICLE 21
UPREIT UNITS/REIT SHARES/LETTER OF CREDIT/SECURITY DEPOSIT
21.1 SECURITY DEPOSIT. On or before the Commencement Date, Subtenant
shall post a Letter of Credit with Sublandlord (or shall pledge or otherwise
deliver limited partnership units in Sublandlord, shares of common stock in
Sublandlord's general partner, or other security acceptable to Sublandlord and
described in Section 21.6 below), to be held as a security deposit
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in accordance with the term, of this Article 21. The security deposit shall, at
all times, be in an amount equal to the then Required Security Deposit Amount
(as defined in Exhibit A hereto).
21.2 OFFICER'S CERTIFICATE/AUDIT. Subtenant shall provide an Officer's
Certificate to Sublandlord not later than forty-five (45) days after the end of
each Fiscal Quarter, as to the Required Security Deposit Amount then in effect,
which Certificate shall include a calculation and reasonable detail of such
item. Without limitation of the foregoing, Sublandlord shall have the right,
at any time and from time to time, to audit, whether directly or through its
accountants, the information set forth in any Officer's Certificate to be
delivered under this Article 21, and in connection with such audit, to examine
Subtenant's books and records with respect thereto (including supporting data,
sales tax returns and Subtenant's workpapers). Any determination made by
Sublandlord pursuant to said audit shall be binding upon Subtenant. If any
such audit discloses that the EBITDA (as defined in Exhibit A hereto) was
overstated by such amount so as to result in a purported reduction in the
Required Security Deposit Amount for which Subtenant was not otherwise entitled
based upon the audited EBITDA calculations, then, in such case, Subtenant shall
be responsible for all costs incurred by Sublandlord in connection with such
audit and examination. If the determination of the then Required Security
Deposit Amount indicates that Sublandlord is then holding either less than or
greater than the then required security deposit hereunder, the parties shall
promptly cooperate with one another in either increasing or decreasing the
security deposit so that Sublandlord, within thirty (30) days after delivery of
said Officer's Certificate (or, if Sublandlord disputes such determination,
then within 30 days following any audit conducted by Sublandlord as provide
above in this Section 21.2), is then holding the appropriate security deposit
hereunder.
21.3 TERMS OF LETTER OF CREDIT. In the event that the security under this
Article 21 is in the form of a Letter of Credit, such Letter of Credit shall:
(i) be an irrevocable standby letter of credit from a bank with a
long-term debt rating from Standard & Poor's Corporation or Xxxxx'x
Investors Services Inc. of "A" or better naming Sublandlord (and/or any
Facility Mortgagee if requested by Sublandlord) as beneficiary to secure
Subtenant's obligations hereunder and Subtenant's or an Affiliate of
Subtenant's obligations under the Other Property Leases;
(ii) have a stated amount equal to the Required Security Deposit
Amount plus, if the Letter of Credit is intended to satisfy Subtenant's
obligations under the Other Property Leases with Sublandlord, the amounts
required under such other leases;
(iii) have a term of not less than one year;
(iv) provide that it will be honored upon a signed statement by
Sublandlord that Sublandlord is entitled to draw upon the letter of
credit under this Sublease, and shall require no signature or statement
from any party other than Sublandlord; and
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(v) permit multiple draws by providing that following the honor of
any drafts in an amount less than the aggregate stated amount of the
Letter of Credit, the issuing bank shall return the original letter of
credit to Sublandlord and that Sublandlord's rights as to the remaining
stated amount of the Letter of Credit will not be extinguished.
21.4 DRAWS AGAINST LETTER OF CREDIT/ALTERNATIVE SECURITY; APPLICATION OF
PROCEEDS. Sublandlord may draw against the Letter of Credit (or, in the case
of alternative security under Section 21.6 below, Sublandlord may apply or
otherwise proceed against such security) upon any monetary default under this
Sublease or any other Event of Default under the terms of Section 16.1.
Sublandlord may apply any amounts drawn or received under the Letter of Credit
(or alternative security) to the satisfaction of any obligations owed to
Sublandlord under this Sublease or the Other Property Leases. Any proceeds
from the Letter of Credit (or alternative security) drawn or received but not
so applied shall be held by Sublandlord as a security deposit.
21.5 RENEWAL OF LETTER OF CREDIT. If the Letter of Credit shall expire at
a time when the Letter of Credit is still required under Section 21.1 or
Section 21.2, Subtenant shall renew the Letter of Credit at least 30 days prior
to its expiration. If Subtenant shall fail to renew the Letter of Credit prior
to such time, Sublandlord may draw against the same and hold the proceeds
thereof as a security deposit until such time as Subtenant shall renew the
Letter of Credit. Sublandlord shall hold such security deposit in a separate
account in trust for Subtenant and shall account to Subtenant for any interest
earned thereon.
21.6 OTHER SECURITY. In the event Sublandlord, at its discretion (and
without obligation to do so), permits the security under this Article 21 to be
in a form other than a Letter of Credit, then the alternative security shall be
in the same amount as the "Required Security Deposit Amount" and shall
otherwise be in such form and substance as may be acceptable to Sublandlord, in
its discretion. In such event, Subtenant agrees to enter into a supplement to
this Sublease, at Sublandlord's request, in order to set forth the terms and
conditions governing the alternative security. Without limitation of the
foregoing, Sublandlord hereby agrees that limited partnership units in
Sublandlord or shares of common stock in Sublandlord's general partner shall be
deemed to be an acceptable form of alternative security hereunder. The value
of each such limited partnership unit or share of common stock, for purposes of
this Article 21, shall be (A) with respect to any partnership unit or share
delivered or pledged to Sublandlord as security as of the Commencement Date of
the Term, the "Price to Public (Per Share)", as shown on the cover page of the
final prospectus distributed in connection with the initial public offering of
shares of common stock of Sublandlord's general partner, and (B) with respect
to any partnership unit or share delivered or pledged to Sublandlord as
security at any time following the Commencement Date of the Term, the average
of the New York Stock Exchange closing prices per share of common stock of
Sublandlord's general partner for the twenty (20) consecutive "Trading Days"
(as hereinafter defined) immediately preceding the date of delivery or pledge
of said partnership unit or share as security hereunder. For purposes of the
foregoing, "Trading Day" shall mean a day on which the New York Stock Exchange
is open for the transaction of business.
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ARTICLE 22
IMPOUNDS
Without limitation on any obligations of Subtenant set forth herein,
Sublandlord shall have the right, at any time following and during the
continuance of an Event of Default hereunder, to require Subtenant to pay to
Sublandlord an additional monthly sum (each an "Impound Payment") sufficient to
pay the Impound Charges (as hereinafter defined) as they become due. As used
herein, "Impound Charges" shall mean real estate taxes on the Subleased
Property or payments in lieu thereof, rental or other payments due to Lessor
under the Master Lease and premiums on any insurance required by this Sublease.
Sublandlord shall determine the amount of the Impound Charges and of each
Impound Payment. The Impound Payments shall be held in a separate account and
shall not be commingled with other funds of Sublandlord and interest thereon
shall be held for the account of Subtenant. Upon Subtenant's tendering to
Sublandlord of invoices therefor no later than thirty (30) days prior to the
respective due dates thereof, Sublandlord shall apply the Impound Payments to
the payment of the Impound Charges in such order or priority as Sublandlord
shall reasonably determine or as otherwise required by law. If at any time the
Impound Payments theretofore paid to Sublandlord shall be insufficient for the
payment of the Impound Charges, Subtenant, within 10 days after Sublandlord's
written demand therefor, shall pay the amount of the deficiency to Sublandlord.
ARTICLE 23
INDEMNIFICATION; RISK OF LOSS
23.1 SUBTENANT'S INDEMNIFICATION. Notwithstanding the existence of any
insurance provided for in Article 13, and without regard to the policy limits
of any such insurance, Subtenant will protect, indemnify, save harmless and
defend Sublandlord, Lessor, each Facility Mortgagee and any mortgagee of Lessor
from and against all liabilities, obligations, claims, damages, penalties,
causes of action, costs and expenses (including reasonable attorneys' fees and
expenses), to the extent permitted by law, imposed upon or incurred by or
asserted against such parties by reason of:
(a) any accident, injury to or death of Persons or loss of or damage
to property occurring on or about the Subleased Property or adjoining
sidewalks, including, but not limited to, any accident, injury to or
death of Person or loss of or damage to property resulting from golf
balls, golf clubs, golf shoes, lawn mowers or other gardening devices,
golf carts, tractors or other motorized vehicles present on or adjacent
to the Subleased Property;
(b) any use, misuse, non-use, condition, maintenance or repair by
Subtenant of the Subleased Property;
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(c) any Impositions (which are the obligations of Subtenant to pay
pursuant to the applicable provisions of this Sublease);
(d) any failure on the part of Subtenant to perform or comply with
any of the terms of this Sublease;
(e) the non-performance of any of the terms and provisions of any
and all existing and future subsubleases of the Subleased Property to be
performed by the subsublandlord (i.e., Subtenant) thereunder;
(f) any "dram shop" liability associated with the sale and/or
consumption of alcohol at the Subleased Property; and
(g) any liability Sublandlord, Lessor, any Facility Mortgagee or any
mortgagee of Lessor may incur or suffer as a result of any permitted
contest by Subtenant pursuant to Article 12.
23.2 SUBLANDLORD'S INDEMNIFICATION OF SUBTENANT. Sublandlord shall
protect, indemnify, save harmless and defend Subtenant from and against all
liabilities, obligations, claims, damages, penalties, causes of action, costs
and expenses (including reasonable attorneys' fees) imposed upon or incurred by
or asserted against Subtenant as a result of Sublandlord's active negligence or
willful misconduct.
23.3 MECHANICS OF INDEMNIFICATION. As soon as reasonably practicable
after receipt by the indemnified party of notice of any liability or claim
incurred by or asserted against the indemnified party that is subject to
indemnification under this Article 23, the indemnified party shall give notice
thereof to the indemnifying party. The indemnified party may at its option
demand indemnity under this Article 23 as soon as a claim has been threatened
by a third party regardless of whether an actual loss has been suffered, so
long as the indemnified party shall in good faith determine that such claim is
not otherwise frivolous and that the indemnified party may be liable for, or
otherwise incur, a loss as a result thereof and shall give notice of such
determination to the indemnifying party. The indemnified party shall permit
the indemnifying party, at its option and expense, to assume the defense of any
such claim by counsel selected by the indemnifying party and reasonably
satisfactory to the indemnified party, and to settle or otherwise dispose of
the same; provided, however, that the indemnified party may at all times
participate in such defense at its expense; and provided further, however, that
the indemnifying party shall not, in defense of any such claim, except with the
prior written consent of the indemnified party, consent to the entry of any
judgment or to enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff in question
to the indemnified party and its affiliates a release of all liabilities in
respect of such claims, or that does not result only in the payment of money
damages by the indemnifying party. If the indemnifying party shall fail to
undertake such defense within 30 days after such notice, or within such shorter
time as may be reasonable under the circumstances, then the indemnified
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party shall have the right to undertake the defense, compromise or settlement
of such liability or claim on behalf of and for the account of the indemnifying
party.
