EXHIBIT 10.33
GROUND LEASE
BETWEEN
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
AS LANDLORD
AND
MISSISSIPPI-I GAMING, L.P.,
AS TENANT
GROUND LEASE BETWEEN ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
AS LANDLORD,
AND MISSISSIPPI-I GAMING, L.P., AS TENANT
TABLE OF CONTENTS
Page
----
ARTICLE 1 DEFINITIONS................................................ 1
1.1 Adjusted Gaming Win........................................ 1
1.2 Affiliate of Tenant........................................ 1
1.3 Annual Fixed Fee........................................... 1
1.4 Commencement Date.......................................... 1
1.5 Effective Date............................................. 1
1.6 Gross Gaming Win........................................... 1
1.7 Improvements............................................... 2
1.8 Landlord's Estate.......................................... 2
1.9 Lease Term................................................. 2
1.10 Lease Year................................................. 2
1.11 Premises................................................... 3
1.12 Property................................................... 3
1.13 Tenant's Estate............................................ 3
1.14 Trade Fixtures............................................. 3
ARTICLE 2 DEMISE, POSSESSION, TERM, OPTIONS TO
EXTEND..................................................... 3
2.1 Demise of Premises......................................... 3
2.2 Term....................................................... 4
2.3 Possession................................................. 4
2.4 [Intentionally Omitted].................................... 4
2.5 Termination Right on One Year's Notice..................... 4
2.6 Gaming Law Invalid......................................... 5
2.7 Tidelands Lease............................................ 5
ARTICLE 3 RENT....................................................... 6
3.1 Annual Base Rent........................................... 6
3.2 Adjustment of Annual Base Rent............................. 7
3.3 Sample Calculation......................................... 8
3.4 Percentage Rent............................................ 8
3.5 Payment of Rent............................................ 9
3.6 Audits..................................................... 9
3.7 Last Year's Rent........................................... 10
3.8 Annual Fixed Fee........................................... 10
3.9 [Intentionally Omitted].................................... 10
3.10 Conversion of Annual Base Rent
and Percentage Rent to Equity.............................. 10
3.11 Licensing Due to Landlord's Rent........................... 11
-i-
TABLE OF CONTENTS
(CONTINUED)
Page
----
ARTICLE 4 PAYMENT OF IMPOSITIONS AND UTILITY CHARGES................. 12
4.1 Impositions................................................ 12
4.2 Apportionment.............................................. 13
4.3 Right to Contest........................................... 13
4.4 Utility Charges............................................ 13
ARTICLE 5 USE........................................................ 14
5.1 Permitted Use.............................................. 14
5.2 Compliance with Law........................................ 14
5.3 Waste...................................................... 14
ARTICLE 6 IMPROVEMENTS............................................... 14
6.1 Construction of Initial Improvements....................... 14
6.2 Construction of Improvements and
Demolition of Improvements................................. 15
6.3 Permits and Basements...................................... 15
6.4 Ownership of Improvements.................................. 16
6.5 Removal of Trade Fixtures.................................. 16
ARTICLE 7 MECHANICS' LIENS........................................... 16
7.1 Mechanics' Liens........................................... 16
7.2 Contests................................................... 16
ARTICLE 8 INSURANCE AND INDEMNITY.................................... 17
8.1 Required Insurance......................................... 17
8.2 Required Terms............................................. 18
8.3 Partial Release of Liability and
Waiver of Subrogation...................................... 18
8.4 Indemnity.................................................. 18
ARTICLE 9 MAINTENANCE, REPAIR AND RESTORATION
OF DAMAGE.................................................. 18
9.1 Tenant's Duty to Maintain and Repair....................... 18
9.2 Tenant's Duty to Restore insured
Damage to Improvements..................................... 19
9.3 Tenant's Option Following Damage
to the Improvements Near the End
of the Lease Term and Following
Uninsured Damage to the Improvements....................... 19
-ii-
TABLE OF CONTENTS
(CONTINUED)
Page
----
9.4 Insurance Proceeds.......................................... 20
ARTICLE 10 CONDEMNATION................................................ 20
10.1 Definitions................................................. 20
10.2 Total Taking................................................ 21
10.3 Partial Taking.............................................. 21
10.4 Temporary Taking............................................ 22
10.5 Apportionment of Award...................................... 22
10.6 General..................................................... 22
ARTICLE 11 DEFAULT AND REMEDIES........................................ 23
11.1 Events of Tenant's Default.................................. 23
11.2 Landlord's Remedies......................................... 24
11.3 Landlord's Default and Tenant's
Remedies.................................................... 24
ARTICLE 12 TERMINATION................................................. 25
12.1 Surrender on Termination.................................... 25
12.2 Recognition of Tenant's Subtenants.......................... 25
12.3 Removal of Trade Fixtures................................... 25
12.4 Tenant's Quitclaim.......................................... 25
ARTICLE 13 ASSIGNMENT AND SUBLETTING................................... 26
13.1 Assignment by Tenant........................................ 26
13.2 Permitted Assignee Defined.................................. 26
13.3 Subletting.................................................. 26
ARTICLE 14 TRANSFER OF PREMISES BY LANDLORD............................ 27
14.1 Transfer by Landlord........................................ 27
14.2 Tenant's Right of First Refusal............................. 28
ARTICLE 15 LEASEHOLD MORTGAGES......................................... 29
15.1 Right to Encumber Tenant's Estate........................... 29
15.2 Notice...................................................... 29
15.3 Leasehold Mortgagee's Rights and
Obligations Prior to Foreclosure............................ 29
15.4 Obligations of Landlord with
Respect to any Leasehold Mortgagee.......................... 30
-iii-
TABLE OF CONTENTS
(CONTINUED)
Page
----
15.5 Leasehold Mortgagee's Rights and
Obligations Following a Foreclosure....................... 31
15.6 Non-Liability of Leasehold
Mortgagee.................................................. 31
15.7 No Restriction on Assignment............................... 31
15.8 New Lease.................................................. 31
15.9 Covenant of Cooperation.................................... 32
15.10 No Amendment............................................... 32
15.11 No Merger.................................................. 32
ARTICLE 16 ENVIRONMENTAL.............................................. 32
16.1 Landlord's Representations.................................. 32
16.2 Covenant to Comply with
Environmental Laws.......................................... 33
16.3 Tenant Indemnity............................................ 33
16.4 Landlord Obligations........................................ 33
16.5 Definition of Environmental Laws............................ 35
16.6 Definition of Hazardous Material............................ 35
16.7 Exclusive Provisions........................................ 36
ARTICLE 17 GENERAL PROVISIONS.......................................... 36
17.1 Estoppel Certificates....................................... 36
17.2 Holding Over................................................ 36
17.3 Notices..................................................... 37
17.4 Attorney's Fees............................................. 37
17.5 No Merger................................................... 38
17.6 Arbitration................................................. 38
17.7 Quiet Enjoyment............................................. 39
17.8 No Partnership.............................................. 39
17.9 Captions.................................................... 39
17.10 Duplicate Originals; Counterparts........................... 39
17.11 Time of the Essence......................................... 39
17.12 Severability................................................ 39
17.13 Interpretation.............................................. 39
17.14 Successors Bound............................................ 40
17.15 No Waiver................................................... 40
17.16 Covenant of Fair Dealing.................................... 40
17.17 Delays...................................................... 40
17.18 Integration................................................. 40
17.19 Memorandum of Lease......................................... 40
17.20 Limit on Tenant's Liability................................. 41
-iv-
TABLE OF CONTENTS
(CONTINUED)
Page
----
Exhibit "A" - Legal Description
Exhibit "B" - Permitted Exceptions
Exhibit "C" - Sample Rent Calculation
Exhibit "D" - Memorandum of Lease
-v-
GROUND LEASE
------------
THIS GROUND LEASE is made as of the _______ day of October, 1993, by and
among ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, an individual resident of Louisiana ("Landlord"), and
MISSISSIPPI-I GAMING, L.P., a Mississippi limited partnership ("Tenant").
ARTICLE 1
---------
DEFINITIONS
1.1 Adjusted Gaming Win: As used herein, the term "Adjusted Gaming
-------------------
Win" shall mean, for the period in question, the positive difference, if any,
derived by subtracting (i) all federal, state and local gaming taxes and fees
related to Tenant's gaming operations at the Premises from (ii) the Gross Gaming
Win.
1.2 Affiliate of Tenant: As used herein, the term "Affiliate of
-------------------
Tenant" shall mean (i) any person or entity who directly or indirectly owns five
percent (5%) or more of the stock, partnership or other beneficial interest in
Tenant, if Tenant is a corporation, partnership or other entity, (ii) any
corporation, partnership or other entity of which five percent (5%) or more of
the stock, partnership or other beneficial interest of which is owned directly
or indirectly by Tenant, and (iii) any corporation, partnership or entity of
which five percent (5%) or more of the stock, partnership or other beneficial
interest is owned directly or indirectly by any person or entity that owns five
percent (5%) or more of the stock, partnership or other beneficial interest of
Tenant, if Tenant is a corporation, partnership or other entity.
1.3 Annual Fixed Fee: As used herein, the term "Annual Fixed Fee"
----------------
shall mean the fee described in paragraph 3.8.
1.4 Commencement Date: As used herein, the term "Commencement Date"
-----------------
shall mean the date on which gaming operations commence at or from the Premises,
including, without limitation, the commencement of gaming operations on the
riverboat or other vessel described in paragraph 5.1.
1.5 Effective Date: As used herein, the term "Effective Date" shall
--------------
mean the date of the last signatory to this Lease necessary to make it binding
upon Landlord and Tenant.
1.6 Gross Gaming Win: As used herein, the term "Gross Gaming Win"
----------------
shall mean, for the period in question, the sum of (a) cash received by Tenant
as winnings from gaming transactions at the Premises (including gaming
transactions
occurring on any gaming vessel permanently moored at the Premises or which takes
on passengers at the Premises), (b) cash received by Tenant in payment for
credit extended by Tenant to a patron for purposes of gaming at the Premises and
(c) compensation received by Tenant for conducting any game at the Premises in
which Tenant is not a party to a wager, less the total of all cash paid out by
----
Tenant as losses to patrons at the Premises and those amounts paid to purchase
annuities to fund losses paid to patrons at the Premises over several years by
independent financial institutions. For purposes of this definition, cash or
the value of non-cash prizes awarded to patrons in a contest or tournament shall
not be losses. Gross Gaming Win shall not include (i) any revenues from the
sale of lodging, parking, travel arrangements, admissions to entertainment
events, food, beverages or merchandise, (ii) any revenues from subtenants or
concessionaires, (iii) any revenues related to any other business operations of
Tenant at the Premises, (iv) counterfeit money or tokens, (v) coins of other
countries which are received in gaming devices, (vi) cash taken in fraudulent
acts perpetrated against Tenant for which Tenant is not reimbursed, or (vii)
cash received as entry fees for contests or tournaments in which patrons compete
for prizes.
1.7 Improvements: As used herein, the term "Improvements" shall mean
------------
all improvements (including, without limitation, the initial improvements
described in paragraph 6.1), structures, buildings, interior improvements,
landscaping, paving, pipes, conduits, roads, walkways, fixtures, fencing, on-
site utility lines, and all apparatus, machinery, devices, fixtures,
appurtenances, and equipment (excluding Trade Fixtures, as defined in paragraph
1.11), and all alterations and additions thereto and replacements thereof which
may be erected or installed on the Premises by Tenant after the date of this
Lease, regardless of how such Improvements are affixed to the Premises. The
term "Improvements" shall not include any gaming vessel or any gaming equipment
---
or other personal property of Tenant, which shall be and remain at all times the
sole personal property of Tenant.
1.8 Landlord's Estate: As used herein, the term "Landlord's Estate"
-----------------
shall mean all of Landlord's right, title and interest in, under and to this
Lease and the Property.
1.9 Lease Term: As used herein, the term "Lease Term" shall mean the
----------
term of this Lease as described in paragraph 2.2.
1.10 Lease Year: As used herein, the term "Lease Year" shall mean (i)
----------
the period from the Commencement Date through and including September 30 next
following, (ii) each complete, successive twelve (12) month period thereafter
during the Lease Term, and (iii) the period commencing
-2-
October 1 immediately following expiration of the final complete twelve (12)
month Lease Year during the Lease Term and continuing through and including the
final day of the Lease Term.
1.11 Premises: As used herein, the term "Premises" shall mean that
--------
certain real property consisting of three (3) parcels constituting approximately
eight and nine-tenths (8.9) acres in the aggregate, the southerly parcel of
which is commonly known as ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, which parcels are more particularly described on Exhibit "A"
-----------
attached hereto and made a part hereof, together with (i) all buildings,
structures and improvements existing on such real property as of the date of
this Lease, and (ii) all easements, licenses, rights and privileges appurtenant
thereto (including, without limitation, all right, title and interest of
Landlord in, under and to the land lying in the streets and roads abutting such
real property to the central lines thereof). The term "Premises" shall not
---
include the Improvements or any rights to minerals lying beneath the surface of
such real property (but Landlord shall have no right to extract any minerals
from the surface of the Premises without Tenant's prior written consent in
Tenant's sole and absolute discretion).
1.12 Property: As used herein, the term "Property" shall mean the
--------
Premises and the Improvements.
1.13 Tenant's Estate: As used herein, the term "Tenant's Estate" shall
---------------
mean all of Tenant's right, title and interest in, under and to this Lease and
the Property.
1.14 Trade Fixtures: As used herein, the term "Trade Fixtures" shall
--------------
mean anything affixed to the Property by Tenant or any subtenant, licensee or
invitee thereof for purposes of trade, manufacture, ornament or commercial use,
if the removal thereof can be effected without irreparable injury to the
Property.
ARTICLE 2
---------
DEMISE, POSSESSION, TERM, OPTIONS TO EXTEND
2.1 Demise of Premises: Landlord hereby leases to Tenant, and Tenant
------------------
hereby leases from Landlord, the Premises for the Lease Term upon the terms and
conditions contained in this Lease. Tenant's lease of the Premises shall be
subject only to those exceptions to Landlord's fee title described on Exhibit
-------
"B" attached hereto and made a part hereof (the "Permitted Exceptions").
---
Landlord warrants and represents to Tenant that Landlord is the owner in fee
simple absolute of the Premises free and clear of any liens, encumbrances,
leases, rights of use or occupancy or any other rights or privileges, other than
the Permitted Exceptions.
