Document:

robk_ex101.htm

EXHIBIT 10.1

Execution Version

 

 

GROUND LEASE AGREEMENT

 

AMONG

 

MARINE LIFE VENTURES, LLC AND MC MARINE, LLC,

 

AS LESSORS

 

AND

 

ROTATE BLACK MS, LLC, AS LESSEE

 

 

 

 

  

  

  

 

GROUND LEASE AGREEMENT

 

THIS GROUND LEASE AGREEMENT (this “Lease”) is entered into by and among MARINE LIFE VENTURES, LLC, a Mississippi limited liability company (“Marine Life”), MC MARINE, LLC, a Mississippi limited liability company (“MC Marine”), (collectively the “Lessors”), and ROTATE BLACK MS, LLC, a Mississippi limited liability company (the “Lessee”) as of the Effective Date.

 

WITNESSETH:

 

WHEREAS, Lessors are the fee simple owners of the Leased Premises (as hereinafter defined);

 

WHEREAS, principal companies of the Lessors and Lessee entered into a letter of intent (“LOI”) dated March 9, 2010, to allow Lessee to perform due diligence in order to determine whether the Leased Premises is feasible for use by Lessee as a site for the operation of a legal gaming facility; and

 

WHEREAS, Lessee has determined that the Leased Premises is feasible for operation of a legal gaming facility, and Lessee desires to lease from Lessors, and Lessors desire to lease to Lessee the Leased Premises pursuant to the terms of this Lease;

 

NOW, THEREFORE, in consideration of the mutual promises, covenants and undertakings hereinafter contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

 

1. Description of Lease Property.  Lessors do hereby lease and let unto Lessee, and Lessee does hereby hire, take, and lease from Lessors, the following described parcels of real property, lying and being situated in the City of Gulfport, Harrison County, First Judicial District, Mississippi, with said properties being located adjacent to the Gulfport Harbor, and described as follows:

 

Parcel I—(“Marine Life Parcel”)

 

Property identified by tax parcel numbers 0811K-02-006.000 and 0811K-02-007.000 and more particularly described in Exhibit “A” attached hereto and made apart hereof

 

Parcel II—(“MC Marine Parcel”)

 

Property identified by tax parcel number 0811K-02-007.001 and more particularly described in Exhibit “B” attached hereto and made apart hereof

 

together with all water rights, water frontage, riparian and/or littoral rights appurtenant, associated, or appertaining thereto (the Marine Life Parcel and MC Marine Parcel collectively are referred to as the “Leased Premises”).  For purposes of this Lease, Leased Premises shall include any and all Improvements now existing or hereafter constructed on the Leased Premises (collectively, the “Improvements”).  Nothing herein shall be deemed a conveyance of anything other than a leasehold in the Leased Premises.

 

  

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Except to the extent otherwise stated in this Lease, it is the purpose and intent of the parties to treat both Marine Life Parcel and MC Marine Parcel as one unified parcel.  Notwithstanding treating both parcels as the unified Leased Premises, the Lessors’ percentage of the rental payments (whether such rental payments are Minimum Rent, Percentage Rent or otherwise) shall be as follows:

 

	
Marine Life

	
66%

	
MC Marine

	
34%

	
Total

	
100%

 

The above percentages shall be referred to as the “Lessors’ Percentages.”  Notwithstanding the foregoing, if Lessors deliver a written notice to Lessee signed by both Lessors which provides for a different allocation of the Lessors’ Percentages, then upon receipt of such notice, the Lessors’ Percentages shall be automatically amended for all purposes of this Lease.

 

2. Purpose and Quiet Enjoyment. This Lease shall be primarily for the purpose of carrying out legal gaming operations (hereinafter referred to as “Gaming Operations”) pursuant to the Mississippi Gaming Control Act, as codified in Mississippi Code Annotated § 75-76-1, et seq., its regulations, and any amendments thereto and other legislation and regulations applicable thereto (hereinafter referred to as “Gaming Control Act”), together with related activities as set forth herein.  Additionally, Lessee agrees to use commercially reasonable efforts to occupy the Leased Premises in a careful, safe and proper manner.  Lessee agrees that it will, at its sole expense, use the Leased Premises for only the purposes pursuant to this Lease herein and Lessee further agrees to use the Leased Premises substantially in accordance with all applicable laws, rules, orders, ordinances, directions, regulations, or requirements of any federal, state, county or municipal authorities.  Lessee agrees not to commit or allow to be committed any waste or nuisance or other act against public policy, deface or damage the Leased Premises in any manner.  Lessee shall have the right of quiet and peaceable possession of the Leased Premises as herein set forth.  In addition to any Gaming Operations, non-gaming structures, including, without limitation, hotels, restaurants, bars, parking garages, and entertainment facilities (collectively “Gaming Structures”) may be built on the Leased Premises for use by the Lessee and/or sale to third parties; provided, however, such uses and sales of the casino structures shall be subject to this Lease. Additionally, the Lessee may construct a marina with boat slips for lease and/or sale to third parties; provided, however, such leasing and sales of the marina facilities or boat slips shall be subject to this Lease.  Notwithstanding anything in this Lease to the contrary, Lessee shall be prohibited from constructing or developing condominiums on the Leased Premises without the express written consent of Lessors.

 

  

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3. Acceptance of Title and Condition of Property.  The Lessee, during a due diligence period granted to it by the Lessors in the LOI, has examined the Leased Premises, the title thereto, all environmental matters, sub-surface conditions, the present uses, non-uses, and zoning thereof.  The Lessee accepts the Leased Premises in an “as-is where is” condition in which it is at the Effective Date hereof without any representation or warranty, express or implied, in fact or in law, by the Lessors, and without recourse to the Lessors, except where such conditions, whether they be title conditions, physical conditions or otherwise, have been intentionally concealed by the Lessors from the Lessee.

 

4. Rent.  This Lease shall consist of a Preliminary Term (defined below) and a Primary Term (defined below) as set forth in the remaining provisions of this paragraph 4.  All rent is to be paid without offset or deduction, except as expressly provided herein, and without notice or demand to the Lessors at their addresses provided in paragraph 27.

 

(a) Effective Date.  The effective date (the “Effective Date”) of this Lease shall be 12:00 a.m. on October 20, 2010.

 

(b) Preliminary Term.  Commencing on the Effective Date, there shall be a preliminary term (the “Preliminary Term”), and the Preliminary Term shall remain in force and effect until the earlier of: (i) 11:59 p.m. on the last day of the ninth (9th) month following the Effective Date; or (ii) the date Gaming Operations begin on the Leased Premises.  During the Preliminary Term, the rent paid by the Lessee to the Lessors shall be equal to Twenty Thousand Dollars ($20,000) per month (the “Preliminary Rent”), paid to the Lessors according to the Lessors’ Percentages.  Notwithstanding anything contained in this paragraph 4(b) to the contrary, the Preliminary Rent shall accrue and the Lessee shall be under no obligation to make any such payment of Preliminary Rent until the earlier of: (i) the date the Lessee commences any construction on the Leased Premises; or (ii) February 1, 2011.  Upon the earlier date reference in the aforementioned sentence, all accrued and unpaid Preliminary Rent shall be due and payable, with the remaining Preliminary Rent payable in monthly installments on the first (1st) day of each month hereafter throughout the remainder of the Preliminary Term as provided in this paragraph; provided, however, that if Lessee does not receive an approval to proceed with the development of a casino on the Leased Premises from the Mississippi Gaming Commission on or prior to March 1, 2011, then this Lease shall be immediately terminable with no obligations due from either party to each other with the exception of the amounts required to be paid pursuant to paragraph 37, which shall be prorated through the date of any termination.

 

(c) Primary Term. The primary term (the “Primary Term”) shall commence on the day immediately succeeding the expiration of the Preliminary Term until 11:59 p.m. October 19, 2109.  During the Primary Term of this Lease, the Lessee shall pay to the Lessor the greater of (i) the Minimum Rent as set forth in paragraph 4(c)(i) hereof, or (ii) the Percentage Rent as defined in paragraph 4(c)(ii) in the manner as provided in paragraph 4(d).  The rent payments set forth in this paragraph 4 and its various sub-paragraphs and subparts shall be subject to the provisions of paragraph 4(f).

 

(i) Minimum Rent.  For purposes of this Lease, the term “Minimum Rent” shall be as follows:

  

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(1)  For the first (1st) six (6) months of the Primary Term, the Minimum Rent shall be equal to Fifty Thousand Dollars ($50,000) per month;

 

(2)  Beginning on the first (1st) day of the seventh (7th) month of the Primary Term, the Minimum Rent shall be Seventy Five Thousand Dollars ($75,000) per month until such time as sub-paragraph (3) immediately below is applicable; and

 

(3)  Beginning on the first (1st) day of the seventh (7th) month following the commencement of Gaming Operations at the Permanent Facility (as defined below), the Minimum Rent shall be One Hundred Ten Thousand Dollars ($110,000) per month adjusted annually as provided in the following provisions of this sub-paragraph (3).  Once the Minimum Rent has been increased to One Hundred Ten Thousand Dollars ($110,000) per month, then upon the first annual anniversary date of the Minimum Rent being increased to One Hundred Ten Thousand Dollars ($110,000), and on each annual anniversary date thereafter, the Minimum Rent shall be increased by the corresponding change in the CPI compared to the prior calendar year’s CPI in an amount not to exceed three percent (3%) per year, and such increase shall be automatic requiring no notice or calculation thereof.  As used herein, CPI means the consumer price index as published by the Bureau of Labor Statistics, U. S. Department of Labor, or if discontinued, the most comparable and similar index then in use.  The CPI for the immediate preceding calendar year and the CPI for the calendar year preceding that shall be used to determine if there has been an annual increase.  If there has been no increase, the rent shall not, under any circumstances, be decreased.  The index to be used herein shall be the “All Urban Consumers - South Urban - All Items” or the most comparable index then in use.  Such CPI increase shall be calculated and compounded.  For purposes of this Lease, the term “Permanent Facility” shall mean the land-based gaming and entertainment facilities developed subsequent to the Lessee’s initial Gaming Operations, which shall be conducted on a gaming vessel docked adjacent to the Leased Premises.  The CPI shall be calculated according to the following illustration:

 

	
CPI for current period

	 	 	133.0	 
	
Less CPI for previous period

	 	 	129.9	 
	
Equals index point change

	 	 	3.1	 
	
Divided by previous period CPI

	 	 	129.9	 
	
Equals

	 	 	0.0239	 
	
Result multiplied by 100

	 	 	0.0239 x 100	 
	
Equals percent change

	 	 	2.39	 
	  	 	 	 	 

 

  

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(ii) Percentage Rent. After the commencement of Gaming Operations by Lessee, Lessee shall calculate the Lessors’ an annual percentage rent (the “Percentage Rent”) on a monthly basis, as set forth herein below:

 

(1)  The Percentage Rent shall be equal to four percent (4%) of the Gross Gaming Revenues, with such amount paid to the Lessors according to the Lessors’ Percentages.  For purposes of this Lease, the term “Gross Gaming Revenues” shall have the same meaning as gross gaming revenue for the purpose of reporting and payment of license fees under the Gaming Control Act and any applicable regulations, as amended. The Percentage Rent shall be subject to the terms of paragraph 4(f) hereof.

 

(2)   Percentage Rent Not Limited to Leased Premises.  The Percentage Rent (including the Percentage Rent under paragraph 4(h), if applicable) described by this Lease shall apply even though the Gaming Operations or other Improvements, including but not limited to Gaming Structures, may be located on the Development Property, or any property located within one thousand (1,000) feet of the Development Property or on any other property so long as the Development Property is in any way used by, required by or associated in any way with the Lessee’s gaming license and such total rent amount shall be paid to the Lessors according to the Lessors’ Percentages.  The Marine Life Parcel, the MC Marine Parcel and any property leased from the City of Gulfport or Gulfport Redevelopment Commission along with the other property described above as it may exist on the Effective Date or at any time thereafter is hereby defined as the “Development Property”) for all purposes of this Lease.  The Percentage Rent is of the essence of this Lease and so long as the Development Property is used in any way or leased in conjunction with Gaming Operations or related activities, such Percentage Rent shall apply, regardless of the particular use (or non-use) made of the Leased Premises.

 

(d)  Payment of Rent During Primary Term.

 

(i) Minimum Rent.  The Lessee shall make a payment equal to the amount of Minimum Rent on the first (1st) day of the Primary Term which shall be prorated for the number of days remaining in the first (1st) month of the Primary Term. Thereafter, the Lessee shall pay an amount equal to the Minimum Rent in monthly installments, in advance, on the first (1st) day of each and every month during the Primary Term.

 

(ii) Percentage Rent.  The Lessee shall pay an amount equal to the Percentage Rent less the amount paid for such month pursuant to clause (i) immediately above on or before the twentieth (20th) day of the next succeeding month.  Such payment of Minimum Rent shall be accompanied by a copy of the monthly revenue reports which must be submitted to the Mississippi Gaming Commission or the Mississippi Department of Revenue for purposes of calculating the licenses fees.  Lessee shall also provide to the Lessors copies of any and all financial statements, reports or audits required of Lessee by the Mississippi Gaming Commission or the Mississippi Department of Revenue pursuant to the Gaming Control Act within ten (10) days after the same are submitted to the Mississippi Gaming Commission.

 

  

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(e) Adjustment of Rent Annually.  Within thirty (30) days of the last day of each calendar year hereunder it shall be determined, for the entire preceding calendar year, the amount of rent due for that year according to the terms hereof.  If the amount of rent paid by Lessee to the Lessors exceeds or is less than the rent provided for herein, then, in such event, there shall be an adjustment made and, if underpaid, the Lessee shall pay any difference to the Lessors within thirty (30) days of the end of such lease year and, if overpaid, the overpayment shall be taken as a credit in favor of the Lessee, and shall reduce the future rent owed by Lessee to the Lessors (whether such rent is Minimum Rent or Percentage Rent), until such overpayment is completely recouped.

 

(f) Cessation of Gaming Operations.  Should any Governmental Authority (defined below) having control over Gaming Operations, zoning or any other matter or issue affect the Gaming Operations, outlaw or deny gaming upon the Leased Premises, then the Lessee shall have the full option to terminate this Lease, which termination shall be effective on the fifth (5th) day following the date upon which the Gaming Operations are effectively outlawed or denied.

 

(g) Delinquent Rent Payments.  In addition to Lessors’ remedies for Lessee’s failure to timely pay rent described under paragraph 8(a), if any payment of Rent is not paid within fifteen (15) days after the due date, then such past-due payment will bear interest at the lesser of (i) the maximum non-usurious rate of interest or (ii) Prime Rate plus two percent (2%) per annum calculated from the fifteenth (15th) day after the due date until paid.  In addition to the late payment interest charge, a late charge of Five Thousand and No/100 Dollars ($5,000) shall be added to each Rent payment not paid within fifteen (15) days after the due date.  In no event shall such late payment interest charge and late payment charge (total of both) exceed the maximum allowed by the then current laws of the State of Mississippi and, in the event such charges (total of both) exceed such maximum allowed by the then current laws of the State of Mississippi, then the maximum late fee as allowed by the then current law of the State of Mississippi shall be due and payable.  The late payment interest charge and late payment charge are to compensate the Lessors for the additional costs incurred in collecting the Rent and/or for liquidated damages and are not a penalty.  The term “Prime Rate” means the prime rate reported (on the business day closest to the relevant day) by the Wall Street Journal, or its successors, in its Money Rates chart in the Money & Investing section (or such successor section).  If the Wall Street Journal, or its successor, is not longer published, then the prime rate reported by the largest (measured by assets) bank based in the United States will be the Prime Rate.  The parties agree the late payment interest charge and late payment charge do not create a Lender and Debtor relationship between the parties and do not constitute a finance charge.

 

(h) Percentage Rent for Unrelated Activities.  If the revenue generated by the Lessee’s Gaming Operations on the Development Property falls below fifty (50%) percent of all of the revenue sources generated by the Lessee on the Development Property on an annual basis, then the Lessee shall pay to Lessors a Percentage Rent equal to one and one-half percent (11⁄2%) of the Gross Non-Gaming Revenue and four percent (4%) of the Gross Gaming Revenue, with such amount paid to the Lessors according to the Lessors’ Percentages.  For purposes of this Lease, the term “Gross Non-Gaming Revenue” shall mean the total revenues received from revenue generated by Lessee’s non-gaming activities on the Development Property (e.g., hotel, restaurant dining, bars, liquor services, etc.) for which it collects retail sales tax under the sales tax laws of the State of Mississippi.  If the State of Mississippi repeals the sales tax law, then Gross Non-Gaming Revenue shall be calculated in a manner that would reach an equivalent result if it were still enacted.

  

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(i) Construction Required as Additional Rent.  As additional rent for this Lease, and subject to the default provisions of paragraph 8 hereof, Lessee shall be required to initially, and for fifty-four (54) months after the Effective Date, place and/or construct its Gaming Structures and Improvements (including the Permanent Facility) on the Leased Premises; provided, however, Lessee shall be entitled to construct parking facilities anywhere on the Development Property.  During the Preliminary Term, the obligation under this paragraph 4(i) shall mean the Improvements necessary to support and facilitate the operation of a gaming vessel having at least twenty thousand (20,000) square feet of gaming space.  Also, as additional rent hereunder and subject to the default provision of paragraph 8 hereof, Lessee shall be required to construct on the Leased Premises the Permanent Facility which shall consist of no less than a casino hotel having at least three hundred (300) rooms within fifty-four (54) months of the Effective Date of this Lease.  Furthermore, Lessee shall be required to place a minimum amount of Improvements physically located within the boundaries of the Leased Premises equal to or exceeding Fifty Million Dollars ($50,000,000) (valued at the time construction is completed) within such fifty-four (54) month period.  Notwithstanding the initial development of the Gaming Structures and Improvements on the Leased Premises as described in this paragraph 4(i), Lessee shall also have the right to develop the Development Property, provided that all of the Gaming Operations are initially, and for fifty-four (54) months after the Effective Date, located on the Leased Premises; and provided, further, that upon expiration of such fifty-four (54) month period, at least sixty percent (60%) of all Gaming Operations are located on the Leased Premises.  At least sixty percent (60%) of all Gaming Operations shall mean Gaming Operations producing at least sixty percent (60%) of Lessee’s Gross Gaming Revenue.

 

(j) Payment Upon Execution of Lease.  Within ten (10) days of the execution of this Lease, Lessee shall pay Ten Thousand Dollars ($10,000) to Lessors according to Lessors’ Percentages, which payment shall be non-refundable under any and all circumstances and may be immediately deposited and used by Lessors, and it shall not be applied toward any rent due under this Lease.

 

5. Gaming Provision.

 

(a)  If necessary and required by any federal, state, or local gaming licensing authorities, including, without limitation, the Mississippi Gaming Commission (or any successor thereto) (collectively “Governmental Authorities”) for the operation by Lessee of its Gaming Operations on the Development Property, Lessors, at the Lessee’s sole cost and expense, shall promptly apply for and use its best efforts to obtain the necessary and required gaming licenses or approvals.  Lessors and Lessee shall fully cooperate with the Governmental Authorities in connection with any approval or permit applications of the Lessors and/or Lessee, or otherwise, which shall include, without limitation, provision of such information, books and records as may be requested by the Governmental Authorities and compliance with all orders and requirements of the Governmental Authorities.

  

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(b)  Lessors hereby acknowledge that Lessors and their Affiliates (as defined below) of Lessors may be required to be licensed or approved by certain Governmental Authorities in order to be eligible to receive payments pursuant to this Lease (collectively “Approvals”).  If at any time: (a) Lessors or any Affiliates of Lessors or any Person (as defined below) required by the appropriate Government Authority to be approved are denied an Approval, or does not apply for an Approval within any required time limit, or withdraws any application for an Approval; or (b) any Governmental Authority commences or threatens to commence any administrative proceeding or court action against Lessors or Affiliate of Lessors or any Person required by the appropriate Government Authority to be approved to terminate or deny any Approval of such Persons (all of the foregoing events described in (a) and (b) above are collectively referred to as a (“Denial”), the Lessors shall be afforded the right to cure the Denial in any manner approved by the Governmental Authority (any such action being collectively referred to as a “Cure”).  Lessors shall cause such Cure to become effective within thirty (30) days from the date of such Denial (or any other time prescribed by the applicable Governmental Authority) (the “Cure Period”).  If, after the Cure Period, a Cure approved by the Governmental Authority is not feasible or permitted, then Lessee shall have the right, in addition to all its other rights and remedies, to purchase the interest of the Lessor, Affiliate or Person who received the Denial as provided in this Lease.  Anything in this paragraph to the contrary notwithstanding, all Cures shall be effected as expeditiously as possible.  For purposes of this Lease, the term “Affiliate” shall mean, with respect to any Person (1) any Person directly or indirectly controlling, controlled by or under common control with such person or (2) any Person owning directly or indirectly fifty percent (50%) or more of the outstanding securities of such Person.  For purposes of this Lease, the term “Person” means any individual, partnership, corporation, limited liability company, trust, or other entity.

 

(c)  Lessors hereby grant to Lessee an option (the “Purchase Right”) to purchase the interest of the Lessor, Affiliate, or Person but only upon Lessors, Affiliate or Person receiving a Denial and being unable to cure such Denial as provided in paragraph 5(b).

 

(d)  Lessee may only exercise the Purchase Right following a Denial and the cure period specified in paragraph 5(b) by delivering written notice to Lessors, Affiliate or Person, as applicable, specifying a time and place at which the close of escrow (“Escrow”) shall occur, which date shall not be less than forty-five (45) days after the date of such notice.

 

(e)  The total purchase price for the interest being purchased (the “Purchase Price”) shall be an amount determined by dividing the Capitalization Rate (hereafter defined) into the average annual income stream realized by Lessors pursuant this Lease for the previous five (5) years of this Lease and thereafter applying the appropriate percentage of the interest being purchased.

 

(i)  The capitalization rate (the “Capitalization Rate”) to be used in the above formula shall be determined by using the following procedure.  Within fifteen (15) days of the event giving rise to this provision, the parties to the transaction shall jointly appoint a mutually acceptable qualified appraiser (“Qualified Appraiser”), who shall be a professional real estate appraiser with an MAI designation and who is qualified by experience and ability to appraise real estate on the Mississippi Gulf Coast, and in particular properties used in the gaming industry.  Such Qualified Appraiser shall determine the appropriate Capitalization Rate to be used in determining the value of the Leased Premises and his or her written opinion of the appropriate Capitalization Rate shall be conclusive and binding on the parties.  If the parties cannot agree on a mutually acceptable Qualified Appraiser, then each of the parties, at their own cost and expense, shall within fifteen (15) days following the expiration of the fifteen-day (15-day) period provided in the previous sentence, appoint a Qualified Appraiser to determine the appropriate Capitalization Rate.  If both Qualified Appraisers agree on the appropriate Capitalization Rate, their written opinions shall be conclusive and binding on the parties.  If only one of the parties appoints a Qualified Appraiser, that appraiser’s written opinion on the appropriate Capitalization Rate shall be conclusive and binding on the parties.  If two Qualified Appraisers are appointed and disagree on the appropriate Capitalization Rate, they shall appoint a third Qualified Appraiser mutually acceptable to them.  The fees and expenses of the third Qualified Appraiser shall be divided equally between the parties.  The third Qualified Appraiser shall not make an independent determination of the appropriate Capitalization Rate, but shall determine which of the opinions of the first two Qualified Appraisers is a more appropriate representation of the Capitalization Rate to be used to determine the value of the Leased Premises, and the Capitalization Rate so determined shall be conclusive and binding on all the parties.  Except otherwise specified in this Lease, the parties, in appointing Qualified Appraisers, and the Qualified Appraisers, in deciding the appropriate Capitalization Rate, shall act in accordance with the rules of the American Arbitration Association.

 

  

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(ii)  If there is less than one (1) full year of income experience after Gaming Operations have commenced when this paragraph 5 is put into force and effect, then the Purchase Price shall be determined as provided in subparagraph (iii) below.  If there is not five (5) years of lease income experience when this paragraph 5 is put into force and effect, then the average annual income stream shall be determined by a projection of the income stream from the average annual income stream that has been paid for a number of years necessary to equal five (5) years.  In order to determine such projection, the previous year’s income shall be multiplied by one hundred five percent (105%) in order to determine the next year’s projected income.  This process shall continue until there are five (5) years of income, including actual and projected, to apply this paragraph.  For purposes of calculating the Purchase Price, the interest of the Lessor, Affiliate or Person who receives a Denial shall reflect the percentage ownership as it bears to the entire Leased Premises as follows:  Assuming that the average annual income stream for the entire Leased Premises is Five Million Dollars ($5,000,000), and the Lessors’ Percentages are equal to sixty-six percent (66%) for Marine Life and thirty-four percent (34%) for MC Marine.  Further, assume that the Capitalization Rate as defined above is nine and five tenths percent (9.5%), and that a Person owning five percent (5%) of MC Marine receives a Denial that cannot be Cured.

 

      = $52,631,578.95 x .017 = $894,000

 

05 × .34 (or MC Marine’s current percentage) = 1.7%

 

  

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(iii)  Notwithstanding the foregoing, under no circumstance shall the Purchase Price calculated under this paragraph 5 be less than an amount determined by applying a square footage price of Two Hundred Dollars ($200) per square foot for the area of fastlands within the Leased Premises.  The area of square feet of the fastlands within the Leased Premises shall be determined by a certified land surveyor selected by the Lessors licensed in the State of Mississippi.  By way of example, and not by way of limitation, assume the same facts in the example described above in subparagraph (ii), and further assume that that the total area of fastlands within the Leased Premises is equal to two hundred twenty thousand two hundred forty-five (220,245) square feet.  The minimum Purchase Price of the entire Leased Premises would be Forty-Four Million Fifty Thousand Eight Hundred Dollars ($44,050,800) [220,254 × $200].  After applying the appropriate percentage of the Person who received the Denial (i.e., 1.7%), the minimum Purchase Price for the five percent (5%) owner of MC Marine would be equal to Seven Hundred Forty-Eight Thousand Eight Hundred Sixty-Four Dollars ($748,864) [$44,50,800 × 1.7%].  The Purchase Price as calculated hereby is for the purpose of this paragraph 5 only and for no other purpose whatsoever under any circumstances.

 

(f)  Upon exercise of the Purchase Right under this paragraph 5, the Lessor, Affiliate or Person who receives a Denial shall convey his, her, or its interest to Lessee at the close of Escrow by generally accepted conveyance or transfer, including a warranty bill of sale, subject only to matters existing upon the Effective Date and matters caused or incurred by Lessee.  Any indebtedness or encumbrance upon such interest shall be satisfied at the close of Escrow.

 

6. Environmental Matter and Indemnification.

 

(a) Environmental Laws.  The term “Environmental Laws” means and includes any and all present and future federal, state or local laws, statutes, ordinances, rules, regulations, orders, judgments, decrees, concessions, grants, franchises, agreements, codes, restrictions, or determinations of any governmental authority regulating, relating to or imposing liability or standards of conduct concerning, any environmental matters, as now or at any time hereafter in effect, including, without limitation, the National Environmental Policy Act, the Clean Water Act, the Clean Air Act, Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, and as may be further amended from time to time (“CERCLA”), the Federal Water Pollution Control Act, the Occupational Safety and Health Act of 1970, the Resource Conservation and Recovery Act of 1976 (“RCRA”), the Hazardous Materials Transportation Act of 1975, the Safe Drinking Water Act, the Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act, as amended by the Federal Environmental Pesticide Control Act of 1972 and by the Federal Pesticide Act of 1978, the Emergency Planning and Community Right-To-Know Act of 1986, the United States Environmental Protection Agency’s Technical Standards and Corrective Action Requirements for Owners and Operators of Underground Storage Tanks, 40 C.F.R. Part 280, The Atomic Energy Act of 1954, the Acid Precipitation Act of 1980, the Low-Level Radioactive Waste Policy Act, the Nuclear Waste Policy Act of 1982 and the Solid Waste Disposal Act and any so-called “Superfund” or “Superlien” law and any comparable or similar environmental laws (whether state or federal), together with all amendments in effect from time to time, and all rules and regulations promulgated from time to time, under or with respect to any or all of the foregoing laws.

