Exhibit 10.11
Transaction Xx. 0000-X00-00
Xxxxxxxxxxx Xx. 0000-X00-00
MASTER LEASE AGREEMENT
(Empress II and Palm Beach Princess Gaming Equipment)
THIS MASTER LEASE AGREEMENT ("Lease" or "Agreement") is made and
entered into as of July 6, 2004, by and between PDS GAMING CORPORATION, a
Minnesota corporation, its successors, designated subsidiaries and assigns
("Lessor") and ITG VEGAS, INC., a Nevada corporation, and ITG PALM BEACH, LLC, a
Delaware limited liability company, jointly and severally as lessees
(collectively "Lessee").
RECITALS
WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to
lease from Lessor in accordance with the terms and conditions contained herein,
certain equipment more fully described in the Lease Schedule or Schedules,
referred to herein as a "Lease Schedule" or "Lease Schedules", as may from time
to time be executed by Lessee.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and
conditions set forth below and other good and valuable consideration, the
receipt and sufficiency of which all parties acknowledge, it is agreed as
follows:
AGREEMENT
1. Recitals Incorporation. The recitals set forth above are hereby
incorporated into this Agreement as material parts thereof and not simply as
mere recitals.
2. Parties.
2.1. The Lessor is PDS GAMING CORPORATION, a Minnesota corporation,
whose address is 0000 XxXxxx Xxxxx, Xxx Xxxxx, XX 00000-0000.
2.2. The Lessee is ITG VEGAS, INC., a Nevada corporation ("ITG"),
whose address is Xxx Xxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxx Xxxxx, XX 00000, and
ITG PALM BEACH, LLC, a Delaware limited liability company ("ITGPB"), whose
address is Xxx Xxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxx Xxxxx, XX 00000. ITG's Tax
ID Number is 00-0000000 and ITGPB's Organizational ID Number is C34290-01. ITG's
location for the purposes of all Uniform Commercial Code filings is the State of
Nevada. ITGPB's location for the purposes of all Uniform Commercial Code filings
is the State of Delaware.
3. Lease. This Lease establishes the general terms and conditions by which
Lessor shall lease the equipment described in each Lease Schedule (the
"Equipment") to Lessee. Each Lease Schedule shall be in the form provided by
Lessor and reasonably acceptable to Lessee and shall incorporate by reference
the terms of this Lease. The Equipment is to be used in connection with that
business described as Palm Beach Casino Cruises and located on the Maritime
Vessels named the Empress II (United States Official Number 998517) ("Empress
Vessel") and the Palm Beach Princess (Panamanian flag, Patente No. 14348-84-E
and IMO No. 8402937) ("Princess Vessel"), both to be docked at Port of Palm
Beach, Xxx Xxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxx Xxxxx, XX 00000 (the Empress
Vessel and the Princess Vessel are hereinafter individually and collectively
referred to as the "Vessel" or "Premises"). Cruise Holdings II, LLC, a Nevada
limited liability company ("Cruise Holdings II"), as Owner, and Palm Beach
Maritime Corporation, formerly named MJQ Corporation, a Delaware corporation
("MJQ") and Palm Beach Empress, Inc., a Delaware corporation ("PBE"), jointly
and severally as Charterer, are parties to that certain Bareboat Charter and
Option to Purchase ("Empress Charter"), that certain Empress Vessel Master Lease
and Empress Vessel lease schedule (collectively the "Empress Vessel Lease") each
dated July 6, 2004, whereby Cruise Holdings II leases the Empress Vessel to MJQ
and PBE. Additionally, Cruise Holdings I, LLC, a Nevada limited liability
company ("Cruise Holdings I"), as Owner, and MJQ and PBE, jointly and severally
as Charterer, are parties to that certain Bareboat Charter and Option to
Purchase ("Princess Charter"), that certain Princess Vessel Master Lease and
Princess Vessel lease schedule (collectively the "Princess Vessel Lease") each
dated July 6, 2004, whereby Cruise Holdings I leases the Princess Vessel to MJQ
and PBE. The Empress Charter, the Princess Charter, the Empress Vessel Lease and
the Princess Vessel Lease are hereinafter collectively referred to as the
"Vessel Lease Documents".
4. Term, Rent and Payment, Fees and Charges.
Master Lease Agreement Page 1
4.1. Term. The term of this Lease shall commence on the date set forth
in each Lease Schedule (the "Commencement Date") and continue as specified in
such Lease Schedule ("Term").
4.2. Rent and Payment. Lessee's obligation to pay rent for the
Equipment shall commence on the Commencement Date and continue for the Term. The
Basic Rent, as set forth and defined in the Lease Schedules, shall be payable in
such amount and on such date as set forth in the Lease Schedule. Any amounts
payable by Lessee, other than Basic Rent, shall be deemed Additional Charges.
Additional Charges shall be due and payable in accordance with the terms of the
Lease Schedule or if not set forth therein, on the Basic Rent payment date
following the date upon which the aforesaid Additional Charges accrue, or the
last day of the Term, whichever is earlier. Lessee shall make all payments at
the address of Lessor set forth above or at such other address as Lessor may
designate in writing. As used herein, the term "Rent" shall mean all Basic Rent
and Additional Charges as described in the Lease Schedules.
4.3. Late Charge. If any Basic Rent is not received by Lessor or its
assignees within five (5) days of when due then a late charge on such Rent shall
be due and payable with such Rent in an amount equal to one and one-half percent
(1.5%) of the delinquent Basic Rent, as defined in the Lease Schedule, payable
for each month such Basic Rent remains delinquent, as reimbursement for
administrative costs and not as a penalty.
4.4. ACH. Lessee shall complete, execute and deliver to Lessor an
Authorization for Automatic Payment form, which authorizes Lessor to deduct
payments of Basic Rent directly from Lessee's checking or savings account at a
specified financial institution in accordance with this Lease and the Lease
Schedules.
4.5. [Intentionally Omitted.]
4.6. [Intentionally Omitted.]
4.7. Documentation Costs, Other Expenses and Charges. In connection
with the closing of each transaction, Lessee also agrees to pay all of Lessor's
out-of-pocket expenses in connection with the closing of each transaction,
including without limitation: [i] documentation costs for this Lease and each
Lease Schedule; [ii] any fees and costs of legal counsel utilized by Lessor
(including in-house counsel); [iii] the costs of site and vessel inspections;
and [iv] all other out-of-pocket expenses incurred by or on behalf of Lessor. At
such time as the Lease is executed and delivered, the aforementioned
out-of-pocket expenses shall not exceed $25,000.00.
4.8. Imposts. In addition to the monthly Basic Rent due in each Lease
Schedule, Lessee agrees to pay and indemnify Lessor for, and hold Lessor
harmless from and against all taxes, assessments, fees and charges (hereinafter
called "Imposts") together with any penalties, fines or interest thereon levied
and imposed by any governmental agency or unit (state, local, federal, domestic
or foreign), regardless of party assessed against: (i) with respect to the Lease
or any Lease Schedule; (ii) upon the Equipment, including without limitation any
"vessel", its value or any interest of Lessor and/or Lessee therein; (iii) upon
or on account of any sale, rental, purchase, ownership, possession, use,
operation, maintenance, delivery or return of the Equipment, or value added
thereto, other than taxes imposed on or measured by the net income or capital of
Lessor. The amount of the Impost shall become Rent to be paid by Lessee within
ten (10) days after Lessor's demand. If any Impost relates to a period during
the Term of a Lease Schedule such Impost shall continue, notwithstanding the
expiration or termination of the Lease or the Lease Schedule, until all such
Imposts are paid in full by Lessee.
4.9. Lessor's Performance of Lessee's Obligations. If Lessee fails to
comply with any of its covenants or obligations herein, Lessor may, at its
option, perform such covenants or obligations on Lessee's behalf without thereby
waiving such conditions or obligations or the failure to comply therewith and
all sums advanced by Lessor in connection therewith shall be repayable by Lessee
as Additional Charges. No such performance shall be deemed to relieve Lessee of
its obligations herein.
5. Certificate of Delivery and Acceptance. Lessee shall deliver to Lessor a
Certificate of Delivery and Acceptance ("Certificate of Acceptance") in the form
provided by the Lessor and reasonably acceptable to Lessee.
6. Net Lease. This Lease including each Lease Schedule is a net lease and
Lessee's obligation to pay all Rent due and the rights of Lessor or its
assignees in, and to, such Rent shall be absolute and unconditional under all
circumstances, notwithstanding: [i] any setoff, abatement, reduction,
counterclaim, recoupment, defense, except the defense of prior payment to the
Lessor in accordance with the Lessor's instructions, or other right which Lessee
may have against Lessor, its assignees, the manufacturer or seller of any of the
Equipment, or any other person for any reason whatsoever, including, without
limitation, any breach by Lessor of this Lease; [ii] any defect in title (other
than defects and exceptions caused by Lessor), condition, operation, fitness for
use, or any damage to or destruction of and of the Equipment, except to the
extent resulting from the gross negligence or willful misconduct of Lessor or
any of its employees, agents or representatives; [iii] any interruption or
cessation of use or possession of the Equipment for any reason, except to the
extent resulting from the gross negligence or willful misconduct of Lessor or
any of its employees, agents or representatives; or
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[iv] any insolvency, bankruptcy, reorganization or similar proceedings
instituted by or against Lessee.
7. Grant of Security Interest.
7.1. In order to secure prompt payment of the Rent and all of the
other amounts from time to time outstanding under and with respect to this Lease
and any Lease Schedule, and the performance and observance by Lessee of all the
agreements, covenants and provisions thereof, Lessee hereby grants to Lessor a
first priority security interest in the Equipment (including, without
limitation, all inventory, fixtures or other property comprising the same)
together with all software (embedded therein or otherwise), Intellectual
Property (as defined herein) and general intangibles necessary for the operation
of the Equipment, all additions, attachments, accessions thereto whether or not
furnished by the supplier of the Equipment, all subleases, and security deposits
thereunder, and any and all substitutions, replacements or exchanges for any
such item of Equipment, in each case in which Lessee shall from time to time
acquire an interest, and any and all insurance and/or other proceeds of the
Equipment in and which a security interest is granted hereunder.
7.2. Lessee hereby acknowledges and agrees that to the extent Lessor's
participation in any purchase and lease of an item or items of the Equipment
pursuant to this Lease or any Lease Schedule constitutes a financing of the
purchase of such item or items of Equipment, Lessee's repayment of the amounts
of such financing shall apply on a "first-in-first-out" basis so that the
portions of the amounts of such financing used to purchase such item or items of
Equipment shall be deemed re-paid in the chronological order of the use of such
amounts to purchase the same.
8. Location, Use, Maintenance, and Inspection.
8.1. Location, Use, Maintenance and Repairs.
8.1.1. Lessee shall keep and use the Equipment on the Premises
and shall not relocate or remove any of the Equipment without the prior, written
consent of Lessor.
8.1.2. Lessee shall at all times and, at its sole cost and
expense, properly use and maintain the Equipment in good operating condition,
other than the normal wear and tear, and make all necessary repairs, alterations
and replacements thereto (collectively, "Repairs"), all of which shall
immediately become the property of Lessor and subject to this Lease.
8.1.3. Lessee shall comply with manufacturer instructions
relating to the Equipment, and any applicable laws and governmental regulations.
8.1.4. Lessee shall pay all reasonable costs and expenses
associated with removal and return of the Equipment.
8.2. Identification and Inspection. Upon request by Lessor, Lessee
shall xxxx each gaming device and related equipment (each a "Unit")
conspicuously with appropriate labels or tags furnished by Lessor and maintain
such markings through the Term to clearly disclose that said Unit is being
leased from Lessor. Subject to Lessee's reasonable security requirements, Lessee
shall permit Lessor's representatives to enter the Premises where any Unit is
located to inspect such Unit upon reasonable notice. Lessor shall comply with
Lessee's access and on board policies prior to boarding of the Premises and
while on board the Premises in accordance with the Charter.
9. Location, Property Rights, and Liens.
9.1. Personal Property. All of the Equipment is personal property and
Lessee shall not affix any of the Equipment to realty so as to change its nature
to a fixture or real property and agrees that all of the Equipment shall remain
personal property during the Term. The Equipment is, and shall at all times
remain removable from the Premises. Lessee agrees that the Equipment is not
essential to the Premises. Lessor expressly retains ownership and title to the
Equipment. Lessee hereby agrees that it shall notify Lessor of any change in
Florida gaming laws or regulations affecting Lessor as a result of its ownership
of the Equipment and assist Lessor in complying with, at Lessee's sole expense,
all of Lessor's obligations as required by the state gaming laws and regulations
regarding maintenance, use, possession and operation of the Equipment. Lessee
hereby authorizes, empowers, and grants a limited power of attorney to Lessor to
record and/or execute and file, on Lessee's behalf, any certificates,
memorandums, statements, refiling, and continuations thereof as Lessor deems
reasonably necessary or advisable to preserve and protect its interest
hereunder. The parties intend to create a lease agreement and the relationship
of lessor and lessee between themselves. Nothing in this Lease shall be
construed or interpreted to create or imply the existence of a finance lease or
installment lease contract. Lessor makes no representation regarding the
treatment of this Lease, the Equipment or the payment of obligations under this
Lease for financial statement reporting or tax purposes.
