AMENDED AND RESTATED LEASE AGREEMENT

 

 

TABLE OF CONTENTS

 

ARTICLE I   Demised Premises			2
Section 1.01.	DEMISE		2
Section 1.02.	TERM		4
Section 1.03.	TERMINATION		4
Section 1.04.	HOLDING OVER		4
ARTICLE II   Rent			5
Section 2.01.	AMOUNT AND MEDIUM OF PAYMENT		5
Section 2.02.	INTERIM FIXED RENT		5
Section 2.03.	MINIMUM NET RENT		6
Section 2.04.	PARTIAL MONTH		6
Section 2.05.	PERCENTAGE RENT		6
Section 2.06.	OBLIGATION TO OPERATE		6
Section 2.07.	QUARTERLY STATEMENT/PAYMENT OF PERCENTAGE RENT		7
Section 2.08.	ACCOUNTING RECORDS AND AUDITING RIGHTS		7
Section 2.08.1.		Accounting Records	7
Section 2.08.2.		Audit Procedures	8
Section 2.09.	NET LEASE		8
Section 2.10.	ADDITIONAL RENT		9
Section 2.11.	ABSOLUTE RIGHT TO RENT		9
Section 2.12.	ABSOLUTE MINIMUM RENT		9
Section 2.13.	GRANT AND CREDIT AGAINST RENT		9
Section 2.14.	BOND ISSUE		9
ARTICLE III   Payment of Taxes, Assessments, Etc.			10
Section 3.01.	IMPOSITIONS		10
Section 3.02.	FURNISHED RECEIPTS		11
Section 3.03.	SEEKING OF REDUCTION OF IMPOSITIONS BY TENANT
			11
Section 3.04.	JOINING OF LANDLORD		11
Section 3.05.	PRIMA FACIE EVIDENCE		11
Section 3.06.	UTILITIES		11
ARTICLE IV   Surrender			12
Section 4.01.	REMOVAL OF PERSONALTY AND FIXTURES		12
Section 4.02.	SURRENDER AND DELIVERY OF DEMISED PREMISES
			13
Section 4.03.	PERSONAL PROPERTY NOT REMOVED		13
Section 4.04.	LANDLORD NOT RESPONSIBLE		13
Section 4.05.	SURVIVAL		13
ARTICLE V   Insurance			13
Section 5.01.	FULL REPLACEMENT COST INSURANCE		13
Section 5.02.	OTHER INSURANCE		14
Section 5.03.	TYPE OF POLICIES		16
Section 5.04.	NAMED INSUREDS		16
Section 5.05.	CANCELLATION NOTICE		17

 

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ARTICLE VI   Landlord’s Right to Perform Tenant’s Covenants			17
Section 6.01.	RIGHT TO MAKE PAYMENTS		17
Section 6.02.	REPAYMENT BY TENANT		17
ARTICLE VII   Repairs and Maintenance of the Demised Premises
Section 7.01.	REPAIRS		18
Section 7.02.	MAINTENANCE		18
Section. 7.03.	NO SERVICES FURNISHED		18
ARTICLE VIII   General and Specific Compliance with Laws, Insurance, Development Agreement and Exhibits Thereto, Etc.			18
Section 8.01.	GENERAL COMPLIANCE		18
Section 8.02.	SPECIFIC COMPLIANCE		19
Section 8.02.1		Building Laws	19
Section 8.02.2		Toxic/Hazardous Substances ; Tenant’s Responsibilities	20
Section 8.02.3		Toxic/Hazardous Substances ; Landlord Responsibilities	23
Section 8.03.	COMPLIANCE WITH INSURANCE		25
Section 8.04.	COMPLIANCE WITH DEVELOPMENT AGREEMENT		25
Section 8.05.	CONTEST OF LAWS		25
ARTICLE IX   Improvements, Etc.			26
Section 9.01.	IMPROVEMENTS		26
Section 9.02.	TITLE TO TENANT’S PERSONALTY AND FIXTURES
Section 9.03.	DESTRUCTION/DAMAGE		26
Section 9.04.	CHANGES AND ALTERATIONS		26
Section 9.05.	PERFORMANCE BOND		27
Section 9.06.	INSURANCE ENDORSEMENTS		27
Section 9.07.	ADDITIONAL IMPROVEMENTS		27
Section 9.08.	COMPLIANCE WITH LAWS		27
Section 9.09.	SURRENDER OF IMPROVEMENTS		27
ARTICLE X   Discharge of Liens			27
Section 10.01.	NO LIENS		27
Section 10.02.	DEFENSE OF LIEN CLAIM		28
Section 10.03.	NO CONSENT		28
ARTICLE XI   No Waste			28
ARTICLE XII   Use of Property			28
Section 12.01.	PROPER USE		28
Section 12.02.	PROHIBITED USE		28
ARTICLE XIII   Entry on Demised Premises by Landlord			29
Section 13.01.	RIGHT TO ENTER		29
Section 13.02.	STORAGE		29
ARTICLE XIV   Indemnification of and by Landlord and Tenant			29

 

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ARTICLE XV   Damage or Destruction		31
Section 15.01.	REPAIR/RESTORATION BY TENANT	31
Section 15.02.	NOTICE	32
Section 15.03.	NO RIGHT TO TERMINATE/SURRENDER	32
ARTICLE XVI   Condemnation		32
Section 16.01.	TAKING	32
Section 16.02.	SUBSTANTIAL/COMPLETE TAKING	32
Section 16.03.	TERMINATION FROM TAKING	33
Section 16.04.	PARTIAL TAKING	33
Section 16.05.	EASEMENT TYPE TAKING	33
ARTICLE XVII   Assignments, Mortgages and Subleases of Tenant’s Interest
		34
ARTICLE XVIII   Default		35
Section 18.01.	“EVENT OF DEFAULT” BY TENANT DEFINED	35
Section 18.02.	REMEDIES	37
Section 18.03.	DAMAGES	38
Section 18.04.	REMEDIES IN EVENT OF BANKRUPTCY OR OTHER PROCEEDING	40
Section 18.05.	CONTINUED OBLIGATION	43
Section 18.06.	WAIVER BY TENANT	43
Section 18.07.	NO WAIVER BY LANDLORD OR TENANT	43
Section 18.08.	INJUNCTION	43
Section 18.09.	CUMULATIVE RIGHTS	44
Section 18.10.	MITIGATION	44
Section 18.11.	DEFAULT BY LANDLORD; TENANT REMEDIES	44
ARTICLE XIX   Renewal Privileges		44
Section 19.01.	EIGHT RENEWAL TERMS	44
Section 19.02.	NO WAIVER OR RELEASE	46
ARTICLE XX   Representations and Warranties		46
Section 20.01.	REPRESENTATIONS AND WARRANTIES OF LANDLORD	46
Section 20.02.	REPRESENTATIONS AND WARRANTIES OF TENANT	46
		47
ARTICLE XXI   Invalidity of Particular Provisions		47
ARTICLE XXII   Notices		48
ARTICLE XXIII   Rent Abatement/Claim for Damages		49
ARTICLE XXIV   Estoppel Certificates		49
Section 24.01.	TENANT’S CERTIFICATE	49
Section 24.02.	LANDLORD’S CERTIFICATE	49
ARTICLE XXV   Miscellaneous		50
Section 25.01.	GOVERNING LAW/VENUE	50
Section 25.02.	CONFLICT AMONG PROVISIONS	50
Section 25.03.	INTEREST RATE	50
Section 25.04.	SPECIAL REPORTS	51

