Hollywood Park, Inc.
Exhibit 10.41
Form 10-K for 1997
LEASE
by and between
CRYSTAL PARK HOTEL AND CASINO DEVELOPMENT COMPANY, LLC
a California limited liability company,
as "Landlord"
and
CALIFORNIA CASINO MANAGEMENT, INC.
a California corporation,
as "Tenant"
Dated: December 19, 1997
TABLE OF CONTENTS
-----------------
Page
----
LEASE................................................................... 1
RECITALS................................................................ 1
Article 1. LEASE OF PREMISES.......................................... 1
1.01 Premises.......................................................... 1
1.02 Landlord's Obligations............................................ 1
Article 2. TERM; POSSESSION; ACCEPTANCE............................... 2
2.01 Term.............................................................. 2
2.02 Termination Right................................................. 2
2.03 Possession........................................................ 3
2.04 Acceptance of Premises; Premises Remodeling....................... 3
Article 3. RENT....................................................... 4
3.01 Monthly Rent...................................................... 4
3.02 Security Deposit................................................... 4
3.03 Legal Tender...................................................... 5
3.04 Additional Rent; Rent Defined..................................... 5
3.05 Interest on Late Payments......................................... 5
Article 4. RECORDS AND ACCOUNTING..................................... 6
4.01 Records........................................................... 6
4.02 Monthly Reports.................................................... 6
4.03 Audited Financial Statements....................................... 6
4.04 Landlord's Right to Audit.......................................... 6
Article 5. USE AND OPERATION OF PREMISES.............................. 7
5.01 Specific Use of Premises.......................................... 7
5.02 Conduct of Business............................................... 7
5.03 Compliance with Restrictions and Laws.............................. 8
5.04 Independent Business.............................................. 8
Article 6. MAINTENANCE, REPAIRS AND ALTERATIONS....................... 8
6.01 Tenant's Obligations to Repair.................................... 8
6.02 Landlord's Option to Make Major Repairs........................... 9
Page
----
6.03 Damage to Premises................................................ 9
6.04 Repair of Damage; Rent Abatement.................................. 10
6.05 Alterations; Improvements; Additions.............................. 10
6.06 Ownership of Improvements, Fixtures, Furnishings and Equipment.... 11
6.07 Mechanic's Liens.................................................. 11
Article 7. INSURANCE, EXONERATION AND INDEMNITY....................... 12
7.01 Liability Insurance............................................... 12
7.02 Property Insurance................................................ 12
7.03 Tenant's Property Insurance....................................... 13
7.04 Landlord's Insurance.............................................. 13
7.05 Insurance Policies................................................ 13
7.06 Waiver of Subrogation............................................. 14
7.07 Exoneration and Indemnity......................................... 15
Article 8. ASSIGNMENT, SUBLETTING, HYPOTHECATION...................... 15
8.01 Consent Required.................................................. 15
8.02 Indirect Transfers................................................ 16
8.03 Obligations of Transferees and Subtenants......................... 16
8.04 Continued Liability; No Waiver.................................... 17
8.05 Transfer of Landlord's Interest................................... 17
8.06 Limitation on Landlord's Interest as to Transferees............... 17
Article 9. EMINENT DOMAIN............................................. 18
9.01 Effect on Lease................................................... 18
9.02 Award............................................................. 19
9.03 Rebuilding......................................................... 19
Article 10. TENANT'S BREACH; LANDLORD'S REMEDIES....................... 19
10.01 Tenant's Breach.................................................. 19
10.02 Landlord's Remedies.............................................. 20
10.03 Right to Cure Tenant's Default................................... 21
10.04 Landlord's Remedies Not Exclusive................................ 22
10.05 Right to Rents, Issues and Profits............................... 22
Page
----
10.06 Receipt of Rents................................................. 23
Article 11. LANDLORD'S DEFAULT; TENANT'S REMEDIES...................... 23
11.01 Landlord's Default............................................... 23
11.02 Tenant's Remedies................................................ 23
11.03 Tenant's Remedies Not Exclusive.................................. 23
11.04 Payment of Rents................................................. 23
Article 12. MORTGAGE OF LANDLORD'S INTEREST............................ 24
12.01 Subordination.................................................... 24
12.02 Tenant's Obligations With Respect to Landlord's Mortgage......... 24
12.03 Definition of Landlord's Mortgage and Landlord's Mortgagee....... 24
Article 13. OPERATING EXPENSES......................................... 24
13.01 Definitions...................................................... 24
13.02 Survival......................................................... 25
Article 14. TAXES AND OTHER CHARGES.................................... 26
14.01 Tenant's Taxes................................................... 26
Article 15. UTILITY AND OTHER SERVICES................................. 26
15.01 Utility Charges.................................................. 26
15.02 Compliance With Governmental Regulations......................... 26
15.03 Security; Landlord Nonresponsibility; Indemnity.................. 27
Article 16. GENERAL PROVISIONS.......................................... 27
16.01 Estoppel Certificates............................................ 27
16.02 Landlord's Right of Entry........................................ 28
16.03 Waiver........................................................... 28
16.04 Surrender of Premises; Holding Over.............................. 29
16.05 Notices.......................................................... 29
16.06 Partial Invalidity; Construction................................. 30
16.07 Captions......................................................... 30
16.08 Short Form Lease................................................. 30
16.09 Brokers' Commissions............................................. 30
Page
----
16.10 Attorneys' Fees.................................................. 30
16.11 Counterparts..................................................... 31
16.12 Sole Agreement................................................... 31
16.13 Successors and Assigns........................................... 31
16.14 Time is of the Essence........................................... 31
16.15 Survival of Covenants............................................ 31
16.16 Landlord's Consent or Approval................................... 31
16.17 Joint and Several Obligations.................................... 32
16.18 No Offer......................................................... 32
16.19 Corporate Resolution............................................. 32
LEASE
THIS LEASE is made and entered into this 19th day of December, 1997, by and
between CRYSTAL PARK HOTEL AND CASINO DEVELOPMENT COMPANY, LLC, a California
limited liability company, hereinafter called "Landlord", and CALIFORNIA CASINO
MANAGEMENT, INC., a California corporation, hereinafter called "Tenant".
RECITALS
--------
A. Landlord is the owner of that certain real property in the City of
Compton, California (the "City"), which property is more particularly described
on Exhibit A attached hereto (the "Property").
B. Landlord has constructed on the Property a casino card club known as
Crystal Park Casino (the "Card Club"). Landlord has also constructed a hotel on
the Property ("Hotel").
C. Landlord desires to lease the Card Club to a licensed card club
operator, together with all fixtures, furniture, equipment and supplies required
to operate a card club, until it can obtain its own license to operate the Card
Club.
D. Tenant is a California corporation. Leo Chu, the sole shareholder of
Tenant, is in the process of being licensed by the State of California and the
City to operate the Card Club.
Article 1.
LEASE OF PREMISES
-----------------
1.01 Premises
--------
(a) Subject to the terms and conditions and reservations provided
herein, Landlord hereby grants, demises and leases to Tenant, and Tenant hereby
hires from Landlord, the Card Club and all fixtures, furniture, equipment,
supplies and all replacements thereof necessary to operate the Card Club
(collectively, the "Premises").
(b) This Lease is subject to the terms, covenants and conditions
herein set forth and each party covenants, as a material part of the
consideration for this Lease, to keep and perform each and all of said terms,
covenants and conditions by it to be kept and performed.
1.02 Landlord's Obligations
----------------------
Prior to the Commencement Date, as that term is hereinafter defined,
Landlord shall, to Tenant's reasonable satisfaction, fully
improve, equip, fixture, furnish and provide all necessary supplies for the
Premises, at Landlord's sole cost and expense, to enable Tenant to operate the
Card Club on the Premises in a first class manner. The performance of Landlord's
obligations under this Section 0 shall comply with any and all Applicable Laws
(as hereinafter defined) and shall be at Landlord's sole cost and expense.
Article 2.
TERM; POSSESSION; ACCEPTANCE
----------------------------
2.01 Term
----
The term of this Lease shall commence on the date upon which Tenant opens
the Card Club for business to the general public (the "Commencement Date") and
shall continue until midnight on the date forty eight (48) months after the
Commencement Date (the "Expiration Date") unless sooner terminated pursuant to
any provision hereof (the "Term" or "the term of this Lease"). Upon
determination of the actual Commencement Date, Landlord and Tenant mutually will
execute a written instrument specifying the Commencement Date and the Term.
2.02 Termination Right
-----------------
(a) Tenant and Landlord agree that at any time after the date hereof,
should Landlord or any Affiliate (as hereinafter defined) of HP/Compton, Inc., a
California corporation ("HPC") become eligible to be licensed to operate a card
club in the State of California, and if all necessary state and local
governmental approvals are first obtained, then Landlord shall cause that
certain Crystal Park Hotel and Casino Development Company Operating Agreement
(the "Operating Agreement") to be amended to provide that: (i) Tenant shall be
admitted as a member of the Landlord; (ii) Tenant's interest in the Landlord
will equal ten percent (10%). At the time of Tenant's admission, the capital
accounts of Landlord's existing members shall be booked at fair market value.
Distributions shall be in proportion with percentage ownership interests. In
such event, this Lease shall terminate and from and after such termination, the
use of the Premises shall be governed by the terms of the Operating Agreement;
provided, however, that the foregoing shall in any event be subject to the
following conditions and limitations;
(1) This Lease may not be terminated, and the Operating Agreement
shall not be amended, until such time as the following conditions have been
satisfied;
(A) the City has taken all actions legally necessary to approve
Landlord or an Affiliate as the owner of an interest in the Card Club operated
by Tenant on the Premises and otherwise approves the partial transfer of
ownership of the Card Club that would be effected by entering into the Operating
Agreement;
(B) such transfer is in compliance with all applicable
provisions of the Compton Municipal Code, as amended from time to time; and
(C) Landlord (or an Affiliate) is eligible under the
laws of the State of California to own an interest in and otherwise participate
in the Card Club and has been duly licensed by the Attorney General of the State
of California to own such interest.
(2) Unless and until all appropriate governmental approvals as
described above have been obtained and Tenant has executed the Operating
Agreement and the amendment to the Operating Agreement contemplated herein, the
amendment shall be of no force or effect.
(3) For the purposes of this Lease, the term "Affiliate" means any
parent corporation, subsidiary or brother-sister corporation of HPC or any
entity owned or controlled by Landlord or any individual or entity which owns or
controls Landlord, HPC or any parent corporation, subsidiary or brother-sister
corporation of HPC, including, without limitation, Hollywood Park Operating
Company.
