Loading...
HomeMy WebLinkAboutAmerican Golf Corporation, CNL Meadowlark, LLC, CF Meadowlark ARCIS, LLC - 2014-11-03Dept. ID CS 14-027 Page 1 of 2 Meeting Date: 11/3/2014 ,*odit -7-d CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 11/3/2014 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Janeen Laudenback, Director of Community Services SUBJECT: Approve and authorize execution of Consent to Assignment of Sublease for Meadowlark Golf Course with lessee American Gold Corporation and CNL Income EAGL Meadowlark LLC (subtenant) and CF ARCIS (assignee); and authorize execution of an Estoppel Certificate Statement of Issue: The City Council is asked to approve the Consent to Sublease Agreement by and between the City of Huntington Beach and American Golf Corporation, a California Corporation, CNL Meadowlark, LLC, a Delaware limited liability company as subtenant, and, CF Meadowlark ARCIS, LLC, a Delaware limited liability company as assignee. Financial Impact: Not applicable Recommended Action: A) Approve the Consent to Assignment of Sublease Agreement by and between the City of Huntington Beach and American Golf Corporation, a California corporation, as the lessee, and CNL Income EAGL Meadowlark, LLC, a Delaware limited liability company, as the subtenant of the lessee, and CF ARCIS, LLC., a Delaware limited partnership; and, B) Authorize the Mayor and City Clerk to sign and execute the Consent to Assignment of Sublease Agreement; and, C) Authorize the City Manager to sign the Estoppel Certificate relating to the Meadowlark Golf Course property; and, D) Authorize the City Manager or designee to take any action and execute any and all documents and agreements necessary to implement this agreement. Alternative Action(s): Do not approve the Consent to Assignment of Sublease agreement and direct staff accordingly. Analysis: In 1974, the City of Huntington Beach entered into a lease agreement with American Golf Corporation for the operation of Meadowlark Golf Course. On July 6, 1992, a new agreement was approved by City Council. The revised agreement provided for major capital improvements to the golf course and gave the City additional control over the operational standards of the course. The 11B -149- Item 10. - I Dept. ID CS 14-027 Page 2 of 2 Meeting Date: 11/3/2014 current agreement expires on February 5, 2018, with an additional ten-year renewal option through February 5, 2028. In 2008, American Golf Corporation (AGC) and certain affiliates entered into an agreement with CNL Income Partners, LP (CNL) for the transfer of 42 golf course properties across the United States; including Meadowlark Golf Course. The buyers under contract are CNL Income Partners, LP (CNL). CNL now desires to assign its interest in Meadowlark Golf Course to CF Meadowlark ARCIS (ARCIS) LLC, a Delaware limited liability company. Pursuant to Section 24 of the current lease agreement, American Golf, under the terms of the existing contract, is requesting the City's consent to assignment of the sublease of the golf course to ARCIS. ARCIS Equity Partners, LLC, is a private equity firm which invests in real estate and leisure sectors — which includes golf courses. ARCIS recently invested in Evergreen Golf Alliance, (EAGL) to operate over 60 golf courses across the nation. To date, ARCIS has invested over $400 million in golf courses and generates approximately $45 million annually. Should the Consent to Assignment of the Sublease be approved, EAGL will take over day-to-day operations of Meadowlark, including maintenance, capital improvements, pro shop and banquet operations. AGC, as "tenant" under the master lease of the golf course, has agreed to the assignment to ARCIS. Staff has reviewed ARCIS' corporate background and marketing materials and has determined that, along with EAGL, the corporation is well -qualified to act as landlord of the golf course. Additionally, the Consent to Assignment of Sublease agreement provides that ARCIS will comply with the terms of the master lease agreement and existing sublease for operation of Meadowlark Golf Course. Staff is, therefore, recommending City Council approval of the agreement. Environmental Status: Not applicable Strategic Plan Goal: Enhance economic development Attachment(s): 1. Consent to Sublease Agreement with lease agreements as exhibits. (Exhibits A and B are included as supporting documents only and do not require execution by the City Council.) 2. Estoppel Certificate Item 10. - 2 HB -150- «T AA a¥ 4a.� ��1HETMCM# m :��/�<w: \- 22- -�- - _- . ƒ� *� «\%� a _ - '- \ � « } \ }� ] This Document was electronically recorded by City of Huntington Beach OFFICIAL BUSINESS Document entitled to free recording per Government Code Sections 6103 and 27383 Recording Requested By: The City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: City Clerk Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder IIII I I II 111111111111111 I 111136.00 2014000488670 09:16am 11/13/14 276 405 C34 F13 10 0.00 0.00 0.00 0.00 27.00 0.00 0.00 0.00 SPACE ABOVE THIS LINE FOR RECORDER'S USE CONSENT TO ASSIGNMENT OF SUBLEASE THIS CONSENT TO SUBLEASE (hereinafter "Agreement") is made this 3 o day of DIG- _ 2014, by and between THE CITY OF HUNTINGTON BEACH ("City"), the Lessor under the Lease described below, and (a) AMERICAN GOLF CORPORATION, a California corporation (the "Lessee"), the Lessee under the Lease and Sublessor under the Sublease described below, (b) CLP MEADOWLARK GOLF, LLC, a Delaware limited liability company, the Subtenant under the Sublease (the "Subtenant") of the Lessee, and (c) CF MEADOWLARK ARCIS LLC, a Delaware limited liability company ("Assignee"), the entity to which Subtenant is assigning its interest in the Sublease. RECITALS: A. City and Lessee are parties to that certain Lease Agreement, dated as of July 6, 1992, by and between City, as City, and Lessee, as lessee, and the other documents listed on Exhibit A hereto (collectively, the "Lease"), relating to the golf course property known as "Meadowlark Golf Course" and more particularly described in the Lease (the "Golf Course"). B. Lessee, as sublandlord, and Subtenant, as subtenant, are parties to that certain Sublease Agreement described on Exhibit B hereto (the "Sublease"), pursuant to which Lessee subleases certain rights and interests in and to the Golf Course to the Subtenant subject to the terms and conditions of the Sublease and subject to the terms and conditions of the Lease. C. The Subtenant desires to assign its rights and interests in and to the Golf Course and the Sublease to Assignee, subject to the City's and Lessee's approval. D. Pursuant to Section 6.02(c) of the Sublease and Section 24 of the Lease, Subtenant has requested the City's and Lessee's consent to the assignment of the Sublease of the Golf Course to Assignee. NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which the City and Lessee hereby acknowledge, the City and Lessee hereby agrees as follows: Consent to Assignment of Lease —Meadowlark 0914625\161524\1591384v7 I. City and Lessee consent to the assignment by Subtenant to Assignee of Subtenant's rights and interest in and to the Sublease and Golf Course. In the event any terms or conditions contained in the below -referenced Assignment of the Sublease by and between Subtenant and Assignor conflict with terms and conditions set forth in the Lease, the terms of the Lease shall control. 2. The parties have provided copies of the assignment of the Sublease to be executed by and between Subtenant and Assignee (the "Assignment"). 3. City and Lessee confirm that the attached Exhibit A sets forth a complete list of documents that make up the Lease. The Lease represents the entire agreement between Lessee and City with respect to the Golf Course. Except as provided in the Lease, City does not represent or warrant in any way its title to the Golf Course or improvements thereto or any other property referenced in this transaction. 4. Lessee and Subtenant confirm that the attached Exhibit B sets forth a complete list of documents that make up the Sublease. The Sublease represents the entire agreement between Lessee and Subtenant with respect to the Golf Course. 5. Lessee hereby expressly agrees to remain bound by the obligations responsibilities and duties under the Lease and Sublease. The Lease is in full force and effect and has not been assigned, modified, supplemented or amended in any way except as described in Exhibit A. City confirms that the Assignment of the Sublease by Subtenant to Assignee, subject to the terms and conditions of the Lease and the provisions of Sections 1 and 2 hereof, will not constitute a default under the Lease. 6. Any additional subleases and/or assignments including lessees and/or sublessees securing financing not described in this Consent to Assignment of Sublease must be approved in writing by the City and Lessee in accordance with the respective requirements of the Lease and Sublease. Assignee shall be required to receive City approval of the management entity ("Manager") responsible for day -to' -day operations of the Golf Course prior to appointment by Assignee. The City agrees to review any request from Assignee for a change in management companies within ten (10) business days from receipt and work cooperatively in good faith with Assignee to approve or make recommendations expeditiously and in no event later than twenty (20) business days thereafter. Manager shall operate, supervise and manage the Golf Course per the terms and conditions of the Lease and Sublease. 7. In addition to the hold harmless/indemnification provision in the Lease, Lessee agrees to defend and indemnify the City from any and all claims, actions, judgments, liabilities, proceedings and costs, including reasonable attorneys' fees and other costs of defense and damages, resulting from the transaction contemplated herein. City shall first look to Lessee to satisfy all claims, actions, judgments, liabilities, proceedings and costs, including reasonable attorneys' fees and other costs of defense and damages resulting from non-performance of the obligations under the Lease. Without limiting the foregoing, in the event Assignee fails to perform obligations required in the Lease first accruing from and after the effective date of the Consent to Assignment of Lease —Meadowlark 0914625\161524\15913847 Assignments, City may pursue any and all rights and remedies against Assignee that it has against Lessee pursuant to the Lease. 8. In addition to the hold harmless/indemnification provision in the Lease, Assignee agrees to defend and indemnify the City from any and all claims, actions, judgments, liabilities, proceedings and costs, including reasonable attorneys' fees and other costs of defense and damages resulting from the transaction contemplated herein. City shall first look to Lessee to satisfy all claims, actions, judgments, liabilities, proceedings and costs, including reasonable attorneys' fees and other costs of defense and damages resulting from non-performance of the obligations under the Lease. 9. The City, in executing its consent to the Assignment, does not (i) release Lessee from any claims or remedies it may have against Lessee under the Lease, or (ii) release Subtenant from any claims or remedies it may have against Subtenant under the Lease or the Sublease arising on or before the effective date of the Assignment. 10. The Lessee, in executing its consent to the Assignment, does hereby release Subtenant from any further rights or obligations under the Sublease accruing or occurring after the effective date of the Assignment. 1 I . Without limiting Lessee's obligations to City under the Lease, City, as it relates to the Lease, and Lessee, as it relates to the Sublease, agree to accept performance from Assignee of operational and administrative matters such as the payment of percentage rent, the maintenance of financial records, the delivery of financial reports to the City and Lessee, obligations to maintain, repair and operate the Golf Course in accordance with the respective terms of the Lease and Sublease, coordination of tournaments provided for under the Lease and Sublease, and other matters required by the Lessee and subtenant in the Lease and Sublease, respectively. All of the aforementioned obligations, in addition to those not .mentioned herein, shall be in accordance with the Lease and Sublease. Percentage rent shall continue to be calculated in the manner described in the Lease, based on the operating revenues of the golf course, whether such revenues are collected by Lessee, Assignee or another operator approved by City. 12. From and after the effective date of the Assignment, City shall provide Assignee with copies of all notices which may be provided to Lessee pursuant to the terms and provisions of the Lease and the Lessee shall provide Assignee with copies of all notices which may be provided to the subtenant pursuant to the terms and provisions of the Sublease. In the event of a default by either City or Lessee or any other party under the Lease, City shall give prompt written notice to Lessee and Assignee. Assignee shall provide City and Lessee all notices, requests and other communications to the parties specified in the Lease and Sublease in writing. All notices to Assignee shall be given to such party at its address set forth below (or to such other address as such party may hereafter specify for the purpose of notice in accordance with the terms of the Lease and Sublease). Assignee: 1 See Section 13 below Consent to Assignment of Lease —Meadowlark 0914625\161524\1591384v7 CF Meadowlark Arcis LLC c/o CF Arcis X LLC 5221 N. O'Conner Blvd., Suite 700 Irving, Texas 75039 Attention: Blake S. Walker, James K. Noble III, and Randy Brown Telecopy No.: (972) 532-4301 With a copy to: Jeffrey W. Giese, Esq. Hunton & Williams LLP 1445 Ross Avenue, Suite 3700 Dallas, Texas 75202 Telephone No.: (214) 468-3328 Email: jgiese@hunton.com The addresses set forth above may be changed as to any party by such party delivering to the other parties at least thirty (30) calendar days' written notice as to such change of address. 13. By accepting this Agreement, Assignee agrees that, as subtenant, it is bound by all of terms and conditions of the Lease that are binding upon Lessee which are first accruing from and after the effective date of this Agreement. Further, by accepting this Agreement, Assignee agrees that, as subtenant, it is bound by all of terms and conditions of the Sublease which are first accruing from and after the effective date of this Agreement. Any specific references to the Lease or Sublease contained herein are for emphasis and/or addition, and not intended to limit this clause in any way. 14. By accepting this Agreement, Assignee agrees that it shall comply with any exclusivity agreement known to Assignee which the City may have, now or in the future, with a product sponsor. This exclusivity shall not apply to third party rentals that bring their own products onto the Golf Course. 15. The original of this Agreement and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who has signed it. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers the day, month and year first above written. SIGNATURES ON THE FOLLOWING PAGES Consent to Assignment of Lease —Meadowlark 4 0914625\161524\15913847 CITY: CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor �PPROV-ED- TO FORM: IJ City A" y o(�iz°►y City Manager INITIATED AND APPRO` Deputy Dkector of Ecorloyliic Development STATE OF CALIFORNIA COUNTY OF The foregoing instrument was acknowledged before me 2014, by , as -,, HUNTINGTON BEACH, a municipal corporation of . S at City. He (She) is personally known to me or has,pr"'uced identification. of Community Services >� day of , of CITY OF of California, on behalf of the (NOTARY SEAL) .�•�''� Notary Public Signature (Name typed, printed or stamped) SIGNATURES CONTINUED ON NEXT PAGE Consent to Assignment of Lease —Meadowlark 5 0914625\161524\15913847 as ACKNOWLEDGMENT STATE OF CALIFORNIA ss COUNTY OF ORANGE On November 12, 2014, before me, P. L. Esparza, Notary Public, personally appeared Joan L. Flynn and Matthew M. Harper who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. of ry Signa re) P. L. ESPARZA Commission # 203275 Notary Public - California Orange County Mi Comm. Ex 'res :uj 4. 2017 (Seal) LESSEE: AMERICAN GOLF CORPORATION, a California corporation LIN STATE OF COUNTY OF The foregoing instrument was acknowledged b 2014, by CORPORATION, a California corporation, on known to me or has produced / (NOTARY SEAL) me this day of , of AMERICAN GOLF f of the corporation. He (She) is personally as identi catio . Notary Public Signature (Name typed, printed or stamped) SIGNATURES CONTINUED ON NEXT PAGE Consent to Assignment of Lease —Meadowlark 6 0914625\161524\1591384v6 • -NIA ALL-PURPOSACKNOWLEDGMENT CIVIL CODE § 1189 State of California personally appeared ELYSE COOK Commission # 1978291 a-•i Notary Public - California a z p = Los Angeles County My Comm. Expires Jun 13, 2016 Name and Title ofte Officer Name(s) of who proved to me on the basis of satisfactory evidence to be the persory(s`) whose raamejAj is/art- subscribed to the within instrument and acknowledged to me that -i2re/she/t4&,p executed the same in /her/their--authorized capacity(i4, and that by _bis/her/their signatureK on the instrument the persorX, or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official Place Notary Seal Above Signature: Signatu of Notary Public OPTIONAL Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Do7�� ment r �� 8v r� Title or Type of Document: Document Number of Pages: Signers) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: _ ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ G eral ❑ Individual ❑ Attorne in Fact ❑ Trustee ❑ Guar an or Conservator ❑ Other: Signer Is Represegfing: Signer's Name: ❑ Corporate Officer ❑ Partner — ❑ Limi ❑ Individual C ❑ Trustee ❑ Other: Date: ;d/❑ General Attorney in Fact Guardian or Conservator Signer Is Rt�voresenting: A✓, 4'✓4�✓�"✓ rii�.�4�: a� •s4'•✓' •.v4'•✓ ••✓ '•✓i.�'✓4'✓4�4'�4'.•i�4'✓� � �4�✓4�✓.�4'•✓4'✓4'ri '.vi-✓iai.�s4'✓4<✓. �4'm '.✓ '✓ •✓.'✓ '✓4�4'.•r4'✓ ' HININC10151 10153 RIM-11MM R I I Lei• • . • • :•• • :•• : ..: •- SUBTENANT: CLP MEADOWLARK GOLF, LLC, Delaware limited liability company By: Name: raBracco Title: Vice President STATE OF _Ft oemb a COUNTY OF ©RAN.0 r=, The foregoing instrument was acknowledged before me this Rk day of 2014, by 1Rmr--,49-Nc-Lo as V.c.6 —'V1RGs►j>SN-( of CLP MEADOWLARK GOLF, LLC, a Delaware limited liability company, on behalf of the company. He (She) is personally known to me or has produced as identification. (NOTARY SEAL) Notary Public Signature i►90TARYPUBLIC SuSANA—IiRC:�150w1a- L(aCo�E STATE oF EL0pjDA (Name typed, printed or stamped) COmnW EE190137 Expires 4/17/2016 SIGNATURES CONTINUED ON NEXT PAGE Consent to Assignment of Lease —Meadowlark 0914625\161524\1591384v7 ASSIGNEE: CF MEADOWLARK ARCIS LLC, a Delaware limited liabilit o any By: i Name: IJWNMEXER Title: 1-1 IORIZED SIGNATORY _STATE OF NEW YORK COUNTY OF On the erl day of inthe year 2014, before me personally came to me known, who, being by me duly sworn, did depose and say that he/she/t ey reside(s) in olD5-- (if the place of residence is in a city, include the sUreet and street number, if any, iereof that he/she/they is (president or other officer or director or attorney in fact duly appointed) of CF MEADOWLARK ARCIS LLC, a Delaware limited liability company, the limited liability company described in and which executed the above instrument; and that he/she/they signed his/her/their name(s) thereto by authority of the Sole Member of said limited liability company. Notary Public Printed Name: MAR N a cLaRKE Notary Public - State of New York My Commission Exp es: N0.01CL6297367 Oualified in Nassau County My Commission Expires Feb 18, 2018 Consent to Assignment of Lease —Meadowlark g 0914625\161524\15913840 1FASP I . Lease Agreement, dated July 6, 1992, by and between the City of Huntington Beach, as City, and American Golf Corporation, as Lessee, as amended by Addendum to Lease Agreement dated July 1, 2013, Consent to Assigmient, of Lease —Meadowlark 9 0914625\ 1 6152C 15913840 Item 10. - 12 HB -160- ADDENDUM TO LEASE AGREEMENT THIS ADDENDUM TO LEASE AGREEMENT (this "Addendum") is made and entered into this /-31— day of S;jt4. " 2013 (the "Effective Date") by and between THE CITE' OF IEI[.INTINGTON EfEACH, a municipal corporation ("Lessor'), and AMERICAN GOLF CORPORATION, a California corporation ("Lessee"). Lessor and Lessee are at times collectively referred to herein as the "Parties" and individually as a "Paztv." RECITALS: A. Lessee leases from Lessor that certain golf course property known as Meadowlark Golf Course and located in Huntington Beach, California (the "Premises") pursuant to that certain Lease Agreement dated July 6, 1992 (the "Ground Lease"). B. Lessor and Lessee have agreed that certain renovations and capital improvements shall be made to the Premises in exchanae for a reduction in the amount of minimum rent payable under the Ground Lease, all on the terms and conditions set forth herein. C. Lessee has subleased the Premises to CLP Meadowlark Golf, LLC, a Delaware limited liability company (ELa CNL Income EAGL Meadowlark, LLC) ("Sublessee"), pursuant to that certain Sublease Agreement dated April 17, 2008 (the "Sublease")" which Sublease was approved by Lessor pursuant to that certain Consent to Sublease dated April 17, 2008 by and between Lessor, Lessee, Sublessee, and Evergreen Alliance Golf Limited, LP. D. Lessor and Lessee acknowledge and agree that Sublessee will perform all of the obligations of Lessee under the Ground Lease for the duration of the Sublease, including but not limited to the renovations and capital improvements set forth in this Addendum. NOW, TREREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee agree as follows: 1. Recitals. Lessor and Lessee acknowledge and agree that the recitals set forth above are true and correct and hereby constitute a part of this Addendum. 2. Definitions. Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Ground Lease. 3. Demolition of Residential Rental Property. Following the Effective Date, but on or before the date which is one (1) year following the Effective Date (the "Site Renovation Period''), Lessee shall, at Lessee's sole cost and expense, demolish and remove the residential building, . the garage, and the perimeter fencing located on a portion of the real property (the "Residential Property") described in the Residential Rental Agreement. attached to the Ground Lease as Exhibit "B" thereto (the "Demolition" ). Lessor acknowledges and agrees that this Addendum satisfies any and all provisions in the Ground Lease requiring Lessee to obtain Lessor's prior consent for the Demolition or otherwise requiring Lessee to submit plans, schematics, requests for approval, or any similar documents or requests to Lessor concerning the 13-3625190248 HB -161- Item 10. - 13 Demolition; however, Lessee shall obtain all required government permits and entitlements at Lessee's sole cost and expense. 4. Site Renovations. During the Site Renovation Period, Lessee shall complete the site renovations listed in Exhibit "A" attached hereto and by this reference incorporated herein (the "Renovations") pursuant to the requirements and other conditions set forth in Exhibit "A.'' Lessor acknowledges and agrees that Exhibit "A" satisfies the requirement for Lessor's prior approval under Section 15 of the Ground Lease; however, Lessee shall obtain all required government permits and entitlements at Lessee's sole cost and expense. 5. Initial Capital Improvements. During each of the following periods during the Term; Lessee shall make certain capital improvements to the Premises at Lessee's sole cost and expense (the "Initial Capital Improvements"): (a) September 1, 2013 through August 31, 2014; (b) September 1, 2014 through August 31, 2015; (c) September 1, 2015 through August 31, 2016: and (d) September 1, 2016 through December 31, 2017 (each, an "Improvement Year"). Initial Capital Improvements shall include, but are not necessarily limited to, the construction, renovation, or alteration of buildings, landscaping, signage, drainage infrastructure, water utility infrastructure, and general golf course improvements. At the beginning of each Improvement Year during the Second Improvement Period, Lessor and Lessee shall use reasonably prompt and good -faith efforts to agree on the Initial Capital Improvements to be made by Lessee during such Improvement Year, which agreement shall satisfy the requirement for Lessor's prior approval under Section 15 of the Ground Lease, Lessee shall expend at least thirty thousand six hundred dollars ($30,600.00) during each Improvement Year on Initial Capital Improvements unless and until Lessee has expended a total sure of two hundred four thousand dollars and zero cents ($204,000.00) on Initial Capital Improvements, at which point Lessee shall have no further obligation to make Initial Capital Improvements. 6, Secondary Capital Improvements. If Lessee extends the Term for an additional period of ten (10) years (the "Renewal Period") beyond the original twenty-five (25) year term pursuant to Section 4 of the Ground Lease, Lessee shall make, during each of the ten (10) twelve (12) month years of the Renewal Period (each, a "Renewal Period Year"), certain capital improvements to the Premises at Lessee's sole cost and expense (the "Secondary Capital Improvements"). Secondary Capital Improvements shall include, but not necessarily be limited to, the construction, renovation, or alteration of buildings, landscaping, signage, drainage infrastructure; water utility infrastructure, and general golf course improvements. Lessee shall expend at least forty thousand five hundred thirty dollars ($40,530.00) during each Renewal Period Year on Secondary Capital Improvements during the Renewal Period unless and until Lessee has expended a total sum of eight hundred ten thousand six hundred four dollars and zero cents ($810,604.00) (the "Expenditure Cap") on Secondary Capital Improvements, at which point Lessee shall have no further obligation to make Secondary Capital Improvements. Lessee must expend an amount equal to the Expenditure Cap- on Secondary Capital Improvements during the Renewal Period unless the Ground Lease is terminated prior to the end of the ten (10) year term of the Renewal Period, in which case Lessee shall have no further obligation to make or pay for Secondary Capital Improvements other than those incurred prior to such termination. 7. Rent Reduction and Residential Property- The Parties acknowledge and agree that the Residential Rental Agreement and the attachment thereto (collectively, the "Residential 2 13-3625/90248 Item 10. - 14 HB -162- Lease Documents ") attached to the Ground Lease as Exhibit "B" thereto are, as of the Effective Date, incorporated into the Ground Lease solely for the purpose of identifying the Residential Property. Accordingly, the Parties shall have no obligations, responsibilities, liabilities, or other duties under the Residential Lease Documents from and after the Effective Date, including but not limited to the payment of any rent associated with the Residential Property pursuant to Section 8 of the Ground Lease or any other operative provision thereof from and after the Effective Date, including during the Renewal Period (if the renewal, option is exercised by Lessee). 8. Application of Ground Lease Provisions. Section 17 of the Ground Lease shall apply to all matters contemplated by this Addendum. Section 7.5 of the Ground Lease shall not apply to the Demolition, Initial Capital Improvements, Secondary Capital Improvements, or any other construction, renovations, improvements, alterations, or other activities contemplated by this Addendum, 9. Integration. and Conflicts. The Parties acknowledge and agree that this Addendum shall be integrated into the Ground Lease as a part thereof. In the event of any conflict or inconsistency between the provisions of the Ground Lease and the terms of this Addendum, the terms of this Addendum shall control, 10. Binding Effect. This Addendum shall be binding upon, and inure to the benefit of, the Parties and their respective successors and assigns. 11. Parallrapeadings. The titles of the various sections of this Addendum are for reference and index purposes only, and none of them shall be taken into consideration or given any effect whatsoever in determining the meaning or scope of the section or paragraph to which they apply. 12. Reserved. 13. Joint Preparation. The Parties have been represented by counsel in the negotiation of the terms of this Addendum and have jointly prepared this Addendum. 14, Modifications. This Addendum may not be amended or modified unless such amendment or modification is in writing and signed by both Parties. 15. Successors and Assigns. The terms, covenants, and conditions contained in this Addendum shall bind and inure to the benefit of the Parties and their successors and assigns. 16. Counterparts. This Addendum may be executed in any number of duplicate originals and each such duplicate original shall be deemed to constitute but one and the same Agreement. 17, if any terms, covenants, or obligations of this Addendum shall be held to be invalid, illegal, or unenforceable in any respect-, this Addendum shall be construed without such provision. 13-3625/90248 3 HB -163- Item 10. - 15 18. Governine Lave. This Addendum shall be construed in accordance with and governed by the laws of the state in which the Premises are located. 19. )Further Assurances; Cooperation. Each of the Parties shall execute and deliver or cause to be delivered to the other Party all such further certificates. instruments, and documents and take such other action as may be reasonably required to effectively carry out fully the intentions of the parties and accomplish the matters contemplated in this Addendum. IN WITNESS WHEREOF, :lessor and Lessee have each caused this Agreement to be executed and delivered in its name by a duly authorized officer as of the Effective Date. "LESSEE" AMERICAN GOLF CORPORATION, a California corporation By: Name: Title: A By : Name Title: 13-3625/90248 0 l Z51-5;( `:LESSOR„ INITIATED AND APPROVED: Director of Community Services I+ REVIEWAPPROVED: A" C.' y anager CI iTERUP�-AAI, 4 APPROVED AS TO FORM: Ci ,T Attorney �{r Y/76 /3 Item 10. - 16 HB -164- 18. Governing Law. This Addendum shall be construed in accordance with and governed by the laws of the state in which the Premises are located. 19. Further Assurances; Cooperation. Each of the Parties shall execute and deliver or cause to be delivered to the other Party all such further certificates, instruments, and docurnents and take such other action as may be reasonably required to effectively carry out fully the intentions of the parties and accomplish the matters contemplated in this Addendum. IN WITNESS WHEREOF, :Lessor and Lessee have each caused this Agreement to be executed and delivered in its name by a duly authorized officer as of the Effective Date. "LESSEE" "LESSOR" NNIERICAN GOLF CORPORATION, a CITY OF HUNTING ON BEACH. a California corporation municipal corporation 0 Name: Title: By: k L Name: Mayor City Clerk IN ITIA I , `ED AND APPROVED: director of Community Services REVIEWED AND APPROVED-. City Manager COUN-R-'EAT j P R 0 V F "D D AS TO FORM: Cit "Attorney orney 13-3625/90248 4 HB - 16-5- Item 10. - 17 EXHIBIT "A" SITE RENOVATION PLAN See Attached. 13-3625/90248 Item 10. - 18 HB - 1 66= EXHIBIT A SITE RENOVATION PLAN Lessee shall complete site renovation as outlined below within one year of the lease amendment approval. All listed improvements are subject to review and approval of the Director of Community Services or his/her designee. Improvements 1. FIRST FLOOR RENOVATIONS a. Men's & Women's Restrooms 9 New flooring, granite counter tops, new sinks/fixtures b. Main Lobby Improvements 0 New carpeting and paint, removal of fountain c. Dining area 0 New exterior doors and hardware 2. SECOND FLOOR RENOVATIONS a. Banquet Room • Exterior Door repair and modifications • New paint ® New windows with low-E glass and window coverings • New lighting • New retractable wall • New furniture b. Ladies Dressing Room ® Minor modifications to create a "Bride's Room" 3. PARKING LOT a. Slurry seal and new striping Note: Course Management anticipates a 5% to 10% increase in business due to improved facilities. HB -167- Item 10. - 19 I F �,-s WcoOWN0 1 IJB _16q_ Item 10. - 21 TABLE OF CONTENTS PAGE 1.. DESCRIPTION OF PREMISES .......... 2. CONSTRUCTION AND USE OF LEASED PREMISES.............2 3. QUIET ENJOYMENT.......................q.............2 4. TERM.* • • . . . . . ♦ . * . • . . . . . . . . . . . . . . . . . • f . • . f • • . tl . O . . f q . 2 5. TERMINATION.............................q...........3 6. LEASE YEAR DEFINED ............... f.... ..... a ... •.... 3 7. IMPROVEMENTS TO THE GOLF COURSE.....................4 8. RENT.*.* ........ o .......................... * ....... 10 9. GROSS REVENUE............................•......••tl12 10. REPORTING AND PAYMENT OF PERCENTAGE RENT ........... 14 11. MAINTENANCE AND EXAMINATION OF RECORDS.............14 12. SERVICES TO BE PROVIDED BY LESSEE..* .... I-* .... *.*is 1 3 q TAXES . • q . . . . • • . • . . • . f . . • . . . . f • . • . . • • . . • . . . • • • f • . • f . 1/y 9 14. UTILITIES . • . • f f . • . . . . . . • . ♦ . • . . • • • • • . . • • • • • . . . • . . . q • 2 0 15. CAPITAL IMPROVEMENTS...............................20 16. MAINTENANCE AND REPAIRS.............................21 17. LESSOR'S COOPERATION......................••...•.•..21 18. INDEMNIFICATION, DEFENSE, HOLD HARMLESS.....6.......22 19. WORKERS' COMPENSATION INSURANCE....................24 20. -INSURANCE . . . • . . . . . . . . • . • . . . . e • . • . . . a a e . • • o • s e f s . q * . 2 4 1 Item 10. - 22 HB -170- TABLE OF CONTENTS PAGE 21. DAMAGE AND RESTORATION..............................27 22. EMINENT DOMAIN .................. ..... •....... ....... 27 23. FRUSTRATION OF PURPOSE..............................28 24. ASSIGNMENT..........................................29 25. BREACH AND REMEDIES.................................30 26. NOTICES AND ADDRESSES ........................ ......#33 27. GOVERNING LAW.......................................34 28. CAPTIONS . . . . . . . . . . . . . . . . . . . • . • . . . . . . • • . . . . . • . . . . • . • . IA 29. DEFAULT WAIVER......................................34 30. INTEGRATION ................ .......................... 35 31. PUBLIC ACCOMMODATION................................35 32. TIME IS OF THE ESSENCE..............................35 33. MINERAL RIGHTS .............. 