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EXHIBIT 10.3
LEASE
This lease, dated the 20th day of December 1999, is between sureBET Casinos,
Inc., as Lessee, and Black Hawk Hotel Corporation, as Lessor.
THE LESSEE AND LESSOR, IN CONSIDERATION OF THIS LEASING AGREE AS FOLLOWS:
1. THE LEASED PREMISES. In consideration of the payment of the rent and
the performance of the covenants and the agreements by the Lessee set
forth herein, the Lessor does hereby lease to the Lessee the Xxxxxx
Tract, Xxxx 0 - 0 xxx xxx Xxxx 00 xx xx Xxx 0 and Lots 9, 10, 11, 12,
13 and part of Lot 14, all in Xxxxx 00, Xxxx xx Xxxxx Xxxx, Xxxxxx xx
Xxxxxx, Xxxxx of Colorado along with all personal property located in
or on the premises and more particularly described in Exhibit A
attached hereto and the exclusive license to the name "Lilly Belle's
Casino, all of which are referred to as "The Premises."
2. TERMS AND RENT.
2.1 The premises, with all appurtenances are leased to the Lessee
for a period of five years commencing on the first day of the
month following the issuance of a temporary or permanent
Colorado gaming license, but not later than October 1, 2000.
2.2 The monthly rental payment for the first year, beginning with
the granting of a temporary or permanent Colorado Gaming
License to Lessee, but not to be later than October 1, 2000,
shall be the greater of $45,000.00 monthly base rent or 4.9%
of the Adjusted Gross Proceeds (AGP as defined by the State of
Colorado), less Colorado gaming taxes and Black Hawk device
fees. If after the best efforts of Lessee in the most timely
means, a permanent or temporary gaming license to operate
Lilly Belle's Casino is not approved from the state by October
1, 2000, then Lessee may at Lessee's option, pay $10,000.00
per month plus all triple net lease expenses until the license
is issued or until March 31, 2001, whichever is earlier. If
the Colorado gaming license is not issued by March 31, 2001,
then this lease shall be null and void and all monies and
security deposit forfeited to Lessor. All monies paid
including security deposit and any improvements made by Lessee
to the property will be forfeited to Lessor under any
conditions Lessee does not fulfill this lease including, but
not limited to, the non-issuance of a Colorado gaming license
to Lessee.
2.3 For the period January 1, 2001 through December 31, 2001, the
monthly payment shall be the greater of $50,000.00 base rent
or 4.9% (four point nine percent) of AGP, less Colorado gaming
taxes and Black Hawk device fees
2.4 For the period January 1, 2002 through December 31, 2002, the
monthly payment shall be $55,000.00 base rent or 4.9% of AGP,
less gaming taxes and device fees, as described above.
2.5 For the period January 1, 2003 through December 31, 2003, the
monthly payment shall be $60,000.00 base rent or 4.9% of AGP,
less gaming taxes and device fees, as described above.
2.6 Commencing January 1, 2004, the base rent shall increase 7%
compounded for each year.
2.7 The base rent shall be due, without notice, in advance, on the
first day of each month. The percentage rent, if any, shall be
paid in arrears on the fifteenth of the following month for
the previous month. Lessee shall furnish Lessor or Lessors
agent, monthly, with complete copies of all accounting records
for income and expenses, including but not limited to, copy of
signed Colorado gaming return, taxes, fees, insurance, food,
liquor, trash, services, maintenance and all other income and
expenses. Lessor shall have the right to audit and examine the
complete books and records of Lessee, upon reasonable notice.
If any additional expense is caused to Lessee as a result of
this examination of the books, then this additional reasonable
expense shall be at Lessor's expense. Lessee shall furnish to
Lessor or Lessor's agent by the end of the month following
year end, at Lessee's expense, an audited year end P&L
statement on the entire casino and any associated
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operations. The Lessee shall pay the rent for the premises
above-described and all payments, documentation, etc.
described above shall be made directly to Black Hawk Hotel
Corporation, Lessor, or at Lessor's option, to agent for
Lessor.
