UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
[] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File No. 1-6697
Mirage Resorts, Incorporated
______________________________________________________
(Exact name of Registrant as specified in its charter)
Nevada 88-0058016
_______________________________ ____________________________________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3400 Las Vegas Boulevard South, Las Vegas, Nevada 89109
________________________________________________________________________
(Address of principal executive offices - Zip Code)
(702) 791-7111
_________________________________________________________________________
(Registrant's telephone number, including area code)
_________________________________________________________________________
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
_____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, $0.008 par value, 91,145,293 shares outstanding as
of May 12, 1995.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The unaudited condensed consolidated financial information as of
March 31, 1995 and for the three-month periods ended March 31,
1995 and 1994 included in this report was reviewed by Arthur
Andersen LLP, independent public accountants, in accordance with
the professional standards and procedures established for such
reviews by the American Institute of Certified Public
Accountants.
<PAGE>
REVIEW REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
_______________________________________________
To the Directors and Stockholders
of Mirage Resorts, Incorporated
We have reviewed the accompanying condensed consolidated balance
sheet of Mirage Resorts, Incorporated and subsidiaries (the
"Company") as of March 31, 1995, and the related condensed
consolidated statements of income and cash flows for the three-
month periods ended March 31, 1995 and 1994. These consolidated
financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the financial statements
referred to above for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Mirage
Resorts, Incorporated and subsidiaries as of December 31, 1994,
and the related consolidated statements of income, stockholders'
equity and cash flows for the year then ended (not presented
herein), and, in our report dated February 8, 1995 (except for
Note 5, as to which the date is March 13, 1995), we expressed an
unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet of Mirage Resorts,
Incorporated and subsidiaries as of December 31, 1994, is fairly
stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
ARTHUR ANDERSEN LLP
Las Vegas, Nevada
May 12, 1995
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<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED Mirage Resorts, Incorporated
BALANCE SHEETS
_________________________________________________________________________________
At March 31, At December 31,
1995 1994
_________________________________________________________________________________
(In thousands) (UNAUDITED)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 53,331 $ 47,142
Receivables, net of allowance for doubtful
accounts of $44,864 and $37,937 75,808 60,192
Inventories 25,679 26,374
Deferred income taxes 39,067 27,906
Prepaid expenses and other 12,127 17,901
_________________________________________________________________________________
Total current assets 206,012 179,515
Property and equipment, net of accumulated
depreciation of $426,661 and $404,965 1,375,930 1,374,992
Other assets, net 107,732 86,932
_________________________________________________________________________________
$1,689,674 $1,641,439
=================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 58,582 $ 74,361
Accrued expenses 88,826 73,744
Income taxes payable 10,668 -
Current maturities of long-term debt 1,464 3,986
_________________________________________________________________________________
Total current liabilities 159,540 152,091
Long-term debt, net of current maturities 329,336 359,584
Other liabilities, including deferred income taxes
of $113,110 and $90,400 121,901 98,842
_________________________________________________________________________________
Total liabilities 610,777 610,517
_________________________________________________________________________________
Commitments and contingencies
Stockholders' equity
Common stock: 91,118 and 90,996 shares outstanding 940 940
Additional paid-in capital and other 701,517 699,116
Retained earnings 531,883 487,007
Treasury stock, at cost: 26,456 and 26,578 shares (155,443) (156,141)
_________________________________________________________________________________
Total stockholders' equity 1,078,897 1,030,922
_________________________________________________________________________________
$1,689,674 $1,641,439
=================================================================================
</TABLE>
See notes to condensed consolidated financial statements.
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<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED Mirage Resorts, Incorporated
STATEMENTS OF INCOME (UNAUDITED)
________________________________________________________________________
Three months ended March 31 1995 1994
________________________________________________________________________
(In thousands, except per share amounts)
<S> <C> <C>
Gross revenues $383,413 $331,074
Less-promotional allowances (30,475) (30,620)
________________________________________________________________________
352,938 300,454
________________________________________________________________________
Costs and expenses
Casino-hotel operations 200,099 185,423
General and administrative 37,810 35,393
Depreciation and amortization 21,041 23,513
Corporate expense 8,431 7,858
________________________________________________________________________
267,381 252,187
________________________________________________________________________
Operating income 85,557 48,267
________________________________________________________________________
Other income and (expenses)
Interest and other income 2,861 1,478
Interest cost (9,597) (14,299)
Interest capitalized 2,359 1,646
Other, net 10 (182)
________________________________________________________________________
(4,367) (11,357)
________________________________________________________________________
Income before income taxes and extra-
ordinary item 81,190 36,910
Provision for income taxes (29,529) (13,562)
________________________________________________________________________
Income before extraordinary item 51,661 23,348
Extraordinary item-loss on early retirement
of debt, net of applicable income tax benefit (6,785) -
________________________________________________________________________
Net income $ 44,876 $ 23,348
========================================================================
Income per share of common stock
Income before extraordinary item $ 0.54 $ 0.24
Extraordinary item-loss on early retirement
of debt, net of applicable income tax benefit (0.07) -
________________________________________________________________________
Net income per share of common stock $ 0.47 $ 0.24
========================================================================
</TABLE>
See notes to condensed consolidated financial statements.
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<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED Mirage Resorts, Incorporated
STATEMENTS OF CASH FLOWS (UNAUDITED)
____________________________________________________________________________________
Three months ended March 31 1995 1994
____________________________________________________________________________________
(In thousands)
<S> <C> <C>
Cash flows from operating activities
Net income $ 44,876 $ 23,348
Adjustments to reconcile net income to net cash provided
by operating activities
Provision for losses on receivables 7,289 5,923
Depreciation and amortization of property and equipment,
including amounts reported as corporate expense 22,050 24,388
Amortization of debt discount and issuance costs 3,143 3,458
Other amortization 1,095 1,075
Loss on early retirement of debt 10,439 -
Deferred income taxes 11,549 5,033
Changes in assets and liabilities
Net increase in receivables (22,905) (8,997)
Net decrease in other current assets 6,469 6,216
Decrease in trade accounts payable (17,558) (21,654)
Increase in other current liabilities 17,560 15,287
Other, net (1,666) 986
____________________________________________________________________________________
Net cash provided by operating activities 82,341 55,063
____________________________________________________________________________________
Cash flows from investing activities
Capital expenditures (24,025) (21,123)
Joint venture and other equity investments (18,387) (5,038)
Other, net 48 694
____________________________________________________________________________________
Net cash used for investing activities (42,364) (25,467)
____________________________________________________________________________________
Cash flows from financing activities
Borrowings under bank credit facilities 5,000 20,000
Repayments of borrowings under bank credit facilities (25,000) (17,000)
Other principal payments of debt (15,353) (28,196)
Other, net 1,565 2,614
____________________________________________________________________________________
Net cash used for financing activities (33,788) (22,582)
____________________________________________________________________________________
Cash and cash equivalents
Increase for the period 6,189 7,014
Balance, beginning of period 47,142 57,462
____________________________________________________________________________________
Balance, end of period $ 53,331 $ 64,476
====================================================================================
Supplemental cash flow disclosure
Interest paid, net of amounts capitalized $ 3,961 $ 4,100
____________________________________________________________________________________
</TABLE>
See notes to condensed consolidated financial statements.
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<PAGE>
NOTES TO CONDENSED CONSOLIDATED Mirage Resorts, Incorporated
FINANCIAL STATEMENTS (UNAUDITED)
_________________________________________________________________
Note 1 - Basis of Presentation
Mirage Resorts, Incorporated (the "Company"), through wholly
owned Nevada subsidiaries, owns and operates some of the most
successful casino-based entertainment resorts in the world.
These facilities include The Mirage and Treasure Island on the
Las Vegas Strip, the Golden Nugget in downtown Las Vegas and the
Golden Nugget-Laughlin in Laughlin, Nevada. The Company also
owns 120 acres formerly occupied by the Dunes Hotel, Casino and
Country Club on the Las Vegas Strip on which it is planning to
develop a major new luxury hotel, casino and resort facility.
The condensed consolidated financial statements have been
prepared in accordance with the accounting policies described in
the Company's 1994 Annual Report on Form 10-K and should be read
in conjunction with the Notes to Consolidated Financial
Statements which appear in that report. The Condensed
Consolidated Balance Sheet at December 31, 1994 was derived from
audited financial statements, but does not include all
disclosures required by generally accepted accounting principles.
In the opinion of management, all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation
of the results for the interim periods have been included. The
interim results reflected in the condensed consolidated financial
statements are not necessarily indicative of expected results for
the full year.
Certain amounts in the 1994 condensed consolidated financial
statements have been reclassified to conform with the 1995
presentation. These reclassifications had no effect on the
Company's net income.
Note 2 - Long-Term Debt
Early Retirement of Debt
On March 13, 1995, the Company called for redemption the
remaining $125,991,000 outstanding principal amount of the 9 7/8%
first mortgage notes collateralized by The Mirage and Treasure
Island. The notes (originally scheduled to mature on October 1,
2000) were redeemed on April 12, 1995 at the initial stated
redemption price of 106.5% of the principal amount. The
redemption premium and the write-off of the unamortized debt
issue costs resulted in an extraordinary loss of $6.8 million,
net of applicable income tax benefits of $3.6 million, which is
reflected in the accompanying 1995 Condensed Consolidated
Statement of Income. The redemption was funded principally by
borrowings under the Company's bank credit facility discussed
below.
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<PAGE>
Note 2 - Long-Term Debt (Continued)
Bank Credit Facility Amendment
On April 6, 1995, the Company's $525 million revolving bank
credit facility maturing in May 1999 was amended to increase the
total availability to $1 billion (as so amended, the "Facility").
Borrowings under the Facility bear interest at a specified
premium over, at the Company's option, the prime rate or the one-,
two-, three- or six-month London Interbank Offered Rate
("LIBOR"). The premium is based on the Company's Annualized
Funded Debt Ratio (as defined) and the rating of its senior
indebtedness. The premium is currently zero for prime rate
borrowings and one percentage point for LIBOR borrowings. The
Company incurs an annual commitment fee on the unused portion of
the Facility, which is also based on the Company's Annualized
Funded Debt Ratio and the rating of its senior indebtedness. The
commitment fee is currently 0.20% per annum.
The Company and its significant subsidiaries, excluding the
subsidiary which owns and operates the Golden Nugget-Laughlin and
certain other subsidiaries (the "Excluded Subsidiaries"), are
directly liable for or have guaranteed the repayment of
borrowings under the Facility. Borrowings under the Facility are
currently uncollateralized. If the Company's Leverage Ratio (as
defined) were to exceed 2.75 to 1.0, or if the rating of its
senior indebtedness were to decline to below investment grade,
the banks would be granted a first lien on the Company's Golden
Nugget, Dunes and Shadow Creek Golf Course properties and certain
other assets (including The Mirage and Treasure Island properties
if the zero coupon first mortgage notes are then no longer
outstanding). The Company has agreed, with certain limited
exceptions, not to dispose of or further encumber such properties
and assets.