9.2. Protection of Lessor's Property Rights. Lessor has the right to
place on any part of the Equipment, a medallion or other marker of suitable size
stating in substance [i] that the Equipment is the property of Lessor, and [ii]
that Lessor, to protect its rights, has
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filed or retains the right to file in appropriate government offices a UCC
Financing Statement covering the Equipment. Lessee hereby authorizes Lessor to
file any and all UCC-1 and/or UCC-3 statements and/or amendments thereto related
to this Lease, any Lease Schedule, and/or the Equipment without Lessee's
authentication, to the extent permitted by applicable law. If directed to do so
by Lessor, Lessee will cooperate with Lessor in preparing and filing such UCC
statements and/or amendments thereto. Lessee hereby agrees that by executing
this Lease or any Lease Schedule that the same shall constitute Lessee's
authorization for all UCC statements and/or amendments thereto related to this
Lease, any Lease Schedule and/or the Equipment.
9.3. Accessions. Lessee agrees that if any part of the Equipment is
physically attached to other personal property that the Equipment shall not lose
its identity and shall constitute an accession. Lessor shall at all times herein
retain its interests in the Equipment and such interest shall continue to be
perfected notwithstanding its becoming an accession.
9.4. Liens and Encumbrances. Unless otherwise provided herein or in
the Charter, Lessee shall not directly or indirectly create, incur or suffer a
mortgage, claim, lien, charge, encumbrance or the legal process of a creditor of
Lessee of any kind upon or against this Lease or any Equipment. Lessee shall at
all times protect and defend, at its own cost and expense, the title of Lessor
from and against such mortgages, claims, liens, charges, encumbrances and legal
processes of creditors of Lessee and shall keep all the Equipment free and clear
from all such mortgages, claims, liens, charges, encumbrances and legal
processes. If any such mortgage, claim, lien, charge or encumbrance is incurred,
Lessee shall immediately notify Lessor and shall take all actions required by
Lessor to remove the same. Lessee shall indemnify Lessor against and hold Lessor
harmless from any and all costs, obligations, liabilities, penalties, damages or
other charges and any and all expenses reasonably incurred in connection with
investigating, defending or asserting any claim, action, suit or proceeding
incident to any matter indemnified against hereunder incurred by Lessee in
connection with or arising from any claims, liens, charges, encumbrances and
legal processes upon or against this Lease or any Equipment.
10. Return of Equipment.
10.1. Duty of Return. At the expiration of any Term or upon
termination of the Lease, unless Lessee exercises its option to purchase the
Equipment from Lessor, Lessee at its expense shall return all of the Equipment
to Lessor or its designee at the Lessor's distribution facility in Las Vegas,
Nevada, in accordance with appropriate gaming laws and regulations and the terms
and conditions of the Lease Schedule. The Equipment shall include all parts,
accessories, attachments, etc. originally delivered to Lessee and shall conform
to all of the manufacturer's specifications and gaming laws and regulations with
respect to normal function, capability, design and condition less normal wear
and tear. The terms "normal wear and tear" includes minor scratches, dents, and
chips to the exterior of the device and wear to the interior components of the
Equipment that is consistent with components of comparably aged machines. Upon
return of the Equipment, Lessee agrees to reimburse Lessor for the full retail
cost of the equipment consisting of gaming devices that is non-functioning or
missing components including, but not limited to, components at the following
indicated reimbursement rate, (i) Door $400.00; (ii) Validator head $550.00;
(iii) Validator Can $245.00; (iv) Monitor $250.00; (v) Circuit Board $420.00;
(vi) Xxxxxx $350.00; (vii) Glass panels $300.00 each.
10.2. Failure to Return. If Lessee fails to return the Equipment or
any portion thereof, as provided above, within fourteen (14) days following
expiration of any Term or termination of the Lease, then Lessee shall either
return the Equipment, replace the Equipment as provided in Section 11.2, or pay
to Lessor the reasonable value thereof.
11. Risk of Loss, Insurance.
11.1. Risk of Loss. Lessee shall bear the risk of all loss or damage
to any Unit or caused by any Unit during the period from the time the Unit is
shipped by Lessor or the Unit's vendor until the time it is returned as provided
herein.
11.2. Equipment Replacement. Except as otherwise provided herein, if
any Unit is lost, stolen, destroyed, seized by governmental action or, in
Lessee's opinion or Lessor's opinion, damaged ("Event of Loss"), this Lease
shall remain in full force and effect without abatement of Rent and Lessee shall
promptly replace such Unit at its sole expense with a Unit of equivalent value
and utility, and similar kind and in substantially the same condition as the
replaced Unit immediately prior to the Event of Loss. Title to such replacement
Unit immediately shall vest and remain in Lessor, and such Unit shall be deemed
Equipment under this Lease and the applicable Lease Schedule. Lessor shall cause
to be paid to Lessee or the vendor of the replacement Unit any insurance
proceeds actually received by Lessor as a result of the Event of Loss promptly
upon receipt of such proceeds. Lessee shall promptly notify Lessor of any Event
of Loss and shall provide Lessor with and shall enter into, execute and deliver
such documentation, as Lessor shall reasonably request with respect to the
replacement of any such Unit. Notwithstanding the foregoing, if there occurs an
Event of Loss which constitutes, in Lessee's opinion, an actual or constructive
total loss of all or a substantial portion of the Equipment, then Lessee shall
have the option, exercisable upon written notice to Lessor, to terminate this
Lease and purchase the Equipment in accordance with Section 21.2; provided,
however, that if Lessee opts to purchase the Equipment under Section 21.2, then
any insurance proceeds actually received by Lessor as a result of such Event of
Loss shall be used to offset the amount due from Lessee to Lessor under Section
21.2 and the excess, if any, shall be promptly paid to Lessee.
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11.3. Insurance.
11.3.1. Lessee shall obtain and maintain in full force and effect
the following insurance: [i] property and liability insurance on the Premises in
accordance with the Vessel Lease Documents; [ii] commercial general liability
insurance; [iii] all risk, full replacement cost property damage insurance on
the Equipment (in no event less than the outstanding balance of the obligations
hereunder), and [iv] workers compensation insurance. Such insurance shall: [i]
name Lessor, its parents, subsidiaries, affiliates and/or assignees, as
additional insureds (general liability and property only) and as first loss
payees as their interests may appear (property only); [ii] provide a waiver of
subrogation to Lessor (workers compensation only); and [iii] provide that the
POLICY MAY NOT BE CANCELED OR MATERIALLY ALTERED WITHOUT THIRTY (30) DAYS PRIOR
WRITTEN NOTICE TO LESSOR.
11.3.2. All such insurance required herein shall be placed with
companies having a rating of at least A, Class XII or better by Best's rating
service. Lessee shall maintain the insurance throughout the contract period and
furnish to Lessor until the payment in full of any obligations herein, insurance
certificates of a kind satisfactory to Lessor showing the existence of the
insurance required hereunder and premium paid.
12. Lessor's Purchase and Performance. Upon receipt of a Lease Schedule
executed and delivered by Lessor, Lessee shall bear all responsibilities and
perform all material obligations of Lessor, which may arise as a result of any
document or agreement between Lessor and a vendor in connection with the
Equipment to be leased under said Lease Schedule, other than payment of the
purchase price; provided that Lessor has provided materially correct and
complete copies of any and all such documents and agreements to Lessee prior to
the execution of such Lease Schedule.
13. Taxes.
13.1. Taxes. Lessee agrees to report, file, pay promptly when due to
the appropriate taxing authority and indemnify, defend, and hold Lessor harmless
from and against any and all taxes (including gross receipts), assessments,
license fees and other federal, state or local governmental charges of any kind
or nature, together with any penalties, interest or fines related thereto
(collectively, "Taxes") that pertain to the Equipment, its purchase, or this
Lease, except such Taxes based solely upon the net income or capital of Lessor,
including, but not necessarily limited to all property, sales and/or use taxes
levied or assessed regardless of whether such taxes are levied or assessed
against Lessor or Lessee.
13.2. Lessor's Filing of Taxes. Notwithstanding the foregoing, Lessor
at its election may report and file sales and/or use tax reports, which are
filed and paid periodically through the Term, and the amounts so due may be
invoiced to Lessee and payable as specified therein, except if and to the extent
Lessee provides a resale or other sales tax exemption certificate.
14. Indemnification. Except for the negligence of Lessor, its employees or
agents and assigns, Lessee hereby assumes liability for and agrees to indemnify,
defend, protect, save and hold harmless the Lessor, its agents, employees,
directors and assignees from and against any and all losses, damages, injuries,
claims, administration of claims, penalties, demands and all expenses, legal or
otherwise (including reasonable attorneys' fees) of whatever kind and nature
arising from (a) the purchase, ownership, use, condition, operation or
maintenance of the Equipment, or (b) any agreement between Lessor and a vendor
(including purchase or sales orders) which was reasonably approved by Lessee, in
each case until the Equipment is returned to Lessor. Any claim, defense, setoff,
or other right of Lessee against any such indemnified party shall not in any way
affect, limit, or diminish Lessee's indemnity obligations hereunder. Each of
Lessor and Lessee shall notify the other party immediately as to any claim,
suit, action, damage, or injury related to the Equipment of which such party has
actual or other notice. Lessee shall, at its own cost and expense, defend any
and all suits within the scope of its indemnification obligation, including
frivolous suits and claims, which may be brought against Lessor and shall
satisfy, pay and discharge any and all judgments and fines that may be recovered
against Lessor in any such action or actions, provided, however, that Lessor
shall give Lessee written notice of any such claim or demand. Lessee agrees that
its obligations under this section shall survive the expiration or termination
of this Lease.
15. Representations, Warranties and Covenants. Lessee hereby represents and
warrants to Lessor that:
15.1. It is an entity duly organized, validly existing and in good
standing under the laws of the state of its formation;
15.2. Lessee's true legal name is as set forth in this Agreement and
that is shall not change its name or jurisdiction of organization without thirty
(30) days' written notice to Lessor;
15.3. It has the power and authority to execute, deliver and perform
this Agreement and other instruments and documents required or contemplated
herein;
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15.4. The execution, delivery and performance of this Agreement has
been duly authorized by all necessary action on the part of Lessee, does not and
will not require the approval of any other interested parties of Lessee and does
not and will not contravene any Certificate or Articles of formation or internal
by-laws or agreement of Lessee, and does not constitute a default of any
indenture, contract, agreement, mortgage, deed of trust, document or instrument
to which Lessee is a party or by which Lessee is bound;
15.5. The person(s) executing this Agreement on behalf of Lessee has
or have been properly authorized to execute the same;
15.6. Lessee has obtained, maintains, and will maintain, on an active
and current basis, all licenses, permits, registrations, approvals and other
authority as may be required from any applicable federal, state, tribal and
local governments and agencies having jurisdiction over it and the subject
matter of this Agreement;
15.7. There are no suits, actions, proceedings or investigations
pending or, to Lessee's knowledge, threatened or, to Lessee's knowledge, any
basis therefor which might materially adversely affect the ability of it to
perform its obligations under this Agreement or have a material adverse effect
upon the financial condition of it or the validity or enforceability of this
Agreement;
15.8. Except for cases no. 03-30038 and 03-30039 pending in the United
States Bankruptcy Court, Southern District of Florida, Lessee is not currently
the subject of any pending or threatened bankruptcy or insolvency proceeding;
15.9. Lessee is not presently insolvent and this Agreement will not
render Lessee insolvent. As used in this section, the term "insolvent" means
that the sum total of all of Lessee's liabilities (whether secured or unsecured,
contingent or fixed, or liquidated or unliquidated) is in excess of the value of
Lessee's non-exempt assets (i.e. all of the assets of the entity that are
available to satisfy claims of creditors);
15.10. As of the date hereof, its obligations under this Agreement are
not subject to any defense, set off or counterclaim;
15.11. Lessee is not currently aware of any event, condition, fact or
circumstance, which, after the execution of this Agreement, would prevent Lessee
from having sufficient working capital to pay all of Lessee's debts as they
become due;
15.12. This Agreement constitutes the valid and legally binding
agreement of Lessee and is enforceable against Lessee in accordance with its
terms, except to the extent that enforcement of any remedies may be limited by
applicable bankruptcy, insolvency, general principles of equity or other similar
laws affecting generally the enforcement of creditor's remedies;
15.13. There have been no amendments, modifications, waivers or
releases with respect to this Agreement or any provisions hereof, whether oral
or written prior to execution hereof;
15.14. The Lessee's state of formation and/or the location of the
Premises will not be changed without thirty (30) days' prior written notice to
Lessor; and
15.15. No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by, any
governmental, regulatory or public or tribal body or authority is required in
connection with Lessee's execution, delivery and performance of, or the
legality, validity, binding effect or enforceability of this Agreement.
