AMF Bowling Centers v. Rio Ventures, Ltd. and Rio Club, LLC

Opinion

ACCEPTED 04-15-00525-CV FOURTH COURT OF APPEALS SAN ANTONIO, TEXAS 12/2/2015 4:11:00 PM KEITH HOTTLE CLERK

CASE NO.04-15-00525-CV

FILED IN 4th COURT OF APPEALS IN THE SAN ANTONIO, TEXAS FOURTH COURT OF APPEALS 12/2/2015 4:11:00 PM SAN ANTONIO,TEXAS KEITH E. HOTTLE Clerk

AMF BOWLING CENTERS,INC.

Appellant

RIO VENTURES,LTD., AND RIO CLUB,LLC, Appellees

Appeal from Cause No.2015cv03002 In the County Court at Law No.10 Bexar County, Texas Honorable Jason Wolff,Presiding

BRIEF FOR APPELLANT

WILSON,ELSER,MOSKOWITZ,EDELMAN &DICKER,LLP Lee L. Cameron, Jr. State Bar No. 03675380 lee.cameronjr@wilsonelser.com Leonard E. Hoffman,III State Bar No. 09789700 Leonard.Hoffman@wilsonelser.com Krishna M. Oropeza State Bar No. 24037353 901 Main Street, Suite 4800 Dallas, Texas 75202 214-698-8000 214-698-11 p1 (fax)

ATTORNEYS FOR APPELLANT ORAL ARGUMENT REQUESTED

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IDENTITY OF PARTIES AND COUNSEL

In accordance with Tex. R. App. P. 3$.2(A)(1)(a), AMF Bowling Centers,

Inc. provides the following list of parties and counsel.

Par Counsel:

Appellant: AMF Bowling Centers, Inc. Lee L. Cameron, Jr.

State Bar No. 03675380 lee.cameronjr@wilsonelser.com Leonard E. Hoffman, III State Bar No. 09789700 Leonard.Hoffman@wilsonelser.com Kristina M. Oropeza State Bar No. 24037353 Kristina.Oropeza@wilsonelser.com 901 Main Street, Suite 4800 Dallas, Texas 75202 214-698-8000 214-698-1101 (fax)

Appellees• Metropolis Nightclubs I, L.P. Dericic J. Rodgers Rio Ventures, Ltd. State Bar No. 24002857 Rio Club, LLC Brandy Smith State Bar No. 24057666 Davis, Cedillo &Mendoza,Inc. 755 E. Mulberry Ave., Suite 500 San Antonio, Texas 78212 (210)822-6666 (210)822-1151 (fax) drodgers@lawdcm.com

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TABLE OF CONTENTS

STATEMENT OF THE CASE............................................................................... 1

ISSUES PRESENTED............................................................................................ 3

STATEMENT OF THE FACTS............................................................................. 4

A. The Original AMF Sublease, the Metropolis Sublease, and the Rio Ventures Sublease................................................ 4

B. Proceedings in Harris County District Court........................................... 5

C. Proceedings in Bexar County District Court.........................:................. 6

STANDARD OF REVIEW .................................................................................... 7

SL:11VIlVIARY OF THE ARGUMENT ..................................................................... 8

ARGUMENT AND AUTHORITIES ..................................................................... 9

I. APPELLEES HAVE NO RIGHT TO POSSESS THE PREMISES BECAUSE THE PURPORTED LEASES ARE INVALID AS A MATTER OF LAW .......................................................... 9

A. Assuming the Use of"Metropolis, Inc." was a Mere Misnomer, the Contracts Are Not Legally Valid Because the Parties Signed the Invalid Metropolis Lease Before Metropolis Nightclubs I, L.P., Existed............................................................................................. 9

B. Appellees' Ratification Argument Fails as a Matter of Law................. 14

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II. BECAUSE THE LEASES ARE INVALID AND POSSESSION OF THE PREMISES SHOULD REVERT TO AMF,APPELLEES HAVE NO RIGHT TO ATTORNEYS'FEES .......................................... 16

CONCLUSION ................................................................................................16

PRAYER ................................................................................................17

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INDEX OF AUTHORITIES

Cases

Camp Mystic, Inc. v. Eastland, 399 S.W.3d 266(Tex. App.—San Antonio 2012, no pet.) ............................. 14

Coinmatch Copp. v. Aspenwood Apt. Co~^p., 417 S.W.3d 909(Tex. 2013) ........................................................................... 14

Commonwealth Nat'l Bank v. U.S., 573 F. Supp. 881 (N.D. Tex. 1983).................................................................. 14

Exxon CoNp. v. Emerald Oil &Gas Co., 331 S.W.3d 419(Tex. 2010) .............................................................................. 7

Flagship Hotel, Ltd. v. City ofGalveston, 117 S.W.3d 552(Tex. App.—Texarkana 2003, pet. denied) .......................... 15

HTS Se~vs., Inc. v. Hallwood Realty Pa~tne~s, L.P., 190 S.W.3d 108(Tex. App.—Houston [1st Dist.] 2005, no pet.) ............. 11, 12

In ~e Hawthorne Townhomes, L.P., 282 S.W.3d 131 (Tex. App.—Dallas 2009, no pet.) ............................ 11, 12, 13

In ~e The Armand Borel Ti^ust, Order No. 09-1129, 2012 WL 6215388(Cal. Super. 2012) ............................ 14

Kahn v. Imperial Ai~po~t, L.P., 308 S.W.3d 432 (Tex. App.—Dallas 2010, no pet.) ................................................................... 11

Lesieu~^ v. Fi~ya~, 325 S.W.3d 242 (Tex. App.—San Antonio 2010, pet. denied) ................................................... 7

Loeffler v. Lyttle Indep. Sch. Dist., 211 S.W.3d 331 (Tex. App.—San Antonio 2006, pet. denied) ................................................. 10

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2133188v.2

Payne v. Edmonson, No. O1-96-00792-CV, 1999 WL 350928, *3 (Tex. App.—Houston [lst Dist.] June 3, 1999, pet. denied) ........................... 11 Sun Ope~atin~- Ltd. P'ship v. Oatman, 911 S.W.2d 749(Tex. App.—San Antonio 1995, writ denied) ...................... 15

Valence Operating Co. v..Do~sett, 164 S.W.3d 656(Tex. 2005} ........................ $

Weste~nGeco, L.L.C. v. Input/Output, Inc., 244 S.W.3d 776(Tex. App.—Houston [14th Dist.] 2008, no pet.) ........... 11, 12

Statutes

Tex. Prop. Code § 24.001 ................................................................................... 14

Rules

Tex. R. App. P. 38.2 ............................................................................................. ii

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BRIEF FOR APPELLANT

AMF Bowling Centers, Inc. files this Appellant's Brief and asks the Court to

reverse the judgment of the County Court, and render judgment and possession of

the Premises at issue for AMF Bowling Centers,Inc.

STATEMENT OF THE CASE

Appellant AlV~' Bowing Centers, Inc. ("ANTE'"), as landlord, filed an eviction

suit in the Justice of the Peace Court, Precinct 3, Place 3 ("J:P. Court") in Bexar'

County, Texas, for possession of real property occupied by Metropolis, Inc.,

Metropolis Nightclubs I, L.P., Rio Ventures, Ltd., and/or Rio Club, LLC. CR: 272-

280; App. A. In that eviction suit, AMF successfully argued that as a matter of law

leases fraudulently signed on behalf of Metropolis, Inc. did not give a separate and

distinct entity known as Metropolis Nightclubs I, L.P.—and, by extension, its sub-

tenants Rio Ventures, Ltd. and Rio Club, LLC (the "Rio Defendants"}—the right to

possession ofthe premises at 13307-A San Pedro Avenue, San Antonio, Texas 78216

(the "Premises"), which 1~1V~' controls as landlord. CR: 14-20, 547; App. B.

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AMF''s position was further supported by an agreed judgment from the 190th

Judicial District Court in Harris County declaring that any lease purportedly made

on behalf of Metropolis, Inc. concerning the Premises was void ab initio. CR: 264-

268; App. C. In addition to the eviction suit and Harris County proceeding, AMF

filed a suit in Bexar County District Court requesting injunctive and declaratory relief

for various breaches ofthe lease and related monetary damages.

After the J.P. Court granted ANIF's Motion for Summary Disposition and

granted possession to AMF,the Rio Defendants appealed to Bexar County Court at

Law No. 10. They moved to abate the case because of the suit in Bexar County

District Court, and AMF moved to raise the appeal bond and assess occupancy fees.

CR: 529-533, 629-634.

The County Court denied both parties' motions regarding abatement and fees,

and then ordered that the Rio Defendants retain possession of the Premises even

though neither side had filed a motion or presented arguments on that topic. CR: 706,

708, 710. After AMF moved for reconsideration based on due process violations, the

County Court vacated the order of possession and heard arguments regarding cross-

motions for summary judgment on the possession issue. CR: 734-740, 810-920, 921,

923-964. On August 13, 2015, the County Court granted Appellees' motion for

summary judgment, denied AMF''s motion for summary judgment, and issued an

order for possession in favor ofthe Rio Defendants despite established legal authority

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2133188v.2 that the leases were invalid or void as a matter of law. CR: 1073, 1075; App. D and

E,respectively. This appeal followed. CR: 1076-077.

ISSUES PRESENTED

ISSUE NO. l: The undisputed facts established that Metropolis Nightclubs

I, LP did not exist when it allegedly entered into a lease with AMF for possession

of the Premises. Can a nonexistent entity enter into a valid contract as a matter of

law?

ISSUE NO. 2: Since the undisputed facts established that Metropolis

Nightclubs I, LP did not exist when it allegedly entered into a lease with AMF for

possession of the Premises, did the trial court err by granting summary judgment

and possession of the Premises to Appellees based on the terms of that invalid or

void contract?

ISSUE NO. 3: Since Appellees have no right to possession of the Premises

as a matter oflaw, did the County Court err in awarding attorneys' fees?

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STATEMENT OF FACTS

A. The Original AMF Sublease, the Metropolis Sublease, and the Rio Ventures Sublease

There are three relevant lease documents in this case. First, AIV~ originally

subleased the Premises from F.W. Woolworth Co. (which assigned its interest to

Woolco, Inc.) in 1989 (the "Original Sublease"). CR: 22-46 (Lease between

Bitters/Woolco Partnership, LLP and AMF Bowling Centers, Inc.). This lease was

renewed and is effective through June 30,2022.Id.

The second lease document, executed in 2005, specified the parties thereto

as AMF and an entity purporting to be "Metropolis, Inc." (the "Invalid Metropolis

Lease"). CR: 48-66; App. F. The Invalid Metropolis Lease concerned an attempted

lease of the Premises from AMF. Id. (Void Sublease between AMF Bowling

Centers, Inc. and Metropolis, Inc.). Gil Butnaru, who falsely claimed to represent

Metropolis, Inc., signed the Invalid Metropolis Lease agreement for the Premises.

CR: 62-63. In connection with that lease, Mr. Butnaru swore in an affidavit that he

was the president of Metropolis, Inc. and therefore had authority to enter into the

Lease. Id. The individuals who misrepresented themselves to be Metropolis, Inc.

agreed to use the Premises as a restaurant, bar, nightclub, or for any other lawful

purpose. CR: 49.

C!

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The third document was executed in 2007 between the party purporting to be

Metropolis, Inc. and Rio Ventures, Ltd. ("Rio Ventures"). CR: 73-78; App. G

(Void Sublease between Metropolis, Inc. and Rio Ventures, Ltd.). In that lease, a

different individual claiming to represent Metropolis, Inc., entered into a sublease for

the Premises with Rio Ventures, Ltd (the "Rio Sublease") so that Rio Ventures could

occupy the Premises. Id. Rio Ventures specifically agreed to comply with all the

provisions of the Invalid Metropolis Lease. CR: 74. This attempted lease term

extends to May 31, 2019. CR: 79-80. The Rio Sublease included a signature from

Samuel Panchevre who, like Mr. Butnaru, falsely represented that he was president

of Metropolis, Inc. and was authorized to enter into a lease agreement on its behalf.

CR: 78. The Rio Sublease is conditioned on the lawful existence of the Invalid

Metropolis Lease; if the Invalid Metropolis Lease terminates, then the Rio Sublease

also terminates. CR: 73 ¶ 2.

B. Proceedings in Harris County District Court

After repeated lease violations, AMF filed an action in Bexar County District

Court in 2014 for a declaration of its rights under the lease. Shortly thereafter, AMF

discovered for the first time that Metropolis, Inc. was not aware of the Invalid

Metropolis Lease or the Rio Sublease. The signatories to those leases, despite their

express representations to the contrary, were not affiliated with Metropolis, Inc., in

any way and never had any authority to bind that company. CR: 696-697. Bal

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Trivedi, who formed Metropolis, Inc., and has acted as a director or officer for the

corporation since its inception, had never heard of the Invalid Metropolis Lease or

the Rio Sublease until the litigation against the Rio Defendants began.Id.

Immediately after learning of Appellees' years of deceitful representations,

AMF filed a declaratory judgment action against Metropolis, Inc. in the 190th

Judicial Court for Harris County, Texas. CR: 264-268. That court entered an

Agreed Final Judgment on January 27, 2Q 15 that, among other things, declared the

Invalid Metropolis Lease void ab initio as between AMF end Metropolis, Inc. Id.;

App. C (Harris County District Court Judgment). Accordingly, the Agreed Final

Judgment fully and finally disposed of any and all claims to possession of the

Premises that Metropolis, Inc. (i.e., the only entity identified on the Invalid

Metropolis Lease as the tenant) may have to the Premises.Id.

C. Proceedings in Bexar County District Court

Their years of deceitful acts having been uncovered and learning of the

District Court's ruling in the Harris County case, Appellees concocted a misnomer

argument in an effort to have a court reform the Invalid Metropolis Lease to

conveniently remove the name Metropolis, Inc. and insert in its place the name

Metropolis Nightclubs I, L.P. In this regard, on July 9, 2015, the Bexar County

District Court also heard a Motion for Partial Summary Judgment against AlV~'.

See CR: 963-964. In that Motion, Metropolis Nightclubs I, L.P. argued that the

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District Court should reform the contracts under a theory of misnomer to reflect its

actual name. See id. AMF argued, among other things, that reformation would be

improper as a matter of law under the undisputed facts of the case. Nevertheless,

the District Court disagreed and ruled that Metropolis Nightclubs I, L.P. was the

correct name on the Invalid Metropolis Lease, Rio Sublease, and respective

extensions, and that the misnomer did not impact their validity or enforceability.

CR: 963-964; App. H. Notably, however, the District Court did not determine

what effect Metropolis Nightclubs I, L.P.'s non-existence as of the effective

date of the Invalid Metropolis Lease had on the legal validity of that lease. Id.

STANDARD OF REVIEW

Appellate courts review the granting of a summary judgment de novo.

Exxon Copp. v. Emerald Oil &Gas Co., 331 S.W.3d 419, 422(Tex. 2010); LesieuN

v. F~ya~, 325 S.W.3d 242, 246 (Tex. App.—San Antonio 2010, pet. denied).

When parties file cross-motions for summary judgment, as in this case where one

of which was granted and the other denied, appellate courts review the summary

judgment evidence presented by both sides, determine all questions presented, and

if the reviewing court determines that the trial court erred, renders the judgment the

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2133188v.2 trial court should have rendered. Valence Operating Co. v. Doi^sett, 164 S.W.3d

656,661 (Tex. 2005).

Here, there are no disputed material facts and Appellees' legal theories are

meritless under Texas law. When the law is properly applied, Appellees cannot

recover possession of the Premises as a matter of law and possession should be

awarded to AMF. Accordingly, this Court should reverse the trial court's decision

to grant Appellees' summary judgment and attorneys' fees, and render judgment

and possession ofthe Premises to AMF.