  

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(b) Hazardous Substances.  The term “Hazardous Substances” means, without limitation, any flammable substances, explosives, radon, radioactive materials, asbestos (and any substance containing asbestos), urea formaldehyde foam insulation, the group of organic compounds known as polychlorinated biphenyls, chemicals known to cause cancer or reproductive toxicity, pollutants, effluents, contaminants, emissions or related materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled, petroleum and petroleum-based products, including crude oil and any fraction thereof, natural gas or synthetic gas used for fuel, methane, hazardous materials, hazardous wastes, underground storage tanks or storage facilities and other substances or related materials defined as hazardous or toxic in, or otherwise included within the scope of, any Environmental Law.  Hazardous Substances shall not mean any existing concrete structures visible from the surface of the Leased Premises or able to be discovered just below the surface of the Leased Premises.

 

(c)Existing Environmental Issues.  As represented by Lessors in sub-paragraphs 7(a)(vii) and 7(a)(viii), Lessors do not have knowledge of any violation of Environmental Laws with regard to the Leased Premises as of the Effective Date.  Howe ver, should Lessee discover Hazardous Substances are located on the Leased Premises that existed on the Effective Date and that Remedial Actions are necessary to comply with the Environmental Laws, then Lessee shall undertake the actions necessary to comply with the Environmental Laws, including any clean-up, remediation, obtaining necessary permits, and such other actions necessary to comply with the Environmental Laws (collectively, “Remedial Actions”); provided, that, such costs are not reasonably estimated to exceed Ten Thousand Dollars ($10,000).  If such costs are reasonably estimated to exceed Ten Thousand Dollars ($10,000) as provided by a report from a reputable environmental engineer or environmental consulting firm, then Lessee shall immediately notify Lessors as provided herein.  Lessors shall have forty-five (45) days after receipt of notice to either:  (1) undertake at Lessors’ expense such necessary Remedial Actions, or (2) notify Lessee as provided herein that they elect not to undertake such necessary Remedial Actions.  In the event Lessors elect not to take such necessary Remedial Actions, then Lessee may either (1) elect to undertake such necessary Remedial Action at its sole expense, or (2) terminate this Lease by providing notice to Lessors as provided herein.

 

(d) Compliance with Environmental Laws After Effective Date.  Lessee shall keep, and shall cause all operators, managers, tenants, subtenants, licensees and occupants of the Leased Premises, anybody who comes onto the Leased Premises under Lessee’s authority or control and all agents, employees, contractors and subcontractors of Lessee to keep, the Leased Premises free of all Hazardous Substances, and Lessee shall not cause or permit the Leased Premises or any part thereof to be used for the storage, treatment, generation, transportation, processing, handling, production or disposal of any Hazardous Substances, except as incidental and necessary to use the Leased Premises for the purposes stated herein, which in all events will be in compliance with all Environmental Laws.

 

  

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(e) Indemnity for Environmental Claims.  Lessee agrees to indemnify, defend (with counsel satisfactory to the Lessors) and hold Lessors and its shareholders, members, managers, officers, employees, directors and agents harmless from any claims, judgments, damages, penalties, fines, expenses, liabilities or lawsuits arising during or after the term of this Lease out of or in anyway related to its use of the Leased Premises or for any leak, peril, release, discharge, emission or disposal of Hazardous Substances affecting the Leased Premises during the occupancy of the Leased Premises by the Lessee, unless such Hazardous Substances were present upon the Leased Premises prior to the Effective Date hereof.  If such Hazardous Substances were present upon the Leased Premises prior to the Effective Date, Lessors shall be solely responsible for any claims, judgments, damages, penalties, fines, expenses, liabilities, or lawsuits arising during or after the term of this Lease arising from any leak, spill, release, discharge, emission, or disposal of Hazardous Substances, except for the Ten Thousand Dollar ($10,000) threshold amount described above in sub-paragraph (c) of this paragraph 6.  It is the purpose of this sub-paragraph (e) is to indemnify and hold the Lessors harmless from any and all lawsuits, claims, losses, damages and actions arising as the result of Lessee’s activity upon the Leased Premises and to provide Lessors’ counsel at Lessors’ choosing and at Lessee’s expense in the event Lessors are joined in any lawsuit involving the Leased Premises, except if the same is the result of the fault or the negligence of Lessors or their predecessors.  Lessee’s obligation to indemnify Lessors pursuant to this sub-paragraph shall survive expiration or early termination of this Lease.

 

7. Representations and Warranties.

 

(a) Representations and Warranties of Lessors.  Lessors hereby represent to Lessee as follows:

 

(i)  Lessors believe they have good and marketable title to the Leased Premises, including all water rights, riparian rights and littoral rights, necessary for the use contemplated by Lessee, and full power and authority to enter into this Lease.  Excluded from such representation are the following: (i) Lessors do not represent that said property is free and clear of the claim of the Secretary of State or State of Mississippi (as sovereign or as trustee), due to the possible former status of the property as water bottoms; (ii) the Lessors do not represent that its riparian and/or littoral rights include the right to float a gaming vessel south or east of the property without the Lessee first obtaining permission and/or paying a fee or charge to the Secretary of State or other appropriate state agency.  Any such charge shall be the sole obligation and responsibility of the Lessee.

 

(ii)  Each of Lessors has full power and authority to enter into this Lease.

 

(iii)  The execution, delivery and performance of this Lease by the person executing the same on behalf of Lessors have been duly and validly authorized and this Lease constitutes the legal, valid and binding obligation of the Lessors enforceable in accordance with its terms.

 

(iv)  This Lease constitutes the legal, valid and binding obligation of the Lessors, enforceable in accordance with its terms.

 

(v)  Lessors are not aware of any adverse condition undisclosed to Lessee which would materially adversely affect Lessee’s use of the Leased Premises, except those set forth herein, and those discovered by Lessee during its due diligence period.

  

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(vi)  Neither Lessors nor, to the best of the Lessors’ knowledge, any Affiliate of Lessors are unwilling to file all necessary applications to obtain whatever Approvals may be required of such Persons in connection with the Leased Premises.  Neither Lessors nor, to the best of the Lessors’ knowledge, any Affiliate of Lessors have ever engaged in any conduct or practices which any of the foregoing Persons should reasonably believe would cause such Person or entity to be denied any Approval and/or cause any of the buy-out triggering events described in paragraph 5.

 

(vii)  Lessors have not received any notice or other communication concerning any alleged violation of Environmental Laws or party notices or other communications concerning liability for Hazardous Materials in connection with the Leased Premises, and there exists no writ, injunction, decree, order or judgment outstanding, nor any lawsuit, claim, proceeding, citation or investigation, pending or threatened, relating to the ownership, use, maintenance or operation of the Leased Premises by any person, or to any alleged violation of any Environmental Law or to the suspected presence of Hazardous Materials thereon, nor, to the best of Lessors’ knowledge do there exist any basis for any such lawsuit, claim, proceeding, citation or investigation being instituted or filed.

 

(viii)  Except as provided herein, to the best of Lessors’ knowledge, there are no Hazardous Materials stored, deposited, or otherwise located in, on or under the Leased Premises nor has the Leased Premises ever been used as a landfill or waste disposal site, or used or occupied for the purpose of, or in any way involving, the handling, manufacture, treatment, storage, use, generation, release, discharge, refining, dumping or disposal of any Hazardous Material to, from or across the Leased Premises.

 

(b) Representations and Warranties of Lessee.  Lessee hereby represents and warrants to the Lessors as follows:

 

(i)  Lessee has full power and authority to enter into this Lease.

 

(ii)  The execution, delivery and performance of this Lease by the person executing the same on behalf of the Lessee have been duly and validly authorized and this Lease constitutes the legal, valid and binding obligation of Lessee enforceable in accordance with its terms.

 

(iii)  This Lease constitutes a legal, valid, and binding obligation of Lessee, enforceable in accordance with its terms.

 

(iv)  Lessee represents that it has performed its due diligence as set forth in paragraph 3 hereof and accepts the Leased Premises in the condition in which it now is without representation or warranty, all as set forth in paragraph 3 hereof.

 

8. Default.  Lessors may terminate this Lease after expiration of the following notices and cure periods:

 

(a)  If rent or delinquent rent payments as provided in Paragraph 4(g) are not paid within ninety (90) days after the written notice from the Lessors to Lessee and to any and all Leasehold Mortgagee(s) (if any);

  

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(b)  If Lessee or any and all Leasehold Mortgagee(s) shall have failed to cure a default in the performance of any covenant or other material representation, warranty, obligation or duty of this Lease (except the payment of rent) within ninety (90) days after written notice thereof from Lessors to the Lessee and any and all Lessor Mortgagee(s);

 

(c)  If Lessee, after the commencement of Gaming Operations, through its own fault, shall cease to conduct Gaming Operations on the Leased Premises for a continuous period of one-hundred eighty (180) days, then Lessors shall have the option to declare this Lease terminated, except for where the cessation of Gaming Operations is caused by a natural disaster beyond the control of Lessee; or

 

(d)  For any other grounds providing for termination as may be otherwise expressly provided in this Lease.

 

In the event a bona fide dispute arises between the parties as to whether a default exists on the part of the Lessee, which dispute cannot be cured within the time periods provided above, then Lessee or any Leasehold Mortgagee(s) may post a bond or a letter of credit (satisfactory to a reasonable man in a similar transaction) in an amount adequate to assure that any such default is cured, and thereafter Lessee or such Leasehold Mortgagee(s) may have a reasonable time (not to exceed one-hundred eighty (180) days after notice of default) to cure any such default, during which time the obligation to pay rent shall continue according to the terms hereof.

 

9. Damage and Destruction.

 

(a) Notice.  In the event of any damage to or destruction of all or any part of the Leased Premises, Lessee will promptly give written notice thereof to Lessors, which notice shall generally describe the nature and extent of such damage or destruction.

 

(b) Restoration.  Except as provided in paragraph 9(d), (e) and (f), and, in the event of any damage to or destruction of all or any part of the Leased Premises and whether or not the insurance proceeds on account of such damage or destruction shall be sufficient for the purpose, Lessee shall promptly commence and shall thereafter diligently and continuously prosecute to completion the restoration, replacement or rebuilding of the Leased Premises as nearly as practicable to their value, architectural condition and character as existed immediately prior to such damage or destruction so as to permit resumption of the use of the Leased Premises for the permitted use(s) to as nearly the same degree as possible (pending completion of the work, such restoration, replacement or rebuilding, together with any temporary repairs and property protection, are herein collectively referred to as “Restoration”).

 

(c) Application of Proceeds.  Except as otherwise provided in this paragraph 9, insurance proceeds received on account of any damage to or destruction of the Leased Premises or any part thereof shall be paid to a third party insurance trustee to be agreed upon by the parties, for application to pay for the cost of Restoration (“Insurance Trustee”). In the event the parties cannot agree on an Insurance Trustee to receive and hold the funds from any such loss, either party may petition the Chancery Court of Harrison County, Mississippi, First Judicial District to appoint an Insurance Trustee.  The parties acknowledge that any FDIC insured banking institution is qualified to serve as the Insurance Trustee provided that said banking institution has no relationship to any party to this Lease.  To the extent any such proceeds shall be inadequate to pay such cost, it shall be Lessee’s sole cost and obligation to pay all additional costs of Restoration, unless Lessee exercises its right of termination as provided in paragraph 9(d) or (e).  Lessee shall provide written notice to Lessors of the availability of such funds.

 

  

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(d) Damage Covered by Insurance.  If the Leased Premises shall be damaged by fire or other casualty which is covered by insurance required to be maintained by Lessee, Lessee shall commence Restoration within thirty (30) days after such insurance proceeds have been made available or no later than one hundred and eighty (180) days after the casualty and shall continue said repairs with due diligence to complete the Restoration; provided, however, if such damage is seventy percent (70%) or more of the Replacement Cost of the Leased Premises, Lessee shall have the option, exercisable by written notice to Lessors within sixty (60) days after the date of such casualty, to terminate this Lease effective as of the date provided below.  In such event, (i) if the Improvements are structurally sound following the casualty, then the term shall cease ten (10) days after Lessee has delivered a certification from the architect that the Improvements are structurally sound notwithstanding the casualty and Lessee has cleared all debris and materials from the Leased Premises and secured the Improvements against the weather or (ii) if the Improvements are not structurally sound following the casualty, then the term shall cease ten (10) days after Lessee has cleared all debris and materials from the Leased Premises and restored the parcel to a clear, clean, filled, compacted and graded surface (the obligations in (i) and (ii) of this sentence are collectively the (“Casualty Termination Work”).  In the event of such termination, any proceeds payable under any of Lessee’s policies for debris removal shall be applied to the cost of the Casualty Termination Work (or paid to Lessor if Lessee does not perform the Casualty Termination Work) and any other proceeds of Lessee’s policies shall be used to pay off Lessee’s permitted mortgagees and the balance shall be paid fifty percent (50%) to Lessors and fifty percent (50%) to Lessee.  If Lessee does not exercise such right to terminate or is required to complete the Restoration, all insurance proceeds shall be paid to the Trustee and shall thereafter be made available to Lessee as Restoration continues and such funds shall be disbursed by the Insurance Trustee, based upon the actual work satisfactorily completed by the Lessee (or its contractor), which work shall be certified by an architect licensed and bonded to conduct business in the State of Mississippi, and following Lessee’s execution of such documents required by the Insurance Trustee to evidence that all bills for Restoration have been paid and there are no outstanding materialman’s liens or bills which could create a lien against the property, and Lessee shall with due diligence proceed with the Restoration.  As used in this paragraph 9, the term “Replacement Cost” shall mean the replacement cost agreed to by Lessees and its insurer in the insurance policies required hereunder. In the event such policies do not contain a determination of replacement cost, then replacement cost shall be determined by other reasonable and appropriate means.

 

(e) Damage Near the End of the Term.  If, during the last ten (10) years of this Lease, the Leased Premises is damaged by fire or other casualty, the Restoration cost of which exceeds Forty Million Dollars ($40,000,000), Lessee and Lessors shall have the option, exercisable by written notice to the other within sixty (60) days after the date of such casualty to terminate this Lease effective as of the date of such casualty. In such event, Lessors shall be entitled to all the insurance proceeds except for any insurance proceeds insured separately by the Lessee which are attributable to the Lessee’s personalty and the amount actually expended by Lessee (at Lessors’ written request) for Casualty Termination Work (i.e., demolishing and removing all damaged Improvements and surrender the Leased Premises to Landlord in a clean condition, free of any and all debris).  If neither party elects to terminate this Lease, then Lessee shall with due diligence cause such Restoration and all insurance proceeds shall be made available to Lessee for such Restoration, as described in paragraph 9(d).

  

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(f) Non Abatement of Rent.  The parties expressly acknowledge and agree that there will be no abatement of rent following any such casualty loss, and that any and all rent or other amounts due hereunder shall remain due and payable following any casualty loss and during any period of Restoration, without setoff, claim or demand.

 

10. Right of Refusal to Purchase Leased Premises.

 

(a) Offer to Purchase Leased Premises from Both Lessors.  Lessors hereby grant to Lessee a first right of first refusal to purchase the Leased Premises in the event that both Lessors shall desire to sell the Leased Premises as a whole, and both Lessors have received a single definitive bona fide offer to purchase the Leased Premises as a whole.  In such event, the Lessors’ shall notify Lessee in writing, which writing shall include an exact copy of such definitive offer, and Lessee shall thereafter have a thirty (30) day period of time within which to purchase the Leased Premises from the Lessors on the same terms and conditions and at the same price as set forth in such offer.  If the Lessee does not elect to exercise its right of first refusal within such thirty (30) day period or notifies the Lessors in writing that it will not exercise such right of first refusal, then Lessors may proceed to sell the Leased Premises pursuant to such bona fide offer under the same terms and conditions as those provided to the Lessee.

 

(b) Offer to Purchase Leased Premises from a Single Lessor.  Each Lessor hereby grants to Lessee a second right of first refusal to purchase its Parcel of the Leased Premises in the event that a single Lessor shall desire to sell its Parcel of Leased Premises, and such Lessor has received a definitive bona fide offer to purchase such Lessor’s Parcel of the Leased Premises.  In such event, the Lessor desiring to sell shall first notify the other Lessor hereof or their successors and/or assigns in writing, which writing shall include an exact copy of such definitive offer, and such other Lessor shall have a thirty (30) day period of time within which to purchase the selling Lessor’s Parcel of the Leased Premises from the selling Lessor on the same terms and conditions and at the same prices as set forth in said offer.  If the Lessors have a written agreement as to such right of first refusal it shall supersede this paragraph, except that if the non-selling Lessor refuses to purchase pursuant thereto, the balance of this paragraph shall apply.  In the event such non-selling Lessor does not exercise its right of first refusal within such thirty (30) day period or such non-selling Lessor notifies the selling Lessor in writing that it will not exercise its right of first refusal, then the selling Lessor shall notify the Lessee in writing, which writing shall include an exact copy of such definitive offer, and Lessee shall thereafter have a thirty (30) day period of time within which to purchase the selling Lessor’s Parcel of the Leased Premises from the selling Lessor on the same terms and conditions and at the same price as set forth in such offer.  If the Lessee does not elect to exercise its right of first refusal within such thirty (30) day period or notifies the selling Lessor in writing that it will not exercise such right of first refusal, then the selling Lessor may proceed to sell selling Lessor’s Parcel pursuant to such bona fide offer under the same terms and conditions as those provided to the Lessee.

  

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(c) Rights of Refusal Shall Apply to Transfers of One Hundred Percent of Lessors.  The provisions of this paragraph 10 shall be applicable to a transaction or to a series of related transactions the purpose of which is circumvent the Lessee’s rights of first refusal provided in paragraph 10(a) and (b), but only if one hundred percent (100%) of the effective ownership of the entire Leased Premises (or one hundred percent (100%) of the effective ownership interest of a single Lessor’s entire Parcel) is transferred.

 

(d) Limitations of Applicability.  This paragraph 10 shall not prohibit any transfer among the owners of a Lessor or any respective Lessor entity in which less than one hundred percent (100%) of the effective ownership of the entire Leased Premises (or one hundred percent (100%) of the effective ownership interest of a single Lessor’s entire Parcel) is transferred.  Furthermore, this paragraph 10 shall not be applicable to any reorganization of a Lessor or a reorganization of an Affiliate of a Lessor.  The provisions of this paragraph 10 shall not prohibit the liquidation of a Lessor and distribution to the owners of the Lessor or an Affiliate of such Lessor.  This paragraph 10 shall not apply to a sale from one Lessor to the other Lessor.  This paragraph 10 shall not prohibit any transfer of ownership interests within the respective Lessor entities or their Affiliates or to or from any Persons owning an interest in Lessors or an Affiliate of a Lessor unless such transfer would result in a transfer of one hundred percent (100%) of the effective ownership of the entire Leased Premises (or one hundred percent (100%) of the effective ownership interest of a single Lessor’s entire Parcel).  In addition to the foregoing, no provision of this Lease shall restrict or otherwise have any effect on a buy-sell agreement among the respective Lessor entities or their Affiliates or any Persons owning an interest in Lessors, a Lessor entity or an Affiliate of a Lessor.

 

11. Right to Convey, Assign, or Sublet.  Lessee may, without Lessors’ consent, convey, sublease, and/or assign its rights, but not its obligations, hereunder, and Lessee may sublease a part or parts of the Leased Premises for such uses as gift shops, restaurants, hotels, marinas or similar use or concession; provided, however, that any conveyance, assignment and/or sublease shall be subject to this Lease, and neither Lessee nor any of its successors, assigns, or sublessees shall create any lien or encumbrance on Lessors’ fee simple title to the Leased Premises.  Lessee shall notify the Lessors, as provided in paragraph 11 hereof, within five (5) days thereafter, of any conveyance, sublease or assignments of rights hereunder.  Lessee shall only be relieved of its obligations hereunder by written release of same from Lessors.  Notwithstanding anything in this Lease to the contrary, no conveyance, sublease, assignment, or Mortgage created by or through the Lessee shall in any way impair the Lessors’ fee ownership interest in the Leased Premises, and any Person taking an interest in the Leased Premises by or through the Lessee shall at all times be subject to and bound by all terms and provisions of this Lease.

 

12. Lessee’s Requirements to Carry Certain Insurance and Lessee’s Indemnification.  Commencing with the Primary Term, Lessee will cause to be carried, and pay the premiums, for the insurance required in this paragraph 12.  Lessee’s insurance shall be issued by an insurance company of recognized standing, authorized to do business in the State of Mississippi with a Best’s Insurance Guide with a minimum rating of (or equivalent to) A+.  Upon the request of Lessors, Lessee shall periodically provide Lessors with certificates of insurance evidencing compliance with the requirements of this paragraph 12.  Lessee’s insurance shall include a waiver of subrogation favoring Lessors regarding the Leased Premises and shall provide or cause its insurer to provide Lessors at least thirty (30) days in advance of any termination, reduction or other material change in Lessee’s coverage on the following policies.

 

  

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(a) Premises Insurance.  A cause of loss special form (all risks) policy insuring the Leased Premises and all Improvements thereon in an amount not less than one hundred percent (100%) of the full replacement value of the Leased Premises as evidenced by “Replacement Costs” or “Restoration” endorsements thereto.  The term “Full Replacement Value” as used herein means actual replacement value without deduction for physical depreciation, as determined upon the request of Lessors, at the expense of Lessee, by appraisals at intervals not more frequently than may be required in order for the company issuing such insurance to provide the required “Replacement Cost” or “Restoration” endorsements.  Any property insurance policy issued pursuant to the forgoing shall name the Lessors as additional insureds on said policy.  Such coverage will provide coverage for debris removal.

 

(b) Liability Insurance.  A combined single limit policy of commercial general public liability insurance for bodily injury, property damage and personal injury liability of not less than Five Million Dollars ($5,000,000) per occurrence and Five Million Dollars ($5,000,000) in the aggregate.  The insurance required by this subsection shall be maintained for coverage for events occurring during the period of this Lease without regard to when the claim is asserted.  Lessors will be named as additional insureds on said policy.

 

(c) Business Interruption Insurance.  Lessee shall maintain business interruption insurance (“Business Interruption Insurance”) sufficient to cover any Rent and all other amounts due under this Lease for a period of six (6) months commencing with the date of loss.

 

(d) Other Insurance.  Lessee shall also carry such other insurance as it may deem prudent or advisable or which is otherwise required by law or customary under the circumstances, including but not limited to, workers’ compensation insurance.

 

(e) Waiver of Subrogation.  Lessee waives any claims that it may have against Lessors on account of any loss or damage occasioned by Lessee, arising from any and all risk covered or required to be covered by the insurance required to be carried under the terms of this Lease, EVEN IF SUCH LOSS OR DAMAGE IS CAUSED BY THE NEGLIGENCE OF THE LESSORS AND EVEN IF THE LESSORS WOULD OTHERWISE BE STRICTLY LIABLE FOR SUCH LOSS OR DAMAGE UNDER APPLICABLE LAW.  Lessee agrees to immediately give its insurance company written notification of the terms of the waiver contained in this paragraph 12(e) and to have its insurance policies properly endorsed, if necessary, to prevent the invalidation of insurance coverage by reason of this waiver.

 

13. Indemnification.  Lessee hereby expressly agrees to indemnify and hold Lessors harmless, or cause Lessors to be indemnified and held harmless, from and against all liabilities, obligations, damages, penalties, claims, causes of action, costs, charges and expenses, including attorney’s fees and costs (collectively “Losses”), which may be imposed upon or incurred by or asserted against Lessors by reason of the following:

  

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(i)  Any construction, alterations, renovations, additions, maintenance or repairs or other work or thing done in or on the Leased Premises or any part thereof;

 

(ii)  Any use, non-use, possession, occupation, alteration, repair, condition, operation, maintenance or management of the Leased Premises or any part thereof or of any street, alley, sidewalk, curb, vault, passageway or space comprising a part of or adjacent to the Leased Premises or any part thereof;

 

(iii)  Any accident, injury (including death at any time resulting therefrom) or damage to any Person or property occurring in or on the Leased Premises or any part thereof;

 

(iv)  Any failure on the part of Lessee to perform or comply with any requirements or with any of the covenants, agreements, terms or conditions contained in this Lease on its part to be performed or complied with;

 

(v)  Any lien or claim which may have arisen out of any act of Lessee or any agent, contractor, subcontractor, servant or employee or Lessee against or on the Leased Premises, or any lien or claim created or permitted to be created by Lessee in with respect to the Leased Premises, or against any assets of any of the Lessors under the laws of the State of Mississippi or of any other governmental authority or any liability which may be asserted against any of the Lessors with respect thereto;

 

(vi)  Any failure on the part of Lessee to keep, observe and perform any of the terms, covenants, agreements, provisions, conditions or limitations contained in any contract for construction of Improvements at the Premises or in connection with any subleases, on Lessee’s part to be kept, observed or performed; or

 

(vii)  Any and all construction, alterations, renovations, additions, or repairs to the Leased Premises the condition of any improvement or any part thereof.

 

Lessee agrees to indemnify Lessors for any such Losses except such matters caused by or resulting from Lessors’ willful or intentional misconduct.  Lessee’s obligation to indemnify Lessors pursuant to this paragraph 12 shall survive expiration or earlier termination of this Lease.  In case any action or proceeding is brought against Lessor by reason of any such occurrence, Lessee, upon Lessors’ request and at Lessee’s expense, will resist and defend such action or proceeding, or cause the same to be resisted and defended either by legal counsel designated by Lessee or, where such occurrence is covered by liability insurance, by legal counsel designated by the insurer if so required by such insurer.

 

14. Lessee Will Obtain Gaming License. Lessee (and/or its principals, as the case may be) will, at its sole cost and expense, and to the best of its ability proceed to obtain any and all governmental licenses, requirements, or approvals which may be necessary under any applicable laws or regulations or rules for the legal operation of a gaming facility on the Leased Premises, and Lessors will co-operate with Lessee to the best of its ability toward accomplishment of the same without cost or expense to the Lessors.  No later than one hundred twenty (120) days after certification by the appropriate Governmental Authorities that the site is zoned for Gaming Operations, Lessee shall submit application for site plan and development plan approval to the Mississippi Gaming Commission and shall diligently proceed to do all things necessary to procure said approvals and a gaming license.

 

  

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15. Lessee’s Right to Enter Into Possession of the Leased Premises. Lessee shall have the right to enter upon and take full possession of the Leased Premises immediately upon the Effective Date.

 

16. Ad Valorem Taxes and Other Charges. Upon the Effective Date, the Lessee shall become liable for the payment of all ad valorem taxes and/or special assessments against the Leased Premises and upon Improvements, Gaming Structures, Permanent Facility and any personal property used thereon.  Ad valorem taxes for the initial year shall be prorated and assumed by the Lessee.  Upon that year’s taxes becoming due and payable, Lessee shall pay its pro rata share and the Lessors shall contribute its pro rata share upon Lessee giving it five (5) days notice of the amount.  In addition, Lessee shall pay on or before the due date, and before any fine, penalty, interest or costs may be added thereto:

 

(a)  All taxes, license fees, assessments, levies, tidelands lease payments, water and sewer rents and charges, and all other governmental charges, general and special, ordinary and extraordinary, foreseen and unforeseen, whether or not now customary or within the contemplation of Lessors and Lessee, which are at any time during the duration of this Lease, imposed or levied upon, reasonably attributable to, or assessed against (i) the Leased Premises, (ii) this Lease or the leasehold estate hereby created, (iii) the operation, possession or use of the Leased Premises, (iv) the cost or value of any equipment, furniture, fixtures and other personal property located in or upon the Premises, or the cost or value of any leasehold Improvements made in or to the Leased Premises by or for Lessee, whether such Improvements are owned by the Lessors or Lessee, and (v) the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Lessee of the Premises or any portion thereof;

 

(b)  All sales, value added, ad valorem, use and similar taxes at any time levied, assessed or payable on account of the acquisition, ownership, leasing, operation, possession or use of the Leased Premises; and

 

(c)  All charges of utilities, communications and similar services serving the Leased Premises.

