Exhibit 10.1
LEASE AGREEMENT
This Lease is made as of April 1, 2002, by and between ALTON K. SMITH, an
Individual ("Landlord"), and ATOMIC PAINTBALL, INC., a Texas corporation
("Tenant").
RECITALS
1. Landlord owns and leases certain land and other interests in real property
located in Ellis County, Texas more particularly described in Article I of this
Lease; Being at that certain lot, tract, or parcel of land situated in the
GEORGE CARPENTER SURVEY, ABSTRACT NO. 190 ("known generally as the "Property").
2. Contemporaneously herewith, Landlord is selling all of Seller's assets
constituting the Property, except the property leased or subleased hereunder, to
Tenant pursuant to a Purchase and Sale Agreement dated of even date herewith
("Purchase and Sale Agreement").
3. Landlord desires to maintain its fee or leasehold interests in the leased
premises described in Article I and lease the same to Tenant on a ground lease
basis.
4. Landlord and Tenant desire to provide a mechanism whereby Landlord could sell
to Tenant and Tenant could purchase from Landlord its fee interest in certain
parcels within the leased premises for development by Tenant as more
particularly described in Article XXV hereof.
AGREEMENT
NOW, THEREFORE, it is mutually agreed by and between the parties hereto as
follows:
ARTICLE I
PREMISES
1.01 Premises. Landlord hereby leases and lets to Tenant, and Tenant hereby
takes and hires from Landlord, upon and subject to the terms, conditions,
covenants and provisions hereof, all of the tracts, pieces and parcels of land,
situated in Ellis County, Texas, more particularly described in Schedule A
annexed hereto and made a part hereof, together with any and all appurtenances,
rights, privileges and easements benefiting, belonging or pertaining thereto
(all of the foregoing hereinafter sometimes referred to as the "demised
premises", "leased premises" or the "premises").
1.02 Lease Attributes. The leased premises consists of two different types of
property interests, land owned in fee by Landlord ("Fee Land") and land leased
by Landlord ("Leased Land"). The Fee Land and Leased Land are separately
identified in Schedule A as such. This lease shall constitute a direct lease of
all Fee Land and a sublease of all Leased Land, subject to the terms and
conditions of the prime leases.
ARTICLE II
TERM
2.01 Initial Term. The initial term of this Lease shall commence on the date
hereof (hereinafter referred to as the "Commencement Date") and shall continue
for a period of One (1) Year.
2.02 Extended Term. Tenant may by right extend the term of this Lease on the
same terms and conditions as provided herein for up to three (3) additional
periods of one (1) year each by sending Landlord written notice of the exercise
of each extension right not less than 1month prior to expiration of the then
current term, together with a payment of an extension fee of Fifty Dollars
($50.00) for each one (1) year extension right exercised. Upon such receipt of
the written notice and payment of the fee, the Lease term shall be automatically
extended.
2.03 Grace Period. In the event Tenant fails to exercise an extension option
pursuant to Section 2.02, Tenant shall not be deemed to have lost its right to
exercise such option until thirty (30) days following written notice thereof
from Landlord, during which period Tenant shall retain its right to exercise
such extension option in accordance with Section 2.02 above. If no such notice
shall have been given by Landlord prior to the expiration of the initial term or
any extended term of this Lease (other than an expiration by virtue of the
exercise by Landlord of its remedies pursuant to Article XVIII below), this
Lease shall not terminate, but rather shall become a tenancy at will on the same
terms and conditions set forth herein, subject to termination by Landlord after
expiration of such thirty (30) days written notice to Tenant.
ARTICLE III
RENT
3.01 Rent. Tenant covenants and agrees to pay Landlord, for the demised
premises, rent at the following rates and times:
(a) Tenant shall pay to Landlord the sum of One Dollar for every person engaging
in Paintball Play Revenues, as hereinafter defined. Said sums shall be payable
on or before first day of the month during the term of this Lease and shall be
determined with reference to the receipts. Paintball Play Revenues actually
received by Tenant for its preceding month starting the month of April 31, 2002.
Rent shall be prorated for any partial month included in the term.
(b) The payment by Tenant to Landlord shall be accompanied by a statement of
Tenant's Chief Financial Officer setting forth the Paintball Play Revenues
actually received by Tenant for the period involved and the method of computing
the amount, if any, simultaneously being paid by Tenant to Landlord in such
detail as Landlord and Tenant shall from time to time reasonably agree. The term
"Paintball Play Revenues" shall mean any and all revenues determined by sales
receipts and in accordance with generally accepted accounting principles
attributable to the use or ownership of the leased premises and any additional
property owned by the Tenant, or its successors or assigns or any affiliates of
any such parties, now or at any time in the future used and operated on an
integrated basis as a part of what is now known as the Property or any successor
thereto, or from any buildings, restaurants, sports facilities or other
structures located thereon, including without limitation, dues, rentals,
concessions, fees, or other revenues relating thereto, excluding only:
(i) sales or excise taxes; and
(ii) proceeds of sales of real property interests, with the term "sales" to
include any lease of real estate for a term exceeding ten (10) years, that are
conveyed to Tenant pursuant to Article XXV below.
Paintball Play Revenues includes such revenues generated through
operations of any business enterprises or person affiliated with Tenant.
Affiliated parties shall mean any persons or business organizations that
control, are controlled by, or are under common control with the Tenant, whether
directly or indirectly through one or more intermediaries. Control shall mean
the ability to control the management or operations of the person or
organization whether through voting or capital interests or through any
management contracts or other arrangements that provide for effective control.
Paintball Play Revenues shall include any revenues or the value of any other
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consideration that are diverted from what is now known as the Property
operations to some other location or source within the Tenant's or any
affiliated party's organization through establishing a contract, agreement or
other business arrangement at what is now known as the Property that is less
favorable than would be established on an independent arm's length basis.
(c) Tenant shall pay the following additional rent based upon the volume of paid
player visits achieved at the demised premises. Beginning with the Fall 2002
paintball season, a one-time rent payment shall be made within 45 days following
the close of any fiscal year of Tenant in which the Paintball games of which the
demised premises are included achieves, for the first time, the paid player
visit volumes set forth below. Each such payment shall be accompanied by a
statement of Tenant's Chief Financial Officer setting forth the player visits
during such period in accordance with the terms of this subsection in such
detail as Landlord and Tenant shall from time to time reasonably agree. Paid
player visits shall be determined by Tenant using the same methodology employed
by Atomic Paintball, Inc. and its affiliated parties at all of their operations,
which shall be consistent in all material respects with the methodologies
employed generally within the industry.
Player Visits One-Time Rent Payment
1-10 $1-$10
11-20 $11-$20
21-30 $21-$30
31-40 $31-$40
41-50 $41-$50
51-60 $51-$60
61-70 $61-$70
71-80 $71-$80
81-90 $81-$90
91-100 $91-$100
The following example is provided for illustrative purposes:
If player visits equal 250 during calendar month, Tenant shall pay $250.00 (for
a total of monthly rent) to Landlord on the first day of the following month. If
player visits during calendar month equal 500 player visits, Tenant shall pay
$500.00 to Landlord on or before the first of the following month.
d) It is expressly understood and agreed that nothing in this Lease contained
shall be deemed or construed to grant or otherwise provide Landlord with any
authority over, or other rights to control or direct, the operation of the
resort at the demised premises.
e) All rent hereunder shall be paid either at the address of Landlord set forth
below with regard to notices, or at such other places of which Landlord shall
have given Tenant written notice at least thirty (30) days in advance, or in the
case of Section 25.02, as therein provided.
f) As hereinafter used the term "rent" shall be deemed for reference purposes to
include all rent covered by this Article III, the Additional Rent described in
Article IV, if any, payable by Tenant to Landlord hereunder and all Option
Payments described in Section 25.02 below.
g) Tenant shall prepare and retain true and accurate books of account and
records, relating to the demised premises conforming to generally accepted
accounting principals consistently applied to the extent applicable, including
but not limited to, Paintball Play Revenues and a record of player visits
sufficient to comply with the foregoing requirements of this Article III.