23.4 SURVIVAL OF INDEMNIFICATION OBLIGATIONS. Subtenant's or
Sublandlord's liability for a breach of the provision of this Article 23
arising during the Term hereof shall survive any termination of this Sublease
for a period of one (1) year (i.e., meaning that Sublandlord or Subtenant, as
the case may be, must give notice to the other of such claim prior to the
expiration of said 1-year period).
23.5 RISK OF LOSS. During the Term of this Sublease, the risk of loss or
of decrease in the enjoyment and beneficial use of the Subleased Property as a
consequence of the damage or destruction thereof by fire, the elements,
casualties, thefts, riots, wars or otherwise, or in consequence of
foreclosures, attachments, levies or executions (other than by Sublandlord and
those claiming from, through or under Sublandlord) is assumed by Subtenant. In
the absence of gross negligence, willful misconduct or breach of this Sublease
by Sublandlord pursuant to Section 26.3, Sublandlord shall in no event be
answerable or accountable therefor nor shall any of the events mentioned in
this Section 23.5 entitle Subtenant to any abatement of Rent.
ARTICLE 24
SUBSUBLETTING AND ASSIGNMENT
24.1 PROHIBITION AGAINST SUBSUBLETTING AND ASSIGNMENT. Subject to Section
24.3, Subtenant shall not, without the prior written consent of Sublandlord
(which consent Sublandlord may grant or withhold in its sole and absolute
discretion, except as hereinafter expressly provided), assign, mortgage,
pledge, hypothecate, encumber or otherwise transfer (except to an Affiliate of
Subtenant) this Sublease or any interest herein, all or any part of the
Subleased Property or suffer or permit this Sublease or the leasehold estate
created hereby or any other rights arising under this Sublease to be assigned,
transferred, mortgaged, pledged, hypothecated or encumbered, in whole or in
part, whether voluntarily, involuntarily or by operation of law; provided,
however, that Sublandlord's consent to a proposed assignment of this Sublease
shall not be withheld if, as of the date of such assignment (a) the proposed
assignee shall also be the assignee of all Other Property Leases, in accordance
with the terms and conditions for assignment set forth therein, (b) the
proposed assignee (together with any proposed guarantor(s) of the proposed
assignee's obligations under this Sublease) has a net worth, as evidenced by
audited financial statements, of at least Thirty Million Dollars
($30,000,000.00), and (c) the proposed assignee, together with its Affiliates,
manages or operates not less than thirty (30) golf courses (hereinafter
collectively called the "Minimum Assignee Qualifications"). Sublandlord shall
have a period of thirty (30) days after delivery to it of a request for
assignment together with the financial and other information on the proposed
assignee (and any proposed guarantors) necessary for Sublandlord to evaluate
whether the proposed assignee satisfies the Minimum Assignee Qualifications
and Sublandlord's failure to respond within thirty (30) days of
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Sublandlord's receipt of a request for assignment and all required information
(as evidenced by a receipt signed and dated by Sublandlord) shall be deemed
Sublandlord's approval of said assignee and said assignment. Any notice
withholding consent must specify in detail the reasonable grounds for
Sublandlord so withholding its consent. For purposes of this Section 24.1, an
assignment of this Sublease shall be deemed to include any Change of Control of
Subtenant, as if such Change of Control were an assignment of this Sublease.
24.2 CHANGES IN CONTROL. A Change of Control requiring the consent of
Sublandlord shall mean:
(a) the issuance and/or sale by Subtenant or the sale by any
stockholder of Subtenant of a Controlling interest in Subtenant to a
Person other than an Affiliate of Subtenant, other than in either case a
distribution to the public pursuant to an effective registration
statement under the Securities Act of 1933, as amended (a "Registered
Offering");
(b) the sale, conveyance or other transfer of all or substantially
all of the assets of Subtenant (whether by operation of law or
otherwise);
(c) any other transaction, or series of transactions, which results
in (i) Xxxxxx Management no longer being the sole managing member of
Subtenant or (ii) Xxxxxx Management no longer owning, directly or
indirectly, beneficially at least fifty-one percent (51%) of the voting
and economic membership or ownership interests in Subtenant, or (iii)
Affiliates of Subtenant no longer having Control of Subtenant (in each
such case, other than through a Registered Offering); or
(d) any transaction pursuant to which Subtenant is merged with or
consolidated into another entity (other than an entity owned and
Controlled by an Affiliate of Subtenant), and Subtenant is not the
surviving entity;
provided, however, that Sublandlord shall not withold its
consent to a proposed assignment of this Sublease resulting from any
proposed Change of Control of Subtenant, so long as (i) for a Change of
Control under Sections 24.2(b) or (d) above, the Person formed by or
surviving such transaction as the assignee of Subtenant's interest
hereunder satisfies the "Minimum Assignee Qualifications" described in
Section 24.1 above, and (ii) for a Change of Control under Sections
24.1(a) or (c) above, the Person obtaining control of Subtenant as a
result of such transaction, together, together with Person's Affiliates,
of such transaction, together with such Person's Affiliates, satisfies
the "Minimum Assignee Qualifications" described in Section 24.1 above.
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24.3 SUBSUBLEASES.
24.3.1 PERMITTED SUBSUBLEASES. Subtenant shall not assign this
Sublease or subsublet all or any part of the Subleased Property without
first having obtained Sublandlord's prior written consent, at
Sublandlord's sole discretion. Notwithstanding the foregoing,
Sublandlord agrees that it shall not unreasonably withhold its consent to
any requested subsublease of portions of the Subleased Property to
concessionaires or licensees to:
(a) operate golf professionals' shops;
(b) operate golf driving ranges;
(c) provide golf lessons;
(d) operate restaurants;
(e) operate bars; and
(f) operate any other portions (but not the entirety) of the
Subleased Property customarily associated with or incidental to the
operation of the Golf Course.
24.3.2 TERMS OF SUBSUBLEASE. Each subsublease of any of the
Subleased Property shall be subject and subordinate to the provisions of
this Sublease. No subsublease made as permitted by Section 24.3.1 shall
affect or reduce any of the obligations of Subtenant hereunder, and all
such obligations shall continue in full force and effect as if no
subsublease had been made. No subsublease shall impose any additional
obligations on Sublandlord under this Sublease.
24.3.3 COPIES. Subtenant shall, within 10 days after the execution
and delivery of any subsublease permitted by Section 24.3.1, deliver a
duplicate original thereof to Sublandlord.
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24.3.4 ASSIGNMENT OF RIGHTS IN SUBSUBLEASES. As security for
performance of its obligations under this Sublease, Subtenant hereby
grants, conveys and assigns to Sublandlord all right, title and interest
of Subtenant in and to all subsubleases now in existence or hereinafter
entered into for any or all of the Subleased Property, and all
extensions, modifications and renewals thereof and all rents, issues and
profits therefrom. Sublandlord hereby grants to Subtenant a license to
collect and enjoy all rents and other sums of money payable under any
subsublease of any of the Subleased Property; provided, however, that
Sublandlord shall have the absolute right at any time after the
occurrence and during the continuance of an Event of Default upon notice
to Subtenant and any subsubtenants to revoke said license and to collect
such rents and sums of money and to retain the same. Subtenant shall not
(i) after the occurrence and during the continuance of an Event of
Default, consent to, cause or allow any material modification or
alteration of any of the terms, conditions or covenants of any of the
subsubleases or the termination thereof, without the prior written
approval of Sublandlord nor (ii) accept any rents (other than customary
security deposits) more than 90 days in advance of the accrual thereof
nor permit anything to be done, the doing of which, nor omit or refrain
from doing anything, the omission of which, will or could be a breach of
or default in the terms of any of the subsubleases.
24.3.5 LICENSES, ETC. For purposes of Sections 24.1, 24.3 and
24.5, subsubleases shall be deemed to include any licenses, concession
arrangements, management contracts or other arrangements relating to the
possession or use of all or any part of the Subleased Property.
24.4 ASSIGNMENT. Upon any assignment permitted under this Sublease
(either as a matter of right or with Sublandlord's consent), the assignee shall
expressly assume, for the benefit of Sublandlord, all obligations and
liabilities of Subtenant hereunder arising from and after the effective date of
such assignment, whereupon the assignor shall, from and after the effective
date of such assignment, be relieved of all liability for any obligations
arising from and after said effective date. No consent to any assignment in a
particular instance shall be deemed to be a waiver of the prohibition set forth
in Article 24. Any assignment or other transfer of all or any portion of
Subtenant's interest in the Sublease in contravention of Article 24 shall be
voidable at Sublandlord's option. All terms and conditions of this Sublease
shall continue to apply from and after the effective date of such assignment
(including, without limitation, the terms of Sections 16.1(j) and 16.1(k)
hereof).
24.5 REIT LIMITATIONS. Anything contained in this Sublease to the
contrary notwithstanding, Subtenant shall not (i) subsublet or assign the
Subleased Property or this Sublease on any basis such that the rental or other
amounts to be paid by the subsubtenant or assignee thereunder would be based,
in whole or in part, on the income or profits derived by the business
activities of the subsubtenant or assignee; (ii) subsublet or assign the
Subleased Property or this Sublease to any Person in which Sublandlord owns,
directly or indirectly (by applying constructive ownership rules set forth in
Section 856(d)(5) of the Code), a 10% or greater
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interest; or (iii) subsublet or assign the Subleased Property or this Sublease
in any other manner or otherwise derive any income which could cause any
portion of the amounts received by Sublandlord pursuant to this Sublease or any
subsublease to fail to qualify as "rents from real property" within the meaning
of Section 856(d) of the Code, or which could cause any other income received
by Sublandlord to fail to qualify as income described in Section 856(c)(2) of
the Code. The requirements of this Section 24.5 shall likewise apply to any
further subleasing by any subsubtenant.
ARTICLE 25
OFFICER'S CERTIFICATES AND OTHER STATEMENTS
25.1 OFFICER'S CERTIFICATES. At any time, and from time to time upon
Subtenant's receipt of not less than 10 days' prior written request by
Sublandlord, Subtenant will furnish to Sublandlord an Officer's Certificate
certifying that:
(a) this Sublease is unmodified and in full force and effect (or
that this Sublease is in full force and effect as modified and setting
forth the modifications);
(b) the dates to which the Rent has been paid;
(c) whether or not, to the best knowledge of Subtenant, Sublandlord
is in default in the performance of any covenant, agreement or condition
contained in this Sublease and, if so, specifying each such default of
which Subtenant may have knowledge;
(d) that, except as otherwise specified, there are no proceedings
pending or, to the knowledge of the signatory, threatened, against
Subtenant before or by any court or administrative agency which, if
adversely decided, would materially and adversely affect the financial
condition and operations of Subtenant; and
(e) responding to such other questions or statements of fact as
Sublandlord, Lessor or any Facility Mortgagee shall reasonably request.