The credit agreement governing the Facility contains covenants
requiring the Company and its subsidiaries (other than the
Excluded Subsidiaries) to maintain a specified tangible net worth
and certain financial ratios. The credit agreement also contains
covenants that impose various restrictions (subject to permitted
amounts) on the ability of the Company and its subsidiaries
(other than the Excluded Subsidiaries) to, among other things,
incur additional debt, commit funds to capital expenditures or
new business ventures, make investments, merge or sell assets or
pay dividends on or repurchase the Company's capital stock.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
COMPARISON OF OPERATING RESULTS FOR THE THREE-MONTH PERIODS
ENDED MARCH 31, 1995 AND 1994
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Financial Highlights
% Increase
Three months ended March 31 1995 1994 (Decrease)
______________________________________________________________________________________
(Dollars in thousands, except per share amounts)
<S> <C> <C> <C>
Gross revenues
The Mirage $215,555 $173,961 23.9%
Treasure Island 98,259 88,391 11.2%
Golden Nugget 52,697 51,181 3.0%
Golden Nugget-Laughlin 16,902 17,541 (3.6)%
_____________________________________________________________________________________
$383,413 $331,074 15.8%
_____________________________________________________________________________________
Net revenues
The Mirage $198,144 $155,767 27.2%
Treasure Island 91,447 82,154 11.3%
Golden Nugget 48,010 46,634 3.0%
Golden Nugget-Laughlin 15,337 15,899 (3.5)%
_____________________________________________________________________________________
$352,938 $300,454 17.5%
_____________________________________________________________________________________
Operating income
The Mirage $ 58,875 $ 29,112 102.2%
Treasure Island 22,653 15,058 50.4%
Golden Nugget 9,886 9,400 5.2%
Golden Nugget-Laughlin 2,574 2,555 0.7%
Corporate expense (8,431) (7,858) 7.3%
_____________________________________________________________________________________
$ 85,557 $ 48,267 77.3%
_____________________________________________________________________________________
Operating margin (operating income/net revenues)
The Mirage 29.7% 18.7% 11.0pts
Treasure Island 24.8% 18.3% 6.5pts
Golden Nugget 20.6% 20.2% 0.4pts
Golden Nugget-Laughlin 16.8% 16.1% 0.7pts
Company-wide 24.2% 16.1% 8.1pts
_____________________________________________________________________________________
Income before extraordinary item $ 51,661 $ 23,348 121.3%
Net income $ 44,876 $ 23,348 92.2%
_____________________________________________________________________________________
Income per share before extraordinary item $ 0.54 $ 0.24 125.0%
Net income per share $ 0.47 $ 0.24 95.8%
_____________________________________________________________________________________
Company-wide table games win percentage 22.2% 16.9% 5.3pts
Company-wide occupancy of standard guest rooms 98.5% 98.1% 0.4pts
_____________________________________________________________________________________
</TABLE>
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<PAGE>
Earnings per share before extraordinary and non-recurring items
of $0.54 in the 1995 first quarter set a new quarterly record for
the Company, exceeding the previous record of $0.42 per share
achieved in the third quarter of 1994. Gross revenues of $383.4
million also set a new quarterly record.
The Company's overall table games win percentage was 22.2%,
versus 16.9% in the first quarter of 1994. By comparison, the
Company's overall win percentage for the full years 1993 and 1994
was 19.3% and 18.8%, respectively.
The Mirage had the best quarter in its five-year history. Its
gross revenues and operating income increased by 23.9% and
102.2%, respectively, over the prior-year quarter. These results
were achieved despite having approximately 6% fewer available
room-nights during the 1995 quarter due to the ongoing guest room
enhancement program which commenced in late February and is
expected to be completed by mid-August of this year. The room
enhancement program will result in approximately 9% fewer
available room-nights at The Mirage for the full year 1995, which
is expected to impact the Company's results of operations.
The substantial improvement in The Mirage's operating results
primarily reflects a $36.2 million, or 62.1%, increase in table
games revenues reflecting a 13.6% increase in activity and a
higher than historical average win percentage. Slot revenues
at The Mirage also increased by $3.8 million, or 15.4%.
Even with fewer available room-nights, The Mirage's gross non-
casino revenues were up by almost 2% over the 1994 first quarter.
This improvement is attributable to a 19.7% increase in
entertainment revenues principally reflecting additional
performances by Siegfried & Roy, as well as an increase in the
average ticket price for the show.
Treasure Island also had an excellent 1995 first quarter. Its
gross revenues and operating income rose by 11.2% and 50.4%,
respectively, over the prior-year period. The improvement in
revenues represents increases of $3.6 million in casino revenues
and $6.3 million in gross non-casino revenues. The growth in
casino revenues is mostly attributable to a $3.2 million, or
21.7%, increase in table games revenues reflecting an improvement
in both activity and the win percentage. Room revenues increased
by $3.2 million, or 16.4%, over the 1994 quarter reflecting an
improvement in both occupancy and the average room rate. The
remainder of the increase in Treasure Island's gross non-casino
revenues is attributable to a $3.1 million, or 48.2%, increase in
entertainment revenues reflecting an increase in occupancy and
the average ticket price for the spectacular show "Mystere,"
performed by the world-renowned Cirque du Soleil.
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<PAGE>
The Golden Nugget in downtown Las Vegas exceeded its strong
results of the prior-year period, despite ongoing construction of
the Fremont Street Experience. Its gross revenues rose by 3.0%
and its operating income grew by 5.2%. The increase in revenues
is primarily due to a $1.1 million, or 5.7%, improvement in gross
non-casino revenues principally reflecting the additional
revenues from the new country/western show "Country Fever," which
opened in June 1994. Casino revenues also showed a modest
improvement. Slot revenues increased by $2.2 million, or 12.4%,
offsetting a $1.7 million, or 13.5%, decline in table games
revenues.
Under continuing difficult market conditions, the Golden Nugget-
Laughlin approximately equaled its results of the prior-year
period. Its gross revenues declined by 3.6% while its operating
income was approximately unchanged. The decline in revenues is
principally due to a 4.5% reduction in slot revenues.
Other Factors Affecting Earnings
Interest cost, net of amounts capitalized, declined by $5.4
million, or 42.8%, primarily reflecting debt levels that on
average were approximately 37% lower than they were in the prior-
year period.
On March 13, 1995, the Company called for redemption the
remaining $126.0 million principal amount of the 9 7/8% first
mortgage notes collateralized by The Mirage and Treasure Island.
The notes were redeemed on April 12, 1995 at the initial stated
redemption price of 106.5% of the principal amount. Although
management believes that it was economically advantageous for the
Company to retire such notes prior to their October 1, 2000
maturity, the call premium and the write-off of the unamortized
debt issue costs resulted in a $6.8 million ($0.07 per share)
extraordinary charge in the 1995 first quarter. There were no
similar extraordinary charges in the prior-year first quarter.
CAPITAL RESOURCES AND LIQUIDITY
Funds from Operations
During the first quarter of both 1995 and 1994, cash flow from
operations was the Company's principal source of funds for
capital expenditures, investments, debt repayments and other
corporate requirements. Net cash provided by operating
activities (as shown in the accompanying Condensed Consolidated
Statements of Cash Flows) was $82.3 million in the first quarter
of 1995, representing an increase of $27.3 million, or 49.5%,
over the 1994 period. This improvement principally reflects the
Company's record 1995 first quarter operating results.
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<PAGE>
Capital Spending
Capital expenditures during the 1995 first quarter totaled $24.0
million. Of this amount, approximately $12 million relates to
the guest room enhancement program at The Mirage. The project,
which is being completed in phases, involves all 2,765 standard
guest rooms and 61 of the 279 suites. The total cost of the
project is expected to be approximately $55 million.
A significant portion of the remaining capital expenditures
during the 1995 period relates to the development of "Beau
Rivage," a major new luxury casino-based entertainment resort the
Company is planning to construct on the northern portion of the
Dunes property at the corner of Flamingo Road and the Strip.
Construction of Beau Rivage is currently expected to begin by
the second half of 1995 and be completed in late 1997
or early 1998. Beau Rivage is expected to be the most ambitious
and complex facility that the Company has ever developed.
Management is determined to infuse the project with extraordinary
originality and creativity. Although the construction plans and
budget have not yet been finalized and are subject to change, the
total cost of the project is anticipated to be less than $1
billion, exclusive of land costs.
Capital expenditures during the 1994 period totaled $21.1
million, a substantial portion of which relates to the completion
of certain projects at Treasure Island. The remaining amount
primarily reflects maintenance capital spending as well as
amounts associated with the Dunes site. Management believes in
maintaining the Company's facilities in first-class condition.
Maintenance capital spending for its four operating properties is
anticipated to approximate $30 million per year.
In early April 1995, a joint venture in which the Company is a
50% partner began construction of a new value-oriented hotel-
casino resort on approximately 46 acres on the southern portion
of the Dunes property near Tropicana Avenue. The facility is
being developed under the working name "Project Victoria" and
will feature approximately 3,000 guest rooms and an 88,000-square
foot casino. The Company's partner in the venture is supervising
the construction and will manage the resort without fee.
Based on the current budget, the total cost of the project is
anticipated to be approximately $280 million. This amount
excludes the estimated value of the land which the Company
contributed as equity to the venture.
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<PAGE>
During 1994, the joint venture obtained a $175 million reducing
revolving credit facility from a group of commercial banks to
fund a substantial portion of the construction costs. The credit
facility is collateralized by a first mortgage on all existing
and future assets of the venture and is non-recourse to the
Company. Under the joint venture agreement, the joint venture's
debt is limited to the lesser of $200 million or 70% of the
project cost, inclusive of land. The balance of the construction
costs is being provided by equity contributions from the
Company's partner and by equity contributions from the Company of
up to $20 million, $5 million of which the Company previously
contributed in cash.
Financing and Liquidity
During the first quarter of 1995, the Company used its existing
cash balances and operating cash flow to further reduce its
outstanding indebtedness by $35.4 million. This reduction
principally consisted of a $20.0 million reduction in amounts
outstanding under the Company's revolving bank credit facility
and a $14.6 million prepayment of its floating rate aircraft
loan.
Principal payments of debt during the 1994 period primarily
reflected the March 15 maturity of the remaining $27.0 million of
floating rate first mortgage notes which were collateralized by
The Mirage and Treasure Island.
On April 6, 1995, the amount available under the Company's
revolving bank credit facility was increased from $525 million to
$1 billion. A substantial portion of the funds required for the
April 12 redemption of the 9 7/8% first mortgage notes was
provided by borrowings under the bank credit facility. At May
12, 1995, borrowings of $115.0 million were outstanding under
the facility.
At March 31, 1995, the Company had cash and cash equivalents of
$53.3 million and net working capital of $46.5 million.
Maturities of the Company's debt are relatively minor through
1997. Management believes that the Company's existing cash
balances, internally generated cash flows and amounts available
under its bank credit facility will be sufficient to fund its
projected capital expenditure needs and future debt obligations.
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<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
10(a) 1995 Stock Option and Stock Appreciation Rights Plan.
Incorporated by reference to Exhibit A to the
Registrant's definitive Proxy Statement filed on April
18, 1995 under cover of Schedule 14A.
10(b) Amendment No. 1 to Reducing Revolving Loan Agreement,
dated as of April 6, 1995, among the Registrant, THE
MIRAGE CASINO-HOTEL, Treasure Island Corp., Beau Rivage,
MH, INC., GNLV, CORP., each bank party thereto, Bank of
America National Trust and Savings Association, Bankers
Trust Company, The Long-Term Credit Bank of Japan, Ltd.,
Los Angeles Agency, Societe Generale and Credit Lyonnais
Los Angeles and Cayman Island Branches, as Co-Agents, and
Bank of America National Trust and Savings Association,
as Administrative Co-Agent (without schedules or
exhibits).
10(c) Amendment No. 1 to Joint Venture Agreement of Victoria
Partners, dated as of April 17, 1995, between MRGS Corp.
and Gold Strike L.V.
10(d) Agreement between Denny's, Inc. and Beau Rivage, dated
as of March 31, 1995 (without exhibits).
10(e) Amended and Restated Lease, dated as of April 26, 1995,
between MKB Company and Beau Rivage (without exhibits).
11 Mirage Resorts, Incorporated - Computation of Net Income
Per Share of Common Stock for the three-month periods
ended March 31, 1995 and 1994.
15 Letter from independent public accountants acknowledging
awareness of the use of their report dated May 12,
1995 in the Registrant's registration statements.
27 Financial Data Schedule.
(b) Reports on Form 8-K.