 

17. Lessee’s Right to Mortgage.  Lessee is given and has the absolute right, without the Lessors’ consent, to mortgage its interest in this Lease, or to pledge, sale-leaseback, or otherwise assign this Lease as security for financing, provided that no such mortgage, pledge, sale-leaseback, and/or assignment shall extend to or affect the fee or the reversionary interest of the Lessors.  Herein any mortgage, pledge, sale-leaseback, and/or assignment for security shall be referred to as a “Mortgage,” and the holder thereof shall be referred to as “Leasehold Mortgagee.”

 

(a)  No Mortgage of this Lease shall be binding upon the Lessors in the enforcement of its rights under this Lease, nor shall the Lessors be deemed to have any notice thereof, unless and until a fully conformed copy of each instrument pertaining to such Mortgage shall have been delivered to Lessors by the method provided in paragraph 27.

 

  

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(b)  If the holder of any such Mortgage shall give the Lessors, before any default shall have occurred in this Lease, a written notice as required in paragraph 27, containing the name and post office address of such Leasehold Mortgagee, Lessors shall thereafter give to each such Leasehold Mortgagee a copy of each notice of default by the Lessee, or demand made on the Lessee pursuant to this Lease, at the same time as such notice of default or demand shall be given by Lessors to Lessee.

 

(c)  Lessors will accept performance by the Leasehold Mortgagee of any such Mortgage of any term of this Lease required to be performed by Lessee, with the same force and effect as though performed by Lessee.

 

(d)  Lessee shall have the right, without Lessors’ consent, to assign income or percentages of gaming revenue for the purposes of obtaining financing, and the Leasehold Mortgagees thereof shall have the same right, duties, and obligations as a Leasehold Mortgagee of Mortgages, pledges, or assignments have in the preceding and remaining portions of this paragraph 17; provided, that, no such assignment shall in any way vitiate the obligation of Lessee to pay any and all rent or other amounts due hereunder.

 

(e)  Lessors, within fourteen (14) days after a request in writing by Lessee, shall furnish a written statement, duly acknowledged, that this Lease is in full force and effect and that there is no default hereunder by Lessee, or if there is a default such statement shall specify the default which Lessors claim to exist.

 

(f)  If, after Lessors are notified of the Leasehold Mortgagee of any Mortgage, then Lessors will not accept any surrender or enter into any modifications of this Lease without the additional written consent of said Leasehold Mortgagee.

 

(g)  In the event a Leasehold Mortgagee shall be entitled to become the owner of this Lease by foreclosure, by assignment in lieu of foreclosure, or otherwise, such Leasehold Mortgagee shall, within a reasonable time, deliver to Lessors an assumption agreement executed in recordable form, pursuant to which such Leasehold Mortgagee assumes the performance of all of the terms, covenants, and conditions of this Lease as Lessee.

 

18. Lessors’ Cooperation with Lessee and Lessee’s Lender Regarding Financing.  Anything in this Lease notwithstanding, Lessors hereby acknowledge that Lessee will seek financing for the casino, hotel, and other developments on the Leased Premises.  Lessors hereby acknowledge that lender(s) of the Lessee may require that certain terms of this Lease be modified as a condition of providing the financing.  Lessors hereby agree and covenant that it will negotiate in good faith any proposed changes that may be requested by such lender(s).

 

19. Uses of the Property. The Lessee may use the Leased Premises for Gaming Operations and/or any other use not prohibited by the laws of the United States of America, the State of Mississippi, or ordinances or regulations of the City of Gulfport, Mississippi.

 

  

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20. Construction, Improvements, Alterations and Maintenance.

 

(a) Aesthetics.  Lessee shall, in the required construction, maintenance, and operation of Gaming Operations upon the Leased Premises, construct, operate, and maintain such property and Improvements, including a vessel to be used for dockside gaming so as to be pleasing and attractive aesthetically.

 

(b) Improvements and Gaming Structures.  Any and all construction, alterations, renovations, additions, or repairs to the Leased Premises, including but not limited to, any Improvements, Gaming Structures and any Permanent Facility constructed after the Effective Date shall be made at the sole cost and expense of Lessee, including any and all costs and expenses regarding or in any way relating to the Improvements.  Lessors’ consent to any Improvements shall not be required; however, in advance of commencing any improvement to the Leased Premises, Lessee shall submit to Lessors complete and appropriate plans, drawings and specifications regarding such Improvements which Lessee desires for the Leased Premises.  Promptly after completion of any Improvements, Lessee shall furnish to Lessors final as-built plans.  The parties agree that any and all Improvements to the Leased Premises shall not reduce any rents due under this Lease.  Further, any and all Improvements constructed by Lessee or on behalf of through Lessee shall be the property of Lessee or any successor in interest (“Owner”) and shall, until they become the property of Lessors at the expiration or earlier termination of the Primary Term as herein specifically provided, be subject to the assessment for ad valorem taxes in the name of the Owner.

 

(c) Lessee Fixtures and Equipment.  Lessee may remove any furniture, trade fixture and fixed equipment purchased or acquired by Lessee and installed in or on the Leased Premises, the cost of which removal shall be paid by Lessee.  Lessee shall fully repair all material damage occasioned by the removal of any such fixtures or equipment and shall leave the Leased Premises in good condition, reasonable wear and tear excluded.  The foregoing notwithstanding, all personal property of Lessee remaining on or within the Leased Premises more than ninety (90) days beyond the termination of the Lease, whether by lapse of time or otherwise, shall be deemed abandoned by Lessee and may be removed and sold or disposed of by Lessors.  Any reasonable costs and damages actually incurred by the Lessors caused or made necessary by reason of removal or disposal of abandoned property shall be paid by Lessee within thirty (30) days of receipt of invoice from Lessors.

 

(d) Liens for Improvements.  Within five (5) days after the commencement of any Improvements, Lessee shall post and keep posted until completion of such work, in a conspicuous place, and shall personally serve upon all contractors or subcontractors performing such work, any required or permitted notice advising them that Lessors’ interests in the Leased Premises shall not be subject to any lien for such work.  If any lien is filed against all or any part of the Leased Premises for work claimed to have been done for, or materials claimed to have been furnished to, Lessee or its agents, servants, contractors, subcontractors, employees or independent contractors, Lessee, at its sole cost and expenses, shall cause such lien to be discharged within twenty (20) days after receipt of notice that such lien has been filed, by payment thereof or by filling a bond or a letter of credit sufficient to discharge the lien.

 

(e) Maintenance.  Throughout the term of the Lease, Lessee agrees to maintain and keep the Leased Premises and any Improvements in good order, condition and repair, ordinary wear, and damage by fire or other casualty excepted. All damage or injury to the Leased Premises caused by Lessee, or carelessness, omission, neglect or improper conduct of Lessee, its agents, employees, patients, guests, invitees, contractors, subcontractors, or licensees shall be repaired, restored or replaced promptly by Lessee at its sole costs and expense.

 

  

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21. Condemnation.  In the event the whole or a substantial part of the Leased Premises is condemned by eminent domain or otherwise acquired by a public agency, or other agency having the right of eminent domain, the Lease shall terminate upon the date that such agency takes possession of the Leased Premises, and the parties hereto shall share in the settlement or award, as the case may be, according to the provisions of the then current Mississippi law.  If less than the whole is taken in such proceedings, and the Leased Premises is still susceptible for use as a legal gaming site, this Lease shall not be terminated and a reduced Minimum Rent shall be negotiated, but the Percentage Rent shall remain the same.  In such instance any recovery shall first apply to restore the Leased Premises to be used as a legal gaming site and any balance shall be distributed according to then existing Mississippi law.

 

22. Surrender of Premises.  Lessee shall surrender the subject premises to Lessors at the expiration or earlier termination of this Lease in good order and condition, reasonable wear and tear accepted.  Upon the expiration or earlier termination of this Lease, fee simple title to the Leased Premises, including without limitation, all Improvements or Gaming Structures shall vest in Lessors free and clear of any liens and encumbrances of any type other than those created by Lessors without any obligation by Lessors to pay any compensation to Lessee or any other person or entity.  To this end, Lessee agrees to execute and deliver a limited warranty deed for any Improvements, Gaming Structures and Permanent Facility then located on the Leased Premises promptly upon the request of the Lessors for no additional consideration.  Further, at the expiration or earlier termination of this Lease, Lessee shall execute, acknowledge and deliver to Lessors, within fifteen (15) days after written demand from Lessors to Lessee, any document in a form reasonably requested by Lessors quitclaiming any right, title or interest in the Leased Premises to Lessors, or other document required by any reputable title company to resolve the cloud of this Lease from the Leased Premises.  Lastly, prior to the last day of the Primary Term, or upon any earlier termination of this Lease, Lessee shall deliver to Lessors, to the extent in Lessee’s possession, Lessee’s executed counterparts of all space leases/subleases and all service and maintenance records for the Leased Premises, all original licenses and permits then pertaining to the Leased Premises, permanent or temporary certificates of occupancy then in effect for the Improvements, and all warranties and guarantees then in effect which Lessee has received in connection with any work or services performed in, on or under the Leased Premises.

 

23. Recognition of Waterfront Status.  The parties hereto recognize that the Leased Premises is waterfront property, and, as such, enjoys common law and statutory riparian/littoral rights; and, that such rights are indivisible property rights contributing to the use, desirability and value of the Leased Premises.  The Lessee is granted such use of such riparian/littoral rights as are necessary for the operations of its gaming vessel, however, the Lessee convenants to honor, protect and preserve the waterfront nature of the property and its attendant riparian/littoral rights and to nurture and preserve the same so as not to diminish the nature and quality of such rights and the value of the waterfront nature of the Leased Premises.  Except as necessary to dock and serve its casino vessel, the Lessee convenants to maintain the shoreline and keep the property and its shoreline from eroding, relicting or avulting so that the present shoreline is faithfully maintained and preserved.  The Lessee convenants to maintain the property so that the waterfront nature thereof will be enjoyed by the Lessee’s guests and invitees and to maintain the waterfront nature of the property and easy access thereto and enjoyment thereof.  There will be no construction along the waterfront that interferes with the view or waterfront nature of the Leased Premises so that upon the return of the Leased Premises to the Lessors at the end of the Primary Term, or as otherwise herein provided, the property will be returned as waterfront property with all riparian/littoral rights fully intact and available for unrestricted enjoyment and use by the balance of the property.

 

  

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24. Forum, Attorneys’ Fees, and Specific Performance.  The parties agree that in the event of necessity of enforcement of this Lease or for any and all claims regarding or relating to this Lease, any resulting litigation shall be irrevocable and exclusively conducted in the state courts of the First Judicial District of Harrison County, Mississippi, or the United States District Court for the Southern District of Mississippi and shall be governed by Mississippi law (without regard to Mississippi’s conflict of law principles).  Any bankruptcy proceedings which might be filed by Lessee or Lessors shall be filed in the Southern District of Mississippi Federal Bankruptcy Court.  In the event of any litigation for enforcement of this Lease, the prevailing party shall be reimbursed all reasonable costs and expenses of litigation, including attorneys’ fees by the unsuccessful party.  In addition to the remedies provided herein both parties shall, at their option, have the remedy of specific performance.

 

25. Unenforceable Provision Shall Not Invalidate the Whole. Any provision of this Lease which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof.  To the extent permitted by applicable law, Lessee and Lessors hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.

 

26. Amendment Provision. No terms or provisions of this Lease may be changed, waived, discharged, or terminated orally, but only by an instrument in writing signed by the party against which the enforcement of the change, waiver, discharge, or termination is sought.

 

27. Notices. All notices required under this Lease shall be given to:

 

The Lessors:

 

MARINE LIFE VENTURES, LLC

Post Office Box 4078

Gulfport, Mississippi 39502

Phone:  (228) 669-6007

Fax:  (228) 822-2317

 

With Mandatory Copy to:

 

Roland F. Samson, III, Esq.

Samson & Powers, PLLC

1300 25th Avenue, Suite 130 (39501)

Post Office Box 1417

Gulfport, Mississippi 39502

Phone:  (228) 822-1109

Fax:  (228) 822-2317

  

24

  

MC MARINE, LLC

1285 Spring Street

Gulfport, Mississippi 39507

Phone:  (228) 896-9008

Fax:  (228) 896-9917

 

With Mandatory Copy to:

 

Virgil G. Gillespie, Esq.

The Gillespie Law Firm

2213 15th Street

Post Office Box 850

Phone:  (228) 864-4520

Fax:  (228) 864-8464

 

The Lessee:

 

ROTATE BLACK MS, LLC

2510 14th Street, Suite 1125 (39501)

Post Office Box 160

Gulfport, MS 39501

Phone: (228) 424-7424

Fax: (228) 822-8535

 

With Mandatory Copy to:

 

J. William Williams, Esq.

Watkins Ludlam Winter & Stennis, PA

2510 14th Street, Suite 1125 (39501)

Post Office Box 160

Gulfport, MS 39501

Phone: (228) 864-3094

Fax: (228) 822-8535

 

  

25

  

 

Or such other places as may be designated by the parties in writing from time to time.  All notices to be given hereunder shall be given by United States Certified Mail, postage prepaid, with the date of the receipt on the envelope to be conclusively taken and treated as the date of the receipt by the person to whom notice is given provided that said envelope is properly addressed and postage properly prepaid.

 

28. Lessors or Lessee Approvals. All approvals and permissions which are required by Lessors pursuant to the terms of this Lease will not be unreasonably withheld by Lessors or by Lessee.

 

29. Parties Shall Co-Operate and Act in Good Faith With Each Other.  Lessee and Lessors both agree that both parties shall at all times act in good faith in the implementation of all aspects of this Lease.  Lessors also agree to advise and/or assist Lessee in any permit applications, and to assist Lessee in all zoning and/or permit applications, even to the extent of being the named applicant therein.

 

30. Recording Memorandum.  This Lease shall not be recorded, but rather a short form memorandum will be recorded which shall set forth the parties, the description of the property, the length of the respective terms, which memorandum shall advise interested parties to contact the parties hereto for further information.

 

31. Parties Are Not Partners or Joint Ventures. The parties hereto have not created and do not intend to create by this Lease a joint venture or partnership relationship between them.

 

32. Parties Agree to Execute Additional Necessary Documents and Papers. The parties hereto agree to execute all additional or necessary papers or documents which may be necessary to carry out the intent and purpose of this Lease.

 

33. Holding Over.  If Lessor allows Lessee to continue to occupy the Leased Premises after the expiration of the Primary Term, without any express agreement as to such occupancy, then such holding over shall be considered a month-to-month tenancy subject to all terms and conditions of this Lease, as long as Lessee continues to pay Two Hundred Percent (200%) of all Minimum Rent and Percentage Rent as provided in this Lease.  However, none of the terms in this paragraph 33 shall be considered an assurance to Lessee that it may continue occupancy of the Leased Premises after expiration of the Primary Term, or an extension of the Primary Term by Lessors on any basis, nor as a waiver of any of Lessors’ rights to terminate this Lease and re-enter the Leased Premises.

 

34. Lessors’ Access to Leased Premises.  Lessors and their representatives shall have the right to enter the Leased Premises at all reasonable times to inspect the same as long as Lessor is accompanied by a Lessee representative and provides Lessee with at least twenty-four (24) hours prior notice, except in the case of an emergency when only notice reasonably under the circumstances shall be required, and notice has been sent to Lessee to make repairs which have not been made after expiration of any application cure period, to make repairs and to maintain the Leased Premises.

 

35. Mortgages Subordinate to Lease.  Any Mortgage given after this date by Lessors shall be subject to and subordinate to the rights of Lessee hereunder.  Any such mortgage executed by Lessors will contain a provision requiring that the holder of the indebtedness secured by such mortgage mail to Lessee, as required by Paragraph 27, a copy of each notice of breach of covenant, default, or foreclosure given by such holder (or any trustee) to the Lessors.  This requirement shall be self-operative and no further act by Lessee shall be required.  Lessors shall deliver to Lessee a copy of any mortgage, renewal, extension, modification, or consolidation within ten (10) days of the execution thereof.  In the event Lessors shall at any time fail to pay any installment of principal or interest or other sum under any mortgage now or hereafter placed on the Leased Premises and to which this Lease shall be subordinate, Lessee may make such payment and deduct the amount thereof, with interest thereof from the date of payment, from the next succeeding installment of rent which shall become due and payable hereunder.

  

26

  

 

36. Real Estate Commission. The only real estate commission payable hereunder shall be that commission incurred by the Lessors in favor of Sawyer Commercial Real Estate, LLC, as evidenced by that separate agreement by and between Lessors and Sawyer Commercial

Real Estate, LLC, providing that Sawyer Commercial Real Estate, LLC receives a commission equal to five (5%) of gross rent received by Lessors, and such commission shall be the sole obligation of Lessors.  In the event of any sale of the Leased Premises by Lessors, said commission shall apply.  Notwithstanding the foregoing, in the event of a conflict in this paragraph 36 and such separate commission agreement among Lessors and Sawyer Commercial Real Estate, LLC, such separate commission agreement shall govern.  Each party shall indemnify the other parties for any demand made for real estate commission incurred contrary to the above statement.

 

37. Triple Net Lease. This Lease shall always be interpreted as a triple net lease in favor of the Lessors, it being understood that in addition to the payment of rent (or any other financial obligation) as provided in this Lease, Lessee shall, upon the Effective Date, be responsible for all construction, maintenance, taxes, tidelands lease payments, insurance, fees, and any and all other costs and expenses incurred as a result of the Lessee’s use or occupancy of the Leased Premises or any other matter assessed against the Leased Premises and any Improvements thereon.  Lessors shall suffer no tax, expense or cost of any nature whatsoever.

 

38. Force Majeure.  In case by reason of force majeure either party hereto shall be rendered unable wholly or in part to carry out its obligations under this Lease, then except as otherwise expressly provided in this Lease, if such party shall give notice and full particulars of such force majeure in writing to the other party within a reasonable time after occurrence of the event or cause relied on, the obligations of the party giving such notice, so far as they are affected by such force majeure, shall be suspended during the continuance of the inability then claimed which shall include a reasonable time for the removal of the effect thereof, but for no longer period, and such party shall endeavor to remove or overcome such inability with all reasonable dispatch. The term “force majeure,” as employed herein, shall mean acts of God, strikes, lockouts or other industrial disturbances, acts of the public enemy, orders of any kind of the Government of the United States or of any state or any civil or military authority, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods, washouts, droughts, arrest, restraining of government and people, civil disturbances, explosions, partial or entire failure of utilities, shortages of labor, material, supplies or transportation, or any other similar or different cause not reasonably within the control of the party claiming such inability.  It is understood and agreed that the settlement of existing or impending strikes, lockouts, or other industrial disturbances shall be entirely within the discretion of the party having the difficulty and that the above requirements that any force majeure shall be reasonably beyond the control of the party and shall be remedied with all reasonable dispatch shall be deemed to be fulfilled even though such existing or impending strikes, lockouts, and other industrial disturbances may not be settled but could have been settled by acceding to the demands of the opposing person or persons.

 

39. Integration.  This Lease embodies the entire agreement and understanding among the parties and supersedes all prior agreements and understandings, if any, among and between the parties relating to the subject matter hereof.

 

40. Terminology.  All personal pronouns used in this Lease, whether used in the masculine, feminine, or neuter gender, shall include all other genders; and the singular shall include the plural, and vice versa.  The headings are for convenience only and neither limit nor amplify the provisions of this Lease itself.

  

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41. Amendment.  This Lease may be amended, modified or supplemented only by an agreement in writing signed by all the parties.  No other written or oral agreement, understanding, instrument or writing other than this Lease or any amendment hereto shall constitute part of this Lease.

 

42. Waivers.  The failure of any party to seek redress for violation of or to insist upon the strict performance of any covenant or condition of this Lease shall not prevent a subsequent act, which would have originally constitute a violation, from having the effect of an original violation.

 

43. Rights and Remedies Cumulative.  The rights and remedies provided by this Lease are cumulative and the use of any one right or remedy by any party shall not preclude or waive the right to seek any or all other remedies.  Said rights and remedies are given in addition to any other rights the parties may have by law, statute, ordinance or otherwise.

 

44. Heirs, Successors and Assigns.  Each and all of the covenants, terms, provisions and agreements herein contained shall be binding upon and inure to the benefit of the parties hereto, their respective heirs, legal representatives, successors and assigns.

 

45. Counterparts.  This Lease may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

 

46. Vacation of 23rd Avenue.  Lessee and Lessors both agree that both parties shall assist each other in good faith to negotiate with the City of Gulfport and undertake any such action as commercially reasonable to cause the City of Gulfport to vacate or transfer ownership in that portion of 23rd Avenue that is contiguous or adjacent to the Leased Premises so that the title to such portion of 23rd Avenue is vested in the Lessors.  The parties hereby recognize that the City of Gulfport recently placed a significant amount of utilities for electrical power, water and sewer under that portion of 23rd Avenue, and, therefore, any vacation or conveyance of such property will be subject to a utility easement for the benefit of the City of Gulfport.  Furthermore, the parties recognize that 23rd Avenue also serves as secondary access for ingress and egress to and from the U.S. Coast Guard facility that is located contiguous and adjacent to a portion of the Leased Premises, and that any vacation or conveyance from the City of Gulfport will be contingent upon finding another suitable secondary access to and from the U.S. Coast Guard facility.  Notwithstanding the foregoing, when and if any property is vested in the Lessors pursuant to the foregoing, such property shall automatically become part of the Leased Premises without any further action of the parties.

 

47. Collateral Assignment of Gulfport Redevelopment Commission Lease to Lessors.  In addition to this Lease, Lessee intends to enter into a long-term ground lease with the Gulfport Redevelopment Commission (the “GRC Lease”) for approximately four and five tenths (4.5) acres of real property contiguous and adjacent to the Leased Premises.  Any property leased by the Lessee pursuant to the GRC Lease shall automatically comprise part of the Development Property.  As additional security for this Lease, Lessee shall collaterally assign its interest in the GRC Lease to the Lessors, and Lessee shall take any and all commercially reasonable actions to accomplish the forgoing to the extent permitted by the terms of GRC Lease, including, without limitation, obtaining the consent of the Gulfport Redevelopment Commission to such collateral assignment.  Notwithstanding the foregoing, the collateral assignment made pursuant to this paragraph 47 shall be subordinate to any assignment for the benefit of any Leasehold Mortgagee, and Lessors shall upon request execute any document reasonably requested by a Leasehold Mortgagee to evidence that the Lessors’ interest in such collateral assignment of the GRC Lease is subordinate to the Leasehold Mortgagee’s rights in the GRC Lease.

 

[Signatures on following page]

  

28

  

 

	 	LESSORS:	 
	 	 	 
	 	MARINE LIFE VENTURES, LLC, a Mississippi limited liability company	 
	 	 	 	 
	
 

	
By: 

	Marine Life Incorporated, its sole member	 
	 	 	 	 
	 	 	 	 
	 	 	By:	/s/ David C. Lion	 
	 	 	Name:	David C. Lion	 
	 	 	Title:	President	 
	 	 	 	 
	 	MC MARINE, LLC, a Mississippi limited liability company	 
	 	 	 	 
	 	By:	/s/ Sherman Muths, Jr.	 
	 	Name:	Sherman Muths, Jr.	 
	 	Title:	Manager	 
	 	 	 	 
	 	LESSEE:	 
	 	 	 
	 	ROTATE BLACK MS, LLC, a Mississippi limited liability company	 
	 	 	 
	 	By:	/s/ Jake Vanderlei	 
	 	Name:	Jake Vanderlei	 
	 	Title:  	President	 

 

  

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Exhibit “A”

 

Legal Description of Parcel I—Marine Life Parcel

 

Parcel A

 

A parcel of land situated and being located in Fractional Section 9, Township 8 South, Range 11 West, City of Gulfport, First Judicial District of Harrison County, Mississippi and being more particularly described as follows, to wit:

 

Commencing at the Northeast corner of Section 9, Township 8 South, Range 11 West; thence run South 00 degrees 00 minutes 00 seconds East 2469.95 feet; thence run North 90 degrees 00 minutes 00 seconds West 1622.46 feet to a point on the southerly margin of 23rd Avenue and the Point of Beginning of the parcel herein described; thence run from said Point of Beginning, South 20 degrees 52 minutes 52 seconds East 173.97 feet; thence run North 68 degrees 45 minutes 14 seconds East 106.61 feet; thence run South 21 degrees 09 minutes 06 seconds East 65.35 feet; thence run North 70 degrees 17 minutes 59 seconds East 169.37 feet; thence run North 64 degrees 14 minutes 03 seconds East 122.79 feet to a point on a bulkhead; thence run the following courses and distances along said bulkhead; North 59 degrees 48 minutes 01 seconds East 9.45 feet; North 46 degrees 26 minutes 53 seconds East 20.02 feet; North 28 degrees 22 minutes 15 seconds East 25.18 feet; North 10 degrees 29 minutes 23 seconds West 50.31 feet; North 65 degrees 01 minutes 39 seconds West 30.23 feet; South 58 degrees 34 minutes 25 seconds West 4.12 feet; North 65 degrees 10 minutes 37 seconds West 19.85 feet; North 82 degrees 49 minutes 15 seconds West 20.11 feet; South 87 degrees 38 minutes 51 seconds West 48.37 feet; North 02 degrees 18 minutes 49 seconds East 52.44 feet; North 02 degrees 24 minutes 44 seconds West 16.03 feet; North 01 degrees 32 minutes 24 seconds East 34.26 feet; North 59 degrees 18 minutes 05 seconds West 3.60 feet; thence leaving the aforementioned bulkhead and run South 68 degrees 53 minutes 22 seconds West 389.26 feet along the southerly margin of 23rd Avenue to the Point of Beginning.  Containing 90,315 square feet or 2.07 acres.

 

And:

 

A parcel of land situated and being located in Fractional Section 9, Township 8 South, Range 11 West, City of Gulfport, First Judicial District of Harrison County, Mississippi and being more particularly described as follows, to-wit:

 

Commencing at the Northeast corner of Section 9, Township 8 South, Range 11 West; thence run South 00 degrees 00 minutes 00 seconds East 2330.17 feet; thence run North 90 degrees 00 minutes 00 seconds West 1260.46 feet to a point on a bulkhead and the Point of Beginning of the parcel herein described; thence run from said Point of Beginning, North 89 degrees 54 minutes 53 seconds East 160.00 feet; thence run South 00 degrees 23 minutes 13 seconds East 203.69 feet; thence run South 70 degrees 17 minutes 59 seconds West 190.10 feet; thence run North 64 degrees 14 minutes 03 seconds East 122.79 feet to a point on a bulkhead; thence run the following courses and distances along said bulkhead; North 59 degrees 48 minutes 01 seconds East 9.45 feet; North 46 degrees 26 minutes 53 seconds East 20.02 feet; North 28 degrees 22 minutes 15 seconds East 25.18 feet; North 10 degrees 29 minutes 23 seconds West 50.31 feet; North 65 degrees 01 minutes 39 seconds West 30.23 feet; South 58 degrees 34 minutes 25 seconds West 4.12 feet; North 65 degrees 10 minutes 37 seconds West 19.85 feet; North 82 degrees 49 minutes 15 seconds West 20.11 feet; South 87 degrees 38 minutes 51 seconds West 48.37 feet; North 02 degrees 18 minutes 49 seconds East 52.44 feet; North 02 degrees 24 minutes 44 seconds West 16.03 feet; North 01 degrees 32 minutes 24 seconds East 34.26 feet; North 59 degrees 18 minutes 05 seconds West 3.60 feet to the Point of Beginning.  Containing 22,386 square feet or 0.51 acre.

