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EXHIBIT 10.13
STATE OF MISSISSIPPI
COUNTY OF XXXXXXXX
FIFTH LEASE AMENDMENT
This Fifth Lease Amendment (the "Amendment") entered into between the
State of Mississippi appearing herein by and through its duly authorized
agencies. The MISSISSIPPI DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT and
the MISSISSIPPI STATE PORT AUTHORITY AT GULFPORT, herein collectively referred
to as LESSOR and GRAND CASINOS OF MISSISSIPPI, INC. - GULFPORT, hereinafter
referred to as LESSEE.
WHEREAS, on May 20, 1992 LESSOR and Grand Casinos, Inc. ("Grand")
entered into that certain Lease Agreement ("Original Lease Agreement"); and
WHEREAS, on December 14, 1992, LESSOR and Grand entered into that
certain First Lease Amendment; and on February 2, 1993 LESSOR, Grand and LESSEE
entered into that certain Second Lease Agreement with Consent to Assignment;
and on February 9, 1994 entered into that certain Third Lease Amendment; and on
June 3, 1994 entered into that certain Fourth Lease Amendment (the Original
Lease as amended by the First, Second, Third and Fourth Amendments is
hereinafter referred to as the "Lease Agreement") (all capitalized terms
utilized herein and not separately defined herein shall have the meanings
ascribed to them in the Lease); and
WHEREAS, LESSOR and LESSEE are desirous of again amending said Lease
in certain particulars.
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NOW, THEREFORE for and in consideration of the mutual covenants and
stipulations contained in the Lease and Amendments thereto, the parties do
mutually contract and agree as follows:
1. ARTICLE I - LEASED PREMISES
The Parties agree that Article I Leased Premises is amended as
follows:
Delete: Parcel 6, Theater/Entertainment Complex.
Insert: Parcel 6, Exhibit Hall/Convention Support Complex.
The remaining provisions of Article I remain unchanged and
shall remain in full force and effect.
2. ARTICLE II - USE OF PREMISES
The first paragraph of Article II, [Use of Premises] remains
unchanged and shall remain in full force and effect. The second paragraph as
amended in the Second Lease Amendment remains unchanged and shall remain in
full force and effect. The third paragraph inserted pursuant to the Third
Lease Amendment shall be amended as follows:
LESSEE shall use Parcel 6 for non-gaming activities and
thereon construct and begin operations, pursuant to the terms
and conditions of the Lease Agreement, an Exhibit
Hall/Convention Support Complex.
The remaining paragraphs in Article II remain unchanged and
shall remain in full force and effect.
3. ARTICLE III - LEASEHOLD AND RELATED PAYMENTS
The first paragraph and subparagraph (1) of Article III
Leasehold and Related Payments remain unchanged and shall remain in full force
and effect. Subparagraphs (2) and (3) are amended to read as follows:
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(2) (a)(i) The annual Rental for gaming operations shall be
$800,000.00 ("Rental") plus five percent (5%) of the gross
annual gaming revenues on the Vessels as defined in the
Mississippi Gaming Control Act over $25,000,000.00
("Percentage Rental").
(ii) The parties recognize that, pursuant to the
Third Lease Amendment, LESSEE paid to LESSOR $1.7
Million as Advanced Rental on Parcel 6 for the
fifty-one month period February 1, 1994 through April
30, 1998. The parties further recognize that, for
the twenty-seven month period from February 1, 1994
through April 30, 1996, LESSEE has accrued rental on
Parcel 6 and LESSOR has credited to the account of
LESSEE the amount of $900,000.00, resulting in a
remaining Unapplied Advanced Rental of $800,000.00
for the twenty-four month period May 1, 1996 through
April 30, 1998 ("Unapplied Advanced Rental").
(iii) For the period JANUARY 1, 1996 THROUGH
DECEMBER 31, 1996: If Percentage Rental shall total
$5.8 Million or less, the Unapplied Advanced Rental
shall be decreased by $400,000.00 and applied to the
account of LESSEE; if Percentage Rental shall total
between $5.8 Million and $6.2 Million, the Unapplied
Advanced Rental shall be decreased by an amount equal
to the difference between the Percentage Rental and
$6.2 Million and applied to the account of LESSEE; if
Percentage Rental shall total $6.2 Million or
greater, the unapplied Advanced Rental shall not
decrease and shall remain available for application
to the account of LESSEE pursuant to (iv) and (v),
infra.
