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EXHIBIT 2.1
LEASE AGREEMENT
between
CITY OF LOUISVILLE, KENTUCKY
Lessor
and
XXXXXXXXX XXXXX INCORPORATED
Lessee
Dated as of January 1, 2002
This Instrument Prepared by:
/s/ XXXX X. XXXX
Xxxx X. Xxxx
XXXXX XXXXX XXXX LLC
000 X. Xxxxxx Xxxxxx, 00xx Xxx.
Xxxxxxxxxx, Xxxxxxxx 00000
(000) 000-0000
5
TABLE OF CONTENTS
1. DEFINED TERMS..........................................................3
2. GRANT AND TERM OF LEASE................................................3
3. RENT...................................................................4
4. OPTION TO PURCHASE.....................................................5
5. TITLE, USE AND QUIET ENJOYMENT.........................................8
6. COVENANT FOR OPERATION AND MAINTENANCE.................................8
7. INSURANCE..............................................................9
8. TAXES AND OTHER GOVERNMENT CHARGES....................................10
9. CONDEMNATIONS; CASUALTY...............................................11
10. ALTERATIONS AND ADDITIONS.............................................13
11. NON-PROJECT PROPERTY; REMOVAL OF PROPERTY FROM THE PROJECT............13
12. DEFAULT...............................................................14
13. WAIVER OF REQUIREMENTS................................................15
14. NOTICES...............................................................15
15. CONSTRUCTION OF LEASE.................................................17
16. CAPTIONS..............................................................17
17. ASSIGNMENT/BINDING ON SUCCESSORS......................................17
18. SHORT FORM LEASE......................................................18
19. ESTOPPEL CERTIFICATES.................................................18
20. CONSENT TO ADDITIONAL MORTGAGES.......................................19
21. SEVERABILITY..........................................................20
22. FURTHER ASSURANCES....................................................20
23. GOVERNING LAW.........................................................20
24. ENTIRE AGREEMENT......................................................20
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25. COUNTERPARTS..........................................................20
26. MISCELLANEOUS.........................................................20
27. NO PERSONAL LIABILITY.................................................21
28. PREPAYMENT............................................................21
29. OTHER LESSOR EXPENSES.................................................21
30. LIMITATION OF LIABILITY OF LESSOR.....................................21
31. NO PERSONAL RECOURSE..................................................21
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LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease"), dated as of January 1, 2002, between
the CITY OF LOUISVILLE, KENTUCKY, a municipality and political subdivision of
the Commonwealth of Kentucky, having an address at 000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000 ("Lessor") and XXXXXXXXX XXXXX INCORPORATED, a
Kentucky corporation, having an address at 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000-0000 ("Lessee"):
WHEREAS, Lessee is in the process of expanding and renovating the
historic racetrack facility known as "Xxxxxxxxx Downs Racetrack" (the
"Facility") located at 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx (the "Site");
WHEREAS, the Project (as defined in the Loan Agreement, defined below)
as proposed by Lessee will be utilized to make horseracing, entertainment,
dining, pari-mutuel wagering and other recreational activities available to the
public, and the racetrack facility, as improved by the Project, will be a
"recreation park" within the meaning of Chapter 103 of the Kentucky Revised
Statutes (the "Act");
WHEREAS, Lessor has determined that the Project will enhance Xxxxxxxxx
Xxxxx Racetrack as a unique asset of Lessor, will create and preserve jobs for
the community (both during construction and thereafter during operation of the
Project) and will increase tax revenues for Lessor;
WHEREAS, Lessee has requested that Lessor issue industrial building
revenue bonds under the Act in order to provide financing for the Project;
WHEREAS, Lessor has determined that the issuance of industrial
building revenue bonds in connection with the Project will promote the economic
development of Lessor
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and the Commonwealth of Kentucky (the "Commonwealth"), will help relieve
conditions of unemployment through the creation of construction and other jobs
and will further improve the status of Xxxxxxxxx Downs Racetrack as a "world
class" recreational destination, thereby helping to make Lessor and the
Commonwealth more attractive to industry and helping to encourage the increase
of industry in the Commonwealth;
WHEREAS, Lessor is therefore issuing its City of Louisville, Kentucky
Taxable Industrial Building Revenue Bond, Series 2002 (Xxxxxxxxx Xxxxx
Incorporated Project), in an amount of $153,000,000, issued as a single
draw-down Bond (the "Bond") pursuant to the Act; and
WHEREAS, pursuant to that certain Loan Agreement (the "Loan
Agreement") of even date herewith by and among Lessor, Lessee, and Xxxxxxxxx
Downs Investment Company, a Kentucky corporation (the "Lender"), Lender has
agreed to purchase the Bond of Lessor and make the Loan(s) (as defined in the
Loan Agreement) to Lessor in accordance with the provisions of the Loan
Agreement; and
WHEREAS, the proceeds of such Bond are and will be advanced directly
to Lessee pursuant to the Loan Agreement and used to assist Lessee with the
financing of certain costs of the Project; and
WHEREAS, in order to permit the issuance of the Bond under the Act for
the purposes of financing the costs of the Project, Lessee is simultaneously
conveying to Lessor, subject to the Existing Mortgage and the Existing Security
Agreement, the Site on which the existing facilities are being renovated and
expanded, together with improvements, fixtures, machinery and equipment and
other tangible personal property now or hereafter located thereon, and Lessor
and Lessee wish to simultaneously enter into this Lease pursuant to which Lessee
will lease back
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such land, improvements, fixtures, machinery and equipment and other tangible
personal property from Lessor in return for rental payments sufficient to pay
debt service on the Bond;
WHEREAS, Lessee has agreed to make lease payments to Lessor under this
Lease in amounts equal to the amounts due from Lessor to the Lender under the
Bond and, pursuant to the Lease, Lessor has directed that Lessee make payments
otherwise payable by it hereunder to Lessor directly to the Lender; and
WHEREAS, in connection with the transactions contemplated by the Loan
Agreement the parties hereto desire to enter into this Lease;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and of the premises, the parties hereto enter into this Lease as
follows:
1 DEFINED TERMS. All capitalized terms used and not otherwise
defined herein shall have the respective meanings assigned thereto in the Loan
Agreement.
