GROUND LEASE AGREEMENT
GROUND LEASE AGREEMENT
TABLE OF CONTENTS
Page
RECITALS 1
ARTICLE I 1
DESCRIPTION, TERM, AND RENTAL 1
1.1. Leased Land; Parking and Access Easements 1
1.2. Conditions to Performance 2
(a) Approval of Plans 2
(b) Gaming Commission and Other Approvals 2
(c) ▇▇▇▇▇▇▇ Financing 2
(d) ▇▇▇▇▇▇▇ Construction Contracts 2
(e) Ameristar Lender Approval 3
(f) Time For Satisfaction of Conditions 3
1.3. Term 3
1.4. Rental 3
(a) Base Rental 3
(b) Percentage Rental 3
(c) Place of Rental Payments 5
ARTICLE II 5
USE OF LEASED LAND AND TITLE TO IMPROVEMENTS 5
2.1. Use of Leased Land 5
(a) Plans and Specifications; Commencement
of Construction 5
(b) Adjacent Hotel Pavilion 5
(c) Construction of Building 6
(d) Construction Standards 7
(e) Insurance During Construction 6
2.2. Compliance with Laws 6
2.3. Other Terms of Use 7
(a) Franchise and Rating 7
(b) Operations 7
(c) Restaurant 7
(d) Exclusive Right to Advertise 8
2.4. Title to Buildings 7
ARTICLE III 8
MAINTENANCE, REPAIRS, AND ALTERATIONS 8
3.1. General Maintenance and Repair 8
3.2. Parking; Snow Removal; Landscaping 9
3.3. Utilities 9
3.4. Governmental Authorities 10
3.5. Last Year of Term 10
3.6. Limitation on Ameristar's Responsibilities 10
3.7. Use of Marks 10
(a) License to Use Ameristar Service Marks 10
(b) License to Use ▇▇▇▇▇▇▇ and Franchisor
Service Marks 11
3.8 Operational Issues 12
(a) Reserving Rooms for Casino Functions 11
(b) Right of First Refusal 13
(c) Comping of Guests 12
(d) Integration of ▇▇▇▇▇▇▇'▇ PMS System with
Ameristar's POS System 12
(e) Referrals 12
(f) Group Rate Referrals 13
(g) Confidentiality 14
(h) Employee Parking 13
(i) Marketing Programs 13
(j) Use of Employee Facilities by ▇▇▇▇▇▇▇
Employees 15
(k) Integration of Telephone System 14
(l) Food Service 14
(m) Change of Franchisor 14
ARTICLE IV 14
MORTGAGES AND LEASEHOLD LIENS 14
4.1. Encumbrance by Ameristar 14
4.2. Encumbrance by ▇▇▇▇▇▇▇ 15
4.3. Certificates of Lease Status 17
4.4. Foreclosure of Leasehold Lien -- Option of
Ameristar to Cure 16
4.5. Leasehold Lender Protection Provisions 17
(a) Notice to Ameristar 17
(b) Definitions 19
(c) Consent of Leasehold Lender Required 18
(d) Default Notices 18
(e) Notice to Leasehold Lender 20
(f) Procedure on Default 19
(g) New Lease 22
(h) New Lease Priorities 23
(i) Leasehold Lender Need Not Cure Specified
Defaults 23
(j) Eminent Domain 25
(k) Casualty Loss 24
(l) No Merger 24
(m) Future Amendments 24
(n) Estoppel Certificate 26
(o) Notices 25
(p) Erroneous Payments 25
(q) Ameristar Pay-Off or Assumption 25
ARTICLE V 27
INSURANCE AND INDEMNIFICATION 27
5.1. Duty to Insure 26
5.2. Proceeds of Insurance 26
5.3. Public Liability Insurance 26
5.4. Policy Form; Content; Insurer 26
5.5. Indemnification 27
(a) Defense and Payment of Claims 27
(b) Mechanics' Liens 27
(c) Resisting Claims 29
ARTICLE VI 28
TAXES, ASSESSMENTS, LIENS, AND ENCUMBRANCES 28
ARTICLE VII 29
CONDEMNATION 29
7.1. Definitions 29
7.2. Parties' Rights and Obligations to be
Governed by Lease 29
7.3. Total Taking 29
7.4. Partial Taking 29
7.5. Restoration of Improvements 30
(a) Restoration of Improvements 30
(b) Abatement or Reduction of Rent 30
7.6. Award Distribution 30
ARTICLE VIII 30
DEFAULT PROVISIONS; REMEDIES; ATTORNEYS' FEES 30
8.1. Default by ▇▇▇▇▇▇▇ 30
(a) Rent or Other Payments 30
(b) Other Covenants or Conditions 31
(c) Abandonment 31
(d) Insolvency 31
(i) Appointment of Receiver 31
(ii) Voluntary Bankruptcy 31
(iii)Assignment for Creditors 31
(iv) Reorganization or Arrangement 31
(v) Involuntary Petition 31
8.2. Remedies 31
(a) Re-entry 32
(b) Suit for Sums Due 32
(c) Specific Performance 32
(d) Reletting 32
(e) Collection of Rents 32
(f) Termination 32
(g) Terminate ▇▇▇▇▇▇▇ With Payoff or Assumption
of Leasehold Lien 33
8.3. Cumulative Remedies 34
8.4. Attorneys' Fees 34
ARTICLE IX 34
COVENANTS AND WARRANTIES 34
9.1. No Warranties by Ameristar 34
9.2. Right to Execute 34
9.3. Peaceful Enjoyment 34
ARTICLE X 35
ASSIGNMENT, SUBLETTING AND SALE 35
10.1. Assignment 35
ARTICLE XI 35
MISCELLANEOUS PROVISIONS 35
11.1. Inspection by Ameristar 36
11.2. Negation of Partnership 36
11.3. Controlling Law 36
11.4. Surrender of Possession 36
11.5. Successors 36
11.6. Headings 36
11.7. Notices 36
11.8. Recording 37
11.9. Competing Hotel 37
11.10.Right of First Offer 37
11.11.Option to Purchase 37
11.13.Signage 38
EXHIBIT A -- Legal Description
EXHIBIT A-1 -- Site Plan
EXHIBIT B -- Ameristar Marks
EXHIBIT C -- ▇▇▇▇▇▇▇ and Franchisor Marks
EXHIBIT D -- Memorandum of Lease
GROUND LEASE AGREEMENT
THIS GROUND LEASE AGREEMENT is made and entered into as of
the 28th day of May, 1999, by and between Ameristar Casino
Council Bluffs, Inc., an Iowa corporation, with an address of
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("Ameristar"), and
River Road Hotel Associates, L.C., an Iowa limited liability
company, with an address of ▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇▇").
RECITALS
A. Ameristar owns certain real property located in Council
Bluffs, Iowa, on which it operates a hotel and a gaming
establishment (the "Casino Property").
B. Ameristar and Council Bluffs Hotel Associates, L.C., an Iowa
limited liability company that is an affiliate of ▇▇▇▇▇▇▇, have
previously entered into that certain Amended and Restated Ground
Lease Agreement dated as of September 7, 1995, as amended to date
(the "1995 Ground Lease") with respect to a portion of the Casino
Property, consisting of approximately 0.786 acres on which it
operates a Holiday Inn hotel (sometimes referred to as the
"adjacent hotel").
C. Ameristar wishes to lease to ▇▇▇▇▇▇▇ another portion of the
Casino Property, which portion consists of approximately 0.426 of
an acre for the construction of another hotel of not less than 96
rooms, and desires to impose certain restrictions on the use of
such parcel of real property, and ▇▇▇▇▇▇▇ wishes to lease said
portion of the Casino Property for such purpose, subject to
Ameristar's restrictions.
NOW, THEREFORE, for and in consideration of the mutual
covenants, conditions and promises contained herein, Ameristar
and ▇▇▇▇▇▇▇ agree as follows:
ARTICLE I
DESCRIPTION, TERM, AND RENTAL
1.1 LEASED LAND; PARKING AND ACCESS EASEMENTS. On completion,
satisfaction or written waiver of all conditions precedent set
forth in this Lease, Ameristar hereby leases to ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ hereby leases from Ameristar the real property more
particularly described in Exhibit "A," attached hereto and made a
part hereof, and as generally set forth and located on the Site
Plan attached as Exhibit "A-1" hereto and made a part hereof,
situated in Council Bluffs, Pottawattamie County, Iowa (the
"Leased Land") for the purpose of building and maintaining a
hotel on the Leased Land in accordance with Section 2.1 below
(the "Building"), excepting and reserving to Ameristar and to
Ameristar's successors, assigns, and invitees a perpetual,
nonexclusive easement for vehicular and pedestrian ingress and
egress and for parking of vehicles upon and across roads,
driveways, sidewalks, and parking areas on the Leased Land, as
the same may exist from time to time. Ameristar hereby grants to
▇▇▇▇▇▇▇ and to ▇▇▇▇▇▇▇'▇ successors, permitted assigns, and
invitees for the term hereof, a nonexclusive easement for
vehicular and pedestrian ingress and egress to and from nearby
public streets and roadways upon and across roads, driveways, and
sidewalks upon Ameristar's adjacent and surrounding lands as the
same may exist from time to time, and for the parking of vehicles
upon nonreserved parking areas located from time
to time upon such lands. Prior to ▇▇▇▇▇▇▇'▇ construction of the
Building, Ameristar may make minor adjustments to the precise
location of the Leased Land and Building, provided that any such
adjustment shall not materially prejudice ▇▇▇▇▇▇▇. Ameristar
agrees to make available to ▇▇▇▇▇▇▇ nonexclusive parking easement
rights on parking spaces on the Casino Property sufficient to
provide the Building with a parking ratio of not less than 1.1
space per hotel room. The nonexclusive easements reserved and
granted herein as set forth on the proposed Site Plan attached
hereto as Exhibit A-1 , shall be set forth in a recorded document
which shall be recorded simultaneously with the memorandum of
Lease referred to in Section 11.8 below, and may be moved or
relocated by Ameristar, provided that such easements shall not be
moved, modified or restricted in a manner which will materially
and unreasonably interfere with ▇▇▇▇▇▇▇'▇ operation of a hotel in
the Building. Ameristar will cause any mortgagee of its interest
in the Leased Land to join in the granting of such easements in
favor of ▇▇▇▇▇▇▇, to enter into a nondisturbance agreement, or to
subordinate its lien to such easements, to the extent necessary
to assure that such easements would survive a foreclosure by any
mortgagee of Ameristar.
1.2 CONDITIONS TO PERFORMANCE. The following shall be
conditions precedent that must be completed or satisfied before
the obligations of the parties under this Lease shall be
effective:
(A) APPROVAL OF PLANS. This Lease is conditioned on the review
and approval by Ameristar of the plans and specifications for the
construction of the Building by ▇▇▇▇▇▇▇, the exterior and
interior appearance of ▇▇▇▇▇▇▇'▇ proposed Building, and ▇▇▇▇▇▇▇'▇
proposed contractor or construction manager. Any objection by
Ameristar to the proposed plans and specifications shall be made
in writing within ten (10) days following the delivery of said
plans and specifications by ▇▇▇▇▇▇▇ to Ameristar. In the event
of any such objection, each party agrees to cooperate with the
other party and to use its best efforts to immediately resolve
the dispute.
(B) GAMING COMMISSION AND OTHER APPROVALS. Ameristar shall have
obtained all necessary approvals of this Lease from the Iowa
Racing and Gaming Commission, or its designee, and any other
consents and approvals to the performance of Ameristar's
obligations under the Lease which may be required from any
governmental authorities having jurisdiction over Ameristar, the
Lease, or the Casino Property which approvals Ameristar will
pursue with reasonable diligence. In addition, Ameristar must
satisfactorily complete a background investigation of ▇▇▇▇▇▇▇
pursuant to the Ameristar Casinos, Inc. Gaming Compliance Program
as a condition to the effectiveness of this Lease, which
Ameristar will pursue with reasonable diligence. ▇▇▇▇▇▇▇ agrees
to cooperate fully with such investigation to the extent
reasonably requested by Ameristar.
(C) ▇▇▇▇▇▇▇ FINANCING. As a condition to the effectiveness of
this Lease, ▇▇▇▇▇▇▇ must obtain financing on or before September
1, 1999 for the construction of the Building, which financing
▇▇▇▇▇▇▇ agrees to pursue with reasonable diligence. Immediately
upon obtaining such commitment, ▇▇▇▇▇▇▇ shall provide to
Ameristar a copy of a written commitment for such financing
issued by a reputable lender acceptable to Ameristar, which
commitment must be subject only to conditions and contingencies
that are customarily required by construction lenders in the
issuance of such commitments, with Ameristar having reasonable
discretion to determine whether such conditions or contingencies
are acceptable.
(D) ▇▇▇▇▇▇▇ CONSTRUCTION CONTRACTS. ▇▇▇▇▇▇▇ shall have entered
into all necessary contracts for the construction of the
Building, and provided Ameristar with a true and correct copy of
such contracts, on or before September 1, 1999.
(E) AMERISTAR LENDER APPROVAL. The Lease shall have been
approved in writing by Ameristar's mortgage lender and any
agreements from such lender required by Section 4.1 shall have
been obtained.
(F) TIME FOR SATISFACTION OF CONDITIONS. If these conditions to
performance are not satisfied within ninety (90) days from the
date this Lease is executed or such other earlier or later date
as is provided herein for satisfaction of such condition, either
party shall have the right to terminate this Lease upon written
notice to the other party.
1.3 TERM. The term of this Lease shall be for a period of fifty
(50) years (the "Term"), commencing on the first to occur of July
1, 1999 or the date that ▇▇▇▇▇▇▇ sends written notice that it is
prepared to commence construction on the Leased Land, or the date
▇▇▇▇▇▇▇ actually commences such construction (the "Commencement
Date") and terminating on the fiftieth (50th) anniversary date of
the Commencement Date, unless sooner terminated pursuant to the
provisions hereof.
1.4 RENTAL.
(A) BASE RENTAL. ▇▇▇▇▇▇▇ agrees to pay an annual base rental to
Ameristar during the Term for the Leased Land and for the rights
and privileges granted ▇▇▇▇▇▇▇ under this Lease, at the time and
place and in the manner specified herein, in the amount of
Seventy Five Thousand Dollars ($75,000) (the "Base Rental"),
payable Six Thousand Two Hundred Fifty Dollars ($6,250) per month
in advance, with the initial payment to be made on the Rental
Commencement Date. The "Rental Commencement Date" shall be the
earlier of the date on which the Building is substantially
completed or three hundred sixty-five (365) days after the
Commencement Date. The amount of the initial Base Rental payment
due on the Rental Commencement Date shall be pro-rated, if
necessary, for the number of days between The Rental Commencement
Date and the Commencement Date. Thereafter, Base Rental shall be
paid monthly in advance. "Substantial Completion" shall mean
that the Building is ready for occupancy and use as a hotel as
evidenced by a Certificate of Occupancy for the Building or other
like document issued by the appropriate governmental authority,
and any franchisor or licensor's requirements for opening of the
hotel have been met.
In the event that during the initial fifteen (15) years of
the Term, Ameristar ceases to operate a riverboat gaming
operation based from the Casino Property, then for such portion
of said fifteen (15) year period when gaming is not operated,
there shall be a moratorium, in Base Rentals otherwise payable;
provided, however, that during such moratorium if Ameristar
elects at its option to cease to maintain and repair its adjacent
Casino Property, ▇▇▇▇▇▇▇ may, at its option, assume
responsibility for all maintenance and repairs of the entrances,
exits, parking areas and landscaping on the Casino Property to
the extent ▇▇▇▇▇▇▇ deems maintenance and repairs desirable in
connection with the operation of ▇▇▇▇▇▇▇'▇ Building.
