LEASE AGREEMENT
BETWEEN
URBAN LAND OF NEVADA, INC.
AND
ALL-AMERICAN GOLF CENTER, LLC
JUNE 1997
TABLE OF CONTENTS
Paragraph #, Description Page #
1. Term .....................................................1
2. Option To Extend Lease Term ..............................2
3. Purpose Of Occupancy .....................................2
4. Exclusive Use ............................................2
5. Prohibited Activities ....................................2
6. Compliance With Laws .....................................3
7. Access To Leased Premises ................................3
8. Tenant Responsible For Repairs ...........................3
9. Improvements .............................................3
10. Property Loss Assumed By Tenant ..........................4
11. Non-Responsibility Notices ...............................5
12. Attorneys Fees ...........................................5
13. Utilities ................................................5
14. Public Liability And Property Damage Insurance ...........5
15. Tenant's Fire Insurance ..................................6
16. Waiver Of Subrogation ....................................6
17. Other Insurance Matters ..................................6
18. Cumulative Remedies ......................................7
19. Defaults And Remedies In The Event Of Default ............7
20. Landlord Default .........................................8
21. Assignment And Subletting ................................8
22. Holdover .................................................9
23. Non-Waiver ...............................................9
24. Number And Gender ........................................10
25. Heirs, Successors And Assigns ............................10
26. Paragraph Caption ........................................11
27. Minimum Rent And Adjustment ..............................11
28. Deposit ..................................................11
29. Percentage Rental ........................................11
30. Liens ....................................................14
31. Indemnification ..........................................15
32. Offset Statement .........................................15
33. Quite Possession .........................................15
34. Service Of Notices .......................................15
35. Partial Invalidity .......................................16
36. Brokers ..................................................16
37. Condemnation .............................................17
38. section # 38 has been intentionally omitted ..............18
39. Taxes ....................................................18
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40. Signage Rights ...........................................19
41. section 41 has been intentionally omitted ................19
42. Gaming ...................................................19
43. section 43 has been intentionally omitted ................19
44. Infrastructures ..........................................19
45. section 45 has been intentionally omitted ................20
46. Tenant's Trademarks/Trade Names ..........................20
47. Hazardous Materials ......................................20
48. Sole And Only Agreement ..................................20
49. Acting In Good Faith, Discretion, And With Reasonable-
ness ....................................................21
50. No Merger ................................................21
51. Transfer Of Landlord's Interest ..........................21
52. Effect Of Exercise Of Privilege By Landlord ..............21
53. Insolvency ...............................................21
54. Execution Of Documents ...................................22
55. Execution To Perform/Force Majeure .......................22
56. Governing Law ............................................22
57. Landlord's Warrantees And Representations ................22
58. Non-Disturbance, Attornment And Subordination Agreement ..24
59. Arbitration ..............................................26
60. Landlord Bankruptcy Proceeding ...........................26
61. Memorandum Of Leases .....................................26
62. Leasehold Mortgagee Rights ...............................27
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INDENTURE OF LEASE
THIS INDENTURE OF LEASE (herein Lease), made and entered into in Las
Vegas, Nevada, on this ------- day of June, 1997 by and between Urban Land of
Nevada, a Nevada corporation (herein called LANDLORD) and All-American Golf
Center, LLC, a California Corporation, (herein TENANT).
BACKGROUND/CONDITIONS - LANDLORD owns approximately 135 acres of
unimproved property in ▇▇▇▇▇ County, Nevada, which is bounded by Las Vegas
Boulevard, ▇▇▇▇▇▇▇▇▇ Street, Sunset Road, and I-215 - the ▇▇▇▇▇ Expressway
("LANDLORD s Property"), which is more particularly shown and highlighted in
yellow on EXHIBIT "A", which is attached hereto and by this reference made a
part hereof.
TENANT wishes to lease approximately 41.4 acres of LANDLORD s Property for
a Golf Center with a golf driving range, a par three executive golf course, a
Clubhouse building to house food concessions, golf pro shop merchandise
retail, a golf testing and fitting center, golf cart storage and other uses
normally expected in a Golf Center ("Leased Premises") as highlighted in blue
on EXHIBIT "A".
LANDLORD wants to provide wholesome, family, sports oriented entertainment
which will be an amenity for its proposed hotel/casino and entertainment
center, planned for the southern part of LANDLORD's Property and expects that
TENANT's development will support and complement LANDLORD's plans for the
balance of LANDLORD's Property.
LANDLORD has agreed to enter into this Lease with TENANT because of
TENANT's exclusive and special relationship with Callaway Golf (i.e., TENANT
intends to build a first class golf driving range and practice facility
similar to and modeled after Callaway Golf's test and fitting facility known
as The ▇▇▇▇▇▇▇▇▇▇▇ Test Center in Carlsbad, California. Such facility will
provide special golf technology known as The Callaway Golf Performance Center
to be used for fitting Callaway golf clubs and for teaching by professionals,
and will be the only such facility in Las Vegas).
LANDLORD has seen TENANT's prepared preliminary plans and has entered into
this Lease expressly on the condition that TENANT builds such a facility.
W I T N E S S E T H:
LANDLORD hereby leases to TENANT, and TENANT hereby hires from LANDLORD,
the premises outlined in blue on EXHIBIT "A" attached hereto and incorporated
herein by reference as though fully set forth herein (herein Leased Premises)
for the term and in accordance with the provisions hereinafter stated and
provided. An exact legal description attached as EXHIBIT "B" will be attached
hereto when available, as required by an agreement of even date herewith
between LANDLORD and TENANT.
IN CONSIDERATION WHEREOF, THE PARTIES HERETO HEREBY COVENANT AND AGREE AS
FOLLOWS:
1. TERM - The term of this Lease will be fifteen (15) years and will
commence on the first day of the month next following the date that the
All-American Golf Center opens for public business , or February 1, 1998,
whichever date comes first; and will expire the last day of the 180th month
thereafter. Once the effective commencement date of this Lease is
established, the parties will execute an Amendment to this Lease and the
Memorandum of Lease required by PARAGRAPH NUMBERED 61 hereof, establishing the
commencement and termination dates with certainty.
2. OPTION TO EXTEND LEASE TERM - LANDLORD hereby grants to TENANT the
right, privilege and option to extend this Lease for two (2) additional terms
of five (5) years each upon the same terms and conditions as herein contained,
including, without limitation, the Minimum Rent and Percentage Rent set forth
in PARAGRAPHS NUMBERED 27 and 29 below.
Provided TENANT is not in default under the terms of this Lease beyond any
applicable notice and cure periods, at the time of its exercise of an option,
the given option to extend may be exercised by TENANT by giving written notice
of exercise to LANDLORD at least one hundred eighty (180) days prior to the
end of the term or expiration of the then extended term. The extension
options set forth herein are not personal to TENANT and may be exercised by
any permitted assignee of this Lease or by any Leasehold Mortgagee as defined
herein below.
3. PURPOSE OF OCCUPANCY - TENANT shall initially use and occupy the
Leased Premises for a commercial recreation facility known as the Golf Center,
which may include a par three golf course and golf driving range designed for
night play, clubhouse building containing golf merchandise retail, food and
beverage service, golf club fitting and rental and a professional golf
instruction center, TENANT may not change the use of the Leased Premises to
other uses and purposes without the prior written consent of LANDLORD which
consent shall not be unreasonably withheld, conditioned or delayed. Uses not
permitted on the Leased Premises are set forth in PARAGRAPH NUMBERED 5 of this
Lease. All food services must be inside the main building, or otherwise
integrated into TENANT's overall All-American Golf Center theme and operation,
it being the parties' intention that no food services will be permitted on
pads or otherwise within the Leased Premises at a location with direct access
to Sunset Road or Las Vegas Boulevard.
4. EXCLUSIVE USE - LANDLORD hereby grants to TENANT the exclusive right
to carry on the following uses: A par three golf course, golf driving range,
miniature golf course, clubhouse building containing golf sports merchandise
retail, golf club fitting and rental and a professional golf instruction
center, food and beverage service. LANDLORD will not permit the conduct of
any business or enterprise of any of the same kind or nature to any of these
specific uses on LANDLORD's Property during the Lease term or any extensions)
thereof. The land to which this covenant pertains is outlined in yellow on
EXHIBIT "A". For these purposes, LANDLORD will execute a recordable
restrictive covenant describing the balance of LANDLORD's Property in EXHIBIT
"A" and the use restrictions applicable thereto and deliver same to TENANT and
allow TENANT to record it. One of TENANT's remedies for a violation of the
restrictive covenant by LANDLORD would be to terminate this Lease.
5. PROHIBITED ACTIVITIES - During the entire term of this Lease, the
following uses shall not be permitted on the Leased Premises: A gas station, a
funeral parlor, a massage parlor, a so-called "flea market," industrial or
residential purposes, an adult bookstore or a store selling or exhibiting
pornographic materials (as used herein "adult bookstore or store selling or
exhibiting pornographic materials" shall include without limitation, a store
displaying for sale or exhibiting books, magazines or other publications
containing any combination of photographs, drawings or sketches of a sexual
nature which are not primarily scientific or educational or store offering for
exhibition, sale or rental videocassettes or other medium capable of
projecting, transmitting, or reproducing independently or in conjunction with
other devices, machine or equipment, an image or series of images the content
of which has been rated or advertised generally "X" or un-rated by the Motion
Picture Rating Association or any successor thereto"), any use that materially
increases the risk of hazardous contamination on the Leased Premises or
surrounding area, and any use that is in any way in violation of any valid
law, ordinance, or regulation of any Federal, State, County, or local agency,
body or entity. In addition, TENANT shall not commit or suffer to be
committed, any waste upon the Leased Premises or any nuisance. LANDLORD
agrees to use its best efforts (including litigation) to prohibit the uses
listed in this Paragraph 5 with the exception of a gas station, on the balance
of LANDLORD's Property during the lease term or any extension thereof.
6. COMPLIANCE WITH LAWS - TENANT shall promptly execute, perform and
comply with each law, rule, order, decision, ordinance, requirement and
regulation of each City, County, State, or Federal authority, department,
board, or body having jurisdiction or authority in relation to this Lease, or
the Leased Premises, and TENANT shall promptly make each such repair,
replacement, improvement or addition required by any such and without cost to
LANDLORD.
7. ACCESS TO LEASED PREMISES - LANDLORD and other designated LANDLORD
TENANTS shall have access to the Leased Premises, at reasonable times which do
not interrupt the normal business of the All-American Golf Center , for the
purpose of making any such improvement, repair or alteration as is the
responsibility of LANDLORD, or other designated LANDLORD TENANTS hereunder, if
any. LANDLORD and other designated LANDLORD TENANTS shall at times when it is
necessary to enter Leased Premises contact the All-American Golf Center
manager prior to entering the leased premises, to inform the manager of the
reason for entering the Leased Premises, the time the Leased Premises will be
occupied, etc. It is, however, expressly understood and agreed that the
authority hereby reserved or granted to the LANDLORD, does not impose, nor
does the LANDLORD assume, by reason thereof, any responsibility, or liability,
whatsoever, for the care, maintenance, supervision, improvement, repair or
alteration of the Leased Premises other than as may be set forth herein.
8. TENANT RESPONSIBLE FOR REPAIRS - LANDLORD shall be under no
liability, obligation or expense whatsoever in connection with the maintenance
or the repair of any improvements constructed upon the Leased Premises, of any
and every description. And, any and every need for repair is hereby accepted
by TENANT, who hereby covenants and agrees to make each such repair at
TENANT's sole cost and expense.
9. IMPROVEMENTS - TENANT shall construct on the Leased Premises a
high-quality commercial recreation facility in a good and workmanlike manner.
TENANT has submitted to LANDLORD, and LANDLORD has approved prior to execution
of this Lease, a Site Plan with colors and an elevation with architectural
detail, Landscaping Plan, Grading Plan, and civil engineering drawings for the
improvements which TENANT intends to construct of the Leased Premises. TENANT
shall pay for the cost of bringing all utilities to buildings or improvements
constructed on the Leased Premises by TENANT. Upon completion of the
improvements and when any buildings are ready for occupancy by TENANT, TENANT
shall prepare and record a Notice of Completion and obtain a Certificate of
Occupancy. After the initial completion of TENANT's commercial recreation
facility on the Leased Premises, TENANT at its cost shall have the right to
make, without LANDLORD's consent, alterations to the improvements; provided
any material structural alterations or improvements or any significant change
in the exterior colors of any buildings on the Leased Premises shall require
LANDLORD's prior written consent which shall be deemed given if LANDLORD does
not object within fifteen (15) days of LANDLORD's receipt of TENANT's request
for consent.
All buildings and other improvements constructed upon the Leased Premises
by TENANT during the term of this Lease and all alterations, additions, and
fixtures thereto from time to time constructed, installed, or placed in, on or
upon the Leased Premises by TENANT shall be owned by TENANT or any permitted
assignee of TENANT until expiration of the term or sooner termination of this
Lease. TENANT shall not remove any of the buildings or permanent improvements
from the Leased Premises nor waste, destroy or modify any of the buildings and
improvements except as permitted by this Lease. Tenant shall have the right
to remove from the Leased Premises all furniture, trade fixtures and equipment
which are not permanently affixed thereto. At the expiration of the term or
sooner termination of this Lease, all buildings and permanent improvements
shall, without compensation to TENANT, remain upon the Leased Premises, and
shall become LANDLORD's property free and clear of any liens, claims, or
rights of any third parties or of TENANT. TENANT shall indemnify LANDLORD
from any such liens, claims, or rights of third parties. Each party agrees to
execute, acknowledge, and deliver any instrument required by the other to
evidence the respective interest of the parties hereto as stated in this
paragraph. Provided, however, within thirty (30) days after the end of the
lease term or any extension thereof, LANDLORD shall inspect the Leased
Premises and shall promptly advise TENANT in writing if TENANT shall be
required to remove any improvements constructed on the Leased Premises by
TENANT. If LANDLORD determines that certain improvements shall be removed,
then TENANT, at TENANT's cost and expense, shall remove such improvements and
shall return the Leased Premises other than as set forth in PARAGRAPH NUMBERED
57 hereof to its previous condition within sixty (60) days after the date of
Landlord's inspection.
TENANT accepts the Leased Premises in an "as is" condition other than as
set forth in PARAGRAPH NUMBERED 57 hereof. LANDLORD makes no warranty as to
the condition of the Leased Premises. LANDLORD shall not make any
improvements on the Leased Premises or pay for any fees or costs in regard to
TENANT's use of the Leased Premises.