15.16. All financial statements concerning the Lessee and its
guarantors that have been delivered as of the date of this Agreement have been
prepared in accordance with GAAP consistently applied throughout the periods
covered (except as disclosed therein and except, with respect to unaudited
financial statements, for the absence of footnotes and normal year-end audit
adjustments) and present fairly in all material respects the financial position
of the persons and entities covered thereby as at the dates thereof and the
results of such person's or entities operations and cash flows for the periods
then ended. Any projections delivered to Lessor on or prior to the date of this
Agreement have been prepared by Lessee in light of the past operations of its
businesses. Such projections are based upon estimates and assumptions stated
therein, all of which Lessee believes to be reasonable and fair in light of
current conditions and current facts known to Lessee and, as of the date of this
Agreement, reflect Lessee's good faith and reasonable estimates of the future
financial performance of Lessee, the Vessel, the casino gaming operations and of
the other information projected therein for the period set forth therein.
15.17. Between the date of Lessee's most recent annual financial
statements and the date of this Agreement, (a) Lessee has not incurred any
obligations, contingent or non-contingent liabilities, liabilities for charges,
long-term leases or unusual forward or long-term commitments which are not
reflected in the financial statements provided to Lessor and which, alone or in
the aggregate, could reasonably be expected to have a material adverse effect on
the financial condition of Lessee or Lessee's ability to perform its obligations
under this Lease, the Vessel Lease Documents or any related documents ("Material
Adverse Effect"), (b) no contract, lease or other agreement or instrument has
been entered into by any Lessee or has become binding upon any Lessee's
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assets and no law or regulation applicable to any Lessee has been adopted which
has had or could reasonably be expected to have a Material Adverse Effect, and
(c) no Lessee is in default and to the best of any Lessee's knowledge no third
party is in default under any contract, lease or other agreement or instrument,
which alone or in the aggregate could reasonably be expected to have a Material
Adverse Effect. Between the date of Lessee's most recent annual financial
statements and the date of this Agreement, no event has occurred which, alone or
together with other events, could reasonably be expected to have a Material
Adverse Effect.
15.18. As of the date of this Agreement (a) no strikes or other
material labor disputes against any Lessee are pending or, to any Lessee's
knowledge, threatened, (b) hours worked by and payment made to employees of each
Lessee comply with all federal, state, local or foreign law applicable to such
matter, (c) all payments due from any Lessee for employee health and welfare
insurance have been paid or accrued as a liability on the books of such Lessee,
(d) there is no organizing activity involving any Lessee pending or, to any
Lessee's knowledge, threatened by any labor union or group of employees, (e)
there are no representation proceedings pending or, to any Lessee's knowledge,
threatened with the National Labor Relations Board, and no labor organization or
group of employees of any Lessee has made a pending demand for recognition, and
(f) there are no complaints or charges against any Lessee pending or, to the
knowledge of any Lessee, threatened to be filed with any governmental authority
or arbitrator based on, arising out of, in connection with, or otherwise
relating to the employment or termination of employment by and Lessee of any
individual.
15.19. As of the Closing Date, each Lessee owns or has rights to use
all trademarks, service marks, records, technology, inventions, know-how,
specifications, modifications, information, and any other intellectual property
necessary to continue to conduct its business as now or heretofore conducted by
it or proposed to be conducted by it ("Intellectual Property"). Each Lessee
conducts its business and affairs without infringement of or interference with
any Intellectual Property of any other person or entity in any material respect.
No Lessee is aware of any infringement claim by any other person or entity with
respect to any Intellectual Property.
15.20. As of the date of this Agreement, no Lessee is a party to any
contract or agreement with any governmental authority and no Lessee's accounts
(as defined in the United States Code) are subject to the Federal Assignment of
Claims Act (31 U.S.C. Section 3727), as amended, or any similar state or local
law.
15.21. No information contained in this Agreement, any of the other
Vessel Lease Documents, any projections, financial statements, or SEC filings or
other reports from time to time delivered hereunder or any written statement
furnished by or on behalf of any Lessee to Lessor contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not misleading
in light of the circumstances under which they were made.
15.22. Lessee shall not directly or indirectly, by operation of law or
otherwise merge, consolidate or otherwise combine with any sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, public benefit corporation
or other entity (any of the foregoing, a "Person").
15.23. Lessee shall not create, incur, assume or permit to exist any
Indebtedness (as defined below) other than (i) Indebtedness existing on the date
hereof, (ii) Indebtedness incurred pursuant to this Lease or the Vessel Lease
Documents and/or incurred for the sole purposes of maintaining, expanding or
enhancing Lessee's and its affiliates' business of operating the Vessels (the
"Operations") (collectively "Permitted Indebtedness") or (iii) Indebtedness
incurred by a subsidiary or affiliate of Lessee for the purpose of acquiring,
maintaining, expanding or enhancing any business, provided, such Indebtedness
(if other than Permitted Indebtedness) is not created, assumed or guaranteed by
Lessee.
15.24. Lessee shall not create, incur, assume or permit to exist any
obligation guaranteeing any Indebtedness, lease, dividend, or other obligation
(except for indorsement of items and instruments in process of collection) of
any other Person in any manner, other than the guaranty of Permitted
Indebtedness. For purposes of this Lease, "Indebtedness" means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to capital leases which is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
assets, real or personal property or services which purchase price is (a) due
more than six (6) months from the date of incurrence of the obligation in
respect thereof, or (b) evidenced by a note or similar written instrument, and
(v) all indebtedness secured by any lien on any property or asset owned or held
by Lessee or any of its subsidiaries regardless of whether the indebtedness
secured thereby shall have been assumed by such Person or is nonrecourse to the
credit of such Person.
16. Warranty, Disclaimers and Limitations of Liability.
16.1. Pre-owned Gaming Devices. All pre-owned gaming devices supplied
herein by Lessor, which are subject to
Master Lease Agreement Page 7
this Lease or any Lease Schedule, if any, are leased in a functional condition.
Lessor warrants that pre-owned gaming devices will be mechanically sound and in
good working order for a period of thirty (30) days following delivery. Lessee's
sole and exclusive remedy in the event of defect of a pre-owned gaming device is
expressly limited to the restoration of the device to good working condition by
adjustment, repair or replacement of defective parts, at Lessee's election.
There are no other warranties, express or implied, including, but not limited
to, warranties of merchantability or fitness for a particular purpose. No
affirmation of fact, including, but not limited to, statements regarding
suitability for use or performance of such Equipment shall be deemed to be a
warranty of Lessor for any purpose. The Lessee will bear the cost of returning
any defective pre-owned gaming devices to Lessor, including shipping and
reasonable packaging. Lessor will bear the cost of returning the repaired or
replacement device to the Lessee, including shipping and reasonable packaging.
Repair of damage caused by the Lessee's negligence or intent, or damage caused
by third parties is the responsibility of the Lessee and shall in no event be
the responsibility of Lessor.
16.2. New Gaming Devices or Equipment. Lessor makes no warranties,
express or implied, including, but not limited to, warranties of merchantability
or fitness for a particular purpose with regard to any new gaming devices or
equipment acquired by Lessor for lease to Lessee hereunder from an Original
Equipment Manufacturer or Supplier ("OEM"). No affirmation of fact, including,
but not limited to, statements regarding suitability for use or performance of
such Equipment shall be deemed to be a warranty of Lessor for any purpose. All
OEM warranties, if any, shall extend to Lessee, subject to the terms and
conditions of said OEM warranty and to the extent as it may apply to any
Equipment leased herein and, upon the request of Lessee, Lessor shall cooperate
with Lessee to enforce any OEM warranty.
16.3. Disclaimer and Limitations of Liability. Notwithstanding
anything herein to the contrary, Lessor shall not be responsible or liable for
any revenues foregone by the Lessee, while any part of the Equipment is not
functioning properly. Lessor shall also not be responsible or liable for any
losses, damages, injuries, claims, penalties, demands and all expenses, legal or
otherwise (including reasonable attorneys' fees) of whatever kind and nature
arising from any patron disputes involving such Equipment. The liability of
Lessor for any of the Equipment leased hereunder, whether in contract, in tort,
under warranty, in negligence or otherwise, shall not exceed the fair market
value of the Equipment itself and under no circumstances shall Lessor be liable
for direct, special, indirect, or consequential damages. Any unauthorized
modification, alteration, or revision of all or any portion of the Equipment
shall cause the warranty described above to be null and void. Lessor, its
affiliates, subsidiaries, representatives, and agents make no other warranty,
express or implied. IN NO EVENT SHALL LESSOR BE LIABLE FOR DIRECT, INDIRECT,
SPECIAL, OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOSS OF PROFITS,
ARISING OUT OF THIS LEASE, THE VESSEL LEASE DOCUMENTS OR ANY LEASE SCHEDULE
REGARDLESS OF THE NATURE OF ANY CLAIM MADE BY LESSEE, BUT EXCLUDING DIRECT
DAMAGES RESULTING FROM LESSOR'S BREACH OF SECTION 16.4.
16.4. Covenant of Lessor. Lessor hereby covenants and agrees that
Lessor will not permit or suffer to exist any lien, claim, liability or other
encumbrance on or against the Equipment by, to or of any person or entity
claiming through Lessor, which impairs Lessee's rights to quiet enjoyment or
purchase option under this Lease, except to the extent attributable to any Event
of Default by Lessee. Lessor shall and shall be entitled to a reasonable
opportunity to cure, contest or defend against any such lien, claim, liability
or other encumbrance.
16.5. Representations and Warranties of Lessor. Lessor hereby
represents and warrants to Lessee that:
16.5.1. It is an entity duly organized, validly existing and in
good standing under the laws of the state of its formation;
16.5.2. It has the power and authority to execute, deliver and
perform this Agreement and other instruments and documents required or
contemplated herein;
16.5.3. The execution, delivery and performance of this Agreement
has been duly authorized by all necessary action on the part of Lessor, does not
and will not require the approval of any other interested parties of Lessor and
does not and will not contravene any Certificate or Articles of formation or
internal by-laws or agreement of Lessor, and does not constitute a material
default of any indenture, contract, agreement, mortgage, deed of trust, document
or instrument to which Lessor is a party or by which Lessor is bound;
16.5.4. The person(s) executing this Agreement on behalf of
Lessor has or have been properly authorized to execute the same;
16.5.5. This Agreement constitutes the valid and legally binding
agreement of Lessor and is enforceable against Lessor in accordance with its
terms, except to the extent that enforcement of any remedies may be limited by
applicable bankruptcy, insolvency, general principles of equity or other similar
laws affecting generally the enforcement of creditor's remedies;
Master Lease Agreement Page 8
16.5.6. Lessor has obtained, maintains, and will maintain, on an
active and current basis, all licenses, permits, registrations, approvals and
other authority as may be required from any applicable federal, state, tribal
and local governments and agencies having jurisdiction over it with respect to
the subject matter of this Agreement, except to the extent that the failure to
obtain and/or maintain any such licenses could not reasonably be expected to
have a material adverse affect on the ability of Lessor to perform its
obligations hereunder;
16.5.7. There are no suits, actions, proceedings or
investigations pending or, to Lessor's knowledge, threatened or, to Lessor's
knowledge, any basis therefor which might materially adversely affect the
ability of it to perform its obligations under this Agreement or have a material
adverse effect upon the financial condition of it or the validity or
enforceability of this Agreement; and
16.5.8. To the knowledge of Lessor, no order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with, or exemption by, any governmental, regulatory or public or tribal body or
authority is required in connection with the execution, delivery and performance
of, or the legality, validity, binding effect or enforceability of this
Agreement.