(B) PERCENTAGE RENTAL. In addition to the Base Rental, ▇▇▇▇▇▇▇
shall pay to Ameristar a percentage rent (the "Percentage Rent")
equal to six percent (6%) of the annual "Gross Sales" with
respect to the Leased Land that exceeds the amount of One Million
Two Hundred Fifty Thousand Dollars ($1,250,000). The term "Gross
Sales" means the total price charged for all services and goods
rendered or sold at, in, on or from the Leased Land by ▇▇▇▇▇▇▇,
whether for cash or on a charge, credit, time basis or otherwise,
without reserve or deduction for inability or failure to collect,
including without limitation room charges and rentals, food and
beverage revenues (reduced by the cost of catered food and
beverage items), but specifically excluding merchandise sales,
telephone and vending machine revenues, video rental revenues,
and other miscellaneous sales. Gross Sales shall also include
all of ▇▇▇▇▇▇▇'▇ receipts, revenues or rights to payment from
subtenants, licensees and concessionaires. There shall not be
included, or if included in the calculation of Gross Sales, there
shall be deducted, as the case may be, provided that specific
record is made at the time of each transaction: (i) the actual
net amount of refunds, credits or allowances actually made or
allowed by ▇▇▇▇▇▇▇ in accordance with reasonable business
practices upon transactions included within Gross Sales (provided
that any credit, service or item given in return shall be
included in Gross Sales when used); and (ii) sales, room or
occupancy taxes which are separately added by ▇▇▇▇▇▇▇ to room
rates or sales prices, paid directly by the customer, collected
by ▇▇▇▇▇▇▇, and actually paid over by ▇▇▇▇▇▇▇ to the governmental
taxing authority, but not deducting from Gross Sales any other
tax of any nature.
The "Gross Sales" and the resulting "Percentage Rent" shall
be calculated and paid quarterly, and reconciled on an annual
basis as of the end of each fiscal year for ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇
shall provide within thirty (30) days after each calendar quarter
and fiscal year end a written calculation of the Gross Sales
during that quarter or fiscal year and the amount of Percentage
Rent due for that quarter or year. The Percentage Rent shall be
paid no later than fifteen (15) days after the expiration of that
thirty (30) day period. If the annual reconciliation indicates
that ▇▇▇▇▇▇▇ has overpaid Percentage Rent, Ameristar shall
promptly refund the amount of such overpayment upon receipt of
the appropriate request, statement, and supporting documentation.
If ▇▇▇▇▇▇▇ fails to deliver any statement of Gross Sales when due
and does not cure such failure within ten (10) days after the
written notice from Ameristar, in addition to all of Ameristar's
other rights and remedies, (i) ▇▇▇▇▇▇▇ shall pay to Ameristar, as
additional rent, an amount equal to One Hundred Dollars ($100.00)
for each day such statement is overdue after the aforesaid ten
(10) day period; and (ii) upon not less than two (2) days' prior
notice to ▇▇▇▇▇▇▇, Ameristar shall have the right to cause an
audit of all books, records and bank accounts of ▇▇▇▇▇▇▇
pertaining to the business conducted on the Leased Land and to
prepare the statements that ▇▇▇▇▇▇▇ has failed to deliver. The
statements prepared by Ameristar shall be conclusive on ▇▇▇▇▇▇▇,
and ▇▇▇▇▇▇▇ shall promptly pay all expenses incurred in the
preparation of such statements and all sums, if any, as may be
shown by such audit to be due as Percentage Rent.
The business of ▇▇▇▇▇▇▇ shall be operated so that a
duplicate dated sales slip, dated invoice, register receipt or
similar evidence of payment, serially numbered, shall be issued
with each transaction resulting in Gross Sales or exclusions
therefrom. ▇▇▇▇▇▇▇ shall keep a general ledger, sales receipts,
sales records and other supporting documentation for at least
three (3) years after the end of the period to which they
pertain. All such documentation shall disclose in detail all
information required to permit Ameristar to verify ▇▇▇▇▇▇▇'▇
Gross Sales and conform to, and be in accordance with, generally
accepted accounting principles consistently applied.
Ameristar shall have the right at any time during normal
business hours after not less than three (3) days' prior written
notice to ▇▇▇▇▇▇▇, to cause an examination or complete audit to
be made of the ▇▇▇▇▇▇▇'▇ documentation. If any audit or
examination shall disclose that any statement of Gross Sales
provided to Ameristar understates Gross Sales for the reporting
period (i) ▇▇▇▇▇▇▇ shall pay to Ameristar upon demand the
resultant deficiency in Percentage Rent, together with interest
at a variable rate equal to two percent (2%) per annum above the
"prime rate" announced by ▇▇▇▇▇ Fargo Bank of Nevada, and (ii) if
the shortfall in Percentage Rent is greater than five percent
(5%) of the total Percentage Rents shown by that audit to be owed
for that period, ▇▇▇▇▇▇▇ shall pay the costs of the audit and
examination, including travel expenses.
In calculating the Percentage Rent that is due for the
period from the Rental Commencement Date and the last day of that
fiscal year, the $1,250,000 threshold for Percentage Rent
calculation shall be pro-rated for the number of days between
those two dates.
As set forth in Section 4.5 below, Ameristar agrees that
payment of Percentage Rent by ▇▇▇▇▇▇▇ shall be subordinated to
payment of debt service payments owed by ▇▇▇▇▇▇▇ to an
Institutional Lender holding a first position Leasehold Lien, to
the extent ▇▇▇▇▇▇▇'▇ net operating revenues are not sufficient to
pay both. In such event Percentage Rent shall be deferred as to
▇▇▇▇▇▇▇, and shall be subsequently payable by ▇▇▇▇▇▇▇, but not by
any Leasehold Lender and its successors and assigns, in the event
▇▇▇▇▇▇▇ subsequently generates sufficient operating revenues over
and above debt service payments to repay deferred Percentage Rent
owed to Ameristar on an cumulative basis. The foregoing
provision shall not be construed to require the refunding by
Ameristar of any rent paid by ▇▇▇▇▇▇▇ to Ameristar.
(C) PLACE OF RENTAL PAYMENTS. All payments of rental required
to be paid to Ameristar under the terms of this Lease shall be
made in lawful money of the United States, free from all claims,
demands, deductions, abatements, set-offs, prior notices, or
counterclaims of any kind or character, and shall be payable at
Ameristar's above address or at such other place or places as may
from time to time be designated by Ameristar by written notice
given to ▇▇▇▇▇▇▇.
ARTICLE II
USE OF LEASED LAND AND TITLE TO IMPROVEMENTS
2.1 USE OF LEASED LAND. So long as Ameristar shall be engaged
in gaming operations on the Casino Property, ▇▇▇▇▇▇▇ shall use
the Leased Land solely for the purpose of constructing,
maintaining, and operating a hotel with not less than 96 rooms
(the "Building" or the "Hotel"). The Building shall be
constructed and maintained at ▇▇▇▇▇▇▇'▇ sole risk and expense in
accordance with the following terms:
(A) PLANS AND SPECIFICATIONS; COMMENCEMENT OF CONSTRUCTION.
▇▇▇▇▇▇▇ shall submit construction plans and specifications for
the Building (including signage) to Ameristar for Ameristar's
review and approval on or before July 1, 1999, and on an ongoing
basis throughout the term of this Lease with respect to any
changes, modifications, or new construction, and ▇▇▇▇▇▇▇
shall commence construction of the Building on the earlier of
September 1, 1999 or thirty (30) days after Ameristar has
approved such plans and specifications.
(B) ADJACENT HOTEL PAVILION. ▇▇▇▇▇▇▇ agrees to connect the
Building to the adjacent hotel and/or pavilion and casino with a
covered, climate controlled breezeway. So long as Ameristar is
engaged in a gaming operation in connection with the Casino
Property, and subject to the nonwaivable requirements of
▇▇▇▇▇▇▇'▇ hotel franchisor or licensor, the exterior and interior
finishes and decor of the Building and of common areas within the
Building shall be in harmony with the finishes and decor of the
adjacent hotel and/or casino. The foregoing provision shall be
deemed to apply to the initial finishes and decor of the casino,
and subsequent to the initial opening the hotel shall not be
required to change finishes and decor merely because the casino
changes its theme, finishes or decor. ▇▇▇▇▇▇▇ and Ameristar
shall cooperate with respect to security in the breezeway.
▇▇▇▇▇▇▇ shall otherwise bear the responsibility and security for
all of the Leased Land and the Building.
(C) CONSTRUCTION OF BUILDING . Once construction is begun,
▇▇▇▇▇▇▇ shall, with reasonable diligence, prosecute to completion
all construction of improvements, additions, or alterations of
the Building required to be constructed by ▇▇▇▇▇▇▇, and in any
event shall have substantially completed construction of the
Building three hundred sixty-five (365) days after the
Commencement Date. The completion deadline shall be extended for
a time period commensurate with the existence of any "force
majeure," which prevents or hinders ongoing construction
activities such as flood, storm, strikes, or similar occurrences
outside ▇▇▇▇▇▇▇'▇ control; provided, however, that in no event
shall such completion deadline be extended longer than six (6)
months. Ameristar shall have sole control of all design and
construction decisions relating to the levee, roadways,
driveways, entrances and exits on the Casino Property. Ameristar
agrees at its expense (to the extent not otherwise provided by
the relevant public or private utility companies) to stub basic
utilities including water, sewer, electricity and telephone to
within one hundred (100) feet of the Leased Land and to provide
preliminary site grading on the Leased Land sufficient to bring
the site to "rough grade." Ameristar shall be responsible for
costs associated with ingress, egress, striping of parking areas,
moving storm sewers, water retention, etc. As a general
presumption, Ameristar will be responsible for costs related to
items outside the "building envelope," which shall be
approximately the "front of the curb." ▇▇▇▇▇▇▇ will indemnify
Ameristar, and hold Ameristar harmless from, any and all damage
to Ameristar's property, including without limitation the parking
lot, and from any costs, claims and liabilities asserted against
Ameristar, as a result of ▇▇▇▇▇▇▇'▇ construction activities.
(D) CONSTRUCTION STANDARDS. All work shall be performed in a
good and workmanlike manner with due regard for and without undue
interference with Ameristar's use of the adjacent real property,
shall comply with plans and specifications approved by Ameristar,
and shall comply with all governmental permits, laws, ordinances,
and regulations. All costs of construction shall be borne by
▇▇▇▇▇▇▇. Construction, staging and materials storage shall be
restricted to certain areas as designated by Ameristar.
(E) INSURANCE DURING CONSTRUCTION. ▇▇▇▇▇▇▇ shall maintain, at
▇▇▇▇▇▇▇'▇ sole expense, a policy of builder's risk insurance in
effect with respect to the construction of the Building
until construction has been completed. Policy limits must be
approved by Ameristar, and shall be commensurate with the value
of the Building and the nature of ▇▇▇▇▇▇▇'▇ construction
activities. Ameristar shall be named as an additional insured
under the policy.
2.2 COMPLIANCE WITH LAWS. ▇▇▇▇▇▇▇ shall not bring or cause or
permit to be brought or kept on the Leased Land anything which
will in any way conflict with any law, ordinance, rule, or
regulation, or commit or suffer to be committed any waste upon
the Leased Land, or use or allow the Leased Land or the Building
to be used for any unlawful purpose. ▇▇▇▇▇▇▇ agrees that
throughout the terms of this Lease ▇▇▇▇▇▇▇ shall fully comply
with all rules, regulations and laws of any government authority
having jurisdiction over the Leased Land or the Building or
▇▇▇▇▇▇▇, including without limitation, those relating to
environmental quality, hazardous waste or hazardous substances.
2.3 OTHER TERMS OF USE.
(A) FRANCHISE AND RATING. So long as Ameristar has gaming
operations on the Casino Property, the Building must be operated
as a franchise of Hampton Inn, or such other franchisor that is
acceptable to Ameristar subject to the terms of Section 3.8 (m)
below. ▇▇▇▇▇▇▇ must obtain and maintain a "3 Diamond" or
equivalent designation from the American Automobile Association
or such other designation and rating agency acceptable to
Ameristar with respect to the operation of the Building as a
limited service hotel. All expenses associated with the
operation of the Leased Land shall be borne by ▇▇▇▇▇▇▇.
(B) OPERATIONS. So long as Ameristar has gaming operations on
the Casino Property, the Building shall be operated continuously
during the Term as a first class hotel, meeting the highest of
standards set by the franchisor and the industry.
(C) RESTAURANT. So long as Ameristar shall be operating a
restaurant on the Casino Property, the Building cannot include a
restaurant or coffee shop without the prior written consent of
Ameristar which can be refused in Ameristar's sole discretion;
however, ▇▇▇▇▇▇▇ shall be permitted to provide a "continental
breakfast" for its patrons between the hours of 6:30 a.m. and
10:00 a.m., may obtain its own liquor license, may bring in
catered food and drink in conjunction with its rental of rooms
for conventions and business meetings, and ▇▇▇▇▇▇▇ may sell
nonperishable snack products in its gift shop or through vending
machines, and may operate a pantry-type warming station for
service of such items.
(D) EXCLUSIVE RIGHT TO ADVERTISE. During the Term and so long
as Ameristar or its successors operates a casino on the Casino
Property, ▇▇▇▇▇▇▇ agrees that it shall not advertise or permit
another casino to place literature or other material promoting
such other casino on the Leased Land or in the Building.
2.4 TITLE TO BUILDINGS. Title to the Building and appurtenances
thereto on the Leased Land and all other improvements and
fixtures constructed or placed on the Leased Land by ▇▇▇▇▇▇▇ in
conjunction with the construction, use or occupancy of the
Building shall be and remain in ▇▇▇▇▇▇▇ or such tenants during
the Term unless otherwise approved or requested by Ameristar.
▇▇▇▇▇▇▇ shall have the right to make alterations, changes, and
repairs as provided herein. Title to the
Building and all such other buildings, permanent improvements,
and fixtures on the Leased Land shall automatically revert to
Ameristar upon the expiration of the Term or other termination of
this Lease. ▇▇▇▇▇▇▇ covenants and agrees that upon expiration of
the Term or other termination of this Lease it will yield up and
deliver the Leased Land with any such buildings, permanent
improvements, and fixtures upon the Leased Land to Ameristar or
its successor in interest at such time free and clear of all
liens and encumbrances of any kind, subject in the event such
termination results from a default by ▇▇▇▇▇▇▇, to the rights of a
Leasehold Lender to obtain a New Lease under the terms of Section
4.5(g) below.
ARTICLE III
MAINTENANCE, REPAIRS, AND ALTERATIONS
3.1 GENERAL MAINTENANCE AND REPAIR. Throughout the Term,
▇▇▇▇▇▇▇ shall, at ▇▇▇▇▇▇▇'▇ sole cost and expense, maintain the
Building and any other improvements constructed on the Leased
Land in first class condition and repair and in accordance with
all applicable laws, rules, ordinances, orders, and regulations
of (i) federal, state, county, municipal, and other governmental
agencies and bodies having or claiming jurisdiction and all their
respective departments, bureaus, and officials, (ii) the
insurance underwriting board or insurance inspection bureau
having or claiming jurisdiction, (iii) all insurance companies
insuring all or any part of the Building or other improvements on
the Leased Land, (iv) the standards of comparable hotels in
comparable markets and locations, as may be in effect from time
to time, and (v) ▇▇▇▇▇▇▇'▇ franchisor and the "3 Diamond" or
equivalent designation from the American Automobile Association
for limited service hotels or other such designation and rating
agency acceptable to Ameristar. ▇▇▇▇▇▇▇ shall manage and operate
the Building in a first class and professional manner.
If, at any time, Ameristar concludes, in its sole
discretion, that the condition of the Building or the guest
services provided by ▇▇▇▇▇▇▇ do not meet the criteria listed in
the preceding paragraph, Ameristar will give notice to ▇▇▇▇▇▇▇
and shall state with as much specificity as possible the reasons
for Ameristar's dissatisfaction. Ameristar's conclusion may be
based, among other things, on the results of inspections
conducted by ▇▇▇▇▇▇▇'▇ franchisor, or the failure of ▇▇▇▇▇▇▇'▇
franchisor to conduct such inspections. Thereafter, ▇▇▇▇▇▇▇
shall have not less than ninety (90) days to cure any defects or
faults alleged by Ameristar.
If Ameristar is still dissatisfied with the inspection
report from ▇▇▇▇▇▇▇'▇ franchisor, or the failure of such
franchisor to inspect, Ameristar may then request that the
Building and the hotel be inspected by a mutually agreeable
independent inspector, it being agreed that ▇▇▇▇▇▇ International
is acceptable, who will conduct an inspection using its standards
for the "3 Diamond" hotels report, as certified by the American
Automobile Association or a "3 star" hotels' report as certified
by Mobil. The independent inspector shall then give a rating
based on its inspection, exclusive of administrative matters and
areas completely outside of ▇▇▇▇▇▇▇'▇ control, as defined above,
and shall determine whether the Building and the hotel are in
compliance with 90% of the evaluation criteria for receiving a "3
Diamond" or "3 Star" rating. ▇▇▇▇▇▇▇ shall be deemed to have
failed the inspection if the rating is less than 90% compliant,
provided that ▇▇▇▇▇▇▇ will not be penalized for areas that are
Ameristar's responsibility, such as maintaining all public areas
and roadways, landscaping (except within the Leased Land) and
parking areas. If ▇▇▇▇▇▇ International is no longer
in the business of inspecting and rating hotels, the parties
shall mutually select another company to provide such services.