Subtenant's failure to deliver such statement within such time shall constitute
an acknowledgment by Subtenant that this Sublease is unmodified and in full
force and effect (except as may be represented to the contrary by Sublandlord),
Sublandlord is not in default in the performance of any covenant, agreement or
condition contained in this Sublease and the other matters set forth in such
request, if any, are true and correct. Any such certificate furnished pursuant
to this Section 25.1 may be relied upon by Sublandlord.
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At any time, and from time to time upon Sublandlord's receipt of not less
than 30 days' prior written request by Subtenant, Sublandlord will furnish to
Subtenant a certificate, signed by a duly authorized representative of
Sublandlord, certifying that:
(a) This Sublease is unmodified and in full force and effect (or
that this Sublease is in full force and effect as modified and setting
forth the modification);
(b) the dates to which the Rent has been paid; and
(c) whether or not, to the best knowledge of Sublandlord, Subtenant
is in default in the performance of any covenant, agreement or condition
contained in this Sublease and, if so, specifying each such default of
which Sublandlord may have knowledge.
Sublandlord's failure to deliver such statement within such time shall
constitute an acknowledgement by Sublandlord that this Sublease is unmodified
and in full force and effect (except as may be represented to the contrary by
Subtenant) and that Subtenant is not in default in the performance of any
covenant, agreement or condition contained in this Sublease. Any such
certificate furnished pursuant to this Section 25.1 may be relied upon by
Subtenant.
25.2 FINANCIAL REPORTING. Subtenant shall deliver to Sublandlord the
following items at the time or times hereinafter set forth:
25.2.1 MONTHLY FINANCIAL INFORMATION. As soon as practicable, and
in any event on or before the thirtieth (30th) day following the end of
each calendar month during the Term, Subtenant shall furnish to
Sublandlord unaudited balance sheets relative to Subtenant and relative
to the Subleased Property as of the end of such calendar month, and
income (including information on Capital Expenditures) and cash flow
statements for Subtenant and the Subleased Property for such calendar
month and on a year-to-date and trailing twelve (12) month basis,
certified as being true and correct in all material respects by
Subtenant.
25.2.2 QUARTER FINANCIAL INFORMATION. As soon as practicable, and
in any event within thirty (30) days after the end of each Fiscal Quarter
during the Term, Subtenant shall furnish to Sublandlord unaudited balance
sheets of Subtenant and of the Subleased Property as of the close of such
Fiscal Quarter, together with income statements and statements of cash
flow for Subtenant and for the Subleased Property for such Fiscal Quarter
and on a year-to-date and trailing twelve (12) month basis, in all cases
setting forth in comparative form the figures for the preceding
corresponding periods, together with a statement of all Capital
Expenditures made during such Fiscal Quarter and a reconciliation thereof
with amounts deposited (or required to be deposited) into the Capital
Expenditure Reserve Account for such Fiscal Quarter, all in detail and
presentation reasonably acceptable to Sublandlord. The foregoing
quarterly financial
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information shall be accompanied by a certificate of a duly authorized
representative of Subtenant, dated within five (5) days of the delivery
of such statement, stating that (i) the authorized representative knows
of no Event of Default or event which, upon notice or the passage of time
or both, would become an Event of Default, or if any such event has
occurred and is continuing, specifying the nature and period of existence
thereof and what action Subtenant has taken or proposes to take with
respect thereto, and (ii) except as otherwise specified in such
certificate, to the best of such representative's knowledge, Subtenant
and Sublandlord have each fulfilled, in all material respects, all of
their respective obligations under this Sublease which are required to be
fulfilled on or prior to the date of such certificate.
25.2.3 ANNUAL FINANCIAL STATEMENTS. As soon as practicable, and in
any event within ninety (90) days after the close of each Fiscal Year
during the Term, Subtenant shall furnish to Sublandlord a copy of its
audited consolidated balance sheet and related audited consolidated
statement of income and audited statement of cash flow, in each case with
respect to Subtenant and with respect to the Subleased Property, prepared
in accordance with generally accepted accounting principles consistently
applied. The foregoing financial statements shall be certified by a
nationally recognized certified public accountants, or such other
accountants as may be reasonably acceptable to Sublandlord. All such
financial statements shall set forth, in comparative form, the figures
for the preceding Fiscal Year. The foregoing annual financial statements
shall be accompanied by an opinion of the foregoing accountants to the
effect that (a) there are no qualifications as to the scope of the audit
and (b) the audit was performed in accordance with generally accepted
accounting principles, consistently applied. The annual financial
statements required hereunder shall be accompanied by a certificate of a
duly authorized representative of Subtenant, dated within five (5) days
of the delivery of such statement, stating that (i) the representative
knows of no Event of Default, or event which, upon notice or the passage
of time or both, would become an Event of Default, or, if any such event
has occurred and is continuing, specifying the nature and period of
existence therein and what action Subtenant has taken or proposes to take
with respect thereto, and (ii) except as otherwise specified in such
certificate, to the best of such representative's knowledge, Subtenant
and Sublandlord have each fulfilled, in all material respects, all of
their respective obligations under this Sublease which are required to be
fulfilled on or prior to the date of such certificate. The foregoing
financial statements shall include a statement of all Capital
Expenditures made during such Fiscal Year and a reconciliation thereof
with amounts deposited (or required to be deposited) into the Capital
Expenditure Reserve Account for such Fiscal Year.
25.2.4 OTHER INFORMATION. Subtenant shall promptly furnish
Sublandlord such other information concerning the business being
conducted at the Subleased Property and/or the financial condition of
Subtenant, as Sublandlord may reasonably request from time to time during
the Term.
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25.2.5 STANDARD REPORTING FORMAT. Without limitation of the
reporting requirements described above in this Article 25, it is
understood and agreed that the monthly, quarterly and annual financial
delivery requirements shall include such information with respect to the
operations of the Subleased Property as set forth on, and in accordance
with the reporting format provided in, Exhibit E attached hereto.
25.3 ENVIRONMENTAL STATEMENTS. Immediately upon Subtenant's learning, or
having reasonable cause to believe, that any Hazardous Material in a quantity
sufficient to require remediation or reporting under applicable law is located
in, on or under the Subleased Property or any adjacent property, Subtenant
shall notify Sublandlord in writing of the same, which notice shall include, to
the extent actually known to Subtenant, (a) a statement, in reasonable detail,
of any enforcement, cleanup, removal, or other governmental or regulatory
action instituted, completed or threatened; (b) a statement, in reasonable
detail, of any claim made or threatened by any Person against Subtenant or the
Subleased Property relating to damage, contribution, cost recovery,
compensation, loss, or injury resulting from or claim to result from any
Hazardous Material; and (c) any reports made to any federal, state or local
environmental agency arising out of or in connection with any Hazardous
Material in or removed from the Subleased Property, including any complaints,
notices, warnings or asserted violations in connection therewith.
ARTICLE 26
SUBLANDLORD MORTGAGES
26.1 SUBLANDLORD MAY GRANT LIENS. Subject to Section 26.2, without the
consent of Subtenant, Sublandlord may, from time to time, directly or
indirectly, create or otherwise cause to exist any lien, encumbrance or title
retention agreement ("Sublandlord's Encumbrance") upon the Subleased Property,
or any portion thereof or interest therein, whether to secure any borrowing or
other means of financing or refinancing. Subject to Subtenant's
non-disturbance rights described in Section 26.2 and to the other terms of this
Article 26, this Sublease is and at all times shall be subject and subordinate
to any ground or underlying leases (including, without limitation, the Master
Lease), and the lien, terms, conditions and provisions of, and to each and
every advance heretofore or hereafter made under, any Facility Mortgages or
other mortgages, trust deeds or like encumbrances, which may now or hereafter
affect the Subleased Property and to all renewals, modifications,
consolidations, replacements and extensions of any such lease (including,
without limitation, the Master Lease), Facility Mortgage, other mortgage, trust
deed or like encumbrance. This clause shall be self-operative and no further
instrument of subordination shall be required by any ground or underlying
lessor or by any mortgagee or beneficiary, affecting any lease or the Subleased
Property. In confirmation of such subordination, Subtenant shall execute
promptly any certificate that Sublandlord may request for such purposes.
26.2 SUBTENANT'S NON-DISTURBANCE RIGHTS. So long as Subtenant shall pay
all Rent as the same becomes due and shall fully comply with all of the terms
of this Sublease and fully
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perform its obligations hereunder, none of Subtenant's rights under this
Sublease shall be disturbed by the holder of any Facility Mortgage (whether
created before or after the Commencement Date) and any other Sublandlord's
Encumbrance which is created or otherwise comes into existence after the
Commencement Date.
26.3 BREACH BY SUBLANDLORD. It shall be a breach of this Sublease if
Sublandlord shall fail to observe or perform any material term, covenant or
condition of this Sublease on its part to be performed and such failure shall
continue for a period of 30 days after notice thereof from Subtenant, unless
such failure cannot with due diligence be cured within a period of 30 days, in
which case such failure shall not be deemed to continue if Sublandlord, within
said 30-day period, proceeds promptly and with due diligence to cure the
failure and diligently completes the curing thereof. The time within which
Sublandlord shall be obligated to cure any such failure shall also be subject
to extension of time due to the occurrence of any Unavoidable Delay.
26.4 FACILITY MORTGAGE PROTECTION. Subtenant agrees that the holder of
any Facility Mortgage or other Sublandlord Encumbrance shall have no duty,
liability or obligation to perform any of the obligations of Sublandlord under
this Sublease (except for such obligations first occurring after such holder
takes title to the Subleased Property), but that in the event of Sublandlord's
default with respect to any such obligation, Subtenant will give any such
holder whose name and address have been furnished to Subtenant in writing for
such purpose notice of Sublandlord's default and allow such holder thirty (30)
days following receipt of such notice for the cure of said default before
invoking any remedies Subtenant may have by reason thereof. Such 30-day cure
period shall be extended (including without limitation such extensions as are
necessary for such holder to take possession of and/or foreclose upon the
Subleased Property) if the failure cannot be cured by said holder within the
foregoing 30-day period, so long as said holder proceeds with due diligence to
cure the failure. Nothing herein contained shall be construed however, to
obligate Facility Mortgagee to cure any default by Sublandlord occurring prior
to any date on which Facility Mortgagee shall succeed to the rights of
Sublandlord, it being expressly agreed that under no circumstances shall
Facility Mortgagee be obligated to remedy any such default.
26.5 ATTORNMENT. In the event that the interest of Sublandlord is
transferred by reason of or assigned in lieu of foreclosure, the exercise of a
power of sale or by any other proceedings or method for the enforcement of a
Facility Mortgage, then this Sublease shall nevertheless continue in full force
and effect and, upon the request of Facility Mortgagee or Successor Owner (as
hereinafter defined), Subtenant shall attorn to Facility Mortgagee or Successor
Owner and shall recognize such person as its landlord. Although the foregoing
provision shall be self-operative, in order to confirm such attornment, upon
the request of Facility Mortgagee or Successor Owner, Subtenant shall execute
and deliver to Facility Mortgagee or Successor Owner (i) an agreement of
attornment in form and content reasonably satisfactory to Facility Mortgagee or
Successor Owner, confirming the foregoing attornment and agreeing to perform
all the terms, covenants and conditions of the Sublease on Subtenant's part to
be performed for the benefit of
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Facility Mortgagee or Successor Owner with the same force and effect as if
Facility Mortgagee or Successor Owner was the sublandlord originally named in
this Sublease or (ii) a new lease with Facility Mortgagee or Successor Owner,
as sublandlord, for the remaining term of the Sublease and otherwise on the
same terms and conditions and with the same options, if any, then remaining.