The Registrant filed no reports on Form 8-K during the
three-month period ended March 31, 1995.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Mirage Resorts, Incorporated
May 12, 1995 by: DANIEL R. LEE
____________ ___________________________
Date Daniel R. Lee
Senior Vice President - Finance
and Development, Chief Financial
Officer and Treasurer (Principal
Financial Officer)
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EXECUTION
AMENDMENT NO. 1 TO REDUCING REVOLVING LOAN AGREEMENT
This Amendment No. 1 to Reducing Revolving Loan Agreement
(this "Amendment") dated as of April 6, 1995 is entered into with
reference to the Reducing Revolving Loan Agreement (the "Loan
Agreement") dated as of May 25, 1994 among Mirage
Resorts, Incorporated, a Nevada corporation ("Parent"), THE
MIRAGE CASINO-HOTEL, a Nevada corporation ("Company"),
Treasure Island Corp., a Nevada corporation ("TI"), Beau Rivage,
a Nevada corporation formerly known as MR Realty ("MRR"),
MH, INC., a Nevada corporation ("MHI" and collectively with
Parent, Company, TI and MRR, the "Borrowers"), the Banks party
thereto, Bank of America National Trust and Savings Association,
Bankers Trust Company, The Long-Term Credit Bank of Japan, Ltd.,
Los Angeles Agency and Societe Generale, as Co-Agents, and Bank
of America National Trust and Savings Association, as
Administrative Co-Agent. Capitalized terms used but not defined
herein are used with the meanings set forth for those terms in
the Loan Agreement.
RECITALS
A. Borrowers have requested that the Banks increase the amount
of the Commitment under the Loan Agreement referred to above from
$525,000,000 to $1,000,000,000 for the purpose of financing the
redemption of the TI Mortgage Notes, an expansion of the scope of
the Dunes Project, Borrowers' proposed Beau Rivage hotel-casino,
and other general corporate purposes.
B. Borrowers have also requested that GNLV, CORP., a Nevada
corporation which is a wholly owned Subsidiary of Parent, become
a Party to the Loan Agreement as an additional Borrower.
C. Each of the parties to the Loan Agreement has agreed that
Credit Lyonnais, Los Angeles Branch and Cayman Island Branch
shall hereafter be designated as a Co-Agent under the Loan
Agreement.
D. Subject to the terms hereof, the existing Banks under the
Loan Agreement have agreed to an increase in the amounts of their
portions of the Commitment and CIBC Inc. and ABN-AMRO Bank N.V.
(collectively, the "New Banks") have agreed to become parties to
the Loan Agreement as Banks and to assume a portion of the
increase to the Commitment, all as set forth on Schedule 1.1 to
the Loan Agreement, as amended and attached as Schedule 1.1 to
this Amendment.
EXHIBIT 10(b)
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<PAGE>
E. Borrowers have also requested the release of all Collateral
for the Obligations, including the release of the Dunes Property
and the Shadow Creek Property from the Lien of the Deed of Trust.
F. The Banks are willing to release the Dunes Property and the
Shadow Creek Property, and the other Collateral, and to otherwise
amend the Loan Agreement and the other Loan Documents in the
manner set forth herein, subject to the fulfillment of the
conditions precedent set forth in Paragraph 21 of this Amendment.
NOW, THEREFORE, Borrowers, the Administrative Co-Agent and the
undersigned Banks (representing 100% of the Banks now party to
the Loan Agreement and the New Banks), agree as follows:
1. Amendment to Section 1.1 - Amended Definitions. Section 1.1
of the Loan Agreement is amended so that the following
definitions set forth therein read in full as follows:
"Applicable Commitment Fee Rate" means, for each Pricing
Period, the rate set forth below (expressed in basis points)
opposite the Applicable Pricing Level for that Pricing Period:
Applicable
Pricing Level Commitment Fee
_____________ ______________
I 16.25
II 20.00
III 22.50
IV 43.75
V 50.00
VI 50.00
"Applicable Pricing Level" means, for each Pricing Period,
the pricing level set forth below opposite the highest pricing
criteria achieved by Borrowers as of the first day of that
Pricing Period (and, if such pricing criteria are set forth
opposite different pricing levels, then the pricing level set
forth below opposite the more creditworthy of such pricing
criteria):
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<PAGE>
<TABLE>
<CAPTION>
Pricing Level Pricing Criteria
_____________ _________________
Annualized Funded Senior
Debt Ratio Debt Rating
______________________ ____________________
<S> <C> <C>
I Less than 1.00 to 1.00 At least A- or A3
II Equal to or greater than At least BBB or Baa2
1.50 to 1.00 but less
than 2.25 to 1.00
III Equal to or greater than At least BBB- or Baa3
1.50 to 1.00 but less
than 2.25 to 1.00
IV Equal to or greater than At least BB+ or Ba1
2.25 to 1.00 but less
than 3.00 to 1.00
V Equal to or greater than At least BB- or Ba3
3.00 to 1.00 but less
than 3.50 to 1.00
VI Equal to or greater than Below BB- or Ba3
3.50 to 1.00 (or unrated)
</TABLE>
"Commercial Letter of Credit" means each Letter of Credit
issued to support the purchase of commodities by Borrowers which
is determined to be a commercial letter of credit by the Issuing
Bank.
"Commitment" means, subject to Sections 2.6, 2.7 and 2.8,
$1,000,000,000. The respective Pro Rata Shares of the Banks with
respect to the Commitment are set forth in Schedule 1.1.
"Commercial Paper Advance" means an Advance made by the
Banks that will be used to repay Commercial Paper Outstandings in
a principal amount not to exceed the aggregate amount of the
Commercial Paper Outstandings.
"Dunes Project" means a new major hotel-casino contemplated
to be constructed by MRR on the Dunes Property currently intended
to be known as "Beau Rivage." The Gold Strike Project is not the
Dunes Project.
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<PAGE>
"Gold Strike Project" means the themed entertainment resort
to be constructed on the southerly portion of the Dunes Property
by Victoria Partners, a joint venture partnership consisting of a
Subsidiary of MRR and an Affiliate of Gold Strike Resorts.
"Letters of Credit" means any of the Standby Letters of
Credit or Commercial Letters of Credit issued by the Issuing Bank
under the Commitment pursuant to Section 2.5, either as
originally issued or as the same may be supplemented, modified,
amended, renewed, extended or supplanted.
"New Venture Basket" means, as of any date of determination,
(a) $500,000,000 plus (b) the New Capital Amount as of that date,
minus (c) the amount by which Restricted Payments made following
the Closing Date exceed the sum of (y) $125,000,000, plus (z) an
amount equal to 50% of cumulative Net Income for the period
commencing January 1, 1995 and ending on the last day of the most
recently-ended Fiscal Quarter (taken as a single fiscal period).
"Other Basket Usage" means [Intentionally omitted].
"Restricted Payment Basket" means, as of any date of
determination, the sum of (a) $125,000,000 plus (b) an amount
equal to 50% of cumulative Net Income for the period commencing
January 1, 1995 and ending on the last day of the most
recently-ended Fiscal Quarter (taken as a single fiscal period),
plus (c) the New Capital Amount as of that date (reduced by the
amount by which the aggregate principal amount of the outstanding
Subordinated Obligations on that date is in excess of
$200,000,000), minus (d) the amount by which New Venture
Investments and New Venture Capital Expenditures made following
the Closing Date exceed $450,000,000.
"Senior Debt Rating" means (a) the rating of the
GNS Mortgage Notes, as determined by either Standard & Poor's
Ratings Group (a Division of McGraw-Hill, Inc.) or Moody's
Investors Service, Inc. (and, if by both such rating agencies,
then the more creditworthy of such credit ratings), or (b) if the
GNS Mortgage Notes are not outstanding, either (i) the implicit
credit rating for senior secured debt securities of Borrowers
based on the credit ratings of other securities of Borrowers by
such rating agencies, or (ii) at Borrowers' option, the rating
designated in a writing from one of the rating agencies referred
to above as the rating which it would assign to senior secured
debt securities of Borrowers if any such debt securities were
outstanding.
"Spin-Off Companies" means GNL, CORP., a Nevada corporation.
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<PAGE>
"Stage I Reduction Amount" means, with respect to any
Stage I Reduction Date, the amount necessary to reduce the
then applicable Commitment to the level set forth below
opposite that Stage I Reduction Date:
Stage I
Reduction Date Commitment Level
___________________ ________________
June 30, 1997 $945,000,000
September 30, 1997 $890,000,000
December 31, 1997 $835,000,000
"Stage I Reduction Test" means, with respect to each Stage I
Reduction Date, that the Senior Debt Rating is then BBB-/Baa3 or
better.
"Stage II Reduction Amount" means (a) with respect to any
Stage II Reduction Date where the Stage II Reductio n Test has
never previously been achieved, the amount necessary to reduce
the then applicable Commitment to the level set forth below
opposite that Stage II Reduction Date:
Stage II
Reduction Date Commitment Level
__________________ ________________
March 31, 1998 $770,000,000
June 30, 1998 $705,000,000
September 30, 1998 $640,000,000
December 31, 1998 $575,000,000
March 31, 1999 $510,000,000;
and (b) with respect to any Stage II Reduction Date where
the Stage II Reduction Test has previously been achieved on a
Stage II Reduction Date, $65,000,000.
"Stage II Reduction Test" means, with respect to each
Stage II Reduction Date, that all of the following tests are then
met: (a) all of the GNS Mortgage Notes have been paid in full,
defeased in accordance with the Mirage/TI First Mortgage
Documents or otherwise extinguished and (b) the Senior Debt
Rating is BBB-/Baa3 or better.
"Standby Letter of Credit" means each Letter of Credit which
is not a Commercial Letter of Credit.
2. Amendment to Section 1.1 - New Definitions. Section 1.1 of
the Loan Agreement is further amended to add the following new
definitions thereto:
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<PAGE>
"Applicable Commercial Paper Support Fee Rate" means, for
each Pricing Period, the rate set forth below (expressed in basis
points) opposite the Applicable Pricing Level for that Pricing
Period:
Applicable Commercial Paper
Pricing Level Support Fee
_____________ ________________
I 31.25
II 35.00
III 37.50
IV 43.75
V 50.00
VI 50.00
"Golden Nugget" means the Golden Nugget Hotel and Casino
located in Las Vegas, Nevada, and the real property owned and
leased by Borrowers and their Subsidiaries and associated
therewith, which real property is described on Schedule 1.1A to
this Agreement.
"Lien Event" means the date upon which the Administrative
Co-Agent is notified that either of the following has occurred:
(a) as of the last day of any Fiscal Quarter, the Leverage Ratio
is greater than 2.75:1.00 or (b) Borrowers' more creditworthy
Senior Debt Rating is at any time lower than BBB- or Baa3.
"Negative Pledge Agreement" means, with respect to the Dunes
Property, the Shadow Creek Property, the Mirage/TI Property or
the Golden Nugget, as the case may be, an agreement creating a
negative pledge with respect to such Real Property in favor of
the Administrative Co-Agent and the Banks, in form suitable for
recordation with the Clark County, Nevada Recorder's Office,
substantially in the form of Exhibit A to Amendment No. 1 hereto.
"New Capital Amount" means, as of each date of
determination, an amount equal to the aggregate net cash proceeds
received by (i) Parent from the issuance and sale of capital
stock of Parent (including upon any conversion or exchange of the
GNS Mortgage Notes or upon any conversion or exchange of other
debt securities of Parent issued after March 1, 1995 into or for
such capital stock) after March 1, 1995 and through such date and
(ii) Borrowers or any Restricted Subsidiary from the issuance and
sale of Subordinated Obligations pursuant to Section 6.10(h)
after March 1, 1995 and through such date.
-6-
<PAGE>
3. Amendment to Section 3.4. Section 3.4 of the Loan Agreement
is amended to read in full as follows:
"3.4 Commitment Fees. From March 31, 1995, Borrowers
shall pay to the Administrative Co-Agent, for the
ratable accounts of the Banks pro rata according to
their Pro Rata Share of the Commitment, a commitment
fee equal to the Applicable Commitment Fee Rate per
annum times the average daily amount by which the
Commitment exceeds the sum of (a) the aggregate
principal Indebtedness evidenced by the Committed
Advance Notes (excluding the Competitive Advances and
Swing Line Outstandings) plus (b) the Aggregate
Effective Amount of all Standby Letters of Credit
outstanding, plus (c) the Commercial Paper
Outstandings. The commitment fee shall be payable
quarterly in arrears on each Quarterly Payment Date and
on the Maturity Date."