If construction of TENANT's proposed project is not completed on the
Leased Premises within two (2) years of the commencement date of this Lease as
established in accordance with PARAGRAPH NUMBERED 1 hereof, LANDLORD upon
written notice to TENANT shall have the right to terminate this Lease. If any
portion of the Leased Premises is not improved within two (2) years of the
execution of this Lease, this Lease shall terminate as to that portion of the
Leased Premises not so improved and upon such partial termination, there shall
be no adjustment in the Minimum Rent as set forth in PARAGRAPH NUMBERED 27 of
this Lease.
10. PROPERTY LOSS ASSUMED BY TENANT - TENANT shall indemnify and hold
LANDLORD and the property of LANDLORD, including the Leased Premises, and any
buildings or improvements now or hereafter on the Leased Premises, free and
harmless of any and all liability, claims, loss, damages, or expenses
resulting from TENANT's occupation and use of the Leased Premises,
specifically including without limitation any liability, claims, loss,
damages, or expenses arising by reason of:
(a) the death or injury of any person, including TENANT or any
person who is an employee or agent of TENANT, or by reason of the damage to or
destruction of any property, including property owned by TENANT or by any
person who is an employee or agent of TENANT, from any cause whatever, except
for LANDLORD's gross negligence, willful acts or omissions or intentional
misconduct while such person or property is in or on the Leased Premises or in
any way connected with the Leased Premises or with any of the improvements or
personal property on the Leased Premises;
(b) the death or injury of any person, including TENANT or any
person who is an employee or agent of TENANT, or by reason of the damage to or
destruction of any property, including property owned by TENANT or by any
person who is an employee or agent of TENANT, caused or allegedly caused by
(i) the condition of the Leased Premises or some building or improvement on
the Leased Premises, or (ii) some act or omission on the Leased Premises by
TENANT or any person except LANDLORD in or about the Leased Premises with
permission and consent of TENANT;
(c) any work performed on the Leased Premises or materials
furnished to the Leased Premises at the instance or request of TENANT or any
person or entity acting for on behalf of TENANT; or,
(d) TENANT's failure to perform any provision of this Lease or to
comply with any requirement of law or any requirement imposed on TENANT or the
Leased Premises by any duly authorized governmental agency or political
subdivision.
The limits of liability insurance as provided in PARAGRAPH NUMBERED 14
of this Lease shall not, however, limit the liability of TENANT under the
indemnity provision of this PARAGRAPH NUMBERED 10.
11. NON-RESPONSIBILITY NOTICES - LANDLORD may place upon said Leased
Premises any notices of lien non-responsibility as LANDLORD deems proper, and
may record such as LANDLORD deems proper, and TENANT shall at all times keep
said Leased Premises and the fee title free and clear of, from and against
each mechanics and each materialman s lien, and each encumbrance, attorney's
fee and costs related thereto for which TENANT, or another acting for, as, or
through TENANT shall be responsible.
12. ATTORNEYS FEES - The Court may award reasonable attorneys fees
and costs to the party hereto prevailing in enforcing any obligation of the
other party hereto under this Lease, or prevailing in any litigation connected
with this Lease.
13. UTILITIES - TENANT shall pay when due any and all Gas,
Electricity, Telephone, Waste Collection, Sewer Rental, and any and all other
UTILITY or USE SERVICE charges which become payable, or accrue, during the
term of this Lease, upon said Leased Premises, and payments therefor shall be
made directly to the Utility Company (except as provided herein elsewhere to
the contrary), and TENANT shall indemnify and hold harmless LANDLORD and also
said Leased Premises of, from and against payment of the same.
14. PUBLIC LIABILITY AND PROPERTY DAMAGE INSURANCE - TENANT at TENANT's
cost shall maintain public liability and property damage insurance with
liability limits of not less than ONE MILLION AND 00/100 DOLLARS
($1,000,000.00) per person and ONE MILLION AND 00/100 DOLLARS ($1,000,000.00)
per occurrence, and property damage limits of not less than FIFTY THOUSAND AND
00/00 DOLLARS ($50,000.00) per occurrence, insuring against all liability of
TENANT and TENANT's agents and employees arising out of or in connection with
TENANT's use or occupancy of the Leased Premises. In addition, TENANT agrees
to name LANDLORD as an additional insured under a FIVE MILLION DOLLAR
($5,000,000) umbrella liability policy to be in force upon receipt of an
occupancy permit for the Leased Premises. Such policies of insurance shall be
for periods of not less than one (1) year, and shall be renewed or a new
policy obtained not less than TWENTY (20) DAYS before a current policy's
coverage terminates.
15. TENANT S FIRE INSURANCE - TENANT at TENANT's cost shall maintain on
all of TENANT's personal property, TENANT's improvements, and alterations, in,
on, or about the Leased Premises, a policy of fire and extended coverage
insurance, with vandalism and malicious mischief endorsements, to the extent
of at least 80% of their full replacement value. The proceeds from any such
policy shall be used by TENANT for the replacement of damaged personal
property and the restoration of TENANT's damaged improvements and alterations,
except, however, in the event any such damage shall occur during the last two
(2) years of the Lease term or any extension thereof, TENANT may elect not to
restore the damaged premises and in such event, the insurance proceeds which
cover the loss of furniture, fixtures and equipment shall be paid directly to
the TENANT. The insurance proceeds which cover the loss of buildings and
permanent improvements shall be paid directly to the LANDLORD. Except as
provided immediately above, TENANT shall hold the insurance proceeds in trust
for such replacement and such restoration and shall disburse the same as
progress in replacement or restoration progresses.
16. WAIVER OF SUBROGATION - The parties release each other, and their
respective authorized representatives, from any claims of damage to any person
or to the Leased Premises and the buildings and other improvements located on
the Leased Premises, and to the fixtures, personal property, TENANT's
improvements, and alterations of either LANDLORD or TENANT in or on the Leased
Premises and the buildings and other improvements located on the Leased
Premises that are caused by or result from risks insured against under any
insurance policies carried by the parties and in force at the time of any such
damage.
Each party shall cause each property insurance policy obtained by it
to provide that the insurance company waives all right of recovery by way of
subrogation against each party in connection with any damage or liability
covered by any policy. Neither party shall be liable to the other for any
damage or liability, caused by fire or any of the risks insured against under
any property insurance policy required by this Lease. If any property
insurance policy cannot be obtained with a waiver of subrogation, or is
obtainable only by the payment of an additional premium charge above that
charged by insurance company issuing the policy without waiver of subrogation,
the party undertaking to obtain the insurance shall notify the other party of
this fact. The other party shall have a period of ten (10) days after
receiving the notice either to place the insurance with a company that is
reasonably satisfactory to the other party and that will carry the insurance
with a waiver of subrogation, or to agree to pay the additional premium if
such a policy is obtainable at additional, reasonable cost. If the insurance
cannot be obtained or the party in whose favor a waiver of subrogation is
desired refuses to pay the additional, reasonable premium charged, the other
party is relieved of the obligation to obtain a waiver of subrogation rights
with respect to the particular insurance involved.
17. OTHER INSURANCE MATTERS - All the insurance required under this
Lease shall:
(a) Be issued by insurance companies authorized to do business in
the State of Nevada with a financial rating of at least a B+ status as rated
in the most recent edition of Best's Insurance Reports.
(b) Be issued as a primary policy.
(c) All of the foregoing insurance policies required pursuant to
PARAGRAPHS NUMBERED 14 and 15 of this Lease shall name LANDLORD as an
additional insured and shall provide that LANDLORD shall be given a minimum of
thirty (30) days written notice by any such insurance company prior to the
cancellation, termination, or alteration of the terms or limits of such
coverage. Each policy, or a certificate of the policy, together with evidence
of payment of premiums, shall be deposited with the other party at the
commencement of the term, and on each renewal of the policy or new policy not
less than TWENTY (20) days before expiration of the term of the policy.
18. CUMULATIVE REMEDIES - All the rights and remedies of the LANDLORD
under this Lease shall be cumulative, and the exercise or assertion of one or
more of said rights or remedies shall not exclude the exercise of or assertion
of any other rights or remedies allowed by law or equity.
19. DEFAULT AND REMEDIES IN THE EVENT OF DEFAULT -
(a) DEFAULTS - TENANT shall be deemed in default and to have
breached this Lease and said default and breach shall be deemed complete and
uncured:
A. In the event that any rental payment, any property tax
payment, any insurance premium or any other monetary payment required herein
to be paid, or reserved herein, has not been paid within ten (10) business
days immediately after written notice that such amount is due and unpaid.
B. In the event that TENANT fails to keep or perform any other
covenant or condition contained in this Lease on TENANT's part to be kept or
performed, and such failure to keep or perform the same continues in whole or
in part, for a period of 30 days after service or giving of written notice
thereof by LANDLORD to TENANT, as provided for service or giving of notice in
this Lease; provided, however, that TENANT shall not be deemed in default
hereunder if it commences to remedy said default within said notice period and
proceeds therewith with due diligence.
(b) REMEDIES - In the event of any default under this Lease,
complete and uncured, as provided in subparagraph A and B immediately above,
LANDLORD may, at LANDLORD's option, exercise one or more or all of the
following remedies, and each shall be deemed cumulative and the exercise of
one or more shall not be deemed or held an election of any remedy to the
exclusion of any other remedy:
A. LANDLORD or his agent or agents shall have the right to and
may enter the Leased Premises as the agent of TENANT and may re-rent the
Leased Premises as the agent of the TENANT and receive the rent therefor on
such terms as shall be satisfactory to LANDLORD, and all rights of TENANT to
repossess the Leased Premises under such leasing shall be terminated and
forfeited. Such reentry by LANDLORD shall not operate to release TENANT from
any rent to be paid or covenants to be performed hereunder during the full
term of this Lease. For the purpose of re-letting, LANDLORD shall be
authorized to make such repairs or alterations in or to the Leased Premises as
may be necessary to place the same in good order and condition. TENANT shall
be liable to LANDLORD for the cost of such repairs or alterations, and all
expenses of such re-entry and re-letting. If the sum realized from the
re-letting is insufficient to satisfy the monthly or term rent provided in
this Lease, LANDLORD, at LANDLORD's option, may require that TENANT pay such
deficiency month by month or LANDLORD may seek said deficiency periodically or
at the end of said unexpired Lease term. LANDLORD shall not in any event be
required to pay to TENANT any surplus of any sums received by LANDLORD
resulting through a re-letting of said Leased Premises and which sum is in
excess of the rent reserved or to be paid under this Lease.
B. The unexpended deposit elsewhere provided herein to be
deposited by TENANT in favor of LANDLORD, to the extent, if any existing, may
be used in restoration of said Leased Premises to the condition existing
before rental to TENANT, including the costs of cleaning up of said Leased
Premises, if any, the costs of advertising said Leased Premises for leasing
through the making of signs or other means, and to the costs of repair or
restoration of said Leased Premises, any or all of the foregoing, and to
payment of any rental commission, and to the extent that there is any
remainder of said deposit, the same shall be applied toward the remaining
rental as it becomes due.
C. Notwithstanding any re-letting without termination, LANDLORD
may at any time thereafter elect to terminate this Lease for such previous
breach and failure to terminate the Lease in the initial instance for such
breach, or the re-letting of the Leased Premises by LANDLORD shall not
constitute a waiver of this right or stop LANDLORD from terminating this Lease
at any subsequent time. Should LANDLORD at any time terminate this Lease for
any breach in addition to any other remedy LANDLORD may have, LANDLORD may
recover from TENANT all damages incurred by reason of such breach, including,
but not limited to:
(1) The worth, at the time of the award of the unpaid rent that
has been earned at the time of termination of this Lease.
(2) The worth, at the time of the award of the amount by which
the unpaid rent 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
TENANT proves could have been reasonably avoided;
(3) 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 loss of rent that TENANT proves could have been reasonably
avoided, and
(4) Any other amount, and court costs necessary to compensate
LANDLORD for all detriment approximately caused by TENANT's default.
"The worth at the time of the award" as used in (1) and (2) of
this paragraph 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 (3) of this paragraph is to be computed by discounting the amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of the
award plus one percent (1%).
D. RIGHT TO PERFORM - If an Event of Default occurs, LANDLORD
may perform such covenant or condition at its option, after notice to TENANT,
All reasonable costs incurred by LANDLORD in so performing shall immediately
be reimbursed to LANDLORD by TENANT. Any performance by LANDLORD of TENANT's
obligations shall not waive or cure such default.
20. LANDLORD DEFAULT - In the event LANDLORD defaults in the performance
of any of its obligations, covenants, representations and warranties hereunder
and if such default continues for a period of fifteen (15) days after written
notice to LANDLORD from TENANT specifying the nature of such default, TENANT
may, at its option, cure the same on behalf of the LANDLORD, whereupon the
cost of such curing shall be due and payable to TENANT from LANDLORD upon
demand therefor by TENANT. The foregoing shall not limit or preclude TENANT
from any other rights and remedies available at law or in equity.
21. ASSIGNMENT AND SUBLETTING - TENANT shall have the absolute right
to assign TENANT's rights under this Lease to a partnership, joint venture,
corporation or entity that is at least fifty percent (50%) owned either
directly or indirectly, by TENANT or a party in interest in the Golf Center,
LLC, or to an entity which controls, is controlled by or is under common
control with TENANT.
Any other assignment of the TENANT's rights under this Lease must be
approved by LANDLORD, which approval will not be unreasonably withheld,
conditioned or delayed. A consent by LANDLORD to one assignment shall not be
deemed to be a consent to any subsequent assignment of this Lease by TENANT.
(a) ASSIGNMENT - Should TENANT be a corporation, any transfer or
assignment of any stock or interest in the corporation totaling in the
aggregate more than fifty percent (50%) of all such stock or interest in the
corporation shall be considered an assignment of this Lease requiring the
prior written consent of LANDLORD; provided, while a transfer of stock or
interest in the corporation of fifty percent (50%) or less shall not be
considered an assignment of this Lease. Upon such transfer, TENANT shall
provide LANDLORD with a copy of the transfer documents which shall include the
name, address, and telephone number of the transferee.
(b) SUBLEASE - TENANT may sublease a portion of the Leased Premises
or TENANT's improvements on the Leased Premises and/or grant a license or
licenses or concession or concessions within the Leased Premises without the
consent of LANDLORD provided that:
(i) Any subtenant, licensee or concessionaire does not occupy
more than fifteen (15%) percent of the Leased Premises;
(ii) Such use is permitted by PARAGRAPH NUMBERED 3 of this
Lease;
(iii) TENANT has executed a sublease agreement with subtenant
which specifically provides for record keeping and reporting as set forth in
the last PARAGRAPH NUMBERED 29(F) hereof.