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h) Landlord shall have the right, at any time, upon reasonable advance notice
(and not more often than once per quarter) to audit or inspect all of Tenant's
books and records relating to Paintball Play Revenues, player visits and any of
the other obligations of Tenant under this Lease, which shall be maintained and
made available at Tenant's offices in Ellis County, Texas. Tenant shall make all
such books and records available for such examination. Landlord's right to
conduct an audit or inspection includes the right to do whatever is reasonably
necessary to complete the audit or inspection. If the audit or inspection
reveals an underpayment of rent, Tenant shall pay the amount of same, together
with interest on such amount at 18% from the date due until paid. If Landlord
conducts an audit or inspection and the audit or inspection reveals an
understatement of Paintball Play Revenues or player visits for a particular
calendar year by more than five percent (5%), Tenant shall pay all reasonable
costs of the audit or inspection. If the audit or inspection reveals an
overpayment of percentage rent, Landlord shall refund same, plus interest at the
rate specified above. Any audits and inspections may be made by Landlord's
employees or by any certified public accountant selected by Landlord.
3.02 Rent to be Net to Landlord. It is the intention of the parties that the
rent payable by Tenant to Landlord pursuant to this Article III shall be net to
Landlord so that this Lease shall yield to Landlord the net annual rent
specified in Article III herein during the term of this Lease, and that all
costs, expenses and obligations of every kind and nature whatsoever relating to
the demised premises shall be paid by Tenant, except as otherwise expressly
provided herein. Without limiting the generality of the foregoing, Landlord and
Tenant hereby agree that Tenant shall be responsible for paying and shall pay
all of the payments due under the leases covering the portion of the land
described as the Leased Land in Schedule A attached hereto, including any
modifications or amendments thereto with Tenant's prior consent. Except as
specifically provided herein, in no event shall Tenant be entitled to any
abatement, reduction, set off, counterclaim, defense or reduction with respect
to the payment of any rent hereunder.
ARTICLE IV
ADDITIONAL RENT
4.01 Taxes and Utility Expenses.
(a) (1) Tenant shall, during the term of this Lease, as additional rent, pay and
discharge punctually, as and when the same shall become due and payable, all
taxes, special and general assessments, water rents, rates and charges, sewer
rents and other governmental impositions and charges of every kind and nature
whatsoever, extraordinary as well as ordinary, (hereinafter referred to as
"Taxes"), and each and every installment thereof which shall or may during the
term of this Lease be charged, levied, laid, assessed imposed, become due and
payable, or a lien upon, or for, or with respect to, the demised premises or any
part thereof, or any buildings, appurtenances or equipment owned by Tenant
thereon or therein or any part thereof, together with all interest and penalties
thereon, under or by virtue of all present or future laws, ordinances,
requirements, orders, directives, rules or regulations of the federal, sate,
county and municipal governments and of all other governmental authorities
whatsoever (all of which shall also be included in the term "Taxes" as
heretofore defined); and all sewer rents and charges for water, steam, gas,
heat, hot water, electricity, light and power, and other services or services
furnished to the demised premises or the occupants thereof during the term of
this Lease (hereinafter referred to as "Utility Expenses").
(2) To the extent that the same may be permitted by law, Tenant or its designees
shall have the right to apply for the conversion of any assessment for local
improvements assessed during the term of this Lease in order to cause the same
to be payable in annual installment, and upon such conversion, Tenant shall pay
and discharge punctually said installments as they shall become due and payable
during the term of this Lease. Landlord agrees to permit the application for the
foregoing conversion to be filed in Landlord's name, if necessary, and shall
execute any and all documents requested by Tenant to accomplish the foregoing
result.
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(3) Tenant shall be deemed to have complied with the covenants of this paragraph
(a) if payment of such Taxes shall have been made either within any period
allowed by law or by the governmental authority imposing the same during which
payment is permitted without penalty or interest or before the same shall become
a lien upon the demised premises, and Tenant shall produce and exhibit to
Landlord satisfactory evidence of such payment, if Landlord shall demand the
same in writing.
(b) All such Taxes, including assessments which have been converted into
installments as set forth in the preceding paragraph (a), which shall become
payable during each of the calendar or fiscal tax years, as the case may be, in
which the term of this Lease commences or terminates, shall be apportioned pro
rata between Landlord and Tenant in accordance with the respective portions of
such year during which such term shall be in effect.
(c) (1) Tenant or its designee shall have the right to contest or review all
such Taxes by legal proceedings, or in such other manner as it may deem suitable
(which, if instituted, Tenant or its designees shall conduct promptly at its own
cost and expense, and, if necessary, in the name of Landlord with the
cooperation of Landlord and Landlord shall execute all documents reasonable
necessary to accomplish the foregoing). Notwithstanding the foregoing, Tenant
shall promptly pay all such taxes if at any time the demised premises or any
part thereof shall then be immediately subject to forfeiture, or if Landlord
shall be subject to any criminal liability arising out of the nonpayment
thereof.
(2) The legal proceedings referred to in the preceding subparagraph (1) shall
include appropriate certiorari proceedings, and appeals from orders therein and
appeals from any judgments, decrees, or orders. In the event of any reduction,
cancellation or discharge, Tenant shall pay the amount finally levied or
assessed against the demised premises or adjudicated to be due and payable on
any such contested Taxes.
(d) Landlord covenants and agrees that if there shall be any refunds or rebates
on account of the Taxes paid by Tenant under the provisions of this Lease, such
refund or rebate shall belong to Tenant. Any refunds received by Landlord shall
be deemed trust funds and as such are to be received by Landlord in trust and
paid to Tenant forthwith. Landlord will, upon the written request of Tenant,
sign any receipts which may be necessary to secure the payment of any such
refund or rebate, and will pay over to Tenant such refund or rebate as received
by Landlord. Landlord further covenants and agrees on request of Tenant at any
time, and from time to time, but without cost to Landlord, to make application
individually (if legally required) or to join in Tenant's application (if
legally required) for separate tax assessments for such portions of the demised
premises as Tenant shall at any time, and from time to time, designate. Landlord
hereby agrees upon reasonable request of Tenant to execute such instruments and
to give Tenant such assistance in connection with such applications as shall be
required by Tenant.
(e) Nothing herein or in this Lease otherwise contained shall require or be
construed to require Tenant to pay any sales, rent, inheritance, estate,
succession, transfer, gift, franchise, income or profit taxes, by whatever name
the same may be called, that are or may be imposed upon Landlord, its successor
or assigns.
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ARTICLE V
USE
The demised premises may be used for any lawful purpose consistent with existing
covenants, conditions and restrictions of record applicable to the premises. The
premises shall not be used for commercial oil and gas exploration operation.