SUlO~IMAR~ OF '~'HE ARGIJMEN'~

Under well established Texas law, anon-existent entity cannot enter into a

contract. The undisputed facts established that Metropolis Nightclubs I, LP. did

not exist when its representative allegedly signed the Invalid Metropolis Lease or

on the effective date of that contract. As a matter of law, therefore, that lease is

invalid or void. Since the Invalid Metropolis Lease was void or invalid as a matter

of law, Metropolis Nightclubs I, L.P. had no legal authority or rights to then

sublease the Premises to the Rio Defendants.

Additionally, invalid or void contracts, like the Invalid Metropolis Lease,

cannot be ratified as a matter of law; one cannot ratify or affirm something that does

2133188v.2 not exist. Moreover, the undisputed facts established that A1V~ never attempted to

ratify the Invalid Metropolis Lease because it tools steps immediately upon learning

of Appellees' deceitful misrepresentations to disavow the validity ofthat contract.

For these reasons, Appellees have no right to possess the Premises and are not

entitled to attorneys' fees. ANg' respectfully requests this Court reverse the

judgment of the County Court and render judgment and possession of the Premises

• ~ 1

ARGUMENT AND AUTHORITIES

I. APPELLEES HAVE NO RIGHT TO POSSESS THE PREMISES BECAUSE THE PURPORTED LEASES ARE INVALID AS A MATTER OF LAWI

A. Assuming the Use of "Metropolis, Inc." was a Mere Misnomer, the Contracts Are Not Legally Valid Because the Parties Signed the Invalid Metropolis Lease Before Metropolis Nightclubs I, L.P. Existed

The undisputed facts established that: (1) on Appellants' motion the Bexar

County District Court issued an order in July 2015 reforming the Invalid

Metropolis Lease to insert the name Metropolis Nightclubs I, L.P, in place of

1 Germane to Issues Nos. 1 and 2.

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Metropolis, Inc.;2 and (2) neither Metropolis Nightclubs I, L.P., nor its general

partner Metropolis Nightclubs,Inc. existed when the Invalid Metropolis Lease

was signed and/or became effective. The Invalid Metropolis Lease was signed on

October 17, 2005 (CR: 63) and had an effective date of October 14, 2005 (CR: 49,

art. 3). CR: 48-66; App. F. But Metropolis Nightclubs I, L.P. and its general

partner, Metropolis Nightclubs, Inc. were not created until October 27, 2005. CR:

730-731; App. I. Indeed, Appellees' representative, Sam Panchevre, admitted in

the court below that Metropolis Nightclubs I, L.P. and its general partner,

Metropolis Nightclubs, Inc. were not created until October 27, 2005. CR: 847.

Under black letter, well established and unequivocal Texas law, a contrac4

entered into by a party who does not exist at the time is invalid or void. If a

party does not exist at the time of contracting, then there can be no "meeting of the

minds," and thus no contract. See Loeffler v. Lyttle Indep. Sch. Dist., 211 S.W.3d

331, 346 (Tex. App.—San Antonio 2006, pet. denied) (meeting of the minds

required to form a valid contract). A nonexistent entity cannot enter into a

2 The undisputed facts established that prior to this July 2015 court order, the name Metropolis Nightclubs I, L.P. did not appear in any of the subject lease documents. Even if the Bexar County District Court's misnomer order is ignored, AMF still must prevail as a matter of law and be awarded possession of the Premises because a Harris County District County entered a final judgment in January 2015 that Metropolis, Inc. (the only party identified as the lessee on the Invalid Metropolis Lease and all purported extensions) has no right to possession ofthe Premises. CR: 264-268; App. C.

10

2133188v.2 contract as a matter of law. Weste~nGeco, L.L.C. v. Input/Output, Inc., 246

S.W.3d 776, 786 (Tex. App.Houston [14th Dist.] 2008, no pet.) ("[A]

nonexistent entity cannot enter into a contract."); In Ne Hawthorne Townhomes,

L.P., 282 S.W.3d 131, 138 (Tex. App.Dallas 2009, no pet.) ("If one of the

parties does not exist, no contract can be formed."); Kahn v. Impe~zal Ai~po~t, L.P.,

308 S.W.3d 432, 438 (Tex. App.—Dallas 2010, no pet.)(ruling that an individual

cannot sign on behalf of and bind a legal entity that does not exist); HTS Sews.,

Inc. v. Hallwood Realty Pa~tne~s, L.P., 190 S.W.3d 108, 114(Tex. App.—Houston

[1st Dist.] 2005, no pet.)("The Herman Group, L.P. did not exist at the time the

parties entered into the original contract; therefore, The Herman Group, L.P. was

not, and could not have been, a party to the original contract."); Payne v.

Edmonson, No. 01-96-00792-CV, 1999 WL 350928, *3 (Tex. App.—Houston [lst

Dist.] June 3, 1999, pet. denied) (there was no contract where one party to a

contract "did not exist until six years later").

In Weste~nGeco LLC, the court analyzed a contract between Input/Output

and Schlumberger to effect a settlement. 246 S.W.3d at 783-84, Under the

agreement, Input/Output agreed not to offer a job to any employee of

Schlumberger unless two years had elapsed since their employment. Id., at 778-79.

This provision purported to apply to future affiliates of Schlumberger as well. Id.,

at 786. The court concluded that Schlumberger could not bind affiliates that did not

11

2133188v.2 exist at the time of the contract as a matter of law: "[B]ecause anon-existent entity

cannot enter into a contract, Schlumberger could not and did not bind

WesternGeco merely by signing a contract in which Schlumberger states that it is

acting on behalf of itself and its future affiliates." Id. Thus, the terms of the

contract could not apply to a company that did not exist at the time the contract

was executed.

Similarly, in HTS Sews. the court analyzed whether a contract could be

enforced against an entity that was not yet formed when the contract was signed.

190 S.W.3d 108. In that case, a garnishee signed a consulting contract as "Sherri

Herman d/b/a The Herman Group." Id., at 113. The other party to the consulting

agreement was Hallwood Realty Partners, L.P. Id., at 110. A third party, HTS

Services, Inc. obtained a writ of garnishment for any funds that Hallwood Realty

Partners, L.P. owed to The Herman Group, L.P. Id. Because "The Herman Group,

L.P." did not exist at the time the consulting agreement was executed, the court

reasoned that it could not have been a party to the agreement and, therefore, could

not obtain any funds Hallwood owed to "Sherri Herman d/b/a The Herman

Group." Id., at 113 and 114. Thus, the consulting agreement could not be enforced

against The Herman Group, L.P. Id.

Likewise, the court in Hawthorne Townhomes reinforces this approach. 282

S.W. 131. The Hawthorne Townhomes court emphasized when a party to the

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2133188v.2 contract does not exist, there can be no meeting of the minds and, thus, a valid

contract cannot be formed:

The formation of a contract requires a meeting of the minds on the contract's essential terms. If one of the parties does not exist, no contract can be formed.

Id., at 138 (citations omitted).

As noted above, the Bexar County District Court ruled in July 2015 that the

leases should be reformed. by substituting the name Metropolis Nightclubs I, L.P.

for Metropolis, Inc. into the disputed leases. However, the undisputed facts

established that neither Metropolis Nightclubs I, L.P., nor its general partner

Metropolis Nightclub, Inc., existed when the Invalid Metropolis Lease purportedly

became effective on October 14, 2005 or when it was signed on October 17, 2005.

Thus, under established Texas law the Invalid Metropolis Lease must be held to be

invalid or void as a matter oflaw.

In stark contrast, here is a list of the cases that support Appellees' argument

that a nonexistent entity can enter into a legally valid contract: None!

Since the Invalid Metropolis Lease is void or invalid as a matter of law, the

Rio Sublease—which is dependent on the validity of the Invalid Metropolis

Lease—is also invalid or void as a matter of law. Accordingly, Appellees have no

13

2133188v.2 rights to possession ofthe Premises.3 The County Court erred in holding otherwise.

Therefore, the judgment of the County Court should be reversed and judgment for

possession should be rendered in favor of AMF.

B. Appellees' Ratification Argument Fails as a Matter of Law

In their motion for summary judgment in the court below Appellees argued

that AMF ratified the Invalid Metropolis Lease by agreeing to extend it. Appellees

are wrong as a matter oflaw for two independent reasons.

First, if a contract is invalid or void, it has no effect and is a nullity.

Commonwealth Nat'l Bank v. U.S., 573 F. Supp. 881, 884 (N.D. Tex. 1983). An

invalid or void contract cannot be ratified; attempts to incorporate an invalid or

void contract have no legal effect. See In ~e The Armand Bo~el Trust, Order No.

09-1129, 2012 WL 6215388 (Cal. Super. 2012). Moreover, subsequent

amendments or extensions cannot relate back to an invalid or void lease. See, e.g.,

3 To prevail in an eviction case, a tenant must show that it has a superior right to actual possession of the relevant premises. See Tex. Prop. Code § 24.001. A valid lease is required to transfer the right of possession of the leased premises from landlord to tenant. See, e.g., Camp Mystic, Inc. v. Eastland, 399 S.W.3d 266, 276 (Tex. App.—San Antonio 2012, no pet.). But the lease must be a valid contract to transfer the legal right to possess. See Coinmatch Copp. v. Aspenwood Apt. Copp., 417 S.W.3d 909, 920 (Tex. 2013)(eviction is permissible when the tenant has no legal possessory interests). Since the Invalid Metropolis Lease was not a valid contract, the legal right of possession never transferred to Appellees.

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2133188v.2

Flagship Hotel, Ltd. v. City of Galveston, 117 S.W.3d 552, 560 (Tex. App.—

Texarkana 2003, pet. denied).

Second, the undisputed facts establish that AMF never attempted to ratify or

recognize the Invalid Metropolis Lease. To ratify an otherwise voidable contract a

party must, by conduct, recognize the contract after acquiring knowledge of all

relevant facts which entitled them to rescind. Sun Operating Ltd. P'ship v.

Oatman, 911 S.W.2d 749, 756(Tex. App.—San Antonio 1995, writ denied).

Here, AMF immediately sought a declaration of its rights under the relevant

leases upon learning Metropolis Nightclubs I, L.P., had misrepresented its

corporate identity and status. When AMF learned of the facts entitling it to rescind

the contract, it took affirmative steps to disavow the validity of the contract.

Immediately after learning of Appellees' years of deceitful representations, AMF

filed a declaratory judgment action against Metropolis, Inc. in the 190th Judicial

Court for Harris County, Texas. That court entered an Agreed Final Judgment on

January 27, 2015 that, among other things, declared the Invalid Metropolis Lease

void ab initio as between AMF and Metropolis, Inc. CR: 264-268. The Bexar

County District court did not reform the subject leases to replace Metropolis, Inc.

with Metropolis Nightclubs I, L.P. until over six months later. CR: 963-964. Thus,

the undisputed facts establish that AMF did not act in anyway to recognize the

contract, which in turn defeats Appellees' ratification argument as a matter of law.

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2133188v.2

As such, the Invalid Metropolis Lease should be deemed void. See Oatman, 911

S.W.2d at 756. And since the Invalid Metropolis Lease is void, Metropolis

Nightclubs I, L.P., cannot incorporate its terms into subsequent subleases or

extensions. Thus, there is no legally valid lease, sublease, or extension granting

Metropolis Nightclubs I, L.P., the right to possess the Premises.

II. BECAUSE THE LEASES ARE INVALID AND POSSESSION OF THE PREMISES SHOULD REVERT TO AMF,APPELLEES HAVE NO RIGHT TO ATTORNEYS'FEES4

In addition to awarding Appellees possession, the County Court also

awarded attorneys' fees in their favor. AMF incorporates all the arguments

previously addressed and asks this Court to reverse the award of attorneys' fees

because neither Metropolis Nightclubs I, LP nor the Rio Defendants have a legal

right to possess the Premises.

CONCLUSION

The undisputed facts established that Appellees have no lawful right to

possession of the Premises. The 190th Judicial District Court in Harris County has

entered judgment that the only named tenant to the Invalid Metropolis Lease,

Metropolis, Inc., has no legal rights to the Premises. Following that judgment,

4 Germane to Issue No. 3.

2133188v.2

Appellees concocted a misnomer argument and convinced the 408th Judicial Court in

Bexar County to replace the name Metropolis, Inc. with Metropolis Nightclubs I,

L.P. in the Invalid Metropolis Lease. However, neither Metropolis Nightclubs I, L.P.

nor its general partner existed when that lease was signed or on the effective date of

that lease. Under established Texas law, therefore, the Invalid Metropolis Lease is

invalid—a nonexistent entity cannot enter into a legally binding contract. As a result,

neither Metropolis Nightclubs I, L.P. nor its sublessees, the Rio Defendants, have

any rights to possession ofthe Premises.

For these reasons, and as explained in greater detail above, the County Court

erred in granting summary judgment and possession for Appellees and by denying

possession ofthe Premises to A1V~'.

'►: ►_

~1V~' respectfully requests this Court to reverse the judgment of the county

court granting possession of the Premises and attorneys' fees in favor of Appellees

and render judgment and possession of the Premises in favor of AMF along with

attorneys' fees.

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2133188v.2

Respectfully Submitted,

WILSON,ELSER,MOSKOWITZ, ED~I.lO~Al~ ~ DICI~~:,I,]LP

lsl Lee L. Cameron J~. Lee L. Cameron, Jr. State Bar No.03675380 lee.cameronjr@wilsonelser.com Leonard E. Hoffman,III State Bar No. 09789700 Leonard.Hoffinan@wilsonelser.com Kristina M. Oropeza State Bar No. 24037353 Bank of America Plaza 901 Main Street, Suite 4800 Dallas, Texas 75202 (214)698-8000 (214)698-11 O 1 (facsi~eile)

ATTORNEYS FOR APPELLANT AMF BOWLING CENTERS,INC.

CERTIFICATE OF SERVICE

I hereby certify that on this 2nd day of December, 2015, a true and correct copy of Appellant's Brief was forwarded to Appellees' Counsel ofrecord.

is/Lee L. Cameron J~. Lee L. Cameron, Jr.

18

2133188v.2

CASE NO.04-15-00525-CV

~llT 'I'H~ FOURTH COURT OF APPEALS SAN ANTONIO, TEXAS

AIV~' BOWLING CENTERS,INC.

Appellant

v.

RIO VENTURES,LTD., AND RIO CLUB,LLC, Appellees

Appeal from Cause Nn. 2015cv03002 In the County Court at Law No. 10 Bexar County, Texas Honorable Jason Wolff,Presiding

APPENDIX TO BRIEF FOR APPELLANT

Tab A AMF's Eviction Petition filed in the J.P. Court Case

Tab B Order Granting AMF's Motion for Summary Disposition in the J.P.

Court Case

Tab C Agreed Final Judgment Entered by the 190th Judicial Court, Harris County, Texas

Tab D Order Granting Appellees' Motion for Summary Disposition in the County Court at Law Case

Tab E Order Granting Possession ofthe Premises to Appellees in the County Court at Law Case

2152699v.1

Tab F The Invalid Metropolis Lease

Tab G The Rio Sublease

Tab I-~ Partial Summary Judgment Order from the 408th Judicial Court, Bexar County, Texas

Tab I Secretary of State Documents regarding formation of Metropolis Nightclubs I, L.P. and Metropolis Nightclubs, Inc.

