Exhibit 10.2
EXCLUSIVE SPACE LEASE AGREEMENT
THIS EXCLUSIVE SPACE LEASE AGREEMENT ("Agreement") dated for
identification purposes only as of the ____ day of August, 1998, is entered
into by and between SPEAKEASY GAMING OF RENO, INC., a Nevada corporation
("SGR"), and XXXXX XXXX XXXXXX AND XXX XXXXXX XXXXXX, dba DYNASTY GAMES
DISTRIBUTING ("Dynasty").
W I T N E S S E T H :
WHEREAS, SGR and Dynasty desire to enter into this Agreement in order
for Dynasty to lease space from SGR for the placement, operation, and
servicing of gaming devices at the Location (as defined herein).
WHEREAS, the parties have agreed that upon the complete satisfaction
of all conditions precedent as described in this Agreement, Dynasty shall
lease space from SGR for the placement, operation, and servicing of gaming
devices at the Location pursuant to the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, SGR and Dynasty hereby agree as follows:
ARTICLE I - DEFINITIONS
1.01 "Agreement" means this Agreement.
1.02 "Dynasty" means Xxxxx Xxxx Xxxxxx and Dee Xxxxxx Xxxxxx, dba
Dynasty Games Distributing.
1.03 "Change Person" means the person or persons employed by Dynasty
as change persons at the Location.
1.04 "Commencement Date" means the date Dynasty receives a
non-restricted license and all other required approvals from the Gaming
Authorities to operate gaming devices at the Location.
1.05 "Expiration Date" means one hundred twenty (120) days after the
Commencement Date, unless sooner terminated or renewed as provided in this
Agreement.
1.06 "Gaming Authorities" means, collectively, the Nevada Gaming
Control Board, the Nevada Gaming Commission, the City of Reno, and/or the
County of Washoe.
1.07 "Gaming Devices" means the gaming devices Dynasty shall install
for the operation of gaming at the Location as more particularly described in
Section 5.02(A) hereof. The initial number of Gaming Devices to be installed
and operated at the Location shall be eighty (80).
1.08 "Gaming Space" means the specific space the Location where the
Gaming Devices shall be located as determined by the parties' mutual
agreement.
1.09 "Gaming Taxes" means the quarterly fee for a gaming license for
a restricted operation (NRS 463.373), the annual excise tax on slot machines
(NRS 463.385), and any and all other license fees or taxes imposed on the
operation of the Gaming Devices by any governmental agency having
jurisdiction over the Location.
1.10 "Location" means the Ramada Inn and Speakeasy Casino located at
000 Xxxx Xxxxx Xxxxxx, Xxxx, Xxxxxx 00000.
1.11 "NGC Regulations" means, collectively, the Nevada Gaming
Control Act and the gaming regulations promulgated by the Nevada Gaming
Commission.
1.12 "NRS" means the Nevada Revised Statutes.
1.13 "Operator of a Slot Machine Route" or "Route Operator" means
the person or entity that meets the definition of "Operator of a Slot Machine
Route" in NRS 463.018.
1.14 "SGR" means Speakeasy Gaming of Reno, Inc., a Nevada
corporation.
1.15 "Term" has the meaning ascribed to it in Section 4.01 of this
Agreement.
1.16 "Token" or "Tokens" means one dollar ($1) gaming tokens that
have been approved by the Gaming Authorities for use at the Location, as more
particularly described in Section 5.02(E) hereof.
ARTICLE II - CONDITIONS PRECEDENT
2.01 CONDITION PRECEDENT. Dynasty acknowledges and agrees that
notwithstanding anything in this Agreement to the contrary, the requirement
that Dynasty, and any other person or persons associated with Dynasty
required to be licensed or found suitable by the Gaming Authorities, have
been licensed or found suitable by the Commencement Date to hold a
non-restricted gaming license for the Location, shall constitute a condition
precedent to the rights and obligations of the parties under this Agreement
and the validity and effect of this Agreement.