(iv) TENANT gives LANDLORD prior written notice of such
subletting and/or concession or license, and a copy of those portions of the
subletting or concession/licensing documents relevant to the immediately
preceding Section (iii) and the name, address, and telephone number of the
sublessee, licensee or concessionaire.
TENANT shall not sublease all or any part of the unimproved property
within the Leased Premises without first obtaining LANDLORD's consent. Any
such sublease without LANDLORD's written consent shall be voidable and, at
LANDLORD's election, shall constitute a default. LANDLORD shall have the
right to approve or disapprove any such proposed sublease in LANDLORD's
discretion.
In the event of a sublease, the term of the sublease shall not extend
beyond the term of this Lease and any and all subleases shall contain an
attornment provision whereby the Sublessee shall recognize TENANT's successor
in interest and a non-disturbance provision whereby TENANT's successor shall
recognize the sublease so long as the Sublessee is not in default thereunder
and shall otherwise be expressly made subject to all the terms and covenants
and conditions of this Lease.
22. HOLDOVER - In the event that TENANT shall remain in the demised
Leased Premises after the expiration or sooner termination of the term of this
Lease or any term theretofore extended as elsewhere provided herein, without
having exercised in writing an option contained in this Lease to extend the
Lease term or the then ending extended term, such holding over shall not
constitute a renewal or an extension of this Lease, and shall constitute a
month-to-month tenancy and, if LANDLORD so requires by written notice to
TENANT, the MINIMUM RENT for such holdover period shall be ONE HUNDRED TWENTY
PERCENT (120%) of the MINIMUM RENT effective on the last day of the term or
extended term, LANDLORD may, at LANDLORD's option, elect to treat TENANT as
one who has not removed at the end of his term, and LANDLORD shall thereupon
be entitled to all the remedies against TENANT provided by law or equity in
that situation, or, if not so treated, the tenancy shall be deemed a tenancy
from month to month, subject to the payment each month of the lease rental
provided for herein.
23. NON-WAIVER - The failure of either party to insist upon strict
compliance with or performance of any term, covenant, condition, or option
contained in this Lease or to the exercise of any option or alternative herein
allowed in any one instance or more instances, shall not be construed, deemed,
found or held a waiver or relinquishment for or in the future of that party's
right to insist upon strict performance of each such term, covenant,
condition, option, or alternative hereof and the same shall be and remain in
full force and effect without waiver.
24. NUMBER AND GENDER - All terms and words used in this Lease,
regardless of the number and gender in which they are used, shall be deemed
and construed to include any other number, singular or plural, and any other
gender, masculine, feminine or neuter, as the context or sense of this Lease
or any paragraph or clause herein may suggest or require, the same as if such
words had been fully, limited by or properly written in the required number
and gender.
25. HEIRS, SUCCESSORS AND ASSIGNS - Each term, covenant, condition and
agreement contained in this Lease, shall be deemed and construed to inure to
the benefit of, apply to, and be binding upon each party hereto and the
respective heirs, executors, administrators, legal representatives, successors
and assigns of each respectively, except as herein expressly stated to the
contrary.
26. PARAGRAPH CAPTION - The captions of paragraphs contained in this
Lease are inserted as a convenience only and by way of guide or reference
only, and none limit, enlarge, define, or otherwise affect the scope or intent
of this Lease or any provision thereof, and none shall in any way be used as a
basis of construction or interpretation of this Lease.
27. MINIMUM RENT AND ADJUSTMENT
A. Beginning on the date which is the earlier of the two dates: (a)
the date that TENANT first opens substantially all of the facilities for the
uses contemplated by PARAGRAPH NUMBERED 3 hereof for business on the Leased
Premises (the Rental Commencement Date); or, (b) February 1, 1998, TENANT
shall pay to LANDLORD minimum rent in the amount of THREE HUNDRED NINETY EIGHT
THOUSAND SEVENTY SEVEN AND 0/100 DOLLARS ($398,077.00) per year (herein
"Minimum Rent") in monthly installments of THIRTY THREE THOUSAND ONE HUNDRED
SEVENTY THREE AND 08/100 DOLLARS ($33,173.08) each (herein "Monthly
Installments"),
B. All minimum rent shall be payable in equal monthly
installments and in advance without deduction or offset on the first day of
each month during the term of this Lease. Any Minimum Rent payable for
less than a full calendar month shall be paid on a proportionate basis based
on the number of days in that calendar month, Minimum Rent shall be paid to
LANDLORD, in lawful money of the United States at the address specified in
Paragraph 34 below or at such other place as LANDLORD shall from time to time
designate in writing.
C. The Minimum Rent shall be increased at the end of the fifth
(5th) year of the term and every five (5) years thereafter ("Adjustment Date")
by an amount equal to ten percent (10%) of the minimum Monthly Installment for
the month immediately preceding the Adjustment Date. Upon adjustment of the
Monthly Installment as provided in this Lease, the parties shall immediately
execute an amendment to the Lease stating the new Monthly Installment and the
concomitant changes to PARAGRAPH NUMBERED 29 hereof with the reference to
Percentage Rental.
D. In the event TENANT shall be late in paying any Monthly
Installment, then TENANT shall pay a "late charge" of FIVE HUNDRED DOLLARS
($500.00) to LANDLORD for each month late, in addition to any such rent
payments. For purposes of this paragraph, any rent payment received by
LANDLORD more than ten (10) business days after its due date shall be deemed a
late payment.
28. DEPOSIT - Concurrently with the execution of this Lease and/or in
accordance with the terms of the Agreement, TENANT has deposited the sum of
SIXTY-SIX THOUSAND THREE HUNDRED FORTY-SIX AND SIXTEEN CENTS ($66,346.16) with
Landlord (herein RENTAL DEPOSIT). Once the terms of the Deposit Agreement are
fulfilled and this Lease becomes effective, the sum so deposited shall be
applied first to the said Minimum Monthly Rent payment first coming due and
thereafter to each successive monthly Minimum Rent payment until exhausted.
29. PERCENTAGE RENTAL -
A. In addition to the Minimum Rent payable annually of THREE
HUNDRED NINETY EIGHT THOUSAND SEVENTY SEVEN AND 0/100 DOLLARS ($398,077.00),
TENANT agrees to pay LANDLORD a percentage rental based upon the four (4)
kinds of gross sales receipts, below set forth, that is, Gross sales receipts
received from customers on the Leased Premises and made up of or consisting of
the following if the total thereof is in excess of THREE HUNDRED NINETY EIGHT
THOUSAND SEVENTY SEVEN AND 0/100 DOLLARS ($398,077.00) per annum:
(i) ten percent (10%) of Gross Annual Sales derived from
driving range tee rentals and par 3 golf course greens fees;
(ii) three percent (3%) of Gross Annual Sales derived from sales
of foods and beverages;
(iii) three percent (3%) of Gross Annual sales derived from sale
of merchandise;
(iv) three percent (3%) of Gross Annual Sales from any other
revenue source derived from All-American Golf Center guests or patron usage of
the Leased Premises.
B. Each Lease Year shall be considered as an independent accounting
period for the purpose of computing the total amount of percentage rental, if
any, payable by TENANT to LANDLORD; and, with respect thereto, (a) if the
total of the said annual percentage receipts for said four (4) kinds of Gross
Annual Sales does not exceed in amount THREE HUNDRED NINETY EIGHT THOUSAND
SEVENTY SEVEN AND 0/100 ($398,077.00), no percentage rental is due or payable
for that Lease Year; and, if TENANT has paid percentage rental, the amount of
such excess payment shall be applied by LANDLORD to the monthly Minimum
Rent(s) next payable in the ensuing Lease Year, except in the case of the last
Lease Year, in which case such adjustment will be made within THIRTY (30) DAYS
after the termination of this Lease; and, (b) if the total of the said annual
percentage receipts exceeds THREE HUNDRED NINETY EIGHT THOUSAND SEVENTY SEVEN
AND 0/100 DOLLARS ($398,077.00) and, in turn, the amount paid by TENANT
exceeds the excess total of said Gross Annual Sales receipts that should be
paid for the Lease Year, the excess paid by TENANT shall be similarly applied
to monthly Minimum Rent as above provided; and, if based upon the total of the
annual percentage receipts over THREE HUNDRED NINETY EIGHT THOUSAND SEVENTY
SEVEN AND 0/100 DOLLARS ($398,077.00), there is a sum yet owing by TENANT for
the Lease Year, then TENANT shall pay said sum to LANDLORD with the monthly
Minimum Rent payment next due.
C. Percentage rent shall be computed each percentage rent period
(as defined in Subparagraph D) below, On or before the fifteenth (15th) day of
the calendar month immediately following the close of each percentage rent
THIRTY THREE THOUSAND ONE HUNDRED SEVENTY THREE AND 08/100 DOLLARS
($33,173.08)per month and NINETY NINE THOUSAND FIVE HUNDRED NINETEEN AND
24/100 DOLLARS ($99,519.24) per calendar quarter that TENANT has paid during
the percentage rent period. TENANT shall pay to LANDLORD the amount by which
the sum computed as a percentage of TENANT's gross sales during the percentage
rent period exceeds the herein elsewhere provided Minimum Rent of THIRTY THREE
THOUSAND ONE HUNDRED SEVENTY THREE AND 08/100 DOLLARS ($33,173.08) per month
and NINETY NINE THOUSAND FIVE HUNDRED NINETEEN AND 24/100 DOLLARS ($99,519.24)
per calendar quarter, that TENANT has paid during the percentage rent period.
D. PERCENTAGE RENT PERIOD; ACCOUNTING PERIODS
DEFINED: The percentage rent period shall be Quarterly. The last
percentage rent period shall end on the date the term expires or terminates.
"Lease Year" is A PERIOD COMMENCING ON THE RENTAL COMMENCEMENT
DATE defined in PARAGRAPH NUMBERED 27 above, AND ENDING ONE (1) YEAR LATER,
and, severally, each such 12 month period thereafter.
"Monthly" rent periods are calendar months within each Lease
Year.
"Quarterly" rent periods are three (3) calendar months within each
Lease Year.
▇. ▇▇▇▇▇ SALES DEFINED: With respect to "Gross Sales" above
designated, they include those of TENANT, subtenants, licensees, and
concessionaires, if any, whether for cash or on credit (whether collected or
not), made on the Leased Premises, whether made by personnel or vending or
other machines.
Gross Sales shall not include, or if included there shall be
deducted (but deducted only to the extent they have been included), the
following:
(1) The selling price of all merchandise returned by customers
and accepted for full credit, or the amount of discounts, refunds, and
allowances made on such merchandise.
(2) Sums and credits received in the settlement of claims for
loss of or damage to merchandise.
(3) The price allowed on all merchandise traded in by customers
for credit or the amount of credit for discounts and allowances made instead
of acceptance of merchandise.
(4) Gift certificates, or similar vouchers, until such time as
they shall have been converted into a sale by redemption.
(5) Sales and use taxes, so-called luxury taxes, consumers
excise taxes, gross receipts taxes, and other similar taxes now or in the
future imposed on the sale of service or merchandise, but only if such taxes
are added to the selling price during the percentage rent period.
(6) Sales of fixtures, equipment or property which are not
TENANT's stock in trade.
(7) Tips or gratuities given by customers to TENANT's agents,
employees or servants, whether such tips or other gratuities are automatically
added to the customer's ▇▇▇▇ or given by the customer separate and apart from
the ▇▇▇▇.
F. STATEMENT OF GROSS SALES - TENANT shall furnish to LANDLORD a
statement of TENANT's gross sales within fifteen days after the end of each
percentage rent period, and an annual statement of gross sales within THIRTY
(30) days after the end of each Lease year, Each statement shall be signed and
certified to be correct by an officer of TENANT.
At TENANT's option, TENANT shall keep at the Leased Premises or at
TENANT's main office currently located in Las Vegas, Nevada, full and accurate
books of account, records, cash receipts, and other pertinent data showing its
Gross Sales. TENANT shall install and maintain accurate receipt-printing cash
registers and shall record on the cash registers every sale and other
transaction made from the Leased Premises. Such books of account records,
cash receipts, and other pertinent data shall be kept until the lapse of a
period of two (2) years after the end of each Lease Year.
LANDLORD shall be entitled within one (1) year after expiration or
termination of this Lease to inspect and examine all of TENANT's books of
account, records, cash receipts, and other pertinent data, to enable LANDLORD
to ascertain TENANT's Gross Sales. TENANT shall cooperate fully with LANDLORD
in making the inspection. LANDLORD shall also be entitled, once during each
Lease Year to an independent audit conducted of TENANT's books of account,
records, cash receipts, and other pertinent data to determine TENANT's Gross
Sales for the immediately preceding Lease Year, by a certified public
accountant to be designated by LANDLORD. The audit shall be limited to the
determination of Gross Sales and shall be conducted only after notice to
TENANT and during usual business hours at the Leased Premises or at TENANT s
main office.
If the audit shows that there is a deficiency in the payment of any
percentage rent, the deficiency shall become immediately due and payable. If
the audit shows that more percentage rent was paid than was due in accordance
herewith, such overpayment shall be credited against the next ensuing Minimum
Rental payment(s). The costs of the audit shall be paid by LANDLORD unless
the audit shows that TENANT understated Gross Sales by three (3%) percent or
more for the Lease Year, in which case TENANT shall pay all of LANDLORD's
costs of the audit. If such audit indicates an understatement of Gross Sales,
such examined records shall continue at all times to be held by TENANT for
further examination until full payment of the deficiency in rent paid and
resulting from such understatement. To audit, LANDLORD must give TENANT
written notice at least three (3) business days prior to arrival of the
auditor and the name of the auditor, and such audit shall be conducted with as
little disruption of TENANT's business as is reasonably possible and be
conducted during normal business hours.
LANDLORD shall keep any information gained from such statements,
inspection, or audit confidential and shall not disclose it other than to
carry out the purposes of this Lease, except that LANDLORD shall be permitted
to divulge the contents of any statements in connection with any financing
arrangements or sale of LANDLORD's interest in the Leased Premises.
It shall be and is the duty of TENANT to require by each licensing
agreement, concession agreement, and sublease, as the case may be, and, if
applicable, each such licensee, concessionaire, and subtenant, as the case may
be, to keep and' provide to TENANT records, reports and statements
substantially like those required of TENANT to be provided to LANDLORD
hereunder and for the reporting periods herein required and the same to be
provided at the times herein provided, however, advanced by due date by five
(5) days, over that herein provided and which agreements shall further provide
that LANDLORD herein may as part of its audit of TENANT's records audit said
licensees, concessionaires, or subtenant's records, which records will be held
and retained for periods equal to those required of TENANT herein. TENANT
shall not be in default in the event that any subtenant, concessionaire or
licensee fails to properly report gross sales, nor will TENANT be obligated to
pay any audit fees incurred in any such audit.
