HomeMy WebLinkAbout92-0624 Elgin Riverboat Resort Dev Agreement RESOLUTION
AUTHORIZING EXECUTION OF A DEVELOPM I T AGREEMENT WITH
ELGIN RIVERBOAT RESO r T
BE IT RESOLVED BY THE CITY COUNCI OF THE CITY OF ELGIN,
ILLINOIS, that George VanDeVoorde, Mayor, and D i lonna Mecum, City Clerk, be and
are hereby authorized and directed to respectively execute a D-velopment Agreement,
substantially as in the form attached hereto, on behalf of the C ty of Elgin with Elgin Riverboat
Resort for the establishment and operation of a riverboat gam i ling facility within the City of
Elgin, a copy of which is attached hereto and made a part here i f by reference.
s/George VanDeVoorde
George anDeVoorde, Mayor
Presented: June 24, 1992
Adopted: June 24, 1992
Vote: Yeas 4 Nays 3
Recorded:
Attest:
s/Dolonna Mecum
Dolonna Mecum, City Clerk
DEVELOPMENT AGREEM NT
THIS AGREEMENT, dated the 24th day of June, 992, by and between the City of
Elgin, a municipal corporation, (hereinafter referred to as the "City"), and Elgin Riverboat
Resort, a partnership consisting of M.S.E. Investments,In•., Last Chance Investments,Inc.,
Diamond Gold, Inc, and Gold Strike Investments, Inc (hereinafter referred to as the
"Developer");
WHEREAS, the State of Illinois has adopted the Ri erboat Gambling Act (Public Act
86-1029) which, effective as of February 7, 1990, legalized riverboat gambling on navigable
waterways in the State of Illinois including the Fox River nning through the City of Elgin,
Illinois; and
WHEREAS, the Riverboat Gambling Act states t .t the Illinois Gaming Board may
issue a license authorizing a riverboat to dock in a municipality only if, prior to the issuance
of the license, the governing body of the municipality .s by majority vote approved the
docking of riverboats in the municipality; and
WHEREAS, Messrs. Michael S. Ensign, William A. Richardson, David R. Belding
and Peter A. Simon have presented to the City their plan or the establishment of a riverboat
gaming facility on the Fox River within the corporate limits of the City of Elgin to be owned
and operated by said individuals or by an entity which t ey will own and control; and
WHEREAS, it appears that the establishment •f riverboat gambling within the
corporate limits of the City of Elgin, Illinois, will gener to substantial tax revenues for and
increase employment opportunities within the City of E1g'n and will otherwise be in the best
interests of the City.
WHEREAS, the Corporate Authorities of the City have formally endorsed and
supported by passage of a resolution on November 13, 1991, the issuance of an owner's
license by the Illinois State Gaming Board to the Developer to permit the establishment and
operation of a riverboat gambling facility which docks with n the City's corporate limits; and
WHEREAS, the City in the exercise of its home le authority and as owners of the
real estate described herein desires to facilitate the Deve oper's gaming operation and the
development of the surrounding area; and
WHEREAS, the Developer intends to make applic.tion to the Illinois Gaming Board
for the issuance of a owner's license as provided in Section Six of the Riverboat Gambling
Act, Illinois Revised Statutes, Chap. 120, Par. 2401, et. .eq; and
NOW THEREFORE, in consideration of the mutual promises and covenants contained
herein, the receipt and sufficiency of which are hereby ac, owledged, the parties do hereby
agree as follows:
Definitions:
The following items shall have the meaning ascribed whin used in this agreement:
1. "Preliminary Approval" -- Illinois Gaming Board reservation of a license in
the name of the Developer.
2. "Temporary License" -- Illinois Gamin: Board grant of a temporary
operational license following a successful operational test cruise.
3. "Permanent License" -- Illinois Gaming Board issuance of a permanent license.
4. "Improvements" -- All buildings, struc res, and improvements hereafter
constructed upon the land during the ten of the lease or option, and any
restoration, addition to, or replacement the ieof, but excluding from therefrom
the land and Developer's trade fixtures.
5. "Land" -- Real property of the City upon which Developer erects structures
or which Developer improves as provided in this Agreement.
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I. Riverboat, Site & Pavilion
A. Riverboat
1. Boat. The Developer shall construct of more than one boat consistent
with the Illinois Riverboat Gaming • ct, and resembling as closely as
practical, the boat shown in the preli inary plan (Exhibit A), at a size
not to exceed 100' x 400', capacit of approximately 1200 gaming
positions, 1500 passengers plus crew, substantially in accordance with
the Illinois Riverboat Gaming Act, to be in operation within one year
from the date the Developer obtains preliminary approval for a State
gaming license, or one year from he date which the site is made
available by the City, whichever occ rs later.
2. Operational Plan. The Developer shall prepare and submit to the City
an operational plan for construction of the boats which shall address
concerns such as noise, hours of construction, and other related
construction activities and provide t - City with a schedule identifying
staging and completion schedules. he City shall grant such permits
necessary or required for constructio, , upon receipt of applications and
fees in compliance with applicable or.inances, statutes and regulations.
B. Site.
1. The site for this project is the north-astcorner of National Street and
the Fox River, and includes propert legally described as follows:
see attached exhibit B
2. A preliminary site plan including b 'lding elevations, riverboat design
concept, location of the building , access and parking is hereby
approved by the City and made a ..rt of this Agreement as "Exhibit
A." A detailed design site plan of t e total land including parking, the
pavilion, and the riverboat, shall be submitted to the City prior to the
issuance of the license by the State Gaming Board, together with an
application to reclassify the site a d for approval of a planned unit
development to be filed not later tha l November 1, 1992, provided that
City has obtained the necessary per its and easements from the Kane
County Forest Preserve District. City shall pass necessary and
appropriate ordinances upon de ermining that the Developer's
application and plans comply with .pplicable statutes, regulations and
ordinances.
3. Environmental Conditions. The C. y agrees, represents and warrants
that as of July 1, 1993:
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(i) no Hazardous Materials will b: located on, in or under the Site;
(ii) no portion of the Site will cu ently be in use for the disposal,
storage, treatment, processing or other handling of Hazardous
Materials;
(iii) no underground storage tanks will be located on, in, or under
the Site and all underground s orage tanks formerly existing on
the Site will have been pr•perly removed and/or filled in
accordance with all applicabl- laws and regulations;
(iv) no investigation, administrativ- order, consent order, litigation,
settlement or legal action wi respect to Hazardous Materials
will be pending or, to the Ci 's best knowledge after diligent
inquiry, will be threatened, ith respect to the Site;
(v) the Site will comply, and to the City's best knowledge after
diligent inquiry all prior us,s of the Site have at all times
complied, with all applicable laws and regulations relating to
environmental matters or Ha..rdous Materials.
The term "Hazardous Materials" me.ns (i) any "hazardous substance"
as defined by the Compensation and Liability Act of 1980 (42 U.S.C.
Section 9601 et.seq.); (ii) asbestos; ( ") polychlorinated biphenyls; (iv)
petroleum, oil, gasoline (refined . d unrefined) and their respective
byproducts and constituents; and (v) any other substance which by any
governmental requirements requir:s special handling in its use,
collection, storage, treatment or dis posal.
4. Environmental Audit. Not later tha November 1, 1992, the City shall
obtain at its own expense and provide to the Developer an
environmental audit (phase one, ane if required thereafter, phase two
and phase three) of the proposed . eas which Developer intends to
construct buildings on the Site. Th: audit shall verify the accuracy of
the City's representations and arranties and shall disclose no
environmental conditions which mig t negatively affect the construction
or completion of the project.
C. Pavilion. The Developer shall construct a pavilion on the site which will be
not less than 30,000 square feet,generally onsistent with the preliminary site
plan, subject to engineering and design odifications.. It shall include a
branch Elgin area visitors center of not less than 500 square feet on the main
floor, suitable to market Elgin area activi es.
4
r AglIN
II. Operations/Hours
A. Pavilion. Any liquor activity in the pavilion hall be conducted in accordance
with the prevailing City Liquor Ordinance a • applicable state law. Use at the
Pavilion may include but is not limited to, food and beverage sales, retail
restaurant liquor sales, entertainment, and all taming activities permitted under
state law, provided the permitted uses comp y with codes and ordinances.
B. Riverboat - Closure. The riverboat operatio: s shall be closed for at least four
consecutive hours in any 24-hour period, i onday through Friday, and two
consecutive hours in any 24-hour period on Saturday and Sunday.
Cruise Day. For the purposes of this para& aph, the first cruise day of each
week begins Monday at 6:00 a.m., and e ds twenty hours later. The last
boarding period for cruise days Sunday thro gh Thursday shall not begin later
than 1:00 a.m., and for cruise days Friday and Saturday not later than 2:00
a.m.. Notwithstanding the above, the board ng period on a Sunday cruise day
shall not begin prior to 9:00 a.m.
III. Option & Lease Agreement
The City hereby grants to the Developer a two year option, commencing upon
execution of this agreement by Developer and a authorized officer of the City
pursuant to authority granted by City's corporate authorities., for the Developer to
lease the site as described above. The Developer s all pay $50,000 to the City within
thirty days following the execution of this agreem:nt, and an additional $50,000 on
the first anniversary date of this Agreement. The Developer may exercise said option
by tendering an executed copy of the Lease Agr,ement to the City, which Lease
Agreement is marked as Exhibit 1, attached heret. and incorporated herein.
IV. Successorship
A. Developer reserves the right, subject to linois and Nevada state law, to
transfer the ownership, or a portion thereo I, of its entity, to a corporation or
joint venture, so long as it maintains not -ss than a 51 percent controlling
ownership interest in the resulting entity.
B. During the entire term of this Agreement, .nd upon the exercise of the lease,
including renewals thereof, the option and/o lease, including renewals thereof,
if for any reason the Developer desires t. cease operations, the Developer
shall have the following options:
5
1. Developer may sublease the site an. any improvements thereon to a
non-gaming operation with the City'• approval.
2. Developer may sublease or sell e gaming operation and any
improvements to the site to a gami g operation with the City's and
State's approval.
3. City shall have the right to exercise i . remedies under the performance
bond as more fully set forth in parag aph 6B of this Agreement. If the
Developer abandons the operation, t may remove all of its personal
property (gaming machines, gamblin: equipment, etc.), and forfeit the
lease, bond and any improvements t+ the site and the boat to the City
as liquidated damages and as th- City's exclusive remedy for
termination of the Development Agr-ement and Lease.
4. Any reference in this Agreement or I -ase to the City's approval shall
be construed to mean that the City s all not unreasonably withhold its
consent, but shall not otherwise limi the City's discretion.
V. Additional Obligations of the City
A. The City shall assist and use its best efforts to help the Developer obtain such
permits from MOT, Army Corp of Engin- rs, Kane County Forest Preserve,
or such other governmental agencies necessi for the development of the site
for the purposes described. The City sha execute any documents required,
apply for permits in the City's name, if n•cessary, and otherwise cooperate
jointly, if necessary, with the Develope in any application for permits
required of this project. Developer agrees to pay all fees in connection with
any studies or permit applications require. by any agency necessary for the
development of the site, however Develope shall not be required to reimburse
the City for any time or expense incur ed by it in connection with its
obligation hereunder. In addition, Developer shall provide all required
information, including plans, specificatio s and insurance required by any
governmental agency. In the event that Developer is unable to obtain any
necessary permits or easements from the .ne County Forest Preserve District
by November 1, 1992, Developer shall b; entitled to a refund and return of
all option monies paid to the City, as ell as the release of the bond as
described hereinafter. Developer shall be solely responsible for any obligation
under any permit or grant of easement and shall indemnify and hold harmless
the City against any claim, loss or liabilit imposed.
B. The City shall assist and use its best effor . to work with local, regional, and
state authorities to provide appropriate sig age along state highways into the
Elgin area to promote and recognize the Developer's operation.
