94-0120 GVC Ground Lease • 1
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GROUND LEASE AGREEMENT
GROUND LEASE made as of the #1= day o€- iJA j , 199 4, between
the City of Elgin, Illinois, an Illinois municipal corporation (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, Inc., and Gold Strike Investments,
Inc.,(hereinafter referred to as the "Tenant").
JECITALS
A. Landlord, is the owner, in fee simple, of the Demised Premises.
B. Landlord's Center City Plan, adopted by 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 Premises and to erect and operate
thereon one or more entertainment and support facilities for 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 the Fox River which docks within
the corporate limits of the City of Elgin.
E. Tenant has received from the Illinois Gaming Board all licenses necessary to
operate a River Gambling Operation on the Fox River adjacent to the Demised Premises
pursuant to the provisions of the Illinois Riverboat Gambling Act (Illinois Revised Statutes,
Chapter 120, Par. 2401 et.seq.).
F. Landlord and Tenant mutually desire to have the Tenant construct and operate
upon the Demised Premises an entertainment and support facilities for the adjacent Riverboat
Gambling Operation subject to applicable ordinances and/or 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 and all easements, rights, rights-of-
way, and licenses thereto, but shall not include Tenant's trade fixtures.
2. "Development Agreement" shall mean that certain 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 and provisions of the Development
Agreement are hereby incorporated herein by reference.
3. "Improvements" shall mean all buildings, stru tures, and improvements now
existing or hereafter constructed upon the Land during th- term of the Lease, and any
restoration, addition to, or replacement thereof, but excl ding therefrom the Land and
Tenant's trade fixtures.
4. "Land" shall mean that certain parcel of real oroperty described in Exhibit B
attached hereto, but shall not mean the improvements the eon or Tenant's trade fixtures
therein.
5. "Kane County Forest Preserve District Ease ent" shall mean the easement
granted by the Kane County Forest Preserve District which permanently permits the tenant
access from the land to the Fox River in accordance with the Developer's needs as identified •
by the Preliminary Site Plan.
6. "Preliminary Site Plan" shall mean that plan for the construction of
improvements on the Demised Premises, and the construction of walkways leading from the
Improvements to the boat docks, which plan is attached he ieto as Exhibit A.
7. "Riverboat Gambling Operation" shall mean le conduct of a business engaged
in the operation of one boat which is located in or upon e Fox River and upon which
gambling operations take place, all as contemplated and 9.rmitted pursuant to the Illinois
Riverboat Gambling Act, together with the operation of e tertainment facilities collateral
thereto, such as retail shops, restaurants, bars or loung-s for the service of alcoholic
beverages and the like located upon the Demised Premises
8. "Tenant's Trade Fixtures" shall mean all pe sonal property owned, used or
installed by Tenant upon the Demised Premises and/o used in connection with the
Improvements thereon, including, without limitation:
(a) Cash registers;
(b) Selling fixtures, including showcases, tables, shelves, counters, desks,
gondola units, island stock fixtures, etal floor racks, self selection
units, column enclosures, and fixture ails and partitions with movable
studs;
(c) Stockroom shelving and fixtures.;
(d) Office furniture, including cabinets, 'hairs, desks, files and safes;
(e) Office machines and equipment;
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(f) Maintenance equipment and tools;
(g) Walls and partitions extending from fie or to ceiling but not an integral
part of slab at top and bottom;
(h) Air compressors, alarm systems, blo ers, heavy kitchen equipment,
paper balers, pumps, refrigeration uni ., heavy scales, wall clocks and
water coolers;
(i) Carpeting, carpet liners, padding, stri v ing and rugs;
(j) Display fixtures, including platfo s, pylons, eggcrate louvers,
decorative ceilings, backgrounds, lo and high partition dividers,
movable curtain display units used as oom effect background, louver
shutters and panels, collapsible or fold ng doors and screens, partitions
and walls not raised and braced to ce. ings leaving approximately one-
third of area between floor and ceili g open, mirrors and mirrored
column enclosures, baffles or curtain walls set on top of wall cases,
• column background display units, lo and high dividers, chandeliers,
lighting fixtures used for decorative or display illumination lamps,
tables, window and wall backgrounds, and window display lighting
fixtures;
(k) Furniture and fixtures, including pholstered chairs and sofas,
ashstands, smokestands, benches, hairs curtains and draperies,
decorative tables, and venetian blinds
(1) Signing and art work, including bull-tin boards, pegboards, pictures
and decorative art placed on walls sign holders, and ornamental
fixtures on walls;
(m) Counter display fixtures, including s gn holders, stands, mirrors, and
table dividers;
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and any and all renewals, replacements of, additions to, and substitutions for the above-
enumerated items.
9. Licenses.
(a) Preliminary Approval -- Illinois Gam ng Board reservation of a license
in the name of the Developer/tenant.
(b) Temporary License -- Illinois Gam ng Board grant of a temporary
operational license following succes ful operational test cruise.
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(c) Permanent License -- Illinois Gaming :oard issuance of a permanent
license.
AGREEMENT
NOW THEREFORE, Landlord and Tenant hereby .gree as follows:
1. Demised Premises and Term. Landlord, in consideration of the rents
hereinafter reserved and the terms, covenants, conditions, : d agreements set forth in this
Lease to be kept and performed by Tenant, does hereby d-mise and let unto Tenant, and
Tenant does hereby lease, hire and take from Landlord, the Demised Premises;
TO HAVE AND TO HOLD the Demised Premises unto Tenant, its permitted
successors and assigns, upon and subject to all of the terms, covenants, conditions,
conditional limitations, and agreement herein contained for a term of years commencing on
the date of this Lease and ending on the hundred and tw tieth month following the first
month of this Lease (the "Basic Term"), or until said term 's sooner terminated or extended
pursuant to any of the conditional limitations or other prov sions of this Lease.
2. Rental.
A. For purposes of this paragraph 2, the following terms shall have the
following meanings:
(i) "Total Investment Cost" shall can the aggregate of all costs,
not to exceed forty million do I ars, paid or incurred by Tenant
in connection with the erecti•n of any Improvements on the.
Demised Premises, the purc ase and/or construction of any
boats to be used for the con uct of the Riverboat Gambling
Operation contemplated he ein, the equipping of said
Improvements and/or boats wi I necessary trade fixtures and the
like, including legal fees, . chitectural fees, site cleanup,
reasonable working capital, . d start up expenses.
(ii) "Net Operating Income" sha mean all revenues received by
Tenant from the conduct of is business operations upon the
Demised Premises of whatever nature whatsoever net(in excess)
of all normal and custom. operating expenses, admission
taxes, wagering taxes, sales es and all other governmental
taxes, charges, fees, assess lents and the like payable with
respect to said revenues or ith regard to the conduct of the
activities conducted by Tenant which generate said revenues, but
expressly excluding any dedu•tions for depreciation or non-cash
amortization or for compensa ion paid
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to any one of the principals of th• Tenant in excess of reasonable
compensation for actual service- rendered as a general manager
by any such principal.
(iii) "Net after tax cash flow" shall mean all revenues received by
Tenant from the conduct of i . business operations upon the
Demised Premises of whatever ,ature whatsoever net (in excess)
of all normal and customary o•;rating expenses, and also net(in
excess) of all federal, state . i d local taxes,admission taxes,
wagering taxes, sales taxes an. all other governmental taxes,
charges, fees, assessments and the like payable with respect to
said revenues or with regard o the conduct of the activities
conducted by Tenant which generate said revenues, but
expressly excluding any deduc ons for depreciation or non-cash
amortization or for compen :tion paid to any one of the
principals of the Tenant in ex.ess of reasonable compensation
for actual services rendered b any such principal, based upon
industry standards.
(iv) "Option Fees" shall mean all sums paid by Tenant pursuant to
paragraph III of the Developm-nt Agreement.
(v) "Cost Recovery Date" shall can that date during the term of
this Lease as of which the Net • fter Tax Cash Flow received by
Tenant shall have equaled Ten.nt's Total Investment Cost.
B. Upon execution of this lease within T:nant's first option year under the
Development agreement, tenant shall •ay the sum of$50,000 as a fixed
rental. Upon execution of this lease 'thin tenant's second option year
under the Development agreement, nant shall pay no rent until the
issuance of a temporary license at w ich time Landlord hereby agrees
to accept as rent and tenant shall 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 Recovery Date, the rental to be paid by
Tenant to Landlord hereunder shal 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 Opera ' g Income of the Tenant.
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D. Tenant hereby agrees to make availabl- to Landlord for inspection and
review all of Tenant's books and ecords which pertain to the
calculation or documentation of Tenant'. Net Operating Revenue and/or
Total Investment Cost and which may •e reasonably necessary in order
to determine or verify the rent due I .ndlord hereunder. All such
books and records shall be made avail.ble to Landlord at the Demised
Premises upon reasonable notice to T-nant. Landlord shall hold all
such information in strictest confiden .
3. Use of Demised Premises. Tenant may use . d occupy the Demised Premises
and the Improvements thereon to operate its entertainme t and support facilities for the
adjacent Riverboat Gambling Operation or for any other law, I purpose. Tenant will not use
or keep or allow the Demises Premises or any portion th-reof or any buildings or other
improvements thereon or any appurtenances thereto, to be u.ed or occupied for any unlawful
purpose and will not suffer any act to be done or any cond tion to exist which constitutes a
nuisance, public or private.
4. Construction of and Title to Improvements a ' Trade Fixtures.
A. Landlord hereby consents to the c•nstruction by Tenant upon the
Demised Premises of those Improve ents as shown generally on the
Preliminary Site Plan, as well as s ch additional Improvements as
Tenant may seek to construct after . y required public hearing with
Landlord's consent, which consent shall not be unreasonably withheld.
All such improvements shall be cons• cted by Tenant in a good and
workmanlike manner and in full an. complete compliance with all
applicable laws and ordinances.
B. Title to Tenant's Trade Fixtures are . d shall be the sole and exclusive
property of Tenant during the term •f this Lease and shall remain the
sole and exclusive property of Tenant fter the expiration of termination
of this Lease, subject to the forfeitur. remedies as more fully set forth
thereinafter. Landlord acknowledges 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 (-xcept as hereinafter provided).
C. Landlord acknowledges and agrees at 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 an. 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 .s any other or further document
which Tenant may reasonably requ-st from Landlord.
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D. During the term of the Lease and whil- Tenant lawfully occupies the
Demised Premises, all Improvemen I presently on the Demised
Premises and all Improvements herea iter constructed o the Demised
Premises are and shall be the prope of Tenant or any party taking
title thereto through Tenant by mens of mesne conveyance or
foreclosure, during, and only during, the continuance of the term of
this Lease and no longer. At all time• during the term of this Lease,
the Improvements which are owned b Tenant shall not be conveyed,
transferred, or assigned unless s ch conveyance, transfer, or
assignment shall be to a person, corporation or other entity to whom
this Lease is being transferred or assi: ed simultaneously therewith in
compliance with the provisions of • rticle 14 hereof (Assignment;
Subletting), and at all such times the holder of the leasehold interest of
Tenant under this Lease shall be the o ner of said Improvements. Any
attempted conveyance, transfer, or . -signment of the Improvements,
whether voluntarily or by operation of l aw or otherwise, to any person,
corporation, or other entity shall be oid and of no effect whatever
unless such conveyance, transfer, or ssignment shall be to a person,
corporation, or other entity to whom 's Lease is being transferred or
assigned simultaneously therewith in compliance with the provisions of
Article 14. Similarly, so long as the provements or any part thereof
shall remain on the Demised Pre ses, any attempted transfer or
assignment of the leasehold interest o 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 • -signed simultaneously therewith.
Upon any termination of this Lease, hether by reason of the normal
expiration of the term hereof, or by r, •son of the provisions of Article
12 (Casualty), or Article 17 (Default by Tenant) hereof, or by reason
of any other cause whatsoever, if the provements or any part thereof
shall then be on the Demised Premis s, all of the Tenant's right, title
= and interest therein or any entity or person acquiring title thereto
through Tenant shall cease and termini te, and title to the Improvements
shall vest in Landlord, and the Improvements or the part thereof then
within the Demised Premises sha be surrendered by Tenant to
Landlord as provided in Article 30 ereof (Surrender). No further
deed or other instrument shall be ne ssary 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.
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E. Notwithstanding anything to the cons •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 third parties by means of sublease or
license, any facility, concession, or anchise 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 . dlord'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 0 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 Mortg.ge, notice of the new name and
address shall be provided to . dlord.
Landlord shall promptly u ton 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 communi :tion as constituting the notice
provided for by subsection II:)(i) above or, in the alternative,
notify the Tenant Lnd the - :sehold Mortgagee of the rejection
of such communication as no conforming with the provisions of
subsection (B)(i)and specify e specific basis of such rejection.
After Landlord has recei ed the notice provided for by
subsection (B)(i) above, the enant, upon being requested to do
so by Landlord, shall wi reasonable promptness provide
Landlord with copies of the ote or other obligation secured by
such Leasehold Mortgage ano of any other documents pertinent
to the Leasehold Mortgage as .pecified by the Landlord. If
requested to do so by Landlord, the Tenant shall thereafter also
provide the Landlord from time to time with a copy of each
amendment or other modifi .tion or supplement to such
instruments. All recorded docu, ents shall be accompanied by
the appropriate certification of e Custodian of the Recording
Office as to their authenticity as true and correct copies of
official records and all no ecorded documents shall be
accompanied by a certification .y Tenant that such documents
are true and correct copies of e originals. From time to time
upon being requested to do so •y Landlord, Tenant shall also
notify Landlord of the date an. place of recording and other
pertinent recording date with re•pect to such instruments as have
been recorded.
C. (i) The term "Lender," as used ' this section 5, shall refer to a
savings bank, savings and lo. association, commercial bank,
trust company, credit union, insurance company, college,
university, real estate investme t trust or pension fund, private
individual, corporation, panne ship, trust or other entity. The
term "Lender" shall also incl de other lenders of substance
which perform functions simil. to any of the foregoing.
(ii) The term "Leasehold Mortgag-" as used in this section 5 shall
include a mortgage, a deed o trust, a deed to secure debt, or
other security instrument by w 'ch Tenant's Leasehold Estate is
mortgage, conveyed, assign- 1, or otherwise transferred, to
secure a debt or other obligati pm
(iii) The term "Leasehold Mortgag- - " as used in this section 5 shall
refer to a hold of a Leasehold ortgage in respect to which the
notice provided for by subsec on (B) of this section 5 has been
given and received and as to w 'ch 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 .rovide a copy of such notice to
every Leasehold Mortgagee. No su h 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 peri.., 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
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subsections (f) and (g) of this section 5 to remedy, commence
remedying or cause to be remedied the financial defaults specified in
any such notice. Landlord shall accept such performance by or at the
instigation of such Leasehold Mortgage as if the same had been done
by Tenant. Tenant authorizes each Le. sehold Mortgagee to take any
such action.at such Leasehold Mortg.gee's option and does hereby
authorize entry upon the premises by th= Leasehold Mortgagee for such
purpose.
E. (i) Anything contained in thi Lease to the contrary
notwithstanding, if any financ . default shall occur which
entitled Landlord to terminate is Lease, Landlord shall have
no right to terminate this Lease nless, following the expiration
of the period of time given Te . t to cure such default [or the
act or omission which gave rise to such default], Landlord shall
notify every Leasehold Mortg.gee of Landlord's intent to so
terminate at least 30 days in ad ance of the proposed effective
date of such termination if such •efault is capable of being cured
by the payment of money, and .t least 45 days in advance of the
proposed effective date of such -rmination if such default is not
capable of being cured by e payment of money. The
provisions of subsection (g) be ow of this section 5 shall apply
if, during such 30 or 45 day ermination Notice Period, any
Leasehold Mortgagee shall:
(1) notify Landlord of such I - .sehold Mortgagee's desire to
nullify such notice, and
(2) pay or cause to be paid . rent, additional rent, or other
payments then due an. in arrears as specified in the
Termination Notice to such Leasehold Mortgagee and
which may become due during such 30 or 45-day period,
and
(3) comply or in good fai , with reasonable diligence and
continuity, commence to comply with all monetary
requirements of this Le:se then in dsfault and reasonable
susceptible of being complied with by such Leasehold
Mortgagee, provided however, that such Leasehold
Mortgage shall not ' - 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
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to the lien of the mortage held by such Leasehold
Mortgagee.
F. (i) If Landlord shall elect to termin:to this Lease by reason of any
default of Tenant, and a - :sehold Mortgage shall have
proceeded in the manner provi•ed for by subsection (1) of this
section 5, the specified date for e termination of this Lease as
fixed by Landlord in its Termi ation Notice shall be extended
for a period of six months, ,•rovided that such Leasehold
Mortgagee shall, during such s', month period:
(1) Pay or cause to be paid e 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 Tenant'. other obligations under this
Lease, excepting [(A) o.ligations of Tenant to satisfy or
otherwise discharge an lien, charge or encumbrance
against Tenant's interes in this Lease or the Demised
Premises junior in prio .ty to the lien of the mortgage
held by such Leaseh o ld Mortgagee] and (B) past
nonmonetary obligatio s then in default and not
reasonably susceptible o being cured by such Leasehold
Mortgagee; and
(2) if not enjoined or stay- , take steps to acquire or sell
Tenant's interest in s Lease by foreclosure of the
Leasehold Mortgage o other appropriate means and
prosecute the same to completion with due diligence.