ARTICLE III - EXCLUSIVE RIGHT
3.01 EXCLUSIVE RIGHT. Subject to the termination provisions contained
in Article XII of
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this Agreement and satisfaction of the condition precedent contained in
Article II above, Dynasty hereby agrees to lease from SGR and SGR hereby
agrees to lease space to Dynasty for the exclusive placement, operation, and
servicing of the Gaming Devices (the "Operation of Gaming Devices") at the
Location pursuant to the terms and conditions set forth in this Agreement.
ARTICLE IV - TERM
4.01 TERM. Except as otherwise provided in this Agreement, the Term
shall commence on the Commencement Date and expire by its terms on the
Expiration Date without notice.
4.02 AUTOMATIC RENEWAL. This Agreement shall automatically renew
for consecutive and repetitive terms of sixty (60) days each (each a "Renewal
Term"), unless either party shall notify the other in writing at least thirty
(30) days prior to the end of the then expiring Term or Renewal Term of its
intention not to renew the Agreement.
ARTICLE V - SERVICE AND OPERATION OF GAMING DEVICES
5.01 DYNASTY'S RIGHTS AND RESPONSIBILITIES. Dynasty shall have the
exclusive space lease for the Operation of Gaming Devices during the Term of
this Agreement at the Location. SGR shall have no participation in the
operation, service or maintenance, or revenue of the Gaming Devices or the
costs associated with operating, minting or servicing the Gaming Devices.
Dynasty shall maintain the Gaming Space in an orderly, clean, and sanitary
fashion. Dynasty shall be responsible for all Tokens to be used by Dynasty at
the Location, if any, and shall follow all requirements and obtain all
approvals related to the maintenance and use of Tokens set forth in the NGC
Regulations.
5.02 LEASING OF GAMING DEVICES. Dynasty may lease a portion of the
Gaming Devices to be operated at the Location from PDS Financial Corporation
("PDS"). Upon termination of this Agreement, Dynasty shall assign and SGR
shall assume all of Dynasty's right, title, and interest in and to the lease
or leases with PDS. Notwithstanding the preceding sentence, SGR shall only
be required to assume the lease or leases with PDS if SGR has obtained all
licenses and approvals from the Gaming Authorities to operate gaming at the
Location and own gaming devices ("SGR's Gaming Approval"). Dynasty may also
lease a portion of the Gaming Devices from other distributors. The parties
agree that SGLV shall assume such non-PDS leases, subject to the SGLV Gaming
Approval, only if such non-PDS leases are as favorable to SGLV as the PDS
lease or leases are.
5.03 SGR'S DUTIES AND RESPONSIBILITIES. SGR shall provide Dynasty
with the equivalent of fifty (50) complimentary drinks per day. Dynasty
shall pay SGR for drinks in excess of fifty (50) at SGR's cost. SGR shall
also provide security for the Location and for Dynasty to utilize for general
security purposes and for the drop and count of cash. Dynasty shall
reimburse SGR on a monthly basis for fifty percent (50%) of the actual cost
to SGR for employing such security.
ARTICLE VI - SPACE LEASE PAYMENTS
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6.01 SPACE LEASE PAYMENTS. Dynasty shall pay to SGR the following
amount as payment for the space lease:
(A) If Dynasty operates 80 Gaming Devices at the Location,
Dynasty shall pay SGR Ten Dollars ($10) per Gaming Device per day;
(B) If Dynasty operates between 81 and 100 Gaming Devices at
the Location, Dynasty shall pay SGR Twelve Dollars ($12) per Gaming Device
per day beginning with the first day the additional Gaming Devices are
installed at the Location;
(C) If Dynasty operates between 101 and 125 Gaming Devices
at the Location, Dynasty shall pay SGR Fourteen Dollars ($14) per Gaming
Device per day beginning with the first day the additional Gaming Devices are
installed at the Location;
(D) If Dynasty operates between 126 and 150 Gaming Devices,
Dynasty shall pay SGR Sixteen Dollars ($16) per Gaming Device per day
beginning with the first day the additional Gaming Devices are installed at
the Location.
If the parties agree that Dynasty may operate more than 150 Gaming
Devices at the Location, the parties shall determine in writing in advance
the amount per Gaming Device per day for the additional Gaming Devices. In
no event shall the amount per Gaming Device per day be less than Sixteen
Dollars ($16).