17. Assignment of Lease. Lessee acknowledges and agrees that Lessor may
sell, assign, mortgage, or otherwise transfer its interest hereunder and/or in
the Equipment to others ("Assignees") without any consent of Lessee, provided
however that Lessee shall be promptly notified of any assignment and that each
Assignee shall expressly take assignment subject to this Lease and the Vessel
Lease Documents and agree to recognize Lessee's rights under this Lease,
including the right to quiet enjoyment and use of the Equipment so long as no
event of default exists under the Lease, during the term of this Lease; provided
further that, notwithstanding the foregoing, if such Assignee is PDS Funding
2004-A, LLC or any of its successors or assigns, such assignment shall be taken
subject to the terms of that certain Notice, Consent and Acknowledgment of
Assignment or Sale of even date herewith by and among Lessor, Lessee, PDS,
Cruise II, ITG, ITG Palm Beach, LLC and International Thoroughbred Breeders,
Inc. Accordingly, Lessee and Lessor agree that upon such assignment, Lessee (i)
shall acknowledge such assignment in writing by executing a Notice, Consent and
Acknowledgment of Assignment furnished by Lessor; (ii) shall promptly pay all
Rent when due to the designated Assignees, notwithstanding any defense, setoff,
abatement, recoupment, reduction or counterclaim whatsoever that Lessee may have
against Lessor; (iii) shall not permit the Lease, the Vessel Lease Documents or
any Lease Schedule so assigned to be amended or the terms thereof waived without
the prior written consent of the Assignees; (iv) shall not require the Assignees
to perform any obligations of Lessor under such Lease Schedule; (v) shall not
terminate or attempt to terminate the Lease, the Vessel Lease Documents or any
Lease Schedule on account of any default by Lessor, so long as such default does
not result in the denial of Lessee's quiet enjoyment, use and possession of the
Equipment; and (vi) acknowledges that any Assignee may reassign its rights and
interest with the same force and effect as the assignment described herein.
Lessee shall not assign this Lease, the Vessel Lease Documents or any Lease
Schedule or assign its rights in or sublet the Equipment, or any interest
therein without Lessor's and its Assignee's prior written consent, which consent
shall not be unreasonably withheld.
18. Financial Information, Lease Agreement.
18.1. Financial Information. Lessee will provide Lessor monthly
financial statements within thirty (30) days of each calendar month and annual
audited financial statements provided within ninety (90) days of fiscal
year-end. Throughout the Term, upon the reasonable request of Lessor, Lessee
shall deliver to Lessor copies of other current financial information of Lessee
and any parent entity of Lessee, which will reflect the financial condition and
operations of Lessee as well as such other information regarding Lessee
reasonably requested by Lessor or its Assignees.
18.2. Books and Records; Account Information. Lessee shall keep
adequate books and records with respect to its business activities in which
proper entries, reflecting all financial transactions, are made in accordance
with GAAP and on a basis consistent with the financial statements delivered by
Lessee and its affiliates as of the date of this Agreement. On Wednesday of each
week, Lessee shall provide Lessor a statement regarding its operating account
(ITG operating account number 2000011165039 and ITGPB operating account number
2000022044013), which statement shall include the account balance as of the
Friday of the preceding week and a list of deposits to and disbursements from
such account during such week.
18.3. Lease Agreement. If any court of competent jurisdiction should
determine that this Lease constitutes a security arrangement as opposed to a
true lease, the parties then agree that this Lease shall constitute a security
agreement within the meaning of the Uniform Commercial Code and that the Lessor
shall be considered a secured party under the provisions thereof and shall be
entitled to all the rights and remedies of a secured party and Lessee, as
debtor, grants to Lessor, as secured party, a security interest in the
Equipment; provided nothing herein shall be construed nor shall the inclusion of
this paragraph be interpreted as derogating from the stated intent and
contractual understanding of the parties that this is a true lease.
19. Default by Lessee. Lessee shall be deemed in default under this
Agreement upon the occurrence of any one of the following
Master Lease Agreement Page 9
events ("Event of Default"):
19.1. Failure to make any payment of Basic Rent within ten (10) days
of when due under this Agreement or any Lease Schedule by its due date;
19.2. Lessee's cancellation, termination, alteration, or rescission of
the Authorization for Automatic Payment without the prior approval of Lessor;
19.3. Lessee's rejection of any authorized withdrawal, payment or
entry permitted by the Authorization for Automatic Payment;
19.4. Failure to perform in any material respect any other obligation
under this Agreement, any Lease Schedule, Vessel Lease Documents or any other
written agreement between Lessee and Lessor, regardless of whether such other
agreement, lease or charter covers the same or similar maritime vessel or gaming
equipment, within thirty (30) days after receipt of written notice of default
and failure to cure; provided, however, that no notice shall be required where a
breach or threatened breach would cause irreparable harm to Lessor and Lessor
may immediately seek equitable relief in a court of competent jurisdiction to
enjoin such breach;
19.5. Lessee shall generally fail to pay its debts as they become due,
shall make an assignment for the benefit of its creditors, shall admit in
writing its inability to pay its debts as they become due, shall file a petition
under any chapter of the Federal Bankruptcy Code or any similar law, state or
federal, now or hereafter existing, shall become "insolvent" as that term is
generally defined under the Federal Bankruptcy Code, shall in any involuntary
bankruptcy case commenced against it file an answer admitting insolvency or
inability to pay its debts as they become due, or shall fail to obtain a
dismissal of such case within one hundred twenty (120) days after its
commencement or convert the case from one chapter of the Federal Bankruptcy Code
to another chapter, or be the subject of an order for relief in such bankruptcy
case, or be adjudged a bankrupt or insolvent, or shall have a custodian, trustee
or receiver appointed for, or have any court take jurisdiction of its property,
or any part thereof, in any proceeding for the purpose of reorganization,
arrangement, dissolution or liquidation, and such custodian, trustee or receiver
shall not be discharged, or such jurisdiction shall not be relinquished, vacated
or stayed within sixty (60) days of the appointment;
19.6. Lessee materially defaults under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced, any indebtedness of Lessee for money borrowed, whether such
indebtedness now exists or shall be created hereafter, which material default
(monetary or otherwise) is not cured within (30) days;
19.7. Lessee shall be dissolved, liquidated or wound up or is
enjoined, restrained, fails or is in any way prevented from maintaining its
existence as a going concern in good standing (excepting, however,
reorganizations, consolidations and/or mergers into or with, and sales to,
affiliates owned by, owning or under common control of or with Lessee and
reorganizations, consolidations and/or mergers resulting from the death of
Xxxxxxx X. Xxxxxx);
19.8. Lessee attempts to remove, sell, transfer, encumber, part with
possession or sublet any part of the Equipment without the prior written consent
of Lessor other than in the ordinary course of business or as otherwise provided
in the Vessel Lease Documents;
19.9. Any part of the Equipment is lost, stolen, materially changed or
destroyed, and is not replaced by Lessee within a reasonable period of time;
19.10. Any part of the Equipment is attached, levied upon, encumbered,
pledged, or seized under any judicial process, unless attributable to the acts
or debts of Lessor;
19.11. Any warranty or representation made or furnished to Lessor by
or on behalf of Lessee in this Lease or any Lease Schedule is false or
misleading in any material respect when made or furnished;
19.12. Failure of Lessee to maintain in full force and effect the
licenses, permits and certifications that may be required under any applicable
gaming laws for the operation of Lessee 's business;
19.13. The revocation of any gaming license of Lessee;
19.14. The denial of any gaming license application of Lessee;
19.15. Failure of Lessee to comply with all applicable gaming statutes
and regulations;
19.16. Failure of Lessee to maintain the insurance required by this
Agreement; and/or
Master Lease Agreement Page 10
19.17. Any merger, consolidation, sale, change in control of Lessee
(other than a change in control resulting from the death of Xxxxxxx X. Xxxxxx)
or any transfer of a majority of Lessee's business or assets, without Lessor's
prior written consent, such consent not to be unreasonably withheld.
20. Lessor Remedies.
20.1. Lessee acknowledges that the enforcement of this Agreement may
require approval of certain regulatory authorities and copies of all Default
Notices, legal proceedings, etc. will be forwarded to the appropriate agency as
required by state law or regulation. Lessee further acknowledges that if any
Event of Default occurs and is continuing after the expiration of any applicable
cure period, Lessor may, in addition to any and all rights and remedies it may
have at law or in equity, without notice to or demand upon any party to this
Agreement and at its sole option, terminate this Lease, all Lease Schedules and
the Vessel Lease Documents and thereafter, if Lessor has not received notice
from Lessee pursuant to Section 21.2 of its intent to exercise its option
thereunder or, if such notice is received but Lessee does not consummate the
purchase within sixty (60) days:
20.1.1. Declare all amounts remaining unpaid under this
Agreement, including without limitation the Termination Value as defined in
Section 21.2, immediately due and payable and interest shall accrue on any
outstanding balance due Lessor at a rate of 3% per annum, until paid in full;
20.1.2. Proceed by appropriate court action or other proceeding,
either at law or in equity to enforce performance by Lessee of any and all
covenants of this Agreement; 20.1.3. Enter onto Lessee's premises or the
Premises in person or by agent and take possession of the Equipment;
20.1.4. Require Lessee to return the Equipment, at Lessee's
expense, to a place reasonably designated by Lessor;
20.1.5. Render the Equipment unusable in such manner as is
reasonable under the circumstances and as may be allowed by applicable law;
20.1.6. Dispose of the Equipment in a commercially reasonable
manner, as Lessor in the good faith exercise of its discretion deems necessary
or appropriate;
20.1.7. Without demand, advertisement or notice of any kind
(except such notice as may be required under Article 9 of the Uniform Commercial
Code, and all of which are, to the extent permitted by law, hereby expressly
waived), sell, resell, lease, re-lease or dispose of the Equipment in any
commercially reasonable manner;
20.1.8. If not already the property of Lessor, purchase the
Equipment at public sale with credit on any amounts owed;
20.1.9. If not already the property of Lessor, purchase the
Equipment at private sale for a price and on such terms as is determined by an
independent appraiser appointed by Lessor to be the price and terms at which a
willing seller would be ready to sell to an able buyer;
20.1.10. Proceed immediately to exercise each and all of the
powers, rights, and privileges reserved or granted to Lessor under this
Agreement;
20.1.11. Subject to applicable and appropriate gaming laws,
rules, laws and regulations, and required approvals, take possession, sell
and/or re-lease any unit of the Equipment as Lessor may desire, in its sole
discretion without demand or notice, wherever the same may be located, without
any court order or pre-taking hearing, any and all damages occasioned by such
retaking being specifically waived herein by Lessee;
20.1.12. Take control of any and all proceeds to which Lessee is
entitled;
20.1.13. Exercise any other remedies available to a Lessor under
the Uniform Commercial Code, if applicable;
20.1.14. Immediately seek equitable relief in a court of
competent jurisdiction to enjoin a breach of this Agreement where said breach or
threatened breach would cause irreparable harm to Lessor; and/or
20.1.15. Exercise any other rights or remedies provided or
available to Lessor at law or in equity.
20.2. Notwithstanding anything to the contrary contained in this Lease
and notwithstanding that this transaction shall constitute an operating lease,
Lessor and Lessee agree that the respective rights, remedies and obligations of
the parties following an
Master Lease Agreement Page 11
Event of Default shall be subject to Article 9 of the Uniform Commercial Code
("UCC") as in effect in the State of Nevada, the same as if the Lessor were a
secured party, even if Article 9 would not otherwise be applicable. Without
limiting the generality of the foregoing, any public or private sale, lease or
other disposition of the Equipment shall comply with Section 9-610 of the UCC,
and distribution of proceeds of sale, lease or other disposition, including
without limitation application of surplus proceeds, shall be in accordance with
Section 9-608 of the UCC. Lessor further agrees that any public or private sale,
lease or other disposition of the Equipment to any party other than Lessee shall
occur at least forty-five (45) days after the date such Event of Default first
occurred.
20.3. With respect to any exercise by Lessor of its right to recover
and/or dispose of the Equipment under this Lease or any Lease Schedule, Lessee
acknowledges and agrees as follows: (i) Lessor shall have no obligation, subject
to the requirements of commercial reasonableness, to clean-up or otherwise
prepare the Equipment for disposition, (ii) Lessor may comply with any
applicable state or federal law requirements in connection with any disposition
of the Equipment and any actions taken in connection therewith shall not be
deemed to have adversely affected the commercial reasonableness of any
disposition of such Equipment, (iii) If Lessor purchases any of the Equipment at
public or private sale, Lessor may pay for the same by crediting some or all of
Lessee's obligations under this Lease or any Lease Schedule.
20.4. No waiver by Lessor, its affiliates, successors or assigns, of
any default, including, but not limited to, acceptance of late payment after the
same is due, shall operate as a waiver of any other default or of the same
default on a future occasion. In the Event of Default, Lessor shall be entitled
to recover all costs, expenses, losses, damages and legal costs (including
reasonable attorneys' fees) reasonably incurred by Lessor in connection with the
enforcement of Lessor's remedies. All rights and remedies of Lessor are
cumulative and are in addition to any other remedies provided for at law or in
equity, including the Uniform Commercial Code, if applicable, and may, to the
extent permitted by law, be exercised concurrently or separately. A termination
hereunder shall occur only upon written notice by Lessor to Lessee and no
repossession or other act by Lessor after default shall relieve Lessee from any
of its obligations to Lessor hereunder unless Lessor so notifies Lessee in
writing.