(ii) If at the end of such six (6 month period such Leasehold
Mortgagee is complying with bsection (g)(i), this Lease shall
not then terminate, and the time for completion by such
Leasehold Mortgagee of its pr•ceedings shall continue so long
as such Leasehold Mortgag. - is enjoined or stayed and
thereafter for so long as such - .sehold Mortgagee proceeds to
complete steps to acquire or :11 Tenant's interest in this Lease
by foreclosure of the Lea•ehold Mortgage or by other
appropriate means with reas•nable diligence or continuity.
Nothing in this subsection (g) of this section 5, however, shall
be construed to extend this - .se beyond the original term
thereof as extended by any o o tions to extend the term of this
Lease properly exercised by enant or a Leasehold Mortgagee
in accordance with section [Ins-rt section number of lease], [nor
to require a Leasehold Mortg.gee to continue such foreclosure
proceedings after the default h.s been cured. If the default shall
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be cured and the Leasehold M•rtgagee shall discontinue such
foreclose proceedings, this Leas: shall continue in full force and
effect as if Tenant had not defa lied under this Lease.]
(iii) If a Leasehold Mortgage is co plying with subsection (g)(i) of
this section 5, upon the acquisi 'en of Tenant's Estate herein by
such Leasehold Mortgagee .1 its designee or any other
purchaser at a foreclosure sale .1- otherwise [and the discharge
of any lien, charge or encumbra ce against the Tenant's interest
in this Lease or the Demis- • Premises which is junior in
priority to the lien of the - .sehold Mortgage held by such
-Leasehold Mortgagee and wh ch the Tenant is obligated to
satisfy and discharge by reason of the terms of this Lease,] this
Lease shall continue in full for - and effect as if Tenant had not
defaulted under this Lease.
(iv) For the purposes of this sectio 5, the making of a Leasehold
Mortgage shall not be deem- • to constitute an assignment or
transfer of this Lease or of the - .sehold Estate hereby created,
nor shall any Leasehold Mort_agee, as such, be deemed to be
an assignee or transferee of is Lease or of the Leasehold
Estate hereby created so .s to require such Leasehold
Mortgagee, as such, to assum- the performance of any of the
terms, covenants or condition• on the part of the Tenant to be
performed hereunder, but the .urchaser at any sale of this Lease
and of the Leasehold Estate h-reby created in proceedings for
the foreclosure of any Leaseh ild Mortgage, or the assignee or
transferee of this Lease and of the Leasehold Estate hereby
created under any instrument •f assignment or transfer in lieu
of the foreclosure of any Lea•-hold Mortgage shall be deemed
to be an assignee or transf- ee within the meaning of this
section 5, and shall be deem • to have agreed.to perform all of
the terms, covenants and con.itions of the part of the Tenant to
be performed hereunder fr•m and after the date of such
purchase and assignment, but •my 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 bu'i 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•urance proceeds be insufficient to
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repair, replace or reconstru t the building or other
improvements to the extent requ ed by section [Insert section
number of lease] and should e Leasehold Mortgage or its
designee choose not to fully re •nstruct the building or other
improvements to the extent r- n uired by section 12(B) such
failure shall constitute an event H f default under this Lease.
(v) Any Leasehold Mortgagee or o er acquirer of the Leasehold
Estate of Tenant pursuant to for-closure, assignment in lieu of
foreclosure or other proceeding may, upon acquiring Tenant's
Leasehold Estate, without furth, consent of Landlord, sell and
assign the Leasehold Estate on uch terms and to such persons
and organizations as are acce•table to such Mortgagee or
acquirer and thereafter be relie ed of all obligations under this
Lease; provided that such assig -e has delivered to Landlord its
written agreement to be bound •y all of the provisions of this
Lease.
(vi) Notwithstanding any other provi sions of this Lease, any sale of
this Lease and of the leasehol• Estate hereby created in any
proceedings for the foreclosure of any Leasehold Mortgage, or
the assignment or transfer of 's Lease or of the Leasehold
Estate hereby created in lieu of e foreclosure of any Leasehold
Mortgage shall be deemed to •e a permitted sale, transfer or
assignment of this Lease and •f the Leasehold Estate hereby
created.
G. Nothing herein contained shall require any Leasehold Mortgagee or its
designee as a condition to its exerci : of right hereunder to cure any
default of Tenant not reasonably sus. eptible of being cured by such
Leasehold Mortgagee or its designee, including but not limited to the
default referred to in section 16 •f Lease provision related to
bankruptcy and insolvency and any o er 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 (f) or (g) of this section . , [or as a condition of entering
into the New Lease provided for by ubsection (h) of this section 5.
H. A Standard Mortgagee Clause namin: each Leasehold Mortgagee may
be added to any and all insurance •olicies required to be carried by
Tenant hereunder on condition that e insurance proceeds are to be
applied in the manner specified ' this Lease and the Leasehold
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Mortgage shall so provide: except tha, the Leasehold Mortgage may
provide a manner for the dispositio of such proceeds, if any,
otherwise payable directly to the Tenan' (but not such proceeds, if any,
payable jointly to the Landlord and the Tenant) pursuant to the
provisions of this Lease.
Landlord shall give each Leasehold ortgagee prompt notice of any
arbitration or legal proceedings between Landlord and Tenant involving
obligations under this Lease. Each Lea ehold Mortgagee shall have the
right to intervene in any such proceed' gs and be made a party to such
proceedings, and the parties hereto do hereby consent to such
intervention. In the event that any Lea-ehold Mortgagee shall not elect
to intervene or become a party to any s ch proceedings, Landlord shall
give the Leasehold Mortgagee notice o f, and a copy of any award or
decision made in any such proceeding•, which shall be binding on all
Leasehold Mortgagees not interve ' g after receipt of notice of
arbitration. In the event Tenant shall fail to appoint an arbitrator after
notice from Landlord, as provided in -ction [insert section number of
lease] hereof, a Leasehold Mortgagee (in order of seniority if here be
more than one) shall have an addition. period of 30 days, after notice
• by Landlord that Tenant has failed to ppoint such arbitrator, to make
such appointment, and the arbitrator .o appointed shall thereupon be
recognized in all respects as if he had been appointed by Tenant.
J. So long as any Leasehold Mortga:e is in existence, unless all
Leasehold Mortgagees shall otherwise expressly consent in writing, the
fee title to the Demised Premises and the Leasehold Estate of Tenant
therein created by this Lease shall not merge but shall remain separate
and distinct, notwithstanding the acq isition of said fee title and said
Leasehold Estate by Landlord or by Tenant or by third party, by
purchaser or otherwise.
_ K. In the event on any occasion herea r Tenant seeks to mortgage his
Leasehold Estate, Landlord agrees to amend this Lease from time to
time to the extent reasonably reque•ted by an Institutional Investor
proposing to make Tenant a loan sec red by a first lien upon Tenant's
Leasehold Estate, provided that suc proposed amendments do not
materially and adversely affect the ri:hts of Landlord or his interest in
the Demised premises. All reasonab - expenses incurred by Landlord
in connection with any such amendm-nt shall be paid by Tenant.
L. If any Leasehold Mortgagee, its d-signee or other purchaser has
acquired the Leasehold Estate of enant pursuant to foreclosure,
conveyance in lieu of foreclosure or other proceedings, or has entered
into a New Lease with Landlord in .ccordance with subsection (h) of
14
this section 5, such Leasehold Mo gagee, its designee or other
purchaser shall succeed to the rights .1 Tenant, if any, in and to the
security deposit paid by Tenant to Lan.lord pursuant to section [insert
section number of lease] of this lease. In such event, Tenant shall no
longer have any rights to such security .eposit, and Landlord shall hold
such security deposit for and on be . • of such Leasehold Mortgagee,
its designee or other purchaser.
M. Landlord shall, without charge, at . y time and from time to time
hereafter, but not more frequently than twice in any one-year period (or
more frequently if such request is mad- in connection with any safe or
mortgaging of Tenant's Leasehold in rest or permitted subletting by
Tenant), within 10 days after written r quest of tenant to do so, certify
by written instrument duly execu id and acknowledged to any
Mortgagee or purchaser, or prop•sed Mortgagee or proposed
purchaser, or any other person, firm •r corporation specified in such
request: (A) as to whether this .se has been supplemented or
amended, and if so, the substance anmanner of such supplement or
amendment; (B) as to the validity and orce and effect of this Lease, in
accordance with its tenor; (C) as t• the existence of any default
• hereunder; (D) as to the existence •f any offsets, counterclaims or
defense hereto on the part of the Ten. t; (E) as to the commencement
and expiration dates of the term of s Lease; and (F) as to any other
matters as may be reasonably so requ-sted. Any such certificate may
be relied upon by the Tenant and any they person, firm or corporation
to whom the same may be exhibits •r delivered, and the contents of
such certificate shall be binding on - Landlord.
N. Notices from Landlord to the Leaseh•ld Mortgagee shall be mailed to
the address furnished Landlord purs t to subsection (b) of this section
5, and those from the Leasehold Mo gage to Landlord shall be mailed
to the address designed pursuant to th- provisions of section 26 hereof.
Such notices, demands and reques . 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 ent was, in fact, due under the
terms of this Lease; and a Leaseh•ld Mortgagee having made any
payment to Landlord pursuant to . dlord'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 e pense, bear, pay and discharge
prior to delinquency, all real estate . es and special assessments or
other taxes which shall be levied, arged, or assessed upon the
Demised Premises and the Improve ents thereon during the term
hereof.
B. Tenant reserves the right to conies the validity of any assessed
valuation of the Land or Improveme is and to pay any taxes under
protest. Landlord shall execute an. deliver to Tenant whatever
documents may be necessary or pro.=r to permit tenant to so contest
any such imposition or which may be necessary to secure payment of
any refund which may result i om any such proceedings.
Notwithstanding the foregoing, Tenan shall not contest any real estate
assessment of the Demised Premises the result thereof would be to
reduce the assessed valuation of e Demised Premises and the
Improvements thereon below the sum of$1,250,000.
C. Tenant shall pay all interest and •-nalties imposed upon the late
payment of any obligation under this •aragraph.
7. Repairs. Subject to the provisions of Articl- 12 and 15 below, Tenant shall
at all times during the term of this Lease, at Tenant's •wn cost and expense, keep the
Demised Premises and the Improvement thereon, and all si.ewalks, curbs, vaults, and vault
spaces adjoining the Demised Premises, and all appurten. ces to the Demised Premises,in
good order, condition, and repair, ordinary wear and - . expected, and in such condition
as may be required by law and by the terms of the insu . 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 =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 ises, and of any agency thereof,
relating to the Demised Premises or the Improvements now or
hereafter located thereon, or the fac 'ties or equipment therein, or the
streets, sidewalks, vault, vault space., curbs, and gutters adjoining the
Demised Premises, or the appurten. ces to the Demised Premises, or
the franchises and privileges conne -d therewith.
16
B. Any ordinance, or amendment of . ordinance, enacted after the
execution of the agreement, other th., amendments to fee schedules
which are of general application, whic restrict the use of the demised
premises as otherwise permitted on the date of execution of the
agreement shall not be applicable io the tenants of the demised
premises.
9. Alterations. Tenant shall have the right, at 1 enant's expense and at Tenant's
sole discretion, from time to time during the term of thi Lease to make any alteration,
addition, or modification to the Demised Premises or the provements 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. ided further, that if any such
alteration or modification shall involve the removal or material demolition of the
Improvements, then Tenant shall obtain Landlord's prio written consent thereto, which
consent shall not be unreasonably withheld. It is expre.sly understood that Landlord's
consent may be conditioned upon the furnishing by Ten. t of waivers of mechanics' and
materialman's liens from all persons furnishing materials •r labor.
10. Mechanic's Liens. During the term of this - .se, Tenant shall not permit any
mechanics', materialmans' or other such lien to be placed :gainst the Demised Premises by
reason of any work, labor service, or material performed or furnished for or to Tenant or
anyone occupying the Demised premises through or under Tenant. Tenant shall at all times
indemnify Landlord against and hold it harmless with res.-ct to any loss, cost, fee, charge,
expense, lien, or liability of any nature occurring or acc I ing by virtue of any such work,
labor, service, or material performed or furnished for or to the Tenant.
11. Insurance.
A. Tenant will at all times during e term of this Lease maintain
insurance on the Demises Premises •f the following character:
•
(i) insurance against loss or d. age by fire and other risks and
perils from time to time in luded under standard extended
coverage endorsements in . , amount equal to not less than
eighty percent (80%) of e replacement value of the
Improvements(exclusive of th- costs of excavation, foundations,
and footings below the lowes' floor). (The insurance described
in this sub-paragraph 11A(i shall hereinafter be called the
"Casualty Insurance.")
(ii) General comprehensive pub 'c liability insurance (including
coverage for elevators, if an , on the Property) against claims
for bodily injury, death, or .roperty damage occurring on, in,
or about the Demised Pre, 'ses and the adjoining streets,
sidewalks, and passageways, .uch insurance to afford protection
17
of not less than $5 million with -spect to bodily injury or death
to all persons in any one accide i t, and not less than $1 million
with respect to property damag; in any one occurrence. (The
insurance described in this sub-paragraph 11 A(ii) shall
hereinafter be called the "Liab' ty Insurance.")
(iii) Adequate boiler and pressure ve.sel insurance on all equipment,
parts thereof, and appurtenanc;s attached or connected to the
Demised Premises which by r- .son of their use or existence are
capable of bursting, erupting, ollapsing, or exploding. (The
insurance described in this sub-paragraph 11 A(iii) shall
hereinafter be called the "Boile Insurance.")
B. Any such insurance shall be writte by companies of recognized
financial standing which are well rate' by a national rating agency and
are legally qualified to issue such insu . ce in the State of Illinois, and
such insurance shall name as the insur- • parties thereunder, Landlord,
or its assigns, and Tenant, as the', interests may appear. Such
insurance may be obtained by Tenan by endorsement on its blanket
insurance policies, provided that (i) .uch blanket policies satisfy the
requirements specified herein and (ii) . dlord shall be furnished with
the certificate of the insurer to th- effect that (a) the amount of
insurance allocable to the Demised Pr,mises is not less than the amount
required by this Article and (b) the protection afforded Tenant and
Landlord is not less than the pro -ction which would have been
afforded under a separate policy sr policies relating only to the
Demised Premises. Landlord shall , of be required to prosecute any
claim against any insurer or to contes any lement proposed any
insurer, provided that Tenant may, .t its costsettand expense, prosecuteby
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 Lan•lord shall cooperate with Tenant
and will joint therein at Tenant's 'tten request upon receipt by
Landlord of an indemnity from Ten. t against all costs, liabilities, and
expenses in connection with such coiperation, prosecution or contest.
C. Tenant shall deliver to Landlord • omptly after the execution and
delivery of this Lease the original o duplicate policies or certificates
of insurance, including certificate evidencing the naming of the
Landlord as an additional insured where necessary, satisfactory to
Landlord evidencing all the insu . ce which is then required to be
maintain by Tenant hereunder, and I enant shall, within 30 days prior
to the expiration of any such ins I ranee, deliver other original or
duplicate policies or other certifica -s of the insurers evidencing the
renewal of such insurance. Should enant fail to effect, maintain, or
18
renew any insurance provided for h:rein, or to pay the premium
therefor, or to deliver to Landlord any •f such policies or certificates,
Landlord, at its option, but without obi"gation so to do, may procure
such insurance, and any sums expended by it to procure such insurance
shall be additional rent hereunder and s all be repaid by Tenant within
30 days following the date on which de and therefor shall be made by
Landlord. Such insurance Policy(ies) shall contain a provisions that
such policy(ies) shall not be canceled o reduced in scope without thirty
(3) days prior written notice to Landlo d.
12. Casualty.
A. If the Improvements on the Demised P emises or any part thereof shall
be damaged or destroyed by fire o other casualty, Tenant shall
promptly notify Landlord of such des• ction or damage. Rent shall
not abate hereunder by reason of any •amage to or destruction of the
Improvements, except as specifically •rovided for in this Lease.
B. If the Improvements on the Demi.ed Premises are substantially
damaged or destroyed in any single fir; or by any single casualty, then,
at Tenant's election and in lieu of re•uilding, replacing and repairing
the Improvements as provided in this -ase:
(i) Tenant may, upon one hundred eighty (180) days written notice,
elect to terminate this . :, whereupon rent shall abate
retroactive to the date of loss;
(ii) All insurance proceeds receiv- • or to be received under the
Casualty Insurance Policy sh: be the sole property of the
Landlord;
(iii) Tenant shall have no responsi•ility whatsoever with regard to
the repair or replacement of . y of the Improvements or other
damages to the Demised Pre 'ses caused by such casualty.