-3-
2.2 Term: The term of this Lease shall be for ninety-nine (99) years
----
commencing on the Commencement Date and ending at midnight on the ninety-ninth
(99th) anniversary of the Commencement Date or upon the sooner termination of
this Lease according to its terms, whichever first occurs.
2.3 Possession: Possession of the Premises shall be delivered by
----------
Landlord to Tenant on the Effective Date free and clear of all tenants and
occupants and the rights of either and all liens, encumbrances, rights or
privileges other than the Permitted Exceptions. Tenant shall accept possession
of the Premises in their condition as of the Effective Date with all existing
structures, paving and other improvements. Tenant shall be entitled, from the
Effective Date to the Commencement Date, to exercise all of the rights and
privileges of the tenant under this Lease (including, without limitation, the
preparation of the Premises for the conduct of Tenant's anticipated business
operations, including the demolition, alteration and construction of
improvements in accordance with Article 6). During such period from the
Effective Date to the Commencement Date, however, Tenant shall have no
obligation with respect to payment of Annual Base Rent, Percentage Rent,
Impositions or any other monetary obligations of Tenant under this Lease, all
such payment obligations to commence only from and after the Commencement Date.
Notwithstanding the foregoing, Landlord shall be entitled for a period not to
exceed fifteen (15) days after the Effective Date, to continue to use and occupy
the structures, paving and other improvements currently present at the Premises
(together with Landlord's personal property, fixtures and equipment located
therein) to operate Landlord's business at the Premises in the same manner as
heretofore operated. Landlord shall, however, use its reasonable efforts and
all due diligence to vacate the Premises at the earliest date reasonably
possible (but not later than fifteen (15) days after the Effective Date).
Landlord shall cooperate reasonably with Tenant to facilitate Tenant's
activities on the Premises (including, without limitation, construction of the
initial Improvements described in paragraph 6.1). Landlord shall indemnify and
hold Tenant harmless from and against all losses, costs, claims and damages
(including attorneys' fees) arising from or relating in any manner to Landlord's
possession, occupancy and use of the Premises from and after the Effective Date.
2.4 [Intentionally Omitted]:
-----------------------
2.5 Termination Right on One Year's Notice: Notwithstanding any other
--------------------------------------
term or condition of this Lease to the contrary, Tenant shall have the right at
any time during the Lease Term (whether during the initial term or any extended
term) to terminate this Lease effective on any anniversary of the Commencement
Date by giving Landlord written notice of such termination at least three
hundred
-4-
sixty-five (365) days prior to the effective date of such termination. In
consideration of Tenant's termination right provided under this paragraph,
Landlord shall be entitled to retain, as liquidated damages and not as a
penalty, from and after any such termination, the entire Two Million Dollar
($2,000,000) sum paid by Tenant to Landlord under paragraph 3.7. Landlord and
Tenant acknowledge that any damage that Landlord might suffer by virtue of
Tenant's exercise of this termination right would not be readily susceptible to
calculation and that such sum constitutes as reasonable estimate of such damage
as may be suffered by Landlord. Landlord's retention of such sums shall
therefore be Landlord's sole remedy, and Tenant's only liability, following any
early termination of this Lease by Tenant's exercise of the termination right
provided in this paragraph. Upon any such termination, (i) all rent and other
sums due under this Lease shall be paid by Tenant through such termination date,
(ii) this Lease shall expire and terminate, and neither Landlord nor Tenant
shall have any further obligations hereunder, except for those which have
accrued prior to the date of such termination and those which expressly survive
any termination under the terms of this Lease.
2.6 Gaming Law Invalid: Notwithstanding any other term or condition of
------------------
this Lease to the contrary, and in addition to and separate from the termination
right described in paragraph 2.5, in the event that Tenant is unable to conduct
gaming operations on the Premises because it is unable to obtain all necessary
governmental licenses, because any necessary governmental license expires and
cannot be renewed or is revoked, because the Premises become ineligible for
gaming operations, because the applicable enabling legislation permitting gaming
is amended, suspended, or revoked by the applicable legislative body, or because
any such enabling legislation is held invalid by a court of competent
jurisdiction, then Tenant may elect, at Tenant's sole and absolute discretion,
to terminate this Lease, effective immediately, by giving written notice of such
termination to Landlord. Upon any such termination, (i) all rent and other sums
due under this Lease shall be prorated as of such termination date and paid by
Tenant, (ii) this Lease shall expire and terminate, and (iii) neither Landlord
nor Tenant shall have any further obligations hereunder, except for those which
have accrued prior to the date of such termination and those which expressly
survive any termination under the terms of this Lease.
2.7 Tidelands Lease:
---------------
A. Landlord and Tenant acknowledge that Tenant may be required
to execute a tidelands lease or leases on terms and conditions acceptable to
Tenant (a "Tidelands Lease") pursuant to which Tenant shall lease from the State
of Mississippi some or all of that portion of the Premises as
-5-
legally constitutes tidelands or other lands lying beneath the waters contiguous
to the Premises subject to the ownership, jurisdiction and public trust of the
State of Mississippi. Throughout the Lease Term, Tenant shall have the sole and
exclusive right to obtain and maintain Tidelands Leases, and Tenant shall be
responsible for payment of all rent thereunder. Landlord shall cooperate
reasonably with Tenant to facilitate Tenant's obtaining and maintaining of
Tidelands Leases in force at all times during the Lease Term, to which end
Landlord shall, among other things, execute (whether individually or jointly
with Tenant), deliver and acknowledge such documents as Tenant may reasonably
request in connection with Tidelands Leases.
B. Notwithstanding any other term or condition of this Lease to
the contrary, and in addition to and separate from the termination rights
described in paragraphs 2.5 and 2.6, in the event that a Tidelands Lease has not
been fully executed and delivered by all parties thereto prior to the Effective
Date or in the event that a Tidelands Lease does not thereafter remain at all
times in full force and effect during the Lease Term, Tenant may elect, in
Tenant's sole and absolute discretion, to terminate this Lease, effective
immediately, by giving written notice of such termination to Landlord. Without
limiting the generality of the foregoing sentence, Tenant may terminate this
Lease pursuant to this paragraph 2.7 if at any time Tenant is unable to
negotiate and execute a renewal, extension or substitute Tidelands Lease on
terms and conditions (including rent) acceptable to Tenant in its sole
discretion. Upon any termination under this paragraph 2.7, (i) all rent and
other sums due under this Lease shall be prorated as of such termination date
and paid by Tenant; (ii) this Lease shall expire and terminate; (iii) Landlord
shall retain the Two Million Dollar ($2,000,000) sum paid by Tenant under
paragraph 3.7; and (iv) neither Landlord nor Tenant shall have any further
obligations hereunder, except for those which have accrued prior to the date of
such termination and those which expressly survive any termination under the
terms of this Lease.
ARTICLE 3
---------
RENT
3.1 Annual Base Rent: Commencing on the Commencement Date and
----------------
continuing throughout the remainder of the Lease Term, Tenant shall pay to
Landlord a fixed annual base rent (the "Annual Base Rent") for each Lease Year
equal to either (i) Five Hundred Thousand Dollars ($500,000), if the Adjusted
Gaming Win for the immediately preceding Lease Year is less than or equal to Ten
Million Dollars ($10,000,000), (ii) One Million Dollars ($1,000,000), if the
Adjusted Gaming Win for
-6-
the immediately preceding Lease Year is greater than Ten Million Dollars
($10,000,000) but less than Fifteen Million Dollars ($15,000,000), or (iii) Two
Million Dollars ($2,000,000), if the Adjusted Gaming Win for the immediately
preceding Lease Year is greater than or equal to Fifteen Million Dollars
($15,000,000). Tenant shall determine within thirty (30) days after
commencement of each Lease Year the Adjusted Gaming Win actually received by
Tenant for the immediately preceding Lease Year. Notwithstanding the first
sentence of this paragraph 3.1, Annual Base Rent for the first Lease Year shall
equal either (a) Five Hundred Thousand Dollars ($500,000), if the Adjusted
Gaming Win for the first Lease Year (determined as hereinafter provided) is less
than or equal to Ten Million Dollars ($10,000,000), (b) One Million Dollars
($1,000,000), if the Adjusted Gaming Win for the first Lease Year is greater
than Ten Million Dollars ($10,000,000) but less than Fifteen Million Dollars
($15,000,000) or (c) Two Million Dollars ($2,000,000) if the Adjusted Gaming Win
for the first Lease Year is greater than or equal to Fifteen Million Dollars
($15,000,000); provided, however, that Annual Base Rent for the first Lease Year
shall in any event be prorated as provided in paragraph 3.5. For purposes of
determining Annual Base Rent for the first Lease Year, Adjusted Gaming Win for
the first Lease Year shall be calculated as follows: (A) if the first Lease
Year consists of one hundred eighty (180) days or more, the Adjusted Gaming Win
for the first Lease Year shall be deemed to equal the actual Adjusted Gaming Win
for the first Lease Year annualized as if the first Lease Year had consisted of
an entire twelve-month period, and (B) if the first Lease Year consists of less
than one hundred eighty (180) days, the Adjusted Gaming Win for the first Lease
Year shall be deemed to equal the Adjusted Gaming Win for the second Lease Year.
3.2 Adjustment of Annual Base Rent: On the fifth (5th) anniversary of
------------------------------
the Commencement Date and on every fifth (5th) anniversary of the Commencement
Date thereafter, the Annual Base Rent amounts of Five Hundred Thousand Dollars
($500,000), one Million Dollars ($1,000,000) and Two Million Dollars
($2,000,000) described in paragraph 3.1 shall each be adjusted to an amount
equal to the product obtained by multiplying such Annual Base Rent amount (as it
may previously have been adjusted pursuant to this paragraph) by the lesser of
(i) 1.06, or (ii) a fraction, the numerator of which is the Consumer Price Index
published immediately preceding such fifth (5th) anniversary and the denominator
of which is the Consumer Price Index published immediately preceding the
Commencement Date. For the next five (5) Lease Years following any such
adjustment, the Annual Base Rent to be paid shall be whichever of the two
adjusted Annual Base Rent amounts is applicable (which shall depend upon the
amount of the Adjusted Gaming Win for the immediately preceding Lease Year as
provided in paragraph 3.1). As used herein, the term "Consumer Price Index"
shall mean the Consumer Price Index,
-7-
All Urban Consumers, subgroup "All Items", for the South Urban Region (Base Year
1982-84 = 100), which is presently being published monthly by the United States
Department of Labor, Bureau of Labor Statistics. If, however, the Consumer
Price Index is changed, revised or discontinued for any reason, there shall be
substituted in lieu thereof, and the term "Consumer Price Index" shall
thereafter refer to, the most nearly comparable official price index of the
United States government so as to obtain substantially the same result as would
have been obtained had the original consumer Price Index not been changed,
revised or discontinued, which alternative index shall be selected by Landlord
and shall be subject to Tenant's written approval.
3.3 Sample Calculation: Attached hereto as Exhibit "C" and made a part
------------------ -----------
hereof is a schedule demonstrating a sample calculation of both Annual Base Rent
and Percentage Rent under this Lease for the first five (5) Lease Years, except
that Exhibit "C" does not take into account the effect of any Consumer Price
-----------
Index adjustment under paragraph 3.2. The sample calculations on Exhibit "C"
-----------
are intended by way of example only to illustrate the calculation of Annual Base
Rent and Percentage Rent hereunder and shall not be deemed to supersede any of
the express provisions of this Lease.
3.4 Percentage Rent: In addition to the Annual Base Rent provided for
---------------
in paragraph 3.1 (as adjusted from time to time under paragraph 3.2), to the
extent permitted under applicable law, Tenant shall pay to Landlord additional
rent (the "Percentage Rent") for each Lease Year based upon the Adjusted Gaming
Win actually received by Tenant during such Lease Year, determined as follows:
A. Except as otherwise provided in subparagraph 3.10B, if the
Adjusted Gaming Win during such Lease Year exceeds Ten Million Dollars
($10,000,000) but is less than Fifteen Million Dollars ($15,000,000), the
Percentage Rent shall equal ten percent (10%) of the amount by which such
Adjusted Gaming Win exceeds Ten Million Dollars ($10,000,000);
B. If the Adjusted Gaming Win for such Lease Year exceeds
Twenty-Five Million Dollars ($25,000,000), the Percentage Rent shall equal five
percent (5%) of the amount by which such Adjusted Gaming Win exceeds Twenty-Five
Million Dollars ($25,000,000); and
C. If the Adjusted Gaming Win for such Lease Year exceeds Fifty
Million Dollars ($50,000,000), the Percentage Rent shall equal the sum of (i)
the amount described in subparagraph 3.4B and (ii) six percent (6%) of the
amount by which such Adjusted Gaming Win exceeds Fifty Million Dollars
($50,000,000).
-8-
3.5 Payment of Rent: Annual Base Rent shall be paid quarterly in
---------------
advance on the first day of each January, April and July for the second, third
and fourth quarters of each Lease Year and on the thirtieth (30th) day of
October for the first quarter of each Lease Year. On or before the thirtieth
(30th) day after the expiration of each of the first three quarters of a Lease
Year, Tenant shall deliver to Landlord (i) Tenant's calculation of the Adjusted
Gaming Win actually received by Tenant during such quarter (on an amortized
basis) and the Percentage Rent due for such quarter, all certified as true and
correct in all material respects by Tenant, and (ii) payment of eighty percent
(80%) of the amount of Percentage Rent due for the most recently concluded
quarterly period, along with a payment as adjusted by such amount as is
necessary to bring the total amount paid by Tenant on account of Percentage Rent
for the Lease Year in question up to an amount equal to eighty percent (80%) of
the Percentage Rent that is due based on the Adjusted Gaming Win actually
received by Tenant for all quarters in Lease Year that have been completed. On
or before the thirtieth (30th) day after the expiration of the fourth quarter of
each Lease Year during the Lease Term, Tenant shall deliver to Landlord (i)
Tenant's calculation of the Adjusted Gaming Win actually received by Tenant for
the Lease Year just completed, certified as true and correct in all material
respects by Tenant, and (ii) payment of such amount as is necessary to bring the
total amount paid to Landlord for Percentage Rent up to an amount equal to one
hundred percent (100%) of the Percentage Rent due for the Lease Year most
recently completed based on the actual Adjusted Gaming Win for such Lease Year.