20.5. In the event of a default by Lessee, Lessor may, at its option,
declare this Agreement terminated without further liability or obligation to
Lessee other than as provided in Section 21.2.
21. Compliance with Governmental Agencies.
21.1. All services furnished hereunder shall comply with the
requirements of all governmental authorities having jurisdiction (the
"Authorities"). The terms and conditions of the Lease or any Lease Schedule
shall be subject to the approval by the Authorities, if such approval is so
required. Lessee agrees to comply with all material requirements of every
governmental authority which has jurisdiction over the Lease, the Vessel Lease
Documents or any Lease Schedule. It is understood that, if at any time either
prior to or subsequent to the initial starting date of the Lease or any Lease
Schedule, the Authorities shall render a final determination either disapproving
the terms and conditions of the Lease or any Lease Schedule or denying the
application of Lessor for a gaming license, vendor registration or casino
service supplier, as a result, directly or indirectly, of this Lease or the acts
or omissions of Lessee, or the acts, omissions or identity of persons or
entities affiliated with Lessee, or if Lessor already has such a license, the
qualifications of Lessor that then, in either of such events, the Lease or any
lease schedule shall be deemed terminated, as of the date of such disapproval or
denial, as though such date were the date originally fixed herein for the notice
of termination of the Lease or any lease schedule.
21.2. If the Lease, the Vessel Lease Documents or any Lease Schedule
is terminated for any reason prior to expiration of the Term (including, without
limitation, as a result of an Event of Default), then Lessee shall have the
option to purchase the Equipment by providing written notice to Lessor within
ten (10) days after termination and tendering payment to Lessor within sixty
(60) days after termination of (i) any amounts then due and owing under the
Lease and any lease schedule, including but not limited to such items as rent,
late charges, and taxes paid by or assessed upon Lessor, and (ii) the amount
equal to the Termination Value, as defined below, and Lessor shall transfer
title to the Equipment to Lessee and in that event the parties hereto shall have
no further liability to each other. Termination Value shall be defined as the
net present value of the remaining rentals due, including the purchase option
amount less any prepayments thereof, discounted at the original all-in yield,
for each Lease Schedule.
22. Waiver of Jury Trial. The parties hereby knowingly and voluntarily
waive their right to a jury trial on any claim or cause of action based upon or
arising out of, directly or indirectly, this Lease or any Lease Schedules, any
dealings between the parties relating to the subject matter hereof or thereof,
and/or the relationship that is being established between the parties. The scope
of this waiver is intended to be all encompassing of any and all disputes that
may be filed in any court (including, without limitation, contract claims, tort
claims, breach of duty claims, and all other common law and statutory claims).
This waiver may not be modified orally, and the waiver shall apply to any
subsequent amendment, renewals, supplement or modifications to this Lease. In
the event of litigation, this Lease may be filed as a written consent to a trial
by the court.
23. Miscellaneous.
Master Lease Agreement Page 12
23.1. Amendments or Modifications. This Lease shall not be modified or
amended except by an instrument in writing signed by or on behalf of the parties
hereto.
23.2. Binding Effect. This Lease shall be binding upon and inure to
the benefit of the parties and their respective, permitted successors, heirs,
executors, administrators, assigns, and all persons claiming by, through or
under them.
23.3. Captions, Headings and Titles. The captions, headings and titles
of the various sections of this Lease are for convenience only and are not to be
construed as confining or limiting in any way the scope or intent of the parties
or the provisions hereof. Whenever the context requires or permits, the singular
shall include the plural, the plural shall include the singular and the
masculine, feminine and neuter shall be freely interchangeable.
23.4. Compliance with All Laws. Neither party shall violate any law or
regulation including, without limitation, any gaming law or regulation or to
engage in any act or omission which tends to bring discredit upon the gaming
industry or otherwise jeopardizes the other party's ability to engage in
business with businesses licensed by any applicable regulatory authorities. Each
party shall use its good faith judgment in determining whether any such
violation, act or omission of the other party or its directors, officers or
managers, if any, places such party's business or licenses at risk and upon such
determination such party shall have the right to immediately terminate this
Lease, the Vessel Lease Documents or any Lease Schedule without further
liability to the other party, other than as provided in Section 21.2.
23.5. Conduct. Lessee acknowledges that Lessor, its subsidiaries and
affiliates, have a positive reputation in the finance and gaming industry and
that Lessor and its subsidiaries and affiliates are subject to regulation and
licensing and desire to maintain their reputation and receive positive
publicity. Lessee therefore agrees that throughout the Term, Lessee`s directors,
officers and managers will not conduct themselves in any manner that materially
adversely affects or is detrimental to, Lessor, its subsidiaries or affiliates,
and will not directly or indirectly make any oral, written or recorded private
or public statement or comment that is disparaging, critical or defamatory of
Lessor or its subsidiaries or affiliates. Lessor shall use its good faith
business judgment in determining whether the conduct of Lessee`s directors,
officers or managers materially adversely affects Lessor, its subsidiaries or
affiliates, and upon such determination Lessor shall have the right to
immediately terminate this Lease, the Vessel Lease Documents or any Lease
Schedules without further liability to Lessee.
23.6. Confidentiality. Lessor and Lessee and their respective
employees shall keep all statistical, financial, confidential, and/or personal
data with respect to the other party requested, received, developed, stored or
viewed by Lessor or Lessee in connection with this Agreement in the strictest
confidence. Lessor and Lessee agree not to divulge to third parties, without the
written consent of the other party, any such information unless: [i] the
information is known to the disclosing party prior to obtaining the same; [ii]
the information is, at the time of disclosure by the disclosing party, then in
the public domain; [iii] the information is obtained by the disclosing party
from a third party who did not receive same, directly or indirectly from the
disclosing party and who has no obligation of secrecy with respect thereto; or
[iv] the disclosing party is obligated to divulge the information to a
governmental or regulatory authority having competent jurisdiction over the
disclosing party or its business, provided that in such event the disclosing
party shall provide the other party with prior written notice and upon the
non-disclosing party's request cooperate with such party to prevent such
disclosure.
23.7. Counterparts. This Lease may be executed in as many counterparts
as may be deemed necessary and convenient, and by the different parties hereto
on separate counterparts, each of which, when so executed or otherwise
authenticated, shall be deemed to be an original, but all such counterparts
together shall constitute but one and the same document.
23.8. Effective Only Upon Execution by Authorized Officer. Neither
this Lease nor any Lease Schedule shall be deemed to constitute an offer or be
binding upon Lessor or Lessee until executed by their respective authorized
officers. No representations made by any Lessor's salespersons or anyone else
shall be binding unless incorporated herein in writing.
23.9. Entire Agreement. This Lease along with any Lease Schedules and
related instruments executed in connection therewith constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, promises, negotiations, representations or
understandings, whether written or oral, between the parties hereto relating to
the subject matter of this Lease or any Lease Schedules. Any prior agreements,
promises, negotiations, representations or understandings, either oral or
written, not expressly set forth in this Lease, any Lease Schedule, or related
instruments executed in connection therewith shall no force or effect.
23.10. Further Assurances. The parties further covenant and agree to
do, execute and deliver, or cause to be done, executed and delivered, and
covenant and agree to use their best efforts to cause their successors and
assigns to do, execute and deliver, or cause to be done, executed and delivered,
all such further acts, transfers and assurances, for implementing the intention
of the parties under this Agreement, as the parties reasonably shall request.
The parties agree to execute any additional instruments
Master Lease Agreement Page 13
or agreements necessary to carry out the intent of this Lease.
23.11. Governing Law. The substantive and procedural laws of the State
of Nevada shall govern the validity, construction, interpretation, performance
and enforcement of this Agreement and the parties agree to jurisdiction in
Nevada without reference to its conflict of laws provisions regardless of the
location of the Equipment. The parties also hereby agree that any action and/or
proceeding in connection with this Agreement shall only be brought in the venue
of Xxxxx County, Nevada.
23.12. Governing Law (Sovereign Nations Only). In the event that
Lessee is an Indian Tribe as defined by the Indian Gaming Regulatory Act, 25
U.S.C. ss.2701 et seq. or a sovereign nation, the parties agree that the
immediate section above shall be null and void and Lessee hereby grants a
limited waiver of its Sovereign Immunity, for the sole benefit of Lessor, such
waiver being limited to actions or claims by Lessor against Lessee, or by Lessee
against Lessor, which shall arise directly from, or are related to, this
Agreement. Any action brought by or against Lessor may be brought only in the
United States District Court most near Lessee`s primary place of business
regardless of the location of the Equipment. The law to be applied by said
United States District Court in any such action shall be the law of the State of
Nevada, including the Uniform Commercial Code, as adopted by the State of
Nevada, without reference to any Nevada choice of law provisions. Without in any
way limiting the generality of the foregoing, Lessee expressly authorizes any
governmental or other agency authorities who have the right and duty under
applicable law to take any and all action authorized or ordered by any court,
including without limitation, entering the land of Lessee and repossessing the
Equipment or otherwise giving effect to any judgment entered. It is the intent
of the parties that Lessor will be able to obtain possession of the Equipment in
accordance with the rights afforded it under applicable laws and/or any court
order.
23.13. Governmental Regulations. Notwithstanding anything in this
Lease, the Vessel Lease Documents or any Lease Schedule to the contrary, in the
event any federal, state, local or other governmental body's statutes, laws,
rules, or regulations are enacted/promulgated, the impact of which will
materially impact the methods and/or costs of Lessor under this Lease, the
Vessel Lease Documents or any Lease Schedule, then, in that event, Lessor, upon
written notice to Lessee, may request a renegotiation of this Lease, the Vessel
Lease Documents or any Lease Schedule. Any modifications to this Lease, the
Vessel Lease Documents or any Lease Schedule resulting from such renegotiation
shall become effective on the latest date as permitted by the governmental body.
In the event the parties are unable to reach a satisfactory agreement during
said renegotiations, Lessor shall have the right to cancel the Lease, the Vessel
Lease Documents and all Lease Schedules at any time by not less than 60 days
prior written notice to Lessee, whereupon the Lease, all Lease Schedules and the
Vessel Lease Documents shall be null and void and Lessee shall have the rights
described in Section 21.2.
23.14. Independence of Parties. All persons hired or employed by each
party in the discharge of this Lease shall be considered employees of that party
and not of any other party to this Lease and shall be solely and exclusively
under the hiring or employing party's direction and control. Neither party nor
any of its employees [i] shall be held or deemed in any way to be an agent,
employee or official of the other party, or [ii] shall have the authority to
bind the other party in any manner whatsoever. Each party further agrees to have
all persons employed by it properly covered by worker's compensation or
employer's liability insurance, as required by law and to assume and pay at its
own cost all taxes and contributions required by an employer under any and all
unemployment insurance, old age pensions, and other applicable so-called Social
Security Acts.
23.15. Intellectual Property Rights not conveyed. Nothing in this
Lease shall be construed as to grant or convey to Lessee any right, title or
interest in and to any intellectual property rights (including software, patent,
copyright and/or trademark) to any part of the Equipment.
23.16. Lease Irrevocable. This Lease is irrevocable for the full Term
hereof and the Rent shall not xxxxx by reason of termination of Lessee's right
of possession and/or the taking of possession by the Lessor or for any other
reason; provided, however, that nothing in this Section 23.16 shall be construed
as limiting Lessor's or Lessee's right to terminate this Lease, any Lease
Schedule and/or the Vessel Lease Documents prior to the expiration of the Term
in accordance with the provisions of this Lease, the Lease Schedules and/or the
Vessel Lease Documents.
23.17. License and Permits. Each party shall obtain and maintain on an
active and current basis, all licenses, permits, registrations, approvals and
other authority as may be required from any applicable federal, state, tribal
and local governments and agencies having jurisdiction over the subject matter
of this Lease and any Lease Schedule.
23.18. Multiple Second Parties. If more than one Lessee is named in
this Lease or a Lease Schedule the liability of each shall be joint and several.
Lessor may bring and prosecute a separate action against separate, individual
Lessees to enforce any one or more Lessees' liability hereunder, whether or not
any action is brought against any other Lessee or any other person and whether
or not any Lessee or any other person is joined in such action or actions.
Nothing shall prohibit Lessor from exercising its rights against any separate
Lessee and any other person simultaneously, jointly and/or severally. Each
Lessee shall be bound by each and every ruling, order and judgment obtained by
Lessor against any Lessee in respect of the obligations, whether or not such
Lessee is
Master Lease Agreement Page 14
a party to the action or proceeding in which such ruling, order or judgment is
issued or rendered.