C. If a portion of the Demised Premi ;s or the Improvements shall be
damaged or destroyed by fire or oth-r casualty and this Lease is not
terminated as provided for herein, th-n:
(i) Rent shall not abate;
(ii) Tenant shall, at its own costs . d expense, repair and/or rebuild
the Improvements and all d. ages to the Demised Premises;
19
(iii) Landlord shall fully cooperate • making available to the Tenant
at Tenant's request such insu . ce proceeds from the Casualty
Insurance Policy as may be r-:sonable necessary to complete
such repair or restoration by T,nant;
(iv) Upon the completion of such repair or restoration, Landlord
shall cooperate in turning ov-r or assigning to Tenant any
excess insurance proceeds rem.i. • g with the understanding that
excess proceeds shall be and remain the sole and exclusive
property of the Tenant.
Nothing herein shall require the Ten. t to pay or expend in the repair
or restoration of the Improvements o Demised Premises any sum of
money in excess of the insurance pro.eeds with regard to the Casualty
Insurance.
13. Indemnity. Tenant will indemnify and hold 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, p:nalties, claims, and judgment (to
the extent that the same are not paid out of the proceeds of: y policy of insurance furnished
by Tenant to Landlord pursuant to Article 11 hereof) arisin: 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 contro of the Demised Premises, the
Improvements now or hereafter located thereon, the fac• 'ties and equipment thereon, the
streets, sidewalks, vaults, vault spaces, curbs, and gutters adjoining the Demised Premises,
the appurtenances to the Demised Premises, or the fr. l 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 sui • 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 Landlor• may be a party defendant, or that
may be filed against the Demised Premises, or the 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 hav- 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 ente .' ent and support facilities
for the adjacent Riverboat Gambling Operation upon the Demised
Premises, it is agreed and understo.• that Tenant may sub-lease
portions of the Demised Premises or provements thereon to sub-
lessees or concessionaires who opera - activities or facilities which
compliment said Riverboat Gambling • N eration or are ancillary thereto,
all without the consent of the Landlord
B. Except as otherwise provided herein, Tenant may not sublease any
portion of the Demised Premises or assign its interest in this Lease
without the prior consent of the Landlord, which consent shall not be
unreasonably withheld.
15. Environmental Conditions. The City grees, represents and warrants
that as of July 1, 1993:
(i) no Hazardous Materials will be located on, in or under the Site;
(ii) no portion of the Site will curr ntly be in use for the disposal,
storage, treatment, processing, or other handling of Hazardous
Materials;
(iii) no underground storage tanks be located on, in, or under
the Site and all underground storage tanks formerly existing on
the Site will have been pro.-rly removed and/or filled in
accordance with all applicable 1 .ws and regulations;
(iv) no investigation, administrativ, order, consent order, litigation,
settlement or legal action with respect to Hazardous Materials
will be pending or, to the Ci 's best knowledge after diligent
inquiry, will be threatened, wi respect to the Site;
(v) the Site will comply, and to e City's best knowledge after
diligent inquiry all prior use. of the Site have at all times
complied, with all applicable laws and regulations relating to
environmental matters or H. .rdous Materials.
The term "Hazardous Materials" me. s (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 and unrefined) and their respective
byproducts and constituents; and (v) ; y other substance which by any
governmental requirements require• special handling in its use,
collection, storage, treatment or disp o sal.
21
Environmental Audit. Not later than N•vember 1, 1992, the City shall
obtain at its own expense and pr•vide to the Developer an
environmental audit (phase one, and if required thereafter, phase two
and phase three) of the proposed are.s which Developer intends to
construct buildings on the Site. The au•it shall verify the accuracy of
the City's representations and warr; ties and shall disclose no
environmental conditions which might n-gatively affect the construction
or completion of the project.
16. Default by Tenant; Termination.
A. The occurrence of any of the folio g shall constitute a material
default and breach of this Lease by Te ant:
(i) Any failure by Tenant to pay e rental, taxes or other sums
required to be paid by Tenant hereunder where such failure
continues for thirty (30) days :fter written notice thereof by
Landlord to Tenant; or
(ii) There shall be filed by or ag.' st Tenant in any court or other
tribunal a petition in bankrupt i or insolvency proceedings or
for reorganization, which proc- •ds are not dismissed within 180
days; or
(iii) Pursuant to any other default or breach of this Lease by Tenant,
Landlord obtains a money judg ent against Tenant in a court of
competent jurisdiction, and -uch judgment is not paid to
Landlord within sixty (60) da s after such judgment becomes
final.
(iv) Developer's violation of the n•n-competition under Paragraph
VI(J) of the Development Agr.ement.
(v) Developer's of IV(A) of the D-velopment Agreement
(vi) Any other default which cause. a termination of the Lease.
Landlord's sole and exclusive remed as agLinst the Tenant by reason
of the occurrence of a material defa It and breach of this Lease by
Tenant shall be to terminate this -4 se, whereupon all of Tenant's
rights and interest in and to the Impro ements on the Demised Premises
shall be forwarded to and become th; sole and exclusive property of,
the Landlord, including any bond po•ted by Developer.
22
B. The occurrence of any default or breach of this Lease by Tenant, other
than those set forth in subparagraph A •bove, shall be deemed not to
be material hereunder, and Landlord shall not have the right to
terminate this Lease for any such defau t. In the event of such a non-
material default, which default contin es for thirty (30) days after
written notice thereof by Landlord to Tenant (provided that, if the
nature of such default is such that the . e cannot be cured within such
30-day period, Tenant shall not be de-med to be in default if Tenant
shall within such period commence su I cure and thereafter diligently
pursue the same to completion), • dlord's sole remedy shall be
damages, as determined by a court of ompetent jurisdiction.
C. Landlord hereby agrees that upon • financial default by Tenant
hereunder, Landlord shall, concurren y with the delivery of written
notice of such default to Tenant, deliv-r a copy of such notice to any
leasehold mortgagee and that in addition to the leasehold mortgagee's
rights, as set forth in Article 5 above, I • dlord hereby agrees that said
leasehold mortgagee shall have the ght to cure any such financial
default by tenant hereunder.
17. Default by Landlord; Termination.
A. Upon any breach or failure by the I . dlord to perform any of its
covenants or obligations as set forth h:rein, or any breach by Landlord
of its representations as set forth her.in, which breach continues for
more than thirty (30) days following 'tten 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 Lana lord, 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 result thereof;
(ii) To terminate this Lease and, • connection therewith, to require
Landlord to purchase from Te ant the Improvements and, if so
elected by Tenant, the Tenant'. Trade Fixtures, all at their then
fair market value and to reco er from Landlord Tenant's lost
profits. For purposes of the oreceding sentence, the term "lost
profits" shall mean the pres-nt value of the Net Operating
Income of the Tenant re, -ived by Tenant during the
immediately-preceding twely. months of the Lease for the
remainder of the term of this -ase, and all extensions thereof,
with the interest factor used such calculation being equal to
23
f
the LIBOR rate of interest as I f a date most near the date of
such breach.
(iii) To have and enjoy such other . d further remedies as may be
available at law or in equity un er Illinois law.
(iv) To require the City at its .ole expense to remedy any
environmental conditions rev- . ed by the environmental audit,
provided that if the City is una s le to do so in a timely fashion,
Tenant shall be entitled to term ate the Lease and recover the
release of the bond and any option monies paid under the
Development Agreement.
All remedies set forth herein are cum lative.
18. Voluntary Termination by Tenant. At the Ten. is sole discretion and election,
the Tenant may declare this Lease terminated at any time. I pon such voluntary termination
by Tenant it is agreed and understood:
A. Tenant shall have the right to remove all of its Trade Fixtures;
B. All Improvements on the Demised Pr- .ses and the Riverboat shall be
forfeited to and remain the sole and ex. lusive property of the Landlord,
as well as the balance of the bond po•ted by Developer;
C. Tenant shall have no further liabili , to Landlord whatsoever with
regard to this Lease.
Notwithstanding any such termination, the Landlord shall still perform its obligations
of indemnity to Tenant as set forth under paragraph 15 above.
19. Tenant's Expenses. Landlord shall reimbu se Tenant upon demand for all
reasonable expenses, including attorneys' fee, incurred b Tenant in connection with any
litigation to enforce any obligation of Landlord which s in default hereunder. If the
leasehold interest of Landlord hereunder shall hereafter b. 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 is made a party to such litigation
without Tenant's consent, then Landlord shall reimbur a Tenant upon demand for all
reasonable expenses, including attorneys; fee, incurred b, Tenant in connection with any
such litigation.
20. Landlord's Expenses. Tenant shall reimbur.a 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 the rotection of Landlord's rights
hereunder, or any litigation or dispute in which Landlord o ecomes a party or otherwise
becomes involved, without fault on its part, relating to the 1-mired Premises or Landlord's
rights or obligations hereunder. If the leasehold interest of enant hereunder shall hereafter
be held by more than one person, corporation, or other enti , and if litigation shall arise by
reason of a dispute among such persons, corporation, or o er entities, and if Landlord is
made a party to such litigation without Landlord's consen , then Tenant shall reimburse
Landlord upon demand for all reasonable expenses, includ. g attorneys' fees, incurred by
Landlord in connection with any such litigation.
21. Waiver of Trial by Jury. To the extent permi -d by law, Landlord and Tenant
hereby waive trial by jury in any litigation brought by either of the parties hereto against the
other on any matter arising out of or in any way connected with this Lease or the Demised
Premises or the Improvements thereon.
22. Merger. In no event shall the leasehold inte est, estate, or rights of Tenant
hereunder, or of the holder of any mortgage upon this Lease merge with any interest, estate,
or rights of Landlord in or to the Demised Premises, it bein: 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 Lang lord's interest, estate and rights
in or to the Demised Premises, notwithstanding that any suc interests, estates, or rights shall
at any time or times be held by or vested in the same person, 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 o corporations, or other entity or
entities who are the owner or owne s of the reversionary estate of
Landlord in and to the Demised Pi emises. In the event of any
conveyance or other divestiture of ti e to the reversionary estate of
Landlord in and to the Demised Pre ses, the grantor or the person or
person, corporation or corporations, or other entity or entities who are
divested of title shall be entirely freed and relieved of all covenants and
obligations thereafter accruing hereuno er, and the grantee or the person
or persons, corporation or corporatio s, or other entity or entities who
otherwise succeeds or succeed to title shall be deemed to have assumed
the covenants and obligations of . dlord hereunder so assumed by
said grantee or successor. Tenant ag ees to attorn to any such grantee
or successor.
B. Notwithstanding anything to the con . as stated in paragraph 23A
above, it is agreed and understood th:t the City of Elgin, Illinois, shall
at all times remain obligated to ' demnify the Tenant under the
provisions of paragraph 15 above (concerning environmental liability)
25
•
and shall be personally liable to the Te ant by reason of its breach or
failure to do so as provided in paragra h 17 above.
24. Landlord's Representations and Warranties.
A. Quiet Enjoyment. Landlord covenants at at all times during the term
of this Lease, so long as Tenant is net in default hereunder, Tenant
shall have the quiet and peaceable enjo ment of the Demised Premises.
B. Landlord has good and merchantable title to the Land and Demised
Premises and has fully power and au ority to make, enter into and
perform its obligations under this Lea-e.
C. Prior to the commencement date of this Lease, the Landlord shall
provide to Tenant, at Landlord's ex.-nse a leasehold policy of title
insurance, issued by Chicago Title surance Company, insuring the
leasehold estate of Tenant in the Demi ed Premises in an amount equal
to One Million Dollars ($1,000,000) and containing a 3.0 zoning
endorsement indicating that the De i sed Premised may be lawfully
used for the conduct of Riverboat G. bling Operation.
D. Simultaneously with the execution of 's Lease, Landlord shall provide
to Tenant a certified copy of the reso tions of the Elgin City Council
authorizing the execution and perfo ance of this Lease by Landlord,
together with an opinion of Erwin W. Jentsch, Esq.; Corporation
Counsel of the City of Elgin, directed to Tenant in form and substance
reasonably acceptable to Tenant's cou sel opining that the City has full
power and authority to make, execute < d perform its obligations under
this Lease; that the Lease is a valid . d binding obligation of the City
enforceable in accordance with its rms; and that the City has full
power and authority to make the env' onmental indemnities as set forth
herein.
25. Renewal Options.
A. Provided that Tenant is not then in de ault hereunder, Tenant shall have
the right to renew this Lease for s ccessive five-year terms, not to
exceed twenty years in total.
26
B. To exercise any such renewal option, the Tenant shall give written
notice thereof to the Landlord not la r than 180 days prior to the
expiration of the then-current term of 's Lease.
C. During any such extended term of s Lease, all of the terms and
conditions of this Lease shall remain ui odified and in full force and
effect.
26. Notices. Any and all notices, demands, ele«lions or other communications
between the parties shall be in writing and shall be delivered personally or by certified mail,
return receipt requested. If mailed, such notice shall be de•osited, postage prepaid, in the
United States mail, addressed to the intended party at the as dress set forth below.
If to Landlord: City of Elgin
150 Dexter Court
Elgin, IL 60120
Attn: City Clerk
If to Tenant: Elgin Riverboat Resort
c/o Mr. Peter A. Simo
Nevada Landing Hotel Casino
P.O. Box 19278
Jean, NV 89019
Any party may change the person or address to o at which it is to receive notice
hereunder by giving notice of such change as provided he -in.
27. Estoppel Certificates. Each party hereto ag -es that at any time and from time
to time during the term of this Lease, within ten (10) day• after request by the other party
hereto or by any leasehold mortgagee, it will execute, a•knowledged, and deliver to the
leasehold mortgagee or such other party or to any prospe•five purchaser, assignee, or any
other mortgagee designated by such other party, a certifi•.to 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 modifica ion agreements); (b) the date to
which rent has been paid; (c) whether or not there is any -xisting 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 hich 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 counter•laims against enforcement of the
obligations to be performed hereunder existing in fav•r of the party executing such
certificate.
28. Payments of Money; Interest. All amounts hatsoever which Tenant shall be
obligated to pay to Landlord pursuant to this Lease shall •e deemed rent, and in the event
27
of the nonpayment by Tenant of any sum of money which T-nant from time to time shall be
obligated to pay to Landlord under any provision of this Lea-e, Landlord shall have the same
rights and remedies by reason of such nonpayment as ' Tenant had failed to pay an
installment of Rent under Article 2 hereof.
29. Non-Waiver. No.waiver by Landlord of any breach by Tenant of any term,
covenant, condition, or agreement herein and no failure b Landlord to exercise any right
or remedy in respect of any breach hereunder, shall cons; to a waiver or relinquishment
for the future of any such term, covenant, condition, or .greement or of any subsequent
breach of any such term, covenant, condition, or agreemen 1, not bar any right or remedy of
Landlord in respect of any such subsequent breach, nor sh.1 the receipt of any rent, or any
portion thereof, by Landlord, operate as a waiver of the ghts of Landlord to enforce the
payment of any other rent then or thereafter in default, .1 to terminate this Lease, or to
recover the Demised Premises, or to invoke any other app opriate remedy which Landlord
may select as herein or by law provided.
30. Surrender.
A. Tenant shall, on the last day of the -rm of this Lease or upon any
termination of this Lease pursuant to Article 16, 17 or 18 hereof, or
upon any other termination of this Le. se, well and truly surrender and
deliver up the Demised Premises, wi the Improvements then located
thereon into the possession and wi the Improvements then located
thereon into the possession and use of Landlord, without fraud or delay
and in good order, condition and re... , free and clear of all lettings
and occupancies, free and clear of . liens and encumbrances other
than those existing on the date of this Lease and those, if any, created
by Landlord, without any payment or allowance whatever by Landlord
on account of or for any building. and improvements erected or
maintained on the Demised premises .t the time of the surrender, or for
the contents thereof or appurtenances thereto; provided, however, that
Tenant's Trade Fixtures, personal p operty, and other belongings of
Tenant or of any subtenant or other ccupant of space in the Demised
Premises shall be and remain the pro.-rty of Tenant, and Tenant shall
have a reasonable time after the exp. .tion of the term of this Lease to
remove the same.
B. Notwithstanding the provisions of p. .graph 30A above, in the event
that the Demised Premises is surrenn ered following the occurrence of
any casualty loss thereon, then unle•s the Tenant elects to repair said
casualty loss and, in connection erewith, to use any Casualty
Insurance proceeds, the Tenant sh. 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 Insurance •olicy shall remain the sole and
exclusive property of the Landlord.
31. Memorandum of Lease. Each of the parties he -to will, promptly upon request
of the other, execute a memorandum of this Lease in form su. •ble for recording setting forth
the names of the parties hereto and the term of this Lease, id-i tifying the Demised Premises,
and also including such other clauses therein as either party ay desire, except the amounts
of Basic Rent payable hereunder.
32. No Oral Changes. This Lease may not be I anged or modified orally, but
only by an agreement in writing signed by the party or its authorized agent against whom
such change or modification is sought to be enforced.
33. Bind and Inure. The terms, covenants, con•itions, and agreements of this
Lease shall bind and inure to the benefit of the parties here a and their respective successors
and assigns.
34. Applicable Law. This Lease shall be gove ed and construed in accordance
with the laws of the State of Illinois.