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C. The City shall use its best efforts to facilitar the development of the project,
its support areas, the parking lot, pavilion i provements, including obtaining
any third-party approvals from neighboring s roperty owners or users including
the Kane County Forest Preserve. With egard to the City's obligation to
provide parking, the City shall provide adeq ate additional parking contiguous
to the Site to serve the project. The par 'ng shall be free to Developer's
customers and contiguous shall mean adjac- t to National St, or Prairie St. or
Bluff Trail(Wellington St.)
D. The City represents that all off-site water a d sewer service has been brought
to the land and site within three (3) months of the date the Developer obtains
a preliminary approval.
F. The City shall support the license application of the Developer to the Illinois
Gaming Board for the issuance of the lic•nse permitting the Developer to
provide riverboat gambling activities on th. Fox River in downtown Elgin on
the site as defined herein, and shall app•ar before the board through an
appropriate authorized representative.
G. The City shall use its best efforts to accomplish its obligations under this
Agreement and to facilitate the opening of the project and the parking lot on
or before March 1, 1994.
VI. Additional Obligations of the Developer
A. Guaranty. When an occupancy permit is issued and the Developer obtains its
temporary license, commences gaming ac vities on the riverboat and during
the term of the lease, Developer guarantees that the City shall receive the sum
of at least $500,000 annually(to be prora d the first year) from one or the
combination of the following sources: 11) lease payments; and (2) State
admission tax, or its equivalent if replaced.
B. Bond.
1. Developer agrees to provide a $2 million bond for the purpose of
guarantying that the project will proceed to operations and to further
provide security for the City for improvements which the City is
obligated under this Agreement to complete, in one of the following
form: (1) letter of credit; (2) corn ercial security bond; (3) certificate
of deposit, or its equivalent; or (4) escrow account with interest paid
to Developer.
2. The public improvements on the ea.t and west banks of the Fox River
from National Street to Chicago 'treet pursuant to the Center City
Master Plan and soon-to-be-comple ed E.D.A.W. Plan, excepting that
7
AmooN
portion of the bank on the Develop is site, shall be constructed by
City.
3. The bond shall be posted within 60 d ys of the Developer's preliminary
approval or commencement date of construction of permanent
improvements to the Site, whichever shall first occur. The bond shall
be released when the City receives $. million in revenues from gaming
tax and admission tax revenues or b ase payments as defined therein,
or as otherwise provided in this agr--ment.
C. Parking/Traffic. A parking and traffic co sultant shall be retained and paid
by the Developer to complete a report in s pport of the land use application
for rezoning and special use -- PUD. All mprovements on the site shall be
paid for by the Developer.
D. The Developer shall pay for all necessary .1 provements of the riverbank on
the Developer's site in accordance with the Developer's site plan pursuant to
the needs of the project.
E. The Developer shall construct and pay for :11 of the necessary improvements
to Grove Avenue from Prairie Street to ational Street, provided they are
directly related to the project.
F. The Developer shall construct and pay for . landscaped green belt adjacent to
the northern boundary of the site, to be des gned by the Developer's architect
and as approved by the City as part of the Developer's land use and zoning
application.
G. The Developer shall utilize two (2) officers from the Elgin Police Department
for security purposes on the land, which obligation shall be reviewed in 36
months to determine the continued need fo such employment. The City shall
provide said officers at the established cont act rate in effect with no overtime
billing. The deployment shall be determin,d by the Developer and the Chief
of Police jointly.
H. The Developer shall establish and implem-nt an affirmative action plan and
program consistent with Federal and S .to law. The Developer has no
obligation with regard to any sub-lessees to monitor and conform their conduct
to any Federal or State law, except as req ired by Federal and State law.
The Developer shall not enter into sep:rate agreements with any other
governmental agency.
J. Upon the issuance of a permanent gam'ng license to the Developer, the
Developer shall not operate a gaming facil' y at any other location in the State
8
PIN 4.14\
of Illinois unless the Elgin Riverboat Resort c s ntinues its full gaming operation
in Elgin, and the individual partners identifi:d herein own a majority interest
in the Elgin Riverboat Resort partnership.
K. A shuttle bus system similar to a trolley on wheels shall be established and
operated between the two public transpor .tion stations and the retail and
commercial establishments that lie betwee the site and the northern-most
station during the normal operating hours in ese areas. Trolley service shall
not be required before 10:00 a.m., and the Developer reserves the right to
charge for such service for moving cente city consumers throughout the
center city area. There shall be no charge for trolley use by customers of
Developer.
L. The Developer shall provide City with copie., of sales, admissions and gaming
tax returns within 30 days after filing or pa ment.
M. The Developer shall file an application for r- oning and special use -- P.U.D.,
on or before November 1, 1992, provide, that the City has obtained the
necessary permits and easements from th, Kane County Forest Preserve
District, said application to be in general accordance with the Preliminary Site
Plan (Exhibit A) and requirements of applic.ble ordinances.
VII. Joint Obligations of Developer and City
A. The Developer and the City shall work joi tly with the Kane County Forest
Preserve to provide for secured access as s own generally on the Preliminary
Site Plan between the pavilion and the rive boat (enclosed loading ramp) for
passengers.
B. An advisory committee composed of repre.entatives of the Fox River Task
Force, Heritage Commission, and Center C'ty Development Corporation shall
work with the land planners, architects, the Developer and the City, to
implement the theme of the project as pres:nted in Exhibit A.
C. The City shall provide the Developer or its representatives with a current set
of all applicable ordinances with which e Developer will be required to
comply, and support all applications or zoning, licensing and code
compliance, it being anticipated and under.tood that a special use PUD will
be required of the Developer. Developer s all also comply with all applicable
federal and state laws.
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VIII. Approval.
The individual partners of the Developer, Michael `.Ensign, William R. Richardson,
David R. Belding and Peter A. Simon, operate ga ing establishments in the State of
Nevada, and each is licensed by and subject to th: jurisdiction of the Nevada State
Gaming Control Board and the Nevada Gaming Commission. As a result, this
agreement is subject to review by each and conditional upon approval of the Nevada
State Gaming Control Board and Nevada Gaming Commission. In the event that
approval as required herein is not obtained wi • 180 days from the date of this
Agreement, this Agreement shall be, at the electio of either party, considered null
and void.
IX. Time is of the Essence.
Time is of the essence of this Agreement and all .rovisions relating thereto shall be
strictly construed.
X. Successors and Assigns.
The terms, covenants and conditions hereof shall oe binding upon, apply and inure
to the benefit of the heirs, executors, administrators, successors in interest and assigns
of the parties hereto. No rights, however, shall inure to the benefit of any assignee,
sub-lessee, or licensee of the Developer unless su•h assignment, sub-lease or license
has been consented to by the City in writing as provided herein, said consent and
approval by the City shall not be unreasonably wi held.
XI. Construction and Venue.
This Agreement shall be construed in accordance ith the law of the State of Illinois,
and any action brought to enforce or interpret said Agreement shall be brought in the
Circuit Court of Kane County, Geneva, Illinois.
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1 1444k
IN WITNESS WHEREOF, we have set our hands and se.ls on the day first above written.
Elgin Riverboat Resort,a partnership C ty of Elgin, a municipal corp.,
consisting of
i2 Jr . ,
4.7 IA-../ .�,.✓/ ../ By: L.- -k id
M.S.E. Investments, Inc George V.`►�Voorde,Mayor
..00"" _...- 1°Illige:- .- _
a han,e Inves e : •
A
41 ' 4--- Attest:
Diamo d Gold, Inc
A
L0:1-0
A-67,,,,_/-i,,,,...„1,---
Gold Strike Investments, Inc v Dolonna Mecum, City Clerk
Each of the individuals hereinafter
agree to guarantee all of the obligations
of the Elgin Riverboat Resort
ZZ7°:./ -4.t..-a‘J-•-),,--e- '
Michael S. Ensign
-AP-
,---
W1 ham A. Ric ardson
11
D. -.. R. :elding
" nr: --"— --
Peter A. Simon
11
FXIiIBIT A
Legal Description
LOTS 2-14 INCLUSIVE,IN BLOCK 358 OF 0. DAVIDSO ''S ADDITION TO ELGIN, V
IN THE CITY OF ELGIN, KANE COUNTY, IL
LOTS 1-28 INCLUSIVE, IN BLOCK 359 OF 0. DAVIDSO 'S ADDITION TO ELGIN,
IN THE CITY OF ELGIN, KANE COUNTY, IL
LOTS 1-12 INCLUSIVE OF DAVIDSON'S GROVE A ' SUB. IN THE CITY OF
ELGIN, KANE COUNTY, IL
THAT PORTION OF WELLINGTON AVE LYING SOUTH OF THE SOUTHERNMOST
PART OF LAKE STREET DESCRIBED AS WELLINGT•N ROW BETWEEN LAKE
STREET AND NATIONAL STREET IN THE CITY OF E GIN, KANE COUNTY, IL
LOTS 4,5 AND 6 ON BLOCK 379 OF RAILROAD ADD ION TO ELGIN, IN THE
CITY OF ELGIN, KANE COUNTY, IL
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EXHIBIT B
LOTS 2-14 INCLUSIVE,IN BLOCK 358 OF O. DAVIDS ON'S ADDITION TO ELGIN, IN
THE CITY OF ELGIN, KANE COUNTY, IL
LOTS 1-28 INCLUSIVE, IN BLOCK 359 OF O. DAVIDS EN'S ADDITION TO ELGIN, IN
THE CITY OF ELGIN, KANE COUNTY, IL
LOTS 1-12 INCLUSIVE OF DAVIDSON'S GROVE AVE SUB. IN THE CITY OF ELGIN,
KANE COUNTY, IL
THAT PORTION OF WELLINGTON AVE LYING SO TH OF THE SOUTHERNMOST
PART OF LAKE STREET DESCRIBED AS WELLIN, TON ROW BETWEEN LAKE
STREET AND NATIONAL STREET IN THE CITY OF :LGIN, KANE COUNTY, IL
LOTS 4,5 AND 6 ON BLOCK 379 OF RAILROAD ADD I ION TO ELGIN, IN THE CITY
OF ELGIN, KANE COUNTY, IL
GROUND LEASE AGREE II NT
GROUND LEASE made as of the day of , 199__, between
the City of Elgin, Illinois, an Illinois municipal corporati o n (hereinafter referred to as the
"Landlord"), and Elgin Riverboat Resort, a partnership consisting of M.S.E. Investments,
INc., Last Chance Investments, Inc, Diamond Gold, In'., and Gold Strike Investments,
Inc.,(hereinafter referred to as the "Tenant").
RECITALS
A. Landlord, is the owner, in fee simple, of th- Demised Premises.
B. Landlord's Center City Plan, adopted 0 the Elgin City Council on
, 19 , as Ordinance No. calls for the Demised Premises and
adjacent property along South Grove Avenue in the City of Elgin, Illinois, to be used as an
entertainment center.
C. Tenant has proposed to lease the Demised ,'remises and to erect and operate
thereon one or more entertainment and support facilities fo the adjacent Riverboat Gambling
Operation (as hereafter defined).
D. Landlord has, by resolution adopted on November 13, 1991, endorsed the
conduct of a Riverboat Gambling Operation by Tenant on he Fox River which docks within
the corporate limits of the City of Elgin.
E. Tenant has received from the Illinois Garth g Board all licenses necessary to
operate a River Gambling Operation on the Fox River .djacent to the Demised Premises
pursuant to the provisions of the Illinois Riverboat Gambl ng Act (Illinois Revised Statutes,
Chapter 120, Par. 2401 et.seq.).
F. Landlord and Tenant mutually desire to hay, the Tenant construct and operate
upon the Demised Premises an entertainment and support cilities for the adjacent Riverboat
Gambling Operation subject to applicable ordinances and/.r other entertainment facilities in
accordance with the terms and provisions set forth below
DEFINITIONS
For the purposes of this Lease, the following terms shall have the following
definitions:
1. "Demised Premises" shall mean the Land a d all easements, rights, rights-of-
way, and licenses thereto, but shall not include Tenant's rade fixtures.