(iv) For the period JANUARY 1, 1997 THROUGH DECEMBER
31, 1997: If Percentage Rental shall total $5.8
Million or less, the Unapplied Advanced Rental shall
be decreased by $400,000.00 and applied to the
account of LESSEE; if Percentage Rental shall total
between $5.8 Million and $6.2 Million, the Unapplied
Advanced Rental shall be decreased by an amount equal
to the difference between the Percentage Rental and
$6.2 Million and applied to the account of LESSEE; if
Percentage Rental shall total $6.2 Million or
greater, the Unapplied Advanced Rental shall not
decrease and shall remain available for application
to the account of LESSEE pursuant to (v), infra.
(v) For the period JANUARY 1, 1998 THROUGH DECEMBER
31, 1998 AND FOR EACH SUCCEEDING TWELVE
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MONTH PERIOD THEREAFTER: If Percentage Rental shall
total $5.8 Million or less, LESSEE shall pay to
LESSOR an additional $400,000.00; if Percentage
Rental shall total between $5.8 Million and $6.2
Million, LESSEE shall pay to LESSOR an additional
amount equal to the difference between the Percentage
Rental and $6.2 Million Dollars. In the event the
Unapplied Advanced Rental is not decreased to zero
dollars by December 31, 1997 pursuant (iii) and (iv),
supra, the Unapplied Advanced Rental shall be
decreased by $33,333.00 or so much of said amount as
may be available as Unapplied Advanced Rental and
credited to the account of LESSEE for each month that
LESSEE is required under this Lease Agreement to pay
Percentage Rental. If for any month LESSEE is
required under this Lease Agreement to pay Percentage
Rental of less than $33,333.00, the Unapplied
Advanced Rental shall be decreased and the account of
LESSEE credited no more than the amount of Percentage
Rental due from LESSEE. At such time as Unapplied
Advanced Rental is reduced to zero dollars, no
further deceases nor credits shall be applied.
(b) In addition to the Rental and Percentage Rental set forth
above, LESSEE shall also pay monthly to LESSOR three percent
(3%) of the gross monthly revenues on all other activities
conducted by LESSEE, and/or its assignees or sublessees or any
other persons on the Leased Premises, including activities
conducted on Parcel 6, or on the vessels ("Additional
Percentage Rental"), except on rental revenues generated in
the operation of the Ice House. In-house transfers which are
presented for payment through internally generated
transactions shall be exempt from the 3% gross monthly fees.
(c) Notwithstanding any provision in the Lease Agreement
apparently to the contrary "gross monthly rentals" with
respect to the Hotel shall not include (a) uncollected or
uncollectible credit accounts, (b) cash refunds, credits or
exchanges if the price of the goods, services, use or
occupancy related thereto was originally included in gross
monthly revenues, (c) any sums collected for any sales,
excise, use or other tax, (d) insurance proceeds, (e) any
condemnation award or proceeds from the sale in lieu of
condemnation, (f) any sums received pursuant to the
cancellation of this Lease Agreement pursuant to Article XIV
hereof, (g) the rental of any tenant, lessee or concessionaire
of Hotel Partnership or its successors or assigns,(h) proceeds
from the sale of fixtures, furnishings, equipment or machinery
after use thereof (i)
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the amount of any discount on sales to employees, guests or
affiliates, and (j) merchandise, services or use or occupancy
of the Hotel Premises transferred or permitted without
compensation to employees, customers, affiliates, charities or
for promotional purposes, provided however, said
"complimentary transactions" shall not exceed five percent
(5%) of gross revenues in any calendar year.
(d) The Rental shall be paid by LESSEE, in advance, in equal
monthly installments of $66,667.00, each on the first day of
every month during the lease year. For each month, a
calculation of the Percentage Rental, as defined herein, and
the Additional Percentage Rental, as defined herein, will be
made and the additional rental paid on or before the 20th day
of the next month. For such calculation, LESSEE is to submit
on or before the 20th day of each month a copy of the monthly
revenue reports submitted to the State Tax Commission showing
gross gaming revenues as defined by Mississippi Gaming Control
Act of 1990, and a report of all other gross monthly revenues
from all other activities conducted on the Vessels and the
Leased Premises, along with a calculation of the additional
rental due, if any. LESSEE shall provide to LESSOR reasonable
access at reasonable times and places to all financial books
and records related to the operations contemplated under this
Lease regardless of the location of such books and records.