• 35. Entire Agreement. This Lease, together wi i the Development Agreement,
shall constitute the entire agreement of the parties conce • g the subject matter set forth
herein and in said Development Agreement, all other prio i agreements and understandings
having been merged herein and extinguished hereby.
36. Obligation to Refrain from Discrimination. T e parties hereto hereby covenant
by and for themselves, their heirs, executors, administrators, 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.• st 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 the land herein leased, nor shall the
lessee himself, or any person claiming under or through • , establish or permit any such
practice or-practices of discrimination or segregation with :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 -1 containing at least 150 rooms,
then Tenant shall have the right . d option, exercisable within 24
months following the issuance of a :rtificate of occupancy with regard
to said hotel, to purchase the :mised Premises and Land (the
"Option").
29
B. To exercise the Option, Tenant shall e iecute and deliver to Landlord
that certain Contract in the form attach- 1 hereto as Exhibit C, inserting
therein the appropriate date of closing, ,urchase price (as determined
below) and other information necessary to complete said form.
C. The purchase price to be paid pursuant o the exercise the Option shall
be determined as follows:
The purchase price shall be determined •y an appraisal to be conducted
by a jointly-approved appraiser u B ' ing the income method of •
determining fair market value. Th, capitalization rate shall be
determined by using the average of .'d rate over the previous 24-
month"period starting on the date of ex-rcise of the option.
D. Following an exercise of the Option, th real estate transaction shall be
governed and controlled in accordance with the terms of the Contract.
30
IN WITNESS WHEREOF, the parties ha e caused this agreement to be
executed on the date first written above.
CITY OF ELGIN, ELGIN ' IVERBOAT RESORT,
a municipal corporation an Illina s partnership
4 ' 1„! By ' :G, L.P.,
By: U(0—#1G'''�-� `" one $f its general partners
Mayor
B, HCCA Corporation,
Attest: it, genera sit ner
IA
B, : !�
City Clerk 'chard L. chulze �
Vice Pr:. $ent
31
REAL ESTATE SALE AGREE NT
THIS AGREEMENT is made and entered into this day of
1992, by and between the City of Elgin, an Illinois mu icipal corporation (hereinafter
(hereinafter referred to as "Seller") and Elgin Riverboat R:sort (hereinafter referred to as
"Purchaser").
RECITALS
A. Seller currently holds title to real estate . d appurtenant rights including
approximately acres of land located at , in the City of
Elgin, Kane County, Illinois. The aforesaid real estate is 1;gaily described as on Exhibit A
attached hereto (which real estate and all improvements the -on shall hereinafter be referred
to as the "Real Estate").
B. Purchaser desires to purchase the Real Esta : from Seller, and Seller desires
to sell and/or cause the Trustee to sell the Real Estate to Purchaser, upon the terms and
conditions hereinafter set forth.
CONSIDERATIO
In consideration of the mutual covenants and pro 'ses of the parties, Seller and
Purchaser hereby agree as follows:
AGREEMENT
1. Sale and Purchase. Seller agrees to sell an./or cause the Trustee to sell and
Purchaser agrees to purchase the Real Estate upon the to s and conditions herein set forth
for a purchase price of , (hereinafter re;erred to as the "Purchase Price").
2. Conveyance. Seller agrees to convey, or ca se to be conveyed, to Purchaser,
or Purchaser's nominee, title to the Real Estate by a recordable, 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 the sum of Five Thousand ($5,000)
Dollars as earnest money upon the execution hereof which shall be applied on the Purchase
Price at the Closing, as hereinafter defined. The balance of e Purchase Price, plus or
minus prorations, shall be paid by Purchaser at the closing in sh or certified or cashier's
check payable to Seller or Seller's order. The earnest money s -11 be held by Chicago Title
and Trust Company (hereafter called "CTTC") in its standard joint order escrow for the
benefit of the parties, and shall be deposited by Purchaser 'thin 5 days following the
acceptance of this Agreement. Purchaser shall pay all fees in .onnection with the escrow.
4. Closing.
•
(a) The consummation of the transaction h: rein described (hereinafter
referred to as the "Closing") shall be on , or on the
date to which such time is extended by : son of Paragraph 8 unless
subsequently mutually agreed otherwise, .t the office of Chicago Title
& Trust Company in St. Charles, Illinoi. (hereinafter referred to as
"CTTC") or such other location as is cceptable to Purchaser and
Seller, provided title is shown to be in the condition required herein or
is otherwise acceptable to Purchaser. At e Closing, the parties shall
deliver all documents required by this A: eement.
(b) At the election of either party, the transac on herein contemplated may
be closed through an escrow with C C, in accordance with the
general provisions of the usual form o Deed and Money Escrow
Agreement then in use by said company, with such special provisions
•
inserted in the escrow agreement to pe t an immediate ("New York-
Style") closing and as otherwise may be equired to conform with this
Agreement. Upon the creation of such . escrow, anything herein to
• the contrary notwithstanding, payment of the Purchase Price and
delivery of deed shall be made through e escrow and the cost of said
escrow shall be shared equally by the pa .'es.
5. " Delivery of Possession. Seller acknowledges at Purchaser is currently in
possession of the real estate.
•
6. Condition. Seller agrees to deliver the Real Elate in the same condition as
it is at the date of this Agreement, ordinary wear and tear ex, pted.
7. Evidence of Title. Seller shall deliver, or caus- to be delivered, to Purchaser
or Purchaser's nominee, within fifteen (15) days after the ac• ptance and execution of this
Agreement by both Parties, a current title commitment om Chicago Title Insurance
Company for an ALTA (1970) Form B Owner's Title Insu : ce Policy in the amount of
$ . The aforesaid commitment shall show title in the intended grantor subject only •
to (a) rights of Purchaser under existing leasehold; (b) th- title exceptions set forth in
Paragraph 2 hereof; and (c) title exceptions pertaining to liens or encumbrances of a definite
or ascertainable amount which may be removed by the payme t of money at the Closing and
which the Seller will so remove at that time by using the funds • be paid to Seller hereunder
(all of which are herein referred to as the "Permitted Excepti•ns"). The title commitment
(and policy issued pursuant thereto) shall contain extended coverage over the general
exceptions to the policy. The title policy shall be conclusive ev'•ence of good title as therein
shown as to all matters incurred by the policy subject only to ii e exceptions therein stated.
8. Closing Adjustments. General real estate tax s and assessments shall be
adjusted ratably (prorated) with respect to the subject Iran :ction as of the day of the .
Closing, using, for such purpose, a presumed 19 real esta tax amount determined by
multiplying the most recent assessed vluation of the Real :state (as determined by the
Township Assessor's office) times and then m ltiplying that product by the
tax rate that was applicable to the Real Estate. Rent s -11 also be prorated as of the
date of closing. No other items shall be prorated and all pro -tions shall be final. Seller
shall pay the amount of any stamp tax imposed by law by the 'tate of Illinois, the county in
which the Real Estate is located, and by any other local law o ordinance on the transfer of
title, and shall furnish completed real estate transfer declaratio s signed by Seller or Seller's
agent in the forms required pursuant to such laws.
9. Damage. The provisions of the Uniform Vend•r and Purchaser Risk Act of
the State of Illinois shall be applicable to this Agreement. •
10. Time. Time is of the essence of this Agreemen . •
11. Notice. All notices herein required shall be in Sting and shall be served on
the parties at the following addresses:
-If to Purchaser: Peter A. Simon
Nevada Landing Hotel & I asino
P.O. Box 19278
Jean, NV 89019
- - with copy to: Robert S. Kramer, P.C.
1250 Larkin Avenue, Ste. 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, retu receipt requested, shall be
sufficient service. Notices shall be deemed served when deli ered if delivered by hand, or
on the date of mailing, if mailed as described above.
3
•
•
12. Choice of Law. This Agreement shall be gove ed by the laws of the State
•
of Illinois.
13. Miscellaneous: If the date for Closing or perfo . ce of an obligation falls
on a Saturday, Sunday or holiday, the date shall be deferred until the first business day
following. No amendments, modifications or changes shall be •inding upon a party unless
set forth in a duly executed document.
14. Termination.
(a) If this Agreement is breached by Pur . r, then (i) Seller may
terminate this Agreement and the earnest money shall be forfeited to
the Seller and retained by the Seller as liq idated damages or(ii) Seller
may seek specific performance of Purch. is obligations under this
Agreement or (iii) Seller may recover suc damages from Purchaser as
Seller may have thereby incurred, apply' g the Earnest Money to any
judgment obtained in such action and reco er any excess damages from
Purchaser. The remedies of Seller enum-rated herein are cumulative.
(b) If this Agreement is breached by Seller, en (i) Purcha§er may declare
this Agreement null and void (whereupo all Earnest Money shall be
refunded to Purchaser) or(ii) Purchaser -y seek specific performance
of Seller's obligations hereunder or (iii) Purchaser may pursue such
other remedies as may be available agains the Seller under Illinois law.
The remedies enumerated herein shall be 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 other •n by reason of the breach
hereof by either party, then all Earnest Money shall be refunded to
•
• Purchaser.
15: Authority to Execute. Purchaser and Sell-r hereby covenant that the
execution of this Agreement and the transaction herein ntemplated have been duly
approved by all necessary corporate action and that the party executing this Agreement on
behalf of Purchaser is authorized to execute same.
16. Entire Agreement. This Agreement contains the entire agreement of the
parties with respect to the sale and purchase of the Rea Estate. All previous and
contemporaneous negotiations, understandings and agreemen between the parties hereto,
with respect to the transactio set forth herein, are merged in this instrument, which along
fully and completely expresses the parties' rights and obliga ons. The preparation of this
. Agreement has been a joint effort of the parties hereto and the i suiting documents shall not,
solely as a matter of judicial construction, be construed mo e severely against one of the
parties than the other.
4
•
•
17. Terms. As used herein, the terms (a) "person" ,hall mean an individual, a
corporation, a partnership, a trust, an unincorporated organizati•n or any agency or political
subdivision thereof, (b) "including" shall mean including, with•ut limiting the generality of
the foregoing, and (c) the masculine shall include the feminine and the neuter.
18. Binding Effect and Survival.
(a) This Agreement shall be binding upon and shall insure to the benefit of
the parties hereto and their respective heir., executors, administrators,
legal representatives, successors and assi ns. No assignment of this
Agreement shall relieve the assigning p. of its obligations hereunder.
(b) All representations, warranties and cove . is contained herein shall
survive the Closing and the delivery of e Deed.
19. Captions. The captions of this Agreement are inserted for convenience of
reference only and in no way define, described or limit the sco• of intent of this Agreement
or any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have e ecuted this 'Real Estate Sale
Agreement as of the day first above written.
•
•
•
5
City of Elgin,
an Illinois mu icipal corporation,
By:
Mayor
Seal
Attest:
City + lerk
Elgin Riverb•at Resort,
an Illinois 13. ership,
M.S.E. Inves ents, Inc
• Last Chance I vestments,Inc.
Diamond Gol. ,Inc.
• Gold Strike vestments, Inc.
EXHIBIT A
Legal Description
LOTS 2-14 INCLUSIVE,IN BLOCK 358 OF O. DAVIDS/I 'S ADDITION TO ELGIN,
IN THE CITY OF ELGIN, KANE COUNTY, IL
LOTS 1-28 INCLUSIVE, IN BLOCK 359 OF O. DAVIDS IN'S ADDITION TO ELGIN,
IN THE CITY OF ELGIN, KANE COUNTY, IL
LOTS 1-12 INCLUSIVE OF DAVIDSON'S GROVE A E SUB. IN THE CITY OF
ELGIN, KANE COUNTY, IL
THAT PORTION OF WELLINGTON AVE LYING SOUT OF THE SOUTHERNMOST
PART OF LAKE STREET DESCRIBED AS WELLING ON 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 AD'ITION TO ELGIN, IN THE
CITY OF ELGIN, KANE COUNTY, IL
.
7
EXHIBIT B
LOTS 2-14 INCLUSIVE,IN BLOCK 358 OF O. DAVIDSO "S ADDITION TO ELGIN, IN
THE CITY OF ELGIN, KANE COUNTY, IL
LOTS 1-28 INCLUSIVE, IN BLOCK 359 OF O. DAVIDSOI 'S ADDITION TO ELGIN, IN
THE CITY OF ELGIN, KANE COUNTY, IL
LOTS 1-12 INCLUSIVE OF DAVIDSON'S GROVE AVE S =. IN THE CITY OF ELGIN,
KANE COUNTY, IL
THAT PORTION OF WELLINGTON AVE LYING SO i OF THE SOUTHERNMOST
PART OF LAKE STREET DESCRIBED AS WELLING ON 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 ADDIT ON TO ELGIN, IN THE CITY
OF ELGIN, KANE COUNTY, IL
•
RAGREE/AMDEVAGR.FP
AMENDMENT TO DEVELOPMENT AGR, EMENT
THIS AGREEMENT is made and e tered into as of
June 23, 1993, by` and between the City of Elgin, a municipal '
corporation, (hereinafter referred to a- the "City") , and
Elgin Riverboat Resort, an Illinois partn= rship, (hereinafter
referred to as "Developer" ) ;
WHEREAS, the City and Develop-r entered into a
Development Agreement on June 24, 1992, f"r the establishment
of a riverboat gaming facility on the F.x River within the
corporate limits of the City; and
WHEREAS, said Development Agreem-nt provides for the .
Developer and the City to work jointly ith the Kane County
Forest Preserve District to obtain an -asement for access
between the pavilion and the riverboat t. be located on the
Fox River; and
WHEREAS, the City has enter-d into a. certain
-Easement Agreement as Grantee with the Kane County Forest
Preserve as Grantor for an easement ••ver Forest Preserve
District property located between Natio al Street and Lake
Street along the eastern boundary of the Fox River in Elgin,
Kane County, Illinois;
WHEREAS, the City desires - o assign and the
Developer desires to assume the rights, duties, obligations
and liabilities of the City as Grantee under said Easement
Agreement; and
WHEREAS, in order to accomplis the assignment of
said easement agreement the parties d=sire to amend the
subject development agreement by amendi g the ground lease
agreement which is attached to the deve opment agreement as
Exhibit 1.
NOW, THEREFORE, in consideratio of the recitals set
forth above, and the mutual promises and covenants contained
in the original Development Agreement and as contained herein,
and other good and valuable considerati•n, the receipt and
sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
1. That this amendment a•reement is hereby
incorporated into and amends the developm-nt agreement between
the City and Developer dated June 24, 1992.
2. That the original form of g ound lease agreement
attached to the subject development agre=ment as Exhibit 1 is
hereby amended by. adding the following n-w section 38 at the
end of said lease agreement:
"38. Assignment of Easement greement with
Kane County Forest Pr,serve District
A. That subject to th- terms, covenants,
conditions and provision- of the subject
Easement Agreement attached hereto as Exhibit D,
the landlord hereby transfe s and assigns to the
tenant all of its right, itle and interest as
it may have lawfully acqui •ed as Granteein, to
and under the subject Easem=nt Agreement.
B. That the tenant hereby accepts the
Assignment from the landl•rd and assumes all
rights, duties, obligation=: and liabilities of
the Grantee under the subje •t Easement Agreement
and shall perform, dis•harge, ' fulfill and
-2-
•
observe all terms, obl gations, covenants,
conditions and provision- of the subject
easement agreement accruing from and after the
date hereof under the sub je. t easement agreement
with the same force and ef 'ect as if the tenant
were the original . Grantee under the subject
Easement Agreement.
• C. That the Developer co enants and agrees to
protect, defend, indemnify and hold harmless
the landlord and the Kane C•unty Forest Preserve
District from and against any and all
liabilities, losses, expe ses, costs, suits,
judgments, claims and dema ds whatsoever in law
or in equity, incurred •r suffered by the
landlord and/or the Kane C•unty Forest Preserve
District that may arise in connection with the
subject Easement Agreement from and after the
date hereof.
D. That at all times during the use and
occupancy of the easeme t premises by the
tenant, the tenant will maintain general
comprehensive public liability insurance against
claims for bodily injury death or property
damage occurring on, in, •r about the easement
premises and the adjoinin• streets, sidewalks,
and passageways as set fo th in the preceding
section 11. In addition t• the requirements for
insurance under Section 11, such insurance shall
name as the insured paries thereunder, the
tenant or its assigns, the landlord and the Kane
County Forest Preserve Dis rict. Tenant shall
deliver to the landlord promptly after the
execution of this leas : the original or
duplicate policies or cert ficates of insurance,
including certificates evi•encing the naming of
the landlord and the Kane .'ounty Forest Preserve
District as additional ins red, satisfactory to
the landlord evidencing al the insurance which
is then required to be mai tained by the tenant
hereunder.
E. That tenant further agi ees that any and all
costs associated with any bike path relocation
during construction' by th: tenant and any and
all costs which might •e incurred by the
landlord associated with t e possible relocation
of the bike path under National Street shall be
paid for by the tenant.
-3-
F. That this Assignment is further subject to
the condition and becomes effective upon the
preliminary finding of suitability by the
Illinois Gaming Board of Tenant's application
for a gaming license.