 

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ARTICLE XXVI   Consent of Landlord and Tenant		51
Section 26.01.	STANDARD	51
Section 26.02.	OTHER ACTS	51
ARTICLE XXVII   Payments Under Protest		51
ARTICLE XXVIII   No Oral Modification		51
ARTICLE XXIX   Covenants to Bind and Benefit Respective Parties
		51
ARTICLE XXX   Captions, Table of Contents and Exhibits		52
Section 30.01.	CAPTIONS	52
Section 30.02.	TABLE OF CONTENTS	52
Section 30.03.	EXHIBITS	52

 

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E.     On March 12, 1993, Landlord and Tenant entered into a certain Lease Agreement (the “Lease”) under which Landlord leased to Tenant the Demised Premises and additional real property.

 

F.     In the Twelfth and Thirteenth Addendums to the Development Agreement (Exhibit D) the parties agreed that Tenant would construct its riverboat gaming floating facility (“Riverboat Gaming Facility”) in a basin adjacent to the Missouri River.

 

G.    The parties hereto have determined that the Lease should be amended and restated.

 

WITNESSETH, that for and in consideration of the sum of Ten and NO/100 Dollars ($10.00) to each of them paid by the other, and other good and valuable consideration, the receipt, adequacy and sufficiency of which is hereby acknowledged by each of them, the parties hereto do hereby covenant and agree as follows:

 

ARTICLE I

Demised Premises

 

Section 1.01. DEMISE . Landlord hereby subleases to Tenant, and Tenant hereby leases from Landlord, the real property described in Exhibit B attached hereto, together with all buildings and improvements to be constructed in accordance with the Development Agreement -(“Site Improvements”) (collectively the “Demised Premises”), and specifically including the Riverboat Gaming Facility and including the following easements and appurtenances:

 

(a)   That certain driveway easement conveyed to Landlord by Kansas City Power and Light Company (“KCPL”) in the document entitled “Service Access Easement Agreement,” which is recorded as Document No.       in Volume       at Page       of the Recorder of Deeds Office of Jackson County, Missouri and which was executed by such parties for the purpose of ingress and egress to and from the Demised Premises and Riverfront Road and which such easement is described in Exhibit B-1, which is attached hereto and incorporated herein by reference; and

 

(b)   A certain pedestrian easement (the “Pedestrian Access Easement”) to be conveyed to and inuring to the benefit of Landlord in accordance with the Development Agreement and providing access for pedestrians crossing Front Street for the purpose of using Tenant’s Riverboat Gaming Facility (to be attached to this Lease and identified as Exhibit B-2, as part of a future amendment to this Lease); and

 

(c)   Any other easements or other rights in adjoining property inuring to the benefit of Landlord by reason of the City Lease including any and all easements reasonably required for the installation, maintenance, operation and service of sewer, water, gas, power, and other utility lines and services.

 

(d)   All machinery, equipment and fixtures and other items of personal property and any replacements thereof, attached to or used

 

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in connection with the use, occupation and operation of the Demised Premises and the Easements, except those items specifically referred to as Tenant’s Personalty and Fixtures in Section 4.01 hereof, and all alterations, additions and improvements hereafter made to the Demised Premises, title to which may now or hereafter vest in City and/or Landlord.

 

Following the conveyance of the Pedestrian Access Easement to Landlord, this Lease shall be amended by the addition of the legal description for such easement.

 

The Pedestrian Access Easement and the Service Access Easement referred to in subsections (a) and (b) are hereinafter referred to as “the Easements.”

 

Landlord warrants that it and no other entity now has the right to sublease the Demised Premises and the Easements to Tenant, and that so long as Tenant is not in default hereunder or under the Development Agreement, Tenant shall have peaceful and quiet use of the Demised Premises and the Easements, subject to all matters presently of record and all other agreements and encumbrances to which this Lease is or may hereafter be subordinated or otherwise made subject to as permitted herein or in the Development Agreement, and such use by Tenant shall also be subject to the following:

 

(i)    any state of facts which an accurate survey may show; and

 

(ii)   easements, covenants and restrictions of record, if any, to the extent that the same are in force or effect; and

 

(iii)  present and future zoning laws, ordinances , resolutions and regulations of the City, and all present and future ordinances, laws, regulations and orders of all boards, bureaus, commissions and bodies of any municipal, county, state or federal government or governmental authority now or hereafter having or acquiring jurisdiction of the Demised Premises and/or the use and improvement thereof and/or the operation of gaming or other enterprises thereat or in connection therewith; and

 

(iv)  violations of law, ordinances, orders and requirements, whether or not of record, of any federal, state or municipal department or authority having jurisdiction over or affecting the Demised Premises, as the same may exist on the date hereof or may be hereafter enacted; and

 

(v)   condition and state of repair of the Demised Premises as the same may be on the date of execution hereof.

 

Notwithstanding anything to the contrary contained herein, the Demised Premises, the Easements, and all improvements presently existing thereon, Landlord’s interest therein and City’s title thereto have been examined by Tenant and when accepted by it as evidenced by its execution hereof or by its use thereof shall be

 

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deemed to have been accepted by it in its then present “as is” condition, except as set out in Article VIII hereof.

