Exhibit 10 (k)
SUBLEASE
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THIS SUBLEASE (the "Sublease") is made and entered into as September
15, 2004, by and between WESTGROUP GROVE ISLE ASSOCIATES, LTD., a Florida
limited partnership ("Sublessor") in favor of GROVE SPA, LLC, a Delaware limited
liability company ("Sublessee").
RECITALS
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A. Pursuant to that certain Amended and Restated Lease Agreement dated
November 19, 1996 by and between Grove Isle Associates, Ltd. ("Prime Lessor") as
lessor and Sublessor, as lessee (the "Prime Lease"), Sublessor is the owner of
the leasehold estate created under the Prime Lease in and to the real property
and improvements described in the Prime Lease as the "Real Property" and
sometimes referred to herein as the "Entire Resort Property".
B. Sublessor is operating the Entire Resort Property as a hotel and
club (collectively, the "Resort").
C. Sublessor desires to sublease to Sublessee, and Sublessee desires to
sublease from Sublessor that portion of the Entire Resort Property which is
depicted on Exhibit A hereto (together with all easements, servitudes, benefits
and other rights and interests appurtenant thereto and/or necessary for the use
and enjoyment thereof, the "Spa Property") for the purpose of developing,
constructing and operating a first class spa thereon.
NOW, THEREFORE, in consideration of the mutual agreement set forth
hereinafter, the Sublessor and Sublessee agree as follows:
1. Demise. Upon the terms and conditions hereinafter set forth, and in
consideration of the payment of the rents and prompt performance by the
Sublessee of the covenants and agreements to be kept and performed by the
Sublessee, the Sublessor does hereby sublet to Sublessee and the Sublessee
hereby sublets from the Sublessor, the Spa Property, including all improvements
thereon. This demise is subject to the following:
(a) All conditions, restrictions and limitations now appearing of
record;
(b) Prorated taxes and assessments for the year 2004 and all
subsequent years;
(c) A nonexclusive right in favor of the Prime Lessor, Grove Isle
Yacht Club Associates ("Yacht Club"), Grove Isle Marina, Inc.,
and their respective agents, contractors, guests and invitees,
to use and enjoy all driveways, walkways, parking facilities
and open spaces now or hereafter located at the Spa Property
to the extent
necessary or appropriate for the use and enjoyment of the
marina located upon and/or adjacent to the Entire Resort
Property;
(d) The terms, conditions, covenants, agreements and provisions of
the Prime Lease;
(e) All zoning and land use ordinances of the City of Miami,
Florida and in any other competent governmental body now
existing or which may hereafter exist during the term of this
Sublease; and
(f) The Tenant's proper performance of all terms and conditions
contained in this Sublease.
2. Term.
2.1 Initial Term. The term of this Sublease shall commence on
___________, 2004 (the "Commencement Date") and end on November 30, 2016 (the
"Termination Date"), unless and to the extent such term is sooner terminated or
extended as provided below, in which event the Termination Date shall be, and
the term of this Sublease shall end on, such earlier or later date, as
applicable.
2.2 Extension Option. Provided that the Sublessee is not in
default under this Sublease, the Sublessee shall have the right to extend the
term of this Sublease for two (2) additional consecutive twenty (20) year terms
on the same terms and conditions as contained in this Sublease (each such option
to extend is called an "Extension Option"), provided that Sublessee gives
Sublessor written notice of Sublessee's intention to exercise such Extension
Option prior to the Termination Date, or the first extended Termination Date, as
applicable.
2.3 Return of Possession. Upon the termination of this
Sublease, the Sublessee shall peaceably and quietly deliver to the Sublessor
possession of the Spa Property.
2.4 TERMINATION OF PRIME LEASE. NOTWITHSTANDING ANY PROVISION
HEREIN TO THE CONTRARY, IN THE EVENT THE PRIME LEASE IS TERMINATED FOR ANY
REASON, THIS SUBLEASE SHALL AUTOMATICALLY TERMINATE.
3. Rent.
3.1 Base Rent. Annual base rent for this Sublease shall be TEN
THOUSAND DOLLARS ($10,000.00), plus sales tax, payable annually in advance to
Sublessor at its notice address set forth below or at such other place as the
Sublessor may specify in writing from time to time. The first annual base rent
payment shall be paid on the date hereof and each subsequent annual base rent
payment shall be paid on the same day of each year thereafter.
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3.2 Net Lease. All payments shall be net to Sublessor, so that
this Sublease shall yield net to the Sublessor the rent to be paid during the
term of this Sublease. Accordingly, the Sublessee shall pay all sales tax on
rent, as well as all costs, expenses and obligations of every kind or nature on,
or with respect to, the Spa Property, which may arise or become due during the
term of this Sublease, including without limitation, real estate taxes to the
extent set forth in Section 3.3 below, utilities and insurance premiums.