6.02 PAYMENT. Dynasty shall not be required to pay space lease
payments for the first month of the Term. Thereafter, space lease payments,
as adjusted in accordance with Section 6.01, shall be payable in advance on
the first day of each month. For example, if the Commencement Date is
September 1, 1998, Dynasty shall pay the first space lease payment on October
1, 1998. All space lease payments, and all other amounts payable to SGR by
Dynasty pursuant to the provisions of this Agreement, shall be paid to SGR
without notice, demand, abatement, deduction or offset, in lawful money of
the United States at the Location or to such other person or at such other
place as SGR may designate from time to time by written notice given to
Dynasty. No payment by Dynasty or receipt by SGR of a lesser amount than the
correct space lease payment due hereunder shall be deemed to be other than a
payment on account; nor shall any endorsement or statement on any check or
any letter accompanying any check or payment be deemed to effect or evidence
an accord and satisfaction; and SGR may accept such check or payment without
prejudice to SGR's right to recover the balance or pursue any other remedy in
this Agreement or at law or in equity provided.
Dynasty shall pay to SGR all amounts due and owing under Section 5.03
of this Agreement within seven (7) days of receiving an invoice from SGR.
6.03 LATE CHARGE; INTEREST. Dynasty acknowledges that the late
payment of space lease payments or any other amounts payable by Dynasty to
SGR hereunder (all of which shall constitute additional rental to the same
extent as space lease payments) will cause SGR to incur administrative
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costs and other damages, the exact amount of which would be impracticable or
extremely difficult to ascertain. SGR and Dynasty agree that if SGR does not
receive any such payment on or before five (5) business days after the date
the payment is due, Dynasty shall pay to SGR, as additional rent, (a) a late
charge equal to five percent (5%) of the overdue amount to cover such
additional administrative costs; and (b) interest on the delinquent amounts
at the lesser of the maximum rate permitted by law if any or twelve percent
(12%) per annum from the date due to the date paid.
ARTICLE VII - DYNASTY'S REPRESENTATIONS AND WARRANTIES
As a material inducement to SGR to enter into this Agreement, Dynasty
covenants, represents, and warrants to SGR, as of the date hereof as follows:
7.01 AUTHORITY; QUALIFICATION.
(A) Each of the individuals executing this Agreement has the
full right, power, and authority to enter into and carry out the transactions
contemplated by this Agreement. The entering into of this Agreement and the
carrying out of the transactions contemplated hereby does not and will not
constitute a default (or event which, with the giving of notice or the
passage of time, would constitute a default) under any agreement to which
Dynasty or any individual executing this Agreement is a party.
(B) This Agreement constitutes the valid and binding
obligation of Dynasty enforceable in accordance with its terms.
(C) The execution, delivery, and performance of this
Agreement by Dynasty will not materially conflict with or result in any
material violation of or constitute a material default under any judicial
stipulation, judgment, statute, writ, injunction, license, permit, or decree
or order of any court or other governmental authority relating to Dynasty and
by which Dynasty is bound.
(D) There are no actions, suits, arbitration, or other
legal, administrative or other governmental proceedings pending or threatened
against or affecting Dynasty which might reasonably be expected to affect
Dynasty's ability to perform its obligations under this Agreement.
(E) All Gaming Devices installed in each of the Location
under this Agreement are or shall be approved by the Gaming Authorities and
shall comply with all applicable federal, state, county, and municipal laws.
(F) Dynasty currently has and shall retain throughout the
Term a Slot Machine Operator's License in good standing with the Gaming
Authorities.
ARTICLE VIII - SGR'S REPRESENTATIONS AND WARRANTIES
As a material inducement to Dynasty to enter into this Agreement, SGR
covenants,
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represents, and warrants to Dynasty, as of the date hereof as follows:
8.01 AUTHORITY; QUALIFICATION.
(A) SGR is duly incorporated and validly existing under the
laws of the State of Nevada. Each of the individuals executing this
Agreement has the full right, power, and authority to enter into and carry
out the transactions contemplated by this Agreement. The entering into of
this Agreement and the carrying out of the transactions contemplated hereby
does not and will not constitute a default (or event which, with the giving
of notice or the passage of time, would constitute a default) under any
agreement to which SGR or any individual executing this Agreement is a party.