3. MAINTENANCE OF PREMISES. The Lessee shall, at the expiration of this
lease, barring improvements and changes, surrender the premises in as
good a condition as when the Lessee entered the premises, ordinary wear
and tear excepted. The Lessee shall keep all sidewalks on and around
the premises free and clear of ice and snow, keep the entire exterior
premises free from all litter, dirt, debris and obstructions, and keep
the premises in a clean and sanitary condition as required by the
ordinances of the state, city and county in which the property is
situated. The Lessee agrees to keep all the improvements upon the
property, including, but not limited to, inventory, fixtures,
mechanical systems, security systems and all related security
equipment, exterior buildings with first class paint and maintenance,
sewer connection, plumbing, wiring, rock walls, parking lots, glass,
and any and all other components etc., in good maintenance and repair
at Lessee's expense. This lease shall be considered a triple net lease
with any and all expenses pertaining to the property, buildings, taxes,
operation, insurance, maintenance, and any other related expenses,
etc., whatsoever, paid by Lessee. The Lessor shall be responsible for
the basic components of the building, including exterior walls,
foundation and roof. Lessee may, at its expense, install an elevator.
4. IMPROVEMENTS TO PREMISES. Any improvements by Lessee over $10,000.00
must be approved in advance by Lessor in writing.
5. ASSIGNMENT AND SUBLEASE. The Lessee shall not sublet any part of the
premises, nor assign this lease, or any interest therein, without the
written consent of the Lessor. Lessee shall have the right to assign
its interest to a subsidiary corporation or affiliate without requiring
prior written consent of Lessor. Lessee intends to assign this
agreement to an operating entity to be formed under Colorado law in
conformity with the rules and requirements of the Colorado Gaming
Commission.
6. USE. The Lessee shall use the premises only as gaming property as
allowed by law, which shall include, but not be limited to, off track
betting, bars, restaurants, parking, lodging and any reasonable uses
associated with a casino in Black Hawk, and shall not use the premises
for any purposes prohibited by the laws of the United States, or the
State of Colorado, or of the ordinances of the City of Black Hawk, or
the County of Xxxxxx, and shall neither permit nor suffer any
disorderly conduct. No noxious, offensive or illegal activity shall be
carried on upon the premises nor shall anything be done or kept on the
premises which may become a public or private nuisance or which may
cause embarrassment, disturbance, to others on adjacent or nearby
property.
7. DAMAGE TO PREMISES. The Lessee shall neither hold, nor attempt to hold,
the Lessor, its agents, contractors and employees, liable for any
injury, damage, claims or loss to person or property occasioned by any
accident, condition or casualty to, upon, or about the premises
including, but not limited to, defective wiring, the breaking or
stopping of the plumbing or sewage upon the premises, unless such
accident, condition or casualty is directly caused by intentional or
reckless acts or omission of the Lessor. Notwithstanding any duty the
Lessor may have hereunder to repair or maintain the premises, in the
event that the improvements upon the premises are damaged by the
negligent, reckless or intentional act or omission of the Lessee or any
employees, agents, invites, licensees or contractors, the Lessee shall
bear the full cost of such repair or replacement and monthly rent shall
be due and payable according to the lease. The Lessee shall hold
Lessor, Lessor's agents and their respective successors and assigns,
harmless and indemnified from all injury, loss, claims or damage to any
person or property while on the demised premises or any other part of
Lessor's property, or arising in any way out of Lessee's business,
which is occasioned by an act or omission of Lessee, its employees,
agents, invites, licensees or contractors. The Lessor is not
responsible for any damage or destruction to the Lessee's personal
property. The Lessee shall neither permit nor suffer said premises to
be endangered by overloading, nor said property to be used for any
purpose which would render the insurance thereon void, or the insurance
risk more hazardous, nor make any alterations 'in, or changes in, upon,
or about said premises, without first obtaining the written consent of
the Lessor.
8. DESTRUCTION OF PREMISES. If the property or the premises shall be
destroyed in whole, or in part by fire, the elements, or other casualty
and if, in the sole opinion of the Lessor, they cannot be repaired
within one
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hundred and twenty (120) days from said injury and the Lessor informs
the Lessee it does not desire to repair same and desires to terminate
this lease, then this lease shall terminate on the date of such injury.
In the event of such termination, the Lessee shall immediately
surrender the possession of the premises and all rights therein to the
Lessor, Lessee shall be granted a license to enter the premises at
reasonable times to remove the Lessee's property, and shall not be
liable for rent accruing subsequent to said event. The Lessor shall
have the right to immediately enter and take possession of the premises
and shall not be liable for any loss, damage or injury to the property
or person of the Lessee or occupancy of, in or upon the premises.
If the Lessor repairs the premises within one hundred and twenty (120)
days, this lease shall continue in full force and effect and the Lessee
shall not be required to pay rent for any portion of said one hundred
and twenty (120) days during which the premises are wholly unfit for
occupancy.
