EXHIBIT 10.3

 

AMENDED AND RESTATED

 

MASTER AGREEMENT OF PURCHASE AND SALE

 

BETWEEN

 

THE MAYOR AND ALDERMEN

 

OF THE CITY OF VICKSBURG, MISSISSIPPI

 

AND

 

COLUMBIA PROPERTIES VICKSBURG, LLC,

 

A MISSISSIPPI LIMITED LIABILITY COMPANY

 

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TABLE OF CONTENTS

 

DEFINITIONS

1

ARTICLE 1

5

Section 1.01 Columbia’s Payments to the City Upon Transfer of Riverboat Casino

5

Section 1.01.1. Amount of Payments

5

Section 1.01.2. Timing and Reporting of Payments

6

Section 1.01.3. Means of Payment

6

Section 1.01.4. Columbia’s Accounting Records

6

Section 1.01.5. City’s Right to Audit

6

Section 1.01.7. Late Payment

7

 

 

ARTICLE 2. SHORESIDE FACILITIES SITES DEVELOPMENT

7

Section 2.01. Shoreside Facilities Sites Development

7

Section 2.02. Columbia’s Right to Perform Alterations and Construct Additions to
Casino Support Facilities

8

Section 2.03. Floodwall

8

Section 2.04. Columbia’s Obligation to Maintain Casino Support Facilities

8

Section 2.05. Insurance

9

Section 2.05.1. Columbia to Insure

9

Section 2.05.1.1. Casualty

9

Section 2.05.1.2. Liability

9

Section 2.05.1.3. Workers’ Compensation

9

Section 2.05.1.4. Other

10

Section 2.05.2. Nature of Insurance Program

10

Section 2.05.3. Policy Requirements and Endorsements

10

Section 2.05.3.1. Additional Insureds

10

Section 2.05.3.2. Primary Coverage

10

Section 2.05.3.3 Columbia’s Acts or Omissions

10

Section 2.05.3.4. Insurance Carrier Standards

10

Section 2.05.3.5. Notice to the City

10

Section 2.05.4. Deliveries to the City

10

Section 2.05.5. Blanket and Umbrella Policies

11

Section 2.05.6. Columbia’s Inability to Obtain Insurance

11

Section 2.05.7. Waiver of Certain Claims

11

Section 2.05.8. No Representation of Adequate Coverage

11

Section 2.06. Damage or Destruction

12

Section 2.06.1. Notice; No Payment Abatement

12

Section 2.06.2. Adjustment of Claims; Use of Insurance Proceeds

12

Section 2.06.3 Depository

12

Section 2.07. Quiet Enjoyment

13

 

 

ARTICLE 3. CITY GARAGES

13

 

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Section 3.01. City Garages

13

 

 

ARTICLE 4. INITIAL RIVERBOAT CASINO

13

Section 4.01. Initial Riverboat Casino

13

 

 

ARTICLE 5. ADDITIONAL COLUMBIA RIVERBOAT CASINO

14

Section 5.01. Additional Columbia Riverboat Casino

14

 

 

ARTICLE 6. CASINO DEVELOPMENT RESTRICTION ON THIRD PARTIES

15

Section 6.01. Casino Development Restriction on Third Parties

15

 

 

ARTICLE 7. TERMINATION FEE

16

Section 7.01. Termination Fee

16

Section 7.02. Permanent Removal of Second Riverboat Casino But First Riverboat
Casino Remains in Operation

18

 

 

ARTICLE 8. EMPLOYMENT IN LOCAL COMMUNITY

18

Section 8.01. Employment in Local Community

18

 

 

ARTICLE 9. CITY’S REVERSIONARY INTEREST IN SHORESIDE FACILITIES SITES

18

Section 9.01. City’s Reversionary Interest

18

Section 9.02. Exchange of Deeds

18

 

 

ARTICLE 10. CLAUSES TO ENSURE MORTGAGEABILITY OF THE SHORESIDE FACILITIES SITES

19

Section 10.01. Rights to Mortgage Shoreside Facilities Sites

19

Section 10.02. Estoppel Certificates

19

Section 10.02.1. Rights of Each Party

19

Section 10.02.2. Failure to Execute Estoppel Certificate

19

Section 10.02.3. Delivery of Estoppel Certificates

20

Section 10.03. Event of Default

20

Section 10.03.1. Monetary Default

20

Section 10.03.2. Non-Monetary Default

20

Section 10.03.3. Remedies

21

Section 10.03.4. Pending Dispute Regarding Event of Default

21

Section 10.04. In the Event Columbia Temporarily Ceases to Operate the Casino
Support Facilities or the Riverboat Casino

22

Section 10.05. Other Mortgagee Protection Provisions

23

Section 10.05.1. Modifications Required by Mortgagee

23

Section 10.05.2. Initial Notice

23

Section 10.05.3. Termination of Mortgagee’s Rights

23

Section 10.05.4. Cancellation, Surrender, Amendment, Etc.

23

Section 10.05.5. Copies of Notices

23

 

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Section 10.05.6. Columbia’s Cure Period Expiration Notice

24

Section 10.05.7. Right to Perform Covenants and Agreements

24

Section 10.05.8. Transfer of Columbia’s Rights

24

Section 10.05.9. Notice of Default and Mortgagee’s Cure Rights

24

Section 10.05.10. Effect of Cure

25

Section 10.05.11. Quiet Enjoyment

26

Section 10.05.12. Failure by Mortgagee to Cure Events of Default

26

Section 10.05.13. Mortgagee’s Right to Enter the Shoreside Facilities Sites

26

Section 10.05.14. Rights of Mortgagee Upon Acquiring Control

26

Section 10.05.15. Payments Made by Mortgagee

27

Section 10.06. Prohibition on City Granting Mortgage

27

Section 10.07. Bankruptcy

27

Section 10.07.1. Affecting Columbia

27

Section 10.07.2. Affecting the City

27

Section 10.08. Default by the City

28

 

 

ARTICLE 11. REPRESENTATIONS, WARRANTIES AND COVENANTS

28

Section 11.01. Representations and Warranties

28

Section 11.02. Covenants

30

Section 11.03. Survival of Representations, Warranties, and Covenants

30

Section 11.04. Columbia’s Representations and Warranties

31

 

 

ARTICLE 12. MISCELLANEOUS

31

Section 12.01. Execution by Both Parties

31

Section 12.02. Captions

31

Section 12.03. Entire Agreement

31

Section 12.04. Successors and Assigns

31

Section 12.05. Sale of Fee Simple Title

32

Section 12.06. Gender and Number

32

Section 12.07. Attorneys’ Fees and Other Costs

32

Section 12.08. Governing Law

33

Section 12.09. Notices

33

Section 12.10. Period of Time

34

Section 12.11. Preparation of Agreement

34

Section 12.12. Exhibits

34

Section 12.13. Further Agreements

34

Section 12.14. No personal Liability

34

Section 12.15. Agreement to Cooperate

34

Section 12.17. Authority to Execute

35

Section 12.18. Force Majeure

35

Section 12.19. City as Landowner

35

Section 12.20. Counterparts

35

Section 12.21. Recording Fees

35

 

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AMENDED AND RESTATED
MASTER AGREEMENT OF PURCHASE AND SALE

 

This Amended and Restated Master Agreement of Purchase and Sale (this
“Agreement”) is made and entered into by and between THE MAYOR AND ALDERMEN OF
THE CITY OF VICKSBURG, MISSISSIPPI (“City”), and COLUMBIA PROPERTIES VICKSBURG,
LLC, a Mississippi limited liability company (“Columbia”).

 

RECITALS:

 

A. The City implemented a master riverfront redevelopment plan for downtown
Vicksburg which included a riverboat casino and a hotel initially owned by
Harrah’s Vicksburg Corporation. The City and Harrah’s entered into a Master
Agreement for Purchase and Sale dated January 21, 1993, and recorded in Book
978, page 366 of the Warren County Mississippi Land Records. For and in
consideration of the mutual promises and covenants set forth herein the City and
Columbia desire to modify certain provisions of the original Master Agreement
for Purchase and Sale.

 

B. Columbia desires to operate a riverboat casino and hotel as part of the
City’s riverfront redevelopment plan for downtown Vicksburg.

 

DEFINITIONS

 

Capitalized terms found herein shall have the meaning ascribed to them in the
Master Agreement of Purchase and Sale, dated January 21, 1993, between The Mayor
and Aldermen of the City of Vicksburg, Mississippi and Harrah’s Vicksburg
Corporation, unless defined herein.

 

The following defined terms shall have the stated meanings for the entire
Agreement unless otherwise specifically stated in the Agreement itself:

 

“Agreement” shall mean this Amended and Restated Master Agreement of Purchase
and Sale made and entered into by and between The Mayor and Aldermen of the City
of Vicksburg, Mississippi and Columbia Properties Vicksburg, LLC, a Mississippi
limited liability company.

 

“Bankruptcy Proceedings” shall mean any proceeding involving a party to this
Agreement under the United States Bankruptcy Code or any similar state or
federal statute for the relief of debtors.

 

“Casino Opening Date” shall mean that specific date on which the Casino
commenced operations in Mississippi: November 15, 1993.

 

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“Casino Support Facilities” shall mean the pavilions, walkways, boardwalks, and
docking facilities required to bring customers from the Hotel to the Riverboat
Casino, the City Garages, and related facilities.

 

“Casualty” shall mean any damage or destruction affecting (i) the Casino Support
Facilities; or (ii) the Riverboat Casino, the Second Riverboat Casino or a
substitute riverboat casino.

 

“City Garages” shall mean the two parking garages containing 800 parking spaces
owned by Columbia.

 

“City Property” shall mean Tract 12, the Crawford Street Property, Tract 11,
Tract 39, Air Right Property, Tract 15, Tract 63 and the Second Riverboat
Property, formerly owned by the City and sold to Harrah’s. See attached
Exhibit “A”.

 

“Columbia Sussex Corporation, Inc. (“CSC”)” shall mean that specific company
which is providing a guaranty on behalf of Columbia in this transaction.

 

“Consumer Price Index” shall mean the Consumer Price Index for All Urban
Consumers published by the Bureau of Labor Statistics of the United States
Department of Labor, United States City Average, all items (1982-1984 = 100). If
such index is no longer published, then Columbia shall designate a successor or
replacement index of substantially equivalent reliability and objectivity. The
Consumer Price Index in effect for any given date shall be deemed to refer to
the Consumer Price Index last published before such date.

 

“Effective Date” shall mean that date upon which the Amended and Restated Master
Agreement of Purchase and Sales has been fully executed and delivered by
Columbia and the City.

 

“Event of Default” shall mean the occurrence of any one or more of the
circumstances set forth in Section 10.03 arising in relation to the Shoreside
Facilities Sites after the Transfer Date (subject to the rights of mortgagees
set forth herein).

 

“Fiscal Month” shall mean Columbia’s actual fiscal month as in effect from time
to time. Such term shall also mean and refer to any partial fiscal month arising
because of a change in Columbia’s fiscal month, subject to proration of any
periodic payments calculated on the basis of a Fiscal Month.

 

“Fiscal Year” shall mean Columbia’s actual fiscal year as in effect from time to
time. Such term shall also mean and refer to any partial fiscal year arising
because of a change in Columbia’s fiscal year or because of a variation between
the commencement date of Columbia’s fiscal year and the date when Columbia is
required to commence to pay the Percentage Amount

 

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calculated with respect to each Fiscal Year (in each case subject to proration
of any periodic payments calculated on the basis of a Fiscal Year).

 

“Fixed Amount” shall mean the amount payable by Columbia to the City, defined as
$562,939.56 per annum, adjusted annually by the Consumer Price Index, with the
base year being 2003. The annual adjustment will be calculated as of
December 1st.

 

“Force Majeure” shall mean an event of force majeure shall include, but not be
limited to, acts of war, insurrection, civil strife and commotion, labor unrest,
acts of God or the discovery of Hazardous Chemicals.

 

“Gross Revenues” shall mean all revenues of any nature derived directly or
indirectly from the Casino Support Facilities and the Riverboat Casino,
including Net Gaming Revenue Win, as defined, food and beverage sales and other
rental or other receipts from lessees, sublessees, licensees and concessionaries
(but not the gross receipts of such lessees, sublessees, licensees or
concessionaires, provided that such lessees, sublessees, licensees and
concessionaires are not subsidiaries or affiliates of Columbia), and revenue
recorded for complimentary food and beverage and merchandise extended to patrons
as promotional items. The revenue from the City Garages and the hotel rooms are
hereby specifically excluded from the calculation of Gross Revenues.