ARTICLE VI
MAINTENANCE, REPAIRS AND IMPROVEMENTS
6.01 Improvements. Subject to the provisions of Section 6.02 below, Tenant shall
have the right, at its own cost and expense, to construct on the demised
premises such buildings, improvements and other facilities as Tenant may desire
and determine appropriate in connection with its operations at the premises.
6.02 Improvement Conditions. The rights of Tenant set forth in Section 6.01 are
subject to the following conditions:
(a) The premises being zoned by Ellis County so as to permit the construction
and operation of the improvements contemplated by Tenant.
(b) Adequate utilities (including sewer, water and necessary energy utilities)
being located on the premises or in property immediately adjoining the premises
and being available for use on the premises.
(c) There being no covenant or restriction affecting the property or any
restriction under any state, county, or local laws or ordinances, which would
prohibit the improvements and the use of the premises contemplated thereby.
(d) There being no easement, covenant or restriction on the portion of the
premises to be improved which, in the opinion of Tenant, would adversely affect
the construction or operation thereon of the improvements.
(e) The receipt of all necessary permits, licenses and approvals of the
appropriate governmental authorities for the construction and operation of the
contemplated improvements in a manner and location, and under such conditions,
as are acceptable to Tenant in its sole judgment.
6.03 Maintenance. Tenant alone shall be responsible for maintaining and shall
maintain, the buildings and improvements currently located on, or at any time
erected on, the demised premises in good condition comparable to conditions
maintained at other Paintball Field ("Paintball") resorts. Landlord shall not be
required to furnish any services or facilities or to make any improvements,
repairs or alterations in or to the demised premises during the term of this
Lease.
6.04 Demolition. Tenant may, at its option and at its own cost and expense, at
any time and from time to time, make such alterations, changes, replacements,
improvements and additions in and to the buildings and improvements currently
located on the demised premises, subject to the conditions specified in Section
6.02, as it may deem desirable, including the removal or demolition of any
building(s) and improvement(s) and/or structure(s) that now or hereafter may be
situated or erected on the demised premises.
6.05 Improvement Ownership. Until the expiration or sooner termination of this
Lease (subject, however, to the rights of the holder of any leasehold
Mortgagee(s) to obtain a new lease as set forth in Section 16 hereof), title to
any building or buildings or improvements situate or erected on the demised
premises and the building equipment and other items installed thereon and any
alterations, changes or additions thereto shall remain solely in Tenant; and
Tenant alone shall be entitled to deduct all depreciation on Tenant's income tax
returns for any such building or buildings, building equipment and/or other
items, improvements, additions, changes or alterations.
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6.06 Disposition at Lease Termination. On the last day or sooner termination of
the term of this Lease, Tenant shall quit and surrender to Landlord the demised
premise, and any buildings and permanent improvements then located thereon,
provided, however, that notwithstanding anything in this Lease to the contrary,
Tenant shall have the right, but not the obligation, at the end of the term, to
remove any buildings or other improvements made, constructed or installed by
Tenant upon the premises, provided that such removal shall be accomplished
within sixty (60) days following the end of the term.
ARTICLE VII
GOVERNMENTAL REQUIREMENTS
7.01 Requirements of Public Authority.
(a) During the term of this Lease, Tenant shall, at its own cost and expense,
promptly observe and comply with all present and future laws, ordinances,
requirements, orders, directives, rules and regulations of the federal, state,
county, municipal governments and of all other governmental authorities
affecting the demised premises or appurtenances thereto or any part thereof
whether the same are in force at the commencement of the term of this Lease or
may in the future be passed, enacted or directed.
(b) Tenant shall have the right to contest by appropriate legal proceedings
diligently conducted in good faith, in the name of the Tenant, or Landlord (if
legally required), or both (if legally required), without cost or expense to
Landlord, the validity or application of any law, ordinance, rule, regulation or
requirement of the nature referred to in paragraph (a) of this Section and, if
by the terms of any such law, ordinance, order, rule, regulation or requirement,
compliance therewith may legally be delayed pending the prosecution of any such
proceeding, Tenant may delay such compliance therewith until the final
determination of such proceeding.
(c) Landlord agrees to execute and deliver any appropriate papers or other
instruments which may be necessary or proper to permit Tenant so to contest the
validity or application of any such law, ordinance, order, rule, regulation or
requirement and to fully cooperate with Tenant in such contest.
ARTICLE VIII
COVENANT AGAINST LIENS
If, because of any act or omission of Tenant, any mechanic's lien shall be filed
against Landlord or any portion of the demised premises, Tenant shall, at its
own cost and expense, cause the same to be discharged of record or bonded within
one hundred twenty (120) days (or such earlier date as may be necessary to
prevent the claimant hereunder from exercising its rights thereunder) after
written notice from Landlord to Tenant, of the filing thereof; and Tenant shall
indemnify and save harmless Landlord against and from all costs, liabilities,
suits, penalties, claims and demands resulting therefrom.
Nothing contained herein shall constitute any consent or request by Landlord,
express or implied, to or for the performance of any labor or services or the
furnishing of any materials or other property in respect of the premises, nor as
giving Tenant any right, power or authority to contract for or permit the
performance of any labor or services or the furnishing of any materials or other
property in such fashion as would permit the making of any claim against
Landlord in respect thereof. Notice is hereby given that landlord will not,
under any circumstances, be liable for any labor, services or materials
furnished to tenant or to anyone having an interest in the premises or any part
thereof through or under tenant, and no mechanic's or other lien for any such
labor, services or materials shall attach to or affect the reversionary or other
interest of landlord in and to the premises, or in and to any alterations,
additions or improvements to be made or erected thereon.
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ARTICLE IX
ACCESS TO PREMISES
Landlord shall have the right to enter upon the demised premises at all
reasonable times to examine the same provided such entry shall not interfere
with the business then being conducted on the demised premises.
ARTICLE X
ASSIGNMENT AND SUBLETTING
10.01 Subletting. Tenant shall be entitled to sublease any portion of the
premises to an affiliated party or to anyone else for a period of Six (6) months
or less without the consent or approval of Landlord. Any sublease in excess of
Six (6) Months to a party not affiliated with Tenant shall require the prior
written consent of Landlord, not to be unreasonably withheld or delayed. Tenant
and Holdings shall remain fully liable to perform their respective obligations
under this Lease and the related Guaranty with respect to any subleased portion
of the premises.
10.02 Assignment. Tenant shall not assign all or any portion of the Lease
without obtaining the prior written consent of Landlord to any such assignment,
which consent Landlord may not unreasonably withhold or delay. Notwithstanding
the foregoing, Tenant shall not be prohibited from assigning all or any portion
of its interest hereunder to any entity affiliated with Tenant. Except as
provided below, Tenant and Holdings shall remain fully liable to perform their
respective obligations under this Lease and the related Guaranty,
notwithstanding any assignment permitted hereunder.
A sale of all or substantially all Tenant's assets, or a transfer of record or
beneficial ownership of more than 50% of the voting stock of Tenant to a party
unaffiliated with Tenant, whether by merger, consolidation, or other
reorganization, shall constitute an "assignment" for purposes of this Section
10.02. In such event, Landlord may not unreasonably withhold or delay its
consent provided that the proposed successor or assign of Tenant shall be a
person or business organization with financial condition and operating
capability and expense reasonably adequate to operate the premises in a manner
consistent with other comparably sized ski resorts throughout the United States.
