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Minnesota-Minnetonka-130 Cheshire Lane Sublease - Grand Casinos Inc. and Lakes Gaming Inc.

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  • Commercial Lease. Start a state-specific lease for the rental of commercial property. Specify the term and rent due, as well as whether the landlord or tenant is responsible for property taxes, insurance, and maintenance and repairs.
  • Commercial Sublease. When a tenant vacates commercial property before the lease term has expired, it may be able to rent the premises to a third party. The tenant would be the sublessor and the third party would be the sublessee. Besides preparing a sublease, both parties will want to review the provisions for assignment or subletting in the original lease agreement between the landlord and the sublessor.
  • Sublease Agreement. Tenants of residential property should prepare a sublease agreement if they are seeking to sublease a room or the entire apartment or house to a third party. All parties should review the original lease agreement to see if there are any restrictions on subletting or assigning the premises.
  • Triple Net Lease. Triple net leases are a type of commercial leases where the tenant has to pay for property taxes, insurance, utilities, and maintenance, in addition to the monthly rent.
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         This Sublease is entered into effective as of the 30th day of December,
1998, between GRAND CASINOS, INC., a Minnesota corporation ("Sublessor"), and
LAKES GAMING, INC., a Minnesota corporation ("Sublessee").


         A. Sublessor currently leases certain premises located at 130 Cheshire
Lane in Minnetonka, Minnesota from Carlson Real Estate Company, a Minnesota
Limited Partnership ("Landlord") pursuant to a Lease between Sublessor and
Landlord dated February 1, 1996 as amended by First Amendment to Lease dated
August 23, 1996 (collectively, the "Master Lease").

         B. Sublessor wishes to sublease to Sublessee and Sublessee wishes to
sublease from Sublessor the Premises demised under the Master Lease.

         NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the parties hereto hereby agree as follows:

         1.  DEFINITIONS. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed thereto in the Master Lease.

         2.  SUBLEASE. Sublessor hereby subleases to Sublessee and Sublessee
subleases from Sublessor the Premises of the Master Premises (the "Sublease

         3.  USE OF SUBLEASE PREMISES. Sublessee shall have the right to use the
Sublease Premises for the purpose of general office use and for no other

         4.  TERM. The term of this Sublease (the "Sublease Term") shall
commence on December 31, 1998, and shall continue thereafter until August 31,
2011, except that this Sublease shall terminate upon any sale as contemplated
under Section 23 of the Master Lease.

         5.  RENTS. Sublessee agrees to pay for the Sublease Premises all Rent
as provided in the Master Lease, including any and all applicable sales and/or
rent taxes thereon. Each rental payment shall be paid directly to Landlord at
Two Carlson Parkway, Suite 100, Plymouth, Minnesota 55447, or at such other
address as Sublessor may specify from time to time, five (5) business days
before such payment is due under the Master Lease, without prior notice, demand,
offset, deduction or abatement of any kind.

         6. ADDITIONAL RENT. Sublessee shall also pay five (5) business days
before such payment is due under the Master Lease, without prior notice, demand,
offset, deduction or abatement of any kind, all other amounts due under the
Master Lease.


<PAGE>   2

     7. MASTER LEASE. Sublessee assumes and agrees to be bound by all of the
terms, covenants and conditions to be performed or observed by Sublessor as the
Tenant under the Master Lease with respect to the Sublease Premises (except as
the Master Lease may be inconsistent with the terms, covenants and conditions of
this Sublease) with the same diligence as if Sublessor were the Landlord under
the Master Lease and Sublessee were the Tenant thereunder, and in the case of
any breach thereof by Sublessee, Sublessor shall have all of the rights against
Sublessee as would be available to the Landlord against the Tenant under the
Master Lease if such breach were by the Tenant thereunder.

     8. DEFAULT. In the event (a) Sublessee defaults in the payment of any rent,
additional rent or other amount which Sublessee is required to pay under this
Sublease, (b) Sublessee defaults in any other obligation under this Sublease and
such default continues for thirty (30) days after Sublessee receives notice of
such default from Sublessor, (c) any proceeding is begun by or against Sublessee
to subject the assets of Sublessee to any bankruptcy or insolvency law or for an
appointment of a receiver of Sublessee or for any of Sublessee's assets, or (d)
Sublessee makes a general assignment of Sublessee's assets for the benefit of
creditors, then, in addition to any rights Sublessor may have under Section 7
above, Sublessor may, with or without terminating this Sublease, cure the
default and charge Sublessee all costs and expenses of doing so, and Sublessor
also may re-enter the Sublease Premises without terminating this Sublease,
remove all persons and property therefrom, and regain possession of the Sublease
Premises, without waiver or loss of any of Sublessor's rights under this
Sublease, including its right to payment of rent, additional rent and other