2152699v.1

APPENDI~~ A

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~..~, :.. -3 PLA~h~`I~`: AMF~c~wln~ Cer~tersx .Inc. • Q~ijit suit for ~t~rrt Rentai Subsi~i5t (if ar3y)- h,~, 'V~. 'T'enant's l'nrtiar~ ~ TOTAL M~?NT~3LY RENT $ ~E~'ENUATtT s R~u'~ent~tres Ltd. aid ~tio CI T~~ LI~C -

Cf.~il~LATI'd'~`: Plainti~f{Landlord~ hereby ec~~plains ofthe defendant(s3 Warned above fax evzcti4n ~#'plaznt ffs prei s {ii~clud~ g star~rocrms.and parking areas]located ,W..,,_ in the abr~ve precarict;.~dciress ofth~ propsrt~+ is;

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i3~fI7 fan Pedro Ave niteA ~an Antonin AI3AR~SS t7itiTT~k. CITY STATE ZI!' ~ ~d"'`,,s 1.SER'~ICE C?F CITA.TIC~~T: Service .is requested nn defend~~ts by p~zsaz~al service at home or ~vc~r~ ar bx alt~~ative ~ez~?3e~as~ aIlov~ed by tlac T~xa~ Justice Gourt l~n~es ofCourt. Glther addresses where the def~nrlant(s} may be served are: ~ ~'

• Saint~el PancI~e}rre;on liehal~ofItiit Ventures, Ltd anc~ Rid ~Iub,:LLC, i.,~ Berri e KiIIs; San ~ntanio;'~'ex 7~2~r ~~ t Jflhn"VV.'V~'nod, as registered agent for service far:Rio Ventures;Ltd.and.Rio Clutr, LLC,4~~II ~Voad~~ay E)~Na, ~u}t~'I-1-'I0, HQc~stona Texas ?'7Q~6 ~''r • Rio Yenfures,L~c~., `14OG Peacaci:Haven,.San .Antonia,'T~xas 7~25b ='

~.~ T3efen~ant(s~ failed to pay rentfor the follnivin~ tiFire gerioii(s):

T'C#TAL I~~I.,INQT_TT~NT REST AS {3~ T,3E~'I`E Q~ ~~..~~G IS: , I'laint'sff reserves.tI~~ ri~~t tg or~tty x~nen€i the axnuunt at triat fo inciurle rc~~t day from tf~c dafe cif Mina ~hrau~h .the riate n~trinl. ~:X~:c~~r~~ cRo~t~s~~x ~v~tc~e~c~r~~~~s~ v~oi~~~rxar~s. I.e~se Violation cif ether than non-paid rent— list lease violations} See attached Grounds.fnr v?etzr~rc 4:[ Ht3L~UV'E~2 AS GRf:)TI~DS I~`~~.E'CTIf3N: p~fendarit(s} are iinlat~ft~i1~F holding o~fet~ since tIaey failed to ~seate at:tlie end oftlie rental.term ar renewat ofextension period, ~~rh ch u~as 5.:~ NQ'I`~CE TO '~'ACA.T~: Plaintiff has given defendanY~s} a ivriiten notiea to vaaaf~ (according_ica Ghaptsr ~4.Uf#S of the Texas ~"ropart~ Code) and demand far possession, Such ~~tice teas delivered tin ~Vtarch, 3~#; ~t?~ S and delivered by this method: fax, CMR~tl2.,.hand-d~Iixery(pflsting.on dnor~ 6.~ATTL~I~2V'EY''S FE~~~ PI.AINTIF~Q is seeking applicable attorney`s fees: Attorney's:name,address, and phone & numbers tee:

Lei I~. ~ameron,:lr., ~sq.; W~Ison nisei' NEosl:owitz Edelman 8c 3~tcker LLP,901 ~t~fain ~tr~ct~ Sukt~ 48pfl, l3ailas,'T.752f?2;~I4.6~8.~~Q~l(o#~iee}~I4.t~8_T l t~l {fax.)

7.~[ 33~i'~iD ~"CtR ~Q~ ~:fiS~~N: If Plaintiff has ~Sieti a band.for ~tossession, Plaintii~ regqCsts ~l.} ihst the am4tsnt of plaintiffs bond and defendant's counter band ba sot; ~~} that plaintiffs band tie approved Iiy t3ie Caui~ ~atd ~3)that proper'niztices:as required by the T~xac Justice Couit Rules ire given to 17efentlaiit(s~. REQLT,EST' I'{?R ~UDG~'I~I~T: PlainGi"i prav~ fhaY def~ndan~(s) be ~,:rved wif~i oiYatzan and fhat:gtaintiff have;jud=~nes~t.against:def'endanT{s}:f~c_ pa~sscssicsn of p~eFnises, including iarrioval of defendants ansl ~ief~ndanl~' possessiosis f`rrsm it~e premises, unpaid lent TF set ~4rth above, attarriey's fees, canr~ costs, arsd 9nietesi on fhe: above sums atthe raie.sYt~Yesi in flee rental confiaci, orrfnot sa st~ifed, ai the.statutary rats farjiidamcnts rz»der Ci~z( Sfatutes Article 5069-1 ~DS:

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~a~se Nutbe~r ~f~r cleark use..€~~1~}.. ~,~~ ~, i ~~ ~ ~ '~

Sfyi~d A'YT~ B~~lz`ng ~e~t~rs,Luc.v.~.i~a ~e~€~ur~~, Ltd., and R.io ~ ~,LLC {e.g.,~o~in S~~t~ ~..AIi Amerrcan insurance eo;In.re A~~ry Arin Janes; In the Matter refthe stale of George Jackson.).

A ci°~y l o~se nforn3aticrn sheet must be co~ipleted and submitfie~i «hen an ari~inal p~tition,is.falcd to initiate s nec~~ suit'The ini'nrma~ian should be tie ta~st available at #bs dine of Ming: This sl~e~t, r~quir~d by Rule pf i~~zl Prs~cedur~ 5112, is intended to collect inf€~rmari~n that ~~siIl be useii for statistical purpas~s ~nlv ~t neither r~ptaces n€xx suppl~men~s t1~e ~1in~s ar s~ry ~~ of pleading ar otk~er cl~curnants as required by la~v or rule. The sleet does not cc«nstituta a discovery request, response, nr supplementation, aid it is not ad~xiissible at t~tat

~. ~an~ac~ information fc~r person ~~an~ efi~t ~as~ 2.1\~a es ~f p~rtzes iin.case:. xnformat~~n sheet: ~~me: Telephone: Pla:~ntiif'(s}: T:,ee L. Ca~nerc~r~, Jr. 214.98.&~t~~ AMF Bc~uziiz~g C~nte~rsx ~~. .1~.ddress: rte: 901 Ivlain tree, ~~i~e 48t}0 214.b98.1 J,(~.l I)e~'ezid.ant(sj:

Cif/St~tel~zp: Stake Baz No: Rice V~niuz~es, Ltd,. ~?all~l'I~1752t?4 0367~38~ Rio Club,Z,L ~~il:

ee:Gamerc~n ez jwilso~~iser.c~zn [A.ttaah additia~ral pale as necessary to list atI. ties]

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~.Ia~dzea~e +~as~ ape,ter is e~atify ~ ~rn~st i or~aa~t issus:.i tie case select auly:i}:

.X~ebt ~~`1ri~rr: A debi. Maim. case is a lavrsuit brow to. ~ ,~t~~c~ivn A.n eviction ease is a Ia~~rs~'~. brae ht to recover a debt. by an assignee ~f a cIaisn; a debt co~Iectgr oz reeaver possession of real praper~y;afte~i by a Iandlcird ctill~ction agency, a ~xnancial institution, or a person or end fiy ~~ainst a tenant, 1~. claim for rent may be ~c~ii3ed with an prima~il~ ~ng~~eii.in the. business.~f]ending rnr~ney at interest: eviction case if the' arnacu~# cif. rent iiu~ and unpaid is n~~ The c~a%~i, can b~ for na Qre than ~It1=~~0, excluding statutory.. more fihan ~I ~;Q€~p, ~xeluding st~tu~ary. interest .and court . interest az~d court oasts iiut i~clud n at~or~n~y fags, if~n . ~gscs but inctudin at#cirn~ fees, ifany. Repuzr arsi~ ~e»tidy. A zepair and_ reri~~dy case is a lawsuit ~S~rrrrl~ ~`laims: A sm~Il claims case is a Iat~isuit bro~~lit filed b~ a residential tensor under. Ghagter 9'~; Subch.agter B of for ~h~. recav~ry ~f mangy d~ a;es, civil penalties, the 'T'exas Pro~erry Cade to enforce ate .Iandlord's ciutj~ to persn~ai property, or otter re2ie~' alIa~~ed b~y law. `I'Y~e repair or remedy a coed can ~naTerially affecting the `physical clainm Harz be for na n~or~ ~~n ~Ifl,Ot3Q, ~~~lud~n~ hcalt . o~'s~~~iy ofan ardznary tenant. The reii~~'sougizt can be statutory irifi~rest ant]. court pasts but including .at~orne}, for na rrmc~re than ~1~},(3t1(1; ~xcluciii~g statutory interest anti fees, `any. court costs but includitz ~t~orn~~fees, if and'• _____ _____....---...

19119i3u.i

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Instructions: The 8er+tice members Ci:~=iI Rei e#`,Act a~pi es tv a ci~ti] proceeding in.the :Tustice Gt~urts. l3efare entering a defauT~~vdgment against an individual deferzc3ant, i~c plaintiff mast.file ~~ith the ct~tu~c an davit statizi~ uthetli~r or not the defendant is s~ the u~~itat~ t`~ervice, s~nx ~~r necessary fa~fis to supp~art,the affzc~avit, car stat'in~ that tie g~~intiffis unabi~ to determine a=hett~er or not the defen.ci~~rs n I~t~ryservice i~ that is the c~sa. The requirement far an affidavit rizay b~ satrsfied h~ a, wriitez~, si.~ned dcacumcr t ~eclased to I?e true under p`~ a~C~r` b~'~srjury. Tf'it~~ppear's ghat the de£end~ntis ire militar,~~ service, tine eaur~ ma}nai enter ajudgment until after ~I~e cc~~rt ~ppai zts an uttomey is regresent't~ie:d~f~ndar~t, Iffhe ci~u~t.is unable to deterrn~ne ifthe defendant is in military:s~nFi~e the court may:r~quire pia ntii~to.fl.e a bond in an amouni.appraved by thec~u .

A person who tnak~s or uses an .affidavit under this Acf.knowzng it tc~ be fatse, nay be fined or imprisoned crr both: 5{~ .U,S.C: rlp~: ~(}t ei sect. Ttr obtain cerfifscafes of service: or ~i~n-sen~ice under the Service membexs` C vzl Relief Act, you mad access the pz~biic ~i?ebsite: hops:11EnvzuF.c~zn~lc.ns€ .rnillaPP.?lscra(sGraHame,do.1'h s cuehsit~ ~~Il provide the current actz~~e miiifary.status:ofan ztrl victual.

~I~7I~R1~ ~`$~~I2S ~:~I~&'4'1[~

case No.`: ~~ ~,~ ~ In ire Just ~e Go~rt of tk,I`4`I~ Bfl~vting renters,Inc, § I3exar County,. Texas Plaintiff §. vs, Rio Ve~►tures, Ltd., .itr Club,LLC ~Pi'8G2TIGf+ ~j j PI~GE I3~fenrl~

BEFOKE NLE,4n ~Izi~ day psrse~nally appeared Lee.L. ~~stert~z~,:Tr,, ~~I~o, uzid.~r penalty afperjur}; sated that the fs~Ilo~rin~ facts are true:

1 am the[~ ~I~ii~ti~~ aft~rrxey t~frect~rd. ~'ar #~.e P~aintif~in this proceeding.

Rio Ventures,_ I~td. and Rica Club,I.I,C, I7efendar~ts, ate nat in military service.

~ ,Def~nda~nt, ~s in military service..

13c a~~ this because ~e~endants are ri~a ~orpc~rate entiiies.'T'hey cannot ge e in the iX wry.

I anz unable to determine ~~~~~~i~r or not ~e I"3t~f~ndant is in military senfic,~--.~ .~ . .

Si~n~d on ~J,,.----.==f-`r~„ ,~~~~~.

1~ ~,-~~''~--~. ? t Siatur€. r 1'rir~ted I~T~~~: L~~ ~.,: ~atn~r~on;.Jr, A~idr~ss: 9~I Main Street, Suite 4.8£~~.

T7alias, Texas'lS'~t~4.

~'elephone: ~14.69S;8flt~0 Fax; 2i~.~i9~.11`tli Mail Ad~Ir~ss: #e~.ca~z7~ronwilsonelser.eaz~i THE ST.A'I`~.:0 T~1~ ~

spa -ma:~rt~ ~u~sc~us~r~ ~ ~o n~r~ ~~ ~:~`~ c~'~ ~ , ~-~ f ,.

Clerk c~ft :~ court 3~{?TARY PL7BT.IC, fate of Texas 'H ~— ...

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39:~ 1.913v.1

275

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PROPERTY BACKGROUND

Plaintiff AMF Bowling Centers, rnc. ("AMF") is the landlord of a retail strip center loca+..ed a# 133J7 San Peda~o Av~nus, Sin Antonio,'Texas 78215 (the "P~eaa~ises"). 'The 'remises consists of a one story building containing approarimately 79,902 square feet of ground floor space and a me~~~e area to the rear containing approximately 10,222 square feet. AMF occupies a portion of the Premises, operating afamily-friendly, upscale bowling and family entertainment facility. AMF leases the remaining portions of the property to a variety of reputable tenants, including a beauty salon {Salon Beatriz), a bowling pro shop(The Strike Zone Pro Shop), an auto repair facility {short's Gazage), and a bingo hall (Jackpot Bingo Parlor). Defendants currently occupy a portion ofthe Premises.

Defendants utilize their portion of the Premises for a night club called Club Rio, which they own and/or operate. Club Rio and AMF's bowling center are adjacent to one another and shaze a wall which divides the businesses. Recently, AMF discovered that Defendants divided the space for Club Rio into two distinct and wholly separate clubs--Club Rio and Maroc Bar— without the consent of AMF. Mazoc Bar is an outdoor nightclub with a su~imm;ng pool in the middle ofthe space.

THE ALLEGED LANDLORD TENANT RELATIONSHIPS

A. Original Sublease

On October 1, 19$9, Plaintiff AMF entered into a sublease agreement with F. W.

Woolworth Co. (the "Original Sublease") to sublet the Premises. Bitters/Woolco Partnership, LLP owns fee simple title to the Premises and obtained F. W. Woolworth Co.'s interest in the Original Sublease (through its successor-in-interest, Woolco, Tnc.) by an assignment dated February 19,20p4.

The Original Sublease was scheduled to expire on June 30, 2014. Accordingly, BitterslWoolCo Partnership,LLP and Plaintiff entered into a new lease for the Premises effective July 1, 2412, set to expire on June 30, 2022 (the "Bowling Center Lease," attached and incorporated herein as Exhibit 1).1

Per the tenors of the Bowling Center Lease, AMF covenanted to the following, among other things:

~ Use the Premises for lawful purposes only;

• Not bring or permit any obscene or pornographic material an the Premises, and to not conduct any obscane, nude, or semi-nude live performances on the Premises; and

~;' 1 The Par-ties amended the Bowling Center Lease extending the terms for one year without materially altering the °~ terms ofthe Howling Center Lease.

GROUNDS FOR EVICTION —PAGE 1 O~6 1911924v.1

276

~"1 ~"~ . ~

3

Not allow subtenants to bring ar permit any obscene ar pornographic material on the Premises, and to not conduct any obscene, nude, or semi-nude live performances on the Premises.

B. The Void Sublease between AMF and the Alleged Metropolis,Inc.

On October 14, 2005, Plaintiff entered into athree-year sublease agreement with who Plaintiff thought was "Metropolis, Inc, or assigns d/b/a Metropolis"(collectively, "Metropolis") for a portion of the Premises (the "Metropolis Sublease" attached and incorporated herein as Exhibit 2)? Specifically, the Metropolis Sublease provided for the lease of the premises known as 13307-A San Pedro Avenue, San Antonio, Texas 78216, consisting of a one story building containing approximately 13,440 square feet of space and outside fenced azea containing approximately 8,200 square feet(described. here as the "Club Rio Premises").

The individuals who represented themselves to be Metropolis, Imc. promised to use the Club Rio Premises "as a Restaurant, Bar or Nightclub, or for any other lawful purpose approved by [AMF Bowling Centers, Inc.J in writing." Ex. 2, art. 3. Furthermore, the individuals who represented themselves to be Metropolis,Inc. promised to:

• Keep the Club Rio Premises clean at its own expense and to remove all refuse from the Club Rio Premises;

• Refrain from bringing or permitting any obscene or pomograpIuc material on the Club Rio Premises and not conduct any obscene, nude, or semi-nude live performances on the Club Rio Premises;

• Not use, suffer, or pernut to be used., the Club Rio Premises in violation ofany restrictions affecfiing fihe Club Rio Premises,including the prohibitions against unlawful activity and obscene or pornographic material on the Club Rio Premises or conduct any obscene, nude, or semi-nude live performances on the Club Rio Premises; and

• Not do anything or suffer or pezmit to be done anyfhing in or about the Club Rio Premises which would violate any covenants made by Plaintiff in fihe Bowling Center Lease.

