CONTRACT 6261-A1 AmendmentAgreement No. 6261-A1
SECOND AMENDMENT TO
DUE DILIGENCE AND RECREATION GROUND LEASE AGREEMENT
THIS SECOND AMENDMENT TO DUE DILIGENCE AND RECREATION GROUND LEASE
AGREEMENT (the "Second Amendment") is made this 21st day of December 2023, by and
between THE CITY OF EL SEGUNDO, a general law City and municipal corporation ("Lessor"), and ES
CENTERCAL, LLC, a Delaware limited liability company ("Lessee").
RECITALS
WHEREAS, Lessor and Lessee entered into that certain Due Diligence and Recreation Ground
Lease Agreement dated February 6, 2021 (as amended by that certain Amendment No. 1 to the Due
Diligence and Recreation Ground Lease Agreement dated February 15, 2022, the "Lease");
WHEREAS, Lessee (as lessor) and Topgolf USA El Segundo LLC, a Delaware limited liability
company ("Topgolf El Ngggnddo") entered into that certain Ground Sublease Agreement dated February 8,
2021 (as amended by that certain First Amendment to Ground Sublease Agreement dated February 15,
2022, the "Sublease");
WHEREAS, Topgolf El Segundo and Spirit Realty, L.P., a Delaware limited partnership ("Spirit
Realty, L.P.") intend to enter into that certain Agreement of Sale and Purchase (as amended, the "Purchase
and Sale A eernent"), for the assignment by Topgolf El Segundo of its leasehold interest in the Sublease
to Spirit Realty, L.P. (the "Assi nmyrt");
WHEREAS, following such Assignment, Topgolf El Segundo and Spirit Realty, L.P. intend to
enter into a sub -sublease agreement whereby Spirit Realty, L.P. shall be sub-sublandlord and Topgolf El
Segundo shall operate the Premises as sub -subtenant (the "'Sub-Subblee"); and
WHEREAS, Lessor and Lessee desire to execute this Second Amendment in order to permit the
contemplated Assignment and operation of the Premises by Topgolf El Segundo under the Sub -Sublease
and amend such other terms of the Lease relating to the Assignment as described herein.
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration
(the receipt and sufficiency of which is hereby acknowledged), the parties agree as follows:
1. Defined Terms. All capitalized terms not defined in this Second Amendment shall have
the meanings assigned to such terms in the Lease.
2. Lease _Terri,. The first sentence of Section 2.1 of the Lease is hereby deleted in its entirety
and replaced with the following:
Lease:
"2.1 The "Basic Term" of this Lease shall begin and the Lessee's leasehold
interest shall become effective on February 17, 2021 (the "Premises Turnover D°ate")
and shall end on December 21, 2043 (the "Initial Term. End Date")."
Ootion Periods. The following language is hereby added to the end of Section 2.2 of the
"Notwithstanding the foregoing, the first Option Period shall commence on the day
following the Initial Term End Date and will end on the twenty fifth (251) anniversary
of the Premises Turnover Date."
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4. Direct Lease. The third sentence of the third grammatical paragraph of Section 18.1.5 of
the Lease is deleted and restated in its entirety as follows:
"Lessor also agrees that in the event that either Lessee terminates this Lease or Lessor terminates
this Lease as a result of any Event of Default by Lessee, Lessor shall deliver written notice to each
of (i) Topgolf and (ii) Spirit Realty, L.P., or, in the case of a Permitted Topgolf Transfer or an
approved sublease in accordance with Section 18.1 of the Lease, the then current subtenant under
the Sublease (the "Subtenant") of such termination and shall first provide Subtenant with thirty (30)
days in which to determine whether to enter into a lease of the Premises (the "Subtenant Election
Period") on the identical rental and other terms and conditions as this Lease (a "Direct Lease"),
provided, that in the event Subtenant elects not to enter into a Direct Lease, Lessor shall then
provide Topgolf with thirty (30) days from the earlier of the date on which Subtenant delivers
notice electing not to enter into a Direct Lease and the expiration of the Subtenant Election Period
(the "Topgolf Election Peri"od'") in which to determine whether to enter into a Direct Lease (and
Lessor shall afford Subtenant or Topgolf, as applicable, the opportunity to enter into such Direct
Lease during the Subtenant Election Period or the Topgolf Election Period, respectively) which
shall take effect immediately upon termination of this Lease; provided that (i) in connection with
its execution and delivery of such lease, Topgolf, TopGolf Guarantor or Subtenant pays Lessor any
unpaid Rent owing by Lessee to Lessor under this Lease (as determined without regard to any
acceleration of or addition to any such Rents pursuant to Section 20.2.4 hereof) and cures any
existing defaults that are capable of being cured by a person or entity other than the Lessee, and (ii)
in the event that Lessee disputes any such termination of this Lease, and Lessor and/or Lessee bring
legal action to determine its rights hereunder, Topgolf, Subtenant and Operator shall have the right
to continue to occupy the Premises during the pendency of such legal action (provided they
continue to pay Rent and other sums to Lessor as they become due hereunder, as determined
without regard to any acceleration or addition to Rents pursuant to Section 20.2.4 hereof) and
Lessor shall first provide Subtenant and second provide Topgolf the right to enter into a Direct
Lease as described above, during the sixty (60) day period after a court of competent jurisdiction
determines that this Lease has terminated or Lessee agrees or otherwise concedes that this Lease
has terminated."