 

“Harrah’s Vicksburg Corporation” or “Harrah’s” shall mean that corporation
licensed by the Mississippi Gaming Commission and operating the facilities that
are the subject of this Agreement and a party to the original Master Agreement
prior to the Transfer Date.

 

“Hazardous Chemical” shall mean any toxic or hazardous substance as defined in
42 U.S.C. § 9601(14); any petroleum product, including, without limitation,
crude oil or any fraction thereof, natural gas liquid, liquefied natural gas or
synthetic gas, asbestos and other pollutants, and any chemical subject to
reporting under EPCRKA; has attached to (or been asserted to exist with respect
to) the Hotel Site by reason of any state, federal or local agency or body
expending monies to clean up or remove any substance referred to in
Section 11.01(r).

 

“Hotel” shall mean the Hotel adjacent to the riverboat Casino which contains 117
rooms and various other related facilities.

 

“Net Gaming Revenue Win” shall mean the sum total of (a) cash received as
winnings from slot machines, table games, keno, sportsbook, racebook, poker
bingo and other games; (b) cash received in payment for credit extended by
Columbia to a patron for purposes of gaming; and (c) compensation received for
conducting any game in which Columbia is not party to a wager; less the total of
all cash paid out as losses to patrons, those amounts paid to purchase annuities
to fund losses paid to patrons over several years by independent financial
institutions and any other items made deductible as losses in the ordinary
course of business according to Columbia’s standard accounting system.

 

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“Net Revenues” shall mean Gross Revenues, as defined, less the following
revenues actually received by Columbia and included in Gross Revenues: (i) any
gratuities or service charges added to a customer’s bill; (ii) any credits or
refunds made to customers, guests or patrons; (iii) any sums and credits
received by Columbia for lost or damaged merchandise; (iv) any sales taxes,
excise taxes, gross receipt taxes, admission taxes, entertainment taxes, tourist
taxes or charges received from patrons and passed on to a governmental or
quasi-governmental entity (This is specifically not intended to create a
deduction for any state, county or municipal tax on gaming revenues or gaming
equipment which are imposed on the operator of a gaming facility.); (v) any
proceeds from the sale or other disposition of furnishings and equipment or
other capital assets; (vi) any fire and extended coverage insurance proceeds;
(vii) any condemnation awards; (viii) any proceeds of financing or refinancing;
(ix) any interest on bank account(s); and (x) revenues representing
complimentary food and beverage and merchandise extended to patrons as
promotional items.

 

“Percentage Amount” shall mean the 1.5 percent (1.5%) of Net Revenues Columbia
agrees to pay the City annually in addition to the Fixed Amount.

 

“Prime Rate” shall mean the prime rate or equivalent “base” or reference” rate
for corporate loans that, at Columbia’s election, by notice to the City, is:
(a) published from time to time in The Wall Street Journal; (b) announced from
time to time by Citibank, N. A., New York, New York, or any other large United
States “money center” commercial bank designated by Columbia; or (c) if such
rate is no longer so published or announced, then a reasonably equivalent rate
published by an authoritative third party designated by Columbia, subject to the
City’s consent which shall not be unreasonably withheld. Notwithstanding
anything to the contrary in this paragraph, the Prime Rate shall never exceed
the highest rate of interest legally permitted to be charged in transactions of
the character of this Agreement between parties of a character similar to the
City and Columbia.

 

“Riverboat Casino” shall mean a riverboat casino containing approximately 20,000
square feet of casino space and approximately 900 gaming positions which will be
docked or moored in and connected with the Casino Support Facilities.

 

“Second Riverboat Casino” shall mean that certain riverboat casino located or to
be located on the Second Riverboat Property. The exterior of the Second
Riverboat Casino shall resemble the paddlewheel or side wheel riverboats that
were an integral part of the Mississippi riverboat history.

 

“Second Riverboat Property” shall mean that certain additional 450 feet of tract
63 along the floodwall as generally depicted on Exhibit “A” which property shall
be adjacent to that certain waterfront property defined as Tract 63 herein, on
which the Riverboat Casino will be docked.

 

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“Shoreside Facilities Sites” shall mean, collectively, Tracts 11 and 39, Tract
15, Tract 63, the Second Riverboat Property, Air Right Property, and Selby
Property, subject to the City’s reversionary rights.

 

“Transfer Date” shall mean the date upon which the Riverboat Casino, Second
Riverboat Casino and any substitute riverboat casino; Hotel; Casino Support
Facilities; and all other properties and facilities contemplated in the
Agreement are transferred from the Harrah’s Vicksburg Corporation to Columbia.

 

“Transfer of Ownership” shall mean that transfer of the Riverboat Casino, Second
Riverboat Casino and any substitute riverboat casino; Hotel; Casino Support
Facilities; and all other properties and facilities contemplated in the
Agreement that are transferred from Harrah’s Vicksburg Corporation to Columbia.

 

“Waiver of Subrogation” shall mean a provision in, or endorsement to, any
insurance policy required by this Agreement, by which the insurance carrier
agrees to waive all rights of recovery by way of subrogation against either
party to this Agreement in connection with any loss covered by such insurance
policy.

 

A G R E E M E N T:

 

IN CONSIDERATION OF THE SUMS TO BE PAID BY COLUMBIA TO THE CITY, THE COVENANTS,
AGREEMENTS AND WARRANTIES OF THE PARTIES HEREIN CONTAINED, AND IN CONSIDERATION
OF THE RECITALS SET FORTH ABOVE, WHICH ARE HEREBY INCORPORATED AS PART OF THIS
AGREEMENT BY REFERENCE, AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT
AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE CITY AND COLUMBIA AGREE AS
FOLLOWS:

 

ARTICLE 1

 

Section 1.01 Columbia’s Payments to the City Upon Transfer of Riverboat Casino.

 

Section 1.01.1. Amount of Payments. In consideration for Columbia’s acquisition
of fee simple title subject to the City’s reversionary interest therein to
Tracts 11 and 39, Tract 15, Tract 63, the Second Riverboat Property, the Selby
Property and the Air Right Property, and in consideration for the City granting
Columbia the exclusive casino development on City-owned or leased property, upon
the transfer of ownership of the Riverboat Casino (“Transfer Date”) and
continuing until the date 30 years thereafter, Columbia agrees to pay the City
$562,939.56 per annum adjusted annually by the Consumer Price Index, as defined,
with the base year being the calendar year of the Transfer Date (2003) (“Fixed
Amount”), plus 1.5 percent (1.5%) of Net Revenues, as term is defined,
(“Percentage Amount”). The Percentage

 

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Amount shall be payable monthly, on the 20th of the month, and is based on the
preceding month’s revenue. Inasmuch as amounts due the City will be prorated
between Columbia and Harrah’s on the Transfer Date, Columbia shall pay the
Percentage Amount for the entire month that the Transfer Date occurs, including
that portion applicable to Harrah’s. Columbia shall also pay the Percentage
Amount due for the month preceding the Transfer Date if the Transfer Date is on
or prior to the 20th of the month.

 

Section 1.01.2. Timing and Reporting of Payments. Columbia shall pay the Fixed
Amount in equal monthly installments in advance on the twentieth (20th) day of
each Fiscal Month, as defined, with the first payment becoming due the month
that the Transfer Date occurs if the Transfer Date is prior to the 20th of the
month. If the Transfer Date is on or after the 20th, then the first payment
shall be made the 20th of the following month.

 

Section 1.01.3. Means of Payment. Columbia shall pay all amounts payable to the
City under Section 1.01 by either of the following, at Columbia’s election,
which election Columbia may change from time to time by at least thirty
(30) days notice to the city: (a) good and sufficient check (subject to
collection) delivered to the City; or (b) wire transfer to the City’s bank
account, which the City shall identify to Columbia upon request (and the City
shall have the right to change from time to time by at least thirty (30) days
notice to Columbia).

 

Section 1.01.4. Columbia’s Accounting Records. Columbia shall maintain (in
Vicksburg or at a central accounting location identified to the City upon
request) accounting records and procedures complying with Columbia’s accounting
standards to enable Columbia to calculate any Percentage Amount due. Columbia
shall preserve Columbia’s books and records relating to each Fiscal Year, as
defined, for at least three (3) years after the end of such Fiscal Year. If at
the conclusion of such three-year period a dispute is pending between the City
and Columbia regarding the amount of Net Revenues, then Columbia shall continue
to preserve such records pending the final disposition of such dispute. Columbia
shall not be responsible for any of Harrah’s accounting records. Any information
regarding Harrah’s accounting, desired by the City, shall be requested, by the
City, directly from Harrah’s prior to the Transfer Date.

 

Section 1.01.5. City’s Right to Audit. Within (and in no event later than) one
hundred eighty (180) days after the end of each Fiscal Year, the City shall be
entitled to cause a certified public accountant designated by the City (and
approved by Columbia, such approval not to be unreasonably withheld) to audit
Columbia’s books and records relevant to the calculation of Net Revenues
reported by Columbia during the preceding Fiscal Year. Any audit shall be
performed in a reasonable manner, during ordinary business hours and without
unreasonably interfering with Columbia’s business. If such audit reveals that
Net Revenues were understated, then within thirty (30) days after receipt of the
audit with appropriate backup documentation, Columbia shall pay the net
additional Percentage Amount due on account of the audit corrections. If such
audit reveals that Net Revenues were overstated, then Columbia shall be entitled
to a credit against the next payment(s) of the Percentage Amount in an amount
equal to the previous overpayment revealed by the audit corrections. Any
adjusting payment on account of previous overpayment

 

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or underpayment shall bear interest at the Prime Rate, as defined, from the date
it would have been paid (or the date of Columbia’s previous overpayment, if
applicable) had Columbia’s annual statement been correct until the date actually
paid or credited. If Percentage Amount was understated by more than 5 percent
(5%), then Columbia shall pay the reasonable cost of such audit; otherwise the
audit shall be conducted at the City’s expense.

 

Columbia hereby agrees to permit the City to obtain from the state of
Mississippi copies of any of its filings in relation to the development
described herein, including the sales tax, gross revenues tax and any other
tax-related information. Columbia hereby authorizes the state of Mississippi tax
commission or other applicable governmental entity to release such information
as requested in writing by the City. The City shall provide Columbia with a copy
of any request made for the above described information.

 

Section 1.01.6. INTENTIONALLY OMITTED

 

Section 1.01.7. Late Payment. If Columbia makes any payment required under this
Section 1.01 more than thirty (30) days after such payment is first due and
payable, then in addition to any other remedies the City may have, and without
reducing or adversely affecting any of the City’s other rights and remedies,
Columbia shall pay the City, within thirty (30) days after demand, interest on
such late payment, at an interest rate equal to the Prime Rate, beginning on the
thirty-first (31ST) day after such payment was first due and payable and
continuing until the date when Columbia actually makes such payment. If Columbia
makes any payment due under this Section 1.01 more than thirty (30) days after
such payment is due and Columbia has, during the preceding Fiscal Year, twice
previously failed to make any payment due under this Section 1.01 within thirty
(30) days after such payment was first due and payable, then, in addition to any
other remedies the City may have, and without reducing or adversely affecting
any of the City’s other rights and remedies, Columbia shall within thirty
(30) days after demand pay the City interest on such late payment, at an
interest rate equal to the Prime Rate, beginning on the date such payment was
first due and payable and continuing until the date when Columbia actually makes
such payment.

 

ARTICLE 2
SHORESIDE FACILITIES SITES DEVELOPMENT

 

Section 2.01. Shoreside Facilities Sites Development.

 

The City shall give Columbia its full cooperation and shall cause its employees
and representatives to assist Columbia in applying for and obtaining any
re-zoning, licensing, and permitting processes required by the municipality for
the development of the Casino Support Facilities on the Shoreside Facilities
Sites to be undertaken in an expeditious manner.