  

A-1

  

Parcel B

 

Commence at the Northeast corner of Section 9, Township 8 South, Range 11 West, Harrison County, Mississippi, and thence run South 00 degrees 00 minutes East a distance of 2,324.25 feet to a point; and thence run North 90 degrees 00 minutes West a distance of 1,372.44 feet to the POINT OF BEGINNING; and from said point of beginning, thence run North 00 degrees 00 minutes East a distance of 136.37 feet to a point; and thence run South 68 degrees 53 minutes 22 seconds West a distance of 457.06 feet to a point; and thence run South 32 degrees 59 minutes 26 seconds East a distance of 130 feet to a point; and thence run North 68 degrees 53 minutes 22 seconds East a distance of 381.18 feet to the point of beginning of the parcel hereby described; said parcel contains 1.227 acres, more or less, as indicated by James R. Clark, Miss. Registered Land surveyor #1653.

 

Plus any property acquired by Marine Life as a result of a conveyance, vacation, or abandonment of Twenty-Third Avenue.

  

A-2

  

Exhibit “B”

 

Legal Description of Parcel II—MC Marine Parcel

 

That certain parcel of land situated and being in the City of Gulfport, Section 9, T8S, R11W, 1st. Judicial District, Harrison County, MS, described more particularly as follows:

 

Commencing at the Northeast corner of Section 9, T8S, R11W, 1st Judicial District, Harrison Co., MS; thence S 0° East, a distance of 2469.95 ft. to a point;

thence N 90° W a distance of 1622.46 ft. to the POINT OF BEGINNING;

thence S 68° 53’ 22” W a distance of 98.65 ft. to a point;

thence S 33° 11’ 56” E a distance of 447.55 ft. to a point;

thence N 68° 49’ 34” E a distance of 102.61 ft. to a point;

thence N 51° 09’ 36” E a distance of 116.01 ft. to a point;

thence N 55° 31’ 44” E a distance of 38.91 ft. to a point;

thence N 17° 41’ 38” W a distance of 49.9 ft. to a point;

thence N 6° 57’ 37” W a distance of 103.63 ft to a point;

thence S 70° 22’ 45” W a distance of 169.37 ft. to a point;

thence N 20° 54’ 19” W a distance of 65.35 ft. to a point;

thence S 68° 45’ 55” W a distance of 106.83 ft. to a point;

thence N 20° 52’ 52” W a distance of 173.80 ft. to the point of beginning.

Said parcel contains 1.756 acres, more or less.

 

AND:

 

That certain parcel of land situated and being in the City of Gulfport, Section 9 T8S, R11W, 1st. Judicial District, Harrison County, Ms., described more particularly as follows:

 

  

B-1

  

 

Commencing at the Northeast corner of Section 9, T8S, R11W, 1st. Judicial District, Harrison County., MS; thence S 0° E, a distance of 2469.95 ft. to a point;

 

thence N 90° W a distance of 1622.46 ft. to a point;

thence S 20° 52’ 52” E a distance of 173.80 ft. to a point;

thence N 68° 45’ 55” E a distance of 106.83 ft. to a point;

thence S 20° 54’ 19” E a distance of 65.35 ft. to a point;

thence N 70° 22’ 45” E a distance of 169.37 ft. to the POINT OF BEGINNING;

thence N 70° 22’ 45” E a distance of 160.93 ft. to a point;

thence S 17° 43’ 20” E a distance of 164.27 ft. to a point;

thence S 32° 40’ 22” W a distance of 230.23 ft to a point;

thence N 18° 52’ 22” W a distance of 73.68 ft. to a point;

thence N 55° 31’ 44” E a distance of 38.91 ft. to a point;

thence N 17° 41’ 38” W a distance of 49.9 ft. to a point;

thence N 6° 57’ 37” W a distance of 103.63 ft. to the point of beginning.

Said parcel contains 0.84 acres, more or less.

 

Plus any property acquired by MC Marine as a result of a conveyance, vacation or abandonment of Twenty-Third Avenue.

 

B-2robk_ex102.htm

EXHIBIT 10.2

 

	Indexing Instructions:	This Instrument  Prepared by and Return to:	 
	The Northeast quarter of  	__________________________________	 
	Section Nine, Township 8 South 	__________________________________	 
	Range 11 West  	__________________________________	 
	First Judicial District of	 	 
	Harrison County, MS	 	 
	 	 	 
	 	 	 
	Lessee:  	Lessor:	 
	Rotate Black MS, LLC,	Gulfport Redevelopment Commission,	 
	a Mississippi limited liability company	the urban renewal agency of the City of Gulfport	 
	2510 14th Street, Suite 1125 (39501)  	2309 15th Street	 
	Post Office Box 160   	Gulfport, MS 39201	 
	Gulfport, MS 39501	Phone:_______________________	 
	Phone: (228) 424-7424	 	 

GROUND LEASE

THIS GROUND LEASE (this “Lease”) is made and entered into by and between the Gulfport Redevelopment Commission, as the urban renewal agency of the City of Gulfport, Mississippi, pursuant to Title 43, Chapter 35, Article 1, Mississippi Code of 1972, as amended (“Lessor”) and Rotate Black MS, LLC, a Mississippi limited liability company (“Lessee”), on October 20, 2010 with an effective date as of the 28th day of October, 2010 (the “Effective Date”).

 

Lessor is the owner of approximately four and five hundred twenty-six thousandths (4.526) acres of real property in Gulfport, Mississippi located adjacent to the Bert Jones Yacht Basin as more particularly described on Exhibit A (the “Parcel”).

 

Lessor has requested proposals from developers and other qualified parties to develop the Parcel in accordance with the Lessor’s Request for Proposals dated September 1, 2010 including, without limitation, any and all supplements or addenda issued by Lessor (collectively, the “RFP”); and Lessee submitted a proposal pursuant to the RFP and was selected by the Lessor in accordance with the term and conditions of the RFP to undertake the Development.

  

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The Lessor and Lessee now desire to enter into a lease for the Parcel for a term of years on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of these premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto intending to be legally bound agree as follows:

 

ARTICLE 1

DEFINITIONS

 

1.1  Additional Amounts.  As defined in Section 5.1.

 

1.2  Additional Rent. As defined in Section 4.5.

 

1.3  Adjusted EBITDA.  As defined in Section 4.7.

 

1.4  Affiliate.  Any Person shall be deemed an Affiliate of Lessee if:

(a)  Lessee and/or its principal(s) owns, either directly, indirectly or through another Person owned or controlled by Lessee, twenty percent (20%) or more of the outstanding stock or other equity interest in the Person, or

 

(b)  Such Person and/or principal(s) owns, either directly, indirectly or through another Person which is under common control with such Person, twenty percent (20%) or more of the outstanding stock or other equity interest in Lessee, or

 

(c)  Lessee, such Affiliate and/or its principal(s) has either directly or indirectly, (i) the right or discretion to control pursuant to the exercise of voting power or the terms of a contract, agreement or otherwise or (ii) the power to direct or cause the direction of the management or policies of a Person.

 

For purposes of this Section 1.4, (i) Lessee shall be deemed to control a Person if it owns twenty percent (20%) or more of all stock or other equity interests in the Person which are entitled to vote and (ii) a Person shall be deemed to be under common control with another Person if there is twenty percent (20%) or more overlap in the ownership of the equity interests in the two or more Persons.

 

The City of Gulfport, Mississippi and any agency, division or instrumentality of the City shall be deemed an Affiliate of Lessor.

 

1.5  Applicable Standards.  The standards generally and customarily applicable from time to time during the Term to commercial buildings in the Gulfport, Mississippi metropolitan area of an age comparable to the age and quality of the Improvements existing at the time this standard is being applied.

 

  

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1.6   Assignee.  A Person to whom an Assignment is made.

 

1.7  Assignment.  A transfer by Lessee of all of its rights, title, interest and obligations hereunder to all or any portion of the Parcel.

 

1.8  Base Rent.  As defined in Section 4.4.

 

1.9  Casualty Termination Work.  As defined in Section 14.1.

 

1.10  City.  The City of Gulfport, Mississippi.

 

1.11  Commencement Date.  The earlier of: (i) issuance of a temporary certificate of occupancy or certificate of occupancy by the City for the Premises or a portion thereof, or (ii) the opening of operations by Lessee to the public, including any gaming operations by Lessee or an Affiliate on the Parcel or any property adjacent or contiguous to the Parcel, or (iii) October 1, 2011.

 

1.12  Construction Deadline.  For Phase 1 and Phase 2 as identified in the Lessee’s RFP Response, the Construction Deadline is October 1, 2012.  For Phase 3 as identified in the Lessee’s RFP Response, the Construction Deadline is October 1, 2015.

 

1.13  Construction Plans.  As defined in Section 8.3.

 

1.14  Development.  Shall mean the development by Lessee or its Affiliates of the Parcel or any property adjacent or contiguous to the Parcel and as contemplated by the Development Plan.

 

1.15  Development Plan.   At any time and from time to time during the Term of this Lease, the Premises and the improving and equipping thereof and shall include, without limitation:  (a) the planning and design of the Premises; (b) the materials and the acquisition and installation of materials to be incorporated in the Improvements; (c) the fixtures and the acquisition and installation of fixtures to be incorporated in the Improvements; and (d) the equipment and the acquisition, leasing, fabrication, design, installation, maintenance, testing, “breaking-in” and future upgrades of any equipment for use at the Premises.

 

1.16  EBITDA.  Determined in accordance with generally accepted accounting principles consistently applied.

 

1.17  Environmental Statutes.  All Requirements, whether now existing or hereafter enacted or promulgated, regulating, relating to or imposing liability or standards of conduct concerning any Regulated Substance or the protection of the environment, including, without limitation:  (i) Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 etseq.(known as CERCLA or Superfund) as amended by the Superfund Amendments and Reauthorization Act of 1986 (known as SARA); (ii) Solid Waste Disposal Act, 42 U.S.C. Section 6901 et seq. (known as SWDA) as amended by Resource Conservation and Recovery Act (known as RCRA); (iii) National Environmental Policy Act, 42 U.S.C. Section 4321 et seq. (known as NEPA); (iv) Toxic Substances Control Act, 15 U.S.C., Section 2601 et seq. (known as TSCA); (v) Safe Drinking Water Act, 42 U.S.C. Section 300(f) et seq. (known as Public Health Service Act, PHSA); (vi) Refuse Act, 33 U.S.C. Section 407 et seq.; (vii) Clean Water Act, 33 U.S.C. Section 1251 et seq. (known as Federal Water Pollution Control Act, FWPCA); (viii) Clean Air Act, 42 U.S.C. Section 7401 et seq. (known as CAA); (ix) The Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 1101 et seq. (known as EPCRTKA); (x) the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq. (known as OSHA); and (xi) any similar statute of the State of Mississippi.

 

  

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1.18  Expiration Date.  As defined in Section 3.1.

 

1.19  Force Majeure Events.  As defined in Section 29.1.

 

1.20  Gaming Control Act.  That certain act entitled Mississippi Gaming Control Act Miss Code Annotated 75-75-1 et.seq. , as such act may be amended from time to time, and the rules and regulations promulgated thereunder by the Mississippi Gaming Commission.

 

1.21  Governmental Authorities or any one a Governmental Authority.  The United States of America, the State of Mississippi, Harrison County, the City of Gulfport, and any agency, department, commission, board, bureau, quasi governmental authority, instrumentality or political subdivision of any of the foregoing, now existing or hereafter created, having jurisdiction over the Premises, the Improvements or any portion of either.

 

1.22  Gross Gaming Revenues.  As defined in Section 4.6.

 

1.23  Impositions.  All assessments and charges for utilities and communication services; all license, permit and other authorization fees; all taxes, duties, charges and assessments of every kind and nature imposed by any Governmental Authority pursuant to any current or subsequently enacted Requirements, which during the Term of this Lease become due, or imposed upon, charged against, measured by or become a lien on: (a) the Parcel; (b) any Improvements or personal property of Lessee located on the Parcel; (c) the interest of Lessee in this Lease or in the proceeds received by Lessee from any Assignments and/or Subleases of any portion of the Premises.

 

1.24  Improvements.  As defined in Section 8.1.

 

1.25  Initial Improvements.  None.

 

1.26  Interest Rate.  A rate of interest equal to the greater of: (i) Prime Rate plus five percent (5%) per annum or (ii) ten percent (10%) per annum, but in no event in excess of the maximum permissible rate then in effect in the State of Mississippi.

  

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1.27  Lease Year.  In the case of the first (1st) Lease Year, the period following the Commencement Date until June 30 of that year and in the case of subsequent Lease Years, the twelve (12) calendar month period following each Lease Year based on a June 30 fiscal year.

 

1.28  Leasehold Estate.  Collectively, (i) all right, title and interest of Lessee in, to and under this Lease, and (ii) all right, title and interest of Lessee in, to and under the Premises and Improvements for the Term.

 

1.29  Leasehold Mortgagor.  Lessee or any other mortgagor of a Leasehold Estate created by this Lease.

 

1.30  Lessee’s Construction.  As defined in Section 8.2.

 

1.31  Lessee’s Policies.  As defined in Section 13.10.

 

1.32  Lessee’s RFP Response.  That certain response by Lessee to the RFP which was dated September 28, 2010 and any supplements or amendments thereto which were approved and accepted in writing by Lessor, a copy of which is incorporated herein by this reference.

 

1.33  Lessee’s Work.  As defined in Section 8.12.

 

1.34  Losses.  As defined in Section 12.1.

 

1.35  Material Default.  As defined in Section 22.2(f).

 

1.36  Mississippi Gaming Commission.  That certain organization which is responsible for the enforcement the Gaming Control Act and Charitable Gaming Laws of the State of Mississippi as established by the Mississippi Legislature or any successor commission or agency.

 

1.37  Owner.  As defined in Section 8.14.

 

1.38  Parcel.  That certain real property containing approximately four and five hundred twenty-six thousandths (4.526) acres legally described on Exhibit A attached hereto and depicted on the survey attached hereto as Exhibit B.

 

1.39  Percentage Rent.  As defined in Section 4.6.

 

1.40  Permitted Mortgage.  Any mortgage, deed of trust, agreement for sale or other security device creating a first lien on Lessee’s Leasehold Estate, a true and complete copy of which has been properly delivered to Lessor.

 

1.41  Permitted Mortgagee.  The holder of a Permitted Mortgage.

 

1.42  Permits.  As defined in Section 8.7.

  

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1.43  Person.  An individual, corporation, limited liability company, partnership of any type, joint venture, estate, trust, unincorporated association, other entity and all Governmental Authorities.

 

1.44  Personal Property.  As defined in Article 15.

 

1.45  Plan Approval Deadline.  As defined in Section 8.4.

 

1.46   Premises.  The Parcel together with all rights and easements appurtenant thereto as expressly granted by this Lease, all existing and future Improvements, temporary or portable structures, and personal property located on, below or above the Parcel.

 

1.47  Prime Rate.  The Prime Rate of interest published as the consensus prime rate by The Wall Street Journal or any successor publication.  If the Prime Rate shall cease to be published, the Prime Rate shall equal the equivalent rate announced from time to time by the Mississippi based bank holding the most deposits at the end of the preceding calendar year.

 

1.48  Public Use Interest.  As defined in Section 7.1.

 

1.49  Regulated Substance.  As defined in Section 12.3.

 

1.50  Rent. As defined in Section 4.1.

 

1.51  Requirements.  Any and all applicable now existing or hereafter enacted or promulgated federal, state, county and municipal laws, rules, orders, judgments, ordinances, regulations, statutes, requirements, permits, consents, certificates, approvals, codes and executive orders.

 

1.52  Space Leases.  As defined in Section 16.4(c).

 

1.53  Sublease.  A transfer by Lessee of less than all of its rights, title, interest and obligations hereunder to all or any portion of the Parcel.  Any further Assignments or Subleases made by Sublessees shall also be included within the meaning of the term Sublease.

 

1.54  Sublessee.  The lessee under a Sublease.

 

1.55  Term.  A period of fifty-nine (59) years commencing on the Commencement Date.  The Term shall also include the period from the Effective Date until the Commencement Date.

 

1.56  Title Matters.  Those matters affecting title to the Parcel including, without limitation, those matters set forth in Exhibit C attached hereto and matters that would be reflected on an ALTA survey of the Parcel.

 

1.57  Water Front Lease.  As defined in Section 7.7.

  

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ARTICLE 2

PARCEL

 

2.1  Lease Grant.  Lessor does hereby demise and lease to Lessee, and Lessee does hereby lease and take from Lessor the Parcel, together with all easements, appurtenances and other rights and privileges now or hereafter belonging or appertaining to the Parcel, subject to the Title Matters, for the Term.

 

2.2  Income Tax Considerations.  Lessor and Lessee agree that throughout the Term, for federal income tax purposes, Lessor shall be treated as the owner of the Parcel and Lessee shall be deemed the owner of the Improvements, and neither Lessor nor Lessee shall take any action (or refrain from taking any action) that is inconsistent with such tax treatment.

 

2.3  The Parcel.  Lessee acknowledges that Lessee is fully familiar with the Parcel, the physical condition thereof, the Title Matters and all Requirements applicable to the Parcel and any contemplated development thereof.  Lessee accepts the Premises in its existing condition and Lessor shall in no event whatsoever be liable for any latent or patent defects in the Premises.  In the event the exact acreage is reduced due to minor discrepancies in the legal description of the Parcel or by the Development Plan, no such reduction shall alter or modify any terms or provisions of this Lease including, without limitation, the Rent due and payable hereunder.

 

2.4  “AS-IS, WHERE IS” Condition.  LESSOR SHALL HAVE NO LIABILITY RELATING TO AND IS NOT MAKING, AND HAS NOT AT ANY TIME MADE, ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PARCEL, PREMISES OR ANY DEVELOPMENT THEREOF, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, PHYSICAL OR STRUCTURAL CONDITION, SOIL CONDITION, ENVIRONMENTAL CONDITION, WETLANDS STATUS, TITLE, ZONING, TAX CONSEQUENCES, IMPOSITIONS, UTILITIES OR UTILITY CAPACITY, POTENTIAL USES, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, COMPLIANCE WITH ANY LEGAL OR OTHER REQUIREMENTS, OR THE TRUTH, ACCURACY OR COMPLETENESS OF ANY INFORMATION PROVIDED TO LESSEE OR ANY OTHER PERSON, OR ANY OTHER MATTER OR THING REGARDING THE PREMISES.  LESSEE ACKNOWLEDGES AND AGREES THAT LESSOR SHALL LEASE TO LESSEE AND LESSEE SHALL ACCEPT THE PREMISES AS IS, WHERE IS, WITH ALL FAULTS.  LESSEE HAS NOT RELIED AND WILL NOT RELY ON, AND LESSOR IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PREMISES OR RELATING THERETO MADE OR FURNISHED BY LESSOR OR ANY AGENT REPRESENTING OR PURPORTING TO REPRESENT LESSOR, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, UNLESS EXPRESSLY SET FORTH IN THIS LEASE.  THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE EXPIRATION OR EARLY TERMINATION OF THIS LEASE. LESSEE HEREBY EXPRESSLY ACKNOWLEDGES THAT IT HAS INSPECTED AND EXAMINED THE PREMISES TO THE EXTENT DEEMED NECESSARY BY LESSEE IN ORDER TO ENABLE LESSEE TO EVALUATE THE LEASE, THE PREMISES AND DEVELOPMENT, USE AND OPERATION OF THE PREMISES.  LESSEE REPRESENTS THAT IT IS A KNOWLEDGEABLE LESSEE AND DEVELOPER OF COMMERCIAL, GAMING REAL ESTATE PROJECTS, IT IS RELYING SOLELY ON ITS OWN EXPERTISE AND THAT OF LESSEE’S CONSULTANTS, AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF LESSOR OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO.

 

	  	Initialed by:	 	 
	 	 	 	 
	 	____________	 	_______________
	 	Lessor   	 	Lessee
	 	 	 	 

 

 

  

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ARTICLE 3

TERM

 

3.1  Commencement, Expiration.  The Term of this Lease shall be for a period equal to the Term beginning on the Commencement Date and ending at 11:59 p.m. on October 31, 2069 (the “Expiration Date”), unless sooner canceled or terminated as provide herein.

 

3.2  No Extension Options.  Lessee shall have no right to extend the Term.

 

3.3  [Intentionally Deleted]

3.4  Cessation of Gaming Operations.  (a) Should any Governmental Authority, including, without limitation, the Mississippi Gaming Commission (or any successor thereto), having control over Lessee's future or current legal gaming operations (“Gaming Operations”), take any action either globally or specifically with respect to the Lessee’s Development which is not based on any act or omission of Lessee, any of its Affiliates or their respective officers, managers, directors, members or owners but would prohibit, deny or revoke Lessee’s license or other authority to conduct Gaming Operations upon the Premises or any property adjacent to the Premises in their entirety, then Lessee or Lessor shall have the option to terminate this Lease upon written notice to the other delivered within thirty (30) days of Lessee receiving actual notice of any such action by the Governmental Authority; which termination shall be effective on the earlier of: (i) the thirtieth (30th) day following the date upon which the Gaming Operations are effectively prohibited, denied or revoked, or (ii) the date specified by Lessee in connection with Lessee’s written notification to Lessor of any such governmental action providing reasonable details of such action.  Lessor shall have a right to object to any such termination by Lessee under this Section 3.4(a) and assert that the provisions of Section 3.4(b) are applicable.  In the event that Lessee does not timely provide any such written notice to Lessor, Lessee shall be deemed to have waived any right to terminate this Lease pursuant to this Section 3.4.

(b) If such prohibition, denial, or revocation is the result of anything that is within the control of Lessee or its Affiliates or is based in whole or in part on the acts or omissions of Lessee, any of its Affiliates or their respective officers, managers, directors, members or owners or because of a finding regarding the suitability of Lessee under the Mississippi Gaming Control Act, then Lessee shall be in default under the terms of this Lease, and Lessor shall be entitled to all remedies contemplated by Section 22.2(e).   Rent or any other obligation under this Lease that specifically survives the termination hereof shall continue to survive.

  

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ARTICLE 4

RENT

4.1  Rent.  Lessee shall pay to Lessor rent, including, without limitation, Base Rent, Additional Rent and Additional Amounts, to Lessor pursuant to the terms and provisions of this Article 4 (collectively, “Rent”).

4.2  [Intentionally Deleted]

4.3  [Intentionally Deleted]

4.4  Base Rent.  Upon commencement of construction of Phase 1 as contemplated by Lessee’s RFP Response, Lessee shall pay to Lessor an amount equal to Fifty Thousand Dollars ($50,000) as the initial Base Rent payment.  After the commencement of gaming operations by Lessee (or an Affiliate of Lessee) on the Parcel or any property adjacent or contiguous to the Parcel, Lessee shall pay Lessor an annual minimum base rent of Six Hundred Thousand and no/100 Dollars ($600,000) (“Base Rent”). For the first (1st) Lease Year, Lessee shall be entitled to a credit against Base Rent in the amount of Fifty Thousand Dollars ($50,000) to be applied to such year's Base Rent payments until the credit is fully utilized.  This Base Rent credit relates to the good faith deposit and application fee paid by Lessee pursuant to the RFP.  Beginning with the sixth (6th) Lease Year (not counting any initial stub Lease Year of less than 9 months) and each successive Lease Year thereafter, Base Rent shall cumulatively increase by two percent (2%) each Lease Year over the Base Rent for the immediately preceding Lease Year.

4.5  Additional Rent.  In an effort to provide Lessor with a mechanism for participating in the economic benefits to be derived from increased land values as the development proceeds, Lessee shall pay additional rent for the Parcel in the amounts calculated in the manner set forth in Sections 4.6 and 4.7 (collectively, “Additional Rent”).  Additional Rent for the final Lease Year shall be due and payable within ninety (90) days after the expiration or earlier termination of this Lease.  These obligations shall survive the expiration or earlier termination of this Lease.

4.6  Calculation of Additional Rent based on Gross Gaming Revenues.  After the commencement of gaming operations by Lessee (or an Affiliate of Lessee) on the Parcel or any property adjacent or contiguous to the Parcel, Lessee shall pay Lessor an annual percentage rent (the “Percentage Rent”) for each and every Lease Year.  The Percentage Rent shall be equal to one percent (1%) of the Gross Gaming Revenues generated by Lessee (or Affiliates of Lessee) on or relating to the Premises or any property adjacent or contiguous to the Parcel owned, leased or controlled by Lessee or any Affiliate.  Lessee acknowledges and agrees that Gross Gaming Revenues shall include all sources of revenue generated by the Development taken as a whole, including any revenue generated by Affiliates of Lessee or by any development located on the Parcel or on any property adjacent or contiguous to the Parcel.  For purposes of this Lease, the term “Gross Gaming Revenues” shall mean the total gaming revenues received less winnings paid out, and such term shall have the same meaning as gross gaming revenue for the purpose of reporting and payment of license fees under the Gaming Control Act.

  

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4.7  Calculation of Additional Rent based on Adjusted EBITDA.  After the earlier of: (i) commencement of operations of Phase 3 (as contemplated and defined in Lessee’s RFP Response) of the Development by Lessee (or an Affiliate of Lessee) on the Parcel or any property adjacent or contiguous to the Parcel owned, leased or controlled by Lessee or any Affiliate or (ii) October 1, 2015, and in addition to the Percentage Rent, Lessee shall pay Lessor an additional sum as Additional Rent in an amount equal to 25 bps of Adjusted EBITDA (defined below) generated by Lessee (or Affiliates of Lessee) on or relating to the Premises or any property adjacent or contiguous to the Parcel owned, leased or controlled by Lessee or any Affiliate for that Lease Year or portion thereof.  The Additional Rent shall increase by 25 bps each Lease Year for the three immediately subsequent Lease Years.  After all of the increases for the stated four (4) Lease Years, the Additional Rent under this Section 4.7 shall equal 1.0% of Adjusted EBITDA for that Lease Year and for each subsequent Lease Year.  In the event Adjusted EBITDA exceeds Seventy-Five Million Dollars ($75,000,000) in any Lease Year (“Hurdle Amount”), Lessee shall pay to Lessor as an additional component of Additional Rent, an additional 25 bps of the amount of Adjusted EBITDA in excess of the Hurdle Amount.  Lessee acknowledges and agrees that Adjusted EBITDA shall include all sources of revenue to be generated by the Development taken as a whole including any revenue generated by Affiliates of Lessee or by any development located on or adjacent or contiguous to the Parcel.  Lessee has provided Lessor a pro-forma reflecting the calculation of Rent.  Lessor acknowledges that the pro-forma provided by Lessee is an estimate only and is not meant to be a guarantee of the Rent for any period during the Lease Term.  For purposes of this Lease, the term “Adjusted EBITDA” shall mean aggregate EBITDA of Lessee and/or it Affiliates determined in accordance with generally accepted accounting principles applied on a consistent basis, including deduction of the payment of license fees paid under the Gaming Control Act, but excluding any dividends and distributions to any equity owners of Lessee.

4.8  Due Date.  Lessee shall pay the Rent described herein without offset or deduction, except as expressly provided herein, and without notice or demand.  The Base Rent due for any period of less than a full Lease Year, and any installment of the Base Rent due for any period of less than a full month, and any Additional Rent due for an operating period which does not equal a full Lease or calendar year, shall be appropriately apportioned, based on a year of twelve (12) thirty (30) day months  All Rent shall be payable in immediately available funds which at the time of payment is legal tender for payment of public and private debts in the United States of America.  Lessee shall pay Rent by wire transfer to the account of Lessor pursuant to wire instructions provided by Lessor from time to time.  Lessor may change the place or manner for delivery of Rent payments upon thirty (30) days written notice to Lessee.

