PUBLIC TRUST TIDELANDS LEASE
STATE OF MISSISSIPPI
COUNTY OF XXXXX
THIS AGREEMENT, made and entered into this the 4th day of
February, 1999, by and between the SECRETARY OF STATE, with the
approval of the GOVERNOR, for and on behalf of the STATE OF
MISSISSIPPI, hereinafter referred to as "LESSOR," and the BEAU
RIVAGE RESORTS, INC., a Mississippi Corporation registered to do
and doing business in the State of Mississippi, hereinafter
referred to as "LESSEE."
WITNESSETH:
THAT FOR THE TERM and in consideration of the rentals
hereinafter set forth, and covenants, conditions, and obligations
to be observed and performed by LESSEE, LESSOR does hereby lease
and rent unto LESSEE, pursuant to the authority of MISS. CODE XXX.
29-1-107, the following described submerged land or tideland,
hereinafter referred to as SAID PROPERTY, to-wit:
A parcel of land situated in the City of Biloxi, Second Judicial
District, Xxxxxxxx County, Mississippi, being more particularly
described as follows, to wit:
Commence at a concrete monument denoting the intersection of the
north margin of X.X. Xxxxxxx 00 with the East margin of I-110 Loop;
thence run South 07 degrees 06'47" East, for a distance of 148.69
feet to a point; thence run South 01 degree 29'12" East, for a
distance of 369.79 feet to the POINT OF BEGINNING; thence run South
60 degrees 54'54" East, for a distance of 32.09 feet to a point;
thence run South 77 degrees 05'04" East, for a distance of 14.68
feet to a point; thence run South 0 degrees 00'00" East, for a
distance of 136.77 feet to a point; thence run North 89 degrees
33'38" East, for a distance of 359.69 feet to a point; thence run
South 0 degrees 23'14" West for a distance of 90.0 feet to a point;
thence run South 89 degrees 36'46" East, for a distance of 803.37
feet to a point; thence run North 89 degrees 32'32" East, for a
distance of 36.95 feet to a point; thence South 0 degrees 22'47"
West, for a distance of 343.89 feet to a point; thence run North
89 degrees 36'46" West, for a distance of 732.82 feet to a point;
thence run North 83 degrees 38'45" West, for a distance of 495.89
feet to a point; thence run North 01 degrees 29'12" West, for a
distance of 532.25 feet to the POINT OF BEGINNING, containing
450,000 Square Feet, or 10.33 acres, approximately.
1. TERM.
The primary term of this lease shall be for thirty (30)
years, beginning on the date of the opening of the casino or
March 31, 1999, whichever occurs sooner. If LESSEE has complied
Exhibit 10.73
with all material terms, covenants, conditions, and obligations of
this lease, as of the expiration of the primary term, LESSEE shall
have the option to extend this lease for a renewal term of twenty
(20) years on terms and provisions as may be agreed to by LESSOR
and LESSEE, and thereafter as described in Section 6 below.
2. CONSIDERATION.
The parties hereto agree that SAID PROPERTY contains
approximately 450,000 square feet of submerged lands or tidelands.
During the first five (5) year period, LESSEE covenants and agrees
to pay annual rental to LESSOR in the sum of $1,100,000. The
parties agree that consideration for this lease is in part
predicated on LESSEE developing and operating a single dockside
gaming facility licensed by the State of Mississippi which will
contain up to 2,228 games, tables and slot machines and up to
71,669 square feet of gaming space as reported to the Gaming
Commission. Should LESSEE desire to expand the gaming area within
its casino beyond 2,228 games, tables and slot machines, or 71,669
square feet of gaming space, notice shall first be given to LESSOR
and a corresponding adjustment to the annual rent shall be made in
the event such expansion results in a material increase in the
fair market rental value. Payment of the first year's rent shall
be made in four (4) installments, with one payment of $275,000 to
be made on or before March 31, 1999, and the remaining balance of
$825,000 to be paid in three (3) equal installments on or before
April 30, 1999, May 31, 1999, and June 30, 1999.
3. RENT ADJUSTMENT.
LESSOR shall, at the end of each five year period of the
primary and renewal lease terms, determine the annual rental for
the following five year period in accordance with MISS. CODE XXX.
Sec. 29-I-107(2) or as amended by subsequent legislation. The
initial appraisal required by MISS. CODE XXX. Sec. 29-1-107(2)
shall be conducted by an appraiser chosen by LESSOR and shall be
completed at least six (6) months prior to the end of the current
five year period. If LESSEE provides written notice to LESSOR
within thirty (30) days after receipt of LESSOR'S appraisal that
LESSEE does not agree with the fair market rental value determined
by LESSOR'S appraiser, LESSEE shall have the right to select an
appraiser to conduct an appraisal of the fair market rental value
of SAID PROPERTY. LESSEE'S appraisal shall be completed within
sixty (60) days after LESSEE provides the foregoing written notice
to LESSOR. If LESSOR'S appraiser and LESSEE'S appraiser cannot
agree on the appraised fair market rental value of SAID PROPERTY
within thirty (30) days after the completion of LESSEE'S
appraisal, LESSOR'S appraiser and LESSEE'S appraiser shall select
a third appraiser to conduct an appraisal of the fair market
rental value of SAID PROPERTY. The third appraisal shall be
completed within sixty (60) days after the third appraiser is
selected. The appraised fair market rental value determined by the
agreement of any two of the three appraisers shall constitute the
appraised fair market rental value for purposes of determining the
annual rental for the following five year period in accordance
with the MISS. CODE XXX. Sec. 29-1-107(2).