4. New Section 3.4A - Commercial Paper Support Fees. The Loan
Agreement is amended to add a new Section 3.4A, to read in full
as follows:
"3.4A Commercial Paper Support Fees. From March 31, 1995,
Borrowers shall pay to the Administrative Co-Agent, for
the ratable accounts of the Banks pro rata according to
their Pro Rata Share of the Commitment, a commercial
paper support fee equal to the Applicable Commercial
Paper Support Fee Rate per annum times the average
daily amount of the Commercial Paper Outstandings. The
commercial paper support fee shall be payable quarterly
in arrears on each Quarterly Payment Date and on the
Maturity Date."
5. Amendment to Section 3.5. Section 3.5 of the Loan Agreement
is amended to read in full as follows:
"3.5 Letter of Credit Fees. With respect to each Letter
of Credit, Borrowers shall pay the following fees:
(a) concurrently with the issuance of each Standby
Letter of Credit, a letter of credit issuance fee
to the Issuing Bank for the sole account of the
Issuing Bank, in an amount set forth in a letter
agreement between Borrowers and the Issuing Bank;
-7-
<PAGE>
(b) concurrently with the issuance of each Standby
Letter of Credit, to the Administrative Co-Agent
for the ratable account of the Banks in accordance
with their Pro Rata Share of the Commitment, a
standby letter of credit fee in an amount equal to
the Applicable Letter of Credit Fee times the face
amount of such Standby Letter of Credit through
the termination or expiration of such Standby
Letter of Credit; and
(c) concurrently with each issuance, negotiation,
drawing, or amendment with respect to any
Commercial Letter of Credit, to the Issuing Bank
for the sole account of the Issuing Bank,
issuance, negotiation, drawing and amendment fees,
in the amounts set forth from time to time as the
Issuing Bank's published scheduled fees for such
services.
Each of the fees payable with respect to Letters of Credit
under this Section are earned when due and are nonrefundable."
6. Amendment to Section 4.6. Section 4.6 of the Loan Agreement
is amended to read in full as follows:
"4.6 No Other Liabilities. Borrowers and the Restricted
Subsidiaries do not have any material liability or
material contingent liability not reflected or
disclosed in the balance sheet described in
Section 4.5(b), other than liabilities and contingent
liabilities arising in the ordinary course of business
since the date of such financial statements. As of the
Closing Date, no circumstance or event has occurred
that constitutes a Material Adverse Effect since
December 31, 1993.
7. Amendment to Section 5.10. Section 5.10 of the Loan
Agreement is amended to read in full as follows:
"5.10 Certain Future Real Property Collateral. If a Lien
Event occurs and is continuing:
(a) as promptly as practicable and in any event
within 15 days, if the GNS Mortgage Notes have not
then been repaid or otherwise defeased or retired,
execute the Deed of Trust (covering those portions
of the Dunes Property and the Shadow Creek
Property then owned by Borrowers and their
Restricted Subsidiaries) and deliver the same to
the Administrative Co-Agent for recordation and
filing with the appropriate Governmental Agencies;
-8-
<PAGE>
(b) as promptly as practicable and in any event
within 15 days, if the GNS Mortgage Notes have
then been repaid, defeased or otherwise retired
(or, if following a Lien Event, the GNS Mortgage
Notes are at any time defeased or otherwise
retired), execute the Mirage/TI Property Deed of
Trust (covering those portions of the Dunes
Property, the Shadow Creek Property and the
Mirage/TI Property then owned by Borrowers and
their Restricted Subsidiaries) and deliver the
same to the Administrative Co-Agent for
recordation and filing with the appropriate
Governmental Agencies;
(c) as promptly as practicable and in any event
within 90 days of any recordation referred to in
paragraph (a) or (b) of this Section, provide the
Administrative Co-Agent with (i) ALTA title
insurance policies issued by the Title Company
insuring the Lien of the Deed of Trust and\or the
Mirage/TI Property Deed of Trust in the form set
forth in Schedule 5.10, subject only to Permitted
Encumbrances and the title exceptions set forth in
Schedule 5.10, in an amount equal to the fair
market value of the property subject thereto, as
determined by the appraisals referred to below,
but not in any event more than the then
Commitment, (ii) such title re -insurance
agreements from other title insurance companies as
the Administrative Co-Agent may reasonably
require, (iii) a current written appraisal of such
real property prepared by a qualified independent
appraiser acceptable to the Requisite Banks
complying in all respects with FIRREA, (iv) an
ALTA survey of such real property by a licensed
surveyor acceptable to the Requisite Banks and
(v) a written "Phase I" environmental report with
respect to any Hazardous Materials on or under the
relevant Real Property prepared by a qualified
independent expert acceptable to the Requisite
Banks, provided that the Administrative Co-Agent
may grant up to two extensions of up to 30 days
each with respect to any one or more of the
requirements set forth in this paragraph (c);
-9-
<PAGE>
(d) as promptly as practicable and in any event
within 15 days (whether the GNS Mortgage Notes
have or have not then been repaid, defeased, or
otherwise retired), execute a deed of trust
substantially in the form of Exhibit G, with
respect to the Golden Nugget and deliver the same
to the Administrative Co-Agent for recordation and
filing with the appropriate Governmental Agencies,
provided that such deed of trust need not encumber
that portion of the Golden Nugget which is located
on leased land unless and until any necessary
consents of the lessors thereof have been
obtained, but shall be amended if such consents
are later obtained; and
(e) as promptly as practicable and in any event
within 90 days of any recordation referred to in
paragraph (d) of this Section, provide the
Administrative Co-Agent with (i) ALTA title
insurance policies issued by the Title Company
insuring the Lien of such deed of trust as a first
Lien on the Golden Nugget subject only to
Permitted Encumbrances and such title exceptions,
and with such endorsements as are reasonably
acceptable to the Administrative Co-Agent, in an
amount equal to the fair market value of the
property subject thereto, as determined by
appraisals, but not in any event more than the
then Commitment, and (ii) such assurances of the
types referred to in clauses (ii) through (v) of
paragraph (c) of this Section as the
Administrative Co-Agent may reasonably request,
provided that the Administrative Co-Agent may
grant up to two extensions of up to 30 days each
with respect to any one or more of the
requirements set forth in this paragraph (e)."
8. Amendment to Section 5.11. Section 5.11 of the Loan
Agreement is amended to read in full as follows:
"5.11 Other Future Collateral. If a Lien Event occurs,
then, as promptly as practicable:
(a) deliver or cause the delivery to the
Administrative Co-Agent of:
(i) in any event within 30 days of such Lien
Event, the Security Agreement executed by
Borrowers and each Significant Subsidiary,
together with such financing statements on
Form UCC-1 executed by Borrowers and each
Significant Subsidiary with respect to the
Security Agreement as the Administrative
Co-Agent may request;
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<PAGE>
(ii) in any event within 120 days of such Lien
Event, the Pledge Agreement (Gaming) executed
by Parent, the Company and GNLV, CORP.
together with the Pledged Collateral (Gaming)
accompanied by appropriate stock powers
endorsed in blank;
(iii) in any event within 30 days of such Lien
Event, the Pledge Agreement (Non-Gaming)
executed by Borrowers and the Restricted
Subsidiaries, together with the Pledged
Collateral (Non-Gaming) and accompanied by
appropriate stock powers endorsed in blank;
and
(b) thereafter, upon the acquisition after the
Closing Date by Borrowers or any Restricted
Subsidiary of:
(i) any capital stock of (A) a new Subsidiary
(other than a Spin-Off Company), (B) a New
Venture Investor or (C) a corporation or
business entity which is the subject of an
Investment described in Section 6.18(k)
or 6.18(l) where the amount of the Investment
of Borrowers and the Restricted Subsidiaries
therein is $15,000,000 or more, deliver the
certificates evidencing such capital stock in
pledge to the Administrative Co-Agent
pursuant to the Pledge Agreement (Gaming) or
Pledge Agreement (Non-Gaming), as the case
may be;
(ii) any fee simple interest in real Property
with a fair market value of $5,000,000 or
more, execute and deliver to the
Administrative Co-Agent a deed of trust or
mortgage (which shall be substantially in the
form of the Deed of Trust) that creates a
Lien on such real Property securing the
Obligations subject in priority only to
Permitted Encumbrances and Liens existing on
such real Property prior to such acquisition
(and not done in contemplation thereof); and
-11-
<PAGE>
(iii) any vessel or vehicle with a fair market
value of $1,000,000 or more, execute and
deliver to the Administrative Co-Agent such
Collateral Documents as are appropriate
therefor as requested by the Administrative
Co-Agent that creates a Lien thereon securing
the Obligations subject in priority only to
Permitted Encumbrances and Liens existing
thereon prior to such acquisition (and not
done in contemplation thereof); provided,
however, that the foregoing shall be subject
to any applicable provision in the Mirage/TI
First Mortgage Documents that prohibits
further Liens on Property located on or used
exclusively in connection with the Mirage/TI
Property and any Negative Pledge permitted
under Section 6.9(h)."
9. Amendment to Section 6.9. Section 6.9 of the Loan Agreement
is amended so that clauses (c) and (j) thereof, and the proviso
following clause (j) thereof, read in full as follows:
"(c) Liens and Negative Pledges existing on the Closing Date
and disclosed in Schedule 4.7 and any
renewals/extensions or amendments thereof; provided that
(i) the obligations secured or benefited thereby are not
increased, and (ii) no Liens or Negative Pledges in
favor of the holders of any Indebtedness which renews,
extends or otherwise refinances the TI Mortgage Notes or
the GNS Mortgage Notes shall be permitted;"
"(j) Liens, Negative Pledges and Rights of Others not
described above on Property having in the aggregate a
fair market value of not more than $2,000,000, provided
that no such Liens, Negative Pledges or Rights of Others
exist with respect to the real property or the
improvements constituting the Dunes Property, the Shadow
Creek Property, the Mirage/TI Property or the Golden
Nugget;
provided, that (i) this Section shall not be deemed to
constitute a Negative Pledge with respect to the capital stock
of GNLV, CORP or Golden Nugget Manufacturing Corp. unless and
until the consent of all relevant Gaming Boards of the State
of Nevada have been obtained thereto, (ii) this Section shall
not apply to prohibit the creation of a Lien, Negative Pledge
or Right of Others to the extent necessary to prevent a
License Revocation if (A) no Default or Event of Default then
exists which is not curable by creation of the Lien, Negative
Pledge or Right of Others and (B) Borrowers have notified the
Administrative Co-Agent in writing of the necessity to invoke
this proviso at least ten (10) Banking Days (or such shorter
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<PAGE>
period as may be necessary in order to comply with a
regulation or order of the relevant Gaming Board) in advance,
and (iii) if, notwithstanding the provisions of this Section,
any Lien prohibited by this Section is created, incurred,
assumed or suffered to exist by Borrowers or their Restricted
Subsidiaries with respect to any of their Property, Borrowers
and their Restricted Subsidiaries shall simultaneously grant
Liens on such Property which secure the Obligations equally
and ratably with the Indebtedness so secured, and will provide
prompt written notice thereof to the Administrative Co-Agent.
Nothing in clause (iii) of this proviso is intended to
relieve the Borrowers or their Restricted Subsidiaries from
their obligations under this Section, and any Lien granted by
Borrowers or the Restricted Subsidiaries to any Person in
violation of the terms hereof shall be deemed to constitute a
Lien granted to the Administrative Co-Agent for the benefit of
the Banks, the Swing Line Bank and the Issuing Bank."
10. Amendment to Section 6.10. Section 6.10 of the Loan
Agreement is amended so that clauses (f) and (j) of such Section
are amended to read in full as follows and to add a new clause
(k):
"(f) Indebtedness consisting of commercial paper of Parent
in an aggregate principal amount not in excess of
$350,000,000 outstanding at any one time; provided, that
(i) the Senior Debt Rating, as of the date of issuance
thereof, is BBB-/Baa3 or higher and (ii) the sum of
(A) the aggregate principal amount thereof, plus (B) the
aggregate principal amount outstanding under the Notes,
plus (C) the Aggregate Effective Amount of all
outstanding Letters of Credit, plus (D) the Swing Line
Outstandings does not at any time exceed the then
applicable Commitment;"
"(j) Guaranty Obligations which are Investments to the
extent that the same are permitted by Sections 6.17 or
6.18; and
"(k) Indebtedness not described above that does not exceed
in the aggregate $5,000,000 outstanding at any time."