(B) This Agreement constitutes the valid and binding
obligation of SGR enforceable in accordance with its terms. This Agreement
and the consummation of the transactions contemplated herein have been duly
authorized on behalf of SGR by all requisite corporate action.
(C) The execution, delivery, and performance of this
Agreement by SGR will not materially conflict with or result in any material
violation of or constitute a material default under:
(i) the Articles of Incorporation or Bylaws of SGR.
(ii) any judicial stipulation, judgment, statute, writ,
injunction, license, permit, or decree or order of any court or other
governmental authority relating to SGR and by which SGR is bound.
(D) To the best of SGR' knowledge, there are no actions,
suits, arbitration, or other legal, administrative or other governmental
proceedings pending or threatened against or affecting SGR which might
reasonably be expected to affect SGR' ability to perform its obligations
under this Agreement.
ARTICLE IX - INDEMNIFICATION AND INSURANCE
9.01 INDEMNIFICATION.
(A) INDEMNIFICATION BY DYNASTY. Dynasty shall indemnify,
hold harmless and, to the extent provided herein, defend SGR, its
shareholders, affiliates, officers, directors, trustees, employees, agents,
successors, and assigns (collectively, "SGR's Indemnified Persons") from and
against, and reimburse each of SGR's Indemnified Persons with respect to, any
and all losses, damages, liabilities, costs, and expenses, including interest
from the date of such loss to the time of payment, and reasonable attorneys'
fees (collectively, "Damages") incurred by any of SGR's Indemnified Persons
by reason of or arising out of or in connection with any act or omission of
Dynasty or its agents, employees, or contractors relating to Dynasty's use or
occupancy of the Location, Dynasty's operation of the Gaming Devices at the
Location, or any patron dispute or
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complaint lodged by the Gaming Authorities.
(B) INDEMNIFICATION BY SGR. SGR shall indemnify, hold harmless
and, to the extent provided herein, defend Dynasty, its officers, directors,
shareholders, and other affiliates, employees, agents, successors, and assigns
(collectively, "Dynasty's Indemnified Persons") from and against, and reimburse
each of Dynasty's Indemnified Persons with respect to, any and all Damages
incurred by any of Dynasty's Indemnified persons by reason of or arising out of
or in connection with any act or omission of SGR or its agents, employees, or
contractors relating to SGR's use or occupancy of the Location.
9.02 LIABILITY INSURANCE. At all times during the Term, Dynasty shall
procure and maintain, at its sole expense, commercial general liability
insurance applying to the use and occupancy of the Location. Such insurance
shall be primary and non-contributing with any other insurance procured by
Dynasty and shall have a minimum combined single limit of liability of at least
$1,000,000 per occurrence and a general aggregate limit of at least $3,000,000.
All such policies shall be written to apply to all bodily injury, property
damage, robbery of and/or by a gaming patron, or personal injury losses, and
shall be endorsed to include SGR as an additional insured. Such liability
insurance shall be written as primary policies, not excess or contributing with
or secondary to any other insurance as may be available to the additional
insureds.
9.03 WORKERS' COMPENSATION INSURANCE. At all times during the Term,
Dynasty shall procure and maintain Workers' Compensation Insurance in accordance
with the laws of the State of Nevada for all of its employees working in or
around the Location.
ARTICLE XI - ASSIGNMENT
11.01. RESTRICTION - DYNASTY. Without the prior written consent of SGR,
Dynasty shall not, either voluntarily or by operation of law, assign, encumber,
or otherwise transfer this Agreement or any interest or rights herein. An
assignment or other action in violation of the foregoing shall be void and, at
SGR's option, shall constitute a material breach of this Agreement.
ARTICLE XII - DEFAULT, REMEDIES AND TERMINATION
12.01 EVENTS OF DEFAULT BY DYNASTY. The occurrence of any of the
following shall constitute a material default and breach of this Agreement by
Dynasty:
(A) The failure by Dynasty to continuously remain licensed and
in good standing with the Gaming Authorities as an Operator of a Slot Machine
Route at all times during the Term.
(B) The failure by Dynasty to pay SGR any amounts due and owing
under this Agreement when due.