 

Section 1.02. TERM . The term of this Lease (the “Term”) shall commence on the date hereof (the “Commencement Date”) and shall terminate on the Termination Date (as defined herein), except as renewed under Article XIX hereof or as earlier terminated under Article XVIII hereof. The date on which the Term shall terminate (the “Termination Date”) shall be the earlier of:

 

(a)    Ten (10) years after the date on which Tenant begins operation of its riverboat gaming enterprise (“Actual Opening Date”) on the Demised Premises; or

 

(b)   Ten (10) years after the Deemed Opening Date (which shall be twenty-four (24) months after the Commencement Date, subject to extension for force majeure delay as defined in Section 5.4 of the Development Agreement) (the Actual Opening Date or the Deemed Opening Date, whichever first occurs is sometimes referred to herein as the “Opening Date”).

 

Landlord and Tenant agree, upon demand of the other, to execute and deliver to the other party hereto, a declaration setting forth the Termination Date (in conformance herewith) as soon as it has been determined.

 

Section 1.03. TERMINATION . This Lease shall terminate on the Termination Date (unless renewed in accordance with the provisions for renewal contained in Article XIX hereof, or unless otherwise extended by written agreement of Landlord and Tenant), without the necessity of any additional notice from either Landlord or Tenant to terminate the same, and Tenant hereby waives notice to then vacate or quit the Demised Premises and agrees that Landlord shall then be entitled to the benefit of all provisions of law respecting the summary recovery of possession of the Demised Premises from a tenant holding over to the same extent as if statutory notice had been given. Tenant hereby agrees that if it fails to surrender the Demised Premises and the Easements on the Termination Date, Tenant will be liable to Landlord for any and all damages which Landlord shall suffer by reason thereof including, but not being limited to, damages under Section 1.04 hereof and liquidated damages as described in Section 2.06 hereof or elsewhere described herein.

 

Section 1.04. HOLDING OVER . If Tenant shall be in possession of the Demised Premises after the expiration of the Term, or, if applicable, after any validly exercised renewal thereof as provided for herein, the tenancy under this Lease shall become one from month to month, terminable by either party on thirty (30) days prior written notice, and shall be subject to all of the terms and conditions of this Lease as though the Term had been extended from month to month, except that: (i) the Minimum Net Rent (as defined herein) payable hereunder for each month during said holdover period shall be equal to twice the monthly installment of Minimum Net Rent (as defined herein) payable during the last month of the Term (or any such renewal thereof), (ii) the installment of

 

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Percentage Rent (as defined herein) payable hereunder for each such month shall be equal to one-twelfth (l/12th) of the average annual Percentage Rent payable hereunder, if any, for the immediately preceding three (3) years of the Term (or any renewal thereof); and (iii) all Additional Rent payable hereunder shall be prorated for each month during such holdover period.

 

ARTICLE II
Rent

 

Section 2.01. AMOUNT AND MEDIUM OF PAYMENT . Throughout the Term and any renewal thereof, Tenant shall pay Landlord, without notice or demand, in lawful money of the United States of America, at the office of Landlord or at such other place as Landlord shall designate within the City, State of Missouri, as rent hereunder (collectively, the “Rent”) the following:

 

a.                Interim Fixed Rent as called for in Section 2.02 hereof; plus

 

b.               Minimum Net Rent as called for in Section 2.03 hereof; plus

 

c.                Percentage Rent as called for in Section 2.05 hereof; plus

 

d.               Additional Rent as called for in Section 2.10 hereof.

 

Section 2.02. INTERIM FIXED RENT . In lieu of Tenant’s otherwise agreeing to reimburse Landlord for expenses paid and/or incurred by Landlord for attorneys, accountants and other consultants retained by Landlord in connection with its requesting Tenant’s Proposal and selecting Tenant as developer (which led to the execution of this Lease by Landlord), and so as to insure that Landlord shall incur no expense with respect to the riverboat gaming enterprise of Tenant, as Tenant agreed to so do under the Proposal, Tenant agrees (i) that any payments made by it to Landlord on or before June 30, 1994 which might under prior agreements have been a credit against Minimum Net Rent, shall not be so deemed and Landlord shall not be obligated to credit such payments or any part thereof against monies due to Landlord hereunder, and (ii) that beginning on July 1, 1994 and continuing through the Opening Date or the Termination Date, whichever first occurs, Tenant shall pay monthly interim fixed rent (“Interim Fixed Rent”) to Landlord at the rate of Twenty-Five Thousand and NO/100 Dollars ($25,000.00) per calendar month, payable in advance on the first day of each such calendar month, three-fifths (3/5) of which sum, as so paid, shall on Opening Date be credited against Minimum Net Rent due hereunder. Tenant shall have no further liability to Landlord for any such Landlord expenses.

 

Section 2.03. MINIMUM NET RENT . Subject to credit therefor under Sections 2.02, 2.04 and 2.13 hereof, beginning on the Opening Date and continuing during the remainder of the Term and any renewal thereof (as adjusted under Section 2.04 with respect

 

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thereto), Tenant shall pay to Landlord a minimum net annual rent, over and above the other payments to be made by Tenant as hereinafter provided, at the rate of Two Million and NO/100 Dollars ($2,000,000.00) per year (as the same may be adjusted during any renewal term hereof). Such minimum net rental (the “Minimum Net Rent”) shall be paid in equal annual installments of Two Million and NO/100 Dollars ($2,000,000.00) each, in advance, on the Opening Date and on the date of each and every annual anniversary of the Opening Date thereafter.

 

Section 2.04. PARTIAL MONTH . If the Commencement Date and/or the Opening Date shall occur on any day other than the first day of a calendar month, Tenant shall pay Landlord on the Commencement Date and receive a credit on the Opening Date, as applicable, of the proportionate amount of Interim Fixed Rent accrued for the balance of such current calendar month.