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LESSOR and LESSEE each agree to use all reasonable efforts to
complete the foregoing appraisal process prior to the beginning of
the following five year period. If for any reason the foregoing
appraisal process is not completed prior to the beginning of the
following five year period, LESSOR and LESSEE agree that the
interim annual rental for the following five year period shall be
the annual rental for the preceding five year period adjusted by
the All Urban Consumer Price Index-All Items (CPI) pursuant to
Miss. Code Xxx. Sec. 29-I-107(2). Upon completion of this
appraisal process, if this appraisal process results in an
appraised fair market rental in excess of the interim annual
rental, LESSEE shall pay to LESSOR such excess within thirty (30)
days after the completion of this appraisal process. In the event
such appraised fair market rental is less than the interim annual
rental, the interim annual rental shall be the annual rental for
such five year period.
LESSOR and LESSEE acknowledge and agree: (a) that SAID
PROPERTY is comprised of parcels devoted to three separate uses,
(1) as a gaming vessel, (2) as a marina and garage overhang, and
(3) as open water; and (b) that, if and when value is assigned
based upon use as a part of the appraisal process required by
statute, such separate uses shall be recognized.
LESSOR and LESSEE further acknowledge and agree that any fair
market rental value appraisal which may be used to determine
rental amounts will deduct the value of any improvements by the
LESSEE which substantially enhance the value of SAID PROPERTY.
LESSOR and LESSEE further acknowledge and agree that the
appraisal of SAID PROPERTY by Xxxxxxxxx & Xxxx, Inc., dated
January 20, 1999, shall not be used for any purpose (whether as
precedence, support or otherwise) by any appraiser in connection
with any subsequent appraisal of SAID PROPERTY.
Any appraiser selected by LESSOR or by LESSEE shall be a
Member of the Appraisal Institute (MAI designation), shall be
disinterested and shall have no personal interest or bias with
respect to LESSOR or to LESSEE, and shall not be compensated on
any basis that is contingent on an action or event resulting from
any analysis, opinions or conclusions contained in such
appraiser's appraisal.
LESSOR shall pay for its appraiser, LESSEE shall pay for its
appraiser, and LESSOR and LESSEE shall share the cost of the third
appraiser equally.
In the event LESSOR and LESSEE cannot agree on an adjusted
rental amount, the lease may be canceled at the option of LESSOR.
4. PLACE AND TIME OF PAYMENT.
Subject to Article 2 above, rent shall be payable to the
STATE OF MISSISSIPPI and shall be payable annually on or before
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March 31 of each year to the STATE OF MISSISSIPPI and shall be
submitted to the SECRETARY OF STATE or his successor in office,
through the Public Lands Division, 000 Xxxxxxxxxxx Xxxxxx, Xxxx
Xxxxxx Xxx 000, Xxxxxxx, Xxxxxxxxxxx 00000.
5. INTEREST PENALTY FOR PAST DUE RENT BALANCES.
LESSEE shall pay a late charge equal to interest at the rate
of twelve percent (12%) per annum from the date due until paid on
any lease rentals, fees, or other charges due and payable
hereunder, which are not paid within thirty (30) days of their due
date.
6. RIGHT TO RE-LEASE.
Pursuant to MISS. CODE XXX. 00-0-000, XXXXXX is hereby
granted the prior right, exclusive of all other persons, to
release at the expiration of this lease, as may be agreed upon
between LESSEE and LESSOR, so long as LESSEE continues to present
satisfactory evidence of LESSEE'S right to occupy the adjacent
uplands.
7. TAXES, SURVEY COSTS, RECORDING FEES.
LESSEE covenants and agrees to pay any and all ad valorem
taxes and special assessments levied by any county or
municipality, if ever any there be, applicable to SAID PROPERTY
and LESSEE'S interest therein and improvements thereon; further,
LESSEE covenants and agrees to pay any and all survey costs and
recording fees in connection with this lease or any other
reasonable fees so determined by law.
8. TRANSFERABILITY OF LEASE.
LESSEE shall NOT sublease, assign, or transfer SAID PROPERTY
without the prior written permission of the Secretary of State or
his successor, which permission shall not arbitrarily or
unreasonably be withheld.
This restriction shall not apply to any future assignment by
LESSEE to a successor organization in a merger, consolidation or
similar reorganization, nor shall it apply to an assignment or
other transfer to an entity that controls, is controlled by or is
under common control with LESSEE. LESSEE agrees to notify LESSOR
of any such future assignment or transfer within thirty (30) days
of same pursuant to MISS. CODE XXX. 29-1-107(2).
9. PUBLIC ACCESS ASSURED.
As a condition of this lease, LESSOR has required that SAID
PROPERTY include significant open water which will not be occupied
by LESSEE and which is not necessary for LESSEE'S development or
operation of a single dockside gaming facility. As a further
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condition of this lease, LESSOR has required that free public
access be maintained with respect to portions of SAID PROPERTY.
Accordingly, LESSEE agrees to maintain free public access to the
open water portion of SAID PROPERTY during the term of the lease
for passage of boats over and across such open water and for
surface fishing around the vessel, with no anchoring to the vessel
or its moorings permitted. This provision does not grant or permit
public access to enter the casino and does not grant or permit
public access beneath the vessel or beneath the parking garage.
Further, this provision does not grant or permit public access to
the marina except with respect to those portions of the marina, if
any, designated for use by the public.
By LESSEE'S entering into this Section 9 and agreeing to
maintain the free public access described above, LESSOR
acknowledges and understands that LESSEE is not agreeing to assume
or accept any responsibility or liability with respect to any such
public access afforded hereunder.