For purposes hereof, "Successor Owner" shall mean any Person who obtains the
interest of Sublandlord in the Subleased Property pursuant to a foreclosure or
deed-in-lieu of foreclosure or power of sale (collectively, a "Facility
Mortgage Foreclosure") of a Facility Mortgage.
26.6 FACILITY MORTGAGEE OR SUCCESSOR OWNER AS SUBLANDLORD. If Facility
Mortgagee or Successor Owner shall succeed to the interest of Sublandlord,
neither Facility Mortgagee nor Successor Owner nor any successor thereto
(herein, in each case, a "Successor Sublandlord") shall have any personal
liability as successor to Sublandlord, and Subtenant shall look only to the
estate and property of said Successor Sublandlord in the Subleased Property or
the proceeds thereof for the satisfaction of Subtenant's remedies for the
collection of a judgment (or other judicial process) requiring the payment of
money in the event of any default by such Successor Sublandlord as landlord
under the Sublease. In addition, Facility Mortgagee, as holder of the Facility
Mortgage, and each Successor Sublandlord, as landlord under the Sublease when
it succeeds to that position, shall in no event (i) be liable to Subtenant for
any act or omission of the "Sublandlord" existing immediately prior to the
Facility Mortgage Foreclosure (the "Foreclosure Sublandlord") or any landlord
prior to such Foreclosure Sublandlord, (ii) be subject to any offset or defense
which Subtenant might have against the Foreclosure Sublandlord or any landlord
prior to such Foreclosure Sublandlord, (iii) be liable to Subtenant for any
liability or obligation of the Foreclosure Sublandlord or any landlord prior to
such Foreclosure Sublandlord, occurring prior to the date that the Successor
Sublandlord acquires title to the Subleased Property, or (iv) be liable to
Subtenant for any security or other deposits given to secure the performance of
Subtenant's obligation under the Sublease, except to that extent that Facility
Mortgagee or Successor Owner shall have acknowledged actual receipt of such
security or other deposits in writing. No other property or assets of a
Successor Sublandlord shall be subject to levy, execution or other enforcement
procedure for the satisfaction of Subtenant's remedies under or with respect to
this Sublease, the relationship of the landlord and the tenant thereunder or
Subtenant's use or occupancy of the Subleased Property.
26.7 PREPAYMENTS AND MODIFICATIONS OF THE SUBLEASE. No prepayment of Rent
due under this Sublease of more than one month in advance shall be binding upon
Successor Owner or Facility Mortgagee, as holder of the Facility Mortgage or as
landlord under this Sublease if Facility Mortgagee succeeds to that position,
unless consented to by Facility Mortgagee, and from and after the date hereof,
no amendment, modification, surrender or cancellation of the Sublease shall be
binding upon Successor Owner or Facility Mortgagee, as holder of the Facility
Mortgage or as landlord under this Sublease if Facility Mortgagee succeeds to
that position, unless such amendment, modification, surrender or cancellation
is done in compliance with the terms of the Facility Mortgage.
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ARTICLE 27
MISCELLANEOUS
27.1 SUBLANDLORD'S RIGHT TO INSPECT. Subtenant shall permit Sublandlord
and its authorized representatives to inspect the Subleased Property upon
reasonable written or oral notice during usual business hours subject to any
security, health, safety or confidentiality requirements of Subtenant or any
governmental agency or insurance requirement relating to the Subleased
Property, or imposed by law or applicable regulations. Sublandlord shall
indemnify, defend and hold Subtenant harmless from and against all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against Subtenant by reason of Sublandlord's
inspection pursuant to this Section 27.1.
27.2 NO WAIVER. No failure by Sublandlord to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy
consequent upon a breach thereof, and no acceptance of full or partial payment
of Rent during the continuance of any such breach, shall constitute a waiver of
any such breach or of any such term. To the extent permitted by law, no
waiver of any breach shall affect or alter this Sublease, which shall continue
in full force and effect with respect to any other then existing or subsequent
breach.
27.3 REMEDIES CUMULATIVE. To the extent permitted by law, each legal,
equitable or contractual right, power and remedy of Sublandlord now or
hereafter provided either in this Sublease or by statute or otherwise shall be
cumulative and concurrent and shall be in addition to every other right, power
and remedy. The exercise or beginning of the exercise by Sublandlord of any
one or more of such rights, powers and remedies shall not preclude the
simultaneous or subsequent exercise by Sublandlord of any or all of such other
rights, powers and remedies.
27.4 ACCEPTANCE OF SURRENDER. No surrender to Sublandlord of this
Sublease or of the Subleased Property or any part thereof, or of any interest
therein, shall be valid or effective unless agreed to and accepted in writing
by Sublandlord and no act by Sublandlord or any representative or agent of
Sublandlord, other than such a written acceptance by Sublandlord, shall
constitute an acceptance of any such surrender.
27.5 NO MERGER OF TITLE. There shall be no merger of this Sublease or of
the leasehold estate created hereby by reason of the fact that the same Person
may acquire, own or hold, directly or indirectly, (a) this Sublease or the
leasehold estate created hereby or any interest in this Sublease or such
leasehold estate and (b) any other superior leasehold estate or the fee estate
in the Subleased Property.
27.6 CONVEYANCE BY SUBLANDLORD. If Sublandlord shall convey an interest
in the Subleased Property in accordance with the terms hereof other than as
security for a debt,
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Sublandlord shall, upon the written assumption by the transferee of the
Subleased Property of all liabilities and obligations of Sublandlord under this
Sublease arising after the transfer, be released from all future liabilities
and obligations under this Sublease arising or accruing from and after the date
of such conveyance or other transfer as to the Subleased Property. All such
future liabilities and obligations shall thereupon be binding upon the new
owner.
27.7 QUIET ENJOYMENT. So long as Subtenant shall pay all Rent as the same
becomes due and shall fully comply with all of the terms of this Sublease and
fully perform its obligations hereunder, Subtenant shall peaceably and quietly
have, hold and enjoy the Subleased Property for the Term hereof, free of any
claim or other action by Sublandlord or anyone claiming by, through or under
Sublandlord, but subject to all liens and encumbrances of record as of the date
hereof or otherwise permitted hereunder, and subject to any Sublandlord's
Encumbrances.
27.8 NOTICES. All notices, demands, requests, consents, approvals and
other communications hereunder shall be in writing and personally delivered, or
mailed (by registered or certified mail, return receipt requested and postage
prepaid), or sent by nationally recognized overnight courier, in each case
addressed to the respective parties, as provided in the Basic Sublease
Provisions. Notices shall be deemed to have been given (i) upon delivery, if
personally delivered, or (ii) upon the third (3rd) Business Day after mailing
by registered or certified mail, or (iii) upon the first (1st) Business Day
after delivery to an overnight courier.
27.9 SURVIVAL OF CLAIMS. Anything contained in this Sublease to the
contrary notwithstanding, all claims against, and liabilities of, Subtenant or
Sublandlord arising prior to any date of termination of this Sublease shall
survive such termination.
27.10 INVALIDITY OF TERMS OR PROVISIONS. If any term or provision of this
Sublease or any application thereof shall be invalid or unenforceable, the
remainder of this Sublease and any other application of such term or provision
shall not be affected thereby.
27.11 PROHIBITION AGAINST USURY. If any late charges provided for in any
provision of this Sublease are based upon a rate in excess of the maximum rate
permitted by applicable law, the parties agree that such charges shall be fixed
at the maximum permissible rate.
27.12 AMENDMENTS TO SUBLEASE. Neither this Sublease nor any provision
hereof may be changed, waived, discharged or terminated except by an instrument
in writing signed by Sublandlord or Subtenant.
27.13 SUCCESSORS AND ASSIGNS. All the terms and provisions of this
Sublease shall be binding upon and inure to the benefit of the parties hereto.
All permitted assignees or sublessees shall be subject to the terms and
provisions of this Sublease.
27.14 TITLES. The headings in this Sublease are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
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27.15 GOVERNING LAW. This Sublease shall be governed by and construed in
accordance with the laws of the State of Tennessee.
27.16 MEMORANDUM OF SUBLEASE. This Sublease shall not be recorded be
either Sublandlord or Subtenant. Notwithstanding the foregoing, Sublandlord
and Subtenant shall, promptly upon the request of either, enter into a short
form memorandum of this Sublease, in form and substance satisfactory to
Sublandlord and suitable for recording under the State, in which reference to
this Sublease, and all options contained herein, shall be made. Subtenant
shall pay all costs and expenses of recording such Memorandum of Sublease.
27.17 ATTORNEYS' FEES. In the event of any dispute between the parties
hereto involving the covenants or conditions contained in this Sublease or
arising out of the subject matter of this Sublease, the prevailing party shall
be entitled to recover against the other party reasonable attorneys' fees and
court costs.
27.18 NON-RECOURSE AS TO SUBLANDLORD. Anything contained herein to the
contrary notwithstanding, any claim based on or in respect of any liability of
Sublandlord under this Sublease shall be enforced only against Sublessor's
interest in the Subleased Property and not against any other assets, properties
or funds of (a) Sublandlord, (b) any director, officer, general partner,
limited partner, employee or agent of Sublandlord, or any general partner of
Sublandlord, any of their respective general partners or stockholders (or any
legal representative, heir, estate, successor or assign of any thereof), (c)
any predecessor or successor partnership or corporation (or other entity) of
Sublandlord, or any of their respective general partners, either directly or
through either Sublandlord or their respective general partners of any
predecessor or successor partnership or corporation or their stockholders,
officers, directors, employees or agents (or other entity), or (d) any other
Person affiliated with any of the foregoing, or any director, officer, employee
or agent of any thereof.
27.19 NO RELATIONSHIP. Sublandlord shall in no event be construed for any
purpose to be a partner, joint venturer or associate of Subtenant or of any
subtenant, operator, concessionaire or licensee of Subtenant with respect to
the Subleased Property or any of the Other Leased Property or otherwise in the
conduct of their respective businesses.
27.20 SIGNS; RELETTING. If Subtenant fails to timely exercise its option
to extend or further extend the Term under Section 2.2 or if an Event of
Default occurs and is continuing, then Sublandlord shall have the right during
the remainder of the Term then in effect (i) to advertise the availability of
the Subleased Property for sale or reletting and to erect upon the Subleased
Property signs indicating such availability and (ii) to show the Subleased
Property to prospective purchasers or tenants or their agents at such
reasonable times as Sublandlord may elect.
27.21 GOLF COURSE NAME. The Subleased Property shall be known by such
trade name and/or trademark or logo as may from time to time be determined by
Sublandlord.