11. Amendment to Section 6.15. Section 6.15 of the Loan
Agreement is amended to read in full as follows:
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<PAGE>
"6.15 Capital Expenditures. Make, or become legally
obligated to make, any Capital Expenditure if to do so
would result in the aggregate Capital Expenditures made
in that Fiscal Year exceeding (i) in the case of the
Fiscal Year ending December 31, 1994, $35,000,000,
(ii) in any other Fiscal Year, if the Dunes Project or
Other Gaming Project is not open for business at any
time during such Fiscal Year, $40,000,000 or (iii) in
any other Fiscal Year, if the Dunes Project or Other
Gaming Project is open for business at any time during
such Fiscal Year, $60,000,000, except:
(a) Capital Expenditures not in excess of
$1,000,000,000 to develop and construct the
Dunes Project, provided that (A) the Project
Commencement Date therefor occurs no later than
October 31, 1995 and (B) the Project Key Date
therefor occurs no later than April 30, 1996 (it
being understood, that if the Project Commencement
Date for the Dunes Project or the Project Key Date
for the Dunes Project occur on later dates which
have not been approved in writing by the Majority
Banks, that further Capital Expenditures with
respect to the Dunes Project will not be permitted
after such dates);
(b) Capital Expenditures not in excess of $60,000,000
and made after January 1, 1994 and prior to
December 31, 1995, for improvements to The Mirage
in progress or planned as of the Closing Date;
(c) Capital Expenditures not in excess of $25,000,000
and made after January 1, 1994 and prior to
December 31, 1995 for the completion,
reconfiguration or improvement of Treasure Island;
(d) Capital Expenditures to the extent financed by
Indebtedness permitted under Section 6.10(d) or
6.10(e);
(e) New Venture Capital Expenditures permitted by
Section 6.16; and
(f) Capital Expenditures not in excess of $40,000,000
made when no Event of Default exists to purchase
corporate aircraft;
provided, however, that (A) Borrowers may exceed any of
the amounts set forth in clauses (a), (b), (c) or (f) above
if the overage amount is treated as a Capital Expenditure
subject to clause (i), (ii) or (iii) of this Section (as
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<PAGE>
applicable) and, giving effect thereto, the limitations
therein set forth are not exceeded and (B) if, in any Fiscal
Year, Capital Expenditures made by Borrowers and the
Restricted Subsidiaries (other than those described in
clauses (a), (b) or (c) above) are less than the maximum
amount permitted for such Fiscal Year under clauses (i),
(ii) or (iii) above, then such unused portion of such amount
shall be carried over and added to the maximum amount
permitted for the immediately following Fiscal Year under
clause (ii) or (iii) above."
12. Deletion of Section 6.16(c). Section 6.16 of the Loan
Agreement is amended to delete the text of clause (c) and to
insert in its place "[Intentionally Omitted]."
13. Deletion of Sections 6.17(c) and 6.17(e). Section 6.17
of the Loan Agreement is amended to delete the text of clauses
(c) and (e) and to insert in their place "[Intentionally
Omitted]."
14. Amendment to Section 7.1. Section 7.1 of the Loan
Agreement is amended by adding new clauses (n) and (o) thereto,
and relettering existing clause (n) as clause (p), so that the
same read in full as follows:
"(n) On each day upon which Borrowers borrow or repay
commercial paper Indebtedness pursuant to Section
6.10(f), a Certificate of a Responsible Official, in a
form and in detail reasonably acceptable to the
Administrative Co -Agent, setting forth the amounts of
such borrowings and repayments and, giving effect
thereto, the aggregate principal amount of the
Commercial Paper Outstandings;
"(o) Within three Banking Days of Borrower's receiving
notice of any change in the Senior Debt Rating, written
notice of such change; and
"(p) Such other data and information as from time to time
may be reasonably requested by the Administrative Co-
Agent, any Bank (through the Administrative Co-Agent) or
the Requisite Banks."
15. Amendment to Section 8.2. Section 8.2 of the Loan
Agreement is amended to read in full as follows:
"8.2 Any Increasing Advance, Etc. The obligation of each
Bank to make any Advance which would increase the prin-
cipal amount outstanding under the Notes, and the
obligation of the Issuing Bank to issue a Letter of
Credit, is subject to the following conditions
precedent:
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<PAGE>
(a) except (i) for representations and warranties which
expressly speak as of a particular date or are no
longer true and correct as a result of a change
which is permitted by this Agreement or (ii) as
disclosed by Borrowers and approved in writing by
the Requisite Banks, the representations and
warranties contained in Article 4 (other than
Sections 4.4(a), 4.6, 4.10, 4.17 and 4.19) shall
be true and correct on and as of the date of the
Advance as though made on that date;
(b) except in the case of any such Advance which is a
Commercial Paper Advance, no Material Adverse
Effect shall have occurred since the Closing Date;
(c) except in the case of any such Advance which is a
Commercial Paper Advance (other than matters
described in Schedule 4.10 or not required as of
the Closing Date to be therein described), there
shall not be then pending or threatened any
action, suit, proceeding or investigation against
or affecting Borrowers or any of the Restricted
Subsidiaries or any Property of any of them before
any Governmental Agency that constitutes a
Material Adverse Effect;
(d) the Administrative Co-Agent shall have timely
received a Request for Loan in compliance with
Article 2 (or telephonic or other request for Loan
referred to in the second sentence of
Section 2.1(b), if applicable) or the Issuing Bank
shall have received a Request for Letter of
Credit, as the case may be, in compliance with
Article 2; and
(e) the Administrative Co-Agent shall have received, in
form and substance satisfactory to the
Administrative Co-Agent, such other assurances,
certificates, documents or consents related to the
foregoing as the Administrative Co-Agent or
Requisite Banks reasonably may require."
16. Funding of Certain Advances. Each of the Banks agrees
that, subject to Paragraph 22 hereof and to the fulfillment of
each of the conditions precedent to this Amendment, the
obligation of the Banks to make Loans in the amount of
$134,560,575.30, the proceeds of which are used to repay the
outstanding Indebtedness evidenced by the TI Mortgage Notes,
shall not be conditioned upon the fulfillment of the conditions
precedent set forth in Sections 8.2 and 8.3 of the Loan
Agreement, provided that the Banks shall not be obligated to make
such Loans if any Event of Default exists.
-16-
<PAGE>
17. Amendment to Certain Exhibits. The forms of Exhibits
F - Compliance Certificate, K - Request for Letter of Credit, and
L - Request for Loan, to the Loan Agreement are amended as set
forth in Exhibits F, K and L to this Amendment, respectively.
18. Joinder of GNLV, CORP. as a Borrower.
(a) Each other Borrower designates GNLV, CORP. as an
additional Borrower under the Loan Agreement and the
other Loan Documents, and accepts GNLV, CORP. as a co-
borrower under the Loan Agreement and the other Loan
Documents.
(b) GNLV, CORP. hereby joins in, and agrees that it is a
Party to, the Loan Agreement and the other Loan
Documents as a Borrower and joins in all the
representations, warranties and covenants of Borrowers,
and is subject to the other terms, provisions,
conditions, and duties applicable to Borrowers under the
Loan Agreement and the other Loan Documents as if it
were an original Party thereto. Without limitation on
the foregoing and any other provision of the Loan
Documents, GNLV, CORP. promises to pay each and every
one of the Obligations when due and to indemnify the
Administrative Co-Agent and the Banks in the manner
contemplated by Article 11 of the Loan Agreement. GNLV,
CORP. acknowledges and agrees that the agreement set
forth in this Paragraph 18 is expressly made for the
benefit of the other Borrowers, the Administrative Co-
Agent, the Issuing Bank and the other Banks and their
respective successors and permitted assigns and shall
survive the termination of the Loan Agreement and the
repayment of the Obligations. From and after the
effective date of this Amendment, GNLV, CORP. shall be a
party to the Loan Agreement and the other Loan Documents
and shall have the rights and obligations of a Borrower
under the Loan Agreement and the other Loan Documents.
GNLV, CORP. designates its address for notices as the
address for the other Borrowers set forth in the
signature pages to the Loan Agreement.
(c) GNLV, CORP. and each other Borrower acknowledges and
agrees that they are jointly and severally liable as
primary obligors for all of the Obligations, whether
advanced to GNLV, CORP. or such Borrower or not, and
whether such Obligations are outstanding as of the
effective date hereof or at any later time. Each
Borrower acknowledges and agrees that the Administrative
Co-Agent and the Banks have made no representation or
warranty to any Party regarding the creditworthiness of
any other Party, and that each Borrower has made such
investigations into the creditworthiness of each other
Borrower as it deems appropriate.
-17-
<PAGE>
(d) Subject to the fulfillment of each of the conditions
precedent set forth in Paragraph 21 hereof, the
Administrative Co-Agent and each Bank accept GNLV, CORP.
as a Borrower under the Loan Agreement and the other
Loan Documents.
19. Joinder of the New Banks.
(a) Each of the New Banks hereby joins and becomes a party
to the Loan Agreement as a Bank. Each New Bank shall
have all of the obligations under the Loan Documents of,
and shall be deemed to have made all of the covenants
and agreements contained in the Loan Documents made by,
a Bank having a Pro Rata Share as reflected on the
revised Schedule 1.1 attached hereto. Each New Bank
acknowledges and agrees that the agreement set forth in
this Paragraph 19 is expressly made for the benefit of
the Borrowers, the Administrative Co-Agent, the Issuing
Bank and the other Banks and their respective successors
and permitted assigns. From and after the effective
date of this Amendment, each New Bank shall be a party
to the Loan Agreement and, to the extent provided
herein, shall have the rights and obligations of a Bank
under the Loan Agreement and the other Loan Documents.
(b) Each New Bank represents and warrants that it has become
a party hereto solely in reliance upon its own
independent investigation of the financial and other
circumstances surrounding Borrowers, the collateral, and
all aspects of the transactions evidenced by or
referenced in the Loan Documents, or has otherwise
satisfied itself with respect thereto, and that it is
not relying upon any representation, warranty or
statement (except any such representation, warranty or
statement expressly set forth in this Amendment) of the
Administrative Co-Agent, the Issuing Bank or any Bank in
connection with its decision to enter into the Loan
Documents. Each New Bank further acknowledges that it
will, independently and without reliance upon the
Administrative Co-Agent, the Issuing Bank or any other
Bank and based upon such New Bank's review of such
documents and information as it deems appropriate at the
time, continue to make its own credit decisions in
connection with the Loan Documents.
(c) Each New Bank represents and warrants that it has
experience and expertise in the extension of credits of
the type contemplated by the Loan Documents; that it has
acquired its Pro Rata Share for its own account and not
with any present intention of selling all or any portion
of such interest; and that it has received, reviewed and
approved copies of all Loan Documents.
-18-
<PAGE>
(d) The Administrative Co-Agent, the Issuing Bank and the
other Banks shall not be responsible to the New Banks
for the execution, effectiveness, accuracy,
completeness, legal effect, genuineness, validity,
enforceability, collectibility or sufficiency of any of
the Loan Documents (other than their own due execution
of the Loan Documents) or for any representations,
warranties, recitals or statements made therein or in
any written or oral statement or in any financial or
other statements, instruments, reports, certificates or
any other documents made or furnished or made available
by them to the New Banks (other than representations,
warranties, recitals or statements made by them therein)
or by or on behalf of the Borrowers to the New Banks in
connection with the Loan Documents and the transactions
contemplated thereby or for the financial condition or
business affairs of the Borrowers or any other Person
liable for the payment of any of the Obligations, the
value of the collateral or any other matter. The
Administrative Co-Agent, the Issuing Bank and the other
Banks shall not be required to ascertain or inquire as
to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements
contained in any of the Loan Documents or as to the use
of the proceeds of the Advances or other extensions of
credit under the Loan Agreement or as to the existence
or possible existence of any Default or Event of
Default.