 

If Columbia so elects, the City, at Columbia’s expense, will either apply for or
jointly apply for with Columbia all U.S. Army Corps of Engineers permits
required to undertake the

 

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dredging and construction activity on the Yazoo River necessary to continue to
dock the riverboat casino and related facilities. Upon the reversion of fee
simple title to the City, any U.S. Army Corps of Engineers permits or licenses
received in relation to the Casino Support Facilities which are assignable or
transferable shall be assigned or transferred by Columbia to the City.

 

Section 2.02. Columbia’s Right to Perform Alterations and Construct Additions to
Casino Support Facilities. At Columbia’s sole cost and expense, Columbia shall
be entitled, but not required, to make and from time to time alter, modify or
reconstruct any improvements, repairs or alterations to the Casino Support
Facilities as Columbia shall consider necessary or appropriate. Columbia, at its
sole cost and expense, shall have the right to add facilities to the Casino
Support Facilities or on the Shoreside Facilities Sites. Columbia shall have the
right to demolish existing Casino Support Facilities provided that the
demolished Casino Support Facilities are replaced with Casino Support Facilities
of comparable value to those demolished. In the event Columbia desires to
demolish all or a part of the Casino Support Facilities and not replace such
Casino Support Facilities with new Casino Support Facilities of a comparable
value, Columbia shall obtain the written approval of the City prior to the
commencement of demolition. Columbia shall perform all construction work in
connection with any improvement, repair or alteration to the Casino Support
Facilities or additions on the Shoreside Facilities Sites in substantial
compliance with all applicable laws, permits, regulations, licenses and codes.

 

When alterations or additions are made to the Casino Support Facilities, an “As
Built” set of plans reflecting such alterations or additions shall be delivered
to the City after such alterations and additions are completed.

 

The City has agreed to close that portion of South Street where Columbia owns
both sides of the street. Columbia will file a petition to close that portion of
South Street, reserving access rights to the floodwall and gates to meet the
City’s obligation under its agreement with the U.S. Army Corps of Engineers. The
City agrees to assist Columbia in filing any such petition. The City further
agrees to assist Columbia with any additional petition to close the streets.

 

Section 2.03. Floodwall. Columbia agrees to keep the floodwall gates on Tract
15, Tract 63 and the Second Riverboat Property open and accessible to the City
so that said floodwall gates can be closed by the City in the event of high
water. Columbia furthermore agrees to give the City access over the Shoreside
Facilities Sites to the floodwall located on the Shoreside Facilities Sites to
perform maintenance and repair on said portion of the floodwall. Until such time
as the Second Riverboat Property is utilized for the Second Riverboat Casino,
the Clay Street entrance at the floodwall shall remain open for public vehicular
and pedestrian use. It is not the intention of the parties to covey the strip of
land on which the floodwall actually sits.

 

Section 2.04. Columbia’s Obligation to Maintain Casino Support Facilities.
Columbia agrees to maintain the Casino Support Facilities, as periodically
altered or constructed, in good order, condition and repair subject to Casualty,
as defined, and reasonable wear and tear.

 

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Section 2.05. Insurance.

 

Section 2.05.1. Columbia to Insure. Columbia shall, at Columbia’s sole cost and
expense, prior to reversion of the Shoreside Facilities Sites and the Casino
Support Facilities located thereon to the City, maintain the following insurance
(or its then reasonably available equivalent):

 

Section 2.05.1.1. Casualty. Casualty insurance providing coverage for the
Shoreside Facilities Sites and Casino Support Facilities and all equipment,
fixtures, and machinery at or in the Casino Support Facilities, against loss,
damage, and destruction by fire and other hazards encompassed under broad form
coverage as may be customary for like properties in Warren County in the state
of Mississippi (but Columbia shall in no event be required to maintain war risk
insurance) from time to time, in an amount not less than 80 percent (80%) of the
replacement value of the insurable buildings, structures, improvements and
equipment (excluding excavations and foundations) located on the Shoreside
Facilities Sites, but in any event sufficient to avoid co-insurance in the event
of a partial loss. To the extent customary for like properties at the time, such
insurance shall include coverage for explosion of steam and pressure boilers and
similar apparatus located in the Casino Support Facilities; an “increased cost
of construction” endorsement; and an endorsement covering demolition and cost of
debris removal.

 

Section 2.05.1.2. Liability. General public liability insurance against claims
for personal injury, death or property damage occurring upon, in or about the
Casino Support Facilities or on the Shoreside Facilities Sites, including
so-called garage keeper’s legal liability coverage. The coverage under all such
liability insurance shall be at least TEN MILLION DOLLARS AND 00/100
($10,000,000) in respect of injury or death to a single person, and at least TEN
MILLION DOLLARS AND 00/100 ($10,000,000), in respect of any one accident, and
not less than TEN MILLION DOLLARS AND 00/100 ($10,000,000) for property damage.
The City shall be entitled, from time to time, upon one hundred eighty
(180) days notice to Columbia to increase the dollar limits set forth in this
paragraph, subject to the following limitations, which shall be cumulative:
(a) such increased limits shall never exceed the limits initially set forth plus
an increase proportionate to the increase in the Consumer Price Index from the
Casino Opening Date to the date of the adjustment, rounded to the nearest
million dollars; (b) such limits shall never exceed the limits customarily
maintained for similar commercial properties located in Warren County; and
(c) the City shall not be entitled to increase such limits more frequently than
once every three (3) years.

 

Section 2.05.1.3. Workers’ Compensation.

 

Workers’ compensation insurance covering all persons employed in connection with
the construction, alteration, repair or operation of the Casino Support
Facilities, and with respect to whom any claim could be asserted against the
City.

 

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Section 2.05.1.4. Other. All insurance required by any mortgage and such other
insurance as Columbia determines appropriate in exercise of Columbia’s
reasonable business judgment.

 

Section 2.05.2. Nature of Insurance Program. Any or all insurance required by
this Agreement may be provided by a “captive” insurance company affiliated with
Columbia or, by notice to the City specifying the risks being covered by
self-insurance, through a self-insurance program provided, in the latter case,
that the self-insuring entity is (a) an affiliate or subsidiary of Columbia or
its parent company; or (b) any other substantial entity that, in the City’s
reasonable judgment, has sufficient assets and net worth under the
circumstances.

 

Section 2.05.3. Policy Requirements and Endorsements. All insurance policies
required by this Agreement shall contain (by endorsement or otherwise) the
following provisions:

 

Section 2.05.3.1. Additional Insureds. To the extent consistent with ordinary
insurance practices, liability insurance policies shall name as additional
insured the City and any mortgagees.

 

Section 2.05.3.2. Primary Coverage. All policies shall be written as primary
policies not contributing with or in excess of any coverage that the City may
carry.

 

Section 2.05.3.3. Columbia’s Acts or Omissions. Each policy shall include, if
available without additional cost, a provision that any act or omission of
Columbia shall not prejudice any other party’s rights (other than Columbia)
under such insurance coverage.

 

Section 2.05.3.4. Insurance Carrier Standards. Each insurance carrier shall be
authorized to do business in the state of Mississippi and shall have a “Best’s”
rating of at least A VII, except to the extent such insurance is provided in
compliance with this Agreement by an affiliated “captive” insurance company or
pursuant to Columbia’s self-insurance program.

 

Section 2.05.3.5. Notice to the City. The insurance carrier shall undertake to
give the City thirty (30) days prior written notice of cancellation or
non-renewal, other than on account of nonpayment of premiums, provided that
(except in the case of a “captive” insurance carrier) failure to give such
notice shall not adversely affect the rights or increase the obligations of the
insurance carrier.

 

Section 2.05.4. Deliveries to the City. Upon notice to such effect by the City,
Columbia shall deliver to the City policies or certificates or certified copies
of the insurance policies required by this Agreement, endorsed “Paid” or
accompanied by other evidence that the premiums for such policies have been paid
before the expiration of any then current policy.

 

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Section 2.05.5. Blanket and Umbrella Policies. Columbia may provide any
insurance required by this Agreement pursuant to a “blanket” or “umbrella”
insurance policy, provided that (i) such policy or a certificate of such policy
shall specify the amount(s) of the total insurance allocated to the Shoreside
Facilities Sites and Casino Support Facilities, which amount(s) shall be subject
to reduction on account of claims made with respect to other properties; and
(ii) such policy otherwise complies with this Agreement.

 

Section 2.05.6. Columbia’s Inability to Obtain Insurance. If (a) any insurance
required by this Agreement should, after diligent effort by Columbia, be
unobtainable at commercially reasonable rates through no act or omission by
Columbia; and (b) Columbia shall obtain the maximum insurance reasonably
obtainable and give written notice to the City of the extent of Columbia’s
inability to obtain any insurance required to be maintained under this
Agreement, then unless Columbia’s inability to procure and maintain such
insurance results from some activity or conduct within Columbia’s reasonable
control, Columbia’s obligation to procure and maintain such insurance as is
unobtainable shall be excused. To the extent that such insurance may be
obtainable by the City at a cost per million dollars of coverage not exceeding
110 percent (110%) of the cost per million dollars of coverage of the insurance
of the same type actually obtained by Columbia, the City may (unless Columbia
has elected to self-insure, in compliance with this Agreement, the risk in
question) at Columbia’s cost and expense procure and maintain such insurance,
which shall be issued in Columbia’s name and otherwise comply with all
applicable requirements of this Agreement.

 

Section 2.05.7. Waiver of Certain Claims. To the extent that the City or
Columbia purchases any hazard insurance relating to the Casino Support
Facilities, the party purchasing such insurance shall attempt to cause the
insurance carrier to agree to a Waiver of Subrogation, as defined. If any
insurance policy cannot be obtained with a Waiver of Subrogation, or a Waiver of
Subrogation is obtainable only by the payment of an additional premium, then the
party undertaking to obtain the insurance shall give notice of such fact to the
other party. The other party shall then have ten (10) business days after
receipt of such written notice either to place the insurance with a company that
is reasonably satisfactory to the other party and that will issue the insurance
with a Waiver of Subrogation at no additional cost, or to agree to pay the
additional premium if such a policy can be obtained only at additional cost. To
the extent that the parties actually obtain insurance with a Waiver of
Subrogation, the parties release each other, and their respective authorized
representatives, from any claims for damage to any person, the Casino Support
Facilities, that are caused by or result from risks insured against under such
insurance policies, but only to the extent of the available insurance proceeds.

 

Section 2.05.8. No Representation of Adequate Coverage. Neither party makes any
representation, or shall be deemed to have made any representation, that the
limits, scope, or form of insurance coverage specified in this Section 2.05 are
adequate or sufficient.

 

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Section 2.06. Damage or Destruction.

 

Section 2.06.1. Notice; No Payment Abatement. Columbia shall promptly give the
City written notice of any Casualty, as defined. The monthly Fixed Amount and
the Percentage Amount to be paid by Columbia during the period operations are
completely or partially closed due to Casualty shall be the average monthly
payment adjusted by the CPI of the Fixed Amount and Percentage Amount paid by
Columbia during the twelve (12) month period preceding the complete or partial
closing of operations in lieu of the Fixed Amount or Percentage Amount actually
earned during such period, unless the amount actually earned is greater than the
amount calculated in accordance with the above procedure. Columbia shall, at its
election (subject to the terms of any applicable mortgages), either: (a) with
reasonable promptness restore the damaged improvements as nearly as may be
practicable to their condition, quality, and class immediately prior to such
Casualty, with such changes or alterations (including demolition) as Columbia
shall elect to make in conformity with this Agreement; or (b) terminate this
Agreement, by at least thirty (30) days advance notice to the City, in which
event the Casino Support Facilities and Shoreside Facilities Sites shall revert
to the City, and assign to the City all of Columbia’s rights with respect to
insurance proceeds arising from the Casualty. In the event Columbia elects “b,”
Columbia shall remain liable for the payment of a termination fee calculated in
accordance with the procedure set forth in Section 7.01. Columbia’s election to
terminate under “b” shall not be effective unless joined in by all
mortgagee(s) whose mortgage(s) grant them the power to withhold consent to such
termination. If Columbia elects “b,” then the City shall have the right, by
notice to Columbia within ten (10) business days after receipt of Columbia’s
notice, to require Columbia to cause the remaining improvements to be demolished
and the debris removed, so that the Shoreside Facilities Sites are returned to
the City as vacant and level land. The parties shall cooperate to make available
the insurance proceeds for such demolition work, which Columbia shall perform
with reasonable promptness but the completion of which shall not be a condition
to termination of this Agreement and the reversion of the Shoreside Facilities
Sites to the City. Any remaining insurance proceeds after performance of such
demolition work shall belong to the City.