(C) The failure by Dynasty to observe or perform any material
provision of this
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Agreement to be observed or performed by Dynasty if such failure continues
for thirty (30) days after written notice thereof by SGR to Dynasty.
(D) The making by Dynasty of any general assignment for the
benefit of creditors, the filing by or against Dynasty of a petition under any
federal or state bankruptcy or insolvency laws (unless, in the case of a
petition filed against Dynasty, the same is dismissed within thirty (30) days
after filing); the appointment of a trustee or receiver to take possession of
any of Dynasty's assets at the Location or Dynasty's interest in this Agreement;
or the attachment, execution, or other seizure of any of Dynasty's assets
located at the Location or SGR's interest in this Agreement, if such seizure is
not discharged within thirty (30) days.
12.02 SGR'S RIGHT TO TERMINATE UPON DYNASTY DEFAULT. In the event of
any material default by Dynasty as provided in Section 12.01 above, SGR shall
have the right to immediately terminate this Agreement and recover possession of
the Gaming Space by giving written notice to Dynasty of SGR's election to
terminate this Agreement, in which event SGR shall be entitled to pursue any
remedies available to it under the law and this Agreement. The notice shall
give in reasonable detail the nature and extent of the failure and shall
identify the Agreement provision(s) containing the obligation(s).
12.03 TERMINATION WITHOUT CAUSE. Notwithstanding anything in this
Agreement to the contrary, Dynasty, in its sole discretion, may terminate this
Agreement for any reason, or for no reason, upon thirty (30) days prior written
notice to SGR.
12.04 TERMINATION UPON SGR GAMING APPROVAL. This Agreement shall
terminate immediately upon SGR's obtaining the SGR Gaming Approval.
12.05 PROCEDURE UPON TERMINATION. Upon the expiration, termination, or
cancellation of this Agreement, SGR and Dynasty shall assist each other in the
orderly and non-disruptive conclusion hereof. Upon the effective date of such
expiration, termination, or cancellation of this Agreement, Dynasty, subject to
SGR's responsibilities to assume the Gaming Device lease or leases, shall remove
all Gaming Devices and other property owned by Dynasty the Location in a manner
which creates the least amount of damage to property and disruption within the
Location. The cost for the removal of Dynasty's property and the restoration of
the Gaming Space to SGR's reasonable satisfaction shall be borne and paid by
Dynasty. Upon the expiration, termination or cancellation of this Agreement,
Dynasty shall pay to SGR all amounts due and owing under this Agreement.
12.06 NON-WAIVER. Nothing in this Article shall be deemed to affect
either party's rights to indemnification for liability or liabilities arising
prior to termination of this Agreement for personal injury or property damages
under the indemnification clause or clauses contained in this Agreement.
ARTICLE XIII - NOTICES
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13.01 NOTICES. All notices which Dynasty or SGR may be required, or may
desire to serve on the other, may be served, as an alternative to personal
service, by mailing the same by registered or certified mail, postage prepaid,
addressed to Dynasty and SGR at the addresses set forth below, or addressed to
such other address or addresses as either Dynasty or SGR may from time to time
designate to the other in writing. Any notice shall be deemed to have been
served at the time the same was posted.
If to Dynasty: If to SGR:
Dynasty SGR
00 X. Xxxxxxxx Xxxx. 000 X. Xxxxx Xxxxxx
Xxxxxx, Xxxxxx 00000 Xxxx, Xxxxxx 00000
Attn: Xxxxx Xxxxxx Attn: Xxxxx Xxxxxx
with copy to: with copy to:
_____________________ Xxxxx Xxxxxx
_____________________ 000 X. Xxxxxxx Xxxxxx
_____________________ Xxxx, Xxxxxx 00000
Attn:________________ Attn: Xxxxxxx X. Xxxxxx
ARTICLE XIV - MISCELLANEOUS
14.01 FORCE MAJEURE. Neither party shall incur any liability to the
other with respect to, and shall not be responsible for any failure to perform,
any obligations hereunder if such failure is caused by any reason beyond the
control of either party including, but not limited to, strike, labor trouble,
governmental rule, regulations, ordinance, statute, or interpretation, or by
fire, earthquake, civil commotion, or failure or disruption of utility services.