23.19. No Joint Venture, Partnership or Agency Relationship. Neither
this Lease nor any Lease Schedule shall create any joint venture or partnership
between the parties. Nothing contained in this Lease and any Lease Schedule
shall confer upon either party any proprietary interest in, or subject a party
to any liability for or in respect of the business, assets, profits, losses or
obligations of the other. Nothing herein contained shall be read or construed so
as to make the parties a partnership, nor shall anything contained herein be
read or construed in any way to restrict the freedom of either party to conduct
any business or activity whatsoever without any accountability to the other
party. Neither party shall be considered to be an agent or representative of the
other party or have any authority or power to act for or undertake any
obligation on behalf of the other party except as expressly authorized by the
other party in writing. Any such unauthorized representation or action shall be
considered a breach of this Lease and any Lease Schedule.
23.20. Nondiscrimination. Neither party shall discriminate against any
person on the basis of race, color, sex, national origin, disability, age,
religion, handicapping condition (including AIDS or AIDS related conditions), or
any other class protected by United States federal law or regulation.
23.21. Non-Party Beneficiaries. Nothing herein, whether express or
implied shall be construed to give any person other than the parties, and their
successors and permitted assigns, any legal or equitable right, remedy of claim
under or in respect of this Lease and any Lease Schedule; but this Lease and any
Lease Schedule shall be held to be for the sole and exclusive benefit of the
parties, and their successors and assigns.
23.22. Notices. Except as otherwise required by law, all notices
required herein shall be in writing and sent by prepaid certified mail or by
courier, addressed to the party at the address of the party specified herein or
such other address designated in writing. Notices are deemed to have been
received [i] on the fourth business day following posting thereof in the U.S.
Mail, properly addressed and postage prepaid, [ii] when received in any medium
if confirmed or receipted for in the manner customary in the medium employed, or
[iii] if acknowledged in any manner by the party to whom the communication is
directed.
23.23. Privileged Licenses.
23.23.1. Lessee acknowledges that Lessor, its parent company,
subsidiaries and affiliates, are businesses that are or may be subject to and
exist because of privileged licenses issued by governmental authorities. If
requested to do so by Lessor, Lessee, and its agents, employees and
subcontractors, shall obtain any license, qualification, clearance or the like
which shall be reasonably requested or required of any of them by Lessor or any
regulatory authority having jurisdiction over Lessor or any parent company,
subsidiary or affiliate of Lessor. If Lessee, or its agents, employees, or
subcontractors, fails to satisfy such requirement or if Lessor or any parent
company, subsidiary or affiliate of Lessor is directed to cease business with
Lessee or its agents, employees or subcontractors by any such authority, or if
Lessor shall in good faith determine, in Lessor's sole and exclusive judgment,
that Lessee, or any of its agents, employees, subcontractors, or representatives
[i] is or might be engaged in, or is about to be engaged in, any activity or
activities, or [ii] was or is involved in any relationship, either of which
could or does jeopardize Lessor's business or such licenses, or those of a
parent company, subsidiary or affiliate, or if any such license is threatened to
be, or is, denied, curtailed, suspended or revoked, this Lease, all Lease
Schedules and the Vessel Lease Documents may be immediately terminated by Lessor
without further liability to Lessee other than as provided in Section 21.2.
23.23.2. Lessee further acknowledges its understanding that it is
illegal for a denied gaming license applicant or a revoked gaming licensee, or a
business entity under such a person's control, to enter or attempt to enter into
a contract with Lessor, its parent company, subsidiaries or any affiliate,
without the prior approval of the Nevada Gaming Commission or other applicable
gaming authorities. Lessee affirms that it is not such a person or entity and
that it is not under the control of such a person; and agrees that this Lease,
all Lease Schedules and the Vessel Lease Documents are each subject to immediate
termination by Lessor, without further liability to Lessee, other than as
provided in Section 21.2, if Lessee is or becomes such a person or entity or is
under the control of such a person.
23.24. Pronouns. Masculine or feminine pronouns shall be substituted
for the neuter form and vice versa, and the plural shall be substituted for the
singular form and vice versa, in any place or places herein in which the context
requires such substitution or substitutions.
23.25. Regulatory Approvals. Certain transactions contemplated by this
Lease and any Lease Schedule may require the approval of governmental regulatory
authorities. Those transactions are entirely conditional upon and subject to the
prior approval of such authority. If the transactions are not so approved, they
shall be null and void ab initio. The parties shall cooperate with one another
and move promptly with due diligence and in good faith to request any required
or appropriate regulatory approvals. If the action or inaction of any
governmental regulatory authority renders the parties unable to consummate any
transaction contemplated by
Master Lease Agreement Page 15
this Lease and any Lease Schedule which thereby denies a party a material
benefit contemplated by this Lease and any Lease Schedule resulting in the
unjust enrichment of the other party, the parties shall negotiate in good faith
an amendment to this Lease and any Lease Schedule which fairly compensates the
party denied the benefit.
23.26. Riders. In the event that any riders are attached hereto and
made a part hereof and if there is a conflict between the terms and provisions
of any rider, including any Lease Schedule and the terms and provisions herein,
the terms and provisions of the rider or Lease Schedule shall control to the
extent of such conflict.
23.27. Setoffs. The monies owed by Lessee herein shall be paid in full
when due under the terms of this Lease and any Lease Schedule without right of
setoff of any monies owed by Lessor to Lessee under any other agreement or for
any other purpose.
23.28. Severability. Each term, covenant, condition or provision of
this Lease and any Lease Schedule shall be viewed as separate and distinct, and
in the event that any such term, covenant, condition or provision shall be held
by a court of competent jurisdiction to be invalid, the remaining provisions
shall continue in full force and effect.
23.29. Subcontracting. Lessee shall not subcontract any of its
obligations herein, or any portion thereof, without Lessor's prior written
consent. Consent by Lessor to any subcontracting of Lessee`s obligations or
responsibilities as set forth in this Lease and any Lease Schedule shall not be
deemed to create a contractual relationship between Lessor and the
subcontracting party.
23.30. Suitability. Lessee understands and acknowledges that this
Lease and any Lease Schedule, at Lessor's discretion, may be subject to Lessee
and its principals completing and submitting to Lessor a due diligence
compliance questionnaire (including an Authorization for the Release of
Information) and being found suitable by Lessor's Compliance Committee.
Notwithstanding any other provision in this Lease and any Lease Schedule to the
contrary, Lessor may terminate this Lease and any Lease Schedule without further
obligation or liability to Lessee if, in the judgment of Lessor's Compliance
Committee, the relationship with Lessee or its principals could subject Lessor
to disciplinary action or cause Lessor to lose or become unable to obtain or
reinstate any federal, state and/or foreign registration, license or approval
material to Lessor's business or the business of any Lessor subsidiary.
23.31. Survival of Indemnities. All indemnities of Lessee shall
survive and continue in full force and effect for events occurring prior to the
return of the Equipment to the Lessor, notwithstanding the expiration or
termination of the Term.
23.32. Time Periods. In the event the provisions of this Lease or any
Lease Schedule require any act to be done or to be taken hereunder on a date
which is a Saturday, Sunday or legal holiday, such act or action shall be deemed
to have been validly done or taken on the next succeeding day which is not a
Saturday, Sunday or legal holiday.
23.33. Waiver. The failure of any party to insist, in any one or more
instances, upon performance of any of the provisions of this Lease or any Lease
Schedule or to take advantage of any of its rights hereunder shall not operate
as a waiver thereof or preclude any other or further exercise thereof or the
exercise of any other right or power. Accordingly, the acceptance of rent by
Lessor after it is due shall not be deemed to be a waiver of any breach by
Lessee of its obligations under this Lease or any Lease Schedule.
[SIGNATURES ON FOLLOWING PAGE]
Master Lease Agreement Page 16
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date set forth above.
ITG VEGAS, INC., a Nevada corporation PDS GAMING CORPORATION, a Minnesota
corporation
By:/S/Xxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Its: President Its: President
ITG PALM BEACH, LLC, a Delaware limited
liability company
By:ITG Vegas Inc, Sole Member
By:/s/Xxxxxxx X. Xxxxxx
Its: President
Master Lease Agreement Page 17
Transaction No. 1188-L01-02
Transaction No. 1192-L01-02
LEASE SCHEDULE NO. T3
(Sale Lease Back Gaming Devices)
(With Options)
THIS LEASE SCHEDULE NO. T3 ("Lease Schedule") is attached to and made
a part of the Master Lease Agreement of even date herewith ("Lease") between PDS
GAMING CORPORATION, a Minnesota corporation, its successors and assigns
("Lessor"), and ITG VEGAS, INC., a Nevada corporation, and ITG PALM BEACH, LLC,
a Delaware limited liability company, jointly and severally as lessees
(collectively "Lessee").
1. Definitions. Terms not otherwise defined in this Lease Schedule shall
have the meaning attributed to such terms in the Lease.
2. Description of Equipment. The equipment listed on Attachment "A" to this
Lease Schedule (the "Equipment") is added to the equipment leased under the
Lease and made subject to the provisions of the Lease. The estimated capitalized
cost of the Equipment is $500,000.00 ("Capitalized Equipment Cost"). Lessor
shall inspect and audit the Equipment prior to any funding pursuant to the
Lease, at Lessee's sole expense. Notwithstanding anything in the Lease to the
contrary, Lessor shall not finance any labor, shipping, installation or training
costs related to the Equipment.
3. Commencement Date. The Commencement Date for the Equipment leased under
this Lease Schedule shall be the Acceptance Date set forth in the Certificate of
Delivery and Acceptance executed by Lessee in connection with this Lease
Schedule.
4. Term. The Term shall commence on the Commencement Date and shall
continue for (36) consecutive months. Except as otherwise provided in the Lease,
this Lease Schedule shall be non-cancelable for the duration of the Term or any
Renewal Term (defined below).
5. Basic Rent And Payments. The Basic Rent due each month during the Term
for the Equipment is as follows:
a. The initial payment of rent (interest only, months one through six,
inclusive) under this Lease Schedule in an amount equal to $5,416.67 ("Initial
Rent") shall be initially due and payable on the Commencement Date ("First
Payment Date"). The standard payment of basic rent (principal and interest, but
not including applicable taxes) under this Lease Schedule in an amount equal to
$16,578.17 ("Basic Rent") shall be due and payable on the seventh (7th) month of
the Term and thereafter through the thirty-sixth (36th) month of the Term in
accordance with the Lease and this Schedule.
b. All remaining payments of Basic Rent shall be due and payable on
the same calendar day of each month for the remainder of the Term.
6. Fees And Charges.
a. Origination and Documentation Fee. Lessee agrees to pay to Lessor
an Origination and Documentation Fee for this Lease Schedule in an amount not to
exceed $6,250.00, which shall be due and payable on or before the First Payment
Date.
b. Closing Fee. Lessee agrees to pay to Lessor a Closing Fee for this
Lease Schedule in an amount equal to two percent (2%) of the total Equipment
cost, or $10,000.00.
c. Imposts. In addition to the monthly Basic Rent due as set forth
above, Lessee agrees to pay and indemnify Lessor for, and hold Lessor harmless
from and against all taxes, assessments, fees and charges (hereinafter called
"Imposts") together with any penalties, fines or interest thereon levied and
imposed by any governmental agency or unit (state, local, federal, domestic or
foreign), regardless of party assessed against: (i) with respect to the Lease or
this Lease Schedule; (ii) upon the Equipment, its value or any interest of
Lessor and/or Lessee therein; (iii) upon or on account of any sale, rental,
purchase, ownership, possession, use, operation, maintenance, delivery or return
of the Equipment, or value added thereto, other than taxes imposed on or
measured by the next income or capital of Lessor. The amount of the Impost shall
become Rent to be paid by Lessee upon Lessor's demand. If any Impost relates to
a period during the Term (initial or renewed, if applicable) (no matter when it
is assessed) then Lessee's liability for such Impost shall continue,
notwithstanding the expiration or termination of the Lease or this Lease
Schedule, until all such Imposts are paid in full by Lessee.
7. Security Deposit. Due and payable on the Commencement Date, Lessee shall
pay to Lessor, a Security Deposit in an amount equal to $5,416.67. The Security
Deposit will be held by the Lessor for the Term of the Lease and will be, at
Lessor's sole discretion,
Lease Schedule Page 1
either (i) returned to Lessee upon satisfactory completion of the terms and
conditions of the Lease; or (ii) if Lessee is not in default under the Term
(initial and/or renewed, if applicable) of the Lease or this Lease Schedule,
applied to Lessee's final payment of Basic Rent.