 

Section 2.05. PERCENTAGE RENT . Beginning with the Opening Date and continuing throughout the entire remaining Term of this Lease and any renewal thereof, pursuant to the terms of Section 2.07 hereof Tenant shall pay to Landlord as minimum percentage rent (the “Percentage Rent”) a sum of money equal to three and one quarter percent (3 1/4%) of Gross Revenues (as defined herein) less Minimum Net Rent paid hereunder. As used herein, the term “Gross Revenues” shall mean the sum of “adjusted gross receipts” as such term is defined under the Missouri Gaming Laws of the Revised Statutes of Missouri, plus all revenues from admissions, sales of food, beverages, merchandise, services, parking charges, and all other business endeavors at the Demised Premises and/or Tenant’s riverboat gaming enterprise as are derived from use of the Demised Premises and/or operation of Tenant’s riverboat gaming enterprise (including any parking facilities or concessions operated with respect thereto) by Tenant or any licensee, sublessee, franchisee or other operator of all or any portion of any such business endeavors, on or in connection with all or any portion of the Demised Premises or the Easements.

 

Section 2.06. OBLIGATION TO OPERATE . At all times from and after the Opening Date during the Term of this Lease (including any validly exercised renewals of the original or any extended term hereof), Tenant will continuously use and occupy the Demised Premises and operate its riverboat gaming enterprise in connection therewith in good faith and in such a manner as shall assure the transaction of a maximum volume of business in and at the Demised Premises and from said riverboat gaming enterprise. If Tenant shall fail to cause its said riverboat gaming enterprise to be operated as required under the immediately preceding sentence, then, in addition to any other remedy available to Landlord under this Lease, Tenant shall pay to the Landlord in lieu of Percentage Rent and in addition to any other Rent payable hereunder, and as liquidated damages for such failure to so operate, a sum equal to fifty percent (50%) of the then applicable Minimum Net Rent applicable to each day or portion thereof during which Tenant shall fail to so operate (e.g. if not operating for forty (40) days, 40/365th of 50% of the then applicable Minimum Net Rent as

 

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Percentage Rent for such forty (40) days). Notwithstanding the foregoing, solely for the purposes of this Section 2.06 Tenant’s failure to so operate shall be deemed unavoidable and not a failure to so operate, if and so long as non-operation shall be directly caused by fire or other casualty, national emergency, condemnation, enemy action, civil commotion, strikes, lockouts, or national defense pre-emptions, acts of God, energy shortages, changes in the Missouri law which prohibits the continuation of Tenant’s business, changes in the Kansas City, Missouri gaming industry which make Tenant’s gaming operations unprofitable for a continuous period of one (1) year or more, or any other similar causes beyond the reasonable control of Tenant, and provided further that Tenant shall continually thereafter use its diligent best efforts to alleviate the cause for such cessation of operation and commence operation as soon thereafter as is practicable.

 

Section 2.07. QUARTERLY STATEMENT/PAYMENT OF PERCENTAGE RENT. Tenant shall deliver to Landlord, within thirty (30) days after the end of each third month of the Term of this Lease after Opening Date, a written statement, in form reasonably acceptable to Landlord, certified to as true, complete and accurate by an authorized officer of Tenant, setting out its Gross Revenues during the immediately preceding three (3) month period (“Tenant’s Quarterly statement”). A similar statement, certified as correct by Tenant’s chief financial officer shall be delivered to Landlord within thirty (30) days after each anniversary of the Opening Date (“Tenant’s Annual Statement”). Tenant shall pay any Percentage Rent due, based on Tenant’s Quarterly Annual Statement, within thirty (30) days after the end of the quarter or year reported in Tenant’s Quarterly or Annual Statement, which statement reflects that any Percentage Rent is due hereunder, as a result of 3-1/4% of Gross Revenues during the total period of time reflected therein exceeding the Minimum Net Rent due for the 12-month period of time as to which said Quarterly or Annual Statement relates.

 

Section 2.08. ACCOUNTING RECORDS AND AUDITING RIGHTS .

 

2.08.1 Accounting Records . Tenant shall maintain at the Demised Premises or at a central accounting location maintained in the City, and identified to Landlord upon request, account records and procedures complying with generally accepted accounting principles consistently applied, as defined by the American Institute of Certified Public Accountants (“AICPA”) and the Financial Accounting Standards Board (“FASB”); provided, however, that such principles shall comply in all respects and conform to all rules, regulations and requirements of the Gaming Commission of the State of Missouri or any similar body established in Missouri relating to accounting principles for the determination of adjusted gross receipts of Tenant, so as to enable Tenant to calculate, and Landlord to verify, any Percentage Rent due under this Lease. Tenant shall preserve Tenant’s said books and records relating to each calendar year for at least three (3) years after the end of such calendar. If at the conclusion of such three-year period, a dispute is pending between Landlord and Tenant regarding the amount

 

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of Percentage Rent due, then Tenant shall continue to preserve such records pending the final disposition of such dispute.

 

2.08.2 Audit Procedures : Within (and in no event later than) seventy-five (75) days after the end of each calendar year of Tenant, Tenant shall cause the certified public accountant then regularly auditing Tenant’s books and records (which CPA shall be licensed in Missouri and shall be a member of AICPA) to audit Tenant’s (and/or any subtenant’s, licensee’s, franchisee’s or concessionaire’s) books and records relevant to the calculation of Rents and other payments and Gross Revenues reported by Tenant and/or which should have been reported by Tenant during its preceding calendar year and to certify to Landlord the correctness of same and the compliance thereof with the definitions and requirements of this Lease. Tenant shall provide to Landlord, at the time of filing thereof, copies of all financial reports and tax returns furnished to the State of Missouri and/or the Gaming Commission thereof in connection with the determination of Tenant’s taxable gaming revenue and/or adjusted gross receipts. Further, if Tenant shall fail to so provide to Landlord such certification and/or copies as and when due hereunder or if Landlord shall desire to audit such statement(s), Landlord, in conjunction with the City Auditor and Director of Finance for the City, shall have the right to audit the books and records of Tenant with respect to Percentage Rent or other payments provided for in this Lease at any time upon reasonable notice; provided that Landlord agrees to exercise this audit right not more frequently than once per fiscal year. Any such audit shall be performed in accordance with generally accepted auditing standards, during ordinary business hours and without unreasonably interfering with Tenant’s business. If such certification was not provided or if any such audit reveals that Gross Revenue or any portion of Percentage Rent due hereunder was understated, then within thirty (30) days after receipt of the audit with appropriate backup documentation, Tenant shall pay to Landlord the additional Percentage Rent due on account of the audit or audit corrections. Any adjusting payment due on account of previous underpayment shall bear interest at the Interest Rate (as defined herein) from the date it would have been paid had Tenant’s Quarterly Statement been correct, until the date actually paid. If such certification was not so provided or if Percentage Rent reported therein was understated by more than two percent (2%) for any audited period of time, then Tenant shall pay the reasonable cost of the audit showing same and/or disclosing such understatement; otherwise the audit shall be conducted at Landlord’s expense.