Ex. 2. The term of the Metropolis Sublease was extended to May 31, 2019 by AMF's prior owner.

2 The alleged parties extended the terms of the Metropolis Sublease without materially altering the terms of the Metropolis Sublease.

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277

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. L

C. Sublease between Metropolis and Rio Ventures,Ltd.

On Mazch 6, 2047, the alleged Metropolis and Rio Ventures, Ltd. {"Rio Ventures")

entered into aseven-year sublease agree~aent far the Club Rio Prernis~s (the "l~ao Ventuua~es Sublease," attached and incorporated herein as E~ibit 3).' Rio Ventures agreed to Limit their use of the Club Ria Premises to the use prescribed in the Metropolis Sublease. Ex. 3, ¶ 4. Furthermore,Rio Ventures agreed to comply with all provisions ofthe Metropolis Sublease, Ex. 3,¶ 4.4 Moreover, Rio Ventures agreed to be bound by tl~e Metropolis Lease and to assume the same role and perform all obligations of Metropolis in the Metropolis Lease as benefiting Plaintiff. Specifically, Rio Ventures agreed it would not:

• Create a nuisance;

• Interfere with any other tenant's normal business operations or AMF's management ofthe building where the Premises are located;

• Permit any waste; and

~ Use the Club Rio Premises in any way that is extrahazardous, would increase insurance premiums, or would void insurance on the building where the Premises aze located.

Ex. 3, ¶ 7. The term of the Rio Ventures Sublease was extended to May 31, 2019 by AMF's prior owner.

GROUNDS FOR EVICTION

THE METROPOLIS SUBY.EASE LS VOID

Defendants' have no right to possession ofthe Club Rio Premises because the Metropolis Sublease is void. Defendants fraudulently represented that they had authority to enter a Tease agreement on behalf of Metropolis,Inc. In fact, Metropolis,Inc. denied that it has ever entered a lease agreement for the subjec# property. See Exhibit 4, Affidavit of Bel Trivedi. On January 27, 2015, the 190th Judicial District Court in Hazris County, Texas, entered judgment declazing that no valid lease agreement exists between AMF and Metropolis, Inc., and that any purported

3 The alleged parties extended the terms of the Rio Ventures Sublease without materially altering the terms of the Rio Ventures Sublease.

Because Rio Ventures assumed the obiigarions contained in the Metropolis Sublease, Rio Ventures is liable to Plaintiff for breach of covenants contained therein. Amco Trust, Inc. v Naylor, 317 S.W.2d 47, 50 {Tex. 1958); Menges x Willoughby, 505 S.W.2d 379, 384 (Tex. Civ. Apg.—San Antonio 1974, writ reed n.r.e.); Jones v. EI Paso Naturat Gas Products Co., 391 S.W.2d 748, 754 (Tex. Civ. App.-=Austin 1965, writ refd n.r.e.}. Furthermore, "a third party may enforce a contract it did not sign when the parties to the contract entered the agreement with the clear and express intention of directly benefiting the third party." Tawes x Barnes,340 S.W.3d ,:,' 419. Here, the Rio Ventures Sublease was expressly intended to directly benefit Plaintiff; thus, Plaintiff can also `~ enforce the provisions set forth in the Rio Ventures Sublease against Rio Ventures.

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""., • a ~ ~ y f

lease agreement between AMF and Metropolis, Inc. is void ab initia. See Exhibit 5, Agreed Final Judgment. The sublease agreement Defendants purported to enter into on behalf of Metropolis, Inc. is void based Defendants' fraudulent acts. Furthermore, the 190' Judicial District Court entered judgment declaring that any sublease agreement ofthe Club Rio Premises between Melxopolis,Inc. and Rio Ventures, Ltd, or Rio Club, LLC is void ab initio. Because Rio Ventures, Ltd. and Rio Club, LLC's right of possession is premised on a valid sublease agreement between AMF and Metropolis,Inc., and because there is no valid sublease agreement between either AIV~ and Metropolis, Tnc., or Metropolis, Inc. and Rio Ventures, Ltd. and Rio Club LLC, Defendants' have no right of possession to the Club Rio Premises. Accordingly, eviction is proper under the Te~cas Property Code.

DEFENDANTS'BREACHES OF THE SUBLEASES (ASSUMWG'THE METROPOLIS SUBLEASE IS VALID}

A. Unlawful Purpose/Illegal Acts

Assuming, arguendo,that the Metropolis Sublease is valid, Defendants agreed to use the Club Rio Premises as a restaurant, baz, or nightclub or any other lawful purpose approved by AMF in writing. Instead, upon information and belief, the Club Rio Premises have become a safe-haven for pervasive underage drinking, illegal drug use, public sexual activity, violence, azmed robbery, and theft. Defendants regularly serve and/or allow minors to consume alcoholic beverages both inside Club Rio's doors and in the shared common parking lot,in violation ofthe laws relafiing to drinking age limits and open containers, and in violation ofthe Metropolis Lease and Rio Ventures Lease. Even more, Defendants' patrons regulazIy use illicit drugs openly in Club Ria and in the shared parking lot, assault one another in the parking lot and within the Ciub Rio, commit theft(ranging from theft of purses to cars to violent robberies at knife-point) in the parking lot and within Club Rio, carry concealed weapons in the parking lot and within Club Rio, and engage in public sexual activities in the parking Iot. Each of these unruly behaviors violates state law as well as city code, thereby viaiating all lease covenants concerning illegal activity. See Ems. 1, 2,& 3. Accordingly, the Club Rio Premises create a dangerous condition that ath~acts criminal misconduct and makes such conduct an unreasonable and foreseeable risk of harm to all the tenants' invitees.

Further problematic, Maroc Bar is operating without a Certificate of Occupancy and without a license to distribute and sell alcohol. Pursuant to various codes and regulations, all businesses are required to have a Certificate of Occupancy to conduct business within the City of San Antonio. This requirement is mandatary in order to maintain code compliance and safety. Likewise, the Texas Alcoholic Beverage Code requires that clubs, such as Mazoc Bar, must obtain proper licenses before they can sell alcohol to the public. Maroc Bar's failure to maintain a liquor license violates city ordinance and sections 11.39(b)(3} and 61.05 ofthe Texas Alcoholic Beverage Code. Mazoc Bar's failure to obtain and/or maintain a Certificate of Occupancy and the appropriate TABC licenses is a violation of numerous codes and regulations and thereby violates the lease covenants concerning illegal activity addressed in all the lease agreements governing the Premises.See Exs.1,2,& 3.

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279

P"~1

Defendants have also violated Section 15-190 of Article VIII of the San Antonio Municipal Code, which requires an operator ofa semipublic swimming pool to have a license for the pool, by failing to maintain a requisite license. Upon information and belief, Defendants have nit ~b~ai~ed the required lieen~e. Iaa addition to not p~sses~ing aa~ rraaantain~g a licea~P for the semipublic s`~►imm~rig pool, Defendants operate the swimming pool in a dangerous, unhygienic and unsafe manner contrary to public health and safety, in violation ofthe subleases and in violation of several municipal and state statutes, including San Antonio Cade of Ordinances, Chapter 15, Article VIII, Sec 15-187 [Responsible for knowledge of all rules], 15- 188 [Compliance with ADA], 15-194 [Intoxication; communicable disease], 15-197 [Safety equipment], and Texas ,Administrative Code, Title 25, Part I, Chapter 265, Subchapter L, Rote 265.202 [Food, Beverages, and Containers at Post10/01/99 and Pre-10/01/99 Pools and Spas]. Accordingly, Defendants aze engaging in unlawful activity by operating the semipublic pool in Mazoc Bar.

Furthermore, upon information and belief, Defendants knowingly permit its patrons to leave the Club Rio Premises with liquor purchased at the premises in violation of several Texas statutes including Tex. Alcohaiic Beverage Code Ann. § 28.10 ["A mixed beverage peimittee may not permit any person to take any alcoholic beverage purchased on the licensed premises from the premises where sold"] and facilitate public intoxication within and outside the shazed parking lot in violation of Texas public intoxication and safety laws including Tex. Penal Code Ann.§§ 49.031,49.02,49.04, and Tex. Alcoholic Beverage Code § 101.75.

~ B. Obscene/Pornographic Behavior

Additionally, upon information and belief, Defendants encourage and/or permit lewd, obscene, and pornographic behavior inside Club Rio and outside in the pazking dot. Specifically, Defendants encourage female patrons to dress in scantily clad. attire by hosting underwear parties and foam parties. The pazking lot is a literal breeding ground for Club Rio patrons which engage in lewd behavior. Tenants on the Premises have found used condoms in the pazking lot while some have been solicited by prostitutes. Defendants regularly have go-go dancers performing in next to no clothing. Additionally, Defendants allow the pool to be used and have in fact recorded videos of females in skimpy, two-piece bathing suits fondling one another which is used as promotional material. Defendants also advertise for "Rio Run Saturdays" with "selfies" offemales, some not wearing tops. Such conduct violates the prohibition against obscene, lewd, semi-nude activities and pornographic material, and constitutes a breach of the lease covenants. See Exs. 1 & 2.

`\

GROUNDS FOR EVICTION -PAGE 5OF6 1911924v.1

G Trash

Upon information and belief, Defendants have further failed to maintain the Club Rio ~'~~~s~s ~ a~~ordanr~ ~ratl~ the Metropolis S~.ble~s~ mad the F~ao ~IentLr~s S~b1_~~s~ T~g~rdaaig the cleanliness of the Premises. Defendants' patrons regularlq trash the shared parking lot, and Defendants wholly fail to even attempt to clean up any of the mess. After the weekend, or a weelaiight in which Club Rio operates, the pazking Iot and sidewalks aze littered with broken glass, beer, wine, and liquor bottles, beer cans, condoms, clothing, and cigarette buds. AMF is leis to clean up Defendants' constant mess since Defendants~refuse to clean their patrons' mess. Defendants' littering is a violation oflaw and a breach ofthe lease covenants.

D. Pool

Upan information and belief, Defendants allow patrons to use the pool. As stated, promotional videos show patrons in the pool in little clothing with alcoholic drinks and without an on-duty lifeguard. Naturally, the pool becomes a cesspool of alcohol, sweat, and other bodily fluids. Without permission from AMF, Defendants drains the pawl directly in the pazking Iot, flooding the parking lot with the stench of chlorine and other chemicals. Such actions constitute violations ofthe Tease covenants and it creates a public nuisance.

E. Signage

Upon information and belief, the parties to the void Metropolis Lease negotiated and agreed that the tenant would not place any signage "or other thing of any kind" on the property without the prior written consent of the landlord (i.e., Plaintiff}. Defendants have violated the void Metropolis Lease and the Rio Ventures Sublease by placing signage and other items on the Club Rio Premises without AMF's prior written consent Defendants' signage and other items are a direct breach ofthe lease covenants.