(a)  Base Rent.  The Base Rent during the Term of this Lease shall be due and payable in equal monthly payments no later than the first day of each month; provided, that, for the first (1st) Lease Year, Lessee shall be entitled to a credit against Base Rent in the amount of Fifty Thousand Dollars ($50,000) to be applied to such year's Base Rent payments until the credit is fully utilized.

(b)  Percentage Rent.  The Lessee shall pay an amount equal to the Percentage Rent less the amount actually paid for Base Rent for the applicable Lease Year pursuant to clause (a) immediately above on or before the forty-fifth (45th) day following the end of each Lease Year.  Lessor shall have no obligation to reimburse Lessee for any Base Rent in the event that the Percentage Rent is less than the Percentage Rent.  The payment of Percentage Rent shall be accompanied by a copy of all revenue reports which must be submitted to the Mississippi Gaming Commission or the Mississippi Department of Revenue for purposes of calculating licenses fees.  Lessee shall also provide to Lessor copies of any and all financial statements, reports or audits required of Lessee or its Affiliates by the Mississippi Gaming Commission or the Mississippi Department of Revenue pursuant to the Gaming Control Act within ten (10) days after the same are submitted to the Mississippi Gaming Commission or Department of Revenue.

  

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(c)  Additional Rent based on Adjusted EBITDA.   Additional Rent shall be due and payable as soon after the end of each operating year as certified financial statements are available to determine Adjusted EBITDA, but in no event more than one hundred twenty (120) days after the end of each operating year.  Such payment of Additional Rent shall be accompanied by a copy of any and all financial statements, reports or audits of Lessee, its parent company and all Affiliates.

4.9  Notice of Default.  Unless the time for payment of Rent has been extended pursuant to Section 4.12, if by the due date for the payment of such Rent, Lessor has not received the payment which has become due and payable, Lessor may, but has no obligation to, deliver to Lessee (and to all Permitted Mortgagees who have complied with Section 20.2 hereof) written notice demanding that within forty-five (45) days thereafter, Lessee pay such Rent, together with late payment charges and interest as described in Sections 4.10 and 4.11.

4.10  Interest.  Unless the time for payment of the Rent has been extended pursuant to Section 4.12, there shall be added to any Rent payment which has become due and payable but has not been paid, interest at the Interest Rate from and after the fifteenth (15th) day following the date that the Rent payment became due.

4.11  Late Charge.  In addition to the interest required by Section 4.10, a late charge in the amount of three percent (3%) of the Rent payment due shall be added to any Rent payment not paid on time.  Lessee acknowledges that such amount is not a penalty but is intended to compensate Lessor for time and internal collection efforts associated with any such late payment.

4.12  Extension. Prior to the time the Rent becomes due, upon Lessee’s written request, Lessor may, but shall not be obligated to, extend the time for payment of the Rent for an additional period not in any event to exceed a total extension of more than ninety (90) days.  In order to be effective, any such extension must be in writing and signed by Lessor.  No more than three (3) extensions may be granted by Lessor during any one (1) Lease Year.  If an extension is granted, there shall be added to the deferred payment a late charge of two percent (2%) and interest at the Interest Rate on the deferred payment and late charge.  This deferred Rent late charge and interest shall be a lien on the Improvements and other personal property of Lessee on the Parcel.

  

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4.13  Arrears.  If the Rent is at any time more than six (6) months in arrears, this Lease shall, subject to the other provisions of this Lease, at the election of Lessor automatically terminate, and Lessor may proceed to cancel it on the land records of Harrison County, Mississippi.

4.14  Right to Inspect.   Lessor, at its cost, shall have the right to inspect or audit, in Lessee's offices, during Lessee's usual business hours, within the one hundred eighty (180) day period following delivery of the statements supporting the calculation of Additional Rent, Lessee's books and records referred to in such statement or relating thereto.  Any independent certified public accountant or other professional utilized by Lessor in respect to any such inspection or audit shall not be engaged on a contingency fee or similar basis, but shall only be engaged on the basis of a fixed fee or fixed hourly rate schedule.  Lessor shall pay the costs of such audit or inspection, but shall not be obligated to reimburse Lessee or its accountants time required to be devoted to any such inspection or audit; provided, however, that if the statements supporting the calculation of Additional Rent for the time period in question is determined to be in error, resulting in an under payment by Lessee of more than five percent (5%) during the applicable period under review, Lessee shall pay Lessor’s inspection/audit costs.  Lessor may not conduct an inspection or have an audit performed pursuant to this paragraph more than once during any calendar year.

ARTICLE 5

ADDITIONAL AMOUNTS

5.1  Additional Amounts.  In addition to the Base Rent or Additional Rent, Lessee shall also pay or cause to be paid all undisputed Impositions and all other costs, expenses, liabilities, obligations or other payments which Lessee under this Lease assumes and agrees to pay, all of which are hereinafter referred to individually and collectively as “Additional Amounts”.  After the Effective Date and during the Term, Lessee, at its sole cost and expense, shall pay or cause to be paid, in addition to the Impositions, all charges for gas, electricity, light, heat, power, telephone, cable or other communication service, and any other utilities rendered or supplied upon or in connection with the Premises, and shall indemnify Lessor and save Lessor harmless from and against any liability or damages on account thereof.  To the extent any statement for such services covers any period before the Effective Date or after the Expiration Date, such statement shall be prorated such that Lessee shall pay only such portion that is attributable to the period within the Term.

5.2  Payment.  Lessee shall pay or cause to be paid all Additional Amounts within thirty (30) days of written demand by Lessor and before any interest, penalty, fine or cost accrues for nonpayment, provided, however, that if any Additional Amounts may by law be paid in installments, Lessee may pay such Additional Amounts in installments together with applicable interest thereon.  Such installments may not extend past the Expiration Date.  Lessee shall pay all such installments and any applicable interest at the time they become due and before any further penalty or fine may be added thereto.

5.3  Evidence.  Within a reasonable period after Lessee receipt of Lessor’s written request, Lessee shall furnish to Lessor pertinent official receipts or other proof satisfactory to Lessor evidencing the payment of any Additional Amounts before the same become delinquent.

  

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5.4  Interest.  If Lessee fails to pay or cause to be paid in accordance with Section 5.2 any Additional Amounts, then Lessor shall have all the rights and remedies provided in Section 22.2, as in the case of nonpayment of Rent and in Section 18.1, including the right to interest at the Interest Rate on all such Additional Amounts, if and to the extent paid by Lessor from and after the date of Lessee’s nonpayment.

5.5  Taxes.  Lessor agrees that Lessee shall have no responsibility or liability for any tax imposed upon Lessor’s interest in the Parcel or Lessor’s interest in this Lease.  Lessor shall have no liability to Lessee for ad valorem or other taxes of any kind assessed against Lessee’s Leasehold Estate or Improvements.

ARTICLE 6

USE OF THE PARCEL AND PREMISES

6.1  Uses.  The Parcel may be used for any use permitted by the Development Plan, as may be amended or revised from time to time.  No portion of the Premises may be used for any illegal activities, environmentally hazardous activities, dry-cleaner (except a location exclusively for pick-up and drop-off), massage parlor, hot tub facility or suntan facility (other than on-site spa related facilities), night club or adult entertainment facility (other than those contained within the gaming facility itself or adjoining facilities including the tower entrance to the gaming vessel) or any store the principal purpose of which is the sale of alcoholic beverages for consumption off premises at any time during the Term.

6.2  Development Plan.  Lessor has leased the Parcel for development, construction, operation and use consistent with the Development Plan, as the same may be amended or revised from time to time.  The Development Plan is outlined in Lessee’s RFP Response and is incorporated herein by this reference.  The Development Plan and any amendments or modifications thereto shall be subject to the prior written consent of Lessor which may be withheld or conditioned in Lessor’s reasonable discretion.  Lessor hereby consents to the Development Plan as contemplated herein.  Lessee shall develop, construct and operate the Parcel only in accordance with the Development Plan; provided, however, that if Lessee desires to develop the Parcel in a manner which is different than the Development Plan, Lessee shall submit for Lessor’s approval an amendment to or revision of the Development Plan and shall otherwise comply with all requirements of amending or revising the Development Plan set forth in the Development Plan or applicable Requirements.  If the revised or amended Development Plan would require zoning inconsistent with any existing zoning, Lessor agrees to authorize Lessee to submit and process a request for a change of zoning to the City.  Any rezoning shall be done upon the mutual agreement of both Lessee and Lessor.

6.3  Zoning.  Lessee agrees to abide by the applicable provisions of any zoning regulations applicable to the Parcel and Improvements and other applicable City land use ordinances.

6.4  Historic Restrictions.  Lessee acknowledges and understands that the Parcel may be subject to the provisions, guidelines and restrictions under the Antiquities Law of Mississippi (Chapter 7 of Title 39 of the Mississippi Code of 1972, as amended) (“Antiquities Law”).  Therefore certain actions with respect to historically significant properties such as all or a portion of the Parcel are subject to approval by the Mississippi Department of Archives and History (“MDAH”), including, without limitation, construction of additional improvements, demolition and removal of existing improvements, and certain actions that may alter the architectural nature or façades of the improvements.  Lessor shall give notice of the execution of this Lease to MDAH as contemplated by the Antiquities Law.  In the event that the Parcel is designated as a Mississippi Landmark by the MDAH, Lessee agrees to comply with the provisions of the Antiquities Law.

  

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6.5  Waste.  Lessee shall not conduct or permit to be conducted any public or private nuisance on the Premises, nor commit or permit to be committed any waste thereon.  Unless provided in the Development Plan, without the prior written consent of Lessor, which will not be unreasonably withheld, Lessee shall not move, use, destroy, cut or remove (or permit to be moved, used, destroyed, cut or removed) any timber, protected native plants or standing trees on the Parcel, except only those which are necessary for the use of the Parcel to the Development Plan.  Lessee shall report to Lessor any known or suspected trespass or waste committed on the Parcel.

6.6  Conformity to Law.  Lessee shall maintain the Premises in a clean and safe condition and in accordance with Applicable Standards.  Lessee shall not use or permit the Premises to be used or occupied at any time during the Term in any manner that is not in full conformity with all applicable regulations.  Lessee promptly shall at all times comply with all applicable Requirements with respect to the Premises, including without limitation the condition, maintenance, use, operation, occupation, improvement and alteration of the Premises, without regard to the nature or cost of the work required to be done, extraordinary, as well as ordinary, of any Governmental Authority, and of any and all of their departments and bureaus of any applicable Fire Rating Bureau or other body exercising similar functions, affecting the Premises, or any street, avenue or sidewalk comprising a part or in front thereof or any vault in or under the same, or requiring the removal of any encroachment, or affecting the construction, maintenance, use, operation, management or occupancy of the Premises, whether or not the same involve or require any structural changes or additions in or to the Premises without regard to whether or not such changes or additions are required on account of any particular use to which the Premises, or any part thereof, may be put, and without regard to the fact that Lessee is not the fee owner of the Premises.  Lessee also shall comply with any and all provisions and requirements of any casualty, liability or other insurance policy required to be carried by Lessee under the provisions of this Lease.  Lessee shall not permit any extra hazardous business, use or purpose to occur on or about the Premises.  Lessee shall promptly provide Lessor written notice of (i) Lessee’s obtaining knowledge of any release of any Regulated Substance on, in, under or from the Premises; (ii) Lessee’s receipt of any notice to such effect from any Governmental Authority; and (iii) Lessee’s obtaining knowledge of the incurring of any expense or loss by such Governmental Authority or by any other Person in connection with the assessment, containment or removal of any Regulated Substance for which expense or loss Lessee may be liable, in whole or in part, or for which expense or loss a lien may be imposed on the Premises.  If Lessee desires to contest the validity or applicability of any Requirement other than as set forth specifically in the Lease, including without limitation, Section 11.1, Lessee, at its sole cost and expense, may carry on such contest, provided that non-compliance shall not constitute a crime or expose Lessor or the Premises to any penalty, fine, liability or expense.

  

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6.7  Minerals.  Lessor excepts and reserves out of the Parcel all oils, gases, geothermal resources, coal, ores, minerals, fertilizer and fossils of every kind which may be in or upon the Parcel.  Notwithstanding the foregoing, Lessor reserves no right to enter upon the Parcel to inspect, explore or extract any such items without the prior written consent of Lessee unless the reservation of such a right of entry is required by any applicable Requirements.  Lessee may withhold its consent to a request by Lessor for entry if Lessee believes in its reasonable discretion that any such entry would delay, interfere with or otherwise adversely affect the development, construction, operation or use of the Parcel.  Lessee shall be entitled to reasonable compensation for any damages resulting from the exercise of the rights reserved hereunder.

6.8  Quiet Enjoyment.  Lessor warrants that Lessee shall quietly have, hold and enjoy the Parcel and the Premises during the Term of this Lease so long as Lessee is not in default (i.e., any required notice having been given and any applicable cure period having expired) under this Lease.

6.9  Surrender.  Lessee shall peaceably surrender possession of the Premises upon the Expiration Date or earlier termination of this Lease.  Upon the expiration or earlier termination of this Lease, fee title to the Premises, including, without limitation, all Improvements, shall vest in Lessor free and clear of any liens or encumbrances of any type other than those created by Lessor without any obligation by Lessor to pay any compensation therefor to Lessee.

ARTICLE 7

EASEMENTS AND DEDICATIONS

7.1  Grant.  Lessor hereby agrees to make land available for easements (hereinafter called “Public Use Interest”) for roadways, access, utilities and drainage over, under and upon and across such portions of the Parcel as are identified and designated from time to time by Lessee and are reasonably necessary or desirable for implementation of the Development Plan.  Such Public Use Interest shall be easements, as required by the applicable Governmental Authority and permitted by state law, and shall in all cases survive expiration, cancellation or termination of this Lease and the Leasehold Estate created pursuant hereto.

7.2  Designation.  Before Lessor will make a Public Use Interest available, Lessee shall deliver a legal description of the applicable portion of the Parcel and a completed application for right-of-way describing the nature of the Public Use Interest required.

7.3  [Intentionally Deleted].

7.4  Dedication to Public Agencies.  After notification and upon receiving full compensation for the Public Use Interest in the manner described above, Lessor shall promptly execute and deliver a perpetual easement for the Public Use Interest in recordable form to the purchaser of the Public Use Interest.  The purchaser of the Public Use Interest shall thereupon immediately dedicate the Public Use Interest to the applicable Governmental Authority or utilities and record such Public Use Interest in the real property records of Harrison County.  Upon such dedication with respect to a perpetual easement Public Use Interest, this Lease shall automatically be subordinate to such Public Use Interest, and Lessee shall have no responsibilities under this Lease with respect to the portion of the Parcel included in the Public Use Interest (except for matters occurring prior to the dedication) until such time, if ever, that the Governmental Authority or the utility abandons the Public Use Interest.  Upon such abandonment, the Public Use Interest shall automatically become subordinate to this Lease until such time, if ever, that the Public Use Interest is once again dedicated to a Governmental Authority or a utility.  Lessor shall also execute such other and further documents as may be required to fully implement the intent of this Section, provided that any other documents executed pursuant to this Section shall not affect any real property other than the portion of the Parcel designated and sold for the Public Use Interest.

  

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7.5  Reduction of Parcel.  Upon dedication to and acceptance by the applicable Governmental Authority or utility of a fee Public Use Interest, the portion of the Parcel included in the fee Public Use Interest shall be deducted from the Parcel for all purposes under this Lease and this Lease shall be terminated as to such portion of the Parcel.  Upon dedication to and acceptance by the applicable Governmental Authority or utilities of a perpetual easement Public Use Interest, the acreage included in the Public Use Interest, unless otherwise agreed to by Lessee, shall remain in the Parcel.  If the Governmental Authority or the utility ever abandons the perpetual easement Public Use Interest, then the acreage comprising the Public Use Interest shall once again be included in the acreage of the Parcel for calculating Base Rent until such time, if ever, that the Public Use Interest is once again dedicated to a Governmental Authority or a utility.

7.6  Easements.  At Lessee’s election and without further consent of Lessor, Lessee may, from time to time, create private, exclusive or non-exclusive easements over, under, upon and across the Parcel for roadway, access, drainage and utilities, including, without limitation, water, power, gas, electric, sewer, telephone, cable television and other communications; provided, however, that such easements shall be for a term that does not extend beyond the Expiration Date.  Any such easement shall terminate upon the later of: (a) the termination of this Lease, or (b) the termination of all Subleases and Space Leases to which the Lessor attorns in accordance with this Lease and which are utilizing the easement.

7.7  Water Front Lease.  As a material inducement to Lessor to execute this Lease and as an ongoing condition of this Lease, Lessee shall sub-lease or cause the appropriate party to enter into a lease with the City of Gulfport for the sixty feet of property running along the water’s edge on the two adjoining properties that Lessee or its Affiliates have under contract to lease (“Water Front Lease”).  The primary terms of such lease shall be: (i) a 60 foot wide strip the length of the waterfront for purposes of a pedestrian friendly boardwalk, (ii) a 99 year lease term and (iii) annual rentals of One Dollar which may be prepaid in full.  Lessor hereby represents and covenants to Lessee that to the best of its knowledge the primary purpose of the sub-lease is for the City of Gulfport to beautify the Parcel in a manner to increase pedestrian traffic to the Parcel and the Bert Jones Yacht Basin and that Lessor shall take no steps either through action or inaction relating to the Water Front Lease that would have a negative impact to the development plans and intended gaming, lodging and entertainment operations of Lessee on the Parcel as described in Lessee’s RFP Response.

  

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ARTICLE 8

CONSTRUCTION AND IMPROVEMENTS

8.1  Definition.  All buildings, fixtures, streets, curbs, sewers, drainage and flood control structures, sidewalks, fences, utilities, landscaping, signs and other structures or improvements of every kind and nature which exist, at any time, and any and all alterations, replacements, additions, upgrades or substitutions relating thereto on, above and below the Parcel or a portion thereof are considered “Improvements” under this Lease.

8.2  Construction.  Lessee covenants that Lessee shall commence and diligently pursue completion of the Improvements to the Premises in accordance with the Development Plan and Construction Plans (“Lessee’s Construction”) to be performed at Lessee’s sole cost, risk and expense.  Lessee represents and warrants that Lessee’s Construction will be performed in a workmanlike manner, according to the Construction Plans.  Subject to the provisions regarding Force Majeure Events, Lessee’s Construction will be substantially completed on or before the Construction Deadline.

8.3  Construction Plans.  Lessee shall within thirty (30) days after the Effective Date submit to the Lessor a plan for the construction of Improvements upon the Parcel (hereinafter called “Construction Plans”).  The Construction Plans shall conform with the requirements and restrictions of the Development Plan.  The Construction Plans shall include a legal description and survey of the applicable portion of the Parcel locating the Improvements, utilities, grading and drawings of the elevation of the Improvements.

8.4  Approval of Construction Plans.  The Construction Plans shall be prepared by architects, engineers and other design professionals duly licensed to practice in the State of Mississippi.  Within seventeen (17) days after receipt of the Construction Plans, Lessor will notify Lessee of its approval of the Construction Plans or of the manner in which the Construction Plans fail to conform to Lessor’s construction requirements or otherwise fail to meet with Lessor’s approval.  If necessary, within twenty (20) days after receipt of Lessor’s notice, Lessee will cause the Construction Plans to be revised in such manner as is required to obtain the approval of Lessor and will submit revised Construction Plans to Lessor for its approval, which shall be granted or denied within fifteen (15) days of receipt of the revised Construction Plans.  If Lessor fails to respond to Lessee’s Construction Plans (or revisions thereto) within the time periods specified above, then the period of delay beyond the applicable deadline shall constitute a “Lessor Delay”.  Except as provided in Section 22.1, the foregoing process shall continue until Lessor has approved the Construction Plans.  After Lessor has approved the Construction Plans, Lessee shall initial and return to Lessor one (1) set of the approved Construction Plans showing the date of Lessor’s approval. The performance of Lessee Construction may not commence in any manner whatsoever within the Premises until Lessor has approved the Construction Plans.  Subject to the extension by the length of any Lessor Delays and provided Lessee has provided the Construction Plans in accordance with Section 8.3, if Lessee has not received final approval from Lessor of the Construction Plans within sixty (60) days after the Effective Date (the “Plan Approval Deadline”), Lessee may terminate this Lease and all of its obligations hereunder by providing written notice thereof to Lessor within thirty (30) days after the Plan Approval Deadline.  Lessee may also elect to continue this Lease in effect.

  

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8.5  Updates to Construction.  At the end of the fifth (5th) Lease Year, and every five (5) year period thereafter, Lessee, following receipt of written request therefore from Lessor, shall provide Lessor with notice of any substantial changes to the Improvements, together with a set of revised as-built Construction Plans of such Improvements.  In addition, from time to time, upon the request of Lessor, Lessee shall provide Lessor with copies of all surveys, engineering and/or environmental reports, feasibility studies, blueprints and/or other documentation regarding the Parcel or the Improvements constructed thereon which are in Lessee’s actual possession or control at the time the request is made.  Lessee may require that the Lessor pay the reasonable cost of copying such documentation as a condition to making such copies.  All documents delivered to Lessor pursuant to the preceding two sentences shall be provided for Lessor’s information, without warranty by Lessee.

8.6  Revisions to Construction Plans.  Following Lessor’s approval of the Construction Plans, Lessee may not cause changes to be made to the Construction Plans without Lessor’s prior, written consent.  Within ten (10) days after receipt of the revisions to the Construction Plans, Lessor will notify Lessee of its approval of the revisions of the Construction Plans or of the manner in which said revisions fail to conform to Lessor’s requirements or otherwise fail to meet with Lessor’s approval.  If necessary, within five (5) days after receipt of Lessor’s notice, Lessee will cause the subject revisions to the Construction Plans to be revised in such manner as is required to obtain the approval of Lessor and will submit revised Construction Plans to Lessor for its approval, which shall be granted or denied within ten (10) business days of receipt of the revised Construction Plans.

8.7  Permits.  Lessee shall have the obligation, at Lessee’s sole expense, to apply for, obtain and maintain any and all applicable licenses, permits, zoning and approvals required by any Governmental Authority for the performance of any of Lessee’s Construction and for any and all activities of Lessee in or about the Premises (collectively, the “Permits”, and each a “Permit”).  To the extent reasonably required, Lessor agrees to cooperate with Lessee in obtaining the Permits, provided that Lessee reimburses Lessor for any reasonable costs associated with such cooperation.  Such cooperation shall include, if reasonably necessary, the execution by Lessor of any applications or other documents necessary for any Permits.

8.8  Copies of Permits.  Lessee shall provide Lessor with copies of any occupancy permit, State Fire Marshal approval and other required Permits pertaining to the occupancy of the Premises following the completion of Lessee’s Construction before full or partial occupancy of the Premises may occur.

8.9  Reports of Contractors.  Lessee shall cause its general contractor to provide monthly updates to Lessor on or before the tenth (10th) day of each month, commencing ninety (90) days after a notice to proceed is issued to the general contractor, stating (i) whether or not the construction and expected completion of Lessee’s Construction are on schedule, and if not, in what respects such work is behind schedule, and (ii) whether any defaults or events which with notice, passage of time or both would constitute a default exist under any construction or related agreements, certificates, permits or other documents associated with Lessee’s Work, including, without limitation, any default of payment obligations to contractor or any subcontractors.

  

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8.10  Major Alteration.  If due to a casualty, obsolescence or any other reason, Lessee desires to construct additional Improvements, make significant modifications to the exterior of any existing Improvements or to demolish any Improvements, Lessee shall submit to Lessor plans for such action and such plans shall be deemed Construction Plans and such plans and construction shall be subject to the provisions of this Article 8, including, without limitation, the review and approval of Lessor.

8.11  No Lessor Warranty.  Lessor’s approval of the Construction Plans shall not be construed as representing or implying that the plans and specifications will, if followed, result in properly designed improvements, and shall not be considered or construed as having made any express or implied warranty whatsoever as to the adequacy, quality, fitness or purpose of any physical conditions, materials, workmanship, plans, specifications, drawings or other requirements pertaining to the construction of the work contemplated therein, and Lessor expressly disclaims any and all such warranties.  Such approval shall in no event be construed as representing or guaranteeing that any improvement built in accordance with the applicable plans and specifications will be built in a good or workmanlike manner.  Lessor shall not be responsible or liable for any defects in any plans or specifications submitted, revised, or approved pursuant to the terms of this Lease, any loss or damage arising from the noncompliance of such plans and specifications with applicable Requirements, nor any defects in construction undertaken pursuant to such plans and specifications.

8.12  General Requirements.  The following requirements shall apply to the performance of Lessee’s Construction and, unless waived in writing by Lessor, to any Major Alterations during the Term (each, “Lessee’s Work”):

(a)  Lessee, at its sole expense, shall apply for and obtain any and all necessary Permits.

(b)  Lessee’s selection of the general contractor(s) to perform Lessee’s Construction shall be subject to the prior, written approval of Lessor, which approval shall not be unreasonably withheld, delayed or conditioned.  The general contractor shall be a licensed Mississippi contractor, and proof of such license shall be furnished to Lessor prior to the commencement of any work.

(c)  Lessee, at its sole cost and expense, shall cause to be delivered to Lessor, as co-obligee a payment and performance bond of a surety company of recognized responsibility licensed to do business in the State of Mississippi.  The bond must be in a form and be written by a surety company approved by Lessor (which approval shall not be unreasonably withheld, delayed or conditioned) and must:  (i) be in the amount of the entire cost of Lessee’s Work in accordance with approved final plans and specifications and as such construction cost is stipulated in the construction contract between Lessee and its contractor;  (ii) guaranty the full and timely performance of the contract for Lessee’s Work; and (iii) be in an amount sufficient to assure that all obligations will be paid for labor and material supplied in connection with Lessee’s Work in accordance with the approved final plans and specifications.

  

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(d)  Without limiting any other indemnity obligations set forth in this Lease, Lessee shall protect, hold harmless and indemnify Lessor from and against claims, damages, losses and expenses, including reasonable attorneys’ fees, arising out of or resulting from, directly or indirectly, performance of Lessee’s Work or any defects or alleged defects in design or construction, including claims, damages, losses (including loss of revenue) and expenses (including attorneys’ fees) arising out of or resulting from, directly or indirectly, the negligent acts or omissions of Lessee’s contractors, subcontractors, suppliers, and anyone directly or indirectly employed by them.  The foregoing indemnity obligation includes any claims by the owners or lessees of adjacent property.

(e)  Prior to the execution of its construction contract, Lessee shall submit to Lessor for Lessor’s review and approval copies of the construction contract and related contract documents (including a detailed cost breakdown and completion schedule) between Lessee and its contractor pertaining to Lessee’s Work.  The contract for the performance of Lessee’s Work shall provide, without limitation, that Lessee’s Work will be performed in compliance with the Construction Plans and on a schedule subject to Lessor’s reasonable approval.

(f)  The performance of Lessee’s Work shall be in a workmanlike and diligent manner to full completion, free from defects and in conformance with the approved plans and specifications, all Permits, applicable Requirements and the approved contract documents.  Without limiting the foregoing, Lessee and its contractors and agents shall conform to and observe all applicable Requirements relating to demolition, abatement, excavation, construction or repair and shall protect all buildings and structures on adjacent properties to the extent required by applicable Requirements.  After the commencement of Lessee’s Work and until substantial completion thereof and excluding Force Majeure Events, Lessee shall not abandon (or permit to be abandoned) the Lessee’s Work for any period greater than twenty (20) consecutive days.  Following completion of Lessee’s Work, Lessee shall cause its contractors to promptly correct any work which is defective or fails to conform to the approved plans and specifications, whether observed before or after substantial completion thereof.