(e) Each New Bank represents and warrants that it has full
power and authority to enter into this Amendment and to
perform its obligations as a Bank in accordance with the
provisions of the Loan Documents and that this Amendment
has been duly authorized, executed and delivered by such
New Bank and constitutes a legal, valid and binding
obligation thereof, enforceable in accordance with its
terms, except as enforceability may be limited by
applicable bankruptcy, moratorium or other similar laws
affecting creditors' rights generally and by general
equitable principles.
-19-
<PAGE>
20. Redesignation of Certain Subsidiaries. The following
Subsidiaries of Parent are redesignated in the manner set forth
below:
<TABLE>
<CAPTION>
Subsidiary Old Designation New Designation
__________ _______________ ________________
<S> <C> <C>
GNLV, CORP. Spin-Off Company Borrower
GNLV FINANCE CORP. Spin-Off Company Restricted Subsidiary
GNLV Holding Corp. Spin-Off Company Restricted Subsidiary
Golden Nugget Spin-Off Company Unrestricted New
Experience Corp. Venture Entity
Golden Nugget Spin-Off Company Unrestricted New
Lawrenceburg, Inc. Venture Entity
Golden Nugget Spin-Off Company Restricted Subsidiary
Manufacturing Corp.
Golden Nugget, Inc. Spin-Off Company Restricted Subsidiary
</TABLE>
Of the foregoing, only GNLV, CORP. is a Significant Subsidiary.
21. Conditions Precedent. The effectiveness of this
Amendment shall be conditioned upon the fulfillment of each of
the following conditions precedent:
(a) The Administrative Co-Agent shall have received all of
the following, each of which shall be originals unless
otherwise specified, each properly executed by a
Responsible Official of each party thereto, each dated
as of the date hereof and each in form and substance
satisfactory to the Administrative Co-Agent and its
legal counsel (unless otherwise specified or, in the
case of the date of any of the following, unless the
Administrative Co-Agent otherwise agrees or directs):
1. Counterparts of this Amendment executed by all
parties hereto;
-20-
<PAGE>
2. Replacement Committed Advance Notes executed by
Borrowers in favor of each Bank, each in the
principal amount of that Bank's Pro Rata Share of
the Commitment (after giving effect to the increase
in the Commitment contemplated hereby) delivered by
Borrowers against redelivery of the original
Committed Advance Notes executed by the original
Borrowers on the Closing Date;
3. Replacement Competitive Advance Notes executed by
Borrowers in favor of each Bank, each in the
principal amount of $200,000,000 delivered by
Borrowers against redelivery of the original
Competitive Advance Notes executed by the original
Borrowers on the Closing Date;
4. Written consents of each of the Subsidiary
Guarantors to the execution, delivery and
performance hereof, substantially in the form of
Exhibit B to this Amendment;
5. A Certificate of a Responsible Official signed by a
Senior Officer of Borrowers attaching a copy of the
notice delivered to the trustee for the holders of
the TI Mortgage Notes contemplated by clause (b) of
this section;
6. Certified copies of resolutions authorizing the
transactions contemplated hereby of the boards of
directors of each Borrower and the Significant
Subsidiaries, in form and substance acceptable to
the Administrative Co-Agent;
7. Written legal opinions dated as of the date hereof
of (a) Peter C. Walsh, Esq., Assistant General
Counsel of Parent and (b) Schreck, Jones, Bernhard,
Woloson & Godfrey, Chartered, special counsel to
Borrowers and the Restricted Subsidiaries, sub-
stantially in the form of the Opinions of Counsel
delivered on the Closing Date but with such
revisions thereto as may reasonably be requested by
the Administrative Co-Agent together with copies of
all factual certificates and legal opinions upon
which such counsel has relied;
8. A Negative Pledge Agreement with r espect to the
Dunes Property, the Shadow Creek Property and the
Golden Nugget; and
9. Such other assurances, certificates, docu ments,
consents or opinions as the Administrative Co -Agent
reasonably may require.
-21-
<PAGE>
(b) TI shall have given irrevocable written notice to the
trustee for the holders of the TI Mortgage Notes of
redemption of all of the outstanding TI Mortgage Notes.
(c) Borrowers shall have paid an up-front fee of $2,375,000
to the Administrative Co-Agent for the account of the
New Banks and those Banks which have increased the
amount of their portion of the Commitment pursuant to
this Amendment, in the amounts set forth on Schedule 21
to this Amendment.
(d) Borrowers shall have paid an amendment fee of $525,000
to the Administrative Co-Agent for the account of the
Banks, in the amounts set forth on Schedule 21 to this
Amendment.
(e) The reasonable costs and expenses of the Administrative
Co-Agent in connection with the preparation of this
Amendment and invoiced to Borrowers prior to the date
hereof shall have been paid.
(f) The representations and warranties of Borrowers
contained in Article 4 of the Loan Agreement shall be
true and correct.
(g) Borrowers and any other Parties shall be in compliance
with all the terms and provisions of the Loan Documents
and no Default or Event of Default shall have occurred
and be continuing.
(h) All legal matters relating to the Loan Documents shall
be satisfactory to Sheppard, Mullin, Richter & Hampton,
special counsel to the Administrative Co-Agent.
22. Conditions to Obligations in Excess of $800,000,000.
Borrowers consent and agree that, notwithstanding any other
provision of the Loan Documents to the contrary, Borrowers shall
not permit the sum of (i) the aggregate principal amount
outstanding under the Notes, plus (ii) the Aggregate Effective
Amount of all outstanding Letters of Credit, plus (iii) the
Swing Line Outstandings, plus (iv) the Commercial Paper
Outstandings, to exceed $800,000,000, and the Administrative Co-
Agent, the Banks, the Issuing Bank and the Swing Line Bank shall
not be obligated to extend any such credit, unless and until
Borrowers shall have notified the Administrative Co-Agent in
writing that the consent of all relevant Gaming Boards of the
State of Nevada to the Negative Pledge contained in Section 6.9
of the Loan Agreement with respect to GNLV, CORP. and Golden
Nugget Manufacturing Corp. have been obtained and that such
Negative Pledge is effective with respect to the capital stock of
GNLV, CORP. and Golden Nugget Manufacturing Corp.
-22-
<PAGE>
23. Release of Liens. Concurrently with the effectiveness
of this Amendment, the Administrative Co-Agent is authorized and
directed by each of the Banks to release the Liens created by the
Collateral Documents. The Administrative Co-Agent shall (a)
execute and deliver to the Borrowers and their Subsidiaries, at
the sole expense of Borrowers and without recourse,
representation or warranty of any kind, all reconveyances,
termination statements and other Lien releases as shall be
reasonably necessary or desirable to carry out the provisions of
this Section and (b) redeliver to the Borrowers the Pledged
Collateral delivered pursuant to the Pledge Agreement (Gaming)
and the Pledge Agreement (Non-Gaming).
24. Golden Nugget Property. Schedule 1.1A to this Amendment
(describing the real property underlying the Golden Nugget) is
deemed attached to the Loan Agreement as a new Schedule 1.1A
thereto.
25. Amendment to Schedule 4.7 re Golden Nugget Property. In
connection with the designation of GNLV, CORP. as a Borrower,
Schedule 4.7 to the Loan Agreement (describing certain Liens,
Negative Pledges and Rights of Others to which property of
Borrowers and their Subsidiaries is subject), is hereby
supplemented to disclose the following:
Corporation Asset Description of Lien
GNLV, CORP. Golden Nugget Not more than 10% of the approximately
7.5 acres of land underlying
the Golden Nugget Hotel and Casino
are leased from third parties.
The leases from (i) The Elizabeth
Properties Trust pursuant to a Lease
dated April 30, 1976 with Golden Nugget,
Inc. (as amended and assigned to GNLV,
CORP.) and (ii) The First National Bank
of Nevada, Trustee under Private Trust
No. 87 pursuant to a lease dated July 1,
1973 with Golden Nugget, Inc. (as
amended and assigned to GNLV, CORP.),
contain provisions which may be
construed to require the consent of the
lessors thereunder prior to the
encumbrance by the tenant of its
leasehold interest. While the remaining
lease from The Fraternal Order of Eagles
dated September 4, 1962 (as assigned to
GNLV, CORP.) does not contain express
provisions of this type, it is possible
-23-
<PAGE>
that Nevada law (as in effect in 1962)
could be construed to require the
consent of the lessor to such an
encumbrance. However, to the extent the
provisions of any such lease or of
former Nevada law may require the
consent of the lessors to the execution,
delivery or recordation of a Deed of
Trust, they cannot be construed to
prohibit the execution, delivery or
performance of a Negative Pledge
Agreement with respect to the Golden
Nugget.
26. Mirage/TI Negative Pledge Agreement. Borrowers agree to
execute and deliver a Negative Pledge Agreement to the
Administrative Co-Agent with respect to the Mirage/TI Property
within 15 Banking Days of the retirement, redemption or
defeasance of all of the GNS Mortgage Notes.
27. Certain Consents. Borrowers agree that they shall:
(a) seek to obtain, by appropriate proceedings
diligently pursued, (i) the consent of all relevant
Gaming Boards of the State of Nevada to a Negative
Pledge with respect to the capital stock of GNLV, CORP.
and Golden Nugget Manufacturing Corp., (ii) if requested
by the Administrative Co-Agent, the concurrent advance
consent of such Gaming Boards to the granting of the
Liens contemplated by Sections 5.10 and 5.11 of the Loan
Agreement to the Administrative Co-Agent should any Lien
Event occur (including the pledge to the Administrative
Co-Agent of 100% of the capital stock of GNLV, CORP. and
Golden Nugget Manufacturing Corp.); and
(b) use their best efforts to obtain the advance consent
of Borrowers' lessors with respect to the Golden Nugget
to the granting of a deed of trust with respect to the
Golden Nugget should any Lien Event occur pursuant to
agreements with such lessors reasonably acceptable to
the Administrative Co-Agent.
27A. Request for Swing Line Loans. Borrowers agree that, in
connection with the making of each Swing Line Loan, Borrowers
shall submit a written request for Swing Line Loan to the Swing
Line Bank in a form reasonably acceptable to the Swing Line Bank,
signed by a Responsible Official of any of Borrower, on behalf of
Borrowers, and properly completed to provide all information
required to be included therein. Unless the Swing Line Bank has
notified, in its sole and absolute discretion, Borrowers to the
contrary, a Swing Line Loan may be requested by telephone by a
Responsible Official of Borrowers, in which case Borrowers shall
confirm such request by promptly delivering a conforming written
request in person or by telecopier conforming to the preceding
sentence to the Swing Line Bank.
-24-
<PAGE>
28. Net Settlement of Advances. Concurrently with the
effectiveness of this Amendment, (a) each Bank which is the owner
of less than its Pro Rata Share of the Obligations shall be
deemed to have purchased from the Banks which are the owner of
more than their Pro Rata Share of the Obligations, at par, and
without recourse, representation or warranty, Obligations in an
amount which is sufficient to cause each Bank to hold its Pro
Rata Share of the Obligations, (b) each Bank shall fund such
Advances as are necessary to cause the aggregate principal amount
of its outstanding Advances to be equal to its Pro Rata Share of
the outstanding Loans, and (c) the risk participation of the
Banks in each outstanding Letter of Credit pursuant to Section
2.5(c) of the Loan Agreement shall be deemed adjusted so that
each Bank shall be deemed to have a risk participation in each
outstanding Letter of Credit equal to that Bank's Pro Rata Share.
The Administrative Co-Agent is authorized to effect a net
settlement of the fees due to each Bank hereunder and Advances to
be made by that Bank to accomplish the foregoing.
29. Representation and Warranty. Borrowers represent and
warrant to the Administrative Co-Agent and the Banks that no
Default or Event of Default has occurred and remains continuing.
30. Confirmation. In all other respects, the terms of the
Loan Agreement and the other Loan Documents are hereby confirmed.
IN WITNESS WHEREOF, Borrowers, the Administrative Co-Agent
and the Banks have executed this Amendment as of the date
first written above by their duly authorized representatives.
MIRAGE RESORTS, INCORPORATED
By: DANIEL R. LEE
____________________________________
Daniel R. Lee
Chief Financial Officer
THE MIRAGE CASINO-HOTEL
By: DANIEL R. LEE
____________________________________
Daniel R. Lee
Assistant Treasurer
-25-
<PAGE>
TREASURE ISLAND CORP.