(4) Tenant hereby covenants and agrees to use its best efforts to
ensure that no provisions of the Compton Municipal Code are enacted that would
preclude or limit the rights of Landlord or an Affiliate to become an owner and
operator of the Card Club and further agrees to fully cooperate with Landlord
and the City in Landlord's efforts to become licensed as such owner and
operator.
(b) The failure by Tenant at any time to be licensed under state or local
law to operate a card club or the disqualification of Tenant as such card club
operator for any reason, including a suspension of license which continues for a
period of five (5) days, shall constitute an Event of Default (as defined in
Section 10.01). Tenant and Landlord agree that in such event, in addition to and
not in limitation of Landlord's remedies under Article 10, Landlord shall have
the right to terminate this Lease without liability upon written notice to
Tenant and thereafter this Lease shall be of no further force or effect.
(c) Notwithstanding anything contained in subparagraph 2.02(a) above,
Tenant shall have the right to terminate this Lease upon thirty (30) days'
written notice to Landlord in the event Tenant's use of the Premises produces
insufficient funds to pay monthly rent as set forth in paragraph 3.01 below,
after Tenant has made all payments of operating expenses, including payment of
any loans or lines of credit related to the operation of the Card Club and prior
to any distribution of revenue to Tenant.
2.03 Possession
----------
Any access to or possession of the Premises by Tenant prior to the
commencement of the Term shall be on and subject to all of the terms,
provisions, covenants and conditions of this Lease except that no Rent shall be
due and except as otherwise expressly herein provided. Landlord shall not have
any control over Tenant and shall not direct or control the operation of the
business of the Card Club on the Premises throughout the Term of this Lease or
any extension thereof.
2.04 Acceptance of Premises; Premises Remodeling
-------------------------------------------
All improvements constructed and maintained by or under the direction of
Landlord or its Affiliates shall be constructed and maintained in accordance
with "Applicable Laws," as that term is defined in Section 0 hereof. Tenant
agrees to accept the Premises subject to (i) all Applicable Laws regulating or
in any manner applicable to any use or occupancy thereof by Tenant (as limited
by this Lease); (ii) the provisions of that certain Amended and Restated
Disposition and Development Agreement, Agreement of Purchase and Sale and Lease
with Option to Purchase, dated April 4, 1995, between Landlord and the Community
Redevelopment Agency of the City, as amended (the "DDA"); and (iii) all liens,
encumbrances, easements, rights of way, covenants, conditions, restrictions,
servitudes, licenses and other matters of record or which have been disclosed in
writing to Tenant prior to the execution of this Lease. By execution of this
Lease, Tenant is not assuming any liability with respect to any failure of the
predecessor tenant to comply with the terms of its lease, including, without
limitation, with respect to any maintenance and repair obligations.
Article 3.
RENT
----
3.01 Monthly Rent
------------
(a) Tenant shall pay to Landlord as Monthly Rent the amounts set forth in
the following schedule:
Month Monthly Rent
----- ------------
1-6 $100,000
7-18 $350,000
19-48 $550,000
The Monthly Rent shall be paid in arrears for the immediately preceding month on
or before the last day of each calendar month during the term hereof, without
any deduction or offset, prior notice or demand. Tenant's obligation to pay
Monthly Rent shall commence on the Commencement Date. If the Commencement Date
shall be a day other than the first day of the calendar month, or, if the Term
shall end on any day other than the last day of the calendar month, then the
Monthly Rent for the first and/or last partial calendar month of the Term, as
the case may be, shall be prorated on a daily basis. This is a "Triple Net
Lease," it being understood that Landlord shall receive the Monthly Rent free
and clear of any and all Operating Expenses and any and all charges and expenses
of any nature whatsoever incurred by Landlord or Tenant in connection with the
ownership and operation of the Premises.
3.02 Security Deposit
----------------
Prior to the Commencement Date, Tenant shall provide Landlord with a cash
deposit in an amount equal to one month's rent as security for Tenant's faithful
performance of the provisions of this Lease (the "Security Deposit"). If Tenant
fails to pay rent or other charges due hereunder, or otherwise defaults with
respect to any provision of this Lease, Landlord shall unilaterally have the
right to use such cash deposit, or any portion thereof, to cure such default or
compensate Landlord for all damages sustained by Landlord resulting from
Tenant's default. Tenant shall, immediately on demand, pay to Landlord a sum
equal to that portion of the Security Deposit expended or applied by Landlord
which was provided for in this paragraph so as to maintain the Security Deposit
in a sum equal to one month's rent. Landlord shall not be required to keep the
Security Deposit separate from its general account nor shall Landlord be
required to pay any interest on the Security Deposit. If Tenant performs all of
Tenant's obligations under this Lease, the Security Deposit, or that portion
thereof which had not been previously applied by Landlord, shall be returned to
Tenant by Landlord, within fourteen (14) days after the expiration of the term
of this Lease or after Tenant has vacated the Premises, whichever is later. Any
time the Monthly Rent increases during the term of this Lease, Tenant shall,
without notice, deposit additional monies with Landlord in order to maintain the
Security Deposit equal to one month's Monthly Rent. Failure to maintain the
Security Deposit shall be deemed a monetary Event of Default.
3.03 Legal Tender
------------
Rent and all other sums payable under this Lease must be paid in lawful
money of the United States of America, without demand, offset or deduction.
3.04 Additional Rent; Rent Defined
-----------------------------
(a) In addition to the Monthly Rent, Tenant shall also pay as additional
rent other charges, fees, costs, taxes, impositions, expenses and other sums
required to be paid by Tenant under the provisions of this Lease whether or not
the same shall be designated as Additional Rent. In the event of nonpayment of
any Additional Rent when due, Landlord shall have all of the rights and remedies
provided hereunder or by law for the nonpayment of rent.
(b) As used in this Lease, the term "Rent" shall include Monthly Rent for
the Premises and Additional Rent.
3.05 Interest on Late Payments
-------------------------
Any Rent or other amounts due from Tenant to Landlord hereunder which are
not paid within five (5) days of when due shall bear interest at a rate (the
"Agreed Rate") equal to two percent (2%) per annum in excess of the "reference
rate" as announced by Bank of America, NT&SA, Los Angeles main office, as such
rate may change from time to time, from the date due until the date paid,
regardless of whether a notice of default or any other notice is given by
Landlord; provided, however, if such rate is greater than the maximum rate of
interest then
permitted to be charged by law, the Agreed Rate shall be the maximum rate of
interest then permitted to be charged by law. In the event that Bank of America,
NT&SA, shall cease to exist or shall cease to announce a "reference rate" (or
equivalent prime rate) or shall cease to have a Los Angeles office, there shall
be substituted such alternative bank, alternative rate or alternative office as
Landlord shall select. Acceptance of interest by Landlord shall not constitute a
waiver of Tenant's default with respect to the overdue amount, or prevent
Landlord from exercising any other rights or remedies.
Article 4.
RECORDS AND ACCOUNTING
----------------------
4.01 Records
-------
For the purposes of ascertaining compliance by Tenant of its obligations
under Article 5 hereof, Tenant agrees to prepare and keep or cause to be
prepared and kept on the Premises (or at such other location approved by
Landlord, which approval shall not be unreasonably withheld) for a period of not
less than thirty-six (36) months following the end of the Term adequate records
which shall show all receipts at the Premises, as well as all charges, fees,
costs, taxes, impositions, expenses and other sums paid or required to be paid
by Tenant in connection with its operation of the Premises ("expenses") and
other information reasonably requested by Landlord from all sales and other
transactions on the Premises by Tenant and by all Subtenants (as hereinafter
defined) in the event Landlord were to approve any other Subtenancy (as
hereinafter defined). The requesting or obtaining of information by Landlord
shall not be deemed to make Landlord responsible for verifying the accuracy of
any such information or make the Landlord responsible for compliance of Tenant's
obligations under Articles 3 and 5, which shall remain the obligations of
Tenant.
4.02 Monthly Reports
---------------
Tenant shall submit to Landlord on or before the fifteenth (15th) day
following the end of each calendar month during the Term (including the 15th day
of the calendar month following the end of the Term), a written statement of
income and expense signed by Tenant, and certified by it (or if Tenant is a
corporation or a partnership, by a duly authorized corporate officer or general
partner of Tenant) to be true and correct, showing in reasonable, accurate
detail the amount of Tenant's receipts, expenses and other information requested
pursuant to Section 4.01 for the immediately preceding period. The certification
of each such statement shall be satisfactory to Landlord in scope and substance
and without qualification except as may be expressly permitted by Landlord. The
statements referred to herein shall be in such form and style and contain such
details and breakdown as Landlord may reasonably determine.
4.03 Audited Financial Statements
----------------------------
Promptly following the end of each calendar year, Tenant shall cause to be
conducted, at its sole cost and expense, an annual audit of its books and
records by Arthur Andersen & Co., Inc. or such other "Big Six" accounting firm
selected by Tenant and acceptable to Landlord.
Within sixty (60) days after the end of each such calendar year, Tenant shall
deliver audited financial statements for the business conducted at the Premises,
certified without qualification by such auditors. Such audited financial
statements shall be the conclusive determination for all calculations required
under Article 3.
4.04 Landlord's Right to Audit
-------------------------
If Tenant omits to prepare and deliver promptly any statement, report or
financial statements required by the provisions of this Article 4, Landlord
shall have the right, in addition to all other rights available to Landlord upon
Tenant's default, to make, or cause to be made, an audit of all books and
records of Tenant and any Subtenants, including their respective bank accounts
which in any way pertain to or show Tenant's activities, and to prepare, or
cause to be prepared, the statement, report or financial statements which Tenant
has failed to prepare and deliver; Tenant shall give Landlord and its designated
representatives access to such books and records at all reasonable times for
purposes of making any such audit and preparing any such statement, report or
financial statements. Such audit shall be made and such statements and reports
shall be prepared by a person or persons selected by Landlord. The statements or
reports so prepared shall be conclusive on Tenant, and Tenant shall pay all
expenses of the audit and other costs incurred by Landlord in connection
therewith. If any such audit shall disclose any willful inaccuracy of Tenant,
such inaccuracy shall constitute an incurable breach of this Lease.
Article 5.
USE AND OPERATION OF PREMISES
-----------------------------
5.01 Specific Use of Premises
------------------------
Tenant shall use and occupy the Premises as the Card Club and for no other
use or purpose.