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ARTICLE 28
SUBTENANT MORTGAGES
Subtenant shall not, directly or indirectly, mortgage, pledge,
hypothecate, create a security interest in or lien on, or otherwise encumber
its interest in the Sublease without the prior written consent of Sublandlord
and each Facility Mortgagee, which consent may be withheld in the sole and
absolute discretion of each such party.
ARTICLE 29
MASTER LEASE
29.1 SUBTENANT'S OBLIGATION TO COMPLY WITH MASTER LEASE. Subtenant hereby
assumes and agrees to fully adhere to, perform and comply with any and all
covenants, agreements, terms, provisions, conditions, duties and obligations
contained in the Master Lease and imposed upon the tenant named therein
(including, without limitation, all obligations to pay rent and other amounts
required thereunder and all obligations pertaining to indemnities granted by
the tenant thereunder) as fully and completely as though it were the tenant
named therein. Subtenant hereby agrees to indemnify, protect, defend and save
harmless Sublandlord from and against any and all liabilities, obligations,
claims, damages, penalties, causes of action, costs and expenses (including
reasonable attorneys' fees and expenses) suffered by Sublandlord as a result of
Subtenant's failure to so comply with the Master Lease.
29.2 SUBORDINATION AND ESTOPPEL. Subtenant acknowledges and agrees that
the lien of this Sublease is, and at all times shall be, expressly subject and
subordinate to the Master Lease, and all present or future (i) ground and
underlying leases of all or any portion of the Subleased Property, (ii)
mortgages or trust deeds permitted under the terms of this Sublease and/or the
Master Lease and which affect all or any portion of the Subleased Property,
(iii) advances under such mortgages or trust deeds, and (iv) renewals,
modifications, replacements and extensions of any such leases, mortgages or
trust deeds. Upon the request of Sublandlord, Subtenant shall execute and
deliver, within ten (10) days after receipt of the request, such certificates
of subordination and estoppel as reasonably may be requested by Sublandlord
and/or Lessor, to evidence the subordination set forth above and provide
information concerning the status of this Sublease.
29.3 LESSOR'S RIGHTS UNDER MASTER LEASE. Subtenant hereby acknowledges
and agrees that (a) Lessor shall have the right to avail itself of any and all
of the rights and remedies available to it under the Master Lease, and (b)
nothing contained in this Sublease shall limit, in any way, Lessor's rights
under the Master Lease with respect to the Subleased Property.
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ARTICLE 30
TENANT'S STRUCTURE
The parties hereto acknowledge and agree that Xxxxxx Xxxxxx Golf
Management LLC, a Delaware limited liability company ("Xxxxxx Management"), is
currently, and throughout the term of this Sublease shall continue to be, the
managing member of Subtenant.
ARTICLE 31
RIGHT OF FIRST OFFER
If Sublandlord desires to sell its interest in the Subleased Property to a
third party purchaser at any time during the Term (other than in connection
with a foreclosure or deed in lieu of foreclosure of, or power of sale under,
any Facility Mortgage), then, prior to selling, or entering into a binding
agreement to sell its interest in the Subleased Property to such third party
purchaser, Sublandlord shall deliver written notice to Subtenant (herein,
"Sublandlord's Notice") setting forth (i) the proposed closing date (which date
shall be no less than sixty (60) days and no more than one hundred eighty (180)
days following the date of said Sublandlord's Notice), and (ii) the proposed
purchase price at which Sublandlord desires to sell its interest in the
Subleased Property, and Subtenant shall thereupon have a right of first offer
(herein, the "First Offer Right") to purchase Sublandlord's interest in the
Subleased Property in accordance with the following terms and conditions.
31.1 EXERCISE OF FIRST OFFER RIGHT. Upon Subtenant's receipt of any such
Sublandlord's Notice, Subtenant shall have a period of twenty-one (21) days
following receipt of such Sublandlord's Notice (herein, "Subtenant's Election
Period") to exercise Subtenant's First Offer Right hereunder. If Subtenant so
exercises its First Offer Right, then Sublandlord's interest in the Subleased
Property shall be sold to Subtenant upon the terms hereinafter set forth. In
the event Subtenant fails to notify Sublandlord, in writing, within Subtenant's
Election Period, that Subtenant has exercised its First Offer Right hereunder,
then Subtenant's rights under this Article 31, shall terminate and be null and
void, and Sublandlord shall have no further obligation under this Article 31;
provided, however, that in the event Sublandlord thereafter fails to close on
any sale of its interest in the Subleased Property within a period of one
hundred eighty (180) days following the expiration of Subtenant's Election
Period (as such period may be extended, if Sublandlord is then under contract
to sell its interest in the Subleased Property to a third party purchaser,
which extension shall continue until the termination of such contract or the
closing of the sale thereunder, whichever first occurs), then Subtenant shall
thereafter again have a First Offer Right with respect to Sublandlord's
interest in the Subleased Property as provided in this Article 31.
Additionally, if the purchase price at which Sublandlord subsequently elects to
sell the Subleased Property to a third party is less than ninety percent (90%)
of the purchase price set forth in Sublandlord's Notice, then Subtenant's First
Offer Right shall be reinstated, and, prior to Sublandlord selling or entering
into a binding agreement to sell, its interest in the
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Subleased Property at such lower price, Sublandlord shall deliver a new
Sublandlord's Notice to Subtenant reflecting the new offered purchase price,
all in accordance with the terms of this Article 31.
31.2 FURTHER DOCUMENTATION. If Subtenant has validly exercised its First
Offer Right, then within fifteen (15) Business Days after the request by either
party and determination of the purchase price as described below, Sublandlord
and Subtenant shall enter into a written agreement confirming the terms,
conditions and provisions applicable to the sale of Sublandlord's interest in
the Subleased Property, including the proposed closing date and purchase price
with respect to such transaction and the other terms set forth in Sublandlord's
Notice or otherwise provided for in this Article 31. Each party further agrees
to execute such documents and to take such actions as may be reasonably
requested by the other party in order to effectuate the sale transaction
contemplated by any such Sublandlord's Notice.
31.3 PURCHASE PRICE. The purchase price of Sublandlord's interest in the
Subleased Property under this Article 31 shall be the price set forth in
Sublandlord's Notice, subject to modification as described in the last sentence
of Section 31.1.
31.4 MECHANICS OF PURCHASE. If Subtenant's First Offer Right hereunder is
exercised, the following closing procedure shall apply:
(a) The closing date ("Closing Date") for the sale of Sublandlord's
interest in the Subleased Property to Subtenant shall be on the date set
forth in Sublandlord's Notice. Payment of the purchase price and the
delivery of the deed (the "Closing") shall be made at the office of
Sublandlord or its attorneys or at such other place as the parties may
agree. At the request of either party, the Closing shall be effected
through a deed and money escrow, the cost of which escrow shall be borne
equally by Sublandlord and Subtenant. The purchase price shall be
payable to Sublandlord on the Closing Date in immediately available funds
or by certified or cashier's check upon delivery of the applicable
assignment document(s) to Subtenant and performance of Sublandlord's
other obligations as set forth herein.
(b) The sale of Sublandlord's interest in the Subleased Property
shall be made by an assignment and assumption document (which, at the
option of Subtenant, may be in recordable form and the form of which
assignment and assumption document shall be attached as an exhibit to the
final contract between the parties) assigning all of Sublandlord's
interest in the Subleased Property to Subtenant (or its designee) and
other documentation necessary to transfer Sublandlord's interest in the
Subleased Property to Subtenant, provided that Subtenant shall accept
Sublandlord's interest in the Subleased Property subject only to (A) the
lien of current general real estate taxes and special assessments not
then due and payable; (B) any acts or doings caused or suffered by
Subtenant; (C) private, public and utility easements and roads and
highways, if any; (D) covenants, conditions and restrictions of record;
(E) existing leases and tenancies
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(including, without limitation, the Master Lease); and (F) such other
liens and encumbrances which were in effect on the date that Sublandlord
obtained its interest in the Subleased Property or which are otherwise
permitted to be imposed on the Subleased Property pursuant to the terms
hereof (collectively, the "Permitted Title Exceptions").
(c) Sublandlord shall deliver or cause to be delivered to Subtenant,
not later than twenty (20) days prior to the Closing, as evidence of
Sublandlord's interest in the Subleased Property, a commitment for a
standard owner's leasehold title insurance policy in the aggregate amount
of the purchase price as provided hereunder. Such title commitment shall
name Subtenant or its designee as the proposed insured and show Subtenant
as holding a leasehold interest in the Subleased Property, subject only
to (a) the Permitted Title Exceptions, and (b) other title exceptions
pertaining to mortgage liens of a definite or ascertainable amount which
may be removed at Closing by the payment of money, and which Sublandlord
shall so remove or cause to be removed concurrently with the Closing.
(d) The payment of all prorations, transfer taxes, title insurance
charges, escrow fees, recording fees and other expenses, fees and charges
shall be made by the party from whom such payment is due in accordance
with statutory requirements or in accordance with the custom at the time
of the Closing for sales of properties (or interests therein) similar to
the Subleased Property located in the geographical area where the
Subleased Property is located; provided, however, that there shall be no
proration of Impositions inasmuch as Subtenant is fully responsible
therefor under this Lease.
(e) Sublandlord's interest in the Subleased Property shall be
transferred to Subtenant under this Article 31 in its as-is condition, it
being acknowledged that Sublandlord has made and shall make no
representations whatsoever as to the condition of said Subleased Property
or any other matters pertaining thereto.
31.5 REIT QUALIFICATION LIMITATION. Notwithstanding any other provision
of this Sublease, Sublandlord shall not be required to sell or transfer its
interest in the Subleased Property, or any portion thereof, which is a real
estate asset as defined in Section 856(c)(6)(B), or functionally equivalent
successor provision, of the Code, to Subtenant if Sublandlord's counsel advises
Sublandlord that such sale or transfer may not be a sale of property described
in Section 857(b)(6)(C), or functionally equivalent successor provision, of the
Code. If Sublandlord determines not to sell such property pursuant to the
above sentence, Subtenant's First Offer Right under this Article 31 shall
continue in full force and effect.
31.6 EFFECTIVENESS OF FIRST OFFER RIGHT. The First Offer Right described
in this Article 28 is for the personal benefit of the original named Subtenant
hereunder, and such right is non-assignable and may not be exercised by any
other party. Without limitation of the foregoing, in the event Subtenant
assigns this Sublease or subsubleases all or greater than fifty percent (50%)
of the area of the Subleased Property, then Subtenant's First Offer Right under
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this Article 31 shall thereupon terminate and be deemed null and void.
Subtenant shall have no right to exercise its First Offer Right under this
Article 31, and any such exercise shall (at Sublandlord's election) be null and
void, if, at the time of such exercise or as of the Closing Date, Subtenant
shall be in default of any of its obligations hereunder.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the parties hereto have executed this Sublease as of
the date and year first above written.