Upon reasonable advance notice, LESSEE shall provide
reasonable access to all financial books and records of
LESSEE's entire operations. LESSEE's entire operations include
all activities conducted on the Vessels and the Leased
Premises by any person or corporation and the other activities
of LESSEE or its affiliated persons or corporations wherever
located. Affiliated shall mean a person or corporation who
owns ten percent (10%) or more of the common stock of LESSEE
or a corporation in which LESSEE owns ten percent (10%) or
more of the common stock, or any person or corporation that
can exert control over LESSEE or that LESSEE can exert control
over or any person or corporation closely connected or
associated with LESSEE or dependent upon or subordinate to
LESSEE. LESSEE shall furnish within three (3) months after
the end of LESSEE's fiscal year, a certified audit of all
activities conducted on the Vessels and the Leased Premises
during that year. LESSOR will accept an annual audit by an
independent Certified Public Accountant auditor at LESSEE's
expenses. If LESSOR has good reason to question the audit,
then the LESSOR shall have the right to audit the books. If
there is any material discrepancy in the financial information
reported in the initial audit, then the cost of such audit
will be borne by LESSEE.
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(3) LESSEE shall complete construction and begin operation of the
Exhibit Hall/Convention Support Complex no later than May 1, 1998.
Notwithstanding anything contained herein to the contrary, in the
event that LESSEE shall be delayed or hindered in or prevented from
completing the Exhibit Hall/Convention Support Complex by May 1, 1998
by reason of strikes, lockouts, material, riots, insurrection, war,
Act of God, or other reasons of a like nature beyond the reasonable
control of LESSEE, then such construction period shall be extended for
a period equivalent to the period of such delay
4. ARTICLE XI - IMPROVEMENTS BY LESSEE
The following shall be inserted immediately after paragraph
(1) (D) of Article XI:
(E) Parcel 6:
(i) Before commencement of construction of the
Exhibit Hall/Convention Support Complex, LESSEE shall obtain LESSOR's written
approval for commencement of construction pursuant to (2), infra.
(ii) At least twenty-five (25) days prior to
commencement of construction, LESSEE shall conduct and provide to LESSOR a
Traffic Circulation study and Plan which shall include traffic counts and
projections for traffic volumes at the intersection of U.S. Highway 90 and
30th Avenue and along the 30th Avenue Extension. LESSOR shall approve or
disapprove the Plan within ten (10) days after LESSOR's receipt of the Plan.
The Plans shall propose specific traffic mitigation measures to reduce impacts
on Port related traffic, including trucks to and from West Pier and vehicles to
and from the Port of Gulfport's Commercial Small Craft Harbor. All approved
mitigation measures shall be completed and implemented prior to commencement of
operation of the Exhibit Hall/Convention support Complex. By January 1 of each
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year, LESSEE shall submit to LESSOR updated and revised traffic volumes and
projections.
5. All references to Theater/Entertainment Complex or
Entertainment/Theater Complex throughout the Lease Agreement and Exhibits shall
now be considered as references to Exhibit Hall/Convention Support Complex.
All other terms and conditions in the Lease Agreement which have not
been amended herein remain unchanged and shall remain in full force and effect.
WITNESS OUR SIGNATURES this the 8th day of July , 1996.
LESSOR:
MISSISSIPPI DEPARTMENT OF ECONOMIC
ATTEST: AND COMMUNITY DEVELOPMENT
BY: /s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX
EXECUTIVE DIRECTOR
MISSISSIPPI STATE PORT AUTHORITY
ATTEST: AT GULFPORT
/s/ Xxxxxx X. Xxxxxxx BY: /s/ Xxxxxx XxXxxxx
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XXXXXX XXXXXXX, PRESIDENT
LESSEE:
GRAND CASINOS OF MISSISSIPPI,
ATTEST: INC. - GULFPORT
/s/ Xxxxxx X. Xxxx BY: /s/ Xxxxxx X. Xxxxxx
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ITS: President
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