9.......................35 ii NB -171- Item 10. - 23 LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND AMERICAN GOLF CORPORATION FOR THE PROPERTY KNOWN AS THE MEADOWLARK GOLF COURSE THIS LEASE AGREEMENT is made and entered into this &A day of 1992, by and between the CITY OF HUNTINGTON BEACH, a municipal corporation, hereinafter referred to as "LESSOR", and AMERICAN GOLF CORPORATION, a California corpora- tion, hereinafter referred to as "LESSEE". WHEREAS, LESSOR owns certain real property (hereinafter referred to as "Premises"), in the City of Huntington Beach, and LESSEE desires to lease said PREMISES for the use and purposes set forth below, and LESSOR and LESSEE had previously entered into that certain lease for the same Premises effective as of January 1, 1975 (Previous Lease), and the parties now wish to terminate such Previous Lease and replace it with this new Lease, NOW, THEREFORE, the parties covenant and agree as follows: OR Wei =!2.3;Au LESSOR hereby leases to LESSEE that certain real property located in the City of Huntington Beach, County of Orange, State of California, and more particularly described in the attached Exhibit "A" and incorporated herein by this reference, commonly known as Meadowlark Golf Course for all purposes, along with all easements, covenants, water well rights and other appurtenant rights associated therewith (collectively, the "Real Property") together with the improvements constructed on or to be constructed on the Real Property (the "Improvements") Item 10. - 24 KB -172- and the property described in Residential Rental Agreement, Exhibit "B" attached hereto and incorporated herein by this reference. The Real Property and the Improvements are hereinafter collectively referred to as the "Leased Premises". MRMMMI-.11164 0 103 Z W31H 61MIT.-I ZKO) M maA.W3 loin U am v 0 &1 *9 LESSEE agrees it will use the Leased Premises exclu- sively for the operation of a public golf course and other activ- ities customarily associated with or incidental to the operation of a public golf course, including without limitation, sale or rental of golf -related merchandise at a golf professional's shop, furnishing of ,lessons by a golf professional, operation of a driving range, and sales of food and both alcoholic and non- alcoholic beverages. LESSEE shall not use the Leased Premises for any unlaw- ful purpose and shall comply with all laws, rules and regula- tions, zoning and licensing regulations applicable to the Leased Premises or the businesses conducted on the Leased Premises. 3. QUIET ENJOYMENT Subject only to the terms of this Lease, so long as LESSEE complies with each and all of its obligations under this Lease, LESSOR shall secure to LESSEE the quiet and -peaceful enjoyment of the Leased Premises and the sole and exclusive possession of the Leased Premises without objection or inter- ference from LESSOR or any party claiming under LESSOR. The PREVIOUS LEASE between the parties is hereby PAI HB -173- Item 10. - 25 terminated as of the commencement date of the new Term herein set forth below. The term of this Lease ("Term") shall be for twenty-five (25) years, beginning on the first day of the calendar month six (6) months following the date of approval by City Council. Provided that LESSEE is not in default pursuant to Section 25.1 of this Lease, LESSEE shall have the option to re- quest to extend the Term of the Lease for an additional period of ten (10) years, and LESSEE shall provide written notice to LESSOR of LESSEE's request for such extension at least eighteen (18) months prior to the expiration of the initial term of the Lease. LESSOR shall determine if LESSEE is in default pursuant to Section 25.1 and, if not, grant the extension within ninety (90) days of receipt.of such request. If Lease is extended, all terms and conditions of this Lease shall continue to be applicable,. unless it is mutually agreed to change any term or condition. This Agreement is subject to termination by LESSOR under Sections 25.1, 25.2 and 29 hereof. 6. LEASE YEAS DEEIKED A "Lease Year" is that period of twelve (12) consecu- tive calendar months beginning with the first month of the Lease as defined in Section 4 and each anniversary thereof during the Term. The Lease Year may be changed by written agreement of the parties. If this Lease is terminated prior to the end of a Lease Year, minimum rent for such partial year shall be prorated based on the number of days in such partial year. Each Lease Year will 3 Item 10. - 26 xB -174- constitute a separate accounting period for the purpose of computing "Percentage Rent" (as hereinafter defined), and gross revenue for any Lease Year shall not be carried forward or backward into any other Lease Year. u•:s v , • � • ; 7.1 LE_SSOR's Obligations. The obligations identified in this subsection 7.1 shall be.referred hereafter as "LESSOR's Obligations." LESSOR shall provide to LESSEE possession of the Leased Premises and LESSOR shall perform, secure and/or provide each'and all of the following: a) Approval of all plans and specifications sub- mitted to LESSOR from LESSEE that meet city code requirements; fees by LESSEE; b) All necessary building permitx upon payment of c) At the point of current connection, all required utilities, including without limitation, if available, gas, electricity, water, sewer, storm drain and fire hydrants. a)- Required Improvements. The obligations identified in this subsection 7.2 (a) shall be referred to as "LESSEE's Required Improvements." LESSEE shall construct the following improvements within the first two years of the Lease Term at an approximate minimum investment including design, engineering, consulting, permits and licenses, supervision and management, fixtures, equipment, and all direct and indirect construction costs of Three Million Two Hundred Thousand ($3,200,000) Dollars; n HB -175- Item 10. - 27 Golf Course I. Design and implementation of new and/or re- placement of waterwise irrigation system that will hookup to reclaimed water system. LESSEE shall meet all federal, state and local requirements for hook- up to such system no later than six (6) months from LESSOR notification of availability of such water. II. Lake lining and drainage improvements III. Fencing IV. Tee work V. Cart paths Driving Range I. 61 stalls w/mats II. Two tiers III. New lighting IV. New netting V. Synthetic target mounds V1. Deeper hitting area Maintenance Building I. Meet all Cal -OSHA requirements II. Fenced for security III. Proper chemical storage Clubhouse I. New building/coffee shop/lounge II. Banquet room III. Golf shop IV. Cart storage for 85 carts b) LESSEE shall obtain all necessary environ- mental studies, mitigations, and permits, such as an environ- mental impact report- or negative declaration; a) Mutually approved changes to or substitutions for LESSEE's Required Improvements shall be in writing and signed by both parties; d) LESSEE shall make all improvements required by this Lease in compliance with the right-of-way for Graham Street. LESSOR may, at its option, choose to improve Graham Street at any time during the term of this Lease. If LESSOR so chooses to improve Graham street, LESSOR shall be responsible for all costs of such.improvements.. 5 Item 10. - 28 HB -176- e) Additional Improvements. Subject to written approval of LESSOR, LESSEE may elect to construct certain addi- tional facilities which are compatible with the LESSEE's Required Improvements and which provide additional city approved services for the Leased Premises. f) The period for construction of the improve- ments described in this section 7.2 shall be extended by the period of any delay caused by inclement weather or other acts of God, shortage of materials or supplies, labor strike or walkout, delay in obtaining permits, licenses, or approvals from govern- mental agencies, or any other force majeure event not within the control of LESSEE. Upon the occurrence of any of these events, LESSEE shall provide written notice to LESSOR of the occurrence of such event and the length of the delay caused by such event. a) Schematic Plans. LESSEE will submit schematic plans for improvements of the golf course to LESSOR not later than sixty (60) days following execution of this Lease for LESSOR's approval.. LESSOR's response to the schematic plans, including any recommendations for change, is to be submitted to LESSEE not later than thirty (30) days following LESSOR's receipt of the schematic plans. b) Development Plan and Final Construction Plans. Within one hundred twenty (120) days following approval of LESSEE's schematic plans, LESSEE shall submit to LESSOR a devel- opment plan, final construction.plans, and specifications for 6 uB -177- Item 10. - 29 LESSOR's approval, subject to city review which may include Com- munity Services Commission, Planning Comtnissionf or City Council. LESSOR shall make every effort to expedite the approval process. c) "As Built" Plans. Within sixty (60) days following completion of LESSEE's Required Improvements, LESSEE shall furnish LESSOR a complete set of reproducibles and three sets of prints of mylar "as built" plans. 7.4 Construction. Promptly following LESSOR's approv- al. --of the developpent plan and final construction plans and issu- ance of necessary permits, LESSEE shall commence LESSEE's Re- quired Improvements and construction of any Optional Improvements in accordance with the Approved Plans. LESSEE shall substantial- ly comply with the Approved Plans unless a change order or alter- ation is otherwise approved in advance by LESSOR. LESSOR shall have the right to inspect all construction for the purpose of confirming that LESSEE is adhering to the Approved Plans, pro- vided that LESSOR's failure to so discover or object to construc- tion that does not adhere to the Approved Plans shall not be con- strued to constitute a waiver by LESSOR of the requirement, that such construction be in accordance with the Approved Plans. LESSEE shall also construct or cause to be constructed upon the Ldased Premises all lines, structures and facilities required in order to provide the Leased Premises with all necessary utility services and drainage. a) Mechanics Liens or Stop -Notices. LESSEE shall at all times indemnify and hold LESSOR harmless from all claims 7 Item 10. - 30 HB -178- for labor and materials in connection with the construction, repair, alteration or installation of structures, improvements, equipment or facilities upon the Leased Premises by LESSEE and from cost of defending against such claims, including reasonable attorney fees. In the event a lien or stop -notice is imposed upon Leased Premises as a result of such construction, repair, alteration or installation, LESSEE shall, within thirty (30) days after notice of the filing of such lien or stop -notice, either: i) Record a valid release of lien; or ii) Procure and record a bond in accordance with Section 3143 of the California Civil Code, which frees the Leased Premises from the claim of the lien or stop -notice and from any action brought to foreclose the lien. 7.5 LESSF_.F, s Assurance of Completion. Prior to LESSEE signing a construction contract and commencement of construction, LESSEE shall furnish LESSOR suitable evidence of money available, approved as to form by the -City -At torney, in an amount of not less than Three Million Two Hundred Thousand ($3,200,000) Dollars in order to complete LESSEE Is' Required Improvements in the form of one of the following: a) A performance bond containing the provisions of a labor and material bond supplied by LESSEE's contractor or contractors, provided said bonds are issued jointly to LESSEE and LESSOR as obligees; or b) An irrevocable letter of credit, in an amount 11 xB -179- Item 10. - 31 not less than Three Million Two Hundred Thousand ($3,200,000) Dollars; or c) A certified letter from a qualified bank certifying that it is holding funds in an amount of not less than Three Million Two Hundred ($3,200,000) Dollars which will he released to LESSEE solely for the construction of LESSEE's Required Improvements. d) Cash deposited in an escrow acceptable to LESSOR, with interest to accrue to LESSEE, but with instructions to the escrow agent to the effect that until construction is completed, funds deposited in escrow may not be released or pledged without LESSOR's written approval; or any combination of the above. e) All bonds and letters of credit must be issued by a company qualified to do business in the State of California. a) All buildings, improvements and facilities, other than personal property, placed upon the Leased Premises by LESSEE, shall become,*LESSOR's property upon the termination of the Lease Agreement. b) The parties acknowledge and agree that LESSEE owns (or leases from third parties other than LESSOR) all personal property located on the Leased Premises or used in connection with the operation, maintenance, or improvement of the Lea*sed Premises and that LESSOR has no present or future right or interest in suchpersonalproperty. Within 30 days after the 0 Item 10. - 32 KB -180- expiration of this Lease, LESSEE shall remove all such personal property from the Leased Premises. e) Upon completion of the improvements and annually thereafter, LESSOR and LESSEE will jointly prepare a complete inventory of all items located upon the Leased Premises (form attached), and shall distinguish each item as to whether it shall be considered real or personal property for purposes of this Lease. This list and any additions will be used as a guideline in determining ownership upon termination of the Lease. 8. RENT �t�J�X` In addition to the rent specified in Exhibit "B", LESSEE shall pay an annual rent in an amount that will be the greater of either (i) the minimum rental payment.as set forth below, or (ii) a rent based upon percentages of gross revenue as set forth below. 8.1 Minimum Rent. LESSEE will pay to LESSOR an annual minimum rent thirty (30) days in arrears in equal monthly installments on the following schedule: Years 1-2. $175,000.00 ($14,583.33 per month) Years 3-10 $300,000.00 ($25,000.00 per month) Years 11-18 $500,000.00 ($41,666.67 per month) Years 19-25 75% of the average of actual percentage rent during Years 11-18 Option Period 75% of the average of actual percentage rent during Years 19-25 8.2 Percentage Rent. In any Lease -Year in which the amount of Percentage Rent set forth below exceeds the Minimum Rent specified in subsection 8.1, LESSEE shall pay to LESSOR Percentage Rent based upon the following formula: 10 HB -181- Item 10. - 33 Years 1-2 Five percent (5%) of gross revenue from greens fees, cart rentals, driving range fees; Four percent (4%) of sales of the golf pro- fessional's shop; Ten percent (10%) of food and beverage sales, including liquor; and Twenty-five percent (25%) of non-food, banquet room rentals. Years 3-10 Nine percent (9%) of gross revenue from greens fees, cart rentals, driving range fees; Four percent (4%) of sales of the golf pro- fessional's shop; Ten percent (10%) of food and beverage sales, including liquor; and Twenty-five percent (25%) of non-food, banquet room rentals. Years 11-18 Eighteen percent (18%) of gross revenue from greens fees, cart rentals, driving range fees; Four percent (4%) of sales of the golf pro- fessional's shop; Ten percent (10%) of food and beverage sales, including liquor; and. Twenty-five percent ( 25 % ) of non-food, banquet room rentals. Years 19-25 Twenty-five percent (25%) of gross revenue from greens fees, cart rentals, driving range fees; Four percent (4%)of sales of the golf pro- fessional's shop; Ten percent (10%) of food and beverage sales, including liquor; and Twenty-five.percent (25%) of non-food, banquet room rentals. option Period Twenty-five percent (25%) of gross revenue from greens fees, cart rentals, driving range fees; Four percent (4%)of sales of the golf pro- fessional's shop; Ten percent (10%) of food and beverage sales, including liquor; and Twenty-five percent (25%) of non-food, banquet room rentals.. 8.3 Late payment charge. if any payment of rent or any other sum due is not received on or postmarked as of the due date, a late charge of ten percent (10%) of the payment due will 11 Item 10. - 34 xB -l82- be added to the payment obligation and the total sum shall be immediately due and payable to LESSOR. An additional charge of ten percent (10%) of said payment, excluding late charges, shall accrue for each additional month that said payment remains unpaid; provided, however, that in the event that LESSEE contests the obligation to pay a sum allegedly due and it is ultimately determined that the sum is not owed, LESSEE shall not be required to pay late charges pursuant to this subsection. VINNINIFTMOMM 1442MMA MA For purposes of calculating Percentage Rent, gross revenue shall mean all money received by LESSEE as a result of the sale of merchandise or the provision of services on the Leased Premises, but shall not include; customers; (a) Cash refunds or credits allowed on returns by (b) Sales taxes, excise taxes, and similar taxes now *r later imposed upon the sale of goods, merchandise or services and paid by LESSEE to the appropriate taxing authority, whether added to or included in the sales price; (c) Fees charged -for golf lessons and instructions; (d) The actual uncollectible amount of any check or draft received by LESSEE as payment for goods or services and - returned to LESSEE from a customer's bank as being uncollectible (commonly "non -sufficient funds" checks), but only after LESSEE has made a reasonable effort to collect on the check; (e) The actual uncollectible amount of any charge or 12 IJB -183- Item 10. - 35 account (commonly "bad debts") incurred by LESSEE for the sale of merchandise or services; provided, however, that the charge or account was extended to the customer by LESSEE, and that reason- able efforts to collect said charge or account have been made; M The actual uncollectible amount of any sale of merchandise or services for which LESSEE accepted a credit card; provided, however, that LESSEE has made reasonable efforts to collect the debt after being notified by the issuing bank of the invalidity or uncollectibility of the charge; (g) Interest or other charges paid by customers for extension of credit; (h) sales made by any concessionaire or licensee of . LESSOR, it being the intention of this Lease that only LESSEE's share of the receipts of such concessionaires or licensees, if and to the extent actually received by LESSEE, are to be included in the calculation of LESSEE's gross revenue; W Sales or trade-ins of machinery, vehicles, trade fixtures or personal property used in connection with LESSEE's operation of the Leased Premises; (j) The value of any merchandise, supplies or equip- ment exchanged or transferred from or to other locations of bus- iness of LESSEE Where such exchange or transfer is not made for the purpose of avoiding a sale which would otherwise be made from or at the Leased.Premises; W Receipts in the form of refunds from or the value of merchandise, supplies or equipment returned to shippers, RKI Item 10. - 36 HB -184- suppliers or manufacturers; (1) The amount of any cash or quantity discounts received from sellers, suppliers or manufacturers; (m) The amount of any gratuities paid or given by customers to or for employees of LESSEE; (n) Receipts from the sales of uniforms or clothing required to be worn by employees; (o) Amounts attributed.to meals served or provided to (p) Receipts from the sale of waste or scrap materials resulting from LESSEE's operations; and (q) Amounts attributable to play by members of the American Golf Club exercising their membership right to play not more than two (2) rounds per year without separate payment of greens fees not to exceed 300 total rounds per yea4l Within thirty (30-) days following the end of each Lease . Month, LESSEE will submit to LESSOR a statement signed by LESSEE or a person authorized by LESSEE showing, in reasonable detail acceptable to LESSOR, the amount and types of gross revenue for the year to date, and a remittance, if appropriate, of the amount by which the Percentage Rent for such year to date exceeds the Minimum Rent. MVEMPAOT-Wo I)MR-35, 1445W.-IN 8OWT34 I PIN Wfo) wamn to LESSEE agrees to maintain its financial records per- taining to the operation of the Leased Premises for a period of RE HB -18-5- Item 10. - 37 four (4) years after the conclusion of any Lease Year and further agrees that such financial records shall be open and available to LESSOR or LESSOR's representative for an examination at all reasonable times during business hours. LESSOR shall give LESSEE notice of such examination at least forty-eight (48) hours before LESSOR intends to conduct such examination. LESSOR shall be entitled at any time within four (4) years after the conclusion of a Lease Year to question the sufficiency of any rent payments or the accuracy of the report furnished by LESSEE. At the end of each Lease Year, LESSEE shall submit an annual statement of gross receipts pursuant to Section 9, certi- fied as correct by LESSEE. LESSOR may, at its option, require an for such outside audit unless such audit shows that LESSEE under- reported applicable income by an amount of five percent (5%) or . greater. If such under -reporting is determined by outside audit, LESSEE shall immediately reimburse LESSOR with the determined amount of under -payment, plus the cost of the outside audit that determined such under -payment. 10M U .(Oita 60A • 1.V4D A Pursuant to this Lease, LESSEE shall provide the serv- ices and operate Meadowlark Golf Course fabilities as follows: 12.1 Management. LESSEE agrees to operate and manage the golf course facilities and services offered in a high quality manner and shall maintain the Leased Premises in accordance with the minimum maintenance standards as listed in the attached "W1 Item 10. - 38 HB - 186- Exhibit C and incorporated herein by this reference. LESSEE agrees it shall provide an overall standard of service at least equal to a "B" or better rating as described in the monthly course evaluation report (Exhibit D), with no single category maintained below a "C". In the event the evaluation report indicates that the premises do not meet the minimum rating requirements set forth in Section 12.1 above, the Director shall so indicate by a detailed, itemized list of all items that need to be corrected, improved, or repaired on the "Evaluation Form". The Evaluation Form shall serve as the LESSOR'S written notice pursuant to Section 25.1 b). Director and LESSEE shall meet and discuss the monthly Evaluation Form, and shall, in good faith, attempt to agree upon the steps .LESSEE shall take to correct, improve, or repair the items in- cluded on the Evaluation Form and the time schedule for doing so. Except as provided below, LESSEE shall have sixty (60) days after receipt of the monthly Evaluation Form to correct, improve, or repair each of the items on the Form, provided that if any item cannot be corrected, improved, or repaired in such period, LESSEE shall have such additional time as reasonably necessary to com- plete such correction, improvement, or repair so -long as LESSEE is diligently proceeding with such correction, improvement, or repair ("Correction Period"). In the event LESSEE disagrees with anything on the monthly Evaluation Form or LESSOR and LESSEE disagree as to whether an item has been properly corrected, improved, or repaired, then the parties agree that the matter in 16 IJB -187- . Item 10. - 39 disagreement shall be submitted for resolution to the Greens Section of the United States Golf Association, or any other person or entity agreed to by the parties, and the parties shall abide by the recommendation of such person or entity. The Correction Period shall be stayed during the period of time that an item is being disputed by either party and is being considered - by the Greens Section of the United States Golf Association or such other person or entity agreed to by the parties. The parties acknowledge and understand that the purpose of the monthly evaluation reports is to determine whether LESSEE is in compliance with Section 12,.1 of this Lease and to identify those areas, if any, which LESSEE needs to correct, improve, or repair,in order to be in compliance with Section 12.1. The par- ties further acknowledge and understand that the Director's de- termination whether the quality standards set forth in Exhibit D have been satisfied and, if not, the number of points that should be deducted for failing to meet these standards is subjective in nature, and LESSOR hereby agrees that Director shall act reason- ably and in good faith in making such determinations. 12.2 Hours of operation. Subject to LESSOR's approval, LESSEE will establish hours of operation for the golf course facilities that shall meet the public demand for said facilities. 12.3 LESSEE's Employees. LESSEE will ensure that its employees shall at all times conduct themselves in a creditable manner. LESSEE will maintain a staff adequate to operate and 17 Item 10. - 40 HB -188- administer all facilities located on the Leased Premises in meeting standards set forth in the attached Exhibit C. dress and conduct standards, with LESSOR's approval, and shall be permitted to deny permission to play to anyone who fails to con- form to standards. LESSEE shall have the right to refuse admis- sion to persons who are drunk, disorderly, under the influence of drugs, or who conduct themselves in a manner that may result in injury or harm to themselves, other persons or property on the premises. right to require LESSEE to refrain from sale or use of items that are of substandard quality as determined by LESSOR in theexer- 12.6 Tournamenta. LESSOR shall have the right two (2) times during each calendar year to schedule a tournament or tour- naments. LESSEE and LESSOR will agree in advance, once a year, on the dates for such tournaments. Tournament participants will be given special rates as mutually agreed for golf tournament fees. 12.7 Charity JQurfiament. One of the two times per year, LESSOR will,have the right to organize and conduct a tournament at no charge for greens fees or equipment rentals which shall be for the purpose of raising money for City of Huntington Beach charities that will be mutually agreed to by LESSOR and LESSEE. M HB -189- Item 10. - 41 12.8 Ate S chedules. Prior to March 1 of each year, LESSEE shall provide to LESSOR a schedule of rates for green fees, golf cart rental, and driving range use for the ensuing year. LESSEE hereby agrees that the rates for green fees, golf cart rental, and driving range will be based on rates charged for similar golf courses in Los Angeles and Orange Counties. If there is a dispute regarding fees and rates, both parties agree to meet and confer in good faith to resolve any dispute. 13. TAXES ax"Awaam - - a Um"I RZWVZM� -, - is not the intent of the parties that this Lease create a posses- sory interest subject to taxation; provided, however, that if this Lease should create a possessory interest in LESSEE which is subject to taxation, LESSEE agrees to pay such taxes prior to delinquency, which is not a waiver of the right to protest. LESSEE will have the right to contest the validity or amount of possessory interest taxes by means of appropriate proceedings diligently pursued at LESSEE's sole expense. LESSEE agrees that, upon final determination of liability, it will promptly pay the amount of taxes found owing, along with any interest, penalties or cost that may result from LESSEE's contest. Director will cooperate with LESSEE in any such contest of the validity or amount of such taxes, provided that LESSOR is not required to incur any cost or expense as a result of such cooperation. 13.2 other Taxo;�g. LESSEE shall pay before they become del . inquent, all real property taxes, or possessory interest taxes 19 Item 10. - 42 HB - 1 90- and assessments levied or assessed against the Premises by any governmental agency, including any special assessments imposed on or against the Premises for the construction or improvement of public works, in, on, or about the premises. 14. UTILITIES LESSEE will pay, before delinquency, all charges for utilities, including electricity, gas, heating, cooling, tele- phone and water, used by LESSEE on the Leased Premises. LESSEE shall pay all charges for groundwater produced from water wells used and operated by LESSEE. Said charges shall include fees, assessments and other charges assessed or imposed on the City of Huntington Beach by the Orange County Water District, Metropoli- tan Water District or any other agency for groundwater extracted by the LESSEE. All charges shall be paid to the city before de- linquency by LESSEE as invoiced. It shall be the responsibility of LESSEE to contact LESSOR's Water Operations Manager at least annually to discuss any charges that may be forthcoming. Unless made on an emergency basis to prevent injury to person or property, LESSEE will submit plans for any alteration or addition with a value of more than Ten Thousand ($10,000) Dollars, to LESSOR for LESSOR's prior approval, such approval not to be unreasonably withheld or delayed. LESSEE shall not have the right to create or permit the creation of any lien attaching to LESSOR's interest in the Leased Premises as a result of any construction of capital improvements. 20 HB -191- Item 10. - 43 Starting in the first year, LESSEE will begin a major renovation and modernization program as set forth in Section 7.2. Work shall be paid for and performed by LESSEE. As indicated in Section 8.2, the percentage rent has been decreased in years 1 through 10 to compensate LESSEE for the capital improvements. if-, LESSEE's Required Improvements are not constructed pursuant to Section 7.2, then LESSOR shall have the option either to cancel the Lease or to unilaterally change the percentage rent for Lease Years 1-10 to the percentages which apply for Lease Years 11-18. V, U 4 3MA U44 DMI11 01=1332-174 6 LESSEE acknowledges it is acquiring the Leased Premises in their current "as is" condition. 