9. INSURANCE. Lessee shall obtain and keep in full force, at Lessee's
expense, a complete insurance policy commencing at the time Lessor
closes on the purchase of the Xxxxxxx property. Lessor and Xxxxxx
Xxxxxxx shall be named as a named insured, and policy must be a full
replacement policy for any damage or misplacement, including structure
and contents as applicable. During the entire time of the lease, Lessee
shall provide liability insurance in the amount of $2,500,000 and name
Lessor as an additional insured. All insurance to cover all property
including all parking areas included in this lease. During this lease
and renewal period(s), Lessor may request these limits be raised within
reasonable limits and Lessee shall cooperate at Lessee's expense with
these reasonable requests. Lessee shall provide copies of insurance
policies to Lessor.
10. REMARKETING OF PROPERTY. The Lessee shall permit the Lessor to market
for sale or lease, leased premises, at any time, 120 days prior to the
end of this lease.
11. LESSOR'S INSPECTION . The Lessee shall allow the Lessor and Lessor's
agent to enter upon the property during normal business hours. Lessor
or its agents shall not take any action that will interfere with
Lessee's business or disturb Lessee's employees or customers.
12. TAXES. Commencing at the time that Lease payments begin, the Lessee
shall be responsible for paying all taxes connected with all leased
properties including, but not limited to real estate taxes, parking
impact fees, city, county, state and federal taxes, special
improvements district taxes and fees, assessments, personal property
taxes and all gaming related taxes including, but not limited to,
gaming equipment and any other entities used in business. Lessee shall
furnish to Lessor, or Lessor's agent, monthly real estate taxes based
upon the most recent mill levy and tax xxxx. These tax payments are to
be kept in a joint savings account by Lessor and Lessee for the purpose
of paying the taxes when due. Any interest shall belong to Lessee.
Lessor shall inform Lessee of all real estate tax increases imposed by
County, City, State or Federal agencies.
13. UTILITIES. The Lessee shall be responsible for paying, including, but
not limited to, electric, gas, water, sewer, special improvement
assessments, phone, refuse disposal, janitorial services and all other
required maintenance services.
14. NO WAIVER OF BREACH . No assent, expressed or implied, to any breach or
default of any one or more of the agreements hereof shall be deemed or
taken to be a waiver of any succeeding or other breach or default.
15. HOLDOVER. If, after the expiration of this lease, the Lessee shall
remain in possession of the premises and continue to pay rent without a
written agreement as to such possession, then such tenancy shall be
regarded as a month-to-month tenancy, at a monthly rental, payable in
advance, equivalent to the last month's rent paid under this lease, and
subject to all the terms, escalations, etc. and conditions of this
lease.
16. DEPOSIT. At the execution of the lease, Lessee will deposit 200,000
shares of common stock of sureBET Casinos, Inc. (OTCBB: DICE) in the
name of Lessor, with Lessor's attorney as a deposit. The Lessor may
apply the deposit to cure any default under the terms of this lease and
shall account to the Lessee for the balance. The Lessee may not apply
the deposit hereunder to the payment of the rent reserved hereunder or
the performance of other obligations. At the termination of this lease,
and there being no default, 200,000 shares of common stock of sureBET
Casinos, Inc. shall be returned to Lessee.
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17. PARKING LOT. All structures are to be removed and the addresses of 305,
311 and 000 Xxxxxxx Xx., are to be converted to a paved parking lot
next to Lilly Belle's at Lessee's expense and responsibility,
contingent upon approval by all applicable government agencies. Should
final approval be unobtainable after Lessee's best efforts, Lessee
shall not be obligated to do same, but shall keep these structures in
first class condition; a shelter shall be constructed around the water
sources located at 000 Xxxxxxx Xx. to prevent damage from water
freezing, or Lessee may place utilities underground, at Lessee's
expense.