 

Section 2.09. NET LEASE . It is the purpose and intent of Landlord and Tenant that this is a net lease and that from and after the Opening Date, the Minimum Net Rent (and any Percentage Rent and/or Additional Rent) shall, except as herein otherwise provided, be absolutely net to Landlord, so that this Lease shall thereafter yield, net, to Landlord, the Minimum Net Rent specified in section 2.03 hereof in each remaining year during the Term and any renewal thereof, together with the Percentage Rent provided for in Section 2.05 hereof, and the Additional Rent provided for in

 

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Section 2.10 hereof, and that all costs, expenses and obligations of every kind and nature whatsoever relating to the Demised Premises and/or the operation of Tenant’s riverboat gaming enterprise thereon and/or in connection therewith, except as herein otherwise provided, which may arise or become due during or out of the original or any renewal Term of this Lease, shall be paid by Tenant, and that Landlord shall be protected, defended, indemnified and held harmless by Tenant from and against the payment of same or any obligation to pay the same.

 

Section 2.10. ADDITIONAL RENT . Except as herein otherwise provided, Tenant shall also pay without notice except as may be required in this Lease, and without abatement, deduction or setoff, as additional rent (“Additional Rent”), all sums, Impositions (as defined in Article III hereof), costs, expenses and other payments which Tenant assumes or agrees to pay hereunder, and, in the event of any non-payment thereof, Landlord shall have all the rights and remedies provided for herein or by law.

 

Section 2.11. ABSOLUTE RIGHT TO RENT . Rent due hereunder shall be paid to Landlord without notice or demand and without abatement, deduction or set-off, except as herein otherwise specifically provided.

 

Section 2.12. ABSOLUTE MINIMUM RENT . Notwithstanding anything to the contrary contained herein, the Minimum Net Rent shall never be less than $2,000,000.00 per year (subject to sums credited under Section 2.03, 2.04 and 2.13 hereof as rent received) and the amount of Additional Rent due hereunder shall always reflect the expenses incurred or made upon which Additional Rent is due.

 

Section 2.13. GRANT AND CREDIT AGAINST RENT . As additional consideration to Landlord for Landlord’s entering into this Lease and the Development Agreement, Tenant shall make a grant to Landlord in the amount of TEN MILLION DOLLARS ($10,000,000.00), payable in all events as follows: ONE MILLION AND NO/100 DOLLARS ($1,000,000.00) on the Opening Date, and a like sum of ONE MILLION AND NO/100 DOLLARS ($1,000,000.00) on the anniversary of the Opening Date in each of the next nine (9) consecutive years after the year in which the Opening Date occurs. This grant, in the aggregate, shall be known as the “Riverfront Park Grant”. Said Riverfront Park Grant, along with Minimum Net Rent payable during the initial ten (10) year term hereof, shall be utilized, interalia , for completion of the work described in Exhibit I of the Development Agreement (or for bond financing payments due with respect thereto), and for the purposes set out in Exhibit D attached hereto.

 

Section 2.14. Bond Issue . Tenant acknowledges that Landlord intends to employ the Rents and Riverfront Park Grant in part to cover debt service under and other costs of a tax exempt revenue bond issue (the “Bond Issuance”) utilizing the Tenant’s credit and its payment, obligations hereunder in order to fund the costs of the work described in Exhibit I to the Development Agreement. Tenant

 

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(b)   all Impositions for the calendar or tax years in which the Commencement Date occurs and the Term or any renewal term ends shall be apportioned so that Tenant shall pay only those portions thereof which correspond with the portion of said calendar years as are within the Term and/or any renewal or extension thereof and are payable by Tenant hereunder.

 

Section 3.02. FURNISHED RECEIPTS . Tenant, upon request of Landlord, shall furnish to Landlord or, if requested by Landlord, to City and/or any mortgagee of Landlord, within thirty (30) days after the date when any Imposition would become delinquent, official receipts of payment issued by the appropriate taxing authority, or other evidence satisfactory to Landlord, City and/or such mortgagee, evidencing the payment thereof.

 

Section 3.03. SEEKING OF REDUCTION OF IMPOSITIONS BY TENANT . Tenant shall be entitled to seek a reduction in the valuation of the Demised Premises for tax purposes and to contest in good faith by appropriate proceedings, at Tenant’s sole cost and expense, and at no cost or expense to Landlord, the amount, rate, or validity in whole or in part of any Imposition, and if permitted by law may defer payment thereof, so long as no interest or penalty shall accrue thereon or with respect thereto or provided that such interest or penalty is deposited with Landlord or such taxing authority by Tenant to protect Landlord’s interest if Tenant does not prevail in such proceeding.

 

Section 3.04. JOINING OF LANDLORD . Landlord shall not be required to join in any proceedings to contest any Imposition unless the provisions of any law, rule or regulation at the time in effect shall require that such proceedings be brought by or in the name of Landlord, in which event Landlord shall join in such proceedings or permit the same to be brought in its name. Landlord shall not ultimately be subjected to any liability for the payment of any costs or expenses in connection with any such proceedings, and Tenant shall protect, defend, indemnify and hold Landlord harmless from any such costs and expenses. Tenant shall be entitled to any refund of any Imposition and penalties or interest thereon which are recovered by Landlord and which have already been paid by Tenant, or which have been paid by Landlord and previously reimbursed in full by Tenant.

 

Section 3.05. PRIMA FACIE EVIDENCE . The certificate, advice, receipt or bill of the appropriate official designated by law to make or issue the same or to receive payment of any Imposition or of non-payment of such Imposition shall be prima facie evidence that such Imposition is due and unpaid or has been paid at the time of the making or issuance of such certificate, advice, receipt or bill.

 

Section 3.06. UTILITIES . During the Term hereof, and any renewals thereof, Tenant shall be responsible for obtaining, maintaining, supplying and paying for all utilities required for operation of its business on and in connection with the Demised Premises and shall make all payments for or with respect to the

 

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same on a timely basis. Such payments as and when due shall also be considered “Impositions” hereunder.