G. NEGATION OF PARTNERSHIP: LANDLORD shall not become or be deemed,
found or held a partner or a joint venture with TENANT by reason of the
provisions of this Lease.
30. LIENS - The LANDLORD and TENANT covenant each with the other that
each party ordering labor or materials for use on or about the Leased Premises
or any parcel wherein any lien shall affect the Leased Premises shall hold the
other harmless against any loss or damage due to any lien filed against the
Leased Premises on account of non-payment or dispute with respect to labor or
materials furnished in connection with construction referred to herein or any
other construction on the Leased Premises and such party shall prevent entry
of any judgment against the Leased Premises. The party against whom such lien
is filed shall notify the other in writing within fifteen (15) days of its
notice of filing, and said lien shall be removed within' thirty (30) days
thereafter or protected by bond or surety should such party so affected desire
to contest such lien.
31. INDEMNIFICATION - TENANT hereby covenants to indemnify, save and
hold LANDLORD and the Leased Premises free, clear and harmless from each
liability, loss, cost, charge, penalty, obligation, expense, attorney's fee,
litigation, judgment, damage, claim or demand of any kind whatsoever in
connection with, arising out of, or by reason of any violation of law,
ordinance or regulation by TENANT, subtenants, licensees, concessionaires, or
of any independent contractor, agent, or employee of TENANT while in, upon,
about or in any way connected with the Leased Premises or any portion thereof
during the term of this Lease.
LANDLORD hereby covenants to indemnify, save and hold TENANT and
the Leased Premises free, clear and harmless from each liability, loss, cost,
charge, penalty, obligation, expense, attorneys fee, litigation, judgment,
damage, claim or demand of any kind whatsoever in connection with, arising out
of, or by reason of any violation of law, ordinance or regulation by LANDLORD
or of any independent contractor, agent, or employee of LANDLORD while in,
upon, about or in any way connected with the Leased Premises or any portion
thereof or LANDLORD's Property during the term of this Lease.
32. OFFSET STATEMENT - Each party agrees at any time and from time to
time during the term of this Lease and within fifteen (15) days after written
demand therefor, to execute and deliver to the party requesting a certificate
in recordable form certifying that this Lease is in full force and effect and
that there are no defenses or offsets thereto, or stating such defenses or
offsets as are claimed by the party responding and stating the dates to which
all rentals have been paid.
33. QUIET POSSESSION - LANDLORD covenants that TENANT may quietly
have, hold and enjoy the Leased Premises during the term of this Lease
without any disturbance from LANDLORD or from any other person claiming
through LANDLORD.
34. SERVICE OF NOTICES - Any and all notices and demands by or from
LANDLORD to TENANT, or by or from TENANT to LANDLORD, required or desired to
be given hereunder shall be in writing and shall be validly given or made if
served either personally or if deposited in the United States mail, certified
or registered, postage prepaid, return receipt requested or given by facsimile
(fax). If such notice or demand be served personally, service shall be
conclusively deemed made at the time of such personal service. If such notice
or demand be served by registered or certified mail in the manner provided,
service shall be deemed to have been given on the date marked on the return
receipt unless delivery is refused or cannot be made, in which case the date
of postmark shall be deemed the date notice has been given. If such notice or
demand is given by fax, the notice shall be deemed given when received.
Any notice or demand to LANDLORD shall be addressed to Landlord at:
Urban Land of Nevada
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇, President
Any notice or demand to TENANT shall be addressed to Tenant at:
All-American Golf Center, LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Managing Partner
With a copy to:
Callaway Golf
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
ATTN: ▇▇▇▇▇ ▇▇▇▇
Any party hereto may change its address for the purpose of receiving
notices or demands as herein provided by a written notice given in the manner
aforesaid to the other party hereto, which notice of change of address shall
not become effective, however, until the actual receipt thereof by the other
party.
35. PARTIAL INVALIDITY - If any term, provision, covenant or condition
of this Lease, or any application thereof, is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, all provisions, covenants
and conditions of this Lease, and all applications thereof, not held invalid,
void or unenforceable, shall continue in full force and effect.
36. BROKERS - Each party warrants that it has not had any dealings with
any Realtor, broker or agent in connection with the negotiation of this Lease,
or any dealings of any character the result of which would make either party
liable for any broker s commission or compensation of any kind.
LANDLORD and TENANT each agree to indemnify, defend and hold the other
harmless from and against all loss and expense (including attorney's fees),
damage and liability resulting from breach or the claims of any broker or
finder on account of any services claimed to have been rendered to the
indemnifying party in connection with the transaction contemplated by this
Lease.
37. CONDEMNATION -
A. DEFINITIONS:
(1) "Condemnation" means (a) the exercise of any governmental
power, whether by any legal proceeding or otherwise, by a condemnor and (b) a
voluntary sale or transfer by LANDLORD to any condemnor, either under threat
of condemnation or while any legal proceeding for condemnation is pending.
(2) "Date of Taking" means the date the condemnor has the right
to possession of the leased premises being condemned.
(3) "Award" means all compensations, sums, or anything of value
awarded paid, or received on a total or partial condemnation.
(4) "Condemnor" means any public or quasi-public authority, or a
private corporation or individual, having the power of condemnation.
B. RIGHTS AND OBLIGATIONS TO BE GOVERNED BY LEASE: If, during the
term of this Lease or during the period of time between the execution of this
lease and the date this Lease commences, there is any taking of all or any
part of the buildings, other improvements, or land of which the Leased
Premises are a part or any interest I the Lease by condemnation or of any of
the COMMON AREAS, the rights and obligations of the parties shall be
determined pursuant to the provisions hereof and its subdivisions.
C. TOTAL TAKING: If the Leased Premises are totally taken by
condemnation, this Lease shall terminate on the date of taking.
D. PARTIAL TAKING OF LEASED PREMISES: If any portion of the Leased
Premises is taken by condemnation, this Lease shall remain in effect, except
that TENANT can elect to terminate this lease if as a result of such partial
taking it is no longer economically feasible for TENANT to conduct its
business on the Leased Premises. If TENANT elects to terminate this Lease,
TENANT must exercise its right to terminate pursuant to this paragraph by
giving notice to LANDLORD within ninety (90) days after the nature and the
extent of the taking have been finally determined. If TENANT elects to
terminate this Lease as provided in this paragraph, TENANT also shall notify
LANDLORD of the date of termination, which date shall not be earlier than
thirty (30) days nor later than ninety (90) days after TENANT has notified
LANDLORD of its election to terminate; except, that this Lease shall terminate
on the date of taking if the date of taking falls on a date before the date of
termination as designated by TENANT. If TENANT does not terminate this Lease
within the ninety (90) day period, this Lease shall continue in full force and
effect.
E. EFFECT ON RENT: If any portion of the Leased Premises is taken by
condemnation and this Lease remains in full force and effect, there shall be
no reduction in the MINIMUM MONTHLY RENTAL.
F. RESTORATION OF LEASED PREMISES: If there is a partial taking of
the Leased Premises and this Lease remains in full force and effect as herein
provided, LANDLORD shall assign to TENANT that portion of the award received
for improvements and severance damages which are reasonably needed for
TENANT's reconstruction and restoration of the remaining portions of the
Leased Premises, including any and all improvements made heretofore together
with the remaining portions of the parking areas to an architectural whole in
substantially the same condition that the same were in prior to such taking.
The portion of the award received by Landlord for land value will be entirely
retained by LANDLORD and will not be made available to TENANT for any reason.
G. AWARD-DISTRIBUTION: All compensation awarded for any taking
whether for the whole or a portion of the Leased Premises, shall belong to
LANDLORD; provided that TENANT shall be entitled to any award made whether to
LANDLORD or to TENANT for the un-depreciated portion of TENANT's improvements,
moving expenses, the value of TENANT's trade fixtures, and loss or damage to
TENANT's business to the extent allowable under the law then in force and
effect. A leasehold mortgagee shall have no claim or interest in LANDLORD's
award for the depreciated portion of TENANT's improvement. TENANT shall have
no claim against LANDLORD or the condemning body or entity for any portion of
the award relating to the value of the un-expired term of this Lease.
38. - SECTION 38 HAS BEEN INTENTIONALLY OMITTED.
39. TAXES - Subject to apportionment of the taxes to the Rental
Commencement Date (the apportionment to be made on the basis of the fraction
derived from the acreage area of the Leased Premises to the total acreage
owned by LANDLORD out of which the Leased Premises are carved), TENANT shall
pay promptly and before they become delinquent (provided all statements are
received by TENANT in a timely manner), all real and personal property taxes,
assessments and other impositions, including, but not limited to, general and
special, direct or indirect, that become due at any time during the term of
this Lease upon or against the Leased Premises including all buildings and
improvements of TENANT, TENANT's furniture, fixtures, equipment now or
hereafter thereon which may be or are lawfully assessed either in the name of
the LANDLORD or TENANT. Copies of all paid receipts shall be forwarded to
LANDLORD. Any leasehold improvements to the Leased Premises shall be deemed
TENANT's personal property for purposes of this section. TENANT shall be
liable for penalties, interest or other charges imposed upon delinquent
payment provided TENANT has received the applicable tax bills and a written
statement of apportionment on a timely basis. TENANT shall pay all real
estate taxes on the land as distinguished from improvements or buildings
during the Lease Term hereof and forward the paid receipt evidencing such
payment to LANDLORD.
In the event assessments are payable in installments, TENANT shall have
the right to elect to pay same over the longest available installment period;
provided that any special assessments resulting from TENANT's development or
improvements must be paid off prior to the end of the Lease Term or any
extension thereof. TENANT shall not be obligated to pay any such installments
due and payable outside the term hereof or any extended terms if extended by
TENANT. Any taxes applicable to this Lease which shall be assessed during and
for the lease term but shall not be due and payable until after the expiration
thereof shall remain an obligation of TENANT that survives such expiration.
TENANT shall not be liable for any inheritance tax, estate tax, gift tax,
transfer tax, income tax, franchise tax, corporate tax, or similar tax upon
the business of LANDLORD nor for any tax or assessment arising from the sale,
lease or other disposition of the Leased Premises, in whole or in part,
whether from a tax re-evaluation of said real estate or an imposition directly
on such transaction; provided, however, that TENANT shall be responsible for
its share of any increases in real property taxes or assessments as set forth
in this PARAGRAPH NUMBERED 39 resulting from an increased valuation of the
Leased Premises because of a sale of the Leased Premises or a revaluation by
any governmental entity.
LANDLORD shall provide TENANT with each assessment notice with respect to
the Leased Premises within fifteen (15) days of receipt of the same to permit
TENANT to contest the same if appropriate. LANDLORD shall cause the Tax
Assessor of ▇▇▇▇▇ County, Nevada to carve out from the remaining property of
LANDLORD and separately assess the Leased Premises and improvements if it is
feasible for LANDLORD to do so.
The TENANT shall have the right, at its own cost and expense, to initiate
and prosecute any proceedings permitted by law for the purpose of obtaining an
abatement or of otherwise contesting the validity or amount of taxes or
assessments assessed to or levied upon the Leased Premises. If required by
law, TENANT may take such action in the name of the LANDLORD, who shall
cooperate with the TENANT to such extent as reasonably required to the end
that such proceedings may be brought to a successful conclusion, TENANT shall
fully indemnify and hold LANDLORD harmless from all loss, cost, damage and
expense incurred in furtherance of any contest or abatement proceeding.
TENANT agrees that in the event of any such election to contest, that it will
(i) pay the tax (unless such payment would operate to bar its right to
contest), and (ii) assure LANDLORD as reasonably necessary that the Leased
Premises and any mortgage lien thereon, if any, will not be subject to
forfeiture or foreclosure, as the case may be.
40. SIGNAGE RIGHTS - TENANT acknowledges LANDLORD's existing seven (7)
billboard signs along Las Vegas Boulevard and agrees to permit LANDLORD to
maintain such signs immediately to the east of the ONE HUNDRED (100) foot
right of way of Las Vegas Boulevard, subject to TENANT's reasonable approval
rights. LANDLORD shall, prior to the effective date of this Lease, and at no
cost to TENANT, exercise its best, good faith efforts to relocate all signs
along Las Vegas Boulevard to immediately to the east of the new ONE HUNDRED
(100) foot setback in accordance with the Agreement (or cause the same to be
so relocated). LANDLORD reserves the right to place two (2) free standing
signs on the Leased Premises along Sunset Road at locations within ONE HUNDRED
(100) FEET of the Sunset Road right of way and outside of the "Clear Zone",
cross-bolded in red on EXHIBIT A"; with specific locations to be approved by
TENANT, which approval shall not be unreasonably withheld, conditioned or
delayed.
TENANT agrees not to permit third parties not involved in an operation on
the Leased Premises to advertise on the Leased Premises. All signs put on the
Leased Premises by TENANT shall be subject to the prior written approval of
LANDLORD which approval will not be unreasonably denied, conditioned or
delayed. TENANT shall be permitted to put signage on the buildings and/or on
pylon or monument signs within the Leased Premises for parties who are doing
business or occupying space within the Leased Premises or parties who have an
interest in the TENANT's business by virtue of a license or sponsorship
agreement with the TENANT. Audio equipment used on the Leased Premises will
not be in violation of any regulations governing the use of audio equipment,
LANDLORD shall not place or permit to be placed any signs on the Leased
Premises other than as expressly set forth herein.
4l. SECTION 41 HAS BEEN INTENTIONALLY OMITTED,
42. GAMING - TENANT is hereby granted the right itself or by and through
a sub-lessee to have up to fifteen (15) slot machines and video poker machines
in the clubhouse or any other facility, subject to licensing. In addition to
all other rental and charges payable hereunder, if TENANT conducts a gaming
enterprise on the Leased Premises in accordance with this PARAGRAPH NUMBERED
42, it shall pay LANDLORD a sum equal to TWENTY-FIVE PERCENT (25%) of the "net
win" as defined in any agreement between TENANT and a gaming licensee,
concessionaire or slot route operator.
43. - SECTION 43 HAS BEEN INTENTIONALLY OMITTED
44. INFRASTRUCTURE - LANDLORD and TENANT mutually agree to share at no
cost to each other the benefits derived from any future development of any
accesses or utility improvements, whether on the Leased Premises or on the
balance of the LANDLORD's Property. Further, LANDLORD and TENANT agree that
any third party who may in the future benefit from any of the improvements
mentioned herein will reimburse, on a pro-rata basis, either the LANDLORD or
the TENANT, depending on which paid for the improvements to which the third
party is deriving benefit.
45. - SECTION 45 HAS BEEN INTENTIONALLY OMITTED.