ARTICLE XI
INDEMNITY
Tenant shall indemnify and save harmless Landlord from and against any and all
liability, damage, penalties or judgments arising from injury to person or
property sustained by anyone in and about the demised premises resulting from
any act or acts or omission or omissions of Tenant, or Tenant's officers,
agents, servants, employees or contractors. Tenant shall, at its own cost and
expense, defend any and all suits or actions which may be brought against
Landlord or in which Landlord may be impleaded with others upon any such
above-mentioned matter, claim or claims, except as may result from the
Landlord's gross negligence or the gross negligence of its officers, agents,
servants, employees or contractors. Excepting such acts, Landlord shall not be
responsible or liable for any damage or injury to any property, fixtures,
buildings or other improvements, or to any person or persons, at any time on the
demised premises, including any damage or injury to Tenant or to any of Tenant's
officers, agents, servants, employees, contractors, customers or sublessees.
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ARTICLE XII
INSURANCE
12.01 Liability Insurance. Tenant shall provide at its expense, and keep in
force during the term of this Lease, general liability insurance in a good and
solvent insurance company or companies licensed to do business in the State of
Texas, selected by Tenant, and reasonably satisfactory to Landlord, or through a
self insurance program approved by all necessary governmental authorities, in
the amount of at least Ten Million Dollars ($10,000,000) with respect to injury
to or death of any one person and Five Million Dollars ($5,000,000) with respect
to injury to or death of more than one person in any one accident or other
occurrence, and One Million Dollars ($1,000,000) with respect to damages to
property. Such policy, policies or programs shall include Landlord as an
additional insured. Tenant agrees to deliver certificates of such insurance to
Landlord at the beginning of the term of this Lease and thereafter not less than
ten (10) days prior to the expiration of any such policy. Such insurance shall
be noncancellable without ten (10) days' written notice to Landlord.
12.02 Property Insurance. During the term of this Lease, Tenant shall keep all
buildings and improvements presently at the premises or hereafter erected by
Tenant on the demised premises at any time insured for the benefit of Landlord
and Tenant and the holder of any leasehold mortgage permitted pursuant to
Section 16 hereof, as their respective interests may appear, against loss or
damage by fire, and those casualties covered by the customary extended coverage
endorsements, in a minimum amount necessary to avoid the effect of coinsurance
provisions of the applicable policies. All proceeds payable at any time and from
time to time by any insurance company under such policies shall be payable to
such leasehold mortgagee, if any, or, if none, to Tenant. Any proceeds paid to
Tenant shall be retained by Tenant and Landlord shall not be entitled to, and
shall have no interest in, such proceeds or any part thereof, except that
Paintball Play Revenues shall include any proceeds of business interruption
insurance received by Tenant with respect thereto. Landlord shall, at Tenant's
cost and expense, cooperate fully with Tenant in order to obtain consents and
other instruments and take all other actions necessary or desirable in order to
effectuate the same and to cause such proceeds to be paid as hereinbefore
provided and Landlord shall not carry any insurance concurrent in coverage and
contributing in the event of loss with any insurance required to be furnished by
Tenant hereunder if the effect of such separate insurance would be to reduce the
protection or the payment to be made under Tenant's insurance.
12.03 Blanket Policy. Any insurance required to be provided by Tenant pursuant
to this Lease may be provided by blanket insurance covering the demised premises
and other locations of Tenant provided such blanket insurance complies with all
of the other requirements of this Lease with respect to the insurance involved.
12.04 Waiver of Subrogation. All insurance policies carried by either party
covering the demised premises, including but not limited to contents, fire and
casualty insurance, shall expressly waive any right on the part of the insurer
against the other party. The parties hereto agree that their policies will
include such waiver clause or endorsement so long as the same shall be
obtainable without extra cost, or if extra cost shall be charged therefor, so
long as the other party pays such extra cost. If extra cost shall be chargeable
therefor, each party shall advise the other thereof and of the amount of the
extra cost, and the other party, as its election, may pay the same, but shall
not be obligated to do so.
12.05 Adjustment. Every Six (6) Month during the term, Landlord and Tenant shall
review the nature and levels of insurance coverage to update the insurance
requirements of this lease to the type, coverages and levels of insurance
customarily being maintained by comparable Paintball Fields located in the
United States.
ARTICLE XIII
DESTRUCTION
13.01 Casualty.
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(a) In the event that, at any time during the term of this Lease, any one or
more of the buildings on the demised premises shall be destroyed or damaged in
whole or in part by fire or other cause within the extended coverage of the
Lease, then, Tenant, at its own cost and expense, shall, subject to the
provisions of paragraph (b) of this Section cause the same to be repaired,
replaced or rebuilt within a period of time which, under all prevailing
circumstances, shall be reasonable, but Tenant shall not be required hereby to
expend any sums in excess of the insurance proceeds recovered by Tenant by
reason of such destruction or damage.
(b) In the event that at any time during the term of this Lease any one or more
of the buildings on the demised premises shall have been damaged or destroyed by
fire or any other cause whatsoever, and such damage or destruction shall amount
to fifteen percent (15%) or more of the sound insurable value of said building
or buildings, or if such damage or destruction shall occur during the last ten
(10) years of the term or any extended term hereof, Tenant shall have the right,
but not the obligation, to elect not to repair, replace or rebuild such building
or improvements.
13.02 Demolition. If Tenant shall elect not to restore any damaged property
pursuant to the provisions of Section 13.01 (b) hereof, it shall, prior to, or
immediately commence and diligently prosecute to completion, the demolition and
removal of any damaged buildings or structures which are upon the demised
premises, and shall remove all rubble.
13.03 No Abatement. Tenant shall not be entitled to any suspension or abatement
of rent by reason of any destruction or damage to the demised premises.
ARTICLE XIV
EMINENT DOMAIN
14.01 Condemnation. If the whole or any part of the demised premises shall be
taken for any public or quasi-public use under any statute or by right of
eminent domain or by private purchase in lieu thereof, then this Lease shall
continue and the taking shall be administered in the manner specified in Section
14.02 below.
14.02 Prosecuting Takings Claims. In the event of a taking (or purchase) the
parties hereto agree to cooperate in applying for and in prosecuting any claim
for such taking and further agree, that the aggregate net award pertaining to
the demised premises, after deducting all expenses and costs, including
attorney's fees, incurred in connection therewith, payable to both Landlord and
Tenant (herein called the "Fund") shall be paid and distributed as follows:
(a) Landlord shall be paid an amount out of the Fund equal to the value of
Landlord's continuing fee interest in the land after taking into account the
remaining term of this Lease, including the extended terms, plus net present
value of the rent and additional rent to be paid to Landlord hereunder over the
remaining term, including the extended terms, of this Lease, all determined as
of the date of taking (or purchase), together with interest thereon from the
date of taking (or purchase) to the date of payment at the rate paid on said
award, and if such value shall be officially determined and stated in the
condemnation proceedings, then the amount thereof shall control for the purposes
hereof, otherwise the same, unless agreed upon by the parties to this Lease,
shall be determined by arbitration.
(b) Any part of the Fund then remaining after the payment to Landlord specified
in subparagraph (a) hereinabove shall be paid to the holder of any leasehold
Mortgage permitted under the provisions of Section 16 hereof, to be applied in
accordance with the terms of such Mortgage, and if no such Mortgage, or there
remains any excess after payment of all amounts due under the mortgage, then to
Tenant.