3.3 Taxes. The Sublessee shall pay, before any fine, penalty,
interest or cost may be added, become due or be imposed for nonpayment thereof
(or, if earlier, the date required under the "Spa Mortgage" or under any other
"Permitted Mortgage", each defined below), all taxes, assessments, water and
sewer rents, rates and charges, transit taxes, charges for public utilities,
excise, levies, license and permit fees and other governmental charges, general
and special, ordinary and extraordinary, unforeseen and foreseen, of any kind
and nature, which at any time during the term of this Sublease may be assessed,
levied, confirmed, imposed upon or grow to be due and payable out of or in
respect of, or become a lien on, the Spa Property or any part thereof or arising
out of the rent received by the Sublessee from any subtenants, any use or
occupation of the Spa Property by Sublessee, and such franchises as may be
appurtenant to the use of the Spa Property, or any document (to which the
Sublessee is a party) creating or transferring an interest or estate in the Spa
Property. In no event, however, shall the Sublessee be required to pay (a)
municipal, state or federal income taxes assessed against the Sublessor or its
income, or (b) the Sublessor's municipal, state or federal capital levy, or (c)
the Sublessor's estate, succession, inheritance, or transfer taxes, or (d)
corporate franchise taxes imposed upon any corporate owner of the fee of the Spa
Property or the leasehold estate created under the Prime Lease, or (e) any tax
on any other activities of Sublessor, but Sublessee shall pay all ad valorem
real and personal property taxes on the Spa Property. If, however, the Spa
Property is not assessed separately from the Entire Resort Property, then the
Sublessor and Sublessee shall mutually agree upon a fair and reasonable
allocation of such taxes to the Spa Property and Sublessee shall pay to
Sublessor such share of such tax upon demand by Sublessor. If Sublessee desires
to contest the validity of any tax or tax claim, it may do so without being in
default hereunder, provided that Sublessee gives the Sublessor written notice of
its intention to contest such tax or claim, that any such contest stays the
enforcement against the Spa Property of such tax or claim, provided, however,
that if the Spa Property is not assessed separately from the Entire Resort
Property, Sublessee shall not have any right to contest such taxes.
3.4 Proration. Notwithstanding anything to the contrary in
this Sublease, taxes for the years in which the commencement date and
termination date occur shall be prorated proportionately between Sublessor and
Sublessee.
4. Sublessee's Covenants as to Use and Occupancy.
4.1 Use. Sublessee shall use the Spa Property only for the
purpose of a first class spa under the name and style "Spa Terre", pursuant to a
pre-paid non-
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exclusive license to the use of the Spa Terre name and ▇▇▇▇, or such other name
and style approved by Sublessor (the "Approved Use"). Sublessee shall
continuously, actively and diligently operate the Spa Property for the Approved
Use so long as the Resort is in operation. Sublessee shall comply with all laws,
statutes, codes, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, permits, licenses, authorizations, directions and requirements of,
and agreements with, all governments, departments, commissions, boards, courts,
authorities, agencies, officials and officers, foreseen or unforeseen, ordinary
or extraordinary, and any restrictions or agreements of record, which now or at
any time hereafter may be applicable to the Spa Property or any part thereof, or
any of the adjoining sidewalks, streets or ways, or any use or condition of the
Spa Property or any part thereof or any persons from time to time employed
thereon or occupants thereof or any business conducted therefrom; including, but
without limiting the generality of the foregoing, all zoning, building and land
use, noise abatements, occupational health and safety and other governmental
requirements relating to health, safety, welfare and environmental protection
(collectively, "Legal Requirements").
4.2 FF&E. The Sublessee shall install and maintain at all
times in the Spa Property modern and high quality fixtures, furnishings,
fittings and equipment.
4.3 Care. Sublessee shall keep in good state of repair and in
first class condition all buildings, furniture, fixtures and equipment thereon
and shall not suffer or permit any waste or neglect of the Spa Property,
provided, however, that Sublessee shall be permitted to replace any or all of
such furniture, fixtures and equipment with items of equal or better value, and
provided, further, that Sublessee shall be permitted to demolish the interior of
the existing buildings in connection with the "Sublessee's Work" (defined
below).
4.4 Maintenance. Sublessee will be responsible, at Sublessee's
sole cost and expense, and at all times throughout the term thereof, for all
maintenance, repairs and replacements in, on or about the Spa Property, and the
Spa Property and all equipment and property thereon shall be maintained in first
class condition. Sublessee's responsibilities hereunder include, but are not
limited to, the replacement, repair and maintenance of the roof and all
structural components, all exterior and interior improvements, fixtures,
appliances, equipment, and systems, including, but not limited to, air
conditioning, heating, plumbing, electrical systems, and glass; and all of the
foregoing shall be maintained in good operating condition at all times and shall
be kept immaculately clean. All replacements, repairs and maintenance shall be
performed by licensed contractors or workmen. Sublessee shall be responsible for
all utilities, including the sanitation, storage and daily removal of all
garbage generated by Sublessee. Sublessee shall perform the aforesaid
maintenance, repairs, replacements and services and shall otherwise use the Spa
Property in a manner which is sensitive to and consistent with the nature of the
Resort. If the Sublessee does not make repairs promptly and adequately or
otherwise fails to comply with this Section, the Sublessor may, but need not,
make repairs or correct such failure, and the Sublessee shall pay Sublessor the
cost thereof on demand.
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5. Improvements and Delivery of Possession. Sublessee represents that
Sublessee has inspected the Spa Property and is accepting the same in "as is"
condition. No representations except those expressly contained herein have been
relied on by Sublessee with respect to the condition, design, capacity or
completion of the Spa Property or any other aspect of the Spa Property.
Sublessee will make no claim against Sublessor on account of any representation
of any kind, whether made by any renting agent, broker, officer or other
representative of Sublessor or which may be contained in any advertisement
relating to the Spa Property unless such representation is specifically set
forth in this Sublease. All improvements shall become Sublessor's property and
remain on the Spa Property upon termination of this Sublease. Notwithstanding
anything to the contrary contained in this Sublease the obtaining and
maintenance of all permits, licenses, zoning and governmental authorizations
required for Sublessee's business operations shall be Sublessee's sole
responsibility and at Sublessee's sole cost and expense and in no case shall the
obtaining or maintenance of such be a condition to Sublessee's obligations
hereunder. Notwithstanding any contrary provision of this Sublease, if any
personal property is located in the Spa Property, the Sublessee accepts such
personal property in its existing condition, as-is, and without representation
or warranty as to title, condition or any latent defects.