16.1 LESSEE's Qhligations. LESSEE assumes sole re- sponsibility for maintenance and repair of the Leased Premises and LESSEE will maintain the Leased Premises in good order and in sanitary and safe condition at LESSEE's sole expense. LESSEE agrees it will maintain the Leased Premises in conformance with maintenance standards set in Exhibit C, subject to monthly performance evaluations as set forth in Exhibit D. MEMMMMI zME616163213-MVIC07 LESSOR recognizes and acknowledges that LESSEE will need the assistance and cooperation of Director in order to properly perform and fulfill LESSEE's covenants- and obligations under this Lease. Therefore, LESSOR agrees Director will assist in securing for LESSEE, as needed, all permits or licenses that are within the jurisdiction and authority of LESSOR's various 21 Item 10. - 44 HB-192- departments, agencies officers, boards or councils, and that are required in order for LESSEE to fulfill its obligations under this Lease. LESSOR agrees Director will designate a specific staff person having appropriate experience and authority whose responsibility it is to work with LESSEE in assisting LESSEE to obtain the full cooperation and assistance of Director, subject to the terms of this Lease and all applicable laws. 17.1 Tnitial Improvement Phase. During the improve- ment phases, Director's agent shall organize meetings with all appropriate agencies for the purpose of acquiring design and construction information; facilitate the submitting and securing of the necessary planning approvals, grading permits, and build- ing permits; and shall aid in developing alternative solutions to issues raised in the planning and plan check phases. WMEEF LESSEE agrees to indemnify and save harmless LESSOR, its officers and employees against any and all claims by or on behalf of any person or persons, firm or firms, corporation or corporations, arising from the conduct or management of LESSEE or from any work or thing whatso6ver done in or about the Leased Premises or any buildings and improvements thereon during the term of the Lease, and will further indemnify and save LESSOR harmless against any and all claims arising during the term of the Lease from any conditions of the buildings on the Leased Premises or'from any activity on the Leased Premises which affects any street, curb or sidewalk adjoining the Leased Prem- 22 HB - 1931- Item 10. - 45 ises or any vaults, passageways or spaces therein or appurtenant thereto, or arising from any breach or default on the part of LESSEE in the performance of any covenant or agreement on the part of LESSEE to be performed, pursuant to the terms of this Lease, or arising from any act of negligence of LESSEE, or any of its agents, contractors, servants, employees or licensees, or arising from any accident, injury or damage whatsoever caused to any person, firm or corporation occurring during the term of this Lease, in or about the Leased Premises or any buildings and improvements thereon, or upon or under the sidewalks and the land adjacent thereto and related to any activity on the Leased Premises, and from and against all costs, counsel fees, expenses and liabilities incurred in or on account of any such claim or action or proceeding brought thereon; and in case any action or proceeding be brought against LESSOR by reason of any such claim, LESSEE, upon notice from LESSOR, covenants to resist or defend such action or proceeding by counsel reasonably satisfactory to LESSOR. LESSEE will conduct all defense at its sole cost And expense. Any costs of defense or attorney's fees incurred by LESSOR in enforcing this obligation will be reimbursed to LESSOR I by LESSEE or may be awarded' to LESSOR -by a court of competene jurisdiction as costs pursuant to California Code, of Civil Proved re Sec. 1021. LESSEE's.obligations under this Section 18 shall not apply to any claims, liabilities, costs and expenses resulting from the sole negligence or willful misconduct of PF-WOORIMM41� a �— � 23 Item 10. - 46 HB - 194- m1mr, MW Pursuant to California Labor Code Sec. 1861, LESSEE acknowledges awareness of Section 3700 et seq. of said code, which requires every employer to be insured against liability for Workers' Compensation; LESSEE covenants that it will comply with such provisions prior to commencing performance of the work hereunder. LESSEE shall maintain such Workers' Compensation Insurance in an amount of not less than Five Hundred Thousand ($500,000) Dollars bodily injury by accident, each accident, Five Hundred Thousand ($500,000) Dollars bodily injury by disease, each employee, and One Million ($1,000,000) Dollars bodily injury by disease, policy limit, at all times incident hereto, in forms and underwritten by insurance companies satisfactory to LESSOR; and LESSEE shall, prior to the commencement of this Agreement, furnish to LESSOR, on a form approved by the City Attorney, a certificate evidencing such insurance; said certificate shall include a provision that the insurer shall notify LESSOR at least thirty (30) days prior to any cancellation or modification of said insurance policy; and LESSEE shall notify LESSOR at least thirty (30) days prior to any -cancellation or modification of such policy. Said insurance shall not derogate from the provi- sion for indemnification of LESSOR by LESSEE under Section 18 of this agreement. In addition to LESSEE's covenant to indemnify LESSOR, 24 HB -195- Item 10. - 47 LESSEE shall obtain and furnish to LESSOR, the following certifi- cates of insurance for the following policies: 20.1 General nsu an e. A policy of general liability insurance, including coverage for bodily injury, prop- erty damage, products/completed operations, and blanket contrac- tual liability. Said insurance shall also include automotive bodily injury and property damage liability insurance. All insurance shall be underwritten by insurance companies in forms satisfactory to LESSOR for all operations, subcontract work, contractual obligations, product or completed operations and all owned vehicles and non -owned vehicles. Said insurance shall name the LESSOR, its officers, agents and employees and all public agencies as determined by the LESSOR as Additional Insureds.. LESSEE shall subscribe for and maintain said insurance policies in full force and effect during the life of this Agreement, in an amount of not less than One Million t$1,000,000> Dollars combined single limit coverage. If coverage is provided under a form which includes a designated general aggregate limit, such limit shall be no less than twice the per occurrence limit. In the event of aggregate coverage, LESSEE shall immediately notify. LESSOR of any known depletion of limits. LESSEE shall require its insurer to waive its subrogation rights against LESSOR and agrees to provide certificates evidencing the same. 20.2 Eire Tnsuzin -P. LESSEE shall maintain in force during the term of this Agreement, a standard broad form fire insurance policy for full replacement of the structure itself, in ; 25 Item 10. - 48 HB -196- which the LESSOR is named as loss payee. The face amount of said policy shall be equal to the full replacement value of the structure itself. LESSOR may, upon thirty (30) days written notice to LESSEE, require said fire insurance coverage to be increased by an amount determined by LESSOR. Prior to the commencement of this Agreement, LESSEE shall furnish to LESSOR certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages; said certificates shall provide the name and policy number of each carrier and policy, and shall state that the policy is currently in force and will not be cancelled without thirty (30) days written notice to LESSOR. LESSEE shall maintain the foregoing insurance coverages in force during the entire term of this Agreement unless waived in writing by the LESSOR's Risk Manager. The requirement for carrying the foregoing insurance shall not derogate from the provisions for indemnification of LESSOR by LESSEE under Section 18 of this Agreement. LESSOR or its representatives shall at all times have the right to inspect the original or a copy of all said policies of insurance. LESSEE shall pay, in a prompt and timely manner, the premiums on all insurance hereinabove required. The parties acknowledge and agree that any insurance maintained by LESSEE pursuant to this Lease may contain deductible provisions and self-insurance or self -assumption provisions up to $250,000 per occurrence or such greater amount as the parties may approve in writing. KE: HB -197- Item 10. - 49 If the,buildings or other improvements on the Leased Premises, should be partially damaged or totally destroyed by fire, storm, earthquake, or other casualty not caused by negli- gence of LESSOR, LESSEE will repair, reconstruct or replace the buildings, improvements or personal property to a condition as nearly similar as possible. In performing such repairs, recon- struction, or replacement, LESSEE shall not be obligated to expend more than the amount of insurance proceeds received by LESSEE. If the parties should decide among themselves that reconstruction or replacement is not warranted, this Lease shall terminate without further obligation on the part of either party, and all insurance proceeds for personal property shall be kept by LESSEE. All fixed assets proceeds shall be kept by LESSOR. is unable to use all or a significant portion of the Leased Premises during repair, reconstruction or replacement as provided for in this section, LESSEE's rental obligations under Section 9.1 during the period of repair, reconstruction, or replacement shall only be percentage rent (and not the greater of minimum rent or percentage rent). The term of this Lease shall also he extended for a period equivalent to the length of time needed for LESSEE to restore the Leased Premises for LESSEE's use pursuant to Section 2 of this Lease. W1840UNIM49 If at any time during the term of this Lease, title to f*A Item 10. - 50 KB -198- all or substantially all of the Leased Premises shall be taken by condemnation or by right of eminent domain, this Lease shall terminate on the date of such taking and all rental payments already made shall be apportioned as of the date of the taking. For purposes of this section, substantially all of the Leased Premises shall be deemed to have been taken if that portion of the Leased Premises not taken cannot be economically utilized by LESSEE for those purposes permitted under Section 2 of this Lease. In the event that title to less than all or substan- tially all of the Leased Premises is taken by condemnation or by right of eminent domain, this Lease shall not terminate, but the minimum rent due during the remainder of the Lease Term shall be reduced as of the date of such partial taking in proportion to the extent LESSEE's operation of the Leased Premises pursuant to Section 2 of this Lease is affected by the partial taking. If there is a taking by condemnation or right of eminent domain, the award shall belong to and be paid to LESSOR, except that LESSEE shall receive from the award a sum attribu- table to the value of LESSEE's leasehold estate, including without limitation any improvements constructed by. LESSEE. At any time during the term of this Lease, if the governing body of any political subdivision having competent jurisdiction over the Leased Premises should enact any valid zoning ordinance, law or regulation which prohibits the use of W1 HB -199- Item 10. - 51 the whole or a substantial part of the Leased Premises for the purposes as provided in Section 2 of this Lease, or if an event of force majeure occurs, including without limitation, declared or undeclared war, sabotage, riot or other acts of civil diso- bedience, acts of government, labor disputes, shortages of fuel, accidents, fires, explosions, floods, earthquakes, or other acts of God, which substantially prevents LESSEE's fulfillment of its obligations as provided for in Section 2 of this Lease, it is agreed that LESSEE may elect, within one hundred twenty (120) days after the effective date of such ordinance, law, regulation or the occurrence of the event of force majeure, to cancel this Lease and surrender possession of the Leased Premises. Any such cancellation and surrender will act to release and discharge LESSEE from any further obligation under this Lease. Except as otherwise provided below, LESSEE shall not assign this Lease or sublet all or part of the Leased Premises without the prior written consent of LESSOR and such consent shall not be unreasonably withheld. LESSEE shall notify LESSOR I of any proposed assignment'or subletting at least sixty (60) days prior to the proposed effective date of such assignment or sub- letting. In the event that any such assignment or subletting is approved by LESSOR, the assignee or sublessee shall agree in writing to be bound by all of the covenants of this Lease required of LESSEE. 29 Item 10. - 52 HB -200- C. Clean Up Debris. Remove all litter and debris from golf course and especially around walls and fences. Empty trash receptacles daily, repair and replace as necessary. D. Maintain Water Fountains. Maintain and clean all ex- terior water fountains and repair all leaks and clog daily. E. Clean Rarkina Lot. Remove all debris and litter from parking lot and sweep parking lot not less than three (3) times per week. Repaint and replace signs in parking lot. F. Maintain Eence and Fen - - Lines. Periodically inspect and repair the fence and fence lines within and around the golf course including, but not limited to, those fences designed to control the flight of golf balls. Maintain f Clean' Carta A. and Check Q.-ration of - golf carts are returned from use, remove all trash and litter, and wash the carts to remove dirt, gaud and grass. Check operating condition of the carts. B. Recharge Batteries. Recharge batteries to electri- cally power golf carts through two, 18-hole rounds of golf. C. Cart Maintenancg. Repair and adjust golf carts to maintain in good operating condition. HB -201 - Item 10. - 53 s EXHIBIT "D"" CITY OF HUNTINGTON BEACH AMERICAN GOLF CORPORATION MONTH YEAR TODAY'S DATE INSPECTED BY SUMMARY SHEET MAINTENANCE INSPECTION OPERATIONAL INSPECTION EARNEDAREA AVAILABLE GREENS 120 TEES 80 FAIRWAYS & ROUGHS $0 IRRIGATION SYSTEM 50 DRIVING RANGE 120 LAKES 45 TREES & SHRUBS 40 CART PATHS 70 ENTRANCE & PWING LOT 80 MAINT. EMPLOYEES 25 MAINT. SHOP & EQUIP. 60 FENCES 5O SUB -TOTAL $20 COMMENTS PERCENTAGE RATING 98 - 100 A 95 - 97 A- 90 - 94 B+ 85 - 89 B 80 - 84 B- 77 - 79 C + 74 - 76 C 70 - 73 C- 0 - 69 D POINTS AREA AVAILABLE EARNED GOLF SHOP 125 CARTS 80 CLUBHOUSE 170 FOOD & BEVERAGE 200 RESTROOMS 100 SUBTOTAL 675 trrra ttrrtrett tarrtrartrtrstrsrtsrrttttr att tttrrsr TOTAL POINTS EARNED PERCENTAGE % RATING The percentage is determined by dividing the total points earned by the total points available 1495. RECEIVED BY AMERICAN GOLF DATE Item 10. - 54 HB -202- GREENS TEES QUALITY STANDARD: Smooth, uniform turf, firm but not hard, well defined, consistent, and of suitable speed. Cups placed in accordance with USDA recommendations. Flag sticks are of good quality, standing straight, and are uniform on all greens. 1. QUALITY AND PLAYABILITY 100% Turf cover, smooth and uniform texture. Greens hold approach shots. Cups are cut cleanly and in proper location. Generly free of weeds, insects, or rodents. 2. APPEARANCE Turf uniform in color and in mowing direction. Collars and aprons cut to maintenance standard. 3. SAND TRAPS Sand surface is uniform and smoothly raked and is of adequate depth for play. Sand is silica, washed plaster, or nursery grade send. Traps are edged, genearily free of weeds, rocks, or debris in traps. Rakes are adequate in number and in good condition. Traps are uniform throughout the course. QUALITY STANDARD: Tees are completely turfed, smooth, level, and firm. Tees drain well with no mud buildup. Tee amenities including, trash cans, signs, tee markers, bell washers, towels, and benches are in good condition and repair. Tees are consistent throughout the course. 1. TEE QUALITY POINTS 100% Turf cover with smooth level surface. AVAILABLE EARNED Geneaally free of weeds, disease, or rodents. Uniform 60 mowing, adequate top dressing and seeding program is evident. POINTS 2. PERIMETER AREAS AROUND TEES AVAILABLE EARNED Area between cartpeth and tees is uniformly mowed 40 and smoothly turfed. Generally free of identifiable traffic pattern into tees, and mud or hard dirt areas. Ballwashers POINTS are clean and filled with water. Towels are in good condition, AVAILABLE EARNED benches are in good condition, and signs are clear and in 20 good condition. All surrounding landscape is in good condition and adequately planted. POINTS AVAILABLE EARNED 50 POINTS AVAILABLE EARNED 30 TOTAL POINTS AVAILABLE 120 TOTAL POINTS AVAILABLE $0 TOTAL POINTS EARNED TOTAL POINTS EARNED COMMENTS: COMMENTS: xs -203- Item 10. - 55 FAIRWAYS AND ROUG QUALITY STANDARD: Fairways are smooth with a uniform turf cover. Turf is firm, but not hard. Well defined, and properly supports the ball for play. Rough properly mowed to specification height which is distinct in height from fairways. 1. QUALITY AND PLAYABILITY 100% turf cover, smooth and POINTS uniform texture. Fairway turf properly supports AVAILABLE EARNED the ball for play. Geneadly free of diseases, weeds, or rodents. 50 2. APPEARANCE Fairways have been mown POINTS consistently throughout the course. Turf is uniform AVAILABLE EARNED in height and color with the appearance of being manicured. Fairways easily distinguishable from roughs. 30 TOTAL POINTS AVAILABLE 80 TOTAL POINTS EARNED COMMENTS: IRRIGATION SYSTEMS QUALITY STANDARD: Even, adequate, uniform irrigation coverage throughout the entire facility. Sprinkler heads and valve boxes. level with grade and trimmed for clearance. No broken heads, valves, or lines are in evidence. 1. IRRIGATION SYSTEM Course shows good irrigation, POINTS neither too wet or too dry. Low spots are filled. AVAILABLE EARNED Irrigation does not throw on drinking fountains. 50 TOTAL POINTS AVAILABLE 50 TOTAL POINTS EARNED COMMENTS: DRIVING RANGE 1. LANDING AREA Surface is smooth and uniform. Artificial greens clearly identified. 2. TEE LINE - TURF AREA Turf area is smooth and uniform. There is evidence of ongoing top dressing and overseeding. 3. TEE LINE - MATS All mats are in good, usable condition. Holes, rips, or tears are repaired. Concrete pad is clean and edged, no cracks, lightly abrasive. 4. PERIMETER AREAS Geneadly clean around driving area. Benches are clean and in good repair. Buckets with water are placed in strategic positions. Fences are in good repair. Lighting is adequate and all bulbs are working. Flags for distancesare clearly marked. Directions for use signs are clearly visible and in good condition. S. RANGE BALLS POINTS AVAILABLE EARNED 10 POINTS AVAILABLE EARNED 20 POINTS AVAILABLE EARNED 20 POINTS AVAILABLE EARNED 50 Range balls are in good POINTS condition. Not smooth or cracked. Balls are AVAILABLE EARNED clean and in plentiful supply. 20 TOTAL POINTS AVAILABLE 120 TOTAL POINTS EARNED COMMENTS: Item 10. - 56 HB -204- LAKE AREAS CART PATHS QUALITY STANDARD: Lakes are clean, free of weeds and other growth. Shorelines are well defined and attractive. Lakes are free of litter and debris. Lakes are suitable for wildlife habitat. 1. APPEARANCE Water is genearily clean POINTS of weeds or other growth, foul order, or floating AVAILABLE EARNED litter or debris. Banks are trimmed. 15 2. PERIMETER AREA Ground around lakes and streams POINTS is mown, trimmed, and has a smooth and clean surface. AVAILABLE EARNED Geneedly free of debris. 20 3. SUPPORT EQUIPMENT Pumps and aerators are POINTS operating smoothly and properly. All lake equipment AVAILABLE EARNED is in good condition and properly maintained. 10 TOTAL POINTS AVAILABLE 45 TOTAL POINTS EARNED COMMENTS: TREES AND SHRUBS QUALITY STANDARD: Trees and scrubs are maintained in a safe, healthy, structurally sound and aesthetically pleasing condition. 1. PRUNING Trees and scrubs are pruned POINTS to maintain cart, mower, and pedestrian traffic clearance AVAILABLE EARNED for a minimum of 7 feet. - Ali automobile, service, and delivery traffic areas pruned to a minimum of 14 feet. 40 Tree basis are neat clean and clear of stumps or down limbs. i OTAL POINTS AVAILABLE 40 TOTAL POINTS EARNED COMMENTS: QUALITY STANDARD: Smooth surface no raised concrete or asphalt surfaces. Curbs properly edged. Paths free of weeds and debris. 1. QUALITY Condition is smooth POINTS with cracks, holes, or breaks repaired. AVAILABLE EARNED 30 2. TRAFFIC CONTROL Ropes, stakes, and other POINTS traffic control devices are clean, in good condition AVAILABLE EARNED and repaired as necessary. 20 3. PERIMETER AREAS Routes used by golf carts POINTS are well maintained and geneariiy free of pot holes AVAILABLE EARNED and present a clean appearance. 20 TOTAL POINTS AVAILABLE 70 TOTAL POINTS EARNED COMMENTS: ENTRANCE AREA AND PARKING LOTS QUALITY STANDARD: Entry area is attractively landscaped and well maintained. Parking lot has good traffic flow and directional signs Surface is clean and smooth, geneedly free of pot holes, cracks or excessive wear. Stripping is bright and clearly evident. Entrance signs are clearly visible and in good condition. 1. ENTRANCE AREA AND SIGNS Entrance area is attractively POINTS landscaped. All planter areas have healthy plant material AVAILABLE EARNED and are free from weeds and debris. 40 Directional signs are in good operational condition and are informative and attractive. 3. PARKING LOTS Parking lot surface is clean and POINTS smooth geneariiy free of pot holes, or signs of excessive wear. AVAILABLE EARNED Stripping is bright and clear. 40 TOTAL POINTS AVAILABLE so TOTAL POINTS EARNED COMMENTS: HB -205- Item 10. - 57 MAINTENANCE EMPLOYL . -QUALITY STANDARD: Golf course superintendent has proper education background and license. Maintenance crews are sufficient in number and wear appropriate clothing and shoes. 1. QUALIFICATIONS Golf course superintendent POINTS is class A qualified. All required licenses for AVAILABLE EARNED chemical handling are obtained. 10 2. QUANTITY The number of maintenance POINTS crew is sufficient to maintain the course per AVAILABLE EARNED the specifications. 10 3. DRESS AND CONDUCT All maintenance crew POINTS wear appropriate clothing and shoes. All crew AVAILABLE EARNED are courteous and trained in their area of responsibility. 5 TOTAL POINTS AVAILABLE 25 TOTAL POINTS EARNED COMMENTS: MAINTENANCE SHOP AND EQUIPMENT QUALITY STANDARD: Shop area is clean and orderly with no obvious safety hazards. Chemical storage is well organized and done according to local and state law. Equipment is in good repair, building is in good repair. 1. BUILDING AREA Maintenance building POINTS area is clean and neat. Walls are painted, storage AVAILABLE EARNED areas are secured, building is property maintained. 40 2. EQUIPMENT Equipment is in good repair POINTS clean and properly maintained. Equipment meets all AVAILABLE EARNED OSHA requirements. 20 TOTAL POINTS AVAILABLE 60 TOTAL POINTS EARNED COMMENTS: Item 10. - 58 FENCES QUALITY STANDARD: Perimeter and protective fences are free of holes, splits and are stretched to original design. Support posts are in place, straight and properly anchored. Fence lines are maintained clean and clear of weeds or other growth. 1. FENCE CONDITION All fences and screens POINTS are genearily free of holes, tears, and splits. AVAILABLE EARNED Support posts are in place and tied tightly to all fence material. 50 TOTAL POINTS AVAILABLE 50 TOTAL POINTS EARNED _ COMMENTS: - GOLF SHOP QUALITY STANDARD: Golf shop is clean and in good repair. Staff is courteous, all signs clearly marked, ample merchandise, floor and window coverings clean and looking now. Storage areas well maintained. Bulletins boards well organized. 1. OPERATIONS Staff is courteous POINTS and responsive to public. Staff is dressed in AVAILABLE EARNED appropriate attire with a clean and neat appearance. All required signs are prop lnently displayed and contain correct information. Starter operations are in compliance with specifications. Merchandise displays are amply supplied with prices clearly marked. Exterior and interior walls, windows, and ceilings are well maintained and in good repair. 125 TOTAL POINTS AVAILABLE 125 TOTAL POINTS EARNED COMMENTS: HB -206- CARTS `QUALITY STANDARD: Carts are sufficient in number to meet customer demand. Seats are in good repair. Floor mats are clean. Carts work properly. Cart storage area is clean and orderly. Carts are clear of trash and graffiti. 1. APPEARANCE Carts are clean and in POINTS good repair. Graffiti is removed. AVAILABLE EARNED Mats are clean. Bag holders, roofs, and tires all in good condition. 40 2. QUANTITY Carts are provided in sufficient POINTS quantity to meet public demand. Check in, check out easily AVAILABLE EARNED done by customers. 20 3. STORAGE AREA Storage area used for cart POINTS storage only. Area is clean and nest. AVAILABLE EARNED Carts are being maintained at a level that Insures good service. Area meets all OSHA requirements. 20 t OTAL POINTS AVAILABLE 80 TOTAL POINTS EARNED COMMENTS: CLUBHOUSE QUALITY STANDARD: Clubhouse is well maintained, obviously in excellent condition. Exterior and interior surfaces well maintained, all signs are in good condition. Walkways are clean and edged. All equipment well maintained. All window and floor coverings in good condition. Office areas well organized and clean. 1. QUALITY AND APPEARANCE All areas of clubhouse POINTS operations are in good condition and properly maintained. AVAILABLE EARNED All surfaces are painted, wail and window coverings clean and new looking. All equipment well maintained. Employee areas clean and organized. All operations are done according to health dept. requirements and city codes. 170 TOTAL POINTS AVAILABLE 170 TOTAL POINTS EARNED COMMENTS: FOOD AND BEVERAGE QUALITY STANDARD: All restaurant and snack bar operations are of the highest quality. Bar operations are well maintained. All kitchen areas meet or exceed health department requirements. Food service operations are well organized. Staffing is adequate to minimize customer wait. Menu variety is adequate to please customers and presented in an attractive manner. 1. OPERATIONS Food is well prepared POINTS and served attractively. Both snack bar and AVAILABLE EARNED restaurant service operate adequate hours as posted. Adequate staff to maintain excellent service is provided. Bar area is attractive, serving of alcoholic beverages meet all code requirements. Kitchen area meets all health department and local code requirements. 200 TOTAL POINTS AVAILABLE 200 TOTAL POINTS EARNED COMMENTS: t1B -207- Item 10. - 59 RESTROOMS QUALITY STANDARD: Restrooms are continually cleaned and well maintained. All fixtures properly work. Interior and exterior are properly clean and painted. Restrooms are attractive to the public. 1. WOMEN'S RESTROOM Entry mats or carpet POINTS clean, entry door fingermark free, tale AVAILABLE and painted wall clean toilets clean: bowls, rims, tank tops, and bodies, clean toiletseats, tops and under sides, mirrors clean and streak free, soap dispenser clean and full, paper towel dispenser clean and full, toilet paper dispenser clean and full, counter top clean, ashtrays emptied and washed, sink and faucet fixtures clean and scoured, light fixtures clean, functional and bug free, room air freshener clean and functional, trash receptacle: clean and liner, reasonably empty, napkin receptacles clean with liner, interior recently swept and washed, exterior of building clean, cobweb free, grass trimmed. so 2. MEN'S RESTROOM Entry mats or carpet POINTS clean, entry door fingermark free, file AVAILABLE and painted wall clean toilets clean: bowls, rims, tank tops, and bodies, clean toilet seats, tops and under sides, mirrors clean and streak free, soap dispenser clean and full, paper towel dispenser clean and full, toilet paper dispenser clean and full, counter top clean, ashtrays emptied and washed, sink and faucet fixtures clean and scoured, light fixtures clean, functional and bug free, room air freshener clean and functional, trash receptacle: clean and finer, reasonably empty, interior recently swept and washed, exterior of building clean, cobweb free, grass trimmed. 50 TOTAL POINTS AVAILABLE 100 TOTAL POINTS EARNED COMMENTS: EARNED EARNED 'CORRECTION LIST ITEM AGREED UPON ACTION (LAND TIMELINE DIRECTOR AMERICAN GOLF DATE: Item 10. - 60 xB -208- 24.1 ight of First RefjLaal. In the event that prior to the stated expiration date of the Lease Term, LESSEE should elect to assign all of its interest in this Lease pursuant to the provisions of Section 24 above, LESSEE shall submit the proposed terms and conditions of any such assignment in writing to LESSOR and LESSOR shall then have the right, to be exercised by means of a written notice delivered to LESSEE no later than sixty (60) days following LESSOR's receipt of LESSEE's initial notice, to terminate this Lease and operate the Leased Premises itself, or to assign LESSEE's interest in the Lease to another third -party lessee of LESSOR's choosing. Should LESSOR exercise this right of first refusal, such exercise shall serve to release LESSEE from all further liability under this Lease other than for events Which may have occurred during the term of LESSEE Is operation ow the Leased Premises. 0 0 3 ZY'AWMAN loin 144:841* The following conditions will constitute a breach of this Lease and a default thereunder: 25.1 Conditi.o fault I a) If LESSEE fails to pay rent, any assessed late fees, or fulfill any other monetary obligation of LESSEE to LESSOR, and LESSEE fails to cure such monetary default within ten (10) days after written notice from LESSOR to LESSEE of such monetary default. b) If either party fails to perform any of its other non -monetary obligations under this Lease when due or 30 flB -209- Item 10. - 61 called for,' and the party in default fails to cure such non- monetary,default within sixty (60) days after written notice from the non -defaulting party of such non -monetary default; provided, however, that if the nature of the non -monetary default is the result of a force majeure occurrence or is otherwise of a nature such that it cannot be fully cured within that sixty (60) day period, the party in default shall have such additional time as is reasonably necessary to cure the default so long as the party in default is proceeding diligently to complete the necessary cure after service of notice by the non -defaulting party. c) If LESSEE shall be adjudged bankrupt, or a receiver be appointed for LESSEE's property, or if LESSEE's interest in this Lease shall pass by operation of law to any person other than LESSEE and such adjudication, appointment or order is not vacated, dismissed, or set aside within one hundred twenty (120) days from its entry. 25.2 Remedies of LESSOR. Without waiving any remedies, LESSOR may, in the event of a default by LESSEE, at LESSOR's option: a) Continue this -Lease in effect without term- inating LESSEE's right to possession, even if LESSEE has breached this Lease and abandoned the Leased Premises, and enforce all of LESSOR's rights and remedies under this Lease, including the right to recover, by suit or otherwise, all sums and installments required to be paid in accordance with the provisions of this Lease, or other monetary performance as it becomes due hereunder, 31 Item 10. - 62 HB -210- or to enforce, by suit or otherwise any other term or provision hereof on the part of LESSEE required to be performed; provided, however, that LESSOR may, at any time thereafter, elect to term- inate this Lease for such previous uncured breach by notifying LESSEE, in writing, that LESSEE's right to possession of the Leased Premises has been terminated; or b) Immediately terminate LESSEE's right to possession of the Leased Premises and repossess the same by summary proceedings or appropriate action, and LESSOR shall thereupon be entitled to receive from LESSEE the following: i) The worth, at the time of the award, of the unpaid rent that had been earned at the time of termination of this Lease; ii) The worth, at the time of the award of the amount by which the unpaid rent that would have been earned after the date of termination of this Lease until the time of award exceeds the amount of the loss of rent that LESSEE proves could have been reasonably avoided; and iii) The worth, at the time of the award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of the loss of rent that LESSEE proves could have been reasonably avoided; and iv) "The worth at the time of the award", as used.in Sections 25.2(b)(i) and 25.2(b)(ii) is to be computed by allowing interest at the rate of ten percent (10%) per annum. "The worth, at the time of the award", as referred to in Section W-11 NB -211- Item 10. - 63 25.2(b)(iii), is to be computed by discounting the amount at the discount rate of ten percent (10%) per annum. 25.3 Interest and Attorneys' Fees. If either party at any time by reason of the other party's default pays any sum or does any act that requires the payment of any sum, the sum paid by the non -defaulting party shall be immediately due and owing by the defaulting party to non -defaulting party at the time the sum is paid and, if repaid at a later date, shall bear interest at the rate of ten percent (10%) per annum from the date the sum is paid by the non -defaulting party until the non - defaulting party is reimbursed by the defaulting party. FTMEEF, MOCOMFETTFIDINT1131) All notices, demands, requests or replies required or permitted by this Lease shall be in writing and may be delivered by any one of the following methods: (1) by personal delivery; (2) by deposit with the United States Postal Service, certified or registered mail, return receipt requested prepaid to the addresses stated below; (3) by prepaid messenger; or (4) by deposit with an overnight express delivery. Notice deposited with the United States Postal Service in the manner described above shall be deemed effective three (3) business days after deposit with the Postal Service. Notice by telegram or overnight express delivery service shall be deemed effective one (1) business day after transmission to the telegraph company or after deposit with the express delivery service. Notice by personal delivery shall be deemed effective at the time of such delivery. 33 Item 10. - 64 IJB -2 1 2- For purposes of notice, demand, request, reply or payment, the address of LESSOR shall be: Community Services Department Director City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 The address of the LESSEE shall be: American Golf Corporation 1633 Twenty -Sixth Street Santa Monica, CA 90404-4024 Attention: Legal Department Each party shall have the right to designate a differ- ent address within the United States of America by the giving of notice in conformity with this section. This Lease and the rights and liabilities of the parties to the Lease shall be governed by the laws of the State of California. If any provision of this Lease is invalidated by judicial decision or statutory enactment, the invalidity ofany such provision will not affect the validity of any other pro- vision of the Lease. PMIRNNWTIZWPNW�� Captions in this Lease are included for convenience only and are not to be taken into consideration in any construction or interpretation of this Lease or any of its provisions. LESSOR's failure to act on any default on the part of LESSEE shall not be construed as a waiver thereof, nor shall any 34 HB -213- Item 10. - 65 custom or practice that may exist between the parties in the course of administering this Agreement he construed to waive any provision thereof. This Lease represents the entire agreement between the parties regarding Meadowlark Golf Course, and supersedes and replaces that certain Lease dated October 21, 1974 between LESSOR and LESSEE. All exhibits attached to this Lease are hereby made a part of and incorporated into this Lease. No previous agree- ment or understanding, verbal or written, of the parties or any of their agents shall be binding or enforceable. LESSEE agrees not to discriminate against any person or class of persons by reason of race, color, creed or national origin in the use of the Leased Premises. LESSEE shall make its accommodations and services available to the public on fair and reasonable terms without unjust discrimination on the basis of race, creed, color or national origin. W�00flAWSZWO) 4W 0 111 M DMIMR, to Time is of the essence of this Lease Agreement. Sub -surface mineral rights to the demised premises, in- cluding a right to construct and maintain one or more drilling sites, have been reserved to LESSORS predecessors in title. LESSEE agrees to permit reasonable ingress and egress to said drilling sites by the holders of said rights. 35 Item 10. - 66 f1B -214- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their authorized officers on the date above written. LESSOR: CITY OF HUNTINGTON BEACH, a munici al corporation Mayor ATTEST: .01 City Clerk V REVIEWED AND APPROVED: LESSEE: AMERICAN GOLF CORPORATION, a California 06—rpration By: C4-4r; cra-EF—Price Its: Execut' -.V* e President By: / "w d R. Sause Its: Chief Finance Officer APPROVED AS TO FORM: ,l,-C*ty At ey -73 INITIATED AND -APPROVED: Co unit ervices Director q-1 HB -215- Item 10. - 67 EXHIBIT A Parcel 1: The southwest quarter of the southeast quarter and the ' south two-thirds of the west half of the northwest quarter of the southeast quarter of Section 21, Township 5 south, Range 11 west, in the Rancho La Bolen Chica, City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 51 Page 13 of Miscellaneous Maps, in the office of the County Recorder of said County. Parcel 2: The east half of the northwest quarter of the southeast quarter and the west half of the northeast quarter of the southeast quarter of Section 21, Township 5 south, Range 11 Vest, in the Rancho La Bolsa Chica, City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 51 Page 13 of Miscellaneous Maps, in the office of the County Recorder of said County. Except the north 447.36 feet of the mast 427.00 feet of said west half. Parcel 3: The northwest quarter of the southeast quarter or the south- east quarter -of Section 21, Township 5 south, Range.11 west, In the Rancho La Bolsa Chica, City of Huntington Beach, County-of_Orange, State of California as per -map recorded in Book 51:Page 13 of Miscellaneous Maps, in the office of the County Recorder of said County. Parcel. • 4 : That portion of Block 4 of Tract No. 86 in the City of Huntington Beach, County of Orange, State of California as per Map recorded in Book 10 Pages 35 and 36 of Miscellaneous Maps, .in the office of the County Recorder of said County, described as follows: Beginning at a point on the north and south quarter section line -of Section 2.1 Township 5 south, Range 11 west, south 00 46' 3011 east 660.74 Peet from the center of said section, said point being the southeast corner of -the land described,:in the deed to Cyril B. Bell et ux, recorded November 23, 19416 in Book 1504 Page 195 of Ofticial Records; thence south 89°• 36' 00" west 580.8.0• - feet along the southerly line of said land and the westerly prolongation thereof; thence south V 46' 301e 'yD Item 10. - 68 HB -216- DE - —4TCAL RENTAL AGREE1si-&'NT loglonal Office: 9400 East Mounts Fn low rive 0 6 t988 Yorba Linda, California 92686 (Mont i Month Tenancy) Tim Is INTENDED TO BEA LEGALLY BINDINd AGREEMENT - niAD IT. CARE FLIt ENT %NAGEME CALIALTOR SITANDARD FORNIA AUOCIATION OF R9 4 FORM Hu4ti4tion'Beach CalMnsta June'10 tggg_ The City gj &nt'ington Bpanh' 'A Laidlord, acid &rrigan Golf Q- yordtj!2n Tenant. Agree at follows: 1. Landlord rents to Tenant and Tinant hires from Landlord those promises described A,'. 