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(c) (1) In the event of a partial taking (or purchase) Tenant shall, at its own
cost and expense, make all repairs to the buildings and improvements on the
demised premises affected by such taking (or purchase) to the extent necessary
to restore the same to a complete architectural unit (to the extent permitted,
however, taking into consideration the amount of land remaining after any such
takings or purchase), provided, however, that Tenant shall not be obligated to
expend an amount in excess of the proceeds of the net award available to Tenant
for such purposes, as hereinafter provided.
(2) All compensation available or paid to Landlord and Tenant upon such a
partial taking (or purchase), shall be paid to Tenant for the purpose of paying
towards the cost of such restoration, or, in the event that the parties hereto
agree that only a portion of the aggregate award is sufficient to so restore,
then only such portion as agreed upon shall be paid to Tenant for such purpose
and the balance shall be distributed pursuant to subparagraph (3) below.
(3) All compensation available or paid to Landlord and Tenant upon such a
partial taking (or purchase) in excess of the amount thereof needed by Tenant to
repair and restore the buildings and improvements shall be distributed in the
same manner as is provided in subparagraphs (a) and (b) this Section 14.02,
except that all compensation for any temporary taking of five (5) years or less
shall be distributed to Tenant without participation by Landlord.
ARTICLE XV
UTILITY EASEMENTS AND HIGHWAY ALIGNMENT
Tenant shall have the right to enter into agreements with utility companies
and/or public authorities which provide necessary utilities, creating easements,
subleases or other necessary property interests in favor of such companies
and/or authorities as are required in order to service the occupants of the
buildings and the improvements on the demised premises, and Landlord covenants
and agrees to provide any reasonably required consent thereto and to execute any
and all documents, agreements and instruments, and to take all other actions, in
order to effectuate such consent all at Tenant's cost and expense. Landlord
further covenants and agrees, upon request of Tenant to convey without
compensation therefor, insubstantial portions of the demised premises for
highway, roadway or utility purposes to any applicable governmental body.
ARTICLE XVI
LEASEHOLD MORTGAGES
16.01 Mortgage. Tenant and every successor and assign of Tenant is hereby given
the right by Landlord in addition to any other rights herein granted, without
Landlord's prior written consent, but only with prior written notice to
Landlord, to mortgage Tenant's interests in this Lease, or any part or parts
thereof, under one or more leasehold Mortgage(s), and to assign this Lease, or
any part or parts thereof, and any subleases, or parts thereof, as collateral
security for such Mortgage(s), upon the condition that all rights acquired under
such Mortgage(s) shall be subject to each and every one of the covenants,
conditions and restrictions set forth in this Lease, and to all rights and
interests of Landlord herein, none of which covenants, conditions or
restrictions is or shall be waived by Landlord by reason of the right given so
to mortgage such interest in this Lease, except as expressly provided herein.
Notwithstanding the foregoing, Tenant is prohibited from mortgaging the
leasehold solely for the purposes of effecting a transfer of its leasehold
interest to a third party in any transaction that does not involve a
contemporaneous exchange of equivalent value determined on independent, arm's
length basis. If Tenant and/or Tenant's successors and assigns shall mortgage
this leasehold or any part or parts thereof, and if the holder(s) of such
Mortgage(s) shall send to Landlord written notice of such Mortgage(s) specifying
the name and address of the Mortgagee(s) and the pertinent recording data with
respect to such Mortgage(s), Landlord agrees that so long as any such leasehold
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Mortgage(s) shall remain unsatisfied of record or until written notice of
satisfaction is given by the holder(s) to Landlord, the following provisions
shall apply.
14 (a) There shall be no cancellation, surrender or material modification of
this Lease by joint action of Landlord and Tenant without at least ten (10) days
advance written notice to the leasehold Mortgagee given in accordance with
Section XXIII below.
(b) Landlord shall, upon serving Tenant with any notice of default,
simultaneously serve a copy of such notice upon the holder(s) of such leasehold
Mortgagee(s), and no such notice of default to Tenant shall be effective unless
and until a copy of such notice is served upon each such holder. The leasehold
Mortgagee(s) shall thereupon have the same period, after service of such notice
upon it, to remedy or cause to be remedied the defaults complained of, and
Landlord shall accept such performance by or at the instigation of such
leasehold Mortgagee(s) as if the same had been done by Tenant.
(c) If the Landlord shall elect to terminate this Lease by reason of any default
of Tenant, the leasehold Mortgagee(s) shall have the right by delivering written
notice thereof to Landlord prior to the effective date of such termination, to
postpone and extend the specified date for the termination of this Lease as
fixed by Landlord in its notice of termination, for a period reasonably
sufficient to allow the leasehold Mortgagee to conduct a foreclosure of its
mortgage, but in no event more than six (6) months from the date of Landlord's
termination notice, provided that such leasehold Mortgagee(s) shall cure or
cause to be cured any then existing monetary defaults and meanwhile pay all
rent, additional rent and other monetary payments due hereunder, and comply with
and perform all of the other terms, conditions and provisions of this Lease on
Tenant's part to be complied with or performed, other than past non-monetary
defaults which cannot reasonably be cured by such Mortgagee, and provided
further, that the leasehold Mortgagee(s) shall forthwith take steps to acquire
or sell Tenant's interest in this Lease by foreclosure of the Mortgage(s) or
otherwise and shall prosecute the same to completion with all due diligence. If,
during said six (6) month period, the leasehold Mortgagee(s) shall have promptly
commenced and shall have actively engaged in steps to acquire or sell Tenant's
interest herein, but shall not have acquired or sold such interest at the end of
such period, the time of said Mortgagee to comply with the provisions of this
Section 16.01 shall be extended for such period as shall be reasonably necessary
to complete such steps with reasonable diligence and continuity.
(d) Landlord agrees that in the event of foreclosure by such mortgagee on this
Lease by reason of any default by Tenant that Landlord will enter into a new
lease of the demised premises directly with the leasehold Mortgagee(s) or its
nominee(s), for the remainder of the term, effective as of the date of such
termination, at the rent and additional rent and upon the terms, provisions,
covenants and agreements as herein contained and subject only to all matters of
record and all rights, if any, of the parties then in possession of any part of
the demised premises, provided:
(i) Said Mortgagee(s) or its nominee(s) shall make written request upon Landlord
for such new lease within fifteen (15) days after the date of such foreclosure
and such written request is accompanied by payment to Landlord of all sums then
due to Landlord under this Lease.
(ii) Said Mortgagee(s) or its nominee(s) shall pay to Landlord at the time of
the execution and delivery of said new lease, any and all sums which would at
the time of the execution and delivery thereof, be due pursuant to this Lease
but for such termination, and in addition thereto, any expenses, including
reasonable attorney's fees, to which Landlord shall have been subjected by
reason of such default.
(iii) Said Mortgagee(s) or its nominee(s) shall perform and observe all
covenants herein contained on Tenant's part to be performed and shall further
remedy any other conditions which Tenant under the terminated lease was
obligated to perform under the terms of this Lease.
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(iv) Landlord shall not warrant possession of the demised premises to the Tenant
under the new lease.
(v) Such new lease shall be expressly made subject to the rights, if any, of
Tenant under the terminated lease.
(vi) The Tenant under such new lease shall have the same right, title and
interest in and to the buildings and improvements on the demised premises as
Tenant had under the terminated lease.