By: DANIEL R. LEE
____________________________________
Daniel R. Lee
Treasurer
BEAU RIVAGE (formerly, MR Realty)
By: BRUCE A. LEVIN
____________________________________
Bruce A. Levin
Assistant Secretary
MH, INC.
By: DANIEL R. LEE
____________________________________
Daniel R. Lee
Treasurer
GNLV, CORP.
By: DANIEL R. LEE
____________________________________
Daniel R. Lee
Treasurer
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative
Co-Agent
By: PEGGY A. FUJIMOTO
____________________________________
Peggy A. Fujimoto, Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Bank
By: JON VARNELL
____________________________________
Jon Varnell, Vice President
-26-
<PAGE>
BANKERS TRUST COMPANY, as Co-Agent and a
Bank
By: CHRISTOPHER KINSLOW
____________________________________
Christopher Kinslow, Vice President
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., LOS ANGELES AGENCY, as Co-Agent
and a Bank
By: MOTOKAZU UEMATSU
____________________________________
Motokazu Uematsu, Deputy General
Manager
____________________________________
[Printed Name & Title]
SOCIETE GENERALE, as Co-Agent and a Bank
By: DONALD L. SCHUBERT
____________________________________
Donald L. Schubert, Vice President
BANK OF SCOTLAND, as a Bank
By: ELIZABETH WILSON
____________________________________
Elizabeth Wilson, Vice President and
Branch Manager
____________________________________
[Printed Name and Title]
CREDIT LYONNAIS LOS ANGELES BRANCH, as
Co-Agent and as a Bank
By: THIERRY F. VINCENT
____________________________________
Thierry F. Vincent, Vice President
-27-
<PAGE>
CREDIT LYONNAIS CAYMAN ISLAND BRANCH, as
Co-Agent and as a Bank
By: THIERRY F. VINCENT
____________________________________
Thierry F. Vincent, Vice President
Authorized Signatory
FIRST INTERSTATE BANK OF NEVADA, N.A.,
as a Bank
By: BRAD PETERSON
____________________________________
Brad Peterson, Vice President
BANK OF AMERICA NEVADA, as a Bank
By: HERB STEEGE
____________________________________
Herb Steege, Vice President
THE FIRST NATIONAL BANK OF BOSTON, as a
Bank
By: REGINALD T. DAWSON
____________________________________
Reginald T. Dawson, Director
FIRST SECURITY BANK OF UTAH, N.A., as a
Bank
By: DAVID P. WILLIAMS
____________________________________
David P. Williams, Vice President
UNITED STATES NATIONAL BANK OF OREGON,
as a Bank
By: DALE PARSHALL
____________________________________
Dale Parshall, Assistant Vice
President
-28-
<PAGE>
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
LOS ANGELES AGENCY, as a Bank
By: TOSHINARI IYODA
____________________________________
Toshinari Iyoda, Senior Vice
President
MIDLANTIC BANK, N.A. as a Bank
By: DENISE D. KILLEN
____________________________________
Denise D. Killen, Vice President
THE NIPPON CREDIT BANK, LTD., LOS
ANGELES AGENCY, as a Bank
By: BERNARDO E. CORREA-HENSCHKE
____________________________________
Bernardo E. Correa-Henschke, Vice
President & Manager
THE SANWA BANK, LIMITED, LOS ANGELES
BRANCH, as a Bank
By: GILL S. REALON
____________________________________
Gill S. Realon, Vice President
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK AND CAYMAN ISLANDS BRANCHES, as
a Bank
By: SALVATORE BATTINELLI
____________________________________
Salvatore Battinelli, V.P.
[Printed Name and Title]
By: JAMES MALLEY
____________________________________
James Malley, V.P.
[Printed Name and Title]
-29-
<PAGE>
GIROCREDIT BANK, as a Bank
By: JOHN REDDING
____________________________________
John Redding, Vice President
By: DHUANE STEPHENS
____________________________________
Dhuane Stephens, Vice President
THE DAIWA BANK, LTD.
By: DAVID M. LAWRENCE
____________________________________
David M. Lawrence, Vice President
By: STEVEN K. JOHNSON
____________________________________
Steven K. Johnson, Vice President
Address for Notices:
The Daiwa Bank, Ltd.
800 West Sixth Street, Suite 950
Los Angeles, California 90017-2704
Telephone: (213) 623-8832
Telecopier: (213) 623-4629
Attention: Steven K. Johnson,
Vice President
THE MITSUBISHI TRUST AND BANKING CORP.
By: TAKASHI SUGITA
__________________________________
Takashi Sugita, Chief Manager
Address for Notices:
The Mitsubishi Trust and Banking Corp.
801 South Figueroa Street, 24th Floor
Los Angeles, California 90017
Telephone: (213) 896-4658
Telecopier: (213) 687-4631
Attention: Rex Olson,
Vice President
-30-
<PAGE>
CIBC INC.
By: PAUL CHAKMAK
__________________________________
Paul Chakmak, Vice President
Address for Notices:
CIBC Inc.
300 South Grand Avenue, 27th Floor
Los Angeles, California 90071
Telephone: (213) 617-6226
Telecopier: (213) 617-1696
Attention: Paul Chakmak,
Vice President
ABN-AMRO BANK N.V.
By: JEFFREY FRENCH
__________________________________
Jeffrey French, Vice President
By: L.T. OSBORNE
__________________________________
L.T. Osborne, Group Vice President
Address for Notices:
ABN-AMRO Bank N.V.
101 California Street, Suite 4550
San Francisco, California 94111-5812
Telephone: (415) 984-3703
Telecopier: (415) 362-3524
Attention: Jeffrey French,
Vice President
-31-
AMENDMENT NO. 1 TO
JOINT VENTURE AGREEMENT OF
VICTORIA PARTNERS
This Amendment No. 1 to Joint Venture Agreement of Victoria
Partners (the "Amendment"), dated as of April 17, 1995, is
entered into with reference to the Joint Venture Agreement of
Victoria Partners (the "Joint Venture Agreement"), dated as of
December 9, 1994, by and between MRGS Corp. ("MR Sub"), a Nevada
corporation controlled by Mirage Resorts, Incorporated, a Nevada
corporation ("MRI"), and Gold Strike L.V., a Nevada general
partnership ("Gold Strike"). Capitalized terms used but not
defined in this Amendment are used with the meanings set forth
for such terms in the Joint Venture Agreement.
PREAMBLE
WHEREAS, MR Sub and Gold Strike desire to amend certain terms and
provisions of the Joint Venture Agreement as provided herein, and
in all other respects to confirm the terms and provisions of the
Joint Venture Agreement.
NOW, THEREFORE, MR Sub and Gold Strike agree as follows:
1. Amendment to Section 3.2. Section 3.2 of the Joint
Venture Agreement is amended to read in its entirety
as follows:
"Section 3.2 MR Sub Additional Capital Contributions.
(a) On the latest date practicable prior to the
first draw on the Construction Financing, and
concurrently with the additional capital
contribution to the Joint Venture by Gold
Strike pursuant to Section 3.3(a), MR Sub
shall, as an additional Capital Contribution,
transfer and convey, or cause to be transferred
and conveyed, to the Joint Venture by Grant,
Bargain, Sale Deed fee title to the Property,
free and clear of all monetary liens and
encumbrances and all other liens and
encumbrances which would materially adversely
affect the Joint Venture's intended use of the
Property, other than such liens and
encumbrances as are reflected on the amended
proforma title policy dated March 2, 1995
issued by Chicago Title Insurance Company (File
No. 94760086-A), which has been previously
reviewed and approved by the Managing Venturer.
Such transfer and conveyance shall not include
EXHIBIT 10(c)
<PAGE>
any water rights appurtenant to the Property,
nor any of the existing wells, pumps, motors
and related facilities located on the Property,
all of which shall be retained and reserved by
MR Sub or its Affiliates. MR Sub or its
Affiliates shall also retain and reserve a
perpetual easement over the Property to operate
and maintain such wells, pumps, motors and
related facilities, to transport water from
such wells over the Property to adjacent
property owned by an Affiliate of MR Sub and to
operate, maintain and repair such
transportation facilities. MR Sub or its
Affiliates shall also retain and reserve a
perpetual easement over the Property and the
Desert Rose Motel property for the purposes of
vehicular and pedestrian access to Las Vegas
Boulevard South for the benefit of "Lot 3"
indicated on Exhibit A hereto. The Venturers
shall cooperate with each other with respect to
the location of such easements, taking into
account the intended location of the Facility
on the Property.
At the time of the transfer and conveyance of
the Property to the Joint Venture, MR Sub shall
also grant, or cause to be granted, to the
Joint Venture a perpetual non-exclusive
easement over the approximately 56-foot-wide
roadway consisting of the indicated portion of
"Lot 1" on Exhibit A hereto for purposes of
possible future access to the Property from
Tropicana Avenue.
The parties agree that the fair market value of
the Property is at least $30,000,000 as of the
date of this Agreement. At the time of the
transfer and conveyance of the Property to the
Joint Venture, the parties shall agree as to
the fair market value at that time, which shall
not be less than $30,000,000.
All real property transfer taxes and other
costs and expenses of transferring and
conveying the Property to the Joint Venture
shall be borne by MR Sub.
(b) MR Sub shall also make such additional cash
capital contributions to the Joint Venture, if
any, as are provided for pursuant to Section
3.3(c), concurrently with the making of
additional cash capital contributions to the
Joint Venture by Gold Strike pursuant to
Section 3.3(c)."
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<PAGE>
2. Amendment to Section 3.3. Section 3.3 of the Joint
Venture Agreement is amended to read in its entirety
as follows:
"Section 3.3 Gold Strike Additional Capital
Contributions.
(a) Prior to or concurrently with the transfer and
conveyance of the Property to the Joint Venture
by MR Sub pursuant to Section 3.2(a), Gold
Strike shall make one or more additional cash
capital contributions aggregating $30,000,000
to the Joint Venture. A portion of such
additional capital contributions may consist of
loan fees and expenses paid by Gold Strike on
behalf of the Joint Venture in connection with
the Construction Financing and other out-of-
pocket fees and expenses paid by Gold Strike on
behalf of the Joint Venture in connection with
the Joint Venture's pre-construction
activities.
(b) From time to time thereafter, and subject to
Section 3.3(c), Gold Strike shall make
additional cash capital contributions to the
Joint Venture in an aggregate amount equal to
the difference between (i) the Project Cost and
(ii) the sum of (A) the net proceeds from the
Construction Financing and (B) the $30,000,000
contributed by Gold Strike pursuant to Section
3.3(a). The additional capital contributions
referred to in the immediately preceding
sentence shall be made at such time or times as
required by the provider of the Construction
Financing or at the time or times as the
Managing Venturer reasonably determines
necessary to coincide with the funding of the
Project Cost.
(c) Notwithstanding Section 3.3(b), if Gold Strike
shall have made additional cash capital
contributions to the Joint Venture pursuant to
Sections 3.3(a) and 3.3(b) aggregating at least
$42,700,000, and the Managing Venturer
reasonably determines that additional funds are
required to pay the Project Cost, the Managing
Venturer may, from time to time, call for equal
additional cash capital contributions to the
Joint Venture from each Venturer. In no event
shall MR Sub be required to make additional
cash capital contributions pursuant to this
-3-
<PAGE>
Section 3.3(c) aggregating in excess of
$15,000,000. Any additional cash capital
contributions by MR Sub pursuant to this
Section 3.3(c) shall be made only at such time
as Gold Strike shall make equal cash capital
contributions pursuant to this Section 3.3(c)."
3. Amendment to Section 3.4. The third sentence of
Section 3.4 of the Joint Venture Agreement is
amended to read in its entirety as follows:
"The acquisition cost of any other additional
property shall be funded by equal additional capital
contributions by each of the Venturers on or prior
to the acquisition date, which shall not affect the
respective obligations of the Venturers to make
additional capital contributions to the Joint
Venture pursuant to Sections 3.2 and 3.3."