6. Alterations, Additions or Improvements.
6.1 The Sublessee shall, at its sole cost and expense,
promptly and diligently perform (or cause to be performed) all work necessary to
complete the Spa Property for the Approved Use ("Sublessee's Work"). Sublesee's
Work shall consist solely of the redevelopment and renovation of the
improvements to the Spa Property contemplated by and expressly described in that
certain Development Agreement of even date herewith by and between Sublessee, as
"Owner", and Noble House Hotels and Resorts, Ltd., as "Developer". Sublessee
shall commence and perform (or cause to be commenced and performed) Sublessee's
Work pursuant to and in accordance with the Development Agreement, including
without limitation the plans, specifications and drawings attached thereto and
approved thereunder. Sublessee's Work, and any future repairs, replacements,
additions or modifications to the Spa Property (collectively, the "Alterations")
shall be performed: (i) at the sole cost of the Sublessee; (ii) by licensed
contractors and subcontractors and workmen; (iii) in a good and workmanlike
manner; (iv) in accordance with the drawings and specifications therefor; (v) in
accordance with all applicable laws and regulations; and (vi) subject to the
restrictions against liens set forth in Section 7 below. After the completion of
Sublessee's Work, Sublessee shall notify Sublessor of any future Alterations
prior to the commencement thereof. Upon installation, all improvements made
pursuant to Sublessee's Work and all Alterations, other than trade fixtures,
shall become the property of Sublessor and shall remain upon and be surrendered
with the Spa Property. Sublessee's Work and all Alterations shall be
accomplished in a good and workmanlike manner so as not to damage the primary
structure or structural qualities of the improvements to the Spa Property. The
right, title and interest of Sublessor in all or any portion of the Spa
Property, underlying property or attached fixtures shall not be subject to any
liens arising directly or indirectly out of any
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improvements, alterations or changes made to the Spa Property, by or on the
behalf of Sublessee, its officers, employees, contractors or agents. The
Sublessee shall promptly pay for all materials supplied and work done with
respect to the Spa Property.
6.2 Without limitation of the foregoing, and notwithstanding
anything to the contrary elsewhere in this Sublease, Sublessee acknowledges that
applicable Legal Requirements for the Spa Property, including without limitation
the building and zoning codes of the City of Miami, county, state and/or federal
laws relating to facilities of the handicapped, and other laws and regulations
have changed many times since the date on which the existing improvements to the
Spa Property were constructed and/or prior renovations to such improvements were
completed, and that as a result of such changes in Legal Requirements, certain
components of such existing improvements are or may not be in compliance with
current Legal Requirements, although such components may not be required to be
brought into such compliance unless and until building permits are requested for
additional work to such improvements, such as building permits for Sublessee's
Work. Sublessee nevertheless accepts the Spa Property "AS IS", and agrees that
if any Sublessee's Work shall cause or result in the imposition of any
requirement upon Sublessor for making alterations, additions or improvements to,
or otherwise bringing all or any portion of any structure, improvement or area
into compliance with current, or hereafter enacted, Legal Requirements (any and
all such work is herein called "Compliance Work"), Sublessee shall be
responsible for performing such Compliance Work and paying the full cost
thereof.
7. Construction Liens. Sublessee has no right, power or authority to
create any mechanics', materialmen's or construction liens upon the Sublessor's
interest in the Spa Property, and the Sublessor's interest in the Spa Property
shall not be subject to liens for improvements made by the Sublessee and the
Sublessee shall not subject the Sublessor's interest in the Spa Property to any
mechanics', materialmen's or other construction liens. Sublessee shall notify
all materialmen, suppliers, contractors, mechanics and laborers involved with
work or improvements to the Spa Property that such party must look only to the
Sublessee or Sublessee's property interests for payment. The Sublessor may (but
shall not be obligated to) put all materialmen, suppliers, contractors,
mechanics and laborers on notice of this provision pursuant to Florida Statutes
713.10. If, notwithstanding the terms hereof, any such lien becomes effective
against the Sublessor's interest in the Spa Property, the Sublessee shall cause
the Spa Property to be released therefrom in any manner permitted under Florida
law within 20 days after written notice from the Sublessor. The Sublessee agrees
to indemnify and save harmless the Sublessor from any and all liabilities,
expenses, costs, expenditures or otherwise, including reasonable attorneys' fees
at all judicial levels, for breach of this provision.
8. Mutual Indemnification. During the entire term of this Sublease,
each party will indemnify and hold harmless the other against any and all
claims, debts, demands, or obligations which may be made against such other
party or against its interest in the Spa Property or any of the other real
property arising out of any act or omission of the indemnifying party or any
contractor, agent, licensee or invitee of such
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indemnifying party. If it becomes necessary for any indemnified party to defend
any action seeking to impose any such liability, the indemnifying party will pay
such indemnified party all reasonable costs of court and reasonable attorneys'
fees incurred by such indemnified party in effecting such defense in addition to
all other sums that such indemnified party may be called upon to pay by reason
of the entry of a judgment against it in the litigation in which such claim is
asserted.
9. Insurance.
9.1 At all times during the term of this Sublease, the
Sublessee will keep the Spa Property, including all buildings and improvements
thereon, insured for casualty loss, public liability, and business interruption,
in amounts no less than the amounts required under the Prime Lease. Such
policies shall (i) include the Sublessor, the Prime Lessor and any mortgagee
under any mortgage permitted under the Prime Lease or this Sublease (a
"Permitted Mortgagee"), as loss payees or additional insured parties (as
applicable), (ii) fully protect both Sublessor, Sublessee, Prime Lessor and such
Permitted Mortgagee, as their respective interests may appear, and (iii) provide
for 60 days' prior written notice of cancellation to Sublessor, Prime Lessor and
such Permitted Mortgagee. All proceeds of insurance shall be held, applied and
disbursed as set forth in the Prime Lease, provided that the insurance proceeds
for damage or destruction to the Spa Property shall be made available by
Sublessor to Sublessee as soon as such proceeds are available to Sublessor under
the Prime Lease. Sublessor shall not impose any restriction whatsoever on the
release of insurance proceeds relating to the Spa Property to Sublessee so long
as the requirements to such release (if any) imposed by the Prime Lessor under
the Prime Lease have been satisfied. Sublessor shall have no duty, obligation or
liability for any action or inaction of Prime Lessor, including, without
limitation, breach of any duty to disburse insurance proceeds.