5. Permitted To Mgjf Transfer. In addition to and without amending the existing categories
of "Permitted Topgolf Transfer" described in the second grammatical paragraph of Section 18.1.5 of the
Lease, a "Permitted Topgolf Transfer" shall also include the assignment of the Sublease by the then current
Subtenant to any entity that will sub -sublease the Premises to either Topgolf El Segundo, an Affiliate of
TGH, or any entity that is approved by Lessor under Section 18 of the Lease to be an Operator of the
Premises. Notwithstanding the foregoing, it shall be a condition precedent to the effectiveness of a
Permitted Topgolf Transfer under this section that each of the following requirements are met: (1) either
(x) the proposed assignee of the Sublease (the "Proposed Sublease Assi nee'') enter into a new or
replacement sub -sublease agreement, such as the Sub -Sublease Agreement by and between Topgolf El
Segundo and Spirit Realty, L.P., with the operator of the Premises to be executed simultaneously with the
Permitted Topgolf Transfer or, (y) the sub -sublease agreement then in effect, if any, continues to remain in
effect on and following the date the Permitted Topgolf Transfer becomes effective (each and collectively,
the "O eratin Sub -Sublease Requirement"), (2) the Proposed Sublease Assignee provides Lessor with
financial statements prepared in accordance with generally accepted accounting principles (the "financial
ili ence") and other evidence reasonably requested by Lessor evidencing the Proposed Sublease
Assignee's satisfaction of the applicable requirements described in Section 18.1.4 (i) or (ii) of the Lease
(each and collectively, the "Transfer Re uireMents"), (3) Lessor provides its affirmative written
acknowledgment, which shall not be unreasonably delayed, conditioned, or withheld, that such Transfer
Requirements and Operating Sub -Sublease Requirement are satisfied ("Ci Acknowled tent'), (4) TGH
shall execute and deliver to Lessor an acknowledgment and restatement of that certain Guarantee
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Agreement by TGH dated February 6, 2021 (as amended or restated) ("Guaralty l estateme�it") in a form
reasonably acceptable to TGH and Lessor, and (5) the Proposed Sublease Assignee shall execute and deliver
to Lessor an Acknowledgment of Lease in such form reasonably acceptable to Lessor, whereby the
Proposed Sublease Assignee, Lessee, and then current Subtenant acknowledge and agree that the documents
used to effectuate the Permitted Topgolf Transfer under this section do not alter the terms or conditions of
the Lease. Within sixty (60) days of receipt of the Financial Diligence and a copy of the sub -sublease
agreement, Lessor shall either provide the Proposed Assignee with (I) the City Acknowledgment or (II)
written notice indicating that the Proposed Sublease Assignee has not satisfied the Transfer Requirements
or Operating Sub -Sublease Requirement to Lessor's reasonable satisfaction along with a detailed
explanation of why such Proposed Sublease Assignee does not meet the Transfer Requirements or
Operating Sub -Sublease Requirement (a "C y Objection"); provided further, that if Lessor provides a City
Objection, the Proposed Sublease Assignee shall have the opportunity, for a period of twenty (20) days
following receipt of the City Objection, to provide additional information as it deems appropriate and as
reasonably requested by Lessor to Lessor and Lessor shall, within twenty (20) days of receipt of any such
additional information, or as soon as reasonably possible, provide a new written notice to the Proposed
Sublease Assignee regarding the satisfaction by such Proposed Sublease Assignee of the applicable
Transfer Requirements and Operating Sub -Sublease Requirement. In the event of a Permitted Topgolf
Transfer pursuant to this section, on or prior to the date the assignment of the Sublease in connection with
the Permitted Topgolf Transfer (the "SubleaseAssignment") becomes effective, Subtenant shall provide
(or shall cause the assignor or Proposed Sublease Assignee to provide) Lessor with (1) a copy of the
Sublease Assignment, along with written confirmation of the Sublease Assignment which shall set forth,
(i) the effective date of the Sublease Assignment, and (ii) the contact and notice information for the
Proposed Sublease Assignee, and (2) the Guaranty Restatement executed by TGH, to be effective
concurrently with the Sublease Assignment, each of which shall be delivered via email to Mark Hensley,
City Attorney, at mhensley@hensleylawgroup.com with a copy to Darrell George, City Manager, at
dgeorge@elsegundo.org and via regular mail to City of El Segundo, 350 Main Street, El Segundo, CA
90245, Attention: City Attorney.