(vii) Nothing herein contained shall require the leasehold Mortgagee(s) or its
nominee(s) to cure any default of Tenant referred to in Article XIX hereof.
(viii) The proceeds from any insurance policies or arising from a condemnation
are to be held by any leasehold Mortgagee(s) and distributed pursuant to the
provisions of this Lease, but the leasehold Mortgagee(s) may reserve its right
to apply to the mortgage debt all, or any part, of Tenant's share of such
proceeds pursuant to such mortgage(s).
16.02 Further Agreement. Landlord shall upon request, execute, acknowledge an
deliver to each leasehold Mortgagee(s), an agreement prepared at the sole cost
and expense of Tenant in form satisfactory to Landlord and such leasehold
Mortgagee(s) between Landlord, Tenant and the leasehold Mortgagee(s), agreeing
to (a) all of the provisions of Section 16.01 and (b) such other provisions as
are reasonably customary in mortgaging long-term leaseholds in connection with
large commercial development projects.
ARTICLE XVII
LANDLORD'S WARRANTIES
17.01 Quiet Enjoyment. Tenant, upon paying the rent and additional rent and all
other sums and charges to be paid by it as herein provided, and observing and
keeping all covenants, warranties, agreements and conditions of this Lease on
its part to be kept, shall quietly have and enjoy the demised premises during
the term of this Lease, without hindrance or molestations, subject to
encumbrances listed in Schedule B.
17.02 Representations, Warranties and Covenants. Landlord warrants, represents
and covenants to Tenant, upon which warranty representation and covenants Tenant
has relied in the execution of this Lease and in the payment of the initial
installments of rent hereunder.
(a) That it has and will maintain good and marketable fee simple title to the
demised premises constituting Fee Land, free and clear of all encumbrances,
liens, defects in title, leases, tenancies, easements, restrictions and
agreements, except for this Lease and the restrictions set forth in Schedule B,
none of which materially impair the current operation of the demised premises as
a Paintball Field.
(b) Landlord represents, warrants and covenants as follows with respect to the
sublease of Leased Land:
(i) Each underlying lease of Leased Land is in full force and effect as of the
date hereof. A true, accurate and correct copy of each lease is attached hereto
as a part of Schedule A, and such leases have not been amended or revised except
as shown in Schedule A. Except as set forth in Schedule 17.02(b), there are no
material defaults, breaches or violations of such leases by lessee or, to
Landlord's Knowledge, by the lessor existing as of the date hereof, and there
have occurred no events which with the passage of time, giving of notice, or
both, would constitute a default, breach or violation of any such leases by
Landlord or, to Landlord's Knowledge, by any such lessor.
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(ii) Landlord shall timely perform all its obligations under such leases in
accordance with the terms thereof, and shall undertake all such actions as may
be necessary or appropriate to maintain such leases in full force and effect, in
accordance with their terms.
(iii) Landlord hereby grants to Tenant the right, power and authority to enter
into independent negotiations with each owner of Leased Land to change, revise,
amend, restate or otherwise alter the underlying leases. Tenant shall not enter
into any change, revision, amendment, alteration or restatement without the
Landlord's prior written consent, which shall not be unreasonably withheld or
delayed.
Landlord shall obtain from each owner of Leased Land and deliver to Tenant a
Landlord's Consent and Estoppel in the form attached hereto as Schedule C.
(d) The execution and delivery of this Lease by Landlord and the performance by
Landlord of the obligations to be performed hereunder have been duly authorized
by all necessary and appropriate action by Landlord under its Operating
Agreement. Except as listed in Schedule 17.02(d), the consummation of the
transactions contemplated hereby and thereby do not and will not (i) conflict
with, or result in a breach of, or default under, or permit acceleration of any
obligation under, any of the terms, conditions, or provisions of any note, bond,
mortgage, indenture, license, material agreement or other material instrument or
obligation to which Landlord is a party, or by which it or any of its properties
or assets may be bound or affected or (ii) violate any order, writ, injunction,
decree or statute, or any rule, regulation, permit, license or conditions
thereto, or (iii) result in the creation or imposition of any lien, charge or
encumbrance of any nature upon any of the demised premises. This Lease is a
valid and binding obligation of Landlord enforceable in accordance with its
terms, subject to equitable principles and applicable bankruptcy and other
creditors' rights laws, regulations and rulings.
(e) Except as set forth in Schedule 17.02(e) Landlord does not have any
Landlord's Knowledge of any violation of any applicable federal, state and local
laws, rules, regulations, ordinances, codes or orders ("Laws") governing the
demised premises and the operation of the Extreme Sports business, including
without limitation environmental and health and safety laws rules and
regulations, and will not knowingly violate any such laws during the term
hereof, and (b) has not received written notification of any asserted material
past or present failure to operate the demised premises and the Extreme Sports
business in accordance with any such law, ordinance or regulation, or of any
event that has occurred which with notice or the passage of time would
constitute any such failure.
(f) (i) No permits, licenses, approvals, clearances or other governmental
consents are required for the execution and delivery of this Lease, except for
the transfer or reissuance of the governmental licenses, permits,
authorizations, approvals and certificates identified in Section 17.02(f).
(ii) The Landlord has not disposed of or permitted to lapse any license, permit
or other authorization from any federal, state or local authorities related to
the demised premises that is currently required for the operation of the Extreme
Sports business.
(iii) Except as reported in Schedule 17.02(f), the Licenses and Permits listed
on Schedule 17.02(f) are all of the governmental licenses, permits,
authorizations, approvals and certificates which are, to Landlord's Knowledge,
required for the current use of the demised premises.
(g) The existing uses of the demised premises by Landlord are permitted uses
within the zoning districts in which they are located and otherwise permitted
under applicable federal, state and local laws, rules and regulations and under
the permits identified in Section 17.02(g).
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(h) Except as provided in Schedule 17.02(h) there is, to Landlord's Knowledge,
no action, suit, proceeding at law or in equity by any person or entity, or any
arbitration or any administrative or other proceeding by or before any
governmental or other instrumentality or agency, pending, threatened, against
Landlord with respect to the Extreme Sports business or any portion of the
demised premises.
(i) Except as provided in Schedule 17.02(i), Landlord (i) has timely filed all
tax returns, tax information returns and other tax reports required to be filed
with any applicable governmental authorities through the date hereof which
relate to the demised premises and, the Extreme Sports business, and has paid
all taxes and other charges which have become due pursuant to such returns and
reports, or pursuant to any assessment received by it, except for any taxes the
validity of which Landlord may be contesting in good faith in appropriate
proceedings, and (ii) shall continue to timely file all such returns and reports
and pay all such taxes relating to Landlord, but not those relating to the
demised premises, the Paintball Field or that Tenant is otherwise obligated to
file or pay hereunder. Landlord is not delinquent in the payment of any tax
assessment or governmental charge which relates to any of the demised premises,
no written notices asserting deficiencies for any taxes which relate to any of
the demised premises have been received by Landlord, and no requests for waivers
of the time to assess or pay any such tax are pending. There are no tax liens
upon any fee portion of the demised premises and, to Landlord's Knowledge, no
tax liens upon any leased portion of the demised premises and no such liens will
arise as a result of the transaction contemplated hereby except as listed in
Schedule 17.02(i) or that will be paid and discharged at Closing. For the
purposes of this Lease, the term "tax" shall include all federal, state, local
and foreign income, property, sales, excise and other taxes of any nature
whatsoever.