If the parties cannot agree on such other party, but if they can
agree on a person who is in the hotel business, then that third
person shall select the inspection company. If the parties
cannot agree on either an inspection company or a third person to
select an inspection company, each party shall promptly choose an
independent arbitrator, which two arbitrators shall in turn name
a third arbitrator, and a majority of said arbitrators shall
select an inspection company.
Once Ameristar has requested that ▇▇▇▇▇▇ International or
another agreed upon independent inspector make inspections
hereunder, such inspector shall make all future inspections for
purposes of this Section 3.1, unless Ameristar gives notice to
▇▇▇▇▇▇▇ that it will once again accept the rating and inspection
of ▇▇▇▇▇▇▇'▇ franchisor. Ameristar shall pay all costs of ▇▇▇▇▇▇
International or the inspector chosen in lieu of ▇▇▇▇▇▇
International. ▇▇▇▇▇▇▇ shall pay all costs of the inspection
conducted by its franchisor.
If ▇▇▇▇▇▇▇ fails to maintain a 90% compliance rating,
whether such inspection is conducted by ▇▇▇▇▇▇▇'▇ franchisor or
another independent inspector, for three (3) consecutive
inspections, but which time period shall in no event be fewer
than twelve (12) months, ▇▇▇▇▇▇▇ shall have three (3) months to
cure any defect or fault. Thereafter a special inspection shall
be ordered. If either such inspection or the next subsequent
inspection shows that ▇▇▇▇▇▇▇ has again failed to maintain a 90%
compliance rating, ▇▇▇▇▇▇▇ shall be in default under this Lease
and Ameristar may terminate the Lease, subject to the provisions
contained herein pertaining to ▇▇▇▇▇▇▇'▇ Leasehold Lender.
Ameristar covenants and agrees that so long as it is engaged
in the conduct of a gaming operation in connection with the
Casino Property, Ameristar will keep its public areas up to the
standard described by the American Automobile Association as
necessary to obtain a "3 Diamond" award.
Except as provided in Section 3.5, in the event of damage or
destruction of all or any part of the Building or other
improvements, ▇▇▇▇▇▇▇ shall promptly and diligently repair,
restore, and replace improvements as required to comply with the
preceding paragraph, or remedy all damage to or destruction of
all or any part of the improvements. After completion of the
repair, restoration, or replacement, the improvements on the
Leased Land shall be at least equal in fair market value,
quality, and use to the condition of the improvements before the
damage or destruction occurred, except as expressly provided to
the contrary in this Lease.
Nothing in this Section defining the general duty of
maintenance and repair shall be construed as limiting any
specific right given elsewhere in this Lease to alter, modify,
demolish, remove, or replace any improvement, or as limiting
provisions relating to condemnation, or to damage or destruction
during the final year or years of the Term. No deprivation,
impairment, or limitation on use resulting from any event or work
contemplated by this Section shall entitle ▇▇▇▇▇▇▇ to any offset,
abatement, or reduction in rent or to any termination or
extension of the Term.
3.2 PARKING; SNOW REMOVAL; LANDSCAPING. Ameristar shall
maintain the parking areas, and provide lighting for the parking
areas on the Casino Property during the Term. Ameristar shall
also keep parking areas and sidewalks and roadways giving access
to the Building free and clear of ice and snow. ▇▇▇▇▇▇▇ shall be
responsible for installing and maintaining all landscaping on
the Leased Land and shall provide for garbage removal. All
landscaping must be approved by Ameristar.
3.3 UTILITIES. The cost of all utility services required for or
provided to the Building or the Leased Land shall be borne by
▇▇▇▇▇▇▇, except that the cost of lighting parking areas on
adjacent property owned by Ameristar shall be borne by Ameristar.
3.4 GOVERNMENTAL AUTHORITIES. During the Term, ▇▇▇▇▇▇▇ shall
promptly comply with all applicable laws, regulations,
ordinances, requirements, and orders of governmental authorities
relating to the Leased Land and any improvements thereon,
including but not limited to the making, at its sole expense, of
any installation, alteration, modification, change, or repair,
whether structural or otherwise; provided, however, that nothing
in this Section shall be construed to eliminate ▇▇▇▇▇▇▇'▇ right
to benefit from any exemption or "grandfather" provision, or its
equivalent, or to challenge the validity, applicability, or
interpretation of any such law, regulation, ordinance,
requirement, or order and to defer compliance until the challenge
is completed.
3.5 LAST YEAR OF TERM. Anything herein to the contrary
notwithstanding, ▇▇▇▇▇▇▇ shall not have the right during the last
365 days of the Term to alter, remove or demolish, in whole or in
part, any buildings, structures, or other improvements which
exist upon the Leased Land 365 days prior to the end of the Term,
except with the prior written consent of Ameristar.
3.6 LIMITATION ON AMERISTAR'S RESPONSIBILITIES. This Lease
shall not be construed to require Ameristar, under any
circumstances, to furnish any services or facilities or to make
any improvements, repairs, or alterations of any kind in or on
the Leased Land except as expressly provided herein. Ameristar's
election to perform any obligation of ▇▇▇▇▇▇▇ on ▇▇▇▇▇▇▇'▇
failure or refusal to do so shall not constitute a waiver of any
right or remedy for ▇▇▇▇▇▇▇'▇ default, and ▇▇▇▇▇▇▇ shall promptly
reimburse, defend, and indemnify Ameristar against all liability,
loss, cost, and expense arising from it.
3.7 USE OF MARKS.
(A) LICENSE TO USE AMERISTAR SERVICE MARKS.
i. Ameristar hereby grants to ▇▇▇▇▇▇▇ a nonexclusive worldwide
right and license to use the names and service marks listed on
Exhibit B hereto and such other names and marks as Ameristar may
add to Exhibit B from time to time upon written notice to ▇▇▇▇▇▇▇
(the "Ameristar Marks") in connection with the promotion and
advertising of the hotel located on the Leased Land during the
term of this Lease, subject to the limitations described in this
paragraph. All other use of the Ameristar Marks by ▇▇▇▇▇▇▇ is
prohibited.
ii. Each and every use of the Ameristar Marks shall include the
service ▇▇▇▇ notices, colors, designs, and proportionate sizes,
shapes, and features all precisely as indicated by Ameristar,
from time to time. ▇▇▇▇▇▇▇ shall submit to Ameristar for
approval all proposed uses of the Ameristar Marks prior to
▇▇▇▇▇▇▇'▇ publication, distribution or use thereof.
iii. The rights and licenses granted under this Lease permitting
the use of the Ameristar Marks shall not be assignable or
transferable by ▇▇▇▇▇▇▇ in any manner whatsoever, nor shall
▇▇▇▇▇▇▇ have the right to grant any sublicenses, except by prior
written consent of Ameristar, which consent Ameristar may grant
or withhold in its sole discretion. Any unauthorized assignment
or transfer by ▇▇▇▇▇▇▇ shall be voidable by Ameristar.
iv. Ameristar specifically reserves the right in its sole
discretion to use and without limitation to license others to use
and to license the Ameristar Marks. ▇▇▇▇▇▇▇ acknowledges the
ownership rights of Ameristar Casinos, Inc. and the licensed
rights of Ameristar in the Ameristar Marks, and further
acknowledges that ▇▇▇▇▇▇▇ will not challenge such ownership or
licensed rights in the Ameristar Marks.
(B) LICENSE TO USE ▇▇▇▇▇▇▇ AND FRANCHISOR SERVICE MARKS.
▇. ▇▇▇▇▇▇▇ hereby grants to Ameristar a nonexclusive worldwide
right and license to use the names and service marks, including
to the extent permissible, its franchisor's Marks and
designations, listed on Exhibit C hereto and such other names and
marks as ▇▇▇▇▇▇▇ may add to Exhibit C from time to time upon
written notice to Ameristar (the "▇▇▇▇▇▇▇ Marks") in connection
with the promotion and advertising of the Casino during the term
of this Lease, subject to the limitations described herein. All
other use of the ▇▇▇▇▇▇▇ Marks by Ameristar is prohibited.
ii. Each and every use of the ▇▇▇▇▇▇▇ Marks shall include the
service ▇▇▇▇ notices, colors, designs, and proportionate sizes,
shapes and features all precisely as indicated by ▇▇▇▇▇▇▇, from
time to time.
iii. The rights and licenses granted under this Lease permitting
the use of the ▇▇▇▇▇▇▇ Marks shall not be assignable or
transferable by Ameristar in any manner whatsoever, nor shall
Ameristar have the right to grant any sublicenses, except by
prior written consent of ▇▇▇▇▇▇▇. Any unauthorized assignment or
transfer by Ameristar shall be voidable by ▇▇▇▇▇▇▇.
iv. ▇▇▇▇▇▇▇ specifically reserves the right in its sole
discretion to use and without limitation to license others to use
and to license the ▇▇▇▇▇▇▇ Marks. Ameristar acknowledges the
ownership rights of ▇▇▇▇▇▇▇ and its franchisor in the ▇▇▇▇▇▇▇
Marks and further acknowledges that Ameristar will not challenge
such rights in the ▇▇▇▇▇▇▇ Marks.
3.8 OPERATIONAL ISSUES.
(A) RESERVING ROOMS FOR CASINO FUNCTIONS. Ameristar may from
time to time, and at its option, reserve up to 60 rooms in the
Hotel in advance of the date of actual use, but in no event may
Ameristar reserve more rooms for any date than that number not
previously reserved by other guests. The rate charged by ▇▇▇▇▇▇▇
for such rooms shall be the lowest available rate for the date(s)
of the reservation, including package plan rates. If the rate
for the dates reserved have not yet been set, ▇▇▇▇▇▇▇ shall
advise Ameristar of the rate as soon as it is available.
Ameristar shall advise ▇▇▇▇▇▇▇ of the identity of the person
who shall occupy a room. Except as otherwise provided herein,
▇▇▇▇▇▇▇ shall collect its charges and fees directly from that
guest. If the person is a "no-show", and if ▇▇▇▇▇▇▇ in fact
denies a person a room that night because there are no vacancies,
Ameristar will pay ▇▇▇▇▇▇▇ the cost of that room.
Ameristar shall be responsible for the payment of the charge
for rooms reserved by it, provided, however, that Ameristar shall
not be charged for any rooms under the following circumstances:
i. A guest designated by Ameristar actually uses
the room, in which event ▇▇▇▇▇▇▇ shall collect all fees and
charges from the guest unless Ameristar has advised ▇▇▇▇▇▇▇ that
Ameristar intends to pay for such room;
ii. A guest designated by Ameristar does not
show, but ▇▇▇▇▇▇▇ did not deny any person a room for that night
because of unavailability;
iii. Ameristar releases 40 or more reserved rooms
at least 21 days before the scheduled date of use;
iv. Ameristar releases 21 to 39 reserved rooms at
least 14 days before the scheduled date of use;
v. Ameristar releases up to 20 rooms at least 2
days before the scheduled date of use; and
vi. With respect to rooms released by Ameristar
outside of the time limits set forth in paragraphs ii, iii and iv
hereof, ▇▇▇▇▇▇▇ actually rents such rooms to another guest.
(B) RIGHT OF FIRST REFUSAL. If ▇▇▇▇▇▇▇ receives a request to
reserve 50 or more rooms from any party, ▇▇▇▇▇▇▇ shall first
offer such rooms to Ameristar upon the terms specified in
paragraph (a) hereof. Ameristar shall have twenty-four hours
after such offer has been communicated to Ameristar's general
manager or designee to accept or reject such offer. If rejected,
▇▇▇▇▇▇▇ may accept the reservation with the third party. If
Ameristar accepts the offer, ▇▇▇▇▇▇▇ shall reserve the rooms for
Ameristar and shall reject the reservation by the third party.
(C) COMPING OF GUESTS. Ameristar may, at its option, decide to
pay all or part of the ▇▇▇▇ of a guest of the Hotel. If
Ameristar elects to pay all or part of a ▇▇▇▇, it shall inform
▇▇▇▇▇▇▇ according to procedures established by Ameristar and
communicated to ▇▇▇▇▇▇▇. If Ameristar so notifies ▇▇▇▇▇▇▇ of a
comp, ▇▇▇▇▇▇▇ shall not thereafter attempt to collect such amount
from the guest. ▇▇▇▇▇▇▇ shall ▇▇▇▇ Ameristar for any such
amounts and Ameristar agrees to pay such amounts to ▇▇▇▇▇▇▇
within 30 days.
(D) INTEGRATION OF ▇▇▇▇▇▇▇'▇ PMS SYSTEM WITH AMERISTAR'S POS
SYSTEM. At such time as it becomes technologically feasible, and
subject to ▇▇▇▇▇▇▇'▇ franchisor's approval, ▇▇▇▇▇▇▇ agrees to
cooperate with Ameristar to integrate its property management
computer system ("PMS System") with Ameristar's point of sale
system ("POS System"), and
Ameristar agrees to cooperate with ▇▇▇▇▇▇▇ in all reasonable
respects with respect to such integration. Ameristar shall pay
all out-of-pocket costs necessary to complete such integration.
Until an integration of ▇▇▇▇▇▇▇'▇ PMS system with Ameristar's POS
System can be reasonably accomplished, Ameristar and ▇▇▇▇▇▇▇
agree to devise a system where such charges can be handled in a
manner mutually agreeable to both parties.
(E) REFERRALS. Provided that ▇▇▇▇▇▇▇ has not defaulted in the
quality standards required to be maintained by it under the Lease
Agreement between ▇▇▇▇▇▇▇ and Ameristar, and to the extent
permitted by law, Ameristar agrees to refer any guests it cannot
accommodate to the Hotel. Provided that Ameristar maintains
quality standards in its hotel at least equal to those maintained
by ▇▇▇▇▇▇▇ in its Hotel and to the extent permitted by law,
▇▇▇▇▇▇▇ agrees to refer any guests it cannot accommodate in the
Hotel or the adjacent hotel (so long as ▇▇▇▇▇▇▇ or its affiliate
owns the adjacent hotel) to Ameristar's hotel. ▇▇▇▇▇▇▇ hereby
grants Ameristar reasonable access to the Hotel from time to time
for the purpose of inspecting the Hotel. Ameristar hereby grants
▇▇▇▇▇▇▇ reasonable access to its hotel from time to time for the
purpose of inspection Ameristar's hotel.
(F) GROUP RATE REFERRALS. If Ameristar refers a block of rooms
which are part of a larger group to ▇▇▇▇▇▇▇ as a result of an
Ameristar generated group sale (including promotions designed to
increase occupancy by offering specific hotel packages to
specific groups), ▇▇▇▇▇▇▇ shall match the group rate offered by
Ameristar for such groups unless ▇▇▇▇▇▇▇'▇ hotel is or is
reasonably expected to be "fully occupied" (i.e., more than 95%
full). If Ameristar is or is reasonably expected to be fully
occupied and refers an entire group to ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ will
match the group rate offered by Ameristar for other groups booked
in the Ameristar hotel in the same period, unless ▇▇▇▇▇▇▇'▇ hotel
is or is reasonably expected to be fully occupied.
Notwithstanding the foregoing, ▇▇▇▇▇▇▇ shall not be obligated to
accept hotel guests referred to ▇▇▇▇▇▇▇ by Ameristar if the room
rate is less than 50% of ▇▇▇▇▇▇▇'▇ rack rate on a requested date
for standard room types (i.e. king or double room types).
(G) CONFIDENTIALITY. ▇▇▇▇▇▇▇ acknowledges and agrees that the
identity of guests or patrons of the casino and Ameristar's
willingness to provide complementary services to a guest or
patron are valuable trade secrets of Ameristar. ▇▇▇▇▇▇▇
covenants and agrees that it shall not use, during the course of
▇▇▇▇▇▇▇'▇ lease with Ameristar or thereafter, any such
confidential or proprietary information or divulge such
information to any person, unless ▇▇▇▇▇▇▇ is compelled to
disclose such information by a governmental process.