All rent shall be paid in lawful money of the United States to Landlord at its
address set forth for notices in paragraph 17.3, or to such other place as
Landlord may designate from time to time in writing, without abatement,
deduction, offset or prior demand therefor, except as otherwise expressly
provided in this Lease. Annual Base Rent and Percentage Rent shall be prorated
as of the commencement or expiration or earlier termination of the Lease Term.
3.6 Audits: Tenant shall provide Landlord with copies of all gaming
------
revenue reports filed by Tenant with the State of Mississippi during the Lease
Term. Landlord reserves the right to conduct an independent audit of Tenant's
records regarding Tenant's gaming operations at the Property to ascertain the
accuracy of any quarterly or annual financial statements submitted by Tenant.
The independent audit, with respect to any one quarterly or annual financial
statement, may be conducted at any time within ninety (90) days of Landlord's
receipt of such Statement and may be conducted by a certified public accounting
firm of Landlord's choice. If any such independent audit correctly shows that
the audited quarterly or annual financial statement resulted in an underpayment
of Percentage Rent of more than five percent (5%) of the Percentage Rent
actually due, then Tenant shall pay the
-9-
cost of such audit. Otherwise, the cost of such audit shall be paid by
Landlord.
3.7 Last Year's Rent: Landlord acknowledges that Tenant has previously
----------------
paid Landlord the sum of One Hundred Thousand Dollars ($100,000) and that Tenant
has paid Landlord as of the Effective Date the additional sum of Nine Hundred
Thousand Dollars ($900,000). Tenant shall further pay Landlord on the
Commencement Date the additional sum of One Million Dollars ($1,000,000), so
that, as of the Commencement Date, Tenant will have paid Landlord the aggregate
amount of Two Million Dollars ($2,000,000). Such aggregate amount shall
constitute payment in full of all Annual Base Rent due for the last twelve (12)
month period of the Lease Term, notwithstanding any adjustments that may
previously have been made to Annual Base Rent under paragraph 3.2.
3.8 Annual Fixed Fee: Tenant shall make ten (10) payments to Landlord
----------------
of the Annual Fixed Fee (as hereinafter defined). Commencing on August 10,
1993, and continuing on August 10 of each year thereafter during the Lease Term
through and including August 10, 2002, Tenant shall pay to Landlord an annual
fixed fee (the "Annual Fixed Fee") for each Lease Year in the amount of Two
Hundred Thousand ($200,000) Dollars in addition to the Annual Base Rent and
Percentage Rent set forth herein. Receipt of the first payment of Two Hundred
Thousand Dollars is hereby acknowledged. Said Annual Fixed Fee shall not be
subject to the adjustment set forth in paragraph 3.2. Further, the Annual Fixed
Fee is not subject to the conversion to equity provided in paragraph 3.10. The
Annual Fixed Fee shall be paid annually in advance on August 10 of each Lease
Year in which the Annual Fixed Fee is required to be paid.
3.9 [Intentionally Omitted]
-----------------------
3.10 Conversion of Annual Base Rent and Percentage Rent to Equity:
------------------------------------------------------------
A. Notwithstanding the foregoing provisions of this Article
III, Tenant shall cause to be transferred to Landlord (or Landlord's designee) a
limited partnership interest (the "Equity Interest") constituting fifteen
percent (15%) of all partnership interests in Tenant, which transfer shall be in
lieu of all Annual Base Rent under paragraph 3.1 and all Percentage Rent (if
any) under subparagraph 3.4A for the first twenty-four (24) month period of the
Lease Term. Landlord acknowledges, however, that the State of Mississippi may
require that Landlord (or its designee) prosecute applications for certain
licenses (including, without limitation, gaming licenses and liquor licenses) on
behalf of the owners of the Equity Interest. In the event therefore that Tenant
determines, in Tenant's sole discretion, that the prosecution of such
applications ("Landlord's Licensing") will
-10-
delay to any material extent the commencement of gaming activity at the
Property, Tenant may, notwithstanding the foregoing provisions of this paragraph
3.10, commence such gazing operations without causing the transfer of the Equity
Interest to Landlord (or its designee). In the event that the Landlord's
Licensing is completed by the second (2nd) anniversary of the Commencement Date,
Tenant shall, promptly after completion of Landlord's Licensing, cause the
Equity Interest to be transferred to Landlord (or its designee), together with
all distributions that would otherwise have been made to the holder of such
Equity Interest from the Commencement Date through the date of such transfer to
the extent permitted under applicable law. If, however, Landlord has not
properly been issued all full and final licenses required with respect to
Tenant's gaming activities at the Property within such two-year period, Tenant
shall have no obligation to cause the Equity Interest to be transferred to
Landlord, but Tenant shall promptly pay Landlord Annual Base Rent for the first
twenty-four (24) month period of the Lease Term in accordance with paragraph 3.1
and Percentage Rent (if any) for such 24-month period in accordance with
subparagraph 3.4A.
B. Notwithstanding subparagraph 3.4A, in the event that (i) the
Equity Interest is transferred to Landlord pursuant to subparagraph 3.10A and
(ii) Adjusted Gaming Win during the third (3rd) Lease Year does not exceed
Twenty-Five Million Dollars ($25,000,000), Percentage Rent under subparagraph
3.4A during the third (3rd) Lease Year shall be determined as follows: First,
the number of days (the "Remaining Days") of the third (3rd) Lease Year that
falls after the expiration of the first twenty-four (24) month period of the
Lease Term shall be calculated. Second, a fraction (the "Adjustment Factor")
shall be established, the numerator of which equals the number of the Remaining
Days and the denominator of which equals three hundred sixty-five (365). Third,
if the Adjusted Gaming Win during the Remaining Days exceeds the product of Ten
Million Dollars ($10,000,000) multiplied by the Adjustment Factor but is less
than the product of Fifteen Million Dollars ($15,000,000) multiplied by the
Adjustment Factor, then Percentage Rent for such third (3rd) Lease Year shall
equal ten percent (10%) of the amount by which such Adjusted Gaming Win exceeds
the product of Ten Million Dollars ($10,000,000) multiplied by the Adjustment
Factor.
3.11 Licensing Due to Landlord's Rent: Landlord and Tenant further
--------------------------------
acknowledge that the State of Mississippi may require the issuance of certain
licenses (the "Required Landlord Licenses") (including, without limitation,
gaming licenses and liquor licenses) in favor of Landlord by virtue of this
Lease. Landlord shall use reasonable efforts and all due diligence to obtain
all Required Landlord Licenses at the earliest date possible. If, however,
forty-five (45) days
-11-
prior to the date reasonably anticipated by Tenant to be the Commencement Date,
Landlord has not obtained all Required Landlord Licenses, Landlord shall
transfer the Landlord's Estate (subject to this Lease) to one or more immediate
family members of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (i.e., parents, siblings, children,
grandchildren or great-grandchildren) (any such family member(s) to which the
Landlord's Estate has been transferred being referred to as an "Approved
Transferee"), provided that all such Approved Transferees shall obtain all
Required Landlord Licenses at least thirty (30) days prior to the anticipated
Commencement Date. If neither Landlord nor the Approved Transferees (if
Landlord has transferred the Landlord's Estate to such Approved Transferees) has
obtained all Required Landlord Licenses at least thirty (30) days before the
anticipated Commencement Date, then Tenant or its designee shall have, and
Landlord hereby grants to Tenant or Tenant's designee, an option to purchase the
Landlord's Estate for a purchase price equal to the fair market value of the
Landlord's Estate given Tenant's then intended use of the Property. If the
parties are unable to agree upon such fair market value, they shall submit the
issue to arbitration pursuant to paragraph 17.6 and shall exercise their good
faith efforts to complete such arbitration within thirty (30) days. Tenant may
exercise such purchase option at any time within ninety (90) days after the
determination of such fair market value by giving Landlord written notice
thereof. The closing of any purchase and sale of the Landlord's Estate pursuant
to such option shall occur no later than ten (10) days after the date Tenant
gives notice of such exercise. At such closing, Landlord shall execute and
deliver, in recordable form, such documents and instruments as Tenant may
reasonably request to effect the legal and valid transfer of the entire
Landlord's Estate to Tenant or its designee. Notwithstanding the foregoing, if
all Required Landlord Licenses have been fully, finally and properly issued in
favor of Landlord prior to Tenant's exercise of such purchase option, then this
Lease shall remain in full force and effect and Tenant shall not thereafter be
entitled to exercise such option. To enable Landlord and Tenant to implement
the provisions of this paragraph 3.11, Tenant shall give Landlord notice of the
date reasonably anticipated to be the Commencement Date no later than sixty (60)
days prior to such date.
ARTICLE 4
---------
PAYMENT OF IMPOSITIONS AND UTILITY CHARGES
4.1 Impositions: Tenant shall pay and discharge or cause to be paid
-----------
and discharged promptly as the same become due and before delinquency all
"Impositions" coming due during the Lease Term. The term "Impositions" as used
herein shall mean all real property taxes, assessments, levies, fees and other
charges (including the annual installments of principal and interest required to
pay any general or special
-12-
assessments for public improvements), which are levied or assessed against, or
with respect to the use of, all or any portion of the Property, but shall not
include any (i) estate, succession, inheritance, transfer, gift, franchise or
similar taxes of Landlord or (ii) taxes on Landlord's income from the Property
or other sources, including any business, income or profits taxes assessed
against Landlord. Any Impositions required to be paid by Tenant which relate to
a tax year during which the Commencement Date or the Lease expiration date or
sooner termination of this Lease occurs shall be prorated between Landlord and
Tenant as of the commencement or termination of this Lease, as the case may be.
If the law permits payment of any Imposition in installments, Tenant may utilize
the permitted installment method over the maximum period of time allowed by law,
and Tenant shall be required to pay before delinquency only the installments
coming due during the Lease Term, together with any interest thereon.
4.2 Apportionment: In the event that the Property is not separately
-------------
taxed or assessed with respect to any Imposition, then such Imposition levied
shall be apportioned between the Property and such other property with which it
is assessed in such manner that Tenant shall pay only that portion of any such
Imposition fairly allocable to the Property.
4.3 Right to Contest: Tenant shall have the right (but not the
----------------
obligation) to pay under protest or to contest or otherwise review by
appropriate legal or administrative proceedings, or in such other manner as
Tenant may desire, any Imposition which Tenant is required to pay pursuant to
the provisions of this Article. Any such contest or other proceeding shall be
conducted solely at Tenant's expense and free of expense to Landlord. Tenant
shall indemnify Landlord against any and all loss, cost, expense or damage
resulting from any such contest or other proceeding. At the request of Tenant,
Landlord shall join in any contest or other proceedings which Tenant may desire
to bring pursuant to this paragraph; provided, however, that Tenant shall pay
all of Landlord's costs and expenses arising from such joinder. Within ten (10)
days after the final determination of the amount due from Tenant for such
Imposition, Tenant shall pay the amount so determined to be due, together with
all costs, expenses and interest.
4.4 Utility Charges: All water, gas, electricity and other public
---------------
utilities used upon or furnished to the Property during the Lease Term shall be
promptly paid by Tenant prior to delinquency.
-13-
ARTICLE 5
---------
USE
5.1 Permitted Use: Tenant may use the Premises, or permit the Premises
-------------
to be used, for the following purposes:
A. Development of one or more of the following on the Property
as is elected by Tenant, of a design and capacity elected by Tenant, all to the
extent allowed by and in conformance with applicable law (a "Gaming Operation"):
(i) a riverboat gaming vessel; (ii) a dockside gaming vessel; or (iii) a land-
based casino;
B. Development and operation of any facilities that are related
to, necessary for the operation of, or compatible with and enhance any Gaming
Operation conducted on the Property, including parking areas, entertainment and
lodging facilities, food and beverage service and facilities, passenger
ticketing facilities, docking facilities, storage and maintenance facilities
(including fueling facilities for any riverboat vessel); and
C. Any other lawful activity or use.
5.2 Compliance with Law: Tenant shall comply with all laws and
-------------------
regulations of governmental authorities with respect to its use of the Property.
Tenant shall have the right, at its own cost and expense, to contest or review
by legal and/or administrative proceeding the validity or legality of any such
law or regulation. During such contest or review, Tenant may refrain from
complying therewith provided that compliance therewith may legally be so held in
abeyance without subjecting Landlord to any liability, civil or criminal, for
Tenant's failure so to comply.
5.3 Waste: Tenant shall not commit or permit waste on the Property nor
-----
shall Tenant remove any earth, rocks, gravel, minerals or the like from the
Premises except to the extent reasonably necessary for the construction of
Improvements.
ARTICLE 6
---------
IMPROVEMENTS
6.1 Construction of Initial Improvements: Tenant may (i) demolish and
------------------------------------
remove all improvements existing on the Premises as of the date of this Lease,
with all salvage belonging to Tenant and without any obligation to reimburse
Landlord for the cost or value of the improvements so demolished, and (ii)
design, engineer, construct, maintain and operate improvements upon the Premises
to enable Tenant to conduct the uses described in paragraphs 5.1A and B.
-14-
6.2 Demolition of Improvements and Construction of New Improvements:
---------------------------------------------------------------
Landlord and Tenant acknowledge that (i) the initially constructed Improvements
may outlive their economic lives or usefulness prior to the expiration of the
Lease Term, and (ii) the effective use of the Premises as contemplated by this
Lease may require the demolition of Improvements, the reconstruction or
refurbishing of Improvements, or the construction of additional or different
Improvements (including buildings and related on-site and off-site improvements)
upon the Premises in addition to those described in paragraph 6.1. Therefore,
at any time and from time to time during the Lease Term, Tenant shall have the
right (but not the obligation) to do any or all of the following, and all
salvage resulting therefrom shall belong to Tenant:
A. Demolish and remove any Improvements;
B. Replace, alter, relocate, reconstruct or add to any
Improvements in whole or in part;
C. Construct or otherwise make any new Improvements as Tenant
may choose on any part of the Property; or
D. Modify or change the contour or grade, or both, of the
Premises.