8. OPTIONS AND NOTICE.
a. Lessor grants Lessee the following option(s):
(i) Purchase Option: At the expiration of the Term (initial or
renewed, if applicable), Lessee may purchase all but not less than all of the
Equipment described in the Lease Schedule for the fair market value of the
Equipment as of the date of expiration of the Term ("Exercise Price") as
determined by an independent appraiser mutually selected by Lessor and Lessee
(the "Purchase Option"); provided, however, that if Lessee has replaced any Unit
within the twelve (12) month period prior to the exercise of the Purchase
Option, the Exercise Price shall be reduced by an amount equal to the excess of
the book value of the replacement Unit over the book value of the replaced Unit
(determined as if such Unit had not been replaced and was still in use as of the
date of calculation).
(ii) Renewal Option: At the expiration of the Term, if Lessee is
not in default of the Lease or this Lease Schedule and has not had a materially
adverse change in its financial condition since the Commencement Date, Lessee
may renew the Lease Term for a period of four (4) to twelve (12) months
("Renewal Term") at the then fair market rental as determined by Lessor in its
sole discretion, based upon the Exercise Price and a rate mutually acceptable to
Lessor and Lessee (the "Renewal Option").
(iii) Option to Return Equipment: At the expiration of the Term
(initial and/or renewed, if applicable), Lessee may return the Equipment to
Lessor at Lessor's warehouse facility in Las Vegas, Nevada, or such other
facility designated by Lessor, according to the terms of the Lease.
b. Unless otherwise specified above, Lessee must give written notice
of the exercise of any Purchase Option or Renewal Option 120 days prior to the
expiration of a term. If written notice of exercise of any Purchase Option or
Renewal Option is not received within a notification period as specified herein,
the applicable term shall be automatically renewed for an additional 120 days at
the most recent Basic Rent as set forth under the Lease Schedule (the "Automatic
Renewal Term"). Upon timely receipt of such notice of exercise, receipt of the
payment of all Rent due under the Lease and payment of the Exercise Price,
Lessor will, with exercise of the Purchase Option, execute and deliver to Lessee
a Xxxx of Sale for the Equipment described in the Lease Schedule. Upon failure
of the Lessor to so deliver a Xxxx of Sale, this Option shall then constitute a
conveyance of the Equipment in accordance herewith and Lessee is hereby
appointed attorney-in-fact of Lessor to execute and deliver all instruments
necessary to convey title to Lessee in accordance herewith, which power of
attorney is coupled with an interest and irrevocable. Payment in full of the
Exercise Price shall be due and payable on or before the expiration of the Term,
Renewal Term or Automatic Renewal Term. At the expiration of the Term, Renewal
Term or Automatic Renewal Term, Lessee may, upon at least 120 days advance
written notice, notify Lessor of its decision to terminate the Lease Schedule
and thereupon Lessee shall, at Lessee's expense, return the Equipment to Lessor
at a facility designated by Lessor, according to the terms of the Lease. Lessee
shall in all respects remain obligated under the Lease for payment of Rent,
care, maintenance, delivery, use and insurance of the Equipment until Lessor
inspects and accepts the Equipment, which inspection and acceptance shall be
undertaken promptly and in good faith. In the event it shall at any time be
determined that by reason of the options hereby given or otherwise that the
lease of the Equipment to which the Purchase Option or the Renewal Option
applies was in fact a sale to the Lessee of the Equipment, the Lessee agrees
that neither it nor its successors or assigns has or will have any claim or
cause of action against Lessor, its successors or assigns, for any reason for
loss sustained by virtue of such determination.
c. Lessee acknowledges that the Equipment sold by Lessor under the
Purchase Option is being sold in an "as is, where is" condition. Lessor makes,
and will make, no representations or warranties regarding the Equipment, its
suitability for Lessee's purpose, or its compliance with any laws. Lessee hereby
assumes all liability for the Equipment and agrees to indemnify Lessor per the
terms of the Lease for any claims whatsoever arising out of the purchase of the
Equipment upon, except for claims, liens, liabilities and other encumbrances
arising solely through Lessor. Notwithstanding the foregoing, however, Lessor
hereby represents, warrants covenants and agrees that upon exercise of the
Purchase Option, Lessor shall deliver good, valid and marketable title to the
Equipment, free and clear of any and all claims, liens, liabilities and other
encumbrances.
9. UCC Filings. Lessee hereby ratifies any and all UCC-1 and/or UCC-3
statements and/or amendments thereto related to this Lease Schedule or the
Equipment previously filed by Lessor and authorizes Lessor to file any and all
UCC-1 and/or UCC-3 statements and/or amendments thereto related to this Lease
Schedule or the Equipment, without Lessee's authentication, to the extent
permitted by applicable law.
Lease Schedule Page 2
10. Incorporation of Lease. All of the provisions of the Lease are
incorporated by reference herein as if set forth fully herein.
Lease Schedule Page 3
Dated this 6th day of July, 2004.
ITG VEGAS, INC., a Nevada corporation PDS GAMING CORPORATION, a Minnesota
corporation
By:/S/Xxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Its: President Its: President
ITG PALM BEACH, LLC, a Delaware limited
liability company
By:ITG Vegas Inc, Sole Member
By:/s/Xxxxxxx X. Xxxxxx
Its: President
Lease Schedule Page 4
ATTACHMENT A
EQUIPMENT
Various used Class III Gaming Devices installed and in use on the Maritime
Vessel named the Palm Beach Princess (IMO Number: 8402937, Registration Number:
14348-84-D (Panama), DNV Class Number: 02720) or the Maritime Vessel named the
Empress II (United States Official Number 998517), each to be docked at Port of
Palm Beach, Xxx Xxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxx Xxxxx, XX 00000
Lease Schedule Page 5
Transaction No. 1188-L01-02
Transaction No. 1192-L01-02
LEASE SCHEDULE NO. T4
(Sale PDS Gaming Devices)
(With Options)
THIS LEASE SCHEDULE NO. T4 ("Lease Schedule") is attached to and made
a part of the Master Lease Agreement of even date herewith ("Lease") between PDS
GAMING CORPORATION, a Minnesota corporation, its successors and assigns
("Lessor"), and ITG VEGAS, INC., a Nevada corporation, and ITG PALM BEACH, LLC,
a Delaware limited liability company, jointly and severally as lessees
(collectively "Lessee").
1. Definitions. Terms not otherwise defined in this Lease Schedule shall
have the meaning attributed to such terms in the Lease.
2. Description of Equipment. The equipment listed on Attachment "A" to this
Lease Schedule (the "Equipment") is added to the equipment leased under the
Lease and made subject to the provisions of the Lease. The capitalized cost of
the Equipment is $1,056,891.75 ("Capitalized Equipment Cost"). Notwithstanding
anything in the Lease to the contrary, Lessor shall not finance any labor,
shipping, installation or training costs related to the Equipment.
3. Commencement Date. The Commencement Date for the Equipment leased under
this Lease Schedule shall be the Acceptance Date set forth in the Certificate of
Delivery and Acceptance executed by Lessee in connection with this Lease
Schedule.
4. Term. The Term shall commence on the Commencement Date and shall
continue for (36) consecutive months. Except as otherwise provided in the Lease,
this Lease Schedule shall be non-cancelable for the duration of the Term or any
Renewal Term (defined below).
5. Basic Rent And Payments. The Basic Rent due each month during the Term
for the Equipment is as follows:
a. The initial payment of rent (interest only, months one through six,
inclusive) under this Lease Schedule in an amount equal to $6,885.61 ("Initial
Rent") shall be initially due and payable on the Commencement Date ("First
Payment Date"). The standard payment of basic rent (principal and interest, but
not including applicable taxes) under this Lease Schedule in an amount equal to
$35,117.23 ("Basic Rent") shall be due and payable on the seventh (7th) month of
the Term and thereafter through the thirty-sixth (36th) month of the Term in
accordance with the Lease and this Schedule.
b. All remaining payments of Basic Rent shall be due and payable on
the same calendar day of each month for the remainder of the Term.
6. Fees And Charges.
a. Origination and Documentation Fee. Lessee agrees to pay to Lessor
an Origination and Documentation Fee for this Lease Schedule in an amount not to
exceed $6,250.00, which shall be due and payable on or before the First Payment
Date.
b. Closing Fee. Lessee agrees to pay to Lessor a Closing Fee for this
Lease Schedule in an amount equal to two percent (2%) of the total Equipment
cost, or $12,711.90.
c. Imposts. In addition to the monthly Basic Rent due as set forth
above, Lessee agrees to pay and indemnify Lessor for, and hold Lessor harmless
from and against all taxes, assessments, fees and charges (hereinafter called
"Imposts") together with any penalties, fines or interest thereon levied and
imposed by any governmental agency or unit (state, local, federal, domestic or
foreign), regardless of party assessed against: (i) with respect to the Lease or
this Lease Schedule; (ii) upon the Equipment, its value or any interest of
Lessor and/or Lessee therein; (iii) upon or on account of any sale, rental,
purchase, ownership, possession, use, operation, maintenance, delivery or return
of the Equipment, or value added thereto, other than taxes imposed on or
measured by the next income or capital of Lessor. The amount of the Impost shall
become Rent to be paid by Lessee upon Lessor's demand. If any Impost relates to
a period during the Term (initial or renewed, if applicable) (no matter when it
is assessed) then Lessee's liability for such Impost shall continue,
notwithstanding the expiration or termination of the Lease or this Lease
Schedule, until all such Imposts are paid in full by Lessee.
Lease Schedule Page 1
7. Security Deposit. Due and payable on the Commencement Date, Lessee shall
pay to Lessor, a Security Deposit in an amount equal to $6,885.61. The Security
Deposit will be held by the Lessor for the Term of the Lease and will be, at
Lessor's sole discretion, either (i) returned to Lessee upon satisfactory
completion of the terms and conditions of the Lease; or (ii) if Lessee is not in
default under the Term (initial and/or renewed, if applicable) of the Lease or
this Lease Schedule, applied to Lessee's final payment of Basic Rent.
8. OPTIONS AND NOTICE.
a. Lessor grants Lessee the following option(s):
(i) Purchase Option: At the expiration of the Term (initial or
renewed, if applicable), Lessee may purchase all but not less than all of the
Equipment described in the Lease Schedule for the fair market value of the
Equipment as of the date of expiration of the Term ("Exercise Price") as
determined by an independent appraiser mutually selected by Lessor and Lessee
(the "Purchase Option"); provided, however, that if Lessee has replaced any Unit
within the twelve (12) month period prior to the exercise of the Purchase
Option, the Exercise Price shall be reduced by an amount equal to the excess of
the book value of the replacement Unit over the book value of the replaced Unit
(determined as if such Unit had not been replaced and was still in use as of the
date of calculation).
(ii) Renewal Option: At the expiration of the Term, if Lessee is
not in default of the Lease or this Lease Schedule and has not had a materially
adverse change in its financial condition since the Commencement Date, Lessee
may renew the Lease Term for a period of four (4) to twelve (12) months
("Renewal Term") at the then fair market rental as determined by Lessor in its
sole discretion, based upon the Exercise Price and a rate mutually acceptable to
Lessor and Lessee (the "Renewal Option").
(iii) Option to Return Equipment: At the expiration of the Term
(initial and/or renewed, if applicable), Lessee may return the Equipment to
Lessor at Lessor's warehouse facility in Las Vegas, Nevada, or such other
facility designated by Lessor, according to the terms of the Lease.
b. Unless otherwise specified above, Lessee must give written notice
of the exercise of any Purchase Option or Renewal Option 120 days prior to the
expiration of a term. If written notice of exercise of any Purchase Option or
Renewal Option is not received within a notification period as specified herein,
the applicable term shall be automatically renewed for an additional 120 days at
the most recent Basic Rent as set forth under the Lease Schedule (the "Automatic
Renewal Term"). Upon timely receipt of such notice of exercise, receipt of the
payment of all Rent due under the Lease and payment of the Exercise Price,
Lessor will, with exercise of the Purchase Option, execute and deliver to Lessee
a Xxxx of Sale for the Equipment described in the Lease Schedule. Upon failure
of the Lessor to so deliver a Xxxx of Sale, this Option shall then constitute a
conveyance of the Equipment in accordance herewith and Lessee is hereby
appointed attorney-in-fact of Lessor to execute and deliver all instruments
necessary to convey title to Lessee in accordance herewith, which power of
attorney is coupled with an interest and irrevocable. Payment in full of the
Exercise Price shall be due and payable on or before the expiration of the Term,
Renewal Term or Automatic Renewal Term. At the expiration of the Term, Renewal
Term or Automatic Renewal Term, Lessee may, upon at least 120 days advance
written notice, notify Lessor of its decision to terminate the Lease Schedule
and thereupon Lessee shall, at Lessee's expense, return the Equipment to Lessor
at a facility designated by Lessor, according to the terms of the Lease. Lessee
shall in all respects remain obligated under the Lease for payment of Rent,
care, maintenance, delivery, use and insurance of the Equipment until Lessor
inspects and accepts the Equipment, which inspection and acceptance shall be
undertaken promptly and in good faith. In the event it shall at any time be
determined that by reason of the options hereby given or otherwise that the
lease of the Equipment to which the Purchase Option or the Renewal Option
applies was in fact a sale to the Lessee of the Equipment, the Lessee agrees
that neither it nor its successors or assigns has or will have any claim or
cause of action against Lessor, its successors or assigns, for any reason for
loss sustained by virtue of such determination.
c. Lessee acknowledges that the Equipment sold by Lessor under the
Purchase Option is being sold in an "as is, where is" condition. Lessor makes,
and will make, no representations or warranties regarding the Equipment, its
suitability for Lessee's purpose, or its compliance with any laws. Lessee hereby
assumes all liability for the Equipment and agrees to indemnify Lessor per the
terms of the Lease for any claims whatsoever arising out of the purchase of the
Equipment upon, except for claims, liens, liabilities and other encumbrances
arising solely through Lessor. Notwithstanding the foregoing, however, Lessor
hereby represents, warrants covenants and agrees that upon exercise of the
Purchase Option, Lessor shall deliver good, valid and marketable title to the
Equipment, free and clear of any and all claims, liens, liabilities and other
encumbrances.