6. Effectiveness of Amendment. The parties acknowledge and agree that the effectiveness of
this Second Amendment is contingent on the occurrence of the assignment by Topgolf El Segundo of the
Sublease to Spirit Realty, L.P. (the "Spirit Sublease Assi tent") on or prior to January 31, 2024. If the
Spirit Sublease Assignment does not occur on or prior to January 31, 2024, this Second Amendment shall,
as of January 31, 2024 and notwithstanding previous execution of this Second Amendment by Lessor and
Lessee, become null and void as if this Second Amendment had not been entered into by Lessor and Lessee.
Upon the occurrence of the Spirit Sublease Assignment, Topgolf El Segundo shall, as soon as reasonably
possible, provide email notice to the Lessor at the email addresses described in Section 5 above confirming
that the Sublease Assignment has occurred.
7. No Other Modifications. Except as the Lease shall be modified and amended hereby, all
other terms of the Lease shall remain unchanged and shall remain in full force and effect as written and
Lessor and Lessee hereby ratify and affirm the Lease and all terms, conditions and obligations in the Lease,
as amended hereby.
8. Transfers Successors arad Assi ns,. This Second Amendment shall inure to the benefit of
and burden of Lessor, Lessee, and their respective transfers, successors and assigns.
9. Governina Law. This Second Amendment shall be construed and interpreted under the
laws of the state of California (without giving effect to its conflict of laws principles).
10. Counterparts. This Second Amendment shall become effective only upon the execution
and delivery by both Lessor and Lessee as evidenced by each parry's respective signatures on the signature
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page below. This Second Amendment may be executed in multiple counterparts, each of which shall be
deemed an original, and all of which together constitute one and the same document. Signatures provided
by telecopy or electronic means (such as a PDF) shall have the same binding effect as original signatures.
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IN WITNESS WHEREOF, Lessor and Lessee have executed this Second Amendment as of the
day and year first above written.
LESSOR:
THE CITY OF EL SEGUNDO,
a general law City and municipal corporation
By:
Name:
Title:,'
Attest:
uwtrx owq�)-a-
Tracy Weave VCity Clerk
Approved as Form:
Mark D. nsley, City Att ey
LESSEE:
ES CENTERCAL, LLC,
a Delaware limited liability company
By:
Name: John Nahas
Title: President, Southern California
y:
Name: Sean Dennison
Title: SVP and General Counsel
[Signature Page to Second Amendment to Due Diligence and Recreation Ground Lease Agreement]
Agreement No. 6261-A1
IN WITNESS WHEREOF, Lessor and Lessee have executed this Second Amendment as of the day and year
first above written.
LESSOR:
THE CITY OF EL SEGUNDO,
a general law City and municipal corporation
By:
—
Name:
Title:
Attest:
Tracy Weaver, City Clerk
Approved as Form:
Mark D. Hensley, City Attorney
LESSEE:
ES CENTERCAL, LLC,
a Delaware limited liability company
By........__m
Name:r.�w
Title: Ciao
[Signalzn•e Page to Second Amendment to Due Diligence and Recreation Gro:md Lease Agreemenl]