 

In the event the buildings, structures, improvements and equipment were insured
for less than 80 percent (80%) of their replacement value, Columbia shall fund
the difference between the actual insurance proceeds received and the amount
that would have been received had the buildings, structures, improvements and
equipment been insured for 80 percent (80%) of their replacement value.

 

Section 2.06.2. Adjustment of Claims; Use of Insurance Proceeds. Columbia shall
be solely responsible for the adjustment of any insurance claim, except that, to
the extent permitted by any mortgage, each mortgagee is expressly authorized and
empowered to participate in any settlements, adjustments, arbitrations or
proceedings with respect to any insurance claim. All proceeds of casualty or
hazard insurance shall be paid to Columbia, subject to rights of mortgagees.

 

Section 2.06.3 Depository. Upon request by any mortgagee (subject to the terms
of the applicable mortgage), all proceeds in excess of ONE MILLION DOLLARS AND
00/100

 

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(1,000,000) of casualty insurance permitted by the mortgage to be applied by
Columbia to rebuild, restore or repair the Casino Support Facilities shall be
deposited with an institutional lender designated by Columbia and the mortgagee,
to be disbursed in accordance with mortgage(s) for the repair, restoration or
reconstruction of the Casino Support Facilities.

 

Section 2.07. Quiet Enjoyment. The City covenants that, so long as the City is
not entitled to the reversion of the Shoreside Facilities Sites on account of an
Event of Default, as defined, or termination by Columbia, Columbia shall and may
peaceably and quietly have, hold and enjoy the Shoreside Facilities Sites and
the Casino Support Facilities without molestation or disturbance by or from the
City or anyone claiming by or through the City.

 

ARTICLE 3
CITY GARAGES

 

Section 3.01. City Garages. Columbia shall have the right to make such
alterations to the City Garages as it deems appropriate (i) to permit access to
the Hotel and Casino Support Facilities; and (ii) to improve their efficiency;
provided, however, Columbia shall obtain the approval of the City prior to
making any structural alterations to the City Garages. The City’s approval of
such structural alterations shall not be unreasonably delayed or withheld.

 

The City hereby approves and agrees to permit Columbia to make new entrances
from the City Garages directly on to the public alley behind the City Garages
which comprise part of Tracts 35 and 38.

 

The City hereby agrees to permit Columbia to construct additional levels of
parking on top of the existing City Garages provided that such additional levels
can be safely added without adversely affecting the structural integrity of the
existing City Garages.

 

Columbia agrees at all times to permit public access to the City Garages for
parking. The parking fee charged, if any, by Columbia for use of the City
Garages shall be the same to all customers.

 

Columbia agrees to allocate 75 (seventy five) parking spaces in a designated
area selected by Columbia in the City Garages to the City for use by the
merchants along Washington Street and employees of the City Monday through
Saturday from 7 A.M. to 7 P.M. Said individuals shall be charged at a rate
established by the City.

 

ARTICLE 4
INITIAL RIVERBOAT CASINO

 

Section 4.01. Initial Riverboat Casino. After the Transfer Date, Columbia shall
operate and maintain a riverboat casino containing approximately 20,000 square
feet of casino space and

 

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approximately 900 gaming positions, which will be docked or moored in and
connected with the Casino Support Facilities.

 

At no time shall the Riverboat Casino, a Second Riverboat Casino, as hereinafter
defined, or substitute riverboat casino be considered the property of the City.
The City hereby agrees that it shall have no right, title or interest in the
Riverboat Casino, a Second Riverboat Casino or substitute riverboat casino. All
benefits and burdens of ownership of the Riverboat Casino, a Second Riverboat
Casino or substitute riverboat casino (except for City’s right to a percentage
of the revenues generated by the Riverboat Casino, a Second Riverboat Casino or
substitute riverboat casino while docked at the Casino Support Facilities) shall
be and remain with Columbia. Columbia or a Columbia’s affiliate(s) shall have
the unrestricted right to obtain financing by granting lenders a mortgage or
security interest in the Riverboat Casino, a Second Riverboat Casino or
substitute riverboat casino; the equipment and supplies located on the Riverboat
Casino, a Second Riverboat Casino or substitute riverboat casino; and the income
and revenues generated by the Riverboat Casino, a Second Riverboat Casino or
substitute riverboat casino (except any interest in such income and revenue
shall be subject to the City’s right to receive a percentage of the revenues
generated by the Riverboat Casino, a Second Riverboat Casino or substitute
riverboat casino while docked at the Casino Support Facilities). Columbia may,
from time to time, substitute a different riverboat casino from the original
Riverboat Casino or Second Riverboat Casino constructed for the Casino Support
Facilities; provided that the substitute riverboat casino contains at least the
same number of gaming positions and complies with the same exterior design
requirements described above.

 

ARTICLE 5
ADDITIONAL COLUMBIA RIVERBOAT CASINO

 

Section 5.01. Additional Columbia Riverboat Casino. Upon the Transfer Date, the
City shall re-convey to Columbia’s fee simple title, subject to the City’s
reversionary interest in said property, that certain additional 450 feet of
Tract 63 along the floodwall as generally depicted on Exhibit “A” which property
shall be adjacent to that certain waterfront property defined as Tract 63
herein, on which the Riverboat Casino will be docked. Said additional 450 feet
of waterfront property shall be referred to as the “Second Riverboat Property.”
Columbia, at its expense, shall obtain, prior to the Transfer Date, a survey of
the Second Riverboat Property and a legal description of the Second Riverboat
Property.

 

(NOTE: PLEASE SEE DEFINITIONS SECTION FOR SECOND RIVERBOAT CASINO-PARAGRAPH WAS
MOVED NOT OMITTED)

 

On the Transfer Date, Columbia shall lease the Second Riverboat Property back to
the City for a rental payment of ONE DOLLAR AND 00/100 ($1.00) per year. The
City shall have the right to use the Second Riverboat Property in the manner it
was being used as of the Effective Date.

 

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At such time as Columbia decides to operate a Second Riverboat Casino, it shall
have the right, upon one hundred twenty (120) days notice to the City, to
terminate the City’s lease. Upon the substantial completion and opening of the
Second Riverboat Casino, Columbia shall pay the City FOUR HUNDRED FIFTY THOUSAND
DOLLARS AND 00/100 ($450,000), adjusted by the CPI, with the base year being the
calendar year in which the Casino Opening Date occurs plus 1.5 percent (1.5%) of
the Second Riverboat Casino’s Net Revenues.

 

Prior to commencing the construction of the mooring and docking facility for the
Second Riverboat Casino, Columbia shall, at its expense, on land owned by the
City at the northern end of the Second Riverboat Property, construct, if the
City so desires, a similar docking, mooring and landing structure as existed as
of the Effective Date on the Second Riverboat Property to be used by the various
passenger riverboats which periodically stop at the City of Vicksburg and the
general public. The City and the general public shall have access through the
floodwall at some point to such new docking and mooring structure.

 

The facilities constructed on the Second Riverboat Property shall be included in
the definition of Casino Support Facilities and the Second Riverboat Property
shall be considered part of the Shoreside Facilities Sites.

 

ARTICLE 6
CASINO DEVELOPMENT RESTRICTION ON THIRD PARTIES

 

Section 6.01. Casino Development Restriction on Third Parties. So long as
Columbia has title to the Shoreside Facilities Sites, the City shall restrict
the use of all property in Warren County, Mississippi, that is owned or
hereafter acquired by the City and is capable of being used for a riverboat
casino operation or riverboat casino support facilities according to the
Mississippi Gaming Control Act of 1990, as amended, and the Regulations of the
Mississippi Gaming Commission, as amended, including, but not limited to the
property which adjoins the water of the Mississippi River or adjoins the water
of the Yazoo Diversion Canal, so that such property shall not be used for the
development or operation of a new casino or its infrastructure/land-based
support facilities as required by the Mississippi Gaming Commission
Regulation II.A., Section 3(h), without the prior written approval of Columbia.
There is no restriction on the utilization of city-owned or leased property for
improvements associated with a particular new riverboat casino operation after
that particular new riverboat casino operation has met its
infrastructure/land-based obligations pursuant to Mississippi Gaming Commission
Regulation II.A., Section 3(h).

 

On the Transfer Date, the City shall record in the land registry for Warren
County a deed restriction on all property owned by the City in Warren County
capable of being used for a riverboat casino operation according to the laws of
the state of Mississippi.

 

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In the event the City acquires additional property after the Transfer Date,
capable of being used for a riverboat casino operation according to the laws of
the state of Mississippi, the City shall record a similar deed restriction on
such property as that referred to above.

 

The City agrees, in its municipal capacity and in its capacity as a private
landowner, not to sell, abandon or vacate that portion of South Street west of
Levee Street and agrees not to permit any other casino operator to use any
portion of the riparian rights associated with South Street for a riverboat
casino.

 

In the event the laws of the state of Mississippi are changed so as to permit
land-based casinos and the City has property it intends to sell or lease for a
land-based casino operation, Columbia shall be given the first right of refusal
to acquire said property at the price and on the terms offered to interested
third parties.

 

ARTICLE 7
TERMINATION FEE

 

Section 7.01. Termination Fee. Columbia shall have the right, upon twelve (12)
months notice to the City, to permanently cease its casino operations and remove
the Riverboat Casino, a substitute riverboat or the Second Riverboat Casino from
the Casino Support Facilities.

 

Twelve (12) months from the date the City receives Columbia’s notice that it is
permanently ceasing its casino operations, the Shoreside Facilities Sites and
the Casino Support Facilities (specifically excluding the Hotel, the Hotel Site
the Riverboat Casino, Second Riverboat Casino and any substitute riverboat
casino and all personal property located on the Shoreside Facilities Sites or in
the Casino Support Facilities or in the Hotel or on the Hotel Site, Riverboat
Casino, Second Riverboat Casino and any substitute riverboat casino) shall
revert to the City, without charge to the City, free and clear of any liens or
mortgages.

 

At the time of termination, Columbia shall pay the City a termination fee of
FOUR HUNDRED FIFTY THOUSAND DOLLARS AND 00/100 ($450,000), as adjusted by the
CPI through the year of termination using the Casino Opening Date as the base
year, for each year and a prorata amount for any partial year remaining at the
time of termination in the period commencing from the Transfer Date to ten
(10) years after the Transfer Date. In the event notice is given twelve
(12) months prior to the tenth (10th) year after the Transfer Date, no
termination fee shall be paid if the termination occurs at the expiration of the
tenth (10th) year after the Transfer Date.

 

If the termination occurs during the years eleven (11) through fifteen (15) from
the Transfer Date, the termination fee shall be FOUR HUNDRED FIFTY THOUSAND
DOLLARS AND 00/100 ($450,000), as adjusted by the CPI through the year of
termination using the Casino Opening Date as the base year, for each year and a
prorata amount for any partial year remaining in the period commencing from year
eleven (11) from the Transfer Date to year fifteen (15) from

 

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the Transfer Date. In the event notice is given twelve (12) months prior to the
fifteenth (15th) year after the Transfer Date, no termination fee shall be paid
of the termination occurs at the expiration of the fifteenth (15th) year after
the Transfer Date.

 

If the termination occurs during the years sixteen (16) through twenty (20) from
the Transfer Date, the termination fee shall be FOUR HUNDRED FIFTY THOUSAND
DOLLARS AND 00/100 ($450,000), as adjusted by the CPI through the year of
termination using the Casino Opening Date as the base year, for each year and a
prorata amount for any partial year remaining in the period commencing from year
sixteen (16) from the Transfer Date to year twenty (20) from the Transfer Date.
In the event notice is given twelve (12 months prior to the twentieth (20th)
year after the Transfer Date, no termination fee shall be paid if the
termination occurs at the expiration of the twentieth (20th) year after the
Transfer Date.