SUBLANDLORD:
PRESIDIO GOLF LIMITED PARTNERSHIP, a
Delaware limited partnership
By:
--------------------------------------
Name:
---------------------------------
Its:
----------------------------------
SUBTENANT:
----------------------------------------,
a
---------------------------------------
By:
--------------------------------------
Name:
---------------------------------
Its:
----------------------------------
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JOINDER
The undersigned, being the managing member of Subtenant, hereby joins in
the execution of the foregoing Sublease, for the purposes of (A) agreeing to
the terms of the Sublease with respect to (i) any and all provisions in the
Sublease relating to Subtenant's Personal Property (some or all of which may be
owned by the undersigned), and (ii) any and all provisions in the Sublease
relating to the Collateral Agreements (some or all of which may be entered into
by the undersigned), and (B) agreeing to be liable under the Sublease, on a
joint and several basis with Subtenant, for all remediation and indemnification
obligations under Section 8.2 and Section 8.3 of the Sublease, to the extent
relating to any Hazardous Material located at the Subleased Property and
expressly identified in any of the Existing Environmental Reports.
IN WITNESS WHEREOF, this Joinder is executed as of the ____ day of
________, 199__.
XXXXXX XXXXXX GOLF MANAGEMENT LLC, a
Delaware limited liability company
By:
--------------------------------------
Name:
---------------------------------
Its:
----------------------------------
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EXHIBIT A
DEFINED TERMS; INTERPRETATION
DEFINED TERMS. For all purposes of this Sublease, except as otherwise
expressly provided or unless the context otherwise requires, the terms defined
below have the meanings assigned to them below.
ADDITIONAL CHARGES: As defined in Section 3.4.
ADDITIONAL RENT: As defined in Basic Sublease Provisions.
AFFILIATE: As applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person.
ANNUAL BASE RENT: As defined in the Basic Sublease Provisions.
APPLICABLE PERCENTAGE: As defined in the Basic Sublease Provisions.
AWARD: Means all compensation, sums or anything of value awarded, paid or
received on a total or partial Condemnation.
BASELINE GOLF COURSE REVENUE: As defined in the Basic Sublease
Provisions.
BASELINE OTHER REVENUE: As defined in the Basic Sublease Provisions.
BASE RENT: Means the proportion of the Annual Base Rent payable with
respect to each respective calendar month as described in Exhibit F attached
hereto.
BASE RENT ESCALATION: As defined in the Basic Sublease Provisions.
BASIC SUBLEASE PROVISIONS: The provisions so labelled starting on page
(1) of this Sublease.
BUSINESS DAY: Each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which national banks in the City of Collierville, Tennessee,
are authorized, or obligated, by law or executive order, to close.
CALCULATION PERIOD: As defined in Section 18.2.
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XXXXXXX XXXXXXXXXXXX: Means all expenditures for capital investment items
at the Subleased Property, to the extent such expenditures are to be
"capitalized" under general accepted accounting principles.
CAPITAL EXPENDITURES RESERVE ACCOUNT: As defined in Section 18.2.
CAPITAL EXPENDITURES RESERVE AMOUNT: As defined in Section 18.2.
CHANGE OF CONTROL: As defined in Section 24.2.
CLOSING: As defined in Section 31.4.
CLOSING DATE: As defined in Section 31.4.
CODE: The Internal Revenue Code of 1986, as amended.
COMMENCEMENT DATE: As defined in the Basic Sublease Provisions.
CONDEMNATION: Means (a) the exercise of any governmental power, whether
by legal proceedings or otherwise, by a Condemnor, and (b) a voluntary sale or
transfer by Sublandlord or Lessor to any Condemnor, either under threat of
condemnation or while legal proceedings for condemnation are pending.
CONDEMNATION THRESHOLD: Means, as of any given date, an amount determined
by dividing (i) the aggregate Base Rent and Additional Rent under this Sublease
for the most recent 12 full calendar months by (ii) the average dividend yield
for such 12 month period on the common stock then issued and outstanding of
Sublandlord's general partner.
CONDEMNOR: Means any public or quasi-public authority, or private
corporation or individual, having the power of condemnation.
CONSUMER PRICE INDEX: Means the Consumer Price Index for Urban Wage
Earners and Clerical Workers for the Collierville, Tennessee area, as reported
by the United States Bureau of Labor Statistics or any successor agency.
CONTROL: Means (including, with correlative meanings, the terms
"controlling" and "controlled by"), as applied to any Person, the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting
securities, by contract or otherwise.
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DATE OF TAKING: Means the date the Condemnor has the right to possession
of the property being condemned.
EBITDA: The net income from the Subleased Property for the period at
issue, as determined in accordance with generally accepted accounting
principles consistently applied, excluding gains (or losses) from debt
restructuring and sales of property and other ordinary items, and without any
reductions for (i) depreciation or amortization, (ii) interest expense [or
Master Lease Rent], (iii) federal or state income taxes, or (iv) non-property
specific entity-level overhead and administrative expenses. Notwithstanding
the foregoing, it is understood that, in computing net income, (i) Golf Course
Revenue and (ii) Other Revenue shall be included as part of total revenue.
ENVIRONMENTAL LAW: Means all applicable statutes, regulations, rules,
ordinances, codes, licenses, permits, orders, demands, approvals,
authorizations and similar items of all governmental agencies, departments,
commissions, boards, bureaus or instrumentalities of the United States, states
and political subdivisions thereof and all applicable judicial, administrative
and regulatory decrees, judgments and orders relating to the protection of
human health or the environment as in effect on the Commencement Date or as
thereafter amended, including but not limited to those pertaining to reporting,
licensing, permitting, investigation, removal and remediation of emissions,
discharges, releases or threatened releases of "Hazardous Materials,"
substances, pollutants, contaminants or hazardous or toxic substances,
materials or wastes whether solid, liquid or gaseous in nature, into the air,
surface water, ground water or land, or relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of substances, pollutants, contaminants or hazardous or toxic
substances, materials, or wastes, whether solid, liquid or gaseous in nature,
including: (x) the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Sections 9601 et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. Sections 6901 et seq.), the Clean Air Act (42 U.S.C.
Sections 7401 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
Section 1251 et seq.), the Safe Drinking Water Act (42 U.S.C. Sections 300f et
seq.), the Toxic Substances Control Act (15 U.S.C. Sections 2601 et seq.), the
Endangered Species Act (16 U.S.C. Sections 1531 et seq.), the Emergency
Planning and Community Right-to-Know Act of 1986 (42 U.S.C. Sections 11001 et
seq.), and (y) analogous state and local provisions.
EVENT OF DEFAULT: As defined in Section 16.1.
EXISTING ENVIRONMENTAL REPORTS: As defined in Section 8.1.1.
EXTENDED TERMS: As defined in the Basic Sublease Provisions.
FACILITY: As defined in the Basic Sublease Provisions.
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FACILITY MORTGAGE: As defined in Section 13.1.
FACILITY MORTGAGE FORECLOSURE: Ad defined in Section 26.5.
FACILITY MORTGAGEE: Means the holder or beneficiary of a Facility
Mortgage, if any, and only to the extent Sublandlord gives Subtenant notice of
the identity and address of such holder or beneficiary.
FIRST OFFER RIGHT: As defined in Article 31.
FISCAL QUARTER: The three-month periods (or applicable portions thereof)
in any Fiscal Year from January 1 through March 31, April 1 through June 30,
July 1 through September 30 and October 1 through December 31.
FISCAL YEAR: As defined in the Basic Sublease Provisions.
FIXTURES: Means all permanently affixed equipment, machinery, fixtures,
and other items of real and/or personal property, including all components
thereof, now and hereafter located in, on or used in connection with and
permanently affixed to or incorporated into the Subleased Improvements,
including all furnaces, boilers, heaters, electrical equipment, heating,
plumbing, lighting, ventilating, refrigeration, air and water pollution
control, waste disposal, air-cooling and air-conditioning systems and
apparatus, sprinkler systems and fire and theft protection equipment, all of
which, to the greatest extent permitted by law, are hereby deemed by the
parties hereto to constitute real estate, together with all replacements,
modifications, alterations and additions thereto, but specifically excluding
all items included within the category of Subtenant's Personal Property and any
Subtenant Improvements.
FORECLOSURE SUBLANDLORD: As defined in Section 26.6.
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FULL REPLACEMENT COST: Means the actual replacement cost thereof from
time to time including increased cost of construction endorsement, less
exclusions provided in the normal fire insurance policy.
GOLF COURSE REVENUE: Means all revenues received (whether by Subtenant or
any subsubtenants, concessionaires, licensees, assignees or other party) from
or by reason of the operation of the Facility, or any other use of the
Subleased Property, including revenues from the initial sale of memberships (to
the extent that membership was sold after the Commencement Date), initiation
fees (to the extent that membership was sold after the Commencement Date)
membership or other dues, greens fees, fees to reserve a tee time, golf-related
guest fees or golf cart rentals, and surcharges, fees or other charges paid to
Subtenant relating to golf tournaments or other group outings or group
activities at the Subleased Property (unless the terms under which Subtenant is
paid by such sponsor do not comply with Section 24.5, in which event the gross
revenues received by such sponsor for the tournament shall be included in Golf
Course Revenue); provided, however, that Golf Course Revenue shall not include:
(a) Other Revenue;
(b) Cash refunds or credits allowed on returns by customers;
(c) The amount of any city, county, state or federal sales or excise
tax on sales, which is both added to the selling price and paid to the
taxing authority by Subtenant.
(d) The actual uncollectible amount of any check or bank draft
received by Subtenant as payment for goods or services and returned to
Subtenant from a customer's bank as being uncollectible, but only after
Subtenant has made reasonable efforts to collect on the check;
(e) The actual uncollectible amount of any charge or credit account
incurred by Subtenant for the sale of merchandise or services; provided,
however, that the credit was extended to the customer by Subtenant, and
that reasonable efforts to collect said account have been made;
(f) The actual uncollectible amount of any sale of merchandise or
services for which Subtenant accepted a credit card; provided, however,
that Subtenant has made reasonable efforts to collect the debt after
being notified by the issuing bank of the invalidity or uncollectability
of the charge;
(g) Interest or other charges paid by customers for extension of
credit;
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(h) Revenue or proceeds from sales or trade-in of machinery,
vehicles, trade fixtures or personal property used in connection with
Subtenant's operation of the Subleased Property;
(i) The value of any merchandise, supplies or equipment exchanged or
transferred from or to other locations or businesses of Subtenant where
such exchange or transfer is not made for the purpose of avoiding a sale
which would otherwise be made from or at the Subleased Property;
(j) Revenue, if any, from receipts in the form of refunds from or
the value of merchandise, supplies or equipment returned to shippers,
suppliers or manufacturers;
(k) Revenue, if any, from the amount of any cash or quantity
discounts received from sellers, suppliers or manufacturers;
(l) The amount of any gratuities paid or given by customers to or
for employees of Subtenant;
(m) Receipts from the sales of uniforms or clothing required to be
worn by employees;
(n) Revenues from charging employees for meals served or provided to
employees of Subtenant;
(o) Receipts from the sale of waste or scrap materials resulting
from Subtenant's operations; and
(p) Revenue received from any subsubtenant, concessionaire or
licensee, inasmuch as the gross revenue received by such subsubtenant,
concessionaire or licensee is otherwise included in the definition of
Golf Course Revenue or Other Revenue.