2. "Development Agreement" shall mean that •ertain agreement bearing said title
entered into between Landlord and Tenant on June 24th, 1992, as expressly authorized
by resolution passed on June 24th, 1992. The terms an s provisions of the Development
Agreement are hereby incorporated herein by reference.
3. "Improvements" shall mean all buildings, s ctures, and improvements now
existing or hereafter constructed upon the Land during the term of the Lease, and any
restoration, addition to, or replacement thereof, but ex luding therefrom the Land and
Tenant's trade fixtures.
4. "Land" shall mean that certain parcel of re.l property described in Exhibit B
attached hereto, but shall not mean the improvements ereon or Tenant's trade fixtures
therein.
5. "Kane County Forest Preserve District Ea.ement" shall mean the easement
granted by the Kane County Forest Preserve District whit h permanently permits the tenant
access from the land to the Fox River in accordance with e Developer's needs as identified
by the Preliminary Site Plan.
6. "Preliminary Site Plan" shall mean tha plan for the construction of
improvements on the Demised Premises, and the construc ion of walkways leading from the
Improvements to the boat docks, which plan is attached ereto as Exhibit A.
7. "Riverboat Gambling Operation" shall mean the conduct of a business engaged
in the operation of one boat which is located in or upo, the Fox River and upon which
gambling operations take place, all as contemplated and permitted pursuant to the Illinois
Riverboat Gambling Act, together with the operation of entertainment facilities collateral
thereto, such as retail shops, restaurants, bars or lou ges for the service of alcoholic
beverages and the like located upon the Demised Premiss.
8. "Tenant's Trade Fixtures" shall mean all personal property owned, used or
installed by Tenant upon the Demised Premises and/er used in connection with the
Improvements thereon, including, without limitation:
(a) Cash registers;
(b) Selling fixtures, including showcase tables, shelves, counters, desks,
gondola units, island stock fixtures, metal floor racks, self selection
units, column enclosures, and fixture walls and partitions with movable
studs;
(c) Stockroom shelving and fixtures.;
(d) Office furniture, including cabinets, chairs, desks, files and safes;
(e) Office machines and equipment;
2
elk "114
(0 Maintenance equipment and tools;
(g) Walls and partitions extending from I oor to ceiling but not an integral
part of slab at top and bottom;
(h) Air compressors, alarm systems, bl.wers, heavy kitchen equipment,
paper balers, pumps, refrigeration u its, heavy scales, wall clocks and
water coolers;
(i) Carpeting, carpet liners, padding, s iping and rugs;
(j) Display fixtures, including platfo ems, pylons, eggcrate louvers,
decorative ceilings, backgrounds, low and high partition dividers,
movable curtain display units used a, room effect background, louver
shutters and panels, collapsible or foiling doors and screens, partitions
and walls not raised and braced to c:ilings leaving approximately one-
third of area between floor and cei ing open, mirrors and mirrored
column enclosures, baffles or curtai walls set on top of wall cases,
column background display units, lo and high dividers, chandeliers,
lighting fixtures used for decorativ- or display illumination lamps,
tables, window and wall backgrouno s, and window display lighting
fixtures;
(k) Furniture and fixtures, including upholstered chairs and sofas,
ashstands, smokestands, benches, chairs curtains and draperies,
decorative tables, and venetian blind.;
(1) Signing and art work, including bu letin boards, pegboards, pictures
and decorative art placed on wall,, sign holders, and ornamental
fixtures on walls;
(m) Counter display fixtures, including •ign holders, stands, mirrors, and
table dividers;
and any and all renewals, replacements of, additions to and substitutions for the above-
enumerated items.
9. Licenses.
(a) Preliminary Approval -- Illinois Ga ing Board reservation of a license
in the name of the Developer/tenant
(b) Temporary License -- Illinois Ga ing Board grant of a temporary
operational license following succes Jul operational test cruise.
3
i
(c) Permanent License -- Illinois Gamin: Board issuance of a permanent
license.
AGREEMENT
NOW THEREFORE, Landlord and Tenant hereby agree as follows:
1. Demised Premises and Term. Landlord in consideration of the rents
hereinafter reserved and the terms, covenants, conditions and agreements set forth in this
Lease to be kept and performed by Tenant, does hereby demise and let unto Tenant, and
Tenant does hereby lease, hire and take from Landlord, e Demised Premises;
TO HAVE AND TO HOLD the Demised Pre ises unto Tenant, its permitted
successors and assigns, upon and subject to all of t - terms, covenants, conditions,
conditional limitations, and agreement herein contained fey a term of years commencing on
the date of this Lease and ending on the hundred and t entieth month following the first
month of this Lease (the "Basic Term"), or until said ter is sooner terminated or extended
pursuant to any of the conditional limitations or other pro isions of this Lease.
2. Rental.
A. For purposes of this paragraph 2, t e following terms shall have the
following meanings:
(i) "Total Investment Cost" shal mean the aggregate of all costs,
not to exceed forty million dollars, paid or incurred by Tenant
in connection with the erec 'on of any Improvements on the
Demised Premises, the pur ase and/or construction of any
boats to be used for the co duct of the Riverboat Gambling
Operation contemplated h;rein, the equipping of said
Improvements and/or boats w th necessary trade fixtures and the
like, including legal fees, :rchitectural fees, site cleanup,
reasonable working capital, a d start up expenses.
(ii) "Net Operating Income" sha 1 mean all revenues received by
Tenant from the conduct of its business operations upon the
Demised Premises of whateve nature whatsoever net (in excess)
of all normal and customar operating expenses, admission
taxes, wagering taxes, sales .xes and all other governmental
taxes, charges, fees, assess ents and the like payable with
respect to said revenues or ith regard to the conduct of the
activities conducted by Tenan which generate said revenues, but
expressly excluding any dedu tions for depreciation or non-cash
amortization or for compens. 'on paid
4
to any one of the principals of he Tenant in excess of reasonable
compensation for actual servi•es rendered as a general manager
by any such principal.
(iii) "Net after tax cash flow" sh.11 mean all revenues received by
Tenant from the conduct of its business operations upon the
Demised Premises of whateve nature whatsoever net (in excess)
of all normal and customary o•erating expenses, and also net(in
excess) of all federal, state .nd local taxes,admission taxes,
wagering taxes, sales taxes .nd all other governmental taxes,
charges, fees, assessments an• the like payable with respect to
said revenues or with regar• to the conduct of the activities
conducted by Tenant whic generate said revenues, but
expressly excluding any dedu•tions for depreciation or non-cash
amortization or for compe cation paid to any one of the
principals of the Tenant in e cess of reasonable compensation
for actual services rendered •y any such principal, based upon
industry standards.
(iv) "Option Fees" shall mean all sums paid by Tenant pursuant to
paragraph III of the Develop ent Agreement.
(v) "Cost Recovery Date" shall can that date during the term of
this Lease as of which the Net After Tax Cash Flow received by
Tenant shall have equaled Te ant's Total Investment Cost.
B. Upon execution of this lease within enant's first option year under the
Development agreement, tenant shall pay the sum of$50,000 as a fixed
rental. Upon execution of this lease ithin tenant's second option year
under the Development agreement, tenant shall pay no rent until the
issuance of a temporary license at w ich time Landlord hereby agrees
to accept as rent and tenant shal pay hereunder an annual sum
determined by multiplying the total s•uare footage of the Land by $.20.
Said rental shall be paid by Tenant to Landlord in increments not less
frequently than quarterly.
C. Upon the arrival of the Cost Recov:ry Date, the rental to be paid by
Tenant to Landlord hereunder sha 1 be the greater of (i) the rent
provided for in paragraph 2B abov,, or (ii) an annual sum equal to
three percent (3%) of the Net Oper. 'ng Income of the Tenant.
5
D. Tenant hereby agrees to make availaIle to Landlord for inspection and
review all of Tenant's books and records which pertain to the
calculation or documentation of Tena is Net Operating Revenue and/or
Total Investment Cost and which ma be reasonably necessary in order
to determine or verify the rent due Landlord hereunder. All such
books and records shall be made ava lable to Landlord at the Demised
Premises upon reasonable notice to enant. Landlord shall hold all
such information in strictest confide ce.
3. Use of Demised Premises. Tenant may use .nd occupy the Demised Premises
and the Improvements thereon to operate its entertainm.nt and support facilities for the
adjacent Riverboat Gambling Operation or for any other la ful purpose. Tenant will not use
or keep or allow the Demises Premises or any portion ereof or any buildings or other
improvements thereon or any appurtenances thereto, to be sed or occupied for any unlawful
purpose and will not suffer any act to be done or any cons ition to exist which constitutes a
nuisance, public or private.
4. Construction of and Title to Improvements o nd Trade Fixtures.
A. Landlord hereby consents to the construction by Tenant upon the
Demised Premises of those Improve ents as shown generally on the
Preliminary Site Plan, as well as ouch additional Improvements as
Tenant may seek to construct after .ny required public hearing with
Landlord's consent, which consent s all not be unreasonably withheld.
All such improvements shall be con.tructed by Tenant in a good and
workmanlike manner and in full a d complete compliance with all
applicable laws and ordinances.
B. Title to Tenant's Trade Fixtures are nd shall be the sole and exclusive
property of Tenant during the term o f this Lease and shall remain the
sole and exclusive property of Tenan u after the expiration of termination
of this Lease, subject to the forfeiter- remedies as more fully set forth
thereinafter. Landlord acknowledge• and understands that it shall have
no right, title or interest in or to Ten.nt's Trade Fixtures either during
the term of this Lease or thereafter lexcept as hereinafter provided).
C. Landlord acknowledges and agrees that Tenant shall have the right to
encumber, sell, or hypothecate Te ant's Trade Fixtures, to remove
them from the Demised Premises, o to otherwise deal with all or any
portion of such Tenant's Trade Fix res, at Tenant's sole discretion.
Provided, further, that upon ten ( 0) days' prior written notice to
Landlord, Landlord shall prepare ano deliver to Tenant a certificate in
recordable form stating that Landlo d has no interest or right in or to
Tenant's Trade Fixtures, as well a. any other or further document
which Tenant may reasonably requebt from Landlord.
6
e
D. During the term of the Lease and w ile Tenant lawfully occupies the
Demised Premises, all Improveme is presently on the Demised
Premises and all Improvements here$fter constructed o the Demised
Premises are and shall be the proper y of Tenant or any party taking
title thereto through Tenant by eans of mesne conveyance or
foreclosure, during, and only during, the continuance of the term of
this Lease and no longer. At all times during the term of this Lease,
the Improvements which are owned y Tenant shall not be conveyed,
transferred, or assigned unless •uch conveyance, transfer, or
assignment shall be to a person, co i oration or other entity to whom
this Lease is being transferred or ass'gned simultaneously therewith in
compliance with the provisions of Article 14 hereof (Assignment;
Subletting), and at all such times the older of the leasehold interest of
Tenant under this Lease shall be the o ner of said Improvements. Any
attempted conveyance, transfer, or .ssignment of the Improvements,
whether voluntarily or by operation o law or otherwise, to any person,
corporation, or other entity shall be void and of no effect whatever
unless such conveyance, transfer, or assignment shall be to a person,
corporation, or other entity to whom this Lease is being transferred or
assigned simultaneously therewith in ompliance with the provisions of
Article 14. Similarly, so long as the mprovements or any part thereof
shall remain on the Demised Pre ises, any attempted transfer or
assignment of the leasehold interest oi Tenant under this Lease shall be
void and of no effect whatever unless such transfer or assignment shall
be to a person, corporation, or other ntity to whom the Improvements
are being conveyed, transferred, or a.signed simultaneously therewith.