 

If the termination occurs during the years twenty-one (21) through twenty-five
(25) from the Transfer Date, the termination fee shall be FOUR HUNDRED FIFTY
THOUSAND DOLLARS AND 00/100 ($450,000), as adjusted by the CPI through the year
of termination using the Casino Opening Date as the base year, for each year and
a prorata amount for any partial year remaining in the period commencing from
year twenty-one (21) from the Transfer Date to year twenty-five (25) from the
Closing. In the event notice is given twelve (12) months prior to the
twenty-fifth (25th) year after the Transfer Date, no termination fee shall be
paid if the termination occurs at the expiration of the twenty-fifth (25th) year
after the Transfer Date.

 

If the termination occurs during the years twenty-six (26) through thirty
(30) from the Transfer Date, the termination fee shall be FOUR HUNDRED FIFTY
THOUSAND DOLLARS AND 00/100 ($450,000), as adjusted by the CPI through the year
of termination using the Casino Opening Date as the base year, for each year and
a prorata amount for any partial year remaining in the period commencing from
year twenty-six (26) from the Transfer Date to year thirty (30) from the
Transfer Date. In the event notice is given twelve (12) months prior to the
thirtieth (30th) year after the Transfer Date, no termination fee shall be paid
if the termination occurs at the expiration of the thirtieth (30th) year after
the Transfer Date.

 

After Columbia makes the appropriate termination payment and delivers the Casino
Support Facilities and Shoreside Facilities Sites to the City, neither party
shall have any further obligations or liabilities one to the other pursuant to
the provisions of this Agreement, except for the obligations set forth in
Sections 1.01.4 and 1.01.5.

 

Upon such termination, Columbia shall have the right to remove the Riverboat
Casino, any substitute riverboat casino and the Second Riverboat Casino, if any,
without any form of compensation to the City other than the termination fee
described above, provided, however, if Columbia damages the Casino Support
Facilities during such removal process, it shall be obligated to restore the
Casino Support Facilities to their existing condition prior to such removal.

 

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Section 7.02. Permanent Removal of Second Riverboat Casino But First Riverboat
Casino Remains in Operation. Columbia shall have the right, at any time after it
terminates the lease with the City and commences operation of the Second
Riverboat Casino on the Second Riverboat Property, to notify the City that it
has elected to permanently cease its Second Riverboat Casino operations. In such
event, Columbia shall remove the Second Riverboat Casino from the facilities
constructed on the Second Riverboat Property, and the Second Riverboat Property
and the improvements thereon shall revert back to the City without charge to the
City. Columbia shall have the right to continue its ownership of and use of the
remainder of the Shoreside Facilities Sites and Casino Support Facilities for
the first Riverboat Casino. In such event, Columbia shall not be obligated to
pay a termination fee. In such event, the Fixed Amount and the Percentage Amount
shall be calculated on the basis of the Net Revenues generated from the
remaining Riverboat Casino.

 

ARTICLE 8

EMPLOYMENT IN LOCAL COMMUNITY

 

Section 8.01. Employment in Local Community. Columbia agrees, in good faith, to
seek to employ in its operations, at all levels, individuals living in the City
of Vicksburg from the various gender, racial and ethnic backgrounds found in the
City of Vicksburg. Columbia also agrees to actively recruit handicapped persons
in the City of Vicksburg to be included among its employees. Columbia further
agrees, in good faith, to contract with local vendors of various gender, racial
and ethnic backgrounds living and doing business in the City of Vicksburg to the
extent possible and insofar as service availability, cost competitiveness and
service quality will allow. Moreover, Columbia agrees to provide training in the
City of Vicksburg for individuals to be employed in Columbia’s Hotel, Casino
Support Facilities and Riverboat Casino operations.

 

ARTICLE 9

CITY’S REVERSIONARY INTEREST

IN SHORESIDE FACILITIES SITES

 

Section 9.01. City’s Reversionary Interest. Fee simple title to the Shoreside
Facilities Sites and improvements thereon, including all Casino Support
Facilities (specifically excluding the Hotel, Hotel Site, the Riverboat Casino,
Second Riverboat Casino and any substitute riverboat casino and all personal
property located on the Shoreside Facilities Sites or in the Casino Support
Facilities or in or on the Hotel, Hotel Site, Riverboat Casino, Second Riverboat
Casino and any substitute riverboat casino) shall automatically revert back to
the City thirty (30) years from the Transfer Date, unless said property has
reverted back to the City prior to such date in accordance with the provisions
of this Agreement. Upon the occurrence of the reversion of title to the
Shoreside Facilities Sites to the City, Columbia will promptly execute such
instruments reasonably requested by the City to evidence that the reversion has,
in fact, occurred.

 

Section 9.02. Exchange of Deeds. On the Transfer Date, Columbia shall transfer
fee simple title to the Shoreside Facilities Sites to the City, and the City
shall immediately thereafter

 

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transfer fee simple title to the Shoreside Facilities Sites which shall include
the thirty (30) year reversion as described in Section 9.01, back to Columbia.
The City will promptly execute such instruments reasonably requested by Columbia
to ensure that the reversion of the Shoreside Facilities Sites occurs no earlier
than thirty (30) years from the Transfer Date, unless said property has reverted
back to the City prior to such date in accordance with the provisions of this
Agreement.

 

ARTICLE 10

CLAUSES TO ENSURE MORTGAGE ABILITY

OF THE SHORESIDE FACILITIES SITES

 

Section 10.01. Rights to Mortgage Shoreside Facilities Sites. Columbia and its
successors in title shall have the absolute and unconditional right to mortgage
at any time and from time to time the Shoreside Facilities Sites, without the
consent of the City, but any mortgagees’ interest shall be subject to the City’s
reversionary interest described in Section 9.01 and elsewhere in this Agreement

 

Section 10.02. Estoppel Certificates.

 

Section 10.02.1. Rights of Each Party. At any time and from time to time, upon
not less than fifteen (15) business days prior written request (an “Estoppel
Certificate Request”) by either party to this Agreement (the “Requesting
Party”), the other party to this Agreement (the “Certifying Party”) shall
execute, acknowledge and deliver to the Requesting Party (or directly to a third
party whose name and address are provided by the requesting party (a ‘Third
Party”)) up to four (4) original counterparts of an estoppel certificate. An
Estoppel Certificate Request shall not be valid unless accompanied by: (a) up to
four (4) counterparts of a proposed form of estoppel certificate reflecting
present facts and circumstances at the time of the Estoppel Certificate Request;
and (b) a certificate by the Requesting Party that to the best of the Requesting
Party’s knowledge the proposed form of estoppel certificate is substantially
correct and omits no material information required to be disclosed in such
estoppel certificate. Any estoppel certificate may be relied upon by any Third
Party to whom an estoppel certificate is required to be directed.

 

Section 10.02.2. Failure to Execute Estoppel Certificate. If (i) the Requesting
Party delivers an Estoppel Certificate Request to the Certifying Party in
accordance with the notice provisions of this Agreement and (ii) fifteen
(15) business days have elapsed from the effectiveness of such Estoppel
Certificate Request and during such period the Certifying Party has failed to
execute and deliver to the Requesting Party (or its attorneys or the Third
Party(ies)

 

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designated by such Requesting Party) the Requesting Party shall deliver a second
written notice to the Certifying Party which states that if the Certifying Party
does not respond within ten (10) days, the Certifying Party shall be deemed for
all purposes, whether this Agreement has been terminated or is otherwise in full
force and effect, to have executed and delivered to the Third Party and the
Requesting Party an estoppel certificate, dated as of the effective date of the
Estoppel Certificate Request, in the form submitted by the Requesting Party to
the Certifying Party.

 

Section 10.02.3. Delivery of Estoppel Certificates. Any Requesting Party may
request that the Certifying Party execute an undated estoppel certificate; such
request shall contain the Requesting Party’s expected date on which the estoppel
certificate will be dated. If the Requesting Party makes such request, then in
place of delivering the undated estoppel certificate to the Requesting Party or
any Third Party, the Certifying Party shall deliver the undated estoppel
certificate to the Requesting Party’s escrow agent, who shall hold the undated
estoppel certificate in accordance with the following provisions. If the
Certifying Party gives notice to the Requesting Party’s escrow agent that the
estoppel certificate is no longer correct, then the Requesting Party’s escrow
agent shall return the estoppel certificate to the Certifying Party, who shall,
within five (5) business days, execute a corrected undated estoppel certificate
and redeliver it to the Requesting Party’s escrow agent. At any time when the
Requesting Party’s escrow agent is holding an undated estoppel certificate and
has not received notice from the Certifying Party that such estoppel certificate
is incorrect, the Requesting Party shall be entitled to instruct its escrow
agent to date the estoppel certificate as of the then-current date and deliver
it to the Requesting Party or a Third Party. The Requesting Party’s escrow agent
shall promptly comply with such request. The Requesting Party shall be entitled
to designate any title insurance company or abstract company licensed in the
state of Mississippi to take the actions to be taken by the Requesting Party’s
escrow agent pursuant to this paragraph.

 

If requested by the Requesting Party’s escrow agent or such title insurance
company or abstract company, the Requesting Party and the Certifying Party shall
enter into an escrow agreement, on customary terms, to further implement the
provisions of this paragraph.

 

Section 10.03. Event of Default.

 

Section 10.03.1. Monetary Default. If a monetary default shall occur and the
monetary default shall continue for fifteen (15) days after the City has given
Columbia notice of such monetary default, specifying in reasonable detail the
amount of money required to be paid by Columbia and the nature of such payment.

 

Section 10.03.2. Non-Monetary Default. If a non-monetary default shall occur and
the non-monetary default shall continue and not be remedied by Columbia within
sixty (60) days after the City shall have delivered to Columbia a notice
describing the same in reasonable detail, or, in the case of a non-monetary
default that cannot with due diligence be cured within sixty (60) days from such
notice, if Columbia shall not: (a) within sixty (60) days from the City’s

 

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notice advise the City of Columbia’s intention to take all reasonable steps
necessary to remedy such non-monetary default; (b) duly commence the cure of
such non-monetary default within such period, and then diligently prosecute to
completion the remedy of the non-monetary default; and (c) complete such remedy
within a reasonable time under the circumstances.

 

Section 10.03.3. Remedies. Upon occurrence of a monetary Event of Default, as
described in Section 10.03.1, the City may give Columbia notice of intention to
obtain the reversion of the Shoreside Facilities Sites to the City at the
expiration of twenty (20) days from the date of service of such notice of
intention. Upon the expiration of such twenty (20) day period, unless Columbia
shall have cured the monetary Event of Default that gave rise to such notice,
fee simple title to the Shoreside Facilities Sites and the Casino Support
Facilities located on the Shoreside Facilities Sites shall revert to the City
and the City shall take possession of the Shoreside Facilities Sites and Casino
Support Facilities (specifically excluding the personal property located on the
Shoreside Facilities Sites or in the Casino Support Facilities; the Riverboat
Casino, the Second Riverboat Casino and any substitute riverboat Casino; and all
personal property located on said riverboats), and the City shall be entitled to
the termination fee calculated in accordance with Section 7.01 for the remainder
of the applicable period. Columbia shall, at its expense, on or before sixty
(60) days after the Shoreside Facilities Sites and Casino Support Facilities
revert to the City, remove the Riverboat Casino, the Second Riverboat Casino, if
any, or any substitute riverboat casino from the Casino Support Facilities and
Shoreside Facilities Sites.

 

Upon occurrence of a non-monetary Event of Default, as described in
Section 10.03.2, the City may give Columbia a notice of intention to obtain the
reversion of the Shoreside Facilities Sites to the City at the expiration of
thirty (30) days from the date of service of such notice of intention. Upon the
expiration of such thirty (30) day period, unless Columbia shall have
(i) completely cured the non-monetary Event of Default that gave rise to such
notice; or (ii) commenced to cure such non-monetary Event of Default that gave
rise to such notice and is diligently pursuing completion of such remedy of the
non-monetary Event of Default, fee simple title to the Shoreside Facilities
Sites and the Casino Support Facilities located on the Shoreside Facilities
shall revert to the City, and the City shall take possession of the Shoreside
Facilities Sites and Casino Support Facilities (specifically excluding the
personal property located on the Shoreside Facilities Sites or in the Casino
Support Facilities; the Riverboat Casino, the Second Riverboat Casino and any
substitute riverboat casino; and all personal property located on said
riverboats), and the City shall be entitled to the termination fee calculated in
accordance with Section 7.01 for the remainder of the applicable period.
Columbia shall, at its expense, on or before sixty (60) days after the Shoreside
Facilities Sites and Casino Support Facilities revert to the City, remove the
Riverboat Casino, the Second Riverboat Casino, if any, or any substitute
riverboat casino from the Casino Support Facilities and Shoreside Facilities
Sites.