Ameristar acknowledges and agrees that the identity of
guests or patrons of the Hotel and the identity of any such
guests as members of Hampton Inn's frequent traveler/guest
program, if any, are valuable trade secrets of ▇▇▇▇▇▇▇ and/or
Hampton Inn. However, ▇▇▇▇▇▇▇ also acknowledges that such
information is critical to Ameristar so that proper attention can
be given to preferred customers of Ameristar's casino. ▇▇▇▇▇▇▇
agrees to reasonably cooperate with Ameristar so as to provide to
Ameristar, upon its request, the names and addresses of ▇▇▇▇▇▇▇'▇
hotel guests. Ameristar shall keep such lists separate from
other information. Ameristar is not authorized to use such
information to market hotel rooms to individuals on such list
without ▇▇▇▇▇▇▇'▇ prior approval. Except as permitted herein,
Ameristar covenants and agrees that it
shall not use, during the course of ▇▇▇▇▇▇▇'▇ lease with
Ameristar or thereafter, any such confidential or proprietary
information or divulge such information to any person without the
prior consent of ▇▇▇▇▇▇▇, unless Ameristar is compelled to
disclose such information by a governmental process.
Notwithstanding the foregoing, ▇▇▇▇▇▇▇ acknowledges that
Ameristar may compile a list of gaming customers from sources
independent of Ameristar's access to ▇▇▇▇▇▇▇'▇ PMS system and
that such list may include guests of the Hotel. ▇▇▇▇▇▇▇ agrees
that Ameristar's use of such independently compiled information
will not violate the covenant of Ameristar hereunder.
(H) EMPLOYEE PARKING. ▇▇▇▇▇▇▇ agrees to use for employee
parking only such spaces in the parking lot as Ameristar may
designate for Hotel employee parking. Such spaces may be in a
separate lot that is off-site and designated solely for Hotel
employee parking.
(I) MARKETING PROGRAMS. Ameristar and ▇▇▇▇▇▇▇ agree to
cooperate on any marketing programs that either party may desire
to implement and, including proposals for joint marketing
programs; provided, however, that such cooperation shall not be
deemed to require a party to pay for the cost of a program beyond
what it desires to pay. ▇▇▇▇▇▇▇ shall have the right to provide
marketing materials for Ameristar's casino in its hotel room, but
shall not provide materials relating to other casinos. Ameristar
shall have the right to inspect ▇▇▇▇▇▇▇'▇ facilities and hotel
rooms at reasonable times to verify that no marketing materials
for competing casino properties are being distributed.
(J) USE OF EMPLOYEE FACILITIES BY KINSETH EMPLOYEES. Ameristar
may, at its option, require that all employees of the Hotel be
out-of-uniform when they visit Ameristar's facilities. Employees
of the Hotel shall not be eligible for promotions, programs,
perquisites and other benefits offered to Ameristar employees.
Hotel employees using such facilities must abide by all policies
and procedures implemented by Ameristar, including, without
limitation, all non-solicitation policies. Ameristar may deny
use of the facilities to any Hotel employee for any or no reason.
(K) INTEGRATION OF TELEPHONE SYSTEM. The parties will explore
the possibility of integrating their respective telephone systems
so that calls can be switched from one system to the other. If
either party reasonably concludes that such integration is not
feasible, ▇▇▇▇▇▇▇ shall provide, to the extent permitted by its
franchisor, and at Ameristar's cost, one of its PMS System
terminals to Ameristar for installation in Ameristar's PBX room.
The parties agree to divide equally the cost of any wiring
required to attach such terminal to the PMS System. Such
terminal shall be in addition to the terminal described in
paragraph 3 above.
(L) FOOD SERVICE. ▇▇▇▇▇▇▇ has the right under Section 2.3(c)
above of the Lease Agreement to offer the guests of the Hotel a
continental breakfast between the hours of 6:30 a.m. and 10:00
a.m.
From time to time Ameristar may also offer guests of the
Hotel discounts on food at restaurants operated by Ameristar or
gaming information and promotional items. If Ameristar desires
to make these discounts available to guests of the Hotel, ▇▇▇▇▇▇▇
agrees to make such offers available to its guests by allowing
Ameristar to display information and promotional
materials in public areas and in guest rooms. ▇▇▇▇▇▇▇ shall have
the right to approve all such material, provided that such
consent shall not be unreasonably withheld.
(M) CHANGE OF FRANCHISOR. Notwithstanding references in this
Ground Lease to Hampton Inn as franchisor of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ may
change its franchisor, but only upon prior written consent of
Ameristar, which consent shall not be unreasonably withheld
provided that quality standards are not diminished and the terms
of this Ground Lease can be met by ▇▇▇▇▇▇▇ under the terms of any
new franchise agreement entered into in connection with such
change.
ARTICLE IV
MORTGAGES AND LEASEHOLD LIENS
4.1 ENCUMBRANCE BY AMERISTAR. Ameristar may, as security for
its own obligations, encumber its interests in the Leased Land
and assign its right to receive rentals and its interest as
landlord under this Lease. ▇▇▇▇▇▇▇ agrees that its interest in
the Leased Land under this Lease shall be subordinate to existing
or future liens in favor of Ameristar's lender(s), provided that
Ameristar obtains from its lender a recognition, nondisturbance
and attornment agreement in favor of ▇▇▇▇▇▇▇, whereby the
interests of ▇▇▇▇▇▇▇ under this Lease are and shall be
subordinated to the lien granted by Ameristar, upon the condition
that such lender or lienholder agrees to recognize ▇▇▇▇▇▇▇'▇
interests under this Lease and to not disturb ▇▇▇▇▇▇▇ and to
attorn to ▇▇▇▇▇▇▇ and any permitted successors and assigns and
any Leasehold Lenders of ▇▇▇▇▇▇▇. Ameristar's lender or
lienholder shall not claim any lien on or interest in the
Building, except by virtue of its receipt of a collateral
assignment of Ameristar's interest as landlord under this Lease,
and the reversionary interest of Ameristar pursuant to Sections
2.4 and 11.4 herein. The parties agree to execute ordinary and
customary documentation acknowledging and confirming their
agreements in this Section 4.1 within fifteen (15) days of
receipt of a written request by the other party or its lender
that it do so.
4.2 ENCUMBRANCE BY ▇▇▇▇▇▇▇. So long as ▇▇▇▇▇▇▇ shall not be in
default under the terms of this Lease at the time of the
granting, and subject to the terms hereof, ▇▇▇▇▇▇▇ shall have the
right to grant to an "Institutional Lender" as that term is
defined in Section 4.5 below, a mortgage or trust deed lien upon
or a security interest in its leasehold estate under this Lease
and in the Building and any other improvements constructed by
▇▇▇▇▇▇▇ on the Leased Land (a "Leasehold Lien"), and to refinance
such Leasehold Lien; provided that each such Leasehold Lien shall
be subordinate and subject to Ameristar's reversionary interest
in the Building and Leased Land. The amount, terms and
conditions of the obligations secured by or contained in a
Leasehold Lien as defined by Section 4.5 below shall be subject
to Ameristar's prior written approval, which shall not be
unreasonably withheld or delayed. Any Leasehold Lien shall not
be for a period exceeding the Term. In no event shall
Ameristar's fee title or reversionary interest be encumbered by
or be subject to the Leasehold Lien. ▇▇▇▇▇▇▇ shall make payment
when due and before delinquency of all principal, interest, and
other charges for which ▇▇▇▇▇▇▇ may be or become obligated under
any obligations secured by or contained in a Leasehold Lien. In
the event ▇▇▇▇▇▇▇ grants such Leasehold Lien, the Leasehold
Lender Protection Provisions set forth in Section 4.5 below, and
the option set forth in Section 4.4 below of Ameristar to cure
defaults in the monetary obligation secured by the Leasehold
Lien, shall both apply. The aggregate amount of all Leasehold
Liens shall
not, at any time, exceed the greater of Four Million Five Hundred
Thousand Dollars ($4,500,000) or seventy five percent (75%) of
the then current appraised value of the Building and improvements
(existing or to be constructed with the proceeds of the Leasehold
Lien) on the Leased Land (the "Aggregate Principal Amount"). In
the event such Leasehold Lien is collateralized by other assets
of ▇▇▇▇▇▇▇ or its affiliates, or proceeds of such financing are
used for any assets or purposes unrelated to the Leased Land and
Building, the Leasehold Lender shall agree to a fair and
equitable allocation of such indebtedness and debt service
between the Leased Land and Building and such other assets, and a
specific "release price" to release the Leasehold Lien on the
Leased Land and Building not to exceed at any time the Aggregate
Principal Amount plus accrued interest and costs of collection
attributable to the Leasehold Lien on the Leased Land, such that
in the event of default by ▇▇▇▇▇▇▇ hereunder or under the
Leasehold Lien, Ameristar may exercise its rights pursuant to
Sections 4.4, 4.5(f)(vii), and/or 11.11 herein to pay off or
assume such portion of the financing attributable to the
Building, the Leased Land, or the improvements located on the
Leased Land. Notwithstanding anything herein to the contrary,
the Aggregate Principal Amount of the "Initial Leasehold Lien"
shall not exceed Four Million Five Hundred Thousand Dollars
($4,500,000). As used in this Lease, the term "Initial Leasehold
Lien" shall mean the first permanent term loan, or the first
combination construction-permanent "mini-perm" loan, placed by
▇▇▇▇▇▇▇ on its leasehold interest in the Leased Land and on its
interest in the Building, provided that the Initial Leasehold
Lien shall have a term of not less than five (5) years following
completion of construction of the Building on the Leased Land.
4.3 CERTIFICATES OF LEASE STATUS. ▇▇▇▇▇▇▇ agrees, at any time
and from time to time, upon receipt of not less than twenty (20)
days' prior written request therefor from Ameristar to execute,
acknowledge, and deliver to Ameristar a statement in writing,
certifying, if such is the case, that this Lease is then
unmodified and unamended and that the Lease is in full force and
effect. If there have been modifications or amendments to this
Lease, said statement shall certify that the Lease is in full
force and effect as then modified and amended, and shall set
forth or attach such modifications and amendments in full. Said
statement shall further state the dates to which the basic rental
or other charges have been paid, and whether or not there is any
existing default by ▇▇▇▇▇▇▇ with respect to any covenant,
promise, or agreement on the part of ▇▇▇▇▇▇▇ under this Lease.
Ameristar agrees to provide similar statements upon the written
request of ▇▇▇▇▇▇▇.
4.4 FORECLOSURE OF LEASEHOLD LIEN -- OPTION OF AMERISTAR TO CURE.
Prior to commencing any action to foreclose a Leasehold Lien, the
holder thereof (the "Leasehold Lender") shall notify Ameristar in
writing of the default by ▇▇▇▇▇▇▇ with a statement of the amount
then due and offer to withhold any acceleration of maturity of
the obligation, payment of which is secured by the Leasehold
Lien, if Ameristar remedies such default within thirty (30) days
of receipt of such notice. Ameristar shall have the option, but
shall not be obligated, to cure ▇▇▇▇▇▇▇'▇ default by making
payment to the holder of all sums due and by curing any other
defaults reasonably susceptible to cure by Ameristar within
thirty (30) days of receipt of the notice. In the event
Ameristar shall cure ▇▇▇▇▇▇▇'▇ default, the Leasehold Lender
shall reinstate the Leasehold Lien in all respects as if no
default had occurred. If a default is not reasonably susceptible
to cure by Ameristar within thirty (30) days, the Leasehold
Lender shall not accelerate or exercise remedies so long as
Ameristar has commenced to cure, and diligently pursues efforts
to cure until completed, and all
sums required to be paid under the Leasehold Lien are timely paid
during the time periods provided in this Section 4.4.
Any sums paid by Ameristar to the Leasehold Lender shall be
considered additional rental immediately due and payable to
Ameristar by ▇▇▇▇▇▇▇ under this Lease, and the failure of ▇▇▇▇▇▇▇
to pay such amounts in full within ten (10) days after Ameristar
shall have sent written notice to ▇▇▇▇▇▇▇ demanding payment shall
be an event of default under this Lease.
Any exercise of Ameristar's option to cure a default in a
Leasehold Lien shall not constitute an assumption by Ameristar of
the obligation nor a waiver of ▇▇▇▇▇▇▇'▇ obligations to make
payments and perform in full under the terms of any obligations
secured by a Leasehold Lien. Subsequent and successive defaults
by ▇▇▇▇▇▇▇ in making payments required by any Leasehold Lien
shall be subject to the foregoing provisions each time any such
default occurs.
In the event of a default by ▇▇▇▇▇▇▇ on a Leasehold Lien, in
addition to Ameristar's option to cure such default as set forth
above without assuming the obligation of ▇▇▇▇▇▇▇ under the
Leasehold Lien, Ameristar shall, upon written notice to ▇▇▇▇▇▇▇
and to Leasehold Lender and the failure of ▇▇▇▇▇▇▇ to cure such
default within the applicable time period specified herein, have
the option to terminate, forfeit and/or acquire ▇▇▇▇▇▇▇'▇
interest in the Leased Land and preserve this Lease in effect and
may substitute itself as lessee under this Lease and assume the
Leasehold Lien on the same "nonrecourse" basis as set forth in
Section 4.5(f)(vii)(2) below, provided such actions shall not
terminate this Lease nor extinguish the lien of the Leasehold
Lender in the Leased Land and Ameristar obtains an opinion of
Iowa legal counsel acceptable to Leasehold Lender that no
"merger" of the leasehold interest in the Leased Land into the
fee interest of Ameristar shall occur.
Any judgment foreclosing a Leasehold Lien and the
foreclosure sale thereunder shall not release ▇▇▇▇▇▇▇ from any of
▇▇▇▇▇▇▇'▇ obligations under this Lease. ▇▇▇▇▇▇▇ shall ensure
that all provisions contained in this Lease requiring the
agreement of a Leasehold Lender shall be incorporated into
documents to which such Lender is a party and that executed
copies of all documents relating to the creation of a Leasehold
Lien or an obligation secured thereby shall be delivered to
Ameristar within ten (10) days of execution thereof.
4.5 LEASEHOLD LENDER PROTECTION PROVISIONS. In the event that
▇▇▇▇▇▇▇ shall grant a Leasehold Lien to an Institutional Lender
as contemplated pursuant to Section 4.2 above, the following
provisions shall apply for the benefit of such Leasehold Lender,
its successors and assigns (including any purchaser at a
foreclosure sale or deed in lieu thereof) notwithstanding any
contrary provisions in this Lease:
(A) NOTICE TO AMERISTAR.
i. (1) If ▇▇▇▇▇▇▇ shall, on one or more occasions,
grant a Leasehold Lien to an Institutional Lender and if the
holder of such Leasehold Lien shall provide Ameristar with notice
of such Leasehold Lien together with a true copy of such
Leasehold Lien and the name and address of such Leasehold Lender,
Ameristar and ▇▇▇▇▇▇▇ agree that, following receipt of such
notice by Ameristar the provisions of this Section 4.5 shall
apply in respect to such Leasehold Lien.
(2) In the event of any assignment of a
Leasehold Lien or in the event of a change of address of a
Leasehold Lender or of an Assignee of such Leasehold Lien, notice
of the new name and address shall be provided to Ameristar.
ii. Ameristar shall promptly upon receipt of a communication
provided for by subsection (a)(i) above acknowledge by a written
instrument receipt of such communication as constituting the
notice provided for by subsection (a)(i) above or, in the
alternative, notify ▇▇▇▇▇▇▇ and the Leasehold Lender of the
rejection of such communication as not conforming with the
provisions of subsection (a)(i) and specify the specific basis of
such rejection.
iii. After Ameristar has received the notice provided for by
subsection (a)(i) above, ▇▇▇▇▇▇▇ if it has not already done so,
shall with reasonable promptness provide Ameristar with copies of
the note or other obligation secured by such Leasehold Lien and
of any other documents pertinent to the Leasehold Lien as
specified by Ameristar. ▇▇▇▇▇▇▇ shall thereafter also provide
Ameristar from time to time with a copy of each amendment or
other modification or supplement to such instruments. All
documents shall be accompanied by a certification by ▇▇▇▇▇▇▇ that
such documents are true and correct copies of the originals.
From time to time, ▇▇▇▇▇▇▇ shall notify Ameristar of the date and
place of recording and other pertinent recording data with
respect to such instruments as have been recorded.
(B) DEFINITIONS.
i. The Term "Institutional Lender" as used in this Article IV
shall refer to a savings bank, savings and loan association,
commercial bank, trust company, credit union, investment bank,
insurance company, college, university, real estate investment
trust or pension fund, investment banker, mortgage banker, or
agents for any of the foregoing. The term "Institutional Lender"
shall also include other lenders of substance which perform
functions similar to any of the foregoing, and which have assets
in excess of One Hundred Million Dollars ($100,000,000) at the
time the obligation secured by the Leasehold Lien is made.
ii. The term "Leasehold Lien" as used in this Article IV shall
include a mortgage, a deed of trust, a deed to secure debt, or
other security instrument by which ▇▇▇▇▇▇▇'▇ leasehold estate is
mortgaged, conveyed, assigned, or otherwise transferred, to
secure a debt or other obligation.
iii. The term "Leasehold Lender" as used in this Article IV shall
refer to a holder of a Leasehold Lien in respect to which the
notice is provided for by subsection (a) of this Section 4.5 has
been given and received and as to which the provisions of this
Section 4.5 are applicable.