46. TENANT'S TRADEMARKS/TRADE NAMES - LANDLORD shall not use any
trademarks or trade names of TENANT or of any of TENANT's subtenants,
licensees or concessionaires without the prior written consent of TENANT; and,
where applicable, of any affected subtenant, licensee or concessionaire.
47. HAZARDOUS MATERIALS - LANDLORD has no knowledge that the Leased
Premises contains any hazardous substance. A hazardous substance for purposes
of this Lease is defined as any substance whose nature and/or quantity of
existence, use, manufacture or affect, render it subject to Federal, State, or
local regulation, investigation, remediation, or removal as potentially
injurious to public health or welfare, i.e. including, but not limited to,
asbestos-containing materials, PCB's or underground tanks.
Neither TENANT nor its agents, employees, or contractors shall cause or
permit hazardous substances to be brought upon, kept, or used in, on, or about
the Leased Premises, except as permitted under and in full compliance with all
environmental laws. If TENANT obtains knowledge of the actual or suspected
release of a hazardous substance, then TENANT shall promptly notify LANDLORD
of such actual or suspected release. TENANT shall immediately notify LANDLORD
of any inquiry, test, investigation, or enforcement proceeding by or against
TENANT involving a release. If TENANT or its agents, employees, or
contractors shall cause or permit a release, then TENANT shall promptly notify
LANDLORD of such release and immediately begin investigation and remediation
of such release, as required by all environmental laws.
If TENANT breaches any obligation set forth in this paragraph, or if a
release is caused or permitted by TENANT or its agents, employees, or
contractors, and such release results in contamination of the Leased Premises,
then TENANT shall indemnify and defend LANDLORD (and LANDLORD's employees,
agents, partners, officers, and directors) against, and protect and hold
LANDLORD (and LANDLORD's employees, agents, partners, officers, and directors)
harmless from any and all claims, actions, suits, proceedings, judgments,
losses, costs, damages, liabilities (including, without limitation, sums paid
in settlement of claims), fines, penalties, or expenses (including, without
limitation, sums paid in settlement of claims), fines, penalties, or expenses
(including, without limitation, reasonable attorney's fees and consultant's
fees, investigation and laboratory fees, and court costs and litigation
expenses) that arise during or after the term as a result of such breach or
contamination.
This indemnity shall include, without limitation, (i) any damage,
liability, fine, penalty, punitive damage, cost, or expense arising from any
claim, action, suit, or proceeding for: personal injury (including sickness,
disease, or death), tangible property damage, nuisance, pollution,
contamination, leak, spill, release, or other effect on the environment, and
(ii) the cost of any investigation, repair, clean-up, treatment, or
detoxification of the Leased Premises and the preparation and implementation
of any closure, disposal, or other actions in connection with the Leased
Premises.
48. SOLE AND ONLY AGREEMENT - This Lease constitutes the sole and only
agreement between LANDLORD and TENANT respecting the Leased Premises, the
leasing of the Leased Premises to TENANT, the construction of the improvements
described in this Lease on the Leased Premises, or the Lease terms herein
specified and correctly sets forth the obligations of LANDLORD and TENANT to
each other as of its date, Any subsequent agreements or representations
respecting the Leased Premises, their Leasing to TENANT by LANDLORD, or any
other matter discussed in this Lease not expressly set forth in this Lease
shall be null and void unless they are in writing and executed by both
parties.
49. ACTING IN GOOD FAITH, DISCRETION, AND WITH REASONABLENESS - Whenever
either LANDLORD or TENANT must act pursuant to the terms of this Lease, said
actions shall be in good faith and any consents or approvals required by one
party from the other shall not be unreasonably withheld, conditioned or
delayed.
50. NO MERGER - There shall be no merger of the leasehold estate created
by this Lease with the fee estate in the Leased Premises by reason of the fact
that the same person may own or hold (i) the leasehold estate created by this
Lease or any interest in the leasehold estate and (ii) the fee estate in the
Leased Premises or any interest in the fee estate unless and until LANDLORD
and TENANT shall execute, acknowledge and record a written instrument
effecting the merger.
5l. TRANSFER OF LANDLORD'S INTEREST - LANDLORD shall have the right at
any time to sell, transfer, assign, pledge, or otherwise dispose of LANDLORD's
interest in the Leased Premises and in this Lease to any person, firm, or
corporation. In the event of such sale, transfer, assignment, or other
disposition, all obligations of LANDLORD hereunder shall devolve upon the
transferee and LANDLORD shall be released from all obligation and liability
thereafter accruing hereunder.
52. EFFECT OF EXERCISE OF PRIVILEGE BY LANDLORD - The exercise of any
right, or option or privilege hereunder by LANDLORD shall not exclude LANDLORD
from exercising any and all other rights, privileges, and options hereunder,
and LANDLORD's failure to exercise any said right, option, or privilege, shall
not relieve TENANT from TENANT's obligations to perform each and every
covenant and condition on TENANT's part to be performed hereunder, nor from
damage or other remedy for failure to perform or meet the obligation of this
Lease.
53. INSOLVENCY:
(a) For any attachment, garnishment, or execution of this Lease or
the interest of the TENANT hereunder in any action brought by or against the
TENANT, the TENANT shall have fifteen (15) days in which to provide the
LANDLORD written notification of such. Following TENANT's written
notification to LANDLORD, the TENANT shall have sixty (60) days in which to
cure. if such attachment, garnishment, or execution of this Lease brought by
or against TENANT cannot be cured within such sixty (60) day period, TENANT
shall not be in default hereunder; provided, TENANT has begun to cure within
such sixty (60) days and continues to diligently pursue a cure. Failure by
TENANT to either (a) notify LANDLORD as required above, or (b) cure (or
commence cure activity) within sixty (60) days following Notification shall
constitute a breach of this Lease by TENANT and a default hereunder.
(b) To the full extent permissible under the Bankruptcy Reform Act of
1978, specifically Section 365 thereof (U.S.C. 365) or any successor thereto,
if TENANT shall file a voluntary petition in bankruptcy or take the benefit of
any insolvency act or be dissolved or adjudicated a bankrupt, or if a receiver
shall be appointed for its business or its assets and the appointment of such
receiver is not vacated within sixty (60) days after such appointment, or if
it shall make an assignment for the benefit of its creditors, then and
forthwith thereafter the LANDLORD shall have all of the rights provided in
Paragraph 19 of this Lease in the event of TENANT's default hereunder.
54. EXECUTION OF DOCUMENTS - LANDLORD and TENANT shall each cooperate
with the other and execute such documents as the other party may reasonably
require or request so as to enable it to conduct its operations, so long as
the requested conduct or execution of documents does not have the effect of
derogating or altering the powers, rights, duties and responsibilities of the
respective parties.
55. INABILITY TO PERFORM/FORCE MAJEURE - The obligations of either party
hereunder shall not be affected or impaired nor shall either party be in
default of its obligations hereunder because such party is unable to fulfill
said obligations or is delayed in doing so, if such inability or delay is
caused by reason of strike, labor troubles, acts of God, governmental laws,
ordinances, rules or regulations or any other cause beyond the reasonable
control of such party.
56. GOVERNING LAW - This Lease, and all matters relating to this Lease,
shall be construed under the laws of the State of Nevada.
57. LANDLORD'S WARRANTIES AND REPRESENTATIONS - LANDLORD hereby warrants
and represents as follows:
(a) TITLE - LANDLORD has good and indefeasible fee simple title to
the Leased Premises and shall be fully capable of delivering to TENANT in
accordance with the terms and provisions of this Lease undisturbed possession
and quiet enjoyment of the Leased Premises,
(b) AUTHORITY OF LANDLORD - This Lease is valid and binding upon
LANDLORD and enforceable against it in accordance with its terms, Without
limiting the generality of the foregoing, (i) the execution and delivery of
this Lease by the person executing this Lease on behalf of LANDLORD and the
consummation by LANDLORD of the transactions contemplated hereby have been
specifically authorized by all requisite corporate action and (ii) the
transactions contemplated hereby are within LANDLORD's purposes and powers as
set forth in the applicable organizational documents forming and governing
LANDLORD.
(c) CONDEMNATION - To LANDLORD's knowledge, there is no pending or
threatened condemnation or similar proceeding affecting the Leased Premises or
any portion thereof nor does LANDLORD have any knowledge that any such action
is presently contemplated.
(d) PENDING LITIGATION - There are no legal actions, suits or other
legal or administrative proceedings pending or threatened against LANDLORD
that would have a material adverse effect upon the Leased Premises, LANDLORD's
interest therein, TENANT's contemplated use thereof or which would prohibit
LANDLORD from completing this transaction.
(e) PARTIES IN POSSESSION/CONTRACTS - No person or entity is in
possession of any portion of the Leased Premises as lessee, tenant at will or
at sufferance, or otherwise, and no person or entity has any right or option
to lease, purchase, occupy, use or possess any portion of the Leased Premises.
There are no maintenance, operations, management or miscellaneous contracts
affecting any portion of the Leased Premises.
(f) NO VIOLATIONS - LANDLORD has no present knowledge of any
violation of any ordinance, regulation, law or statute of any governmental or
quasi-governmental authority pertaining to the Leased Premises or any portion
thereof. The execution by LANDLORD of this Lease and the consummation by
LANDLORD of the transaction contemplated hereby does not and during the Term
of this Lease will not result in a breach of any term or provision of or
constitute a default or a condition which with notice or lapse of time or both
would ripen into a default under any indenture, agreement, instrument or
obligation to which LANDLORD is a party or to which LANDLORD or the Leased
Premises or any portion thereof is subject.
(g) DEBTS AND LIENS - LANDLORD has not incurred and to LANDLORD's
knowledge there are no unpaid charges, debts, liabilities, claims or
obligations as a result of the construction, occupancy, ownership, use or
operation of the Leased Premises which could give rise to any mechanic's,
materialments or other statutory lien against the Leased Premises or any
portion thereof,
(h) HAZARDOUS MATERIALS AND HAZARDOUS MATERIALS CONTAMINATION
DEFINITIONS:
A. For the purposes of this Lease, the parties agree that, unless the
content otherwise specifies or requires, the following terms shall have the
meaning herein specified:
(i) "Hazardous Materials" shall mean (a) any "hazardous waste" as
defined by the Resource Conservation and Recovery Act of 1976 (42 U. S,C,
Section 6901 et secr,) ("CERCLAII) as amended from time to time, and
regulations promulgated thereunder; (c) asbestos; (d) polychlorinated
bi-phenyls; (e) underground storage tanks, whether empty, filled or partially
filled with any substance, (f) any substance the presence of which on the
Leased Premises is prohibited by any Governmental Requirements; and (g) any
other substance which by any Governmental Requirements requires special
handling or notification of any federal, state or local governmental entity in
its collection, storage, treatment, or disposal.
(ii) "Hazardous Materials Contamination" shall mean the
contamination (whether presently existing or hereafter occurring) of the
Improvements, facilities, soil, ground water, air or other elements on or of
the Leased Premises by Hazardous Materials, or the contamination of the
buildings, facilities, soil, ground water, air or other elements on or of any
other property as a result of Hazardous Materials at any time (whether before
or after the date of this Lease) emanating from the Leased Premises.
(iii) "Governmental Authority" shall mean the United States, the
State of Nevada, the county in which the Leased Premises is situated (or each
such county if the Leased Premises is situated in more than one county), the
city in which the Leased Premises is situated (or each such city if the Leased
Premises is situated in more than one city), and any political subdivision of
any of the foregoing, and any agency, department, commission, board, bureau,
court or instrumentality of any of them which now or hereafter has
jurisdiction over the LANDLORD or the construction, development, management
and operation of the Leased Premises.
(iv) "Governmental Requirement" shall mean any law, ordinance,
order, rule, regulation or directive of a Governmental Authority.
B. LANDLORD hereby expressly warrants and represents:
(i) To the best of LANDLORD's knowledge, no Hazardous Materials
are now located on the Leased Premises, and neither LANDLORD nor any other
person has ever caused or permitted any Hazardous Materials to be placed,
held, located or disposed of on, under or at the Leased Premises or any part
thereof;
(ii) To the best of LANDLORD's knowledge, no part of the Leased
Premises is being used for the disposal, storage, treatment, processing or
other handling of Hazardous Materials, nor is any part of the Leased Premises
affected by any Hazardous Materials Contamination;
(iii) To the best of LANDLORD's knowledge, no part of the Leased
Premises has been used in the past for the disposal, storage, treatment,
processing or other handling of Hazardous Materials;
(iv) To the best of LANDLORD's knowledge, no property adjoining
the Leased Premises is being used, or has been used at any previous time for
the disposal, storage, treatment, processing or other handling of Hazardous
Materials nor is any other property adjoining the Leased Premises affected by
Hazardous Materials Contamination:
(v) To the best of LANDLORD's knowledge, no investigation,
administrative order, consent order and agreement, litigation or settlement
with respect to Hazardous Materials or Hazardous Materials Contamination is
proposed, threatened, anticipated or in existence with respect to the Leased
Premises, To the best of LANDLORD's knowledge, the Leased Premises is not
currently on, and to LANDLORD's knowledge has never been on, any federal or
state "Superfund" or "Superlien" list.
(i) NO CONFLICTS - The execution and delivery of this Lease, and the
performance by the LANDLORD of its obligations hereunder, do not and will not
(a) conflict with or result in a breach of any term, condition or provision
of, or constitute a default under (i) the articles of incorporation or bylaws
of the LANDLORD, (ii) any bond, debenture, note or other evidence of
indebtedness or (iii) any contract, indenture, mortgage, loan agreement,
lease, joint venture or other agreement or instrument to which the LANDLORD is
a party or by which the LANDLORD or any of its properties are bound, or (b)
result in any violation of any Governmental Requirements.
(j) NO CONSENTS NECESSARY - No consent or approval of any third
party, including, without limitation, any Governmental Authority, is required
in connection with the execution, delivery or performance by the LANDLORD of
this Lease and the consummation of the transactions contemplated herein.
LANDLORD shall indemnify and hold TENANT harmless of, from and against
any and all claims, demands, liabilities, liens, costs, expenses, penalties,
damages and losses, including without limitation reasonable attorneys' fees
and costs suffered by TENANT as a result of any breach of warranty or
representation made by LANDLORD in this PARAGRAPH NUMBERED 57. Each warranty
and each representation shall survive the termination of the Lease.