Upon any termination of this Lease, whether by reason of the normal
expiration of the term hereof, or by -ason of the provisions of Article
12 (Casualty), or Article 17 (Defaul u by Tenant) hereof, or by reason
of any other cause whatsoever, if the I mprovements or any part thereof
shall then be on the Demised Premises, all of the Tenant's right, title
and interest therein or any entity or person acquiring title thereto
through Tenant shall cease and termi ate, and title to the Improvements
shall vest in Landlord, and the Impr i vements or the part thereof then
within the Demised Premises shal be surrendered by Tenant to
Landlord as provided in Article 30 thereof (Surrender). No further
deed or other instrument shall be ne essary to confirm the vesting in
Landlord of title to the Improvements. However, upon any termination
of this Lease, Tenant, upon requ•st of Landlord, shall execute,
acknowledge, and deliver to Landlord a deed confirmed that all of
Tenant's right, title, and interest in o to the Improvements has expired,
and that title to the Improvements ha• vested in Landlord. Tenant shall
pay the cost of recording said deed.
7
ANN
E. Notwithstanding anything to the con .ry contained above, Tenant shall
have the right, at its option, during e term of this Lease, to use the
Demised Premises and Improvemen , in any reasonable and lawful
manner consistent with Tenant's bus' ess practices, including the right
to operate, by itself or through thine parties by means of sublease or
license, any facility, concession, or ranchise for the sale or rental of
goods or services appropriate for or in connection with Tenant's
business, in Tenant's sole discretion provided that such use is not in
violation of law.
5. Leasehold Mortgagees.
A. On one or more occasions, without I .ndlord's prior consent, Tenant
may mortgage or otherwise encumbe Tenant's Leasehold Estate to any
Lender (as hereinafter defined), nder one or more Leasehold
Mortgages and assign this Lease a. security for such Mortgage or
Mortgages.
B. (i) If Tenant shall, on one or more occasions, mortgage Tenant's
Leasehold Estate of a Lender, and if the hold of such Leasehold
Mortgage shall provide Landlord with notice of such Leasehold
Mortgage together with a tru: copy of such leasehold mortgage
and the name and address o f the Mortgagee, Landlord and
Tenant agree that, following -ceipt of such notice by Landlord,
the provisions of this sectio 5 shall apply in respect to each
such leasehold mortgage.
(ii) In the event of any assignme t of a Leasehold Mortgage or of
an Assignee of such Mortga:e, notice of the new name and
address shall be provided to .ndlord.
Landlord shall promptly u.on receipt of a communication
purporting to constitute the otice provided for by subsection
(B)(i) above acknowledge by an instrument in recordable form
receipt of such communic.tion as constituting the notice
provided for by subsection :)(i) above or, in the alternative,
notify the Tenant and the Le.sehold Mortgagee of the rejection
of such communication as not conforming with the provisions of
subsection (B)(i) and specify e specific basis of such rejection.
After Landlord has receiv,d the notice provided for by
subsection (B)(i) above, the enant, upon being requested to do
so by Landlord, shall with reasonable promptness provide
Landlord with copies of the ote or other obligation secured by
such Leasehold Mortgage an. of any other documents pertinent
8
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to the Leasehold Mortgage a• specified by the Landlord. If
requested to do so by Landlors, the Tenant shall thereafter also
provide the Landlord from ti e to time with a copy of each
amendment or other modifi ation or supplement to such
instruments. All recorded documents shall be accompanied by
the appropriate certification o the Custodian of the Recording
Office as to their authentici as true and correct copies of
official records and all no recorded documents shall be
accompanied by a certificatio by Tenant that such documents
are true and correct copies of e originals. From time to time
upon being requested to do se by Landlord, Tenant shall also
notify Landlord of the date a d place of recording and other
pertinent recording date with r spect to such instruments as have
been recorded.
C. (i) The term "Lender," as used n this section 5, shall refer to a
savings bank, savings and lo.n association, commercial bank,
trust company, credit unio , insurance company, college,
university, real estate investor•nt trust or pension fund, private
individual, corporation, partni rship, trust or other entity. The
term "Lender" shall also in.lude other lenders of substance
which perform functions simi .r to any of the foregoing.
(ii) The term "Leasehold Mortga:e" as used in this section 5 shall
include a mortgage, a deed o trust, a deed to secure debt, or
other security instrument by hich Tenant's Leasehold Estate is
mortgage, conveyed, assign.d, or otherwise transferred, to
secure a debt or other obliga Son.
(iii) The term "Leasehold Mortga:ee" as used in this section 5 shall
refer to a hold of a Leasehold Mortgage in respect to which the
notice provided for by subsec 'on (B) of this section 5 has been
given and received and as to hich the provisions of this section
5 are applicable.
D. Landlord, upon providing Tenant any notice of a financial default under
this Lease, shall at the same time provide a copy of such notice to
every Leasehold Mortgagee. No s ch notice by Landlord to Tenant
shall be deemed to have been duly gi en unless and until a copy thereof
has been so provided to every Lease old Mortgagee. From and after
such notice has been given to a Leas hold Mortgagee, such Leasehold
Mortgagee shall have the same period, after the giving of such notice
upon it, for remedying any financial default or causing the same to be
remedied, as is given Tenant after th• giving of such notice to Tenant,
plus in each instance, the additio al periods of time specified to
9
subsections (0 and (g) of this se tion 5 to remedy, commence
remedying or cause to be remedied e financial defaults specified in
any such notice. Landlord shall accent such performance by or at the
instigation of such Leasehold Mortga:ee as if the same had been done
by Tenant. Tenant authorizes each I -asehold Mortgagee to take any
such action.at such Leasehold Mor :agee's option and does hereby
authorize entry upon the premises by e Leasehold Mortgagee for such
purpose.
E. (i) Anything contained in is Lease to the contrary
notwithstanding, if any final cial default shall occur which
entitled Landlord to terminate this Lease, Landlord shall have
no right to terminate this Leas- unless, following the expiration
of the period of time given T;nant to cure such default [or the
act or omission which gave rise to such default], Landlord shall
notify every Leasehold Mort:agee of Landlord's intent to so
terminate at least 30 days in .dvance of the proposed effective
date of such termination if suc default is capable of being cured
by the payment of money, and at least 45 days in advance of the
proposed effective date of suc termination if such default is not
capable of being cured by the payment of money. The
provisions of subsection (g) blow of this section 5 shall apply
if, during such 30 or 45 day Termination Notice Period, any
Leasehold Mortgagee shall:
(1) notify Landlord of suc Leasehold Mortgagee's desire to
nullify such notice, ant
(2) pay or cause to be paid all rent, additional rent, or other
payments then due a d in arrears as specified in the
Termination Notice to such Leasehold Mortgagee and
which may become du: during such 30 or 45-day period,
and
(3) comply or in good fai h, with reasonable diligence and
continuity, commence to comply with all monetary
requirements of this :ase then in default and reasonable
susceptible of being complied with by such Leasehold
Mortgagee, provided however, that such Leasehold
Mortgage shall not o e required during such 45-day
period to cure or •ommence to cure any default
consisting of Tenant's Failure to satisfy and discharge any
lien, charge or encumb ance against the Tenant's interest
in this Lease or the De ised Premises junior in priority
10
to the lien of the mortgage held by such Leasehold
Mortgagee.
F. (i) If Landlord shall elect to term nate this Lease by reason of any
default of Tenant, and a -asehold Mortgage shall have
proceeded in the manner pro ided for by subsection (f) of this
section 5, the specified date for the termination of this Lease as
fixed by Landlord in its Ter ination Notice shall be extended
for a period of six months provided that such Leasehold
Mortgagee shall, during such %ix month period:
(1) Pay or cause to be pail the rent, additional rent or other
monetary obligations of Tenant under this Lease as the
same become due, and continue its good faith efforts to
perform all of Tenan 's other obligations under this
Lease, excepting [(A) obligations of Tenant to satisfy or
otherwise discharge a, y lien, charge or encumbrance
against Tenant's inter:st in this Lease or the Demised
Premises junior in priority to the lien of the mortgage
held by such Lease old Mortgagee] and (B) past
nonmonetary obligations then in default and not
reasonably susceptible •f being cured by such Leasehold
Mortgagee; and
(2) if not enjoined or sta ed, take steps to acquire or sell
Tenant's interest in , is Lease by foreclosure of the
Leasehold Mortgage or other appropriate means and
prosecute the same to ' ompletion with due diligence.
(ii) If at the end of such six (i) month period such Leasehold
Mortgagee is complying with subsection (g)(i), this Lease shall
not then terminate, and the time for completion by such
Leasehold Mortgagee of its p oceedings shall continue so long
as such Leasehold Mortga:,ee is enjoined or stayed and
thereafter for so long as such 1 -asehold Mortgagee proceeds to
complete steps to acquire or sell Tenant's interest in this Lease
by foreclosure of the Le.sehold Mortgage or by other
appropriate means with rea.onable diligence or continuity.
Nothing in this subsection (g of this section 5, however, shall
be construed to extend this Lease beyond the original term
thereof as extended by any options to extend the term of this
Lease properly exercised by enant or a Leasehold Mortgagee
in accordance with section [In.ert section number of lease], [nor
to require a Leasehold Mortg:gee to continue such foreclosure
proceedings after the default as been cured. If the default shall
11
app.•
be cured and the Leasehold ortgagee shall discontinue such
foreclose proceedings, this Le;se shall continue in full force and
effect as if Tenant had not de aulted under this Lease.]
(iii) If a Leasehold Mortgage is complying with subsection (g)(i) of
this section 5, upon the acqui'ition of Tenant's Estate herein by
such Leasehold Mortgagee or its designee or any other
purchaser at a foreclosure sal- or otherwise [and the discharge
of any lien, charge or encumb ance against the Tenant's interest
in this Lease or the Demis•d Premises which is junior in
priority to the lien of the •asehold Mortgage held by such
Leasehold Mortgagee and hich the Tenant is obligated to
satisfy and discharge by reason of the terms of this Lease,] this
Lease shall continue in full fo ce and effect as if Tenant had not
defaulted under this Lease.
(iv) For the purposes of this sec 'ion 5, the making of a Leasehold
Mortgage shall not be deem.d to constitute an assignment or
transfer of this Lease or of th. Leasehold Estate hereby created,
nor shall any Leasehold Mor gagee, as such, be deemed to be
an assignee or transferee of this Lease or of the Leasehold
Estate hereby created so as to require such Leasehold
Mortgagee, as such, to assu e the performance of any of the
terms, covenants or conditio s on the part of the Tenant to be
performed hereunder, but the purchaser at any sale of this Lease
and of the Leasehold Estate ereby created in proceedings for
the foreclosure of any Lease old Mortgage, or the assignee or
transferee of this Lease and of the Leasehold Estate hereby
created under any instrument of assignment or transfer in lieu
of the foreclosure of any Leasehold Mortgage shall be deemed
to be an assignee or transf;ree within the meaning of this
section 5, and shall be deemes to have agreed to perform all of
the terms, covenants and cone itions of the part of the Tenant to
be performed hereunder from and after the date of such
purchase and assignment, but only for so long as such purchaser
or assignee is the owner o the Leasehold Estate. If the
Leasehold Mortgagee or its d:signee shall become holder of the
Leasehold Estate and if the b ildings and improvements on the
premises shall have been or become materially damaged on,
before or after the date of s ch purchase and assignment, the
Leasehold Mortgagee or its d:signee shall be obligated to repair,
replace or reconstruct the buil ding or other improvements only
to the extent of the net ins rance proceeds received by the
Leasehold Mortgagee or its d:signee by reason of such damage.
However, should such net in rance proceeds be insufficient to
12
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repair, replace or recons i ct the building or other
improvements to the extent re.uired by section [Insert section
number of lease] and should the Leasehold Mortgage or its
designee choose not to fully -construct the building or other
improvements to the extent equired by section 12(B) such
failure shall constitute an even of default under this Lease.
(v) Any Leasehold Mortgagee or other acquirer of the Leasehold
Estate of Tenant pursuant to foreclosure, assignment in lieu of
foreclosure or other proceedin:s may, upon acquiring Tenant's
Leasehold Estate, without fur er consent of Landlord, sell and
assign the Leasehold Estate o such terms and to such persons
and organizations as are acceptable to such Mortgagee or
acquirer and thereafter be reli;ved of all obligations under this
Lease; provided that such assi:nee has delivered to Landlord its
written agreement to be bounn by all of the provisions of this
Lease.