(g)  Lessee’s Work shall be performed at Lessee’s sole expense and risk, and Lessor shall have no liability therefor.  Lessor shall not have any financial obligation or other obligation of any kind under this Lease except as specifically set forth herein and shall not be liable, directly or indirectly, for the payment of any sums whatsoever, or for the performance of any other obligation whatsoever, arising out of the work performed pursuant to any contracts related to Lessee’s Work.

(h)  Lessee shall cause the Architect to provide Lessor with complete “as built” Construction Plans within sixty (60) days after the substantial completion of Lessee’s Work.

  

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8.13  No Liens.  Lessee covenants and agrees to pay for all work, labor and materials, and all expense whatsoever in connection with the performance of Lessee’s Construction and agrees to keep and hold Lessor fully harmless against all mechanic’s, furnisher’s or other liens and claims of every kind, which may arise out of or be based upon any such work, construction, removal of improvements, or any alterations, repairs or maintenance.  In the event that any lien is filed against the Premises or against Lessee’s Leasehold Estate under this Lease, then the Lessee shall, within thirty (30) days from the date that the lien is filed, and in any event prior to the date any party commences proceedings to foreclose on such lien, either:  (1) pay the claim and cause the lien to be removed from the Premises and/or the Leasehold Estate of Lessee under this Lease or (2) furnish security in an amount sufficient to cause the lien to be removed from the Premises and/or the Leasehold Estate of Lessee under this Lease.

8.14  Ownership.  All Improvements constructed by Lessee shall be the property of Lessee or any successor-in-interest (“Owner”) and shall, unless and until they become the property of Lessor as herein specifically provided, be subject to assessment for ad valorem taxes in the name of the Owner.

8.15  Subleases.  In connection with any Sublease or Assignment actually approved by Lessor, Lessee may sell all of its rights, title and interest in and to any and all Improvements and may allow Sublessees or Assignees to construct Improvements subject to the terms and provisions contained herein, in which event the party which so purchases or constructs such Improvements, and its successors and assigns, shall thereafter be deemed to be the Owner of such Improvements and shall be subject to the requirements, and enjoy the benefits, of this Lease as to such Improvements.

8.16  Appraisal.  If the value of the Improvements must be determined by appraisal, said appraisal shall consider the condition and current value of the Improvements and their suitability for uses ordinarily made of the lands on which the Improvements are located at the time of the appraisal.

8.17  Removal.  With the approval of any applicable Permitted Mortgagee and Lessor, the Owner of the Improvements shall have the right, from time to time, to remove or demolish all or any part of such Improvements on the Parcel which have been damaged or become obsolete; provided, however, that Lessee shall continue to be obligated to pay Rent as set forth herein.  Lessee shall promptly and with diligence proceed to replace or restore all Improvements that have been removed with Improvements that have been approved by Lessor.

8.18  Improvement District.  Notwithstanding anything to the contrary in this Lease, Lessor and Lessee acknowledge and agree that the Parcel may be included within the boundaries of a City or county special assessment or improvement district; provided, however, that any assessment or lien shall attach and encumber only Lessee’s Leasehold Estate and the Improvements.  Lessee shall furnish Lessor with the amounts of assessments and charges of every character levied against the Leasehold Estate or the Improvements as soon as the assessments are charged or levied.  Lessee agrees to make timely payment of all assessment charges.  If any installment of any assessment or charge against Lessee’s Leasehold Estate is not paid when due, then such nonpayment shall be a default under this Lease.  If the delinquent amounts against the Leasehold Estate and Improvements are not paid within thirty (30) days from the date due, then Lessor may exercise the rights under Section 18.1 or may act to terminate this Lease.  This Section shall not be construed as constituting a lien against the fee interest of Lessor in the Parcel, nor any obligation against Lessor to pay charges or assessments imposed pursuant to an improvement plan.  No action of any nature may be brought to forfeit, terminate or foreclose Lessor’s title or fee interest in the Parcel for failure of Lessee to pay any assessment.

  

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ARTICLE 9

REPAIRS AND MAINTENANCE

9.1  Repair.  After the Effective Date and during the Term, Lessee, at its sole cost and expense, shall maintain and repair the following components of the Premises consistent with Applicable Standards:  the structure and exterior façade of the Improvements, all base building fixtures, equipment and systems, all base building common areas, and all public and other improvements outside of the buildings comprising the Improvements.  Lessee shall not permit any physical waste to the Premises, and shall, except as provided herein, and at Lessee’s sole cost and expense, make all repairs and replacements, structural or otherwise, required to maintain the Improvements in accordance with Applicable Standards.  Lessee shall maintain all portions of the Premises and, to the extent required by Requirements, all areas adjoining the same, in a clean, neat and orderly condition, free of dirt, rubbish, snow, ice and unlawful obstructions, and in accordance with Applicable Standards. Lessee shall comply with, or it shall cause to be complied with, all requirements of all policies of public liability, fire or other insurance at any time in force with respect to the Premises.

9.2  No Services.  Notwithstanding any other provision in this Lease, Lessor shall not be required to furnish any services or facilities or to make any repairs, alterations, replacements or improvements whatsoever in or to the Premises.  Lessee hereby assumes the full and sole responsibility for the condition, operations, repair, replacement, and maintenance and management of the Premises including, without limitation, all Improvements.

ARTICLE 10

LIENS

10.1  Payment; Indemnity.  Lessee shall be responsible for payment of all costs and charges for any work done by or for it on the Premises or in connection with Lessee’s occupancy thereof, and, subject to the provisions of Section 10.2, Lessee shall keep the Premises free and clear of all mechanics’ liens and other liens and encumbrances on account of work done for or authorized by Lessee or Persons claiming under it or bond over such liens according to state law.  Lessee expressly agrees to and shall indemnify and hold Lessor harmless against liability, damages, costs, attorneys’ fees and all other expenses or loss on account of claims of lien  or other encumbrances of laborers or material men or others for work performed or materials or supplies furnished for or authorized by Lessee or Persons claiming under it.

10.2  Release; Contest.  If, because of any act or omission (or alleged act or omission) of Lessee, any mechanics’, materialmen’s or other lien, charge or order for the payment of  money shall be filed or recorded against the Premises or against Lessor (whether or not such lien, charge or order is valid or enforceable as such), Lessee shall, at its own expense, cause the same to be released and discharged of record within thirty (30) days after Lessee shall have received notice of the filing or recording thereof, or Lessee may, within said period, in the case of mechanics’ or materialmen’s liens, furnish to Lessor a bond, letter of credit or other instrument satisfactory to Lessor against any other lien, charge or order, in which case Lessee shall have the right in good faith to contest the validity or amount thereof.  Notwithstanding the foregoing, if Lessee has already furnished a bond to a Permitted Mortgagee, Lessee may satisfy the requirements of this Section 10.2 by providing Lessor with a copy of such bond.

  

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10.3  Notice.  Should any claims of lien or other encumbrances be filed against the Parcel or any action purporting to affect the title to the Parcel be commenced, the party receiving notice of such lien or action shall immediately give the other party written notice thereof.

ARTICLE 11

CONTESTS

11.1  Lessee Right to Contest.  Notwithstanding anything contained herein to the contrary, after written notice to Lessor, Lessee may contest by appropriate legal proceedings, conducted in good faith and with due diligence, the amount, validity or application, in whole or in part, of any Imposition, Requirement, lien, encumbrance, charge or any other adverse claim against the Premises provided that: (a) the fee interest of Lessor shall not thereby be encumbered in any manner (or, if encumbered, such fee interest is adequately protected by a bond or similar security ensuring payment of the disputed item in the event Lessee’s protest is unsuccessful); (b) such proceeding shall operate to suspend the collection of any fine, fee, charge, assessment or Imposition from Lessor and the Parcel; and (c) Lessor shall not thereby become subject to any civil or criminal liability whatsoever for Lessor and Lessee’s failure to comply.

ARTICLE 12

INDEMNIFICATION

12.1  Losses.  Lessee hereby expressly agrees to indemnify and hold Lessor and its officers, directors, commissioners and employees (collectively, the “Indemnitees”) harmless, or cause Lessor to be indemnified and held harmless, from and against all liabilities, obligations, damages, penalties, claims, causes of action, costs, charges and reasonable expenses, including reasonable attorneys’ fees and costs (collectively “Losses”), which may be imposed upon or incurred by or asserted against Lessor after the Effective Date by reason of the following:

(a)  any restoration, construction or other work or thing done in or on the Premises or any part thereof;

(b)  any use, non-use, possession, occupation, alteration, repair, condition, operation, maintenance or management of the Premises or any part thereof or of any street, alley, sidewalk, curb, vault, passageway or space comprising a part of or adjacent to the Premises or any part thereof;

  

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(c)  any accident, injury (including death at any time resulting therefrom) or damage to any Person or property occurring in or on the Premises or any part thereof or in, or about any sidewalk or vault;

(d)  any failure on the part of Lessee to perform or comply with any  Requirements or with any of the covenants, agreements, terms or conditions contained in this Lease on its part to be performed or complied with;

(e)  any lien or claim which may have arisen out of any act of Lessee or any agent, contractor, servant or employee of Lessee against or on the Premises or any lien or claim created or permitted to be created by Lessee in respect of the Premises against any assets of any of the Indemnitees under the laws of the State of Mississippi or of any other Governmental Authority or any liability which may be asserted against any of the Indemnitees with respect thereto;

(f)  any failure on the part of Lessee to keep, observe and perform any of the terms, covenants, agreements, provisions, conditions or limitations contained in any contract for construction of Improvements at the Premises or in connection with any Subleases, on Lessee’s part to be kept, observed or performed;

(g)  any right to contest by Lessee expressly permitted pursuant to the provisions of this Lease;

(h)  any action taken by any Person or Governmental Authority pursuant to any Environmental Statute or under common law, pertaining to Regulated Substances, or in any manner arising out of or related to the presence, use, generation, storage, disposal or transport of any Regulated Substance or environmental contaminants found in, on or under, affixed to or emanating from the Premises, provided, however, such indemnity shall not relate to any pre-existing environmental condition or any environmental condition caused by Lessor; or

(i)  the condition of any Improvement or any part thereof.

Lessee agrees to indemnify Lessor for any such Losses except such matters caused by or resulting from Lessor’s willful or intentional misconduct.

12.2  Defense.  In case any action or proceeding is brought against Lessor by reason of any such occurrence, Lessee, upon Lessor’s request and at Lessee’s expense, will resist and defend such action or proceeding, or cause the same to be resisted and defended, either by legal counsel designated by Lessee or, where such occurrence is covered by liability insurance, by legal counsel designated by the insurer if so required by such insurer, in each case subject to Lessor’s reasonable approval of such counsel.

12.3  Environmental Damage.  In addition to the indemnification contemplated by Section 12.1, Lessee hereby agrees to and does indemnify and hold Lessor harmless from and against any and all liability, obligations, losses, damages, penalties, claims, environmental response and cleanup costs and fines, and actions, suits, costs, taxes, charges, expenses and disbursements, including reasonable legal fees and expenses of whatsoever kind or nature (collectively, “claims” or “damages”) imposed on, incurred by or reserved against Lessor in any way relating to or arising out of the existence or presence of any “Regulated Substance,” as defined herein, on, under or from the Parcel from and after the Effective Date, and any claims or damages in any way related to or arising out of the removal, treatment, storage, disposition, mitigation, cleanup or remedying of any Regulated Substance on the Parcel.

  

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For the purposes of this Lease, the term “Regulated Substance” shall include but not be limited to substances, materials or chemicals defined as regulated substances, hazardous waste, hazardous materials, toxic substances, dangerous waste, radioactive material, medical waste, biohazardous or infectious waste, pollutants, toxic pollutants, toxic waste, herbicides, fungicides, rodenticides, insecticides, contaminants, or pesticides or special waste in any relevant Environmental Statute and any material, waste or substance that is explosive, radioactive, asbestos containing, a hydrocarbon, a polychlorinated biphenyl, lead, urea formaldehyde, radon gas or petroleum, petroleum-based or petroleum derived products.  This indemnification shall include, without limitation, claims or damages arising out of any violations of any Environmental Statute.  The foregoing environmental indemnity shall survive the expiration or termination of this Lease and/or any transfer of all or any portion of the Premises and shall be governed by the laws of the State of Mississippi.

In the event any such action or claim is brought or asserted against Lessor, Lessee shall have the right, subject to the right of Lessor to make all final decisions, (a) to participate with Lessor in the conduct of any further required cleanup, remove or remedial actions and/or negotiation and defense of any claim indemnifiable under this environmental indemnity provision, having reasonable regard to the continuing conduct of the operation/business located on the Parcel and (b) to participate with Lessor in negotiating and finalizing any agreement or settlement with respect to any such claim or cleanup.

Lessee agrees to provide Lessor with copies of all information it receives or obtains regarding the environmental condition of the Parcel, including, but not limited to, any environmental audits Lessee may conduct on the Parcel.

12.4   Limit.  If, within the first six (6) months after the Effective Date, Lessee discovers any Regulated Substance on the Parcel and such Regulated Substance existed on the Parcel prior to the Effective Date, and the existence of such Regulated Substances materially and substantially affects Lessee’s ability to use the entire Parcel, Lessee may surrender the entire Parcel to Lessor and terminate this Lease.  Alternatively, Lessee shall have the right to take appropriate remedial action with respect to the Regulated Substance, including, but not limited to, defending any claim arising out of, or related to, the existence of the Regulated Substance on the Parcel and carrying out any required clean-up.  In no event shall Lessor have any liability or obligation relating in any manner to any such Regulated Substances or the remediation thereof.  Lessee acknowledges that it has had the opportunity to conduct environmental assessments and soil analysis as part of its due diligence prior to execution of this Lease and is satisfied with the results of its assessments.

  

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ARTICLE 13

INSURANCE

13.1  Liability.  Lessee, at its expense, shall at all times during the Term maintain (or cause to be maintained) in full force broad form commercial general liability insurance, which insures Lessee and Lessor against liability for injury to persons and property, and death of any Person occurring in, on, or about the Premises, or arising out of Lessee’s development, construction, maintenance, use of occupancy thereof.  All commercial general liability policies shall contain a provision that Lessor shall be entitled to recover under the policies for any loss occasioned to it, its Affiliates, servants, agents and employees by reason of the negligence or wrongdoing of Lessee, its servants, agents and employees, sublessees, concessionaires or permittees.  Further, the policies shall provide that their coverage is primary over any other insurance coverage available to Lessor, its Affiliates, servants, agents and employees.

13.2  Amounts.  The insurance shall afford protection of not less than $5,000,000 in combined single limits for bodily injury and property damage and each liability policy shall be written on an occurrence basis, provided, however, that the minimum amount of coverage for the above shall be adjusted upward on Lessor’s reasonable request so that such respective minimum amounts of coverage shall not be less than the amounts then required by statute or generally carried in connection with similar developments in Harrison County, Mississippi, whichever is greater.

13.3  Casualty Insurance.  Lessee, at its expense, shall at all times during the Term maintain (or cause to be maintained) all Risk Property Damage Insurance, including flood, windstorm or change of condition, lightning, tornado and hail, boiler and machinery and electrical injury coverage, on the Premises and all alterations, extensions and replacements thereof, for the full replacement cost at the time of the loss, including any increased cost of construction (but excluding foundations and footings) and without reduction for depreciation, of the Premises, naming Lessor as a loss payee as its interest may appear.  The determination of the full replacement cost amount shall be adjusted annually to comply with the requirements of the insurer and Lessor.  In addition, each policy shall contain inflation guard coverage and a waiver of co-insurance provisions.  Lessee hereby releases Lessor and its Affiliates from any and all liability for damage or loss to the Premises and all alterations, extensions and replacements thereof, unless such damage or loss is caused by the negligence of Lessor, its employees, agents or independent contractors, without regard to the amount of insurance proceeds recovered from Lessee’s insurer.  The maximum deductible shall be five percent (5%) of total insured value unless otherwise consented to by Lessor.

13.4  [Intentionally Deleted].

13.5   Employer’s Liability.  Lessee, at its expense, shall maintain continuously in force at all times during the Term, if Lessee has any employees, Workers’ Compensation Insurance in accordance with all applicable Requirements, including Employer’s Liability Insurance, in the minimum amount of $1,000,000 each accident, $1,000,000 disease policy limit and $1,000,000 disease each employee.  Notwithstanding applicable statutory exemptions, Workers’ Compensation Insurance shall be maintained regardless of the number of employees employed by Lessee or the type of work performed.

  

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13.6  Business Interruption.  Business income (loss of rents) insurance in amounts sufficient to compensate Lessee for the greater of (i) gross revenues for twelve (12) months, or (ii) six (6) months of operating expenses including debt service and Rent and containing an extended period of indemnity endorsement which provides that after the physical loss to any of the Improvements and personal property has been repaired, the continued loss of income will be insured until such income either returns to the same level it was at prior to the loss, or the expiration twelve (12) months from the date that the Improvements and Lessee’s personal property are repaired or replaced and operations are resumed, whichever first occurs, and notwithstanding that the policy may expire prior to the end of such period.  The amount of coverage shall be adjusted annually to reflect the rents and profits or income payable during the succeeding twelve (12) month period.

13.7  Automobile Insurance.  If applicable, Comprehensive Automobile Liability Insurance including all owned, hired, leased, assigned and non-owned vehicles, with a minimum combined single limit of $500,000 per accident.

13.8  Terrorism Coverage.  Insurance coverage against loss or damage to persons and property by reason of any certified or non-certified act of terrorism in terms consistent with the provisions hereof to the extent such coverage is commercially available.

13.9  Garage Keepers.  If applicable, Garage Keepers Legal Liability Insurance to cover the following exposures with respect to any and all valet spaces and related services in any parking facility located on the Parcel with limits of not less than $1,000,000 (which Lessee may satisfy by requiring the applicable parking management company to obtain and maintain such coverage pursuant to the requirements hereof):  (i) fire and explosion, (ii) theft (of an entire car), (iii) riot, civil commotion, malicious mischief and vandalism.  The maximum deductible shall be $2,500.

13.10  Excess Liability.  Lessee, at its expense, shall maintain continuously in force at all times during the Term, excess liability insurance in compliance with the following:

(a)  Injury/Property  $10,000,000 per occurrence.

(b)  The policy shall be written on an excess, “following form” basis above the coverages described in the Employer’s Liability, Commercial General Liability and Automobile Liability above. The policy also is to provide a “drop down” feature in case the limits of the primary policy are exhausted.

All of the policies required to be maintained in this Article are collectively referred to as “Lessee’s Policies.”

  

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13.11  Requirements of Lessee’s Policies.

(a)  Lessee shall, as of the Effective Date, deliver to Lessor evidence that said insurance policies have been prepaid as required above with original certificates signed by an authorized agent of the applicable insurance companies evidencing such insurance satisfactory to Lessor.  Certified copies of such policies and endorsements must be delivered to Lessor within thirty (30) days of the Effective Date.  Lessee shall renew all such insurance and deliver to Lessor certificates and certified copies of all policies and endorsements evidencing such renewals at least thirty (30) days before any such insurance shall expire.  Lessee further agrees that each such insurance policy: (i) shall provide for at least thirty (30) days prior written notice to Lessor prior to any policy reduction or cancellation for any reason other than non-payment of premium and at least ten (10) days prior written notice to Lessor prior to any cancellation due to non-payment of premium; (ii) shall contain an endorsement or agreement by the insurer that any loss shall be payable to Lessor or its Affiliates in accordance with the terms of such policy notwithstanding any act or negligence of Lessor, Lessee or any other Person which might otherwise result in forfeiture of such insurance; (iii) shall waive all rights of subrogation against Lessor and its Affiliates; (iv) include standard non-contributory clauses naming Lessor, Permitted Mortgagee and any designated Affiliates of either, (v) in the event that any portion of the Premises constitutes a legal non-conforming use under applicable Improvements’ zoning or land use laws or ordinances, shall include an ordinance and law coverage endorsement which will contain Coverage A: “Loss Due to Operation of Law” (with a minimum liability limit equal to Replacement Cost with Agreed Value Endorsement), Coverage B: “Demolition Cost” and Coverage C: “Increased Cost of Construction” coverages in amounts as required by Lessor; and (vi) may be in the form of a blanket policy, provided that, Lessee hereby acknowledges and agrees that failure to pay any portion of the premium therefor which is not allocable to the Improvements and the Premises or any other action not relating to the Improvements and the Premises which would otherwise permit the issuer thereof to cancel the coverage thereof, would require the Improvements and the Premises to be insured by separate, single-property policies and the blanket policy must properly identify and fully protect the Improvements and the Premises as if a separate policy were issued for one hundred percent (100%) of replacement cost at the time of loss and otherwise meet all of Lessor’s applicable insurance requirements set forth in this Article 13.  Approval of any insurance by Lessor shall not be a representation of the solvency of any insurer or the sufficiency of any amount of insurance.  In the event Lessee fails to provide, maintain, keep in force or deliver and furnish to Lessor the policies of insurance required by this Lease or evidence of their replacement or renewal as required herein, Lessor may, but shall not be obligated to, procure such insurance and Lessee shall pay as an Additional Amount all amounts advanced by Lessor therefor, together with interest thereon at the Interest Rate from and after the date advanced by Lessor until actually repaid by Lessee, promptly upon demand by Lessor.  Lessor shall not be responsible for nor incur any liability for the failure of the insurer to perform even though Lessor has caused the insurance to be placed with the insurer after failure of Lessee to furnish such insurance.  Lessee shall not obtain insurance for the Premises in addition to that required by Lessor without the prior written consent of Lessor, which consent will not be unreasonably withheld provided that: (i) Lessor and its Affiliates are either a named insured or loss payee on such insurance, as appropriate, (ii) Lessor receives complete copies of all policies evidencing such insurance, and (iii) such insurance complies with all of the applicable requirements set forth herein.

  

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(b)  Without limiting or modifying the requirements set forth in this Article 13, Lessee must at all times maintain such insurance coverage as is required by a Permitted Mortgage.

(c)  None of the requirements contained herein as to types and limits of insurance coverage to be maintained by Lessee is intended to and shall not in any manner limit or qualify the liabilities and obligations assumed by Lessee.  Notwithstanding requirements in agreements between Lessee and any third parties, Lessor shall have no responsibilities for insurance deductibles or self-insured retentions.

(d)  Lessee agrees, upon written request of Lessor, to increase the minimum limits of the Commercial General Liability, Casualty Insurance and Excess Liability insurance coverages set forth above and to modify the required insurance coverages, from time to time as reasonably necessary in order to reasonably protect the interests of the parties insured thereby.

13.12  Contractor Insurance Requirements.  Lessee shall cause its general construction contractor and all of its operating contractor(s) performing any services in or about the Premises at any time during the Term to maintain in effect at all times during the full term of such work, insurance coverage in accordance and full compliance with all of the requirements set forth in this Article 13 and shall include appropriate endorsements to cover all sub-contractors performing services or work in connection with the Development.  During the period of any construction, renovation or alteration of or addition to the existing Improvements which exceeds the lesser of ten percent (10%) of the principal amount of the indebtedness secured by any Permitted Mortgage or $100,000, at Lessor’s request, a completed value, “All Risk” Builder’s Risk form or “Course of Construction” insurance policy in non-reporting form, in an amount approved by Lessor, may be required.

13.13  Insurer.  The insurance provided for pursuant to this Article shall be effected under a valid and enforceable policy or policies issued by insurers of recognized responsibility authorized to do business in the State of Mississippi and which have and maintain a claims paying ability rating of “A” or better by Standard & Poor’s (or equivalent acceptable to Lessor).  All policies shall be for terms of at least one year, with premium prepaid.  Such policies may be carried under a blanket policy so long as the coverage afforded is no less than that required under this Article and contains a “per location aggregate” in the applicable amounts set forth above.

13.14  Copies.  Copies of all executed policies of insurance, including endorsements or certificates thereof, shall be delivered to Lessor prior to Lessee’s use of the Parcel or any commencement of construction relating to the Premises.  Lessee shall deliver to Lessor evidence of Lessee’s Policies at all times during the Term.

  

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ARTICLE 14

CASUALTY

14.1  Neither party hereto shall be released, by reason of any damage or destruction of the Premises from the obligations created or imposed by virtue of this Lease.  Except as expressly set forth in this Section 14.1, this Lease shall not terminate, be forfeited or be affected in any manner, and there shall be no reduction or abatement of the Rent payable hereunder, by reason of damage to or total, substantial or partial destruction of any of the Improvements or any part thereof or by reason of the untenantability of the same or any part thereof, for or due to any reason or cause whatsoever.  Lessee, notwithstanding any Requirements, waives any and all rights to quit or surrender the Premises or any part thereof.  Lessee expressly agrees that its obligations hereunder, including, without limitation, the payment of Rent, shall continue as though the Improvements had not been damaged or destroyed and without abatement, suspension, diminution or reduction of any kind.  It is the intention of Lessor and Lessee that the foregoing is an “express agreement to the contrary” as may be provided in any applicable statute of the State of Mississippi.  Notwithstanding the foregoing, in the event that the Premises is damaged by fire or other casualty to such an extent that the cost to restore the Premises exceeds 70% of its replacement cost as determined by Lessee’s insurance carrier responsible for underwriting the loss, Lessee shall have the right, within ninety (90) days after the occurrence of such loss or destruction, to terminate this Lease, by notice in writing to Lessor.  In such event, (i) if the Improvements are structurally sound following the casualty, then the Term shall cease ten (10) days after Lessee has delivered a certification from the Architect that the Improvements are structurally sound notwithstanding the casualty and Lessee has cleared all debris and materials from the Premises and secured the Improvements against the weather or (ii) if the Improvements are not structurally sound following the casualty, then the Term shall cease ten (10) days after Lessee has cleared all debris and materials from the Premises and restored the Parcel to a clear, clean, filled, compacted and graded surface (the obligations in (i) and (ii) of this sentence are collectively the “Casualty Termination Work”).  In the event of such termination, any proceeds payable under any of Lessee’s Policies for Debris Removal shall be applied to the cost of the Casualty Termination Work (or paid to Lessor if Lessee does not perform the Casualty Termination Work) and any other proceeds of Lessee’s Policies shall be used to pay off Lessee’s Permitted Mortgagees and the balance shall be paid to Lessor.

14.2  Except as provided in Section 14.1 above, if the Improvements are damaged or destroyed by any cause whatsoever during the Term, Lessee shall, with reasonable promptness, commence and continue thereafter diligently and continuously to, repair, rebuild and restore the Improvements, at its sole expense, to at least the size, function and condition existing immediately prior to the damage or destruction, and shall do so even though the proceeds of Lessee’s Policies covering the loss shall be insufficient to reimburse Lessee therefor.   Subject to Force Majeure Events under Section 26.1, Lessee shall commence such work within one hundred twenty (120) days after such casualty, provided, however, if payment of the insurance proceeds is contested or not settled promptly for any reason, then Lessor shall grant a reasonable extension of time, not to exceed an additional one hundred twenty (120) days without just cause, for commencing repairs.  If Lessee’s Permitted Mortgagee does not control disbursement of any applicable insurance proceeds, then such proceeds shall be deposited with Lessor for disbursement in a manner consistent with the disbursement of advances under a construction loan.

  

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14.3  Notice of Damage.  In the event of any material damage to the Premises by reason of fire or other casualty, Lessee shall give immediate notice thereof to Lessor.

ARTICLE 15

TRADE FIXTURES AND PERSONAL PROPERTY

15.1  Personal Property.  Except as otherwise provided in this Lease, any removable trade fixtures, signs, equipment and other personal property (collectively, “Personal Property”) installed in or on the Premises by Assignees, Sublessees, concessionaires or occupants may be removed, so long as such removal does not result in structural damage, and shall remain the property of the party who owns it unless ownership is otherwise vested in Lessee under any Assignment, Sublease or other agreement.  The owner of such Personal Property shall have the right at any time prior to expiration or early termination of this Lease to remove or permit removal of any and all of the same without the consent by Lessor.  Lessee and the owner of such Personal Property shall be jointly and severally responsible to repair any and all damage caused by the removal thereof.