(j) Except as disclosed in Schedule 17.02(j), there are to Landlord's Knowledge,
no outstanding or threatened actions, claims, proceedings, determinations or
judgments by any party, including, but not limited to, any governmental
authority or agency, against or involving the Landlord, arising under the Clear
Air Act, the Federal Water Pollution Control Act of 1972, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Solid Waste
Disposal Act, the Resource Conservation and Recovery Act and the Toxic
Substances Control Act, and any amendments or extensions of the foregoing
statutes, and all other applicable environmental requirements or any other
federal, state, local or other environmental, health or safety law, regulation,
order or requirement, requiring the remediation or removal of an existing
environmentally contaminated condition or substance. Except as listed in
Schedule 17.02(j), there are, to Landlord's Knowledge, no outstanding or
threatened orders, determinations or notices of violation issued by any federal,
state, local or other governmental authority administering environmental or
health and safety laws in connection with operation of the demised premises or
the Extreme Sports business, which have not been complied with or resolved to
the satisfaction of such governmental authority.
17.03 Remedies. In the event Landlord fails to undertake the actions, or refrain
from taking action, required pursuant to subparagraph 17.02 (b) above, then
Tenant shall have the right, but not the obligation, to perform all such acts
and pay all sums of money necessary, on behalf of Landlord, to maintain the
lease in full force and effect, and Landlord hereby appoints Tenant as its true
and lawful attorney in fact for purposes of undertaking all such action on
behalf of and in the name of Landlord as Tenant deems necessary or appropriate
to maintain any or all underlying leases in full force and effect. The power of
attorney herein granted is coupled with an interest and is therefore irrevocable
during the term of this Lease. Tenant may offset against any and all amounts due
hereunder any cost and expense incurred by Tenant in exercising its rights under
this subsection 17.03. Prior to offsetting against rent due hereunder Tenant
shall provide Landlord with notice of its intent to offset and Landlord shall
have a period of 30 days to advise Tenant that it objects to or disputes the
offset, in which case any such dispute shall be submitted to arbitration in
accordance with the provisions hereof. Tenant shall use reasonable efforts to
mitigate any damages resulting from Landlord's breach or default.
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17.04 General Provisions. The term "Landlord's Knowledge" shall have the same
meaning as the term "Seller's Knowledge" under Section 6.17(c) of the Purchase
and Sale Agreement. Seller expressly disclaims any express or implied warranties
not specifically set forth in this Lease, the Purchase and Sale Agreement, or
any other agreement entered into by and between Landlord and Tenant.
ARTICLE XVIII
DEFAULT
18.01 Defaults. In the event of any one or more of the following events ("Events
of Default") shall have occurred and shall not have been remedied as hereinafter
provided: (1) the occurrence of any event set forth in Article XIX hereof,
without the curing of same as therein provided; (2) Tenant's failure to pay any
installment of basic rent, additional rent or any other monetary payments when
the same shall be due and payable and the continuance of such failure for a
period of ten (10) days after receipt by Tenant of notice in writing from
Landlord specifying in detail the nature of such failure, provided, however that
Tenant shall pay interest at the rate of 18% per annum during any period in
which any payment is delinquent; (3) a material default by Tenant, and the
expiration of any grace, notice or cure period required thereby, under any of
the other agreements then existing between Landlord and Tenant, including
without limitation, the and (4) Tenant's failure to perform any of the other
covenants, conditions and agreements herein contained on Tenant's part to be
kept or performed and the continuance of such failure for a period of sixty (60)
days after receipt by Tenant of notice in writing from Landlord specifying in
detail the nature of such failure, and provided Tenant shall not cure said
failure as provided in Section 18.02 hereof; then, Landlord may, at its option,
give to Tenant a notice of election to end the term of this Lease upon a date
specified in such notice, which date shall be not less than thirty (30) business
days (Saturdays, Sundays and legal holidays excluded) after the date of receipt
by Tenant of such notice from Landlord, and upon the date specified in said
notice, the term and estate hereby vested in Tenant shall cease and any and all
other right, title and interest of Tenant hereunder shall likewise cease without
further notice or lapse of time, as fully and with like effect as if the entire
term of this Lease had elapsed, but Tenant shall continue to be liable to
Landlord as hereinafter provided. Simultaneously with the sending of the notice
to Tenant, hereinabove provided for, Landlord shall send a copy of such notice
to any leasehold Mortgagee(s) as to which Landlord has received written notice.
The curing of any default(s) in the manner provided hereinabove by any of the
aforesaid parties or combinations thereof, shall constitute a curing of any
default(s) hereunder with like effect as if Tenant had cured the same hereunder.
18.02 Cure.
(a) In the event that Landlord gives notice of a default of such a nature that
it cannot reasonably be cured within such sixty (60) day period, then such cure
period shall be deemed to continue so long as Tenant, after receiving such
notice, proceeds to cure the default as soon as reasonably possible and
continues to take all steps necessary to complete the same within a period of
time which, under all prevailing circumstances, shall be reasonable; provided
that, in no event shall any cure period extend for a period longer than 180 days
after the Landlord's notice of default under Section 18.01. No cure period shall
be deemed to end if and so long as Tenant shall be prevented from curing the
same by any of the causes constituting Force Majeure.
(b) Notwithstanding anything to the contrary contained in this Article XVIII, in
the event that any default(s) of Tenant shall be cured in any manner hereinabove
provided, Tenant's right hereunder shall continue unaffected by such default(s).
18.03 Remedies.
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(a) Upon any Event of Default pursuant to Section 18.01, or at any time
thereafter, Landlord may, in addition to and without prejudice to any other
rights and remedies Landlord shall have at law or in equity, including
termination, reenter the demised premises, and recover possession thereof and
dispossess any or all occupants of the demised premises in the manner prescribed
by the applicable laws relating to summary proceedings, or similar laws; but
Tenant in such case shall remain liable to Landlord as hereinafter provided.
(b) In case of any such default, reentry, expiration and/or dispossess by
Landlord: (1) the rent shall become due thereupon and be paid up to the time of
such reentry, expiration and/or dispossess; (2) Landlord may relet the demised
premises or any part or parts thereof, either in the name of Landlord or
otherwise, for a term or terms which may, at Landlord's option, be less than or
exceed the period which would otherwise have constituted the balance of the term
of this Lease and (3) Landlord may pursue any and all other remedies allowed to
Landlord under applicable law, including without limitation, the collection of
all future rent and other monetary payments provided for hereunder. Landlord, at
Landlord's option and Tenant's expense, may make such alteration, repairs,
and/or replacements in the demised premises as are reasonably necessary for the
purpose of reletting and premises; and the making of such alterations, repairs,
replacements and/or decorations shall not operate or be construed to release
Tenant from liability hereunder as aforesaid. Landlord agrees to use reasonable
efforts to mitigate all damages and to relet the demised premises in the event
of any default specified herein.