9.2 Certificates. The Sublessee shall deliver to the Sublessor
certified Certificates of Insurance with original signatures, along with the
receipted bills evidencing payment of the premium for them. However, nothing
contained herein shall prohibit the Sublessee from financing such premiums and
if Sublessee does so, such receipt shall evidence that the installment premium
payment or payments are paid at or before their respective maturities.
9.3 Insurance Claims. Except as specifically provided
otherwise herein, no damage or destruction to any building or improvements by
fire, windstorm, or any other casualty shall be deemed to entitle the Sublessee
to surrender possession of the Spa Property, to terminate this Sublease, to
violate any of its provisions, or to cause any rebate or reduction in the Rent
when due or thereafter becoming due under its terms. If the Sublease is
cancelled because of the Sublessee's default while any obligation from an
insurance company to pay for all or any part of the damage remains outstanding,
the claim against the insurance company shall, upon cancellation of the
Sublease, be deemed immediately to become the absolute and unconditional
property of the Sublessor.
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9.4 Proceeds Payable to Mortgagee. Any Permitted Mortgagee
may, in accordance with its terms, require that the insurance proceeds be paid
to it and thereafter disbursed for the cost of reconstruction, repair and
restoration ("Restoration") in accordance with such mortgagee's own construction
disbursement procedures, but subject to Section 9.2 of the Prime Lease and
Section 9.6 hereof, the Sublessee shall still be required to provide any funds
necessary for the Restoration which are in excess of available insurance
proceeds.
9.5 Damages; Insurance Proceeds; Joint Bank Account. If the
Sublessee is not then in default under this Sublease, then Sublessee shall be
paid any excess money received from insurance remaining after the building or
buildings upon the Spa Property are reconstructed, repaired or restored. If,
after damage or destruction caused by fire, windstorm, or other cause, the
Sublessee does not commence Restoration within three (3) months from the date of
payment of the loss and prosecute the Restoration so that it will be completed
within nine (9) months after the damage or destruction occurs, then Sublessee
shall pay to the Sublessor the amount collected, or the balance thereof
remaining in the joint account, plus any additional funds required to complete
such Restoration. If the Sublessee is obligated under this Sublease to
effectuate any Restoration but fails to so do within the time specified, the
Sublessor may terminate this Sublease and retain the amount as liquidated and
agreed upon damages. The 9-month period for Restoration shall be extended by
delays caused without the Sublessee's fault or neglect by act of God, strikes,
lockouts, or other conditions (other than matters of finance) beyond the
Sublessee's control.
9.6 Damage Near End of Term. Notwithstanding anything herein
to the contrary, if the improvements upon the Spa Property are damaged or
destroyed so that operation thereof as contemplated under this Sublease is
significantly impaired or impracticable and such damage or destruction occurs
within the last 18 months of the term of this Sublease (without giving effect to
any unexercised extension options), then, Sublessee shall have no obligation to
effect any Restoration and unless Sublessee agrees to do so, this Sublease shall
terminate as of the date of such damage or destruction and the Sublessee shall
have no further extension options; provided, however, that Sublessee shall
insure that the Spa Property complies with all Legal Requirements with respect
to casualty losses of such type (for example, any partially damaged building
shall be secured and made safe from collapse or further damage), and shall be
entitled to any available insurance proceeds for such purpose. Sublessor shall
be entitled to receive any insurance proceeds not used by Sublessee in
accordance with the immediately preceding sentence.
10. Transfer.
10.1 Neither Sublessor nor Sublessee shall sell, transfer,
convey, grant options with respect to or otherwise dispose of, or agree to sell,
transfer, convey, grant options with respect to or otherwise dispose of, this
Sublease or all or any part of any interest in the Spa Property or any part
thereof (any such disposition, transaction or agreement is herein called a
"Transfer"), and any such purported Transfer shall be null
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and void and of no force or effect, except a sale or transfer made in compliance
with Section 7.3 of the Operating Agreement of Sublessee in effect between
affiliates of Sublessor and Sublessee.
10.2 Intentionally left blank.
11. Condemnation. If at any time during the term of this Sublease, all
or any portion of the Spa Property is taken, appropriated or condemned by reason
of eminent domain, the Sublessor and Sublessee shall divide that portion of the
proceeds and awards to which the Sublessor is entitled, ▇▇▇▇▇ the Rent, and make
other adjustments in a just and equitable manner under the circumstances. If the
parties cannot agree on a just and equitable division, abatement of Rent, or
other adjustments within 60 days after the award has been made, the disputed
matter shall, by appropriate proceedings, be submitted to a court having
jurisdiction of the subject matter for its decision and determination. If legal
title to the entire Spa Property is wholly taken by condemnation, this Sublease
shall terminate as of the date of such taking.