10. DEFAULT.
The parties herein expressly agree that if DEFAULT shall be
made in the payment of any tax, assessment or rent due pursuant to
this LEASE, after thirty (30) days notice to pay the same, then
and in any such event of DEFAULT it shall be lawful for LESSOR to
enter upon SAID PROPERTY, or any part thereon, upon LESSOR'S
thirty (30) day written notice to LESSEE, either with or without
process of law, to reenter and repossess the same, and to distrain
for any rent or assessment that may be due thereon, at the
election of LESSOR, but nothing herein is to be construed to mean
that LESSOR is not permitted to hold LESSEE liable for any unpaid
rent or assessment to that time. As to all other conditions,
covenants, and obligations imposed on LESSEE herein, enforcement
shall be by proceeding at law or in equity against any person
violating or attempting to violate said conditions, covenants, and
obligations, to restrain violation and to recover damages, if any,
including reasonable expenses of litigation and reasonable
attorney's fees, as may be awarded by the Court. Such enforcement
by proceedings at law or in equity may be instituted at any time
after thirty (30) days written notice to LESSEE if the default or
violation has not been corrected within that thirty (30) day
period. Invalidation of any material provision of this lease by
judgment or court order shall, unless agreed otherwise by the
parties, operate as an approved cancellation of this lease.
11. FORFEITURE, DEFAULT OR CANCELLATION.
LESSEE'S FAILURE to comply with the material provisions of
this lease shall result, at the option of LESSOR, in the
cancellation of this lease within thirty (30) days after written
notice of default is given; provided, however, that if at the end
of said 30-day period LESSEE is undertaking a diligent, good faith
effort to cure or has notified LESSOR in writing that it is
presenting a good faith challenge regarding its failure to comply
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(other than failure to pay rent when due), the 30-day period may
be extended as agreed between the parties. In the event of any
FORFEITURE, DEFAULT OR CANCELLATION of this lease or termination
of the term, said LESSEE shall quit, deliver up and surrender
possession of SAID PROPERTY, and thereupon this lease and all
agreements and covenants on LESSOR'S behalf to be performed and
kept, shall cease, terminate and be utterly void, the same as if
the lease had not been made. In addition thereof, LESSOR shall be
entitled to whatever remedies it may have at law or equity.
Immediately upon the termination of this lease, whether by
FORFEITURE, DEFAULT, or CANCELLATION, LESSOR shall be entitled to
take possession of SAID PROPERTY, custom and usage to the contrary
notwithstanding. If LESSEE declines or fails to remove the
improvements, structures and equipment occupying and erected upon
the leased premises within one hundred eighty (180) days after
expiration or termination of this lease, such structures and
equipment will be deemed forfeited by LESSEE, and may be removed
and/or sold by LESSOR after ten (10) days written notice by
certified mail addressed to LESSEE. Any costs incurred by LESSOR
in the removal of such improvements, structures and equipment
shall be paid for from the proceeds of sale of such improvements,
structures and equipment. If funds derived from the sale of such
improvements, structures and equipment are insufficient to pay
costs of removal, LESSOR shall have, and is hereby granted, a lien
upon the interest, if any, of LESSEE in adjacent uplands,
enforceable in proceedings as provided by law.
12. RENT NOT REFUNDABLE.
LESSOR and LESSEE agree that any rent paid during the term of
this lease is nonrefundable and LESSEE waives any right or claim
it may have to refund of rents paid under the term of this lease.
13. IMPROVEMENTS.
LESSEE will construct and maintain all improvements on SAID
PROPERTY as shown on Exhibit 1 attached hereto, and LESSEE shall
own such improvements, and LESSOR acknowledges that the
improvements which presently exist and which are to be constructed
on SAID PROPERTY are not the property of LESSOR. LESSEE shall not
construct under the terms of this lease any building or pier of
any type on adjoining State property.
14. RESTRICTIONS ON USE.
LESSEE shall comply with any and all applicable federal,
state, county or city laws, statutes, regulations, building codes,
building requirements, safety or conservation regulations, fire
codes, ordinances, pollution standards, or zoning regulations.
LESSEE specifically agrees to comply with the ordinances of the
City of Biloxi or to obtain appropriate variances, copies of which
will be provided to LESSOR. LESSEE further agrees not to fill or
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cover more than 66.7% of the surface area of SAID PROPERTY with
structures or other improvements of any kind in order to maintain
at least one third of the surface area of SAID PROPERTY as open
water.
If LESSEE fails to make permitted use of SAID PROPERTY or
abandons SAID PROPERTY, or uses SAID PROPERTY in violation of any
applicable law or regulation as aforesaid, this lease may be
terminated or canceled by LESSOR after thirty (30) days written
notice to LESSEE; provided, however, that if at the end of said 30-
day period LESSEE is undertaking a diligent, good faith effort to
cure or has notified LESSOR in writing that it is presenting a
good faith challenge regarding any such violation or non-permitted
use, the 30-day period may be extended as agreed between the
parties.
15. CANCELLATION OF LICENSE.
Should the Gaming Commission cancel the gaming license
pursuant to which the "dockside casino" contemplated by this lease
is operated due to LESSEE'S violation of any applicable statute or
regulation, said cancellation shall, at the option of the LESSOR,
be sufficient grounds for immediate termination of the lease and
removal of the casino vessel at the sole expense of LESSEE;
provided, however, in the event LESSEE voluntarily surrenders its
gaming license and LESSOR and LESSEE mutually agree to a different
use, to an appropriate rental and to such other terms as may be
appropriate under the circumstances, then this lease will not
terminate.