(vi) Notwithstanding any other pro isions of this Lease, any sale of
this Lease and of the leasehold Estate hereby created in any
proceedings for the foreclosur• of any Leasehold Mortgage, or
the assignment or transfer of this Lease or of the Leasehold
Estate hereby created in lieu o'the foreclosure of any Leasehold
Mortgage shall be deemed to be a permitted sale, transfer or
assignment of this Lease and of the Leasehold Estate hereby
created.
G. Nothing herein contained shall requir; any Leasehold Mortgagee or its
designee as a condition to its exercis- of right hereunder to cure any
default of Tenant not reasonably su ceptible of being cured by such
Leasehold Mortgagee or its designee including but not limited to the
default referred to in section 16 of Lease provision related to
bankruptcy and insolvency and any other sections of the Lease which
may impose conditions of default no susceptible to being cured by a
Leasehold Mortgagee, or a subseque t owner of the Leasehold Estate
through foreclosure] hereof, in order to comply with the provisions of
subsections (0 or (g) of this section , [or as a condition of entering
into the New Lease provided for by subsection (h) of this section 5.
H. A Standard Mortgagee Clause naminL each Leasehold Mortgagee may
be added to any and all insurance policies required to be carried by
Tenant hereunder on condition that he insurance proceeds are to be
applied in the manner specified i this Lease and the Leasehold
13
Mortgage shall so provide: except at the Leasehold Mortgage may
provide a manner for the disposi on of such proceeds, if any,
otherwise payable directly to the Ten.nt (but not such proceeds, if any,
payable jointly to the Landlord a d the Tenant) pursuant to the
provisions of this Lease.
Landlord shall give each Leasehold ortgagee prompt notice of any
arbitration or legal proceedings betwe,n Landlord and Tenant involving
obligations under this Lease. Each L:asehold Mortgagee shall have the
right to intervene in any such procee•ings and be made a party to such
proceedings, and the parties here io do hereby consent to such
intervention. In the event that any Le.sehold Mortgagee shall not elect
to intervene or become a party to any such proceedings, Landlord shall
give the Leasehold Mortgagee notic. of, and a copy of any award or
decision made in any such proceedings, which shall be binding on all
Leasehold Mortgagees not interve ing after receipt of notice of
arbitration. In the event Tenant shall fail to appoint an arbitrator after
notice from Landlord, as provided in section [insert section number of
lease] hereof, a Leasehold Mortgage; (in order of seniority if here be
more than one) shall have an additio al period of 30 days, after notice
by Landlord that Tenant has failed to appoint such arbitrator, to make
such appointment, and the arbitrator so appointed shall thereupon be
recognized in all respects as if he ha' been appointed by Tenant.
J. So long as any Leasehold Mortg ge is in existence, unless all
Leasehold Mortgagees shall otherwis; expressly consent in writing, the
fee title to the Demised Premises an' the Leasehold Estate of Tenant
therein created by this Lease shall no merge but shall remain separate
and distinct, notwithstanding the ace uisition of said fee title and said
Leasehold Estate by Landlord or b Tenant or by third party, by
purchaser or otherwise.
K. In the event on any occasion hereaf er Tenant seeks to mortgage his
Leasehold Estate, Landlord agrees to amend this Lease from time to
time to the extent reasonably requ-sted by an Institutional Investor
proposing to make Tenant a loan sec red by a first lien upon Tenant's
Leasehold Estate, provided that such proposed amendments do not
materially and adversely affect the ri.;hts of Landlord or his interest in
the Demised premises. All reasonab e expenses incurred by Landlord
in connection with any such amend ent shall be paid by Tenant.
L. If any Leasehold Mortgagee, its •esignee or other purchaser has
acquired the Leasehold Estate of enant pursuant to foreclosure,
conveyance in lieu of foreclosure or ether proceedings, or has entered
into a New Lease with Landlord in .ccordance with subsection (h) of
14
this section 5, such Leasehold Mortgagee, its designee or other
purchaser shall succeed to the rights of Tenant, if any, in and to the
security deposit paid by Tenant to L. dlord pursuant to section [insert
section number of lease] of this leas&. In such event, Tenant shall no
longer have any rights to such securit deposit, and Landlord shall hold
such security deposit for and on beh.lf of such Leasehold Mortgagee,
its designee or other purchaser.
M. Landlord shall, without charge, at ;ny time and from time to time
hereafter, but not more frequently tha twice in any one-year period (or
more frequently if such request is m.de in connection with any safe or
mortgaging of Tenant's Leasehold i terest or permitted subletting by
Tenant), within 10 days after written request of tenant to do so, certify
by written instrument duly exec -d and acknowledged to any
Mortgagee or purchaser, or pro.osed Mortgagee or proposed
purchaser, or any other person, fi or corporation specified in such
request: (A) as to whether this -ase has been supplemented or
amended, and if so, the substance a d manner of such supplement or
amendment; (B) as to the validity ano force and effect of this Lease, in
accordance with its tenor; (C) as to the existence of any default
hereunder; (D) as to the existence .f any offsets, counterclaims or
defense hereto on the part of the Te ant; (E) as to the commencement
and expiration dates of the term of t is Lease; and (F) as to any other
matters as may be reasonably so req ested. Any such certificate may
be relied upon by the Tenant and any other person, firm or corporation
to whom the same may be exhibits or delivered, and the contents of
such certificate shall be binding on e Landlord.
N. Notices from Landlord to the Lease old Mortgagee shall be mailed to
the address furnished Landlord pursu.nt to subsection (b) of this section
5, and those from the Leasehold Mo tgage to Landlord shall be mailed
to the address designed pursuant to t e provisions of section 26 hereof.
Such notices, demands and reques is shall be given in the manner
described in section 26 of lease] and shall in all respects be governed
by the provisions of that section.
0. No payment made to Landlord b a Leasehold Mortgagee shall
constitute agreement that such pay I ent was, in fact, due under the
terms of this Lease; and a Leasehold Mortgagee having made any
payment to Landlord pursuant to ndlord's wrongful, improper, or
mistaken notice or demand shall be -ntitled to the return of any such
payment or portion thereof provid d he shall have made demand
therefor not later than one year after the date of its payment.
15
6. Taxes.
A. Tenant will, at Tenant's own cost and expense, bear, pay and discharge
prior to delinquency, all real estate .xes and special assessments or
other taxes which shall be levied, charged, or assessed upon the
Demised Premises and the Improv,ments thereon during the term
hereof.
B. Tenant reserves the right to conte.t the validity of any assessed
valuation of the Land or Improvem•nts and to pay any taxes under
protest. Landlord shall execute . d deliver to Tenant whatever
documents may be necessary or proper to permit tenant to so contest
any such imposition or which may b• necessary to secure payment of
any refund which may result from any such proceedings.
Notwithstanding the foregoing, Tena t shall not contest any real estate
assessment of the Demised Premises if the result thereof would be to
reduce the assessed valuation of e Demised Premises and the
Improvements thereon below the su of $1,250,000.
C. Tenant shall pay all interest and tenalties imposed upon the late
payment of any obligation under this paragraph.
7. Repairs. Subject to the provisions of Artic e 12 and 15 below, Tenant shall
at all times during the term of this Lease, at Tenant's own cost and expense, keep the
Demised Premises and the Improvement thereon, and all s�dewalks, curbs, vaults, and vault
spaces adjoining the Demised Premises, and all appurten.nces to the Demised Premises,in
good order, condition, and repair, ordinary wear and tea expected, and in such condition
as may be required by law and by the terms of the insura ce policies furnished pursuant to
this Lease, whether or not such repair shall be interior or -xterior, and whether or not such
repair shall be of a structural nature, and whether or not e same can be said to be within
the present contemplation of the parties hereto.
8. Compliance with Law.
A. Tenant shall at all times during the t.rm of the Lease, at Tenant's own
cost and expense, perform and co ply with all laws, rules, orders,
ordinances, regulations, and require ents now or hereafter enacted or
promulgated, of every governmental authority and municipality having
jurisdiction over the Demised Pre ses, and of any agency thereof,
relating to the Demised Premises or the Improvements now or
hereafter located thereon, or the faci ities or equipment therein, or the
streets, sidewalks, vault, vault space,, curbs, and gutters adjoining the
Demised Premises, or the appurtena ces to the Demised Premises, or
the franchises and privileges connec ed therewith.
16
elb" '11114
B. Any ordinance, or amendment of :n ordinance, enacted after the
execution of the agreement, other an amendments to fee schedules
which are of general application, wh. h restrict the use of the demised
premises as otherwise permitted o the date of execution of the
agreement shall not be applicable to the tenants of the demised
premises.
9. Alterations. Tenant shall have the right, at enant's expense and at Tenant's
sole discretion, from time to time during the term of th s Lease to make any alteration,
addition, or modification to the Demised Premises or the Improvements thereon; provided
that, after said alterations, additions, or modifications, the Demised premises shall be for a
use of the Demised Premises permitted herein; and pr ivided further, that if any such
alteration or modification shall involve the removal or material demolition of the
Improvements, then Tenant shall obtain Landlord's prior written consent thereto, which
consent shall not be unreasonably withheld. It is expr,ssly understood that Landlord's
consent may be conditioned upon the furnishing by Ten.nt of waivers of mechanics' and
materialman's liens from all persons furnishing materials er labor.
10. Mechanic's Liens. During the term of this -ase, Tenant shall not permit any
mechanics', materialmans' or other such lien to be placed against the Demised Premises by
reason of any work, labor service, or material performe I or furnished for or to Tenant or
anyone occupying the Demised premises through or unde Tenant. Tenant shall at all times
indemnify Landlord against and hold it harmless with res.ect to any loss, cost, fee, charge,
expense, lien, or liability of any nature occurring or acc ing by virtue of any such work,
labor, service, or material performed or furnished for or o the Tenant.
11. Insurance.
A. Tenant will at all times during [e term of this Lease maintain
insurance on the Demises Premises if the following character:
(i) insurance against loss or da age by fire and other risks and
perils from time to time in luded under standard extended
coverage endorsements in a amount equal to not less than
eighty percent (80%) of he replacement value of the
Improvements (exclusive of th- costs of excavation, foundations,
and footings below the lowest floor). (The insurance described
in this sub-paragraph 11A(i shall hereinafter be called the
"Casualty Insurance.")
(ii) General comprehensive pub is liability insurance (including
coverage for elevators, if an , on the Property) against claims
for bodily injury, death, or p operty damage occurring on, in,
or about the Demised Pre ises and the adjoining streets,
sidewalks, and passageways, such insurance to afford protection
17
of not less than $5 million wi respect to bodily injury or death
to all persons in any one acci e ent, and not less than $1 million
with respect to property dam.ge in any one occurrence. (The
insurance described in thi sub-paragraph 11 A(ii) shall
hereinafter be called the "Lia s ility Insurance.")
(iii) Adequate boiler and pressure essel insurance on all equipment,
parts thereof, and appurtenan es attached or connected to the
Demised Premises which by ri ason of their use or existence are
capable of bursting, erupting, collapsing, or exploding. (The
insurance described in thi• sub-paragraph 11 A(iii) shall
hereinafter be called the "Boi er Insurance.")
B. Any such insurance shall be writt;n by companies of recognized
financial standing which are well rat:d by a national rating agency and
are legally qualified to issue such ins rance in the State of Illinois, and
such insurance shall name as the ins red parties thereunder, Landlord,
or its assigns, and Tenant, as the r interests may appear. Such
insurance may be obtained by Tena t by endorsement on its blanket
insurance policies, provided that (i) such blanket policies satisfy the
requirements specified herein and (ii Landlord shall be furnished with
the certificate of the insurer to th• effect that (a) the amount of
insurance allocable to the Demised P remises is not less than the amount
required by this Article and (b) the protection afforded Tenant and
Landlord is not less than the pro ection which would have been
afforded under a separate policy er policies relating only to the
Demised Premises. Landlord shall I of be required to prosecute any
claim against any insurer or to conte•t any settlement proposed by any
insurer, provided that Tenant may, .t its cost and expense, prosecute
any such claim or contest any suc settlement, and in such event
Tenant may bring any such prosec tion or contest in the name of
Landlord, Tenant, or both, and Lane lord shall cooperate with Tenant
and will joint therein at Tenant's ritten request upon receipt by
Landlord of an indemnity from Tena t against all costs, liabilities, and
expenses in connection with such cooperation, prosecution or contest.