16782 Graham St. vs thee with t!IL fur: t�rar and ap Was, it any, Ant[ fixtures. inert—nt to tbi st-Icturg, cluding out ujya� ,n a aj4eyllar lawt la shovm on Exhibit A artechtdheretor-andattach ithe exhibit It the Ust to extanstm) - - 2. The term %hall commence an April 1, 19 -88 and shall continue from month to rronth.This tentelogtoomentmay Vrmlpatod.at any tims, by either party by giving written notice 3Od72 In advance. 4s Tenant aqutopey $ 3 —rant per month payable In advance on the day of each nonth " $ - 0' ropre"ting prorated rent from date of postattion. 3. The tent shall be paid at City Hall, City of Hu,.t:Ln=-n Beach, O00 Mai., P.O. BO. 190, HB, CA 9264 tr at any odd�nrst designated by the LAndtotd In wthins. 4. If as security has been deposited. Landlord may, use thereftom such amounts as Are tessonably necessary to romady Tenant's defaults In the payment of rent, to repair damages caused by.Tersent,'and to clean tits premises It nocesssKy upon tattrination of tenancy. It usadtaward tant;o damages during the term 61 tenancy. Tenant agrees to taloosto told total security deposit upon live days written notice delivered to Tenant fn pors6l, or by mallitig. Security It any; together with on Isomited Accounting. thall be mailed to Tenant at lost known addists within 14 days of surrender of premises; S. Tenant woot to pay for all utilities and services based upon occupancy of the pforrilsot orsd she following charges: Any and lll- taxes, if any except None - - which shall be gold for by Landlord. 8. Tenant has examined the pternises and, all furniture, lurnishinDi and appliances It any, arpi fixtures contained therein, aril accepts the same to being cloon. In good order, condition. and repair, with the following exceptions:' Any and all cogjt Qf repairsto be charges to tenant. 7. Tha'�romlflos are rented for use as a residence by the foijdsving nomsd_porvolis: Pica oni and family, No animal, bird, or pot except thad be kopCon of about the promites without Landlord's prior written consent. 8. Tenant shall not disturb, annoy, andang"r or Interfere with other Tenants of the building of neighbors, nor use thv,p4*mlso% to? any ur-w44 pustroms, surrviolate, any low or ordinaries. nor commit waste or nulmrsco up2n.or about the premises. a tu orregulations . posted'on the promises .. or . delivered . to Ten . 9 nt . by .. LandlJd:— T4nrmt Agrees to comply wli� all reasonable ** lot, , , .0. Topont.thill keep the premises wrd furniture, furnishings And Appliances, J1 Any, and fixtur4q, which are rented for hit exclusive use In good order'and condition and pay for any repairs to the property caused by• Tenant's negligence of misuse or that or Tenant's Invitett. Landlord shall otherwise maintain the property. Tenant's personal property Is not insured by Landlord. 11. Tenant "I'l nint point, wallpaper, nor make alterations to the ptopirty wl thou I, Landlord'& pt for written consent. t2. Upon not less then 24 bouts advance "tics, Tenant shall make the demised premises available 'duIlg noimel business hours to Landlord at his Authorized agent or representative, for the purpose of entering (a) to tnake necessary agreed repairs, docwatlons, alterations or Improvements or to supply necessary or agreed services, and to) to show the premises to prospective or actual purchasers, moilliageas, tonanit, workman or contractors. In an emergency, Landlord, his agent or Authorized triptesentative may enter the primisel it any time eirldsout locurIng prior permission from Tenant for the putpois of making corrections or repairs to alleviate such einargency, 13. Tenant shall not let or sublet,all or any part of the premises nor assign this agreement or any Interest In It without the prior written consent of Luxilotd. 14, If Tenant Abandons or vacates the piannites, Landlord may at hit option terminate this "tartment, and regain posteision In the mannol laryAbird by law. 15, Ilanyllivol action or proceeding be brought by alther party to enforce Any part of this agratment, the prevailing party shill recover Iv saWltion to all offset relief, reasonable attotneyl feet and costs. 16. Time It of the tateria. The waiver by Landlord or Tenant of any breach [hail not be comttuird to be a continuing waiver of any tubso,"rit breach. 17. Notice upon'Ttintint shall tra served as provided by law. Notice upon Landlord may be served upon Manager of the dimis4d premises Dan M. Brennan, Real Property Manager at City Hall (Lddress-as above Said Man"ar Is nuthody-A to accept service on behalf of Laixllord I& Within 10 days miter written notice, Tenant Agrees to execute And deliver 'a cattillc6ta as submitted by Landlo"I ackitowledqlrpg that this agreement Is unmodified and In full forte and effect or In full force and effect as modified And s!aIhm the rrmciffications. Failure to comqflt shelf be deemed Tenant's acknowledgement that the certificate as submitted by Landlord Is tru' e :,A correct And msy be relied upon by are tomiar or putcha"i.- 19. In the event rent is not paid with in five (5) days af ter'' due date Tenant agrees to pay a late charge of $... ... Tenant agrees further to pay for each - dishonored bank check. 20. The undersigned Tenant acknowledges having read the foregoing prior to execution and .receipt'qfa copy hereof. 21.*'(SEE NOTE ON REVERSE) PLEASE SIGN AND RETURN ciiy',of Huntington Beach, a municipal corporation, Ajv=CkN GOLF CORPORATI(X4 by Dan Brennan, Real Property Manager Tenant Ey( �,e, Davidson mid , lard Tenant 0 'WiltIIIIINTATION 14 MADD AS TO flig LiftlAt, VALIDITY Of ANY PROVID . IQN . OR T119 AIJFOUAOY OF ANY 11110VISION I -ANY SPECIFIC- TRANSACTION. XREAL ESTATE BROKER IS THE PERSON QUALIFIED TO ADVISE ON REAL ESTATE. IF. OU DESIRE LEGAL ADVICE CONSULT YOUR ATTORNEY. HB -2 17 Item 10. - 69 ATTACLIMENT: 21. The future rental schedule will be as follows Ist year April 1st 1988 through March 31st1989 will be $350.00/per mo. 2nd year' April let 1989 through March 31st -1990 will be $500.00/per mo. 3rd year - April let 1990 through March 31st 1991 will be $650.00/per MO. 4th year - April let 1991 through March 31st 1992 will be $800.00/pnr mo. Each year thereafter starting April 1st 1992 the rents will be increased in the amount of 7% of the previous years monthly rental amount, example Stfi year amount of $856.00/per mo. etc. These yearly increases of 7% will continue until the term of the present lease the,City has with American Golf Corporation or their Successors. LANDLORDA, AMERIU�N (9J1.LV WRi:Vi�KrIUN BY: Ken Davidson TENANT cfuw�.,r fr2. Lf 57 $1) oqq, C, A T-2 Item 10. - 70 �., 4-� --5 �!5z HB -�2 18- east 300.00 feet; thence north 89° 36' 00" east 580-80 feet to said north and south quarter section line; thence north 0° 46' 30" west 300.00 feet to the point of beginning. Parcel 6: That portion of Block 4 of Tract No. 86 in the City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 10 Pages 35 and 36 of Miscellaneous Maps, in the office of the County Recorder of said County described as follows: Beginning at the southwest corner of the land described as Parcel 1 in the deed to Edmund 3. Newbegin et ux, recorded October 3: 194T in Book 1567 Page 91 of Official Records; thence north 0° 46' 30" west 300.00 feet; thence south 890 36' 00" west 82.10 feet to the west line of said block; thence south '00=46'' 30" east 300.00 feet along said west line to the northwest corner of the land described in the deed to diaria.Ampolilla et al, recorded July 30, 1959 in Book 4818 Page 497 of Official Records; thence north 89". 36' 00" east 82.10 feet to the point of beginning. 2. 101 xB _2 1 9_ Item 10. - 71 •/v EXHIBIT "C" MAINTENANCE STANDARDS Meadowlark Golf Course City of Huntington Beach cligaQW-1 A. Prepare Greens for Daily Use. on a daily basis, change cup location and repair ball marks, divots and other damage. B. Mow Greens. Mow to maintain a grass height of not less than 1/8 inch and not more than 1/4 inch. Vertical mow at least twice monthly from February to November. C. Aerify Greens. Aerify greens at least twice per year with the plugs removed the same day. D. Tandress Greens. After vertical mowing and aerifying, a good quality, medium grade nursery sand with particle size of approximately 2.0 mm shall be brushed into the surface of the green. E. Herbicide and Rest Control. As turf and weather con- ditions dictate, apply herbicides, pesticides and preemergent herbicides to the greens. F. Omerseed Greens. Overseed greens as weather condi- tions dictate. After overseeding a preventive program of fungicide application shall be followed. Prior to overseeding, greens to be aerified and vertically mowed. Item 10. - 72 HB -220- ii. Maintain lees A. SP�ip..p Tees. On a daily basis, move and/or replace tee markers, tee benches and ball washers for proper teeing and wearing of turf. Keep ball washers filled to proper level with water plus an appropriate cleaning agent. Tee towels to be changed weekly. B. Repair Tee Areas. Overseed and topdress or resod worn and damaged tee areas with the same type of turf grass. O. Max Tee areas. Mow tee areas to maintain a grass height of 1/2 inch or less. Vertical mow as necessary for thatch removal. D. Ae_ i y Tees. Two (2 ) times per year, aerify the tee areas and topdress with good quality, medium grade nursery sand. E. Fertilize Tee Areas. Apply eight (8 ) to twelve 412 D pounds of actual nitrogen for every thousand (1,000) square feet of turf per year in a manner to provide uniform growth. Four (4) pounds of nitrogen shall be supplied through the -application of a N-P-K formulation of approximately a 4-1-2 ratio. F. Herbicide and Rast Control. As turf and weather con- ditions dictate, apply herbicides, pesticides and preemergent herbicides to tees. G. overseed and Tondress Tee Areas. monthly, the turf areas are to be overseeded and topdressed. Apply a preventive fungicidal treatment prior to overseeding. 2 1B -221- Item 10. - 73 III. maintain E _irways_ A. Bepair Turf Areas. Overseed worn and damaged turf areas with the same type of turf grass. 0 B. Mow Turf Areas. Mow as necessary to maintain a grass height of 1/2 inch to 3/4 inch in fairway and 3/4 inch to 1 1/2 inches in roughs. Contour mow as ­.to master plan of fairways and roughs at the golf courses. Vertical now as necessary to prevent mat or thatch buildup. C. Aerify Turf 6reas. Aerify turf areas three (3) times a year. I D. Fertilize Turf Areas. Apply six (6) pounds of actual nitrogen for every thousand (1,000) square feet of turf per year in a manner to provide uniform growth of turf. Two (2) pounds of nitrogen shall be supplied through the application of a fertilizer with N-P-K formulation of approximately a 4-1-2 ratio. Aerification shall precede fertilization each time. E. H erbicide and Ripat Control. As turf and weather con- ditions dictate, apply herbicides, pesticides and preemergent herbicides to the.fair'wayse IV. maintain Bad Nurseries A. Maintain Sod Aream. Maintain and mow sod of the same type of grass and soil condition as used for the tees and greens. B. Renl ace Sod. -After removal of sod, replace the proper soil and reseed the area. 3 Item 10. - 74 HB -222- 0 All sidewalks, curbs, parkways, walkways, driveways, parking lots and cart paths are to be edged at least once per week. Valve boxes, meter boxes, backflow preventers and other structures are to be edged or trimmed regularly. Vi . Maintain Lass and Ponds A. Remove weds. Periodically remove weeds from water areas. B. Cheek and Maintain Water Level. Periodically check water level and fill or drain the water areas as necessary. C. Control Algae. Establish a regular program to control the growth of algae. Vii. Maintain Sand Tra4m A. a Sand Trans. As necessary, edge sand traps to maintain a neat lip. B. Bake and Cl eann 'Traps. hake traps daily, eliminate weeds and fill traps with fresh sand as necessary to maintain at least a four (4) inch depth in bottom and on slopes, replace rakes as necessary. Sand to be, of a dust -free type. A. Evaluate Sail anti Emdrnnmt-ntal Conditions. nary, determine soil texture, porosity, water holding capacity, drainage, compaction, precipitation rate, runoff, infiltration rate, percolation rate, evapotranspiration, seasonal temperatures, prevailing wind conditions, time of day or night, type of grass plant and root structure. 4 xB -223- Item 10. - 75 B . Trrj_gate_C&nirye. irrigate all turf areas, trees and planting areas to maintain adequate moisture for healthy growth. Every effort should be made to employ water conservation practices without compromising the level of maintenance. 1. Inspect Operating Condition. On a daily basis, inspect and test irrigation systems including controllers, heads, valves and lines. 2. Correct or Repair Irrigation System. On a daily basis, adjust sprinklerheads and controllers, unplug clogged heads, remove obstacles and flush lines to insure proper operating conditions. IX. Maintain Trees, shrilbr, and aj:ound Coo A. 2rune Trees. Trim and prune trees to maintain safe vehicular and pedestrian clearance and visibility, to prevent or eliminate 'hazardous situations and to maintain playable standards. 11:1 40--y-0 FIFE Major and minor damage to trees shall be remedied as directed by Project Manager. Damage occurring from either spray drift or lateral leaching shall be corrected and the soil conditioned to ensure its ability to support -plant life. C. Plant New Trees. Any new trees or replacement trees shall be planted in accordance with the policy of one for one. Replacement trees shall be acceptable. trees for the situation and, if possible, a minimum of a 24- box., 5 Item 10. - 76 HB 224- D . Stake Trees. All newly planted trees shall be staked as necessary for protection. The stakes used to secure the tree shall be checked frequently and either retied to prevent girdling or removed along with the stakes when no longer required. E. Pest Contrnl. Control insects, disease and other pests as necessary to maintain healthy and attractive trees, shrubs and ground cover. F. an Up Debris. Pick up and remove all trash and debris such as paper, drinking cans, bottles, fallen limbs and leaves. G. Pg_-Maya Weeds. Periodically remove weeds and grass from shrubs and ground cover areas and edge planting areas. H. Prune -Shrubs. Prune shrubs to protect from wind and insect damage and to maintain appropriate appearance* I. Hemay-al of Dead plants. All dead, diseased, damaged and unsightly branches, vines, plants, spent flowers and blooms or other growth shall be removed and replaced with the same type of plant or plant material, if possible, or with similar plants approved by the city.. X. Maintain Rest;, Rooms A. Clean Rest Booms. on a daily basis, clean, disinfect, deodorize and free of deposits the floors, floor drains, wash basins, piping, toilets, toilet seats, walls and partitions around the toilets, urinals, mirrors, and supplies dispensers. R HB -225- Item 10. - 77 on a weekly basis, clean, disinfect, deodorize and free of deposits the walls and ceiling. B. Replenj _njies. on a daily basis, replenish the rest room supplies including all paper supplies and cleaning materials. C. Fmpty Trash. Empty, clean and disinfect trash recep- tacles prior to opening the golf course each day. D. Remove Graffiti. Repaint to matching surface or scrub *ff graffiti on all interior and exterior surfaces on a daily E. Chp-ek Lighting. Check daily to ensure that all inter- ior and exterior lighting fixtures and lights are in good con- dition and operable. Replace light bulbs or tubes as necessary. F. Maintain Structures. As necessary, maintain and repair walls, ceilings, roofs, floors,.doors and partitions.of structures. G. Repair Leaks and Claus. on a daily basis, repair all leaking fixtures, stopped -up or damaged basins, toilets and urinals and all clogged drains. I. Ma-intaionturf Areas P-9007.31 � � UPPOFT-M, � � � �M MMMENM�� clear, clean and safe condition and repair damaged concrete, asphalt or ruts. B. Maintain Drainage Lines. Inspect, clean and deweed all surface flow lines, barranca channels, catch basins and other drainage structures. 7 Item 10. - 78 HB -226- REAL & PERSONAL PROPERTY LIST MEADOWLARK GOLF COURSE Year CITY AMER/GOLF 79 I SUBLEASE I . Sublease Agreement, dated April 17, 2008, by and between American Golf Corporation, as sublandlord, and CLP Meadowlark Golf, LLC. Consent to Assignment of Lease —Meadowlark 10 0914625\ 161524\! 591384v7 Item 10. - 80 HB -228- OFFICIAL BUSINESS Document entitled to free recording per Government Code Sections 6103 and 27383 Recording Requested By: The City of Huntington Beach 2000 Main Street Huntington Beach; California 92648 Attention: City Clerk SPACE ABOVE THIS TINE FOR RECORDER'S USE CONSENT TO SUBLEASE THIS CONSENT TO SUBLEASE (hereinafter "Agreement") is made this 7th day of Apri 1 , 2008, by and between THE CITY OF HUNTINGTON BEACH ("City"), under the Lease described below, and (a) AMERICAN GOLF CORPORATION, a California corporation, the Lessee under the Lease (the "Lessee"), (b) CNL INCOME EAGL MEADOWLARK, LLC, a Delaware limited liability company, as subtenant (the "Subtenant") of the Lessee, and (c) EVERGREEN ALLIANCE GOLF LIMITED, L.P., a Delaware limited partnership ("EAGL"), which will operate the premises described by the Lease under a further sublease agreement with the Subtenant. Subtenant and EAGL shall be collectively referred to as ("Subtenants"). RECITALS: A. City and Lessee are parties to that certain Lease Agreement, dated as of July 6, 1992, by and between City, as City, and Lessee, as lessee, and the other documents listed on Exhibit A hereto (collectively, the "Lease"), relating to the golf course property known as "Meadowlark Golf Course" and more particularly described in the Lease (the "Golf Course"). B. Lessee, as sublandiord, has entered into a contract to sublease certain rights and interests in and to the Golf Course to the Subtenant under the terms of the sublease described below, subject to the City's approval, and subject to the terms and conditions of the Lease. C. The Subtenant desires to take a sublease of the Golf Course and to further sublease certain rights and interests in and to the Golf Course to EAGL, subject to the City's approval, and subject to the terms and conditions of the Lease, under the terms of the further sublease agreement described below. 08-150613.21 Meadowlark Consent to Sublease lease (3) (3) ��6 C xB -229- 'Item 10.-81 4; 'y k D. Pursuant to section 24 of the Lease, Lessee and the Subtenant have requested City's consent to the sublease of the Golf Course to the Subtenant, and the Subtenant has requested the City's consent to the further sublease of the Golf Course to EAGL NOW, THEREFORE, in consideration of the foregoing, and the undertakings of the parties under the Lease and under the sublease and the further sublease agreement referred to herein, and for other good and valuable consideration, the receipt and sufficiency of which the City hereby acknowledges, the City hereby agrees as follows: I. City consents to the sublease of Lessee's rights and interest in and to the Golf Course to Subtenant. In the event any terms or conditions contained in the CNL Sublease conflict with terms and conditions set forth in the Lease, the terms of the Lease shall control. 2. City consents to the further sublease of such right, title and interest in and to the Golf Course to EAGL. In the event any terms or conditions contained in the EAGL Sublease conflict with terms and conditions set forth in the Lease, the terms of the Lease shall control. 3. The parties have provided copies of the proposed sublease between Lessee and u enan to u ease an the7f(57=d- subfe -- EAGL (the "EAGL Sublease"). For identification purposes, and without binding the City to the terms thereof, a copy of the CNL Sublease is attached hereto as Exhibit B and a copy of the EAGL Sublease is attached hereto as Exhibit C. Notwithstanding the foregoing, City shall not be bound by any of the terms and conditions of the CNL Sublease or the EAGL Sublease. 4. City confirms that the attached Exhibit A sets forth a complete list of documents that make up the Lease. The Lease represents the entire agreement between Lessee and City with respect to the Golf Course. Except as provided in the Lease, City does not represent or warrant in any way its title to the Golf Course or improvements thereto or any other property referenced in this transaction. 5. Lessee hereby expressly agrees to remain bound by the obligations responsibilities and duties under the Lease. The Lease is in full force and effect and has not been assigned, modified, supplemented or amended in any way except as described in Exhibit A. City confirms that the operation of the Golf Course under the CNL Sublease and the EAGL Sublease, subject to the terms and conditions of the Lease and the provisions of Sections 1 and 2 hereof, will not constitute a default under the Lease. 6. Any additional subleases and/or assignments including lessees and/or sublessees securing financing not described in this Consent to SubLease must be approved in writing by the City in accordance with the requirements of the Lease. 7. In addition to the hold harmless/indemnification provision in the Lease, Lessee agrees to defend and indemnify the City from any and all claims, actions, judgments, liabilities, proceedings and costs, including reasonable attorneys' fees and other costs of defense and damages, resulting from the transaction contemplated herein. City shall first look 08-150613.21 Meadowlark Consent to Sublease lease (3) (3) 2 Item 10. - 82 HB -230- ?R� 02 or /� to Lessee to satisfy all claims, actions, judgments, liabilities, proceedings and costs, including reasonable attorneys' fees and other costs of defense and damages resulting from non- performance of the obligations under the Lease. Without limiting the foregoing, in the event subtenants fail to perform obligations required in the Lease, City may pursue any and all rights and remedies against subtenants that it has against Lessee pursuant to the Lease. 8. In addition to the hold harmless/indemnification provision in the Lease, Subtenants agree to defend and indemnify the City from any and all claims, actions, judgments, liabilities, proceedings and costs, including reasonable attomeys' fees and other costs of defense and damages resulting from the transaction contemplated herein.' City shall first look to Lessee to satisfy all claims, actions, judgments, liabilities, proceedings and costs, including reasonable attorneys' fees and other costs of defense and damages resulting from non-performance of the obligations under the Lease. 9. The City, in executing its consent to the CNL Sublease and the EAGL Sublease, does not release Lessee from any claims or remedies it may have against Lessee under the Lease. 10. Without limiting Lessee's obligations to City under the Lease, City agrees to accept performance from Subtenant and/or EAGL of operational and administrative matters,. - such as the payment of percentage rent, the maintenance of financial records, the delivery of financial reports to the City, obligations to maintain, repair and operate the Golf Course in accordance with the Lease, coordination of tournaments provided for under the Lease, and other matters required by the Lessee in the Lease. All of the aforementioned obligations, in addition to those not mentioned herein, shall be in accordance with the Lease. Percentage rent shall continue to be calculated in the manner described in the Lease, based on the operating revenues of the golf course, whether such revenues are collected by Lessee, Sublessee, EAGL or another operator approved by City. 11. City shall provide Subtenant and EAGL with copies of all notices which may be provided to Lessee pursuant to the terms and provisions of the Lease. In the event of a default by either City or Lessee or any other party under the Lease, City shall give prompt written notice to Lessee, Subtenant and EAGL. Subtenant and EAGL shall provide City all notices, requests and other communications to the parties specified in the Lease and sublease(s) in writing. All notices to Subtenant and EAGL shall be given to such party at its address set forth below (or to such other address as such party may hereafter specify for the purpose of notice in accordance with the terms of the Lease). Subtenant: CNL Income EAGL Meadowlark, LLC c/o CNL Income Properties, Inc. 450 S. Orange Avenue Orlando, Florida 32801 Attention: Tammie A. Quinlan, Chief Financial Officer 08-1506/3-21 Meadowlark Consent to Sublease lease (3) (3) EAGL: Evergreen Alliance Golf Limited, L.P. 4851 LB7 Freeway, Suite 600 Dallas, Texas 75244 Attention: Lynn Marie Mallery Fax: (214) 722-6052 NB -231- 2 .,-- /// )119e, Item 10. - 83 Attention: Amy Sinelli, Esq., Senior Vice President /Corporate Counsel Fax: (407) 540-2544 With a copy to: Lowndes, Drosdick, Doster, Kantor and Reed, P.A. 215 North Eola Drive P.O. Box 2809 Orlando, Florida 32801 Attention: William T. Dymond, Jr., Esq. Fax: (407) 843-4444 With a copy to: The Addison Law Finn 14901 Quorum Drive, Suite 650 Dallas, Texas 75254 Attn: Randy Addison, Esq. Fax: (972) 960-7719 The addresses set forth above may be changed as to any party by such party delivering to the other parties at least thirty (30) calendar days' written notice as to such change of address. 12. By accepting this Agreement, Subtenant and EAGL agree that, as subtenants, theyy are bound nn�nby all of terms and conditions of the Lease rt that are binding upon gLessee from d -9 ex th Tffe-n-y date-- -fbis e v ee-M- e t rinTtJ peci+xc'r-&--ren-ce to the I ease Gout- - herein are for emphasis and/or addition, and not intended to limit this clause in any way. 13. Subtenant(s) agree to comply with City's exclusive concessionaire agreement with Coca Cola Bottling dated February 16, 1999. In addition, all food and beverages shall be offered or sold in recyclable paper or plastic containers. No pull -top cans or Styrofoam containers are to be vended or dispensed from the Leased Property. 14. The original of this Agreement and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who has signed it. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers the day, month and year first above written. SIGNATURES CONTINUED ON NEXT PAGE 08-1506/3-21 Meadowlark Consent to Sublease lease (3) (3) 4 Item 10. - 84 xB -232- ?.,4 6 __- V aF /T LESSEE: AMERICAN GOLF CORPORATION, a California corporation M print name ITS: -(circle one) Chairman./President/Vice President go AND Mark J. Friedman, Secretary SUBTENANT: CNL INCOME EAGL MEADOWLARK, LLC, a Delaware limited liability company ME Amy Sinelli, Senior Vice President �1 M print name ITS: (circle one) Secretary/Chief Financial Officer/Asst. Secretary —Treasurer CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor ity Clerk INITIATED AND APPROVED: Director of Econdi6c Development Di Community Service Al AS TO FORM: t—City Attorney Aky- 3-di-0e R 7 VD AND APPROVED: Cirdministrator SIGNATURES CONTINUED ON NEXT PAGE 08-1506/3-21 Meadowlark Consent to Sublease lease (3) (3) 14B -233- 5 'gz— n'-_ ILL -Item 10. - 85 State of California County of _ CEE On . J�� 4 1 r before me, �-- S�- i 4- Date �' Here insert Name and Title the Officer personally appeared n # 15"179 Place Notary Seat Above who proved to me on the basis of satisfactory evidence to be the person(A) whose names) `are subscribed to the within instrument and acknowledged to me that sh ti:tey executed the same in lei er ttaeir authorized capacity(Ks), and that by iais er tl;& signatureW on the instrument the person(A), or the entity upon behalf of which the person(f) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws true and correct. WITNESS y ha n o ' i seal. Signature Signature f Notary P c OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: i_. 0A) 44---�?` 7P L L=7Qci Document Date: R1 G .r�4� t' Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signers) Signer's Name: D Individual D Corporate Officer — Title(s): — ❑ Partner — D Limited ❑ General D Attorney in Fact D Trustee D Guardian or Conservator D Other: Signer Is Representing: RIGHTaTHUI�IBPIR Top of thumb here I�t3F.SICNEE� �;: Signer's Name: O Individual C Corporate Officer — Title(s): D Partner — ❑ Limited 0 General D Attorney in Fact © Trustee D Guardian or Conservator 0 Other: Signer is Representing: RiGH'CT.SIGNHUN4sPFUNTER,; 'OP, . (92007National Notary Association •9MDeSotoAve.,P.O.Box 2402•Chatsworth, CA91313.2402•mwr.NationatNotary.org Item#5.S97 Reorder CaffTot3-Rreet-W"76-6827 Item 10. - 86 xs -234- 1� � 6 o r-1�4 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of On IOUK14- /Q. �2before me, :S I . I pate 7- Ham Inr,4 Name and Title W the Officer personally appeared /z- Z�� Names) 01 Signer(S) Piace Notary SeW Above who proved to me on the basis of satisfactory evidence to be the person(} whose name(s)2ope- subscribed to the within instrument and acknowledged to me that �efi� executed the same in er heir authorized capacity(I?S), and that by 4e ' signature(4) on the instrument the personQg), or the entity upon behalf of which the personop acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS T y _��d at seV. Signature - gignature4otNotir r.blic I OPTIONAL Though the information below is not required by law, it may prove valuable to persons retying on the document and could prevent fraudulent removal and reattachment of this form to another document Description of Attached Docume II Title or Type of Document: ror4� CA) 7- 41 D+cu-itte,ait Date: mewv Number of Paqes: Signer(s) Other Than Named Above: - Capacity(ies) Claimed by Signer(s) Signer's Name: 0 Individual 0 Corporate Officer - Title(s): 0 Partner - 0 Limited 0 General • Attorney in Fact • Trustee 0 Guardian or Conservator 0 Other: Signer fs Representing: - �RIG -HTTHIM _BPRNTof; sty I .Signer's Name: 0 Individual 0 Corporate Officer - Ttle(s): 0 Partner - 0 Limited 0 General 0 Attorney in Fact 0 Trustee Top of thumb here 0 Guardian or Conservator 0 Other: 7 Signer Is Representing: - H B -2 3 5 - -7- e5r- la - Item 10. - 87 LESSEE: AMERICAN GOLF CORPORATION, a California corporation By: print name ITS: (circle one) Chairman/President/Vice President AND By: Mark J. Friedman, Secretary SUBTENANT: CNL u\TCOMF- EAGL MEADOWLARK, LLC, a V By: Joseph T. Fn. Senior -4-- Vice President AND Y' print name ITS: (circle one ) Secretary/Chief Financial Officer sstS=ie ,4- Treasurer -------------- CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor City Clerk INITIATED AND APPROVED: Director of Economic Development Director of Community Services APPROVED AS TO FORM: City Attorney Aw- 3-d(-O? REVIEWED AND APPROVED: City Administrator SIGNATURES CONTINUED ON NEXT PAGE [ I K 0-11) 111 og- 150613-21 Meadowlark Consent to Sublease lease (3) (3) Item 10. - 88 HB -236- A -CC ?, of-- /� STATE OF FLORIDA COUNTY OF ORANGE IW The foregoing instrument was acknowledged before me this A_L_ day of March, 2008, by Joseph T. Johnson as Senior Vice President of CNL INCOME EAGL MEADOWLARK, LLC, a Delaware limited liability company. ULjE_personally known to ine or has produced as identification. (NOTARY SEAL) ,g Cathleen A Coffey Commission # DD466308 Eypires September 24,2009 'i" X.N-vl Bonded Ticy Fal. - Insume'd T LOW .,4 Notary Public Signature .c&THLFXN,LC0FFF-Y (Name typed, printed or stamped) Notary Public, State of Florida Commission No.: My Commission Expires: The foregoing instrument was acknowledged before me this day of March, 2008, by Linda Scarcelli as Assistant Secretary of CNL INCOME EAGL MEADOWLARK, LLC, a Delaware limited liability company. She is personally known to me or has produced as (NOTARY SEAL) Cathleen A. Coffey Commission # DD466308 Expires September 24, 2009 iF.Ii�zr-r.ardecTmyPa,n-,ns,,,once inc $M385-7019 0914625\1 30607\1 137673\1 Notary for Meadowlark consent (2t7 Notary Public Sipature, If, CATIMEM A. 'Conzx (Name typed, printed or stamped) Notary Public, State of Florida Commission No.: My Commission Expires: HB -'237- '0 , = //-,/ Item 10. - 89 LESSEE: GOLF CORPORATION, a California Paul jone rpinITS: {circleChairrrl resident }Vice President CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor City Clerk INITIATED AND APPROVED: By: Y ark J. Fnedman, Secretary Director of Economic Development SUBTENANT: f RiI jNc-c)MF FAGL MEADOWLARK LLC a Director of Community Services Delaware limited liability company APPROVED AS TO FORM: By: Joseph T_ Johnson, Senior Vice President City .Attorney Mv'- 3 air-ag AND By- REVIEWED AND APPROVED: print name ITS: (circle one) Secretary/Chief Financial City Administrator Officer sst, Secret Treasurer SIGNATURES CONTINUED ON NEXT PAGE o8.150613.21 Meadowlark Consent to Sublease lease (3) (3) 61 Item 10. - 90 HB -23s- STATE OF CALIFORNIA ) I SS. COUNTY OF Los Angeles On I efore me, —Elyse Cook Notary Public, (here insert name and title of the officef) personally appeared Paul Major, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized -capacity, and- that by his -signature on the instrument- the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. ELYSE COOK Commission # 1479.39,5 Notary public California LOS Angeles County SEAL WY Comm. Expires APT 26,2008 Notar ublic ( eal) k\TC .02.99871WM02.7U21Q12,1 HB -239- Item 10. - 91 STATE OF CALIFORNIA ) � SS. COUNTY OF Los Angeles ) On ` ��before me, Elyse Cook , Notary Public, (here insert name and title of the officer) personally appeared Mark J. Friedman, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. ELYM COOK Commission # 1479395 Notary Public - California Los Angeles County SEAL Notary, %DC - 0289871000002 - 2682202 v1 Item 10. - 92 xB -240- ?, ld\ Dr- /� TENANT: EVERGREEN ALLIANCE GOLF LIMITED, L.P., a Delaware limited partnership By: PREMIER GOLF EAGL GP, LLC., a Delaware limited liability co G eral Partner By: / '✓ L°'ynn Mari Mallery, Vice President AND By: C41LO _ o W print am ITS: (circle one Secretary/Chief Financial Officer Asst. Secretary Treasurer NOTICE: THIS SUB -SUBLEASE CONTAINS WAIVERS AND INDEMNITIES BY THE TENANT OF TBE LANDLORD'S OWN NEGLIGENCE. EAGL: EVERGREEN ALLIANCE GOLF LIMITED, COUNTERPART L.P., a Delaware limited partnersbip By. PREMIER GOLF EAGL GP, LLC., a Delaware li liability co any, General Partner By: 14 print name ,._____.,,,_ ITS: (circle one) Chairman/Presidenii ice President By: f L n e all ry, ice Presid Exhibit A: Lease Agreement, dated July b, 1992, between the City of Huntington Beach and American Golf Corporation. Exhibit B: Form of CNL Sublease Exhibit C: Form of EAGL Sublease 08-1606(3-21 Meadowlark Consent to Sublease lease (3) (3) 6 _� _?'ge'r l G^ �41 Item 10. - 93 HB STATE OF TEXAS COUNTY OF DALLAS This instrument was acknowledged before me on the4LVday of March, 2008, by Lynn Marie Mallery, Vice President and Secretary of PREMIER GOLF EAGL OP, L.L.C, the general partner of EVERGREEN ALLIANCE GOLF LIMITED, L.P., on behalf of said partnership. edAd �. Notary Public in an CAROL L. BORO the State of Texas Notary Pubfie, State of Texas MY Commission Expires My commission -expires: 691d31d-610 This instrument was acknowledged before me on them"/ day of March, 2008, by Joe Munch, Vice 'President of PREMIER GOLF EAGL GP, L.L.6, the general partner of EVERGREEN ALLIANCE GOLF LIMITED, L.P,, on behalf of said partnership. Notary Public i — the State of Tex ;7"7,"t7t104;f!"