16. NO CLAIM OF TITLE OR INTEREST.
LESSEE, in accepting this lease, does hereby agree that no
claim of title or interest to SAID PROPERTY shall be made by
reason of the occupancy or use thereof, that all title and
interest to SAID PROPERTY is vested in the LESSOR. LESSEE further
acknowledges and agrees that it is entitled to no rights to
adjoining submerged lands or tidelands as a result of this lease.
17. CATASTROPHIC DESTRUCTION.
In the event of catastrophic destruction by natural causes of
LESSEE'S improvements on SAID PROPERTY, LESSEE may terminate this
lease at its option, provided SAID PROPERTY is surrendered in a
condition at least equal to that at the inception of this lease;
provided that LESSEE shall not be obligated to restore or replace
any portion of SAID PROPERTY lost or damaged as a result of the
catastrophic destruction by natural causes. LESSOR agrees that it
shall interpose no objection should LESSEE decide to rebuild those
improvements demolished in such a catastrophe. In such event,
LESSEE shall not be required to pay any rent for the period of
time between such catastrophic destruction and the commencement of
construction. For the period of time after the commencement of
construction and until the improvements are rebuilt and the casino
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reopens, LESSEE shall be required to pay as rent the lowest
appraised amount per square foot for open water in effect at the
time of such catastrophic destruction. Such lowest appraised
amount is currently seven (7) cents per square foot.
18. DUE DILIGENCE.
LESSEE shall be responsible for any damages that may be
caused to SAID PROPERTY by the activities of LESSEE under this
lease, and shall exercise due diligence in the protection of other
property of LESSOR in the vicinity thereof against damage or waste
from any and all conditions created by LESSEE. LESSEE shall not
deposit any refuse on any State property adjoining SAID PROPERTY.
Disposition of refuse and waste shall be consistent with local and
State health regulations.
19. INDEMNITY AND HOLD HARMLESS.
LESSEE agrees to hold and save harmless, protect and
indemnify LESSOR, the Secretary of State and his successors,
employees, officers and agents, from and against any and all loss,
damages, claims, suits or actions at law or equity, judgments and
costs, including reasonable attorney's fees, which may arise or
grow out of any injury or death of persons or loss or damage to
property connected with LESSEE'S exercise of any right granted or
conferred hereby, or LESSEE'S use, maintenance, operation or
condition of the property herein leased or the activities thereon
conducted by LESSEE, whether sustained by LESSEE, his respective
agents or employees, or by any other persons, or corporations
which seek to hold LESSOR liable.
In executing this Lease, LESSOR is relying on a survey and/or
legal description (see Exhibit 1) provided by the LESSEE. LESSEE
expressly assumes all liability for the correctness thereof and
expressly agrees to indemnify and save harmless LESSOR, its
employees, officers and agents, for all liability, damages
(including damages to land, aquatic life and other natural
resources), expenses, causes of actions, suits, claims, costs,
fees, including reasonable attorneys' fees and costs, penalties
(civil and criminal) or judgments arising out of State's reliance
on LESSEE's survey.
20. QUIET AND PEACEFUL POSSESSION.
LESSEE shall have quiet and peaceful possession of SAID
PROPERTY so long as compliance is made by LESSEE with the terms of
this agreement. LESSEE agrees to deliver possession of SAID
PROPERTY peaceably and promptly within ten (10) days after the
expiration or termination of this lease.
21. RIGHT OF ENTRY.
LESSOR reserves the right to enter onto SAID PROPERTY to
inspect the premises to determine compliance with the lease terms
herein.
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22. PERMITTED USE; CANCELLATION BY LESSEE.
All property of LESSEE shall be maintained by LESSEE at
LESSEE'S expense and in a clean, orderly, healthful, and
attractive condition, subject to inspection by LESSOR or his
representative at any time. LESSEE shall, at its sole cost and
expense, make any and all additions to, repairs, alterations,
maintenance, replacements, or changes about and to the LESSEE'S
improvements on SAID PROPERTY, which may be required by any public
authority affecting the property and its use. It is expressly
agreed by and between the parties that LESSEE will not occupy or
use, nor permit to be occupied or used, SAID PROPERTY for any
unlawful purposes.
It is specifically agreed that LESSEE will use SAID PROPERTY
for a marina and for the docking of a single gaming vessel, as
shown on the attached Exhibit 1, to be operated under a
Mississippi Gaming License issued to LESSEE as shown in Exhibit 2
attached hereto. LESSEE shall commence permitted use on or before
June 30, 1999.
In the event LESSEE's right to SAID PROPERTY for the
operation of a casino is restrained or enjoined by a court of
competent jurisdiction, or otherwise legally abrogated or
interrupted due to a challenge to the legality of the Mississippi
gaming statutes under which the casino is operated or by act of
the Mississippi Legislature or the United States Congress, LESSEE
shall be entitled to pay reduced rent at the lower appraised value
for open water as provided for in Article 17, or LESSEE may, in
its sole discretion, terminate this lease immediately, and in the
event of such termination, LESSEE's obligation to pay rent shall
cease immediately.
In the event LESSEE voluntarily ceases to use SAID PROPERTY
for the permitted use, LESSEE may, at its option, cancel this
lease upon one hundred eighty (180) days written notice to LESSOR.
In such event LESSEE shall not be obligated to pre-pay rent beyond
such 180 day period.
23. LESSOR NOT RESPONSIBLE.
LESSEE assumes full responsibility for the condition of the
premises and LESSOR shall not be liable or responsible for any
damages or injuries caused by any vices or defects therein to
LESSEE or to any occupant or to anyone in or on SAID PROPERTY who
derives his right to be thereon from LESSEE. LESSEE agrees to
maintain the leased premises in good condition, keeping the
structures and equipment located thereon in a good state of repair
in the interests of public health and safety.