 

ARTICLE IV

Surrender

 

Section 4.01. REMOVAL OF PERSONALTY AND FIXTURES . The Riverboat Gaming Facility, together with its contents and including trade fixtures and personalty shall, until termination of this Agreement, be the absolute property of the Tenant. Following the termination of this Agreement, Tenant shall have a period of sixty days (60) in which to remove all or part of the furniture, trade fixtures and business equipment within the Riverboat Gaming Facility (“Removal Period”). Tenant’s furniture, trade fixtures and business equipment shall include and be limited to the following: (1) all gaming equipment including slot machines, table games (Blackjack, Craps, Poker, Mini Baccarat), slot bases, slot systems (tracking, data and communications), cards, chips, cups, etc.; (2) All gaming-related furnishings, fixtures and equipment including tables, chairs and stools; (3) unattached casino bar equipment and related items (e. g. mixers and blenders), office furniture and portable panel systems and equipment other than that located in general business offices; (4) All computers and equipment other than that located in general business offices (5) All interior and exterior signage (attached and freestanding); (6) All security and surveillance and specialized audio visual equipment and systems related to casino operation only and not to any portion of the Demised Premises as a structure; (7) All (i) other special decorative elements and (ii) advertising elements, related to or expressing the brand name of Tenant or concerning Tenant’s corporate identity; (8) reader or other message type boards whether installed on the interior or exterior and (9) special decorative doors, windows or lighting fixtures but only if Tenant on such removal replaces such items with items of comparable functional and decorative quality. In addition, Tenant will reasonably repair any material damage to the Riverboat Gaming Facility caused by Tenant’s exercise of its right to remove Tenant’s Personalty and Fixtures. Provided, however, Tenant shall not have the right to remove any: (i) wiring or other apparatus or devise (including that for general building security systems) that is installed within the walls, floors or ceilings of the Riverboat Gaming Facility on a permanent or semi-permanent basis, or (ii) signage that is of a generic nature such as that for exits and restrooms. All of the above is referred to herein as “Tenant’s Personalty and Fixtures”. Following Removal Period and subject to Tenant’s absolute right to remove Tenant’s Personalty and Fixtures, any furniture, trade fixtures and business equipment remaining within the Riverboat Gaming Facility following the Removal period shall become the property of Landlord and Tenant shall transfer all title and interest in the Riverboat Gaming Facility and remaining personalty, equipment and fixtures to Landlord.

 

Section 4.02. SURRENDER AND DELIVERY OF DEMISED PREMISES . Except as is herein otherwise provided, Tenant shall on the last day of the Term hereof, or any valid renewal or extension thereof,

 

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or upon the date of any earlier termination of this Lease, well and truly surrender and deliver up the Demised Premises and the Easements to the possession and use of Landlord without fraud or delay and in good order, condition and repair, except for reasonable wear and tear after the last necessary repair, replacement, restoration or renewal made by Tenant pursuant to its obligations, or the obligations of any of its subtenants, franchisees, licensees or invitees hereunder, and the transfer to Landlord of any reserve accounts with respect thereto, free and clear of all lettings and occupancies other than subleases then immediately terminable at the option of the Landlord or subleases to which Landlord shall have specifically consented, and free and clear of all liens and encumbrances other than those, if any, presently existing, or hereafter created and specifically consented to in writing by Landlord, without any payment or allowance whatever by Landlord for or on account of any improvements which may then be on the Demised Premises.

 

Section 4.03. PERSONAL PROPERTY NOT REMOVED . Any personal property of Tenant which shall remain in or on the Demised Premises after the expiration of the Removal Period may, at the option of Landlord, be deemed to have been abandoned by Tenant and either may be retained by Landlord as its property or be disposed of, without accountability, in such manner as Landlord may see fit, or if Landlord shall give written notice to Tenant to such effect, such property shall be immediately removed by Tenant at Tenant’s sole cost and expense. Upon entering into any agreement with any subleasee, licensee, franchise or other operator which occupies or is entitled to place any personal property on or in the Demised Premises, Tenant shall advise Landlord of same (appropriately redacted by Tenant to protect proprietary or confidential information) and furnish to Landlord a copy of the agreement between Tenant and such party, so that Landlord may notify such third party of Landlord’s right to any personal property remaining in or on the Demised Premises after the end of the Renewal Period.

 

Section 4.04. LANDLORD NOT RESPONSIBLE . Landlord shall not be responsible for any loss or damage occurring to any personal property owned by Tenant or any sublessee, licensee or franchisee of Tenant or any of their respective suppliers, customers or invitees.

 

Section 4.05. SURVIVAL . The provisions of this Article IV shall survive any termination of this Lease.

 

ARTICLE V

Insurance

 

Section 5.01. FULL REPLACEMENT COST INSURANCE . Tenant, at its sole cost and expense and at no cost or expense to Landlord, shall keep all of the improvements on the Demised Premises (now or hereafter existing) or used in connection therewith including, without limitation the Riverboat Gaming Facility, insured, during the Term and each renewal and extension thereof, against any loss or damage by fire, flood, earthquake and all other casualties and

 

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perils, and including, without limitation, all other perils as are included within what is commonly known as “all risk coverage” for any improvements on the Demised Premises, as the same shall from time to time be customary for premises similarly situated in Kansas City, Jackson County, Missouri, with full replacement cost insurance, in amounts sufficient to prevent City, Landlord or Tenant from being or becoming a co-insurer within the terms of the policy or policies in question and in no event less than the full replacement cost value thereof, exclusive of the cost of foundations, excavations, and footings below the lowest basement floor, and without any deduction being made for depreciation. Such full replacement cost value shall be determined from time to time, but not more frequently than once in any twelve (12) consecutive calendar months, at the request of Landlord, by an appraiser, architect, ship builder and/or contractor or one or more of same, as applicable, who shall be acceptable to Landlord in its sole discretion. No omission on the part of Landlord to request any such determination shall relieve Tenant of its obligation hereunder.