5.02 Conduct of Business
-------------------
(a) Landlord and Tenant acknowledge that Tenant's obligation to operate a
business in conformance with this Article 5 is a material inducement to Landlord
to enter into this Lease, without which Landlord would not have entered into
this Lease. Accordingly, except as expressly provided elsewhere herein, Tenant
agrees to conduct business continuously at the Premises during the entire Term
of this Lease, except when prevented from doing so by reason of the acts or
omissions of Landlord or any Affiliate, strikes, lockouts, casualty damage, the
order of any governmental agency having jurisdiction over the Premises and/or
the conduct of Tenant's business therein or other reasons (other than financial
inability) beyond Tenant's reasonable control or during such periods that
alterations or repairs are being made to the Premises which make it
impracticable to keep the Premises open. Tenant agrees that, commencing with the
Commencement Date and continuing for the remainder of the Term, Tenant shall be
open for business on a 24-hour a day basis except to the extent prohibited by
law. Tenant shall at all times actively and diligently operate its business on
the Premises in a commercially reasonable manner.
(b) In the event that Landlord consents to any subleasing, Tenant shall
cause all Subtenants to comply with all of the requirements of this Section 0 to
the same extent as if each such Subtenant were the Tenant hereunder.
(c) Tenant shall at all times during the Term of this Lease remain fully
licensed as a "card club operator" in good standing.
5.03 Compliance with Restrictions and Laws
-------------------------------------
Tenant shall, at its sole cost, comply with all of the requirements of all
covenants, conditions and restrictions of record applicable to the Premises or
any part thereof and shall faithfully observe all such covenants, conditions and
restrictions. Tenant shall, at its sole cost, comply with all federal, state and
local laws, regulations, rules, ordinances, zoning variances, conditional use
permits and orders now in force or which may hereafter be in force applicable to
Tenant, any Subtenant, the Premises, and/or the use or occupancy of the Premises
or the conduct of business therein or thereon, including all applicable
provisions of the DDA and any other governmental agreement governing the
Premises ("Applicable Laws"). Tenant acknowledges that it is familiar with such
conditions, and agrees that all of such conditions (and all additional
conditions which may be imposed in the future) constitute "Applicable Laws"
within the meaning of this Lease. Tenant shall cause any Subtenants to comply
with and observe all such covenants, conditions, restrictions and Applicable
Laws.
5.04 Independent Business
--------------------
By this Lease, neither party acquires any right, title or interest in or to
any property of the other party except such rights as are specifically stated in
this Lease. The relationship between Landlord and Tenant is solely that of
landlord and tenant, and is not and shall not be deemed to be a partnership or
joint venture.
Article 6.
MAINTENANCE, REPAIRS AND ALTERATIONS
------------------------------------
6.01 Tenant's Obligations to Repair
------------------------------
Tenant shall at its sole cost and expense, maintain in clean and safe
condition, and make all repairs and replacements to the Premises and every part
thereof, structural and non-structural, so as to keep, maintain and preserve the
Premises in first class condition and repair, including, without limitation, the
roof, the foundation, the heating, ventilation and air conditioning system
("HVAC"), elevators, if any, all plumbing and sewage facilities, fire
sprinklers, electrical and lighting facilities, systems, appliances, and
equipment within the Premises, fixtures, interior and exterior walls, floors,
ceilings, windows, doors, entrances, all interior and exterior glass (including
plate glass), and skylights located within the Premises, and all sidewalks,
service areas, parking areas and landscaping comprising part of the Premises.
All repairs and replacements required to be made by Tenant shall be made
promptly with new materials of like kind and quality to those used in the
original construction of the Premises. If
the repair or replacement work affects the structural parts of the Premises, or
if the estimated cost of any item or repair or replacement exceeds $10,000, then
Tenant shall first obtain Landlord's written approval of the scope of work,
plans therefor, and materials to be used. Any such work shall be performed by
Landlord's contractor or by such contractor as Tenant may choose from an
approved list to be submitted by Landlord. Landlord shall have the right to make
any repairs or replacements which are not promptly made by Tenant and charge
Tenant, as Additional Rent, for the cost thereof together with interest thereon
at the Agreed Rate from the date of payment thereof by Landlord. Without
limiting any of Tenant's obligations hereunder, during the Lease Term Tenant, at
its expense, shall obtain and keep in force an HVAC service contract and a roof
maintenance program satisfactory to Landlord. Tenant hereby waives the benefit
of any statute now or hereafter in effect which would otherwise afford Tenant
the right to make repairs at Landlord's expense or to terminate this Lease
because of Landlord's failure to keep the Premises in good condition, order and
repair. Tenant specifically waives all rights it may have under Sections
1932(1), 1941 and 1942 of the California Civil Code, and any similar or
successor statute or law. Notwithstanding anything to the contrary contained
herein, Landlord shall exercise its rights under any guaranties or warranties
relating to the original construction of the Premises if the need to make
repairs arises due to a defect therein; provided, however, Landlord shall not
have any liability or be required to expend any funds if such guaranties or
warranties are not honored by the makers hereof.
6.02 Landlord's Option to Make Major Repairs
---------------------------------------
Notwithstanding anything to the contrary herein, in lieu of Tenant making
any repairs to or replacements of the structural roof, exterior or load-bearing
walls or foundation, or any replacement or resurfacing of the parking area,
which Tenant would otherwise be obligated to make pursuant to Section 6.01
hereof, Landlord instead may elect to perform any or all such repairs or
replacements itself, in which case Tenant shall pay to Landlord the full cost
thereof within 15 days after Landlord's submission of a bill therefor.
6.03 Damage to Premises
------------------
In the case of damage to or destruction of the Premises by fire or other
casualty, Tenant's rental obligation shall continue as provided in Article 3
above to the extent of rental loss insurance and/or business interruption
insurance proceeds, and Tenant shall rebuild and restore such casualty damage,
unless Tenant elects to terminate the Lease pursuant to the further terms of
this Article 6. In the event that Tenant undertakes any restoration and/or
repair work, such work shall be done in accordance with the provisions of
Section 6.05 hereof and Landlord shall make the casualty insurance proceeds
available to Tenant for that purpose.
If the Premises are damaged to the extent that Tenant is unable to operate
a first class card club therein and such damage cannot be repaired within one
hundred eighty (180) days from the date of damage, Tenant may terminate this
Lease by giving written notice to Landlord no later than ten (10) days after the
date of occurrence of such damage. In the event either party duly elects to
terminate this Lease, this
Lease shall be deemed to have been terminated as of the date of occurrence of
such damage and neither party shall have any further liability under this Lease
except for the provisions herein, which by their terms survive the expiration or
earlier termination of this Lease.
6.04 Repair of Damage; Rent Abatement
--------------------------------
(a) If this Lease is terminated pursuant to any of the provisions of
Section 6.03 hereof, the Monthly Rent, Additional Rent and other payments
provided for herein shall be paid by Tenant through the date that Tenant closes
the Card Club and all rents and other payments made by Tenant to Landlord shall
be appropriately prorated through the date of such closure.
6.05 Alterations; Improvements; Additions
------------------------------------
Tenant shall not make or permit the making of any alterations,
improvements, additions or installations ("Alterations") in, on or about the
Premises without Landlord's prior written consent and unless and until the
drawings, plans and specifications for such Alteration shall have been first
submitted in triplicate to and approved by Landlord and, if required, by any and
all mortgagees of Landlord. Landlord's approval to any such Alteration shall not
be unreasonably withheld or delayed.
Landlord, acting reasonably, may, as a condition to its consent pursuant to
this Section 6.05, require Tenant to furnish Landlord, prior to the commencement
of any work that could constitute the basis for a mechanic's lien on the
Premises and before any building materials are delivered to the Premises, with a
bond by a responsible surety company licensed to do business in California, in a
form and with a company satisfactory to Landlord, in an amount equal to one and
one-half times the estimated cost of the work to be done and the materials to be
supplied, such bond to remain in effect until all such costs shall have been
fully paid and the improvements fully insured by Tenant as herein provided. Such
bond, if required, shall secure completion by Tenant, or on its default by the
surety, of all work free from any and all liens of contractors, subcontractors,
materialmen, laborers or others and shall defend and indemnify Landlord from and
against any loss, damage or liability in any manner arising out of or connected
with such work. Landlord may also impose additional reasonable conditions upon
its consent pursuant to this Section 6.05, including, but not limited to, a
requirement that any work be supervised by a qualified engineer or architect
approved by Landlord and that appropriate "builder's risk" insurance be
obtained.
Any Alterations made in, on or about the Premises by or at the direction of
Tenant (or any Subtenant), shall be made and completed with due diligence, in a
good and workmanlike manner, in strict compliance with the requirements of all
Applicable Laws and all conditions of Landlord's consent. Tenant agrees to carry
such insurance as required by Section 7.02 hereof covering each and every such
Alteration.
So long as there exist any restrictions on the square footage of
improvements on the Property, Tenant shall not, under any
circumstances, do anything which would increase the square footage of the
Premises.
6.06 Ownership of Improvements, Fixtures, Furnishings and Equipment
--------------------------------------------------------------
All improvements, alterations, additions and installations constructed,
installed, affixed or otherwise made in, on or about the Premises by or at the
direction of either Landlord or Tenant (or any Subtenant) at any time prior to
or during the term of this Lease, including, without limitation, any and all
carpeting, floor coverings, wall coverings, lighting and hardware fixtures,
window treatments and ceilings, trade fixtures whether or not permanently
affixed to the Premises, furniture, business equipment and stock in trade, shall
at once become a part of the realty, if applicable and, in any event belong to
Landlord, without any obligation on the part of Landlord to compensate Tenant or
any other person therefor. Any damage to the Premises resulting from the removal
of any items permitted or required to be removed by Tenant hereunder shall be
promptly repaired by Tenant at its sole cost and expense.
6.07 Mechanic's Liens
----------------
Tenant shall promptly pay and discharge all claims for work or labor done
or goods or materials furnished by third parties, at the request of Tenant or
any Subtenant and shall keep the Premises free and clear of all mechanic's and
materialman's liens in connection therewith. If any mechanic's or materialman's
lien is filed for work done on behalf of Tenant or any Subtenant at, or
materials supplied to, the Premises by a third party, Tenant shall remove such
lien by payment or bond (regardless of whether Tenant contests the claim made by
the person asserting such lien and regardless of whether such claim is valid or
has any basis in fact or law) not later than fifteen (15) days after written
demand for such removal is made by Landlord. If Tenant shall fail to discharge
any such lien within such 15-day period, then in addition to any other right or
remedy of Landlord, Landlord may, but shall not be obligated to, take such
action or pay such amount as Landlord, in its sole discretion, shall deem
appropriate to remove such lien, and Tenant shall pay to Landlord as Additional
Rent all amounts (including attorneys' fees) paid or incurred by Landlord in
connection therewith within five (5) days after demand by Landlord, together
with interest at the Agreed Rate from the date of payment by Landlord.