- �7 CAROL L. BOROWY Notary Public, State of Texas My Commission Expires Pebruory 23. 2010 My commission expires: 6 7 /0 It STATE OF TEXAS COUNTY OF DALLAS 'u— This instrument was acknowledged before me on the4q� -day of March, 2008, by Carol Borowy, Assistant Secretary of PREMIER GOLF EAGL GP, L.L.C, the general partner of EVERGREEN ALLIANCE GOLF LIMITED, L.P., on behalf of said partnership. otary Public in and Ior 0M.14 the State of Texas The foregoing Instrumom W'z WW C09Y bit th'a 6riginal on file in this office. mm Su qirp_� H jLiQ Attest Cl co— city Clerk and iclo Clark of the CRY counr,11 of the city of Huntington Bszchs womL-, sputy UB -242- Item 10. - 94 4442�_�Q CHAREA REEVES Notary Public. State of Texas My Commission Expires Novembet 21, 2009 ?tmc-- /1 ESTOPPEL CERTIFICATE Meadowlark Golf Course, Huntington Beach, California 014 CLP MEADOWLARK GOLF, LLC c/o CNL Lifestyle Properties, Inc. 450 South Orange Avenue, Suite 1200 Orlando, Florida 32801 Attention: Chief Financial Officer and General Counsel CF MEADOWLARK ARCIS LLC c/o CF Arcis X LLC 5221 N. O'Conner Blvd., Suite 700 Irving, Texas 75039 Attention: Blake S. Walker, James K. Noble, and Randy Brown Re: The documents described in the attached Exhibit A (collectively, the "Lease"). Ladies and Gentlemen: The undersigned, the authorized representative of the City of Huntington Beach, California ("Landlord"), intending to be legally bound, hereby certifies to you and agrees as follows: 1. Landlord is the owner of the fee simple estate of the golf course property known as the Meadowlark Golf Course, and more fully described in the Lease (the "Premises"). 2. The Lease represents the entire agreement between American Golf Corporation ("Tenant") and Landlord with respect to the Premises and there do not exist any other agreements between the Tenant and Landlord concerning the Premises, whether oral or written. The Lease (defined in Exhibit A) is in full force and effect and has not been assigned, modified, supplemented or amended in any way except as described on Exhibit A attached to this certificate. 3. Tenant is not in default in the payment of any rent, additional rent or other charges under the Lease. 4. Minimum rent is payable under the Lease at a monthly rate of $44,314.00. Tenant is currently paying percentage rent in excess of minimum rent. All amounts due and ayable by the Tenant under the Lease have been paid in full through �G(3 , 2014 (except for any adjustments in payments of 0914625\161524\15914190 percentage rent or additional rent as may be called for by any annual accounting and adjustment procedure called for under the Lease). 5. To Landlord's knowledge, Tenant is not in default in the performance of any other obligation of Tenant under the Lease. Except for the agreements and other documents referred to herein (the "Lease Related Documents"), there are no other agreements or undertakings by the Tenant to the Landlord relating to the Lease or the Premises and there are no documents under which any of Tenant's obligations under the Lease and/or Lease Related Documents have been altered or waived by Landlord. Tenant is not in default of, and Tenant has performed to Landlord's satisfaction any and all conditions or obligations to be performed on or prior to the date hereof, under the Lease and/or Lease Related Documents. Neither Landlord nor, to the Landlord's knowledge, Tenant has acted or failed to act in a manner which, with notice or the passage of time, or both, could result in a default under the Lease. 6. The term of the Lease commenced January 1, 1993 and expires December 31, 2017, subject to any rights to renew or extend that are described in the Lease. 7. Each "Lease Year" under the Lease commences on January 1 in each year and ends on December 31 of the following year. 8. Tenant has not granted Landlord any lien or security interest in any assets of Tenant, including without limitation, Tenant's accounts receivable or Tenant's furniture, fixture equipment or other personal property located on the Premises, whether now owned or hereafter acquired. 9. Landlord is not holding a security deposit under the Lease. No further security payments are owing to Landlord. Further, the Tenant has not paid any rents due under the Lease more than thirty (30) days in advance of the date due under the Lease. 10. Except for the documents relating to the Huntington Beach Public Financing Authority Lease Revenue Bonds, 2001 Series A in the principal amount of $31,360,000, the Landlord has not assigned, transferred or pledged all or any part of its interest under the Lease to any other person or entity. Landlord has the capacity, power and authority to issue this letter without the consent of any person or entity that has not been obtained or that does not remain in effect. This letter is binding against Landlord and may be relied on by the addressees hereof and their lenders. 11. All construction, improvements, alterations, or additions, if any, to the Premises required under the Lease have been fully completed in accordance with the terms of the Lease. 12. Lessee has completed certain capital improvements to the Premises required to be completed for the period from September 1, 2013 through August 31, 2014 pursuant to paragraph 5 of the Addendum to Lease. 2 0914625\ 161524\ 15914190 13. Landlord's address for notice is: Director of Community Services City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 14. Landlord acknowledges that Tenant's subtenant, CLP MEADOWLARK GOLF, LLC, a Delaware limited liability company ("Subtenant") intends to assign its interest in that certain Sublease Agreement dated April 17, 2008 by and between Subtenant and Tenant to CF MEADOWLARK ARCIS LLC, a Delaware limited liability company ("Assignee"). By separate instrument delivered to the Subtenant and Assignee, Landlord has consented to such assignment. 15. This letter is issued with the intent that the Subtenant, Assignee and Assignee's lenders, if any, may rely hereon in Subtenant's assignment of the Sublease. Sincerely yours, CITY OF H TON BEACH By: Name: F e A. WiIson Title: City Manager A proved as teT-rm: ty Atto ey 0914625\ 161524\ 15914190 FXTTTRTT A 1. Lease Agreement dated July 6, 1992 by and between the City of Huntington Beach and American Golf Corporation. 2. Addendum to Lease Agreement dated July 1, 2013 (the "Addendum to Lease") 4 0914625\ 161524\ 15914190 �s 74) LEASE AGREEMENT AMERICAN GOLF CORPORATION Mal CITY OF HUNTINGTON BEACH HB -169- Item 10. - 21 TABLE OF CONTENTS PAGE 1. DESCRIPTION OF PREMISES .............................1 2. CONSTRUCTION AND USE OF LEASED PREMISES.............2 3. QUIET ENJOYMENT.....................................2 4. TERM................................................2 5. TERMINATION.........................................3 6. LEASE YEAR DEFINED..................................3 7. IMPROVEMENTS TO THE GOLF COURSE ...... ...............4 8. RENT...............................................10 9. GROSS REVENUE......................................12 10. REPORTING AND PAYMENT OF PERCENTAGE RENT ........... 14 11. MAINTENANCE AND EXAMINATION OF RECORDS.............14 12. SERVICES TO BE PROVIDED BY LESSEE..................is 13. TAXES..............................................19 14. UTILITIES..........................................20 15. CAPITAL IMPROVEMENTS ......................... a..... 20 16. MAINTENANCE AND REPAIRS .............................21 17. LESSOR'S COOPERATION................................21 18. INDEMNIFICATION, DEFENSE, HOLD HARMLESS ............ 22 19. WORKERS' COMPENSATION INSURANCE....................24 20. INSURANCE..........................................24 i Item 10. - 22 HB -170- TABLE OF CONTENTS PAGE 21. DAMAGE AND RESTORATION..............................27 22. EMINENT DOMAIN......................................27 23. FRUSTRATION OF PURPOSE..............................28 24. ASSIGNMENT ................. a.........................29 25. BREACH AND REMEDIES .............................. o.o30 26. NOTICES AND ADDRESSES...............................33 27. GOVERNING LAW.......................................34 28. CAPTIONS . . . . . . . . . . . . . . . . . . . . . • . . . . . . • . . . . . . . . . . . . . . . 34 29. DEFAULT WAIVER......................................34 30. INTEGRATION..........................................35 31. PUBLIC ACCOMMODATION................................35 32. TIME IS OF THE ESSENCE..............................35 33. MINERAL RIGHTS......................................35 ii HB —171— Item 10. - 23 LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND AMERICAN GOLF CORPORATION FOR THE PROPERTY KNOWN AS THE MEADOWLARK GOLF COURSE THIS LEASE AGREEMENT is made and entered into this (aday of�g 1992, by and between the CITY OF HUNTINGTON BEACH, a municipal corporation, hereinafter referred to as "LESSOR", and AMERICAN GOLF CORPORATION, a California corpora- tion, hereinafter referred to as "LESSEE". WHEREAS, LESSOR owns certain real property (hereinafter referred to as "Premises"), in the City of Huntington Beach, and LESSEE desires to lease said PREMISES for the use and purposes set forth below, and LESSOR and LESSEE had previously entered into that certain lease for the same Premises effective as of January 1, 1975 (Previous Lease), and the parties now wish to terminate such Previous Lease and replace it with this new Lease, NOW, THEREFORE, the parties covenant and agree as follows: MWEEFWWR•► We mu; LESSOR hereby leases to LESSEE that certain real property located in the City of Huntington Beach, County of Orange, State of California, and more particularly described in the attached Exhibit "A" and incorporated herein by this reference, commonly known as Meadowlark Golf Course for all purposes, along with all easements, covenants, water well rights and other appurtenant rights associated therewith (collectively, the "Real Property") together with the improvements constructed 9 on or to be constructed on the Real Property (the "Improvements") Item 10. - 24 xB -172- and the property described in Residential Rental Agreement, Exhibit "B" attached hereto and incorporated herein by this reference. The Real Property and the Improvements are hereinafter collectively referred to as.the "Leased Premises". MMIUSTOT : ii MAli e pin Wa 214 LESSEE agrees it will use the Leased Premises exclu- sively for the operation of a public golf course and other activ- ities customarily associated with or incidental to the operation of a public golf course, including without limitation, sale or rental of golf -related merchandise at a golf professional's shop, furnishing of ,lessons by a golf professional, operation of a driving range, and sales of food and both alcoholic and non- alcoholic beverages. LESSEE shall not use the Leased Premises for any unlaw- ful purpose and shall comply with all laws, rules and regula- tions, zoning and licensing regulations applicable to the Leased Premises or the businesses conducted on the Leased Premises. Subject only to the terms of this Lease, so long as LESSEE complies with each and all of its obligations under this Lease, LESSOR shall secure to LESSEE the quiet and peaceful enjoyment of the Leased Premises and the sole and exclusive possession of the Leased Premises without objection or inter- ference from LESSOR or any party claiming under LESSOR. r. _ . - The PREVIOUS LEASE between the parties is hereby 2 h1B -173- Item 10. - 25 terminated as of the commencement date of the new Term herein set forth below. The term of this Lease ("Term") shall be for twenty-five (25) years, beginning on the first day of the calendar month six (6) months following the date of approval by City Council. Provided that LESSEE -is not in default pursuant to Section 25.1 of this Lease, LESSEE shall have the option to re- quest to extend the Term of the Lease for an additional period of ten (10) years, and LESSEE shall provide written notice to LESSOR of LESSEE's request for such extension at least eighteen (18) months prior to the expiration of the initial term of the Lease. LESSOR shall determine if LESSEE is in default pursuant to Section 25.1 and, if not, grant the extension within ninety (90) days of receipt. of such request. If Lease is extended, all terms and conditions of this Lease shall continue to be applicable,. unless it is mutually agreed to change any term or condition. :v ►� aY This Agreement is subject to termination by LESSOR under Sections 25.1, 25.2 and 29 hereof. 6. ICE YEAR DEFINED A "Lease Year" is that period of twelve (12) consecu- tive calendar months beginning with the first month of the Lease as defined in Section 4 and each anniversary thereof during the Term. The Lease Year may be changed by written agreement of the parties. If this Lease is terminated prior to the end of a Lease Year, minimum rent for such partial year shall be prorated based on the number of days in such partial year. Each Lease Year will 3 Item 10. - 26 HB -1 74- constitute a separate accounting period for the purpose of computing "Percentage Rent" (as hereinafter defined), and gross revenue for any Lease Year shall not be carried forward or backward into any other Lease Year. 7.1 LE SOR's Obligations. The obligations identified in this subsection 7.1 shall be referred hereafter as "LESSOR's Obligations." LESSOR shall provide to LESSEE possession of the Leased Premises and LESSOR shall perform, secure and/or provide each'and all of the following: a) Approval of all plans and specifications sub- mitted to LESSOR from LESSEE that meet city code requirements; b) All necessary building permits upon payment of fees by LESSEE; c) At the point of current connection, all required utilities, including without limitation, if available, gas, electricity, water, sewer, storm drain- and fire -hydrants. a)• Required Improvements. The obligations identified in this subsection 7.2 (a) shall be referred to as "LESSEE's Required Improvements." LESSEE shall construct the following improvements within the first two years of the Lease Term at an approximate minimum investment including design, engineering, consulting, permits and licenses, supervision and management, fixtures, equipment, and all direct and indirect construction costs of Three Million Two Hundred Thousand ($3,200,000) Dollars: 4 xB -175- Item 10. - 27 Golf Course I. Design and implementation of new and/or re- placement of waterwise irrigation system that will hookup to reclaimed water system. LESSEE shall meet all federal, state and local requirements for hook- up to such system no later than six (6) months from LESSOR notification of availability of such water. Ii. Lake lining and drainage improvements III. Fencing IV. Tee work V. Cart paths Driving Range I. 61 stalls w/mats Ii. Two tiers III. New lighting IV. New netting V. Synthetic target mounds .VI. Deeper hitting area Maintenance Building I. Meet all Cal -OS -HA requirements Ii. Fenced for security III. Proper chemical storage Clubhouse I. New building/coffee shop/lounge Ii. Banquet room III. Golf shop IV. Cart storage for 85 carts b) LESSEE shall obtain all necessary environ- mental studies, mitigations, and permits, such as an environ- mental impact report or negative declaration; c) Mutually approved changes to or substitutions for LESSEE's Required Improvements shall be in writing and signed by both parties; d) LESSEE shall make all improvements required by this Lease in compliance with the right-of-way for Graham'Street. LESSOR may, at its option, choose to improve Graham Street at any time during the term of this Lease. If LESSOR so chooses to improve Graham Street, LESSOR shall be responsible for all costs of such -improvements., Item 10. - 28 HB -176- es Additional Improvements. Subject to written approval of LESSOR, LESSEE may elect to construct certain addi- tional facilities which are compatible with the LESSEE's Required Improvements and which provide additional city approved services for the Leased Premises. f) The period for construction of the improve- ments described in this section 7.2 shall be extended by the period of any delay caused by inclement weather or other acts of God, shortage of materials or supplies, labor strike or walkout, delay in obtaining permits, licenses, or approvals from govern- mental agencies, or any other force majeure event not within the control of LESSEE. Upon the occurrence of any of these events, LESSEE shall provide written notice to LESSOR of the occurrence of such event and the length of the delay caused by such event. w s w t 'J F-i I - t s -. • s a) Schematic Plans. LESSEE will submit schematic plans for improvements of the golf course to LESSOR not later than sixty (60) days following execution of this Lease for LESSOR's approval.. LESSOR's response to the schematic plans, including any recommendations .for change, is to be submitted to LESSEE not later than thirty (30) days following LESSOR's receipt of the schematic.plans. b? Development Plan and Final Construction Plans. Within one hundred twenty (120) days following approval of LESSEE's schematic plans, LESSEE shall submit to LESSOR a devel- opment plan, final construction.plans, and specifications for R h-B -177- Item 10. - 29 LESSOR's approval, subject to city review which may include Com- munity Services Commission, Planning Commission, or City Council. LESSOR shall make every effort to expedite the approval process. c) "As Built" Plans. Within sixty (60) days following completion of LESSEE's Required Improvements, LESSEE shall furnish LESSOR a complete set of reproducibles and three sets of prints of mylar "as built" plans. 7.4 ConstrUction. Promptly following LESSOR's approv- al. -of the development plan and final construction plans and issu- ance of necessary permits, LESSEE shall commence LESSEE's Re- quired Improvements and construction of any Optional Improvements in accordance with the Approved Plans. LESSEE shall substantial- ly comply with the Approved Plans unless a change order or alter— ation. is otherwise approved in advance by LESSOR. LESSOR shall have the right to inspect all construction for the purpose of confirming that LESSEE is adhering to the Approved Plans, pro- vided that LESSOR's failure to so discover or object to construc- tion that does not adhere to the Approved Plans shall not be con- strued to constitute a waiver by LESSOR of the requirement that such construction be in accordance with the Approved Plans. LESSEE shall also construct or cause to be constructed upon the Leased Premises all lines, structures and facilities required in order to provide the Leased Premises with all necessary utility services and drainage. ai Mechanics Liens or Stop -Notices. LESSEE shall at all times indemnify and hold LESSOR harmless from all claims 7 Item 10. - 30 xB -178- for labor and materials in connection with the construction, repair, alteration or installation of structures, improvements, equipment or facilities upon the Leased Premises by LESSEE and from cost of defending against such claims, including reasonable attorney fees. In the event a lien or stop -notice is imposed upon Leased Premises as a result of such construction, repair, alteration or installation, LESSEE shall, within thirty (30) days after notice of the filing of such lien or stop -notice, either: i) Record a valid release of lien; or ii) Procure and record a bond in accordance with Section 3143 of the California Civil code, which frees the Leased Premises from the claim of the lien or stop -notice and from any action brought to foreclose the lien. 7.5 LESSERI cz AGcti-it'ance of completion. Prior to LESSEE signing a construction contract and commencement of construction, LESSEE shall furnish LESSOR suitable evidence of money available, approved as to form by the -City -Attorney, in an amount of not less than Three Million Two Hundred Thousand ($3,200,000) Dollars in order to complete LESSEE' s`Required Improvements in the form of one of the following: a) A performance bond containing the provisions of a labor and material bond supplied by LESSEE's contractor or contractors, provided said bonds are issued jointly to LESSEE and LESSOR as obligees; or b) An irrevocable letter of credit, in an amount HB -179- Item 10. - 31 not less than Three Million Two Hundred Thousand ($3,200,000) Dollars; or c) A certified letter from a qualified bank certifying that it is holding funds in an amount of not less than Three Million Two Hundred ($3,200,000) Dollars which will be released to LESSEE solely for the construction of LESSEE's Required Improvements. d) Cash deposited in an escrow acceptable to LESSOR, with interest to accrue to LESSEE, but with instructions to the escrow agent to the effect that until construction is completed, funds deposited in escrow may not be released or pledged without LESSOR's written approval; or any combination of the above. e) All bonds and letters of credit must be issued by a company qualified to do business in the State of California. • � ! � � • Its • fi i a) All buildings, improvements and facilities, other than personal property, placed upon the Leased Premises by LESSEE, shall become.'LESSOR's, property upon the termination of the Lease Agreement. b) The parties acknowledge and agree that LESSEE owns for leases from third parties other than LESSOR) all personal property located on the Leased Premises or used in connection with the operation, maintenance, or improvement of the Leased Premises and that LESSOR has no present or future right or interest in such personal property. Within 30 days after the Item 10. - 32 xB -1 s0- expiration of this Lease, LESSEE shall remove all such personal property from the Leased Premises. c) Upon completion of the improvements and annually thereafter, LESSOR and LESSEE will jointly prepare a complete inventory of all items located upon the Leased Premises (form attached), and shall distinguish each item as to whether it shall be considered real or personal property for purposes of this Lease. This list and any additions will be used as a guideline in determining ownership upon termination of the Lease. 8. EENT X In addition to the rent specified in Exhibit "B", LESSEE shall pay an annual rent in an amount that will be the greater of either (i) the minimum rental payment.as set forth below, or (ii) a rent based upon percentages of gross revenue as set forth below. 8.1 Minimum Rent. LESSEE will pay to LESSOR an annual minimum rent thirty (30) days in arrears in equal monthly installments on the following schedule: Years 1-2. $175,000.00 ($14,583.33 per month) Years 3-10 $300,000.00 ($25,000.00 per month) Years 11-18 $500,000.00 ($41,666.67 per month) Years 19-25 75% of the average of actual percentage rent during Years 11-18 Option Period 75% of the average of actual percentage rent during Years 19-25 8.2 Parc ne tag Rant. In any Lease -Year in which the amount of Percentage Rent set forth below exceeds the Minimum Rent specified in subsection 8.1, LESSEE shall pay to LESSOR Percentage Rent based upon the following formula: 10 HB_l8l_ Item 10. - 33 Years 1-2 Five percent (5%) of gross revenue from greens fees, cart rentals, driving range fees; Four percent (4%) of sales of the golf pro- fessional's shop; Ten percent (10%) of food and beverage sales, including liquor; and Twenty-five percent (25%) of non-food, banquet room rentals. Years 3-10 Nine percent (9%) of gross revenue from greens fees, cart rentals, driving range fees; Four percent ( 4 % ) of sales of the golf pro- . fessional's shop; Ten percent (10%) of food and beverage sales, including liquor; and Twenty-five percent (25%) of non-food, banquet room rentals. Years 11-18 Eighteen percent (18%) of gross revenue from greens fees, cart rentals, driving range fees; Four percent (4%) of sales of the golf pro- fessional's shop; Ten percent (10%) of food and beverage sales, including liquor; and. Twenty-five percent (25%) of non-food, banquet room rentals. Years 19-25 Twenty-five percent (25%) of gross revenue from greens fees, cart rentals, driving range fees; Four percent (4%)of sales of the golf pro- fessional's shop; Ten percent (10%) of food and beverage sales, including liquor; and Twenty-five.percent (25%) of non-food, banquet room rentals. Option Period Twenty-five percent (25%) of gross revenue from greens,fees, cart rentals, driving range fees; Four percent (4%)of sales of the golfpro- fessional's shop; Ten percent (10%) of food and beverage sales, including liquor; and Twenty-five percent (25%) of non-food, banquet room rentals.. 8.3 Date Payment Charge. If any payment of rent or any other sum due is not received on or postmarked as of the due date, a late charge.of ten percent (10%) of the payment due will 11 Item 10. - 34 HB -1822- be added to the payment obligation and the total sum shall be immediately -due and payable to LESSOR. An additional charge of ten percent (10%) of said payment, excluding late charges, shall accrue for each additional month that said payment remains unpaid; provided, however, that in the event that LESSEE contests the obligation to pay a sum allegedly due and it is ultimately determined that the sum is not owed, LESSEE shall not be required to pay late charges pursuant to this subsection. For purposes of calculating Percentage Rent, gross revenue shall mean all money received by LESSEE as a result of the sale of merchandise or the provision of services on the Leased Premises, but shall not include: customers; (a) Cash refunds or credits allowed on returns by (b) Sales taxes, excise taxes, and similar taxes now or later imposed upon the sale of goods, merchandise or services and paid by LESSEE to the appropriate taxing authority, whether added to or included in the sales price; (c) Fees charged -for golf lessons and. instructions; (d) The actual uncollectible amount of any check or draft received by LESSEE as payment for goods or services and• returned to LESSEE from a customer's bank as being uncollectible (commonly "non -sufficient funds" checks), but only after LESSEE has made a reasonable effort to collect on the check; (e) The actual uncollectible amount of any charge or 12 HB -183- Item 10. - 35 account (commonly "bad debts") incurred by LESSEE for the sale of merchandise or services; provided, however, that the charge or account was extended to the customer by LESSEE, and that reason- able efforts to collect said charge or account have been made; (f) The actual uncollectible amount of any sale of merchandise or services for which LESSEE accepted a credit card; provided, however, that LESSEE has made reasonable efforts to collect the debt after being notified by the issuing bank of the invalidity or uncollectibility of the charge; (g) Interest or other charges paid by customers for extension of credit; (h) Sales made by any concessionaire or licensee of LESSOR, it being the intention of this Lease that only LESSEE's share of the receipts of such concessionaires or licensees, if and to the extent actually received by LESSEE, are to be included in the calculation of LESSEE's gross revenue; (i) Sales or trade-ins of machinery, vehicles, trade fixtures or personal property used in connection with LESSEE's operation of the Leased Premises; (j) The value of any merchandise, supplies or equip- ment exchanged or transferred from or to other locations of bus- iness of LESSEE where such exchange or transfer is not made for the purpose of avoiding a sale which would otherwise be made from or at the Leased.Premises; (k) Receipts in the form of refunds from or the value of merchandise, supplies or equipment returned to shippers, 13 Item 10. - 36 HB -184- suppliers or manufacturers; (1) The amount of any cash or quantity discounts received from sellers, suppliers or manufacturers; (m) The amount of any gratuities paid or given by customers to or for employees of LESSEE; (n) Receipts from the sales of uniforms or clothing required to be worn by employees; (o) Amounts attributed.to meals served or provided to employees of LESSEE; (p) Receipts from the sale of waste or scrap materials resulting from LESSEE's operations; and (q) Amounts attributable to play by members of the American Golf Club exercising their membership right to play not more than two (2) rounds per year without separate payment of greens fees not to exceed 300 total rounds per year. FF#IIMF-.T We i Within thirty (30-) days following the end of each Lease Month, LESSEE will submit to LESSOR a statement signed by LESSEE or a person authorized by LESSEE showing, in reasonable detail acceptable to LESSOR, the amount and types of gross revenue for the year to date, and a remittance, if appropriate, of the amount by which the Percentage Rent for such year to date exceeds the Minimum Rent. LESSEE agrees to maintain its financial records per- taining to the operation of the Leased Premises for a period of 14 HB -185- Item 10. - 37 four (4) years after the conclusion of any Lease Year and further agrees that such financial records shall be open and available to LESSOR or LESSOR's representative for an examination at all reasonable times during business hours. LESSOR shall give LESSEE notice of such examination at least forty-eight (48) hours before LESSOR intends to conduct such examination. LESSOR shall be entitled at any time within four (4) years. after the conclusion of a Lease Year to question the sufficiency of any rent payments or the accuracy of the report furnished by LESSEE. At the end of each Lease Year, LESSEE shall submit an annual statement of gross receipts pursuant to Section 9, certi- fied as correct by LESSEE. LESSOR may, at its option, require an outside audit of LESSEE's financial reporting. LESSOR shall pay I for such outside audit unless such audit shows that LESSEE under- reported applicable income by an amount of five percent (5%) or greater. If such under -reporting is determined by outside audit, LESSEE shall immediately reimburse LESSOR with the determined amount of under -payment, plus the cost of the outside audit that determined such under -payment. a s. •.s r i Pursuant to this Lease, LESSEE shall provide the serv- ices and operate Meadowlark Golf Course facilities as follows: 12.1 Management. LESSEE agrees to operate and manage the golf course facilities and services offered in a high quality manner and shall maintain the Leased Premises in accordance with the minimum maintenance standards as listed in the attached 15 Item 10. - 38 HB -186- Exhibit C and incorporated herein by this reference. LESSEE agrees it shall provide an overall standard of service at least equal to a "B" or better rating as described in the monthly course evaluation report (Exhibit D), with no single category maintained below a "C". in the event the evaluation report indicates that the M premises do not meet the minimum rating requirements set forth in Section 12.1 above, the Director shall so indicate by a detailed, itemized list of all items that need to be corrected, improved, or repaired on the "Evaluation Form". The Evaluation Form shall serve as the LESSOR'S written notice pursuant to Section 25.1 b). Director and LESSEE shall meet and discuss the monthly Evaluation Form., and shall, in good faith, attempt to agree upon the steps .LESSEE shall take to correct, improve, or repair the items in- cluded on the Evaluation Form and the time schedule for doing so. Except as provided below, LESSEE shall have sixty (60) days after receipt of the monthly Evaluation Form to correct, improve, or repair each of the items on the Form, provided that if any ,item cannot be corrected, improved, or repaired in such period, LESSEE shall have such additional time as reasonably necessary to com- plete such correction, improvement, or repair so -long as LESSEE is diligently proceeding with such correction, improvement, or repair ("Correction Period"). In the event LESSEE disagrees with anything on the monthly Evaluation Form or LESSOR and LESSEE disagree as to whether an item has been properly corrected, improved, or repaired, then the parties agree that the matter in lb xB -187- . Item 10. - 39 disagreement shall be submitted for resolution to the Greens Section of the United States Golf Association, or any other person or entity agreed to by the parties, and the parties shall abide by the recommendation of such person or entity. The Correction Period shall be stayed during the period of time that an item is being disputed by either party and is being considered - by the Greens Section of the United States Golf Association or such other person or entity agreed to by the parties. The parties acknowledge and understand that the purpose of the monthly evaluation reports is to determine whether LESSEE is in compliance with Section 12..1 of this Lease and to identify those areas, if any, which LESSEE needs to correct, improve, or repair in order to be in compliance with Section 12.1. The par- ties further acknowledge and understand that. the Director's de- termination whether the quality standards set forth in Exhibit D have been satisfied and, if not, the number of points that should be deducted for failing to meet these standards is subjective in nature, and LESSOR hereby agrees that Director shall act reason- ably and in good faith in making such determinations. 12.2 Hours of Operation. Subject to LESSOR's approval, LESSEE will establish hours of operation for the golf course facilities that shall meet the public demand for said facilities. 12.3 LPL 'sRmp oyeen.• LESSEE will ensure that its employees shall -at all times conduct themselves in a creditable manner. LESSEE will maintain a staff adequate to operate and 17 Item 10. - 40 xs -188- administer all facilities located on the Leased Premises in meeting standards set forth in the attached Exhibit C. 12.4 11rpSs and conduct Standard.. LESSEE shall set dress and conduct standards, with LESSOR`s approval, and shall be permitted to deny permission to play to anyone who fails to con- form to standards. LESSEE shall have the right to refuse admis- sion to persons who are drunk, disorderly, under the influence of drugs, or who conduct themselves in a manner that may result in injury or harm to themselves, other persons or property on the premises. 12.5 Merchandise and Ewipmen_. LESSOR retains the right to require LESSEE to refrain from sale or use of items that are of substandard quality as determined by LESSOR in the -.exer- cise -of LESSOR`s reasonable judgment. 12.6 Tournaments. LESSOR. shall have the right two (2) times during each calendar year to schedule a tournament or tour- naments. LESSEE and LESSOR will agree in advance, once a year, on the dates for such tournaments. Tournament participants will be given special rates as mutually agreed for golf tournament fees. 12.7 Charity ToLrn men . One of the two times per year, LESSOR will,have the right to organize and conduct a tournament at no charge for greens fees or equipment rentals which shall be for the purpose of raising money for City of Huntington Beach charities that will be mutually agreed to by LESSOR and LESSEE. 