 

Section 5.02. OTHER INSURANCE . Tenant, at its sole cost and expense and at no cost or expense to Landlord, shall maintain during the Term and all renewals thereof:

 

(a)   for the mutual benefit of City, Landlord and Tenant, general commercial (comprehensive) public liability insurance, and specifically including but not being limited to indemnity insurance against claims for personal injury, bodily injury, death or property damage, occurring upon, in or about or adjacent to the Demised Premises, and/or any adjacent public improvements, garage, bridge, walkway or elevators, and on, in or about the adjoining sidewalks, walkways and passageways, including, without limitation, insurance protecting against claims for personal injury, bodily injury or claim, death or property damage resulting directly or indirectly from ownership, use, occupancy or maintenance thereof including any change, alteration, improvement or repair thereof, to afford protection for at least $200,000,000.00 to any one individual per occurrence combined single limit and $200,000,000.00 in the aggregate; and

 

(b)   rental value insurance against loss of rental or other income to be derived by Landlord from the operation of Tenant’s business in connection with the Demised Premises due to the risks referred to in Section 5.01 hereof (including those embraced by “all perils coverage”) in an amount sufficient to prevent Tenant from becoming a co-insurer within the terms of the policy or policies in question, but in no event in an amount or amounts less than the aggregate amount of the Minimum Net Rent and Percentage Rent, the Additional Rent payable hereunder for a period of one (1) year; and Tenant hereby assigns to Landlord the proceeds of such insurance so

 

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that in the event the improvements on the Demised Premises shall be destroyed or seriously damaged, such proceeds shall be held as security for the payment of such sums due hereunder until the restoration of such improvements and, as Tenant shall make payment of such sums to Landlord, Landlord shall, if Tenant shall not then be in default under this Lease, pay out to Tenant from said amount the sums which shall have been so paid by insurance proceeds. Tenant may, at its election, carry such insurance as a coverage contained in a business interruption insurance policy; and

 

(c)   such other insurance, and in such amounts, as may from time to time be reasonably required by Landlord against other insurable hazards and liabilities which at the time are customarily insured against in the case of premises and/or business operations similarly situated in the State of Missouri, due regard being or to be given to the type of improvements and the construction, use and occupancy thereof, including but not being limited to workers’ compensation and other comparable insurance; and

 

(d)   with respect to any construction or remodeling of improvements on the Demised Premises, Tenant shall provide or shall require that each contractor performing such work shall carry and maintain, at no cost or expense to Landlord, with customary deductibles:

 

(i)    commercial (comprehensive) liability insurance, including (but not limited to) contractor’s liability coverage, contractual liability coverage, completed operations coverage, broad form property damage endorsement and contractor’s protective liability coverage, to afford protection, with respect to personal injury, bodily injury, death or property damage of not less than $1,000,000.00 per occurrence combined single limit; and

 

(ii)   comprehensive automobile liability insurance with limit’s for each occurrence of not less than $1,000,000.00 combined single limit; and

 

(iii)  workers’ compensation insurance or similar insurance in form and amounts required by law, including employer’s liability in the amount of not less than $1,000,000.00 each occurrence, $1,000,000.00 by disease and $1,000,000.00 each person by disease;

 

(iv)  Builder’s risk insurance, insuring the Demised Premises and related property under construction or remodeling of improvements thereon with limits previously approved by Landlord; and

 

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(v)   umbrella and excess umbrella insurance with limits previously approved by Landlord.

 

(e)   The amount of the coverages set out herein shall be subject to increase or decrease at the time of each renewal of this Lease in accordance with Consumer Price Index provisions of Section 19.01 below.

 

Section 5.03. TYPE OF POLICIES .

 

A.            All insurance provided for in this Article shall be effected and continuously maintained under valid and enforceable policies issued by insurers of recognized responsibility licensed to do business in the State of Missouri, or be a recognized insurance facility, in either case acceptable to Landlord, which acceptance shall not be unreasonably withheld. Upon the execution of this Lease, and thereafter not less than fifteen (15) days prior to the expiration dates of the expiring policies theretofore furnished pursuant to this Article V, originals or binders of the policies (or, in the case of general public liability insurance, certificates of the insurers) bearing notations evidencing the payment of premiums in full, or accompanied by other evidence satisfactory to Landlord of such payment, shall be delivered by Tenant to Landlord.

 

B.            Nothing in this Article V shall prevent Tenant from taking out insurance of the kind and in the amounts provided for under this Article V under a blanket insurance policy or policies covering properties in addition to the Demised Premises, provided, however, that any such policy or policies of blanket insurance (i) shall specify therein, or Tenant shall furnish Landlord with a written statement from the insurers under such policy or policies specifying, the amount of the total insurance allocated to the Demised Premises, which amounts shall not be less than the amounts required by Sections 5.01 and 5.02 hereof and (ii) with respect to property coverage, such amounts so specified shall be sufficient to prevent any one of the insureds from becoming a co-insurer within the terms of the applicable policy or policies, and provided further, however, that any such policy or policies of blanket insurance, as to the Demised Premises, shall otherwise comply as to endorsements and coverage with the provisions of this Article.

 

Section 5.04. NAMED INSUREDS .

 

A.            All policies of insurance provided for in this Article V shall name City, Landlord and Tenant as the insured, as their respective interests may appear, and also each fee and/or each leasehold mortgagee of the Demised Premises, when requested, as the interest of any such mortgagee may appear, by standard mortgagee clause, if obtainable, provided that any such mortgagee shall agree that the proceeds of such insurance shall be applied in accordance with this Lease. In case of any particular casualty resulting in damage or destruction not exceeding $500,000.00 in the aggregate, the loss under such policies shall be adjusted by Tenant and the insurance companies. In case of such damage or destruction in

 

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excess of $500,000.00, the loss shall be adjusted with the insurance companies by Tenant and Landlord. Notwithstanding the foregoing, Tenant shall adjust any loss with respect to the Riverboat Gaming Facility unless an Event of Default shall exist and be uncured on the date of any such loss, in which case any such loss shall be adjusted by Landlord.

 

B.            All such policies shall provide that the loss, if any, thereunder shall be adjusted and paid as hereinabove provided. Each such policy shall contain a provision that no involuntary act or omission of Tenant or anyone operating under rights granted by it shall affect or limit the obligation of the issuing insurance company to so pay the amount of any loss sustained.

 

Section 5.05. CANCELLATION NOTICE . Each such policy or certificate therefor issued by the insurer shall contain an agreement by the insurer that such policy shall not be canceled or amended without at least thirty (30) days prior written notice to Landlord and wording such that the insurer must notify Landlord of any such impending cancellation or amendment.