The amount of time for either party to perform any of their obligations shall be
extended by the amount of time each party is delayed in performing such
obligation by reason of any force majeure occurrence whether similar to or
different from the foregoing types of occurrences.
14.02 NEVADA LAW. The laws of the State of Nevada applicable to
contracts made and wholly performed therein shall govern the validity,
construction, performance, and effect of this Agreement.
14.03 ASSIGNMENT; BINDING EFFECT. Neither party may assign, transfer,
or convey any of its rights herein or hereunder to any person or entity
whatsoever without the prior written consent of the other party hereto. Any
attempt to assign or transfer this Agreement without such consent shall be
considered null and void and of no force and effect. This Agreement shall inure
to the benefit of and be binding upon the parties hereto, their respective
successors and permitted assigns.
14.04 SEVERABILITY. In the event any provision of this Agreement is
found to be unenforceable, the remainder of this Agreement shall not be
affected, and any provision found to be
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invalid shall be enforceable to the extent permitted by law. The parties
agree that in the event two different interpretations may be given to any
provision hereunder, one of which will render the provision unenforceable,
and one of which will render the provision enforceable, the interpretation
rendering the provision enforceable shall be adopted.
14.05 TIME OF ESSENCE. Time is of the essence in this Agreement and all
of the terms, provisions, covenants, and conditions hereof.
14.06 CAPTIONS. The captions appearing at the commencement of the
Articles and Sections hereof are descriptive only and for convenience in
reference to this Agreement and in no way whatsoever define, limit, or describe
the scope or intent of this Agreement.
14.07 PRONOUNS. Masculine or feminine pronouns shall be substituted for
the neuter form and vice versa in any place or places herein in which the
context requires such substitution or substitutions.
14.08 KNOWLEDGE OF PARTY. Any representation or warranty herein
contained made by or on behalf of a party to the knowledge of such party shall
be deemed to mean and be limited to actual knowledge of an executive officer of
such party of the matter in question, or actual knowledge of such facts as would
charge such executive officer of such party with knowledge of the matter in
question.
14.09 ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement constitutes
the entire agreement between the parties pertaining to the subject matter
contained in it and supersedes all prior agreements, brochures, informational
memoranda, representations, and understandings of the parties. This Agreement
may not be modified or terminated orally; and no modification, termination, or
waiver will be valid unless contained in a writing signed by both parties. In
addition, no such modification, termination, or waiver shall be effective for
any purpose unless it is signed by SGR. Except as may be otherwise provided in
this Agreement, no waiver of any of the provisions, whether or not similar, nor
shall any waiver constitute a continuing waiver, and no waiver shall be binding
unless evidenced by an instrument in writing executed by the party against whom
the waiver is sought to be enforced.
14.10 NO THIRD PARTY BENEFICIARY. This Agreement is for the benefit of,
and may be enforced only by, Dynasty and SGR and their respective successors and
permitted assigns, and is not for the benefit of, nor intended to be for the
benefit of, and may not be enforced by, any third party.
14.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, with each counterpart being deemed to be an original instrument,
but all such counterparts together shall constitute but one agreement.
14.12 ATTORNEY'S FEES. If any action is brought by any party hereto
concerning a breach of
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any of the provisions of this Agreement, the prevailing party shall be
entitled to recover from the other party the reasonable attorneys' fees and
expenses of the prevailing party incurred in connection therewith.
14.13 NO PARTY DEEMED DRAFTER. The parties agree that neither party
shall be deemed to be the drafter of this Agreement and that in the event this
Agreement is ever construed by a court of law or entity, such court shall not
construe this Agreement or any provision hereof against either party as the
drafter of the Agreement, Dynasty and SGR acknowledging that each has
contributed substantially and materially to the preparation hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
date written below.
SGR: Dynasty:
SPEAKEASY GAMING OF RENO,
INC., a Nevada corporation /s/ Xxxxx X. Xxxxxx
-----------------------------
XXXXX XXXX XXXXXX
By: /s/ Xxxxx X. Xxxxxx Date: 8/25/98
-----------------------------
Print Title: Vice President /s/ Dee Xxxxxx Xxxxxx
-----------------------------
DEE XXXXXX XXXXXX
Date: Date: Sept. 1, 1998
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