(C) CONSENT OF LEASEHOLD LENDER REQUIRED.
No cancellation, surrender or modification of this Lease
shall be effective as to any Leasehold Lender unless consented to
in writing by such Leasehold Lender, which consent shall not be
unreasonably withheld or delayed.
(D) DEFAULT NOTICES.
Ameristar, upon providing ▇▇▇▇▇▇▇ any notice of:
(i) default under this Lease or (ii) a termination of this Lease,
or (iii) a matter on which Ameristar may predicate or claim a
default shall at the same time provide a copy of such notice to
Leasehold Lender. No such notice by Ameristar to ▇▇▇▇▇▇▇ shall
be deemed to have been duly given unless and until a copy thereof
has been so provided to Leasehold Lender. From and after such
notice has been given to a Leasehold Lender, such Leasehold
Lender shall have the same period, after the giving of such
notice upon it, for remedying any default or acts or omissions
which are the subject matter of such notice or causing the same
to be remedied, as is given Tenant after the giving of such
notice to Tenant, plus in each instance, the additional periods
of time specified in subsections (e) and (f) of this Section 4.5
to remedy, commence remedying or cause to be remedied the
defaults or acts or omissions which are the subject matter of
such notice specified in any such notice. Ameristar shall accept
such performance by or at the instigation of such Leasehold
Lender as if the same had been done by ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇
authorizes each Leasehold Lender to take any such action at such
Leasehold Lender's option and does hereby authorize entry upon
the premises by the Leasehold Lender for such purpose.
(E) NOTICE TO LEASEHOLD LENDER.
i. Anything contained in this Lease to the contrary
notwithstanding, if any default shall occur which entitles
Ameristar to terminate this Lease, Ameristar shall have no right
to terminate this Lease unless, following the expiration of the
period of time given ▇▇▇▇▇▇▇ to cure such default, Ameristar
shall notify Leasehold Lender of Ameristar's intent to so
terminate at least thirty (30) days in advance of the proposed
effective date of such termination if such default is capable of
being cured by the payment of money, and at least forty-five (45)
days in advance of the proposed effective date of such
termination if such default is not capable of being cured by the
payment of money. The provisions of subsection (f) below of this
Section 4.5 shall apply if, during such thirty (30) or forty-five
(45) day Termination Notice Period, any Leasehold Lender shall:
(1) notify Ameristar of such Leasehold Lender's desire to
nullify such notice, and
(2) pay or cause to be paid all rent, additional rent, and other
payments then due and in arrears as specified in the Termination
Notice to such Leasehold Lender and which may become due during
such thirty (30) or forty-five (45) day period, and
(3) comply or in good faith, with reasonable diligence and
continuity, commence to comply with all nonmonetary requirements
of this Lease then in default and reasonably susceptible of being
complied with by Leasehold Lender; provided, however, that such
Leasehold Lender shall not be required during such forty-five
(45) day period to cure or commence to cure any default
consisting of ▇▇▇▇▇▇▇'▇ failure to satisfy and discharge any
payment due to such Leasehold Lender on the Leasehold Lien, or
any lien, charge or encumbrance against ▇▇▇▇▇▇▇'▇ interest in
this Lease or the Leased Land junior in priority to the Leasehold
Lien held by such Leasehold Lender.
ii. Any notice to be given by Ameristar to a Leasehold Lender
pursuant to any provision of this Section 4.5 shall be deemed
properly addressed if sent to the Leasehold Lender who served the
notice referred to in subsection (a)(i)(1) unless notice of a
change of Mortgage ownership has been given to Landlord pursuant
to subsection (a)(i)(2).
(F) PROCEDURE ON DEFAULT.
i. If Ameristar shall elect to terminate this Lease by reason
of any default of ▇▇▇▇▇▇▇, and a Leasehold Lender shall have
proceeded in the manner provided by subsection (e) of this
Section 4.5, the specified date for the termination of this Lease
as fixed by Ameristar in its Termination Notice shall be extended
for a period of six (6) months, provided that such Leasehold
Lender shall, during such six (6) month period:
(1) Pay or cause to be paid the rent, additional rent and other
monetary obligations of ▇▇▇▇▇▇▇ under this Lease as the same
become due and continue its good faith efforts to perform all of
▇▇▇▇▇▇▇'▇ other obligations under this Lease, excepting
(A) ▇▇▇▇▇▇▇'▇ obligations to pay any percentage rents to
Ameristar pursuant to Section 1.4(b) herein, at any time during
which ▇▇▇▇▇▇▇ is delinquent on its monetary obligations to
Leasehold Lender; (B) obligations of ▇▇▇▇▇▇▇ to satisfy or
otherwise discharge any payment due to Leasehold Lender on its
Leasehold Lien, or any lien, charge or encumbrance against
▇▇▇▇▇▇▇'▇ interest in this Lease or the Leased Land junior in
priority to the lien of the mortgage held by such Leasehold
Lender; (C) reimbursement of amounts advanced by Ameristar to
Leasehold Lender on behalf of ▇▇▇▇▇▇▇ to cure monetary defaults
by ▇▇▇▇▇▇▇ on the obligation secured by the Leasehold Lien; and
(D) past nonmonetary obligations then in default and not
reasonably susceptible of being cured by such Leasehold Lender;
and
(2) if not enjoined or stayed, take steps to acquire or sell
▇▇▇▇▇▇▇'▇ interest in this Lease by foreclosure of the Leasehold
Lien or other appropriate means and prosecute the same to
completion with due diligence.
ii. If at the end of such six (6) month period such Leasehold
Lender is complying with subsection (f)(i), this Lease shall not
then terminate, and the time for completion by such Leasehold
Lender of its proceedings shall continue so long as such
Leasehold Lender is enjoined or stayed and thereafter for so long
as such Leasehold Lender proceeds to complete steps to acquire or
sell ▇▇▇▇▇▇▇'▇ interest in this Lease by foreclosure of the
Leasehold Lien or by other appropriate means with reasonable
diligence and continuity. Nothing in this subsection (f) of this
Section 4.5, however, shall be construed to extend this Lease
beyond the original term thereof, nor to require a Leasehold
Lender to continue such foreclosure proceedings after the default
has been cured. If the default shall be cured and the Leasehold
Lender shall discontinue such foreclosure proceedings, this Lease
shall continue in full force and effect as if ▇▇▇▇▇▇▇ had not
defaulted under this Lease.
iii. If a Leasehold Lender is complying with subsection (f)(i) of
this Section 4.5, upon the acquisition of ▇▇▇▇▇▇▇'▇ interest
herein by such Leasehold Lender or its designee or any other
purchaser at a foreclosure sale or otherwise, this Lease shall
continue in full force and effect as if ▇▇▇▇▇▇▇ had not defaulted
under this Lease.
iv. For the purposes of this Section 4.5 the making of a
Leasehold Lien shall not be deemed to constitute an assignment or
transfer of this Lease or of the leasehold estate hereby created,
nor shall any Leasehold Lender, as such, be deemed to be an
assignee or transferee of this Lease or of the leasehold estate
hereby created so as to require such Leasehold Lender, as such,
to assume the performance of any of the terms, covenants or
conditions on the part of ▇▇▇▇▇▇▇ to be performed hereunder, but
the purchaser at any sale of this Lease and of the leasehold
estate hereby created in any proceedings for the foreclosure of
any Leasehold Lien, or the assignee or transferee of this Lease
and of the leasehold estate hereby created under any instrument
of assignment or transfer in lieu of the foreclosure of any
Leasehold Lien shall be deemed to be an assignee or transferee
within the meaning of this Section 4.5, and shall be deemed to
have agreed to perform all of the terms, and covenants and
conditions on the part of ▇▇▇▇▇▇▇ to be performed hereunder from
and after the date of such purchase and assignment, but only for
so long as such purchaser or assignee is the owner of the
leasehold estate. If the Leasehold Lender or its designee shall
become the holder of the leasehold estate and if the buildings
and improvements on the premises shall have been or become
materially damaged on, before or after the date of such purchase
and assignment, the Leasehold Lender or its designee shall be
obligated to repair, replace or reconstruct the building or other
improvements only to the extent of the net insurance proceeds
received by the Leasehold Lender or its designee by reason of
such damage. However, should such net insurance proceeds be
insufficient to repair, replace or reconstruct the building or
other improvements to the extent required by Articles III and V
and should the Leasehold Lender or its designee choose not to
fully reconstruct the building or other improvements to the
extent required by Articles III and V such failure shall
constitute an event of default under this Lease.
v. Any Leasehold Lender or other acquirer of the leasehold
estate of ▇▇▇▇▇▇▇ pursuant to foreclosure, assignment in lieu of
foreclosure or other proceedings may, upon acquiring ▇▇▇▇▇▇▇'▇
leasehold estate, without further consent of Ameristar, sell and
assign the leasehold estate on such terms and to such persons and
organizations as are acceptable to such Leasehold Lender or
acquirer and thereafter be relieved of all obligations under this
Lease; provided that such assignee has delivered to Ameristar its
written agreement to be bound by all of the provisions of this
Lease.
vi. Notwithstanding any other provisions of this Lease, any sale
of this Lease and of the leasehold estate hereby created in any
proceedings for the foreclosure of any Leasehold Lien, or the
assignment or transfer of this Lease and of the Leasehold Estate
hereby created in lieu of the foreclosure of any Leasehold Lien
shall be deemed to be a permitted sale, transfer or assignment of
▇▇▇▇▇▇▇'▇ interest in this Lease and of the leasehold estate
hereby created.
vii. In the event of a default under the Leasehold Lien Leasehold
Lender will notify Ameristar of such default and shall afford
Ameristar the following rights:
(1) In the event Leasehold Lender acquires ▇▇▇▇▇▇▇'▇ interest in
the Leased Land by foreclosure or deed in lieu of foreclosure,
Ameristar shall have the exclusive option for a period of sixty
(60) days from such notice, but not the obligation, to acquire
the Leased Land from Leasehold Lender for the outstanding
principal amount of the Leasehold Lien on the Leased Land (not to
exceed the greater of (x) Four Million Five Hundred Thousand
Dollars
($4,500,000) or (y) seventy five percent (75%) of the appraised
value of the Leased Land, plus accrued interest and costs of
collection, including foreclosure costs attributable to the
Leasehold Lien on the Leased Land ("Option Price").
(2) In the event Leasehold Lender shall commence a foreclosure
proceeding and at any time prior to the foreclosure sale and
provided Ameristar has acquired, forfeited or terminated all of
▇▇▇▇▇▇▇'▇ right, title and interest in the Leased Land, then at
any time prior to the foreclosure sale and upon presentation to
Leasehold Lender of reasonable evidence that it has acquired,
forfeited or terminated ▇▇▇▇▇▇▇'▇ interest in the Leased Land
free of any lien, adverse interest or claim including rights
available to ▇▇▇▇▇▇▇ in bankruptcy, Ameristar shall have the
right to bring all defaults current, including cost of collection
and foreclosure costs attributable to the Leasehold Lien on the
Leased Land, and to assume the Leasehold Lien for its then unpaid
principal balance attributable to the Leased Land, said principal
balance not to exceed the Aggregate Principal Amount, together
with pro-rata interest, attorneys' fees and costs of collection
attributable to the Leased Land. Ameristar, at its cost and
expense, will execute such "nonrecourse" assumption documents as
Leasehold Lenders may reasonably require to confirm the
nonrecourse assumption of the Leasehold Lien and deliver to
Leasehold Lender an endorsement to Leasehold Lender's loan policy
of title insurance insuring Ameristar to be the owner of the
leasehold interest in the Ground Lease free of any lien, adverse
interest or claim including rights available to ▇▇▇▇▇▇▇ in
bankruptcy and continuing the insured priority of the Leasehold
Lien on the Leased Land free of any exceptions to coverage other
than as set forth in Leasehold Lender's existing loan policy. To
the extent the Leasehold Lien encumbers property other than the
Leased Land, upon such assumption, Leasehold Lender agrees to
bifurcate and separate the Leasehold Lien documents into two
separate sets of documents, one encumbering and creating a
security interest upon the Leased Land and the other encumbering
and creating a security interest in the other property and
provided that the amount of the Leasehold Lien on the Leased Land
will not exceed the Aggregate Principal Amount in principal
indebtedness, together with pro-rata interest, attorneys' fees
and costs of collection attributable to the Leased Land. The
bifurcated loan applicable to the Leased Land shall have the same
interest rate, amortization period, and remaining installment
payment periods as under the Leasehold Lien. This right is
subject to Leasehold Lender receiving an opinion satisfactory to
it from Iowa counsel acceptable to Leasehold Lender that such
bifurcation may accomplish the aforementioned results under Iowa
law without affecting the Leasehold Lien security (other than the
bifurcation) and does not create any impediment or obstacle to
exercising the remedies available to Leasehold Lender under the
Leasehold Lien documents. This right is personal only to
Ameristar under the Ground Lease (and to Ameristar's mortgage
lender) and shall not benefit any other party, including ▇▇▇▇▇▇▇,
its successors and assigns.
(G) NEW LEASE.
In the event of the termination of this Lease as a result of
▇▇▇▇▇▇▇'▇ default Ameristar shall, in addition to providing the
notices of default and termination as required by subsections (d)
and (e) above of this Section 4.5, provide each Leasehold Lender
with written notice that the Lease has been terminated, together
with a statement of all sums which would at that time be due
under this Lease but for such termination, and of all other
defaults, if any, then known to Ameristar. Subject to the
provisions of Section 4.5 (f)(vii) above, Ameristar agrees to
enter into a new lease ("New
Lease") of the Leased Land with such Leasehold Lender or its
designee for the remainder of the term of this Lease, effective
as of the date of termination, at the rent and additional rent,
and upon the terms, covenants and conditions (but excluding
requirements which are not applicable or which have already been
fulfilled) of this Lease, provided:
i. Such Leasehold Lender shall make written request upon
Ameristar for such New Lease within sixty (60) days after the
date such Leasehold Lender receives Ameristar's Notice of
Termination of this Lease given pursuant to this subsection (g).
ii. Such Leasehold Lender or its designee shall pay or cause to
be paid to Ameristar at the time of the execution and delivery of
such New Lease, any and all sums which would at the time of
execution and delivery thereof be due pursuant to this Lease but
for such termination and, in addition thereto, all reasonable out-
of-pocket expenses, including reasonable attorneys' fees, which
Ameristar shall have incurred at such time or during such sixty
day period by reason of such termination and the execution and
delivery of the New Lease and which have not otherwise been
received by Ameristar from ▇▇▇▇▇▇▇ or other party in interest
under ▇▇▇▇▇▇▇. Upon the execution of such New Lease, Ameristar
shall allow to the tenant named therein as an offset against the
sums otherwise due under this subsection (g)(ii) or under the New
Lease, an amount equal to the net income derived by Ameristar
from the Leased Land during the period from the date of
termination of this Lease to the date of the beginning of the
Lease term of such New Lease. In the event of a controversy as
to the amount to be paid to Landlord pursuant to this subsection
(g)(ii), the payment obligation shall be satisfied if Ameristar
shall be paid the amount not in controversy, and the Leasehold
Lender or its designee shall agree to pay any additional sum
ultimately determined to be due plus interest at the rate of ten
percent (10%) per annum and such obligation shall be adequately
secured.
iii. Such Leasehold Lender or its designee shall agree to remedy
any of ▇▇▇▇▇▇▇'▇ defaults of which said Leasehold Lender was
notified by Ameristar's Notice of Termination and which are
reasonably susceptible of being so cured by Leasehold Lender or
its designee.
iv. It shall be the intention and agreement of the parties that
any New Lease made pursuant to this subsection (g) shall have the
same priority and rights in relation to any mortgage or other
lien, charge or encumbrance on the fee of the Leased Land and the
tenant under such New Lease shall have the same right, title and
interest in and to the Leased Land and the buildings and
improvements thereon as ▇▇▇▇▇▇▇ had under this Lease.
v. The tenant under any such New Lease shall be liable to
perform the obligations imposed on the tenant by such New Lease
only during the period such person has ownership of such
leasehold estate.
(H) NEW LEASE PRIORITIES.