18. LESSOR'S REMEDIES FOR BREACH . If the Lessee shall be in arrears in
payment of any installment of rent, or any portion thereof, or in
default of any other covenants or agreements set forth in this lease,
and the default remains uncorrected for a period of ten (10) days after
the Lessor has given written notice thereof pursuant to applicable law,
then the Lessor may, at the Lessor's option, undertake any of the
following remedies without limitation: (a) declare the term of the
lease ended; (b) terminate the Lessee's right to possession of the
premises and reenter and repossess the premises pursuant to applicable
provisions of the Colorado Forcible Entry and Detainer Statute; (c)
recover all present and future damages, costs and other relief to which
the Lessor is entitled; (d) pursue breach of contract remedies; and/or
(e) pursue an and all available remedies in law or equity. In the event
possession is terminated by a reason of default prior to expiration of
the term, the Lessee shall be responsible for the rent occurring for
the remainder of the term, subject to the Lessor's duty to mitigate
such damages. Pursuant to applicable law [1340-104(d.5), (e.5) and
13-40-107.5, C.R.S.] which is incorporated by this reference, in the
event repeated or substantial default(s) under the lease occur, the
Lessor may terminate the Lessee's possession upon a written Notice to
Quit, without a right to cure. Upon such termination, the Lessor shall
have available any and all of the above-listed remedies.
19. ATTORNEY FEES. In the event any dispute arises concerning the terms of
this lease or the non-payment of any sums under this lease, and the
matter is turned over to an attorney, the party prevailing in such
dispute shall be entitled, in addition to other damages and costs, to
receive reasonable attorneys' fees from the other party.
20. LATE CHARGES. In the event any payment required hereunder is not made
within ten (10) days after the payment is due, a late charge in the
amount of 10% of the payment will be paid by the Lessee.
21. CONDEMNATION. In the event of a condemnation or other taking by a
governmental agency, all proceeds for the premises of Lessor shall be
paid to the Lessor hereunder, the Lessee waiving all right to any such
payments. However all proceeds for business interruption or loss of
business shall be paid to lessee.
22. INSOLVENCY OF LESSEE. This lease is made with the express understanding
and agreement that 'in the event the Lessee becomes insolvent, the
Lessor may declare this lease ended, and all rights of the Lessee
hereunder shall terminate and cease.
23. REMOVAL OF PROPERTY AT TERMINATION . At the termination of this lease,
Lessor shall retain possession of all items included in lease and all
replacements thereto. Lessee may remove all of its personal property,
whether or not attached to the leased premises, so long as it does not
cause damage to the premises, and Lessee repairs any damage caused by
such removal, at Lessee's expense.
24. LICENSING. Lessee and all applicable parties shall immediately apply
for all necessary licenses upon signing of this lease, including, but
not limited to, gaming, liquor, building, etc., at Lessee's expense,
and furnish to Lessor copies of gaming license application(s).
25. NO LIENS. Lessee shall not cause any lien to be placed on, including,
but not limited to, properties, or any of its equipment owned by
Lessor. A lien waiver must be signed for all construction and or work
on any property or items owned by Lessor and a lien waiver notice shall
be posted in a conspicuous location on building or property.
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26. OPTION TO PURCHASE. Lessee shall have the option to purchase the
premises for the sum of $5,800,000 between June 1, 2003 and May 30,
2005. In the event Lessee exercises its option to extend this Lease
then in that event, the purchase price shall be increased by 7%
compounded per year, for each year, or apportioned part of each year,
from the base price of $5,800,000. To exercise this option, Lessee
shall submit its notice of intent to exercise option through Lessor or
Lessor's agent. Purchase shall include all inventory, the trade name
Lilly Belle's, Real Estate, rights, equipment, improvements and any
other items included in this lease.
27. CONFIDENTIALLY. All terms and conditions of this lease shall remain
fully confidential and non-disclosure by all parties and by all third
parties with the exception that Lessee, Lessor or their agents may
supply material to banks, lenders or financial groups for the purpose
of loans and financial decisions. A copy of this lease will be supplied
to the Colorado Gaming Commission.
28. OPTION TO RENEW. Lessee shall have, at its option, the right to renew
this lease for three (3) additional terms of five (5) years each.
29. TERMS OF LESSORS MORTGAGE. Any mortgage(s) or security interest(s) by
Lessor encumbering the premises shall provide for the right of
prepayment and release of the leased premises for an amount that does
not exceed the applicable exercise price of Lessee's option to
purchase.
Any mortgage or lien securing the property shall contain the following
language: "Mortgagee hereby consents to the lease of the property and
equipment by Lessor to Lessee pursuant to the terms of this lease.
Mortgagee agrees that the rights of Lessee under the lease shall remain
in full force and effect and Lessee's possession of the leased premises
and the equipment thereon under the lease will remain undisturbed by
mortgagee during the term of the lease so long as Lessee satisfies all
of its obligations under the lease. This lease shall survive and will
be honored by Mortgagee and any subsequent purchaser in the event of
default by Lessor and foreclosure of the leased property.