Notwithstanding the foregoing, Tenant shall have the right to contest the
correctness or the validity of any such lien if, immediately upon demand by
Landlord, Tenant procures and records a lien release bond issued by a
corporation authorized to issue surety bonds in California in an amount equal to
one and one-half times the amount of the claim of lien. The bond shall meet the
requirements of Civil Code (S) 3143 or any similar or successor statute and
shall provide for the payment of any sum that the claimant may recover on the
claim (together with costs of suit, if it recovers in the action).
Except for Landlord's express obligations relating to the improvement,
maintenance and repair of the Premises, nothing in this Lease shall be deemed to
be, or construed in any way as constituting, the consent or request of Landlord,
express or implied, to or for the performance of any labor or the furnishing of
any materials for any
construction, rebuilding, alteration or repair of or to the Premises or any part
thereof by any person or as giving Tenant any right, power or authority to
contract for or permit the rendering of any services or the furnishing of any
materials which might in any way give rise to the right to assert any lien
against Landlord's interest in any property. Landlord shall have the right to
post and keep posted at any and all times on the Premises any notices for the
protection of Landlord and the Premises from any such lien. Tenant shall, before
the commencement of any work, or the delivery of any materials, which might
result in any such lien, give to Landlord written notice of its (or any
Subtenant's) intention to perform such work or obtain such materials in
sufficient time to enable the posting of such notices.
Article 7.
INSURANCE, EXONERATION AND INDEMNITY
------------------------------------
7.01 Liability Insurance
-------------------
Tenant shall obtain and keep in force during the Term of this Lease a
Commercial General Liability policy of insurance protecting Tenant and Landlord
(as an additional insured) against claims for bodily injury, personal injury or
personal advertising injury, and property damage based upon, involving, or
arising out of the ownership, use, occupancy, or maintenance of the Premises and
all areas appurtenant thereto. Such insurance shall be on an occurrence basis
providing single limit coverage in an amount not less than Ten Million Dollars
and No Cents ($10,000,000.00) per occurrence. Such insurance shall be with an
"Additional Insured-Managers or Landlords of Property" Endorsement and contain
the "Amendment of the Pollution Exclusion" for damage caused by heat, smoke, or
fumes from a hostile fire. Such policy shall not contain any intra-insured
exclusions as between insured persons or entities, but shall include coverage
for liability assumed under this Lease as an "insured contract" for the
performance of Tenant's indemnity obligations under this Lease. The limits of
insurance required by this Lease or otherwise carried by Tenant shall not,
however, limit the liability of Tenant nor relieve Tenant of any obligation
hereunder. All insurance to be carried by Tenant shall be primary to and not
contributory with any similar insurance carried by Landlord, whose insurance
shall be considered excess insurance only. During the construction, alteration,
or repair of any improvements on the Premises, the party contracting for said
construction shall provide and maintain workers' compensation and employers'
liability insurance covering all persons employed in connection with such
construction, alteration, or repair and with respect to whom death or personal
injury claims could be asserted against Landlord, Tenant, or the Premises.
7.02 Property Insurance
------------------
(a) Building and Improvements. Tenant shall obtain and keep in
-------------------------
force during the Term a policy or policies of insurance in the name of Landlord,
with loss payable to Landlord insuring against damage to, or destruction of any
improvements comprising the Premises, together with all fixtures, machinery and
equipment therein and thereon. The amount of such insurance shall be equal to
the full replacement cost of the improvements comprising the Premises, as such
cost shall change from time to time, or such greater amount as may be required
pursuant
to Applicable Laws. Such policy or policies shall insure against all risks of
direct physical loss or damage (including, if mutually approved of by Landlord
and Tenant, the perils of flood and/or earthquake; provided, however, that
Tenant shall consent to Landlord's request to carry such insurance if Landlord
reasonably determines, from time to time, taking into account Tenant's financial
condition, that the value of minimizing the risk of loss outweighs the financial
burden of carrying such insurance), including, without limitation, coverage for
any additional costs resulting from debris removal and coverage for the
enforcement of any ordinance or law regulating the reconstruction or replacement
of any undamaged sections of the Premises required to be demolished or removed
by reason of the enforcement of any Applicable Law as the result of a covered
cause of loss. Such policy or policies shall also contain an agreed valuation
provision (in lieu of any coinsurance clause), and waiver of subrogation. If
such insurance coverage has a deductible clause, the deductible amount shall not
exceed Five Thousand Dollars and No Cents ($5,000.00) per occurrence, and Tenant
shall be liable for such deductible amount in the event of an insured loss.
(b) Rental Value. Tenant shall, in addition, obtain and keep in
------------
force during the Term (or if only available to Landlord, reimburse Landlord) for
the costs of a policy or policies in the name of Landlord, with loss payable to
Landlord, insuring the loss of the Monthly Rent for one (1) year. Such insurance
shall provide that in the event the Lease is terminated by reason of an insured
loss, the period of indemnity for coverage shall be extended beyond the date of
the completion of repairs or replacement of the Premises, to provide for one (1)
full year's loss of rental revenues from the date of any such loss. Such
insurance shall contain an agreed valuation provision in lieu of any coinsurance
clause, and the amount of coverage shall be adjusted annually to reflect the
projected Monthly Rent otherwise payable by Tenant, for the next one (1) year.
Tenant shall be liable for any deductible amount in the event of such loss.
Tenant shall also obtain business interruption insurance, in form and substance
reasonably acceptable to Landlord.
7.03 Tenant's Property Insurance
---------------------------
Tenant, at its sole cost, shall either by separate policy or, at Landlord's
option, by endorsement to a policy already carried, maintain insurance coverage
on all of Tenant's personal property in, on, under, or about the Premises
similar in coverage to that carried under Paragraph 7.2 hereof. Such insurance
shall be full replacement cost coverage with a deductible of not to exceed Five
Thousand Dollars and No Cents ($5,000.00) per occurrence. The proceeds from any
such insurance shall be used by Tenant for the replacement of personal property.
7.04 Landlord's Insurance. Landlord, at its expense, may obtain and keep
--------------------
in force during the Term of this Lease a blanket policy of public liability
insurance covering the Premises.
7.05 Insurance Policies. Insurance required hereunder shall be kept in
------------------
companies duly licensed to transact business in the State of California and
maintaining during the policy term a "General Policyholders Rating" of at least
A, VIII or other rating as may be
required by Landlord, as set forth in the most current issue of "Best's
Insurance Guide." Tenant shall not do or permit to be done anything which shall
invalidate the insurance policies referred to in this Article. With respect to
insurance required of Tenant hereunder, Tenant shall cause to be delivered to
Landlord certified copies of policies of insurance or certificates evidencing
the existence and amounts of such insurance with the insureds and loss payable
clauses as required by this Lease. No such policy shall be cancelable or subject
to modification except after thirty (30) days prior written notice to Landlord.
Tenant shall, at least thirty (30) days prior to the expiration of such
policies, furnish Landlord with evidence of renewals or "insurance binders"
evidencing renewal thereof, or else Landlord may order such insurance and charge
the cost thereof to Tenant, which amount shall be payable by Tenant to Landlord
upon demand. If Tenant shall fail to procure and maintain the insurance required
to be carried by Tenant under this Article, Landlord may, but shall not be
required to, procure and maintain such insurance, but at Tenant's expense.
The insurance provided for herein may be brought within the coverage of a
so-called "blanket" policy or policies of insurance carried and maintained by
Tenant if (i) Landlord and, if requested by Landlord, any mortgagee of Landlord
shall be named as additional insureds or loss payees thereunder as required in
this Article 7, (ii) the coverage afforded Landlord and Tenant shall not be
reduced or diminished by reason of the use of such "blanket" policy or policies
and (iii) all of the other requirements set forth in this Article VII are
satisfied.
7.06 Waiver of Subrogation
---------------------
To the extent permitted by law and without affecting the coverage provided
by insurance required to be maintained hereunder, Landlord and Tenant each
waives any right to recover against the other (a) damages for injury to or death
of persons, (b) damages to property, (c) damage to the Premises or any part
thereof, and (d) claims arising by reason of any of the foregoing, but only to
the extent that any of the foregoing damages and/or claims are covered (then
only to the extent of such coverage) by insurance actually carried, or required
by this Lease to be carried, by either Landlord or Tenant. This provision is
intended to waive fully, and for the benefit of each party, any rights and/or
claims which might give rise to a right of subrogation in any insurer. Each
party shall cause each insurance policy obtained by it to permit such waiver of
subrogation or to provide that the insurer waives all right of recovery by way
of subrogation against either party in connection with any damage covered by
such policy. If any insurance policy cannot be obtained permitting or providing
for a waiver of subrogation, or is obtainable only by the payment of an
additional premium charge above that charged by insurers issuing policies not
permitting or providing for a waiver of subrogation, the party undertaking to
obtain such insurance shall notify the other party in writing of this fact. The
other party shall have a period of fifteen (15) days after receiving the notice
either to place the insurance with an insurer that is reasonably satisfactory to
the other party and that will carry the insurance permitting or providing for a
waiver of subrogation, or to agree to pay the additional premium if such a
policy is obtainable at additional cost. If such insurance cannot be obtained or
the party in whose favor a waiver of subrogation is desired refuses
to pay the additional premium charged, the other party shall be relieved of the
obligation to obtain a waiver of subrogation rights with respect to the
particular insurance involved during the policy period of such insurance, but
such obligation shall revive (subject to the provisions of this Section 0) upon
the expiration of such policy period.