24. LIABILITY INSURANCE.
LESSEE shall secure and maintain throughout the term of the
lease a liability insurance policy providing coverage in a
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commercially reasonable amount to be determined by LESSEE, but in
no event less than $5,000,000, against accidents, death or bodily
injury or loss or damage to property occurring on or in connection
to SAID PROPERTY, or LESSEE'S vessel, or arising out of or
associated with any activity of LESSEE on SAID PROPERTY. LESSEE
shall annually supply a certificate evidencing said insurance to
LESSOR.
25. RESERVATION OF MINERAL RIGHTS.
LESSEE further covenants and agrees that this lease and
interest of LESSEE SHALL NOT include any mineral, oil or gas,
coal, lignite, or other subterranean rights WHATSOEVER.
26. RIGHT TO CANCEL UPON INSOLVENCY OF LESSEE.
LESSEE covenants and agrees that if an execution or process
is levied upon SAID PROPERTY and is not removed within ninety (90)
days or if a Petition in Bankruptcy be filed by or against LESSEE
in any court of competent jurisdiction, LESSOR shall have the
right at its option, to cancel this lease; provided, however, that
if a Petition in Bankruptcy is filed by a person other than
LESSEE, and payment of rent remains current, LESSOR shall not have
the right to cancel this lease under this Section 26 until an
Order for Relief has been entered by the bankruptcy court in
connection with such petition. LESSEE covenants and agrees that
this lease and the interest of LESSEE hereunder shall not, without
the written consent of the Secretary of State or his successor
first obtained, be subject to garnishment or sale under execution
or otherwise in any suit or proceeding which may be brought by or
against LESSEE.
27. WAIVER NOT A DISCHARGE.
No failure, or successive failures, on the part of LESSOR to
enforce any provisions, nor any waiver or successive waivers on
its part of any provision herein, shall operate as a discharge
thereof or render the same inoperative or impair the right of
LESSOR to enforce the same upon any renewal thereof or in the
event of subsequent breach or breaches.
28. CANCELLATION UPON FAILURE TO COMPLY.
LESSEE'S failure to comply with the provisions of this lease
shall result, at the option of LESSOR, in the termination or
cancellation of this lease within thirty (30) days after written
notice of default is given, unless such default is cured within
thirty (30) days of receipt of such notice.
29. NOTICE.
All notifications required under the terms of this lease
shall be made by U.S. mail, return receipt requested, to the
parties at the following addresses:
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Secretary of State: 000 Xxxxxxxxxxx Xxxxxx
Post Office Box 136
Jackson, Mississippi 39205
Beau Rivage Resorts, Inc.: Attn: Vice President & General Counsel
000 Xxxxx Xxxx.
Xxxxxx, Xxxxxxxxxxx 00000
30. LAWS OF MISSISSIPPI TO GOVERN.
This agreement is to be governed by the laws of the STATE OF
MISSISSIPPI, both as to interpretation and performance.
31. PERMITTED TRANSFERS.
LESSEE may, without the consent of LESSOR, transfer ownership
of the vessel to any affiliated or related entity. LESSEE will
provide written notice to LESSOR of any such transfer within
thirty (30) days after such transfer.
32. LEASEHOLD MORTGAGEE PROTECTIONS.
This Section 32 is included to give additional rights to the
Leasehold Mortgagee, as defined herein. Unless specifically so
stated, the additional rights herein shall not amend the remaining
provisions of the lease with regard to the LESSEE, and may not be
exercised, claimed or used in any manner by the LESSEE.
(a) LESSOR does hereby consent to a Leasehold Mortgage. The
Leasehold Mortgage will be a lien on the public trust tideland
leasehold property interest described herein. The Leasehold
Mortgage will not be an encumbrance on the fee interest in the
public trust tidelands real property leased from the State of
Mississippi, but is limited strictly to a leasehold interest only.
Furthermore, it is understood and agreed that in the event the
Leasehold Mortgage holder should foreclose, it shall have the
right to make a one time assignment of SAID PROPERTY to any
financially responsible person licensed by the Mississippi Gaming
Commission.
(b) When a notice of default or termination is to be given to
the LESSEE under the terms of this lease, such notice shall also
be given to the Leasehold Mortgagee at the address designated by
the Leasehold Mortgagee. Leasehold Mortgagee shall designate in
writing delivered to LESSOR by United States Mail, postage
prepaid, certified mail, an address for notice purposes within
thirty (30) days of execution of any such mortgage. Any address so
designated shall remain the address for purposes of notice to
Leasehold Mortgagee or Mortgagees until Leasehold Mortgagee, in
the same manner and by the same means, designates a change in such
address. Should there be more than one (1) Leasehold Mortgagee,
only one address shall be designated.
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(c) For purposes of this lease, "Leasehold Mortgage" means
the deed of trust, mortgage or lien consented to in paragraph (a)
above, on this Lease Agreement and/or the LESSEE's leasehold
interest under this lease, which shall include facilities
constructed or placed on SAID PROPERTY including any vessels, and
"Leasehold Mortgagee" shall mean the beneficiary or beneficiaries
under the Leasehold Mortgage. Any Leasehold Mortgagee may exercise
any of its right hereunder through a designee, nominee, or wholly
owned subsidiary.