2. GRANT AND TERM OF LEASE. Upon the term and conditions
hereinafter set forth and subject to the Existing Mortgage and the Existing
Security Agreement, Lessor hereby leases to Lessee, and Lessee leases from
Lessor, all of the following (collectively, the "Leased Premises"): the land and
all buildings, structures, other improvements and fixtures now standing or at
any time hereafter constructed or placed upon the Site, including, without
limitation, all of the foregoing which are included in or constitute a part of
the Facility (said buildings, structures, other improvements and fixtures being
herein collectively called the "Improvements") and all equipment, machinery,
furniture, furnishings and removable fixtures of every kind and nature (the
"Tangible Personal Property" as more particularly described in the Xxxx of Sale)
whatsoever which are now or at any time hereafter located in or upon, or affixed
to, the Site (the description of which site is attached hereto and made a part
hereof as EXHIBIT A hereto) and/or any
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Improvements which now or hereafter are used or useful in connection with, or
constitute a part of, the Facility. The Leased Premises do not include any
inventory, accounts receivable or intangible personal property. The term (the
"Term") of this Lease shall be from January 1, 2002 to December 31, 2032.
Notwithstanding the foregoing, Lessee shall have the option at any time during
the Term to terminate this Lease by exercising its Option to Purchase pursuant
to Section 4 hereof; provided, however, that the indemnification obligations
from Lessee in favor of Lessor shall survive termination of the Lease, pursuant
to Article VI of the Loan Agreement.
3. RENT. Until the Rent Termination Event (hereinafter defined),
rent hereunder (the "Rent") shall be equal to the amounts payable to the Lender
pursuant to the Bond and shall be payable in the amounts and at the times
interest or principal is payable to Lender under the Bond. The Bond is a
"draw-down" bond, with principal to be advanced from the Lender to Lessee,
pursuant to the terms of the Bond. A schedule of disbursements of principal is
to be attached to the Bond. Lessor hereby irrevocably and unconditionally
directs Lessee to pay, as Rent, all amounts due under the Bond directly to the
Lender, at the times and in the manner prescribed in Bond and the Loan
Agreement. As used herein, the term "Rent Termination Event" shall mean the
earlier of (i) the payment and performance in full of all obligations of Lessee
under this Lease and the Loan Agreement and the other Bond Documents or (ii) the
termination of this Lease pursuant to the proper exercise of the Option to
Purchase, as hereinafter noted.
The obligations of Lessee to pay Rent pursuant to this Lease and to
perform and observe the other agreements and covenants on its part contained
herein shall be absolute and unconditional. Until such time as the principal of,
premium, if any, and interest on the Bond and any other amounts payable to
Lessor under any other Bond Documents shall have been fully paid or other
provision for the payment thereof shall have been made in accordance with the
Loan
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Agreement, Lessee (i) shall not suspend or discontinue any Rent pursuant to this
Lease (unless consented to by the Lender), (ii) shall perform and observe all
its other agreements contained in this Lease, and (iii) except as provided in
Section 4 hereof, shall not terminate this Lease for any cause including,
without limiting the generality of the foregoing, failure to complete the
Project, failure of title of the Project or any part thereof, any acts or
circumstances that may constitute failure of consideration, destruction of or
damage to the Project, commercial frustration of purpose, any change in the tax
or other laws of the United States of America or of the Commonwealth of Kentucky
or any political subdivision thereof or any failure of Lessor to perform and
observe any agreement, whether express or implied, or any duty, liability or
obligation arising out of or connected with this Lease. Nothing contained in
this Section shall be construed to release Lessor from the performance of any of
the agreements on its part herein contained; and in the event Lessor should fail
to perform any such agreement on its part, Lessee may institute such action
against Lessor as Lessee may deem necessary to compel performance so long as
such action shall be in accordance with the agreements on the part of Lessee
contained in the preceding sentence. Lessee may, however, at its own expense and
in its own name or in the name of Lessor, prosecute or defend any action or
proceeding or take any other action involving third persons which Lessee deems
reasonably necessary in order to insure completion of the acquisition,
construction, installation and equipping of the Project or to secure or protect
Lessor's and its respective rights of ownership, possession, occupancy and use
of the Project, and in such event Lessor hereby agrees to cooperate fully with
Lessee.