7.07 Exoneration and Indemnity
-------------------------
(a) Tenant shall indemnify Landlord and its Affiliates, and each of their
respective agents, contractors, officers, shareholders and employees and hold
each of them harmless from and against any and all losses, liabilities,
judgments, settlements, causes of action, suits, costs and expenses (including
reasonable attorneys' fees and other costs of investigation and defense) which
they may suffer or incur by reason of any claim asserted by any person arising
out of, or related to (or allegedly arising out of or related to): (i) any
failure by Tenant to perform any material obligation to be performed by Tenant
under the terms of this Lease; or (ii) any wrongful act, wrongful omission,
negligence or wilful misconduct of Tenant or any of its agents, employees,
representatives, officers, directors or independent contractors. If any action
or proceeding is brought against Landlord or any of its Affiliates (or any of
their respective agents, contractors, officers, shareholders or employees) by
reason of any such claim, Tenant, upon Landlord's request, shall defend the same
by counsel reasonably satisfactory to Landlord, at Tenant's expense.
(b) Landlord shall indemnify Tenant and its affiliates, and each of their
respective agents, contractors, officers, shareholders and employees and hold
each of them harmless from and against any and all losses, liabilities,
judgments, settlements, causes of action, suits, costs and expenses (including
reasonable attorneys' fees and other cost of investigation and defense) which
they may suffer or incur by reason of any claim asserted by any person arising
out of, or related to (or allegedly or arising out of or related to): (i) any
failure by Landlord to perform any material obligation to be performed by
Landlord under the terms of this Lease; or (ii) any wrongful act, wrongful
omission, negligence or misconduct of Landlord or any Affiliate of Landlord or
any of its or their agents, employees, representatives, officers, directors or
independent contractors. If any action or proceeding is brought against Tenant
or any of its affiliates (or any of their respective agents, contractors,
officers, shareholders or employees) by reason of any such claim, Landlord upon
Tenant's request, shall defend the same by counsel satisfactory to Tenant at
Landlord's expense.
Article 8.
ASSIGNMENT, SUBLETTING, HYPOTHECATION
-------------------------------------
8.01 Consent Required
----------------
Except as hereinafter provided in this Article 8, Tenant shall not
voluntarily, involuntarily or by operation of law assign, transfer, mortgage,
pledge, hypothecate or otherwise encumber or transfer (collectively, a
"Transfer") all or any part of Tenant's interest in this Lease or in the
Premises or sublet the whole or any part of the Premises, or permit any other
person, firm or corporation (a "Subtenant") to occupy by license, concession or
otherwise any portion of the Premises (collectively, a "Subletting"), without
first obtaining in each and every instance the prior written consent of
Landlord. Any Transfer or further subletting by a Subtenant shall be considered
a Subletting or Transfer hereunder and shall require the prior written consent
of Landlord. Express as expressly set forth in Section 8.02, consent to any type
of Transfer may be withheld in Landlord's sole discretion.
Any purported Transfer or Subletting without Landlord's prior written consent
shall be null and void and have no force or effect whatever and shall constitute
an incurable breach of this Lease.
8.02 Indirect Transfers
------------------
If, at any time during the Term, Tenant is a partnership, the death,
insolvency, withdrawal, substitution, addition or change in the identity of any
general partner of Tenant (including, without limitation, any transfer of any
stock of any corporation which is a partner of Tenant) following the date such
partnership becomes the Tenant hereunder shall be deemed a Transfer within the
meaning of this Lease. If, at any time during the Term, Tenant is a
corporation, the transfer of the stock of Tenant to any person who is not as of
the date hereof a shareholder of Tenant shall be considered a Transfer for
purposes of this Lease whether such change occurs by reason of transfer,
redemption, issuance of additional stock, operation of law, or any other cause
whatever. Tenant may not transfer any stock if the proposed transferee is not
compatible with the licensing, permitting, regulatory and other governmental
restrictions applicable to Tenant, Landlord or Landlord's Affiliates. Tenant
represents and warrants that Leo Chu owns One Hundred Percent (100%) of the
issued and outstanding stock of Tenant. In the event of the death of Leo Chu
during the term of this Lease, Landlord shall not unreasonably withhold its
consent to the transfer of the stock of Tenant, provided that the proposed
transferee otherwise meets the requirements set forth in this Section 8.02.
8.03 Obligations of Transferees and Subtenants
-----------------------------------------
(a) Each person or entity obtaining ownership of Tenant's interest in this
Lease, or any portion thereof, by reason of a Transfer (a "Transferee"), shall
unqualifiedly agree in writing, for the benefit of Landlord, to perform all of
the obligations of Tenant under this Lease. Such agreement shall be in form and
substance satisfactory to Landlord and shall be delivered to Landlord no later
than the date of such Transfer.
(b) In connection with any Subletting, Tenant shall use only such form of
agreement with a Subtenant concerning such Subletting (a "Sublease") as shall
have been approved, as to form and substance, by Landlord, acting reasonably and
after approval, such Sublease shall not be amended or modified in any material
respect without the prior written consent of Landlord. Each Subtenant shall, by
reason of having entered into such Sublease, be deemed to have agreed, for the
benefit of Landlord (i) to the provisions specified in Section 0 hereof, and
(ii) to comply with each and every obligation to be performed by Tenant
hereunder (specifically including Section 0 hereof and this Article 8), except
(i) Tenant's obligation to pay Rent to Landlord; and (ii) the minimum policy
limits of any insurance to be carried by a Subtenant. Concurrently with any
Subletting, Tenant shall provide Landlord with written notice of the name and
address of any Subtenant for the purpose of giving notices to such Subtenant.
8.04 Continued Liability; No Waiver
------------------------------
Any consent to any Transfer or Subletting which may be given by Landlord shall
not constitute a waiver by Landlord of the provisions of this Article, or a
consent to any other or further Transfer or Subletting, or, in the event of a
Subletting, a release of Tenant from primary liability for the full performance
by it of the provisions of this Lease. Notwithstanding any Subletting, Tenant
shall continue to be liable for the full performance of each and every
obligation under this Lease to be performed by Tenant, regardless of whether
Tenant is in possession of the Premises or has any power or legal ability to
perform such obligations. Notwithstanding any Transfer (or multiple Transfers)
the person named herein as Tenant (and any Transferee) shall continue to be
primarily liable in any and all events for the full performance of each and
every obligation under this Lease to be performed by Tenant, and the obligations
under this Lease of the person named herein as Tenant and any and all
Transferees shall be joint and several.
8.05 Transfer of Landlord's Interest. The term "Landlord" as used herein
-------------------------------
shall mean and include only the owner or owners, at the time in question, of the
fee title to the Premises. In the event of any transfer, assignment or other
conveyance or transfers of any such title to any party other than an Affiliate,
Landlord herein named (and in case of any subsequent transfers or conveyances,
the then grantor) shall be automatically freed and relieved from and after the
date of such transfer, assignment or conveyance of all liability as respects the
performance of any covenants or obligations on the part of Landlord contained in
this Lease thereafter to be performed and, without further agreement, the
transferee of such title or interest shall be deemed to have assumed and agreed
to observe and perform any and all obligations of Landlord hereunder, during its
ownership of the Premises. Landlord may transfer its interest in the Premises
and/or this Lease without Tenant's consent and such transfer or subsequent
transfer shall not be deemed a violation by Landlord of any of the terms and
conditions hereof.
8.06 Limitation on Landlord's Interest as to Transferees. Neither Landlord
---------------------------------------------------
nor any assignee or transferee shall have the right to in any way participate in
the operation or ownership of the Card Club or in any way receive a financial
interest in or exercise influence over the
Card Club until: (i) the laws of the State of California allow the Card Club to
be owned or operated by a public company; or (ii) the State of California
Department of Justice specifically permits such transferee or assignee to act in
such a manner with respect to the Card Club, whether or not such transferee or
assignee is eligible for gaming registration at the time of such transfer,
assignment, or conveyance. Pursuant to this Section 8.06, Landlord shall
expressly state, in any document which transfers, assigns or conveys any of its
rights, title or interest to this Lease, that no assignee or transferee shall
have the right to participate in the ownership or operation of the Card Club or
in any way obtain a financial interest and/or exercise any influence over the
Card Club until: (i) the laws of the State of California provide that the Card
Club may be owned or operated by a public company; or (ii) the State of
California Department of Justice specifically permits such transferee or
assignee to act in such a manner with respect to the Card Club, whether or not
such transferee or assignee is eligible for gaming registration at the time of
such transfer, assignment, or conveyance. Nothing in this Section 8.06 shall be
deemed to change or alter any provision of this Lease or require that any
party's rights hereunder be changed or altered upon Landlord's transfer or
conveyance of its right, title or interest herein except as expressly stated
above.
Article 9.
EMINENT DOMAIN
--------------
9.01 Effect on Lease
---------------
If the Premises or any portion thereof are taken or damaged, including
severance damage, under the power of eminent domain or by inverse condemnation
or for any public or quasi-public use, or voluntarily conveyed or transferred in
lieu of an exercise of eminent domain or while condemnation proceedings are
pending (all of which are herein called "condemnation"), this Lease shall
terminate as to the part so taken as of the date the condemning authority takes
title or possession, whichever first occurs. If so much of the Premises is
taken by condemnation that the remainder is unsuitable for Tenant's continued
occupancy for the uses and purposes for which the Premises are leased, Tenant
shall have the option, exercisable only by written notice to Landlord within
thirty (30) days after Landlord shall have given Tenant written notice of such
taking (or in the absence of such notice, within thirty (30) days after the
condemning authority shall have taken title or possession, whichever first
occurs), to terminate this Lease as of the later of the date the condemning
authority takes such title or possession (whichever first occurs) or the date
Tenant vacates the Premises; provided, however, that if Landlord disagrees with
Tenant's determination that the portion of the Premises remaining after
condemnation is unsuitable for Tenant's occupancy, such controversy shall be
settled by arbitration in Los Angeles, California in accordance with the
commercial arbitration rules of the American Arbitration Association then in
effect. In the event that less than all of the Premises shall be taken by
condemnation and Tenant does not elect to terminate this Lease in accordance
with the foregoing, this Lease shall remain in full force and effect as to the
portion of the Premises remaining, except that the Monthly Rent and applicable
Additional Rent shall be reduced in the same ratio that the floor area of the
portion of the Premises taken by such condemnation bears to the floor area of
the Premises immediately before such condemnation.
9.02 Award
-----
In the event of any Taking, whether whole or partial, Landlord and Tenant
shall be entitled to receive and retain such separate awards and portions of
lump sum awards as may be allocated to their respective interests in any
condemnation proceedings.