G. That tenant shall occupy and use the
easement premises described in the attached
easement agreement subject to the terms of the
easement agreement and subject to the terms and
requirements of this ground lease. .
H. That this Assignment- shall be binding upon
and enure to the benefit of the landlord, the
tenant and the respective legal representatives,
heirs, successors and assigns. "
IN WITNESS WHEREOF, the parties haveexecuted or
have caused this Agreement to be executed on the day and year
first written above. •
•
CITY OF ELGIN, a municipal ELGIN RIVERBOAT RESORT,
corpor ion an Illinois partnership
1 .
wl'
teILeAkKfnNJt
BY � '�:�-� rth
Brits eneral Partner
George
anDeVoorde, Mayor
Attest:
A,
Ate.cAPpi-- IC It A,Zb L. SC-14 t�
Do onna Mecum, City Clerk Name
VICE PR -St DIA/ t
Title
_4_
ASSIGNMENT AND ASSUMP ION
OF DEVELOPMENT AGREE ENT
THIS ASSIGNMENT AND ASSUMPTION OF DEV:LOPMENT AGREEMENT is
entered into by and between ELGIN RIVERBOAT RES*RT, a Nevada partnership
("Assignor") and RBG, L.P., an Illinois limited partnership ("•ssignee") as of the 17th day
of December, 1992.
RECITALS
A) Assignor is a party, together with the City • Elgin, to that certain
Development Agreement dated as of June 24, 992 (the 'Development
Agreement"), pursuant to which Assignor obt-fined certain rights and
undertook certain obligations with respect to r:al estate owned by the
City of Elgin in connection with Assignor's :pplication to obtain a
riverboat gaming license from the State of Illinois (the "Application").
B) Assignee has become a joint venture partner of Assignor, and Assignor
and Assignee jointly have filed the Application.
C) The City of Elgin has approved the assignmen' of a 50% interest in the
Development Agreement by virtue of th.:t certain "Resolution
Consenting to Elgin Riverboat Resort Partial A signment to RBG, L.P.,
an Illinois Partnership, an Affiliate of Hyatt De elopment Corporation"
passed by the City Council of Elgin on Decem•er 16, 1992 (the "Elgin
Resolution").
D) Assignor and Assignee desire to execute and deliver this Assignment
and Assumption of Development Agreement is effect the assignment
of a 50% interest in the Development Agree ent and to comply with
the provisions of the Elgin Resolution.
NOW, THEREFORE, the parties hereby agree as fo lows:
1) Assignor hereby assigns to Assignee 50% of i s right, title and interest
in and to the Development Agreement.
2) Assignee hereby assumes 50% of the Assignor's obligations under the
Development Agreement.
3) The parties agree that they shall be jointly a d severally liable for all
obligations to the City of Elgin arising u der the Development
Agreement, and each agrees to indemnify an. hold the other harmless
from any and against all cost, liability, damag-, obligation or expense
in excess of each party's respective 50% hare, including, without
limitation, reasonable attorneys' fees, arising out of the Development
Agreement.
•
•
4) This Assignment and Assumption of Developm:nt Agreement shall be
binding upon and inure to the benefit of the parties hereto, their
successors and assigns, and shall be governe• by and construed in
accordance with the laws of the State of Illinois
5) This Assignment and Assumption of Devel•pment Agreement is
expressly intended to comply with the terms •f the Elgin Resolution
consenting to this assignment as requested by the parties.
6) The parties shall file a fully executed original o duplicate copy of this
Assignment and Assumption of Development •greement with the City
Clerk of the City of Elgin. This Assignme t and Assumption of
Development Agreement may be relied upon by the City of Elgin in
enforcing the terms of the Development Agree, ent.
7) This Assignment and Assumption of Devel•pment Agreement is
executed on May 14, 1993, but is and shall be •eemed to be effective
as of December 17, 1992.
IN WITNESS WHEREOF, the parties hereto have e ecuted this Assignment and
Assumption of Lease as of the date first above written.
ASSIGNOR:
•
ELGIN RIVERBOAT RESORT,
an Illinois partnership
By: Diamon old Inc.,
a Nev a cor ora r
By:
Peter A. Simon II
President
ASSIGNEE:
RBG, LP.,
an Illinois limite partnership
•
By: HCCA C rporation,
a Delaw oro io
its Gen art r
•
By: 1�
� a7d L chulze �`-
ic Presid nt
SECOND AMENDMENT TO DEVELOPMENT AGREEMENT
AND GROUND LEASE AGREEMENT
t4 This Agreement is made and entered •into as of
�1 t
anuary /1994 , by and between the CITY OF ELGIN, a municipal
�
Z corporation, (hereinafter referred to as the "City" ) , and
ELGIN RIVERBOAT RESORT, an Illinois partnership (hereinafter
referred to as the "Developer" ) .
WHEREAS, the City and Developer entered into a
Development Agreement on June 24, 1992, (hereinafter referred
to as the "Development Agreement") for the establishment of a
riverboat gaming facility along the Fox River on property
owned by the City and legally described therein (hereinafter
referred to as the "Subject Property") ; and •
WHEREAS, the City and Developer entered into an
amendment to the Development Agreement on June 23, 1993, with
said amendment including an amendment to the form of the
Ground Lease Agreement attached to the Development Agreement;
and
WHEREAS, Section I .B.3. of the Development Agreement
and Section 15 of the Ground Lease Agreement contain certain
covenants, representations and warranties of the City as to
environmental conditions on the subject property; and
WHEREAS, the parties have discovered that the
covenants, representations and warranties •of the City
contained in Section I .B. 3. of the Development Agreement and
Section 15 of the Ground Lease Agreement are inaccurate as of
the date hereof; and
WHEREAS, in lieu of the coven=nts, representations
and warranties of the City contained in .ection I .B.3. of the
Development Agreement and Section 15 •f the Ground Lease
Agreement, the City now represents =nd warrants to the
Developer that as of the execution her:of the environmental
conditions on the Subject Property are substantially as set
forth in the Request for Specific Cleanu• Objectives prepared
by ATEC Associates, Inc. , a copy of whi h is attached hereto
and made a part hereof by reference as Ex ibit A; and
WHEREAS, the City has submitued said Request for
Specific Cleanup Objectives attached he eto as Exhibit A to
the Illinois Environmental Protection Ag-ncy and the Illinois
Environmental Protection Agency has appr•ved said Request for
Specific Cleanup Objectives in a letter •f December 8, 1993, a
copy of which is attached hereto and m=de a part hereof by
reference as Exhibit B; and
WHEREAS, as an inducement o the Developer to
proceed with the execution and delivery of the Ground Lease
Agreement, the parties have agreed to a procedure for the
removal of certain contaminated soils on the Subject Property
consistent with the Illinois Environmen al Protection Agency
approval of Specific Cleanup Objectiv=s and the City has
agreed to indemnify the Developer and it- partners, as well as
its officers, employees and agents fro any and all costs
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arising out of any environmental contam nation or conditions
existing on the Subject Property, if an , as of the date of
the entry into this Agreement and the execution and delivery
of the Ground Lease Agreement; and
WHEREAS, Developer has accepte• the City's offer and
is willing to proceed with the executio and delivery of the
Ground Lease Agreement, upon the Amendme 't of the Ground Lease
Agreement and the Development Agreement pursuant to the terms
of this Second Amendment.
NOW, THEREFORE, in consider- tion of the mutual
promises and undertakings contained here n, and other good and
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties here o agree as follows :
1 . That all of the foreg•ing recitals are a
material part of this Agreement aid they are hereby
incorporated into this Second Amendment their entirety.
2. That, subject in all resp-cts to provisions of
-Paragraph 4 hereof, during Deve oper's construction
activities on the Subject Property, t will excavate and
remove contaminated soils in the areas t• be staked out in the
field by the City's environmental consultant, ATEC
Associates, Inc. (hereinafter referred to as "ATEC") . Upon
execution of this Agreement, the City shall cause ATEC to
identify those areas of contaminated so 1 to be excavated and
• removed by Developer by staking those areas in the field.
Developer shall then excavate and rem•ve such contaminated
-3-
soil off site and dispose of same in a anner in conformance
with the procedures outlined in the 1-tter of December 8,
1993, from the State of Illinois Env ronmental Protection
Agency, a copy of which is attached here o as Exhibit B. The
City shall be responsible for any additi•nal or premium costs
incurred by Developer in the excavation, removal and disposal
of said contaminated soils as a result of said soils being
contaminated. Developer agrees that the excavation, and
removal and disposal of said contaminated soils will be done
in the most cost effective manner as ci cumstances reasonably
permit.
3 . That to the extent any Ha ardous Materials are
transported off site, disposed of, or mi•rate. naturally, it is
agreed by the parties hereto that the Ci ■y, exclusively, shall
be deemed the "generator" of such materi- ls, or has "arranged
for treatment or disposal . " The City shall sign manifests
required acknowledging such status or act on.
4 . That in the event during Developer's
construction activities or during the subsequent use and
occupancy of the Subject Property und-r the Ground Lease
Agreement Developer encounters any environmental
contamination Developer believes r=quires remediation,
Developer shall immediately contact the City Manager of the
City. Developer and the City Manager shall confer as to
whether any additional remediation is necessary. In the event
the parties agree in writing as to ad•itional remediations
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that must be performed and the cost th-reof, the Developer
shall then proceed to perform such envir.nmental remediations
to remove the environmental contaminatio and the City shall
be responsible for any additional or prem um costs incurred by
the Developer in the remediation of such environmental
contamination. Developer agrees that • ny such remediation
will be done in the most cost effec ive manner as the
circumstances reasonably permit. In t e event the parties
cannot agree in writing as to addition= l remediations that
must be performed and/or the cost thereo . , Developer reserves
the right to proceed with the =dditional disputed
remediation. The City shall only be responsible for any
additional or premium costs incurred by he Developer in the
disputed remediation only to the extent t at costs incurred in
the disputed remediation were incurred in a cost effective
manner as the circumstances reasonabl permitted and the
disputed remediation was required unser then applicable
'federal and state environmental regulatio s.
5. That the parties agree t at it is in their
mutual interest to analyze the potential risk, if any, to the
public health, safety and the enviro. ent which may be
presented by any contaminated soil or pollutants which may
remain on the Subject Property. The city shall cause its
environmental consultant ATEC to conduct such an analysis to
study such matter. The parties further =gree that they shall
share the costs of such analysis accor•ing to the following
-5-
allocation: analysis pertaining to soil - City 50% and
Developer 50%; analysis pertaining to gro .nd water - City 100%
and Developer 0%. To enable ATEC to con•uct such an analysis
with respect to soils, Developer agrees to provide to the City
and ATEC with all final plans for the subject development, .
including, but not limited to, final b ilding plans, final
site plans, final grading plans, final ',larks detailing cover
materials and final landscaping plans .
6 . That the portion of the Subject Property legally
described on Exhibit C hereto, commonly known as the "Bunge
property", is hereby deleted from the Ground Lease Agreement.
Notwithstanding anything in the preced'ng sentence to the
contrary, the City agrees that the Bunge •roperty shall become
a part of the Subject Property and subjec to the Ground Lease
Agreement, including all amendments ther-to, without further
action of the parties when contamina ed soil, water or
Hazardous Materials located thereon or th-reunder, if any, are
remediated by the City in accordance with the remediation plan
approved by the IEPA and the City. The city hereby agrees to
submit a proposed remediation plan for tie Bunge property to
the Developer for review and comment and will consider
comments by the Developer in good fait . The City further
agrees that immediately upon its receipt of approval from the
IEPA as provided above, it shall take all steps which are
necessary to remediate the Bunge proper y. At such time as
the Bunge property has become a por ion of the Subject
-6-
Property (and either party may request t at the other execute
an instrument in recordable form acknowledging such
occurrence, which request shall not be u reasonably refused) ,
Developer shall be entitled to utilize th- Bunge property. No
additional rental (other than as already •rovided in Section 2
of the Ground Lease Agreement) or other c•nsideration shall be
payable by the Developer to the City fol the reinclusion of
the Bunge property as part of the Subje•t Property under the
Ground Lease Agreement.
7 . That attached as Exhibit D hereto is the legal
description of land west of and adjacent to the Subject
Property. Said land is now owned by the Forest Preserve
District of Kane County and is the su•ject of an easement
agreement between the Forest Preserve District and the City.
That easement agreement is the subject o an amendment to the
Ground Lease Agreement between the Cith and the Developer
pursuant to which the rights of the Cit will be assigned to
the Developer. The City and Developer have been engaged in
-- discussions with the Forest Preserve D strict regarding the
acquisition by the City of title to a. •ortion of the Forest
Preserve District land. The parties agre- that it is in their
mutual interests to analyze the enviro ental conditions on
the Forest Preserve District land. Developer agrees to cause
an environmental investigation to be performed on the Forest
Preserve District property to analyze hether any Hazardous
Materials or other environmental contami ation exists on said
-7-
property. The Developer shall provide the City with the
results of said environmental investi.ation. Upon the
conclusion of said environmental investigation, Developer
shall determine whether it wishes to pro.eed with attempts to
arrange for the City to acquire fee t tle to said Forest
Preserve District land. In the event he Developer in its
sole discretion determines that said Forst Preserve District
land should not be included in the Groun. Lease, the parties
agree no additional efforts will be req ired to be made for
said acquisition. In the event Develope determines that the
property is suitable for inclusion i the Ground Lease
Agreement, the parties agree to continue ith discussions with
the Forest Preserve District regarding th- acquisition by the
City of title to said Forest Preserve Di -trict land. In the
event Developer notifies the City th• t the property is
suitable for inclusion in the Ground Lease Agreement and
during the term of the Ground Lease Agr-ement the City then
acquires title to any portion of the Forst Preserve District
land, then such portion of the Forest P eserve District land
shall immediately become part of the su.ject property under
the ground lease without further action .n the part of either
the City or the Developer. The City an. the Developer shall
exert their best efforts in order for th= City to acquire fee
title to such portion of the Forest Pr-serve District land
unencumbered by title reversions . No a.ditional rent (other
than as already provided in Section 2 of the Ground Lease
-8-
Agreement) or other considerations sha 1 be payable by the
Developer to the City for the addition •f such portion of the
Forest Preserve District property to he Subject Property
under the Ground Lease Agreement. The City makes no
warranties or representations as to the title of the Forest
Preserve District land nor any represen ations or warranties
with respect to the environmental conditions thereof,
notwithstanding any other representations or warranties in the
Development Agreement, the Ground Lea :e Agreement or any
amendments thereto including this Second : endment.
8. That the City hereby agr •es to indemnify and
hold harmless the Developer, and its par ners, as well as its
officers, employees and agents, and anb of them, from and
against any and all damages, losses, cla ms, causes of action,
lawsuits, judgments, or liability whats•ever arising out of
any environmental contamination or condi ions existing on the
Subject Property, if any, as of the da e of the entry into
•this agreement. Developer shall immedi =tely notify the City
of any claims falling within said inde nification and shall
immediately tender all such matters •o the City for the
defense thereof. The City, at the City's own cost and
expense, will defend by counsel of the City's choosing, any
and all claims falling within said indem ification against the
Developer or in which the Developer m.y be impleaded with
others. Developer, at its sole discre ion and at its sole
cost, may retain attorneys to monitor .nd/or participate in
-9-
the defense of any such claims f= lling within said
indemnification and the City shall di .ect its lawyers to
cooperate with Developer's lawyers in suc activities . In the
event a proposed settlement of a claim falling within said
indemnification would adversely effe•t the operations,
improvements or rights of the Developer as tenant under the
Ground Lease Agreement, such a proposed =ettlement is subject
to Developer's approval which appro al shall not be
unreasonably withheld.
9 . That any terms used he ein, including the
recitals hereto, bearing upper case let 'ers and not defined
herein shall have the same meanings described to them in the
Development Agreement and the Ground Lease Agreement. .
10 . That this Second Amendment to the Development
. Agreement and Ground Lease Agreement shal be deemed to be and
are a material part of the Development Agreement and Ground
Lease Agreement, and the execution and •elivery are material
inducements for the Developer to exec to and deliver the
- Ground Lease Agreement. The terms of thi- Second Amendment to
the Development agreement and Ground L-ase Agreement shall
govern in the event of any conflict between this Second
amendment and the Development Agreement or the Ground Lease
Agreement.
11 . That in the event Developer incurs any costs for
which the City is responsible under this .econd Amendment, and
such costs are not paid by the City withi thirty (30) days of
-10-
the presentation by Developer to the City of an invoice
therefore, then Developer shall have the right to set off the
amount of such costs and such interest hereon as may accrue
at a rate equal to one percent ( 1%) less than that of the
prime rate, as published daily in the all Street Journal,
against the rental next coming due und-r the Ground Lease
Agreement until such costs have been p.; id in full by such
rental credits .
12 . That this Second Amendment and the Ground Lease
Agreement of which it is a part shall re ate back to the date
of and be deemed effective as of Decembe . 15, 1993, and shall
supersede the terms of the Amended Acce-s and Hold Harmless
Agreement of December 15, 1993, which uuon the execution of
this Second Amendment and the Ground Lea .e Agreement shall be
rendered of no force and effect.