 

Section 10.03.4. Pending Dispute Regarding Event of Default. Notwithstanding
anything to the contrary in the foregoing remedies provided for the City under
this Agreement, if Columbia shall have given the City notice prior to the fee
simple title to the Shoreside Facilities

 

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Sites reverting to the City, that Columbia contests the City’s determination
that an Event of Default has occurred and specified in detail all reasons for
such contest, then the City shall not disturb Columbia’s title or possession of
the Shoreside Facilities Sites, Columbia shall be entitled to remain in
possession of the Shoreside Facilities Sites, so long as: (a) Columbia continues
to pay the City the Fixed Amount and Percentage Amount provided for in this
Agreement and continues to perform such other obligations under this Agreement
as are not in dispute; and (b) Columbia is prosecuting appropriate judicial
proceedings to prevent the Shoreside Facilities Sites from reverting back to the
City.

 

Section 10.04. In the Event Columbia Temporarily Ceases to Operate the Casino
Support Facilities or the Riverboat Casino. It shall not be an Event of Default
under this Agreement as it relates to the Shoreside Facilities Sites if Columbia
from time to time temporarily ceases operation of the Riverboat Casino or the
Second Riverboat Casino, or a substitute riverboat casino or the Casino Support
Facilities provided that: (i) Columbia makes, in lieu of the actual Fixed Amount
and Percentage Amount due based on the formulas set forth in Section 1.01, a
monetary payment to the City for each month said operations are closed equal to
the average monthly payment adjusted by the CPI of the Fixed Amount and
Percentage Amount paid by Columbia during the twelve (12) month period preceding
the closing of the Riverboat Casino or Second Riverboat Casino, or a substitute
riverboat casino or the Casino Support Facilities; and (ii) said temporary
closure is for a period of twelve (12) consecutive months or less. Columbia
shall deliver to the City written notice of any temporary cessation in the
operations of the Riverboat Casino or the Second Riverboat Casino, or a
substitute riverboat casino or the Casino Support Facilities within fifteen
(15) days after such temporary cessation of operations commences and such notice
shall contain the reasons for the temporary cessation of operations and the
expected reopening date.

 

A closure of an area in the Casino Support Facilities or on the Riverboat
Casino, Second Riverboat Casino or a substitute riverboat casino for
refurbishment or remodeling or change of use shall not constitute a closure for
purposes of this Section 10.04, and Columbia shall continue to pay the Fixed
Amount and Percentage Amount due in accordance with the formulas set forth in
Section 1.01.

 

Notwithstanding the above, if the reason the Casino Support Facilities,
Riverboat Casino, Second Riverboat Casino or substitute riverboat casino ceases
operations is because of an event of Force Majeure or Casualty, the twelve
(12) month period shall not apply provided that Columbia recommences operation
as soon as such operations can be commenced without jeopardizing said
facilities; Columbia’s employees or the public. During the period said
facilities are closed because of an event of Force Majeure or Casualty, Columbia
shall make the Fixed Amount and Percentage Amount payments described in the
first paragraph of this Section.

 

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Section 10.05. Other Mortgagee Protection Provisions.

 

Section 10.05.1. Modifications Required by Mortgagee. If any mortgagee or
prospective mortgagee shall require any modification(s) of this Agreement after
Closing (including clarifications and supplementations to Mortgagee’s Cure
Rights), then the City shall, at Columbia’s request, promptly execute and
deliver to Columbia such instruments in recordable form effecting such
modification(s) as such mortgagee or prospective mortgagee shall require,
provided that such modification(s): (i) do not adversely affect any of the
City’s rights or materially increase any of the City’s obligations under this
Agreement; (ii) are consistent with the customary requirements of institutional
lenders at the time in the state of Mississippi, or are required by banking,
insurance or similar laws and regulations; and (iii) can be legally agreed to by
the City.

 

Section 10.05.2. Initial Notice. If Columbia enters into any mortgage(s), then
the mortgagee(s) thereunder shall be entitled to the mortgagee protections
provided for under this Agreement only from and after such time as Columbia or
such mortgagee has either (or both): (a) given the City notice of the name and
address of such mortgagee, accompanied by a copy of the executed mortgage; or
(b) recorded or caused to be recorded an instrument giving notice of such
mortgage and the name and address of the mortgagee.

 

Any mortgagee shall be free to change its name and address from time to time by
notice to the City. In the event of a change of name, such notice may be
provided either by the original mortgagee or by the mortgagee under its new
name, without proof of any kind confirming the change of name. Notice of any
change of a mortgagee’s identity or address, or of a transfer of a mortgage, may
be made by any means permitted for the original notice of the mortgagee’s
original name and address.

 

Section 10.05.3. Termination of Mortgagee’s Rights. If a mortgagee is entitled
to the mortgagee protections provided for under this Agreement, then such
entitlement shall not terminate unless and until such time, if any, as the
mortgagee shall have been satisfied and discharged of record.

 

Section 10.05.4. Cancellation, Surrender, Amendment, Etc. No voluntary
(i) cancellation; (ii) termination; (iii) surrender, acceptance of surrender,
(iv) abandonment; (v) amendment; (vi) modification of this Agreement; or
(vii) the reversion of the Shoreside Facilities Sites shall occur without the
prior consent of such mortgagee.

 

Section 10.05.5. Copies of Notices. If the City shall give any notice to
Columbia, then the City shall at the same time and by the same means give a copy
of such notice to each mortgagee. No notice to Columbia shall be effective
unless and until so given to each mortgagee. No Event of Default predicated upon
the giving of notice to Columbia shall be deemed to have occurred unless like
notice shall have been so given to each mortgagee at the same time and by the
same means, which notice shall describe in reasonable detail the alleged Event
of Default.

 

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Section 10.05.6. Columbia’s Cure Period Expiration Notice. If Columbia is in
default under this Agreement as it relates to the Shoreside Facilities Sites,
and the cure period applicable to Columbia expires without cure of Columbia’s
default, then the City shall promptly give notice of such fact to each
mortgagee, which notice shall describe in reasonable detail Columbia’s default
(a “Columbia Cure Period Expiration Notice”).

 

Section 10.05.7. Right to Perform Covenants and Agreements. Any mortgagee shall
have the right, but not the obligation to perform any obligation of Columbia
under this Agreement and to remedy any default by Columbia. The City shall
accept performance by or at the instigation of a mortgagee in fulfillment of
Columbia’s obligations, for the account of Columbia and with the same force and
effect as if performed by Columbia. No such performance by a mortgagee shall
cause such mortgagee to become a “mortgagee in possession” or otherwise cause
such mortgagee to be deemed to be in possession of the Shoreside Facilities
Sites or bound by this Agreement.

 

Section 10.05.8. Transfer of Columbia’s Rights. Columbia may delegate or
otherwise transfer to a mortgagee any or all of Columbia’s rights under this
Agreement, but no such delegation or transfer shall bind the City unless and
until the City shall have received a copy of a written instrument effecting such
delegation accompanied by a photocopy of the mortgagee’s fully-executed
mortgage. Such delegation or transfer of authority may be effected by the terms
of the mortgage itself, in which case service upon the City of an executed
counterpart of certified copy of such mortgage, together with a written notice
specifying the provisions of such mortgage that delegate or transfer such
authority to the mortgagee, shall be sufficient to bind the City to such
delegation or transfer of rights.

 

Section 10.05.9. Notice of Default and Mortgagee’s Cure Rights. Upon receiving
any notice of default, any mortgagees shall have the same cure period granted to
Columbia under this Agreement, plus the additional time provided for below,
within which to take (if such mortgagee so elects) whichever of the actions set
forth below shall apply with respect to the default described in such notice of
default (such actions, “Mortgagee’s Cure”; and, a mortgagee’s rights to take
such actions, “Mortgagee’s Cure Rights”):

 

In the case of a monetary default, or a non-monetary default that a mortgagee is
reasonably capable of curing (without obtaining possession of the Shoreside
Facilities Sites) within the cure period allowed to Columbia under this
Agreement, mortgagee shall be entitled (but not required) to cure such default
within a cure period consisting of Columbia’s cure period under this Agreement
extended through the date thirty (30) days after such mortgagee shall have
received Columbia’s Cure Period Expiration Notice as to such default. If the
amount of any monetary default has not been finally determined (for example, if
a dispute has arisen between the City and Columbia regarding the proper amount
of the Percentage Amount), then in place of curing of such monetary default a
mortgagee shall be entitled instead to (a) cure such monetary default to the
extent the amount hereof is not in dispute; and (b) undertake in writing that
such mortgagee shall cure the remaining disputed portion of such monetary
default within thirty (30)

 

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days after the dispute shall have been resolved (and the parties shall then
cooperate to resolve such dispute promptly in accordance with this Agreement).

 

In the case of any other non-monetary default (other than a non-monetary default
that is not reasonably susceptible of being cured by a mortgagee without having
possession of the Shoreside Facilities Sites), mortgagee shall be entitled, but
not required, to (x) within a period consisting of Columbia’s cure period for
the default, extended through the date forty-five (45) days after receipt of
Columbia’s Cure Period Expiration Notice as to such default, advise the City of
mortgagee’s intention to take all reasonable steps necessary to remedy such
non-monetary default; (y) duly commence the cure of such non-monetary default
within such extended period, and thereafter diligently prosecute to completion
the remedy of such nonmonetary default, subject to events of Force Majeure; and
(z) complete such remedy within a reasonable time under the circumstances.

 

In the case of a non-monetary default that is not reasonably susceptible of
being cured by a mortgagee without obtaining possession of the Shoreside
Facilities Sites (including failure to complete the Casino Support Facilities),
mortgagee shall be entitled (but not required) to do the following, so long as,
with respect to any defaults other than those referred to in this paragraph,
such mortgagee has exercised or is exercising the applicable Mortgagee’s Cure
Rights as defined above:

 

At any time during the cure period (if any) that applies to Columbia, extended
through the date forty-five (45) days after such mortgagee’s receipt of the
Columbia’s Cure Period Expiration Notice as to such default, or if no cure
period applies to Columbia, then within forty-five (45) days after receiving
notice of the non-monetary default, mortgagee shall be entitled to institute
proceedings, and (subject to any stay in any proceedings involving the
bankruptcy, insolvency, or reorganization of Columbia or the like, or any
injunction, unless such stay or injunction is lifted), diligently prosecute the
same to completion subject to Force Majeure, to obtain possession of the
Shoreside Facilities Sites as mortgagee (including possession by the receiver),
or acquire the fee simple estate of Columbia subject to the City’s reversionary
right by foreclosure proceedings or otherwise, including delivery of an
assignment in lieu of foreclosure (the obtaining of such possession or the
completion of such acquisition, “Control of the Shoreside Facilities Sites”).

 

Upon obtaining Control of the Shoreside Facilities Sites (before or after
expiration of any otherwise applicable cure period), mortgagee shall be entitled
(but not required) to proceed with reasonable diligence and reasonable
continuity to cure such non-monetary defaults as are then reasonably susceptible
of being cured by such mortgagee (excluding personal defaults of Columbia, which
mortgagee shall not be required to cure), subject to Force Majeure.

 

Section 10.05.10. Effect of Cure. A mortgagee shall not be required to continue
to exercise Mortgagee’s Cure Rights or otherwise proceed to obtain or to
exercise Control of the

 

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Shoreside Facilities Sites if and when the default that such mortgagee was
attempting to cure shall have been cured. Upon such cure and the cure of any
other defaults in accordance with this Agreement, this Agreement shall continue
in full force and effect as if no default(s) had occurred, and Columbia shall
retain fee simple title to the Shoreside Facilities Sites subject to the City’s
reversionary interest.