18 xB -I s1)- Item 10. - 41 12.8 Rate Schedules. Prior to March 1 of each year, LESSEE shall provide to LESSOR a schedule of rates for green fees, golf cart rental, and driving range use for the ensuing year. LESSEE hereby agrees that the rates for green fees, golf cart rental, and driving range will be based on rates charged for similar golf courses in Los Angeles and Orange Counties. If there is a dispute regarding fees and rates, both parties agree to meet and confer in good faith to resolve any dispute. 13. TAXES is not the intent of the parties that this Lease create a posses - spry interest subject to taxation; provided, however, that if this Lease should create a possessory interest in LESSEE which is subject to taxation, LESSEE agrees to pay such taxes prior to delinquency, which is not a waiver of the right to protest. LESSEE will have the right to contest the validity or amount of possessory interest taxes by means of appropriate proceedings diligently pursued at LESSEE's sole expense. LESSEE agrees that, upon final determination of liability, it will promptly pay the amount of taxes found owing, along .with any interest, penalties or cost that may result from LESSEE's contest. Director will cooperate with LESSEE in any such contest of the validity or amount of such taxes, provided that LESSOR is not required to incur any cost or expense as a result of such cooperation. 13.2 other Taxes. LESSEE shall pay before they become delinquent, all real property taxes, or possessory interest taxes 19 Item 10. - 42 xB - 1 90- and assessments levied or assessed against the Premises by any governmental agency, including any special assessments imposed on or against the Premises for the construction or improvement of public works, in, on, or about the premises. 14. UTILITIES LESSEE will pay, before delinquency, all charges for utilities, including electricity, gas, heating, cooling, tele- phone and water, used by LESSEE on the Leased Premises. LESSEE shall pay all charges for groundwater produced from water wells used and operated by LESSEE. Said charges shall include fees, assessments and other charges assessed or imposed on the City of Huntington Beach by the Orange County Water District, Metropoli- tan Water District or any other agency for groundwater extracted by the LESSEE. All charges shall be paid to the city before de- linquency by LESSEE as invoiced. It shall be the responsibility of LESSEE to contact LESSOR's Water operations Manager at least annually to discuss any charges that may be forthcoming. yt'�i u l Unless made on an emergency basis to prevent injury to person or property, LESSEE will submit plans for any alteration or addition with a value of more than Ten Thousand ($10,000) Dollars, to LESSOR for LESSOR's prior approval, such approval not to be unreasonably withheld -or delayed. LESSEE shall not have the right to create or permit the creation of any lien attaching to LESSOR's interest in the Leased Premises as a result of any construction of capital improvements. 20 HB -191- Item 10. - 43 Starting in the first year, LESSEE will begin a major renovation and modernization program as set forth in Section 7.2. Work shall be paid for and performed by LESSEE. As indicated in Section 8.2, the percentage rent has been decreased in years 1 through 10 to compensate LESSEE for the capital improvements. If LESSEE's Required Improvements are not constructed pursuant to Section 7.2, then LESSOR shall have the option either to cancel the Lease or to unilaterally change the percentage rent for Lease Years 1-10 to the percentages which apply for Lease Years 11-18. LESSEE acknowledges it is acquiring the Leased Premises in their current "as is" condition. 16.1 T.F9.gFF'a Obligations. LESSEE assumes sole re- sponsibility for maintenance and repair of the Leased Premises and LESSEE will maintain the Leased Premises in good order and in sanitary and safe condition at LESSEE's sole expense. LESSEE agrees it will maintain the Leased Premises in conformance with maintenance standards set in Exhibit C, subject to monthly performance evaluations as set forth in Exhibit D. FREFAMIMS ••. •► LESSOR recognizes and acknowledges that LESSEE will need the assistance and cooperation of Director in order to properly perform and fulfill LESSEE's covenants and obligations under this Lease. Therefore, LESSOR agrees Director will assist in securing for LESSEE, as needed, all permits or licenses that are within the jurisdiction and authority of LESSOR's various 21 Item 10. - 44 HB -192- departments, agencies officers, boards or councils, and that are required in order for LESSEE to fulfill its obligations under this Lease. LESSOR agrees Director will designate a specific staff person having appropriate experience and authority whose responsibility it is to work with LESSEE in assisting LESSEE to obtain the full cooperation and assistance of Director, subject to the terms of this Lease and all applicable laws. 17.1 Tnitial Trnnrovement Phase. During the improve- ment phases, Director's agent shall organize meetings with all appropriate agencies for the purpose of acquiring design and construction information; facilitate the submitting and securing of the necessary planning approvals, grading permits, and build- ing permits; and shall aid in developing alternative solutions to issues raised in the planning and plan check phases. WMEN ai ��_ !i ! �• ! �G;id LESSEE agrees to indemnify and save harmless LESSOR, its officers and employees against any and all claims by or on behalf of any person or persons, firm or firms, corporation or corporations, arising from the conduct or management of LESSEE or from any work or thing whatsoever done in or about the Leased Premises or any buildings and improvements thereon during the term of the Lease, and will further indemnify and save LESSOR harmless against any and all claims arising during the term of the Lease from any conditions of the buildings on the Leased Premises or from any activity on the Leased Premises which affects any street, curb or sidewalk adjoining the Leased Prem- 22 HB -19' Item 10. - 45 ices or any vaults, passageways or spaces therein or appurtenant thereto, or arising from any breach or default on the part of LESSEE in the performance of any covenant or agreement on the part of LESSEE to be performed,.pursuant to the terms of this Lease, or arising from any act of negligence of LESSEE, or any of its agents, contractors, servants, employees or licensees, or arising from any accident, injury or damage whatsoever caused to any person, firm or corporation occurring during the term of this Lease, in or about the Leased Premises or any buildings and improvements thereon, or upon or under the sidewalks and the land adjacent thereto and related to any activity on the Leased Premises, and from and against all costs, counsel fees, expenses and liabilities incurred in or on account of any such claim or action or proceeding brought thereon; and in case any action or proceeding be brought against LESSOR by reason of any such claim, LESSEE, upon notice from LESSOR, covenants to resist or defend such action or proceeding by counsel reasonably satisfactory to. LESSOR. LESSEE will conduct all defense at its sole cost and expense. Any costs of defense or attorney's fees incurred by LESSOR in enforcing this obligation will be reimbursed to LESSOR by LESSEE or may be awarded' to LESSOR -by a court of competent jurisdiction as costs pursuant to California Code. of CiMi l Procedure Sec. 1021. LESSEE' s. obligations under this Section 18 shall not apply to any claims, liabilities, costs and expenses resulting from the sole negligence or willful misconduct of LESSOR or LESSOR'S employees or agents. 23 Item 10. - 46 HB -194- Pursuant to California Labor Cade Sec. 1861, LESSEE acknowledges awareness of Section 3700 et seq. of said code, which requires every employer to be insured against liability for Workers' Compensation; LESSEE covenants that it will comply with such provisions prior to commencing performance of the work hereunder. LESSEE shall maintain such Workers' Compensation Insurance in an amount of not less than Five Hundred Thousand ($500,000) Dollars bodily injury by accident, each accident, Five Hundred Thousand ($500,000) Dollars bodily injury by disease, each employee, and One Million ($1,000,000) Dollars bodily injury by disease, policy limit, at all times incident hereto, in forms and underwritten by insurance companies satisfactory to LESSOR; and LESSEE shall, prior to the commencement of this Agreement, furnish to LESSOR, on a form approved by the City Attorney, a certificate evidencing such insurance; said certificate shall include a provision that the insurer shall notify LESSOR at least thirty (30) days prior to.any cancellation or modification of said insurance policy; and LESSEE shall notify LESSOR at least thirty (30) days prior to any cancellation or modification of such policy. Said insurance shall not derogate from the provi- sion for indemnification of LESSOR by LESSEE under Section 18 of this agreement. 20. INSURANCE In addition to LESSEE's covenant to indemnify LESSOR, 24 HB -195- Item 10. - 47 LESSEE shall obtain and furnish to LESSOR, the following certifi- cates of insurance for the following policies: 20.1 General Tjability Insurance. A policy of general liability insurance, including coverage for bodily injury, prop- erty damage, products/completed operations, and blanket contrac- tual liability. Said insurance shall also include automotive bodily injury and property damage liability insurance. All insurance shall be underwritten by insurance companies in forms satisfactory to LESSOR for all operations, subcontract work, contractual obligations, product or completed operations and all owned vehicles and non -owned vehicles. Said insurance shall name the LESSOR, its officers, agents and employees and all public agencies as determined by the LESSOR as Additional Insureds.. LESSEE shall subscribe for and maintain said insurance policies in full force and effect during the life of this Agreement, in an amount of not less than One Million ($1,000,000) Dollars combined single limit coverage. If coverage is provided under a form which includes a designated general aggregate limit, such limit shall be no less than twice the per occurrence limit. In the event of aggregate coverage, LESSEE shall immediately notify. LESSOR. of any known depletion of limits. LESSEE shall require its insurer to waive its subrogation rights against LESSOR and agrees to provide certificates evidencing the same. 20.2 FAQ Tnsuranne. LESSEE shall maintain in force during the term of this Agreement, a standard broad form fire insurance policy for full replacement of the structure itself, in 25 Item 10. - 48 xB -196- which the LESSOR is named as loss payee. The face amount of said policy shall be equal to the full replacement value of the structure itself. LESSOR may, upon thirty (30) days written notice to LESSEE, require said fire insurance coverage to be increased by an amount determined by LESSOR. Prior to the commencement of this Agreement, LESSEE shall furnish to LESSOR certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages; said certificates shall provide the name and policy number of each carrier and policy, and shall state that the policy is currently in force and will not be cancelled without thirty (30) days written notice to LESSOR. LESSEE shall maintain the foregoing insurance coverages in force during the entire term of this Agreement unless waived in writing by the LESSOR's Risk Manager. The requirement for carrying the foregoing insurance shall not derogate from the provisions for indemnification of LESSOR by LESSEE under Section 18 of this Agreement. LESSOR or its representatives shall at all times have the right to inspect the original or a copy of all said policies of insurance. LESSEE shall pay, in a prompt and timely manner, the premiums on all insurance hereinabove required. The parties acknowledge and agree that any insurance maintained by LESSEE pursuant to this Lease may contain deductible provisions and self-insurance or self -assumption provisions up to $250,000 per occurrence or such greater amount as the parties may approve in writing. 26 NR -197- Item 10. - 49 if the,buildings or other improvements on the Leased Premises, should be partially damaged or totally destroyed by fire, storm, earthquake, or other casualty not caused by negli- gence of LESSOR, LESSEE will repair, reconstruct or replace the buildings, improvements or personal property to a condition as nearly similar as possible. In performing such repairs, recon- struction, or replacement, LESSEE shall not be obligated to - expend more than the amount of insurance proceeds received by LESSEE. If the parties should decide among themselves that reconstruction or replacement is not warranted, this Lease shall terminate without further obligation on the.part of either party, and all insurance proceeds for personal property shall be kept by LESSEE. All fixed assets proceeds shall be kept by LESSOR. 21.1 Rental Abate ent and Tern Extension. If LESSEE is unable to use all or a significant portion of the Leased Premises during repair, reconstruction or replacement as provided for in this section, LESSEE's rental obligations. under Section 8.1 during the period of repair, reconstruction, or replacement shall only be percentage rent (and not the greater of minimum rent or percentage rent). The term of this Lease shall also be extended for a period equivalent to the length of time needed for LESSEE to restore the Leased Premises for LESSEE's use pursuant to Section 2 of this Lease. WMENT40"awkv M 1163 NA ez If at any time during the term of this Lease, title to 27 Item 10. - 50 HB -199- all or substantially all of the Leased Premises shall be taken by condemnation or by right of eminent domain, this Lease shall terminate on the date of such taking and all rental payments already made shall be apportioned as of the date of the taking. For purposes of this section, substantially all of the Leased Premises shall be deemed to have been taken if that portion of the Leased Premises not taken cannot be economically utilized by LESSEE for those purposes permitted under Section 2 of this Lease. In the event that title to less than all or substan- tially all of the Leased Premises is taken by condemnation or by right of eminent domain, this Lease shall not terminate, but the minimum rent due during the remainder of the Lease Term shall be reduced as of the date of such partial taking in proportion to the extent LESSEE`s operation of the Leased Premises pursuant to Section 2 of this Lease is affected by the partial taking. If there is a taking by condemnation or right of eminent domain, the award shall belong to and be paid to LESSOR, except that LESSEE shall receive from the award a sum attribu- table to the value of LESSEE`s leasehold estate, including without limitation any improvements constructed by LESSEE. 23. FRUSTRATION Off' PURPOSE At any time during the term of this Lease, if the governing body of any political subdivision having competent jurisdiction over the Leased Premises should enact any valid zoning ordinance, law or regulation which prohibits the use of m HB -199- Item 10. - 51 y the whole or a substantial part of the Leased Premises for the purposes as provided in Section 2 of this Lease, or if an event of force majeure occurs, including without limitation, declared or undeclared war, sabotage, riot or other acts of civil diso- bedience, acts of government, labor disputes, shortages of fuel, accidents, fires, explosions, floods, earthquakes, or other acts of God, which substantially prevents LESSEE's fulfillment of its obligations as provided for in Section 2 of this Lease, it is agreed that LESSEE may elect, within one hundred twenty (120) days after the effective date of such ordinance, law., regulation or the occurrence of the event of force majeure, to cancel this Lease and surrender possession of the Leased Premises. Any such cancellation and surrender will act to release and discharge LESSEE from any further obligation under this Lease. 24. ASST ,ATM N Except as otherwise provided below, LESSEE shall not assign this Lease or sublet all or part of the Leased Premises without the prior written consent of LESSOR and such consent shall not be unreasonably withheld. LESSEE shall notify LESSOR of any proposed assignment'or subletting at least sixty (60) days prior to the proposed effective date of such assignment or sub- letting. In the event that any such assignment or subletting is approved by LESSOR, the assignee or sublessee shall agree in writing to be bound by all of the covenants of this Lease required of LESSEE. 29 Item 10. - 52 HB -200- C. Clean Up Debris. Remove all litter and debris from golf course and especially around walls and fences. Empty trash receptacles daily, repair and replace as necessary. D. Maintain Water Fonntains. Maintain and clean all ex- terior water fountains and repair all leaks and clog daily. E. Clean Parking Lot. Remove all debris and litter from parking lot and sweep parking lot not less than three (3) times per week. Repaint and replace signs in parking lot. F. Maintain F n Pand Pence Lines. Periodically inspect and repair the fence and fence lines within and around the golf course including, but not limited to, those fences designed to control the flight of golf balls. XI I. maintain calf carts A... Clean and _hPnk 02ra i!anof Carts. After the golf carts are returned -from use, remove all trash and litter, and wash the carts to remove dirt, mud and grass. Check operating condition of the carts. B. Bacharge Batteries. Recharge batteries to electri- cally power golf carts through two, 18-hole rounds of golf.. C. Cart _,Maintenance. Repair and adjust golf carts to maintain in good operating condition. �Li xB -201- Item 10. - 53 `s EXHIBIT "D" CITY OF HUNTINGTON BEACH MEADOWLARK GOLF COURSE EVALUATION REPORT AMERICAN GOLF CORPORATION MONTH YEAR TODAY'S DATE INSPECTED BY SUMMARY SHEET MAINTENANCE INSPECTION OPERATIONAL INSPECTION POINTS AREA AVAILABLE EARNED GREENS 120 TEES 80 FAIRWAYS & ROUGHS 80 IRRIGATION SYSTEM 50 DRIVING RANGE 120 LAKES 45 TREES & SHRUBS 40 CART PATHS 70 ENTRANCE & PWING LOT 80 MAINT. EMPLOYEES 25 MAINT. SHOP & EQUIP. 60 FENCES 50 SUB -TOTAL $20 COMMENTS PERCENTAGE RATING 98 - 100 A 95-97 A- 90 - 94 S + 85 - 89 B 80 - 84 B- 77 - 79 C+ 74-76 C 70 - 73 C- 0-69 D POINTS AREA AVAILABLE EARNED GOLF SHOP 125 CARTS 80 CLUBHOUSE 170 FOOD & BEVERAGE 200 RESTROOMS 100 SUS -TOTAL 675 i1.fltitiiYft.ill!l4F*(fif{#f ff•i(f•R i.*f•M•*f if f• TOTAL POINTS EARNED PERCENTAGE % RATING The percentage is determined by dividing the total points earned by the total points available 1495. RECEIVED BY AMERICAN GOLF DATE Item 10. - 54 HB -202- GREENS QUALITY STANDARD: Smooth, uniform turf, firm but not hard, well defined, consistent, and of suitable speed. Cups placed in accordance with USGA recommendations. Rag sticks are of good quelity, standing straight, and are uniform on all greens. 1. QUALITY AND PLAYABILITY 100% Turf cover, smooth and uniform POINTS texture. Greens hold approach shots. Cups are out cleanly and in proper location. Generly free of AVAILABLE EARNED woods, insects, or rodents. 60 2. APPEARANCE Turf uniform in color POINTS and in mowing direction. Collars and aprons out to AVAILABLE EARNED maintenance standard. 40 3. SAND TRAPS Sand surface is uniform POINTS and smoothly raked and is of adequate depth AVAILABLE EARNED for play. Sand is silica, washed plaster, or nursery 20 grade sand. Traps are edged, genearlly free of weeds, rocks, or debris in traps. Rakes are adequate in number and in good condition. Traps are uniform throughout the course. TOTAL POINTS AVAILABLE 120 TOTAL POINTS EARNED COMMENTS: TEES QUALITY STANDARD: Tees are completely turfed, smooth, level, and firm. Tees drain well with no mud buildup. Tee amenities including, trash cans, signs, tee markers, ball washers, towels, and benches are in good condition and repair. Tees are consistent throughout the course. 1. TEE QUALITY 100% Turf cover with POINTS smooth level surface. Generrlly free of weeds, AVAILABLE EARNED disease, or rodents. Uniform mowing, adequate top 5Q dressing and seeding program is evident. 2. PERIMETER AREAS AROUND TEES Area between cartpath and POINTS tees is uniformly mowed and smoothly turfed. AVAILABLE EARNED Generally free of identifiable traffic 30 pattern into tees, and mud or hard dirt areas. Ballwashers are clean and filled with water. Towels are in good condition, benches are in good condition, and signs are clear and in good condition. All surrounding landscape is in good condition and adequately planted. TOTAL POINTS AVAILABLE $0 TOTAL POINTS EARNED COMMENTS: HB _2 0' Item 10. - 55 FAIRWAYS AND ROUE DRIVING RANGE QUALITY STANDARD: Fairways are smooth with a uniform turf cover. Turf is firm, but not hard. Well defined, and properly supports the ball for play. Rough properly mowed to specification height which is distinct in height from fairways. 1. QUALITY AND PLAYABILITY 100% turf cover, smooth and POINTS uniform texture. Fairway turf properly supports AVAILABLE EARNED the ball for play. Genearily free of diseases, weeds, or rodents. s0 2. APPEARANCE Fairways have been mown POINTS consistently throughout the course. Turf is uniform AVAILABLE EARNED in height and color with the appearance of being manicured. Fairways easily distinguishable from roughs. 30 TOTAL POINTS AVAILABLE 80 TOTAL POINTS EARNED COMMENTS: IRRIGATION SYSTEMS QUALITY STANDARD: Even, adequate, uniform irrigation coverage throughout the entire facility. Sprinkler heads and valve boxes. level with grade and trimmed for clearance. No broken heads, valves, or lines are in evidence. 1. IRRIGATION SYSTEM Course shows good irrigation, POINTS neither too wet or too dry. Low spots are filled. AVAILABLE EARNED Irrigation does not throw on drinking fountains. 50 TOTAL POINTS AVAILABLE 50 TOTAL POINTS EARNED COMMENTS: 1. LANDING AREA Surface is smooth and uniform. Artificial greens clearly identified. 2. TEE LINE - TURF AREA Turf area is smooth and uniform. There is evidence of ongoing top dressing and overseeding. 3. TEE LINE - MATS All mats are in good, usable condition. Holes, rips, or tears are repaired. Concrete pad is clean and edged, no cracks, lightly abrasive. 4. PERIMETER AREAS Geneadly clean around driving area. Benches are clean and in good repair. Buckets with water are placed in strategic positions. Fences are in good repair. Lighting is adequate and all bulbs are working. Flags for distancesare clearly marked. Directions for use signs are clearly visible and in good condition. 5. RANGE BALLS POINTS AVAILABLE EARNED 10 POINTS AVAILABLE EARNED 20 POINTS AVAILABLE EARNED 20 POINTS AVAILABLE EARNED 50 Range balls are in good POINTS condition. Not smooth or cracked. Balls are AVAILABLE EARNED clean and in plentiful supply. 20 TOTAL POINTS AVAILABLE 120 TOTAL POINTS EARNED COMMENTS: Item 10. - 56 HB -204- LAKE AREAS QUALITY STANDARD: Lakes are clean, free of weeds and other growth. Shorelines are well defined and attractive. Lakes are free of litter and debris. Lakes are suitable for wildlife habitat. 1. APPEARANCE Water is genearily clean POINTS of weeds or other growth, foul order, or floating AVAILABLE EARNED litter or debris. Banks are trimmed. 15 2. PERIMETER AREA Ground around lakes and streams POINTS is mown, trimmed, and has a smooth and clean surface. AVAILABLE EARNED Geneadly free of debris. 20 3. SUPPORT EQUIPMENT Pumps and aerators are POINTS operating smoothly and properly. All lake equipment AVAILABLE EARNED is in good condition and properly maintained. 10 TOTAL POINTS AVAILABLE 45 TOTAL POINTS EARNED COMMENTS: TREES AND SHRUBS QUALITY STANDARD: Trees and scrubs are maintained in •a safe, healthy, structurally sound and aesthetically pleasing condition. 1. PRUNING Trees and scrubs are pruned POINTS to maintain cart, mower, and pedestrian traffic clearance AVAILABLE EARNED for a minimum of 7 feaL.• All automobile, service, and delivery traffic areas pruned to a minimum of 14 feet. 40 Tree basis are neat clean and clear of stumps or down limbs. OTAL POINTS AVAILABLE 40 TOTAL POINTS EARNED CART PATHS QUALITY STANDARD: Smooth surface no raised concrete or asphalt surfaces. Curbs properly edged. Paths free of weeds and debris. 1. QUALITY Condition is smooth POINTS with cracks, holes, or breaks repaired. AVAILABLE EARNED 30 2. TRAFFIC CONTROL Ropes, stakes, and other POINTS traffic control devices are clean, in good condition AVAILABLE EARNED and repaired as necessary. 20 3. PERIMETER AREAS Routes used by golf carts POINTS are well maintained and genearily free of pot holes AVAILABLE EARNED and present a clean appearance. 20 TOTAL POINTS AVAILABLE 70 TOTAL POINTS EARNED COMMENTS: ENTRANCE AREA AND PARKING LOTS QUALITY STANDARD: Entry area is attractively landscaped and well maintained. Parking lot has good traffic flow and directional signs Surface is dean and smooth, genearily free of pot holes, cracks or excessive wear. Stripping is bright and clearly evident. Entrance signs are clearly visible and in good condition. 1. ENTRANCE AREA AND SIGNS Entrance area is attractively POINTS landscaped. All planter areas have healthy plant material AVAILABLE EARNED and are free from weeds and debris. 40 Directional signs are in good operational condition and are informative and attractive. 3. PARKING LOTS Parking lot surface is clean and POINTS smooth genearily free of pot holes, or signs of excessive wear. AVAILABLE EARNED Stripping is bright and clear. . 40 TOTAL POINTS AVAILABLE 80 TOTAL POINTS EARNED COMMENTS: COMMENTS: xB -205- Item 10. - 57 .� MAINTENANCE EMPLOYL . -QUALITY STANDARD: Golf course superintendent has proper education background and license. Maintenance crews are sufficient in number and wear appropriate clothing and shoes. 1. QUALIFICATIONS Golf course superintendent POINTS is class A qualified. All required licenses for AVAILABLE EARNED chemical handling are obtained. 10 2. QUANTITY The number of maintenance POINTS crew is sufficient to maintain the course per AVAILABLE EARNED the specifications. 10 3. DRESS AND CONDUCT All maintenance crew POINTS wear appropriate clothing and shoes. All crew AVAILABLE EARNED are courteous and trained in their area of responsibility. 5 TOTAL POINTS AVAILABLE 25 TOTAL POINTS EARNED COMMENTS: MAINTENANCE SHOP AND EQUIPMENT QUALITY STANDARD: Shop area is clean and orderly with no obvious safety hazards. Chemical storage is well organized and done according to local and state law. Equipment is in good repair, building is in good repair. 1. BUILDING AREA Maintenance building POINTS area is clean and neat. Walls are painted, storage AVAILABLE EARNED areas are secured, building is propedy maintained. 40 2. EQUIPMENT Equipment is in good repair POINTS clean and properly maintained. Equipment meets all AVAILABLE EARNED OSHA requirements. 20 TOTAL POINTS AVAILABLE 60 TOTAL POINTS EARNED COMMENTS: FENCES QUALITY STANDARD: Perimeter and protective fences are free of holes, splits and are stretched to original design. Support posts are in place, straight and properly anchored. Fence lines are maintained clean and clear of weeds or other growth. 1. FENCE CONDITION All fences and screens POINTS are geneadly free of holes, tears, and splits. AVAILABLE EARNED Support posts are in place and tied tightly to all fence material. 50 TOTAL POINTS AVAILABLE 50 TOTAL POINTS EARNED _ COMMENTS: GOLF SHOP QUALITY STANDARD: Golf shop is clean and in good repair. Staff is courteous, all signs clearly marked, ample merchandise, floor and Window coverings clean and looking new. Storage areas well maintained. Bulletins boards well organized. 1. OPERATIONS Staff is courteous POINTS and responsive to public. Staff is dressed in AVAILABLE EARNED appropriate attire with a clean and neat appearance. All required signs are prominently displayed and contain correct information. Starter operations are in compliance with specifications. Merchandise displays are amply supplied with prices clearly marked. Exterior and interior walls, Windows, and ceilings are well maintained and in good repair. 125 TOTAL POINTS AVAILABLE 125 TOTAL POINTS EARNED COMMENTS: Item 10. - 58 xB -206- CARTS `QUALITY STANDARD: Carts are sufficient in number to meet customer demand. Seats are in good repair. Floor mats are clean. Carts work properly. Cart storage area is clean and orderly. Carts are clear of trash and graffiti. 1. APPEARANCE Carts are clean and in POINTS good repair. Graffiti is removed. AVAILABLE EARNED Mats are clean. Beg holders, roofs, and tires all in good condition. 40 2. QUANTITY Carts are provided in sufficient POINTS quantity to meet public demand. Check in, check out easily AVAILABLE EARNED done by customers. 20 3. STORAGE AREA Storage area used for cart storage only. Area is clean and neat. Carts are being maintained at a level that insures good service. Area meets all OSHA requirements. POINTS AVAILABLE EARNED 20 i OTAL POINTS AVAILABLE 80 TOTAL POINTS EARNED COMMENTS CLUBHOUSE QUALITY STANDARD: Clubhouse is well maintained, obviously in excellent condition. Exterior and interior surfaces well maintained, ell signs are in good condition. Walkways are clean and edged. All equipment well maintained. Ail window and floor coverings in good condition. Office areas well organized and clean. 1. QUALITY AND APPEARANCE All areas of clubhouse POINTS operations are in good condition and properly maintained. AVAILABLE EARNED All surfaces are painted, well and window coverings clean and new looking. All equipment well maintained. Employee areas clean and organized. All operations are done according to health dept. requirements and city codes. 170 TOTAL POINTS AVAILABLE 170 TOTAL POINTS EARNED COMMENTS: FOOD AND BEVERAGE QUALITY STANDARD: Ail restaurant and snack bar operations are of the highest quality. Bar operations are well maintained. All kitchen areas meet or exceed health department requirements. Food service operations are well organized. Staffing is adequate to minimize customer wait. Menu variety is adequate to please customers and presented in an attractive manner. 1. OPERATIONS Food is we€i prepared POINTS and served attractively. Both snack bar and AVAILABLE EARNED restaurant service operate adequate hours as posted. Adequate staff to maintain excellent service is provided. Bar area is attractive, serving of alcoholic beverages meet all code requirements. Kitchen area meets all health department and local code requirements. 200 TOTAL POINTS AVAILABLE 200 TOTAL POINTS EARNED COMMENTS: NR -207- Item 10. - 59 RESTROOMS { QUALITY STANDARD: Restrooms are continually cleaned and well maintained. All fixtures properly work. Interior and exterior are properly clean and painted. Restrooms are attractive to the public. 1. WOMEN'S RESTROOM Entry mats or carpet POINTS clean, entry door fingermark free, file AVAILABLE and painted wall clean toilets clean: bowls, rims, tank tops, and bodies, clean toilet.seats, tops and under sides, mirrors clean and streak free, soap dispenser clean and full, paper towel dispenser clean and full, toilet paper dispenser clean and full, counter top clean, ashtrays emptied and washed, sink and faucet fixtures clean and scoured, light fixtures clean, functional and bug free, room air freshener clean and functional, trash receptacle: clean and liner, reasonably empty, napkin receptacles clean with liner, interior recently swept and washed, exterior of building clean, cobweb free, grass trimmed. 50 2. MEN'S RESTROOM Entry mats or carpet POINTS clean, entry door fingermark free, file AVAILABLE and painted wall clean toilets clean: bowls, rims, tank tops, and bodies, clean toilet seats, tops and under sides, mirrors clean and streak free, soap dispenser clean and full, paper towel dispenser clean and full, toilet paper dispenser clean and full, counter top clean, ashtrays emptied and washed, sink and faucet fixtures clean and scoured, light fixtures clean, functional and bug free, room air freshener clean and functional, trash receptacle: clean and finer, reasonably empty, interior recently swept and washed, exterior of building clean, cobweb free, grass trimmed. 50 TOTAL POINTS AVAILABLE 100 TOTAL POINTS EARNED COMMENTS: EARNED EARNED 'CORRECTION LIST ITEM AGREED UPON ACTION AND TIMELINE DIRECTOR AMERICAN GOLF DATE: Item 10. - 60 xB -208- 24.1 Right of First Refusal. In the event that prior to the stated expiration date of the Lease Term, LESSEE should elect to assign all of its interest in this Lease pursuant to the provisions of Section 24 above, LESSEE shall submit the proposed terms and conditions of any such assignment in writing to LESSOR and LESSOR shall then have the right, to be exercised by means of a written notice delivered to LESSEE no later than sixty (60) days following LESSOR's receipt of LESSEE's initial notice, to terminate this Lease and operate the Leased Premises itself, or to assign LESSEE's interest in the Lease to another third -party lessee of LESSOR's choosing. Should LESSOR exercise this right of first refusal, such exercise shall serve to release LESSEE from all further liability under this Lease other than for events Which may have occurred during the term of LESSEE's operation of the Leased Premises. The following conditions will constitute a breach of this Lease and a default thereunder: 25.1 Conditions of Default a) If LESSEE fails to pay rent, any assessed late fees, or fulfill any other monetary obligation of LESSEE to LESSOR, and LESSEE fails to cure such monetary default within ten (10) days after written notice from LESSOR to LESSEE of such monetary default. b) if either party fails to perform any of its other non -monetary obligations under this Lease when due or 30 xB -209- Item 10. - 61 called for, and the party in default fails to cure such non- monetary default within sixty (60) days after written notice from the non -defaulting party of such non -monetary default; provided, however, that if the nature of the non -monetary default is the result of a force majeure occurrence or is otherwise of a nature such that it cannot be fully cured within that sixty (60) day period, the party in default shall have such additional time as is reasonably necessary to cure the default so long as the party in default is proceeding diligently to complete the necessary cure after service of notice by the non -defaulting party. c) If LESSEE shall be adjudged bankrupt, or.a receiver be appointed for LESSEE's property, or if LESSEE's interest in this Lease shall pass by operation of law to any person other than LESSEE and such adjudication, appointment or order is not vacated, dismissed, or set aside within one hundred twenty (120) days from its entry. 