(d) Notwithstanding anything to the contrary in this Section
or elsewhere in this lease: (1) LESSOR consents to the execution,
delivery and recording or filing of the Leasehold Mortgage and the
collateral assignment of such Leasehold Mortgage; (2) LESSOR
acknowledges that any beneficiary of the Leasehold Mortgage
(and/or their representatives or assignees) are Leasehold
Mortgagee(s) for all purposes of this lease and no further
conditions need to be satisfied for such holder (and/or their
representatives or assignees) to be Leasehold Mortgagee.
(e) If the Leasehold Mortgagee, as such term is hereinabove
defined, shall forward to LESSOR a copy of the Leasehold Mortgage
together with a written notice setting forth its name and address,
then any such copy of said mortgage and any such notice shall be
deemed also to have been forwarded to any successor to LESSOR's
interest in SAID PROPERTY and until the time, if any, that said
mortgage shall be satisfied of record or said Leasehold Mortgagee
shall give LESSOR written notice that said mortgage has been
satisfied, and further, LESSOR agrees and acknowledges as follows
for the benefit of the Leasehold Mortgagee (all of which
agreements and covenants shall be cumulative, so that if a
Leasehold Mortgagee exercises rights or remedies under any one of
the following paragraphs the same shall not be deemed an election
of remedies and the Leasehold Mortgagee shall continue to have all
other rights and remedies provided for below):
(1) LESSOR shall not accept any voluntary cancellation,
surrender, termination or abandonment of this lease by LESSEE and
no modification or amendment of this lease shall be binding upon
the Leasehold Mortgagee or affect the lien of the Leasehold
Mortgage if done without the written consent of the Leasehold
Mortgagee.
(2) If LESSOR shall give any notice, demand or election
(hereafter in this paragraph collectively referred to as
"notices") to LESSEE hereunder, LESSOR shall at the same time send
a copy of such notice by United States Mail, postage prepaid,
certified mail, to the Leasehold Mortgagee, and the giving of such
notice shall be deemed complete upon the date the United States
mail certifies that notice was delivered to the Leasehold
Mortgagee. No notice given by LESSOR to LESSEE shall be binding
upon or affect the Leasehold Mortgagee unless a copy of said
notice shall be delivered as provided herein to said Leasehold
Mortgagee. In the case of any assignment of the mortgage or
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mortgages held by it or change in address of any Leasehold
Mortgagee, said assignee of Leasehold Mortgagee, by written notice
by United States Mail, postage prepaid, certified mail, to LESSOR,
may change the name of said Leasehold Mortgagee and/or the address
to which such copies of notices are to be sent by notice to
LESSOR.
(3) Notwithstanding anything to the contrary herein, the
Leasehold Mortgagee shall have the right to perform any term,
covenant, condition or agreement of this lease to be performed by
LESSEE (excluding any covenant, condition or term in which the
performance thereof would require a gaming license) and to remedy
any default by LESSEE hereunder, and LESSOR shall accept such
performance by the Leasehold Mortgagee with the same force and
effect as if furnished by LESSEE. However, should Leasehold
Mortgagee exercise its rights under this provision, it will
indemnify and hold LESSOR harmless from and against any and all
loss, costs, liability and expense (including reasonable
attorneys' fees) resulting from such action to the extent and so
long as LESSOR's actions are pursuant to and in compliance with
instructions from the Leasehold Mortgagee.
(4) If LESSOR shall give a notice by United States Mail,
postage prepaid, certified mail, of a default by LESSEE under this
lease and if such default shall not be remedied within any
applicable grace period and LESSOR shall become entitled to re-
enter SAID PROPERTY or terminate this lease, then, before re-
entering SAID PROPERTY or terminating this lease, LESSOR shall
give the Leasehold Mortgagee not less than thirty (30) days
additional written notice of the default and shall allow the
Leasehold Mortgagee such additional thirty (30) days within which
to cure the default, or, in the case of a default (other than a
default in the payment of any rent or other sum of money under
this lease) which cannot in the exercise of diligence be cured
within said thirty (30) day period, shall allow the Leasehold
Mortgagee such additional thirty (30) days to commence the curing
of the default, in which event LESSOR shall not re-enter SAID
PROPERTY or terminate this lease, so long as the Leasehold
Mortgagee, or LESSEE, is diligently and in good faith engaged in
curing default, so long as all payments under this lease remain
current as described in this lease during the additional time to
cure.
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(5) LESSEE may delegate irrevocably to the Leasehold
Mortgagee the authority to exercise any or all of LESSEE's rights
hereunder (including without limitation the authority to exercise
any option to extend or renew the term hereof), but no such
delegation shall be binding upon LESSOR unless and until either
LESSEE or the Leasehold Mortgagee shall give to LESSOR a true copy
by United States Mail, postage prepaid, certified mail, of a
written instrument effecting such delegation and indemnifying
LESSOR for any dispute between LESSOR and Leasehold Mortgagee
relating to such delegation or any conflicting claims as between
LESSEE and Leasehold Mortgagee so long as LESSOR's actions are in
compliance with and pursuant to instructions from the Leasehold
Mortgagee. For the purpose of exercising such rights, Leasehold
Mortgagee shall, for the purposes of this lease, be deemed to be
the LESSEE. However, LESSEE shall remain entitled to receive the
notices provided for under this lease.