12. Mortgages. Sublessee shall not suffer or permit its interest in the
Spa Property or the Spa to be subject to any mortgage or other lien, provided,
however, that Sublessee shall be permitted to encumber the Spa Property with a
mortgage (the "Mortgage") securing a principal sum not to exceed $1,000,000 to
finance Sublessee's Work and the renovation of the Spa Property, bearing
interest at a market rate of interest, maturing not later than 20 years after
the date hereof. Although Sublessee shall have the right to encumber Sublessee's
leasehold interest in the Spa Property created by this Sublease with a Spa
Mortgage, the Spa Mortgage shall be subject and subordinate to the terms,
conditions, covenants and provisions of the Prime Lease and any Permitted
Mortgages (including the Existing Mortgage), and the respective rights and
interests of Prime Lessor and Prime Lessee and the holder of the Permitted
Mortgages thereunder, however, Sublessee shall be entitled to a non-disturbance
agreement (similar to the type of Non-Disturbance Agreement to be provided to
the Prime Lessee under Section 13.3 of the Prime Lease), provided that
Sublessee's non-disturbance agreement shall be conditioned upon there being no
default under this Sublease or the Prime Lease. In no event shall Sublessor have
any personal liability for payment of the indebtedness secured by the Spa
Mortgage or for the performance of any other obligation thereunder. Sublessee
shall promptly fulfill and perform all obligations of Sublessee under the Spa
Mortgage and the obligations secured thereby and shall indemnify and hold
harmless the Sublessor of, from and against any and all loss, claim or damage
which may be incurred by or threatened against Sublessee as a result of
Sublessee's failure to promptly fulfill and perform all of its obligations under
the Spa Mortgage and the obligations secured thereby.
13. Default.
13.1 Definition. A "default" or "Default" by any party to this
Sublease means a failure of such party to pay or perform any of its obligations
under this
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Sublease (such failure to pay or perform is called a "breach") and in each case,
expiration of any notice, grace or cure period.
13.2 By Sublessee.
(a) Notice; Cure. If at any time the
Sublessee fails to pay any sum of money on the day it is due and payable, or if
the Sublessee breaches any other covenant under this Sublease, the Sublessor
shall give written notice thereof to Sublessee, but Sublessor shall not be
entitled to declare this Sublease in default unless the payment is not paid
within ten (10) days after Sublessee receives Sublessor's notice, and, in the
case of any other breach, the breach continues for thirty (30) days after
Sublessee receives Sublessor's notice. However, nothing contained herein shall
be construed as precluding the Sublessor from having any other remedy that may
be necessary to preserve its right and its interest in the Spa Property and this
Sublease, even before expiration of the grace or notice periods provided for in
this Section, if under the then existing circumstances, the allowance of the
grace or the notice period would prejudice or endanger the Sublessor's rights,
estate and interest in this Sublease or the Spa Property.
(b) Remedies. Upon any breach by Sublessee
and expiration of all applicable notice, grace and cure periods, the Sublessor
may declare the Sublease term ended. In that event, the Sublessor may re-enter
upon any part of the Spa Property, either with or without process of law, the
Sublessee waiving any demand for possession of the Spa Property. The Sublessor
shall also have all other remedies provided by law and/or equity and this
Sublease. Immediately upon termination of the term, at the Sublessor's election
or in any other way, the Sublessee shall peaceably surrender and deliver up the
Spa Property to the Sublessor, or its agent or attorney. If the Sublessee, or
its agent, attorney, or Sublessees, holds the Spa Property, or any part thereof,
one day after the date for their surrender, according to the terms of this
Sublease, the Sublessee shall be deemed guilty of forcible detainer of the Spa
Property and shall be subject to eviction or removal, forcibly or otherwise,
with or without process of law.
(c) Revenue: Receiver. Subject to the rights
of the holder of the Spa Mortgage or any other Permitted Mortgagee to which this
Sublease is or is made subordinate, the Sublessee pledges with, and assigns to,
the Sublessor as security for Sublessee's obligations under this Sublease all
rents, issues, operating revenue, accounts, proceeds and profits ("Revenue")
that might otherwise accrue to the Sublessee for the use, enjoyment, and
operation of the Spa Property. In connection with such pledging of such Revenue,
the Sublessee covenants and agrees with the Sublessor that if the Sublessor,
upon the Sublessee's default, elects to file suit to enforce this Sublease and
protect its rights, the Sublessor may, as ancillary to such suit, apply to any
court of competent jurisdiction for the appointment of a receiver of all and
singular the Spa Property. Nothing contained in this Section shall be construed
as empowering the Sublessor to collect or receive Revenue accruing from the Spa
Property, unless and until the Sublessee is in default.
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13.3 By Sublessor.
(a) In the event of a breach by the
Sublessor, the Sublessee shall give written notice to the Sublessor, but
Sublessee shall not be entitled to declare this Sublease in default unless, in
the case of any failure to make a payment of money, such amount is not paid
within ten (10) days after the Sublessor receives Sublessee's notice that such
payment is due, and in the case of any other violation, the violation continues
for thirty (30) days after Sublessor receives Sublessee's notice. However,
nothing contained herein shall be construed as precluding the Sublessee from
having any other remedy that may be necessary to preserve its right and its
interest in the Spa Property, and this Sublease, even before expiration of the
notice period provided in this Section, if under the then existing
circumstances, the allowance of the notice period - , would prejudice or
endanger the Sublessee's rights, estate and interest in this Sublease, or the
Spa Property.
(b) Remedies. Upon any default by Sublessor
and expiration of all applicable notice and cure periods, the Sublessee may
terminate this Sublease, and shall also have all other remedies provided by law
and/or equity and this Sublease.
13.4 Default Interest. All arrearages in the payment of Rent
and other sums payable hereunder by one party to the other shall bear interest
from the termination of any grace period provided hereunder, payable at the rate
(the "Default Rate") equal to the lesser of (i) the "prime rate" as in effect
from time to time as reported in the Wall Street Journal, plus six percent (6%)
per annum until paid, or (ii) the maximum rate permitted by law.
13.5 Sublessor's Right to Cure. If Sublessee shall fail to
promptly fulfill any or all of its obligations under this Sublease, Sublessor
shall have the right, but not obligation, to take such actions and expend such
monies as are necessary or desirable in order to fulfill such obligation, and
advance all amounts necessary or desirable in order to do so, and the amounts so
advanced by Sublessor shall bear interest at the Default Rate until paid, and
shall be due and owing from Sublessee to Sublessor on demand. Sublessee shall
have no claim or cause of action against Sublessor for any action or inaction
taken by Sublessor in connection with the exercise of its rights under this
Section.