6.3 Permits and Basements: Tenant may apply for and secure from any
---------------------
governmental authority having jurisdiction of the Property any approvals,
permits or licenses required for the development and use of the Property for the
purposes permitted by this Lease. Tenant shall have the right to grant or
convey in form required by such governmental authority dedications of portions
of the Premises for public use and/or rights of way or easements for poles or
conduits for gas, electricity, water, telephone, storm and sanitary sewer lines
and for other utility, municipal or special district services which may be
required by governmental authorities as a condition to granting any such
approval, permit or license or which otherwise may be necessary in connection
with constructing improvements on the Premises. Tenant may enter into
agreements restricting use or granting easements over the Premises or obtain
zoning changes, variances or use permits where necessary in connection with
constructing improvements on the Premises. Landlord shall upon request by
Tenant execute or join in the execution of any application for such agreements,
approvals, permits or licenses and agrees jointly with Tenant to make such
necessary dedications as may be required by appropriate governmental agencies or
by requisite utility districts and/or companies as a condition to the
construction of such improvements. In the event Tenant wishes to sublease a
portion of the Premises in a manner requiring the subdivision of the Premises
and the recordation of a
-15-
subdivision or parcel map or the taking of any similar measures legally to
effect such subdivision, Landlord shall join with Tenant in executing all
documents necessary to effect such subdivision so long as Tenant pays all costs
and expenses arising by reason of such subdivision. All fees in connection with
such agreements, approvals, permits or licenses shall be paid by Tenant.
Nothing contained herein shall be deemed to impose upon Landlord any liability
to any governmental authority arising from any breach of any agreement or
application executed by or on behalf of Landlord pursuant to this paragraph and,
in connection therewith, Tenant shall indemnify and hold Landlord harmless from
any loss, cost, expense or claim against Landlord by any such governmental
agency arising from any such breach.
6.4 Ownership of Improvements: All Improvements constructed or in
-------------------------
installed upon the Premises by Tenant at any time during the Lease Term or any
extension thereof, which are and remain real property, are and shall be the
property of Tenant; provided, however, that upon the expiration or earlier
termination of this Lease, title to such Improvements then existing on the
Premises shall vest in Landlord and the same shall become the property of
Landlord without notice or execution of further instruments and without cost,
expense or obligation of any kind or nature to Landlord.
6.5 Removal of Trade Fixtures: Tenant and any subtenant,
-------------------------
concessionaire, licensee or invitee shall have the right to remove any or all
Trade Fixtures installed by it on the Property provided it repairs any damage
caused by such removal. Upon written request from Tenant, Landlord shall from
time to time execute and deliver any instrument that may be required by any
equipment supplier, vendor, lessor and/or lender whereby Landlord waives and/or
releases any rights it may have or acquire with respect to any Trade Fixtures
Tenant or any subtenant, concessionaire, licensee or invitee may affix to the
Property and agreeing that the same do not constitute realty.
ARTICLE 7
---------
MECHANICS' LIENS
7.1 Mechanics' Liens: Tenant covenants and agrees to keep the Property
----------------
free and clear of and from any and all mechanics', materialmen's and other liens
of record for work or labor done, services performed, or materials, appliances
or power contributed, used or furnished in the construction of any Improvements
upon the Premises or any alterations, repairs or additions thereto which Tenant
may make.
7.2 Contests: Tenant may, at its sole cost and expense, contest any
--------
lien of the nature set forth in this Article. In the event of any such contest,
Tenant shall
-16-
indemnify Landlord against all loss, cost, expense and damage resulting
therefrom. In the event Tenant contests any such lien and sustains an adverse
determination, Tenant shall nevertheless not be in default if it satisfies the
indebtedness in question within ten (10) days after actual final determination
by the court or administrative agency involved.
ARTICLE 8
---------
INSURANCE AND INDEMNITY
8.1 Required Insurance: Tenant shall, at its sole cost and expense,
------------------
procure and maintain the following insurance at all times during the Lease Term:
A. A policy or policies of comprehensive general liability
insurance, naming Landlord as additional insured, against loss or other
liability for bodily injury, death or property damage occurring on or about, or
resulting from an occurrence on or about, the Property with combined single
limit coverage of not less than Three Million Dollars ($3,000,000.00). The
minimum limits of such policies of liability insurance shall be reasonably
increased from time to time to meet changed circumstances, including, but not
limited to, changes in the purchasing power of the dollar and changes indicated
by the course of plaintiffs' verdicts in personal injury actions in ▇▇▇▇▇▇▇▇
County, Mississippi, but shall not exceed the amount of coverage then commonly
carried for similar property and improvements located in ▇▇▇▇▇▇▇▇ County. If
the parties are unable to agree on the amount by which the minimum coverage
required of Tenant is to be increased, the controversy shall be resolved by
arbitration according to the procedure set forth in paragraph 17.6. Landlord
may not request a change in the limits of Tenant's liability insurance more
often than once in any five (5) year period.
B. A policy or policies of standard fire and extended coverage
property damage insurance (including coverage for wind, hail and flood damage,
provided that such coverage is available at commercially reasonable rates),
naming Landlord as additional insured (as its interest may appear), in an amount
equal to not less than ninety percent (90%) of the full replacement value of the
Improvements with loss payable in accordance with the provisions of paragraph
9.4. Whenever any alterations or improvements are in the course of construction,
the insurance required by this subparagraph, to the extent appropriate, shall be
carried by Tenant in builder's risk form written on a completed value basis,
insuring against loss to the extent of at least ninety percent (90%) of the
replacement value of that which is being covered.
-17-
8.2 Required Terms: All policies provided for herein shall be with
--------------
financially responsible insurance companies authorized to do business in the
State of Mississippi. Each such policy shall provide that the policy cannot be
canceled or altered without thirty (30) days prior written notice to Landlord.
Certificates of insurance evidencing these policies shall be delivered to
Landlord. Tenant shall, at least ten (10) days prior to the expiration of such
policies, furnish Landlord with renewals or binders showing no lapse in
coverage.
8.3 Partial Release of Liability and Waiver of Subrogation: Landlord
------------------------------------------------------
and Tenant release each other and their respective agents, contractors and
employees, and Landlord releases Tenant's subtenants, from any claims for damage
to any persons or property that are caused by or result from risks insured
against under any insurance policy or policies required by this Article which
are in force at the time of such damage, but only to the extent such claims are
covered by such insurance. This release shall be in effect with respect to any
loss only so long as the applicable insurance policy(s) contain a clause to the
effect that this release shall not affect the right of the named insured to
recover under such policies. Tenant shall cause each insurance policy obtained
by it to provide that the insurance company waives all rights of recovery by way
of subrogation against either or both Landlord and Tenant in connection with any
damage covered by such policy so long as such a waiver of subrogation is
available and can be obtained without unreasonable additional cost.
8.4 Indemnity: Tenant shall defend with competent counsel, indemnify
----------
and hold Landlord harmless from all liability, costs and expenses arising by
reason of any injury or death to any person or persons, or damage to property of
any person or persons, including without limitation, Tenant and Tenant's
servants, agents, employees, contractors and subtenants from any cause or causes
whatsoever (other than causes of liability, costs and expenses within Landlord's
control or resulting from the fault of Landlord or its agents, contractors or
employees or which are Claims subject to paragraph 16.4) occurring in or upon
the Property during the Lease Term.
ARTICLE 9
---------
MAINTENANCE, REPAIR AND
RESTORATION OF DAMAGE
9.1 Tenant's Duty to Maintain and Repair: During the Lease Term,
------------------------------------
Tenant shall, at its sole cost and expense, (i) keep and maintain the Property
in good order and repair (ordinary wear and tear excepted), and (ii) make any
and all repairs, alterations or improvements to the Property which may
-18-
be required by any law or other governmental regulation. Landlord shall have no
obligation to make any repairs, alterations or improvements to the Property
during the Lease Term. Nothing contained in this paragraph shall be construed
as limiting any right given elsewhere in this Lease to Tenant to alter, modify,
demolish, remove or replace any Improvements, or as limiting provisions relating
to Condemnation or to damage to the Improvements.
9.2 Tenant's Duty to Restore Insured Damage to Improvements: If any
-------------------------------------------------------
Improvements are damaged by fire or other peril covered by the insurance
required to be carried by Tenant pursuant to paragraph 8.1B, then Tenant shall
either (i) restore the Improvements so damaged to the condition that existed
prior to such damage, but only to the extent reasonably practicable and
permitted by law, or (ii) demolish all or any of the Improvements and construct
additional or replacement Improvements, but only so long as the Improvements
following such work of demolition and replacement are at least equal in value to
the Improvements existing prior to the damage. Such work of restoration or
replacement shall be commenced and completed within a reasonable period of time,
subject to reasonable delays associated with adjustment or settlement of
insurance claims and procurement of new subtenants, if necessary.
9.3 Tenant's Option Following Damage to the Improvements Near the End
-----------------------------------------------------------------
of the Lease Term and Following Uninsured Damage to the Improvements: If (i)
--------------------------------------------------------------------
any Improvements are damaged by any peril that is not covered by the insurance
---
required to be carried by Tenant pursuant to paragraph 8.1B, or (ii) any
Improvements are damaged by any peril to the extent of twenty-five percent (25%)
or more of the then replacement value of all Improvements then existing on the
Property within ten (10) years of the end of the Lease Term, then Tenant shall
have the option to do any of the following:
A. Tenant may elect to terminate this Lease. To exercise any
such option to terminate, Tenant must give Landlord written notice of its
election to terminate within sixty (60) days from the date of such damage. Upon
the termination date set forth in said notice: (i) all rent and other sums due
pursuant to this Lease shall be prorated as of such termination date and paid by
Tenant; (ii) this Lease shall expire and terminate; (iii) Landlord shall refund
to Tenant the positive difference, if any, between (a) so much of the Two
Million Dollar ($2,000,000) sum paid by Tenant under paragraph 3.7 as has not
actually been applied against Annual Base Rent for the last twelve (12) month
period of the Lease Term, and (b) an amount equal to fifty percent (50%) of the
then applicable Annual Base Rent; and (iv) neither Landlord nor Tenant shall
have any further obligations hereunder, except for those which have accrued
prior to the date of such termination and those which expressly survive any
termination
-19-
under the terms of this Lease. In the event Tenant terminates the Lease
pursuant to this paragraph, Tenant shall at its sole expense prior to the date
of such termination either (i) demolish and remove all damaged Improvements, or
(ii) restore the damaged Improvements only to the extent necessary to avoid any
violation of any law, and Tenant shall indemnify and hold Landlord harmless from
any mechanics' liens or other liabilities resulting from such work.
Notwithstanding anything contained in this paragraph, Tenant shall not have the
right to terminate this Lease as a result of any damage unless any and all
Leasehold Mortgages shall have been fully satisfied and discharged.
B. Tenant shall have the right to continue this Lease in effect
and to demolish the damaged Improvements without the obligation to restore or
replace such damaged Improvements with any replacement Improvements.
9.4 Insurance Proceeds: All insurance proceeds payable on account of
------------------
any damage to the Property shall be paid as follows:
A. If a Leasehold Mortgage is in existence, then all insurance
proceeds shall be paid to the Leasehold Mortgagee for application according to
the terms of the Leasehold Mortgage, and any remaining proceeds shall be paid to
Tenant to be applied toward the cost of restoring the Property to the extent
required by this Article.
B. If there is no Leasehold Mortgage in existence, then all
insurance proceeds shall be paid to Tenant and shall be applied by Tenant toward
the restoration of the Property and any insurance proceeds not needed for such
purpose may be retained by Tenant.
C. Notwithstanding the foregoing, if this Lease is terminated
by Tenant pursuant to paragraph 9.3A, all insurance proceeds payable as a result
of such damage shall be applied in the following order of priority: (i) first,
to the payment of all expenses incurred by Tenant in completing the demolition
and/or restoration required of it pursuant to paragraph 9.3A; (ii) second, to
the satisfaction and payment of any Leasehold Mortgage; and (iii) the remainder
of insurance proceeds, if any, shall be paid to Landlord.
ARTICLE 10
----------
CONDEMNATION
10.1 Definitions: As used in this Lease, the following terms shall have
-----------
the following meanings:
A. The term "Condemnation" shall mean (i) any permanent taking
by the exercise of the power of eminent
-20-
domain, whether by legal proceedings or otherwise, by any person or entity
having the legal power to do so, (ii) a voluntary sale or transfer by Landlord
to any condemnor, either under threat of condemnation or while legal proceedings
for condemnation are pending, or (iii) any permanent taking by inverse
condemnation.
B. The term "Total Taking" shall mean a Condemnation of (i) all
or substantially all of the Property or (ii) any portion of the Property which
leaves remaining a balance which, in Tenant's reasonable judgment, may not be
economically operated for the purpose the Property was operated prior to the
Date of Taking.
C. The term "Partial Taking" shall mean a Condemnation of a
portion of the Property which does not constitute a "Total Taking".
D. The term "Date of Taking" shall mean the date that the
condemner takes possession of the property being condemned; and
E. The term "Award" shall mean all compensation, sums or
anything of value awarded, paid or received on or because of a Total Taking, a
Partial Taking or a temporary taking of the Property.
10.2 Total Taking: If during the Lease Term there occurs a Total
------------
Taking, (i) this Lease shall terminate on the Date of Taking, (ii) all
obligations hereunder shall be prorated to that date, (iii) neither Landlord nor
Tenant shall have any further obligations hereunder, except for those which have
accrued prior to the date of such termination and those which expressly survive
any termination under the terms of this Lease, and (iv) any fixtures, machinery,
equipment and personal property (excluding Trade Fixtures) used in the operation
and maintenance of the Improvements ("Building Service Equipment") and not so
taken shall be sold as promptly as possible thereafter, with the proceeds of
such sale being included in the Award for the purposes of this Lease.
10.3 Partial Taking: If during the Lease Term there occurs a Partial
--------------
Taking, the following shall apply:
A. This Lease shall terminate as to the portion so taken and
shall remain in full force and effect as to the portion remaining.
B. Effective as of the Date of Taking, Annual Base Rent shall
be redetermined as provided in paragraph 3.1 based upon the area of the Premises
remaining after the Condemnation.
-21-
C. Tenant shall, at its sole cost and with reasonable
diligence, commence and complete the restoration of the portion of the Property
not taken (to the extent then permitted by law) to a condition which is
economically viable, architecturally complete and suitable for the uses
permitted by this Lease.