C. Tenant shall deliver to Landlord p omptly after the execution and
delivery of this Lease the original o duplicate policies or certificates
of insurance, including certificates evidencing the naming of the
Landlord as an additional insured here necessary, satisfactory to
Landlord evidencing all the insura ce which is then required to be
maintain by Tenant hereunder, and enant shall, within 30 days prior
to the expiration of any such ins rance, deliver other original or
duplicate policies or other certificate s of the insurers evidencing the
renewal of such insurance. Should enant fail to effect, maintain, or
18
AIN
renew any insurance provided for I erein, or to pay the premium
therefor, or to deliver to Landlord a y of such policies or certificates,
Landlord, at its option, but without obligation so to do, may procure
such insurance, and any sums expend-d by it to procure such insurance
shall be additional rent hereunder an. shall be repaid by Tenant within
30 days following the date on which o emand therefor shall be made by
Landlord. Such insurance Policy(ie.) shall contain a provisions that
such policy(ies) shall not be canceled or reduced in scope without thirty
(3) days prior written notice to Land ord.
12. Casualty.
A. If the Improvements on the Demised ('remises or any part thereof shall
be damaged or destroyed by fire or other casualty, Tenant shall
promptly notify Landlord of such d:struction or damage. Rent shall
not abate hereunder by reason of an damage to or destruction of the
Improvements, except as specifically provided for in this Lease.
B. If the Improvements on the De ised Premises are substantially
damaged or destroyed in any single fi e or by any single casualty, then,
at Tenant's election and in lieu of r:building, replacing and repairing
the Improvements as provided in thi• Lease:
(i) Tenant may, upon one hundrea eighty (180) days written notice,
elect to terminate this Lea e, whereupon rent shall abate
retroactive to the date of loss
(ii) All insurance proceeds recei ed or to be received under the
Casualty Insurance Policy s all be the sole property of the
Landlord;
(iii) Tenant shall have no response bility whatsoever with regard to
the repair or replacement of .ny of the Improvements or other
damages to the Demised Pre ises caused by such casualty.
C. If a portion of the Demised Premis-s or the Improvements shall be
damaged or destroyed by fire or o er casualty and this Lease is not
terminated as provided for herein, en:
(i) Rent shall not abate;
(ii) Tenant shall, at its own costs nd expense, repair and/or rebuild
the Improvements and all da ages to the Demised Premises;
19
r Amos
(iii) Landlord shall fully cooperate in making available to the Tenant
at Tenant's request such insu ance proceeds from the Casualty
Insurance Policy as may be easonable necessary to complete
such repair or restoration by I enant;
(iv) Upon the completion of suc I repair or restoration, Landlord
shall cooperate in turning o er or assigning to Tenant any
excess insurance proceeds re aining with the understanding that
excess proceeds shall be ano remain the sole and exclusive
property of the Tenant.
Nothing herein shall require the Ten:nt to pay or expend in the repair
or restoration of the Improvements or Demised Premises any sum of
money in excess of the insurance pr ceeds with regard to the Casualty
Insurance.
13. Indemnity. Tenant will indemnify and hold I armless Landlord (except for the
environmental issues as described hereinafter), from and .gainst any and all liability, loss,
damages, expenses, costs of action, suits, interest, fines, penalties, claims, and judgment (to
the extent that the same are not paid out of the proceeds o'any policy of insurance furnished
by Tenant to Landlord pursuant to Article 11 hereof) arisi g from injury, or claim of injury,
during the term of this Lease to person or property of an, and every nature, and from any
matter or thing, growing out of the occupation, possession use, management, improvement,
construction, alteration, repair, maintenance, or control of the Demised Premises, the
Improvements now or hereafter located thereon, the faclities and equipment thereon, the
streets, sidewalks, vaults, vault spaces, curbs, and gutters adjoining the Demised Premises,
the appurtenances to the Demised Premises, or the fra chises and privileges connected
therewith, or arising out of Tenant's failure to perform, fully and promptly, or Tenant's
postponement of compliance with, each and every term, covenant, condition, and agreement
herein provided to be performed by Tenant. Tenant, at T:nant's own cost and expense, will
defend by counsel of Tenant's choosing any and all suit• that may be brought and claims
which may be made, against Landlord, or in which Landlord may be impleaded with others,
whether Landlord shall be liable or not, upon any suc above-mentioned liability, loss,
damages, expenses, costs of action, suits, interest, fines, penalties, claims, and judgments
and shall satisfy, pay, and discharge any and all judgme is that may be recovered against
Landlord in any such action or actions, in which Landlord may be a party defendant, or that
may be filed against the Demised Premises, or th: Improvement thereon, or the
appurtenances, or any interest therein, and in the event of the failure of Tenant to pay the
sum or sums for which Tenant shall become liable as afor:said, then Landlord may pay such
sum or sums, with all interest and charges which may have accrued thereon, and the amount
so paid by Landlord shall be payable by Tenant to Landlord upon demand.
14. Assignment; Subletting.
20
A. So long as Tenant is operating its e tertainment and support facilities
for the adjacent Riverboat Gambli g Operation upon the Demised
Premises, it is agreed and unders good that Tenant may sub-lease
portions of the Demised Premises or Improvements thereon to sub-
lessees or concessionaires who ope ate activities or facilities which
compliment said Riverboat Gambling Operation or are ancillary thereto,
all without the consent of the Landlord.
B. Except as otherwise provided herei , Tenant may not sublease any
portion of the Demised Premises o I assign its interest in this Lease
without the prior consent of the Lan.lord, which consent shall not be
unreasonably withheld.
15. Environmental Conditions. The Cit agrees, represents and warrants
that as of July 1, 1993:
(i) no Hazardous Materials will o e located on, in or under the Site;
(ii) no portion of the Site will cu rently be in use for the disposal,
storage, treatment, processing, or other handling of Hazardous
Materials;
(iii) no underground storage tank• will be located on, in, or under
the Site and all underground •torage tanks formerly existing on
the Site will have been properly removed and/or filled in
accordance with all applicabl: laws and regulations;
(iv) no investigation, administrati e order, consent order, litigation,
settlement or legal action wi respect to Hazardous Materials
will be pending or, to the Ci y's best knowledge after diligent
inquiry, will be threatened, ith respect to the Site;
(v) the Site will comply, and to the City's best knowledge after
diligent inquiry all prior us s of the Site have at all times
complied, with all applicable laws and regulations relating to
environmental matters or Hazardous Materials.
The term "Hazardous Materials" means (i) any "hazardous substance"
as defined by the Compensation and Liability Act of 1980(42 U.S.C.
Section 9601 et.seq.); (ii)asbestos; (iii) polychlorinated biphenyls; (iv)
petroleum, oil, gasoline(refined ano unrefined) and their respective
byproducts and constituents; and (v) .ny other substance which by any
governmental requirements requir:s special handling in its use,
collection, storage, treatment or dis o osal.
21
Environmental Audit. Not later than November 1, 1992, the City shall
obtain at its own expense and provide to the Developer an
environmental audit (phase one, and if required thereafter, phase two
and phase three) of the proposed a eas which Developer intends to
construct buildings on the Site. The audit shall verify the accuracy of
the City's representations and w.rranties and shall disclose no
environmental conditions which mig negatively affect the construction
or completion of the project.
16. Default by Tenant; Termination.
A. The occurrence of any of the following shall constitute a material
default and breach of this Lease by enant:
(i) Any failure by Tenant to pa the rental, taxes or other sums
required to be paid by Ten.nt hereunder where such failure
continues for thirty (30) da s after written notice thereof by
Landlord to Tenant; or
(ii) There shall be filed by or ag.inst Tenant in any court or other
tribunal a petition in bankru itcy or insolvency proceedings or
for reorganization, which pro.eeds are not dismissed within 180
days; or
(iii) Pursuant to any other default or breach of this Lease by Tenant,
Landlord obtains a money jud:ment against Tenant in a court of
competent jurisdiction, and such judgment is not paid to
Landlord within sixty (60) d;ys after such judgment becomes
final.
(iv) Developer's violation of the on-competition under Paragraph
VI(J) of the Development Ag eement.
(v) Developer's of IV(A) of the development Agreement
(vi) Any other default which caus-s a termination of the Lease.
Landlord's sole and exclusive reme•y as against the Tenant by reason
of the occurrence of a material de :ult and breach of this Lease by
Tenant shall be to terminate this -ase, whereupon all of Tenant's
rights and interest in and to the Impri ements on the Demised Premises
shall be forwarded to and become e sole and exclusive property of,
the Landlord, including any bond posted by Developer.
22
rib* '1114t
B. The occurrence of any default or bre.ch of this Lease by Tenant, other
than those set forth in subparagraph A above, shall be deemed not to
be material hereunder, and Landl•rd shall not have the right to
terminate this Lease for any such de ault. In the event of such a non-
material default, which default con 'nues for thirty (30) days after
written notice thereof by Landlord to Tenant (provided that, if the
nature of such default is such that the same cannot be cured within such
30-day period, Tenant shall not be I eemed to be in default if Tenant
shall within such period commence such cure and thereafter diligently
pursue the same to completion), andlord's sole remedy shall be
damages, as determined by a court if competent jurisdiction.
C. Landlord hereby agrees that upo a financial default by Tenant
hereunder, Landlord shall, concurr:ntly with the delivery of written
notice of such default to Tenant, del ver a copy of such notice to any
leasehold mortgagee and that in add.tion to the leasehold mortgagee's
rights, as set forth in Article 5 above Landlord hereby agrees that said
leasehold mortgagee shall have the right to cure any such financial
default by tenant hereunder.
17. Default by Landlord; Termination.
A. Upon any breach or failure by the Landlord to perform any of its
covenants or obligations as set forth erein, or any breach by Landlord
of its representations as set forth h:rein, which breach continues for
more than thirty (30) days followin ti written notice thereof by Tenant
to Landlord, said action shall consti to a material default and breach
of this Lease by Landlord.
B. Upon a breach of this Lease by Ladlord, the Tenant shall have the
right, at its election:
(i) To recover from Landlord s ch damages as shall have been
incurred by Tenant as a resul thereof;
(ii) To terminate this Lease and, i connection therewith, to require
Landlord to purchase from T:nant the Improvements and, if so
elected by Tenant, the Tenant's Trade Fixtures, all at their then
fair market value and to rec I ver from Landlord Tenant's lost
profits. For purposes of the preceding sentence, the term "lost
profits" shall mean the pre sent value of the Net Operating
Income of the Tenant re eived by Tenant during the
immediately-preceding twelv• months of the Lease for the
remainder of the term of this -ase, and all extensions thereof,
with the interest factor used 'n such calculation being equal to
23
enk
the LIBOR rate of interest a of a date most near the date of
such breach.
(iii) To have and enjoy such othe and further remedies as may be
available at law or in equity ,nder Illinois law.
(iv) To require the City at its sole expense to remedy any
environmental conditions rev:aled by the environmental audit,
provided that if the City is u .ble to do so in a timely fashion,
Tenant shall be entitled to ter inate the Lease and recover the
release of the bond and an option monies paid under the
Development Agreement.
All remedies set forth herein are cu ulative.
18. Voluntary Termination by Tenant. At the Te ant's sole discretion and election,
the Tenant may declare this Lease terminated at any time. Upon such voluntary termination
by Tenant it is agreed and understood:
A. Tenant shall have the right to remov• all of its Trade Fixtures;
B. All Improvements on the Demised P remises and the Riverboat shall be
forfeited to and remain the sole and e elusive property of the Landlord,
as well as the balance of the bond p o sted by Developer;
C. Tenant shall have no further liabirty to Landlord whatsoever with
regard to this Lease.