ARTICLE 16

ASSIGNMENTS AND SUBLEASES

16.1  Assignments.  Without prior approval by Lessor but only after at least ten (10) days prior written notice to Lessor, and so long as there then is no uncured default, Lessee shall have the right at any time and from time to time during the Term:

(a)  to assign all or any part of its right, title and interest in and to this Lease to one or more Affiliates for any purpose, provided Lessee owns more than eighty percent (80%) of the Affiliate; and

(b)  to assign or otherwise encumber by way of mortgages, deeds of trust or otherwise, all or any part of its rights, title and interest in and to this Lease to any unrelated Persons for the purpose of obtaining financing to accomplish the Development.

Notwithstanding anything herein to the contrary, Lessee shall not be released of any obligations or liabilities hereunder unless Lessor in it sole and absolute discretion elects to release Lessee and no such release will be operative or enforceable unless and until it is in writing and signed by Lessor.  Furthermore, with Lessor’s prior written approval, which may be withheld, conditioned or delayed in Lessor’s sole but reasonable discretion, and so long as there then is no uncured default, Lessee may at any time and from time to time during the Term assign all of its right, title and interest hereunder to all or any portion of the Parcel.  The parties agree that in determining whether to give its consent to a proposed assignment, it shall be reasonable for Lessor to inquire regarding the identity of the assignee and the uses to which the assigned portion of the Parcel will be put after the assignment, the assignee’s prior gaming experience, including, without limitation, its ownership, operation and management team, the position of the Mississippi Gaming Commission, and if such inquiry suggests that the use or uses will involve more than an incidental use of Regulated Substances on the assigned portion of the Parcel, it shall be reasonable for Lessor to require reasonable security and/or safeguards against the release of such Regulated Substances as a condition to giving its consent to an Assignment.  Lessor shall be deemed to have objected to an Assignment if it does not consent to the Assignment within forty-five (45) days after Lessee requests its consent to the Assignment.  Concurrently with an Assignment by Lessee hereunder, Lessor shall enter into a new lease (an “Assignment Lease”) with the Assignee for the portion of the Parcel so assigned with the Assignee.  The Assignment Lease shall include the provisions in this Lease which are applicable to the portion of the Parcel so assigned.

  

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16.2  Form of Assignment.  The form of Assignment Lease shall be substantially identical to this Lease and is subject to the prior approval of Lessor, which shall not be unreasonably withheld, conditioned or delayed.  Any Assignment Lease which is not substantial identical with this Lease must be approved by Lessor in writing, which approval may be withheld in Lessor’s sole discretion.

16.3  Default.  If any Assignee fails to perform its obligations as lessee under its Assignment Lease with Lessor, Lessor agrees that Lessee shall have the right, but not the obligation, to cure such default if any Permitted Mortgagee fails to exercise its rights to cure such default as may be provided in such Assignment Lease.  If Lessee elects to cure such default, Lessee shall have the right, but not the obligation, to assume the Assignee’s rights, title, interest and obligations in and to the portion of the Parcel assigned to such Assignee, subject to the rights of any Permitted Mortgagee.  Lessor agrees that, if such a default occurs, Lessor will first provide any Permitted Mortgagee with the opportunity to cure such default.  If such Permitted Mortgagee fails or elects not to cure such default, Lessor shall provide Lessee with the same notices, rights and opportunities to cure as are afforded to Permitted Mortgagees under Article 20.

16.4  Subleases.  At any time and from time to time during the Term, so long as there is no uncured default, and without further approval by Lessor, Lessee may, as set forth below, grant one or more Subleases but only in connection with a Space Lease.  All other Subleases of all or any portion of the Parcel shall be subject to the prior written consent of Lessor which may be withheld, conditioned or delayed in Lessor’s sole but reasonable discretion.

(a)  Terms.  Each Sublease shall be upon such terms and conditions as Lessee and the applicable Sublessee shall mutually agree; provided, however, that:

(i)  The term of such Sublease shall not extend beyond the Expiration Date plus any extensions or renewals hereof.

(ii)  Except as otherwise set forth herein, no Sublease shall relieve Lessee of its responsibility to pay and perform all of its obligations hereunder;

(iii)  Lessee shall not be entitled under a Sublease to collect rent which is prepaid in excess of one (1) year in advance, unless Lessee provides Lessor with a bond which is in such form as is reasonable satisfactory to Lessor and secures payment to Lessor of the pro rata portion of such prepaid rent which Lessor would be entitled to receive as Rent under this Lease for the applicable portion of the Premises.

  

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(b)  Attornment.  If this Lease is terminated prior to the expiration of its Term and provided Lessor has entered into a subordination, non-disturbance and attornment agreement with such Sublessee, then, so long as each Sublessee complies with the terms and conditions set forth in its Sublease and shall attorn thereunder directly to Lessor, Lessor shall attorn to such Sublessee in accordance with the term of the applicable Sublease; provided, however, that each of the following conditions have been satisfied:

(i)  Lessor’s obligations thereunder shall be no greater and its rights no less than those set forth in this Lease.

(ii)  No Sublessee shall be required to make any payment to Lessor unless and until such Sublessee shall have received written notice from Lessor of the termination of this Lease and a direction that payments and performance thereafter be made directly to Lessor.  Thereafter, upon such Sublessee’s timely payment or performance to Lessor, Lessor shall not be entitled to claim a default for not having received any corresponding payment or performance from Lessee; provided, however, that if a Sublessee receives conflicting written notices demanding payment or performance from Lessor and Lessee, such Sublessee shall have the right to interplead such payment and/or other matters in any court of competent jurisdiction, in which event such Sublessee shall not be deemed in default and payment or performance when and as ordered by such court shall constitute full performance.  So long as a Sublessee has made payment or performance to Lessor or interpleaded such matters and is not subject to termination for default of the applicable Sublease, Lessor shall not join that Sublessee as a party defendant in any action or proceeding or take any other action for the purpose of terminating said Sublessee’s interest and estate because of any default under or termination of this Lease.  Moreover, notwithstanding the termination of this Lease, so long as Lessee has complied with the requirements hereof relating to Subleases, Lessor shall recognize any and all Subleases entered into pursuant to the terms hereof; provided, however, that any and all benefits which would thereafter accrue to Lessee under the Sublease shall belong to Lessor.

(iii)  The aggregate rent under of all Subleases is sufficient to timely pay in full all Rent due and payable under this Lease.

(iv)  Each Sublessee shall have entered into a Non-Disturbance and Attornment Agreement with Lessor in a form acceptable to Lessor in its sole but reasonable discretion.

  

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(c)  Space Leases.  Notwithstanding the provisions of Subsection 16.4(a) above, the following provisions shall apply to Subleases that are “Space Leases” as hereinafter defined:

(i)  For purposes of this Subsection (c), a “Space Lease” shall be any Sublease which involves the lease of all or a portion of the common area of the Improvements located on the Parcel to an unrelated third party.  The term “Space Lease” is therefore intended to cover leases of ancillary retail space, including, without limitation, restaurant and bar space, within buildings located on the Parcel but may not include a lease of an entire building located on the Parcel.  The term “Space Lease” shall not include a lease of land only and shall also exclude any Sublease to an Affiliate of Lessee.

(ii)  If this Lease is terminated prior to the expiration of its Term and provided Lessor has entered into a subordination, non-disturbance and attornment agreement with such Sublessee in a form acceptable to Lessor in its sole but reasonable discretion, then, so long as each tenant under a Space Lease complies with the terms and conditions of its Space Lease and shall attorn directly to Lessor, Lessor shall attorn to such Space Lease in accordance with the terms of the applicable Space Lease except only as follows:

(1)  Lessor shall not assume any affirmative obligations of the landlord with respect to any Space Lease (e.g., to construct Improvements, to maintain and/or repair leased premises, or to maintain and/or repair common areas).  In consideration of Lessor not assuming any such affirmative obligations, the tenant under a Space Lease shall have the right (but not the obligation), alone or in conjunction with similarly situated tenants under other Space Leases, to perform any affirmative obligations of the landlord under the Space Lease and to set-off the amount expended by such tenant in performing such affirmative obligations against the rent due to Lessor under the Space Lease; provided, however, that unless Lessor has otherwise agreed, in no event shall such set-off reduce the rent payable to Lessor under any such Space Lease below 60% of the rent otherwise payable thereunder.  Lessor may agree to allow a greater set-off to a tenant under a Space Lease if Lessor believes such a set-off is in the best interests of the Lessor.  The tenant’s rights with respect to such affirmative obligations shall be limited to such a set-off right or, if permitted by the terms of the Space Lease, to terminating its Space Lease.  In no event shall a tenant under a Space Lease have any right to recover damages against Lessor for failing to perform any affirmative obligation under any Space Lease.

(2)  All Space Leases shall be subject to the terms of Subsection 16.4(a) and Subsection 16.4(b)(ii).

(3)  Except as specified herein, Lessor shall honor all provisions of any Space Lease.

  

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16.5  Notice of Assignments and Subleases.  Within a reasonable period of time after the execution of each Assignment or Sublease, Lessee shall give Lessor a notice of the Assignment or Sublease which shall specify the following:

(a)  the applicable portion of the Premises;

(b)  the commencement and termination date for the Assignment or Sublease; and

(c)  the Assignee’s or Sublessee’s address for notice.

ARTICLE 17

CONDEMNATION

17.1  Entire Taking.  If the entire Premises shall be taken by exercise of the power of eminent domain or condemnation (or by purchase in lieu thereof), then this Lease shall terminate as of the time when Lessor is divested of its interest in the Premises, and the Rent theretofore paid or then payable shall be apportioned and paid up to the date of termination, and any unearned Rent shall be refunded by Lessor to Lessee.

17.2  Partial Taking.  If a portion of the Premises shall be taken by exercise of the power of eminent domain or condemnation (or by purchase in lieu thereof) and such taking results in the loss of any building comprising a part of the Improvements on the Premises in its entirety or a substantial portion of such building on the Premises, Lessee may, at its option terminate this Lease as to the building so lost and that portion of the Premises on which the “lost” building is situated and which serves the lost building, all in accordance with the terms and provisions below.  Lessee shall provide notice to Lessor within ten (10) days after receipt of notice of any contemplated taking.  Within thirty (30) days of notice of such proposed taking, Lessee shall provide notice to Lessor of its intent to terminate the Lease and shall specify the portion of the Premises and Improvements with respect to which it so intends to terminate the Lease.

17.3  Condemnation Proceeds.  Lessor and, if a default does not exist under this Lease, Lessee and any applicable Permitted Mortgagees and Sublessees shall cooperate in prosecuting and collecting their respective claims for an award on account of a taking of all or any portion of the Parcel and all damages or awards (with any interest thereon) to which Lessor, Lessee or any applicable Permitted Mortgagees and Sublessees may be entitled by reason of any taking of all or any portion of the Parcel (herein referred to as “Condemnation Proceeds”).  Except as expressly provided in this Article, no taking of any interest in all or any portion of the Parcel shall be grounds for termination of this Lease or any portion thereof by Lessor or Lessee.

(a)  Lessor at all times, regardless of when the taking occurs, shall be entitled to receive, with interest thereon, that portion of the award as shall represent compensation for its loss of Rent, under this Lease, plus the value of Lessor’s reversionary interest in the Improvements at the end of the Term both discounted to present value.  Lessor shall also be entitled to severance damages for any harm caused by the taking to any surrounding lands.

  

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(b)  During all the Lease Term, Lessee shall be entitled to the entire balance of the award relating to the value of Lessee’s Leasehold Estate.

(c)  If the values of the respective interests of Lessor and Lessee shall be determined according to the provisions of subdivisions (a) and (b) of this Section in the proceeding pursuant to which any portion of the Parcel shall have been taken or condemned, the values so determined shall be conclusive upon Lessor and Lessee.  If such values shall not have been thus separately determined, such values shall be fixed by agreement between Lessor and Lessee.

ARTICLE 18

LESSORS’ RIGHT TO PERFORM AND INSPECT

18.1  Right to Perform; Emergency Repairs.  If a default occurs which is not cured within the applicable cure periods, then Lessor may, but without being obligated to do so, cure such default by making such payment or performing such act for the account and at the expense of Lessee.  No such payment or performance by Lessor shall operate to release or discharge Lessee from any obligation hereunder.  All sums paid by Lessor pursuant to this Article and all costs and expenses (including reasonable attorneys’ fees and costs) so incurred shall constitute Additional Amounts payable by Lessee to Lessor on demand.  In addition, in the case of an emergency which represents an immediate threat to persons or property, the Lessor may, but without being obligated to do so, enter the Parcel to perform emergency repairs without waiting for the expiration of any applicable cure period.

18.2  Inspection.  Lessee acknowledges and agrees that Lessor and its authorized representatives shall have the right to enter the Premises and any portion thereof at all reasonable times following reasonable notice to inspect for compliance with the terms of this Lease and to perform any work under Section 18.1, and may take all such action as may be necessary or appropriate for such purposes.  Furthermore, Lessee acknowledges and agrees that, at any time within eighteen (18) months prior to the Expiration Date and upon reasonable notice, Lessor may enter the Premises or any portion thereof for the purpose of showing the same to prospective tenants, purchasers or mortgagees and may display on the Premises advertisements for sale or lease.  No entry pursuant to this Section shall constitute an eviction.

ARTICLE 19

HOLDING OVER

 

        19.1  No Holdover.  Neither Lessee nor any Assignee or Sublessee, upon the expiration or cancellation of this Lease, is entitled to hold over for any reason.  If, nevertheless, there is any holding over by Lessee, any Assignee or Sublessee, the holding over shall give rise to a tenancy at the sufferance of Lessor upon the same terms and conditions as are provided for herein with a Rent for the hold over period equal to two (2) times the last annual installment of Rent prorated and due monthly in advance.

  

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ARTICLE 20

MORTGAGES

 

20.1  Lien on Leasehold Interest.  Lessee shall have the right from time to time during the Lease Term to charge or otherwise encumber, by way of a Permitted Mortgage, this Lease or any part thereof.  In no event shall this Lease be subordinate to any Permitted Mortgage.

20.2  Filing.  No mortgage or deed of trust shall be a Permitted Mortgage or an effective lien on Lessee’s Leasehold Estate until a true copy thereof is filed with Lessor.  Lessor and Lessee agree that, following such filing with Lessor, the provisions of this Article shall apply with respect to each such Permitted Mortgage.  The term of such Permitted Mortgage shall not be longer than the remaining Term of this Lease.

20.3  Preconditions.  Lessee, from time to time during the Term of this Lease, may make one or more Permitted Mortgages upon Lessee’s Leasehold Estate without the prior written consent of Lessor; provided that Lessee or the holder of the Permitted Mortgage shall promptly deliver to Lessor, in the manner herein provided for the giving of notice to Lessor, a true copy of the Permitted Mortgage and of any assignment thereof and shall notify Lessor of the address of the Permitted Mortgagee to which notices may be sent.

20.4  Lessor’s Acknowledgment.  Upon Lessee’s request, Lessor shall provide a receipt acknowledging receipt of a copy of any Permitted Mortgage under Section 20.3 hereof.

20.5  Conditions.  The following provisions shall apply to any Permitted Mortgage made in accordance with Section 20.3 hereof:

(a)  For the purpose of this Section, a “Permitted Mortgagee” shall be limited to an “Institutional Lender,” or an “Approved Lender.”  An “Institutional Lender” shall mean a bank, savings bank, savings and loan association or institution, insurance company, trust company, mortgage banking company, non-Affiliate private equity or other investment fund, college or other institution of learning, pension, profit-sharing or retirement fund or trust, real estate investment trust, Governmental Authority, or any other organization or company similar to any of the foregoing, or any Affiliate of any of the foregoing.  The parties understand and agree that the definition of Institutional Lender shall include, in addition to current lenders of the sort listed above, future entities of a character not within their contemplation at the time of execution of this Lease but which shall perform functions similar to any of the foregoing.  An “Approved Lender” shall mean a Lender who is not an “Institutional Lender” but who has been approved by Lessor prior to the recording and/or filing of such Lender’s Permitted Mortgage.  Lessor agrees that its approval of a potential Lender as an “Approved Lender” shall not be unreasonably withheld or delayed and Lessor agrees that is shall be deemed to have approved any proposed Lender as an “Approved Lender” if it has not disapproved such Lender within forty-five (45) days after Lessee has requested approval of the proposed Lender.

(b)  Lessor, upon providing Lessee any notice of: (i) default under this Lease, or (ii) a termination of this Lease, or (iii) a matter on which Lessor may predicate or claim a default, shall at the same time provide a true copy of such notice to every Permitted Mortgagee.  No such notice by Lessor to Lessee shall be deemed to have been duly given unless and until a copy thereof has been so transmitted to every Permitted Mortgagee which has complied with Section 20.2.  From and after such notice has been given to a Permitted Mortgagee, such Permitted Mortgagee shall have the same period, after the giving of such notice upon it, for remedying any default or acts or omissions which are the subject matter of such notice or causing the same to be remedied, as is given Lessee after the giving of such notice to Lessee to remedy, commence remedying or cause to be remedied the defaults or acts or omissions that are the subject matter of such notice.  If the Permitted Mortgagee fails to remedy the default, act or omission that is the subject matter of such notice within cure period, Lessor may, subject to the provisions of Subsection 20.5(e) below, exercise the remedies set forth in Article 22.

  

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(c)  If Lessee defaults under any of the provisions of this Lease, each Permitted Mortgagee shall have the right to make good such default whether the same consists of the failure to pay Rent or the failure to perform any other matter or thing which Lessee is hereby required to do or perform and Lessor shall accept such performance on the part of the Permitted Mortgagee as though the same had been done or performed by Lessee.

(d)  Any Permitted Mortgagee may at the time of any damage or destruction to the Premises or any machinery, fixtures or equipment therein, by fire or otherwise, at its sole cost and expense, repair the same or construct new buildings, as the case may be, in accordance with the Development Plan and terms hereof, and in such event, if the Permitted Mortgagee repairs or constructs in accordance herewith, it shall be subrogated to the rights of Lessee to all insurance proceeds payable as a result of such damage or destruction.

(e)  In the case of any default by Lessee, Lessor will take no action by reason of any such default so long as the periods for the Permitted Mortgagee to cure Lessee’s defaults as set forth herein have not run.  In the event Lessor issues a termination notice, the notice will not become final if within forty-five (45) days of the date of issuance of the notice, the Permitted Mortgagee files with Lessee and Lessor written notice of its intent to proceed with a foreclosure action (including possession by a receiver) and within ninety (90) days of the date of the issuance of Lessor’s notice, the Permitted Mortgagee has, unless precluded by a court order, commenced a foreclosure action.  The Permitted Mortgagee shall not be required to continue such possession or continue such foreclosure proceedings if the default which would have been the reason for serving such a notice shall be cured.  Nothing herein shall preclude Lessor from exercising any rights or remedies under this Lease with respect to any other default by Lessee during the period of such forbearance provided Lessor complies with the provisions of this Article with respect to such other default.  If the Permitted Mortgagee or a purchaser at a foreclosure shall acquire title to Lessee’s Leasehold Estate by foreclosure, trustee’s sale or by assignment or deed in lieu of foreclosure or otherwise, and shall cure all defaults of Lessee which are susceptible of being cured by the Permitted Mortgagee or such purchaser, as the case may be, then the defaults of any prior holder of Lessee’s Leasehold Estate which are not susceptible of being cured by the Permitted Mortgagee (or such purchaser) shall no longer be deemed to be in default hereunder.

(f)  Any Permitted Mortgagee or any purchaser of Lessee’s Leasehold Estate may become the legal owner and holder of all or a portion of this Lease in lieu of foreclosure, whereupon such Permitted Mortgagee or purchaser at a foreclosure sale shall immediately thereafter become and remain liable under this Lease to the same extent as Lessee and any and all benefits that would thereafter accrue to Lessee under this Lease shall belong to such Permitted Mortgagee or purchaser.  In case any such Permitted Mortgagee or purchaser by foreclosure becomes the owner and holder of this Lease, any of the same events described in Section 22.1 by such Permitted Mortgagee or purchaser shall constitute a default, and Lessor shall be entitled to the same remedies, but only to that part or portion of the Premises held under this Lease by such Permitted Mortgagee or purchaser.  Any Permitted Mortgagee or purchaser by foreclosure shall be liable hereunder to Lessor only to the extent of any interest in the Leasehold Estate or Improvements for the performance of any obligation of Lessee hereunder or for the collection or satisfaction of any money judgment that Lessor may obtain against such Permitted Mortgagee or purchaser by foreclosure.

  

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(g)  If an Institutional Lender shall be the Lessee as a trustee, each and every obligation of such trustee shall be binding upon it solely in its fiduciary capacity and shall have no force and effect against such Institutional Lender in its individual capacity.

(h)  Lessor shall upon request of a Permitted Mortgagee execute, acknowledge and deliver to each Permitted Mortgagee an acknowledgment prepared at the sole cost and expense of Lessee, in form reasonably satisfactory to Lessor, agreeing to all of the provisions of this Section 20.5.

(i)  Lessor agrees that the name of any Permitted Mortgagee may be added as a named insured or to the “loss payable endorsement” or named under a standard mortgagee clause of any and all insurance policies required to be carried by Lessee hereunder on the condition that the insurance proceeds are to be applied in the manner specified in this Lease and that the Permitted Mortgage or collateral document shall so provide.  The proceeds of any insurance policies or arising from a condemnation are to be held by the Permitted Mortgagee whose Permitted Mortgagee is prior in lien to any other Permitted Mortgage, or by a bank or trust company chosen by such Permitted Mortgagee which is authorized to do business in Mississippi and has a net worth of $10,000,000 or more, and distributed pursuant to the provisions of this Lease, but the Permitted Mortgagee may reserve the right to apply all, or any part, of Lessee’s share of such proceeds to the Permitted Mortgage debt pursuant to such Permitted Mortgage before or in lieu of any required application of such proceeds hereunder.

(j)  Any Permitted Mortgagee shall be given prompt notice by Lessee of any legal proceedings by the parties hereto involving obligations under this Lease, and shall have the right to intervene therein and be made a party to such proceedings, and the parties hereto do hereby consent to such intervention.  If any Permitted Mortgagee shall not elect to intervene or become a party to such proceedings, the Permitted Mortgagee shall receive notice of, and a copy of any award or decision made in, said proceedings which shall be binding on all Permitted Mortgagees not intervening after the receipt of notice of the proceeding.

(k)  As to any Permitted Mortgage, Lessor consents to a provision therein for an assignment of rents due from Sublease(s) to the holder thereof, effective upon the default under the Permitted Mortgage, and to a provision therein that the holder thereof, in any action to foreclosure the same, shall be entitled to the appointment of a receiver.

  

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(l)  Nothing herein contained shall be deemed to impose any obligation on the part of Lessor to deliver physical possession of the Parcel to any Permitted Mortgagee, or to its nominee.  Lessor agrees, however, that Lessor will, at the sole cost and expense of such Permitted Mortgagee, or its nominee, cooperate in the prosecution of summary proceedings to evict the then defaulting Lessee.

(m)  Lessee may delegate irrevocably to the Permitted Mortgagee the authority to exercise any and all of Lessee’s rights hereunder, but no such delegation shall be binding upon Lessor unless and until either Lessee or said Permitted Mortgagee gives to Lessor a true copy of a written instrument effecting such delegation.  Such delegation of authority may be effected by the terms of the Permitted Mortgage itself, in which case the service upon Lessor of a true copy of the Permitted Mortgage in accordance with this Article, together with a written notice specifying the provision therein which delegates such authority to said Permitted Mortgagee, shall be sufficient to give Lessor notice of such delegation.

(n)  Lessor shall, at any time and from time to time hereafter, within thirty (30) days after written request of Lessee to do so, certify by written instrument duly executed and acknowledged to any Permitted Mortgagee, proposed Permitted Mortgagee, purchaser, proposed purchaser, Assignee, proposed Assignee, Sublessee, proposed Sublessee or any other Person, specified in such request: (i) as to whether this Lease has been supplemented, modified or amended, and if so, the substance and manner of such supplement, modification or amendment; (ii) as to the existence of any default hereunder to the best of Lessor’s knowledge; (iii) as to the Commencement Date and Expiration Date of the Lease Term.  The form of estoppel certificate shall be determined by Lessor in its sole but reasonable discretion.  Lessor may charge Lessee a reasonable fee for preparing and issuing any such certificate to defray Lessor’s cost in preparing the same.

(o)  Lessee shall, at any time and from time to time hereafter, within thirty (30) days after written request of Lessor to do so, certify by written instrument duly executed and acknowledged to any mortgagee, proposed mortgagee, purchaser, proposed purchaser, assignee, proposed assignee, sublessee, proposed sublessee or any other Person specified in such request: (i) as to whether this Lease has been supplemented, modified or amended, and if so, the substance and manner of such supplement, modification or amendment; (ii) as to the existence of any default hereunder by Lessee or to the best of Lessee’s knowledge by Lessor; (iii) as to the Commencement Date and Expiration Date of the Lease Term.

 

(p)  Nothing herein contained shall require any Permitted Mortgagee, as a condition to its exercise of its rights hereunder or subsequent to such exercise of its right, to cure any default of Lessee not reasonably susceptible of being cured by such Permitted Mortgagee or subsequent owner of the Leasehold Estate through foreclosure, including but not limited to, the default referred to in Section 22.1(k) related to bankruptcy and insolvency and any other sections of this Lease that may impose conditions of default not susceptible to being cured by a Permitted Mortgagee or a subsequent owner of the Leasehold Estate through foreclosure.

 

(q)  So long as any Permitted Mortgage is in existence, unless all Permitted Mortgagees shall otherwise consent in writing, the fee title to the Parcel and the Leasehold Estate of Lessee therein created by this Lease shall not merge but shall remain separate and distinct, notwithstanding the acquisition of such fee title and such Leasehold Estate by Lessor or by Lessee or by a third party, by purchase or otherwise.  So long as any Permitted Mortgage is in existence, unless all Permitted Mortgagees shall otherwise consent in writing, rejection of this Lease by Lessee under the United States Bankruptcy Code shall not terminate this Lease or merge the fee title and the Leasehold Estate in the Parcel if within sixty (60) days after the Effective Date of the rejection a Permitted Mortgagee, by written notice to Lessor, shall request that such rejection shall operate as an assignment of this Lease in lieu of foreclosure to such Permitted Mortgagee, whereupon such Permitted Mortgagee shall immediately thereafter become and remain liable under this Lease to the same extent as Lessee and any and all benefits that would thereafter accrue to Lessee under this Lease shall belong to such Permitted Mortgagee.

  

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ARTICLE 21

NO SUBORDINATION

21.1  No Subordination.  Lessor’s interest in the Parcel and in this Lease, as the same may be modified, amended or supplemented, shall not be subject or subordinate to:  (a) any mortgage or deed of trust now or hereafter placed upon Lessee’s Leasehold Estate; or (b) any other liens or encumbrances hereafter affecting Lessee’s Leasehold Estate.

ARTICLE 22

DEFAULT AND REMEDIES

22.1  Events.  Default shall be deemed to have occurred in the following situations:

(a)  If Lessee fails to pay an installment of Rent within forty-five (45) days after the notice required by Section 4.9, including late charges and interest as provided in Sections 4.10 and 4.11, unless the time for the payment has been previously extended pursuant to Section 4.12.

(b)  If Lessee fails to timely perform or comply with the terms of this Lease of such nature that Lessee’s failure cannot be cured.