ARTICLE XIX
BANKRUPTCY AND INSOLVENCY
If, after the commencement of the term of this Lease: (a) the Tenant then having
the title to the leasehold estate created hereunder shall while having such
title be adjudicated a bankrupt or adjudged to be insolvent; (b) a receiver or
trustee shall be appointed for the aforesaid Tenant's property and affairs; (c)
the aforesaid Tenant shall make an assignment for the benefit of creditors or
shall file a petition in bankruptcy or insolvency or for reorganization or shall
make application for the appointment of a receiver; or (d) any execution or
attachment shall be issued against the aforesaid Tenant or any of the aforesaid
Tenant's property, whereby the demised premises or any building or buildings or
any improvements thereon shall be taken or occupied or attempted to be taken or
occupied by someone other than the aforesaid Tenant, except as may herein be
permitted, and such adjudication, appointment, assignment, petition, execution
or attachment shall not be set aside, vacated, discharged or bonded within
ninety (90) days after the issuance of the same, then an Event of a Default
hereunder shall be deemed to have occurred. Notwithstanding anything to the
contrary hereinabove contained, upon the occurrence of a default pursuant to
this Article, if the rent and other monetary payments due and payable hereunder
shall continue to be paid and the other covenants, conditions and agreements of
this Lease on Tenant's part to be kept and performed shall continue to be kept
and performed, no event of default shall have been deemed to have occurred.
ARTICLE XX
WAIVERS
Failure of Landlord or Tenant to complain of any act or omission on the part of
the other party no matter how long the same may continue, shall not be deemed to
be a waiver by said party of any of its rights hereunder. No waiver by Landlord
or Tenant at any time, express or implied, of any breach of any provision of
this Lease shall be deemed a waiver of a breach of any other provision of this
Lease or a consent to any subsequent breach of the same or any other provision.
No acceptance by Landlord of any partial payment shall constitute an accord or
satisfaction but shall only be deemed a part payment on account.
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ARTICLE XXI
GOVERNMENT APPROVALS
Landlord covenants and agrees to cooperate fully with Tenant in any and all
applications and proceedings and appeals made or prosecuted by Tenant in
connection with obtaining any necessary permits, licenses, approvals or consents
under the zoning, land use, environmental and/or building regulations,
ordinances, codes, laws and directives of all of the federal, state county and
other authorities having jurisdiction over the development and use of the
demised premises, including without limitation, the Ellis County Planning Board.
Landlord shall execute any and all documents, instruments, consents and
authorizations requested by Tenant which shall be reasonably necessary or
desirable with respect thereto. Tenant may prosecute such applications,
proceedings and appeals in its own name and through counsel of its choice, but
shall do so at its own cost and expense and shall reimburse Landlord for
Landlord's reasonable expenses incurred in such cooperative efforts.
ARTICLE XXII
FORCE MAJEURE
In the event that Landlord or Tenant shall be delayed, hindered in or prevented
from the performance of any act (except for monetary payments) required
hereunder by reason of strikes, lock-outs, organized labor disputes,
unavailability of materials, extended failure of power, governmental laws or
regulations prohibiting performance of any obligation hereunder, riots,
insurrection, war or civil strife, or other reason beyond such party's
reasonable control, then performance of such act shall be excused for the period
of the delay and the proof for the performance of any such act shall be extended
for a period equivalent to the period of such delay.
ARTICLE XXIII
NOTICES
Every notice, approval, consent or other communication authorized or required by
this Lease shall not be effective unless the same shall be in writing and sent
postage prepaid by United States registered or certified mail, return receipt
requested, directed to the other party at its address set forth hereinbelow, or
such other address as either party may designate by notice given form time to
time in accordance with this Article. Unless otherwise directed by Landlord,
rent payable by Tenant hereunder shall be paid to Landlord at the same place
where a notice to Landlord is herein required to be directed. All such notices
and other communications initially shall be addressed as follows:
Tenant:
Landlord:
All such notices shall be deemed to have been given and received as of the date
of deposit of such notice in a depository of the U.S. Postal Service.
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ARTICLE XXIV
CERTIFICATES
Either party shall, without charge, at any time and from time to time hereafter,
within thirty (30) days after written request of the other, certify by written
instrument duly executed and acknowledged to any mortgagee or purchaser, or
proposed mortgagee or proposed purchaser, or any other person, firm or
corporation specified in such request: (a) as to whether this Lease has been
supplemented or amended, and if so, the substance and manner of such supplement
or amendment; (b) as to the validity and force and effect of this Lease, in
accordance with its tenor as then constituted; (c) as to the existence of any
known default thereunder; (d) as to the existence of any offsets, counterclaims
or defense thereto on the part of such other party; (e) as to the commencement
and expiration dates of the term of this lease; and (f) as to any other matters
as may reasonably be so requested. Any such certificate may be relied upon by
the party requesting it and any other person, firm or corporation to whom the
same may be exhibited or delivered, and the contents of such certificate shall
be binding on the party executing same.
ARTICLE XXV
MISCELLANEOUS
25.01 Governing Law. This Lease and the performance thereof shall be governed,
interpreted, construed and regulated by the laws of the State of Texas.
25.02 Partial Invalidity. If any term, covenant, condition or provision of this
Lease or the application thereof to any person or circumstance shall, at any
time or to any extent, 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 is held invalid or unenforceable, shall not be
affected thereby, and each term, covenant, condition and provision of this Lease
shall be valid and enforceable to the fullest extent permitted by law.
25.03 Short Form Lease. The parties will at any time, at the request of either
one, promptly execute duplicate originals of an instrument, in recordable form
reasonably satisfactory to both parties, which will constitute a short form of
lease, setting forth a description of the demised premises, the term of this
Lease and any other portions thereof, excepting the rental provisions, as either
party may request.
25.04 Interpretations. Wherever herein the singular number is used, the same
shall include the plural, and the masculine gander shall include the feminine
and neuter genders, and vice versa, as the context shall require. The section
headings used herein are for reference and covenance only, and shall not enter
into the interpretation hereof. This Lease may be executed in several
counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument. The terms "Landlord" and "Tenant"
whenever used herein shall mean only the owner for the time being of Landlord's
or Tenant's interest herein, and upon any sale or assignment of the interest of
either Landlord or Tenant herein, their respective successors in interest and/or
assigns shall, during the term of their ownership of their respective estates
herein, be deemed to be Landlord or Tenant, as the case may be.
25.05 Entire Agreement. No oral statements or prior written matter shall have
any force or effect. Tenant agrees that it is not relying on any representations
or agreements other than those contained in this Lease. This Agreement shall not
be modified or canceled except by writing subscribed by all parties.
25.06 Parties. Except as herein otherwise expressly provided, the covenants,
conditions and agreements contained in this lease shall bind and inure to the
benefit of Landlord and Tenant and their respective heirs, successors,
administrators and assigns.
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25.07 Restriction on use of Landlord's Adjacent Land. Attached as Schedule 26.07
is a list of all real estate owned beneficially or of record by Landlord or by
any entities in which Landlord owns any interest, located within a 50 mile
radius of the leased premises. Landlord hereby agrees that during the term of
this Lease, none of the entities in which Landlord has a controlling interest
shall use the restricted property designated in such Schedule 26.07 for a motel,
hotel, inn, restaurant or other type of place of lodging or guest entertainment
(other than single family residences). The restriction imposed hereby for the
benefit of Tenant is intended to run with the land and be enforceable against
Landlord's successors in title to such land.
IN WITNESS WHEREOF, the parties hereto have executed this Lease under seal as of
the day and year first written below.
EXECUTED as of April 1, 2002.
LANDLORD:
ALTON K. SMITH, INC.,
An Individual
By:___________________________
TENANT:
ATOMIC PAINTBALL, INC.,
a Texas corporation
By: __________________________
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