25.2 Remedies of LESSOR. Without waiving any remedies, LESSOR may, in the event of a default by LESSEE, at LESSOR's option: a) Continue this -Lease in effect without term- inating LESSEE's right to possession, even if LESSEE has breached this Lease and abandoned the Leased Premises, and enforce all 'of LESSOR's rights and remedies under this Lease, including the right to recover, by suit orotherwise, all sums and installments required to be paid in accordance with the provisions of this Lease, or other monetary performance as it becomes due hereunder, 31 Item 10. - 62 HB -210- or to enforce, by suit or otherwise any other term or provision hereof on the part of LESSEE required to be performed; provided, however, that LESSOR may, at any time thereafter, elect to term- inate this Lease for such previous uncured breach by notifying LESSEE, in writing, that LESSEE's right to possession of the Leased Premises has been terminated; or b) Immediately terminate LESSEE's right to possession of the Leased Premises and repossess the same by summary proceedings or appropriate action, and LESSOR shall thereupon be entitled to receive from LESSEE the following: i) The worth, at the time of the award, of the unpaid rent that had been earned at the time of termination of this Lease; ii) The worth, at the time of the award of the amount by which the unpaid rent that would have been earned after the date of termination of this Lease until the time of award exceeds the amount of the loss of rent that LESSEE proves could have been reasonably avoided; and iii) The worth, at the time of the award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of the loss of rent that LESSEE proves could have been reasonably avoided; and iv) "The worth at the time of the award", as used.in Sections 25o2(b)(i) and 25.2(b)(ii) is to be computed by allowing interest at the rate of ten percent (100) per annume "The worth, at the time of the award", as referred to in Section CIE Hs -211- Item 10. - 63 25.2(b)(iii), is to be computed by discounting the amount at the discount rate of ten percent (10%) per annum. 25.3 Tnterest and Attorneys'Feea. If either party at any time by reason of the other party's default pays any sum or does any act that requires the payment of any sum, the sum paid by the non -defaulting party shall be immediately due and owing by the defaulting party to non -defaulting party at the time the sum is paid and, if repaid at a later date, shall bear interest at the rate of ten percent (10%) per annum from the date the sum is paid by the non -defaulting party until the non - defaulting party is reimbursed by the defaulting party. All notices, demands, requests or replies required or permitted by this Lease shall be in writing and may be delivered by any one of the following methods: (1) by personal delivery; (2) by deposit with the United States Postal Service, certified or registered mail, return receipt requested prepaid to the addresses stated below; (3) by prepaid messenger; or (4) by deposit with an overnight express delivery. Notice deposited with the United States Postal Service in the manner described above shall be deemed effective three (3) business days after deposit with the Postal Service. Notice by telegram or overnight express delivery service shall be deemed effective one (1) business day after transmission to the telegraph company or after deposit with the express delivery service. Notice by personal delivery shall be deemed effective at the time of such delivery. 33 Ttem 1 n_ - 64 HB -212- For purposes of notice, demand, request, reply or payment, the address of LESSOR shall be: Community Services Department Director City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 The address of the LESSEE shall be: American Golf Corporation 1633 Twenty -Sixth Street Santa Monica, CA 90404-4024 Attention: Legal Department Each party shall have the right to designate a differ- ent address within the United States of America by the giving of notice in conformity with this section. This Lease and the rights and liabilities of the parties to the Lease shall be governed by the laws of the State of California. If any provision of this Lease is invalidated by judicial decision or statutory enactment, the invalidity of any such provision will not affect the validity of any other pro- vision of the Lease.. Captions in this Lease are included for convenience only and are not to be taken into consideration in any construction or interpretation of this Lease ar any of its provisions. • .c LESSOR's failure to act on any default on the part of LESSEE shall not be construed as a waiver thereof, nor shall any 34 T R _21 Item 10. - 65 custom or practice that may exist between the parties in the course of'administering this Agreement be construed to waive any provision thereof. This Lease represents the entire agreement between the parties regarding Meadowlark Golf Course, and supersedes and replaces that certain Lease dated October 21, 1974 between LESSOR and LESSEE. All exhibits attached to this Lease are hereby made a part of and incorporated into this Lease. No previous agree- ment or understanding, verbal or written, of the parties or any of their agents shall be binding or enforceable. 01�20301416WASMGN LESSEE agrees not to discriminate against any person or class of persons by reason of race, color, creed or national origin in the use of the Leased Premises. LESSEE shall make its accommodations and services available to the public on fair and reasonable terms without unjust discrimination on the basis of race, creed, color or national origin. Time is of the essence of this Lease Agreement. Sub -surface mineral rights to the demised premises, in- cluding a right to construct and maintain one or more drilling sites, have been reserved to LESSOR'S predecessors in title. LESSEE agrees to permit reasonable ingress and egress to said drilling sites by the holders of said rights. 35 Tfnm 10 - AA LT-D 71 A - i IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their authorized officers on the date above written. LESSOR: CITY OF HUNTINGTON BEACH, a munici al corporation Mayor ATTEST: City Clerk REVIEWED AND APPROVED: LESSEE: AMERICAN GOLF CORPORATION, a California orp ration e By: ZC4.4 Grai`=Price W. l Its: !Xecut' --.V' e President By: w d R. Sause Its: Chief Finance Officer APPROVED AS TO F �pg�yCity At o ey INITIATED eANDPPROVED: Co unit ervices Director HB -21 5- Item 10. 67 EXHIBIT A Parcel 1: The southwest quarter of the southeast quarter and the south two-thirds of the west half of the northwest quarter of the southeast quarter of Section 21, Township 5 south, Range 11 west, in the Rancho La Bolsa Chica, City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 51 Page 13 of Miscellaneous Maps, in the office of the County Recorder of said County. Parcel 2: The east half of the northwest quarter of the southeast quarter and the west half of the northeast quarter of the southeast quarter of Section 21, Township 5 south, Range 11 West, in the Rancho La Bolsa Chica, City of Huntington Beach, County of Orange, State of California, as per map recorded in Book 51 Page 13 of Miscellaneous Maps, in the office of the County Recorder of said County. Except the north 447.30 feet of the east 427.00 feet of said west half. Parcel 3: The northwest quarter of the southeast quarter or the south- east quarter -of Section 21, Township 5 south, Range.11 west, In the Rancho La Bola& Chica, City of Huntington Beach, County•cf•Orange, State of California as per map recorded in Book 51 Page 13 of Miscellaneous Maps, in the office of the County Recorder of said County. Parcel -4: That portion of Block 4 of Tract No. 86 in the City of Huntington Beach, County of Orange, State of California as per Map recorded.in Book 10 Pages 35 and 36 of Miscellaneous Maps,..in the office of the -County Recorder of said County, described as follows: Beginning at a point on the north and south quarter section line -of Section 2-1 Township 5 south, Range 11 west, south 00 46' 30' east 60LO-74 feet from the center of said section, said point being the southeast corner of -the land described;: .in the deed to Cyril B. Bell et ux, recorded November 23, 1946 in Book 1504 Page 195 of Official Records; thence south 89k 36' 00" west 580.8.0. feet along the southerly line of said land and the westerly prolongation thereof; thence south 0.0 46' 30" 'y0 Item 10. - 68 xs -216- 1 ' AMtFiti.:HN 1a L l.V sr r+ni+vw � �� RhOton.10111ca: i % � �gK TtAL—&{ENT%1L AG�{EEkiY Ag 19400 Fasi MOUnta taw rive Yorba Linda, California 92686 (Mont ' i Month Tenancy) ` THIS 19 INTENDEO TO BE A LEGALLY 13INniN.d AGREEMENT - READ IT.CAREFUI CALIFORNIA AB=IATION Df 111ALTORI O STANDARD FORM }1}64ingt:on'Beach California June' 10' Y ens. 1. L&WICird rorin to Tenant and Tortant biros from Landlord those promises described act._ _ 0 6 @88 MANAGEMENT . 1g88..- Landlord, attd Tenant, agree at follows: •fRi,t�l�j.'am•I,jy t2aaicit�nra� ,gasherwlsh $ i 1 iurnwrts,endap tlorecas,tlany,arsdtixturca:811 rsprrtnan r_the S , {Lre inc],udinp out hullait` lu rY tzarages' 0mv.1 "ba chown on ExhlNt A artsched herato"and attach the exhibit U die flat k exmersstved 2. The term shell commence on April 1, 19 88 , and shall continue from month to nonth. Thit rental agreement may brs torminated at any time by either party by giving written notice 30 dasyys in odvarsca. Tanent ingress to pay S 350.00 rant per month payable in advance on tits f1rst day of each nonth and $ �, rapresentl,7 rotated rant from data of possession. 3, The tent shall be paid at CitV Hall, City of Huntington Beach, 2000 Main, P .O. BOx 190, HB , CA 92648. it at any addrets designated by the Landlord In wilting. 4. 2 .0 as security has been deposited. Landlord may.use therefrom such amounts as are reasonably necessary to remedy Tonenes defaults in the payment of rent, to repair damages canted by,Tagi nt,'and to clean the pramites it nacatsovy upon tssmination of tenancy. ti used toward tent or damages during the term tit tenancy, Tenant ogsees to reinstato told total seeurftY deposit upon Ilya deys written notice delivered to Tenant in parson or by malting, Security dapoVt of:.batetice Vistoof, if any; itpttsor with on Itotntted soeoundria. thell-be mailed to Tenant at last known address within 14 days of surrender of lximlees. fi. Tongnt-ogroet to pay for all utiiitkt and services based upon occupancy of the premises and Clio following cherget: Any and all taxes if any except _ _None which shalt be pail for by Landlord. e. Tonord has examined the.promites.and, all furniture, furnishings and appliances. It any, ern! fixtures contained therein, and accepts the am* as being clean. In good order, condition, and repair, with the following exceptions: , Any and all colt of rep -airs to 7. The".0romitas are rented Aor useas a reaidance by the toi�idwtng narsed�,erwrts: 'Judy Picconi and s amity, No animal, bled, or pot except shall be kept •ore or about Cho promises without Landlord's p� feet writ ten content. 8. Tenant shall not disturb, annoy, endanger or interfere with other Tenants of the building or neighbors, not use the promise's for any url-wing pulpotas. nor violate "lower ordinance, not commit waste or nultance upon of about the premises., '. Tenant agrees to comply with all reasonable rules or regulations posted on the premises or delivered to Tenant by Landlord. .0. Tonant.thsii keep the promises And furniture, furnithingt.and aplillancet,31 any, and fixtures. which are rented for hit excluslye tilt in good ordet arxf condition and pay for any repairs to the property caused by•Tenant's.negligence or misuse or that of Tenant's Invitees, Landlord shall otherwise maintain the property. Tenant's personal property Is not Insured by Landlord. 11. Tenant shaft not paint, wallpaper, nor make alterations to the property without: Landlord'& prior written consent. tt. Upon not last than 24 hours exdvertee rsotdee, Tenant shall make the demised promises available during nnm,el buslness hours to Landlord or his authorized agent or representative, for the purpose of entering (a) to make necessary agreed repairs, decorations, altetations. or Improvements or to supply necessary or agreed sarvicet, and (b) to show the promises to prospective or actual purchasstt, mottgageas, tenants, workman of contractors. in an emergency, Landlord, his agent or authorised topresentative may enter the premises it any time witttaut saeu0ng.prior parmitilon from Tenant tot the purpose of moking corrections or topalrs to alleviate such esnergsney, 13. Tenant shalt not lot or subht•alt or any part of the pterritses nor assign this Agreement or any Interest In it without the prior written consent of Landlord, 14, if -Tenant obendont or vacates the promises, Landlord may at hit option terminate Chit epreement, and regain possession In the msnnu orxoGrJbod by low. 15. lf'riny.lagal action or proeeoding be brought by sillier party to enforce any part of this agreement, the prevailing potty shall rocoyor Irl addition to all other relief, reasonable attotney's feet and costs. 1fl. Time is of the essence, The waiver by Larxilord or Tenant of any breech shill not be cousiruod to be a continuing waiver of any tubsocttsan! braactt. 17. Notica .upon Tenant shaft be served as provided by law. Notice upon Landlord may be served upon Manager of the demised premises Dan M. Brennan, Real Property Manager At City Hall (Address as above) Said Manager is muthatir;d to accept service on behalf of Letxiloid 111. Within 10 days after written notice, Tenant agrees to execule and deliver a certificate as wtsmitted by Landlord acksxtwletlgim that We agreement is.unmodlfled and in full force and effect of In full force and affect as modilled anti sletissg the modifications. Failure to compli shall be doomed Tenant's acknowledgtment that the certificate as submitted by Landlord Is true rod correct and may be r_liad upon by ens' tender of putchosat:' _ 19. In the event rent is not paid with in five (5) days ifter'due date; Tenant agrees to pay a late charge of $..:... Tenant agrees further to pay $...... ., for each dishonored bank check. 20. The undersigned Tenant acknowledges having read the foregoing prior to execution and receipt'cf a copy hereof. 21:"{SEE NOTE ON REVERSE) PLEASE SIGN AND RETURN City .of Huntington Beach, a municipal corporation At'1EF2ICAI3 GOLF CtlRPORAfiIisl by Dan II, Brennan, Real Property Manager �v,;•• o^ •� Tenant )—Ken Dav3_ • .. ., Tenant r t? Aff'RIIIiANTATION fA MADI Aft TO (tiff± 1,11CIA1, VA4101TY Of ANY PROVISION bli"fillil At FULIAoY OF ANY PnOVISION ' 4-ANY SPECIFIC, TRANSACTION. XREAL ESTATE BROKER IS THE PERSON QUALIFIED TO ADVISE ON REAL ESTATE. IF. nU DESIRE LEGAL ADVICE CONSULT YOUR ATTORNEY. Item 10. - 69 ATTACHMENT: 21. The future rental schedule will be as follows - `1st year - .April 1st 1988 through March 31st.1989 will be $350.00/per mo. 2nd year - April lst 1989 through March 31st•1990 will be $500.00/per mo. 3rd year - April 1st 1990 through March 31st 1991 will be $650.00/per mo. 4th year - April 1st 1991 through March 31st 1992 will be $800.00/per mo. Each year thereafter starting April 1st 1992 the rents will be increased in the amount of 7% of the previous years monthly rental amount, example 5th year amount of _$855.00/per mo. etc. These yearly increases of 7% will continue until the term of the present lease the, City has with American Golf Corporation or their Successors. TEliLINT By: Ken Davidson LANDLORD TENANT } p t d r rtjcyra"rAe p .i rz `f 1? f 20' l 0 2. L / TtPm 10 _ 70 r -' �l �l HB -218- east 300.00 feet; thence north 89° 36' 00" east 580.80 feet to said north and south quarter section line; thence north 00 46' 30" Kest 300.00 feet -to the point of beginning. Parcel 6: That portion of Block 4 of Tract No. 86 in the City of Huntington Beach, .County of Orange, State of California, as per map recorded in Book 10 Pages 35 and 36 of Miscellaneous Maps, in the office of the County Recorder of said County described as follows: Beginning at the southwest corner of the land described as Parcel 1 in the deed to Edmund J. Newbegin et ux, recorded October 3, 1947 in Book 1567 gage 91 of Official Records; thence north 010 46' 30" west 300.00 feet; thence south 89* 36' 00" west 82.10 feet to the west line of said block; thence south VOL 46" 30" east 300.00 feet along said west line to the northwest corner of the land described in the deed to Qloria.Ampolilla et al, recorded July 36, 1959 in Book 4818 Page 497 of official Records; thence north 89a- 361 00" east 82.10 feet to the point of beginning. 2. HB -219- 111 Item 10. - 71 EXHIBIT "C" MAINTENANCE STANDARDS Meadowlark Golf Course City of Huntington Beach I. Maintain Greens A. Prej2are Greens for Daily nse. On a daily basis, change cup location and repair ball marks, divots and other damage. B. Mow Greens. Maw to maintain a grass height of not less than 1/8 inch and not more than 1/4 inch. Vertical mow at least twice monthly from February to November. C. Aerify Greene. Aerify greens at least twice per year with the plugs removed the same day. D. Tondress Greens. After vertical mowing and aerifying, a good quality, medium grade nursery sand with particle size of approximately 2.0 mm shall be brushed into the surface of the green. E. Herbicide and Peat Control. As turf and weather con- ditions dictate, apply herbicides, pesticides and preemergent herbicides to the greens. F. Q3ZargeeA VZrppng. Overseed greens as weather Bondi tions dictate. After overseeding a preventive program of fungicide application shall be followed. Prior to.overseeding, greens to be aerified and vertically mowed. Item 10. - 72 xB -220- A. Set; Up Tees. On a daily basis, move and/or replace tee markers, tee benches and ball washers for proper teeing and wearing of turf. Keep ball washers filled to proper level with water plus an appropriate cleaning agent. Tee towels to be changed weekly. B. PP -pair Areas. Overseed and topdress or resod worn and damaged tee areas with the same type of turf grass. C. Maw Tee Areas. Mow tee areas to maintain a grass height of 1/2 inch or less. Vertical mow as necessary for thatch removal. D. Ai5�rifzv T _ a. Two ( 2 ) times per year, aerify the tee areas and topdress with good duality, medium grade nursery sand. E. Ear_i]i a Tee Aromas. Apply eight (8) to twelve (12) pounds of actual nitrogen for every thousand (1,000) square feet of turf per year in a manner to provide uniform growth. Four (4) pounds of nitrogen shall be supplied through the -application of a N-P-K formulation of approximately a 4-1-2 ratio. F. BRrhiaid and 2&-a - on _ral. Asturf and weather con- ditions dictate, apply herbicides, pesticides and preemergent herbicides to tees. G. Qv raaad and Topes^ gs T as. areas are to be overseeded and topdressed. fungicidal treatment prior to overseeding. Monthly, the turf Apply a preventive 2 HB -221- Item 10. - 73 III. Maintain Eairways A. Repair Turf Area. Overseed worn and damaged turf areas with the same type of turf grass. 0 B. Mow Turf Areas. Mow as necessary to maintain a grass height of 1/2 inch to 3/4 inch in fairway and 3/4 inch to 1 1/2 inches in roughs. Contour mow as --to master plan of fairways and roughs at the golf courses. Vertical mow as necessary to prevent mat or thatch buildup. a year. C. AQrfy Turf Ar _• s. Aerify turf areas three ( 3 ) times t D. Fertilize Tnrf Areag. Apply six (6) pounds of actual nitrogen for every thousand (1,000) square feet of turf per year in a manner to provide uniform growth of turf. Two (2) pounds of nitrogen shall be supplied through the application of a fertilizer with N-F-K formulation of approximately a 4-1-2 ratio. Aerification shall precede fertilization each time. E. $farbi,t-i-g- and Peat Control. As turf, and weather con- ditions dictate, apply herbicides, pesticides and preemergent herbicides to the.fairways. M - • • • • \ ' .A. Maintain sod Areas. Maintain and mow sod of the same type of grass and soil condition as used for the tees and greens. B. ReplacSod. • After removal of sod, replace the proper soil and reseed the area. 3 Item 10. - 74 HB -222- V. EdgE Ali sidewalks, curbs, parkways, walkways, driveways, parking lots and cart paths are to be edged at least once per week. Valve boxes, meter boxes, backflow preventers and other structures are to be edged or trimmed regularly. A. Remove weeds. Periodically remove weeds from water areas. B. Check and Maintain ter s. vel. Periodically check water level and fill or drain the water areas as necessary. C. Cantrg2l Alga. Establish a regular program to control the growth of algae. VII . Maintain Sand Tr,aya A. Ed= sand Tra32s. As necessary, edge sand traps to maintain a neat lip. B. Hake and. Cam Trio Rake traps daily, eliminate weeds and fall traps with fresh sand as necessary to maintain at least a four (4) inch depth in bottom and on slopes, replace rakes as necessary. Sand to be. of a dust -free type. VIII. jrrigat6 and Maintain Irrigation systems neces- sary, determine soil texture, porosity, water holding capacity, drainage, compaction, precipitation rate, runoff, infiltration rate, percolation rate, evapotranspiration, seasonal temperatures, prevailing wind conditions, time of day or night, type of grass plant and root structure. 4 HB _221;_ Item 10. - 75 e B. Trr-ga Co r_cLe. Irrigate all turf areas, trees and planting areas to maintain adequate moisture for healthy growth. Every effort should be made to employ water conservation practices without compromising the level of maintenance. 1. inspect operating Condition. On a daily basis, inspect and test irrigation systems including controllers, heads, valves and lines. 2. Corrent or Repair T r3 gation System. On a daily basis, adjust sprinklerheads and controllers, unplug clogged heads, remove obstacles and flush lines to insure proper operating conditions. IX. Ma i nta i n Traes, Sb rubs and Ground Cover A. Prune Trgp. Trim and prune trees to maintain safe vehicular and pedestrian clearance and visibility, to prevent or eliminate hazardous situations and to maintain playable standards. B. Repair Damaged TrPeG. Mayor and minor damage to trees shall be remedied as directed by, Project Manager. Damage occurring from either spray drift or lateral leaching shall be corrected and the soil conditioned to ensure its ability to support -plant life. C. Plant New Trees. Any new trees or replacement trees shall be planted in accordance with the policy of one for one. Replacement trees shall be acceptable trees for the situation and, if possible, a minimum of a 24" box. 5 Item 10. - 76 xB -224- D. Stake Trees. All newly planted trees shall be staked as necessary for protection. The stakes used to secure the tree shall be checked frequently and either retied to prevent girdling or removed along with the stakes when no longer required. E. Rest Control. Control insects, disease and other pests as necessary to maintain healthy and attractive trees, shrubs and ground cover. E. Clean op Dbr's. Pick up and remove all trash and debris such as paper, drinking cans, bottles, fallen limbs and leaves. G. Remove Weeds. Periodically remove weeds and grass from shrubs and ground cover areas and edge planting areas. H. Brune Shrubs. Prune shrubs to protect from wind and insect damage and to maintain appropriate appearance. g. Re-movai_ of pad Plants. All dead, diseased, damaged and .unsightly branches, vines, plants, spent flowers and blooms or other growth shall be removed and replaced with the same type of plant or plant material, if possible, or with similar plants approved by the city.. X. Maintain Rest Rooms A. Cl^-an Rppt Rooms. on a daily basis, clean, disinfect, deodorize and free of deposits the floors, floor drains, wash basins, piping, toilets, toilet seats, walls and partitions around the toilets, urinals, mirrors, and supplies dispensers. xB -225- Item 10. - 77 on.a weekly basis, clean, disinfect, deodorize and free of deposits the walls and ceiling. B. Replenish SupplieA. On a daily basis, replenish the rest room supplies including all paper supplies and cleaning materials. C. Empty Trash. Empty, clean and disinfect trash recep- tacles prior to opening the golf course each day. D. Remove Graffiti. Repaint to matching surface or scrub off graffiti on all interior and exterior surfaces on a daily basis. E. Check Lighting. Check daily to ensure that all inter - for and exterior lighting fixtures and lights are in good con- dition and operable. Replace light bulbs or tubes as necessary. F. Maintain S rvctures. As necessary, maintain and repair walls, ceilings, roofs, floors,.daors and partitions.of structures. G. Repair T oaks and el ngn.. On a daily basis, repair all leaking fixtures, stopped -up or damaged basins, toilets and urinals and all clogged drains. XI. Mn i jtain Nonttrf Areas A. Ma'n a'nCart-Paths. Maintain cart paths in a -smooth, clear, clean and safe condition and repair damaged concrete, asphalt.or ruts. B. Maintain Drainage Lines. Inspect, clean and deweed all surface flow lines, barranca channels, catch basins and other drainage structures. 7 Item 10. - 78 HB -226- REAL & PERSONAL PROPERTY LIST MEADOWLARK GOLF COURSE Year CITY AMER/GOLF 79 EXHIBIT B SUBLEASE I. Sublease Agreement, dated April 17, 2008, by and between American Golf Corporation, as sublandlord, and CLP Meadowlark Golf, LLC. Consent to Assignment of Lease —Meadowlark 10 09146251161524115913847 Item 10. - 80 HB -2228- OFFICIAL BUSINESS Document entitled to free recording per Government Code Sections 6103 and 27383 Recording Requested By: The City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: City Clerk SPACE ABOVE THIS LINE FOR RECORDER'S USE CONSENT TO SUBLEASE THIS CONSENT TO SUBLEASE (hereinafter "Agreement") is made this 7th day of April , 2008, by and between THE CITY OF HUNTINGTON BEACH ("City"), under the Lease described below, and (a) AMERICAN GOLF CORPORATION, a California corporation, the Lessee under the Lease (the "Lessee"), (b) CNL INCOME EAGL MEADOWLARK, LLC, a Delaware limited liability company, as subtenant (the "Subtenant") of the Lessee, and (c) EVERGREEN ALLIANCE GOLF LIMITED, L.P., a Delaware limited partnership ("EAGL"), which will operate the premises described by the Lease under a farther sublease agreement with the Subtenant. Subtenant and EAGL shall be collectively referred to as ("Subtenants"). RECITALS: A. City and Lessee are parties to that certain Lease Agreement, dated as of July 6, 1992, by and between City, as City, and Lessee, as lessee, and the other documents listed on Exhibit A hereto (collectively, the "Lease'), relating to the golf course property known as "Meadowlark Golf Course" and more particularly described in the Lease (the "Golf Course"). B. Lessee, as sublandlord, has entered into a contract to sublease certain rights and interests in and to the Golf Course to the Subtenant under the terms of the sublease described below, subject to the City's approval, and subject to the terms and conditions of the Lease. C. The Subtenant desires to take a sublease of the Golf Course and to further sublease certain rights and interests in and to the Golf Course to EAGL, subject to the City's approval, and subject to the terms and conditions of the Lease, under the terms of the further sublease agreement described below. 08-3-50613.21 Meadowlark Consent to Sublease lease (3) (3) HB -? 29 _ c �Item10.-81 z D. Pursuant to section 24 of the Lease, Lessee and the Subtenant have requested City's consent to the sublease of the Golf Course to the Subtenant, and the Subtenant has requested the City's consent to the further sublease of the Golf Course to EAGL- NOW, THEREFORE, in consideration of the foregoing, and the undertakings of the parties under the Lease and under the sublease and the further sublease agreement referred to herein, and for other good and valuable consideration, the receipt and sufficiency of which the City hereby acknowledges, the City hereby agrees as follows: 1. City consents to the sublease of Lessee's rights and interest in and to the Golf Course to Subtenant. In the event any terms or conditions contained in the CNL Sublease conflict with terms and conditions set forth in the Lease, the terms of the Lease shall control. 2. City consents to the further sublease of such right, title and interest in and to the Golf Course to EAGL. In the event any terms or conditions contained in the EAGL Sublease conflict with terms and conditions set forth in the Lease, the terms of the Lease shall control. 3. The parties have provided copies of the proposed sublease between Lessee and u enan e lubleaseandMe r ed sub -sublease between ubtenarr`�__ z_ EAGL (the "EAGL Sublease"). For identification purposes, and without binding the City to the terms thereof, a copy of the CNL Sublease is attached hereto as Exhibit B and a copy of the EAGL Sublease is attached hereto as Exhibit C. Notwithstanding the foregoing, City shall not be bound by any of the terms and conditions of the CNL Sublease or the EAGL Sublease. 4. City confirms that the attached Exhibit A sets forth a complete list of documents that make up the Lease. The Lease represents the entire agreement between Lessee and City with respect to the Golf Course. Except as provided in the Lease, City does not represent or warrant in any way its title to the Golf Course or improvements thereto or any other property referenced in this transaction. S. Lessee hereby expressly agrees to remain bound by the obligations responsibilities and duties under the Lease. The Lease is in full force and effect and has not been assigned, modified, supplemented or amended in any way except as described in Exhibit A. City confirms that the operation of the Golf Course under the CNL Sublease and the EAGL Sublease, subject to the terms and conditions of the Lease and the provisions of Sections 1 and 2 hereof, will not constitute a default under the Lease. b. Any additional subleases and/or assignments including lessees and/or sublessees securing financing not described in this Consent to SubLease must be approved in writing by the City in accordance with the requirements of the Lease. 7. In addition to the hold harmless/indemnification provision in the Lease, Lessee agrees to defend and indemnify the City from any and all claims, actions, judgments, liabilities, proceedings and costs, including reasonable attorneys' fees and other costs of defense and damages, resulting from the transaction contemplated herein. City shall first look 08-150613-21 Meadowlark Consent to Sublease lease (3) (3) 2 Item 10. - 82 HB -230- 02 ar /� to Lessee to satisfy all claims, actions, judgments, liabilities, proceedings and costs, including reasonable attorneys' fees and other costs of defense and damages resulting from non- performance of the obligations under the Lease. Without limiting the foregoing, in the event subtenants fail to perform obligations required in the Lease, City may pursue any and all rights and remedies against subtenants that it has against Lessee pursuant to the Lease. 8. In addition to the hold harmlesslindemnification provision in the Lease, Subtenants agree to defend and indemnify the City from any and all claims, actions, judgments, liabilities, proceedings and costs, including reasonable attorneys' fees and other costs of defense and damages resulting -Eo-m the transaction contemplated Herein - City shal first look to Lessee to satisfy all claims, actions, judgments, liabilities, proceedings and costs, including reasonable attorneys' fees and other costs of defense and damages resulting from non-performance of the obligations under the Lease. 9- The City, in executing its consent to the CNL Sublease and the EAGL Sublease, does not release Lessee from any claims or remedies it may have against Lessee under the Lease. 10. Without limiting Lessee's obligations to City under the Lease, City agrees to accept performance from Subtenant and/or EAGL of operational and administrative matters,. - such as the payment of percentage rent, the maintenance of financial records, the delivery of financial reports to the City, obligations to maintain, repair and operate the Golf Course in accordance with the Lease, coordination of tournaments provided for under the Lease, and other matters required by the Lessee in the Lease. All of the aforementioned obligations, in addition to those not mentioned herein, shall be in accordance with the Lease. Percentage rent shall continue to be calculated in the manner described in the Lease, based on the operating revenues of the golf course, whether such revenues are collected by Lessee, Sublessee, EAGL or another operator approved by City. 11. City shall provide Subtenant and EAGL with copies of all notices which may be provided to Lessee pursuant to the terms and provisions of the Lease. In the event of a default by either City or Lessee or any other party under the Lease, City shall give prompt written notice to Lessee, Subtenant and EAGL. Subtenant and EAGL shall provide City all notices, requests and other communications to the parties specified in the Lease and sublease(s) in writing. All notices to Subtenant and EAGL shall be given to such party at its address set forth below (or to such other address as such party may hereafter specify for the purpose of notice in accordance with the terms of the Lease). Subtenant: CNL Income EAGL Meadowlark, LLC c/o CNL Income Properties, Inc. 450 S. Orange Avenue Orlando, Florida 32801 Attention: Tammie A. Quinlan, Chief Financial Officer 08-15WS-21 Meadowlark Consent to Sublease Tease (3) (3) EAGL: Evergreen Alliance Golf Limited, L.P. 4851 LBJ Freeway, Suite 600 Dallas, Texas 75244 Attention: Lynn Marie Mallery Fax: (214) 722-6052 HB -231- )19r, - 2 .,-- r.,/ Item 10. - 83 Attention: Amy Sinelli, Esq., Senior Vice President /Corporate Counsel Fax: (407) 540-2544 With a copy to: Lowndes, Drosdick, Doster, Kantor and Reed, P.A 215 North Eola Drive P.O. Box 2809 Orlando, Florida 32801 Attention: William T. Dymond, Jr., Esq. Fax: (407) 843-4444 i With a copy to: The Addison Law Firm 14901 Quorum Drive, Suite 650 Dallas, Texas 75254 Attn: Randy Addison, Esq. Fax: (972) 960-7719 The addresses set forth above may be changed as to any party by such party delivering to the other parties at least thirty (30) calendar days' written notice as to such change of address. 12. By accepting this Agreement, Subtenant and EAGL agree that, as subtenants, they are bound by all of terms and conditions of the Lease that are binding upon Lessee from and ag herein are for emphasis and/or addition, and not intended to limit this clause in any way. 13. Subtenant(s) agree to comply with City's exclusive concessionaire agreement with Coca Cola Bottling dated February 16, 1999. In addition, all food and beverages shall be offered or sold in recyclable paper or plastic containers. No pull -top cans or Styrofoam containers are to be vended or dispensed from the Leased Property. 14. The original of this Agreement and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who has signed it. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers the day, month and year first above written. SIGNATURES CONTINUED ON NEXT PAGE 08-150613-21 Meadowlark Consent to Sublease Iease (3) (3) 4 Item 10. - 84 xB ii V oF- / LESSEE: AMERICAN GOLF CORPORATION, a California corporation By: print name - --- ITS: (circle one) Chainnan/President/Vice President AND Mark J. Friedman, Secretary SUBTENANT: CNL INCOME EAGL MEADOWLARK, LLC, a Delaware limited liability company Mot Amy Sinelli, Senior Vice President .AND print name ITS: (circle one) Secretary/Chief Financial Officer/Asst. Secretary — Treasurer CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor ity Clerk INITIATED DDfAND APPROVED: Director of Econ is Development Dire or f Community Servic APP VED AS TO FORM: �✓� 3 zS-oS �' City Attorney MY- 3-,n-op 2A GS REVVD AND APPROVED: Ci Administrator SIGNATURES CONTINUED ON NEXT PAGE 08-150613-21 Meadowlark Consent to Sublease lease (3) (3) HB -2JJ- -Item 10. - 85 State of California County of L,�� Cal On RY 1- 90 Fbefore me, Date personally appeared P. L. E WARIA c4l"Uf f # I5") 79 who proved to me on the basis of satisfactory evidence to be the person() whose name(soaxe subscribed to the within instrument and acknowledged to me that sh they executed the same in NRL6R"r authorized capacity(W, and that by U" er heir signature(Q on the instrument the person(6), or the entity upon behalf of which the person(f) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of thee State of California that the foregoing paragraph is true and correct. WITNESSt?a�r6Notary Signature Place Notary Seal Above Signature c OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached document t Title or Type of Document: �oc�s-�T 77� GL=}itCE Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: Signer's Name: ❑ Individual ❑ Individual ❑ Corporate Officer—Title(s): ❑ Corporate Officer—Title(s): ❑ Partner — ❑ Limited ❑ General _ _ _ ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact = - ❑ Attorney in Fact s -. ❑ Trustee Top of thumb here ❑ Trustee Tap of thumb here ❑ Guardian or Conservator ❑ Guardian or Conservator ❑ Other: ❑ Other: Signer Is Representing: Signer Is Representing: Q2007National Notary Association•9350DeSoto Ave.,P.0.Box 2402•Chatsworth, CA 91313,E402•vnwr.NafionalNotaryorg ItemN5907 ReorderCaUT06-Frees-BOO-876-W27 Item 10. - 86 HB -234- -��,,17 Or— CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT li��.'�1_C��C�:;n:;a•�.�.•�.�C ;.�..��.:.v!�.�ar-�..�.�i�� � ���q;�2..^.af: �;:�i;cv .v!:�5�� e;�.>!c�S!-T3;:�3:ai , C!ca ���,.�.�;':i,=�S�i State of California County of/C) On f 4_ D before me, Z-- Date Here insert Name and Title of the Off ", personally appeared i— // _ ��X)'1_) Name(s) of Signer(s) Place Notary Seal Above who proved to me on the basis of satisfactory evidence to be the persono whose name(fs +ire subscribed to the within instrument and acknowledged to me that 4eA� executed the same in er heir authorized capacity(t $), and that by4u�-ie ei� signature(o on the instrument the persono*, or the entity upon behalf of which the personp acted, executed the instrument. 1 certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS y h✓ d f al se Signature ignature of Notar ublic OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document Description of Attached Documen Title or Type of Document: jL_—T 71) Document Date: 1 L— 6 Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): — ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer is Representing-. AIGHTTt llM13PRINT l TF.StGNER. '. Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ limited ❑ General ❑ Attorney in Fact fop of thumb here ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: ✓:�✓.:�✓.:V:v:C✓:�:�✓.:�:�:�:v:�:VK�:`�:�:C✓.:V:'✓S��.l✓:�✓.:v:�:`.:�✓.:�✓•t`.:V :\✓.�✓.:uS�'✓. 'J6v:tJ.:V .�.:i✓Sv:'c/:v:V:v:`.4�✓4�.`� HB -?35- Item 10. - 87 • �t LESSEE: AMERICAN GOLF CORPORATION, a California corporation 0 print name ITS: (circle one) Chairman/President/Vice President WE By: Mark J. Friedman, Secretary SUBTENANT: CNL INCOME EAGL MEADOWLARK, LLC, a By: Joseph T. n, Senior Vice President AND print name ITS: {circle cn_e�S=etary/Chief Financial ofyicerv<s—scsecm—firy'F Treasurer CITY OF HUNTIN GTON BEACH, a municipal corporation of the State of California Mayor City Clerk INITIATED AND APPROVED: Director of Economic Development Director of Community Services APPROVED AS TO FORM: City Attorney MY- 3-A-0? �• U�6 REVIEWED AND APPROVED: City Administrator SIGNATURES CONTINUED ON NEXT PAGE COUNTERPART 08-150613-21 Meadowlark Consent to Sublease lease (3) (3) 61 Item 10. - 88 HB -236- �c 7 or-- f STATE OF FLORIDA COUNTY OF ORANGE The foregoing instrument was acknowledged before me this � day of March, 2008, by Joseph T. Johnson as Senior Vice President of CNL INCOME EAGL MEADOWLARK, LLC, a Delaware limited liability company. He is personally known to me or has produced as identification. (NOTARY SEAL) prr:Y •'.,.,,, Cathleen A. Coffey pLskll-� Commission # DD466308 Expires September 24, 2009 ��;pF�� t� Bonded 7toy Fam-Insurdncc. tnc 80�39S70S9 STATE OF FLORIDA COUNTY OF ORANGE Notary Public Signature CA.THLUN A. COMY - (Name typed, printed or stamped) Notary Public, State of Florida Commission No.: My Commission Expires: The foregoing instrument was acknowledged before me this � day of March, 2008, by Linda Scarcelli as Assistant Secretary of CNL INCOME EAGL MEADOWLARK, LLC, a Delaware limited liability company. She is personally known to me or has produced as identi 1catlon. (NOTARY SEAL) Cathleen A. Coffey �aQ Commission # DD466308 -"' Expires September 24, 2009 � i •NSo�� Bonded Tray Fam-msvtance Inc 800439 -7019 0914625\1 30607\1 137673\1 Notary for Meadowlark consent Publicr 0S. --� Notary =tCOFM- (Name typed, printed or stamped) Notary Public, State of Florida Commission No.: My Commission Expires: HB -2337- ?�- ti'c 12 Item l0.-89 LESSEE: AMERICA caxparati an By Paul ITS: {circle 1 By: GOLF CORPORATION, a California President J. Friedman, Secretary CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor City Clerk INITIATED AND APPROVED: Director of Economic Development SUBTENANT: t l�l tNt'om FAGI, MEADOWLARK, LLC a Director of Community Services Delaware limited Iiability company APPROVED AS TO FORM: By: • Joseph T _ Johnson, Senior Vice President City Attorney ntiY- 9t-og A ND ZS• C3� By REVIEWED AND APPROVED: print name ITS: {circle one Secretary/Chief Financial City Administrator Officer ssi Secrets Treasurer SIGNATURES CONTINUED ON NEXT PAGE 09-150613-21 Meadowlark Consent to Sublease lease (3) (3) 5 Item 10. - 90 HB -2 ; s- f �'G STATE OF CALIFORNIA ) SS. COUNTY OF Los An eles } On B efore me, Elyse Cook , Notary Public, (here insert name and title of the officer) personally appeared Paul Major, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed fife sarrie -in his "authorized--capacity--and- that` by -his -signature on -the instrument -the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. .` COOK i ��.L tr• Commission # 1479395 -Noloy public - Col,fomio Los Angeles County SEAL mycomm. Expires Apr 26, 2008 MC . 028987/000002 - 2682202 11 e:�9 Not ublic � { eal} HB -?39- Item 10. - 91 STATE OF CALIFORNIA ) SS. COUNTY OF Los Angeles ) On N% ,�!/,))Drbefore me, Elyse Cook , Notary Public, (here insert name and title of the officer) personally appeared Mark J. Friedman, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct ELYSE COOK Commission # 1479395 Notary Public - California Los Angeles County SEAL Notary \\\DC - 0289871000002 - 2682202 v1 Item 10. - 92 HB -240- ?4-c� /';;� TENANT: EVERGREEN ALLIANCE GOLF LIMITED, L.P., a Delaware limited partnership By: PREMIER GOLF EAGL GP, LLC., a Delaware _._ limited - liability..• 0 eral-•Partber By. / ynri Marie Mallery, Vice President AND By: QV9..0L ic, W print am ITS: (circle one Secretary/Chief Financial Officer Asst. Secretary Treasurer NOTICE: THIS SUB -SUBLEASE CONTAINS WAIVERS AND TNDEMN rms By TOTE TENANT OF THE LANDLORD'S OWN NEGLIGENCE. EAGL: EVERGREEN ALLIANCE GOLF LIMITED, LP., a Delaware limited partnership By. PREMIER GOLF EAGL GP, LLC., a Delaware l" ' liability eo any, General Partner By: print name ITS: (circle one) Chairman/Preside ice Presiders y= L n e all ry, icepresidenr— Exhibit A: Lease Agreement, dated July 6,1992, between the City of Huntington Beach and American Golf Corporation. Exhibit B: Form of CNL Sublease Exhibit C: Farm of EAGL Sublease 08-150613.21 Meadowlark Coasent to Sublease lease (3) (3) 6 HB-241- l3 G^Item 10. - 93 STATE OF TEXAS COUNTY OF DALLAS I This instrument was acknowledged before me on the L�day of March, 2008, by Lynn Marie Mallery, Vice President and Secretary of PREMIER GOLF EAGL GP, L.L.C, the general partner of EVERGREEN ALLIANCE GOLF LIMITED, L.P., on behalf of said partnership. Notary Public in an o'�FY Pu , CAROL L. BOROWY the St ate of Texas �o� -= Notary Public, State of Texas My Commission Expires l�a�rlaecy Rat 1Rt9 My commission expires: STATE OF TEXAS § COUNTY OF DALLAS § This instrument was acknowledged before me on the;il day of March, 2008, by Joe Munch, Vice 'President of PREMIER GOLF EAGL GP, L.L.C, the general partner of EVERGREEN ALLIANCE GOLF LIMITED, L.P., on behalf of said partnership. Notary Public it the State of Tex >R: P ei ; CAROL L. BOROWY Notary Public, State of Texas _ - My Commission Expires •h: rf•Ff+tibxuary 23, 2E1t0 My commission expires: 6� ' 3 fa r" ,� STATE OF TEXAS § COUNTY OF DALLAS § This instrument was acknowledged before me on thedT nay of March, 2008, by Carol Borowy, Assistant Secretary of PREMIER GOLF EAGL GP, L.L.C, the general partner of EVERGREEN ALLIANCE GOLF LIMITED, L.P., on behalf of said partnership. owtary Public in and for �� the State of Texas •ate forte® 'liv 03py coy the original on file 4n this offk*. west ti My comrniss e��ires:— ( � D� 2 cil o and lCity of Huntington Clerk lthe CRY Beams, Coccr+eii of the ��Y c alffornWL n C. Item 10. - 94 HB -242- '"""" CHARLA REEVES = 4� AT PL�,4 -� "� Notary Public, State of Texas My Commission Expires #� `• '�t� November 21, 2009 ADDENDUM TO LEASE AGREEMENT THIS ADDENDUM TO LEASE AGREEMENT (this `Addendum") is made and entered into this /Jl— day of S Ge..L. 2013 (the "Effective Date") by and bet%veen THE CITY OF HI NTPiGTON IfEACH, a municipal corporation ("Lessor"), and AMERICAN GOLF CORPORATION, a California corporation ("Lessee"). Lessor and Lessee are at times collectively referred to herein as the "Parties" and individually as a "Party." RECITALS: A. Lessee leases from Lessor that certain golf course property known as Meadowlark Golf Course and located in Huntington Beach, California (the "Premises") pursuant to that certain Lease Agreement dated July 6, 1992 (the "Ground Lease"). B. Lessor and Lessee have agreed that certain renovations and capital improvements shall be made to the Premises in exchange for a reduction in the amount of minimum rent payable under the Ground Lease, all on the terms and conditions set forth herein. C. Lessee has subleased the Premises to CLP Meadowlark Golf, LLC, a Delaware limited liability company (flk/a CNL Income EAGL Meadowlark; LLC) ("5ublessee''), pursuant to that certain Sublease Agreement dated April 17, 2008 (the "Sublease"), which Sublease was approved by Lessor pursuant to that certain Consent to Sublease dated April 17, 2008 by and between Lessor, Lessee, Sublessee, and Evergreen Alliance Golf Limited, LP. D. Lessor and Lessee acknowledge and agree that Sublessee will perform all of the obligations of Lessee under the Ground Lease for the duration of the Sublease, including but not limited to the renovations and capital improvements set forth in this Addendum. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee agree as follows: l . Recitals. Lessor and Lessee acknowledge and agree that the recitals set forth above are true and correct and hereby constitute a part of this Addendum. 2. Definitions. Capitalized terms used but not otherwise defined herein shall have the meanings given. to such terms in the Ground Lease. 3. Demolition of Residential Rental Property. Following the Effective Date, but on or before the date which is one (1) year following the Effective Date (the "Site Renovation Period"), Lessee shall, at Lessee's sole cost and expense, demolish and remove the residential building,. the garage, and the perimeter fencing located on a portion of the real property (the "Residential Prop ") described in the Residential Rental Agreement attached to the Ground Lease as Exhibit "B" thereto (the "Demolition"). Lessor acknowledges and agrees that this Addendum satisfies any and all provisions in the Ground Lease requiring Lessee to obtain Lessor's prior consent for the Demolition or otherwise requiring Lessee to submit plans, schematics, requests for approval, or any similar documents or requests to Lessor concerning the 13-3625190248 HB -161- Item 10. - 13 Demolition; however, Lessee shall obtain all required government permits and entitlements at Lessee's sole cost and expense. 4. Site Renovations. During the Site Renovation Period, Lessee shall complete the site renovations listed in Exhibit "A" attached hereto and by this reference incorporated herein (the "Renovations") pursuant to the requirements and other conditions set forth in Exhibit "A." Lessor acknowledges and agrees that Exhibit `A" satisfies the requirement for Lessor's prior approval under Section 15 of the Ground Lease; however, Lessee shall obtain all required government permits and entitlements at Lessee's sole cost and expense. 5. Initial Capital Improvements. During each of the following periods during the Term; Lessee shall make certain capital improvements to the Premises at Lessee's sole cost and expense (the "Initial Capital Improvements"): (a) September 1, 2013 through August 31, 2014; (b) September 1, 2014 through August 31, 2015; (c) September 1, 2015 through August 31, 2016; and (d) September 1, 2016 through December 31, 2017 (each, an "Improvement Year"). Initial Capital Improvements shall include, but are not necessarily limited to, the construction, renovation, or alteration of buildings, landscaping, signage, drainage infrastructure, water utility infrastructure, and general golf course improvements. At the beginning of each Improvement Year during the Second Improvement Period, Lessor and Lessee shall use reasonably prompt and good -faith efforts to agree on the Initial Capital Improvements to be made by Lessee during such Improvement Year, which agreement shall satisfy the requirement for Lessor's prior approval under Section 15 of the Ground Lease. Lessee shall expend at least thirty thousand six hundred dollars ($30,600.00) during each Improvement Year on Initial Capital improvements unless and until Lessee has expended a total sum of two hundred four thousand dollars and zero cents ($204,000.00) on Initial Capital Improvements, at which point Lessee shall have no further obligation to make Initial Capital Improvements. 6. Secondary Capital Improvements. If Lessee extends the Term for an additional period of ten (10) years (the "Renewal Period") beyond the original twenty-five (25) year tenn pursuant to Section 4 of the Ground Lease, Lessee shall make, during each of the ten (10) twelve (12) month years of the Renewal Period (each, a "Renewal Period Year"), certain capital improvements to the Premises at Lessee's sole cost and expense (the "Secondary Capital Improvements"). Secondary Capital Improvements shall include, but not necessarily be limited to, the construction, renovation, or alteration of buildings, landscaping, signage, drainage infrastructure, water utility infrastructure, and general golf course improvements. Lessee shall expend at least forty thousand five hundred thirty dollars ($40,530.00) during each Renewal Period Year on Secondary Capital Improvements during the Renewal Period unless and until Lessee has expended a total sum of eight hundred ten thousand six hundred four dollars and zero cents ($810,604.00) (the "Expenditure Can") on Secondary Capital Improvements, at which point Lessee shall have no further obligation to make Secondary Capital Improvements. Lessee must expend an amount equal to the Expenditure Cap- on Secondary Capital Improvements during the Renewal Period unless the Ground Lease is terminated prior to the end of the ten (10) year term of the Renewal Period, in which case Lessee shall have no further obligation to make or pay for Secondary Capital Improvements other than those incurred prior to such termination. 7. Rent Reduction and Residential Property. The Parties acknowledge and agree that the Residential Rental Agreement and the attachment thereto (collectively, the "Residential 2 13-3625190248 Item 10. - 14 HB -162- Lease Documents") attached to the Ground Lease as Exhibit "B" thereto are, as of the Effective Date, incorporated into the Ground Lease solely for the purpose of identifying the Residential Property. Accordingly, the Parties shall have no obligations, responsibilities, liabilities, or other duties under the Residential Lease Documents from and after the Effective Date, including but not limited to the payment of any rent associated with the Residential Property pursuant to Section 8 of the Ground Lease or any other operative provision thereof from and after the Effective Date, including during the Renewal Period (if the renewal, option is exercised by Lessee). 8. _Application of Ground Lease Provisions. Section 17 of the Ground Lease shall apply to all matters contemplated by this Addendum. Section 7.5 of the Ground Lease shall not apply to the Demolition, Initial Capital Improvements, Secondary Capital Improvements, or any other construction, renovations, improvements, alterations, or other activities contemplated by this Addendum. 9. Integration and Conflicts. The Parties acknowledge and agree that this Addendum shall be integrated into the Ground Lease as a part thereof. In the event of any conflict or inconsistency between the provisions of the Ground Lease and the terms of this Addendum, the terms of this Addendum shall control. 10. Binding Effect. This Addendum shall be binding upon, and inure to the benefit of, the Parties and their respective successors and assigns. 11. Paragraph headings. The titles of the various sections of this Addendum are for reference and index purposes only, and none of them shall be taken into consideration or given any effect whatsoever in determining the meaning or scope of the section or paragraph to which they apply. 12. Reserved. 13. Joint Preparation. The Parties have been represented by counsel in the negotiation of the terms of this Addendum and have jointly prepared this Addendum. 14. Modifications. This Addendum may not be amended or modified unless such amendment or modification is in writing and signed by both Parties. 15. Successors and Assigns. The terms, covenants, and conditions contained in this Addendum shall bind and inure to the benefit of the Parties and their successors and assigns. 16. Counterparts. This Addendum may be executed in any number of duplicate originals and each such duplicate original shall be deemed to constitute but one and the same Agreement. 17. Severability. If any terms, covenants, or obligations of this Addendum shall be held to be invalid, illegal, or unenforceable in any respect, this Addendum shall be construed without such provision. I3-3625/90248 xB -1 63- Item 10. - 15 18. Gover>nina Law. This Addendum shall be construed in accordance with and governed by the laws of the state in which the Premises are located. 19. Further Assurances; Cooperation. Each of the Parties shall execute and deliver or cause to be delivered to the other Party all such further certificates. instruments, and documents and take such other action as may be reasonably required to effectively carry out fully the intentions of the parties and accomplish the matters contemplated in this Addendum. IN WITNESS WHEREOF, :Lessor and Lessee have each caused this .Agreement to be executed and delivered in its name by a duly authorized officer as of the Effective Date. "LESSEE" AMERICAN GOLF CORPORATION, California corporation By: Name: Title: 1NITIATED AND .APPROVED: By: Name: �,/ OU NTER c 1. Title: U , "LESSOR" ervices G✓ // f Director of Community S �� REVIE\�� APPROVED: C' y anager 4 APPROVED .AS TO FORM: Ci j Attorney ...(� 13-3625/902-�5 Item 10. - 16 HB -164- 18. Governine Law. This Addendum shall be construed in accordance with and governed by the laws of the state in which the Premises are located. 19. Further Assurances; Cooperation. Each of the Parties shall execute and deliver or cause to be delivered to the other Party, all such further certificates, instruments, and documents and take such other action as may be reasonably required to effectively carry out fully the intentions of the parties and accomplish the matters contemplated in this Addendum. IN WITNESS WHEREOF, :Lessor and Lessee have each caused this Agreement to be executed and delivered in its name by a duly authorized officer as of the Effective Date. "LESSEE" "LESSOR" AMERICAN GOLF CORPORATION, a CITY OF HUNTINGTON BEACH, a California corporation municipal corporation = Name: Title: By: l Name: Title: Mayor City Clerk iNITIA D AND APPROVED: ?irector of Community Services REVIEWED AND APPROVED: City Manager COLS PROVED AS TO FORM: Cit 'Attorney 4 1U�10 Item 10. - 17 EXHIBIT "A" SITE RENOVATION PLAN See Attached. 13-3625,190248 Item 10. - 18 HB -166- SITE RENOVATION PLAN Lessee shall complete site renovation as outlined below within one year of the lease amendment approval. All listed improvements are subject to review and approval of the Director of Community Services or his/her designee. Improvements 1. FIRST FLOOR RENOVATIONS a. Men's & Women's Restrooms New flooring, granite counter tops, new sinks/fixtures b. Main Lobby Improvements New carpeting and paint, removal of fountain c. Dining area ® New exterior doors and hardware 2. SECOND FLOOR RENOVATIONS a. Banquet Room • Exterior Door repair and modifications • New paint • New windows with low-E glass and window coverings • New lighting ® New retractable wall • New furniture b. Ladies Dressing Room m Minor modifications to create a "Bride's Room" 3. PARKING LOT a. Slurry seal and new striping Note: Course Management anticipates a 5% to 10% increase in business due to improved facilities. xB -167- Item 10. - 19 =DATEYYY) CERTIFICATE F LIABILITY INSURANCE 14 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER, IMPORTANT: If the certificate holder Is an ADDITIONAL INSURED, the policy(ies) must be endorsed. It SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER NAMFACT Leslie Jameson, CISR, ACSR Ragland Strother & Lafitte PHONE (214)522-4880 eAx c2141520-3e56 3838 Oak Lawn Ave. Ste. 500 EMAIL 1lameson@rslins.com ennccec. INSURER S1 AFFORDING COVERAGE Dallas TX 75219-4506 INSURFRA:Libert Mutual Insurance INSURED INSURER B : CF Arcis X LLC IhI$URER C ; 5221 N. O'Connor Blvd INSURERD: Spite 700 IIQ�.1IrjFl�F Irving TX 75039 INSURERF: COVERAGES CERTIFICATE NUMBER:14/15 Meadowlark REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. f,I T R _TR TYPE OF INSURANCE , a LISUOR POLICY NUMBER PWD Y EFF Y POLICY EXP DDN Y LIMITS GENERAL LIABILITY EACH OCCURRENCE $ 11000,000 X COMMERCIAL GENERAL LIABILITY PREMISES !Fa nrravranrat $- 500,000 A CLAIMS -MADE L_^_.IOCCUR X B2-Z91-463101-024 9/30/2014 9/30/2015 MED EXP (Any one person) $ 10,000 PERSONAL & ADV INJURY $ 1,000,000 X Including Pollution APPROVED AS TO F • l it Liability GENERAL AGGREGATE $ 2,000,000 GEN'L AGGREGATE LIMIT APPLIES PER: PRODUCTS - COMP/OP AGG $ 2,000,000 PRE} Ll LOC X POLICY.0 % h111,14" $ AUTOMOBILE LIABILITY / J rlrlifer McGrath, City Attorne (Q/T---�—L0 COMBINED I L 1 000 000 , BODILY INJURY (Per person) $ A X ANY AUTO / / BODILY INJURY (Per accident) $ ALL OWNED SCHEDULED X 36-291-463101-014 9/30/2014 9/30/2015 AUTOS AUTOS X HIRED AUTOS X NOTOSWNED PROPER"enOAMAGF $ medic -al flvmagts $ UMBRELLA LIAB X OCCUR EACH OCCURRENCE- $ 10 , 000 , 000 X AGGREGATE $ 10,000,000 A EXCESS LIAB CLAIMS -MADE DED X RETENTION$ 10,00 $ H7-Z91-463101-054 /30/2014 9/30/2015 WORKERSCOMPENSATION WCSTATU• OTH- AND EMPLOYERS' LIABILITY YIN r Ry!-tN?y?5 ANY PROPRIETOR/PARTNER/EXECUTIVE E.L EACH ACCIDENT $ OFFICER/MEMBER EXCLUDED? D N E L DISEASE - EA EMPLOYEE: S (Mandatory in NH) 1 If yes, describe under DESCRIPTION OF OPERATIONS below EL DISEASE - POLICY LIMIT $ A Liquor Liabiltiy B2-Z91-463101-024 9/30/2014 /30/2015 Aggregate Limit $2,000,000 DESCRIPTION OF OPERATIONS I LOCATIONS f VEHICLES (Attach ACORD 101, Additional Remarks Schedule, If more space Is required) Re: CF Meadowlark Arcis LLC; Meadowlark Golf Course 16782 Graham Street Huntington Beach CA 92649 The General Liability and Auto Liability policies includes an additional insured endorsement that provides additional insured status to City of Huntington Beach, Its Elected or Appointed Officials, Agents, Officers, Employees, and 'Volunteers only when there is a written contract between the named insured and the certificate holder that requires such status. 30 Day notice of cancellation applies only when there is a written contract between the named insured and the certificate holder that requires such status. CERTIFICATE CANCELLA cgonzales@ surfcity-hb-org SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN City of Huntington Beach ACCORDANCE WITH THE POLICY PROVISIONS. 2000 Main Street Huntington Beach, CA 92648-2702 AUTHORIZED REPRESENTATIVE W. Scott Ragland/SRS ACORD 25 (2010/05) ©1988-2010 ACORD CORPORATION. All rights reserved. INS025 (201005) D1 The ACORD name and logo are registered marks of ACORD Other Named Insureds CF ArCiS X Holdings, LLC CF Broad bay Arcis LLC, The Tradition Golf Club at Broad 2102 Lards Landing, Virginia Beach VA 23454 CF Canyon Springs Arcis LLC, Canyon Springs Golf Club 24400 Canyon Golf Rd, , San Antonio TX 78258 CF Cinco Ranch Arcis LLC, The Golf Club at Cinco Ranch 23030 Cinco Ranch Blvd, Katy TX 77450 CF Clear Creek Arcis LLC, Clear Creek Golf Course 3902 Fellows Rd. Houston Tx 77047 Cr Cowboys Arcis LLC, Cowboys Golf Club 1600 Fairway Drive, Grapevine TX 76051 CF Crossings Arcis LLC, The Crossings Golf Club 800 Virginia Center Pkwy, Glen Allen VA 23059 CF Fossil Creek Arcis LLC, The Golf Club at Fossil Creek 3401 Clubgate Dr. Ft. Worth TX 76137 CF LakeRidge Arcis LLC, LakeRidge Country Club 8802 Vicksburg Avenue, Lubbock TX 79424 CF Mansfield National Arcis LLC, Mansfield National Golf 3750 National Parkway, Mansfield TX 76083 CF Montgomery Arcis LLC, Montgomery Country Club 20908 Golf View Dr., Laytonsville MD 20882 CF Planatation Arcis LLC, Plantation Golf Club 4701 Plantation Lane, Frisco TX 75035 CF Raven Phoenix Arcis LLC, Raven Phoenix Golf Club 3636 E. Baseline, Phoenix AZ 85331 CF Tatum Ranch Arcis LLC, Tatum Ranch Golf Club CF Valencia Arcs LLC, Valencia Country Club CF Weston Hills Arcis LLC, Weston Hills Country Club CF Meadowlark Arcis LLC, Meadow' -ark Golf Course Lakeridge Country Club Association LP beverages Mansfield Beverage Club Arcis Equity Partners CF Arcis Investors, LLC 29888 N. Tatum Ranch Dr_ Cave Creek AZ 85331 27330 North Tourney Road, Valencia CA 91355 2600 Country Club Way, Weston FL 33332 16782 Graham Street, Huntington Beach CA 92649 :,iqUor LiC - Lakeridge Country Club Liquor Lic - Lakepark Courses Licuor Lic - Mansfield National OFAPPINF (0212007) COPYRIGHT 2007, AIMS SERVICES INC POLICY NUMBER: TB2-Z91-463101-024 COMMERCIAL GENERAL LIABILITY THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - OWNERS, LESSEES OR CONTRACTORS - (FORM 13) This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART. SCHEDULE Name ofPerson orOrganization: City ofHuntington Beach Its elected Drappointed officials, ag8nts, off|OenS' employees and volunteers 2800 Main Street Huntington Beach, CA 92048'2702 (if noentry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.) WHO IS AN INSURED (Section U) is amended to include as an insured the person or organizationahown in the Schedule, but only with respect to liability arising out of "your work" for that insured by or for you. CG 201O 11 85 Copyright, Insurance Services Office, Inc., 1984 Page I of 0 ACTOR" EVIDENCE OF C®�I MERCIAL PROPERTY INSURANCE DATEIMMIDDIYYYY) 10/28/2014 THIS EVIDENCE OF COMMERCIAL PROPERTY INSURANCE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE ADDITIONAL INTEREST NAMED BELOW. THIS EVIDENCE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS EVIDENCE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE ADDITIONAL INTEREST. PRODUCER NAME, I PHONE (2 522-4880 CONTACT PERSON AND ADDRESS (A/C.o COMPANY NAME AND ADDRESS NAICNO: Ragland Strother & Lafitte 3838 Oak Lawn Ave. Ste. 500 Liberty Mutual Insurance 2875 Browns Bridge Road Dallas TX 75219-4506 Gainesville GA 30504 IF MULTIPLE COMPANIES, COMPLETE SEPARATE FORM FOR EACH FAX AIC No): (214) 520-3856 ADDRIESS: jstollenwerck@rslins.com CODE: SUB CODE: POLICY TYPE Commercial Property AGENCY CUSTOMER ID #: 00010772 NAMED INSURED AND ADDRESS LOAN NUMBER POLICY NUMBER CF Arcis X LLC YU2-Z91-463101-044 5221 N. O'Connor Blvd Suite 700 EFFECTIVE DATE EXPIRATION DATE Irving TX 75039 9J30J2014 9/30/2015 CONTINUED UNTIL TERMINATED IFCHECKED ADDITIONAL NAMED INSUREDS) THIS REPLACES PRIOR EVIDENCE DATED: See Attached List of Additional Insureds VKVrtKI T INI-VKMA I wN kuse KCMAKna on page Z, IT mores ace Is re ulrea Lu DUIL UINti VM Lu DUQ11'1wQ r�-rtQVi'lML rrtVr"MI I LOCATION/DESCRIPTION THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS EVIDENCE OF PROPERTY INSURANCE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. i.nvrnw nr ---I. .. ,.,.. I- 1-1- X Inr in, COMMERCIAL PROPERTY COVERAGE AMOUNT OF INSURANCE: $ 117,829,200 DED: 10, 000 YES NO NIA ❑ BUSINESS INCOME ❑ RENTAL VALUE }{ If YES, LIMIT. 20,560,788 X Actual Loss Sustained, # of months:l2 BLANKET COVERAGE x If YES, indicate value(s) reported on property identified above: $ TERRORISM COVERAGE x Attach Disclosure Notice / DEC IS THERE A TERRORISM -SPECIFIC EXCLUSION? x IS DOMESTIC TERRORISM EXCLUDED? x LIMITED FUNGUS COVERAGE X If YES, LIMIT. 250 000 DED: 10,000 FUNGUS EXCLUSION (If "YES", specify organization's form used) X REPLACEMENT COST x AGREED VALUE x COINSURANCE x If YES, % EQUIPMENT BREAKDOWN (If Applicable) x If YES, LIMIT. 100 000 DED: 10,000 ORDINANCE OR LAW - Coverage for loss to undamaged portion of bldg X Demolition Costs x If YES, LIMIT: 500,000 DED: 10,000 Incr. Cost of Construction x If YES, LIMIT: Included DED: 10,000 EARTH MOVEMENT (If Applicable) x If YES, LIMIT: 5 000 000** DED: 25000 FLOOD (If Applicable) x If YES, LIMIT: Varies By Loc DED: VariesLoc WIND / HAIL (If Subject to Different Provisions) x If YES, LIMIT: Varies By Loc DED. Varies Loc PERMISSION TO WAIVE SUBROGATION IN FAVOR OF MORTGAGE HOLDER PRIOR TO LOSS X ** No Earth Movement Coverage - California CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AI IVNAL IN I tKtto I MORTGAGEE CONTRACT OF SALE LENDERS LOSS PAYABLE City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648-2702 LENDER SERVICING AGENT NAME AND ADDRESS AUTHORIZED REPRESENTATIVE W. Scott Ragland/SRS Gam/ — "��T / ACORD 28 (2009112) Page 1 of 2 © 2003-2009 ACORD CORPORATION. An rlgnts reservea. INS028 (200912) 04 The ACORD name and logo are registered marks of ACORD EVIDENCE OF COMMERCIAL PROPERTY INSURANCE REMARKS - Including Special Conditions (Use only it more ACORD 28 (2009/12) Page 2 of 2 INS028 (200912).04 COMMENTS/REMARKS RE: CF Meadowlark Arciss LLC; Meadowlark Golf Course 16782 Graham Street Hungington Beach CA 92649 Certificate holder is named as Mortgagee/Loss Payee as respects property. 30 Days Notice of Cancellation, except 10 days for non-payment of premium Building and Contents are covered at Replacement Cost, subject to Policy Limits I OFREMARK COPYRIGHT 2000, AMS SERVICES INC. Additional Named Insureds Other Named Insureds Arcis Equity Partners, LLC CF Ancala Arcis LLC Ancala Country Club CF Arcis Investors II LLC CF Arcis X Holdings LLC CF Arrowhead Country Arcis LLC Arrowhead Country Club CF Arrowhead Golf Arcis LLC Arrowhead Golf Course CF Bear Creek Arcis LLC Bear Creek Golf Club CF Broad Bay Arcis LLC The Tradition Golf Club at Broad Bay CF Canyon Springs Arcis LLC Canyon Springs Golf Club CF Challedon Arcis LLC Links at Challedon CF Cinco Ranch Arcis LLC The Golf Club at Cinco Ranch CF Clear Creek Arcis LLC Clear Creek Golf Course CF Continental Arcis LLC Continental Golf Course CF Cowboys Arcis LLC Cowboys Golf Club CF Crossings Arcis LLC The Crossings Golf Club CF David L Baker Arcis LLC David L. Baker Golf Course CF Deer Creek Arcis LLC Deer Creek Golf Club CF Eagle Brook Arcis LLC Eagle Brook Country Club CF Forest Park Arcis LLC Forest Park Golf Course CF Fossil Creek Arcis LLC The Golf Club at Fossil Creek CF Fox Meadow Arcis LLC Fox Meadow Country Club CF Hunt Valley Arcis LLC Hunt Valley Golf Club CF Kiskiack Arcis LLC Kiskiack Golf Club CF Kokopelli Arcis LLC Kokopelli Golf Course CF Lake Park Arcis LLC Lake Park Golf Course OFAPPINF (02/2007) COPYRIGHT 2007, AMS SERVICES INC ' � 1 October 22, 2014 Mr. David Dominquez Facilities, Development & Concessions Manager City of Huntington Beach Community Services Department 2000 Main Street, 5th Floor Huntington Beach, CA 92648-2702 Re: Meadowlark — Consent to Lease Dear Mr. Dominquez: HUNTON & WILLIAMS LLP FOUNTAIN PLACE 1445 ROSS AVENUE SUITE 3700 DALLAS, TEXAS 75202-2799 TEL 214 •979- 3000 FAX 214. 880.0011 ASHLEY DRUMMOND DIRECT DIAL: 214 • 979 • 3019 EMAIL: ADrummond@hunton.com FILE NO. 80552.000014 Via Overnight Delivery In connection with the above -referenced matter, enclosed please find four (4) original fully executed and notarized signature pages on behalf of CF Meadowlark Arcis LLC. If you have any questions, please do not hesitate to contact me at (214) 979-3019. Sincerely, Ashley Drummond ADD/lrn Enclosures ATLANTA AUSTIN BANGKOK BEIJING BRUSSELS CHARLOTTE DALLAS HOUSTON LONDON LOSANGELES McLEAN MIAMI NEW YORK NORFOLK RALEIGH RICHMOND SAN FRANCISCO TOKYO WASHINGTON www.hunton.com 80552,000014 EMF_US 52878894v1 Lowndes Drosdick Doster Kantor Reed,PA. A T T O R N E Y S A T L A W October 22, 2014 VIA FEDERAL EXPRESS David Dominquez Facilities, Development & Concessions Manager City of Huntington Beach Community Services Department 2000 Main Street, 5th Floor Huntington Beach, CA 92648-2702 RICHARD E. ENGLEBRIGHT, JR. richard.englebright@lowndes-law.com 215 Nortb Eola Drive, Orlando, Florida 32801 T: 407-418-6228 1 F: 407-843-4444 vT I11 MERITAS LAW FIRMS WORLDWIDE Re: Consent to Assignment of Sublease by and between the City of Huntington Beach, American Golf Corporation, CLP Meadowlark Golf, LLC and CF Meadowlark Arcis LLC Dear Mr. Dominquez: Enclosed herewith are four (4) counterparts of the above -captioned document, each originally executed on behalf of American Golf Corporation and CLP Meadowlark Golf, LLC. Please feel free to contact me should you have any questions regarding the enclosed. REE/jr Enclosures c: Kevin Sher, Esq. (via email) Sincerely, Richard E*Ele r. 0914625\ 1 61524\1 63 5409v 1 www.lowndes-law.com Item '. - 12 11B -126- Item 10. - 20 xB -168- Item 7. - 12 HB -126- Item 10. - 20 xB -168-