The land underlying the CGC is leased under an operating lease that expires in 2012 and has two five-year renewal options. In March 2006, the Company exercised the first of two options, extending the lease to 2018. Also, the lease has a provision for contingent rent to be paid by AAGC upon reaching certain levels of gross revenues. The Company recognizes the minimum rental expense on a straight-line basis over the term of the lease, which includes the two five year renewal options.

At December 31, 2012, minimum future lease payments under non-cancelable operating leases are as follows:


2012	$	493,715
2013		529,840
2014		529,840
2015		529,840
2016		529,840
Thereafter		2,613,100

	$	5,226,175

Total rent expense for all operating leases were $493,715 for 2012 and $481,673 for 2011.

On June 19, 2009, the Company entered into a “Customer Agreement” with Callaway Golf Company (“Callaway”) and Saint Andrews Golf Shop, Ltd. (“SAGS”) through our majority owned subsidiary AAGC. As part of the agreement, that continues through 2013 and automatically extends until December 31, 2018, Callaway invested money to improve both AAGC's range facility as well as the golfing center. They also provide advertising expense each year paid for by AAGC and reimbursed in golf merchandise to SAGS. AAGC is then reimbursed by SAGS for AAGC's expenditures in advertising as incurred.

Pursuant to this agreement, AAGC is required to expend at least $250,000 for marketing and promotion of Callaway for a period of approximately three and one half years with an automatic extension to December 31, 2018 unless written notice of termination is received by November 2013. Additionally, pursuant to the Customer Agreement AAGC has expended amounts to improve both its range facility as well as the golfing center. These improvements include Callaway Golf® branded elements. Callaway agreed to provide funding and resources in the minimum amount of $2,750,000 to be allocated as follows: 1) $750,000 towards operating expenses of AAGC; 2) $750,000 towards facility improvements for both AAGC and Saint Andrews Golf Shop; 3) $500,000 in range landing area improvements of AAGC and 4) three payments each of $250,000 for annual advertising expenses paid by AAGC, which will be repaid in golf merchandise to SAGS. AAGC will then be reimbursed by SAGS for AAGC's expenditures in advertising as incurred.

Both AAGC and Saint Andrews have agreed to exclusively sell only Callaway golf products at the Callaway Golf Center for the term of the Customer Agreement. As discussed in Note 9 - Subsequent Events, AACG and Callaway have agreed to terminate the Customer Agreeement on June 13, 2013