10.4 Temporary Taking: If there occurs a temporary taking of all or any
-----------------
part of the Property during the Lease Term, (i) this Lease shall not be affected
in any way, (ii) Tenant shall continue to pay and perform all of the obligations
payable or performable by Tenant hereunder, and (iii) any Award made as a result
of said temporary taking shall be paid solely to Tenant.
10.5 Apportionment of Award: Any Award made as a result of a Total
----------------------
Taking or Partial Taking shrill be paid as follows:
A. Landlord shall receive that portion of any Award made for
that part of the Premises taken (valued as unimproved and encumbered by this
Lease);
B. Tenant shall receive that portion of any Award made for a
taking of any Improvements and that portion of any Award made for a taking of
Tenant's Estate (including any so-called "leasehold bonus value");
C. The remainder of the Award, if any, shall be allocated as
follows: (i) Tenant shall receive the portion of the Award (if any) payable for
restoration of the Improvements and Building Service Equipment, a taking of
Tenant's personal property or Trade Fixtures, for interruption of Tenant's
business, for Tenant's relocation costs, and/or for loss of Tenant's goodwill;
(ii) each subtenant of Tenant shall receive the portion of the Award (if any)
payable for a taking of said subtenant's personal property or Trade Fixtures
(and for said subtenant's relocation costs, loss of goodwill, or loss due to
interruption of business if, but only if, its sublease so provides); (iii) the
portion of the Award payable as severance damages upon a Partial Taking (if any)
shall be equitably apportioned between Landlord and Tenant so that Tenant
receives the portion of such severance damages which is fairly attributable to
any impairment of Tenant's use of the portion of the Property not taken during
the then remainder of the Lease Term; and (iv) any Award of attorneys' fees and
expenses and/or court costs made in any Condemnation proceeding shall be
received by the party(ies) who paid or incurred the expense in question.
10.6 General: Each party hereto shall be responsible for representing
-------
its own interest (at its own cost) in any proceeding or negotiation regarding
any Condemnation or any Award. To the extent possible, Landlord and Tenant
shall
-22-
together make one combined claim for an Award (including severance damages if
applicable) and shall cooperate to maximize the total amount of the Award.
Issues between Landlord and Tenant which must be resolved to implement the
provisions of this Article shall be joined in any pending Condemnation
proceeding, to the extent permissible under then applicable law, to the end that
multiplicity of actions shall be avoided. Any dispute between Landlord and
Tenant arising under this Article which is not so joined in a Condemnation
proceeding shall be determined by arbitration pursuant to the arbitration
provisions contained in paragraph 17.6.
ARTICLE 11
----------
DEFAULT AND REMEDIES
11.1 Events of Tenant's Default: Tenant shall be in default under this
--------------------------
Lease if any of the following occurs:
A. Tenant shall have failed to pay Annual Base Rent, Percentage
Rent or any other charge or obligation of Tenant requiring the payment of money
under the terms of this Lease within fifteen (15) days after receipt of written
notice from Landlord that such obligation is due and unpaid; or
B. Tenant shall have failed to perform any term, covenant or
condition of this Lease to be performed by Tenant, except those requiring the
payment of money, and Tenant shall have failed to cure same within sixty (60)
days after written notice from Landlord, delivered in accordance with the
provisions of this Lease, where such failure could reasonably be cured within
said sixty (60) day period; provided, however, that where such failure could not
reasonably be cured within said sixty (60) day period, that Tenant shall not be
in default unless it has failed to promptly commence and thereafter continue to
make diligent and reasonable efforts to cure such failure as soon as
practicable; or
C. Tenant shall have made a general assignment of its assets
for the benefit of its creditors; or
D. A court shall have made or entered any decree or order
with respect to Tenant or Tenant shall have submitted to or sought a decree or
order (or a petition or pleading shall have been filed in connection therewith)
which: (i) grants or constitutes (or seeks) an order for relief, appointment of
a trustee, or confirmation of a reorganization plan under the bankruptcy laws of
the United States; (ii) approves as properly filed (or seeks such approval of) a
petition seeking liquidation or reorganization under said bankruptcy laws or any
other debtor's relief law or statute of the United States or any state thereof;
or (iii) otherwise
-23-
directs (or seeks) the winding up or liquidation of Tenant; and such petition,
decree or order shall have continued in effect for a period of ninety (90) or
more consecutive days; or
E. The sequestration or attachment of, or execution or other
levy on, Tenant's interest in this Lease or the Premises or any Improvements
located thereon shall have occurred and Tenant shall have failed to obtain a
return or release of such property within thirty (30) days thereafter, or prior
to sale pursuant to such levy, whichever first occurs.
11.2 Landlord's Remedies: In the event of Tenant's default pursuant to
-------------------
paragraph 11.1, Landlord shall have the following remedies:
A. Landlord may, at Landlord's election, keep this Lease in
effect and enforce all of its rights and remedies under the Lease, including the
right to recover the rent and other sums as they become due by appropriate legal
action.
B. Landlord may, at Landlord's election, terminate this Lease
by giving Tenant written notice of termination. On the giving of the notice, in
accordance with the terms of this Lease, all of Tenant's right in the Property
shall terminate. Promptly after notice of termination, Tenant shall surrender
and vacate the Property in broom-clean condition, and Landlord may re-enter and
take possession of the Property; provided, however, that (i) Landlord shall not
eject any subtenant of Tenant then occupying space within the Property pursuant
to a valid sublease executed by Tenant who is not then in default, and (ii)
Landlord shall recognize the rights of such subtenants as provided in paragraph
13.3. This Lease may also be terminated by a judgment specifically providing
for termination.
Landlord shall use its best efforts with all due diligence to mitigate any
damages resulting from any such default by Tenant (including, without
limitation, the prompt reletting of the Premises in whole or in part for the
remainder of the Lease Term on reasonable terms and conditions), and Tenant
shall not in any event be liable for any damages reasonably mitigable by
Landlord. Landlord waives any right of distraint, distress for rent or
landlord's lien that may arise at law.
11.3 Landlord's Default and Tenant's Remedies: In the event Landlord
----------------------------------------
fails to perform any of its obligations under this Lease and fails to cure such
default within sixty (60) days after written notice from Tenant specifying the
nature of such default where such default could reasonably be cured within said
sixty (60) day period, or fails to commence such
-24-
cure within said sixty (60) day period and thereafter continuously with due
diligence prosecute such cure to completion where such default could not
reasonably be cured within said sixty (60) day period, then Tenant shall have
the following remedies:
A. Tenant may proceed in equity or at law to compel Landlord to
perform its obligations and/or to recover damages proximately caused by such
failure to perform (except to the extent Tenant has waived its right to damages
resulting from injury to person or damage to property as provided herein).
B. Tenant may cure any default of Landlord at Landlord's cost
and deduct the cost of such cure from the next installments of Annual Base Rent
and Percentage Rent and any other amounts payable under this Lease.
ARTICLE 12
----------
TERMINATION
12.1 Surrender on Termination: Upon termination of this Lease for any
------------------------
cause, Tenant shall quit and surrender the Property to Landlord without any
payment therefor by Landlord, without delay, in good order, condition and
repair, ordinary wear and tear excepted. Upon such termination, title to the
Improvements then existing on the Premises shall automatically vest in Landlord
without the execution of any further instrument. In no event shall the
provisions hereof impose any obligation upon Tenant to replace Improvements that
are demolished or removed or to restore and/or reconstruct Improvements
following any damage or condemnation unless Tenant is required to do so by
Article 9 or Article 10.
12.2 Recognition of Tenant's Subtenants: If this Lease is terminated
----------------------------------
for any reason prior to the expiration of the Lease Term, Landlord shall
recognize all subtenants of Tenant who are not then in default under the terms
of their respective subleases as provided in paragraph 13.3.
12.3 Removal of Trade Fixtures: If Tenant is not then in default,
-------------------------
Tenant may remove or cause to be removed all Trade Fixtures installed in the
Improvements which are the property of Tenant. Any of said Trade Fixtures that
are not removed from the Property within thirty (30) days after the date of any
termination of this Lease thereafter shall belong to Landlord without the
payment of any consideration.
12.4 Tenant's Quitclaim: Upon the expiration of the Lease Term, or any
------------------
sooner termination of this Lease, Tenant agrees to execute, acknowledge and
deliver to Landlord a proper instrument in writing, releasing and quitclaiming
to
-25-
Landlord all right, title and interest of Tenant in and to the Property.
ARTICLE 13
----------
ASSIGNMENT AND SUBLETTING
13.1 Assignment by Tenant: Tenant shall have the following rights to
--------------------
assign or otherwise transfer Tenant's Estate:
A. Tenant shall have the absolute right to assign or otherwise
transfer all or part of Tenant's Estate so long as the assigning Tenant and its
assignee both agree to become personally liable for the full and faithful
performance of the Tenant's obligations under this Lease and the assignee
acquires all necessary licenses to continue the Gaming Operation then being
conducted on the Premises.
B. Tenant shall also have the right to assign or otherwise
transfer all or part of Tenant's Estate to (i) any person(s) or entity(s) with
the prior written consent of Landlord, which consent shall not be unreasonably
withheld or delayed, or (ii) a "Permitted Assignee" (as defined below) without
Landlord's consent. If Tenant so assigns or transfers Tenant's Estate pursuant
to this subparagraph 13.1B, then Tenant shall be released from all further
liability under this Lease arising or accruing after the effective date of such
assignment.
C. No assignment or transfer by Tenant pursuant to this
paragraph 13.1 shall be effective unless (i) Tenant shall have given Landlord
reasonable notice of the proposed assignment or transfer and, if applicable,
appropriate documentation as evidence that the proposed assignee or transferee
qualifies as a Permitted Assignee, and (ii) the proposed assignee or transferee
shall have agreed in writing to assume and perform all obligations of Tenant
under this Lease arising after the date of transfer.
13.2 Permitted Assignee Defined: As used herein, the term "Permitted
--------------------------
Assignee" shall mean (i) any Affiliate of Tenant, or (ii) any person or entity
whose tangible net worth on the date of assignment (computed according to
generally accepted accounting principles) is greater than the then equivalent
(adjusted for changes in the purchasing power of the dollar during the Lease
Term) of Ten Million Dollars ($10,000,000) in 1993.
13.3 Subletting: Tenant shall have the absolute and unrestricted right
----------
to sublease all or any part of the Property during the Lease Term to any
person(s) or entity(s) for uses consistent with the uses permitted by this
Lease, and Landlord shall recognize the rights of each such person or entity
under
-26-
its respective sublease so long as it is not in default under such sublease;
provided, however, that no sublease to a subtenant to conduct gaming operations
at the Premises may be made without Landlord's prior written consent (not to be
unreasonably withheld or delayed). No sublease shall release Tenant from
primary liability for all obligations of Tenant under this Lease. Upon written
request by Tenant, Landlord shall execute with each such subtenant a recognition
and non-disturbance agreement in form reasonably satisfactory to Tenant in
substance providing that in the event this Lease is terminated, Landlord will
recognize the rights of such subtenant under its sublease so long as such
subtenant is not in default, all so long as each of the following is satisfied:
A. The term of the sublease does not exceed the Lease Term, as
it may be extended;
B. The sublease contains a provision reasonably satisfactory to
Landlord requiring the subtenant to attorn to (and pay sublease rent to)
Landlord if Tenant defaults under this Lease; and
C. Tenant shall have submitted to Landlord a true copy of the
sublease.
ARTICLE 14
----------
TRANSFER OF PREMISES BY LANDLORD
14.1 Transfer by Landlord: Subject to the restrictions set forth in
--------------------
this paragraph, to the right of first refusal of Tenant set forth in paragraph
14.2, and to Tenant's prior written consent (not to be unreasonably withheld or
delayed), Landlord may assign and transfer all of Landlord's Estate at any time
during the Lease Term, but only if such assignee shall have (A) currently in
force all licenses, permits and approvals (including, without limitation, gaming
licenses and liquor licenses) required for Tenant's uninterrupted use,
operation, possession and occupancy of the Property in Tenant's then-current
manner and Tenant's exercise of all its rights and privileges under this Lease,
and (B) by written agreement, agreed to (i) recognize Tenant under this Lease,
(ii) assume the obligations of Landlord imposed herein, and (iii) be bound by
each and every term hereof, including, without limitation, the terms of
paragraph 14.2 whereby Tenant has a continuing right of first refusal to
purchase Landlord's Estate. In no event shall Landlord have the right to
transfer or otherwise assign (a) less than all of Landlord's Estate without
Tenant's prior written consent, which consent may be refused in Tenant's sole
and absolute discretion, and any such transfer without Tenant's consent shall be
voidable by Tenant, or (b) any right, title or interest in Landlord's Estate if
such transfer or assignment would, directly or indirectly, impair, suspend,
-27-
increase the cost of or otherwise interfere with Tenant's possession, occupancy,
use or operation of the Property to any extent, whether in its then-current
manner or in any other manner permitted under this Lease (including, without
limitation, any transfer or assignment to any person or entity that does not
then hold all full, final, properly issued and valid licenses required of such
person or entity to permit Tenant's gaming operations from and at the Property).
14.2 Tenant's Right of First Refusal: If, at any time during the Lease
-------------------------------
Term (as the same may be extended), Landlord Shall desire to transfer Landlord's
Estate, then Landlord shall first offer to Tenant the opportunity to purchase
Landlord's Estate by giving Tenant written notice of the terms upon which it
would be willing to sell Landlord's Estate ("Landlord's First Offer"). Tenant
shall have the exclusive right to purchase Landlord's Estate upon the terms and
conditions stated in Landlord's First Offer, which Tenant may exercise only by
giving written notice to Landlord of Tenant's exercise of said right within
thirty (30) days following the date of receipt by Tenant of Landlord's First
Offer. If Tenant timely exercises its right, it shall purchase Landlord's
Estate on the terms and conditions contained in Landlord's First offer.