Notwithstanding any such termination, the Landlora shall still perform its obligations
of indemnity to Tenant as set forth under paragraph 15 as ove.
19. Tenant's Expenses. Landlord shall reimb rse Tenant upon demand for all
reasonable expenses, including attorneys' fee, incurred 'y Tenant in connection with any
litigation to enforce any obligation of Landlord which is in default hereunder. If the
leasehold interest of Landlord hereunder shall hereafter le held by more than one person,
corporation, or other entity, and if litigation shall arise b, reason of a dispute among such
person, corporations, or other entities, and if Tenant i' made a party to such litigation
without Tenant's consent, then Landlord shall reimbu se Tenant upon demand for all
reasonable expenses, including attorneys; fee, incurred sy Tenant in connection with any
such litigation.
20. Landlord's Expenses. Tenant shall reimbu ase Landlord upon demand for all
reasonable expenses, including attorneys' fee, incurred b Landlord in connection with the
collection of any rent in default hereunder, or the termin,tion of this Lease by reason of a
material default of Tenant, as such term is defined above or the enforcement of any other
24
obligation of Tenant which is in default hereunder, or th- protection of Landlord's rights
hereunder, or any litigation or dispute in which Landlo id becomes a party or otherwise
becomes involved, without fault on its part, relating to the Demised Premises or Landlord's
rights or obligations hereunder. If the leasehold interest o Tenant hereunder shall hereafter
be held by more than one person, corporation, or other en Sty, and if litigation shall arise by
reason of a dispute among such persons, corporation, or other entities, and if Landlord is
made a party to such litigation without Landlord's cons-nt, then Tenant shall reimburse
Landlord upon demand for all reasonable expenses, incl ding attorneys' fees, incurred by
Landlord in connection with any such litigation.
21. Waiver of Trial by Jury. To the extent perm tted by law, Landlord and Tenant
hereby waive trial by jury in any litigation brought by eith r of the parties hereto against the
other on any matter arising out of or in any way connect-'I with this Lease or the Demised
Premises or the Improvements thereon.
22. Merger. In no event shall the leasehold in erest, estate, or rights of Tenant
hereunder, or of the holder of any mortgage upon this Lea - , merge with any interest, estate,
or rights of Landlord in or to the Demised Premises, it be'l g understood that such leasehold
interest, estate, and rights of tenant hereunder, and of the holder of any mortgage upon this
Lease, shall be deemed to be separate and distinct from La dlord's interest, estate and rights
in or to the Demised Premises, notwithstanding that any su h interests, estates, or rights shall
at any time or times be held by or vested in the same per.on, corporation, or other entity.
23. Definition of "Landlord. "
A. The term "Landlord" as used in this -ase shall at any given time mean
the person or persons, corporation or corporations, or other entity or
entities who are the owner or own-rs of the reversionary estate of
Landlord in and to the Demised 'remises. In the event of any
conveyance or other divestiture of itle to the reversionary estate of
Landlord in and to the Demised Pre ises, the grantor or the person or
person, corporation or corporations, or other entity or entities who are
divested of title shall be entirely free I and relieved of all covenants and
obligations thereafter accruing hereu der, and the grantee or the person
or persons, corporation or corporations, or other entity or entities who
otherwise succeeds or succeed to lid: shall be deemed to have assumed
the covenants and obligations of .ndlord hereunder so assumed by
said grantee or successor. Tenant a:rees to attorn to any such grantee
or successor.
B. Notwithstanding anything to the co trary as stated in paragraph 23A
above, it is agreed and understood thi t the City of Elgin, Illinois, shall
at all times remain obligated to i demnify the Tenant under the
provisions of paragraph 15 above (concerning environmental liability)
25
i
and shall be personally liable to the Tenant by reason of its breach or
failure to do so as provided in para raph 17 above.
24. Landlord's Representations and Warrantie
A. Quiet Enjoyment. Landlord covena is that at all times during the term
of this Lease, so long as Tenant is not in default hereunder, Tenant
shall have the quiet and peaceable e 'oyment of the Demised Premises.
B. Landlord has good and merchantabl e title to the Land and Demised
Premises and has fully power and ,uthority to make, enter into and
perform its obligations under this ase.
C. Prior to the commencement date of this Lease, the Landlord shall
provide to Tenant, at Landlord's e pense a leasehold policy of title
insurance, issued by Chicago Title Insurance Company, insuring the
leasehold estate of Tenant in the De ised Premises in an amount equal
to One Million Dollars ($1,000,0110) and containing a 3.0 zoning
endorsement indicating that the Dei ised Premised may be lawfully
used for the conduct of Riverboat ambling Operation.
D. Simultaneously with the execution o this Lease, Landlord shall provide
to Tenant a certified copy of the resolutions of the Elgin City Council
authorizing the execution and perfo mance of this Lease by Landlord,
together with an opinion of Erwi W. Jentsch, Esq.; Corporation
Counsel of the City of Elgin, directes to Tenant in form and substance
reasonably acceptable to Tenant's co nsel opining that the City has full
power and authority to make, execut: and perform its obligations under
this Lease; that the Lease is a valid s nd binding obligation of the City
enforceable in accordance with its erms; and that the City has full
power and authority to make the env ronmental indemnities as set forth
herein.
25. Renewal Options.
A. Provided that Tenant is not then in &fault hereunder, Tenant shall have
the right to renew this Lease for s ccessive five-year terms, not to
exceed twenty years in total.
26
ANIN
B. To exercise any such renewal optio , the Tenant shall give written
notice thereof to the Landlord not ater than 180 days prior to the
expiration of the then-current term o this Lease.
C. During any such extended term of is Lease, all of the terms and
conditions of this Lease shall remain unmodified and in full force and
effect.
26. Notices. Anyand all notices, demands, el•ctions or other communications
between the parties shall be in writing and shall be deliver;d personally or by certified mail,
return receipt requested. If mailed, such notice shall be o eposited, postage prepaid, in the
United States mail, addressed to the intended party at the address set forth below.
If to Landlord: City of Elgin
150 Dexter Court
Elgin, IL 60120
Attn: City Clerk
If to Tenant: Elgin Riverboat Resor
c/o Mr. Peter A. Simon
Nevada Landing Hotel & Casino
P.O. Box 19278
Jean, NV 89019
Any party may change the person or address to I r at which it is to receive notice
hereunder by giving notice of such change as provided h:rein.
27. Estoppel Certificates. Each party hereto ag ees that at any time and from time
to time during the term of this Lease, within ten (10) da s after request by the other party
hereto or by any leasehold mortgagee, it will execute, .cknowledged, and deliver to the
leasehold mortgagee or such other party or to any prosp:ctive purchaser, assignee, or any
other mortgagee designated by such other party, a certi cate stating (a) that this Lease is
unmodified and in force and effect (or if there have been odifications, that this Lease is in
force and effect as modified, and identifying the modific:tion agreements); (b) the date to
which rent has been paid; (c) whether or not there is any existing default by Tenant in the
payment of any rent or other sum of money hereunder , and whether or not there is any
other existing default by either party hereto with respect to which a notice of default has been
served, and , if there is any such default, specifying the ature and extent thereof; and (d)
whether or not there are any set-offs, defenses, or counte laims against enforcement of the
obligations to be performed hereunder existing in fa or of the party executing such
certificate.
28. Payments of Money; Interest. All amounts whatsoever which Tenant shall be
obligated to pay to Landlord pursuant to this Lease shall be deemed rent, and in the event
27
of the nonpayment by Tenant of any sum of money which Tenant from time to time shall be
obligated to pay to Landlord under any provision of thisase, Landlord shall have the same
rights and remedies by reason of such nonpayment as if Tenant had failed to pay an
installment of Rent under Article 2 hereof.
29. Non-Waiver. No waiver by Landlord of a y breach by Tenant of any term,
covenant, condition, or agreement herein and no failure •y Landlord to exercise any right
or remedy in respect of any breach hereunder, shall con titute a waiver or relinquishment
for the future of any such term, covenant, condition, o agreement or of any subsequent
breach of any such term, covenant, condition, or agreeme t, not bar any right or remedy of
Landlord in respect of any such subsequent breach, nor s all the receipt of any rent, or any
portion thereof, by Landlord, operate as a waiver of the rights of Landlord to enforce the
payment of any other rent then or thereafter in default, or to terminate this Lease, or to
recover the Demised Premises, or to invoke any other ap.ropriate remedy which Landlord
may select as herein or by law provided.
30. Surrender.
A. Tenant shall, on the last day of th: term of this Lease or upon any
termination of this Lease pursuant t. Article 16, 17 or 18 hereof, or
upon any other termination of this ..ase, well and truly surrender and
deliver up the Demised Premises, w th the Improvements then located
thereon into the possession and wi the Improvements then located
thereon into the possession and use o Landlord, without fraud or delay
and in good order, condition and re.air, free and clear of all lettings
and occupancies, free and clear of .11 liens and encumbrances other
than those existing on the date of thi. Lease and those, if any, created
by Landlord, without any payment o allowance whatever by Landlord
on account of or for any buildin 1 s and improvements erected or
maintained on the Demised premises at the time of the surrender, or for
the contents thereof or appurtenance. thereto; provided, however, that
Tenant's Trade Fixtures, personal I roperty, and other belongings of
Tenant or of any subtenant or other occupant of space in the Demised
Premises shall be and remain the pr.perty of Tenant, and Tenant shall
have a reasonable time after the expil ation of the term of this Lease to
remove the same.
B. Notwithstanding the provisions of p.,ragraph 30A above, in the event
that the Demised Premises is surren o ered following the occurrence of
any casualty loss thereon, then unle.5 the Tenant elects to repair said
casualty loss and, in connection herewith, to use any Casualty
Insurance proceeds, the Tenant shal be obligated only to deliver the
Improvements in the condition as th:y may be following such casualty
loss and, as provided above, all s ch Casualty Insurance proceeds
28
received under the Casualty Insuranc: policy shall remain the sole and
exclusive property of the Landlord.
31. Memorandum of Lease. Each of the parties ereto will, promptly upon request
of the other, execute a memorandum of this Lease in form 'uitable for recording setting forth
the names of the parties hereto and the term of this Lease, is entifying the Demised Premises,
and also including such other clauses therein as either p. , may desire, except the amounts
of Basic Rent payable hereunder.
32. No Oral Changes. This Lease may not be changed or modified orally, but
only by an agreement in writing signed by the party or i s. authorized agent against whom
such change or modification is sought to be enforced.
33. Bind and Inure. The terms, covenants, c nditions, and agreements of this
Lease shall bind and inure to the benefit of the parties her o and their respective successors
and assigns.
34. Applicable Law. This Lease shall be gove:ned and construed in accordance
with the laws of the State of Illinois.
35. Entire Agreement. This Lease, together w th the Development Agreement,
shall constitute the entire agreement of the parties conce ping the subject matter set forth
herein and in said Development Agreement, all other prier agreements and understandings
having been merged herein and extinguished hereby.
36. Obligation to Refrain from Discrimination. he parties hereto hereby covenant
by and for themselves, their heirs, executors, administra:ors, and assigns, and all persons
claiming under or through them that this Lease is made an" accepted upon and subject to the
following conditions: There shall be no discrimination ag:inst or segregation of any person
or group of persons on account of sex, race, color, creed, ational origin, or ancestry, in the
leasing, subleasing, transferring, use, or enjoyment of th: land herein leased, nor shall the
lessee himself, or any person claiming under or through im, establish or permit any such
practice or practices of discrimination or segregation with r-ference to the selection, location,
number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the land
herein leased.
37. Option to Purchase.
A. In the event that Tenant subsequently constructs upon the Land forming
a part of the Demised Premises a ho el containing at least 150 rooms,
then Tenant shall have the right a d option, exercisable within 24
months following the issuance of a c rtificate of occupancy with regard
to said hotel, to purchase the D mised Premises and Land (the
"Option").