If more than one Leasehold Lender shall request a New Lease
pursuant to subsection (g)(i) of this Section 4.5, Ameristar
shall enter into such New Lease with the Leasehold Lender whose
mortgage is prior in lien, or with the designee of such Leasehold
Lender. Ameristar, without
liability to ▇▇▇▇▇▇▇ or any Leasehold Lender with an adverse
claim, may rely upon a mortgagee title insurance commitment
issued by a responsible title insurance company or licensed
attorney or governmental agency performing such services or doing
business within the state in which the Leased Land located as the
basis for determining the appropriate Leasehold Lender who is
entitled to such New Lease.
(I) LEASEHOLD LENDER NEED NOT CURE SPECIFIED DEFAULTS.
Nothing herein contained shall require any Leasehold Lender
or its designee as a condition to its exercise of rights
hereunder to cure any default of ▇▇▇▇▇▇▇ not reasonably
susceptible of being cured by such Leasehold Lender or its
designee, or otherwise excluded by agreement herein, including
but not limited to: (i) the defaults referred to in Section
8.1(d); (ii) the franchise rating and operation covenants set
forth in Sections 2.3(a) and (b) and 3.1(v); and (iii) the
requirement of a minimum of 96 in-service hotel rooms, if
Leasehold Lender determines in its reasonable business judgment
that it cannot economically operate 96 in-service rooms in order
to comply with the provisions of subsections (e) or (f) of this
Section 4.5, or as a condition of entering into the New Lease
provided for by subsection (g) of this Section 4.5.
(J) EMINENT DOMAIN.
▇▇▇▇▇▇▇'▇ share, as provided by Section 7.6 of this Lease,
of the proceeds arising from an exercise of the power of Eminent
Domain shall, subject to the provisions of such Section 7.6 be
disposed of as provided for by the Leasehold Lien and shall be
subject to the prior right of the Leasehold Lender to repay the
indebtedness secured by the Leasehold Lien out of the award.
(K) CASUALTY LOSS.
A Standard Mortgagee Clause naming each Leasehold Lender may
be added to any and all insurance policies required to be carried
by ▇▇▇▇▇▇▇ hereunder on condition that the insurance proceeds are
to be applied in the manner specified in this Lease and the
Leasehold Lien shall so provide; except that the Leasehold Lien
may provide a manner for the disposition of such proceeds, if
any, otherwise payable directly to ▇▇▇▇▇▇▇ (but not such
proceeds, if any, payable jointly to Ameristar and ▇▇▇▇▇▇▇)
pursuant to the provisions of this Lease.
The Leasehold Lien may condition the application of
▇▇▇▇▇▇▇'▇ insurance proceeds to repair and restoration of the
improvements as contemplated by Section 5.2 below, on reasonable
requirements such as: (i) ▇▇▇▇▇▇▇ not being in monetary default
to the Leasehold Lender; (ii) the adequacy of such insurance
proceeds, together with such other funds as may be provided by
▇▇▇▇▇▇▇, to pay for all costs of repair and restoration of the
improvements; (iii) that the improvements, after repair and
restoration, shall have an economic utility and fair market value
equal to that which existed prior to the casualty;
(iv) compliance with procedures for disbursement of such proceeds
to insure application of the funds to repair and restoration,
similar to those utilized in construction lending by
Institutional Lenders; and (v) that the proceeds be held by the
Leasehold Lender pending their disbursement to pay costs of
repair and restoration.
(L) NO MERGER.
So long as any Leasehold Lien is in existence, unless all
Leasehold Lenders shall otherwise expressly consent in writing
the fee title to the Leased Land and the Leasehold Estate of
▇▇▇▇▇▇▇ therein created by this Lease shall not merge but shall
remain separate and distinct, notwithstanding the acquisition of
said fee title and said leasehold estate by Ameristar, by
▇▇▇▇▇▇▇, or by a third party, by purchase or otherwise.
(M) FUTURE AMENDMENTS.
In the event on any occasions hereafter ▇▇▇▇▇▇▇ seeks to
mortgage its leasehold estate, Ameristar agrees to amend this
Lease from time to time to the extent reasonably requested by an
Institutional Lender proposing to make ▇▇▇▇▇▇▇ a loan secured by
a first lien upon ▇▇▇▇▇▇▇'▇ leasehold estate, provided that such
proposed amendments do not materially and adversely affect the
rights of Ameristar or his interest in the Leased Land and all
other Institutional Lenders consent in writing to such charge.
All reasonable expenses incurred by Ameristar in connection with
any such amendment shall be paid by ▇▇▇▇▇▇▇. The foregoing
provisions shall be subject to reasonable approval rights in
favor of Ameristar's lender.
(N) ESTOPPEL CERTIFICATE.
Ameristar shall, without charge, at any time and from time
to time hereafter, but not more frequently than twice in any one-
year period (or more frequently if such request is made in
connection with any sale or mortgaging of ▇▇▇▇▇▇▇'▇ leasehold
interest or permitted subletting by ▇▇▇▇▇▇▇) within twenty (20)
business days after written request of ▇▇▇▇▇▇▇ to do so, certify
by written instrument duly executed and acknowledged to any
mortgagee or purchaser, or proposed mortgagee or proposed
purchaser, or any other person, form or corporation specified in
such request: (A) as to whether this Lease has been supplemented
or amended, and if so, the substance and manner of such
supplement or amendment; (B) as to the validity and force and
effect of this Lease, in accordance with its tenor; (C) as to the
existence of any default hereunder; (D) as to the existence of
any offsets, counterclaims or defenses hereto on the part of
▇▇▇▇▇▇▇; (E) as to the commencement and expiration dates of the
term of this Lease; and (F) as to any other matters as may be
reasonably so requested. Any such certificate may be relied upon
by ▇▇▇▇▇▇▇ and any other person, firm or corporation to whom the
same may be exhibited or delivered, and the contents of such
certificate shall be binding on Ameristar.
(O) NOTICES.
Notice from Ameristar to the Leasehold Lender shall be
mailed to the address furnished Ameristar pursuant to subsection
(b) of this Section 4.5 and those from the Leasehold Lender to
Ameristar shall be mailed to the address designated pursuant to
the provisions of Section 11.7 hereof. Such notices, demands and
requests shall be given in the manner described in Section 11.7
and shall in all respects be governed by the provisions of that
Section.
(P) ERRONEOUS PAYMENTS.
Unless otherwise agreed in writing by a Leasehold Lender, no
payment made to Ameristar by a Leasehold Lender shall constitute
agreement that such payment was, in fact, due under the
terms of this Lease; and a Leasehold Lender having made any
payment to Ameristar pursuant to Ameristar's wrongful, improper
or mistaken notice or demand shall be entitled to the return of
any such payment or portion thereof provided he shall have made
demand therefor not later than one (1) year after the date of its
payment.
(Q) AMERISTAR PAY-OFF OR ASSUMPTION.
The foregoing provisions of this Section 4.5 limiting
Ameristar's rights to terminate, forfeit or acquire ▇▇▇▇▇▇▇'▇
interest in this Lease are expressly subject to, and shall be
deemed to be consistent with, Ameristar's remedies for default by
▇▇▇▇▇▇▇ under this Lease as set forth in Section 8.2(g) below
relating to Ameristar's pay-off or assumption of a Leasehold Lien
related to the Leased Land.
ARTICLE V
INSURANCE AND INDEMNIFICATION
5.1 DUTY TO INSURE. Throughout the Term, at ▇▇▇▇▇▇▇'▇ sole cost
and expense, ▇▇▇▇▇▇▇ shall keep or cause to be kept insured for
the mutual benefit of Ameristar and ▇▇▇▇▇▇▇ as loss payees and
with Ameristar as an additional insured, all improvements erected
by ▇▇▇▇▇▇▇ on the Leased Land against loss or damage by fire or
such other risks as Ameristar may require. The amount of the
insurance shall be sufficient to prevent either Ameristar or
▇▇▇▇▇▇▇ from becoming a coinsurer under the provisions of the
policies, but in no event shall the amount be less than the then
actual replacement cost excluding costs of replacing excavations
and foundations but without deduction for depreciation (herein
called full insurable value). If any dispute whether the amount
of insurance complies with the above requirements cannot be
resolved by agreement, Ameristar may, not more often than once
every twelve (12) months, request the carrier of the insurance
then in force to determine the full insurable value, and the
resulting determination shall be conclusive between the parties
for the purpose of this Section.
5.2 PROCEEDS OF INSURANCE. Ameristar shall, at ▇▇▇▇▇▇▇'▇ cost
and expense, cooperate fully with ▇▇▇▇▇▇▇ to obtain the largest
possible recovery, and all policies of fire and extended coverage
insurance required by the previous paragraph shall provide that
the proceeds shall be paid directly to ▇▇▇▇▇▇▇ and to Ameristar
as their interests may appear, subject to the provisions of
subsection 4.5(k) above. Where no right to terminate this Lease
exists or is exercised by reason of any damage or destruction,
Ameristar shall make the proceeds available to ▇▇▇▇▇▇▇ (or, in
Ameristar's discretion, shall apply the proceeds) for the sole
purpose of reconstructing damaged improvements as stated in
Section 3.1, above, and any insurance proceeds remaining after
reconstruction shall, be shared equally by Ameristar and ▇▇▇▇▇▇▇.
The foregoing provisions of this Section 5.2 are subject to the
Leasehold Lender Protection Provisions in Section 4.5 above.
5.3 PUBLIC LIABILITY INSURANCE. Throughout the Term, at
▇▇▇▇▇▇▇'▇ sole cost and expense, ▇▇▇▇▇▇▇ shall keep or cause to
be kept in force, for the mutual benefit of Ameristar and ▇▇▇▇▇▇▇
as coinsureds, comprehensive broad form general public liability
insurance against claims and liability for personal injury,
death, or property damage arising from the use, occupancy,
disuse, or condition of the Leased Land, improvements, or
adjoining areas or ways, providing protection of at least Ten
Million Dollars ($10,000,000) for bodily injury or death to any
one person, at least Ten
Million Dollars ($10,000,000 for any one accident or occurrence,
and at least Five Million Dollars ($5,000,000) for property
damage. The amounts of coverage set forth herein shall be
subject to appropriate commercially reasonable increases every
five (5) years upon written notice from Ameristar to ▇▇▇▇▇▇▇
specifying the new policy limits.
5.4 POLICY FORM; CONTENT; INSURER. All insurance required by
express provisions of this Lease shall be carried only by
responsible insurance companies licensed to do business in the
State of Iowa rated no lower than "AXII" in the most recent
addition of A.M. Best's and "AA" in the most recent addition of
Standard & Poor's. All such policies shall be nonassessable and
shall contain language, to the extent obtainable, to the effect
that (1) any loss shall be payable notwithstanding any act or
negligence of Ameristar that might otherwise result in a
forfeiture of the insurance, (2) the insurer waives the right of
subrogation against Ameristar and against Ameristar's agents and
representatives, (3) the policies are primary and noncontributory
with any insurance that may be carried by Ameristar, and (4) the
policies cannot be canceled or materially changed except after
thirty (30) days' written notice by the insurer to Ameristar.
▇▇▇▇▇▇▇ shall furnish Ameristar with copies of all such policies
promptly on receipt of the copies, or with certificates
evidencing the insurance. Before the Commencement Date, ▇▇▇▇▇▇▇
shall furnish Ameristar with binders representing all insurance
required by this Lease. At the expiration of the Term, if
permitted by the insurer, ▇▇▇▇▇▇▇ shall assign to Ameristar all
▇▇▇▇▇▇▇'▇ right, title and interest in insurance required to be
maintained by ▇▇▇▇▇▇▇ and Ameristar shall reimburse ▇▇▇▇▇▇▇ pro-
rata for all prepaid premiums on such insurance. ▇▇▇▇▇▇▇ may
obtain for its own account any insurance not required under this
Lease. ▇▇▇▇▇▇▇ may provide any insurance required or permitted
under this Lease by blanket policy covering the Leased Land,
including improvements thereon, and any other properties.
Ameristar agrees to use its best efforts to name ▇▇▇▇▇▇▇ as
an additional insured, as its interest may appear, on any public
liability insurance policies obtained by Ameristar with respect
to the Casino Property.
5.5 INDEMNIFICATION.
(A) DEFENSE AND PAYMENT OF CLAIMS. ▇▇▇▇▇▇▇ agrees to defend,
indemnify, and hold Ameristar harmless together with all of its
servants, agents, or employees, from and against all liability,
loss or costs incurred, including reasonable attorneys' fees,
arising out of or relating to injuries or deaths of persons or
damages to property caused by ▇▇▇▇▇▇▇'▇ acts or omissions to act,
use of, or occupancy of the Leased Land, or as the result of
▇▇▇▇▇▇▇'▇ operations on the Leased Land. Each party hereto shall
give to the other parties prompt and timely notice of any claim
or suit instituted coming to its knowledge which in any way,
directly or indirectly, contingently or otherwise, affects or
might affect the other party, and all parties shall have the
right to participate in the defense of the same to the extent of
each party's own interest.
(B) MECHANICS' LIENS. In the event any mechanics' or other
liens or orders for the payment of money shall be filed against
the Leased Land or the Building or any other improvements thereon
by reason of or arising out of any labor, material furnished or
alleged to have been furnished, or to be furnished to, for or at
the request of, ▇▇▇▇▇▇▇ or its agents or contractors on
the Leased Land, ▇▇▇▇▇▇▇ shall, within thirty (30) days after it
receives notice or knowledge thereof, either pay or bond against
the same or provide for the discharge thereof in such manner as
may be provided by law. ▇▇▇▇▇▇▇ shall also defend on behalf of
Ameristar at ▇▇▇▇▇▇▇'▇ sole expense, any action, suit or
proceeding which may be brought thereon, or for the enforcement
of such liens or orders, and ▇▇▇▇▇▇▇ shall pay any damage and
discharge any judgment entered therein and save harmless
Ameristar from any and all claims or damages resulting therefrom.
Ameristar reserves the right, however, to defend or to direct the
defense of any such suit or proceedings. ▇▇▇▇▇▇▇ shall pay all
expenses of such defense, including reasonable attorneys' fees,
and shall pay any damage and discharge any judgment entered
therein and save Ameristar harmless from any and all claims or
damages resulting therefrom.
(C) RESISTING CLAIMS. In the event ▇▇▇▇▇▇▇ shall desire to
resist any mechanics' or materialmen's liens, or any other claim
against the hereinabove described premises on account of
building, rebuilding, repairing, reconstructing or otherwise
improving the Leased Land, ▇▇▇▇▇▇▇ shall have the right to do so,
provided ▇▇▇▇▇▇▇ shall first place funds into escrow in an amount
sufficient to pay said claim or lien, with said escrow directed
to pay such claim or lien in the event of a result adverse to
▇▇▇▇▇▇▇, or provide for a bond or other financial arrangement
sufficient to assure payment of the claim or lien. The foregoing
requirements to post a bond or escrow for claims or liens shall
not apply to claims or liens under Twenty-Five Thousand Dollars
($25,000) individually or in the aggregate unless such claims or
liens threaten a foreclosure of any interest in the Leased Land
or the Building.
ARTICLE VI
TAXES, ASSESSMENTS, LIENS, AND ENCUMBRANCES
▇▇▇▇▇▇▇ shall be responsible for and shall pay and discharge
all taxes and assessments to the extent accrued, levied, or
coming into existence after the Commencement Date which may
become a lien upon or which may be levied by the State, County,
or any other tax levying body upon the Leased Land, the Building,
or improvements thereon erected by ▇▇▇▇▇▇▇ or property located
thereon or therein. Ameristar shall promptly forward any tax or
assessment notices received by Ameristar relating to the Leased
Land to ▇▇▇▇▇▇▇. In the event that the taxing body with
jurisdiction over the Leased Land does not segregate the Leased
Land for taxation as a separate parcel, ▇▇▇▇▇▇▇ and Ameristar
shall agree on a mutually acceptable methodology for allocating
responsibility for such taxes. Except as otherwise provided
herein, ▇▇▇▇▇▇▇ shall also be responsible for and shall pay all
insurance premiums, and or all liabilities, charges, fees,
obligations, liens, and encumbrances associated with or relating
to the existence and use by ▇▇▇▇▇▇▇ of this Lease, the Leased
Land or the Building, including, but not limited to, all
assessment installments due or payable after the date of this
Lease. All payments of taxes or assessments or both, except
permitted installment payments, shall be prorated between
Ameristar and ▇▇▇▇▇▇▇ for the initial lease year and for the year
in which the Lease terminates. ▇▇▇▇▇▇▇ may, in its own name, or
to the extent necessary under Ameristar's name, contest in good
faith by all appropriate proceedings, the amount, applicability,
or validity of any lien, tax, assessment, or fine pertaining to
the Leased Land, or to any improvement on the Leased Land, and in
the event ▇▇▇▇▇▇▇ does in good faith contest the applicability or
validity of any lien, tax, assessment, or fine, Ameristar will
cooperate in such contest whenever possible with ▇▇▇▇▇▇▇;
provided that such contest will not subject any part of the
Leased Land to risk of forfeiture
or loss. If at any time payment of the whole or any part of such
lien, tax, assessment, or fine shall become necessary in order to
prevent any such forfeiture or loss, ▇▇▇▇▇▇▇ shall pay the same
or cause the same to be paid in time to prevent such forfeiture
or loss.