13.6 Cumulative Remedies. During the continuance of this
Sublease, each party shall have all rights and remedies which this Sublease and
the laws of the State of Florida assure to it. All rights and remedies accruing
to the Sublessor shall be cumulative; that is, the Sublessor may pursue all of
such rights and remedies, in whatever order it desires and the law permits
without being compelled to resort to any one remedy in advance of any other.
14. Prime Lease. This Sublease is and shall be expressly subject and
subordinate to the Prime Lease and the terms, provisions, covenants and
conditions
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thereof. This Sublease is also subject and subordinate to all instruments,
agreements and other matters to which the Prime Lease is or shall be subject or
subordinate. Sublessee shall conform to, and use the Spa Property in accordance
with, all the terms, provisions, covenants, agreements and conditions of the
Prime Lease as same apply to the Spa Property, and will do no act which will
result in a default or violation of said terms, provisions, covenants,
agreements and conditions. To the extent there are inconsistencies between any
provisions of the Prime Lease and any provisions of this Sublease, the
provisions of this Sublease shall control unless the use or occupancy of the Spa
Property by Sublessee or any action or inaction by Sublessee in accordance with
said provision would be a violation of or default under the terms of the Prime
Lease, in which event the provisions of the Prime Lease shall control.
15. Marina Rights.
15.1 Sublessee shall sublease to Yacht Club or its designee
during the entire term of this Sublease approximately 240 square feet of space
in the Spa Property for use as a dockmaster's office (the "Dockmaster's Office")
at an annual rental rate of $15.00 per square foot "net" ("Dockmaster Rent"),
subject to annual increases as hereinafter provided. Dockmaster Rent shall be
paid in twelve (12) equal monthly installments on the first day of each month,
commencing on the first day of the first month following substantial completion
of Sublessee's Work and delivery of possession of the Dockmaster's Office to
Yacht Club. Dockmaster Rent shall be adjusted and increased each year on the
first anniversary of the substantial completion of the Sublessee's Work and on
each anniversary thereafter (each an "Adjustment Date"), by adding thereto an
amount equal to the product of (i) the Dockmaster Rent for the first full year
that Dockmaster Rent is due (the "First Year"), and (ii) a fraction, the
numerator of which is the "Index" (as defined in the Prime Lease) for the month
immediately preceding the Adjustment Date minus the Index for the month
immediately preceding the First Year, and the denominator of which is the Index
for the month immediately preceding the First Year. Sublessee shall notify Yacht
Club of the increase (if any) to the Dockmaster Rent for the applicable year and
the increased amount of the new monthly installments due with respect thereto
(if applicable), and Yacht Club's Dockmaster Rent shall be adjusted accordingly.
In the event that the utilities consumed at the Dockmaster's Office are
separately submetered, Yacht Club shall pay for all such utilities directly to
the utility company providing same. However, if utilities are not separately
submetered, Yacht Club will pay to Sublessee, in addition to the monthly rent
hereinabove provided, an additional fifty dollars ($50.00) per month for all
utilities used or consumed at the Dockmaster's Office, subject to annual
increases based on the same adjustments as Dockmaster Rent. Sublessee shall be
responsible for completion of leasehold improvements constituting the
Dockmaster's office, with the exception of any future expansion.
15.2 Sublessor and its employees, agents, contractors and
lawful users of the Resort shall have and enjoy a nonexclusive right to use and
enjoy all driveways, walkways, parking facilities and open spaces now or
hereafter located at the Spa Property; subject, however, in all cases, to the
reasonable restrictions imposed by
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Sublessee upon all users of such facilities and Sublessee's right to relocate,
remove, alter or demolish such facilities from time to time. Sublessor shall
indemnify and hold Sublessee harmless from and against any and all laws, claim
or damage which may be incurred by or threatened against and as a result of, or
in connection with, any gross negligence or intentional misconduct of Sublessor
or its employees, agents, invitees and licensees on or with respect to the Spa
Property and agrees to maintain and keep in effect at all times during the term
of this Sublease, liability insurance policies relating to the Resort (including
the Spa Property) in the amounts required under the Prime Lease.
15.3 Sublessee and its employees, agents, contractors and
lawful users of the Spa shall have and enjoy a nonexclusive right, for the term
of this Sublease, (a) to use and enjoy all driveways, walkways, and open spaces
now or hereafter located at the Entire Resort Property, to the extent necessary
or appropriate for the construction of the Spa and/or for their use and
enjoyment of the Spa, as applicable, and (b) to erect, maintain and repair
directional signage for the Spa at the Entire Resort Property so long as such
sign is conformed to all applicable legal requirements and are in the same
locations as, and are similar in size and design to, existing signage at the
Entire Resort Property; subject, however, in all cases, to the reasonable
restrictions imposed by Sublessor upon all users of such facilities and
Sublessor's right to relocate, remove, alter or demolish such facilities from
time to time. Sublessee shall indemnify and hold Sublessor harmless from and
against any and all laws, claim or damage which may be incurred by or threatened
against and as a result of, or in connection with, the exercise ` ,~ of its
right to maintain and repair its signage hereunder or any gross negligence or
intentional misconduct of Sublessee or its employees, agents, Spa invitees and
licensees on or with respect to the Entire Resort Property and agrees to
maintain and keep in effect at all times during the term of this Sublease,
liability insurance policies relating to the Spa Property in an amount not less
than $5,000,000. Sublessor shall provide parking for Spa guests and Spa
employees on the same basis as provided under the Prime Lease.