29
0
B. To exercise the Option, Tenant shall execute and deliver to Landlord
that certain Contract in the form attar ed hereto as Exhibit C, inserting
therein the appropriate date of closin , purchase price (as determined
below) and other information necess ry to complete said form.
C. The purchase price to be paid pursua I t to the exercise the Option shall
be determined as follows:
The purchase price shall be determin.d by an appraisal to be conducted
by a jointly-approved appraiser u. izing the income method of
determining fair market value. I he capitalization rate shall be
determined by using the average of said rate over the previous 24-
month period starting on the date of -xercise of the option.
D. Following an exercise of the Option, he real estate transaction shall be
governed and controlled in accordance with the terms of the Contract.
30
fek
v
IN WITNESS WHEREOF, we have set our hands and se�ls on the day first above written.
.
Elgin Riverboat Resort,a partnership ity of Elgin, a municipal corp.,
consisting of
By:
M.S.E. Investments, Inc George VanDeVoorde, Mayor
Last Chance Investments, Inc
Attest:
Diamond Gold, Inc
Gold Strike Investments, Inc Dolonna Mecum, City Clerk
Each of the individuals hereinafter
agree to guarantee all of the obligations
of the Elgin Riverboat Resort
Michael S. Ensign
William A. Richardson
David R. Belding
Peter A. Simon
31
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-
REAL ESTATE SALE AGREEMENT
THIS AGREEMENT is made and entered into this day of
1992, by and between the City of Elgin, an Illinois municipal corporation (hereinafter
(hereinafter referred to as "Seller") and Elgin Riverboat Resort (hereinafter referred to as
"Purchaser").
RECITALS
A. Seller currently holds title to real estate :nd appurtenant rights including
approximately acres of land located at , in the City of
Elgin, Kane County, Illinois. The aforesaid real estate is legally described as on Exhibit A
attached hereto (which real estate and all improvements th,reon shall hereinafter be referred
to as the "Real Estate").
B. Purchaser desires to purchase the Real Es .to from Seller, and Seller desires
to sell and/or cause the Trustee to sell the Real Estate t• Purchaser, upon the terms and
conditions hereinafter set forth.
CONSIDERATI I N
In consideration of the mutual covenants and pr•mises of the parties, Seller and
Purchaser hereby agree as follows:
AGREEMENT
1. Sale and Purchase. Seller agrees to sell a id/or cause the Trustee to sell and
Purchaser agrees to purchase the Real Estate upon the ter s and conditions herein set forth
for a purchase price of , (hereinafter reg erred to as the "Purchase Price").
2. Conveyance. Seller agrees to convey, or c use to be conveyed, to Purchaser,
or Purchaser's nominee, title to the Real Estate by a rec rdable, stamped Warranty Deed,
subject only to: (a) general real estate taxes not due and p yable as of the date of the closing
hereof; (b) acts of Purchaser and those parties acting rough or for Purchaser; and (c)
easements, covenants, and restrictions of record, provide the existing uses are not violated
by same.
3. Earnest Money. Purchase agrees to pay t e sum of Five Thousand ($5,000)
Dollars as earnest money upon the execution hereof whic shall be applied on the Purchase
Price at the Closing, as hereinafter defined. The balane of the Purchase Price, plus or
minus prorations, shall be paid by Purchaser at the closi g in cash or certified or cashier's
check payable to Seller or Seller's order. The earnest mo ey shall be held by Chicago Title
and Trust Company (hereafter called "CTTC") in its s .ndard joint order escrow for the
benefit of the parties, and shall be deposited by Purch:ser within 5 days following the
acceptance of this Agreement. Purchaser shall pay all fe•s in connection with the escrow.
4. Closing.
(a) The consummation of the transac on herein described (hereinafter
referred to as the "Closing") shall be on , or on the
date to which such time is extended by reason of Paragraph 8 unless
subsequently mutually agreed other ise, at the office of Chicago Title
& Trust Company in St. Charles, Illinois (hereinafter referred to as
"CTTC") or such other location a• is acceptable to Purchaser and
Seller, provided title is shown to be n the condition required herein or
is otherwise acceptable to Purchaser At the Closing, the parties shall
deliver all documents required by th s Agreement.
(b) At the election of either party, the tr.nsaction herein contemplated may
be closed through an escrow with CTTC, in accordance with the
general provisions of the usual fo of Deed and Money Escrow
Agreement then in use by said com I any, with such special provisions
inserted in the escrow agreement to permit an immediate ("New York-
Style") closing and as otherwise ma be required to conform with this
Agreement. Upon the creation of s ch an escrow, anything herein to
the contrary notwithstanding, pay ent of the Purchase Price and
delivery of deed shall be made throu:h the escrow and the cost of said
escrow shall be shared equally by th- parties.
5. Delivery of Possession. Seller acknowled:es that Purchaser is currently in
possession of the real estate.
6. Condition. Seller agrees to deliver the Real Estate in the same condition as
it is at the date of this Agreement, ordinary wear and tea excepted.
7. Evidence of Title. Seller shall deliver, or c.use to be delivered, to Purchaser
or Purchaser's nominee, within fifteen (15) days after the acceptance and execution of this
Agreement by both Parties, a current title commitme t from Chicago Title Insurance
Company for an ALTA (1970) Form B Owner's Title I surance Policy in the amount of
$ . The aforesaid commitment shall show title i the intended grantor subject only
to (a) rights of Purchaser under existing leasehold; (b) the title exceptions set forth in
Paragraph 2 hereof; and (c) title exceptions pertaining to ens or encumbrances of a definite
or ascertainable amount which may be removed by the pa ment of money at the Closing and
which the Seller will so remove at that time byusing the nds to be paid to Seller hereunder
(all of which are herein referred to as the "Permitted Ex eptions"). The title commitment
(and policy issued pursuant thereto) shall contain ext nded coverage over the general
exceptions to the policy. The title policy shall be conclusi e evidence of good title as therein
shown as to all matters incurred by the policy subject on y to the exceptions therein stated.
8. Closing Adjustments. General real esta 1- taxes and assessments shall be
adjusted ratably (prorated) with respect to the subject transaction as of the day of the
Closing, using, for such purpose, a presumed 19 rea estate tax amount determined by
multiplying the most recent assessed vluation of the 'eal Estate (as determined by the
Township Assessor's office) times and thin multiplying that product by the
tax rate that was applicable to the Real Estate. R-nt shall also be prorated as of the
date of closing. No other items shall be prorated and a 1 prorations shall be final. Seller
shall pay the amount of any stamp tax imposed by law by the State of Illinois, the county in
which the Real Estate is located, and by any other local 1:w or ordinance on the transfer of
title, and shall furnish completed real estate transfer decla ations signed by Seller or Seller's
agent in the forms required pursuant to such laws.
9. Damage. The provisions of the Uniform endor and Purchaser Risk Act of
the State of Illinois shall be applicable to this Agreement
10. Time. Time is of the essence of this Agre•ment.
11. Notice. All notices herein required shall b; in writing and shall be served on
the parties at the following addresses:
If to Purchaser: Peter A. Simon
Nevada Landing Hote & Casino
P.O. Box 19278
Jean, NV 89019
with copy to: Robert S. Kramer, P. .
1250 Larkin Avenue, te. 100
Elgin, IL 60123
If to Seller: City Clerk
City of Elgin
150 Dexter Court
Elgin, IL 60120
The mailing of a notice by registered or certified mail, eturn receipt requested, shall be
sufficient service. Notices shall be deemed served when elivered if delivered by hand, or
on the date of mailing, if mailed as described above.
3
12. Choice of Law. This Agreement shall be governed by the laws of the State
of Illinois.
13. Miscellaneous. If the date for Closing or erformance of an obligation falls
on a Saturday, Sunday or holiday, the date shall be de erred until the first business day
following. No amendments, modifications or changes sh 11 be binding upon a party unless
set forth in a duly executed document.
14. Termination.
(a) If this Agreement is breached by Purchaser, then (i) Seller may
terminate this Agreement and the e.rnest money shall be forfeited to
the Seller and retained by the Seller ,s liquidated damages or (ii) Seller
may seek specific performance of p'urchaser's obligations under this
Agreement or (iii) Seller may recov:r such damages from Purchaser as
Seller may have thereby incurred, a.plying the Earnest Money to any
judgment obtained in such action an. recover any excess damages from
Purchaser. The remedies of Seller :numerated herein are cumulative.
(b) If this Agreement is breached by Sel er, then (i) Purchaser may declare
this Agreement null and void (wher upon all Earnest Money shall be
refunded to Purchaser) or (ii) Purcha.er may seek specific performance
of Seller's obligations hereunder o (iii) Purchaser may pursue such
other remedies as may be available a:ainst the Seller under Illinois law.
The remedies enumerated herein sha 1 be in addition to, and not in lieu
of, such other remedies as may be expressly provided to Purchaser
under this Agreement.
(c) If this Agreement is terminated of er than by reason of the breach
hereof by either party, then all Ea nest Money shall be refunded to
Purchaser.
15. Authority to Execute. Purchaser and eller hereby covenant that the
execution of this Agreement and the transaction here n contemplated have been duly
approved by all necessary corporate action and that the .arty executing this Agreement on
behalf of Purchaser is authorized to execute same.
16. Entire Agreement. This Agreement con .ins the entire agreement of the
parties with respect to the sale and purchase of the Real Estate. All previous and
contemporaneous negotiations, understandings and agree ents between the parties hereto,
with respect to the transactio set forth herein, are merges in this instrument, which along
fully and completely expresses the parties' rights and ob igations. The preparation of this
Agreement has been a joint effort of the parties hereto and the resulting documents shall not,
solely as a matter of judicial construction, be construed more severely against one of the
parties than the other.
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17. Terms. As used herein, the terms (a) "p rson" shall mean an individual, a
corporation, a partnership, a trust, an unincorporated org nization or any agency or political
subdivision thereof, (b) "including" shall mean includin , without limiting the generality of
the foregoing, and (c) the masculine shall include the fe inine and the neuter.
18. Binding Effect and Survival.
(a) This Agreement shall be binding up on and shall insure to the benefit of
the parties hereto and their respecti e heirs, executors, administrators,
legal representatives, successors a d assigns. No assignment of this
Agreement shall relieve the assignin: party of its obligations hereunder.
(b) All representations, warranties an. covenants contained herein shall
survive the Closing and the deliver of the Deed.
19. Captions. The captions of this Agreeme t are inserted for convenience of
reference only and in no way define, described or limit th- scope of intent of this Agreement
or any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto h.ve executed this Real Estate Sale
Agreement as of the day first above written.
5
)111
City g of 'gin,
an Il1in 's municipal corporation,
By:
M yor
Seal
Attest:
City Clerk
Elgin ' verboat Resort,
an Illino s partnership,
M.S.E. nvestments, Inc
Last Ch.nce Investments,Inc.
Diamon. Gold,Inc.
Gold Strike Investments, Inc.
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EXHIBIT A
Legal Description
LOTS 2-14 INCLUSIVE,IN BLOCK 358 OF O. DAVI SON'S ADDITION TO ELGIN,
IN THE CITY OF ELGIN, KANE COUNTY, IL
LOTS 1-28 INCLUSIVE, IN BLOCK 359 OF O. DAVI SON'S ADDITION TO ELGIN,
IN THE CITY OF ELGIN, KANE COUNTY, IL
LOTS 1-12 INCLUSIVE OF DAVIDSON'S GROVE AVE SUB. IN THE CITY OF
ELGIN, KANE COUNTY, IL
THAT PORTION OF WELLINGTON AVE LYING SOI TH OF THE SOUTHERNMOST
PART OF LAKE STREET DESCRIBED AS WELLI GTON ROW BETWEEN LAKE
STREET AND NATIONAL STREET IN THE CITY 0 ELGIN, KANE COUNTY, IL
LOTS 4,5 AND 6 ON BLOCK 379 OF RAILROAD • DDITION TO ELGIN, IN THE
CITY OF ELGIN, KANE COUNTY, IL
7