GROUNDS FOR EVICTION -PAGE6 OF6 19119Z4v.1 280 ~ ~ ~ 1 t

547

~'"°.~

APR*?3-2015 63:29 FROM:JF3 CIVIL. T0:9121g6981101 P.2~2

~~~, c~~us.~ rra ~za~~sua7Y ~ AIVI~'~3UWL~'NG CTNT1~~tS,INC., ) NSTICE OF TSE FEACE COUYtT Plteinti~, . ~ ~'• } PRECII~TCT 3,PLACE 2

XtyU'V~N'~T~S,L'S'D., Anrl RIO CLU73,LLC.~ ~IePend~ntd~. ) B~?ZAl~ COYTN'X"f~C, 7~AS

ORDEi,~

On tTus dQy, came on to bo cons~derod AMF Bowling Crintars, Inc.'s Mottot~ for 5umcn~uy ~7is~ositio~. ~.fter considorin~ the motion and mr~~nvtits of couasoly tJ]C COLII~ f1i1Gj5 ghat Aivd~ BowiFng Centers,Zao,'s 1V~otion for Summary Disposition should be G1~AN'I~D.

It is. therefore, ORDE~3D that AMF Bowling Centexs, It~o.'s Motion for Summary D3spositlon is j~~►b~r GR.ANT~D,

`'"'~ SIGNED this 2? day off' ~,~__„201 S.

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APPENDI~~ C

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~~ ,✓'~ 1/1412015 8:46:16 AM Chris Qanief -District Clerk Harris County r.

f Envelope No:3759162 ~ ,., By: MCNEAL,ARI(?NME ,\ Y~ cause No.Zais-01499 ~,~o a~ ~ov~~~~t~ ~tv~~~,y~rc., s ~r~;~~y~~r~~~ ~o~~;

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v. § 190'CIT JU[)1CIAL DISTRICT

METROPOL,iS,INC., §

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Defendant, § HAR121S COUNTY,TEXAS

AGREED FTNAL,IUUGM~NT

This case came before the Court for a final adjudication. All parties appeared or waived

appearance, announced ready for trial or waived announcement, waived a trial by jury, and

announced that they had settled this case, subject to the Court's entry of this Agreed Final

Judgment. After reviewing the pteadings an file herein, evidence adniiited and being otherwise

fully appzised,the Court finds the following;

Metropolis,tne. is a domestic For~Profit Corporation organized under the laws ofTexas. Metropolis, Inc. has been managed and/or operated by I3a1 Trivedi since 2002 as represented by Bal Trivedi and reflected by public information reports filed with the Texas Secretary of State.

\V Metropolis, Inc. never entered into any agreements with AMF Howling Centers, Inc. ar 0 any ofits associated entities. u Metropolis, Tnc. never entered into any sublease agreements with AMF Bowling Centers, a Inc. or any of its associated entities for the sublease of the premises known as 13307-A do r San Pedro Avenue, San Antonia, Texas 78216 and/or 133 7 San Pedro Avenue, Suite A, San Antonia, Bexar County,Texas 78216, the lease propE:i~ty ai issue in this matter.

o,

~: a RECpRDER'S MEMORANDUM ~tt~g insauinentis of poor qusl9t~l z atthe tlme oftmagtng c d AGREEDFINALJtfDGMENT—Page v 1881 i85v.1 0 A d 264 U

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Metropolis, Inc. never authorized anyone to enter into any sublease agreements on its behalffor the premises known as 13307-A San Pedro Avenua, San Antonio,'~ea~~ 7~~ ~6 ~~.r~r ~33J~ 5asn P~d,~ ~,~~~ue, ~~ai~ A,San ~`in~onio, Bexar County, Texas ~8~16, the lease property at issue in this matfer. Metropolis, lnc. never entered into any agreements with Ilia Ventures, Ltd. or any of its associated entities. Metropolis, Inc. never entered into any sublease agreements with Rio Ventures, Ltd. or any of its associated entities for the sublease of the premises known as i3307-A San Pedro Avenue, San Antonio, Texas 78216 andlor !3307 San I'cdro Avenue, Suite A,San Antonia Bexar County, Texas 7$216,the Jease property at~issue in this matter. Metropolis, Inc. never auflzorized anyone to enter into any sublease agreements on its behalfto lease the premises known as 13307-A San Yedro Avenue, San Antonio, Texas 78216 andlor 13307 San Pedro Avenue, Suite A, San Antonio, Bexar County, Texas 78216 to Rio Ventwes,Ltd. or any other party, the lease property at testae in this matter. Metropolis,Inc. never requested AMF Bowling Centers, Inc. and/or its associated entities to consent to a sablease for the premises known as 1330?-A San Pedro Avenue, San ; Antonio, Texas 78216 andlor 13307 San Pedro Avenue, Suite A, San Antonio, Bexar / Co~uity,Texas 78216,the lease property at issue in this matter. Metropolis, Inc. never consented to or ratified any sub]ease agreements entered into for ~' the premises known as 13307-A San Pedro Avenue, San Antonio, Texas 78216 and/or 13307 San Pedro Avenue, Suite A, San Antflnia, Bexar County, Texas 7821b, the lease property at issue in this matter. To the extent that Metropolis,Inc, is a party to any sublease agreements for the premises known as 133U7-A San Pedro Avenue, San flntanio, Texas 78216 and/or 13307 San Pedro Avenue, Suite A, San Antonio, Bexax County, Texas 782]6, Metropolis, Inc. hereby terminates any and all sublease agreements ~s of Monday, January 12, 201S, and the same shall be void ab initio. io the extent that AMF Bawling Centers, Inc. or any of its associated entities are parties to any sublease agreements with Metropolis, Inc. for the premises known as I3307-A San Pedro Avenue,San Antonio, Texas 78216and/or 13307 San Peciro Avenue, Suite A, San Antonio, Bexar County, Texas 782X6, AMF IIawling Centers, Inc, and/or its associated entities accept Metropolis, Inc.'s termination of the sublease agreements and the same shat! be void ab initio.

ror all these reasons,tha Agreed Final ]udgment should be entered. It is hereby ADNDGBD AND DECREED that Metropolis, Inc. never entered into any sublease

agreements with AMF Bowling Centers, Inc., or any of its associated entities, for the premises

AGREED FIiVALJtlDGME1VT—Page Z 881 t65v.1 ,

1 ~ ~ r~ t .

_ ~•

known as 13307-A San Pedro Avenue, San Antonio, Texas 78215 and/or 13307 San Yedro

Avenue, Suite A,San Antonio,Bexar County,Tcxas 78216.

ADJUDGED AI~TD DECREED that Metropolis,Inc. does nat have any rights, interests or

obligations under any sublease agreements cvcr executed wsth AMF Iiowiing Centers, Inc., or

any of its associated entities, for the premises 3ct~own es 13307-A San Pedro Avenue, San

Antonio, Texas 78216 and/or 13307 San Pedro Avenue, SuiEe A, San Antonio, Bexar County,

Texas 78216.

AD3U77GED AND DECREED that to the extent any sublease a~reemenf exists between

Metropolis, Inc, and AMF Bowling Centers, inc., or any of its associated entities, for the

premises known as 13307-A San Pedro Avenue, San Antonio, Texas 78216 and/or 13307 San

Pedro Avenue, Suite A, San Antonio, Bexar County, Texas 78216, the agreement is void ab

initio and is also terminated without fi~rther force and effect,

ADJUDGED AND DECREED that Metropolis, Inc. did not enter into any sublease

agreements with Rio Ventures, Ltd,, or any of its associated entities, for the premises known as

13307-A San Peden Avenue, San Antonia, Texas 7$216 and/or 133Q7 San Pedro Avenue, Suite

A,San Antonio,Bexar County,Texas 78216.

ADJUDGED AND DECREED that Metropolis,lnc. does not have any ri~his, interests or

obligations under any sublease &greements ever executed wi#h Rio Ventt~res, Ltd., or any of its

associated entities, far fhe premises known as 13347-A San i~edro Avenue,San Antonio, Texas

78216 and/or 1330? San Pedro Avenue,Suite A,San Antonio, Bcxar Caunfy,'texas 78216.

ADJUDGED AND DECREED that to the extent any sublease agreement exists between

Metropolis,Inc. and Rio Ventures, Ltd., or any of its associated entities, for the premises known

as 13307-A Sate Pedro Avenue, San Antonio, Texas 78216 and/or 13307 San Pedro Avenue,

Ace~En F~N~r,JunCnt~n~r—Page 3 1881 i85v,1

1 /~` t 1 ~ ~ ~ 1

•r-, ,j.

ADJUDGED AND DECREED iliac etich' party+ N~i(1 bear its awn casts, including

attorneys' fees,incurred in this lawsuit It is tug Q~er

ORDERED, ADJUDGED AND DECREED by tt~e Court that this Judgment is final,

disposes of all claims and parties, is appealable and that all other relief not expressly granted in

this Agreed rival Judgment is denied. This Judgment disposes of a!! claims and ail parties.

Signed thisi~~of„~{__~,,~142915.

AGnEED AS TO SUBSTANCE AND FORM:

r

Lee L.Cameron, r. Counsel for Plaintiff' AMF Bowling Centers,Inc.

C ~~ Ba!Tr~vcdi Counsel for Defendant Metropolis, Tna.

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AGREI'i.D FINAL J(1pCMENT—Page 4 i8786dbv 2 z ~~ U O Q 't~ w 267 ~~ f ~t },,~~ ~ ~~~w w ~ A}I/V r • ~ ~~ ~ ~ ~~ ~

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~,~~15 ~~I71~ D'LSLY7.Ct. t"iP.Fk Q~~ati1S Co~v_ Texas certify that ~h%s is a ~ru~ and correct copy ~fthe original record filed anal or recorded inr. my affi~e;electro~icallv ar hazel ~op~ as it agp~ars on this date. ~Mness my official hand and seal of office ~5 ~~~ ~r zoo$

Gertifie~ 13oct~negt Number: 639~9717b

Chris Daniel,~I~TRICT CLERK AARRTSCOTJr:TY','TEYAS

In accordance ~vi~e Teas ~a~ernme~t Code 4Q6AI3 eleciranicalh- tra~smi~ted aathenticated dacnmeats are'slid. if there is a +q~estian regarding the raiidit~ of this document and yr seal please ~-ma~7 snggart~hcdicfrictclerk.com .:

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1073

~"°~ ~,

CAUSE NO.201S CV 03QOz -=

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~~ ~~~

AMF BOWLING CENTERS,INC., § IN THE COUNTY C~RT.~~m Plaintiff, § ~~, ,r,~o w ;.,.s~~ '~x~3 y, § AT LAW N~0.14~,~,..~ § ~ `~x~ RIO VENTURES,LTD.,and § o ~ r~-+z .. ~-~,—

~a,-*sm RIO GZUB,L.L.C., § ~ f~ Defendants § BEXAR COUNTY,TEXA~~

ORDER ON DEFENDANTS'MOTION FOR StfMMARY DISPOSITION

On August 13, 2015 Defendants presented their Motion for Sunomary Disposition to the

Court. Upon due consideration of the Motion, the evidence presented at the hearing, the

applicable legal authorities, and the arguments of counsel, the Court finds that the relief

requested should be GRANTED.

IT IS'I'HER~FORE,ORTDERED,ADJUDGED AND DECREED That Rio Ventures,

Ltd. and Rio Club,L.L.C. aze entitled. to possession ofthe Premises.

THIS YS A FINAL ORDER.

SIGNED g"~3-fa

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ORDER ON MOTION FOR SUMMARY DISPOSITION PAGE 1 OF 1

APPENDIX E

1075

/"R !"~a

CAUSE NO.2015 CV 03002

AMF I30WLING CENTERS,INC., § IN THE COUNTY~4IT ~ ...--..

cam+ ZCy"" r ~~~~niiff~ § ~ a ~,.,., ~~.

§ c~ I nc'

RIO VENTURES,LTD.,and § ~ :2~; RIO CLUB,L.L.C., § ~ ~;~''

Defendants § SEXAR COUNTY,~EX~~~ --

cn ORDER F4R POSSESSION

4n August 13, 2015, the Court considered the de novo appeal of the forcible entry and

detainer appeal of the above captioned matter from the Justice Court Precinct 3, Place 2, Bexar

County, Texas, Cause No. 32-E-15-00716. Upon due consideration of the papers on file, the

evidence presented, the applicable legal authorities, and the arguments of counsel, the Court

finds that possession of the demised premises, 133Q7-A San Pedro Ave, San Antonio, Texas

78216 (the "Premises"} be awazded to Defendants Rip Ventures, Ltd., and Rio Club, L.L.C. The

misnomer of Metropolis Nightclubs I, L.P. on the Lease, Sublease, Metropolis Extension, and

R.io Ventures Extension does not impact the validity or enforceability of the Lease, Sublease,

Metropolis Extension, or Rio Ventures Extension.

IT IS THEREFORE,ORDERED,ADJUDGED,AND DECREED that judgment for

possession ofthe Premises is awarded in favor of Rio Ventures, Ltd., and Rio Club, L.L.C.; and

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the bond shall be

relinquished and discharged to Rio Ventures, Ltd., and Rio Club, L.L.C.;

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that al! writs and

processes for the enforcement ofthis Order may issue as

SIGNED Sr`I~•t

ING

ORDER 1 OF 1 i ~~

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LANDLORD; AMF BOWLING CENTERS,~Nc.

TENANT: Metropolis, inc. or assigns, dlb/a MetropaEis LOCATION: 933Q7A SAN PEDRO AVE.

SAN ANTdNI~, TEXAS

SUBLEASE AGREEMENT TABLE ~~ CONTENTS

• ~ Article 1 Parties 1 Article 2 Premises 1 Article 3 Term and Use 1 Article 4 Possession Article S Rental 2 Article6 Tile ~ . 2 Article 7 Alterations 3 Article8 Removal of Chattels 3 Article 9 Camplfance far Tenant's Account 3 Article 10 Utill~ies 4 Article 11 assignments, Subletting &Discontinuance of Operation 4 Article 12 Repairs 5 Article 13 . Damage 6y Fire 5 Article 14 Indemnity 6 Article 15 Regula~ior~s B ArficSe ~6 Eminent domain ' 7 Artlol~ 't7 Default Article 18 Notice of Termination 8 A~icle 19 Right of Entry 8 Article 20 fteletting After Tenant's Default 8 Aficie 21 Notices 9 Arrticle 22 Waiver 9 Article 23 Genera{ Provisions 10 At#icE'e 24 Mechanic's Uen 11 Article 25 ~omman Facilities 11 r° 28 Ar~cle Reai Estate Commissions 12 Article i 27 Occupancy and Rectal Taxes 12 Article 28 Real Estate Taxes 72 Article 29 Signs 12 A~icle 30 Contingencies 13 Article 31 Security Deposit 'f 3 Article 32 Renewal Option 14 A~icle 33 Landlord Fixtures and Equipment 94

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i, ~ e

~A~s ART. 1. This lease; made in quadruplicate,fhe 14fih day of October 20(?5T by and between AMF BOWLING CENTERS,INC.. a corporation organized and existing under the laws of the Commonwealth of Virginia, having its principal place of business of 8100 AMF Drive, MectlanicsviUe. Virginia 2311'f hereinafter referred to as "l.,andlcrd", and Metropolis, Inc, or assigns d/b/a f~etropof'ts a limited liability company, organ'~zed and existing under the lavtirs of the State af•Texas~ hereinafter referred to as "Tenant", WITNESSETH:

PREMISES ART. 2, The Landlord does demise and let unto the Tenant and the Tenant does lease and take tram ttZe Land{ard for the term acrd upon tine terms and candiftons setforth in ifiis tease the premises known as 13307-A San Pedro Avenue, San Antonia, Texas 78216 and consisting of a one story building containing appro~cunatety 13440 square feet of space artd ouFslde fenced area containing approximately 8,20a square feet as more particuEar[y shown on Exhibit A a~ttaeh~d hereto and rmade a pact hereof(the "Premises"),together with a license to use as and to the event that the same presently exist subject, however, to'the provisions of ART.25 h~reaf, all Common Facilities, including `- parking areas and all streets, service drives and sidewalks shown on Exhibit 8 attached hereto and made a dart hereof within the area described as "Entire Premises". TERM OF USE ART.3. To have and to hold the same far the term (subject to Art.4 and Ark 30 hereof} to commence on ~atober 14, 200 and to end on tP►e 30fLi , day of September, 2008 at Midnight, unless sooner terminated as herein provided, and for any euet~cised option periods-as specit+ed in ART.32 hereof. Said Premises to be used asa Restaurant, Bar or N(ghtclut► or for arty other lawful purpose approved by Landlord in wrI~ng, whose approval will not be unreasonably withheld, and ~xoept as speaf~cally limited in Article 1 ~ hereof. POSSESSION ART,4. The Tenant accepts the building, improvements, and mechar~icat systems ~n tf~s Premises in their present condition. The Tenant agrees #a deliver to the Landlord physics! possession ofthe Premises, upon the termination of the term hereof, or any e~cEensians thereof, free and clear Qf all tenants and occupants and tt~ee:~ights of either. in good conditian~ reasonable wear and tear excepted. Ter~anf shall keep tt~e Premises clean at its ovm expense, and wiq remove a41 refuse from the Premises.Tenant shall not bum any materiaEs or rubbish of any descr~p~on upon the Premises. Te~ar~t agrees to

.•

~' ~

•,

keep all accumulated rubbish in covered containers and to have same removed regularfy, to the event Tenant fails to kip ttn~ I~~~i~~~ ~~d ~the~ pc~ar~s heretofore descn'bed in the proper condtttan Landlord may cause the same to be doge far end an ac~aunt of Tenant and Tenant hereby agrees to pay the expense thereof an demand as addittona{ rent RENTAL

ART. 5, The Tenant agrees to pay to the tandlard the guaranteed annual rer~t~l without p~iar demand, in equal montF~ly instailmerits based on the rental schedule below, on the first day of each and every month during the term hereof for the current calendar month, cammendng October 14, 2005; provided, however that the manthty rental due and payable for the period October 'i4, 20 5 through Nat+ember 30, 24Q5 shop be $0 and the monthly rerrta!far fhe month df December 2005 shall be paid ire advance on the dafe this lease is executed. The aforesaid payments of~ rent are to he made fo the landlord by delivery of the funds t~_the Center Manager iof AMF Country Lanes, 13307 San Pedro Avenue, San Antonio, Texas, onto such other place ss shai{ tie designafied by Landlord in~ writing at least ten {10j days prior to the next ensuing rent payment date.

RENTAL SCNEDUL.E

October 14, 20I}5 thrta November 30;2005 $0 Mo. December 1, 2005 thru Sept~rnb~r 30,2006 Mo.

October 1,2406 thru September.30,2407 Ma.

October 1, 2007 thru September 30, 20Q8 -

Ma.

If any monthly ins~aEimer~t is not paid by the fifth (5~) day after the due date thereof, Tenant sha11 atsa pay, in ad~itlon to the monthly rental instatimen#, • a late fee equal to fnre pert~nt{5%)of such monthly rental instalhn~nt. T(1`LE ART,6. The Landlord herein is r►at the owner of the Premises but holds possession of same by virtue of the following lease agreement(herein referred to as fhe "Over~ease"}:

Sublease dated October 1,'1989 by and befween ~.W. WOOLWORTH GO., landlord, hereinafter referred to as "Ovartandtard" and AMF BOWLING as CENTERS,lNC., as tenant, a facsimile of whicF~ shat! be atfached to this Eease for reference and otf~er purposes rela~ng to this lease.

The Tarrant agrees that it wi!{ not do(or sufFer ar permit to be done)

anything in or about the Premises or in connecEion therewith which violates any of the covenants.made by the Landlotd as tenant in said Overiease. The'

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Lan8lord agrees that fhe Tenant, upon paying the rent and perform€ng a!t of ths ~~►~~~~i~~.~~ ~~~~ lease, ~a~v quae~y ~~I~I U~M ~~~cy the P~errz~~ d€c~~g ~h~ ~~rr~ hereof,free ftom hindrance, or molesta~an by the Landlord, but subject however, ~o the Overleasa and atl mortgages, tiens~ res#ricfians and sncumbrartces . affa~ng said Premises.

The covenants of this lease shaft not be binding upon AMF BOWLING CENTERS,INC. if it shall far any reason cease to be the holder of fhe said 4veriease, provided tts successor assumes the obtiga~ans of E.ar~dlord under this tease, including the covenant of quiet enjoyment AL3'ERATIt~NS ART.7. The Tenant agrees that ~t will not without first obtaining the written cartsent of the ~andtord make any structural ornon-structural changes to the Premises. The Tenant agrees to pay the entire cost of ap.prior approved changes and a(teratians. Landlord hereby agrees that consent for Tenantto make alterations shall not be ~unreasanably withheld. CR addition, Tenant hereby agrees to invest a~ least$100,000 in refurbishments to the P~mises vutthin fhe initial ninety {80} days of the ierrn of the lease, and to promptly thereafter provide landtard with copies of at{ paid k~voices and lien releases applicable to the associated refurbishments. Tenant shag notfinance the cost of any such refurbishment with any third party debt serrured by the Premises ar any related nefurbishmer~ts.

The Tenant agrees that all changes and aiteratfons made by iE to the Premises shall be made in a good and workmaniik~ manner in accordance with plans and specifica~ans submit#ed to and approved by Landlord, and in conipliarice witi~ all federal state or municipal laws and ordinances and the rules and regulations of any department ar dirrision thereof. The Tenant also agrees that prior to ifie making of any changes ar altera~ons to the Premises, tt wi!} procure at ids own expense and maintain and keep in fore:Atte~atians riders an the pubt~c fiabflity Insurance policies described in ART. 14 hereof protecting the Landlord against loss or liability during the mgking ofsuch changes or alterations. ~•

in the event that(x} the total cost of any alteraf~ans to be pertarmed at any dime exceeds $10,QDO.QO acrd (y)such altera~ons are being performed by fhi~ci parties {rather than persons assacfat~d with Tenant) Tenantshat( provide LandD~rd wig ~itt~er 3ien ret~ase~ evidenaitag payment of ail work performed on ~ monthly basis for all w~ric performed during such month or a completion bond payable in ttEe event of defaui# to AMF Bowling.Centers, Inc, in an amount equal to the cast of the changes or alterations from a bonding com~sany Cc~nsed by the StaEe of Texas and aacegtabie to Landlord. Any such completion bond shat! be delivered to tF~e L;andford pc~oc to the cammencemenf of any changes or altera~orts to the Premises. REMOVAL OF GHATTELS

52

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AFtT, B, In the event the Tenant shall nat be in de~auf~ under the fiarrns and provisions ofth'ss lease fhe Tenant may, prlo~ to the terminatfan thereof, remove the Tenar~Ys chapels, fixtures acrd persanai praparty from tl~e Premises provided that the Tenant shalt immediatery repair, at Tenant's sole expense, any and ap damage done to the Premises by such removal. COMPLIANCE FQR TENANTS ACCOUNT ART.9. Anything f~erein corrtained to the contrary notwithstanding, the Tenant agrees that if the Tenant shop be in defaui# in petfom~ing any of the terms, cave~tants, conditions or provisions of this lease on the Tenanfs part to bs performed, except tfie aavenant concerning the paymerrt of rent, and If the Tenant stall not have cured such default witFtin thirty(30)days after receipt of written notice from tFte La~dlard,the Landlord, if it so elects may enter the Premises for the purpose cf performing the same far the account of the Tenant and any amount paid or expenses c~ IEabili~es inccrrred by the landlord in the performance ofsame, shall be deemed addjtional ant and shall be paid by.the Tenant to the Lantiiord ate the first day ofthe foltowln~ calendar month. UTILITIES