16. Quiet Enjoyment. Subject to the terms hereof, so long as the
Sublessee keeps and performs all of its covenants and conditions under this
Sublease, Sublessee shall have quiet, undisturbed and continued possession of
the Spa Property, free from all claims against the Sublessor and all persons
claiming by, through or under the Sublessor.
17. Right of Entry. The Sublessor and its agents may enter upon the Spa
Property at all reasonable times to examine their condition and use or to
exhibit the same to its lenders, investors and prospective purchasers, so long
as that right is exercised in a manner which does not unreasonably interfere
with the Sublessee in the conduct of its business on the Spa Property. If the
Spa Property is damaged by fire, windstorm or other casualty which causes it to
be exposed to the elements, the Sublessor may enter upon them to make emergency
repairs if the Sublessee fails to do so. However, if it does so, the act or acts
shall not be deemed to excuse the Sublessee from its obligation to keep the Spa
Property in repair, and the Sublessee shall, upon
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Sublessor's demand, immediately reimburse Sublessor for the cost of the
emergency repairs.
18. License. Sublessor, being the holder of a license from the Prime
Lessor, to use the "Names" and "Marks" defined below, hereby grants to
Sublessee, to the extent Sublessor has the power and authority to do so, a
pre-paid non exclusive sublicense to use, during the term of this Sublease,
solely for the purposes set forth below in this section, any and all trademarks,
trade names and fictitious names "Grove Isle Club", "Grove Isle Hotel", "Grove
Isle Resort", "Little Grove Isle" or any combination or derivation thereof
(collectively the "Names"), and the trademarks registered with the Florida
Department of State, Trademark Registration Section, Registration numbers T941
,324, T941 ,325, T941 ,326 and T941 ,327 (collectively, the "Marks"); provided,
however, that the sublicense granted hereunder shall be utilized only in
connection with the use, operation and management, advertisement and promotion
of the Spa Property and not for any other properties, for the Approved Use.
Sublessee agrees that the quality of services provided by it with respect to the
Marks and the Names shall conform to the operating standards set forth in
Section 15.2 of the Prime Lease and Article 4 of this Sublease. Sublessor also
grants to Sublessee a pre-paid nonexclusive license to use the Name and ▇▇▇▇
"Spa Terre" in connection with the operation of the Spa Property. The sublicense
and license granted hereunder shall remain in full force and effect for the term
of this Sublease, is not assignable or otherwise transferrable, directly or
indirectly, and shall automatically terminate on termination of this Sublease.
19. Miscellaneous.
19.1 Governing Law. All of the rights and remedies of the
parties shall be governed by the provisions of this instrument and by the laws
of the State of Florida.
19.2 Force Majeure. If the Sublessor or Sublessee is delayed,
hindered, or prevented from performing any act required hereunder (other than
the payment of money) by reason of strikes, lockouts, labor troubles, inability
to procure materials, failure of power, restrictive government laws or
regulations, riots, insurrection, the act, failure to act or default of the
other party, war, or other reason beyond its control, then performance of the
act shall be excused for the period of the delay. In that event, the period for
the performance of the act shall be extended for a period equivalent to the
period of the delay; provided, however, that no such extension shall extend
beyond the period allowed for such performance under the Prime Lease (including
force majeure delays allowed under the Prime Lease).
19.3 Estoppel Certificates. Either party shall, without
charge, at any time and from time to time hereafter (but not more frequently
than twice during any one calendar year), within twenty (20) days after the
other's written request to the other, certify by instrument duly executed and
acknowledged to any mortgages or purchaser or proposed mortgagee or proposed
purchaser, or any other person, firm, or corporation specified in the request as
to:
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(a) Whether this Sublease has been
supplemented or amended, and, if so, the substance and manner of the supplement
or amendment;
(b) The validity and force and effect of this
Sublease, in accordance with its tenor as then constituted;
(c) The existence of any default under this
Sublease;
(d) The existence of all offsets,
counterclaims, or defenses thereto on the part of the other party;
(e)The Commencement Date and Termination
Date; and (f)All other matters that may reasonably be so requested.
Any such certificate may be relied upon by the party who requested it
and any other person, firm, or corporation to whom it may be exhibited or
delivered, and the contents of the certificate shall be binding on the party
executing it. Failure within the 20-day period to give a written reply shall
constitute a representation, which any person may rely upon as being true and
correct, that the Sublease is in good standing.
19.4 Duplicates; Recordation. Either party shall, at any time,
at the other's request, promptly execute duplicate originals of an instrument,
in recordable form, which shall constitute a short form of this Sublease. This
short form lease will set forth a description of the Spa Property, the term of
this Sublease, and any other portion thereof, except for the rental provisions,
reasonably requested by either party.
19.5 No Recourse. Notwithstanding anything to the contrary,
the parties hereto shall look solely to the interest of the other in the Spa
Property and this Sublease, for the satisfaction of any remedy it may have
hereunder or in connection herewith and shall not look to any other assets of
such other party or of any other person, firm or corporation. No personal
liability shall attach to any of present or future shareholders, officers, or
directors of any party or its partners, for any obligation hereunder or in
connection herewith, except gross negligence, fraud or intentional
misrepresentations.
19.6 Consent Not to be Unreasonably Withheld. Except to the
extent, if any, specifically provided otherwise herein, the Sublessor shall not
unreasonably withhold its consent, permission, or approval for any act which may
be required or desired by the Sublessee under the provisions of this Sublease.
Such consent, permission, or approval shall be deemed to have been granted if,
within forty-five (45) days after Sublessor receives the request, fails to
notify the Lessee of its express disapproval and the reasons therefor, except as
otherwise provided herein.
19.7 Non-Waiver. No waiver of a breach of any covenant in this
Sublease shall be construed to be a waiver of any succeeding breach of the same
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covenant. No delay or failure by either party to exercise any right under this
Sublease, and no partial or single exercise of that right, shall constitute a
waiver of that or any other right, unless otherwise expressly provided herein.