However, in the event Tenant does not so accept Landlord's First Offer within
said thirty (30) day period, then Landlord may sell Landlord's Estate to any
third party for the same purchase price contained in Landlord's First Offer and
otherwise on the same terms and conditions contained in Landlord's First Offer
so long as such sale and transfer is consummated within one hundred twenty (120)
days after delivery to Tenant of Landlord's First Offer. If, within said one
hundred twenty day (120) period, Landlord receives a bona fide offer from a
third party to purchase Landlord's Estate for a price less than that contained
in Landlord's First Offer, or Landlord shall receive a bona fide offer from a
third party to purchase Landlord's Estate for the price contained in Landlord's
First Offer and not otherwise on the same terms and conditions contained in
Landlord's First Offer, and Landlord desires to accept such offer, then Landlord
shall give written notice to Tenant setting forth the terms of such offer and
the fact that Landlord is willing to accept such offer ("Landlord's Second
Notice"). Tenant shall have the right to purchase Landlord's Estate at the
price and upon the terms and conditions stated in Landlord's Second Notice
exercisable by giving written notice to Landlord of Tenant's exercise of such
right within fifteen (15) days following the day that Tenant receives Landlord's
Second Notice. In the event that Tenant shall elect to so purchase Landlord's
Estate, then it shall do so upon the terms and conditions contained in
Landlord's Second Notice. If Tenant does not notify Landlord of its agreement
to purchase Landlord's Estate upon such terms within said fifteen (15) day
period, then Landlord may sell Landlord's Estate to any third party in strict
accordance with the terms and conditions
-28-
contained in Landlord's Second Notice. If Landlord's Estate has not been sold
and transferred after one hundred twenty (120) days have passed since Tenant
shall have received Landlord's First Offer, then any election by Landlord to
assign and sell Landlord's Estate shall be deemed a new determination to do so
and shall be subject to all of the procedures set forth in this paragraph.
Notwithstanding the election of Tenant not to exercise the right of first
refusal contained in this paragraph, the provisions of this paragraph shall
continue to apply to any successor in interest of Landlord. Notwithstanding
anything contained herein, the provisions of this paragraph 14.2 shall not apply
to any transfer by Landlord of Landlord's Estate to a single entity
(corporation, partnership or trust), the partners, shareholders or beneficial
owners of which are all immediate family members of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (parents,
siblings, children, grandchildren or great-grandchildren). No capital stock,
partnership or other beneficial or ownership interest in any such entity may
thereafter be transferred to any persons other than such immediate family
members.
ARTICLE 15
----------
LEASEHOLD MORTGAGES
15.1 Right to Encumber Tenant's Estate: Tenant may at any time and from
---------------------------------
time to time during the Lease Tern encumber Tenant's Estate by one or more
mortgages, deeds of trust or other proper instruments as security for the
repayment of such loan(s) as Tenant may desire, without having Landlord consent
to or join in the execution of such instrument. Any such encumbrance shall be
referred to herein as a "Leasehold Mortgage", and the holder of any Leasehold
Mortgage shall be referred to as a "Leasehold Mortgagee". Any Leasehold
Mortgage shall be subject to all of the covenants and conditions of this Lease.
Any Leasehold Mortgage shall provide that the Leasehold Mortgagee shall be
subrogated to any and all of the rights of Landlord under this Lease in the
event the Leasehold Mortgagee cures a default by Tenant.
15.2 Notice: Tenant shall give written notice of any Leasehold Mortgage
------
to Landlord and shall forward to Landlord a copy of any instrument evidencing
such Leasehold Mortgage along with copies of all other loan documents signed by
Tenant with respect to such Leasehold Mortgage within thirty (30) days after the
recording thereof.
15.3 Leasehold Mortgagee's Rights and Obligations Prior to Foreclosure:
-----------------------------------------------------------------
Any Leasehold Mortgagee may, but shall not be required to unless and until the
Leasehold Mortgage is foreclosed, pay any of the rent due under this Lease,
procure and maintain any insurance, pay any Impositions, make any repairs or
improvements, and do any other act required of Tenant by the terms of this Lease
in order to cure a default
-29-
of Tenant, prevent a forfeiture of the Lease, or otherwise protect its security
interest in the Property. In this regard, the Leasehold Mortgagee, pursuant to
the terms of its Leasehold Mortgage and for purposes of protecting its security
interest in the Property, may enter into possession of the Property, collect
rents due from subtenants of Tenant, and otherwise perform such acts as the
Leasehold Mortgagee may deem necessary to so protect its security. Any such
payment or act by the Leasehold Mortgagee shall be as effective hereunder as if
done by Tenant, and may be done by the Leasehold Mortgagee without assuming the
obligations of Tenant under this Lease and without causing a default under this
Lease.
15.4 Obligations of Landlord with Respect to any Leasehold Mortgagee:
---------------------------------------------------------------
After having been notified of the existence of a Leasehold Mortgage, Landlord
shall give any such Leasehold Mortgagee written notice of (i) any default by
Tenant hereunder and/or any other event authorizing the termination of this
Lease, and (ii) the exercise of any remedy by Landlord by reason of any default
by Tenant under this Lease. In this regard, Landlord shall not have the power
to (a) terminate the Lease unless Landlord shall have first given such Leasehold
Mortgagee sixty (60) days written notice of its intent to terminate this Lease,
or (b) terminate this Lease if, within said sixty (60) day period (or such
longer period of time as is reasonably required by such Leasehold Mortgagee to
obtain possession of the Property if that is necessary to cure Tenant's
default), such Leasehold Mortgagee either:
A. Cures Tenant's default whether by the payment of money or
the performance of any act required to so cure such default; or
B. Commences and thereafter continuously pursues foreclosure of
the Leasehold Mortgage or otherwise acquires the interest of Tenant under the
Lease, but only so long as such Leasehold Mortgagee performs all obligations to
be performed by Tenant (including the payment of rent, Impositions and all other
monetary obligations) until such time as Tenant's Estate is so acquired or sold
upon foreclosure or by way of other appropriate proceedings in the nature
thereof.
C. Notwithstanding anything contained in this Lease to the
contrary, Landlord may not terminate this Lease as a result of (i) the
occurrence of any Tenant's default described in subparagraphs C, D and E of
paragraph 11.1, or (ii) any default of Tenant that cannot be cured by the
Leasehold Mortgage, so long as any Leasehold Mortgagee has commenced and
thereafter is continuously pursuing the foreclosure of the Leasehold Mortgage,
but only so long as the Leasehold Mortgagee performs all other obligations to be
performed by Tenant (including the payment of rent,
-30-
Impositions and all other monetary obligations) until such time as Tenant's
Estate is so acquired or sold upon foreclosure or by way of other appropriate
proceedings in the nature thereof.
15.5 Leasehold Mortgagee's Rights and Obligations Following a
---------------------------------------------------------
Foreclosure: Should a Leasehold Mortgagee or any other person acquire Tenant's
-----------
Estate by private power of sale, by judicial foreclosure, or other appropriate
proceedings in the nature thereof, or as a result of any other action or remedy
provided by any Leasehold Mortgage, then the Leasehold Mortgagee or any such
person:
A. Shall acquire Tenant's Estate subject to all of the
provisions of this Lease, including without limitation the rights of Tenant set
forth in Article 14; and
B. Shall be liable for the performance of all the obligations
of Tenant under this Lease, including the curing of all the defaults of Tenant
existing prior to such acquisition except those defaults that cannot by their
nature be cured.
15.6 Non-Liability of Leasehold Mortgagee: A Leasehold Mortgagee shall
------------------------------------
not be obligated to perform Tenant's obligations under this Lease unless and
until the Leasehold Mortgagee acquires Tenant's interest in the Property by
foreclosure or other similar proceedings.
15.7 No Restriction on Assignment: Notwithstanding the provisions of
----------------------------
paragraph 13.1, if a Leasehold Mortgagee or any other person acquires Tenant's
Estate as a result of a sale under said Leasehold Mortgage pursuant to a power
of sale contained therein, a judgment of foreclosure, or by deed or other
instrument in lieu of foreclosure, such Leasehold Mortgagee or other person
shall have the privilege of assigning or transferring Tenant's Estate to any
other person(s) or entity(s) without the prior consent of Landlord, provided,
however, that there shall be delivered to Landlord in due form for recording (i)
a duplicate original of the instrument of assignment, and (ii) an instrument of
assumption by the transferee of all of Tenant's obligations under this Lease,
and the Leasehold Mortgagee or other person who so acquired Tenant's Estate
through foreclosure proceedings shall be relieved of any further liability under
the Lease from and after the effective date of such transfer.
15.8 New Lease: If a Leasehold Mortgagee acquires Tenant's Estate by
---------
way of foreclosure or otherwise, and if the Leasehold Mortgagee so requests,
Landlord shall enter into a new lease of the Premises with the Leasehold
Mortgagee, effective as of the date the Leasehold Mortgagee so acquired Tenant's
Estate (but with the same relative priority as this Lease with regard to
encumbrances on the Property) for the
-31-
remainder of the Lease Term and at the same rent and upon the same terms and
conditions contained in this Lease. The Leasehold Mortgagee shall pay all
costs, fees, expenses and legal fees incurred by Landlord in connection with the
execution of such new lease.
15.9 Covenant of Cooperation: Landlord covenants and agrees to execute
-----------------------
any documents reasonably required by any lender making a leasehold Mortgage to
effectuate the foregoing so long as Landlord assumes no liability whatsoever
thereunder and this Lease shall remain prior to any such Leasehold Mortgage.
15.10 No Amendment: So long as any Leasehold mortgage is in effect and
------------
Landlord has been given notice of its existence, then this Lease will not be
voluntarily canceled, surrendered, terminated, amended, modified or in any
manner altered without the prior written consent of the Leasehold Mortgagee.
Landlord and Tenant covenant and agree to cooperate in including in this Lease
by suitable amendment, from time to time, any provision which may reasonably be
requested by any proposed Leasehold Mortgagee for the purpose of implementing
the mortgagee protection provisions contained in this Lease and allowing such
Leasehold Mortgagee reasonable means to protect or preserve the lien of the
Leasehold Mortgage on the occurrence of a default by Tenant hereunder. Landlord
and Tenant each agree to execute and deliver (and to acknowledge, if necessary,
for recording purposes) any document necessary to effect any such amendment;
provided, however, that any such amendment shall in no event affect the term or
rent under this Lease or otherwise adversely affect any rights of Landlord or
Tenant hereunder in any material respect.
15.11 No Merger: So long as there is a Leasehold Mortgage in effect,
---------
Tenant's Estate will not merge with Landlord's Estate by reason of the fact that
(i) Tenant's Estate is acquired by Landlord, or (ii) Landlord's Estate is
acquired by Tenant.
ARTICLE 16
----------
ENVIRONMENTAL
16.1 Landlord's Representations: Except as disclosed in writing to
--------------------------
Tenant by Landlord prior to the Effective Date or as disclosed in writing to
Tenant in any consultant's report prior to the Effective Date, Landlord warrants
and represents that (i) no Hazardous Material (as defined in paragraph 16.6) is
present on the Premises or the soil, surface water or groundwater thereof; (ii)
no underground storage tanks or asbestos containing building materials are
present on the Premises; and (iii) no action, proceeding or claim is pending or
threatened concerning the Premises
-32-
concerning any Hazardous Material or pursuant to any Environmental Law (as
defined in paragraph 16.5). Landlord has delivered to Tenant all reports and
environmental assessments of the Premises conducted at the request of or
otherwise available to Landlord, and Landlord has complied with all
environmental disclosure obligations imposed upon Landlord by applicable law
with respect to this transaction.
16.2 Covenant to Comply with Environmental Laws: Within the time
------------------------------------------
permitted by applicable law, Tenant, at its sole cost, shall perform or cause to
be performed, any investigation, remediation, removal action or detoxification
of the Premises, and shall comply with any Environmental Law, relating to any
Hazardous Material released, disposed, discharged or emitted on or about the
Premises during the Lease Term by Tenant or Tenant's employees or agents.
Within the time permitted by applicable Law, Landlord, at its sole cost, shall
perform or cause to be performed, any investigation, remediation, removal action
or detoxification of the Premises and shall comply with any Environmental Law
relating to any Hazardous Material present at any time on or about the Premises
or the soil, air, improvements, groundwater or surface water thereof, except to
the extent that such Hazardous Material is released, discharged or emitted on or
about the Premises during the Lease Term by Tenant or Tenant's employees or
agents.
16.3 Tenant Indemnity: Tenant shall indemnify, defend with counsel
----------------
reasonably acceptable to Landlord, and hold harmless Landlord, its employees,
agents, contractors, stockholders, partners, officers, directors, successors,
personal representatives, and assigns (collectively the "Landlord
Indemnitees"),from and against all claims, actions, suits, proceedings,
judgments, losses, costs, personal injuries, damages, liabilities, deficiencies,
fines, penalties, attorneys' fees, consultants' fees, investigations,
detoxifications, remediations, removals and expenses of every type and nature
("Claims"), to the extent caused by the release, disposal, discharge or emission
of Hazardous Materials on or about the Premises during the Lease Term by Tenant
or Tenant's employees or agents. Notwithstanding anything to the contrary in
this Lease, Tenant shall have no other liability, responsibility or duty to
reimburse Landlord with respect to any Hazardous Material on or about the
Premises or any Environmental Law regarding the Premises or the soil, air,
improvements, groundwater or surface water thereof.
16.4 Landlord Obligations:
--------------------
A. Landlord shall undertake, control and complete, at
Landlord's sole cost and expense and to Tenant's reasonable satisfaction, to the
extent required by applicable Environmental Laws, investigation and remediation
of any and
-33-
all Hazardous Materials in, on or under the Premises or about the Premises to
the extent caused by Hazardous Materials now or heretofore in, on or under the
Premises (i) known to Landlord as of April 9, 1993, or (ii) disclosed by any
environmental reports existing as of such date with respect to the Premises or
any portion thereof.
B. If any court or governmental agency orders Landlord to
investigate or remediate any Hazardous Materials located in, on, under or about
the Premises, Landlord shall comply with such order at its sole cost without
contribution from Tenant, except to the extent that the presence of such
Hazardous Materials was caused by Tenant or persons under Tenant's control.