 

Section 10.05.11. Quiet Enjoyment. So long as the time period for a mortgagee to
exercise Mortgagee’s Cure Rights with respect to a non-monetary default by
Columbia has not expired (and provided that all monetary defaults are cured
within mortgagee’s cure period provided for under this Agreement), the City
shall not (i) re-enter the Shoreside Facilities Sites; (ii) serve a notice of
election to obtain the fee simple title to the Shoreside Facilities Sites
through its reversionary interest; or (iii) bring a proceeding on account of
such default to (A) dispossess Columbia and/or other occupants of the Shoreside
Facilities Sites; (B) re-enter the Shoreside Facilities Sites; (C) terminate
this Agreement; or (D) otherwise exercise any other rights or remedies under
this Agreement by reason of such default. Nothing in the mortgagee protections
provided for in this Agreement shall be construed to either (i) extend
Columbia’s fee simple estate beyond the expiration date provided for in this
Agreement (including renewal terms) that would have applied if no default had
occurred; or (ii) require any mortgagee to cure any personal default of
Columbia, which the mortgagee is not capable of curing.

 

Section 10.05.12. Failure by Mortgagee to Cure Events of Default. In the event
that a mortgagee fails to cure an Event of Default within the applicable time
frames provided for such mortgagee to cure an Event of Default, fee simple title
to the Shoreside Facilities Sites and the Casino Support Facilities located on
the Shoreside Facilities Sites shall revert to the City and the City shall take
possession of the Shoreside Facilities Sites and the Casino Support Facilities
(specifically excluding the personal property located on the Shoreside
Facilities Sites or in the Casino Support Facilities; the Riverboat Casino, the
Second Riverboat Casino and any substitute riverboat casino; and all personal
property located on said riverboats); and the City shall be entitled to the
termination fee calculated in accordance with Section 7.01 for the remainder of
the applicable period from Columbia. Columbia or the mortgagee shall, at its
expense, on or before sixty (60) days after the Shoreside Facilities Sites and
Casino Support Facilities revert to the City, remove the Riverboat Casino, the
Second Riverboat Casino, if any, or any substitute riverboat casino from the
Casino Support Facilities and Shoreside Facilities Sites.

 

Section 10.05.13. Mortgagee’s Right to Enter the Shoreside Facilities Sites. The
City and Columbia authorize each mortgagee to enter the Shoreside Facilities
Sites as necessary to effect Mortgagee’s Cure and take any action(s) reasonably
necessary to effect Mortgagee’s Cure. A mortgagee’s rights under this paragraph
shall not constitute Control of the Shoreside Facilities Sites or otherwise be
construed to mean that such mortgagee has possession of the Shoreside Facilities
Sites.

 

Section 10.05.14. Rights of Mortgagee Upon Acquiring Control. If any mortgagee
or a purchaser at a foreclosure sale shall acquire Control of the Shoreside
Facilities

 

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Sites and shall cure all monetary defaults and proceed and continue to exercise
Mortgagee’s Cure rights, then (i) any personal defaults by Columbia shall no
longer be deemed defaults; and (ii) the City shall recognize any purchaser of
Columbia’s fee simple estate subject to the City’s reversionary rights pursuant
to a foreclosure sale under a mortgage, or any transferee of Columbia’s fee
simple estate subject to the City’s reversionary rights under an assignment in
lieu of foreclosure, or, if the mortgagee should be such purchaser or assignee,
the mortgagee and any assignee of the mortgagee.

 

Section 10.05.15. Payments Made by Mortgagee. Any payment made by a mortgagee to
the City to cure any claimed default shall be deemed to have been made “under
protest” and without prejudice to Columbia or mortgagee’s recovery of such
payment if the City’s claim of a default shall be determined to have been
erroneous.

 

Section 10.06. Prohibition on City Granting Mortgage. The City shall not grant
any party a mortgage or security interest in the Shoreside Facilities Sites or
the Casino Support Facilities. This provision, however, shall not be interpreted
so as to prohibit the City from assigning its right to receive the Fixed Amount
and Percentage Amount from Columbia hereunder.

 

Section 10.07. Bankruptcy.

 

Section 10.07.1. Affecting Columbia. If Columbia (as debtor in possession) or a
trustee in bankruptcy for Columbia rejects this Agreement in connection with any
proceeding involving Columbia under the United States Bankruptcy Code or any
similar state or federal statute for the relief of debtors (a “Bankruptcy
Proceeding”), then the City agrees, for the benefit of each and every mortgagee,
that such rejection shall be deemed Columbia’s assignment in lieu of
foreclosure. Upon such deemed assignment, this Agreement shall not terminate and
each mortgagee shall continue to have all the rights of a mortgagee under this
Agreement as if the Bankruptcy Proceeding had not occurred, unless such
mortgagee shall reject such deemed assignment by written notice to the City
within thirty (30) days after receiving written notice of the rejection of this
Agreement in Bankruptcy Proceedings. If any court of competent jurisdiction
shall determine that this Agreement shall have been terminated notwithstanding
the deemed assignment provided for in place of rejection of this Agreement, then
Columbia’s mortgagees shall be entitled to a new agreement on the same terms as
set forth herein.

 

Section 10.07.2. Affecting the City. If the City (as debtor in possession) or a
trustee in bankruptcy for the City rejects this Agreement in connection with any
Bankruptcy Proceeding involving the City, Columbia’s fee simple estate shall
continue unaffected and the City shall only be entitled to its reversionary
interest at the end of thirty (30) years from Transfer Date and the amounts
specified in Section 1.01 and Section 5.01 any damages arising from such
rejection in accordance with applicable law governing the Bankruptcy Proceeding.

 

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Section 10.08. Default by the City. If the City fails, after Closing, to comply
with any or all of the obligations, covenants, warranties or agreements to be
performed, honored or observed by the City under and pursuant to the terms and
provisions of this Agreement, and such monetary default is not cured within
thirty (30) days after notice of such non-monetary default is not cured within
ninety (90) days after notice, then Columbia shall have the right to damages,
specific performance or any other remedy legally available to Columbia. However,
if the breach by the City is non-monetary and is of a nature that it cannot
reasonably be remedied or corrected within such ninety (90) day period, then
such ninety (90) day period shall be deemed to be extended for such additional
period as may reasonably be required to remedy or correct the same if the City
promptly commences to remedy the breach upon receipt of Columbia’s notice and
continues therewith with due diligence.

 

ARTICLE 11

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Section 11.01. Representations and Warranties. The City represents and warrants
to Columbia that the following facts and conditions exist and are true as of the
Effective Date and shall exist and be true as of the Transfer Date and as of the
date of recording of the deeds:

 

(a) The City is a municipality duly organized and validly existing in good
standing under the laws of the state of Mississippi;

 

(b) INTENTIONALLY OMITTED

 

(c) This Agreement constitutes, and all documents executed and delivered by the
City in connection with the transaction contemplated hereby shall constitute,
valid and binding obligations of the City. The execution of this Agreement and
all documents and instruments to be delivered by the City in connection with the
transactions contemplated herein have been duly authorized. Neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will be in violation of any agreement, contract
or other restriction to which the City is a party or is bound;

 

(d) Harrah’s has no outstanding obligations, including payment obligations, in
connection with Harrah’s acquisition or development of the Property or otherwise
under the Master Agreement.

 

(e) As of the date hereof, Harrah’s is in full compliance with its obligations
under the Master Agreement and the Recorded Documents and there is no state of
facts, either with or without the passage of time that would constitute a
default thereunder.

 

(f) There are no pending eminent domain proceedings or any other governmental
action or judicial actions of any kind against the Property, with the exception
of the McGuffie Two lot. The City is not negotiating to transfer or sell any
portion of its interest in

 

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the Property. The Property complies with all current building codes and other
City requirements.

 

(g) This Master Agreement is unmodified and in full force and effect. Except for
documents and other agreements of record between the City and Harrah’s
(collectively, the “Recorded Agreements”) and the Master Agreement, there are no
written or oral agreements, understandings or ordinances relating to the
Property.

 

(h) There are no lease, rental, license or other agreements affecting any
portion of City Property, except for the agreements with the City merchants to
use the City Garages and the agreement with Mississippi River Tours, Inc., which
only affect the Second Riverboat Property, and the agreement with the U.S. Army
Corps of Engineers regarding maintenance of the floodwall, and no persons or
entities are in possession of or have any right to use or occupy any portion of
the City Property except for the City and those parties to the above-referenced
agreements;

 

(i) INTENTIONALLY OMITTED

 

(j) INTENTIONALLY OMITTED

 

(k) There is no existing or, to the City’s knowledge, pending or threatened
condemnation or other similar proceedings affecting any portion of the City
Property, or any pending public improvements in, about or otherwise affecting
the City Property, except for the improvements described herein, or access to
the City Property or which will create additional cost to the owner of the City
Property by means of special assessments;

 

(l) INTENTIONALLY OMITTED

 

(m) INTENTIONALLY OMITTED

 

(n) INTENTIONALLY OMITTED

 

(o) INTENTIONALLY OMITTED

 

(p) The City is not a “foreign person” within the meaning of
Section 1445(f)(3) of the Internal Revenue Code of 1986;

 

(q) INTENTIONALLY OMITTED

 

(r) The City knows of no facts, nor has the City failed to disclose any facts it
is aware of, which would materially adversely affect Columbia’s fee simple
estate or prevent Columbia from operating the Hotel, the Casino Support
Facilities or the Riverboat Casino. The City is not making any representations
as to matters at law;

 

(s) INTENTIONALLY OMITTED

 

(t) Upon the execution of the Agreement, that prior Master Agreement, dated
January 21st, 1993, and all amendments thereto, entered into by and between the
City and

 

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Harrah’s shall be of no further force or effect except for definitions, as
provided under this Agreement’s Definitions Section

 

(u) The City has received no notice that the City Property violates any
applicable law, regulation, ordinance code or insurance requirement.

 

Section 11.02. Covenants. Commencing on the Effective Date and continuing until
the earlier of (i) the date this Agreement is terminated or expires the City:

 

(a) INTENTIONALLY OMITTED

 

(b) INTENTIONALLY OMITTED

 

(c) INTENTIONALLY OMITTED

 

(d) INTENTIONALLY OMITTED

 

(e) INTENTIONALLY OMITTED

 

(f) shall not enter into any contract for an alternative riverboat casino on
property owned, leased or controlled by the City as outlined in Article 6 of the
Agreement.

 

(g) agrees to amend its zoning ordinance to allow a surface parking lot, as
opposed to multi-level parking decks, to be in the historic/downtown district.

 

(h) agrees to convey parcel 60 for parcel 21, subject to the City’s reversionary
interest in the Shoreside Facilities Sites, as defined in Article 9, and which
is deemed to be fair market value under Section 57-7-1 of the Mississippi Code.
The City shall be responsible for executing all documents necessary to complete
this swap.

 

(i) agrees to close that portion of South Street that is owned on both sides by
Columbia, provided that the City retains access to the floodgates and any
utilities within that portion of South Street.

 

Section 11.03. Survival of Representations, Warranties, and Covenants. All of
the City’s representations, warranties and covenants shall survive the Transfer.
In the event any of the City’s representations, warranties or covenants
hereunder are determined to be materially false or misleading prior to the
Transfer, Columbia shall have the option of (i) waiving such failure and
proceeding to the Transfer subject thereto or (ii) declaring this Agreement to
be in default and exercising the right to damages, specific performance or any
other legally available remedy, including, but not limited to, the right to
terminate this Agreement without a termination fee. In the event any of the
City’s representations, warranties or covenants are determined to be materially
false or misleading after Transfer and Columbia suffers damages, Columbia shall
be entitled to damages, specific performance or any other remedy legally
available to Columbia.

 

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Section 11.04. Columbia’s Representations and Warranties. Columbia represents
and warrants to the City that the following facts and conditions exist and are
true as of the date hereof and shall exist and be true as of the date of
Transfer and as of the date of recording of the deeds:

 

(a) Columbia is a Mississippi limited liability company duly organized and
validly existing in good standing under the laws of the state of Mississippi and
authorized to do business in Mississippi;

 

(b) This Agreement constitutes, and all documents executed and delivered by
Columbia in connection with the transaction contemplated hereby shall
constitute, valid and binding obligations of Columbia. The execution of this
Agreement and all documents and instruments to be delivered by Columbia in
connection with the transactions contemplated herein has been duly authorized.
Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will be in violation of any agreement, contract
or other restriction to which Columbia is a party or is bound.