13. That attached hereto as E hibit E is a legal
description of land east of and adja. ent to the Subject
Property constituting that part of Wellington Avenue lying
-- southerly of Prairie Street and northerl of National Street.
Said land is now a public right of way wh ch Developer desires
to include within the Subject Property in the Ground Lease
Agreement. It is agreed that in the e ent that during the
term of the Ground Lease Agreement the Ci y vacates Wellington
Avenue and is able to obtain a Quit Claim Deed to the easterly
half of said portion of Wellington Aven e from the Chicago &
Northwestern Railroad, then the vacated •ortion of Wellington
-11-
Avenue shall immediately become a' p=rt of the Subject
Property and subject to the Ground Lease . Agreement, including
all amendments thereto, without further =ction on the part of
either the City or Developer. Either p-rty may request that
the other execute an instrument n recordable form
acknowledging such occurrence, which r=quest shall not be
unreasonably refused. No additional ient (other than as
already provided in Section 2 of the Gr.und Lease Agreement)
or other consideration shall be payable by Developer to the
City for the inclusion of the vacated portion of Wellington
Avenue as part of the Subject Property u der the Ground Lease
Agreement.
14 . That except as modified he •eby, the Development
Agreement and Ground Lease Agreement rem- in in full force and
effect.
IN WITNESS WHEREOF, the parti-s have caused this
agreement to be executed on the date first written above.
CITY 0 ELGIN, a u icipal ELGIN RIVEE•BOAT RESORT, an
corp. a 'i•n Illinois p=rtnership
By By RBG, One of Its
Mayor j-' , r General Pa tners
By,�H CA Corporation, Its
Attest: Gerie al artner
City Clerk R.I . Schul e, Vice President
•
•
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THIRD AMENDMENT
TO
DEVELOPMENT AGREEMENT AND GR•UND LEASE
THIS AGREEMENT is made and entered into as of June 9, 1994 by
and between CITY OF ELGIN, a municipal corporation (hereinafter
referred to as the "City") , and ELGIN RIVERBOAT RESORT, an Illinois
partnership (hereinafter referred to as the "Developer") .
RECITALS
A. City and Developer have heretofore entered into a certain
Development Agreement dated as of June 24, 1992 contemplating the
establishment of a riverboat gaming facility along the Fox River on
property owned by the City and legally described therein
(hereinafter referred to as the "Leased Premises") . The
Development Agreement has heretofore been amended by a certain
Amendment to Development Agreement dated as of June 23, 1993 and a
certain Second Amendment to Development Agreement and Ground Lease
Agreement dated as of January 20, 1994. For purposes hereof, the
Development Agreement, as so amended, will be hereinafter
collectively referred to as the "Development Agreement" .
3. Pursuant to the provisions of the Development Agreement,
th3 City, as Landlord, and Developer, as Tenant, have heretofore
entered into the Ground Lease Agreement referred to in the
Development Agreement as o " January 20, 1994 (the Ground Lease
Agreement, together with relevant provisions of the Development
Agreement amending the same, being herein referred to as the
"Lease") .
C. The Developer has commenced construction of its proposed
riverboat on property adjacent to the Leased Premises and described
below as the "East Parcel" and the "West Parcel" and will, when the
riverboat is completed, move the same to a dockside location
adjacent to the Leased Premises.
D. City and Developer have now agreed that Developer will
provide financial support and expertise to the City for certain
additional public improvement projects and City and Developer have
agreed to make certain amendments to the Development Agreement and
the Lease, all as more fully hereinafter set forth.
NOW, THEREFORE, it is hereby agreed, by and between the
parties hereto, as follows:
ARTICLE I
SOUTH GROVE STREET PRO' ECT
1.01 Statement of Intent. The City as heretofore closed a
portion of South Grove Street in the City, extending from Chicago.
Avenue to Spring Street, to vehicular tr- ffic and has created a
pedestrian mall. The City Council has here of ore approvgd a design
concept for restoration of vehicular traffic entitled "Conceptual
Option 2 (Medium Quality) ", contemplati g the removal of the
existing pedestrian mall, the re-opening •f that portion of South
Grove Street to vehicular traffic and the construction and
installation of certain related landsca•ing features and other
public improvements. Developer has determined that the re-opening
of South Grove Street to continuous and uninterrupted vehicular
traffic will benefit its riverboat pro 'ect and, accordingly,
Developer has agreed to provide certain fi ancial and other support
to the South Grove Street project. Whe ever in this Article I
there is reference to the "South Grove Street Project" or the
"Project" the same shall mean the reuoval of the existing
pedestrian mall, the construction of a ne street and sidewalk to
permit both vehicular and pedestrian •raffic, and the other
landscaping and public improvements co templated by the City
Council, or so much thereof as may be com!leted prior to the date
referred to in Section 1.06(B) .
1.02 Planning. The City has her- of ore retained design
professionals to prepare plans and specifi ations for the Project.
To the extent additional design profe-sionals are required,
Developer will consult with the City reg-rding the same and will
assist the City in the selection proc-ss. In addition, if
requested by the City, the Developer will review contracts with
design professionals and advise the City on terms to be
incorporated therein.
In connection with the design proce-s, Developer will work
with the City and its design profession. ls to prepare detailed
plans and specifications embodying the de-.ign heretofore approved
by the City Council and will consult o means and methods of
preparing design packages for bidding p rposes so as to permit
expeditious construction of the Projec' and efficient budget
controls. It is currently contemp ated that plans and
specifications will be prepared so as to d'vide the Project, to the
extent feasible, into three (3) segme is consisting of (i)
demolition; that is the removal of the existing pavement and
landscaping features; (ii) street constru' tion necessary to bring
the Project to "functional completion"; an. (iii) final completion,
consisting of construction necessary to b ing the Project to full
and final completion. For purposes here.f, the term "functional
completion" includes all work associat- • with the Project as
2
described on Annex 1 hereto other than hose portions of the
Project designated as Streetscape Furnis ings (bid items 12.01
through 12.07) , Streetscape Amenities (b'd items 13 . 01 through
13.08) , and special fountain lighting ( .id item 9. 01) . The
construction items excluded from the def nition of "functional
completion" will be herein referred to as he "finish items". No
plans and specifications shall be deemed couplete until approved by
the City, it being understood and agreed th-t the City may elect to
approve plans and specifications separately for each segment of the
Project in order to permit a more expediti.us process of bidding,
contract letting and commencement of work n the most expeditious
manner.
1.03 Construction Process.
(A) Attached hereto as Annex 1 is a description of the
various items to be included in the Projec as well as preliminary
estimates of cost. Annex 1 is being atta'hed hereto in order to
better define the Project although, it i- understood, that the
detailed plans and specifications may vary from the description in
Annex 1, and actual costs will vary as well Developer agrees that
it will, from time to time, as plans -nd specifications are
prepared and cost estimates are refined, update the information
contained in Annex 1.
(B) Developer will, after appr.val of plans and
specifications for the South Grove Street 'roject contemplated by
Section 1.02, cause construction of the -ame to be effected as
expeditiously as possible, all in accordance with the plans and
specifications as theretofore approved by .he City. In connection
with foregoing, the Developer will en'er into one or more
construction contracts, supply or purcha e contracts, and other
related contracts and agreements (which shall include, without
limitation, contracts with inspecting eng neers and construction
managers) , with contractors, suppliers and materialmen, as
necessary to cause completion of the South Grove Street Project as
herein contemplated; provided, however, no contract shall be
entered into by Developer without the writt-n approval of the City.
In connection with the letting of contrac s, the Developer shall
select the process which it deems most easonable in order to
effect completion of the South Grove Str=et Project in the most
expeditious manner possible and may ele. t, at its discretion,
either to employ a method of competit've bidding or to let
contracts without competitive bidding, -s it shall determine;
provided, however, (i) Developer will onsult with the City
regarding all aspects of the bidding and c.ntract letting process;
(ii) all contracts shall require contr=ctors to comply with
prevailing wage rate requirements applic=ble to contracts made
directly with the City; (iii) all contrac s will provide that any
warranties, express or implied, applicable hereto shall be for the
3
benefit of the City; and (iv) will require 'he contractors to carry
builders risk and other insurance sat'sfactory to City and
Developer naming City and Developer as additional insureds.
(C) Contracts will be let for demoli'ion and construction up
to the items of construction necessary to achieve functional
completion. No contracts will be let for -ny finish items unless
Developer and City agree that, after letting any suchjcontracts,
the total cost of the Project will not =xceed Two Million Four
Hundred Thousand Dollars ($2,400,000) . If either Developer or the
City are of the opinion that any contract for finish work, or the
sum of anticipated costs for all contract for finish work, would
cause the total cost of the Project to exceed $2,400, 000, no
contract shall be let until measures are aken to the reasonable
satisfaction of both City and Developer to effect a cost reduction
sufficient to enable total costs to be equal to or less than
$2,400, 000, such measures to include, without limitation, redesign
of the Project with respect to the fin“sh items to eliminate
certain aesthetic or other design fea ures such as pavers,
landscaping, fountain lighting and other :terns. The items to be
eliminated, and the method of achieving cost savings, shall be
within the discretion of the City, it bein! understood and agreed,
however, Developer shall have no obligation to let any contracts
for finish items, or to incur any obligatio' s with respect thereto,
unless (i) Developer determines, in its rea-onable discretion, that
the total cost of completing the finish wok as revised by the City
will cause total Project costs to be -qual to or less than
$2,400,000; or (ii) by appropriate action •f the City Council, the
City shall have agreed to pay that poi tion of the costs of
completion of finish work which would caus- total Project costs to
exceed $2,400,000.
(D) During the course of constriction, Developer will
supervise all contractors, materialmen a d suppliers and provide
any necessary coordination among the cont actors. Developer will
also review all requests for payment, and - 11 contractor affidavits
and lien waivers, will provide copies the eof (or such thereof as
the City may request) to the City and will recommend the amounts to
be paid periodically and from time to ti.e during the course of
construction; provided, however, no payme is shall be made to any
contractor, materialmen or supplier withou the written approval of
the City. The City agrees that it will review all requests for
payment, and will not unreasonably withhold or delay its approval
thereto. If, for any reason, the City d sapproves any requested
payment which has been recommended by 'eveloper, it shall set
forth, in writing, its reasons therefor, a d the amount, if any, it
would be willing to approve for payment a that time.
•
4
(E) Developer, in consultation with contractors, will prepare
and deliver to the City schedules for com?letion of the work and
will update such schedules from time to Dime as Developer deems
necessary.
(F) Developer will prepare or revi- punch- lists prepared
from time to time by the specialists retain-d by the City, and will
supervise the completion of all checklist i ems and will advise the
City from time to time (in writing if requ= sted by the City) as to
the status of completion of all such items. In addition, from time
to time during the course of construction, Developer will report to
the City (in writing if requested by the ity) as to the overall
progress of the Project, and the perfo nance by each of the
contractors, materialmen and suppliers. I , deemed necessary, from
time to time, Developer will advise the Ci'y as to any enforcement
actions which might be necessary against .ny of the contractors,
materialmen and suppliers and will take -uch action as it deems
reasonably necessary, so long as any such . ction instituted by the
Developer shall have been approved in wriuing by the City.
1.04 Waiver of Developer Liability. In the performance of its
duties hereunder, it is understood and ass eed that Developer is
acting solely as advisor and consultant t• the City and not as a
designer, architect, engineer, contractor, u'aterialman or supplier.
Accordingly, Developer shall have no liability to the City, or any
other third party, for (i) any defect or dei iciency in any plans or
specifications, (ii) any defect in workman-hip or materials; (iii)
any delays in completion of the work; or (iv) any deviation from
the approved plans and specifications. Without limiting the
generality of the foregoing, Developer sh- 11 have no liability in
the event any plans and specifications ar. not in compliance with
applicable provisions of law, for any st ctural defects in the
construction or in any of the materials •r supplies incorporated
therein or used in connection therewith, f.r the acts or omissions
of any specialist, contractor, materialma or supplier during the
course of construction or in connection wi h any related work, and
the City shall indemnify, defend and held Developer (and its
partners, agents and employees) compleDely free and harmless
therefrom. In any contracts let with res?ect to the Project, the
contractor will be required to maintain in -ffect adequate builders
risk or similar insurance naming the City and Developer as
additional insureds.
1.05 Compensation. Developer agrees to perform its services
hereunder without any fee or other com.ensation, but shall be
entitled to reimbursement, as a Project •ost, for its actual and
reasonable out-of-pocket costs incurred 'n connection therewith,
such cost and expenses to exclude, howeve , Developer' s corporate
overhead and the salary and benefits .f any of its regular
employees.
5
1.06 Financial Contribution.
(A) Developer agrees to pay the cost- and expenses incurred
in connection with the South Grove Street Project, including all
construction, construction management an. inspection costs and
expenses (but excluding design costs) , •hich amount shall be
disbursed by Developer, from time to time, as the same become due
and payable (such payments to be made, h.wever, subject to the
approval process set forth above) ; provide. , however, in no event
shall Developer be obligated. to expend i excess of Two Million
Four Hundred Thousand Dollars ($2,400,000) n connection therewith.
In the event the costs of the South Grov= Street Project exceed
$2,400, 000, the City shall be responsible ' or the payment thereof
and shall indemnify, defend and hold Deve oper (its partners and
agents) completely free and harmless therefrom. The provisions of
this Section 1. 06 are for the sole benefit of (and may be enforced
solely by) the City, and are not intended or the benefit of (and
may not be enforced by) any third par'y such as any design
specialist, contractor, materialman or supi.lier.
(B) In the event, for any reason, he South Grove Street
Project has not been completed, or in the event, for any reason,
additional funds remain to be expended in .onnection therewith, at
December 31, 1994, Developer will deposit the amount, if any, by
which Two Million Four Hundred ThousanDollars ($2,400,000)
exceeds the amounts theretofore expended by Developer in connection
with the Project, in a joint order esc•ow with a third party
mutually satisfactory to City and Developer who shall be instructed
to hold such funds and disburse them, fro. time to time, upon the
joint order of City and Developer, for he payment of Project
expenses theretofore unpaid. Funds in e- crow shall be invested
from time to time in short term United Sta'es Treasury obligations
with the interest earnings thereon to be or the sole benefit of
Developer. Interest earned from time to ti.e shall be disbursed to
Developer as soon as possible after r-ceipt thereof by the
escrowee. Upon completion of the Proje t (as certified by the
supervising architect or engineer) , and u.on payment of all costs
and expenses in connection therewith, any funds remaining in the
escrow shall be refunded to Developer. In e event, at such time,
there are any disputes with contractors, m.•terialmen, suppliers or
specialists, funds sufficient to pay any a.ounts claimed to be due
by any such parties (up to the limit of he amounts then in the
escrow) shall be retained in escrow until s ch disputes are finally
and conclusively resolved.
6
ARTICLE II
East Parcel Project
2.01 Statement of Intent. The East Pa' cel (legally described
on Exhibit A hereto) , is currently owned by the City and is subject
to a temporary construction access agreeme t in favor of Developer
for use of the East Parcel (together with .he West Parcel) for the
construction of Developer' s riverboat. Following construction of
the riverboat, the City and Developer des re to improve the East
Parcel as a public parking lot, and to leas- the same from the City
to Developer for said purpose, and also to acquire certain rights
to purchase the East Parcel as more fully ereinafter set forth.
2.02 Lease of East Parcel. As expedit ously as possible after
the execution and delivery hereof, City a d Developer will enter
into a lease (the "East Parcel Lease") w'th respect to the East
Parcel, on a form mutually satisfactory o City and Developer,
which shall contain the following material terms and provisions:
(a) Following expiration or ea Tier termination of the
temporary construction access agreeme t from City to Developer
of the East Parcel, and following coupletion of construction
of Developer' s riverboat, Developer w' 11, at its sole cost and
expense, construct on the East Pa, cel a parking lot in
accordance with applicable legal stand-rds. Construction Will
include asphalt re-surfacing and striping, landscaping and the
installation of lighting and railing-.
(b) The Developer will operate the parking lot on the
East Parcel, at its sole cost and expense, continuously
throughout the term of the East Par el Lease, as a public
parking facility available for use, .n a non-discriminatory
basis, by all members of the public.
(c) Operating policies with respect to the parking lot
shall be determined solely by Develol.er, including, without
limitation, hours of operation, prov'ded, however, (i) in no
event shall any person be charged fo the normal use of the
lot for vehicle parking; and (ii) the parking lot shall
maintain minimum hours of operation b=tween 7: 00 a.m. and 6:00
p.m. of each day (subject to c osure for repair and
maintenance purposes) , but may, at De eloper' s discretion, be
open at other hours as well.
(d) The term of the lease shal be five (5) years.
(e) Rental shall be One Dollar ($1.00) per annum.
7
(f) The City will indemnify, d=fend and hold Developer
(and its partners and agents) complet -ly free and harmless of
and from any and all environmental liabilities, costs or
expenses relating to the East Par.el, including, without
limitation, the cost of hauling and d sposing of contaminated
soils which may be excavated in conn-ction with the parking.
lot construction; provided, however, ' f the cost of disposing
of contaminated soils exceeds the cos of disposition of non-
contaminated soils, the difference sh= 11 be paid by the City.