Ameristar and ▇▇▇▇▇▇▇ shall utilize their reasonable best
efforts to obtain separate assessment of taxes from all taxing
authorities having jurisdiction with respect to the Leased Land,
the Building, and the remainder of the Casino Property, and to
the extent necessary under applicable law, to constitute the
Leased Land as a separate legal parcel.
ARTICLE VII
CONDEMNATION
7.1 DEFINITIONS.
(a) "Condemnation" means (i) the exercise of any governmental
power, whether by legal proceedings or otherwise, by any
condemnor and (ii) a voluntary sale or transfer by Ameristar to
any condemnor, either under threat of condemnation or while legal
proceedings for condemnation are pending.
(b) "Date of taking" means the date the condemnor has the right
to possession of the property being condemned.
(c) "Award" means all compensation, sums, or anything of value
awarded, paid, or received on a total or partial condemnation.
(d) "Condemnor" means any public or quasi-public authority or
private corporation or individual having the power of
condemnation.
7.2 PARTIES' RIGHTS AND OBLIGATIONS TO BE GOVERNED BY LEASE.
If, during the Term or during the period of time between the
execution of this Lease and the Commencement Date, there is any
taking of all or any part of the Building, other improvements, or
Leased Land or any interest in this Lease by condemnation, the
rights and obligations of the parties shall be determined
pursuant to the following paragraphs.
7.3 TOTAL TAKING. If the Leased Land and all improvements
thereon are totally taken by condemnation, this Lease shall
terminate on the date of taking.
7.4 7.4. PARTIAL TAKING. If only a portion of the Leased Land
or of any improvements is taken by condemnation, this Lease shall
remain in effect, except that ▇▇▇▇▇▇▇ may elect to terminate this
Lease if: (i) the remaining Leased Land or improvements could
not be economically and feasibly used by ▇▇▇▇▇▇▇, and (ii) a
reasonable amount of reconstruction (taking into account costs
associated therewith, including unavoidable loss of use of
portions of the Leased Land and rentals accruing hereunder during
reconstruction) would not make the remaining Leased Land and
improvements reasonably suited for ▇▇▇▇▇▇▇'▇ continued occupancy
for the uses and purposes for which the Leased Land has been
leased; or, if (iii) ▇▇▇▇▇▇▇ is unable to fulfill its covenants
to
Ameristar pursuant to Article II of this Lease, unless such
particular covenants which cannot reasonably be fulfilled by
virtue of such partial taking are waived by Ameristar in writing.
If ▇▇▇▇▇▇▇ elects to terminate this Lease, ▇▇▇▇▇▇▇ must
exercise its right to terminate pursuant to this Section by
giving notice to Ameristar within thirty (30) days after the
nature and the extent of the taking have been finally determined.
If ▇▇▇▇▇▇▇ elects to terminate this Lease as provided in this
Section, ▇▇▇▇▇▇▇ shall also notify Ameristar of the date of
termination, which date shall not be earlier than ninety (90)
days nor later than one hundred eighty (180) days after ▇▇▇▇▇▇▇
has notified Ameristar of its election to terminate; except that
this Lease shall terminate on the date of taking if the date of
taking falls on a date before the date of termination as
designated by ▇▇▇▇▇▇▇. If ▇▇▇▇▇▇▇ does not terminate this Lease
within the thirty (30) day period, this Lease shall continue in
full force and effect, except that Rental from and after the
effective date of the taking shall be reduced by a proportion
equal to the ratio of the area of the Leased Land taken to the
total area of the Leased Land immediately prior to the taking and
that Base Rental shall be similarly reduced for purposes of
future Rental adjustments.
7.5 RESTORATION OF IMPROVEMENTS.
(A) RESTORATION OF IMPROVEMENTS. If there is a partial taking
of the Leased Land and improvements located thereon and this
Lease remains in full force and effect pursuant to Section 7.4
above, ▇▇▇▇▇▇▇, at its cost, shall accomplish all repair or
restoration necessary to render the remaining improvements usable
for the uses and purposes for which the Leased Land has been
leased.
(B) ABATEMENT OR REDUCTION OF RENT. To the extent specific
rooms are damaged and thereby rendered unrentable, Rent shall be
abated during the period of restoration, but all other
obligations of ▇▇▇▇▇▇▇ under this Lease shall remain in full
force and effect.
7.6 AWARD DISTRIBUTION. If proceeds of condemnation are awarded
separately to Ameristar and ▇▇▇▇▇▇▇ based on their respective
interests in the Leased Land, the Building, and any improvements,
each party shall retain its own award, subject to the obligations
of ▇▇▇▇▇▇▇ under any Leasehold Lien. In the event of a single
condemnation award, however, the award shall be apportioned
between the parties as follows: first, to the unpaid principal
and interest owed on the obligations secured by any Leasehold
Liens; second Ameristar shall be entitled to the value of any
portion of the Leased Land taken determined based on its highest
and best use, but as if the Leased Land were unencumbered by this
Lease; and third, the balance of any award, subject to the rights
of any Leasehold Lender, shall go to ▇▇▇▇▇▇▇; provided, however,
that in the event of any taking during the last ten (10) years of
the Term, Ameristar shall also be entitled to receive a
percentage of the remainder of the award equal to ten percent
(10%) in the event of a taking in the tenth (10th) Lease year
prior to the end of the Initial Term and an additional ten
percent (10%) for each Lease year thereafter, and provided
further that Ameristar shall be entitled to keep the entire
condemnation proceeds in the event of a taking in the last two
(2) years of the Initial Term.
ARTICLE VIII
DEFAULT PROVISIONS; REMEDIES; ATTORNEYS' FEES
8.1 DEFAULT BY ▇▇▇▇▇▇▇. Each of the following shall be deemed
an event of default by ▇▇▇▇▇▇▇ and a breach of this Lease:
(A) RENT OR OTHER PAYMENTS. If ▇▇▇▇▇▇▇ shall default in the
payment of rent or other payments hereunder when due according to
the terms of this Lease and shall not have fully corrected the
same within ten (10) days after ▇▇▇▇▇▇▇'▇ receipt of written
notice from Ameristar.
(B) OTHER COVENANTS OR CONDITIONS. If ▇▇▇▇▇▇▇ shall default in
the performance or observance of any other covenant or condition
of this Lease or of any note, deed of trust, or other document
relating to a Leasehold Lien to be performed or observed by
▇▇▇▇▇▇▇, whether or not Ameristar is a party to any such
documents, and ▇▇▇▇▇▇▇ shall not have fully corrected the same
within thirty (30) days after notice thereof has been sent by
Ameristar to ▇▇▇▇▇▇▇, or such other specific period of notice and
opportunity to cure as may be expressly provided herein.
(C) ABANDONMENT. Total abandonment by ▇▇▇▇▇▇▇ of the Leased
Land and any improvements constructed by ▇▇▇▇▇▇▇ on the Leased
Land.
(D) INSOLVENCY. If during the Term of this Lease:
I. APPOINTMENT OF RECEIVER. ▇▇▇▇▇▇▇ shall apply for or consent
in writing to the appointment of a receiver, trustee, or
liquidator of ▇▇▇▇▇▇▇ or of all or substantially all of ▇▇▇▇▇▇▇'▇
assets or shall not obtain the termination of any such
receivership or trusteeship involuntarily ordered; or
II. VOLUNTARY BANKRUPTCY. ▇▇▇▇▇▇▇ shall file a voluntary
petition for relief under the United States Bankruptcy Code as
that now exists or under amendment or successor law thereto or
any other law dealing with the subject of bankruptcy or admit in
writing its inability to pay its debts as they become due; or
III. ASSIGNMENT FOR CREDITORS. ▇▇▇▇▇▇▇ shall make a general
assignment for the benefit of creditors; or
IV. REORGANIZATION OR ARRANGEMENT. ▇▇▇▇▇▇▇ shall enter into any
reorganization, composition, or other arrangement with any or all
of its creditors pursuant to any insolvency law or the common
law; or
V. INVOLUNTARY PETITION. Any creditor of ▇▇▇▇▇▇▇ shall have
commenced an involuntary proceeding under the United States
Bankruptcy Code or any successor law or other law dealing with
the subject of bankruptcy and ▇▇▇▇▇▇▇ shall not have obtained the
dismissal of the proceeding within ninety (90) days after its
commencement.
8.2 REMEDIES. In the event of any breach or default of this
Lease by ▇▇▇▇▇▇▇ and so long as such breach or default is
continuing, then subject to the rights of any Leasehold Lender
under Article IV of the Lease, Ameristar, in addition to any
other rights or remedies Ameristar may have, shall have the
right, with or without notice to take any or all of the following
actions:
(A) RE-ENTRY. Immediately re-enter and take possession of the
Leased Land, Building, and any other improvements and remove all
persons and property from the Leased Land or the Building. Any
property may be stored on the Leased Land or in any other place,
for the account of and at the expense and at the risk of ▇▇▇▇▇▇▇.
Except in the case of gross negligence or willful misconduct on
the part of Ameristar, ▇▇▇▇▇▇▇ hereby waives all claims for
damages which may be caused by the re-entry of Ameristar and
taking possession of the Leased Land, Building and other
improvements or removing or storing the property as herein
provided, and will save Ameristar harmless from any loss, costs
or damages occasioned Ameristar thereby. No such re-entry shall
be considered or construed to be a forceful entry. No such re-
entry or taking possession of the premises by Ameristar shall be
construed as an election on Ameristar's part to terminate this
Lease unless a written notice of such intention is given to
▇▇▇▇▇▇▇; or
(B) SUIT FOR SUMS DUE. Collect by suit or otherwise from time
to time any unpaid rents or other sums due as they become due for
the account of ▇▇▇▇▇▇▇; or
(C) SPECIFIC PERFORMANCE. Enforce by suit any term of the Lease
required to be kept or performed by ▇▇▇▇▇▇▇; or
(D) RELETTING. Without terminating this Lease, relet the Leased
Land or any part thereof, or any space in the Building for the
account of ▇▇▇▇▇▇▇ for such term or terms and at such rental or
rentals and upon such other terms and conditions as Ameristar in
Ameristar's sole discretion may deem advisable, with the right to
make alterations and repairs to any improvements located on the
Leased Land. Rentals received by Ameristar from such reletting
shall be applied as follows; First, to the payment of any costs
of such reletting; second, to the payment of the cost of any
alterations and repairs to the Leased Land or improvements
thereon made necessary by ▇▇▇▇▇▇▇'▇ breach of the provisions of
this Lease; third, to payment of any indebtedness, other than
rent, due Ameristar hereunder from ▇▇▇▇▇▇▇; fourth, to the
payment of rent due and unpaid hereunder; and the residue, if
any, shall be held by Ameristar and applied in payment of future
rent as the same may become due and payable hereunder. Should
such rental received from such reletting be less than the rental
agreed to be paid that quarter by ▇▇▇▇▇▇▇ hereunder, then ▇▇▇▇▇▇▇
shall pay such deficiency to Ameristar. Notwithstanding any such
reletting without termination, Ameristar may at any time
thereafter elect to terminate this Lease for such previous
breach; or
(E) COLLECTION OF RENTS. Without terminating this Lease,
collect all rents, revenues and room charges from payable
Building, with any such revenues to be applied in the manner set
forth in subparagraph (d) immediately preceding; or
(F) TERMINATION. Terminate this Lease. Should Ameristar at any
time terminate this Lease for any breach, in addition to any
other remedy Ameristar may have, Ameristar may recover from
▇▇▇▇▇▇▇ all damages Ameristar may incur by reason of such breach,
including without limitation the following:
i. the worth at the time of award of any unpaid rent or other
sums which had been earned or which were due at the time of such
termination; plus
ii. the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until
the time of award exceeds the amount of rent loss that ▇▇▇▇▇▇▇
proves could have been reasonably avoided; plus
iii. the worth at the time of award of the amount by which the
unpaid rent for the balance of the Term after the time of award
exceeds the amount of rent loss that ▇▇▇▇▇▇▇ proves could be
reasonably avoided; plus
iv. any other amount necessary to compensate Ameristar for all
the detriment proximately caused by ▇▇▇▇▇▇▇'▇ failure to perform
its obligations under this Lease or which in the ordinary course
of things would be likely to result therefrom (but excluding
consequential damages from lost profits to Ameristar's gaming
operations), including, but not limited to, any costs or expenses
incurred by ▇▇▇▇▇▇▇ in retaking possession of the Leased Land and
improvements thereon, including reasonable attorneys' fees,
maintaining or preserving the Leased Land or improvements thereon
after such default, preparing the Leased Land and other
improvements thereon for reletting to a new tenant, including
repairs or alterations to any improvements for such reletting,
leasing commissions, or any other costs necessary or appropriate
to relet the Leased Land; plus
v. at Ameristar's election, such other amounts in addition to
or in lieu of the foregoing as may be permitted from time to time
by the laws of the State of Iowa.
As used in subparagraphs (i) and (ii), above, the "worth at
the time of award" is computed by charging interest on each
installment of rent or other sum from the due date at a variable
rate which shall be equal to five percent (5%) per annum over the
"prime rate" as announced by First Interstate Bank of Nevada.
(G) TERMINATE ▇▇▇▇▇▇▇ WITH PAYOFF OR ASSUMPTION OF LEASEHOLD
LIEN. Terminate, forfeit or acquire ▇▇▇▇▇▇▇'▇ interest in this
Lease and the Leased Land as set forth herein, free of any lien,
adverse interest or claim including rights available to ▇▇▇▇▇▇▇
in bankruptcy, conditioned upon Ameristar concurrently therewith
doing one of the following:
i. pay off in full Leasehold Lenders for the lesser of then
outstanding aggregate principal amount of the Leasehold Lien
attributable to the Leased Land (not to exceed the greater of (x)
Four Million Five Hundred Thousand Dollars ($4,500,000) or (y)
seventy five percent (75%) of the appraised value of the Leased
Land), plus accrued interest and costs attributable to the
Leasehold Lien on the Leased Land; or
ii. provided that Ameristar obtains an opinion of the Iowa legal
counsel acceptable to Leasehold Lender that no "merger" of the
leasehold interest and the fee interest in the Leased Land will
occur, novate and substitute Ameristar itself as lessee under
this Lease, and assume the Leasehold Lien for its then unpaid
principal balance attributable to the Leased Land, said principal
balance not to exceed the Aggregate Principal Amount as defined
in Section 4.2 above, together with accrued interest, attorneys'
fees and costs of collection attributable to the Leasehold Lien
on the Leased Land. In such event, Ameristar, at its cost and
expense, will execute such "nonrecourse" assumption documents as
Leasehold Lenders may reasonably require to confirm
the nonrecourse assumption of the Leasehold Lien and deliver to
Leasehold Lender an endorsement to Leasehold Lender's loan policy
of title insurance insuring Ameristar to be the owner of the
leasehold interest in the Ground Lease free of any lien, adverse
interest or claim including rights available to ▇▇▇▇▇▇▇ in
bankruptcy and continuing the insured priority of the Leasehold
Lien on the Leased Land free of any exceptions to coverage other
than as set forth in Leasehold Lender's existing loan policy. To
the extent the Leasehold Lien encumbers property other than the
Leased Land, upon such assumption, Leasehold Lender agrees to
bifurcate and separate the Leasehold Lien documents into two
separate sets of documents, one encumbering and creating a
security interest upon the Leased Land and the other encumbering
and creating a security interest in the other property and
provided that the amount of the Leasehold Lien on the Leased Land
will not exceed the lesser of the then outstanding balance of
principal, and unpaid interest, costs and fees attributable to
the Leased Land, or the Aggregate Principal Amount in principal
indebtedness. The bifurcated loan applicable to the Leased Land
shall have the same interest rate, amortization period, and
installment payment periods as under the Leasehold Lien. This
right is subject to Leasehold Lender receiving an opinion
satisfactory to it from Iowa counsel acceptable to Leasehold
Lender that such bifurcation may accomplish the aforementioned
results under Iowa law without affecting the Leasehold Lien
security (other than the bifurcation) and does not create any
impediment or obstacle to exercising the remedies available to
Leasehold Lender under the Leasehold Lien documents. This right
is personal only to Ameristar under the Ground Lease (and to
Ameristar's mortgage lender) and shall not benefit any other
party, including ▇▇▇▇▇▇▇, its successors and assigns.