C. Landlord shall indemnify, defend with counsel reasonably
acceptable to Tenant, and hold harmless Tenant, its employees, agents,
contractors, stockholders, partners, officers, directors, successors,
subtenants, personal representatives and assigns (collectively the "Tenant
Indemnitees") from and against all Claims (as defined in paragraph 16.3) arising
from or relating to compliance with the order of any court or governmental
agency regarding Hazardous Materials present at any time on or about the
Premises; except to the extent that the foregoing actually results from (i) the
release, disposal, discharge or emission of Hazardous Materials on or about the
Premises during the Lease Term by Tenant or Tenant's employees or agents or (ii)
the act or omission of any other party (other than Landlord or persons under
Landlord's control) who places, transports, discharges or releases Hazardous
Materials to the surface of the Premises after Tenant has the exclusive right to
occupy the Premises. Landlord's foregoing indemnification shall include
liability for any and all costs incurred by Tenant in connection with any such
court or governmental agency, including, without limitation, attorneys' and
consultants' fees, but shall not include any liability for any lost profits or
other consequential damages incurred by Tenant.
D. At such time as Tenant, at its cost and expense, undertakes
the demolition of those structures presently located on the Premises, Landlord
shall, in compliance with applicable Environmental Laws, remove and dispose of
any and all asbestos located in the structures being demolished. Landlord shall
coordinate such removal activities with Tenant's demolition and construction
activities. Prior to Tenant's awarding a demolition contract with respect to
existing structures on the Premises, Tenant, its consultants and Landlord shall
identify the location of all asbestos in such structures. As part of its
demolition contract award process, Tenant shall require contract applicants to
state the amount of their bid for demolition, assuming there was no asbestos in
the structures to be
-34-
demolished. Tenant shall then identify all parts of such structures which will
be removed and disposed of by Landlord in accordance with its obligations
concerning asbestos removal described above. Tenant shall then require
applicants to state the amount of their bid for demolition, excluding the
obligation to demolish and remove such identified portions of the structures.
If the applicant to which Tenant awards the demolition contract reduces its bid
as a result of Landlord's removal and disposal of such identified portions of
the structures, Tenant shall pay Landlord an amount equal to such cost savings.
Such payment shall constitute payment in full for Landlord's asbestos removal
and disposal activities hereunder.
E. Notwithstanding the foregoing provisions of this paragraph
16.4, in the event that any Claims (as defined in paragraph 16.3) arise during
the Lease Term with respect to Hazardous Materials on or about the Premises that
have actually resulted directly from the release, disposal, discharge or
emission of Hazardous Materials in the Back Bay of Biloxi by parties other than
Landlord or Tenant, Landlord and Tenant shall each bear fifty percent (50%) of
all costs to remediate, remove or otherwise deal with such Hazardous Materials
in accordance with Environmental Laws, and Landlord and Tenant shall both join
in any resulting litigation and shall each bear fifty percent (50%) of all costs
(including attorneys' and consultants' fees) of such litigation.
F. Landlord shall perform all of its investigative, remediation
and other obligations under this paragraph 16.4 in a manner which will minimize
interference with and disruption of the operations of Tenant.
16.5 Definition of Environmental Laws: As used herein "Environmental
--------------------------------
Laws" shall mean all local, state or federal laws, statutes, ordinances, rules,
regulations, judgments, injunctions, stipulations, decrees, orders, permits,
approvals, treaties or protocols now or hereafter enacted, issued or promulgated
by any governmental authority which relate to any Hazardous Material or to the
use, handling, transportation, production, disposal, discharge, release,
emission, sale or storage of, or the exposure of any person to, a Hazardous
Material.
16.6 Definition of Hazardous Material: The term "Hazardous Material"
--------------------------------
shall mean any material or substance that is now or hereafter prohibited or
regulated by any law or that is now or hereafter designated by any governmental
authority to be radioactive, toxic, hazardous or otherwise a danger to health,
reproduction or the environment, including, without limitation, (i) oil and
petroleum products, (ii) explosives, (iii) radioactive substances and materials,
(iv) hazardous, ultra-hazardous or toxic substances or wastes, (v) asbestos,
(vi) urea formaldehyde, (vii) polychlorinated biphenyls and
-35-
transformers or other equipment which contain fluid containing polychlorinated
biphenyls, (viii) radon gas, and (ix) chemicals, materials or substances now or
hereafter defined or included in the definition of "hazardous substances",
"hazardous waste", "hazardous materials", or "toxic substances", or words of
similar import, under any law, including, not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as now or
hereafter amended ("CERCLA"), the Hazardous Materials Transportation Act, as now
or hereafter amended, the Resource Conservation Recovery Act, as now or
hereafter amended, the Federal Water Pollution Control Act, as now or hereafter
amended, the Clean Air Act, as now or hereafter amended, the Occupational Safety
and Health Act, as now or hereafter amended, and similar laws now or hereafter
enacted.
16.7 Exclusive Provisions: This Article 16 constitutes the entire
--------------------
agreement between Landlord and Tenant regarding Hazardous Materials and
Environmental Laws. No other provision of this Lease shall be deemed to apply
thereto.
ARTICLE 17
----------
GENERAL PROVISIONS
17.1 Estoppel Certificates: Each party agrees promptly following
---------------------
request by the other to execute and deliver to the other an estoppel
certificate, (i) certifying that this Lease is unmodified and in full force and
effect, or, if modified, stating the nature of such modification and certifying
that this Lease, as so modified, is in full force and effect and the date to
which the rent and other charges are paid in advance, if any; and (ii)
acknowledging that, to the responding party's knowledge, there are not any
uncured defaults on the part of either party hereunder, or, if there exist any
such uncured defaults, stating the nature of such uncured defaults; and (iii)
evidencing the status of the Lease as may be required either by a lender making
a loan to be secured by Tenant's Estate or by a purchaser of the Premises or
Tenant's Estate. A party's failure to deliver an estoppel certificate as
required herein within twenty (20) days following receipt of written request
therefor shall be conclusive upon such party that as of the date of said request
(i) this Lease is in full force and effect, without modification; (ii) there are
no uncured defaults under this Lease on the part of either party; and (iii) no
rent more than one quarterly installment thereof has been paid in advance, all
except as may otherwise be set forth in such request.
17.2 Holding Over: This Lease shall terminate without further notice on
------------
the last day of the Lease Term. Any holding over by Tenant after such date
shall not constitute a renewal or extension of this Lease or give Tenant any
rights in or to
-36-
the Property except as expressly provided herein. Any holding over after such
date with the consent of Landlord shall be construed to be a tenancy from month
to month, at the same rental (including Percentage Rent) due as of the last
month of the Lease Term, and shall otherwise be on the terms and conditions
herein specified insofar as applicable.
17.3 Notices: Any notice required or desired to be given pursuant to
-------
this Lease shall be in writing with copies directed as below indicated and shall
be personally served or, in lieu of personal service, by depositing same in the
United States mail, postage prepaid, certified or registered mail with request
for return receipt, in which latter event such notice shall be deemed delivered
seventy-two (72) hours after same shall have been so deposited in the United
States mail, or when actually delivered (if earlier), and if such notice shall
be addressed to Landlord, the address of Landlord is:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
c/o The ▇▇▇▇▇▇▇▇ Group, Inc.
▇▇▇▇▇▇▇▇ Machinery Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a duplicate copy to:
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and if addressed to Tenant, the address of Tenant is:
Mississippi-I Gaming, L.P.
c/o Boomtown, Inc.
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
with a duplicate copy to:
______________________________
______________________________
______________________________
Either Landlord or Tenant may change its respective addresses by giving written
notice to the other in accordance with the provisions of this paragraph.
17.4 Attorney's Fees: In the event either party shall bring any action,
---------------
arbitration or legal proceeding for an alleged breach of any provision of this
Lease, to recover rent, to terminate this Lease, or to enforce, protect,
determine or establish any term, covenant or condition of this Lease or the
rights or obligations hereunder of either party, the prevailing party, in
addition to whatever other relief it
-37-
may be entitled to, shall be entitled to recover from the non-prevailing party
reasonable attorneys' fees and expenses and court costs.
17.5 No Merger: The voluntary or other surrender of this Lease by
---------
Tenant, or a mutual cancellation thereof, shall not work a merger and shall, at
the option of Landlord, operate as an assignment to Landlord of any and/or all
subleases of subtenants.
17.6 Arbitration: Any question, dispute or controversy specifically
-----------
required to be determined by arbitration under any term or provision of this
Lease (and only such questions, disputes or controversies) shall be determined
pursuant to the provisions of this paragraph. Either Landlord or Tenant may
initiate such proceedings by giving written notice to the other stating an
intention to arbitrate, the issue to be arbitrated, and the relief sought. Such
arbitration shall be conducted pursuant to the provisions of the laws of the
State of Mississippi then in force, with the rules of procedure to be those of
the American Arbitration Association or its successor insofar as said rules of
procedure do not conflict with the laws of the State of Mississippi then in
force. Once notice to arbitrate has been given, Landlord and Tenant shall
jointly, within fifteen (15) days of such notice, select one arbitrator, or if
they cannot agree on one arbitrator then each shall select an arbitrator within
twenty (20) days of delivery of said notice, and the two arbitrators selected
shall designate the third arbitrator within twenty-five (25) days of delivery of
said notice. The three arbitrators shall convene as soon as practicable and
offer Landlord and Tenant the opportunity to present their cases. If any party
to the arbitration, after being duly notified, fails to appear, participate or
produce evidence at an arbitration hearing, the arbitrator(s) may make an award
based solely on the evidence actually presented. The arbitrators shall, by
majority vote, make such award and decision as is appropriate and in accord with
the terms of this Lease, and such award shall be binding upon Landlord and
Tenant and enforceable in a court of law. The cost of arbitration shall be
borne by Landlord and Tenant as determined by the arbitrators. In the event
either party fails to appoint an arbitrator or the two arbitrators fail to
select a third arbitrator within the time required by this paragraph, then upon
application of either party, the arbitrator shall be appointed by the American
Arbitration Association, or if there be no American Arbitration Association or
it shall refuse to perform this function, then at the request of either Landlord
or Tenant such arbitrator shall be appointed by the then senior judge of the
Chancery Court of the State of Mississippi for the Second Judicial District of
the County of ▇▇▇▇▇▇▇▇.
-38-
17.7 Quiet Enjoyment: Landlord covenants that Landlord has full right
---------------
to make this Lease and that Tenant shall have quiet and peaceful possession of
the Premises as against Landlord and any person claiming the same by, through or
under Landlord.
17.8 No Partnership: It is agreed that nothing contained in this Lease
--------------
shall be deemed or construed as creating a partnership, joint venture,
unincorporated association, or other similar relationship between Landlord and
Tenant, or cause Landlord to be responsible in any way for the debts or
obligations of Tenant. Neither the method of computing rent nor any other
provision contained in this Lease nor any acts of the parties hereto shall be
deemed to create any relationship between Landlord and Tenant other than the
relationship of landlord and tenant.
17.9 Captions: The captions used in this Lease are for the purpose of
--------
convenience only and shall not be construed to limit or extend the meaning of
any part of this Lease.
17.10 Duplicate Originals; Counterparts: Any executed copy of this Lease
---------------------------------
shall be deemed an original for all purposes. This Lease may be executed in one
or more counterparts, each of which shall be deemed to be an original, but all
of which taken together shall constitute one and the same Lease.
17.11 Time of the Essence: Time is of the essence of this Lease.
-------------------
17.12 Severability: In the event any one or more of the provisions
------------
contained herein shall for any reason be held to be invalid, illegal or
unenforceable in any respect, every other provision of this Lease shall remain
and subsist in full force and effect, and this Lease shall be construed as if
such invalid, illegal or unenforceable provision had not been contained herein.
17.13 Interpretation: The language in all parts of this Lease shall in
--------------
all cases be construed as a whole according to its fair meaning and not strictly
for or against either Landlord or Tenant. This Lease is the result of
negotiations among and has been reviewed by the parties and their respective
counsel. Accordingly, this Lease shall be deemed to be the product of both
parties hereto, and no ambiguity shall be construed in favor of or against
either party. In the event that Landlord or Tenant is comprised of more than
one person or entity, all covenants, obligations and liabilities of Landlord and
Tenant shall be the joint and several covenants, obligations and liabilities of
all such persons and entities comprising Landlord and Tenant, respectively.
When the context of this Lease requires, a reference to one gender includes the
other genders, a
-39-
partnership, a corporation and a joint venture, and the singular includes the
plural. The validity, construction, effect, performance and enforcement of this
Lease shall be governed in all respects by the laws of the State of Mississippi.
17.14 Successors Bound: The covenants and agreements contained in this
----------------
Lease shall be binding upon and shall inure to the benefit of the parties hereto
and their respective heirs, successors, and permitted assigns, all subject to
the limitations contained in Articles 13 and 14.
17.15 No Waiver: The waiver by Landlord or Tenant of any breach of any
---------
term, covenant or condition herein contained shall not be deemed to be a waiver
of such term, covenant or condition or any subsequent breach of the same or any
other term, covenant or condition herein contained.
17.16 Covenant of Fair Dealing: Each party hereto agrees to act
------------------------
reasonably and in good faith with respect to the performance and fulfillment of
the terms of each and every covenant and condition contained in this Lease.
17.17 Delays: Any prevention, delay or stoppage due to strikes,
------
lockouts, inclement weather, labor disputes, acts of God, inability to obtain
labor, materials or fuels or reasonable substitute therefor, governmental
restrictions, regulations, controls, action or inaction, civil commotion, fire
or other casualty, and other causes beyond the reasonable control of the party
obligated to perform shall excuse the performance, for a period equal to the
period of any said prevention, delay or stoppage, of any obligation hereunder.
17.18 Integration: This Lease and all exhibits hereto constitute the
-----------
entire agreement between the parties, and there are no agreements or
representations between the parties except as expressed herein. Without
limiting the generality of the foregoing sentence, in the event of any conflict
between the terms and conditions of this Lease and the terms and conditions of
that certain Agreement to Lease Property in Biloxi, Mississippi, dated April 9,
1993, between Boomtown, Inc. and Landlord, this Lease shall control. Except as
otherwise provided herein, no subsequent change or addition to this Lease shall
be binding unless in writing and signed by the parties hereto.
17.19 Memorandum of Lease: Concurrently with the execution and delivery
-------------------
of this Lease, Landlord and Tenant shall execute a Memorandum of Lease in the
form of Exhibit "D" attached hereto and made a part hereof which Memorandum,
-----------
when fully executed, shall be recorded in the Official Records of ▇▇▇▇▇▇▇▇
County, Mississippi.