If the City fails or refuses to m-ke any payments herein
required, Developer may, in addition to any other rights or
remedies it may have, suspend constru.tion of the improvements
until payment is made.
(g) During the term of the ast Parcel Lease, the
Developer shall have the right to sul.mit to the City a plan
for redevelopment of the East Par. el, together with the
redevelopment of the West Parcel an• , if accepted, the City
shall agree to sell both parcels to he Developer at a price
to be agreed upon. While the City will have no obligation to
approve any such redevelopment •roposal submitted by
Developer, it shall nevertheless con ider, in good faith, all
such proposals actually submitted to it. City will agree (as
a covenant which will survive any ea Tier termination of the
Lease) that during the five (5) ye.;r period commencing on
commencement of the Lease, City wil not develop or propose
any development of or on the East Parcel (other than for
public parking purposes) without he written consent of
Developer.
(h) For a period of five (5) ye-rs from the commencement
of the parking lease, Developer scall have the right to
purchase the East Parcel upon t e following terms and
conditions: (1) Developer shall hay: concurrently exercised
its rights to purchase the West Parce ; (2) the purchase price
shall be fair market value for the E=st Parcel as determined
by an appraisal procedure to be set , orth in the East Parcel
Lease; and (3) the deed of conveyance shall contain a reverter
in favor of the City whereby the Ea-.t Parcel will revert to
the City, without additional cons'deration or payment to
Developer, in the event (a) on or p. ior to a date which not
sooner than three (3) years after the date of the deed
(subject to force majeure provisio s) Developer shall have
failed to commence construction, o. within five (5) years
after the date of the deed (su•ject to force majeure
provisions) shall have failed to comp ete construction, either
on the West Parcel, the East Parcel •r the Leased Premises a
hotel, having not less than one h , dred fifty (150) guest
rooms and suites, of a quality e• al to or exceeding the
standard of quality currently applic-ble to the Nevada hotel
8
properties owned by an affiliate of N-vada Landing, Inc. (an
affiliate of one of the partners •f Developer) ; or (b)
Developer (or any successor owner of the East Parcel) shall
fail to maintain free public parki g on the East Parcel
sufficient to accommodate the number •f vehicles accommodated
on the East Parcel prior to the purch-se thereof by Developer
except during such period of time as se for such purpose by
reason of force majeure or by reaso of construction of an
improvement on the East Parcel. In it- plans for the proposed
hotel, Developer will seek to provide = product of the highest
quality deemed appropriate by Develop-r given the anticipated
use of the hotel and the prevail ng market conditions,
including consideration of an execut've wing or floor.
(i) Notwithstanding the provis'ons of subparagraph (h)
above, if, prior to the purchase •f the East Parcel by
Developer pursuant to the exercise o • its option, but within
five (5) years after expiration of t e five (5) year option
period referred to in subparagrap (h) above, the City
proposes to construct, or permit . o be constructed, any
building or other improvement on tie East Parcel, or any
portion thereof, the City shall first otify Developer thereof
in writing setting forth the na ure of the proposed
development, and the portion of th= East Parcel to be so
developed. Upon receiving such notice, the Developer shall
have thirty (30) days in which to no. ify the City in writing
of its intention to purchase that potion of the East Parcel
which the City proposes to develop, -nd, if Developer elects
its right to purchase as herein provi•ed, the delivery of its
said notice shall constitute a bind'ng contract between the
City and Developer for the purchase of the East Parcel at a
price equal to fair market value to be determined in
accordance with the appraisal proce•ures applicable to the
option referred to above and s •ject to the reverter
provisions set forth above. If Dev=loper fails to exercise
its right to purchase as herein provi•ed, the City may develop
that portion of the East Parcel w ich it had originally
proposed to develop free of any remaining rights of Developer
with respect thereto (including any ights under the options
set forth in subparagraph (g) above)
2.03 Restoration of Lake Street. As soon as reasonably
practicable after Developer' s completion of construction of its
riverboat, and in any event concurrently ith the construction of
the parking lot on the East Parcel, Developer will, at its sole
cost and expense, restore that portion of sake Street running from
South Grove Street to Wellington Avenue 'consisting of new curbs
and sidewalks, asphalt resurfacing, lighti g and any restoration of
the base of the street necessary as a re-ult of damage resulting
from Developer' s construction activitie- ) to the standard of
9
construction applicable to the portion of South Grove Street
running through the Leased Premises. Developer will retain all
design and construction contractors necessary for the prosecution
of such work, will submit its plans and specifications to the City
for approval (which approval shall not be unreasonably withheld or
delayed) and will commence and complete construction as
expeditiously as possible.
ARTICLE III
West Parcel Project,
3.01 Statement of Intent. The West Parcel (legally described
on Exhibit B hereto) , is currently owned by the City and is subject
to a temporary construction access agreement in favor of the
Developer for use of the West Parcel (together with the East
Parcel) for the construction of Developer' s riverboat. Following
construction of the riverboat, Developer has agreed to restore and
improve the West Parcel in consideration of the granting of certain
rights to purchase the West Parcel as more fully hereinafter set
forth.
3.02 Restoration and Improvement of West Parcel.
(A) As expeditiously as possible after expiration of the
temporary construction access agreement currently in effect between
the City and Developer, Developer will restore the West Parcel to
an open space which will include a restoration of the former
bicycle path on property adjacent to the West Parcel (representing
a continuation of the bicycle path on adjacent property) , and a
landscaped green space for the remainder of the West Parcel. The
plans will contemplate use of the West Parcel solely for passive
recreational use by the public without facilities for active use
such as sports or other activities. All costs and expenses
incurred in connection with the foregoing shall be borne and paid
for by Developer. Developer, however, will have the right, without
fee or compensation to the City, to use the West Parcel for events
or activities incident to its riverboat operations.
(B) Prior to commencing restoration of the West Parcel,
Developer will submit conceptual plans therefor to the City for its
approval, which approval shall not be unreasonably withheld or
delayed. Approval by the City shall relate solely to engineering
matters and compliance with legal requirements, and determining
that the plans and specifications contemplate restoration of the
West Parcel as herein described. Developer will consult with the
City regarding plans and specifications fcr the restoration of the
West Parcel, and will consider in good faith all suggestions made
by the City, but shall have no obligation to incorporate any design
10
or construction changes which, in the reasonable opinion of
Developer, would materially increase the ' ost of the restoration
project.
(C) The City will indemnify, defend -nd hold Developer (and
its partners and agents) completely free -nd harmless of and from
any and all environmental liabilities, cos' s and expenses relating
to the West Parcel, including, without imitation, the cost of
hauling and disposing of contaminated soil - which may be excavated
in connection with the foregoing. If the city fails or refuses to
make any payments herein required, Develo•er may, in addition to
any other rights or remedies it may have, suspend construction of
the improvements until payment is made.
3.03 West Parcel Development Rights. In connection with the
foregoing, and as soon as reasonably practicable after the
execution and delivery hereof, City and Developer will jointly
cause to be prepared, and will execute a d deliver, appropriate
legal instruments to the following effect:
(a) The City will agree, as a c.venant running with the
West Parcel, that no development will be permitted on the West
Parcel, andit shall remain in its s ate as improved by the
Developer as contemplated by Section ' .02 above, for a period
of not less than five (5) years following execution and
delivery of the said agreement, witho t the written consent of
Developer.
(b) The Developer will agree that during the above
referred five (5) year period, the De eloper will maintain the
West Parcel in a neat and orderly coidition at its sole cost
and expense consistent with its orig nal design and intended
use.
(c) The City will grant to th- Developer, by written
instrument running with the West Parc=-1, an option to purchase
the West Parcel at any time duri g the five (5) period
referred to in subparagraph (a) above, upon the following
terms and conditions: (1) Developer shall have concurrently
exercised its rights to purchase t e East Parcel; (2) the
purchase price shall be fair market alue for the West Parcel
as determined by an appraisal procedu e to be set forth in the
said instrument; and (3) the deed of onveyance shall contain
a reverter in favor of the City wher-by the West Parcel will
revert to the City, without addi ' ional consideration or
payment to Developer, in the event, on or prior to a date
which not sooner than three (3) yeas after the date of the
deed (subject to force majeure pro isions) Developer shall
have failed to commence construction, or Within five (5) years
after the date of the deed (su•ject to force majeure
11
provisions) shall have failed to comple e construction, either
on the West Parcel, the East Parcel o. the Leased Premises a
hotel, having not less than one hun.red fifty (150) guest
rooms and suites, of a quality equal to or exceeding the
standard of quality contemplated by S.ction 2.02 (h) .
•
(d) Notwithstanding the provisi.ns of subparagraph (c)
above, if, prior to the expiration of the five, (5) year
periods referred to in subparagraphs (a) and (c) above, the
City proposes to construct, or permit to be constructed, any
building or other improvement on th- West Parcel, or any
portion thereof, the City shall first otify Developer thereof
in writing setting forth the nature of the proposed
development, and the portion of the West Parcel to be so
developed. Upon receiving such noti.e, the Developer shall
have thirty (30) days in which to notify the City in writing
of its intention to purchase the West •arcel, and if Developer
elects its right to purchase as herei provided, the delivery
of its said notice shall constitute a •inding contract between
the City and Developer for the purch-se of such part of the
property as shall be identified to De eloper in the original
notice from the City to Developer at a price equal to fair
market-value to be determined in accor.ance with the appraisal
procedures applicable to the option referred to above and
subject to the reverter provisions set forth above. If
Developer fails to exercise its righ' to purchase as herein
provided, the City may develop that po tion of the West Parcel
which it had originally proposed t. develop free of any
remaining rights of Developer with re-pect thereto (including
any rights under the options set forth in subparagraph (c)
above) .
ARTICLE IV
Revisions to Development Agreem-nt and Lease
4.01 Statement of Intent. The City and the Developer have
agreed that, in consideration of the mu ual agreements of the
parties herein contained, and in order to further clarify certain
provisions of the Lease, the Lease will be .mended as expeditiously
as possible as more fully hereinafter set forth.
4.02 Revised Lease Document. The parties hereto hereby
acknowledge that they have agreed that ame dments to the Lease will
be entered into both for the purpose of = ltering certain of the
terms and provisions thereof, and als• for the purpose of
clarifying the terms and provisions of he Lease. It is the
intention of the parties that the Developtent Agreement will only
contain terms and provisions applicable during the process of
development and construction of the Lease. Premises and that all
terms and provisions applicable to the speration of the Leased
12
Premises, and, to the extent applicable, Developer' s riverboat
gaming business, shall be set forth in a re-tated and amended Lease
Agreement. It is acknowledged, however that the process of
revising, approving, executing and deliver'ng both the Development
Agreement and the Lease will be time cons .ing. Accordingly, and
in order not to unduly delay the commenc.ment and completion of
construction of the South Grove Street Project, the_ City and
Developer hereby agree, as a binding and enforceable agreement of
the parties effective immediately upon the execution and delivery
hereof, that they will enter into one or .ore written instruments
revising and restating both the Development Agreement and the Lease
in a manner consistent with the terms .•nd provisions of this
Agreement and containing terms and provisons identical to those
currently contained in the Development A.reement and the Lease,
subject however to amendment and revis'on to incorporate the
following covenants and agreements of the parties hereto:
(a) The City acknowledges satisfactory completion of the
following covenants and obligations o . the Developer under the
Development Agreement and the Le-se and the following
approvals having heretofore been gra ted by the City:
(1) The City acknowledg=s that Developer has
submitted to the City detaile• and final plans and
specifications for Developer' s riverboat, and for the
pavilion to be constructed on he Leased Premises and
acknowledges and agrees that, any provision of the
Development Agreement or the Lease to the contrary
notwithstanding, the riverboat and pavilion, if built
substantially in accordance with the plans and
specifications, will be in fuel compliance with the
provisions of the Development A•reement and Lease.
(2) The City has app•oved the Developer's
operational plan for constructi.n of the riverboat.
(3) The City has approved Developer' s planned unit
development for the Leased Pre ises and its plans and
specifications for the building-- and improvements to be
constructed, and now under cons ruction, thereon.
(4) The City acknowledge- receipt of all option
payments required to be paid (s bject to the provisions
of Section 4. 02 (b) below) .
(5) The City acknowledges that receipt of the Two
Million Dollar ($2,000,000) bond required to be posted by
Developer in accordance with the provisions of the
13
Development Agreement and acknow edges that the bonds are
in full compliance with the requirements of the
Development Agreement.
(6) The provisions of Article VII of the
Development Agreement have all been completed and are.
hereby deleted.
(7) The City acknowledges at Developer has not as
yet received its Temporary Li ense or its Permanent
License (as said terms are def ned in the Development
Agreement) any provision or refe, ence in the Ground Lease
to the contrary notwithstanding
(8) The City acknowled!es and agrees that
Developer, Elgin Riverboat Res•rt, is a joint venture
consisting of Nevada Landing Pa tnership and RBG, L.P. ,
as its joint venture partners, .•nd City hereby approves
the current ownership of the jo nt venture interests.
(b) Developer hereby agrees th-t it shall, concurrently
with the execution and delivery of 'he amended and restated
Development Agreement and Lease, pay o the City an additional
option payment of Fifty Thousand Dollars ($50,000) .
(c) All provisions of Articl- II of the Development
Agreement shall be incorporated in 'he restated and amended
Lease; provided, however, Article II(B) shall be revised and
superseded in its entirety to pro ide that Developer may
operate the riverboat continuously oughout the entirety of
each day and shall be obligated to c ose down operations only
for two (2) hours during any twent -four (24) hour period,
selection of the two hour period o shutdown for each and
every day to be at the discretion of Developer.
(d) The City acknowledges that = 11 of the obligations of
the Developer under Article V(C) and Article VI(F) and (I) of
the Development Agreement have eithe been completed or are no
longer applicable, and are hereby deleted. In addition, the
obligation of Developer under Articl- VI(L) of the Development
Agreement, to the extent the same re• ires delivery of copies
of sales tax returns to the City, i likewise hereby deleted
although Developer shall continue to provide copies of
admissions and gaming tax returns as currently required.
Developer shall also provide the Cit with its state sales tax
number and the sales tax numbers of its subtenants and
concessionaires.
14
•
(e) In lieu of the provisions of Article VI(G) of the
Development Agreement, Developer •agrees that it shall,
commencing October 1, 1994 and for a .eriod of five (5) years
thereafter, pay to the City an amoun equal to Three Hundred
Fifty Thousand Dollars ($350, 000) pe year, in equal monthly
installments due on the first day of =ach month, to be used by
the City to defray law enforcement co- is which may be incurred
by the City, such obligation to term7nate upon expiration of
the aforesaid five (5) year period, or, if earlier, upon
termination of the Lease.
(f) The City agrees that the shittle bus system referred
to in Article VI(K) of the Devel.pment Agreement may be
operated either by Developer, by a independent contractor
selected and retained by the Develop=r, or by the PACE system
if arrangements suitable to Develope' can be worked out with
PACE, so long as the shuttle bus system follows a route
through downtown Elgin and connects ith each of the existing
METRA stations. At Developer' s op ion, charges, on a non-
discriminatory basis, can be made to any of the users of the
system in amounts determined from ti��e to time by Developer.
The actual hours of operation of the shuttle bus system shall
be developed and determined by Devel.per.
(g) Any provision of the Devel•pment Agreement or Lease
requiring that the riverboat or pavilion or both be open for
business by a particular date are h-reby deleted.
(h) The option to purchase the eased Premises currently
contained in the Lease will be revi-ed to be consistent with
the purchase options to be set forth n the written agreements
to be entered into with respect to the East Parcel and the
West Parcel as above provided, exc=pt that the term of the
option as contained in the Lease shall continue throughout the
Lease Term. The purchase price sh- 11 be fair market value
based on the value of the anticipate; rental income stream to
the City.
(i) In Section 2 (A) (i) of the Lease, which defines the
term "Total Investment Costs", the r-ference to Forty Million
Dollars ($40, 000, 000) is hereby chan,ed to read "Seventy-Five
Million Dollars ($75,000,000) ". It is understood that among
the costs to be included in determi ing the amount of Total
Investment Costs shall be the cos of temporary shipyard
construction facilities, the cost of dredging in the Fox
River, licensing costs, rental and •ption payments, and the
cost of constructing the improvemen's on the East Parcel and
the West Parcel.
15
(j) The term "Net After Tax Cash Flow" as defined in the
Lease was intended to provide for determination of the
relevant amount after the payment b the Developer of all
federal, state and local income tax r= turns. However, since
Developer is a partnership which is no subject to federal or
Illinois income taxes (all such t-xes being the direct
obligation of the partners) the defin'tion of said term shall
be revised to insert a formula which will deduct an amount
equal to the amount of income taxes which would have been
payable had Developer been an individu. 1 resident in the State
of Illinois and thereby required to pa ' federal, state and (if
applicable) local income taxes.