9.03 Rebuilding
----------
In the event that this Lease is not terminated by reason of such condemnation,
Landlord shall, to the extent of the severance damages applicable to the
building of which the Premises are a part actually received by Landlord and
Tenant in connection with such condemnation, and subject to the provisions of
any Landlord's mortgage concerning the application of condemnation proceeds,
cause such restoration and repair to the remaining portion of the Premises to be
done as may be necessary to restore them to an architectural and usable whole
reasonably suitable for the conduct of the business of Tenant.
Article 10.
TENANT'S BREACH; LANDLORD'S REMEDIES
------------------------------------
10.01 Tenant's Breach
---------------
The occurrence of any one of the following events shall constitute an "Event
of Default" and a breach of this Lease by Tenant:
(a) The failure by Tenant to make any payment of Monthly Rent, Additional
Rent or other payment required to be made by Tenant hereunder, as and when due,
where such failure shall continue for a period of five (5) days after written
notice thereof from Landlord to Tenant.
(b) The failure by Tenant to observe or perform any of the material covenants
or obligations under this Lease to be observed or performed by Tenant, other
than as specified in subsections (a) and (d) of this Section 0, where such
failure shall continue for a period of thirty (30) days after written notice
thereof from Landlord to Tenant; provided, however, that if the nature of such
failure is such that more than thirty (30) days are reasonably required for its
cure, then Tenant shall not be in default if Tenant shall commence such cure
within said 30-day period and thereafter diligently prosecutes such cure to
completion.
(c) The abandonment of the Premises by Tenant.
(d) The failure by Tenant to remain fully licensed as a "card club operator"
in good standing at all times during the Term of this Lease which failure shall
continue for a period of five (5) days.
(e) The appointment by any court of a receiver, interim trustee or trustee to
take possession of any asset or assets of Tenant, said receivership or
trusteeship remaining undischarged for a period of sixty (60) days.
(f) A general assignment by Tenant for the benefit of creditors.
(g) The filing of a voluntary petition by Tenant in bankruptcy or any other
petition under any section or chapter of the Bankruptcy Code or any similar law,
whether state, federal or foreign, for the relief of debtors.
(h) The filing against Tenant of an involuntary petition or any other
petition under any section or chapter of the Bankruptcy Code or any similar law,
whether state, federal or foreign, for the relief of debtors by the creditors of
Tenant, said petition remaining undischarged for a period of sixty (60) days.
(i) The attachment, execution or judicial seizure of all or any part of the
properties and assets of Tenant, such attachment, execution or other seizure
remaining undismissed or undischarged for a period of fifteen (15) days after
the levy thereof.
(j) The admission in writing by Tenant of its inability to pay its respective
debts or perform its obligations as they become due.
(k) The calling of a meeting of the creditors representing a significant
portion of the unsecured liabilities of Tenant for the purpose of effecting a
moratorium, extension, composition or any of the foregoing.
(l) The occurrence of any of the events specified in subsections (e) through
(l), inclusive, with respect to any general partner of Tenant (if Tenant is a
partnership) or any guarantor of Tenant's obligations under this Lease.
(m) The occurrence of a default not cured within the applicable cure period,
under that certain Management Agreement with respect to the operation of the
Hotel, between Landlord and Tenant, of even date herewith.
(n) The occurrence of any event which expressly constitutes an incurable
breach of this Lease.
The notices specified in subsections (a) and (b) of this Section 0 shall be in
lieu of, and not in addition to, any notices required under California Code of
Civil Procedure Section 1161 or any successor statute.
10.02 Landlord's Remedies
-------------------
In the event of an Event of Default under Section 0 then Landlord, in addition
to any other rights or remedies it may have at law, in equity or otherwise,
shall have the following rights:
(a) Landlord shall have the right to terminate this Lease and Tenant's right
to possession of the Premises by giving written notice of termination to Tenant.
No act by Landlord other than giving express written notice to Tenant shall
terminate this Lease or Tenant's right to possession of the Premises. Should
Landlord at any time terminate this Lease for any breach, in addition to any
other remedy it may have, it is hereby agreed by Landlord and Tenant that the
damages Landlord shall be entitled to recover under this Lease shall include
without limitation:
(i) The worth, at the time of award, of the unpaid Rent that has
been earned at the time of the termination of this Lease;
(ii) The worth, at the time of award, of the amount by which the
unpaid Rent that would have been earned after the date of termination of this
Lease until the time of award exceeds the amount of the loss of Rent that Tenant
proves could have been reasonably avoided;
(iii) The worth, at the time of award, of the amount by which the
unpaid Rent for the balance of the stated term hereof (determined without regard
to the termination of this Lease for Tenant's breach) after the time of award
exceeds the amount of the loss of Rent that Tenant proves could be reasonably
avoided; and
(iv) Any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's breach, including, but not limited to,
the costs and expenses (including attorneys' fees, court costs, advertising
costs and brokers' commissions) of recovering
possession of the Premises, removing persons or property therefrom, placing the
Premises in good order, condition and repair, preparing and altering the
Premises for reletting and all other costs and expenses of reletting.
"The worth, at the time of award," as used in subparagraphs (i) and (ii) above
shall be computed by allowing interest at the Agreed Rate. "The worth at the
time of award," as referred to in subparagraph (iii) above shall be computed by
discounting the amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award, plus one percent (1%). The terms "Rent" and
"Rents" as used in this Section 0 shall include the Monthly Rent, and all
Additional Rent and all other fees and charges required to be paid by Tenant
pursuant to the provisions of this Lease.
(b) Even though Tenant has breached or defaulted under this Lease and
abandoned the Premises, this Lease shall continue in effect for so long as
Landlord does not terminate Tenant's right to possession, and Landlord may
enforce all of its rights and remedies under this Lease, including but not
limited to the right to recover all Rents as they become due hereunder. Tenant's
right to possession of the Premises shall not be deemed to have been terminated
by Landlord unless express written notice to such effect is given by Landlord to
Tenant, and Tenant's right to possession of the Premises shall in no event be
deemed terminated without such notice on account of acts of maintenance or
preservation of or efforts to relet the Premises by Landlord or by reason of the
appointment of a receiver upon the initiative of Landlord.
10.03 Right to Cure Tenant's Default
------------------------------
If, after the expiration of any cure or notice period, Tenant has failed to do
any act required to be done by Tenant hereunder, Landlord may (but without being
obligated to do so) cure such failure at Tenant's cost. If Landlord at any
time, by reason of Tenant's failure to comply with the provisions of this Lease,
pays any sum or does any act that requires the payment of any sum, the sum paid
by Landlord shall be due immediately from Tenant to Landlord at the time the sum
is paid and, if paid at a later date, shall bear interest at the Agreed Rate
from the date the sum is paid by Landlord until Landlord is reimbursed by
Tenant. Such sum, together with interest thereon, shall be Additional Rent
hereunder.
10.04 Landlord's Remedies Not Exclusive
---------------------------------
The several rights and remedies herein granted to Landlord shall be cumulative
and in addition to any others to which Landlord is or may be entitled by law or
in equity, and the exercise of one or more rights or remedies shall not
prejudice or impair the concurrent or subsequent exercise of any other rights or
remedies which Landlord may have and shall not be deemed a waiver of any of
Landlord's rights or remedies or to be a release of Tenant from any of Tenant's
obligations, unless such waiver or release is expressed in writing and signed by
Landlord.
10.05 Right to Rents, Issues and Profits
----------------------------------
In the event this Lease is terminated pursuant to the provisions of this
Article 10, all of the right, title, estate and interest of Tenant in and to (a)
the Premises; (b) all rents, issues and profits of the Premises whether then
accrued or to accrue; (c) all insurance policies and all insurance monies paid
or payable to Tenant with respect to the Premises, any property thereon and any
business conducted thereon; and (d), at the election of Landlord, all Subleases
then in existence for any part or parts of the Premises, shall, without
compensation being paid therefor, pass unto and vest in and become the property
of Landlord, free of any trust or claim thereto by Tenant. Tenant hereby
assigns to Landlord all subrents and other sums falling due from Subtenants
during any period in which Landlord has the right under this Lease, whether
exercised or not, to reenter the Premises upon Tenant's breach of this Lease,
and Tenant shall not have any right, interest or claim in or to such sums during
any such period. By its acceptance of an interest subject to this Lease, each
Subtenant shall be deemed to have agreed, and Tenant shall require each
Subtenant to expressly agree in writing (i) upon receipt of written notice from
Landlord that Tenant has breached this Lease, to make all payments of subrents
directly to Landlord, which payments shall be received by Landlord without any
liability or obligation to such Subtenant or otherwise (except to credit such
payments against the rents and other sums due under this Lease from Tenant), and
(ii) at the election of Landlord in its sole discretion, to attorn to Landlord
in the event this Lease is terminated as the result of Tenant's breach.
Each Sublease shall terminate upon the termination of this Lease for Tenant's
breach unless Landlord shall expressly elect by written notice to the Subtenant
thereunder to continue such Sublease in effect following a termination of the
Lease. Neither Landlord's consent to such Sublease, nor Landlord's receipt of
subrents from the Subtenant thereunder, nor any other act or omission by
Landlord other than Landlord's express written election to keep such Sublease in
effect following termination of this Lease, shall be construed as a consent to
the continued use or occupancy of the Premises by the Subtenant thereunder
following the termination of this Lease for Tenant's breach.
10.06 Receipt of Rents
----------------
Landlord's acceptance of full or partial payment of Rent following any Event
of Default shall not constitute a waiver of such Event of Default.
Article 11.
LANDLORD'S DEFAULT; TENANT'S REMEDIES
-------------------------------------
11.01 Landlord's Default
------------------
The failure by Landlord to observe or perform any of the material covenants or
obligations under this Lease to be observed or performed by Landlord where such
failure shall continue for a period of thirty (30) days after written notice
thereof from Tenant to Landlord shall constitute a default of this Lease by
Landlord; provided, however, that if the nature of such failure is such that
more than thirty (30) days are reasonably required for its cure, then Landlord
shall not be in default if Landlord shall commence such cure within said 30-day
period and thereafter diligently prosecutes such cure to completion.
11.02 Tenant's Remedies
-----------------
In the event of Landlord's default under Section 11.01 after the expiration of
any applicable cure period, in addition to any other rights or remedies it may
have at law, in equity or otherwise, Tenant, acting reasonably, shall have the
right but not the obligation to cure Landlord's default, at Landlord's expense.
If Tenant at any time, by reason of Landlord's failure to comply with the
provisions of this Lease, pays any sum or does any act that requires the payment
of any sum, the sum paid by Tenant, at Tenant's option, shall be offset against
future Rent or shall be due immediately from Landlord to Tenant at the time the
sum is paid and, if paid at a later date, shall bear interest at the Agreed Rate
from the date the sum is paid by Tenant until Tenant is reimbursed by Landlord.