58. NON-DISTURBANCE, ATTORNMENT AND SUBORDINATION AGREEMENT
A. LANDLORD agrees that, no later than TWENTY (20) days after the date of
full execution of the Lease, it will provide TENANT with commercially
reasonable non-disturbance, subordination and attornment agreements
"non-disturbance agreement") in favor of TENANT from any ground lessors,
mortgage holders or lien holders (each,, a "Superior Mortgagee") then in
existence, if any, substantially in a form mutually acceptable to LANDLORD and
TENANT. Said non-disturbance agreements shall be in recordable form and may
be recorded at TENANT's election and expense, In the event LANDLORD fails to
provide such commercially reasonable non-disturbance agreements within the
time frame set forth above, TENANT shall have the right, exercisable at any
time thereafter, to give TEN (10) business days' written notice to LANDLORD
terminating the Lease. In the event LANDLORD does not provide TENANT with the
applicable non-disturbance agreements within such TEN (10) business day
period, the Lease shall terminate and LANDLORD shall reimburse TENANT for all
of TENANT's out-of-pocket costs incurred in connection with the design and
construction of the TENANT improvements and TENANT's legal fees incurred in
connection with the review and negotiation of the Lease and this provision
shall survive the termination of the Lease and LANDLORD shall forthwith pay
TENANT the sums represented by the Promissory Notes herein referred to,
LANDLORD agrees to provide TENANT with commercially reasonable and mutually
acceptable non-disturbance agreements, in favor of TENANT from any Superior
Mortgagee(s) of LANDLORD who later come(s) into existence at any time prior to
the expiration of the Term of the Lease, as it may be extended, in
consideration of, and as a condition precedent to, TENANT's agreement to be
bound by Lease PARAGRAPH NUMBERED 58B below. Said non-disturbance agreements
shall be in recordable form and may be recorded at TENANT's election and
expense.
B. OBLIGATIONS OF TENANT - Subject to PARAGRAPH NUMBERED 58A above, the
Lease and the rights granted to TENANT by the Lease shall be subject and
subordinate to (a) all ground or underlying leases affecting all or any part
of the Leased Premises subsequently existing and all amendments, renewals,
modifications, supplements and extensions of the leases, and (b) all deeds of
trust or mortgages subsequently affecting or encumbering all or any part of
the Leased Premises; provided, however, that if LANDLORD elects at any time to
have TENANT's interest in the Lease be or become superior, senior or prior to
any such instrument, then upon receipt by TENANT of written notice of such
election, TENANT shall immediately execute all necessary and reasonable
subordination instruments or other documents confirming the subordination of
such mortgage, deed of trust, ground or underlying lease to the Lease.
C. ATTORNMENT BY TENANT - Subject to PARAGRAPH NUMBERED 58A above, in the
event of the cancellation or termination of any or all ground or underlying
leases affecting all or any part of the Leased Premises in accordance with its
terms or by the surrender thereof, whether voluntary, involuntary or by
operation of law, or by summary proceedings, or in the event of any
foreclosure of any or all mortgages or deeds of trust encumbering the Leased
Premises by trustees sale, voluntary agreement, deed in lieu of foreclosure,
or by the commencement of any judicial action seeking foreclosure, TENANT, at
the request of the then landlord under the Lease, shall attorn to and
recognize (a) the ground or underlying lessor, under the ground or underlying
lease being terminated or canceled, and (b) the beneficiary or purchaser at
the foreclosure sale, as TENANT's landlord under this Lease, and TENANT agrees
to execute and deliver at any time upon request of such ground or underlying
lessor, beneficiary, purchaser, or their successors, any instrument to further
evidence such attornment. TENANT hereby waives its right, if any, to elect to
terminate the Lease or to surrender possession of the Leased Premises in the
event of any such ground or underlying lease cancellation or termination or
mortgage or deed of trust foreclosure.
D. NON-DISTURBANCE - Notwithstanding any of the provisions of this
PARAGRAPH NUMBERED 58 to the contrary, TENANT shall be allowed to occupy the
Leased Premises, subject to the conditions of this Lease, and this Lease shall
remain in effect, until an Event of Default occurs (and all applicable notice
and cure periods have expired), or until TENANT's rights are modified because
of an Eminent Domain proceeding pursuant to PARAGRAPH NUMBERED 37 hereof.
59. ARBITRATION - The parties agree to submit to arbitration any dispute
related to this Lease and agree that the arbitration process shall be the
exclusive means for resolving disputes which the parties cannot resolve. Any
arbitration hereunder shall be conducted under the Dispute Resolution Rules of
the American Arbitration Association ("AAA") as modified herein. Arbitration
proceedings shall take place in Las Vegas, Nevada, before a single arbitrator
who shall be a lawyer. All arbitration proceedings shall be confidential.
Neither party shall disclose any information about the evidence produced by
the other party in the arbitration proceedings, except in the course of
judicial, regulatory, or arbitration proceeding, or as may be demanded by
government authority. Before making any disclosure permitted by the preceding
sentence, a party shall give the other party reasonable advance written notice
of the intended disclosure and an opportunity to prevent disclosure. In
connection with any arbitration provisions hereunder, each party shall have
the right to take the deposition of two (2) individuals and any expert witness
retained by the other party. Additional discovery may be had only where the
arbitrator so orders, upon a showing of substantial need. Only evidence that
is directly relevant to the issues may be obtained in discovery. Each party
bears the burden of persuasion of any claim or counterclaim raised by that
party. The arbitration provisions of this Lease shall not prevent any party
from obtaining injunctive relief from a court of competent jurisdiction to
enforce the obligations for which such party may obtain provisional relief
pending a decision on the merits by the arbitrator. Each of the parties
hereby consents to the jurisdiction of Nevada courts for such purpose. The
arbitrator shall have authority to award any remedy or relief that a court of
the State of Nevada could grant in conformity to applicable law, except that
the arbitrator shall have no authority to award attorneys' fees or punitive
damages. Any arbitration award shall be accompanied by a written statement
containing a summary of the issues in controversy, a description of the award,
and an explanation of the reasons for the award. The arbitrators award shall
be final and judgment may be entered upon such award by any court.
60. LANDLORD BANKRUPTCY PROCEEDING - In the event that the obligations of
LANDLORD under this Lease are not performed during the pendency of a
bankruptcy or insolvency proceeding involving the LANDLORD as the debtor, or
following the rejection of this Lease in accordance with Section 365 of the
United States Bankruptcy Code, then notwithstanding any provision of this
Lease to the contrary, TENANT shall have the right to set off against rents
next due and owing under this Lease (a) any and all damages caused by such
non-performance of LANDLORD's obligations under this Lease by LANDLORD,
debtor-in-possession, or the bankruptcy trustee, and (b) any and all damages
caused by the non-performance of LANDLORDIS obligations under this Lease
following any rejection of this Lease in accordance with Section 355 of the
United States Bankruptcy Code.
61. MEMORANDUM OF LEASE - Upon execution of this Lease, LANDLORD and
TENANT shall execute a Memorandum of Lease in recordable form, which LANDLORD
shall deliver to TENANT for recording at TENANT's option. Said Memorandum
shall be amended as to legal descriptions and commencement and termination
dates when such information is available.
62. LEASEHOLD MORTGAGEE RIGHTS
A. DEFINITIONS:
(1) The term "Leasehold Mortgagee" shall mean the holder of the
beneficial interest of a Leasehold Deed of Trust, who has given written notice
to LANDLORD of its name and address for notices.
(2) The term "Leasehold Deed of Trust" shall mean any encumbrance of
the Lease, by a deed of trust, mortgage or other security instrument,
including, without limitation, assignments of rents, issues and profits from
the Leased Premises, to secure repayment of loans made to, or obligations of
TENANT thereunder.
B. TERMINATION AND MODIFICATION - LANDLORD agrees that, so long as any
Leasehold Mortgagee, its successor or assign holds a Leasehold Deed of Trust,
no termination of the Lease by TENANT and no subordination, cancellation,
surrender or modification of the Lease shall be effective without the prior
written consent of such Leasehold Mortgagee.
C. ENCUMBRANCE AND ASSIGNMENT OF LEASE - LANDLORD"S prior written
consent shall not be required to any of the following, provided notice is
given to LANDLORD and LANDLORD is provided copies of all documentation
relating thereto:
(1) TENANT's encumbering the Lease by any Leasehold Deed of Trust,
the possession of the Leased Premises by a Leasehold Mortgagee or by a
receiver under a Leasehold Deed of Trust, and a sale or assignment of the
Lease by foreclosure under a Leasehold Deed of Trust, or by a deed or
assignment in lieu of foreclosure; or
(2) Further assignments or subleases of the Lease by a Leasehold
Mortgagee and, to the extent not in conflict with the Lease, the exercise of
any other rights, powers or remedies any Leasehold Mortgagee may have under a
Leasehold Deed of Trust; or
(3) Assignment of all or any part of any interest in the Lease
acquired by a purchaser at a foreclosure sale under a Leasehold Deed of Trust
or by a deed or assignment in lieu of foreclosure to any person or entity,
including, without limitation, a Leasehold Mortgagee. LANDLORD consents to any
of the above-described assignments without restriction. Nothing in the Lease
shall impose on a Leasehold Mortgagee the obligations of TENANT under the
Lease solely because such Leasehold Mortgagee accepts a Leasehold Deed of
Trust.
D. NOTICE OF DEFAULTS - LANDLORD agrees to give Leasehold Mortgagee
immediate notice of all defaults by TENANT under the Lease, and to
simultaneously give to Leasehold Mortgagee a written copy of all notices and
demands that LANDLORD gives to TENANT. No notice or demand under the Lease
shall be effective until after notice is received by Leasehold Mortgagee. Any
notices of default given by LANDLORD under the Lease shall describe the
default(s) with reasonable detail. Leasehold Mortgagee shall have the right
to cure any breach or default within the time periods given below.
E. LEASEHOLD MORTGAGEE'S CURE RIGHTS
(1) After receipt by TENANT of a notice of default under the Lease
and the expiration of any applicable period of cure given to TENANT under the
Lease, LANDLORD shall deliver an additional notice ("Mortgagee's Notice") to
Leasehold Mortgagee (which Leasehold Mortgagee shall be non-related and
non-affiliated as to TENANT) specifying the default and stating that TENANT'S
period of cure has expired. Leasehold Mortgagee shall thereupon have the
additional periods of time to cure any uncured default, as set forth below,
without payment of default charges, fees, late charges or interest that might
otherwise be payable by TENANT. LANDLORD shall not terminate the Lease or
exercise its other remedies under the Lease if:
(i) Within THIRTY (30) days after Leasehold Mortgagee's receipt
of the Mortgagee's Notice, Leasehold Mortgagee (A) cures the default, or (B)
if the default reasonably requires more than THIRTY (30) days to cure,
commences to cure said default and diligently prosecutes the same to
completion; or,
(ii) Where the default cannot be cured by payment or expenditure
of money or without possession of the Leased Premises or otherwise, Leasehold
Mortgagee initiates foreclosure or other appropriate proceedings within SIXTY
(60) days after receipt of the Mortgagee's Notice, cures all other defaults
reasonably capable of cure, complies with all other covenants and conditions
of the Lease reasonably capable of compliance, and continues to pay all rents,
real property taxes and assessments, and insurance premiums to be paid by
TENANT under the Lease, Leasehold Mortgagee shall then have SIXTY (60) days,
following the later to occur of (A) the date of execution and delivery of a
New Lease of the Leased Premises pursuant to PARAGRAPH NUMBERED E(4) below, or
(B) the date on which Leasehold Mortgagee or its nominee is able to occupy the
Leased Premises following eviction of or vacating by TENANT under the Lease,
to cure such default; provided, however, that if any such default, by its
nature, is such that it cannot practicably be cured within SIXTY (60) days,
then Leasehold Mortgagee shall have such time as shall be reasonably necessary
to cure the default provided that Leasehold Mortgagee commences such cure
within such SIXTY (60) day period and thereafter diligently prosecutes the
cure to completion.
(2) LANDLORD agrees to accept performance by Leasehold Mortgagee of
all cures, conditions and covenants as though performed by TENANT, and agrees
to permit Leasehold Mortgagee access to the Leased Premises to take all such
actions as may be necessary or useful to perform any condition or covenants of
the Lease or to cure any default of TENANT.
(3) If Leasehold Mortgagee elects any of the above-mentioned options,
then upon Leasehold Mortgagee's acquisition of the Lease by foreclosure,
whether by power of sale or otherwise or by deed or assignment in lieu of
foreclosure, or if a receiver be appointed, the Lease shall continue in full
force and effect, provided that, if Leasehold Mortgagee elects the option
provided in Subsection E(l)(ii) above, then upon Leasehold Mortgagee's
acquisition of the Lease, Leasehold Mortgagee shall cure all prior defaults of
TENANT under the Lease that are reasonably capable of being cured by Leasehold
Mortgagee within the time set forth in Subsection E(l)(ii) above, and LANDLORD
shall treat Leasehold Mortgagee as TENANT under the Lease. If Leasehold
Mortgagee cures all defaults by TENANT and does not acquire the Lease, or if
Leasehold Mortgagee commences an action as set forth in Subsection E(l)(ii),
and thereafter TENANT cures such defaults (which cure LANDLORD shall be
obligated to accept) and Leasehold Mortgagee then terminates all proceedings
under the option in Subsection E(l)(ii) above, then the Lease shall remain in
full force and effect between LANDLORD and TENANT.
(4) In the event the Lease is terminated for any reason prior to the
end of the Lease term (unless the Lease is terminated due to Leasehold
Mortgagee's failure to exercise its rights under this Section 62, LANDLORD
shall enter into a new lease ("New Lease") with Leasehold Mortgagee or
Leasehold Mortgagee's nominee covering the Leased Premises, provided that
Leasehold Mortgagee (i) requests such New Lease by written notice to LANDLORD
within SIXTY (60) days after written notice by LANDLORD of termination of the
Lease, and (ii) cures all prior defaults of TENANT that are reasonably capable
of being cured by Leasehold Mortgagee. The New Lease shall be for the
remainder of the Lease term, effective at the date of such termination, and
shall only include all the rents and all the covenants, agreements,
conditions, provisions, restrictions and limitations contained in the Lease.
In connection with a New Lease, LANDLORD shall assign to Leasehold Mortgagee
or its nominee all of LANDLORD's interest in all existing subleases of all or
any part of the Leased Premises and all attornments given by the sub-lessee's.
LANDLORD shall not terminate or agree to terminate any sublease or enter into
any new lease or sublease for all or any portion of the Leased Premises
without Leasehold Mortgagee's prior written consent, unless Leasehold
Mortgagee fails to deliver its request for a New Lease under this PARAGRAPH
62. In connection with any such New Lease, LANDLORD shall, by grant deed,
convey to Leasehold Mortgagee, or its nominee, title to the improvements, if
any, which become vested in LANDLORD as a result of termination of the Lease.