4. OPTION TO PURCHASE. At (i) the scheduled expiration of the
Term of this Lease or (ii) on the first day of each month during the Term of
this Lease Agreement, Lessee shall have the option to purchase all or any
portion of the Leased Premises from Lessor for One Dollar
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($1.00), subject to satisfaction of the conditions set forth in this Section 4.
The rights granted to Lessee in this Section 4 shall be deemed the "Option to
Purchase."
Lessee's right to exercise its Option to Purchase hereunder is
conditioned upon satisfaction of all of the following conditions:
(i) the absence of any default under the Insurance
Agreement (provided that any default which has been
waived by the non-defaulting party may be disregarded
for purposes of this sentence);
(ii) the payment of, or provision to Lessor of
adequate security ("adequate security" to be determined
by Lessor in its reasonable discretion) for, any fees,
expenses, claims, other amounts or payments then due to
Lessor and for other obligations incurred and to be
incurred by the Lessor in connection with the Project
or under the Loan Agreement, the Lease, the Insurance
Agreement or the other Bond Documents (provided, that,
to the extent that Lessor has any fees, expenses or
claims against Lessee for indemnification arising under
either Section 6.5 or Section 7.11 of the Loan
Agreement, Lessee will be deemed to have provided
adequate security to Lessor for such fees, expenses or
claims by providing Lessor with evidence that it is in
compliance with the requirements of Section 7 of this
Lease and the Insurance Agreement) or the other Bond
Documents;
(iii) the payment of any ad valorem taxes then due
and payable to the City, the School District, the
Commonwealth of Kentucky and other local taxing
authorities with respect to the Project;
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(iv) Lessee's delivery to Lessor of a statement in
writing from Lender acknowledging that the amounts due
under the Loan Agreement (including the Bond) have been
paid in full or forgiven; and
(v) Lessee's delivery to Lessor of at least
fifteen (15) days prior written notice stating (a) that
Lessee wishes to exercise the Option to Purchase, (b)
that the conditions for exercise of the Option to
Purchase under Section 4 of the Lease are satisfied
(acknowledging, however, that Lessor, in its reasonable
discretion, shall be entitled to determine whether in
fact such conditions have been satisfied insofar as
they affect Lessor's rights), and (c) the time, date
and place at which closing of the transfer of the title
to the Leased Premises shall occur.
If Lessee properly exercises the Option to Purchase granted under this Section
4, and all of the foregoing conditions have been met, Lessor shall, on the date
and at the time and place specified in Lessee's notice of exercise, convey to
Lessee, by quitclaim deed and xxxx of sale with no warranties, all of Lessor's
right, title and interest to the Leased Premises. Lessee shall bear all cost and
expenses in connection with the preparation of the documents of conveyance and
the delivery thereof and all fees, assessments, taxes and charges in connection
with the conveyance of title to the Project. Notwithstanding any of the
foregoing to the contrary, if (i) Lessee properly gives notice of its Option to
Purchase hereunder to Lessor, (ii) all of the foregoing conditions have been met
and (iii) Lessor fails to execute and deliver a quitclaim deed and xxxx of sale
to Lessee, legal and equitable title to the Leased Premises shall automatically
be transferred from Lessor to Lessee notwithstanding the fact that no quitclaim
deed and no xxxx of sale has been executed by Lessor. It is the intention of the
parties that at the conclusion of the Term of the Lease or at the conclusion of
the Term of the Lease pursuant to the Option to Purchase, title to
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the Leased Premises shall automatically be vested in Lessee, subject to any of
the foregoing limitations to the extent applicable. Upon conveyance of title and
payment therefor as aforesaid, this Agreement shall cease and terminate and all
obligations of Lessee and Lessor hereunder, except obligations pertaining to
indemnification, shall be terminated and extinguished.
5. TITLE, USE AND QUIET ENJOYMENT. Lessor covenants, warrants and
represents that at all times prior to the expiration or other termination of
this Lease when Lessee is not in default hereunder or under other Bond Documents
beyond applicable grace periods, if any, the peaceable and quiet enjoyment of
the Leased Premises by Lessee shall not be disturbed by Lessor; provided,
however, that Lessor (in its capacity as a municipal body and not as landlord
hereunder) shall not be prevented from enforcing, as against Lessee or the
Leased Premises, any laws of general application heretofore or hereafter enacted
by Lessor (in its capacity as a municipal body).