-40-
17.20 Limit on Tenant's Liability: Notwithstanding anything to the
---------------------------
contrary in this Lease, no stockholder or partner of Tenant nor any officer,
director, agent or employee of Tenant shall have any personal liability or
responsibility with respect to Tenant's covenants and obligations hereunder or
any other document executed or delivered in connection with the transactions
contemplated by this Lease. Recourse for all such covenants and obligations
shall be limited strictly to the corporate or partnership assets of Tenant. No
recourse may be had against the personal assets of any stockholder, partner,
officer, director, agent or employee of Tenant.
IN WITNESS WHEREOF, the parties hereto have executed this Ground Lease on
the respective dates below set forth to be effective as of the Effective Date.
LANDLORD:
--------
Dated: ____________ ___________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
TENANT:
------
MISSISSIPPI-I GAMING, L.P.,
a Mississippi limited
partnership
Dated: ____________ By: Bayview Yacht Club, Inc.,
a Mississippi corporation,
its sole General Partner
By: ______________________
Title: ___________________
-41-
EXHIBIT "A"
Legal description of real property situated in the Second Judicial District of
▇▇▇▇▇▇▇▇ County, Mississippi, and described as follows:
PROPERTY IN BLOCK 1: Commencing on the northern side of Bay View Avenue at a
point marked by a rod at the intersection of Bay View Avenue and extension of
the east line of Main Street; thence N 73 degree 28' E a distance of 440.7 feet
along Bay View Avenue to a point marked by a pipe; thence North 282.0 feet to a
pipe; thence to the Back Bay of Biloxi; thence westerly along Back Bay of Biloxi
to a point marked by a rod on the extension of the east line of Main Street;
thence South 344.4 feet to a point marked by a rod at the intersection of Bay
View Avenue and the extension of the east line of Main Street and the point of
beginning. Said piece of ground contains Lots 1 through 3, inclusive, ▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ of Biloxi, Second Judicial District of ▇▇▇▇▇▇▇▇
County, Mississippi.
PROPERTY IN BLOCK 2: Commencing at a point in Block 2 on Bay View Avenue marked
by a pipe and thence South a Distance 230 feet along a line to a point marked by
an iron pipe; thence South 0 degree 10' East a distance of 150.4 feet to a point
marked by a post; thence South 31 37' East a distance of 67.6 feet to a Point
marked by a post; thence South 1 degree 00' West a distance of 257.5 feet to a
point marked by a post; thence South 89 degree 47' West a distance of 130 feet
to a point marked by a pipe; thence North along ▇▇▇▇▇ Street a distance of 475.3
feet to a point marked by a pipe; thence North 89 degree 47' East a distance of
130 feet to a point marked by a pipe. Said piece of ground contains Lots 3
through 11 inclusive, Block 2, Gorenflo's Addition, Second Judicial District of
▇▇▇▇▇▇▇▇ County, Mississippi.
PROPERTY IN BLOCK 3: Commencing at a point at the ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇ Street; thence South a distance of 652.5 feet along ▇▇▇▇▇ Street to a
point marked by a pipe; thence South 89 degree 47' West a distance of 128 feet
to a point marked by a pipe; thence North 0 degree 16' West a distance of 288.1
feet to a point marked by a post; thence South 87 degree 05' West a distance of
122.3 feet to a point marked by post on Main Street; thence North a distance of
60 feet along Main Street to a point marked by a post; thence North 89 degree
02' East a distance of 76 feet to a point marked by a post; thence North 0
degree 04' West a distance of 253.9 feet to a point on Bay View Avenue marked by
a pipe; thence North 72 degree 51' East a distance of 184.5 feet along Bay View
Avenue to the point of be . Said piece of ground contains Lots 1 through 11
inclusive, Block 3, ▇▇▇▇▇▇▇▇'▇ Addition, and that lot having a front on Main
Street of 60 feet and bounded formerly on the North by property of St. ▇▇▇▇▇
Catholic Church and bounded formerly on the South by property of ▇▇▇▇▇▇▇▇▇;
bounded formerly on the
EXHIBIT "A" - PAGE 1
East by ▇.▇. ▇▇▇▇▇▇ Packing Company, and bounded on the West by Main Street,
located in ▇▇▇▇▇▇▇▇'▇ Addition to the City of Biloxi, in the Second Judicial
District of ▇▇▇▇▇▇▇▇ County, Mississippi.
This property is also described as shown on the following page 2 of this
Exhibit "A", and the following legal description is more expansive than the
legal description above (on this page).
EXHIBIT "A" - PAGE 2
EXHIBIT "B"
ITEM 1. Any prior reservation or conveyance, together with release of damages,
of minerals of every kind and character including, but not limited to, oil, gas,
sand and gravel in, on and under subject property.
ITEM 2. Easements or other uses of subject property not visible from the
surface, or easements or claims of easements, not shown by the public records.
ITEM 3. Subject to riparian and/or littoral rights and title to that portion
of the captioned property which lies beneath the ordinary high water ▇▇▇▇ as
established as of the date the State of Mississippi was admitted to the Union,
subject to any changes that may have occurred.
ITEM 4. Subject to the Conditional Use Plat recorded in Plat Book 13 at Page
39 and 39A on file and of record in the Office of the Chancery Clerk of ▇▇▇▇▇▇▇▇
County, Second Judicial District, Mississippi.
ITEM 5. Subject to the terms and conditions of this lease.
ITEM 6. Until such time as anticipated tidelands lease with State of
Mississippi is executed and made part of this policy by endorsement, approved by
the Company, the liability of this policy is limited to the value of said
insured leasehold interest as set forth on Schedule A of policy.
ITEM 7. Subject to the rights of the United States of America to protect,
regulate and improve navigation in the Gulf of Mexico and the Back Bay of Biloxi
and, in connection therewith, to establish harbor lines to regulate the
construction of piers, wharves, bulkheads or other works and the making of
deposits therein.
EXHIBIT C
Calculation of Lease Amount
===============================================================================
100% of Amt. 5% of Amt. 6% of Amt.
Adjusted From $10 MM greater than greater than Total
Gaming Win Base Lease to $15 MM $25 MM $50 MM Lease Amt.
--------------------------------------------------------------------------------
8,000,000 500,000 500,000
--------------------------------------------------------------------------------
9,000,000 500,000 500,000
--------------------------------------------------------------------------------
10,000,000 500,000 500,000
--------------------------------------------------------------------------------
11,000,000 1,000,000 100,000 1,100,000
--------------------------------------------------------------------------------
12,000,000 1,000,000 200,000 1,200,000
--------------------------------------------------------------------------------
13,000,000 1,000,000 300,000 1,300,000
--------------------------------------------------------------------------------
14,000,000 1,000,000 400,000 1,400,000
--------------------------------------------------------------------------------
15,000,000 2,000,000 2,000,000
--------------------------------------------------------------------------------
16,000,000 2,000,000 2,000,000
--------------------------------------------------------------------------------
17,000,000 2,000,000 2,000,000
--------------------------------------------------------------------------------
18,000,000 2,000,000 2,000,000
--------------------------------------------------------------------------------
19,000,000 2,000,000 2,000,000
--------------------------------------------------------------------------------
20,000,000 2,000,000 2,000,000
--------------------------------------------------------------------------------
21,000,000 2,000,000 2,000,000
--------------------------------------------------------------------------------
22,000,000 2,000,000 2,000,000
--------------------------------------------------------------------------------
23,000,000 2,000,000 2,000,000
--------------------------------------------------------------------------------
24,000,000 2,000,000 2,000,000
--------------------------------------------------------------------------------
25,000,000 2,000,000 2,000,000
--------------------------------------------------------------------------------
26,000,000 2,000,000 50,000 2,050,000
--------------------------------------------------------------------------------
27,000,000 2,000,000 100,000 2,100,000
--------------------------------------------------------------------------------
28,000,000 2,000,000 150,000 2,150,000
--------------------------------------------------------------------------------
29,000,000 2,000,000 200,000 2,200,000
--------------------------------------------------------------------------------
30,000,000 2,000,000 250,000 2,250,000
--------------------------------------------------------------------------------
31,000,000 2,000,000 300,000 2,300,000
--------------------------------------------------------------------------------
32,000,000 2,000,000 350,000 2,350,000
--------------------------------------------------------------------------------
33,000,000 2,000,000 400,000 2,400,000
--------------------------------------------------------------------------------
34,000,000 2,000,000 450,000 2,450,000
--------------------------------------------------------------------------------
35,000,000 2,000,000 500,000 2,500,000
--------------------------------------------------------------------------------
36,000,000 2,000,000 550,000 2,550,000
--------------------------------------------------------------------------------
37,000,000 2,000,000 600,000 2,600,000
--------------------------------------------------------------------------------
38,000,000 2,000,000 650,000 2,650,000
--------------------------------------------------------------------------------
39,000,000 2,000,000 700,000 2,700,000
--------------------------------------------------------------------------------
40,000,000 2,000,000 750,000 2,750,000
--------------------------------------------------------------------------------
41,000,000 2,000,000 800,000 2,800,000
--------------------------------------------------------------------------------
42,000,000 2,000,000 850,000 2,850,000
--------------------------------------------------------------------------------
43,000,000 2,000,000 900,000 2,900,000
--------------------------------------------------------------------------------
44,000,000 2,000,000 950,000 2,950,000
--------------------------------------------------------------------------------
45,000,000 2,000,000 1,000,000 3,000,000
--------------------------------------------------------------------------------
46,000,000 2,000,000 1,050,000 3,050,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
47,000,000 2,000,000 1,100,000 3,100,000
--------------------------------------------------------------------------------
48,000,000 2,000,000 1,150,000 3,150,000
--------------------------------------------------------------------------------
49,000,000 2,000,000 1,200,000 3,200,000
--------------------------------------------------------------------------------
50,000,000 2,000,000 1,250,000 3,250,000
--------------------------------------------------------------------------------
51,000,000 2,000,000 1,300,000 60,000 3,360,000
--------------------------------------------------------------------------------
52,000,000 2,000,000 1,350,000 120,000 3,470,000
--------------------------------------------------------------------------------
53,000,000 2,000,000 1,400,000 180,000 3,580,000
--------------------------------------------------------------------------------
54,000,000 2,000,000 1,450,000 240,000 3,690,000
--------------------------------------------------------------------------------
55,000,000 2,000,000 1,500,000 300,000 3,800,000
--------------------------------------------------------------------------------
56,000,000 2,000,000 1,550,000 360,000 3,910,000
--------------------------------------------------------------------------------
57,000,000 2,000,000 1,600,000 420,000 4,020,000
--------------------------------------------------------------------------------
58,000,000 2,000,000 1,650,000 480,000 4,130,000
--------------------------------------------------------------------------------
59,000,000 2,000,000 1,700,000 540,000 4,240,000
--------------------------------------------------------------------------------
60,000,000 2,000,000 1,750,000 600,000 4,350,000
================================================================================
EXHIBIT "D"
Prepared by and, when recorded, return to:
Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Real Estate Dept./DKK
________________________________________________________________________________
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE is made as of the ___ day of October, 1993, by and
among ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, an individual resident of Louisiana ("Landlord"), and
Mississippi-I GAMING, L.P., a Mississippi limited partnership ("Tenant").
1. Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, that certain real property consisting of approximately eight and nine-
tenths (8.9) acres commonly known as ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, Mississippi, and more particularly described on Exhibit "A" attached
-----------
hereto and made a part hereof, together with (i) all buildings, structures and
improvements existing on such real property as of the date of the hereinafter-
defined Lease, and (ii) all easements, licenses, rights and privileges
appurtenant thereto (including, without limitation, all right, title and
interest of Landlord in, under and to the land lying in the streets and roads
abutting such real property to the central lines thereof) (all of which is
referred to collectively herein as the "Premises"), on the terms and conditions
of that certain Ground Lease (the "Lease") dated the date hereof by Landlord and
Tenant regarding the Premises.
2. Tenant shall be entitled to use and possess the Premises, without
payment of rent or other monetary obligations, from the date hereof to the
Commencement Date. The anticipated Commencement Date of the Lease Term is March
31, 1994, but the actual commencement Date of the Lease Term shall be as
provided in the Lease. The Lease Term shall be for ninety-nine (99) years
commencing on the Commencement Date and ending at midnight on the ninety-ninth
(99th) anniversary of the Commencement Date.
3. Tenant shall also be entitled to terminate the Lease prior to the
expiration of the Lease Term on the terms and conditions provided in the Lease.
4. Landlord hereby grants to Tenant both an option and a continuing right
of first refusal to purchase any or all right, title and interest of Landlord
in, under and to the
Premises and the Lease on the terms and conditions provided in the Lease.
5. All capitalized terms used, but not defined, herein shall have the
meanings ascribed to them in the Lease. The purpose of this Memorandum is to
give public notice of the existence of the Lease. In the event, however, of any
inconsistency between this Memorandum and the terms and conditions of the Lease,
the Lease shall prevail.
IN WITNESS WHEREOF, the parties have executed this Memorandum of Lease, by
their duly-authorized representatives, as of the day and year first above
written.
LANDLORD:
______________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Address: _____________________
Telephone: ___________________
TENANT:
MISSISSIPPI-I GAMING, L.P.,
a Mississippi limited
partnership
By: Bayview Yacht Club, Inc.
a Mississippi corporation,
its Sole General Partner
By: _____________________
Title: __________________
Address: c/o Boomtown, Inc.
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-2-
STATE OF ____________________
COUNTY OF ___________________
Personally appeared before me, the undersigned authority in and for the
said county and state, on this ____ day of __________, 19__, within my
jurisdiction, the within named ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, duly identified before me, who
acknowledged that he executed the above and foregoing instrument.
[NOTARIAL SEAL] ______________________________
Notary Public
My commission expires: ________
STATE OF ____________________
COUNTY OF ___________________
Personally appeared before me, the undersigned authority in and for the
said county/parish and state, on this ____ day of __________, 19__, within my
jurisdiction, the within named
__________________________________________________, duly identified before me,
who acknowledged that _he_ is __________ of Bayview Yacht Club, Inc., a
Mississippi corporation, and that for and on behalf of said corporation, and as
its act and deed as sole general partner of MISSISSIPPI-I GAMING, L.P., a
Mississippi limited partnership, and as its act and deed, _he_ executed the
above and foregoing instrument, after first having been duly authorized by said
corporation and limited partnership so to do.
[NOTARIAL SEAL] ______________________________
Notary Public
My commission expires: ________
-3-