19.8 Miscellaneous. Sublessor represents, warrants and
covenants that it will provide the services described in this Section 19.8 to
Sublessee in the event the affiliate of Sublessor who is a Member of Sublessee
is no longer a Member of Sublessee for any reason. Such services will include
all billing and bookkeeping services for Spa usage by members and Resort guests
billed to the Grove Isle Club and Resort, cooperative advertising and marketing
programs, and an incoming telephone extension from the hotel main switchboard.
Provided that Sublessor provides all such services at the level and quality
required herein, Sublessee shall pay a monthly fee for such services equal to
(i) three percent (3%) of incurred revenue for such month (for all billing and
bookkeeping services), and (ii) one percent (1%) of "Gross Operating Revenue"
for such month (for all cooperative advertising and marketing programs). The
capitalized terms used herein with quotation marks shall have the meanings given
to them in that certain Spa Management Agreement of even date herewith by and
between Sublessee, as owner, and Noble House Grove Isle, Ltd., as operator,
governing the management and operation of the Spa Property.
19.9 Relationship. The relationship between parties is that of
Sublessor and Sublessee only, and in no event shall the parties be deemed to be
partners or joint venturers.
19.10 Written Modifications. No modification, release,
discharge, or waiver of any provision hereof shall be of any force, effect, or
value unless signed in writing by the party to be charged therewith, or its duly
authorized agent or attorney.
19.11 Entire Agreement. This instrument contains the entire
agreement between parties as of this date with respect to the subject matter
hereof. The execution hereof has not been induced by either party by
representations, promises, or understandings not expressed herein. There are no
collateral agreements, stipulations, promises, or undertakings whatsoever upon
the respective parties in any way touching the subject matter of this instrument
which are not expressly contained herein or in any other documents executed in
connection herewith.
19.12 Notices. All notices and responses which are required or
permitted under this Sublease shall be in writing, and shall be deemed complete
only when actually delivered to the recipient as follows or delivery at such
address is refused: (a) If to Sublessor: Westgroup Grove Isle Associates c/o
Noble House Hotels & Resorts ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: ▇▇.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(a) If to Sublessor: Westgroup Grove Isle Associates
c/o Noble House Hotels & Resorts
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) If to Sublessee: Grove Spa, LLC
c/o Courtland Investments
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to: Noble House Associates, LLC.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Either party may change the place for giving notice by written notice
in the manner set forth in this Section.
19.13 Joint Liability. If the parties upon either side
(Sublessor and Sublessee) consist of more than one person, such persons shall be
jointly and severally liable on the covenants of this Sublease.
19.14 Liability Continued. All references to the Sublessor and
Sublessee mean the persons who, from time to time, occupy the positions,
respectively, of Sublessor and Sublessee. However, this shall not be construed
as relieving a person of any liability incurred by it by reason of or in
connection with it having been Sublessor and Sublessee at one time, unless such
release is provided for under other provision of this Sublease.
19.15 No Third Party Benefits. This Sublease is made for the
sole benefit of the parties hereto, and no third party shall be a beneficiary
hereof or have any rights hereunder.
19.16 Attorney's Fees; Venue. In the event of any litigation,
action, suit or proceeding between any parties to this Sublease pertaining to
the construction or enforcement of this Sublease, the prevailing party shall be
entitled to payment by the other of such prevailing parties reasonable
attorney's fees and expenses in connection with such litigation, actions, suit
or proceeding. Any action or proceeding brought by the parties concerning any
matters arising out of this Sublease shall be heard in a court sitting in
Miami-Dade County, Florida, the parties hereto hereby waiving any objections to
such venue. Sublessor and Sublessee knowingly, intentionally and voluntarily
waive all rights to a trial by jury in any action or proceeding relating to or
arising out of this Sublease.
19.17 Broker. The parties represent that there are no brokers
involved in this transaction and that no brokerage commissions are payable to
any third party.
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19.18 Headings. Headings in this Sublease are for convenience
and reference only and shall not be used to interpret or construe its
provisions.
19.19 Time of Essence. Time is expressly declared to be of the
essence of this Sublease and of each provision hereof.
19.20 Counterparts. This Sublease may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute but one instrument.
19.21 Partial Invalidity. If any term, covenant or condition
of this Sublease, or the application thereof to any person or circumstance shall
to any extent be invalid or unenforceable, the remainder of this Sublease, or
the application of such term, covenant or condition to persons or circumstances
other than those to which it is held invalid or unenforceable, shall not be
affected thereby and each other term, covenant and condition of this Sublease
shall be valid and be enforced, to the fullest extent permitted by law.
19.22 Radon Gas. Radon is a naturally occurring radioactive
gas that, when it has accumulated in a building in sufficient quantities, may
present health risks to persons who are exposed to it over time. Levels of radon
that exceed federal and state guidelines have been found in buildings in
Florida. Additional information regarding radon and radon testing may be
obtained from your county health department.
IN WITNESS WHEREOF, the Sublessor and Sublessee have hereunto set their
hands and seals as of the day and year above written.
SUBLESSOR:
WESTGROUP GROVE ISLE ASSOCIATES
LTD., a Florida limited partnership, by
WESTGROUP PARTNER, INC., a
California corporation, its sole general
partner
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------- -----------------------
Print Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------
Print Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
SUBLESSEE:
18
GROVE SPA, LLC, a Delaware LLC
By: NOBLE HOUSE ASSOCIATES, LLC,
a Delaware limited liability
company
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ illegible
------------------- -----------------
Print Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Its Managing Member
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------
Print Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
By: CII SPA, LLC a Delaware limited
liability Company
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------- -----------------------
Print Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Courtland Investments, Inc.
Its Managing Member and Member
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By:
------------------
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Exhibits:
---------
Exhibit A - Spa Property
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