(f) If LESSOR terminates this lease, then LESSOR will notify
the Leasehold Mortgagee of such termination (a "Termination
Notice"), which notice shall set forth all sums due to LESSOR
under this lease, and upon the written request of the Leasehold
Mortgagee, LESSOR will enter into a new lease of SAID PROPERTY
with the Leasehold Mortgagee for the remainder of this lease term,
effective as of the date of such termination, at the rent and
additional rent and upon the terms, provisions, covenants and
agreements herein contained (including, without limitation, all
rights, options, or privileges to extend or renew the term hereof)
provided:
(1) the Leasehold Mortgagee shall request LESSOR for such a
new lease within thirty (30) days after the date of the
Termination Notice and such written request by United States Mail,
postage prepaid, certified mail, is accompanied by payment to
LESSOR of all sums then due to LESSOR under this lease as
described in the Termination Notice;
(2) the Leasehold Mortgagee shall pay to LESSOR, at the time
of the execution and delivery of said new lease, any and all
reasonable expenses, including legal and attorneys' fees, to which
the LESSOR shall have been subjected by reason of such
termination; and
(3) the Leasehold Mortgagee shall, on or before execution and
delivery of said new lease, perform and observe all the other
covenants and conditions on LESSEE's part to be performed and
observed to the extent that LESSEE shall have failed to perform
and observe the same, except that (a) with respect to any default
which cannot be cured by the Leasehold Mortgagee until it obtains
possession of SAID PROPERTY, the Leasehold Mortgagee shall have a
reasonable time after the Leasehold Mortgagee obtains possession,
to cure such default, provided the Leasehold Mortgagee shall first
agree in writing to proceed diligently to remedy said default
after it obtains possession of SAID PROPERTY and shall in fact
proceed diligently and in good faith to do so and shall in fact so
-14-
do, and (b) in no event shall the Leasehold Mortgagee be required
to cure a default related to bankruptcy, insolvency, a prohibited
transfer, failure to deliver financial information relating to
LESSEE (to the extent, if any, that any of the foregoing actually
constitute(s) a non-monetary default under this lease), and any
other non-monetary default that by its nature relates only to
LESSEE or its affiliates or can reasonably be performed only by
LESSEE or its affiliates. Upon execution and delivery of such new
lease, any subleases which may have theretofore been assigned and
transferred to LESSOR shall thereupon be assigned and transferred
by LESSOR to the new lessee. During the period from the date of
the termination of this lease until the date the term of the new
lease commences, LESSOR shall not terminate any sublease or seek
to recover possession of any sublet space without permission of
the Leasehold Mortgagee, except that LESSOR may elect to do so by
reason of a default (beyond any applicable notice or grace
periods) by any subtenant under the terms, covenants or conditions
on such subtenant's part to be performed or complied with pursuant
to such sublease.
(g) Any new lease entered into pursuant to this lease shall
be in recordable form. Notice is hereby given to any intervening
claimants that such new lease shall be superior to all rights,
liens and interests intervening between the date of this lease and
the date of such new lease period. Such new lease shall be free of
all rights of the originally named LESSEE hereunder. The
provisions of the immediately preceding sentence shall be self-
executing. LESSOR, however, does not in any way assure, guarantee
or warrant that said new lease shall be superior under applicable
law and therein granted a priority status.
(h) Upon written request of LESSEE or of the Leasehold
Mortgagee, LESSOR will:
(1) deliver to them or any of them a separate written
instrument signed and acknowledged by LESSOR setting forth and
confirming the provisions of this lease;
(2) acknowledge to them or any of them in writing the receipt
by LESSOR of any notice or instrument received by the LESSOR
pursuant to the provisions of this lease.
(i) To the best of the ability of the LESSOR, when a new
lease is entered into with the Leasehold Mortgagee or its designee
(such holder or designee being herein called the "Acquiring
Holder" and the leasehold mortgage of such Acquiring Holder being
herein called the "Acquiring Holder's Leasehold Mortgage"), the
liens on and estates and other interests in SAID PROPERTY or this
lease of all persons holding directly or indirectly under or
through LESSEE (including the Acquiring Holder's Leasehold
Mortgage), other than liens, estates and interests which are
subordinate to the Acquiring Holders Leasehold Mortgage, shall
immediately and without documentation continue in effect, attach
to the new lease and be reinstated as to each other to the same
-15-
extent, and in the same manner, order and priority, as if (1) the
new lease were this lease, (2) this lease had not been terminated
and (3) the Acquiring Holder had acquired the leasehold estate
under this lease by assignment on the date the term of the new
lease commences. For the purposes of the preceding sentences, each
lien, estate or interest which could have been extinguished by the
foreclosure of the Acquiring Holder's Leasehold Mortgage shall be
deemed to be subordinate to the Acquiring Holder's Leasehold
Mortgage.
(j) Notwithstanding anything in this lease to the contrary,
the Leasehold Mortgagee shall be entitled to participate in any
proceedings relating to any condemnation of all or part of this
lease or the leasehold interest created by this lease. In both a
partial and total taking, any award paid with respect to this
lease or the Leasehold Interest created by this lease shall first
be applied to pay off in full, the indebtedness secured by the
Leasehold Mortgage. Notwithstanding the foregoing, in the event of
a partial condemnation, and with the consent of the Leasehold
Mortgagee, any condemnation proceeds may be applied instead to
restore the portion of SAID PROPERTY not condemned pursuant to
disbursement procedures deemed appropriate by the Leasehold
Mortgagee.
(k) Notwithstanding anything in this lease to the contrary,
all proceeds of fire and other hazard insurance policies shall be
delivered to the Leasehold Mortgagee, if any. Such insurance
proceeds shall be applied flat to pay off in full, in order of
priority, the indebtedness secured by the Leasehold Mortgage, or
as otherwise provided in the senior Leasehold Mortgage. The
Leasehold Mortgagees are hereby empowered to participate in any
settlement, arbitration or proceeding involving such a casualty.