6. COVENANT FOR OPERATION AND MAINTENANCE. Lessor shall have no
responsibility for the maintenance, operation or repair of the Leased Premises
or any expenses associated therewith. So long as any Bond is outstanding, Lessee
will maintain, preserve and keep the Project, or cause the Project to be
maintained, preserved and kept, in good repair, working order and condition and
will from time to time make or cause to be made all proper repairs, replacements
and renewals necessary to continue to constitute the Project as an industrial
building project under KRS Chapter 103; provided, however, that Lessee will have
no obligation to maintain, preserve, keep, repair, replace or renew any element
or portion of the Project (i) the maintenance, preservation, keeping, repairing,
replacement or renewal of which becomes uneconomical to Lessee because of damage
or destruction by a cause not within the control of Lessee, or condemnation of
all or substantially all of the Project or obsolescence (including
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economic obsolescence) or change in government standards and regulations, and
(ii) with respect to which Lessee has furnished to Lessor and the Lender a
certificate executed by Lessee certifying that the maintenance, preservation,
keeping, repair, replacement or renewal of such element or unit of the Project
or the Project itself is being discontinued for one of the foregoing reasons,
which shall be stated therein.
7. INSURANCE. During the Term of this Lease, and in addition to
the requirements of the Existing Mortgage, the Existing Security Agreement, any
Leasehold Mortgage and the Insurance Agreement, Lessee covenants to maintain
insurance (at Lessee's own expense) as follows:
(a) Lessee shall continuously at all times during the Lease Term
maintain insurance against such risks as are customarily insured against by
businesses of like size and character, paying as the same become due all
premiums in respect thereto, including, without limitation, public liability
insurance.
(b) All insurance shall be taken out and maintained with
generally recognized responsible insurance companies qualified to do business in
the Commonwealth of Kentucky and may be written with deductible amounts
comparable to those on similar policies by other businesses of like size and
character. Each public liability insurance policy with respect to the Leased
Premises shall name Lessor as an additional insured. Lessee shall not permit any
condition to exist with respect to the Leased Premises which would wholly or
partially invalidate the insurance thereon. Unless a policy with such an
undertaking is unavailable or is available only at a cost which Lessee
reasonably determines to be unreasonable, each policy shall contain an
undertaking by the insurer that such policy shall not be modified adversely to
the interest of Lessor or cancelled without at least thirty (30) days' prior
notice to Lessor.
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(c) Notwithstanding any provision hereof to the contrary, Lessee
shall also maintain liability insurance in at least the minimum amount required
by the Insurance Agreement. Lessee shall cause its policy or policies for
liability insurance to name Lessor an as additional insured and additional loss
payee.
(d) Notwithstanding any provision hereof to the contrary, but
subject to the Insurance Agreement, Lessee may self-insure any insurance
required hereunder.
8. TAXES AND OTHER GOVERNMENT CHARGES. It is understood, acknowledged
and agreed by the parties that pursuant to KRS 103.285, the Project and the
Leased Premises are intended to be exempt from taxation by Lessor and other
political subdivisions in Kentucky to the same extent as other public property
used for public purposes, as long as the same are owned by Lessor. Except for
such taxes exempted by virtue of KRS 103.285, Lessee covenants and agrees to pay
during the term of this Lease, as the same respectively become due, as
additional lease rentals, all other taxes, payments in lieu of taxes,
assessments and other governmental charges of any kind whatsoever, if any, that
may at any time be lawfully assessed, levied or charged against or with respect
to the Project or any payments made or to be made pursuant to this Lease;
provided, that with respect to special assessments or other governmental charges
that may lawfully be paid in installments over a period of years, Lessee shall
be obligated to pay only such installments as may have become due. Additionally,
Lessee agrees to pay to the Jefferson County School District payments in lieu of
taxes equal to the amounts which would have been due and payable by Lessee
absent the application of KRS 103.285.
Lessee may, at its expense and in its own name, in good faith contest
any such asserted taxes, assessments and other governmental charges and, in the
event of any such contest, may permit the taxes, assessments or other
governmental charges so contested to remain unpaid
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during the period of such contest and any appeal therefrom unless Lessor shall
notify Lessee that, in the opinion of its counsel, by nonpayment of any such
items the security provided pursuant to the provisions of this Lease will be
materially endangered, in which event such taxes, charges for payments in lieu
of taxes, assessments or charges shall be paid forthwith or such other
arrangements to protect the interests of the Lessor as are acceptable to Lessor
shall be made. Lessor will cooperate fully with Lessee in any such contest. In
the event Lessee shall fail to pay any of the foregoing items required by this
Section to be paid by Lessee, Lessor or the Lender may (but shall be under no
obligation to) pay the same and any amounts so advanced therefor by Lessor or
the Lender shall become an additional obligation of Lessee to the one making the
advancement, which amounts, together with interest thereon, Lessee agrees to
pay. Lessee may, at its expense and in its own name and behalf, apply for any
tax exemption or exemption from payments in lieu of taxes allowed by the
Commonwealth of Kentucky, or any political or taxing subdivision thereof under
any existing or future provisions of law which grants or may grant any such tax
exemption or exemptions from payments in lieu of taxes.