 

(c) The Guaranty of CSC constitutes a binding obligation of Columbia Properties
Vicksburg, LLC. Execution of said guaranty has been duly authorized and does not
violate any agreements, contracts, or other restrictions to which CSC is a party
or bound.

 

ARTICLE 12

MISCELLANEOUS

 

Section 12.01. Execution by Both Parties. This Agreement shall not become
effective and binding until fully executed and delivered by Columbia and the
City (“Effective Date”).

 

Section 12.02. Captions. The captions employed in this Agreement are for
convenience only and are not intended to in any way limit or amplify the terms
and provisions of this Agreement.

 

Section 12.03. Entire Agreement. This Agreement contains the complete agreement
between the parties and cannot be varied or waived except by the written
agreement of the parties. The parties agree that said agreement constitutes the
entire agreement between the parties and no other oral agreements,
understandings, representations or warranties prior to or contemporaneous with
said agreement shall be effective, except as expressly set forth or incorporated
herein.

 

Any portion of said agreement not otherwise consummated at the Transfer shall
survive the Closing of this transaction as continuing agreement between the
parties.

 

Section 12.04. Successors and Assigns. This Agreement shall apply to, inure to
the benefit of and be binding upon and enforceable against the parties hereto
and their respective

 

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successors, assigns, heirs, executors, administrators and legal representatives
to the same extent as if specified at length throughout this Agreement.

 

This Agreement may be assigned from time to time by Columbia upon written notice
to the City, to any parent, subsidiary or affiliate of Columbia, or its
successor corporation, provided that such assignee agrees to be bound by the
terms and conditions of this Agreement. Upon assignment, Columbia shall be
released from all obligations and liabilities hereunder. The acquisition of
Columbia or its parent company by a third party shall not constitute an
assignment of this Agreement by Columbia, and this Agreement shall remain in
full force and effect between Columbia and the City.

 

In addition, Columbia shall have the right, upon written notice to the City, to
assign this Agreement to a third party, provided that such third party’s
performance under this Agreement continues to be guaranteed by Columbia Sussex
Corporation, Inc., its successor corporation or corporation with a net worth of
at least TWENTY MILLION DOLLARS and 00/100 ($20,000,000).

 

The City shall not assign this Agreement. The City shall have the right to
assign the proceeds derived pursuant to this Agreement to third parties.

 

Section 12.05. Sale of Fee Simple Title. The limitations on assignability of
this Agreement set forth in Section 12.04 shall not in any manner limit
Columbia’s right to sell the Hotel or Hotel Site to a third party after the
Hotel is substantially completed and opens to the public and commences doing
business. Furthermore, Columbia shall have the right to sell its fee simple
title to the Shoreside Facilities Sites and the Casino Support Facilities
subject to the City’s reversionary interest after the Casino Support Facilities
are substantially completed and open to the public for business.

 

Any third party purchaser of the Hotel, the Hotel Site, the Shoreside Facilities
Sites or the Casino Support Facilities shall be subject to the terms and
conditions contained in this Agreement.

 

Section 12.06. Gender and Number. The plural shall include the singular and the
singular, the plural, wherever the context so permits; the masculine shall
include the feminine and the neuter; the feminine, the masculine and the neuter,
and the neuter, the masculine and the feminine.

 

Section 12.07. Attorneys’ Fees and Other Costs. The parties to this Agreement
shall bear their own attorneys’ fees in relation to negotiating and drafting
this Agreement. Should Columbia or the City engage in litigation to enforce
their respective rights pursuant to this Agreement, the prevailing party shall
have the right to indemnity by the non-prevailing party for an amount equal to
the prevailing party’s reasonable attorneys’ fees, court costs and expenses
arising therefrom.

 

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Section 12.08. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the state of Mississippi, without giving effect
to any conflicts of laws.

 

Columbia and the City agree that the venue for any dispute shall be in the
Southern Federal District Court of Mississippi. If federal court jurisdiction is
not available, the venue for any dispute shall be Warren County, Mississippi.

 

Section 12.09. Notices. All notices required, permitted, or given pursuant to
the provisions of this Agreement shall be in writing, and either
(i) hand-delivered; (ii) delivered by certified mail, postage prepaid, return
receipt requested; (iii) delivered by an overnight delivery service; or
(iv) delivered by facsimile machine followed within twenty-four (24) hours by
delivery under options (i), (ii) or (iii), addressed as follows:

 

If to City:

 

City of Vicksburg

 

 

1401 Walnut Street

 

 

Vicksburg, MS 39180

 

 

Attn: City Clerk

 

 

Facsimile Number: (601) 634-4565

 

 

 

 

 

with a copy to:

 

 

 

 

 

City of Vicksburg Legal Department

 

 

1401 Walnut Street

 

 

Vicksburg, MS 39180

 

 

 

 

 

Facsimile Number: (601) 634-6232

 

 

 

If to Columbia:

 

Columbia Properties Vicksburg LLC,

 

 

a Mississippi limited liability company

 

 

207 Grandview Drive

 

 

Fort Mitchell, KY 41017

 

 

Attn: Joseph A. Yung

 

 

Facsimile Number: (859) 578-1190

 

 

 

 

 

with a copy to:

 

 

 

 

 

Balch & Bingham LLP

 

 

401 East Capitol Street

 

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Suite 200

 

 

Jackson, MS 39201

 

 

Attn: Scott E. Andress

 

 

Facsimile No. (601) 961-4466

 

Notices shall be deemed delivered (i) on the date that is five (5) calendar days
after the notice is deposited in the U.S. mail (not counting the mailing date),
if sent by certified mail; (ii) on the date the hand-delivery is made, if
hand-delivered; (iii) on the date the transmission is made, if delivered by
facsimile machine; or (iv) on the next business day following the service, if
delivered by an overnight delivery service. The addresses given above may be
changed by any party by notice given in the manner provided herein.

 

Section 12.10. Period of Time. Whenever any determination is to be made or
action is to be taken on a date specified in this Agreement, if such date shall
fall on a Saturday, Sunday or legal holiday under the laws of the state of
Mississippi, then in such event, said date shall be extended to the next day
which is not a Saturday, Sunday or legal holiday.

 

Section 12.11. Preparation of Agreement. This Agreement shall not be construed
more strongly against either party regardless of who is responsible for it
preparation.

 

Section 12.12. Exhibits. All exhibits attached hereto are incorporated herein by
reference and made a part hereof as if fully rewritten or reproduced herein.

 

Section 12.13. Further Agreements. The City and Columbia agree to execute,
acknowledge, and deliver, or cause to be delivered, any and all such
conveyances, assignments, confirmations, satisfactions, releases, instruments of
further assurance, approvals, consents and such other instruments and documents
as may be reasonably necessary to carry out the intent and purpose of this
Agreement and in transactions contemplated hereby.

 

Section 12.14. No personal Liability. Neither the shareholders, officers,
directors, agents or employees of Columbia, nor the officers, employees, agents
or representatives of the City shall be personally or individually liable under
this Agreement.

 

Section 12.15. Agreement to Cooperate. The City agrees, at Columbia’s expense
(i) to fully cooperate with Columbia in connection with Columbia’s obtaining all
necessary regulatory approvals, permits and licenses for Columbia to develop the
Hotel, the Casino Support Facilities and the Riverboat Casino; and (ii) that it
will join in any applications made by Columbia for such approvals, permits and
licenses if Columbia deems such action would expedite the approval process.

 

Section 12.16. INTENTIONALLY OMITTED

 

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Section 12.17. Authority to Execute. The City and Columbia represent and warrant
to each other that their respective entities have full power and authority to
execute this Agreement and to be bound by and perform the terms hereof. On
request, each party shall furnish the other evidence of such authority.

 

Section 12.18. Force Majeure. An event of force majeure shall include, but not
be limited to, acts of war, insurrection, civil strife and commotion, labor
unrest, acts of God or the discovery of Hazardous Chemicals (“Force Majeure”).

 

Upon the occurrence of an event of Force Majeure, Columbia may cease operation
of all or part of its development efforts, recommencing such development efforts
when Columbia deems, in the reasonable exercise of its discretion, that such may
be done without jeopardy to the development, its employees or the public. It is
further understood and agreed that with respect to any obligation to be
performed by Columbia or the City, such party shall in no event be liable for
failure so to do when prevented by an event of Force Majeure. The time within
which such obligation shall be performed shall be extended for a period of time
equivalent to the delay from such event of Force Majeure.

 

Section 12.19. City as Landowner. Columbia acknowledges that the City is a
governmental entity, a municipality, subject to laws that do not apply to
private landowners. In addition, the City as a municipality has certain
governmental functions which it cannot obligate, agree in advance how it will
exercise those functions and cannot contract regarding the exercise of its
governmental functions. In recognition of the City’s status as a municipality,
it is agreed that nothing in this Agreement shall be deemed to require the City
to do anything which is in violation of applicable law or becomes prohibitive by
applicable law regarding municipalities.

 

Any covenant, agreement or provision in this Agreement is subject to and limited
by applicable state and federal law regulating municipalities. Any agreement or
covenants of approval, or condition on the City shall never be treated as
obligating the City in its governmental capacity as a municipality or to
obligate the City to adopt any codes, ordinances or make any governmental
decisions but are only intended to apply to the City to the extent that those
requirements would apply to a private non-governmental landowner, except where
it is expressly provided herein that the City is specifically taking the
specified action in its governmental capacity.

 

Section 12.20. Counterparts. This Agreement may be executed simultaneously in
one or more counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.

 

Section 12.21. Recording Fees. All recording fees associated with the Agreement
will be the responsibility of Columbia.

 

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Section 12.22. Rule Against Perpetuities. If the rule against perpetuities or
any rule of law with respect to restrictions on the alienation of property or
any other rule of law shall limit the time when any event contemplated by the
Agreement may occur, the happening of such event shall not be impaired within
any period permitted by such rule. Such period with respect to the rule against
perpetuities shall expire upon the expiration of twenty (20) years after the
death of the last survivor of the following persons:

 

Jennifer Ann Thomas of Memphis, Tennessee
Justin Robert Wright of Memphis, Tennessee
Kelsey Alexandra Wright of Memphis, Tennessee
Thomas Justin Bayless of Memphis, Tennessee
Nathan Wiley Reynolds of Memphis, Tennessee

 

The intent of this provision is to allow to the maximum extent permissible by an
applicable rule of law the occurrence of any event contemplated by this
Agreement.

 

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Witness Our Signatures on the date herein below.

This the 24th day of October, 2003.

 

 

The Mayor and Aldermen of

 

The City of Vicksburg, MS

 

 

 

/s/ Laurence E. Leyens

 

By:

Laurence E. Leyens,

 

 

Mayor

Attest:

 

 

 

/s/ [ILLEGIBLE]

 

 

 

  City Clerk

 

 

 

This the 22nd day of October, 2003.

 

 

 

 

 

 

 

Columbia Properties,
Vicksburg, LLC

 

 

 

 

/s/ William J. Yung

 

By:

William J. Yung

 

 

President

 

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STATE OF KENTUCKY

 

)

 

 

)ss.

COUNTY OF KENTON

 

)

 

Personally appeared before me, the undersigned authority in and for the said
county and state, on this 22nd day of October, 2003, within my jurisdiction, the
within named Willims J. Yung who acknowledged that he is the president of
Columbia Properties Vicksburg, L.L.C., a Mississipi limited liability company,
and that for and on behalf of the said limited liability company, and as its act
and deed, he executed the above and foregoing instrument, after first having
been duly authorized by said limited liability company so to do.

 

 

/s/ [ILLEGIBLE]

 

NOTARY PUBLIC

My Commission Expires:

 

 

 

MICHELLE STALLMEYER

 

 

 

[ILLEGIBLE]

 

 

 

/s/ Michelle Stallmeyer

 

 

Signature

 

 

 

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State Of Mississippi
County of Warren

 

On this 24th day of October, 2003, personally appeared before me, a notary
public in and for said County and State, Lawrence Leyens, known to me to be the
Mayor of the City of Vicksburg, Mississippi and upon oath did depose that he is
the Mayor of said City, that the signature to said instrument was made by him as
Mayor of said City, and that the City executed the said instrument freely and
voluntarily and for the uses and purposes therein mentioned.

 

 

 

 

/s/ Barbara Jean Luke

 

Notary Public

 

My Commission Expires: July 11, 2007

 

 

 

 

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