(k) Anything in the Leas= to the contrary
notwithstanding, Developer shall be entitled to a credit
against that portion of its rent meas ed by its Net Operating
Income in order to enable Develope to recover any costs
incurred by Developer in connection with the South Grove
Street Project as contemplated by Art'cle II above. Payment
of the component of Developer' s rent obligation measured by
Net Operating Income shall be made on ..n annual basis and such
annual credit shall be equal in amoun to the lesser of: (i)
one-third (1/3rd) of the costs in•urred by Developer in
connection with the South Grove S reet Project (without
interest) ; or (ii) fifty percent (59%) of Developer' s rent
obligation to the extent such obl'gation is measured by
Developer' s Net Operating Income; p ovided, however, in no
event shall the total amount of - 11 credits granted to
Developer pursuant hereto exceed he costs incurred by
Developer in connection with the Sou h Grove Street Project
(without interest) .
(1) The City grants to Develop=r an easement over that
portion of South Grove Street which s through the Leased
Premises for the purpose of const cting, maintaining and
operating a pedestrian bridge, ov-r South Grove Street
connecting the parking garage and oth=r parking areas with the
pavilion to be constructed on the Le- sed Premises.
(m) City and Developer acknowl-dges there are various
ambiguities in the Lease and other •rovisions of the Lease
which require clarification, all of w ich will be incorporated
in the restated Lease Agreement herein contemplated; provided,
however, no substantive changes shall be made in the terms and
provisions of the Lease not otherwise ' erein in this Agreement
contemplated, any such amendments to •e solely for the purpose
of clarifying and making more certaii the existing terms and
provisions thereof.
16
ARTICLE V
General
5.01 City Approvals. Except as to any provision herein
specifically requiring approval by the Ci .y Council, wherever in
this Agreement there is reference to app' oval by the City, or
consultation with the City, the same shall mean approval by, or
consultation with, the City Manager, or a y person designated by
the City Manager in writing for purpose of •ranting such approvals
or for the purpose of engaging in any conte.plated consultation, it
being understood and agreed that Developer may rely, and shall be
fully protected in relying, on any approv- 1 granted hereunder by
the City Manager or his designee, and sha 1 have fully performed
its consultation and other duties by co sulting with the City
Manager or his designee.
5.02 Effective Date. This Agreement -hall be effective as of
the date hereof provided the execution ani delivery hereof shall
have heretofore been approved by the City ouncil of the City.
5. 03 Miscellaneous. Notices require• or delivered hereunder
shall be in writing and shall be deem=d duly delivered upon
compliance with the notice provisions currently in effect with
respect to the Development Agreement and th- Lease. This Agreement
shall be governed by the laws of the Stat= of Illinois, and shall
be fully binding upon the parties heret. , and their respective
successors and assigns.
IN WITNESS WHEREOF, the parties h=reto have caused this
Agreement to be duly executed on their b=half as of the day and
year first above written.
CITY OF ELGIN, a municipal
corporat •n
By: /
Mayor
ELGIN R - ;OAT RESORT, an Illinois
limite, ji=r, ership
By: L. � e
C.'tPMK168082\0228
17
EXHIBIT A
Legal Description
(East Parcel)
That part of the Southwest Qu=rter of Section
13, Township 41 North, Range 8 E-st of the Third
Principal Meridian described as foll•ws :
Lots 3 through 18 in Block 1 of 0. Davidson's
Addition to Elgin.
Also
Block A in Davidson's Grove Ave ue Subdivision.
EXHIBIT B
• Legal Description
(West Parcel)
That part of James T. Gifford' s Addition land
Block B of Davidson' s Grove Avenue Subdivision and
Block 4 of 0. Davidson's Addition to Elgin and lying
South of a line drawn parallel to t e Southeasterly
line of said James T. Gifford' s Add tion, said line
passes through a point being 85. 0 f-et Southeasterly
(as measured along the West line of rove Avenue) of
the South line of Prairie Street.
T %RIMY
FOUNTAIN SQUARE PLAZA PHASE I
CONCEPTUAL ESTIMATE OF COST OPTION 2-MEDIUM QUALITY
Bid Item Description of Item Estimated Pay Unit Cost Item Cost
Quantity Unit (Dollars) (Dollars)
SITE CLEARING AND DEMOLITION _
1.01 Concrete Planters Removal &Disposal 27 Each 250.06.: ;6,750.00
1.02 Brick Paver& Base Removal & Disposal 3,500 CuYd 50.00 195,000.00
1.03 Concrete Sidewalk Removal & Disposal 100 CuYd 55.00 5,500.00
1.04 Conc. Curb&Gutter Removal & Disposal 620 L.Ft. 5.00 3,100.00
1.05 Tree Removal&Disposal 46 Each 300.00 13,800.00
1.06 Tree Grate&Found. Removal & Disposal 16 Each 100.00 1,600.00
1.07 Fountain &Piping Removal&Disposal 1 LSum 20,000.00 20,000.00
1.08 Centrum, Kiosks, &Clock Rem.&Disp. 1 LSum 25,000.00 25,000.00
1.09 Streetlights& Misc. Rem. &Disp. 1 LSum 10,000.00 10,000.00
1.1 Storm Structure Removal &Disposal 18 Each 300.00 5,400.00
1.11 Storm Sewer Pipe Removal& Disposal 1,300 LFt. 10.00 11,300.00
1.12 Bituminous Pavement Removal & Disposal 100 CuYd 50.00 5,000.00
Category Subtotal 282,450.00
SIDEWALK VAULT ABANDONMENT
2.01 . Reinforced Masonry Block Wall 1,040 SqFt 6.00 0.00
2.02 Select Granular Fill for Vaults 380 CuYd 30.00 0.00
2.03 Relocate Gas Service & Meter(allow) 1 .Each 1,500.00 0.00
2.04 Relocate Telephone Service 1 Each 2,000.00 0.00
2.05 Relocate Electric Service&Panels(allow) 1 Each 2,500.00 0.00
2.06 Relocate Water Service & Meter(allow) 1 Each 2,500.00 0.00
2.07 Relocate Air Handling Sys. in Vault(allow) 1 Each 10,000.00 0.00
2.08 Abandon Vault Utilities 2 Each 500.00 0.00
Category Subtotal 0.00
PAVEMENT
3.01 • B-6.18 Curb and Gutter • 1,700 LFL 11.00 18,700.00
3.02 . 4'Aggregate Leveling Course-Roadway 3,700 SqYd 3.00 11,100.00 .
3.03 8.5"BAM Base Course 3,400 SqYd 12.00 40,800.00
3.04 2"Bit. Conc. Class I Binder w/Prime Coat 3,400 SqYd 3.00 10,200.00
3.05 1.5"Bit. Conc. Class I Surface w/Tack Coat 4,735 SqYd 2.50 11,837.00
3.06 Concrete Sidewalk 100 SqFt 2.50 250.00
3.07 4'Temporary Plywood Sidewalk 7,000 SqFt 3.50 24,500.00
3.08 6"Agg. Leveling Course-Unit Pavers 1,600 SqYd 4.50 7,200.00
3.09 6"Concrete Base Course-Unit Pavers 1,600 SqYd 15.00 24,000.00
3.10 10"Agg. Leveling Course 1,600 SqYd 7.20 11,520.00
3.11 4"Scored Concrete Walk 2,000 SqYd 30.00 60,000.00
• Category Subtotal 220,107.00
Page 1
•r -
FOUNTAIN SQUARE PLAZA PHASE I
CONCEPTUAL ESTIMATE OF COST OPTION 2-M: DIUM QUALITY
Bid Item Description of Item Estimated -ay Unit Cost Item Cost
Quantity nit (Dollars) (Dollars)
WATER MAIN DISTRIBUTION SYSTEM
4.01 Remove and Replace Water Hydrant 4 ach 2,000.00 8,000.00
4.02 Valve Vault Adjustments 15 ach 250.00 3,750.00
4.03 . 6"Ductile Iron Water Fire Hydrant Extension 80 LFt 25.00 2,000.00
4.04 Select Granular Trench Backfill 500 uYd 25.00 12,500.00
4.05 4'Ductile Iron Water Service 760 LFt 22.00 16,720.00
4.06 4"Valve &Valve Box&Pressure Tap 23 ach 2,500.00 57,500.00
Category Subtotal 100,470.00
STORM SEWER SYSTEM
5.01 12"Reinforced Concrete Pipe Installation 370 LFt 18.00 6,660.00
5.02 15"Reinforced Concrete Pipe Installation 230 LFt • 20.00 4,600.00
5.03 21"Reinforced Concrete Pipe Installation 450 LFt 25.00 11,250.00
5.04 24"Reinforced Concrete Pipe Installation 300 Lft 30.00 9,000.00
5.05 4'Dia. Manhole w/Frame&Grate 7 ach 1,300.00 9,100.00
5.06 4'Diam. Catch Basin w/Frame&Grate 11 ach 1,300.00 14,300.00
5.07 Structure Frame Adjustments • 15 ach 250.00 3,750.00
5.08 Partial Manhole Reconstruction 4 ach 1,500.00 6,000.00
5.09 Internal Television Inspection 1 Sum 2,000.00 2,000.00 .
5.10 Select Granular Backfill 1400 uYd 27.00 37,800.00
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Category Subtotal 104,460.00 •
SANITARY SEWER SYSTEM
6.01 Manhole Frame Adjustments 8 Each 250.00 2,000.00
6.02 Partial Manhole Reconstruction 3 Each 1,500.00 4,500.00
6.03 Internal Television Inspection • 1 Sum 2,500.00 2,500.00
Category Subtotal .... 9,000.00
PEDESTRIAN LIGHTING
8.01 Twin Acorns on 12'Pole-70W 50 Each 4,500.00 225,000.00
8.02 Single Acorn on 12'Pole- 100W 4 Each 3,500.00 14,000.00
8.03 Single Acorn-Special Mount- 100W • 0 Each 2,000.00 0.00
8.04 Quad Acorns-Special-70W 0 Each 2,500.00 0.00
8.05 Bollard Lighting- 50W 50 Each 1,000.00 0.00
Category Subtotal 239,000.00
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SPECIAL LIGHTING
9.01 Fountain Lighting 1 Each 15,000.00 15,000.00
9.02 Kiosk Lighting - 0 Each 5,000.00 0.00
9.03 Stage Up-Lighting 1 Each 10,000.00 • 0.00
9.04 Roadway Up- Lighting • 1 Each 15,000.00 0.00
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Page 2
FOUNTAIN SQUARE PLAZA PHASE I
CONCEPTUAL ESTIMATE OF COST OPTION 2-M=DIUM QUALITY
Bid Item Description of Item Estimated -ay Unit Cost Item Cost
Quantity nit (Dollars) llars)
9.05 Control Panel (Lights, Fountain, etc.) 1 =ach 25,000.00 25,000.00
Category Subtotal :40,000.00
•
• ELECTRICAL WIRING
10.01 Conduit&Cable in Trench (6c) 1500 U . Ft. 20.00 30,000.00
10.02 Conduit&Cable in Trench(12c) 250 Li . Ft. 30.00 7,500.00
10.03 Conduit& Cable in Trench (12s) 500 U . Ft. 40.00 20,000.00
10.04 Conduit&Cable in Trench(12s+) . 500 Li . Ft. 50.00 25,000.00
Category Subtotal 82,500.00
WALKWAY PAVING
11.01 Special Paving 17500 SF 15.00 262,500.00
Category Subtotal 262,500.00
STREETSCAPE FURNISHINGS
12.01 Tree Grates/Pits 19 =ach 4,800.00 91,200.00
12.02 Benches 15 =ach 1,700.00 25,500.00
12.03 Waste Receptacles 10 =ach1,300.00 13,000.00
12.04 Bollards 60 =ach 1,000.00 60,000.00
12.05 Regulatory Signage 40 =ach 250.00 10,000.00
12.06 Bicycle Racks 3 =ach 2,000.00 6,0.00.00
12.07 Newspaper Rack Enclosures 0 =ach 10,000.00 0.00
Category Subtotal 205,700.00
STREETSCAPE AMENITIES
13.01 Fountain/Clock Tower Footing 1 . S $175,000 100,000.00
13.02 DuPage Fountain 0 S $90,000 . 0.00
13.03 Stage in Water Feature 0 S $100,000 0.00
13.04 Tensile Covering 1 S $100,000 0.00
13.05 Kiosks with Sculpture 3 =ach $25,000 75,000.00
13.06 Light Bases at Entries(footing only) 2 =ach $2,000 4,000.00
13.07 Banners 60 =ach $500 30,000.00
13.08 Artwork 1 •!low $100,000 50,000.00
Category Subtotal 259,000.00
PLANT MATERIAL • • •
14.01 5'-Street Trees 19 =ach 1,000.00 19,000.00
14.02 Seasonal Flowers/Fountain S 2,500.00
14.03 Irrigation 19 =ach 1,600.00 30,400.00
Category Subtotal 51,900.00
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Page 3
•
FOUNTAIN SQUARE PLAZA PHASE I
CONCEPTUAL ESTIMATE OF COST OPTION 2-M:DIUM QUALITY
Bid Item Description of Item Estimated -ay Unit Cost item Cost
Quantity it (Dollars) (Dollars)
15.01 Crane operation to plant trees if necessary 19 ach 250.00 0.00
Category Subtotal 0.00
TRAFFIC CONTROL
17.01 Intersection Signalization LS 25,000.00
17.02 Traffic Control Signals LS • 5,000.00
Category Subtotal 30,000.00
Total Phase I Estimate Total $1,887,087
Contingency $188,708
Total Project Estimate including Contingency $2,075,795
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Page 4
RIVERBT.SA3
6/7/95
SUPPLEMENTAL AGREEMENT TO THIRD AMENDMENT TO DEVELOPMENT
AGREEMENT AND GROUND LEASE AGREEMENT
This Agreement is made and entered into as of
June 14, 1995, by and between the CITY OF ELGIN, an Illinois
municipal corporation, (hereinafter referred to as the
"City" ) , and ELGIN RIVERBOAT RESORT, an Illinois partnership
(hereinafter referred to as the "Developer" ) .
WHEREAS, the City and Developer have previously
entered into a certain Development Agreement dated as of
June 24, 1992, contemplating the establishment of a riverboat
gaming facility along the Fox River on the property owned by
the City and legally described therein; and
WHEREAS, Development Agreement was subsequently
amended by (i) a certain Amendment to the Development
Agreement dated as of June 23, 1993, ( ii) a certain Second
Amendment to the Development Agreement and Ground Lease
Agreement dated as of January 20, 1994 ; and ( iii) a certain
Third Amendment to the Development Agreement and Ground Lease
Agreement dated as of June 9 , 1994 (the "Third Amendment" ) ; and
WHEREAS, pursuant to the Third Amendment the
Developer has made certain improvements referred to therein as
the South Grove Street Project providing for the removal of
the existing pedestrian mall and the reopening of a portion of
South Grove Street to vehicular traffic and the construction
and installation of certain related la dscaping features and
other public improvements; and
WHEREAS, the Developer is now proceeding with
certain restoration and other improvem:•nts to the bike path
between the riverboat gaming pavilion an• Prairie Street; and
WHEREAS, the parties desire that as part of the
restoration and improvements to said b'ke path area that the
Developer install the same pole mounte• path lighting as was
installed by the Developer adjacent to the riverboat gaming
pavilion; and
WHEREAS, the parties desire to provide for the
construction and payment of the additional lighting
improvements on the bike path area •etween the riverboat
gaming pavilion and Prairie Street by s pplementing the Third
Amendment to include such additional 1 'ghting in the listing
of specifications to the South Grove Str:et Project.
NOW, THEREFORE, in considera •ion of the foregoing
recitals, the mutual promises and ndertakings contained
herein, and other good and valuable consideration, the receipt
and sufficiency of which are hereby ack owledged, the parties
hereto agree as follows :
1 . That the foregoing reci •als are incorporated
into this Agreement in their entirety.
2 . That words and phrases no ' defined herein shall
have the meaning subscribed to them in t e Third Amendment.
-2-
3 . That the document identified as "Annex 1"
attached to the Third Amendment is hereby supplemented by
adding the following additional item under the section
"PEDESTRIAN LIGHTING" on page 2 thereof :
"Contemporary pole mounted 18 Each 1, 000 18 , 000
path lights the same type as
are in front of the riverboat
gaming pavilion to be placed
along bike path between the
riverboat gaming pavilion
and Prairie Street"
4 . That Developer shall cause the installation of
the 18 additional lights as part of the restoration and
improvements to the bike path between the riverboat gaming
pavilion and Prairie Street. The City shall reimburse
Developer for the cost thereof pursuant to the terms of the. .
Third Amendment.
5 . That except as modified hereby, this Agreement
shall not be deemed to amend or modify the terms and
provisions of the Third Amendment.
IN WITNESS WHEREOF, the parties have caused this
agreement to be executed on the date first written above.
CITY OF ELGIN, a municipal ELGIN RIVERBOAT RESORT, an
corporation Illinois partnership
By Xa-:� By RBG, L. P. , One of Its
Mayor General Partners
By HCCA ,Corporation, Its
Attest: G n r artner
i
f
City Clerk J.L. Sc ulze, Vice President