9. CONDEMNATIONS; CASUALTY.
(a) In the event of any taking of the Leased Premises or any
portion thereof under the power of eminent domain, or otherwise by any public or
quasi-public authority (or any conveyance of the Leased Premises or any portion
thereof in lieu of or in anticipation of any such taking), subject to the
Existing Mortgage, the Existing Security Agreement and any Leasehold Mortgage,
(i) this Lease shall, upon the vesting of title pursuant to such taking or
conveyance, terminate as to the portion of the Leased Premises so taken; (ii)
if, in the judgment of Lessee the restoration or continued operation of the
Improvements after such taking or conveyance is not economically feasible, and
no default hereunder then exists which remains
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unwaived by the Lender or Lessor, Lessee may, upon fifteen (15) days prior
written notice to Lessor and with the prior written consent of the Lender (and
in addition to any other rights of cancellation to which Lessee may be entitled
hereunder), terminate this Lease as to the remainder of the Leased Premises by
exercising the Option to Purchase pursuant to Section 4 hereof. Subject to the
Existing Mortgage, the Existing Security Agreement, any Leasehold Mortgage, the
Insurance Agreement and the rights of Lessor to indemnification under any Bond
Documents, all such proceeds shall first be applied to the restoration of the
Improvements (if Lessee shall elect to restore the same) or the removal thereof,
and any balance thereof remaining after such application shall be paid only to
Lessee.
(b) In the event of any damage or destruction to the Leased
Premises by fire or other casualty, subject to the Existing Mortgage, the
Existing Security Agreement, any Leasehold Mortgage, the Insurance Agreement and
the rights of Lessor to indemnification under any Bond Documents, all proceeds
shall first be applied to the restoration of the Improvements (if Lessee shall
elect to restore the same) or the removal thereof, and any balance thereof
remaining after such application shall be paid only to Lessee. If, in the
judgment of Lessee, the restoration of the Improvements and their continued
operation thereafter is not economically feasible, Lessee may, if not in default
hereunder, subject to the Existing Mortgage, the Existing Security Agreement,
any Leasehold Mortgage, the Insurance Agreement and the rights of Lessor to
indemnification under any Bond Documents, upon fifteen (15) days' prior written
notice to Lessor and with the prior written consent of the Lender (and in
addition to any other rights of cancellation to which Lessee may be entitled
hereunder), terminate this Lease by exercising the Option to Purchase pursuant
to Section 4 hereof. Notwithstanding whether Lessee exercises the Option to
Purchase, subject to the Existing Mortgage, the Existing Security Agreement, any
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Leasehold Mortgage, the Insurance Agreement and the rights of Lessor to
indemnification under any Bond Documents, Lessee shall be entitled to settle all
insurance claims and to receive all insurance proceeds.
10. ALTERATIONS AND ADDITIONS. Lessee shall have the privilege of
requesting additional assistance in completing the Project, by issuance of
additional issues of bonds (subject to acceptance of such request by Lessor, if
Lessor is asked to issue such bonds) or through financing from other sources,
and for the making of alterations, additions and improvements upon, in and to
the Project, as it in its discretion may from time to time determine to be
desirable for its use and purposes and as do not adversely affect the use,
operating unity or value of the Project or the structural integrity of any
building or other structure forming a part thereof. Any or all of said
alterations, additions, or improvements shall be located wholly within the
boundary lines of the Site and comply with all applicable federal, state and
local laws and regulations thereunder. All such alterations, additions and
improvements, except structures which are independent of the Project and not
connected thereto by party walls and with respect to which release of a portion
of the Site has been made, shall become part of the Project.
11. NON-PROJECT PROPERTY; REMOVAL OF PROPERTY FROM THE PROJECT. It
is recognized and acknowledged that Lessee may install in and about the Project
at its own expense machinery, equipment and other general property to which it
may choose to retain title. All such machinery, equipment and property shall
remain the sole property of Lessee and shall not be conveyed to Lessor.
Nothing contained in this Lease shall prohibit or prevent Lessee from
leasing machinery, equipment or other property or from purchasing such property
for use in or about the Project under a conditional sales contract, lease sale
contract or subject to vendor's lien or security
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interest as security for the unpaid portion of the purchase price thereof,
provided no such lien or security interest shall otherwise attach to the
Project. Lessor and the Lender, if requested by the Borrower, shall consent to
the installation of any such machinery, equipment or other property and waive
and relinquish to the seller or lessor thereof, as the case may be, all right of
levy for rent and all claims and demands of every kind against any such property
installed or to be installed under any such lease or contract.