(c)  If Lessee fails to perform or comply with any other term of this Lease; provided, however, that with respect to any such failure which is of such a nature that although curable it cannot, with due diligence and adequate resources, be cured within forty-five (45) days, a default shall not be deemed to exist if Lessee commences curing such failure within the twenty (20) days and thereafter proceeds with reasonable diligence and action to compete curing such failure; provided however, the cure period shall not exceed ninety (90) days.

(d)  If Lessee fails to timely commence and complete Lessee’s Construction in accordance with the specific dates set forth herein or any milestones set forth in the Construction Plans which were approved by Lessor.

  

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(e)  If Lessee or any of its Affiliates fails to obtain all required licenses, permits and authorizations for its intended use as contemplated herein by February 28, 2011 or fails to continually maintain the validity, enforceability and good standing of all such licenses, permits and authorizations, including, without limitation, all applicable licenses under the Gaming Control Act.

(f)  If Lessee fails to continuously maintain the Premises open for gaming operations, subject to Force Majeure Events under Section 26.1.

(g)  If Lessee fails to operate the Premises as a gaming facility in accordance with applicable laws and its intended uses as contemplated herein.

(h)  If Lessee vacates the Premises for a period in excess of twenty (20) consecutive days, subject to Force Majeure Events under Section 26.1.

(i)  If the City’s rights and interest under the Water Front Lease is modified, altered, terminated or otherwise adversely impacted in any material manner, other than the result of a default by the Lessor or the City of the terms provided in Section 7.7 of this Lease.

(j)  If Lessee fails to timely perform or comply with the terms of the certain Ground Lease(s) between Lessee and Marine Life Ventures, LLC and MC Marine, LLC, dated October 20, 2010 relating the lease and development of certain property which is adjacent to or adjoining the Parcel after giving effect to any applicable cure or grace periods.

(k)  If Lessee files a voluntary petition in bankruptcy, is adjudicated bankrupt or insolvent, or files any petitions or answers seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any Requirements; seeks, consents to or acquiesces in the appointment of any trustee, receiver of liquidator of Lessee or of all or any substantial part of its respective property or of a portion of the Premises; makes any general assignments for the benefit of creditors; or admits in writing its inability to pay its debts generally as they become due.

(l)  If a petition is filed against Lessee seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or other similar relief under any Requirements, and remains undismissed or unstayed for an aggregate of ninety (90) days (whether or not consecutive), or if a trustee, receiver or liquidator of Lessee or of all or any substantial part of its properties or of the Parcel is appointed without the consent or acquiescence of Lessor and such appointment remains unvacated or unstayed for an aggregate of ninety (90) days (whether or not consecutive).

  

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22.2  Notice; Remedies.

(a)  Upon an event of default, Lessor shall send a notice of default to Lessee and to any Permitted Mortgagee who has complied with Section 20.2.  The notice shall state the specific nature of the default.

(b)  Subject to the rights of any Permitted Mortgagee, if a default exists and has not been timely cured, Lessor may exercise any and all of the remedies set forth below:

(i)  Lessor may terminate this Lease and declare all rights of Lessee ended;

(ii)  Lessor may exercise the rights set forth in Article 16 to receive payment and performance in connection with Subleases;

(iii)  Lessor may institute an action at law to collect all past due Rents and other amounts due hereunder;

(iv)  Lessor may institute an action at law to collect all actual damages arising from Lessee’s failure to perform any other covenant hereunder, subject to the limitations set forth in this Section 22.2;

(v)  If the default is of such a nature that it cannot be cured by monetary damages, Lessor may institute an action in equity seeking injunctive relief to enjoin Lessee or any other interested party from breaching a covenant of this Lease.

(c)  If this Lease is terminated due to a default by Lessee, Lessor shall have as Lessor’s sole remedy relating to future Rent hereunder as liquidated damages the right, in lieu of seeking damages for future Rent hereunder, to collect and receive liquidated damages in an amount equal to five (5) times the average of the Rent due hereunder for the three (3) Lease Years of the Term in which the highest Rent was due hereunder.  The parties acknowledge that the actual loss for future Rent which Lessor would suffer as a result of an early termination of this Lease would be difficult, if not impossible, to determine and that the amount specified herein is intended to be a reasonable estimate of such loss and not a penalty.  The liquidated damages are intended to compensate Lessor for loss of Rent for Lessee’s failure to perform its obligations under this Lease.  This provision is not intended to limit or alter any indemnification or other obligations or liabilities of Lessee hereunder and Lessor reserves all rights and claims at law or in equity relating thereto.

(d)  Notwithstanding the provisions of subsection 22.2, Lessor may not cancel this Lease due to a default by Lessee unless such default is a “Material Default” as defined by this subsection (f).  For purposes of this subsection (f) a “Material Default” shall mean (a) any failure to pay Rent or other monetary amounts or assessments due hereunder, (b) any failure of Lessee to honor the indemnity provisions herein, (c) any failure to maintain the insurance required by Article 13 herein (but only if and to the extent such insurance coverage is reasonably available for purchase) or (d) any other default by Lessee which materially and adversely affects the Parcel or the Lessor’s interest therein or in this Lease.

  

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22.3  Fees and Costs.  Lessee shall pay to Lessor all costs and expenses, including, without limitation, reasonable attorneys’ fees and disbursements, incurred by Lessor in any action or proceeding to which Lessor may be made a party by reason of any act or omission of Lessee.  Lessee also shall pay to Lessor all costs and expenses, including, without limitation, reasonable attorneys’ fees and disbursements, incurred by Lessor in enforcing any of the covenants and provisions of this Lease and incurred in any action brought by Lessor against Lessee on account of the provisions hereof, and all such costs, expenses, and reasonable attorneys’ fees and disbursements may be included in and form a part of any judgment entered in any proceeding brought by Lessor against Lessee on or under this Lease.  All of the sums paid or obligations incurred by Lessor as aforesaid, with interest at the Interest Rate, shall be paid by Lessee to Lessor within ten (10) days after demand by Lessor.

22.4  Assignment.  In the case of an Assignment, any of the events described in Section 22.1 by the Assignee shall constitute a default under the Assignment.  Upon such default, Lessor shall be entitled to the same remedies set forth in Section 22.2; provided, however, that Lessor may only exercise such remedies against the Assignee and the portion of the Parcel subject to the Assignment.  A default under a partial Assignment shall not constitute a default under this Lease.

22.5  Waiver.  No waiver or breach of any term of this Lease shall be construed as a waiver of any subsequent breach of the same or any other term.

ARTICLE 23

NO ABATEMENT OF RENT

23.1  No Rent Abatement.  Except as may be otherwise expressly provided herein, there shall be no abatement, off-set, diminution or reduction of Rent payable by Lessee hereunder or of the other obligations of Lessee hereunder under any circumstances.

ARTICLE 24

LESSOR’S TRANSFER OF INTEREST

24.1  Permitted Transfer.  Lessor may sell its interest in the Parcel without Lessee’s consent, provided that Lessor agrees to give Lessee written notice of its intent to sell the Parcel prior to offering the Parcel for sale.  Any sale or exchange of the Parcel shall in any event be made subject to this Lease.  If Lessor sells its interest in the Parcel and at any time thereafter, the Parcel as opposed to the Improvements thereon, shall be subject to either ad valorem property taxes or taxes for Rent received by Lessor or any assessment in lieu thereof, the then Lessor shall be obligated to bear the entire cost thereof, including any interest, penalty, fine or cost which may be added thereto, and shall also be obligated to present to Lessee evidence of such payment before the same shall become delinquent.  If the then Lessor or Lessor’s successor in interest fails to do so, Lessee may pay such amounts for the benefit of Lessor and deduct the amount of such payment, together with interest thereon at the Interest Rate, from any Base Rent or Additional Rent thereafter becoming due under this Lease.

  

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ARTICLE 25

COMMUNITY STANDARDS

25.1  Non-Discrimination.  Lessee agrees that it will not affect or execute any agreement, assignment, lease, sublease, conveyance, or other instrument whereby the Premises or any part thereof is restricted upon the basis of race, religion, color, sex, age, handicap disability or national origin in the sale, lease, or occupancy thereof.  In addition, Lessee, in connection with the erection, maintenance, repair, restoration, alteration or replacement of, or addition to, the Improvements shall:  (a) not discriminate nor permit discrimination against any Person by reason of race, creed, color, religion, national origin, ancestry, sex, age, disability or marital status; and (b) comply with all applicable Requirements from time to time in effect prohibiting such discrimination.

25.2  Minority Participation.  Lessee agrees that it will assure substantive participation by minority business enterprises in the development and/or redevelopment of the Premises, consistent with the goals and objectives of the City's Equal Business Opportunity Program Ordinance.

ARTICLE 26

FORCE MAJEURE

26.1  Unavoidable Delays.  Whenever Lessee, pursuant to the provisions of this Lease, is required to construct any Improvements on the Parcel within a particular time limit, or at or before a specified date, and if Lessee should, in good faith, be delayed in such work, erection, restoration or repair by any act of war, strike, lockout, fire, hurricane, flood, abnormal weather condition which necessitates extraordinary measures and expense, other casualty, or any other cause in each instance beyond its reasonable control, and occurring without its fault or negligence (each a “Force Majeure Event”), a period of time equal to such period of delay shall be added to the particular time limit otherwise provided herein, and Lessee shall not be in default if it shall complete such work, erection, restoration or repair within the stipulated time limit, increased by a period of time equal to such period of delay.  Neither economic impracticality nor the inability to perform in whole or in part for economic reasons shall constitute a Force Majeure Event.  In the event of the happening of a Force Majeure Event, Lessee shall give Lessor written notice thereof within ten (10) days after acquiring knowledge of the beginning of the delay in each instance, including a brief description of the circumstances of such Force Majeure Event and an estimate of the anticipated delay.  If Lessee asserts the continuation of a Force Majeure Event for a period longer than forty-five (45) days, it shall give Lessor written notice each month during such continuation which includes an updated estimate of the anticipated continued delay (which estimate shall be certified by the architect in the case of a Force Majeure Event that affects the performance of Lessee’s renovations).  Within ten (10) days after acquiring knowledge of cessation of such Force Majeure Event, Lessee shall give Lessor written notice of the date of such cessation.  Lessee shall use prompt reasonable diligence to remove the cause of any such delay.

 

  

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ARTICLE 27

SURRENDER AT END OF TERM

27.1  Surrender.  On the Expiration Date or earlier termination of the Term, Lessee shall surrender the Premises in a condition that is consistent with Applicable Standards.  Lessee shall perform all regular and periodic maintenance, repairs and replacements throughout the Term up to the Expiration Date or earlier termination of the Term, provided that the foregoing shall not be construed to require Lessee to accelerate periodic maintenance, repairs or replacements that in the ordinary course would be performed after expiration of the Term.  Title to the Improvements shall automatically, and without the necessity of any further action, vest in Lessor upon the expiration or earlier termination of this Lease.  Lessee hereby waives any notice now or hereafter required by law with respect to vacating the Premises on any such termination or expiration of this Lease.

27.2  Remove Property.  Upon the expiration or earlier termination of this Lease, or if requested by Lessor upon a re-entry by Lessor upon the Premises pursuant to Article 22, Lessee shall remove its personal property and equipment, provided that the removal of any such property does not cause structural damage to the Improvements, necessitate changes in the Improvements or render the Improvements or any part thereof unfit for use and occupancy and shall well and truly surrender and deliver up to Lessor the Premises and all Improvements thereon, free and clear of all lettings, occupancies, liens, service contracts and encumbrances.  Lessee shall pay the cost of repairing any damage to the Premises arising from the removal of such property, and such obligation shall survive the Term.

27.3  Transfer.  Prior to the last day of the Term or upon any earlier termination of this Lease, or upon a re-entry by Lessor upon the Premises pursuant to Article 22 hereof, Lessee shall deliver to Lessor, to the extent in Lessee’s possession, Lessee’s executed counterparts of all Space Leases and any service and maintenance contracts then affecting the Premises or any part thereof, true and complete maintenance records for the Premises, all original licenses and permits then pertaining to the Premises, permanent or temporary certificates of occupancy then in effect for the Improvements, and all warranties and guarantees then in effect which Lessee has received in connection with any work or services performed or fixtures installed in, on or under the Premises.

27.4  Remaining Property.  Any personal property of Lessee or of any Sublessee which shall remain on the Premises after the expiration or termination of this Lease and after the removal of Lessee or such Sublessee, may, at the option of Lessor, be deemed to have been abandoned by Lessee or such Sublessee and either may be retained by Lessor as its property or be disposed of, without accountability, in such manner as Lessor may see fit and at Lessee’s sole cost and expense, and such obligation shall survive the Term.  Lessor shall not be responsible for any loss or damage occurring to any such property owned by Lessee or any Sublessee.

27.5  Survival.  The provisions of this Article shall survive any expiration or termination of this Lease.

 

  

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ARTICLE 28

LESSOR NOT LIABLE FOR INJURY OR DAMAGE, ETC.

28.1  No Liability.  Lessor shall not in any event whatsoever be liable for any injury or damage to Lessee or to any other Person happening on, in or about the Premises and its appurtenances, nor for any injury or damage to the Premises or to any property belonging to Lessee or to any other Person which may be caused by any fire or breakage, or by the use, misuse or abuse of the Improvements (including, but not limited to, any of the common areas within the buildings, fixtures, equipment, elevators, hatches, openings, installations, stairways, hallways, or other common facilities), or the streets or sidewalk area within or adjacent to the Premises or which may arise from any other cause whatsoever.

 

28.2  Utilities.  Lessor shall not be liable to Lessee or to any other Person for any failure of water supply, gas or electric current, nor for any injury or damage to any property of Lessee or of any other Person or to the Premises caused by or resulting from gasoline, oil, steam, gas, electricity, or hurricane, tornado, flood, wind or similar storms or disturbances, or water, rain or snow which may leak or flow from the street, sewer, gas mains or subsurface area or from any part of the Premises, or leakage of gasoline or oil from pipes, appliances, sewer or plumbing works therein, or from any other place, nor for interference with light or other  incorporeal hereditaments by anybody.

28.3  Soil.  In addition to the provisions of Sections 28.1 and 28.2, in no event shall Lessor be liable to Lessee or to any other Person for any injury or damage to any property of Lessee or of any other Person or to the Premises, arising out of any sinking, shifting, movement, subsidence, failure in load-bearing capacity of, or other matter or difficulty related to, the soil, or other surface or subsurface materials, on the Premises, it being agreed that Lessee shall assume and bear all risk of loss with respect thereto.

ARTICLE 29

MISCELLANEOUS

29.1  Brokers.  Each of the parties represents to the other that it has not dealt with any broker, finder or like entity in connection with this Lease.  If any claim is made by any Person who shall claim to have acted or dealt with Lessee or Lessor in connection with this transaction, Lessee or Lessor as the case may be, will pay the brokerage commission, fee or other compensation to which such Person is entitled, shall indemnify and hold harmless the other party hereto against any claim asserted by such Person for any such brokerage commission, fee or other compensation and shall reimburse such other party for any costs or expenses including, without limitation, reasonable attorneys’ fees and disbursements, incurred by such other party in defending itself against claims made against it for any such brokerage commission, fee or other compensation.

29.2  Successors.  Each provision of this Lease shall extend to, be binding on and inure to the benefit of not only Lessor and Lessee, but each of their respective heirs, administrators, executors, successors in interest and permitted assigns.

 

  

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29.3  Relationship.  The relationship of the parties hereto is that of lessor and lessee, and it is expressly understood and agreed that Lessor does not in any way or for any purpose become a partner of Lessee or joint venturer with Lessee.

29.4  Quitclaim.  After the expiration or termination of this Lease, Lessee shall execute, acknowledge and deliver to Lessor, within fifteen (15) days after written demand from Lessor to Lessee, any document in a form reasonably requested by Lessor quitclaiming any right, title or interest in the Leasehold Estate to Lessor or other document required by any reputable title company to resolve the cloud of this Lease from the Premises.

29.5  Severability.  If any provision of this Lease or any application thereof shall be invalid or unenforceable, the remainder of this Lease and any other application of such provision shall not be affected thereby and each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.

29.6  Amendments.  This Lease may only be modified or amended in writing.

29.7  Memorandum.  The parties shall execute and cause to be recorded, upon the request of the other, a memorandum of this Lease suitable for recording purposes.  Lessor may in lieu of recording a memorandum of this Lease elect to record this Lease in its entirety.

29.8  Cooperation.  The parties hereto agree to fully and reasonably cooperate so as to allow Lessee to develop the Parcel consistent with the Development Plan, this Lease and the applicable zoning.  Lessor’s cooperation shall include, but not be limited to, executing applications and petitions consistent with the Development Plan.  The parties also agree to execute such other and further documents as may be reasonably required by any party thereto.  Lessor’s cooperation shall not include any obligation on the part of Lessor to expend any monies on behalf of Lessee.

29.9  No Waiver.  No failure by Lessor or any prior Lessor to insist upon the strict performance of any covenant, agreement, term or condition of this Lease or to exercise any right or remedy consequent upon a breach thereof, and no acceptance of full or partial Rent during the continuance of any such breach, shall constitute a waiver of any such breach or of such covenant, agreement, term or condition.  No covenant, agreement, term or condition of this Lease to be performed or complied with by Lessee, and no breach thereof, shall be waived, altered or modified except by a written instrument executed by Lessor.  No waiver of any breach shall affect or alter this Lease, but each and every covenant, agreement, term and condition of this Lease still continue in full force and effect with respect to any other then existing or subsequent breach thereof.

29.10 Construction.  The parties acknowledge that they have both had the benefit of legal counsel with regard to this Lease.  They therefore agree that, notwithstanding anything contained herein to the contrary, this Lease and all of its terms, provisions and conditions shall be construed fairly and not strictly against either Lessor or Lessee.

 

  

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29.11 Notices.  Any notice to be given or other document to be delivered by one party to the other shall be in writing and served by personal service, nationally recognized overnight courier (e.g. Federal Express) or by depositing same in the United States Mail, postage prepaid, return receipt requested and addressed as follows:

 

	 	To Lessor:	GULFPORT REDEVELOPMENT COMMISSION 

Attn:  Chairperson

2309 15th Street

Gulfport, MS 39201

Phone:

Fax:

With a Mandatory Copy to:

City of Gulfport

Attn:  Dr. John R. Kelly

Chief Administrative Officer

Post Office Box 1780

Gulfport, MS 39502

Phone: (228) 868-5700

Fax:

 

	 	To Lessee:	ROTATE BLACK MS, LLC 

2510 14th Street, Suite 1125 (39501)

Post Office Box 160

Gulfport, MS 39501

Phone: (228) 424-7424

Fax: (228) 822-8535

 

With Mandatory Copy to:

 

J. William Williams, Esq.

Watkins Ludlam Winter & Stennis, PA

2510 14th Street, Suite 1125 (39501)

Post Office Box 160

Gulfport, MS 39501

Phone: (228) 864-3094

Fax: (228) 822-8535

 

  

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Either party may, by written notice delivered to the other in accordance with the provisions of this Section, designate a different address to which any notices shall thereafter be delivered or mailed.  Notice shall be deemed to have been given on the date on which notice was delivered if notice is given by personal delivery or overnight courier, and three (3) days following the date of deposit in the mail, if mailed.  Notice shall be deemed to have been received on the date on which the notice is received by the party to whom such notice was addressed.

29.12  Lessor’s Authority.  Lessor hereby warrants and represents to Lessee that it has the full legal power and authority to execute, deliver and perform the terms and obligations of Lessor set forth herein.

29.13  Transfers.  Any attempt to assign, sublease, mortgage, convey, transfer, pledge, encumber or otherwise dispose of any estate or interest in this Lease, other than pursuant to express terms of this Lease, shall be void and shall not be effective.

29.14  Joint and Several, Lessee Representative.  If more than one Person is named as or becomes Lessee hereunder, Lessor may require the signatures of all such Persons in connection with any notice to be given or action to be taken by Lessee hereunder except to the extent that any such Person shall designate another such Person as its attorney-in-fact to act on its behalf, which designation shall be effective until receipt by Lessor of notice of its revocation.  Each Person named as Lessee shall be jointly and severally liable for all of Lessee’s obligations hereunder.  Any notice by Lessor to any one (1) Person named as Lessee shall be sufficient and shall have the same force and effect as though given to all parties named as Lessee.  If all such parties designate in writing one Person to receive copies of all notices, Lessor agrees to send copies of all notices to that Person.  Lessee shall not be permitted to designate more than one (1) Person to receive copies of notices (with a copy to one (1) other Person).  Delivery of notice to such Person shall be deemed delivery of notice to all Lessees if there is more than one (1) Lessee.

29.15  Limitation of Liability.  The liability of Lessor or of any Person who has at any time acted as Lessor hereunder for damages or otherwise shall be limited to Lessor’s interest in the Premises, including, without limitation, the rents and profits therefrom, the proceeds of any insurance policies covering or relating to the Premises, any awards payable in connection with any condemnation of the Premises or any part thereof, and any other rights, privileges, licenses, franchises, claims, causes of action or other interests, sums or receivables appurtenant to the Premises.  Neither Lessor nor any such Person nor any of the members, directors, officers, employees, agents or servants of either shall have any liability (personal or otherwise) hereunder beyond Lessor’s interest in the Premises, and no other property or assets of Lessor or any such Person or any of the members, directors, officers, employees, agents or servants of either shall be subject to levy, execution or other enforcement procedure for the satisfaction of Lessee’s remedies hereunder.

29.16  No Merger.  Except as otherwise expressly provided in this Lease, there shall be no merger of this Lease or the Leasehold Estate created hereby with the fee estate in the Premises or any part thereof by reason of the same Person acquiring or holding, directly or indirectly, this Lease or the Leasehold Estate created hereby or any interest in this Lease or in such Leasehold Estate as well as the fee estate in the Premises.

 

  

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29.17  Lessor Release.  If Lessor or any successor to its interest hereunder ceases to have any interest in the Premises or there is at any time or from time to time any sale or sales or disposition or dispositions or transfer or transfers of Lessor’s interest in the Premises, the seller or transferor shall be and hereby is entirely freed and relieved of all agreements, covenants and obligations of Lessor hereunder to be performed on or after the date of such sale or transfer, and it shall be deemed and construed without further agreement between the parties or their successors in interest or between the parties and the Person who acquires or owns the Lessor’s interest in the Premises, including, without limitation, the purchaser or transferee in any such sale, that, subject to the provisions of Section 29.16, such Person has assumed and agreed to carry out any and all agreements, covenants and obligations of Lessor hereunder accruing from and after the date of such acquisition, sale or transfer.

 

29.18  Additional Reports.  Lessee shall provide such reports to Lessor as are required under and as set forth in any Permitted Mortgage, including but not limited to, quarterly or annual, statements of operation, financial statements and property condition reports (if any), and shall continue to provide Lessor all such reports in the absence of a Permitted Mortgage.   These shall include quarterly financial reports and on a yearly basis, audited financial statements and tax returns relating to the use and operation of the Parcel or any adjoining development, including, without limitation, financial statements of any affiliates of Lessee involved in the use or operation of the Parcel or any adjoining development.

29.19  No Litigation.  Except as previously disclosed to Lessor in writing, neither Lessee nor any of its affiliates is a party to any past, pending or threatened litigation which relates to, or if decided adversely, could have a material adverse effect upon, the Lessee or its ability to complete the development and operation of the improvements as contemplated hereby (including arbitration or similar alternative dispute resolution proceedings).

29.20  Future Sale.  Lessee acknowledges that it has not been induced to enter into this Lease by any promise from Lessor or any of it agents, servants or employees, that the Parcel will be offered for sale at any time.

29.21  No Partnership or Agency.  Nothing contained in this Lease shall be construed to create a partnership or joint venture between the parties or their successors in interest or permitted assigns.  Lessee is not an agent or representative of Lessor and has no right or authority to act for on behalf of Lessor in any capacity or in any manner.

29.22  No Fee.  No provision of this Lease shall create any right in Lessee or any Permitted Mortgagee to a fee interest in the Parcel in any manner.

29.23  Governing Law.  This Lease shall be governed by, construed and enforced in accordance with the laws of the State of Mississippi.  Any legal proceeding arising out of this Lease shall be brought in the Courts located in Harrison County.

29.24  Mutual Termination.  This Lease may be terminated prior to the expiration date upon written agreement signed by both Lessor and Lessee.  The agreement shall specify the terms and conditions of such a cancellation.  Lessee shall not be due any refunds for prepaid Rent for termination under this clause.

 

  

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29.25  Headings.  The titles to the Articles and Sections of this Lease are for convenience of reference and are not a part of this Lease and shall have no effect upon the construction or interpretation of any part of this Lease.

29.26  Integration.  This Lease, together with the Exhibits appended hereto, embodies the whole agreement of the parties.  There are no other agreements or terms, oral or written.  This document supersedes all previous communications, representations and agreements, oral or written, between the parties.

[Signature Page Immediately Follows]

 

  

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IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease as of the Effective Date.

 

	
LESSEE:

	 
	 	 
	
ROTATE BLACK MS, LLC, a Mississippi limited liability company

	 
	 	 	 
	
By: 

	/s/ Jake Vanderlei	 
	Name 	Jake Vanderlei	 
	Title 	President	 
	 	 	 
	 	 	 
	
LESSOR:

	 
	 	 	 
	
GULFPORT REDEVELOPMENT COMMISSION

	 
	 	 	 
	By:	/s/ Carole Lynn Meadows	 
	Name:	Carole Lynn Meadows	 
	Title:	Chair, GRC	 

 

  

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STATE OF MISSISSIPPI

COUNTY OF __________________

Personally appeared before me, the undersigned authority in and for the said county and state, on this _____ day of October, 2010, within my jurisdiction, the within named ________________________, who acknowledged to me that he is ___________________ of Rotate Black, MS, a Mississippi limited liability company, and as the act and deed of said limited liability company, he executed the above and foregoing instrument, after first having been duly authorized by said limited liability company so to do.

______________________

NOTARY PUBLIC

STATE OF MISSISSIPPI

COUNTY OF HARRISON

Personally appeared before me, the undersigned authority in and for the said county and state, on this ____ day of October, 2010, within my jurisdiction, the within named Carole Lynn Meadows, who acknowledged to me that she is the Chairperson of the Gulfport Redevelopment Commission, and as the act and deed of said commission, she executed the above and foregoing instrument, after first having been duly authorized by said commission so to do.

______________________

NOTARY PUBLIC

 

 

Exhibit List

Exhibit A – Legal Description

Exhibit B – Site Map

Exhibit C – Title Matters

 

  

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Exhibit A

Description and Identification of

Site Parcels

The legal description of the Site is contained in the Quitclaim Deed from the City to the GRC dated August 23rd, 2010 and recorded in the lands records of the First Judicial District of Harrison County Mississippi.

In general, the legal description is as follows:

That certain parcel of land and property situated and being in the city of Gulfport, 1st Judicial District, Harrison County, Mississippi, and more particularly described as follows:

Commencing at the Northeast corner of Section 9, Township 8 South, Range 11 West, City of Gulfport, Harrison County, Mississippi; thence S 0o00’00”E a distance of 1630.65 feet to a point; thence N 90o00’00”W a distance of 2343.11 feet to a point; thence S32o09’04”E a distance of 240.70 feet to the POINT OF BEGINNING; thence S32o09’04”E a distance of 479.20 feet  to a point; thence S62o18’14”E a distance of 151.18 feet to a point; thence S32o59’26”E a distance of 50.17 feet  to a point; thence N68o53’22”E a distance of 248.01 feet to a point; thence N21o06’38”W a distance of 330.00 feet  to a point; thence N68o53’22”E a distance of 70.98 feet  to a point; thence N67o04’W a distance of 422.21 feet to a point; thence S71o26’19”W a distance of 199.82 feet  to the POINT OF BEGINNING.

 

 

A-1

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