30. CONTINGENT LEASE. This lease is entirely contingent on Black Hawk Hotel
Corporation closing on its option to purchase from Xxxxxx Xxxxxxx, by
January 31, 2000, 000 Xxxxxxx Xx., Xxxxx Xxxx, Xxxxxxxx.
31. LEASING OF PARKING. Lessor may continue to lease out current parking
spaces and collect rents from those until Lessee opens for operation.
32. REAL ESTATE COMMISSIONS. Lessee shall not be obligated for any real
estate commission or fees payable to Lessor's agent(s) in connection
with this transaction and lessor shall indemnify Lessee against any
claim to commissions or fees and all cost associated therewith
including, reasonable attorney's fees.
33. PROTECTION OF PROPERTY. Lessee covenants and agrees that nothing shall
be done or kept on the premises which might impair the value of the
premises or which would constitute waste.
34. NEW STREETSCAPE. It is understood that the City of Black Hawk or
another Government Agency may purchase, condemn or otherwise make use
of some property in front of, or behind, all the properties on Xxxxxxx
Street for a new streetscape plan or wall rebuilding or other uses, and
if any property is thus used, it shall not change any of the terms of
this lease or Lessee's purchase options.
35. NO RELIANCE . Lessee has not relied upon any projections, figures,
estimates, etc., oral or written and shall hold Lessor and his agent
harmless of such supplied by Lessor or his agent. Lessee acknowledges
to making an informed decision based upon its own due diligence and
legal advice from attorneys, professionals, accountants, etc. and
tenant is well experienced in gaming matters, leases, Real Estate and
takes full responsibility for all decisions in these matters.
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36. NOTICES . All notices shall be in writing and be personally delivered,
faxed or sent by first class mail, unless otherwise provided by law, to
the respective parties.
37. PARTIAL INVALIDITY. If any term or provision of this lease shall be
invalid or unenforceable, the remainder of this lease shall not be
affected thereby and shall be valid and enforceable to the full extent
permitted by law.
38. BINDING EFFECT. This lease shall be binding on the parties, their
personal representatives, successors and assigns. If there is more than
one entity or persons which are the Lessees under this lease, all
covenants and agreements herein to be performed by the Lessees shall be
joint and several.
39. PURCHASE OF sureBET SHARES. Lessor shall purchase 250,000 shares of
Class A common stock in sureBET Casinos, Inc. for the sum of $250,000
cash to be paid to Lessee on or before March 1, 2000. The shares shall
bear a restrictive legend and not be fully transferable for a period of
twelve (12) months from issuance. Lessor shall also be granted an
option to purchase an additional 265,000 shares of sureBET Class A
common stock at $2.25 per share for a period of five years. In the
event that Lessor does not complete the purchase of the initial 250,000
shares, then in that event, this agreement and the underlying Lease
shall be null and void and all consideration paid by Lessee, in cash or
stock, shall be returned to Lessee.
40. EXECUTION BY FACSIMILE . Facsimile copies of this lease will be
accepted as binding, to be followed up with original signed and
notarized copies to each party.
LESSOR LESSEE
Black Hawk Hotel Corporation sureBET Casinos, Inc.
By: /s/ Xxxxx X. Xxxxx, Xx. By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------- --------------------------------
Xxxxx X. Xxxxx, Xx. Xxxxxxx X. Xxxxxxx
President and Secretary President
0000 Xxxxx Xxxxxxxxxx Xxxx. 0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx XX 00000 Xxxxxxxxx XX 00000
Date: 12/24/99 Date: 12/20/99
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XXXXX XX XXXXXXXX XXXXX XX XXXXXXX
Xxxxxx xx Xxxxxxxx Xxxxxx of Escambia
The foregoing instrument was
The foregoing instrument was acknowledged before me this 20th
acknowledged before me this 24th day of Dec, 1999, by Xxxxxxx X.
day of Dec, 1999, by Xxxxx X. Xxxxxxx who is personally known to
Xxxxx, Jr., who is personally known me or produced identification in
to me or produced identification in the form of _____________________
the form of Colorado Drivers _________________ and acknowledged
License and acknowledged that that he executed the same for the
he/she executed the same for the uses and purposes therein
uses and purposes therein expressed.
expressed.
/s/ Xxxxxxx X Xxxxxxx
/s/ Xxxxx X. Xxxxx NOTARY PUBLIC
NOTARY PUBLIC
My commission CC622168
My commission expires 1/21/2001 Expires March 15, 2001
0000 X Xxxxxxxx Xxxx
Xxxxxxxxx XX 00000
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