(1) The Leasehold Mortgagee shall have the right, by giving
notice in writing by United States Mail, postage prepaid,
certified mail, to LESSOR, to irrevocably and exclusively delegate
any rights and remedies granted by this lease to the Leasehold
Mortgage to any collateral assignee of the Leasehold Mortgagee's
Leasehold Mortgage. Such collateral assignee shall be entitled to
all the same rights, benefits, privileges, protections and notices
as would apply to the Leasehold Mortgagee. In the event of any
conflicting claims between the Leasehold Mortgagee and a
collateral assignee of such Leasehold Mortgagee's Leasehold
Mortgage, LESSOR shall honor the claims of the collateral assignee
(to the exclusion of the claims of the Leasehold Mortgagee),
provided that such collateral assignee agrees to indemnify LESSOR
and hold LESSOR harmless from and against any and all loss, cost,
liability and expense (including reasonable attorneys' fees)
arising from any litigation or other dispute between such
collateral assignee and the Leasehold Mortgagee from which its
rights derive.
(m) Within fifteen days after written request therefor from
the Leasehold Mortgagee, LESSOR shall deliver to the Leasehold
-16-
Mortgagee a certificate signed by LESSOR in form reasonably
designated by the Leasehold Mortgagee, certifying as to: (1) the
rent payable under this lease; (2) the term of this lease and the
status of LESSEE's extension rights, if any, (3) the nature of any
known defaults by LESSEE alleged by LESSOR; and (4) any other
matters reasonably requested by the Leasehold Mortgagee.
(n) Should Leasehold Mortgagee for any reason take possession
of SAID PROPERTY, it shall be subject to and comply fully with all
of the provisions and conditions of this lease which would bind
the LESSEE, but only for so long as the Leasehold Mortgagee has
not assigned its interest under the lease or abandoned SAID
PROPERTY.
(o) The LESSOR agrees that the rights hereunder of Leasehold
Mortgagee shall be exercisable by such Leasehold Mortgagee in the
order of the priority of lien or other security interest of their
respective Leasehold Mortgage, but it shall not be the duty or
obligation of the LESSOR to assure compliance with this provision.
(p) LESSOR consents to any exercise of remedies by any
Leasehold Mortgagee including acceptance of an assignment, deed or
other conveyance in lieu of foreclosure.
(q) Any notice which LESSOR is required to give to any
Leasehold Mortgagee hereunder shall be deemed to have been given
when the United States Postal Service certifies that such notice
was delivered to the Leasehold Mortgagee at the address specified
in this lease or at such other address as may be specified from
time to time by the Leasehold Mortgagee.
IN WITNESS WHEREOF, this lease is executed by LESSOR and
LESSEE, this the 4th day of February, 1999.
LESSOR:
STATE OF MISSISSIPPI
XXXX XXXXX
SECRETARY OF STATE
BY: XXXXXX XxXXXXXXX
XXXXXX XxXXXXXXX
ASSISTANT SECRETARY OF
STATE FOR PUBLIC LANDS
LESSEE:
BEAU RIVAGE RESORTS, INC.
BY: XXXXX X. XXXXX
TITLE: CHIEF EXECUTIVE OFFICER
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APPROVED BY THE GOVERNOR of the State of Mississippi on the 11th
day of February, 1999.
XXXX XXXXXXX
GOVERNOR
STATE OF MISSISSIPPI
COUNTY OF XXXXX
PERSONALLY APPEARED BEFORE ME, the undersigned authority in
and for said county and state, on this 11th day of February, 1999,
within my jurisdiction the within named XXXX XXXXXXX, personally
known to me to be the GOVERNOR of the STATE OF MISSISSIPPI, who
acknowledged that he executed the above and foregoing LEASE
AGREEMENT as the act and deed of said GOVERNOR for and on behalf
of the STATE OF MISSISSIPPI, on the date and for the purposes
therein stated, being first duly authorized to so do.
XXXXXXX X. XXXXXX
NOTARY PUBLIC
My Commission Expires:
Notary Public State of Mississippi At Large
My Commission Expires May 14, 2000
Bonded Thru Xxxxxx Xxxxxxxxx, Inc.
STATE OF MISSISSIPPI
COUNTY OF XXXXX
PERSONALLY APPEARED BEFORE ME, the undersigned authority in
and for said county and state, on this 8th day of February, 1999,
within my jurisdiction the within named XXXXXX XxXXXXXXX,
personally known to me to be the ASSISTANT SECRETARY OF STATE FOR
PUBLIC LANDS of the STATE OF MISSISSIPPI, who acknowledged that he
executed the above and foregoing LEASE AGREEMENT as the act and
deed of said ASSISTANT SECRETARY OF STATE for and on behalf of the
STATE OF MISSISSIPPI, on the date and for the purposes therein
stated, being first duly authorized to so do.
XXXXX X. XXXXX
NOTARY PUBLIC
My Commission Expires:
Mississippi Statewide Notary Public
My Commission Expires May 28, 1999
Bonded Thru Xxxxxxx Notary Service
STATE OF MISSISSIPPI
COUNTY OF XXXXXXXX
PERSONALLY APPEARED BEFORE ME, the undersigned authority in
and for the said county and state, on this 4th day of February,
-18-
1999, within my jurisdiction, the within named Xxxxx Xxxxx, who
acknowledged that he/she is Chief Executive Officer of BEAU RIVAGE
RESORTS, INC., a Mississippi corporation, and that for and on
behalf of said corporation, and as its act and deed he/she
executed the above and foregoing instrument, after first having
been duly authorized by said corporation so to do.
My Commission Expires: XXXXXX X. XXXXXXXXX
2-24-99 NOTARY PUBLIC
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