LANDLORD shall allow to the TENANT under the New Lease a credit against rent
equal to the net income, if any, derived by LANDLORD from the Leased Premises
during the period from the date of termination of the Lease until the date of
execution of the New Lease under this PARAGRAPH 62.
(5) Leasehold Mortgagee or any other purchaser at a foreclosure sale
of the Leasehold Deed of Trust (or Leasehold Mortgagee or its nominee if one
of them enters into a New Lease with LANDLORD) shall succeed to all the
interest of TENANT in any security or other deposits or other impound payments
paid by TENANT to LANDLORD.
F. PERMITTED DELAYS - So long as Leasehold Mortgagee is prevented by any
process or injunction issued by any court or by any statutory stay, or by
reason of any action by any court having jurisdiction of any bankruptcy or
insolvency proceeding involving TENANT, from commencing or prosecuting
foreclosure or other appropriate proceedings in the nature thereof, Leasehold
Mortgagee shall not be deemed for that reason to have failed to commence such
proceedings or to have failed to diligently prosecute such proceedings,
provided that Leasehold Mortgagee uses reasonable efforts to contest and
appeal the issuance or continuance of any such process, stay or injunction.
G. DEFAULTS DEEMED CURED - On transfer of the Lease at any foreclosure
sale under the Leasehold Deed of Trust or by deed or assignment in lieu of
foreclosure, or upon creation of a New Lease, any or all of the following
defaults relating to the prior owner of the Lease shall be deemed cured:
(1) Attachment, execution or other judicial levy upon the Lease;
(2) Assignment of the Lease for the direct or indirect benefit of
creditors of the prior TENANT;
(3) Judicial appointment of a receiver or similar officer to take
possession of the Lease;
(4) Filing any petition by, for or against TENANT under any
chapter of the federal Bankruptcy Act or any federal or state debtor relief
statute, as amended;
(5) Any other default personal to TENANT and/or not otherwise
reasonably curable by Leasehold Mortgagee.
H. MERGER - So long as a Leasehold Mortgagee holds a Leasehold Deed of
Trust, the fee title to the Leased Premises and the leasehold estate created
by the Lease shall not merge unless all Leasehold Mortgagees expressly consent
to the merger in writing. This provision shall apply even if TENANT or
LANDLORD or any third party acquires both the fee title and the Lease.
I. CONDEMNATION - Any condemnation award to which TENANT is entitled
shall be paid directly to Leasehold Mortgagee. Leasehold Mortgagee shall have
the right to participate in all condemnation award proceedings held by the
condemning authority and the allocation of such award.
J. INSURANCE - Any insurance proceeds payable from any policy of
insurance (other than liability insurance) required by the Lease shall be paid
to Leasehold Mortgagee. Leasehold Mortgagee shall have the right to
participate in all adjustments, settlements, negotiation or actions with the
insurance company regarding the amount and allocation of any such insurance
proceeds. Any insurance policies permitted or required by the Lease shall
name Leasehold Mortgagee as an additional insured or loss payee, as
appropriate.
K. RESTORATION - Leasehold Mortgagee, if it exercises any of its
remedies under this PARAGRAPH 62 above, shall have no obligation to restore or
repair damage to the improvements that cost in excess of available insurance
proceeds.
L. LIMITATION ON LIABILITY - Leasehold Mortgagee shall not be liable to
perform TENANT's obligations under the Lease, unless and until Leasehold
Mortgagee acquires the Lease, by foreclosure under power of sale or otherwise,
by deed or assignment in lieu of foreclosure, or under the New Lease
provisions hereof. The liability of any Leasehold Mortgagee who acquires the
Lease shall be limited to Leasehold Mortgagee's interest in the Lease.
Leasehold Mortgagee shall not be liable for any such obligations under the
Lease following the assignment of its interest under the Lease to any other
transferee or any purchaser at foreclosure, whether conducted by power of sale
or otherwise. An interest in a Leasehold Deed of Trust securing any unpaid
part of the purchase price for the Lease shall not be considered retention of
an interest in the Lease for purposes of this subsection.
M. PRIORITY - The Lease, and any extensions, renewals or replacements
thereof, and a permitted sublease entered into by TENANT as sub-lessor, and
any Leasehold Deed of Trust or other encumbrance recorded by Leasehold
Mortgagee shall be superior to any mortgages, deeds of trust or similar
encumbrances placed by LANDLORD on the Leased Premises and to any lien right,
if any, of LANDLORD on the buildings, and any furniture, fixtures, equipment
or other personal property of TENANT upon the Leased Premises.
N. ESTOPPEL CERTIFICATE -
(a) Within 20 calendar days of written request by Leasehold
Mortgagee, LANDLORD shall execute and deliver to Leasehold Mortgagee or to any
proposed purchaser of TENANT's estate, a statement certifying as follows:
(1) The existence of the Lease and amendments to it;
(2) The last date LANDLORD received rent under the Lease, the
date such rent was due and the amount thereof;
(3) Whether there are any Events of Default under the Lease
(or whether there is or has been any event, act or omission which would
constitute an event of default with notice or lapse of time or both) to the
best knowledge of LANDLORD as of the date of the certificate;
(4) TENANT's satisfaction of all conditions precedent under
the Lease for commencement of construction of the improvements, or setting
forth the conditions that remain unsatisfied;
(5) Acknowledging receipt of Leasehold Mortgagee's or
purchaser's name and address for notice;
(6) That LANDLORD understands the recipient will rely on the
certificate.
(b) Within 20 calendar days of written request by LANDLORD or
LANDLORD's Fee Mortgagee, TENANT shall execute and deliver to both such
parties or to any proposed purchaser of LANDLORD's estate, a statement
certifying as follows:
(1) The existence of the Lease and amendments to it;
(2) The last date LANDLORD received rent under the Lease, the
date such rent was due and the amount thereof;
(3) Whether there are any Events of LANDLORD Default under
the Lease (or whether there is or has been any event, act or omission which
would constitute such an event of default with notice or lapse of time or
both) to the best knowledge of TENANT as of the date of the certificate;
(4) LANDLORD's satisfaction of all conditions precedent under
the Lease for commencement of construction of the improvements, or setting
forth the conditions that remain unsatisfied;
(5) Acknowledging receipt of Leasehold Mortgagee's or
purchaser's name and address for notice;
(6) That TENANT understands the recipient will rely on the
certificate.
0. NOTICE - Notices and other communications required by the Lease to be
given to Leasehold Mortgagee shall be delivered in accordance with PARAGRAPH
NUMBERED 34 of the Lease, at the address provided by Leasehold Mortgagee.
This address may be changed by a notice given in the same manner. No notices
given to TENANT by LANDLORD pursuant to the Lease shall be deemed effective
unless and until Leasehold Mortgagee receives a copy thereof.
P. SUCCESSORS - The right and benefits of Leasehold Mortgagee under this
Amendment shall benefit and may be exercised by the holder of any Leasehold
Deed of Trust given now or in the future as an encumbrance on the Lease.
Q. OPTIONS -LANDLORD and TENANT agree that Leasehold Mortgagee may
exercise any OPTION to extend the term of the Lease which is granted to TENANT
under or in connection with the Lease. LANDLORD agrees to accept notice(s) of
exercise of such option(s) signed by Leasehold Mortgagee with the same effect
as though the notice were signed and delivered by TENANT, which notice may be
delivered by Leasehold Mortgagee within FIVE (5) days after the termination of
the period of time in which TENANT must exercise such option. In the event
TENANT fails to complete such extension, LANDLORD shall notify Leasehold
Mortgagee of such failure, and Leasehold Mortgagee shall thereupon have the
option to complete such extension within an additional period of time equal to
the time period originally available to TENANT, commencing from the date such
notice is received by Leasehold Mortgagee.
R. CLAIMS - LANDLORD and TENANT shall deliver to Leasehold Mortgagee
notice of any litigation or arbitration proceedings between the parties or
involving the Leased Premises or the Lease. Leasehold Mortgagee shall have
the right, at its option, to intervene and become a party to any such
proceedings. If Leasehold Mortgagee elects not to intervene or become a
party, LANDLORD shall deliver to Leasehold Mortgagee prompt notice of and a
copy of any award, decision or settlement agreement made in connection with
any such proceeding.
S. FURTHER AMENDMENTS - LANDLORD and TENANT shall cooperate in including
in the Lease by suitable amendment from time to time any provision which may
be reasonably requested by any proposed Leasehold Mortgagee for the purpose of
implementing the mortgagee protection provisions contained in this PARAGRAPH
NUMBERED 62 and allowing that Leasehold Mortgagee reasonable means to protect
or preserve the lien of its Leasehold Deed of Trust upon the occurrence of a
default under the terms of the Lease. LANDLORD and TENANT each agree to
execute and deliver (and to acknowledge for recording purposes, if necessary)
any agreement required to effect any such amendment; provided that any such
amendment shall not in any way affect the term or rent under the Lease or
otherwise in any material respect adversely affect any rights of LANDLORD
under the Lease.
IN WITNESS WHEREOF, the parties hereto have executed this Lease the day
and year first above written.
LANDLORD: URBAN LAND OF NEVADA, a Nevada corporation
By: /s/ ▇▇▇▇▇▇▇ T. H. ▇▇▇
▇▇▇▇▇▇▇ T. H. ▇▇▇, Vice President
TENANT: ALL-AMERICAN GOLF CENTER, LLC., a California corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Managing Partner
GUARANTY
The undersigned hereby unconditionally guarantees payment and performance of
the terms, covenants and conditions contained in the above INDENTURE OF LEASE
to be kept, performed and paid by SAINT ▇▇▇▇▇▇▇ GOLF CORPORATION in favor of
LANDLORD, URBAN LAND OF NEVADA, a Nevada corporation.
DATED: This 9th day of June, 1997.
SAINT ▇▇▇▇▇▇▇ GOLF CORPORATION, a Nevada corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
EXHIBIT "A"
SECURED PROMISSORY NOTE
$______________ _______________, ____
San Diego, California
FOR VALUE RECEIVED, __________________, ("Maker"), promises to pay to
__________________ ("Holder"), or order, at Holder's place of business in
__________________, the principal amount of _____________________ Dollars
($______________), with interest on such amount until paid, at the rate set
forth below and payable as follows:
INTEREST RATE. The amount of outstanding principal shall bear interest at
a rate of ten percent (10%) per annum. Interest shall accrue on the principal
balance from and after the date hereof and shall be calculated on the basis of
a 365-day year.
MAXIMUM INTEREST. Notwithstanding the foregoing, in no event whatsoever
shall the amount paid, or agreed to be paid, to Holder for the use,
forbearance or detention of money to be loaned hereunder or otherwise, for the
performance or payment of any covenant or obligation contained herein, exceed
the maximum amount permissible under applicable law. If from any circumstance
whatsoever fulfillment of any provision hereof exceeds the limit of validity
prescribed by law, then, ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity, and if from any such circumstance
Holder shall ever receive as interest under this Note or otherwise an amount
that would exceed the highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount owing
hereunder and not to the payment of interest, or if such excessive interest
exceeds the unpaid balance of principal, such excess shall be refunded to
Maker.
TERM. The term of this Note shall be for a period beginning on the date
hereof and ending on a date twelve (12) months from the date hereof (the
"Maturity Date"). All unpaid principal, together with any and all accrued and
unpaid interest, shall be due on the Maturity Date.
PAYMENT. Principal and interest shall be paid in twelve (12) equal
monthly installments. The first installment is due on the day which is one
month from the date hereof and each subsequent monthly installment shall be
due on the same day of each succeeding month and continuing until the Maturity
Date. All outstanding principal and interest shall be due and payable on the
Maturity Date. Any payment hereunder shall be applied first to the payment of
costs and charges of collection, if any, then to accrued interest, and the
balance, if any, shall be then applied to reduction of principal. Principal
and interest are payable in lawful money of the United States of America.
PREPAYMENT. Maker may prepay this Note in full or in part at any time
without prepayment charge.
SECURITY AGREEMENT. This Note is secured pursuant to a _______________
dated _________________________ by and between Holder and Maker which grants
a security interest in Maker's membership interest in All-American Golf LLC, a
California limited liability company (the "Security Agreement").
DEFAULT/ACCELERATION. If any one or more of the following events shall
occur (hereinafter called an "Event of Default"), namely: (i) Maker shall
fail to make timely payment of any installment hereunder and such failure is
not cured within ten (10) days of written notice by Holder to Maker; or (ii)
default shall occur under the Security Agreement; THEN, upon the occurrence of
any such Event of Default, or upon the expiration of the term of this Note,
Holder at its election, and without presentment demand, notice of any kind all
of which are expressly waived by Maker, may declare the entire outstanding
balance of principal and interest thereon immediately due and payable,
together with all costs of collection, including attorneys' fees, and may
exercise upon or enforce its rights to its collateral, as may be set forth in
the Security Agreement in addition to all of its other rights and remedies,
all of which are cumulative.
NO WAIVER BY HOLDER. The acceptance by Holder of any payment under this
Note after the date such payment is due, or the failure to declare an Event of
Default as herein provided, shall not constitute a waiver of any of the terms
of this Note or the right to require the prompt payment when due of future or
succeeding payments or to declare an Event of Default for any failure to so
pay or for any other default. The acceptance by Holder of a payment of a
portion of any installment at any time that such installment is due in full
shall not cure or excuse the default caused by the failure to pay such
installment in full and shall not constitute a waiver of the right to require
full payment when due of all future or succeeding installments.
ATTORNEYS' FEES AND COSTS. In the event Holder takes any action to
enforce any provision of this Note, either through legal proceedings or
otherwise, Maker promises to immediately reimburse Holder for reasonable
attorneys' fees and all other costs and expenses so incurred as awarded by a
court of law. Maker shall also reimburse Holder for all attorneys' fees and
costs reasonably incurred in the representation of Holder in any bankruptcy,
insolvency, reorganization or other debtor-relief proceeding of or relating to
Maker, or for any action to enforce any judgment rendered hereon or relating
to enforcement hereof.
LATE PAYMENT. Maker agrees that if for any reason it fails to make any of
the monthly payments required herein, including the amount due at the Maturity
Date, within five (5) days after the due date, Holder shall be entitled to
damages for the detriment caused thereby, the extent of which damages are
extremely difficult and impractical to ascertain. Maker therefore agrees that
a sum equal to five percent (5%) of such delinquent payment is a reasonable
estimate of such damages and Maker agrees to pay such sum upon demand by
Holder. Acceptance of such late charge by the Holder shall in no event
constitute a waiver of Maker's default with respect to such overdue amount nor
prevent the Holder from exercising any of the other rights and remedies
granted hereunder.