Lessee shall have the right, in its reasonable discretion, to replace
any tangible real or personal property constituting a portion of the Property
with other tangible real or personal property of equal or greater value or to
sell any tangible real or personal property constituting a portion of the
Property so long as the aggregate value of all such real or personal property
sold without replacement is less than five percent (5%) of the value of the
Project.
12. DEFAULT. If (i) Lessee fails to pay the Rent specified in Section 3
hereof to the Lender at the times and in the manner provided herein and such
failure continues for sixty (60) days after notice from Lender to Lessee and
Lessor, or (ii) Lessee defaults under the Insurance Agreement or otherwise
materially fails to comply with the terms of Section 7 hereof and such default
or failure continues for fifteen (15) days after notice from Lessor to Lessee,
or (iii) Lessee defaults in compliance with any other material obligation or
covenant owing from Lessee to Lessor hereunder and fails to cure such default
within sixty (60) days after notice to cure such default (provided, however,
that if at the end of the 60-day period referred to in clause (iii) Lessee is
attempting to cure a default of the nature referred to in such clause with due
diligence, such sixty (60) day period shall be extended for so long as Lessee
continues to attempt to cure such default), then Lessor may, at Lessor's option
and in addition to any and all other rights and remedies that Lessor may have at
law or in equity, terminate this Lease, without prejudice to any
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rights of indemnification Lessor may have hereunder or under the Loan Agreement
or under the Insurance Agreement (which rights shall survive any such
termination). In addition, upon the occurrence of a default referred to in (ii)
above and the continuation of such default or failure for fifteen (15) days
after notice from Lessor to Lessee, Lessor may, if it determines to do so in its
sole discretion, immediately cause the Leased Premises to be transferred back to
Lessee. The occurrence of any default under this Lease shall not derogate from
the right of Lessee to exercise its Option to Purchase under Section 4 hereof,
which right shall remain in effect upon termination of this Lease following a
default, and which right may be exercised upon Lessee's satisfaction of the
conditions set forth in Section 4 hereof.
13. WAIVER OF REQUIREMENTS. No requirement whatsoever of this Lease
shall be deemed waived or varied except in writing, nor shall Lessor's or
Lender's acceptance of any payment with knowledge of any default constitute a
waiver of Lessor's or Lender's rights thereby nor of any subsequent or continued
breach of any requirements of this Lease. All remedies herein provided for shall
be in addition to, and not in substitution for, any remedies otherwise available
to Lessor or Lessee.
14. NOTICES. All notices, requests, consents and other communications
("Notices") required or contemplated by the provisions hereof shall be in
writing and personally delivered, or sent by facsimile, telecopy, telex,
telegram, cable, mail (by certified or registered mail, return receipt
requested, fully prepaid) or by reputable overnight courier, fully prepaid, as
to each party hereto, at its address set forth below or at such other address as
shall be designated by such party in a notice to the other party hereto given
pursuant to this Section. All notices shall be effective (i) if personally
delivered on a Business Day during normal business hours in the time zone in
which delivered, when so delivered, (ii) if sent by telecopy, telex, telegram or
cable during
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normal business hours in the time zone in which delivered, when so received, or
the next Business Day if sent after normal business hours in the time zone sent
to, (iii) if so mailed, upon receipt thereof and (iv) if by such courier, on the
next Business Day, except that if such courier shall be delivering to a foreign
country, three Business Days after being given to such courier. For the purposes
of this Section, the term Business Day shall mean a day that is a business day
in the city to which such notice is transmitted. A copy of all notices sent by
either party hereto shall be sent by such party to the Lender at the address set
forth below concurrently with such notice being sent to the other party
Lessor: City of Louisville, Kentucky
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Mayor
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
With copy to: Xxxxx Xxxxxx
City of Louisville, Kentucky
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Lessee: Xxxxxxxxx Xxxxx Incorporated
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxx
Senior Vice President Finance
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
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With a copy to: Xxxxxxx X . Xxxx
Senior Vice President and General Counsel
Xxxxxxxxx Downs Incorporated
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Lender: Xxxxxxxxx Xxxxx Investment Company
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, President
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
15. CONSTRUCTION OF LEASE. Words of any gender used in this Lease shall
be held to include any other gender, and words in the singular number shall be
held to include the plural, when the same requires. Wherever used herein, the
words "Lessor" and "Lessee" shall be deemed to include the permitted successors,
sublessees and assigns of the parties, unless the context excludes such
construction.
16. CAPTIONS. The captions as to contents of particular sections or
paragraphs herein are inserted only for convenience, and are in no way to be
construed as part of this Lease or as a limitation on the scope of the
particular sections or paragraphs to which they refer.