ART. 9Q._ Landlord agFees to provEde, at Its sole expense, ai! utility services used an the Premises.• UEii'~ies to be only water, electric and or gas., 1'ha foregoing naiwlthstanding, any interrt~ptian. ire utility service shaEE not: constitute an eviction or disturbance of the Tenants quiet enjoymen# of Ehe Premises and, artless the same results from Landlorri's negligence ar intentional aa~, no damages or rent abatement shall be due Tenantftom L.andlard. ASSIGNMENTS.SUBLETTING DISCQNTlNUANCE t)~ OPERATt~N ART. 11. The Tenant sha(1 not assign,su6iease~ mortgage, pledge, ar encumber this tease without the prior written consent of the Landtorcl~ which consent. in the case of any proposed sublease, shall not be unreasonably withheld. to the even!that Tenant wishes to sublease the Premises, Tenant sha11, fn eonnectian with its request for Landlord's•cvnsent, provide Landforc! with a copy of ariy such proposed sublease, copes of all re{ated financial and credit infon»ation regaccling the proposed sublessee and copies of any and alt addi~onal information reasonably requested by landlord; provided, hawevar, that Tenant may redact then rental figures from any ~uah campy of the sublease.`i`t~e foregoing notwithstanding,the Land{ord will permit the sublease of the Premises to a corporation awned entirely by, or under fide sole control of, the Tenant.

The Tenant agrees that the value of the Premises and the reputation of the l.artcfior~ and:Overfandlord will be seriously injured if the Premises are used for obscene ar pornographic purposes or any snrE of commercial sex establishment The Tenant agrees that Tenant wig not bring ar. permit any obscene or pornographic mater~sl an the Premises, and shall not permit or

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conduct any obscene, 11Ud@, or semi-nude t)ve perfarmartces on the Prei»Ises, ii@~ ~3@i'r~i~Y~i iis~ fii i~'i@ "r3'i8F7iiS8S i~f i~Ei'u~~ Fi3C5~@E~ii~j, Pa~9 ~~~~iQ^§, ~~ ~5 ~ ~C2= coped rubber gBods shop or as a sex club of any sort ar as a "massage parlor". The Tenant agrees further that the Yenant will nr~t permit any of these uses !~y any sublessee ac assignee of the Premises.'This Article shall directly bFnd any successar~ in interest #o the Tertan~ Tenant agrees that if at any time Tenant viafates. arty of the p~ovisians a~'this Article, such violation shat! be deemed a breach of a substantial obfig~~ion Qf the terms of this lease and obJecti~naale conduct. Pornographic material is defined far purposes of this Article as any writ#en or pictorial matter wi#h prurient appeal Qr any objects ar instrumetrts that are prir~tarily cr materially corice~rnad with lewd ar prurient sexual ~ctivity.

Nr~thstanding any sui~le~ing ar assignment,Tenant shill remain iiable~ for the periarmance of all the terms, covenants'and aondi~ians of this lease. In addition, no such assignment or su6teas~ will relieve any guarantor of fhfs lease ftam any iiet~iEity under sum guaranty.. ~ .

REPAiFtS ART. 12. Tenant shaA, at Its own cost and expense, keep and maintain the Premises and appurtenances thereto and every part thereof, ins goad orcler and.~epair excr~pt portions bf the Premises to be repaired by Landford~ pursuant to this Artict~ 12° W~haut limiting the foregoing, Tenant agrees to keep all interior fixtures, ptu_ mb~9,walls and lig~iting m good order and repair, and 'tenant shall be {;able far any damage to such system`s. Tenant agrees to return the Premises to 1.andtord at the expiration ar sooner termination of this lease in as good condi#ion and repair as when first cereived, reasonable wear and tsar, and damage by Fire or other insurable casualty excepted. All damage ar injury to the Premises or the building, ar the cammatt area, caused by the act of negiigenoe of Tenani~ his agents, employees, licensees, invites or by v~sito~s shaft be promptly repaired by Tenant, at its sale Cost artd expense and to the satisfaction of Landlord. Landlord may make such repairs which are no# promptly made by Tenant and charge Tenantfar the cost thereof and Tenant hereby agrees to pay such amounts an demand es add'~ionat rent hereunder. Tenant shall have no right to make repairs at tfte dense of Landlord, or to deduct the cost thereoffrom the rent due hereunder, Tlie landlord agrees fo maintain and pay for {a)al! repairs, struatiaral ar atbetwtse, to the exterior rsf the Premises, identified as being exteriaC walls, roofkop HVAC equipment, parking logy, curbs, sidewalks arm alleys.

Nofi~~fttstartding fire above,the Tenant agrees to make and pay for interior or exteriQt repairs resulting from alterations ar improvements made to tt►e Premises by Tenant

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DAtv~AGE BY FIRE ART. 13. The Tenant agrees thaf if the building for tFie ~'rernises or the building of which the Premises are a part is damaged ar destroped by fire or through any other cause to imm~dlate}y notify the Landlord of such damage ar destruction.

In the eventthe Landlord does not exercise its apfion to cancel and terminate this Lease as herein provided, fine Landlord agrees to take appropriate action to require the Overlandlorcl to comply with the provisions of ART. 13 of sa[d Overlease at Overiandlord's own cos# and expense and there shall bean abaterneni of cent during the same period and in the same proportion as ~e abatement of rent realized by the Landlord pursuant to the provision of ART. 13 of the C~veriease.

It is spectftcaily und~rstoad that the l..andlord sha(1 have no obligation whatsoever to restore the building for the Premises ar the building ofi which the Premises are 2~ part and that the Land3acd's oblEgations In this respect ace m~stricted solely to faking the appropriate action referred to in 'Ehe preceding paragraph of Phis ART.73. Furthemrore, nalwiths#anding anything in this ART. 13 to fhe carttrary withstanding, the LandiQr~d may,!n the event that l~ndlorci detemtines, in its sofa discre~on, that the cost of restoring or repairing any such damages are material,terminate this lease by giving written notice to Tenant, in which event the Is~se will terminate and neither party will have any further . liability #a one another under flits lease.

Furthermore, Tenant agrees Yhat in fhe event of damage or destrudian by fire or other cause of Tenant's leasehold improvements, Landlord shall have no obligation to impair ar restore said leasehold improvements and Tenant agrees to maintain insurance coverage on such leasehold improvements and to repair or res#ore same in the ever~f of damage by ire or other cause. (h1DEMNiTY.

ART.14. The Tenant during Elie term hereof shall ~ndemntfy and save the ~.andforci and the Prerntses free and harmless from and against any and all claims and demands whether for injuries to ~ersans andlo~ lass of fife, ar damage to prope~iy~ arising out of fhe use and accupahcy of the Premises by the Tenant or by any person or persor►s holding under the Tenant, excepting hoinrever such alatmsared dert~ands whether for irtjca~iea #o pe~on~ or lass of fife or damage to property caused by acts or omissions of the l..andlord.

The land{ord during.the term hereof steal! indemnify and save harmless the Tenant and its I'rcensees ftom and against any and alt claims and demands whether far injaries to persons or loss of life or damage to property, acEsing apt of acts or omission's of the Landlord.

The Tenant agrees that it will obtain and maintain in full force and effect

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througfiout the term cif this lease, public[iabitity insurance with iimifs of not less fan ~~~~~~3,C~:~~~~ ~~3€~ ~e~pe~ t~ ~ecs~.^.ai ~~~:~ese~ aid B~s~ ~€ t~~, ar~~ $500,00 with respect#a property dam~~e, a!I s~uatt policies to cxntain an endorsement Insuring the Tenant's cantractua( Ifabiiity to the Landlord as set forth in the preceding paragraphs and an endorsement watering the insur~r"s right of subrogation against the Landlord. The Tenantfurther agrees that it small deliver to tha L.andlard a cet~ificate of the Ensuring company certNying the above described insurance is in fuq force and effect prior to the commencement date of this tease and (hereafter on an annual basis no later than January 95 of each year of the term. REGULATlOt~tS

ART, 15. IF any federal, stata or municipal gavemment or any department or division th~reafshall condemn the Premises or any part thereof as unsafe or as not in canfarmiEy wiEh,the laws and reguta~ons refafing to the• use, occupataan and construction(hereof, or has prdered or required or shall hereafter order ar require any r~bnilding, alteratEan or repair thereof or irtstalEations therein, Landlord agrees to take appropriate action when sa requested by the Tenant in wriEing in rec;uire the ~verEandiord at the 4veriandiord's ovm cflst and expense to rebuild ar make such afterafions, installa~ians and repairs as may be necessary to comply with such laws, orcters or requirements. If by reason of such laws, orders ar requirements or work done by the Overlandlord in cannec~ian therewith, the Tenant or its 1lcensees are '~ _ deprived of the use of the Premises, Tenant's rerrt shall abate during the same period and in fhe same proportion as the ab~temerrt of rent realized by Landlord pursuant to the provisions of ART. 15 of the Ove~iease. If, however, such condemnation,,order or request as in this Article set forth shall be the result of some unusual use of the Premises by #tie ~'enant ar its licensees, the Tenant shall comply with such order or requirement wifhin the Premises at jts awn cost and expense and no abatement of rent shall be granted. EMINENT DOMAIN ART.I6. to the event alt of the Premises steal! be approp~ated or taken under the•powec of eminent domain by any public or quasi-public au#horlfyt this lease shall terminate and expfia as atthe date of such taking and the Landlord and Tenant sha~il thereupon be released from any further liability hereunder otherwise arising~from and after the date of such taking.'

in the event part of the Premises shalt be appropriated pr taken under the power of eminent domain by arty public yr quasi-public authority the Tenant shall have'the right to cancel and terntinate this lease as of the date of such takfig upon giving to fEte Landlord notice in writing of Bch election within twenty (20)days after the receipt by the Tenant from the Landlord of written nonce that; said Premises have been so appropriated ar taken. to the event of~s~~h cancellation the Tenant shall thareupan be released from any further liability under Ellis lease, The larrdiord agrees immediately after arty appropriation ar

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fia{cing to give to the Tenant na~ic~ in writing thereof.

!fi a portion of the Premises shall have been appropriated ar taken and if this lease shall continue, Then to t~af event, the Landlord agrees to take appropriate action when so requested by the Tenant ~n wrung to require the Overlandlord at tl~e Overlandlard's own oesf and expense, to immediat~iy restore the fauiiding on the Land remaining to a complete unit of i'rk~ quaEify and character as existed prior to such approprrafion ar taking. Tenant's rent shat!chafe during the same period and in tfie same proportion as tYie abatement of rent reat'~zed by Landlord pursuant to the provisions of Art.16 of the Overtease.

DEFAULT

ART. 17. - Each ofttie f411owing shall be deemed a defauf~ and a breach of ~h~s lease:(a)the fiE1ng of a pe~tion by or against the Tenant for adjudication as a ban[crupt or tnsoivent;(b)the underEaking of any action for the • d4ssolu~ion or iiquida~on of the Tenarrt, whether ins#ituted by or against the Tenant;(c)the making by the Tenant of an assignment for the benefit of creditors;(d)abandonment of the Premises and a failure to maintain and repair ttta Premises as required by this lease; fie) faHura to perform any covenant •(except the covenant conc,~rntng the payment of rent} or condi~on of this lease on the part of the Tenant to bs pertormed and if such default continues for a period of thirty(30)days after nonce in writing of the exis#ence of such default shall be given by the Landlord to the Tenant;(fl failure by the Tenant to pay within fve(5)days after written demand by Landtiorti~ arty rent or otheG sum or sums ascerEainable and payable to the Landlord under the terms of this lease; (gj passage of this lease by operation of taw to any per~an or persons ether than the Tenant;(h)appointment of a receiver ar trustee for the Tenant's properly if such receiver or trusfige shat{ not be discharged within fihirly(34)days after his appointment NOTICE C?F TERMINATION

ART. 18. to the event aP any such default an the part atthe Tenant, this lease may be terminated by the.Landlord at any time thereafter by gyring to the Tenant net teas than five(5j days notice ~n writing of Its tnten~on to terminate this lease. Upon tfie date specified in such notice of termination, this lease a»d the term hereof shall expire and come to an end in the same manner and to the same extent as if such date were the date herein provided far the expiration of the #erm of phis le~s~a Such right Af ter►xtiina~on ~ha11 be in ~dd~ian to any other fights and.remediesof the Landlord under the provisions of this lease or otherwise available to l.andlorct urtda~ applicable law. An election by Landlord to pursue any one or more right ar remedy shall not constitute an etectlon by Landlord to pursue such remedy to the exclusion of, ar a~ a waiver of the right to pursue, any o#her right or remedy.

If the basis flf such notEce shall be salary the failure of the Tenant to make repairs, atterat~or►s or changes in or to the PremEse~~ and if within the thirty(30~

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day period specified by ART. 17(e) hereof, the Tenant shag have cammencerl ~a,.~# ~ha!! c~~t E~~de c~~:~BRt~~ G~~~ P~~~i~o ~~a~~e~~s or chara~~~, the L~ndla~d will nat, while the Tenanf is diligently engaged in making said repairs, altara~ians or changes, give to tFre Tenant native t~rmir~ating this (ease, as provided far in ttzis Article, unless Tenant`s default may iesutt in the termination of fhe C?veitease or subject tfie Landlord to a fine or penally. RIGHT OF ENTRY ART. 19. in the event of a default on the part of the Tenant pursuant to the provisions of ART. 17 hereof, the [.andiord or its agent, servants or represenEa~ves, may immediatelyor at any time thereafter, re-enter the Premises by #orce,summary proceedings, or otherwise and receive possession of said Premises and remove all persons and property-therefrom, without being liable far prasecu~on therefor, and the Tenant hereby e~ressiy waives the service of any nonce in writing of intention to re-enter. No re-entry by the Landlorc# sha11 be deemed an acceptance of a surrender of this.lease. RELETTING AFFER TENANTS DEF/~UL.T P►RT. 20. fn the event of a default an the part of the Tenant, the Tenant agrees that !n additlan #o any atfier rights and remedies of the Landlord under the prav~siotts of this tease,the l.andlard may, but shall not be required fo do so, relet the Premises or any part #hereof(with or without terminating this "'~ tease andlor taking passesslatt of said Premises by court action or othervvise)

either in the name of the Landlord or otherwise at such rent as i~ may deem reasonable and #ar a term which may, in the discre~an of #ire Landlord, extend beyond the term of~this lease, and in +connection ~nrith such reletting may alter and change the Premises to ffie extent which may be necessary to suit the needs and requirements of the r~ew tenant, and the Tenant e~ressfy agrees Eo pay as liquidated damage fog the breach of the covenants contained in this lease an amount not to exceed the differences between the rent reserved and the rent collected ar~d received, if any, by the Landtor~ (less all expenses of every kind of the Landlord in connection with afte~ing, repairing and releiting the Promises)

• during the remainder of the term of this Eerie. Such difference Qr deficiency between ffie rent herein reserved and the rent collected shall be tiue and payable iri monthly payments during the temt of this lease as the amount of such djfference ar deficiency shalt from time to time be ascertained. _

{dt~TICES ART,21. Wherever in this lease it chap Ise required or permitted that notice ar demand be given ar serried by either party to this lease to or on the other, such natic~ or demand shall be given and served and shalt not be deemed to have been duty given and served unless in wtifing and farwarcted by, certiFied malt, and addressed as follows:

TO THE lANDLfJRD • 8100 ANiF Qrive

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Mechanicsville, Vf~ 2311'i Atten~on: ~c~-~'tesider~t -lea{ ~stata

TO THE TENANT: Samuel Panchevre 16 Carriage HiiEs San Antonio, Taxas 78257

Such address may be changed from Mme to fiime by either party by serving rratices as above provided. WAVER ART.22. No defauii~ shall be deemed waived unless in writing signed by the ~andfard.

The failure offie Landland to insist upon a sMct perfo~rna~ca of any of the terms, covenants and condifioRs ~ierein, shag nat be deemed a waiver of any rights or remedies that tk►e ~ar~dforcf may have, and shag not be deemed a waiver of a subsequent breach ar default in the terms, covenants and conditions herein contained. This instrument may not be changed. modified oc discharged orally. ~ . GENERAL PRQVtS14NS ART.23. This lease is and shall be considered to be the onEy agreement between the parties hereto. AH negot~a~ons and ora{ agreements accep~ble to i~ofih parties are included herein.

1t is further agreed between the parties F~ereto that the signing of this lease by ifie Tarrant does naE aons~tute a complete transacEfan unfit such time as Phis fuse shall have been accepted by the Landlord, and executed by its proper officers.

The captions of this loose are far carnenience only and are nc~t a pall ofi this lease and do not in any way IimiE or ampiifjr the terms and provisEons of ifiis tease.

0f more than one person or corpsara#ion is named ~~ Tenant in this lease and executes the same as such, than ancf in such evaatt the ward `Tenant" wherever used in this lease, is intended to refer to all such persons or corporations, and the [iabitify of such persons or corporations for campisance with and perfarrnance of all ofi the terms, covenants and provisions of fihis lease shall lae }Qit~t and several.

The Landlord and Tenant agree that aq fhe provisions i~ereof are to be construed as covenants artd agreements as though the wards importing such

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covenants and agreemen#s were used in each separate paragraph hereof, and i~~4 iii ag 4~~ ~~v~~irris h~~~~ shaDt ~lyd ar~d ;r~€~r~ t~ tts~ ~~.^,e~~ ~~e pa~ie~ hereto, and t~tair respecflve heirs, legal represer►ta~ves, successors and assigns.

The Tenanfi agrees that under alt circumstances where the Qveflandiard shall be required to perFonn any obligation under ifie Overlease and the Landlord has agreed in this lease to tike appropriate actin to require the Overiandiocd sa to do,the l.andiord shall be sntftled to a reasonable time within which to require the Overtandlerd to perform such obCgation.

Na dimine~ion or abatement of rent, or other compensation,shall be claimed or altawed for inconventenr~, discomfort or interrup~on of business arising from the making of repairs or improvements to ~e building or for any space taken to comply with any law, ordinance or order of a governmenfa! authority, except as eEsewhere herein specfficagy provided.

The Tenant waives all r~ghEs fo redeem under any~law of the State of Texas which is now in effect or may hereafter be enacted or enforced.

The rights given td the Landlo€d herein are in addition to any rights that may be given to the Landlord by any stah~~e or of.~erwise.

The Tenant agrees that the Landlord and its agents and employees may . during reasonable business hours enter in#o and upon the Premises for the ~~ purpose of inspea~ng same, or for the purpose of sale or within six(6j months prior to the expiration of ~e term hereof 4r any ex#ensiun thereof for the purpose of rental. During the six (6) months prior to the expiration of the term hereof, the Tenant agrees ghat the usual nofi~ces "Far Safe" and "Ta Let" may he pEaced and remain unmote$ted in a conspicuous place upon the exterior of the Premises.

Anytttting in this lease to the contrary nafwiths#ending, the Tenant agrees that it will not uses suffer or permit to ~ used, the Premises or any part thereof in viotatioR of any res~-ic~ons affecting the Premises and now in force.

The Landlord shall not be tia~le far arty failure of water supply or electric c~rrettt, nor for injury or damage to person ar praperEy caused by or resul~ng from steam,gast'efectric, water, rain or snow, which may teak or flow from any part of the building nn the Premises or the buUding of which the Premises are a part, or from pipes, appliances or plumbing work of the same, or from the street ~~ sub-surface or from any other ptace~ c~or for intetf~renc~ with ligh# ar other tt►an the Landlord, or caused by oparations~ by ar for any governmental o~ quasigovemrnenta ! authority in c~nstruc~an of any public arqucsi-public work; the Landior~i shall not be {fable far any tatent defect in said building. MECHANIC'S LIEN . AFtT. 24. The Land{~rd sFrail not be liable for any tabor or materials furnished ~o the Tenant and no mechanic's or others lien for such I&bor and

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materials shat) attaci~► to or affect the Fr~mises or the i~f~~t.aff~~ f.~~idi~rd therain. Whenever aid as after as any such ien snaiE have been r~iE~~ ~~~i~~~ the P~emises, the Tenant shat[ fortF~with remove or safisfy the same by bonding, deposit or payment and in defauEE thereoffor ten X10}'days afbac notice to the Tenant, the t..andlard may pay the amount of such mechanic`s il~n or disdzar~e the same by bond ar deposit and the amount so paid or deposited together with interest at the rate of tweive('E2%? percent per annum shall be deemed additional rent dtte hereunder and payable on the date when the next instafiment of rent sf~ali become due, COMMON ~ACIUTfES ART,26. The itcsnse given hereunder to Tenanfi to use ~ttie Common Facilities hereinabove described shall not be deemed to grant or•c~nvey to Tenant any rights, easements or interest(other than a bare license to use)said Gammon Faci(i~ies.