9. UCC Filings. Lessee hereby ratifies any and all UCC-1 and/or UCC-3
statements
Lease Schedule Page 2
and/or amendments thereto related to this Lease Schedule or the Equipment
previously filed by Lessor and authorizes Lessor to file any and all UCC-1
and/or UCC-3 statements and/or amendments thereto related to this Lease Schedule
or the Equipment, without Lessee's authentication, to the extent permitted by
applicable law.
10. Incorporation of Lease. All of the provisions of the Lease are
incorporated by reference herein as if set forth fully herein.
Lease Schedule Page 3
Dated this 6th day of July, 2004.
ITG VEGAS, INC., a Nevada corporation PDS GAMING CORPORATION, a Minnesota
corporation
By:/S/Xxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Its: President Its: President
ITG PALM BEACH, LLC, a Delaware limited
liability company
By:ITG Vegas Inc, Sole Member
By:/s/Xxxxxxx X. Xxxxxx
Its: President
Lease Schedule Page 4
ATTACHMENT A
EQUIPMENT
141 Class III Gaming Devices to be delivered by PDS installed and in use on the
Maritime Vessel named the Palm Beach Princess (IMO Number: 8402937, Registration
Number: 14348-84-D (Panama), DNV Class Number: 02720) or the Maritime Vessel
named the Empress II (United States Official Number 998517), each to be docked
at Port of Palm Beach, Xxx Xxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxx Xxxxx, XX 00000
Lease Schedule Page 5
Transaction No. 1188-L01-02
Transaction No. 1192-L01-02
LEASE SCHEDULE NO. T5
(New Gaming Devices)
(With Options)
THIS LEASE SCHEDULE NO. T5 ("Lease Schedule") is attached to and made
a part of the Master Lease Agreement of even date herewith ("Lease") between PDS
GAMING CORPORATION, a Minnesota corporation, its successors and assigns
("Lessor"), and ITG VEGAS, INC., a Nevada corporation, and ITG PALM BEACH, LLC,
a Delaware limited liability company, jointly and severally as lessees
(collectively "Lessee").
1. Definitions. Terms not otherwise defined in this Lease Schedule shall
have the meaning attributed to such terms in the Lease.
2. Description of Equipment. The equipment listed on Attachment "A" to this
Lease Schedule (the "Equipment") is added to the equipment leased under the
Lease and made subject to the provisions of the Lease. The capitalized cost of
the Equipment is $1,864,405.00 ("Capitalized Equipment Cost"). Lessor shall
approve all sales orders and invoices related to the Equipment prior to any
funding. Notwithstanding anything in the Lease to the contrary, Lessor shall not
finance any labor, shipping, installation or training costs related to the
Equipment.
3. Commencement Date. The Commencement Date for the Equipment leased under
this Lease Schedule shall be the Acceptance Date set forth in the Certificate of
Delivery and Acceptance executed by Lessee in connection with this Lease
Schedule.
4. Term. The Term shall commence on the Commencement Date and shall
continue for (36) consecutive months. Except as otherwise provided in the Lease,
this Lease Schedule shall be non-cancelable for the duration of the Term or any
Renewal Term (defined below).
5. Basic Rent And Payments. The Basic Rent due each month during the Term
for the Equipment is as follows:
a. The initial payment of rent (interest only, months one through six,
inclusive) under this Lease Schedule in an amount equal to $20,197.72 ("Initial
Rent") shall be initially due and payable on the Commencement Date ("First
Payment Date"). The standard payment of basic rent (principal and interest, but
not including applicable taxes) under this Lease Schedule in an amount equal to
$61,816.84 ("Basic Rent") shall be due and payable on the seventh (7th) month of
the Term and thereafter through the thirty-sixth (36th) month of the Term in
accordance with the Lease and this Schedule.
b. All remaining payments of Basic Rent shall be due and payable on
the same calendar day of each month for the remainder of the Term.
6. Fees And Charges.
a. Origination and Documentation Fee. Lessee agrees to pay to Lessor
an Origination and Documentation Fee for this Lease Schedule in an amount not to
exceed $12,500.00, which shall be due and payable on or before the First Payment
Date.
b. Closing Fee. Lessee agrees to pay to Lessor a Closing Fee for this
Lease Schedule in an amount equal to two percent (2%) of the total Equipment
cost, or $37,288.10.
c. Imposts. In addition to the monthly Basic Rent due as set forth
above, Lessee agrees to pay and indemnify Lessor for, and hold Lessor harmless
from and against all taxes, assessments, fees and charges (hereinafter called
"Imposts") together with any penalties, fines or interest thereon levied and
imposed by any governmental agency or unit (state, local, federal, domestic or
foreign), regardless of party assessed against: (i) with respect to the Lease or
this Lease Schedule; (ii) upon the Equipment, its value or any interest of
Lessor and/or Lessee therein; (iii) upon or on account of any sale, rental,
purchase, ownership, possession, use, operation, maintenance, delivery or return
of the Equipment, or value added thereto, other than taxes imposed on or
measured by the next income or capital of Lessor. The amount of the Impost shall
become Rent to be paid by Lessee upon Lessor's demand. If any Impost relates to
a period during the Term (initial or renewed, if applicable) (no matter when it
is assessed) then Lessee's liability for such Impost shall continue,
notwithstanding the expiration or termination of the Lease or this Lease
Schedule, until all such Imposts are paid in full by Lessee.
Lease Schedule Page 1
7. Security Deposit. Due and payable on the Commencement Date, Lessee shall
pay to Lessor, a Security Deposit in an amount equal to $20,197.72. The Security
Deposit will be held by the Lessor for the Term of the Lease and will be, at
Lessor's sole discretion, either (i) returned to Lessee upon satisfactory
completion of the terms and conditions of the Lease; or (ii) if Lessee is not in
default under the Term (initial and/or renewed, if applicable) of the Lease or
this Lease Schedule, applied to Lessee's final payment of Basic Rent.
8. OPTIONS AND NOTICE.
a. Lessor grants Lessee the following option(s):
(i) Purchase Option: At the expiration of the Term (initial or
renewed, if applicable), Lessee may purchase all but not less than all of the
Equipment described in the Lease Schedule for the fair market value of the
Equipment as of the date of expiration of the Term ("Exercise Price") as
determined by an independent appraiser mutually selected by Lessor and Lessee
(the "Purchase Option"); provided, however, that if Lessee has replaced any Unit
within the twelve (12) month period prior to the exercise of the Purchase
Option, the Exercise Price shall be reduced by an amount equal to the excess of
the book value of the replacement Unit over the book value of the replaced Unit
(determined as if such Unit had not been replaced and was still in use as of the
date of calculation).
(ii) Renewal Option: At the expiration of the Term, if Lessee is
not in default of the Lease or this Lease Schedule and has not had a materially
adverse change in its financial condition since the Commencement Date, Lessee
may renew the Lease Term for a period of four (4) to twelve (12) months
("Renewal Term") at the then fair market rental as determined by Lessor in its
sole discretion, based upon the Exercise Price and a rate mutually acceptable to
Lessor and Lessee (the "Renewal Option").
(iii) Option to Return Equipment: At the expiration of the Term
(initial and/or renewed, if applicable), Lessee may return the Equipment to
Lessor at Lessor's warehouse facility in Las Vegas, Nevada, or such other
facility designated by Lessor, according to the terms of the Lease.
b. Unless otherwise specified above, Lessee must give written notice
of the exercise of any Purchase Option or Renewal Option 120 days prior to the
expiration of a term. If written notice of exercise of any Purchase Option or
Renewal Option is not received within a notification period as specified herein,
the applicable term shall be automatically renewed for an additional 120 days at
the most recent Basic Rent as set forth under the Lease Schedule (the "Automatic
Renewal Term"). Upon timely receipt of such notice of exercise, receipt of the
payment of all Rent due under the Lease and payment of the Exercise Price,
Lessor will, with exercise of the Purchase Option, execute and deliver to Lessee
a Xxxx of Sale for the Equipment described in the Lease Schedule. Upon failure
of the Lessor to so deliver a Xxxx of Sale, this Option shall then constitute a
conveyance of the Equipment in accordance herewith and Lessee is hereby
appointed attorney-in-fact of Lessor to execute and deliver all instruments
necessary to convey title to Lessee in accordance herewith, which power of
attorney is coupled with an interest and irrevocable. Payment in full of the
Exercise Price shall be due and payable on or before the expiration of the Term,
Renewal Term or Automatic Renewal Term. At the expiration of the Term, Renewal
Term or Automatic Renewal Term, Lessee may, upon at least 120 days advance
written notice, notify Lessor of its decision to terminate the Lease Schedule
and thereupon Lessee shall, at Lessee's expense, return the Equipment to Lessor
at a facility designated by Lessor, according to the terms of the Lease. Lessee
shall in all respects remain obligated under the Lease for payment of Rent,
care, maintenance, delivery, use and insurance of the Equipment until Lessor
inspects and accepts the Equipment, which inspection and acceptance shall be
undertaken promptly and in good faith. In the event it shall at any time be
determined that by reason of the options hereby given or otherwise that the
lease of the Equipment to which the Purchase Option or the Renewal Option
applies was in fact a sale to the Lessee of the Equipment, the Lessee agrees
that neither it nor its successors or assigns has or will have any claim or
cause of action against Lessor, its successors or assigns, for any reason for
loss sustained by virtue of such determination.
c. Lessee acknowledges that the Equipment sold by Lessor under the
Purchase Option is being sold in an "as is, where is" condition. Lessor makes,
and will make, no representations or warranties regarding the Equipment, its
suitability for Lessee's purpose, or its compliance with any laws. Lessee hereby
assumes all liability for the Equipment and agrees to indemnify Lessor per the
terms of the Lease for any claims whatsoever arising out of the purchase of the
Equipment upon, except for claims, liens, liabilities and other encumbrances
arising solely through Lessor. Notwithstanding the foregoing, however, Lessor
hereby represents, warrants covenants and agrees that upon exercise of the
Purchase Option, Lessor shall deliver good, valid and marketable title to the
Equipment, free and clear of any and all claims, liens, liabilities and other
encumbrances.
9. UCC Filings. Lessee hereby ratifies any and all UCC-1 and/or UCC-3
statements
Lease Schedule Page 2
and/or amendments thereto related to this Lease Schedule or the Equipment
previously filed by Lessor and authorizes Lessor to file any and all UCC-1
and/or UCC-3 statements and/or amendments thereto related to this Lease Schedule
or the Equipment, without Lessee's authentication, to the extent permitted by
applicable law.
10. Incorporation of Lease. All of the provisions of the Lease are
incorporated by reference herein as if set forth fully herein.
Lease Schedule Page 3
Dated this 6th day of July, 2004.
ITG VEGAS, INC., a Nevada corporation PDS GAMING CORPORATION, a Minnesota
corporation
By:/S/Xxxxxxx X. Xxxxxx By:/s/Xxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Its: President Its: President
ITG PALM BEACH, LLC, a Delaware limited
liability company
By:ITG Vegas Inc, Sole Member
By:/s/Xxxxxxx X. Xxxxxx
Its: President
Lease Schedule Page 4
ATTACHMENT A
EQUIPMENT
Approximately 459 Class III Gaming Devices and a Player Tracking System with any
related equipment installed and in use on the Maritime Vessel named the Palm
Beach Princess (IMO Number: 8402937, Registration Number: 14348-84-D (Panama),
DNV Class Number: 02720) or the Maritime Vessel named the Empress II (United
States Official Number 998517), each to be docked at Port of Palm Beach, Xxx
Xxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxx Xxxxx, XX 00000
Lease Schedule Page 5