WAIVERS. The Maker, endorsers, guarantors and sureties of this Note
hereby waive diligence, demand, presentment, notice of nonpayment, protest and
notice of protest, and expressly agree that this Note and any payment
hereunder, may be renewed, modified or extended from time to time and at any
time and consent to the acceptance or release of the security for this Note or
a release of any party or guarantor, all without in any way effecting their
liability and waive the right to plead any and all statutes of limitations as
a defense to any demand on this Note, or on any guaranty thereof, or to any
agreement to pay the same to the full extent permissible by law.
MISCELLANEOUS. The terms of this Note shall inure to the benefit of and
bind the parties hereto and their successors and assigns. Maker represents
and warrants to Holder that the obligations hereunder arise out of or in
connection with business purposes and do not relate to any personal, family or
household purpose. As used herein the term "Maker" shall include the
undersigned Maker and any other person or entity who may subsequently become
eligible for the payment hereof. The term "Holder" shall include the named
Holder as well as any other person or entity to whom this Note or any interest
in this Note is conveyed, transferred or assigned. Each person signing this
Note on behalf of Maker represents and warrants that he has full authority to
do so and that this Note binds Maker.
NOTICE. In the event either party provides notice to the other party
pursuant to this Note, such notice shall be provided in the same manner as
required in the Security Agreement.
GOVERNING LAW. This Note shall be governed by and construed and enforced
in accordance with the internal laws of the State of California without giving
any effect to principles of conflict of laws. This Note shall be deemed made
and entered into in San Diego County, California.
MAKER:
By:
Its:
EXHIBIT "B"
SECURED PROMISSORY NOTE
$5,250,000.00 June 13, ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
FOR VALUE RECEIVED, All-American Golf LLC, a California limited liability
company ("Maker"), promises to pay to Callaway Golf Company, a California
corporation ("Holder"), or order, at its place of business in San Diego,
California, or such other place as Holder may designate, the principal amount
of Five Million Two Hundred Fifty Thousand Dollars ($5,250,000.00), or so much
thereof as may be advanced, with interest on such amounts advanced until paid,
at the rate set forth below and payable as follows:
INTEREST RATE. The amount of outstanding principal shall bear interest at
a rate of ten percent (10%) per annum. Interest shall accrue on the principal
balance from the date of and on the amount of each advance made under this
Note, as advances are made pursuant to the paragraph of this Note titled
Disbursement Instruction and Authorization and shall be calculated on the
basis of a 365-day year.
MAXIMUM INTEREST. In no event whatsoever shall the amount paid, or agreed
to be paid, to Holder for the use, forbearance or detention of money to be
loaned hereunder or otherwise, for the performance or payment of any covenant
or obligation contained herein, exceed the maximum amount permissible under
applicable law. If from any circumstance whatsoever fulfillment of any
provision hereof exceeds the limit of validity prescribed by law, then, ipso
facto, the obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstance Holder shall ever receive as
interest under this Note or otherwise an amount that would exceed the highest
lawful rate, such amount that would be excessive interest shall be applied to
the reduction of the principal amount owing hereunder and not to the payment
of interest, or if such excessive interest exceeds the unpaid balance of
principal, such excess shall be refunded to Maker.
TERM. The term of this Note shall be for a period beginning on the date
hereof and ending on the tenth anniversary (the "Maturity Date") of the date
which the Center, as such term is defined in the Operating Agreement
(hereinafter defined), is open to the public (the "Center Opening"). All
unpaid principal, together with any and all accrued and unpaid interest, shall
be due on the Maturity Date.
PAYMENT. Payment of principal and interest due hereunder shall be payable
as follows:
(i) Commencing on the date which is sixty (60) days after the Center
Opening and continuing on the same day of each month thereafter until the
Maturity Date, the interest accrued on the principal outstanding shall be
payable in monthly installments.
(ii) Commencing on the fifth anniversary of the Center Opening and
continuing on the same day of each month thereafter until the Maturity Date,
the principal outstanding as of the fifth anniversary of the Center Opening
shall be payable in sixty (60) equal monthly installments, or more, and on the
Maturity Date, the entire unpaid principal balance together with all accrued
and unpaid interest shall be due and payable.
(iii) Additional payments shall be made on amounts outstanding
hereunder from time to time during the term of this Note from distributable
cash from the Maker pursuant to Article VI of that Operating Agreement for
All-American Golf LLC dated June 13, 1997, as amended, restated, modified, or
supplemented from time to time (the "Operating Agreement").
Any payment hereunder shall be applied first to the payment of costs and
charges of collection, if any, then to accrued interest, and the balance, if
any, shall be then applied to reduction of principal. Principal and interest
are payable in lawful money of the United States of America.
PREPAYMENT. Maker may prepay this Note in full or in part at any time
without prepayment charge. No partial prepayment shall release Maker from
thereafter tendering all regular scheduled monthly payments required herein
until this Note is paid in full. No amount prepaid shall be available for
reborrowing. Payments of distributable cash from the Maker pursuant to
Article VI of the Operating Agreement shall be considered to be prepayments of
this Note.
SECURITY AGREEMENT. This Note is secured pursuant to a Continuing
Security Agreement dated June 13, 1997 by and between Holder and Maker (the
"Security Agreement"), a Membership Interest Security Agreement dated June 13,
1997 by and between Holder and Saint ▇▇▇▇▇▇▇ Golf Corporation, a Nevada
corporation ("Saint ▇▇▇▇▇▇▇") (the "Membership Interest Security Agreement"),
and the Deed of Trust dated June 13, 1997 executed by the Maker in favor of
Holder securing the Indenture of Lease dated June 13, 1997 by and between
Urban Land of Nevada, a Nevada corporation, and Holder (the "Deed of Trust").
DEFAULT/ACCELERATION. If any one or more of the following events shall
occur (hereinafter called an "Event of Default"), namely: (i) Maker shall
fail to timely make payment of any installment hereunder and such failure is
not cured within ten (10) days of written notice by Holder to Maker; (ii) the
Center Opening does not occur on or before April 1, 1998; (iii) default or an
event of default shall occur under the Security Agreement; (iv) default or an
event of default shall occur under the Membership Interest Security Agreement;
(v) default or an event of default shall occur under the Deed of Trust; or
(vi) the Performance Criteria do not meet the specified minimum levels set
forth in Exhibit A hereto; THEN, upon the occurrence of any such Event of
Default, or upon the expiration of the term of this Note, Holder at its
election, and without presentment demand, notice of any kind all of which are
expressly waived by Maker, may declare the entire outstanding balance of
principal and interest thereon immediately due and payable, together with all
costs of collection, including attorneys' fees, or may exercise upon or
enforce its rights to its collateral, as may be set forth in the Security
Agreement, the Membership Interest Security Agreement or the Deed of Trust,
all of which remedies are cumulative.
NO WAIVER BY HOLDER. The acceptance by Holder of any payment under this
Note after the date such payment is due, or the failure to declare an Event of
Default as herein provided, shall not constitute a waiver of any of the terms
of this Note or the right to require the prompt payment when due of future or
succeeding payments or to declare an Event of Default for any failure to so
pay or for any other default. The acceptance by Holder of a payment of a
portion of any installment at any time that such installment is due in full
shall not cure or excuse the default caused by the failure to pay such
installment in full and shall not constitute a waiver of the right to require
full payment when due of all future or succeeding installments. All remedies
and rights of Holder are cumulative.
ATTORNEYS' FEES AND COSTS. In the event Holder takes any action to
enforce any provision of this Note, either through legal proceedings or
otherwise, Maker promises to immediately reimburse Holder for reasonable
attorneys' fees and all other costs and expenses so incurred as awarded by a
court of law. Maker shall also reimburse Holder for all attorneys' fees and
costs reasonably incurred in the representation of Holder in any bankruptcy,
insolvency, reorganization or other debtor-relief proceeding of or relating to
Maker, or for any action to enforce any judgment rendered hereon or relating
to enforcement hereof.
LATE PAYMENT. Maker agrees that if for any reason it fails to make any of
the monthly payments required herein, including the amount due at the Maturity
Date, within five (5) days after the due date, Holder shall be entitled to
damages for the detriment caused thereby, the extent of which damages are
extremely difficult and impractical to ascertain. Maker therefore agrees that
a sum equal to five percent (5%) of such delinquent payment is a reasonable
estimate of such damages and Maker agrees to pay such sum upon demand by
Holder. Acceptance of such late charge by the Holder shall in no event
constitute a waiver of Maker's default with respect to such overdue amount nor
prevent the Holder from exercising any of the other rights and remedies
granted hereunder.
DISBURSEMENT INSTRUCTION AND AUTHORIZATION. Holder is making the loan to
Maker evidenced hereby to facilitate Maker's initial construction costs of the
Center. Accordingly, Holder shall make advances from time to time hereunder
directly to Maker in accordance with the completion of the milestones set
forth on Exhibit B attached hereto. Such advances shall be subject to the
terms of this Note, the Security Agreement, the Membership Interest Security
Agreement and the Deed of Trust. Holder shall note all advances, their
amounts and the disbursement date, and principal amounts paid, on the schedule
attached hereto, and shall provide a copy of the updated schedule to Maker
after each advance and such notations shall constitute prima facie evidence of
the outstanding principal amount hereof; provided, however, that Holder's
failure to record any such advance or payment shall not alter Maker's
obligation to repay all amounts actually advanced hereunder. Notwithstanding
any other provision of this Note, or any other agreement executed in
connection herewith, Holder shall have no obligation to advance any amounts to
Maker, upon or after the occurrence of any Event of Default hereunder, or upon
an event occurring with which the giving of notice or the passage of time
would be an Event of Default.
WAIVERS. The Maker, endorsers, guarantors and sureties of this Note
hereby waive diligence, demand, presentment, notice of nonpayment, protest and
notice of protest, and expressly agree that this Note and any payment
hereunder, may be renewed, modified or extended from time to time and at any
time and consent to the acceptance or release of the security for this Note or
a release of any party or guarantor, all without in any way effecting their
liability and waive the right to plead any and all statutes of limitations as
a defense to any demand on this Note, or on any guaranty thereof, or to any
agreement to pay the same to the full extent permissible by law.
MISCELLANEOUS. The terms of this Note shall inure to the benefit of and
bind the parties hereto and their successors and assigns. Maker represents
and warrants to Holder that the obligations hereunder arise out of or in
connection with business purposes and do not relate to any personal, family or
household purpose. As used herein the term "Maker" shall include the
undersigned Maker and any other person or entity who may subsequently become
eligible for the payment hereof. The term "Holder" shall include the named
Holder as well as any other person or entity to whom this Note or any interest
in this Note is conveyed, transferred or assigned. This Note, or any interest
in this Note, and all rights and security therefore, may be conveyed,
transferred or assigned by the Holder to any other person or entity without
the consent of Maker. Each person signing this Note on behalf of Maker
represents and warrants that he has full authority to do so and that this Note
binds Maker. The terms of this Note may only be modified by a writing signed
by Maker and Holder.
NOTICE. In the event either party provides notice to the other party
pursuant to this Note, such notice shall be provided in the same manner as
required in the Security Agreement.
GOVERNING LAW. This Note shall be governed by and construed and enforced
in accordance with the internal laws of the State of California without giving
any effect to principles of conflict of laws. This Note shall be deemed made
and entered into in San Diego County, California.
ALL-AMERICAN GOLF LLC, a California limited
liability company
By: SAINT ▇▇▇▇▇▇▇ GOLF CORPORATION,
a Nevada corporation, Managing Member
By:
▇▇▇ ▇▇▇▇▇▇, President
EXHIBIT A
PERFORMANCE CRITERIA
FISCAL YEAR PERFORMANCE CRITERIA
1997 The Company shall not realize a net loss in excess of
$500,000 from the date of the opening of the Center
to the general public through December 31, 1997.
1998 The Company shall not realize a net loss in excess of
$400,000 for the year nor a cumulative, undiscounted
net loss in excess of $1,000,000 as of the end of the
year.
1999 The Company shall not realize a net loss in excess of
$300,000 for the year nor a cumulative, undiscounted
net loss in excess of $1,000,000 as of the end of the
year.
2000 The Company shall not realize a net loss in excess of
$200,000 for the year nor a cumulative, undiscounted
net loss in excess of $1,000,000 as of the end of the
year.
2001 The Company shall attain inception-to-date, undis-
counted net profit of at least $1.
2002+ During each fiscal year that the Callaway Golf Loan
remains outstanding, the Allocation of Net Income
and Net Loss to Callaway Golf as calculated pursuant
to Article VI of this Agreement will represent at
least a 5% annual return on the equity investment
of Callaway Golf.
During each fiscal year following the year in which
the Callaway Golf Loan is repaid, the Allocation
of Net Income and Net Loss to Callaway Golf as cal-
culated pursuant to Article VI of this Agreement will
represent at least a 10% annual return on the equity
investment* of Callaway Golf.
Performance Criteria shall be subject to applicable governmental laws,
orders, ordinances, rules, regulations and restrictions, acts of God, fires,
strikes and other labor difficulties, accidents, war and any risks in any way
pertaining thereto and all other events and circumstances beyond the control
of Company. Failure to achieve Performance Criteria shall not be deemed to
have occurred if such failure is caused by any of the events set forth in the
preceding sentence.
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* As to any fiscal year, the equity investment of Callaway Golf is defined as:
- the initial capital contribution of $750,000
plus
- any additional capital contribution made by (or conversion of debt to
equity effected by) Callaway Golf pursuant to this Agreement. Contributions
made during the subject year will be appropriately weighted to reflect the
portion of the year benefitted by the contribution
plus
- cumulative prior year net income allocations pursuant to Article VI of
this Agreement, except that if cumulative prior year allocations represent a
net loss, such cumulative prior year allocations will be disregarded
minus
- any distributions made to Callaway Golf pursuant to Article VI of this
Agreement.
Distributions made during the subject year will be appropriately weighted to
reflect the portion of the year affected by the distribution.
EXHIBIT B
MILESTONES AND ADVANCES
MILESTONE AMOUNT OF ADVANCE
1. Execution of Operating Agreement by Holder
and Saint ▇▇▇▇▇▇▇ Golf Corporation. $1,312,500
2. Completion of the grassing of the golf course
and driving range located within the Center. $1,312,500
3. Completion of the construction of the tee line
pad and completion of the clubhouse roof and
wall construction of the clubhouse located
within the Center. $1,312,500
4. At the date which is the later of (i) the
Center Opening, or (ii) the completion of all
construction tasks related to the Center and
scheduled completion of any and all open porch
list items. $1,312,500
SCHEDULE OF ADVANCES
Unpaid
Amount of Amount of Principal Amount of
Date Advance Principal Paid Balance of Note Interest Paid