l.andtord agrees to take approp~ate action whensa requested by the, Tert~ntin~wri~ing•to~requlre~#he Ove~landiorci.to maintain.afl o~,said Common Fadlit~es in good and.usat~le_aandi#ian, free and clear of ice, snow and debris , and adequately fighted ~t a[!times when ~enatlt is~open for business,_without any charge or cost for. such use (ij► Tenant REAL ESTATE C(3MMISSiONS ART.26. E.andiard and Tenanf each hereby represent acknowledge and agree that it has cf~al~ with no person or party in connection with tf~~s tease and neither of them owes any person or party any rental commisslons~ broker €ees or related fees arising out of the negotia#Ion ar consummation of this lease. Tenon# hereby indemnifies arfcff holds Landlord harmless from any e~aims relating to any incoccecfies$ or Inaccuracy in the representa~an made by Tenant in the preceding sentence and Landlord F~ereby iridemni~iea and hr~ids Tenant hornless from any claims renting to any inca~rectness or inaccuracy in the representation made by Landlord in the preceding sentence, OCCUPANCY AND RENTAL.TAXES

ART,27. Tenant hereby agrees to pay all excise, sates, use, transac~ian or privilege taxes ar similar taxes however named, which may be levied, ~ivhefher against l..andford, Ov~rtancltord or T~na~nt~ by any government or gavemmental agency upon the rental payable under this lease, Tenant's occupancy of ilia Premises ar the privilege of Tenon# to conduct business in the Premises. .

REAL ESTATE TAXES

AR's. 28. Landlord shall be t~sponsibla for all payments regarding re81 estate taxes for the Premises.

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SIGNS

ART. ~9. Tenant wltl not place ar suffer to be placed ar maintained on any extetiar doar,.wai) or window of the Premises any sign, awning or canopy of advesEising matter or otfter thing of any kind and will not place or maintaidoor n any ng adverti sing matter an the glass of any window or of decorainon, letteri or t the.Premises without first obtaining Landlord's prior written approv and al consen in each instance. Tenantfurther agrees to maintain any such sign, avming canopy, decara~ion, fettering and advertising matter fi good condition at aEl Mmes. Goad condifiion as herein used shah tnotude, without limi#atian~ palr~ting, replacEng Csgh~rtg arsd such repairs and improvements as shill meet l andlord's rd spe~ificatlores, All signs shalt be subject to landlord's approrrat and i.andto agrees that paid approval shall not be unraaso rsably wi~tthe ld, Tenant , at sign on Tenant`s sale expense, shalt be atlowed to place and maintain a {ighted add~ia nal the pylon sign for the center subject to the provisi ons above, with n~ charges for said privilege.

COt~TiNGEtdC{ES ART.3fl. Landlord's and Tenant's obligations under this lease'

liquor ~- agreement shalt be can~nger►t an the Tenant securing all business and s, then iicanses by January 1, 2006. Should Tenant not secure said'license rd Tana nt shaA have the unilateral right to terminate the Sublease and Landlo Devem ber rent payme nt shalt then refum Tenants Security Deposit and the

SECURITY DEPOSIT ART. 31. No later than the date this lease is executed, Tenant shall t of deliver to Landlord a security deposit(the nSecurity Deposes,in the amoun y for the ?~as securit full and fai~ful perturmance at every provision of this lease to be perfor med by addi~o n to the advanc e Ten~n~.The payment of the security deposit shell be in ed. if date this (sass is execut payment of the L?ecsmber 2405 rental pa9d on the rd in its sole Tenant defaufis with respect to any provisions of this lease, Landlo y Deposit d'~sct~t~an may elect to use, apply ar retain all or any part ofi the Securit paymer ~t of any for the payment og any rent or any other earn i~ defau4t , or ftar thespend ar becom e obligat ed to spend by other amount which Landlord may loss or t~eason of Tenant's defaul# or to compensate landlord for any other Sactr~ity damage whEch Landlord may suffer by reason of Tenant's dsfaul ~ Said be liable to Tenant for Deposit shall be in the form of cash; Landlord shall riot faithful ly interest accruing;to or earned by such deposit If Tenant shall fully and by it, the Securit y Deposi t perform each prevision of this tease to be performed art of ar any unused balance thereof sF~atl he returned to Tenant ~t the expirati the lease term and upon Tenant's vac~~ing the Pfernisss. Providing Tenant lies

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not defaulted on arty ofthe lease terms, of the Beautify Deposit shall be applied to December's 2006 man#hly rent payment resuiiing in ~ ~~v~ S~eurity Deposit balance of ~ ~

RENEWAL OPT~QN ART.32, Provided Tenant is not in default an any of thet~ 1nd

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condition af.this lease at the expita~ion of tine original term of the rasa, Landlord f~ereby gracits Ten~~ the option to renew this a~greemenk for fwo(2) option periods. The first op~ian period for a three (3) year period'(October 1, 2U08 throug~i September 30, 2411)ender the same terms and 'conditions as contained.herein, except that the monthiv rental amount shalt be at. per month for ths first year af,ths op~an, per month fior the secbrid option year, and per mor►th far the in~rcropuon year, 7ite second option pei~od , for a two t2} year eight(B) month period (October 7,2Q11 through May 3'i, 20i4)' under the same terms and conditions as cc~n#atned hereir~,~ except tt►a~ the monthhr rental amount shat{ Eye at~ per month Eoc the fist year of the option, per mari#h far the second Qption year, and : per month for ~irtal months of said opfl4n year Tenant shah ~ofify Landlord by certified signed receipt mail na later titan 6 months prior fo the eacpiration of the then present tease term ~f the Tenant's intent to exercise the option.

LAND~.t}RD FIXTURES}AND EQUIPMENT ART.33. Exhibit"C", attached hereto, contains a complete list of ail fixtures and equipment that are the Sole property of the Landlord and sFialt die left for Tenant's use during the term of this tease. Atl items are delivered in "as is" condition without warranty from E.andlord and are accepted and received by Tenant in that condition and shat! be returned to Landlord in good working order upon lease termination. Tenant shall be iespanstble f~F alt equipment maintenance during the tettn of this tease.

!N WITNESS WHEREOF,xhe Landlord and Tenant have duly executed and affuced their respective seals to this sublease on the day and year first abase-written. AMF B~WLfNG ER ,!N . BY:

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STATE OF l ~'~I'/~ S

CITY/COUNTY QF rC~.Q ~~,s

On the ~~Ic~ay of r ~ 20Q5, before me a Nata~ry Pubtic in and fart a r~saidjurisdiction , the undersig ned officer, personally appeared .~.QGt,. ~ t~rho ~ --~~.~~ Metropali $, Inc„ a ack owlsdg~d himself to be the~~c,. e~ rjr1.~ ~~~ of ~c'r.~ ca~poration~ and thathe as such officer, being authorized to do soy executed ~f~te foregoing tns#rvment for the purposes therein contained by signing fhe name of the aacpora~ian try himself as ~,~,P.c~si~.Q.v 7~"'

In witness whereof, t hereunto set my hand and official seal.

Public eaoaae~e¢ri CARMEN D. Yl~Rq ~~~ My commission expires: ~%-30--D My Comm.~,oq.90.2009 ~ '\

STATE ~F VlRG1NlA COUNTY QF HANOVER

On the,~day of~5~,2005, b~fot~e me a Notary Public in and for tha aforesaid ~uEisdiction, the undersigned officer personally appeared Mark S. Katcher, who acEcr~owledged himself to be the Vice President of Reai estate of AMF Bowling Cer►ters, lnc., a Virginia cocporatfon, and that he as such officer,s being authorized to do sa, executed the faregatng Instrument far the purpose therein cortitained by signing the name of the corporatlon by himself as Vice President ~f Real Estate.

En witness whes~~f, t h~r~unto set my hand and ificiai seal.

Notary Public

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EXHI~1~'"C"

LANDLORD; AMF BOWLING CENTERS,INC.

TENANT: ~ JYE YMAS,LlC

L4CATi4l~: 13307-A SAN P~DRO AVE, SAN ANTQNlO, TEXAS

LANDLORD FIXTURES AND EQUIPMENT: '

1. Apprax. 6' x 12' combination walk-in freezer/refrigerator,

2, E.arge kitchen venk hood with ANSUl. SYSTEM,

3. Fifty {50) gallon elec~ic hot water heater.

#562724 v2 015632029Z7

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APPENDIX G

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~tTIIL~~E ~.GY~ ~'1~f~iT

This SUBLE~~E AGREEMENT(this "Sublease") is eczt~red into on March 6, 2007(the `-`Effective Date"~, by and between Metropolis, inc., a Texas corporation whose address is 16 Carriage Hii~s~ San Antonio, Texas 7825'1("Sublessor"), and R.io Ventures, Ltd, a Texas limited partnersk~.ip whose address is 1406 Peacock Haven, Juan ~lntdnio,Texas 7$256("Sublessee' . ~ '

l.. Demise and Description of Fro~erty:

Sublessor iesses to Sublessee, and Sublessee leases from Sublessee, the premises the "Subleased Premises'•' or the "Premises") located at 13307 San Pedro Avenue, Suite A, Ban Antonia, Bexar Count,Texas 7$216.

2. Terre:

The term aF this Sublease {the "Sublease Term's shatl~-commence=onFebruary]~, 200~'t {the "Sublease Com,rciencement Date',•andi c nd on:May3k,2a14~(the "Sublease Terminstio~ 'D~tte'~, But ttus~Subleesc will terminate earlier .in the event of a tarminatian of the Sublease ~. Agreement dated October 14, 2005 (the "Base Lease"), beEween AMF Bowting Centers, Inc., a • Delaware earparadon;as Landlord,and Sublessor,as Tenant,leasing~the Premises.

`~ 3. Rest:

During the term of this Sublease, Sublessee will pay Sublessor the same montl~y rental for the Premises provided In the Main Lease, glue the sum ofTwo Thousand and No/tQO Dollars ' t~,aoo:ao).~ 4. Use ofPremises:

• Sublessee wills use the Premises only for the use permitted under the Base Lease (the "Permitted Sublease Use"~. '

•~~5. Assumpi~on Agreement ~ercd Covenants:

(a) Sublessee wil! carn~iy with t►11 of the provisions Qf the Bass Lease that are to be performed by the Sublessor as Tenant during the term ofthis Sublease.

(b) If the Base Lease is canceled or terminated before its expiration date and before the expiration date and before the expiration date of this• Sublease or any extensions and renewals, ar ifthe Base Leese is surrendered, whether voluntarily, involuntarily, or by operation of Iaw, Sublessee will make full attornment to the Landlord for the balance of the term of #his Sublease, including asiy extensions and renewals, based on the sazne c.~venants and conditions of this Sublease, so as to establish fl'srect privity of estafe end contract between the Landtor8 and Sublessee, with the same force as though this Sublease was atlginally mach directly from thej

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Landlord to ~t~lessee. Landlord wilt tnen ber,~~~ ~~ i.€ssdieu~ r~uad~r this vdable

(c) The provisions of the Base Lease, to the exfent that they de not conf`fict with see a~`ees specific provisions of this Sublease, are fuily incorporated into this Sublease. Subles the same role and to he bound to Sublessor by the Bass Lease axtd to assume toward Subiessar Base Lease assumes perForm all of the obligations and responsibilities that Sublessor by the se is the this Sublea toward Landlord. The relationship between Sublessee and Sublessor under same as that between Sublessor and Lancilorcl under the Base Lease,

6. Sublessee agraes to:

Sublease (a) Sublease the Subleased Premises far the Sublease Tenn heginr►ing on the Commencement Dace and endit~ on the sublease Teninination Date.

(b) Pay the Sublease Rent to'Sublessor in edvance ofthe first{I~ day ofeach month.

on the (c) Vacate the Subleased Premsses and return all keys to fhe Subleased Premises tecmin~tibn oFthis Sublease.

against any toss, (d) Indemnify, defend, and hoid Sublessor harmless from and out of use of the Subleased reasonable attorney's fees, court and other costs, ar claims arising Premises or res~l~ng from Sublessees failure to comply with the Hale Lease.

ns! insured, (e} Maintain public IiabilIty insurance, with Sublessor named as an additio ', in the amounts ark for the parposes sorted in the Base Lease.

ncement (fl Deliver certificates of insurance to Sublessor before the Sublease Comme Date and thereafter on an annual basis.

'1. Sublessee agrees uat fa:

se Use.

(a) Use the Sabieased Premises Por any purpose other than the Permitted Sublea

lv~ L`CC3~.R.niticanrp,ti

ions or Landlord's (e) Interfere with any other tenant`s normal business operat management ofthe bviidin~ where the'Premises ate located.

(cn Permit any waste.

zardous, would increase (e)- Use the Subleased Premises in any way that is exhsha the Premises are located.

insurance premiums,or would void insurance on Ehe build'u~ where - ..

(fl Allow a lien to be placed on the SubSessed Premises.

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(a) Permit and authorize Sublessee to assign this Sublease or sublease any portion ofthe Subleased Premises in secordance with the terms of Article 11 of the Sese I.eAse, provided Sublessee is nat in default on any of the ternzs and condirions of this Subiesse beyond any cure period and so long es the entire unpaid principal balance of the Promissory Note of even date hereof in the principal sum of Qne ~-luncfred'Seventy Five and Na(140 Dollars ($175,004.40) between Sublessor,as payee, and Sublessee,es maker,is paid in full.

{b) Subleass the Subleased Premises to Sublessee For the Sublease Term.

(e) Comply with Tenant's dbligadans under the Base Tease.

(~ Enfoc~e Landlord's oblig,~tions under fhe Base Lease.

{e) Ivlake available to the Sublease Premises ail services and rights provided under fhe Base Lease.

Q. Sublessor and Sublessee agree to the faUawing:

(a) Defaults by Sublessee are(i)fail4n~ to pay timely the Sublease Rend (ii) abandoning or.vacating a substantial gartion of the Subleased Premises, and (iii)failing to comp3y within Thirty (3~)days Biter written notice with any ma#eriril provision of tine Base Lease or Sublease other flan the defaults set forth in(i)or (ii) above.

(b) Sublessors remedies for Sublessee's default are to ~)entex and take possession of the Subleased Premises, after which Sublessor may relet fihe Subleased Premises on behalf of Sublessee and receive the Sublease Rent directly by reason of the relenting, and Sublessee agrees to reimburse Sublessor for any reasonable expendiducs made in order to rele~ (ii} enter the Subleased notice Premises and perform Sublessee's obligations; and (iii) temunate this Sublease by written and sue for cliamages.

(c) Sublessee's remedy for Subtessor's defaultis to suefor damages.

(d) 'Phis Sublease is subordinate to the Base Lease, a copy of which Sublessee.

acknowledges as received.

(e) Sublessor znay retain, des~t~oy, or dispose of ~y property left in the Subleased Premises after the expiration oEthirty(30)days of the end ofthe Sublease Temt.

(fl Sublessor has Alt the ri~Iits ofLandlord under the Base Lease as to Sublessee,_

(~ If either pazty retains ~n aftomey to enforce this Sublease, the party prevailing in li~i~ation is entitled w recAver reasonable artornsy's fees and court and other costs.

/"`~ a ~"`~

V

4U. ]3ase ~~t.~~s~.s4~n~n~. P~trst~:ni to th e Base Lase.

Il. Advcrfisarnenf ofPremeses. During the last Ehirey (30) days of the Sublease Term, Sublessor may glace a sign an the Premises advet~ising the Premises far rent or sale,

f2. Renewal Dpfion. Provided Suf~lessee is not in default an sny o~ the terms and ennditions of this Sublease beyond any cure period, Sublessee shall notify Sublessor in wtitu~ no later than seven {'T) months prior to the expiration of dze than present lease temp under the Base Lease ofSublessee's desit~ to gave Sublessor exercise the renewal option granted under Article 32 of the Base Lease, and Sublessor shall be required to exercise such option, and Che Sublease shall continue in fu11 farce and affect far the term.ofthe renewal option.

13. Asbestos. Buildings or struatttres located on fhe Premises may contain asbestos-containing rnatariai or pres~uned asbestos-containing material as defined by aSHA regulations. Sublessee has inspected the Premises and conducted such tests attd inspccHons as Sublessee dc~ms necessary or desirable. Sublessee will provide Sublessor wifh copies of all such test results and insgec6ons. S~cblessee wilt comply with all toles and regula4aas relating to asbestos in performing any maintenance, housekeeping,consEruction, renovation, or remadeIiug oFtE'ie Premises, and Sublessee wilj bear al} et~sts related to removal and disposal of asbestos from the k~remises, only and so long as such asbestos were directly and solely installed by Sublessee.

14, -Security Dcposi~ Sublessee hereby agrees to pay to Sub}essor a S'ecurity'D~osi~ in the amount of Ten Thousand and Nolld0 Dollars -~($~1:0;000:00}; which shall he subject to and governed by the terms sod conditions of Article 31 ofthe Base Lease.

I5. Furniture and Fixtures. Ati furniizue and fixtures and equipment placed in the' Premise$ by Sublessee will remain Subiessess's property, subject to Sublessor's rights as provided by law. Sublessee may, when this Sublease expires,remove the furniture and fixtures if removal is dor►e so es not to damage the Premises,

16. Texas Law Ta• Agply. This Sublease v►711 be consErued tender Texas law, and a!I obligations of the parties are performable in Bexar County,Texas.

17. PxrEies Board. This Suhlcase will bind find inure To the benefit of the parties hereto ar~d their respective heirs, executors, administrators, legal representatives, suece~sors, and assigns except as this Sublease otherwise sgeciftes.

1.~. Legal C~usta~uetioax~ IE any one or more of the provisions of this Sublease is for any reason held invalid, illegal, or unenforceable in any respects that invaliflity, illegality, or as unenforceability will nvt aFFect any other provision ofthis sublease, which wiI! be construed if it trod never included the invalid, illegal, or unenforceab le provision.

19. Prior Agreements Superseded, This Sublease cor:stitutes the sole sgreeament of the parties hereto and supersedes any prior understandings ar written ar oral agreements Isefweea the parties hereto resgecti~,g the subject matter.

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~fl. i~3atice. Unless this Su~iI~s°~ ~:~vides otherwise, any tsotics, tender, Qr ~eliv~cy ~9 or by be given by either parry to the other may be erected by personal det4very In wcYting i requested , and wi!! be consider ed registered or certified mail, postage grepaid, retiun mceipt recefved as ofthe actual mailing.

Ehe 21. Capitalized Terms. All capitalized teens not defined in dus Sublease shall have meaning assigned to them in Efie Bassi Lease.

[SIGNA'TURES QTI THE NEXT PAGE)

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~h ~~~'Id~s ~YYl~~~4i~,the parties hereto have ~~al~ ~xe~~~ this Sable ~-s ~£i~a~ Effec~iva Date.

SUBLESSOR:

fay:

x7 V i~f_rc'+~T <

RIO VENTURES,LTD.

By: Rio Club, LL Genen3I Partner

Hy; Name. ~~tcr~ ~Uc~

Title:

APPENDIX H

/ 'R~

CAUSE NU.ZOY4-CI-19987

AMF Bt~VVL~1V~ C~~i'I~~,~E., ~ ~t1~fL ~YS t""Ft"1~i ~t"3,'i3R~'Y'

Plaintiff, § .

y, ~ 408 JUDICIAL DISTRICT

METROPOLIS,INC., § RIO VENTURES,LTD., § and 1~lIO G~,~,G.L,C., $

Defendants. ~ BEXAR CUUNTY,TEXAS

URI3EA GRANTING METRUPOLiS N:CGHTC~..UBS i,LP'S MOTION FOR PARTIAL SUMMARY JUDGMENT AND DECLARA'['l~t~Y ItELIF,~ '~UtJ~ On Tua¢ b ,X2015, Metropolis iYightclubs t, ~.P presented it Morton for Psrtial Summary

Judgment and Declaratory Relief(the "Niation")t~ the court. Upon due consideration of the

Motion,the evidence presented at the hearing, the applicable legal authorities, and the arguments

ofcounsel, the Court ffnds that the reli~frequested should be GRANTED.

IT IS TFIEREFC7RE, ORDEIt~t~ that

(a) Metropolis Nightclubs 1, L.P'. is the proper name df the tenant to the Lease for the

Premises with AMF Bowling Centers, Inc. dated October 14, 2005;

(b} Metropolis Nightclubs I, I.,P. is the proper name of the subl~sar for the Premises to

the Sublease with Rio Ventures,Ltd.dated March 6,2Q07;

(c} Metropolis Nightclubs I, L.P. is the proper name of the tenant far the Premises to tl~~

Metropolis Extension with AMF Bowling Centers, lr~c. dated Apri130,2014;

(d} McUropolis Nightclubs I, L'.P, is the proper name of ttce sublessor for the Premises to

the Rio Ventures Extension with Ria Ventures, Ltd. dated April 30,2014;

EXHIBIT

5

5!£:aEgd T9RZZBF~o,L 42Ei5E£!~TZ ~~a =~T~~3 ~S~wos3 OTBO StOZ-DI-'Iftt

~"ti ~1

{e) The misnomer of Metropolis Ni~htelubs f, L.P. on the Lease, Sublease Metropolis

Extension, and Rio Ventures Extetisian does not impact the validity or enforceability

ofthe Lease, Su?dlease, Metropolis Extension, and Rio Ventures Extension;

(f} The Agreed Final Judgnent entered in AMF Bawling Centers, Inc. v. Metropatis,

Ina, Case No,2Q15-01439, 190 'Judicial District Court, Hams County, Texas does

not have any impactor effect on the rights of Metmpalis ~d Club Rio to the ~'r~mises;

and

(g) ogolig N telub L.P. be~twarded ids reasonable an hecesa atty y's ens

top t this Orion, be ted h fu rand ther re'f to

Metropolis ightclub ,L.P. m y beju entitl t law~in '#y.

a~ a~ ~ ~-.

~.

DGE P SIDING ~~

~,1~:sBe~ iq?IZZ86~❑,L ~sno;, ~~rr~stQ y~gvvros3 J64 GtEtSE~iZ areo ~o~-a~-znr

APPENDI~~ I

/~

cor~or~uo~s seCuon .~E o Carlos H. Cascos P,O.Bo~ 13697 ~,`~~ Fl, Secretary of State ~" Austin, Texas 78711-3697 W X Y ~ in

Viir~e orine ~ecreia.ry of mate

Certificate of Fact

The undersigned, as Secretary of State ofTexas, does hereby certify that the document, Articles of Incorporation for Metropolis Nightclubs, Inc. (file number 800563621), a Domestic For-Profit Corporation, ~uvas filed in this office on October 27,2005.

It is further certified that the entity status in Texas is in existence.

In testunony whereof, Y have hereunto signed my name officially and caused to be impressed hereon the Seal of State at my office in Austin, Texas on June 03,2015.

.I '~.i ~~~