17. ASSIGNMENT/BINDING ON SUCCESSORS. This Lease may not be assigned by
Lessor, unless such assignment or other action is required by law or is
necessary to preserve Lessor's indemnification and other rights, except that
this Lease may be assigned by Lessor to the Lender. Unless such assignment or
other action is required by law or is necessary to preserve Lessor's
indemnification and other rights, Lessor may not assign, encumber, sell,
transfer or convey all or any part of its interest in the Leased Premises or any
portion thereof, including, without limitation, placing any liens on its
interest in the Leased Premises or any portion thereof.
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If there is no default under the Loan Agreement, this Lease or
Insurance Agreement, this Lease may be assigned, and/or the Leased Premises
sublet in whole or in part, by Lessee without Lessor's consent to any reputable
Person who agrees to assume and accept the duties of Lessee hereunder and under
the Loan Agreement and Insurance Agreement. The term "reputable Person" shall
include, without limitation, any present or future holders of or any
participants in any Leasehold Mortgage on the leasehold interest hereunder or on
the fee interest under the Existing Mortgage or any interest in the Tangible
Personal Property under the Existing Security Agreement, and/or the designee(s)
of any such holders and/or participants and/or any purchasers of such leasehold
interest or such fee interest upon the foreclosure of, or by assignment in lieu
of the foreclosure of, any such mortgage. All the provisions herein contained
shall bind and inure to the benefit of the parties hereto, their successors and
legal representatives and their permitted assigns.
Lessor and Lessee agree that any interest of Lessor under this Lease
held by Lessor as of January 1, 2003 shall on such date and thereafter be deemed
to be held by Louisville Jefferson County Metro Government, as statutory
successor to Lessor.
Nothing in this Section 17 shall limit Lessee's right to lease suites,
corporate boxes and other facilities constituting a portion of the Leased
Premises in the normal course of Lessee's operation of the Leased Premises.
18. SHORT FORM LEASE. Either party shall, upon request of the other,
execute in recordable form a short form lease for the purpose of recordation.
19. ESTOPPEL CERTIFICATES. Lessor will execute, acknowledge and deliver
promptly upon request by Lessee, a certificate certifying (i) that this Lease is
unmodified and in full force and effect (or, if there have been modifications,
that this Lease is in full force and effect as
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modified, stating the date of each instrument so modifying the Lease and having
attached thereto a copy thereof), and (ii), without independent investigation,
whether any default of Lessee known to it exists hereunder and, if any such
default exists, specifying the nature and period of existence thereof and what
action it is taking or proposes to take with respect thereto, and whether notice
thereof has been given to Lessee. Lessor shall be entitled to rely upon
certificates from Lender and Lessee exclusively in providing such
certificate(s). Any such certificate may be relied upon by any prospective
purchaser, pledgee, mortgagee or other transferee of Lessee's interest under
this Lease, but shall be completely without prejudice as to rights of Lessor as
to the existence of actual defaults.
20. CONSENT TO ADDITIONAL MORTGAGES. Provided that Lessee is not in
default under this Lease, the Loan Agreement or the Insurance Agreement, to the
extent Lessee advises Lessor that it is replacing the Existing Credit Agreement
with another principal credit facility or credit facilities, or supplementing
the Existing Credit Agreement with another principal credit facility or credit
facilities, or replacing or supplementing any of the foregoing (collectively,
the "Additional Credit Facilities") in favor of PNC Bank, National Association
("PNC") or other lenders (collectively, the "Additional Lenders"), Lessor agrees
that it will (i) consent to Lessee's entry into additional leasehold mortgages
with any Additional Lenders and agree to give such Additional Lenders reasonable
notice of, and opportunity to cure, defaults of the Lessee hereunder or under
the Loan Agreement and (ii) if required by such Additional Lenders, enter into
(a) a non-recourse mortgage of the Lessor's interest in the Site and the Leased
Premises to additionally secure Lessee's obligations to the Additional Lenders
and (b) a non-recourse security agreement concerning Lessor's interest in the
Tangible Personal Property to secure the
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obligations of Lessee and any guarantors party to the Additional Credit
Facilities to the Additional Lenders.
21. SEVERABILITY. If any provision of this Lease is invalid or
unenforceable as to either of the parties, the remainder of this Lease shall not
be affected thereby.
22. FURTHER ASSURANCES. Each party shall execute, acknowledge and
deliver such documents and other instruments and perform such acts as may be
reasonably required by the other party or the Lender, in order to give full
effect to this Lease or to facilitate the recording of the short form of lease
referred to in Section 18 above.
23. GOVERNING LAW. This Lease shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Kentucky applicable to
agreements made in and to be performed wholly within such Commonwealth.