11.03 Tenant's Remedies Not Exclusive
-------------------------------
The several rights and remedies herein granted to Tenant shall be cumulative
and in addition to any others to which Tenant is or may be entitled by law or in
equity, and the exercise of one or more rights or remedies shall not prejudice
or impair the concurrent or subsequent exercise of any other rights or remedies
which Tenant may have and shall not be deemed a waiver of any of Tenant's rights
or remedies or to be a release of Landlord from any of Landlord's obligations,
unless such waiver or release is expressed in writing and signed by Tenant.
11.04 Payment of Rents
----------------
Tenant's payment of full or partial payment of Rent following any default of
Landlord under this Lease shall not constitute a waiver of such default.
Article 12.
MORTGAGE OF LANDLORD'S INTEREST
-------------------------------
12.01 Subordination
-------------
The rights of Tenant hereunder shall be subject and subordinate to the lien or
interest of any Landlord's mortgage. Landlord shall use its reasonable efforts
to cause the holder thereof to execute and deliver to Tenant a subordination,
non-disturbance and attornment agreement in form and substance reasonably
acceptable to Tenant.
12.02 Tenant's Obligations With Respect to Landlord's Mortgage
--------------------------------------------------------
Tenant shall at any time and from time to time, upon not less than twenty (20)
days' prior written request by Landlord, deliver to Landlord either or both of
the following:
(a) Such financial information concerning Tenant and Tenant's operations as
reasonably may be required by any mortgagee or prospective mortgagee under any
Landlord's mortgage; provided, however, that any such financial information
shall be required and used only for bona fide business reasons related to such
mortgage or the obtaining thereof; and
(b) An executed and acknowledged instrument amending this Lease in such
respect as may be reasonably required by any mortgagee or prospective mortgagee
under any Landlord's mortgage; provided, however, that any such amendment shall
not materially alter or impair any of the rights and remedies of Tenant under
this Lease.
12.03 Definition of Landlord's Mortgage and Landlord's Mortgagee
----------------------------------------------------------
As used in this Lease, the term "Landlord's mortgage" refers to each mortgage
or deed of trust which may in the future encumber, the Premises or any part
thereof, and each lease of which Landlord is the lessee which covers, or may in
the future cover, the Premises or any part thereof. As used in this Lease, the
terms "Landlord's mortgagee" and "mortgagee of Landlord" include the mortgagee,
or bondholder under each such mortgage, the beneficiary under each such deed of
trust and the lessor under each such lease.
Article 13.
OPERATING EXPENSES
------------------
13.01 Definitions
-----------
(a) "Operating Expenses" shall include all expenses and costs of every kind
and nature (including without limitation, payments to independent contractors)
which Landlord shall pay or become obligated to pay because of or in connection
with the ownership and operation of the Premises and surrounding property and
supporting facilities, and additional facilities (as such additional facilities
may be determined by Landlord to be reasonably necessary in subsequent years),
including, without limitation: (i) all Tax Costs; (ii) all Insurance Costs;
(iii) any deductible portion of an insured loss occurring to the Premises; (iv)
expenses payable for the Premises under any reciprocal
easement agreement or other expense sharing arrangement with adjacent property
owner(s); and (v) all other expenses incurred by Landlord in connection with the
Premises.
(b) As used herein, the term "Insurance Costs" shall mean and refer to all
insurance premiums paid by Landlord with respect to insuring the Premises or any
portion thereof or the interest of Landlord or any mortgagee of Landlord
therein, including, without limitation, premiums for fire, extended coverage,
earthquake, business interruption, loss of rents and liability insurance, and
any other insurance which Landlord deems necessary or advisable.
(c) As used herein, the term "Tax Costs" shall mean and refer to all real
estate taxes, personal property taxes, privilege taxes, gross income taxes
assessed on the income of the Card Club, excise taxes, gross sales or use taxes,
water charges, sewer charges, assessments (including, but not limited to,
assessments for public improvements or benefits) and all other governmental
taxes, fees, impositions and charges of every kind and nature, whether or not
now customary or within the contemplation of the parties hereto, which shall be
or become due and payable under or by virtue of any law, statute, ordinance,
regulation or other requirement of any governmental authority, whether federal,
state, county, city, municipal or otherwise, (i) which shall be levied, assessed
or imposed upon Landlord or the owner of the Premises, or (ii) which shall be or
become liens upon or against the Premises or any portion thereof, or any
interest of Landlord or Tenant, or (iii) which shall be levied, assessed or
imposed or shall be or become liens upon or against any personal property used
in connection with the Premises or (iv) which shall be levied or imposed upon or
with respect to the ownership, possession, leasing, operation, management,
maintenance, improvement, alteration, repair, use or occupancy of the Premises
or any portion thereof. Landlord and Tenant recognize that there may be imposed
new forms of taxes, assessments, charges, levies or fees, or there may be an
increase in certain existing taxes, assessments, charges, levies or fees placed
on, or levied in connection with the ownership, leasing, occupancy or operation
of the Premises and its facilities. All such new or increased taxes,
assessments, charges, levies or fees which are imposed or increased, including,
but not limited to, any taxes, assessments, charges, levies and fees assessed or
imposed due to the existence of this Lease or for the purpose of funding
services or special assessment districts theretofore funded by real property
taxes, shall also be included within the meaning of "Tax Costs" as used herein.
"Tax Costs" shall also include any costs incurred in negotiating or contesting
any of the foregoing taxes, fees, impositions and charges. "Tax Costs" shall not
include estate, inheritance, gift or franchise taxes of Landlord or the federal
or state net income tax imposed on Landlord.
13.02 Survival. Any sum payable by Tenant under this Article 13 which would
--------
not otherwise be due until after the termination of this Lease, shall, if the
exact amount is uncertain when this Lease terminates, be paid by Tenant to
Landlord upon such termination in an amount to be estimated by Landlord with an
adjustment to be made once the exact amount in known.
Article 14.
TAXES AND OTHER CHARGES
-----------------------
14.01 Tenant's Taxes
--------------
Tenant agrees that it will pay and discharge, punctually as and when the same
shall become due and payable without penalty, all personal property taxes,
excise taxes and all other governmental taxes, fees, impositions and charges
payable by Tenant of every kind and nature, whether or not now customary or
within the contemplation of the parties hereto, which shall be or become due and
payable under or by virtue of any law, statute, ordinance, regulation or other
requirement of any governmental authority, whether federal, state, county,
municipal or otherwise (all of such taxes, charges, assessments and other
governmental impositions being hereinafter collectively referred to as "Tenant's
Tax" or "Tenant's Taxes") which shall be levied, assessed or imposed, or shall
be or become liens, upon or against any personal property of Tenant or any
interest of Tenant therein or under this Lease.
Notwithstanding the foregoing provisions of this Section 14.01, nothing
contained in this Lease shall require Tenant to pay any franchise, estate,
inheritance, succession, capital levy or transfer tax of Landlord or any net
income or excess profits tax which is in fact personal to Landlord.
Article 15.
UTILITY AND OTHER SERVICES
--------------------------
15.01 Utility Charges
---------------
Tenant shall make application and otherwise arrange, and pay or cause to be
paid all charges for water, sewer, gas, electricity, light, power, telephone and
any other utility services used in or on or supplied to or for the Premises, or
any part thereof.
15.02 Compliance With Governmental Regulations
----------------------------------------
Landlord and Tenant shall comply with all rules, regulations and requirements
promulgated by national, state or local government agencies or utility suppliers
concerning the use of utility services, including any rationing, limitation, or
other control. Landlord may cooperate voluntarily in any reasonable manner with
the efforts of all governmental agencies or utility suppliers in reducing
consumption of energy or other resources. Tenant shall not be entitled to
terminate this Lease nor to any reduction or abatement of Rent by reason of such
compliance or cooperation. Tenant agrees at all times to cooperate fully with
Landlord and to abide by all rules, regulations and requirements which Landlord
may prescribe in order to maximize the efficiency of the HVAC system and all
other utility systems.
15.03 Security; Landlord Nonresponsibility; Indemnity
-----------------------------------------------
Tenant expressly agrees that Tenant shall have the sole responsibility for
providing surveillance and security relating to the Premises and the persons
therein and the activities conducted in and about Premises, including, without
limitation, surveillance necessary to maintain the integrity of the casino
activities, and Landlord shall have no responsibility with respect thereto.
Under no circumstances, and in no event, shall Landlord be liable to Tenant, any
Subtenant or any other person by reason of any theft, burglary, robbery,
assault, trespass, arson, unauthorized entry, vandalism, or any other act of any
person (other than a duly authorized agent of Landlord) occurring in or about
the Premises, and Tenant shall indemnify Landlord and its agents, contractors
and employees and hold each of them harmless from and against any and all
losses, liabilities, judgments, costs or expenses (including reasonable
attorneys' fees and other costs of investigation or defense) which they may
suffer or incur by reason of any claim asserted by any person arising out of, or
related to, any of the foregoing.
Article 16.
GENERAL PROVISIONS
------------------
16.01 Estoppel Certificates
---------------------
Either party shall, without charge, at any time and from time to time, within
ten (10) business days after request by the other party, deliver a written
certificate duly executed and acknowledged, certifying to the requesting party,
or any other person or entity specified by the requesting party:
(a) That this Lease is unmodified and in full force and effect, or if there
has been any modification, that the same is in full force and effect as so
modified, and identifying any such modification;
(b) Whether or not to the knowledge of the certifying party there are then
existing any offsets or defenses in favor of such party against the enforcement
of any of the terms, covenants and conditions of this Lease and, if so,
specifying the same, and also whether or not to the knowledge of the certifying
party, the requesting party has observed and performed all of the terms,
covenants and conditions on its part to be observed and performed, and, if not,
specifying the same;
(c) The dates to which Monthly Rent, Additional Rent and all other charges
hereunder have been paid; and
(d) Any other matter which reasonably relates to the tenancy created hereby
and the contractual relationship between Landlord and Tenant.