 

ARTICLE VI

Landlord’s Right to Perform Tenant’s Covenants

 

Section 6.01. RIGHT TO MAKE PAYMENTS . If Tenant shall at any time fail to pay any Imposition or utility cost or charge in accordance with the provisions of Article III hereof, or to take out, pay for, maintain or deliver any of the insurance policies or certificates therefor as provided for in Article V hereof, or shall fail to make any other payment or perform any other act on its part to be made or performed under this Lease, then Landlord, after ten (10) days notice to Tenant (or without notice in case of an emergency) and Tenant’s failure to cure the same with the time period, if any, allowed for such cure, and without waiving or releasing Tenant from any obligation of Tenant contained in this Lease or from any default by Tenant hereunder and without waiving Landlord’s right to take such action as may be permissible under this Lease as a result of such default, may (but shall be under no obligation to):

 

(a)   pay any Imposition or other charge payable by Tenant pursuant to the provisions of Article III hereof, or

 

(b)   take out, pay for and maintain any of the insurance policies provided for in Article V hereof, or

 

(c)   make any other payment or perform any other act on Tenant’s part to be made or performed under this Lease,

 

and may enter upon the Demised Premises for any such purpose, and take all such action thereon, as may be necessary therefor or in connection therewith.

 

Section 6.02. REPAYMENT BY TENANT . All sums so paid by Landlord under this Article VI and or as a result of the exercise

 

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by Landlord of any of its rights under this Article VI, and all costs and expenses incurred by Landlord with respect thereto or in connection therewith, including, without limitation, reasonable attorneys’ fees in connection with the performance of any such act, together with interest thereon at the Interest Rate from the date of such payment or incurrence by Landlord of such cost and expense, shall constitute Additional Rent payable by Tenant under this Lease and shall be paid by Tenant to Landlord on demand.

 

ARTICLE VII

Repairs and Maintenance of the Demised Premises

 

Section 7.01. REPAIRS . Throughout the Term of this Lease and any renewal thereof, Tenant shall, at its sole cost and expense and at no cost or expense to Landlord, take good care of the Demised Premises and all improvements and additions thereon or thereto, including, without limitation, all alleyways, walkways, passageways, sidewalks, curbs and streets, parking facilities and bridges adjoining the same and shall keep the same in good order and condition, except for reasonable wear and tear after the last necessary repair, replacement, restoration or renewal made by Tenant pursuant to its obligations hereunder, and shall make all necessary repairs thereto, interior and exterior, structural and non-structural, ordinary and extraordinary, and foreseen and unforeseen. All repairs, replacements, restorations and renewals made by Tenant shall be at least equal in quality and class to the original work with respect thereto.

 

Section 7.02. MAINTENANCE . Tenant shall at its sole cost and expense, and at no cost or expense to Landlord, put, keep and maintain all portions of the Demised Premises and the sidewalks, curbs, streets, bridges, alleyways, walkways and passageways, bridges and parking facilities adjoining the same in a clean and orderly condition, free of dirt, rubbish, snow, ice and unlawful obstructions. Tenant shall also provide for structural maintenance, repair and replacement of the portions of the Demised Premises normally requiring same.

 

Section 7.03. NO SERVICES FURNISHED . Landlord shall not be required to furnish to Tenant any utilities, facilities or services of any kind whatsoever during the Term hereof or any renewal thereof, such as, but not limited to, water, steam, heat, gas, telephone, cable televisions, hot water, electricity, light, and/or power. Landlord shall in no event be required to make any alterations, rebuildings, replacements, changes, additions, improvements or repairs during the Term of this Lease or any renewal thereof.

 

ARTICLE VIII

 

General and Specific Compliance with Laws, Insurance,

Development Agreement and Exhibits Thereto, Etc.

 

Section 8.01. GENERAL COMPLIANCE . Throughout the Term of this Lease and any renewal thereof, Tenant, at its sole cost and

 

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expense and at no cost or expense to Landlord, shall promptly comply with all present and future laws, ordinances, orders, rules, regulations and requirements of all federal, state and municipal governments, departments, commissions, boards and officers, and all other body or bodies exercising similar functions, foreseen or unforeseen, ordinary as well as extraordinary, which may be applicable to the Demised Premises and the Easements or any portion thereof, and/or the sidewalks, alleyways, walkways, passageways, curbs, streets, parking facilities and bridges adjoining the same or to the use or manner of use of the Demised Premises and the Easements or any portion thereof, or the owners or occupants thereof, including but not limited to the operation of any Riverboat Gaming Facility used in connection therewith and the operation of any riverboat gaming enterprise in connection with the Demised Premises and the Easements, whether or not such compliance is required by reason of any condition, event or circumstance existing prior to or after the commencement of the Term or any renewal thereof. Provided, however, that nothing in this Lease shall be construed to invalidate the Frustration of Purpose provisions found in Section 5.7 of the Development Agreement, which provisions are hereby incorporated herein by reference.

 

Section 8.02. SPECIFIC COMPLIANCE . Notwithstanding the foregoing or anything else contained in this Lease to the contrary, and not intending to limit the same, Tenant agrees that after its improvement and/or construction of improvements on the Demised Premises, or the modification of same, Tenant shall do and/or comply with each and all of the following:

 

Section 8.02.1 Building Laws . Such improvements and their use by Tenant, its sublessees, franchisees, licensees and its and/or their respective agents, employees, contractors or invitees, shall comply fully with all environmental, air quality, zoning, flood plain, planning, subdivision, building, health, labor, discrimination, fire, traffic, safety, wetlands, shoreline and other governmental and regulatory rules, laws, ordinances, statutes, codes and requirements applicable to the Demised Premises or any portion thereof, including, without limitation, the Fair Housing Act of 1968 (as amended) and the Americans with Disabilities Act of 1990 (collectively, the “Building Laws”). Tenant shall obtain such final certificates as may be required or customary and evidencing compliance with all building codes and permits, and approval of full occupancy of such improvements (as improved) and of all installations therein or improvements thereto. Tenant shall cause the Demised Premises to be continuously in compliance with all Building Laws (as the same may be amended or enacted from time to time). Tenant agrees to protect, defend, (with counsel reasonably satisfactory to Landlord) indemnify and hold City and Landlord and Landlord’s Commissioners, officers, employees, contractors and agents harmless from and against all liability threatened against or suffered by them or either of them by reason of a breach by Tenant of any of the foregoing representations and warranties contained herein. The foregoing indemnity shall include the cost of all alterations to the Demised Premises (including, without limitation, all architectural,

 

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