8.3 CUMULATIVE REMEDIES. The remedies herein given to Ameristar
shall be cumulative, and the exercise or nonexercise of any one
remedy by Ameristar on any occasion shall not exclude or
constitute a waiver of any other remedy on the same or any other
occasion. Without any previous notice or demand, separate
actions may be maintained by Ameristar against ▇▇▇▇▇▇▇ from time
to time to recover any rent or damages which, at the commencement
of any such action, have become due and payable to Ameristar,
without waiting until the end of the Term.
8.4 ATTORNEYS' FEES. In the event of any default by ▇▇▇▇▇▇▇,
Ameristar shall be entitled to recover from ▇▇▇▇▇▇▇, in addition
to any other remedies, relief, or damages to which the Ameristar
may be entitled hereunder or under applicable law, all costs,
including reasonable attorneys' fees, incurred in enforcing its
rights hereunder, recovering possession of the Leased Land or any
improvements, or recovering damages for the breach hereof,
whether incurred through litigation or otherwise.
ARTICLE IX
COVENANTS AND WARRANTIES
9.1 NO WARRANTIES BY AMERISTAR. Ameristar makes no warranties
or representations whatsoever, express or implied, regarding the
condition of the Leased Land, its value, its marketability, or
its fitness for a particular use or development. ▇▇▇▇▇▇▇ agrees
to take possession of the Leased Land in an "as is" condition.
Ameristar's right, title, and interest in and to the Leased Land,
except for this Lease, shall not be subordinated or subject to
any other claim or interest of ▇▇▇▇▇▇▇ or to any other claim or
interest of any mortgagee or other creditor in connection with
the financing of the improvements to be constructed on the Leased
Land.
9.2 RIGHT TO EXECUTE. The parties represent that each has full
right and power to execute and perform this Lease and to grant
the estate leased herein and the rights, easements, privileges,
appurtenances, and hereditaments belonging or pertaining thereto.
9.3 PEACEFUL ENJOYMENT. ▇▇▇▇▇▇▇, on paying the rent herein
reserved and performing the covenants and provisions hereof on
its part to be performed, shall peacefully and quietly have and
enjoy the Leased Land, and all such existing rights, easements,
privileges, appurtenances, and hereditaments belonging or
pertaining thereto, during the Term; provided, however, that
Ameristar does not warrant that a governmental authority may not
at some time during the Term, without the consent or permission
of Ameristar, pass ordinances or perform acts which may be
prejudicial to ▇▇▇▇▇▇▇ through no fault of Ameristar. Ameristar
shall provide to ▇▇▇▇▇▇▇'▇ customers, guests and invitees,
nonexclusive parking rights sufficient for the operation of the
hotel on the designated parking areas as they exist from time-to-
time on Ameristar's Casino Property, however, ▇▇▇▇▇▇▇ shall have
no right to designate or require a particular location or
configuration with respect to such parking, or to interfere in
any way with Ameristar's use and designation of parking areas.
ARTICLE X
ASSIGNMENT, SUBLETTING AND SALE
10.1 ASSIGNMENT. Ameristar may assign its interests in this
Lease upon written notice to ▇▇▇▇▇▇▇ and its Leasehold Lender.
Except for assignment to a Leasehold Lender as contemplated under
Article IV of this Lease, ▇▇▇▇▇▇▇ may not assign this Lease or
sublet its interest in the Leased Land without the prior written
consent of Ameristar, which consent shall not be unreasonably
withheld by Ameristar provided that the proposed assignee is:
(a) of equal or greater financial capacity and net worth as
▇▇▇▇▇▇▇ on the date of such assignment, but in any event having a
financial capacity and net worth reasonable, under the
circumstances at the time of the assignment, to require for a
lessee under this Lease; (b) an experienced manager and/or
operator of similar hotel properties; (c) a franchisee of the
same hotel chain as ▇▇▇▇▇▇▇ or of another franchisor approved
pursuant to Sections 2.3(a) and 3.8(m) above; and (d) highly
reputable as a hotel and business operator. A change of the
manager of ▇▇▇▇▇▇▇ (currently ▇▇▇▇▇▇▇ Hotel Corporation) (to an
entity other than one in which ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇ or their families maintain, directly or
indirectly, voting and operating control), or the failure of
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, and ▇▇▇▇ ▇▇▇▇▇▇▇ or
their families to maintain, directly or indirectly, voting and
operating control of the manager of ▇▇▇▇▇▇▇ shall be considered
an assignment for purposes of this section. An assignment of 50%
or more of the membership interests in ▇▇▇▇▇▇▇ in and of itself
shall not be considered an assignment for purposes of this
section. In the event Ameristar gives its consent for any
assignment or subletting of this Lease, the assignee or subtenant
shall assume in writing all of ▇▇▇▇▇▇▇'▇ obligations and duties
under this Lease and shall be subject to all of the terms of this
Lease, and Ameristar shall be subject only to those obligations
and shall enjoy such rights and privileges as are set forth in
this Lease. Such sublease or assignment shall not relieve
▇▇▇▇▇▇▇ from its liability under this Lease without Ameristar's
written consent, which shall be in Ameristar's sole discretion.
The provisions of this Section 10.1 are specifically subject to
the provisions of Section 4.5 of this Lease, and in the event of
any conflict, the provisions of Section 4.5 shall control.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 INSPECTION BY AMERISTAR. Ameristar may enter upon the
Leased Land at any reasonable time for any purpose necessary,
incidental to, or connected with verification of the performance
of ▇▇▇▇▇▇▇'▇ obligations hereunder, but subject to any provisions
with respect thereto otherwise contained herein.
11.2 NEGATION OF PARTNERSHIP. Nothing in this Lease shall be
construed to render Ameristar in any way or for any purpose a
partner, joint venturer, or associate in any relationship with
▇▇▇▇▇▇▇ other than that of landlord and tenant, nor shall this
Lease be construed to authorize either to act as agent for the
other except as expressly provided to the contrary in this Lease.
11.3 CONTROLLING LAW. This Lease shall be deemed to be made and
shall be construed in accordance with the laws of the State of
Iowa.
11.4 SURRENDER OF POSSESSION. ▇▇▇▇▇▇▇ agrees to yield and
deliver to Ameristar possession of the Leased Land, the Building,
and all other improvements on the Leased Land at the termination
of this Lease, or as otherwise provided herein, in good condition
and in accordance with the express obligations provided herein,
except for reasonable wear and tear, and, although not required
to effectuate a surrender, ▇▇▇▇▇▇▇ shall execute and deliver to
Ameristar a good and sufficient document of relinquishment, if
and when requested.
11.5 SUCCESSORS. This Lease shall bind and inure to the benefit
of any successor or assignee of Ameristar and any successors or
permitted assignees of ▇▇▇▇▇▇▇, whether resulting from any
merger, consolidation, reorganization, assignment, foreclosure,
or otherwise.
11.6 HEADINGS. The article and section headings contained herein
are for convenience and reference and are not intended to define
or limit the scope of any provision of this Lease.
11.7 NOTICES. All notices, requests, consents and demands shall
be given to or made upon the parties at their respective
addresses set forth below, or at such other address as a party
may designate in writing delivered to the other party. Unless
otherwise agreed in this Lease, all notices, requests, consents
and demands shall be given or made by personal delivery, by
confirmed air courier, by facsimile transmission ("fax"), or by
postage prepaid first class mail, to the party addressed as
aforesaid. If sent by confirmed air courier, such notice shall
be deemed to be given upon the earlier to occur of the date upon
which it is actually received by the addressee or the business
day upon which delivery is made at such address, as confirmed by
the air courier (or if the date of such confirmed delivery is not
a business day, the next succeeding business day). If mailed,
such notice shall be deemed to be given upon the earlier to occur
of the date upon which it is actually received by the addressee
or the third (3rd) business day following the date upon which it
is deposited in a first-class postage-prepaid envelope in the
United States mail addressed to such address. If given by fax,
such notice shall be deemed to be given upon the date it is
actually received by the addressee, as confirmed by a return fax
signed by the addressee.
If to Ameristar:
Ameristar Casino Council Bluffs, Inc.
Attention: General Manager
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax; (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Sanders, Barnet, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Mosk
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇▇:
River Road Hotel Associates, L.C.
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇▇▇, Brown, Koehn, Shors & ▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
11.8 RECORDING. Ameristar and ▇▇▇▇▇▇▇ agree to execute and have
acknowledged, and ▇▇▇▇▇▇▇ agrees to deliver to Ameristar, a
memorandum of this Lease in the form attached hereto as
Exhibit D. Such memorandum shall be recorded with the County
recorder or clerk.
11.9 COMPETING HOTEL. ▇▇▇▇▇▇▇ acknowledges that Ameristar
operates, and may construct or permit the construction of another
hotel or hotels on or near the Casino Property and that such
hotel(s) will be entitled to compete with ▇▇▇▇▇▇▇'▇ hotel.
Nothing in this Lease shall be deemed to be a covenant by
Ameristar not to compete with ▇▇▇▇▇▇▇ or not to permit such
competition by other hotel owners or operators, or to permit
other hotel owners or operators or other third-parties to utilize
parking areas on the Casino Property on a nonexclusive basis.
11.10 RIGHT OF FIRST OFFER. In the event that during the
first fifteen (15) years of the Term Ameristar determines to sell
or lease any portion of the Casino Property to any third-party
for the
construction of a hotel facility in which Ameristar has no
ownership interest in the hotel operation and which would compete
with the hotel in ▇▇▇▇▇▇▇'▇ Building, Ameristar agrees to so
notify ▇▇▇▇▇▇▇ in writing, and for a period of thirty (30) days
thereafter, ▇▇▇▇▇▇▇ shall have a right to make an offer with
respect to such additional hotel and if ▇▇▇▇▇▇▇ makes such offer,
for a period of thirty (30) days after such offer Ameristar will
negotiate in good faith to determine if an acceptable transaction
can be structured and agreed to with ▇▇▇▇▇▇▇. If no written
agreement is reached between Ameristar and ▇▇▇▇▇▇▇ during such
subsequent thirty (30) day period, Ameristar shall be free to
negotiate with any other party. The foregoing shall not apply to
any transaction wherein Ameristar sells substantially all of the
Casino Property to a third-party.
11.11 OPTION TO PURCHASE. ▇▇▇▇▇▇▇ hereby grants Ameristar an
irrevocable option to purchase all of ▇▇▇▇▇▇▇'▇ right, title and
interest in and to the Leased Land, the Lease, the Building, any
other improvements on the Leased Land, fixtures, equipment,
personal property, contract rights and general intangibles, and
any and all appurtenances thereto necessary to operate the hotel
(the "Property Interests"), which option period shall commence
three (3) years after the hotel opens for business in the
Building, and the option shall terminate without further notice
ten (10) years after the hotel opens for business in the
Building. The option price shall be the greater of Seven Million
Dollars ($7,000,000), or the "mean" appraised value, which shall
be determined by taking the "mean" value of the two (2) closest
of three (3) MAI appraisals of the foregoing Property Interests
valued as an operating hotel. Upon Ameristar's giving written
notice to ▇▇▇▇▇▇▇ of its intention to exercise this option,
unless Ameristar and ▇▇▇▇▇▇▇ agree on an option price within
thirty (30) days of such notice, Ameristar and ▇▇▇▇▇▇▇ shall each
choose an MAI appraiser, which appraisers shall then in turn
select a third appraiser. For purposes of this Section 11.11,
the "mean appraised value" shall mean during the first year of
the option period one hundred twenty-five percent (125%) of the
mean of the two (2) closest appraised fair market values of the
Property Interests, and during the remainder of the option period
the option price shall be equal to one hundred fifteen percent
(115%) of such mean of the two (2) closest appraisals; provided,
however, that in any event throughout the term of the option the
option price shall not be less than the lesser of the outstanding
balance owed on any Leasehold Lien(s) on the Property Interests
subject to this option, or the Aggregate Principal Amount (plus
accrued interest and costs of collection related to the Leased
Land). Upon receipt of the appraisals necessary to determine the
option price, Ameristar shall have sixty (60) days to determine
whether to proceed in exercising the option. If Ameristar elects
not to proceed with a closing under the option, it shall
reimburse ▇▇▇▇▇▇▇ for the out-of-pocket costs incurred by ▇▇▇▇▇▇▇
for the appraisals. Any future notice of intention by Ameristar
with respect to the option shall require new appraisals unless
otherwise agreed by the parties. Ameristar agrees that in the
event of any foreclosure sale by a Leasehold Lender under a
Leasehold Lien, this option in favor of Ameristar shall be deemed
to be subordinate to such Leasehold Lien, provided that prior to
the time of such foreclosure sale, Ameristar shall have the
rights specified in Sections 4.4, 4.5(f)(vii), and this Section
11.11 of this Lease. After the expiration of the option period
set forth herein, through the remainder of the Ground Lease term
Ameristar shall have, and is hereby granted by ▇▇▇▇▇▇▇, a right
of first refusal for a period of sixty (60) days after
Ameristar's receipt of notice from ▇▇▇▇▇▇▇ to purchase the
Property Interests for the same price and terms as ▇▇▇▇▇▇▇ is
willing to sell to any third-party offer ▇▇▇▇▇▇▇ intends to
accept. ▇▇▇▇▇▇▇ agrees to provide Ameristar with a true and
complete copy of any such offer at the same time as it gives
Ameristar written notice pursuant to this right of first refusal.
If Ameristar does not exercise its right of first refusal, and
the proposed
transaction does not close, or is modified in any way,
Ameristar's right of first refusal shall continue as to the
modified offer and any future or other offers which ▇▇▇▇▇▇▇ would
intend to accept. This right of first refusal granted by ▇▇▇▇▇▇▇
herein shall expire immediately prior to any foreclosure sale
conducted by Leasehold Lender, or upon Leasehold Lender's
recording of a deed in lieu of foreclosure.
11.12 SIGNAGE. Ameristar grants to ▇▇▇▇▇▇▇ the right to
erect a sign on Ameristar's property at a location to be approved
by Ameristar in its sole and absolute discretion. The costs of
acquiring, erecting and maintaining the sign shall be borne by
▇▇▇▇▇▇▇. Ameristar agrees to grant to ▇▇▇▇▇▇▇ all necessary
easements allowing the existence of the sign and access to
▇▇▇▇▇▇▇ to maintain the sign. The proposed design of the sign
shall be submitted by ▇▇▇▇▇▇▇ to Ameristar and it shall not be
inconsistent or interfere with the Ameristar sign or obstruct or
interfere with "view corridors" of any Ameristar facility. In
the event of any dispute with respect to the proposed design or
location of the sign, such party agrees to cooperate with the
other party and use its best efforts to immediately resolve the
dispute.
IN WITNESS WHEREOF, the parties have caused this Ground
Lease Agreement to be executed as of the above stated date.
AMERISTAR:
Ameristar Casino Council Bluffs, Inc.
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Its: Vice President
▇▇▇▇▇▇▇:
River Road Hotel Associates, L.C.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Member
STATE OF NEVADA )
: ss.
COUNTY OF ▇▇▇▇▇ )
The foregoing instrument was acknowledged before me this
28th day of May, 1999, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, the Vice President
of Ameristar Casino Council Bluffs, Inc., an Iowa corporation.
My commission expires: /s/▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Notary Public
10/23/00 Residing at: Las Vegas, NV
STATE OF IOWA )
: ss.
COUNTY OF Cerro Gordo )
The foregoing instrument was acknowledged before me this
28th day of May, 1999, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the Member of River
Road Hotel Associates, L.C., an Iowa limited liability company.
My commission expires: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr.
Notary Public
9/26/2000 Residing at: ▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇
EXHIBIT A
LEGAL DESCRIPTION
EXHIBIT A-1
SITE PLAN
EXHIBIT B
AMERISTAR MARKS
EXHIBIT C
▇▇▇▇▇▇▇ AND FRANCHISOR MARKS
EXHIBIT D
MEMORANDUM OF LEASE
[To be recorded in County Records.]