The failure of the certifying party to deliver such certificate within five
(5) business days after a second written request shall constitute a default
hereunder and shall be conclusive upon Landlord, Tenant and any other person,
firm or corporation for whose benefit the certificate was requested, that this
Lease is in full force and effect
without modification except as may be represented by the requesting party, and
that there are no uncured defaults on the part of the requesting party. If the
certifying party does not deliver such certificate to the requesting party or
such person designated by the requesting party within such 10-day period, the
certifying party shall be liable to the requesting party for all damages,
losses, costs and expenses proximately resulting from the certifying party's
failure to timely deliver such certificate. If the certifying party makes any
false statement or claim in any such certificate, the certifying party shall be
liable to the requesting party for all damages, losses, costs and expenses
proximately resulting therefrom.
16.02 Landlord's Right of Entry
-------------------------
Provided that Landlord does not unreasonably interfere with the operation of
Tenant's business on the Premises, Landlord and its agents shall have the right:
(a) To display the Premises to prospective tenants. If Tenant vacates the
Premises prior to the expiration of the Term, Landlord, at its sole cost and
expense, may from and after Tenant's vacation decorate, remodel, repair, alter,
improve or otherwise prepare the Premises for reoccupancy.
(b) To enter the Premises at any reasonable time for inspections, to exhibit
the Premises to others, such as prospective purchasers and insurance, building
and lender's inspectors, to perform its obligations under this Lease and for any
purpose whatsoever reasonably related to the safety, protection or preservation
of the Premises or Landlord's interest therein, without being deemed guilty of
an eviction or disturbance of Tenant's use and possession, provided that
Landlord shall not unreasonably interfere with Tenant's business operation.
Tenant shall deliver to Landlord all keys necessary to unlock all of the doors
in, on or about the Premises, except Tenant's vaults and safes, and Landlord
shall have the right to use any and all means which Landlord may deem proper in
order to obtain entry in an emergency.
16.03 Waiver
------
No waiver of any breach of any covenant or condition herein contained shall be
effective unless such waiver is in writing, signed by the aggrieved party and
delivered to the breaching party. The waiver by the aggrieved party of any such
breach or breaches, or the failure by the aggrieved party to exercise any right
or remedy in respect of any such breach or breaches, shall not constitute a
waiver or relinquishment for the future of any such covenant or condition or of
any subsequent breach of any such covenant or condition nor bar any right or
remedy of the aggrieved party in respect of any such subsequent breach. The
receipt of any Rent after the expiration of any cure period provided for in this
Lease (regardless of any endorsement on any check or any statement in any letter
accompanying any payment of Rent) by Landlord shall not operate as an accord and
satisfaction or a waiver of the right of Landlord to enforce the payment of
Rents previously due or as a bar to the termination of this Lease or the
enforcement of any other remedy for default in the payment of such Rents
previously due, or for any other breach of this Lease by Tenant.
16.04 Surrender of Premises; Holding Over
-----------------------------------
Subject to Landlord's obligations to maintain and repair the Premises, Tenant
agrees on the last day of the Term or on the earlier termination of this Lease
to surrender the Premises, in good order, condition and repair, reasonable wear
and tear excepted.
If Tenant fails to surrender the Premises upon the termination of this Lease,
Tenant agrees to and shall indemnify and hold harmless Landlord from and against
any loss or liability, including costs and attorneys' fees, resulting from such
failure to surrender the Premises, including but not limited to, any claims
made by, or loss of rent from, any succeeding tenant based on or resulting from
such failure to surrender. Nothing contained herein shall be construed as a
consent to Tenant's occupancy or possession of the Premises beyond the
expiration or earlier termination of this Lease.
16.05 Notices
-------
Wherever in this Lease one party to this Lease is required or permitted to
give or serve a notice, statement, request or demand to or on the other, such
notice, statement, request or demand shall be given or served upon the party to
whom directed in writing and shall be delivered personally or forwarded by
registered or certified mail, postage prepaid, return receipt requested,
addressed to Landlord or Tenant, as the case may be, at the address of that
party set forth below with copies to be sent concurrently as follows:
If to Tenant: California Casino Management, Inc.
Radisson Crystal Park Hotel and Casino
123 E. Artesia Boulevard
Crystal Park, CA 90220
Attention: Leo Chu
With a copy to: Michael C. Baum, Esq.
Tucker & Baum
228 South Beverly Drive
Beverly Hills, CA 90212
Fax: (310) 246-6622
If to Landlord: Crystal Park Hotel and Casino
Development Company, LLC
c/o HP/Compton, Inc.
1050 So. Prairie Ave.
Inglewood, CA 90301
Attn: G. Michael Finnigan
With a copy to: Sandra G. Kanengiser, Esq.
Irell & Manella LLP
1800 Avenue of the Stars, Suite 900
Los Angeles, CA 90067
Either party may change its address for notice by written notice given to the
other in the manner hereinabove provided. Any such notice, statement, request
or demand shall be deemed to have been duly given or served on the date
personally delivered or two (2) business
days after the date deposited in the United States mail in accordance with this
Section 16.05.
16.06 Partial Invalidity; Construction
--------------------------------
If any term or provision of this Lease or the application thereof to any
person or circumstance shall to any extent be held to be invalid or
unenforceable, the remainder of this Lease, or the application of such term or
provision to persons or circumstances other than those as to which it has been
held invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Lease shall be valid and be enforced to the fullest extent
permitted by law. This Lease shall be governed by and construed under the laws
of the State of California. When required by the context of this Lease, the
singular shall include the plural, and the neuter shall include the masculine
and feminine.
16.07 Captions
--------
The captions and headings in this Lease are inserted only as a matter of
convenience and for reference, and they in no way define, limit or describe the
scope of this Lease or the intent of any provision hereof.
16.08 Short Form Lease
----------------
At the request of Landlord, Tenant agrees to join in the execution and
delivery of a short form memorandum of this Lease to be recorded in the Official
Records of Los Angeles County, California. The terms, covenants and conditions
of this Lease shall control over any such memorandum. In no event shall Tenant
have this Lease recorded without the prior written consent of Landlord, which
consent may be withheld in Landlord's sole and absolute discretion.
16.09 Brokers' Commissions
--------------------
Each party represents and warrants to the other party that it has had no
dealings with any broker, finder or agent in connection with the subject matter
of this Lease or any of the transactions contemplated hereby. Each party agrees
to defend, indemnify and hold harmless the other party from any claim, suit,
liability, cost or expense (including attorneys' fees) with respect to brokerage
or finder's fees or commissions or other similar compensation alleged to be
owing on account of such party's dealings (or alleged dealings) with any real
estate broker, agent, finder or other person.
16.10 Attorneys' Fees
---------------
(a) In the event of any litigation between Landlord and Tenant alleging a
breach of this Lease by either party, or seeking a declaration of the rights of
the parties hereunder, the losing party shall pay to the prevailing party its
costs of litigation including reasonable attorneys' fees.
(b) Each party shall reimburse the other party, upon demand, for all costs
and expenses (including attorneys' fees) incurred by such party in connection
with any bankruptcy proceeding, or other proceeding
under Title 11 of the United States Code (or any successor or similar law)
involving the other party.
16.11 Counterparts
------------
This Lease may be executed in two or more counterparts, each of which may be
deemed an original, but all of which together shall constitute one and the same
instrument.
16.12 Sole Agreement
--------------
This Lease contains all of the agreements of the parties hereto with respect
to the matters covered hereby, and no prior agreements, oral or written, or
understandings or representations of any nature whatsoever pertaining to any
such matters shall be effective for any purpose unless specifically incorporated
in the provisions of this Lease or said agreements.
16.13 Successors and Assigns
----------------------
Subject to the provisions hereof relative to assignment, this Lease shall be
binding upon and inure to the benefit of the successors and assigns of the
respective parties hereto, and the terms "Landlord" and "Tenant" shall include
the respective successors and assigns of such parties.
16.14 Time is of the Essence
----------------------
Time is of the essence with respect to the performance or observance of each
of the obligations, covenants and agreements of each of Landlord and Tenant
under this Lease.
16.15 Survival of Covenants
---------------------
Except with respect to those conditions, covenants and agreements of this
Lease which by their express terms are applicable only to, or which by their
nature could only be applicable after, a certain date or time during the term
hereof, all of the conditions, covenants and agreements of this Lease shall be
deemed to be effective as of the date of this Lease. Any obligation arising
during the Term of this Lease under any provision hereof, which by its nature
would require Landlord and/or Tenant to take certain action after the expiration
of the Term or other termination of this Lease, including any termination
resulting from the breach of this Lease by Landlord or Tenant, shall be deemed
to survive the expiration of the Term or other termination of this Lease to the
extent of requiring any action to be performed after the expiration of the Term
or other termination hereof which is necessary to fully perform the obligation
that arose prior to such expiration or termination.
16.16 Landlord's Consent or Approval
------------------------------
Where any provision of this Lease requires the consent or approval of Landlord
to any action to be taken or of any instrument or document submitted or
furnished by Tenant or otherwise, such consent or approval shall not be
unreasonably withheld or delayed by Landlord unless such provision entitles
Landlord to the discretionary withholding of any such consent or approval
required thereby. The consent or approval of Landlord to or of any such act,
instrument or document shall not be deemed a waiver of, or render unnecessary,
Landlord's consent or approval to or of any subsequent similar or dissimilar
acts to be taken or instruments or documents to be submitted or furnished by
Tenant hereunder.
16.17 Joint and Several Obligations
-----------------------------
If more than one person or entity is Tenant or Landlord, the obligations
imposed on that party shall be joint and several. If either Landlord or Tenant
is a partnership, the obligations of each general partner shall be joint and
several.
16.18 No Offer
--------
The submission of this document for examination and discussion does not
constitute an offer to lease, or a reservation of, or option for, the Premises.
This document will become effective and binding only upon execution and delivery
by Landlord and Tenant.
16.19 Corporate Resolution
--------------------
If Tenant is a corporation, Tenant shall deliver to Landlord, upon execution
of this Lease, a certified copy of a resolution of its board of directors
authorizing the execution of this Lease and naming the officer or officers who
are authorized to execute this Lease on behalf of the corporation.
IN WITNESS WHEREOF, the parties hereto have duly executed this Lease as of the
day and year first above written.
LANDLORD: CRYSTAL PARK HOTEL AND CASINO
DEVELOPMENT COMPANY, LLC,
a California limited liability company
By: HP/COMPTON, INC.,
a California managing member
By: /s/ G. Michael Finnigan
--------------------------------
G. Michael Finnigan
Title: Vice President
-----------------------------
TENANT: CALIFORNIA CASINO MANAGEMENT, INC.,
a California corporation
By: /s/ Leo Chu
-------------------------------
Leo Chu
Title: President
---------------------------