     9. SUBLESSOR COOPERATION. Sublessor agrees to cooperate with Sublessee in
all respects as reasonably requested by Sublessee in its dealings with Landlord
under the Master Lease without charge (except reasonable out of pocket expenses
directly related thereto). In the event Sublessee locates a third party
purchaser acceptable to Landlord and Landlord's lender, Sublessor agrees to
promptly cooperate and diligently assist Sublessee in all respects to consummate
the sale to such third party purchaser as provided for in Section 23 of the
Master Lease.

    10. INSURANCE. Sublessee shall provide its own liability insurance coverage
with respect to the operation of its business in the Sublease Premises. The
insurance shall have such limits and be issued by companies reasonably
acceptable to Sublessor and such policies shall list Sublessor as an additional
insured. Sublessee shall, at Sublessor's request, deliver certificates to
Sublessor to evidence the insurance to be maintained by Sublessee pursuant to
this Section, which certificates shall provide that the insurance may not be
canceled or materially changed in scope or amount unless thirty (30) days
advance written notice is given to Sublessor.

    11. RIGHT TO INSPECT. Sublessor shall have the right to inspect the
Sublease Premises during reasonable business hours and upon giving notice to

    12. ACCEPTANCE OF PREMISES. Sublessee agrees to accept the Sublease Premises
in its


<PAGE>   3

"AS IS" condition. All alterations, improvements or renovations to the Sublease
Premises shall be performed at Sublessee's sole expense.

         13. REPAIR OBLIGATIONS. Sublessee shall, at Sublessee's expense,
promptly perform any repairs or maintenance with respect to the Sublease
Premises which Sublessor has agreed to perform under the Master Lease.

         14. NOTICES. Whenever any notice, demand, approval, consent, request or
election is given or made pursuant to this Sublease, it shall be in writing.
Communications to Sublessor shall be addressed as follows:

                        Grand Casinos, Inc.
                        3930 Howard Hughes Parkway
                        Las Vegas, Nevada 89109
                        Attention: President

or to such other addresses as may have been specified by prior written notice to
the parties. Communications to Sublessee shall be addressed as follows:

                        Lakes Gaming, Inc.
                        130 Cheshire Lane
                        Minnetonka, Minnesota 55305
                        Attention: President

or to such address as may have been specified by prior written notice to the
parties. Any communications so addressed shall be deemed duly served if
personally delivered or if mailed by registered or certified mail, return
receipt requested.

         15. RIGHTS OF SUBLESSEE. Sublessee agrees that it is not hereby
acquiring any of Sublessor's rights or options under the Master Lease including
but not limited to Sublessor's Option to Purchase as more specifically set forth
in Section 23 of the Master Lease.

         16. TERMINATION OF MASTER LEASE. If for any reason the term of the
Master Lease is terminated prior to the expiration of this Sublease, the
Sublease shall thereupon be terminated.

         17. SUBLEASE. The parties hereby state their intention that this
Sublease is intended to be a sublease of Sublessor's interest in the Sublease
Premises and is not intended to terminate, alter, assign or amend Sublessor's
leasehold interest in the Sublease Premises under the Master Lease.

         18. ASSIGNMENT SUBLETTING. Sublessee shall have the right to assign
this Sublease or to sublet any portion of the Sublease Premises to the full
extent that Sublessor has the right to assign or sublet under the Master Lease.


<PAGE>   4

         19. GOVERNING LAW. This Sublease shall be governed by and interpreted
in accordance with the laws of the State of Minnesota, without giving effect to
its conflict of law principles.

         20. QUIET ENJOYMENT. Sublessee, upon payment of all rent required
hereunder and performance of each of the covenants, agreements and conditions of
this Sublease, shall lawfully and quietly hold, occupy and enjoy the Sublease
Premises during the Sublease Term.


<PAGE>   5

         IN WITNESS WHEREOF, the parties have caused this Sublease to be
executed as of the date first written above.

Sublessor:                                          Sublesse

GRAND CASINOS, INC.,                                LAKES GAMING, INC.,
a Minnesota corporation                             a Minnesota corporation

By:  /s/ Timothy Cope                               By:  /s/ Timothy Cope     
     -----------------------                             -----------------------
     Timothy Cope                                        Timothy Cope
     Chief Financial Officer                             Chief Financial Officer