24. ENTIRE AGREEMENT. This Lease contains all of the agreements and
conditions made between the parties hereto regarding the subject matter of this
Lease and may not be modified orally or in any other manner than by an agreement
in writing signed by all of the parties hereto or their respective successors in
interest.
25. COUNTERPARTS. This Lease may be executed in counterparts, any one
or series of which, when executed by all parties, shall be deemed one
instrument.
26. MISCELLANEOUS. Notwithstanding anything to the contrary contained
herein, Lessee shall have the right, without the consent of Lessor, to dispose
of or make alterations and changes to the Leased Premises including furniture,
fixtures and equipment thereon, so long as (i) such alterations or changes do
not materially adversely affect the value of the Project as whole and (ii) such
alterations or changes do not affect the status of the Project as an "industrial
building" within the meaning of the Act.
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27. NO PERSONAL LIABILITY. No officer, official, director, employee,
agent or representative of, and no shareholder (in such capacity) or
incorporator (in such capacity) of, any party hereto (or any partner in any such
party which is a partnership) shall have any liability whatsoever under this
Lease in connection with the transactions contemplated hereby, whether or not
the transactions contemplated hereby are consummated in accordance with the
terms hereof, provided, however, that nothing in this Section 27 shall diminish
or impair the obligations of any party to this Lease, the Loan Agreement, the
Insurance Agreement or any other Bond Document to which it is a party.
28. PREPAYMENT. Lessee shall have the right to cause Lessor to prepay
the Bond in whole or in part, upon the written direction of Lessee, but solely
with monies furnished to Lessor by Lessee.
29. OTHER LESSOR EXPENSES. Anything to the contrary herein
notwithstanding, Lessee shall pay any reasonable expenses (including but not
limited to reasonable attorney's fees and other charges of the Lessor) not
specifically mentioned herein which are reasonably incurred by Lessor, after
notice to Lessee, in connection with the Project, this Lease, the Loan
Agreement, the Insurance Agreement, the Bond or the other Bond Documents.
30. LIMITATION OF LIABILITY OF LESSOR. In the event of any default by
the Lessor hereunder and notwithstanding the provisions of Section 31 below, the
liability of the Lessor to the Lessee shall be enforceable only out of Lessor's
interest in the Project and under this Agreement and there shall be no other
recourse for damages by the Lessee against the Lessor, its officers, members,
agents and employees, or any of the property now or hereafter owned by it or
them.
31. NO PERSONAL RECOURSE. No recourse shall be had for any claim based
on (i) the
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Lease, (ii) the Loan Agreement, (iii) the Bond, (iv) the Consent Waiver and
Estoppel between the Lessor and PNC, or (v) the Leasehold Mortgage and Security
Agreement between Lessee and PNC with a Joinder by the Lessor, against the
Lessor or any member, officer or employee past, present or future, of the Lessor
or of any successor body as such, either directly or through the Lessor or any
such successor body, under any constitutional provision, statute or rule of law
or by the enforcement of any assessment or penalty or otherwise.
[Remainder of this Page Left Blank Intentionally]
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IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease on the
date set forth below.
LESSOR:
THE CITY OF LOUISVILLE, KENTUCKY
By:/s/ XXXXX X. XXXXXXXXX
Name: Xxxxx X. Xxxxxxxxx
Title: Mayor
Date: DECEMBER 23, 2002
ATTESTED:
/s/ XXXXXXXX X. XXXXXX
Clerk of the Board of Aldermen
LESSEE:
XXXXXXXXX DOWNS INCORPORATED
By:/s/ XXXXXXX X. XXXXXX
Name: XXXXXXX X. XXXXXX
Title: SENIOR VICE PRESIDENT, FINANCE
Date: DECEMBER 20, 2002
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ACKNOWLEDGMENTS
COMMONWEALTH OF KENTUCKY )
: ss.:
COUNTY OF JEFFERSON )
The foregoing instrument was acknowledged before me on December 23,
2002 by Xxxxx X. Xxxxxxxxx and Xxxxx Xxxxxx, as the Mayor and Clerk of the Board
of Aldermen, respectively, of the City of Louisville, Kentucky, a municipality
and political subdivision of the Commonwealth of Kentucky, on behalf of said
City.
My commission expires:SEPTEMBER 25, 2004.
(SEAL)
/s/ XXXXXX X. XXXXXXX
Notary Public
COMMONWEALTH OF KENTUCKY )
: ss.:
COUNTY OF JEFFERSON )
The foregoing instrument was acknowledged before me on December 20,
2002 by Xxxxxxx X. Xxxxxx, as the Senior Vice President, Finance of Xxxxxxxxx
Downs Incorporated, a Kentucky corporation.
My commission expires:SEPTEMBER 6, 2006.
(SEAL)
/s/ XXX XXXXXXX
Notary Public
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EXHIBIT A omitted consisting of a legal description of the property. The
registrant will supplementally provide a copy of such exhibit to the Commission
upon request.