HAZARDOUS MATERIAL: Means any chemical substance:
(i) the presence of which requires investigation or remediation
under any federal, state or local statute, regulation, ordinance, order,
action or policy, administrative request or civil complaint under any of
the foregoing or under common law;
(ii) which is defined as a "hazardous waste" or "hazardous
substance" under any federal, state or local statute, regulation or
ordinance or amendments thereto as in effect as of the Commencement Date,
or as thereafter amended, including the
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Comprehensive Environmental Response, Compensation and Liability Act (42
U.S.C. Sections 6901 et seq.);
(iii) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous and as of the
Commencement Date, or as thereafter amended, is regulated by any
governmental authority, agency, department, commission, board, agency or
instrumentality of the United States, or any state or any political
subdivision thereof having or asserting jurisdiction over the Subleased
Property;
(iv) the presence of which on any of the Subleased Property causes a
nuisance upon such Subleased Property or to adjacent properties or poses
a hazard to the health or safety of persons on or about any of the
Subleased Property;
(v) which, except as contained in building materials, contains
gasoline, diesel fuel or other petroleum hydrocarbons, polychlorinated
biphenyls (PCBs) or friable asbestos or friable asbestos-containing
materials or urea formaldehyde foam insulation; or
(vi) radon gas.
IMPARTIAL APPRAISER: As defined in Section 13.2.
IMPOSITIONS: Means collectively:
(a) all taxes (including all real and personal property, ad valorem,
sales and use, single business, gross receipts, transaction privilege,
rent or similar taxes);
(b) assessments and levies (including all assessments for public
improvements or benefits, whether or not commenced or completed prior to
the date hereof and whether or not to be completed within the Term);
(c) excises;
(d) fees (including license, permit, inspection, authorization and
similar fees); and
(e) all other governmental charges;
in each case whether general or special, ordinary or extraordinary, or foreseen
or unforeseen, of every character in respect of the Subleased Property and/or
the Rent (including all interest and penalties thereon due to any failure in
payment by Subtenant), which at any time during or
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in respect of the term hereof may be assessed or imposed on or in respect of
or be a lien upon (i) Sublandlord or Sublandlord's interest in the Subleased
Property; (ii) the Subleased Property or any part thereof or any rent therefrom
or any estate, right, title or interest therein; or (iii) any operation, use or
possession of, or sales from or activity conducted on or in connection with the
Subleased Property or the leasing or use of the Subleased Property or any part
thereof; provided, however, that Impositions shall not include:
(aa) any tax based on net income (whether denominated as an income,
franchise, capital stock or other tax) imposed on Sublandlord or any
other Person other than Subtenant;
(bb) any transfer, or net revenue tax of Sublandlord or any other
Person other than Subtenant;
(cc) any tax imposed with respect to the sale, exchange or other
disposition by Sublandlord of any Subleased Property or the proceeds
thereof; or
(dd) any tax imposed with respect to any principal or interest on
any indebtedness on the Subleased Property.
IMPOUND CHARGES: As defined in Article 22.
IMPOUND PAYMENT: As defined in Article 22.
INITIAL BASE RENT: As defined in the Basic Sublease Provisions.
INITIAL TERM: As defined in the Basic Sublease Provisions.
INSURANCE REQUIREMENTS: All terms of any insurance policy required by
this Sublease and all requirements of the issuer of any such policy.
LAND: As defined in Article 1.
LEGAL REQUIREMENTS: All federal, state, county, municipal and other
governmental statutes, laws (including the Americans with Disabilities Act and
any Environmental Laws), rules, orders, regulations, ordinances, judgments,
decrees and injunctions affecting either the Subleased Property or the
construction, use or alteration thereof, whether now or hereafter enacted and
in force, including any which may (i) require repairs, modifications or
alterations in or to the Subleased Property; (ii) in any way adversely affect
the use and enjoyment thereof, and all permits, licenses and authorizations and
regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instruments, either of record or
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known to Subtenant (other than encumbrances created by Sublandlord without the
consent of Subtenant and which are not otherwise permitted under the Sublease),
at any time in force affecting the Subleased Property; or (iii) require the
cleanup or other treatment of any Hazardous Material.
LESSOR: As defined in the recitals to this Sublease.
LETTER OF CREDIT: Means a letter of credit satisfying the requirements of
Section 21.3.
MASTER LEASE: As defined in the recitals to this Sublease.
MASTER LEASE RENT: As defined in Section 3.1.2.
MASTER LEASE RENT DUE DATE: As defined in Section 3.1.2.
OFFICER'S CERTIFICATE: A certificate of Subtenant signed by a duly
authorized representative of Subtenant.
OTHER LEASED PROPERTY: Means the properties leased or subleased to
Subtenant or an Affiliate of Subtenant by Sublandlord or an Affiliate of
Sublandlord, and listed on Exhibit C attached hereto.
OTHER PROPERTY LEASES: Means the other leases or subleases entered into
between Sublandlord or an Affiliate of Sublandlord and Subtenant or an
Affiliate of Subtenant relating to Subtenant's use of the Other Leased
Property.
OTHER REVENUE: Means all revenue received (whether by Subtenant or any
subsubtenants, concessionaires, licensees or other party) from or by reason of
the Subleased Property relating to (i) the operation of snack bars,
restaurants, bars and banquet operations, (ii) merchandise sold on the
Subleased Property, (iii) parking, (iv) fitness centers, (v) tennis facilities,
(vi) day care, (vii) nongolf-related guest fees (provided that if any fees or
charges assessed by Subtenant relate to packages including golf and
nongolf-related activities, the entire package price shall be included as "Golf
Course Revenue"), (viii) locker rentals, (ix) bag storage, (x) video games,
(xi) vending machines and (xii) fees or other charges paid to Subtenant by
providers of golf lessons (unless the terms under which Subtenant is paid by
such provider do not comply with Section 24.5, in which event the gross revenue
received by such provider shall be included in Other Revenue); provided,
however, that the items described in clauses (b) through (p) of the definition
of Golf Course Revenue shall be excluded from the definition of Other Revenue.
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OVERDUE RATE: On any date, a rate equal to 3% above the Prime Rate, but
in no event greater than the maximum rate then permitted under applicable law.
XXXXXX MANAGEMENT: As defined in Article 30.
PERSON: Means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts, Indian tribes or other organizations,
whether or not legal entities, and governments and agencies and political
subdivisions thereof.
PRIMARY INTENDED USE: Means the operation of a golf course (including
clubhouse facilities), consisting of the Facility, and other activities
customarily associated with or incidental to the operation of a golf course,
including sale or rental of golf-related merchandise at a golf professional's
shop, sale of memberships, furnishing of lessons by a golf professional,
operation of a driving range, and sales of food and beverages, including liquor
sales.
PRIME RATE: On any date, a rate equal to the annual rate on such date
announced by Xxxxx Fargo Bank, National Association to be its prime rate or
base rate for 90-day unsecured loans to its corporate borrowers of the highest
credit standing (or, if Xxxxx Fargo Bank, National Association no longer
announces such prime rate or base rate, then the prime or base rate announced
by such other financial institution as selected by Sublandlord) but in no event
greater than the maximum rate then permitted under applicable law.
QUARTERLY BASE RENT : Means, with respect to any Fiscal Quarter,
one-fourth of the Annual Base Rent for the Fiscal Year in which such Fiscal
Quarter falls.
REGISTERED OFFERING: As defined in Section 24.2.
RELATED RIGHTS: As defined in Article 1.
RENT: Collectively, the Base Rent, Additional Rent, Additional Charges
and Master Lease Rent.
RENT COVERAGE RATIO: Means, for any period, the ratio of (a) EBITDA for
the Subleased Property for such period, to (b) the Initial Base Rent
obligations payable hereunder for such period.
REQUIRED SECURITY DEPOSIT AMOUNT: Means, (A) the amount of $1,057,000.00
for the period commencing on the Commencement Date and continuing through the
end of the fourth (4th) full Fiscal Quarter occurring during the Term, and (B)
thereafter, the following applicable
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amounts, determined as of the last day of each subsequent Fiscal Quarter during
the Term: (a) the amount of $1,057,00.00, in the event that the Rent Coverage
Ratio for the twelve (12) month period ending as of such date of determination
is less than 1.2:1; (b) the amount of $704,667.00, in the event that the Rent
Coverage Ratio for the twelve (12) month period ending as of such date of
determination is equal to or greater than 1.2:1, but less than 1.3:1; (c) the
amount of $352,334.00, in the event that the Rent Coverage Ratio for the twelve
(12) month period ending as of such date of determination is equal to or
greater than 1.3:1, but less than 1.4:1; and (d) zero amount, in the event that
the Rent Coverage Ratio for the twelve (12) month period ending as of such date
of determination is equal to or greater than 1.4:1.
STATE: The State or Commonwealth in which the Subleased Property is
located.
SUBLANDLORD: As defined in the preamble.
SUBTENANT'S ELECTION PERIOD: As defined in Section 28.1.
SUBLANDLORD'S ENCUMBRANCE: As defined in Section 26.1.
SUBLANDLORD'S NOTICE: As defined in Article 31.
SUBLANDLORD'S PERSONAL PROPERTY: As defined in Article 1.
SUBLANDLORD'S NOTICE. As defined in Section 28.1.
SUBLEASE: As defined in the preamble.
SUBLEASED IMPROVEMENTS: As defined in Article 1.
SUBLEASED PROPERTY: As defined in Article 1.
SUCCESSOR SUBLANDLORD: As defined in Section 26.6.
SUCCESSOR OWNER: As defined in Section 26.5.
SUBTENANT: As defined in the preamble.
SUBTENANT IMPROVEMENT: As defined in Section 10.1.
SUBTENANT'S ELECTION PERIOD: As defined in Section 28.1.
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SUBTENANT'S PERSONAL PROPERTY: All machinery, equipment, furniture,
furnishings, movable walls or partitions, phone system, computers or trade
fixtures or other personal property, and consumable inventory and supplies,
owned by Subtenant or Xxxxxx Management and used or useful in Subtenant's
business on the Subleased Property, including all items of furniture,
furnishings, equipment, supplies and inventory, kitchen fixtures, bar
equipment, flatware, lawn mowers and other gardening tools, tractors and other
motorized vehicles and golf carts.
TERM: Collectively, the Initial Term and any Extended Terms, as the
context may require, unless earlier terminated pursuant to the provisions
hereof.
UNAVOIDABLE DELAYS: Delays due to strikes, lockouts, inability to procure
materials, power failure, acts of God, governmental restrictions, enemy action,
civil commotion, fire, unavoidable casualty or other causes beyond the control
of the party responsible for performing an obligation hereunder, provided that
lack of funds shall not be deemed a cause beyond the control of either party
hereto unless such lack of funds is caused by the failure of the other party
hereto to perform any obligations of such party, under this Sublease.
UNSUITABLE FOR ITS PRIMARY INTENDED USE. A state or condition of the
Facility such that in the good faith judgment of Subtenant, reasonably
exercised, the Facility cannot be operated on a commercially practicable basis
for its Primary Intended Use.