~~~~ ~~~' ~(~~j ~~ ~ ~- .•a►~ 1~~ A~~~/ C31'~OS H. Ca5C05 Secretary of State

Core visit us on the inlernet athttp:/hv►v~N.sos.slate. tx.us/ Phone:(512)463-5555 Fax:(S12)463-5709 Dial: 7-1-1 For Relay Services Prepared by: SOS-VJEB TID:10264 Document:609656090003

G■1 G.1

c~or~orarions s~tion ~~~ ~ o~ Carlos H. Cascos P.O,Ba113697 ~, ~, Secretary of State Austin,Texas 7R711-3697 W

x

U~~ce oftie Secretary of State

Certificate of Fact

The undersigned, as Secretary of State ofTexas, does hereby certify that the document, Certificate of Limited Partnership for Metropolis Nightclubs I, L.P.(file number 800563626), a Domestic Limited Partnership(LP}, wasfled in this office on Oceober 27, 2045.

It is further certified that the entity status in Texas is in existence.

In testimony whereof, I have hereunto signed my name officially and caused to be impressed hereon the Seal of State at my office in Austin, Texas on June 03, 2015.

A~_'aei ~~j` ~ ~~ wj

~}~~ -~ rQ ~~~~ ~~j~~ %\ ~~ rk •~~~~ /~~rl C2.r10S H, CaSCOS Secretary of State

Conre ~~islt us on fhe Internet at http:/hrtiv~v.sos.state.lx us/ Phone:(512)463-5555 Fax:(S1Z)463-5709 Dial: 7-1-1 for Retay Services Prepared b~ SpS-WEB 'TID: 10264 Document 609656090003