INTERPRETATION. The foregoing defined terms include the plural as well as
the singular. "Including" and variants thereof shall be deemed to mean
"including without limitation." All accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with generally accepted
accounting principles as at the time applicable. All references in this
Sublease to designated "Articles," "Sections" and other subdivisions are to the
designated Articles, Sections and other subdivisions of this Sublease. The
words "herein," "hereof" and "hereunder" and other words of similar import
refer to this Sublease as a whole and not to any particular Article, Section or
other subdivision.
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EXHIBIT D
OPERATING STANDARDS
1. Greens, Practice Putting Greens & Nurseries.
A. Mowing - At least five days per week at a height between 3/16" -
5/16"during the growing season; as needed during the off season.
B. Change cup locations on all greens and practice putting greens daily
during the active season and at least three times weekly in the off-season.
Cup location on all greens will be moved at least twenty feet from the previous
placement.
C. Repair ball marks, divots, or any other damaged turf areas on all
greens and practice greens daily.
D. Aerify all greens, practice putting greens and nurseries at least
three times per year during the growing season. Aerify problem areas as often
as necessary to produce superior turf quality.
E. Topdress all greens, practice putting greens and nurseries;
(1) After any aerification performed with 1/2" or larger tines;
(2) As needed to maintain a smooth putting surface.
(3) Topdressing will be sand or a mix similar to that used to
construct the greens.
F. Light vertical mowing of all greens, practice putting greens and
nurseries shall be performed as appropriate to smooth and true the putting
surfaces. Heavy dethatching shall be performed only prior to any winter
overseeding.
Note: Where bermudagrass greens are maintained, they shall be
overseeded annually, approximately 2 to 3 weeks before the first annual
frost, using perennial rye or a blend of perennial rye, Poa trivialis
and/or fine fescues - at a rate between 20 and 30 lbs. per 1,000 square
feet.
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The putting surface shall be prepared for overseeding by aerifying
not later than 30 days prior to overseeding and verticutting weekly
starting three to four weeks prior.
Overseeding shall be topdressed 1/8" with material similar to green
construction materials or an approved sand/organic mixture. A complete
fertilizer shall be applied immediately prior to seeding. Greens shall be
irrigated sufficient to remain moist but not soaked until all seed has
germinated.
During germination period, cup shall be changed frequently. First
mowing shall be at 5/16" reducing to normal cutting heights gradually.
A preventive program of fungicide applications shall be maintained
starting two days after overseeding.
G. Spiking of all greens and practice greens shall be performed as
needed between aerifications to maintain water infiltration.
H. Fertilization - All greens, practice greens, and nurseries shall be
fertilized with nitrogen, phosphorous, potash, and other elements as needed to
maintain color, growth, health and turgidity of the turf, without allowing
excessive or succulent growth.
The goal of the greens fertilization program is to provide the best
possible putting surface, not to produce the maximum amount of growth.
I. Fungicides - All greens, practice greens and nurseries shall receive
appropriate fungicide applications to prevent and/or control fungal disease
activity.
X. Xxxx Control - All greens, practice greens and nurseries shall be
maintained free of undesirable grasses and weeds. Pre-emergent herbicides
shall be used as necessary to prevent intrusion into the greens of weeds
difficult to eradicate such as goosegrass, crabgrass, etc.
K. Insecticides - All greens, practice greens and nurseries shall be
treated as necessary to prevent or halt insect damage.
2. TEES - ALL AREAS USED FOR TEE SURFACE.
A. Mowing - All tees shall be mowed at a height between 3/8" - 5/8"
three times per week during growing season and as necessary during off-season.
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X. Xxxxxxxxxxx - All worn areas on tees shall be topdressed at least
weekly to fill divots and level tee surface. Topdressing material shall
contain seed of annual or perennial ryegrasses, or other species as
appropriate.
C. Overseeding - All tees shall be overseeded at a rate of not less
than 10 lbs./1,000 square feet, approximately two to three weeks before the
first expected annual frost. Seed used shall be a suitable species or
blend.
D. Set up - Tee markers and all tee equipment shall be moved daily for
proper play and control of turf wear.
E. Weed Control - Tees shall be kept weed free to an extent of at
least 90% of the area by the proper and timely application of pre- and/or
post-emergent herbicides.
F. Vertical Mowing - All tees shall be verticut as necessary to
control mat or thatch build-up.
G. Aerification - All tees shall be aerified at least every two months
from March through October and as necessary during the remainder of the
year.
H. Fertilization - All tees shall be fertilized with nitrogen,
phosphorous, potash, and other elements as needed to maintain color,
growth, health and turgidity of the turf, without showing excessive or
succulent growth.
3. FAIRWAYS - ALL AREAS OF PLAY EXCEPT GREENS, TEES, ROUGHS AND NATURAL
GROWTH AREAS.
A. Mowing - All fairways shall be mowed at least three times per week
at a height between 1/2" - 7/8" during the growing season and as needed for
the balance of the year.
B. Aerification - All fairways shall be aerified a minimum of three
times per year during the growing season. Aerification holes shall not
exceed a spacing of eight inches on center or be of a diameter of less than
1/2".
C. Fertilization - All fairways shall be fertilized with nitrogen,
phosphorous, potash, or other elements as needed to maintain color, growth,
health and turgidity of the turf, without allowing excessive or succulent
growth.
D. Vertical mowing - All fairways shall be verticut as necessary to
control mat or thatch build-up.
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E. Weed control - Fairways shall be kept weed free to an extent of at
least 90% of the area by the proper and timely application of pre- and/or
post-emergent herbicides.
4. ROUGHS. All turfed areas of play except greens, tees, fairways and
natural growth areas.
A. Mowing - All roughs shall be mowed weekly during the growing
season and as necessary during the balance of the year, at heights between
3/4" and 1-1/2". Rough height shall not exceed 2" without the direct
approval of the regional superintendent, and rough mowing shall not be
suspended for any tournament without such approval.
B. Aerification -
(1) Fairway-to-tree-line play areas shall be aerified at least two
times per year.
(2) Within wooded play areas - as necessary to establish and/or
maintain turf.
C. Fertilization - Roughs shall be fertilized as necessary to
maintain turf.
X. Xxxx Control - Shall be performed as necessary to prevent seed
formation and to allow proper play.
5. NATURAL GROWTH AREAS. All areas in which native or introduced
vegetation is allowed to survive without routine mowing, cultivating, irrigation
or other routine maintenance procedures. May be out of play areas, steep
slopes, barriers, windbreaks, nature trails, etc. Such areas are to be
maintained free of excessive trash, noxious weeds and vertebrate pests, and in
such manner as to comply fully with fire department regulations or other such
regulations as may apply. Such natural growth areas may be improved and may
from time to time be subjected to irrigation, cultivation, pruning, or other
such practices as may be necessary or desirable to establish or maintain them.
6. PLANTERS - ALL AREAS PLANTED WITH ORNAMENTAL PLANTS, NOT INTENDED FOR
GOLF PLAY AND HAVING A DEFINABLE BORDER.
A. Clean-up - All planters shall be maintained free of trash and
debris.
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B. Weed Control - All planters shall be maintained free of weeds by
mechanical and/or chemical means.
C. Trimming - The plant material (trees, shrubbery and ground
covers) in planters shall be trimmed for protection from wind, insect
damage, and for appearance.
7. TREES - ALL TREES WITHIN THE PROPERTY LINES OF THE GOLF COURSE.
A. Stakes - Trees shall be staked as necessary until of sufficient
size to stand unassisted. Stakes shall be removed as soon as possible.
B. Pruning - All trees shall be properly pruned for protection from
wind and pests as well as for appearance and safety.
C. Irrigation - All trees shall be irrigated to provide adequate
moisture for normal growth.
D. Mowing - Large area mowers shall not be used within one foot of
the trunk of any tree.
E. Removal and Replacement - When appropriate, all dead trees, for
whatever cause, shall be removed. Any necessary replacement shall be with
a tree of appropriate type and size.
8. IRRIGATION - ALL EQUIPMENT REQUIRED TO IRRIGATE ALL AREAS OF THE
PROPERTY.
A. Repair or replace all heads, valves, controllers, wiring, and
pipe as needed to maintain the proper operation of the entire golf course
irrigation system (including greens, tees, fairways, planters, flower beds,
etc.) on an on-going basis
B. The golf course shall be irrigated as necessary to support the
proper growth of golf turf and associated landscaping.
9. FENCES - ALL FENCES AND WALLS, BLOCK, CHAIN LINK, OR BARBED WIRE, ETC.
ON OR WITHIN BOUNDARIES OF THE PROPERTY.
A. Repair all broken or damaged fencing as necessary.
B. Repair or replace as necessary all fences, gates and locking
devices needed for the protection of the golf course or equipment.
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00. CLUBHOUSE AND STRUCTURES - ALL STRUCTURES WITHIN THE BOUNDARIES OF THE
GOLF COURSE.
A. Course Restrooms - All course restrooms shall be maintained
daily to provide clean and sanitary facilities for the users and employees
of the course. Soap, towels, toilet paper, etc. shall be provided in
adequate quantity at all times. Portable facilities shall be maintained
similarly.
B. All buildings and structures shall be maintained in good repair
at all times. Surrounding areas shall be maintained free of weeds, brush,
disorganized junk or broken-down equipment, trash piles, etc. Interior
areas shall be clean and neatly organized, safe and sanitary for customers
and employees. Painting, rodent and insect control, and landscaping shall
be performed as necessary. "Housekeeping" duties shall be assigned to all
maintenance crew members and shall be performed daily.
C. Cart Paths - Maintain all cart paths in a safe and clean
condition and repair promptly as needed.
D. The golf course superintendent is responsible for all facilities
and structures maintenance not within the clubhouse area proper.
11. EDGING. All sidewalks, patios and concrete cart paths must be kept
edged. Edging around valve boxes, meter boxes, backflow preventers, etc. shall
be done as needed to insure that there is no obstruction of play or maintenance
from growth around these items.
12. SAND TRAPS. All sand traps shall be edged as necessary to maintain an
appropriate lip, raked daily and filled with fresh sand as needed to maintain a
minimum 1 1/2" depth on slopes and 4" in the bottom. Replacement sand will be
of a dust-free type, suitable for trap use.
13. LANDSCAPED AREAS. The various planting areas throughout the course
shall be cultivated, weeded, and pruned on a regular basis, with at least two
replanting programs for annuals scheduled each year, depending on the length of
the season.
14. TRASH AND REFUSE. Shall be collected daily and removed from the
property in a safe, sanitary and lawful manner as necessary to minimize or
eliminate problems from refuse odors, insects, etc. Approved trash receptacles
shall be conveniently stationed on tees and other appropriate areas and emptied
daily.
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00. VERTEBRATE PEST CONTROL. Shall be routinely performed throughout the
property on an on-going basis, in such a manner that vertebrate pest
populations are steadily reduced and eventually eliminated.
16. AQUATIC. All lakes, ponds and streams shall be maintained in a safe
and sanitary manner and in good appearance.
17. SOIL AND WATER. Analysis will be performed yearly by an approved
professional laboratory.
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