4. Amendment to Section 3.5.
(a) The fifth sentence of the first paragraph of
Section 3.5 of the Joint Venture Agreement is
amended to read in its entirety as follows:
"For purposes of the immediately preceding
sentence, the value of the Property contributed
by MR Sub pursuant to Section 3.2(a) shall at
all times be deemed to be equal to the
aggregate amount of all cash capital
contributions made by Gold Strike pursuant to
Sections 3.3(a) and 3.3(b) (or made by MR Sub
hereunder following a default by Gold Strike
pursuant to Section 3.3(a) or 3.3(b))."
(b) The first sentence of the third paragraph of
Section 3.5 of the Joint Venture Agreement is
amended to read in its entirety as follows:
"By way of illustration, assume that (i) MR Sub
and Gold Strike each has a 50% Interest, (ii)
MR Sub has previously contributed the Property
and Gold Strike has previously contributed
$30,000,000 pursuant to Sections 3.2(a) and
3.3(a), respectively and (iii) Gold Strike is
required to contribute an additional
$35,000,000 pursuant to Section 3.3(b)."
5. Amendment to Section 3.7. Section 3.7 of the Joint
Venture Agreement is amended to read in its entirety
as follows:
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<PAGE>
"Section 3.7 Loans by Venturers to the Joint
Venture. If the Managing Venturer reasonably
determines that the Joint Venture's existing funds
(giving effect to funds available pursuant to
existing third-party financing and amounts required
to be contributed to the Joint Venture by the
Venturers pursuant to Sections 3.2 and 3.3) are
insufficient to meet the Joint Venture's costs,
expenses, obligations and liabilities, the Managing
Venturer may offer to each Venturer the opportunity
to advance funds to the Joint Venture in proportion
to its respective Interest. No Venturer shall be
required to advance funds to the Joint Venture, and
neither Venturer shall be permitted to advance funds
to the Joint Venture without the approval of each
Venturer. All amounts so advanced shall take the
form of an unsecured loan and shall bear interest at
a floating rate equal to the Joint Venture's
weighted average cost of borrowed funds (or, if the
Joint Venture then has no borrowed funds, the
published prime rate charged from time to time by
Bank of America NT & SA). Such loans shall be
repayable on demand but solely out of property or
assets of the Joint Venture, in accordance with the
provisions of Section 6.2(a) and Article 13 hereof,
and no Venturer shall have any personal liability on
account thereof, nor shall there be any recourse to
such Venturer's assets. To the extent required by
the terms of the Construction Financing or such
other third-party financing obtained by the Joint
Venture, repayment of such loans shall be
subordinated to the prior repayment of the
Construction Financing or other third-party
financing. The provisions of this Section 3.7 are
solely and exclusively for the benefit of the
Venturers, may only be enforced by the Venturers and
shall not inure to the benefit of, or be enforceable
by, any third party, including without limitation
any creditor of the Joint Venture."
6. Amendment to Section 3.8. Section 3.8 of the Loan
Agreement is amended to read in its entirety as
follows:
"Section 3.8 Loans by Third Parties to the Joint
Venture. [Intentionally deleted.]"
7. Amendment to Section 4.1. The fourth sentence of
Section 4.1 of the Joint Venture Agreement is
amended to read in its entirety as follows:
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<PAGE>
"In any event, without the approval of each
Venturer, the aggregate principal amount of
Construction Financing and all other Joint Venture
indebtedness outstanding at any time shall not
exceed $200,000,000."
8. Amendment to Section 5.2. Section 5.2(e) of the
Joint Venture Agreement is amended to read in its
entirety as follows:
"(e) If the additional capital contributions of Gold
Strike pursuant to Sections 3.3(a) and 3.3(b) hereof
exceed the fair market value of the Property as
agreed by the Venturers pursuant to Section 3.2(a)
hereof, upon liquidation of the Joint Venture in
accordance with Article 13 hereof, MR Sub shall be
allocated items of income and gain, including gross
income if necessary, equal to the excess of such
additional capital contributions over such fair
market value."
9. Amendment to Section 13.1. Section 13.1(h) of the
Joint Venture Agreement is amended to read in its
entirety as follows:
"(h) [Intentionally deleted.]; or"
10. Facility Enhancements. The Venturers agree that,
unless each Venturer otherwise consents, the
Facility shall include each of the items listed on
Appendix A to this Amendment.
11. Waiver of Right to Dissolve. Gold Strike hereby
waives its right to elect to dissolve the Joint
Venture pursuant to the first paragraph of Section
4.2 of the Joint Venture Agreement.
12. Confirmation. In all other respects, the terms and
provisions of the Joint Venture Agreement are hereby
confirmed and shall remain unchanged and in full
force and effect.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Amendment as of the date first above written.
MRGS CORP., a Nevada corporation
By: DANIEL R. LEE
___________________________
Daniel R. Lee
Chief Financial Officer
GOLD STRIKE L.V., a Nevada
general partnership
By: M.S.E. Investments, Inc., a
Nevada corporation
Title: General Partner
By: MICHAEL S. ENSIGN
___________________________
Michael S. Ensign
President
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<PAGE>
APPENDIX A
__________
CONSTRUCTION ENHANCEMENTS AND UPGRADES
______________________________________
<TABLE>
<CAPTION>
<S> <C>
Enhance hotel registration area ...................................... $ 1,000,000
Upgrade expansion of back of kitchen for coolers and freezer,
dishwashers and room service kitchen................................. 750,000
Improve pool and landscape.. ......................................... 500,000
Additional retail store in front approximately 4,000 sq. ft. at
$200 per foot........................................................ 800,000
Two-pipe system in place of window units ............................. 4,500,000
Upgrade connection link between joint venture
property and Beau Rivage............................................. 750,000
Enhance bathrooms including granite sink top,
marble showers, fixtures upgrade, wall covering, bathtubs.......... 2,000,000
Upgrade suites (335 suites x $1,408) ................................. 500,000
Upgrade room furnishings, carpet, larger armoire and wall covering ... 2,670,000
Upgrade elevators main lobby and all 32 floors elevator lobbies ...... 1,800,000
Additional retail space in the Food Court ............................ 500,000
Upgrade interior and exterior lighting ............................... 1,000,000
Additional banquet room (16,000 sq. ft. at $70), equipment
and interior......................................................... 1,120,000
Enhance entertainment feature with Marvel motion simulators .......... 1,500,000
Expand credit department, collections, credit hosts (third
floor above cage - 5,000 sq. ft. x $60) ............................. 300,000
Improve stage and lighting in showroom................................ 900,000
Improve signage on floors and in rooms ............................... 200,000
Upgrade four high-roller suites (32nd floor) ......................... 2,000,000
VIP check-in lounge .................................................. 200,000
Enhance storage, warehouse and offices by building
basement (75,000 sq. ft. at $60) ................................... 4,500,000
Total Improvements .............................................. 27,490,000
Construction Contingencies ...................................... 5,000,000
___________
GRAND TOTAL ............................................. $32,490,000
===========
</TABLE>
-8-
AGREEMENT
Between
DENNY'S, INC.
and
BEAU RIVAGE
Dated March 31, 1995
EXHIBIT 10 (d)
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
_________________
Page
____
<S> <C> <C>
1. Sale of Assets........................................2
2. Consideration.........................................2
3. Conveyance of Assets..................................2
4. Denny's Representations and Warranties................3
5. Representations and Warranties of Beau Rivage.........5
6. Denny's Covenants Regarding Assets Pending Closing....5
7. Denny's Conditions to Closing.........................6
8. Beau Rivage's Conditions to Closing...................6
9. The Closing...........................................7
10. The Sublease..........................................8
11. Remedies..............................................8
12. Indemnifications......................................9
13. Brokers...............................................9
14. Governing Law.........................................9
15. Attorneys' Fees.......................................9
16. Interpretation.......................................10
17. Entire Agreement.....................................10
18. Modifications........................................10
19. Waivers..............................................10
20. Severability.........................................10
21. Binding Effect.......................................10
22. Multiple Counterparts................................10
23. Further Assurances...................................10
24. Negotiated Agreement.................................10
25. Relationship of Parties..............................10
26. Additional Actions...................................11
27. Time of the Essence..................................11
28. Fixtures Sold As Is..................................11
29. Notices..............................................11
</TABLE>
i
<PAGE>
LIST OF EXHIBITS
________________
Exhibit "A" Real Property Legal Description
Exhibit "B" The Lease
Exhibit "C" Proposed Lease Amendment Agreement Between Beau
Rivage and The Mack Trust
Exhibit "D" Preliminary Title Report Issued by Nevada Title
Company dated as of December 1, 1994
Exhibit "E" Assignment of Lease
ii
<PAGE>
AGREEMENT
_________
THIS AGREEMENT is entered into by and between DENNY'S,
INC., a California corporation ("Denny's") and BEAU RIVAGE, a
Nevada corporation ("Beau Rivage") as of this 31 day of March,
1995, based upon the following:
R E C I T A L S
_______________
A. Denny's is the owner of certain assets used in
connection with Denny's No. 64 located at 3680 Las Vegas
Boulevard South in Clark County, Nevada (the "Restaurant"),
including fixtures and equipment used in and located at the
Restaurant and Denny's right, title and interest in and to the
leasehold estate to the real property described in Exhibit "A"
hereto (together with the improvements thereon and the
appurtenances thereto, the "Real Property") evidenced by that
certain lease entered into as of the 28th day of July 1989 by and
between Minami (Nevada) Incorporated as "Landlord" and Denny's as
"Tenant," which lease is referred to in a Short Form Lease
recorded October 4, 1990 in Book No. 901004 as Document No. 00401
in the Office of the Clark County Recorder, a true and correct
copy of which lease is attached hereto as Exhibit "B" (the
"Lease"). (Said assets, excluding cash, accounts receivable,
consumable inventory, perishable food stuffs, the freezer and
cooler, the kitchen equipment not attached as fixtures to the
real property, proprietary items bearing the Denny's logo, small
ware (dishes, glassware, pots, pans and silverware), seating
package (booths, stools and tables) and items of decor, are
hereinafter collectively referred to as the "Assets.")
B. Beau Rivage is the owner of real property contiguous to
the Real Property, upon which it proposes to construct a resort
hotel and casino. In order for it to enhance its frontage on the
Las Vegas Strip, Beau Rivage is desirous of purchasing from
Denny's all of Denny's right, title and interest in and to the
Assets for the consideration and upon the terms and conditions
hereinafter set forth.
C. The successor in interest to Minami (Nevada)
Incorporated as Landlord under the Lease is the Nate Mack Living
Trust (the "Mack Trust"). Beau Rivage is negotiating a Lease
Amendment Agreement with the Mack Trust by the terms of which the
Mack Trust would agree to an assignment of the Lease from Denny's
to Beau Rivage and would further agree to enter into an amended
and restated Lease with Beau Rivage following the closing of the
transaction hereinafter provided for (the "Closing"). A copy of
the proposed Lease Amendment Agreement between Beau Rivage and
the Mack Trust (excluding the attachments referred to as Exhibits
therein) is attached hereto as Exhibit "C."
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<PAGE>
D. Denny's and Beau Rivage have agreed that following the
Closing of the transaction hereinafter set forth, Beau Rivage
shall sublease the Assets to Denny's upon the conditions and for
the rent set forth in the currently existing Lease attached
hereto as Exhibit "B," but such sublease shall be terminable by
Beau Rivage upon not less than sixty (60) days' written notice.
E. The parties hereto are desirous of setting forth their
understandings and agreements with respect to the foregoing and
other matters properly relating thereto.
A G R E E M E N T
_________________
NOW, THEREFORE, based upon the foregoing, in
consideration for the mutual covenants hereinafter set forth and
for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties hereto agree
as follows:
1. Sale of Assets. At the Closing, Denny's shall sell,
assign, transfer and convey to Beau Rivage all of Denny's right,
title and interest in and to the Assets for the consideration and
subject to the terms and conditions herein contained.
2. Consideration. The consideration (the
"Consideration") to be paid to Denny's by Beau Rivage pursuant to
this Agreement shall be the sum of Six Million Three Hundred
Thousand Dollars ($6,300,000), payable as follows:
(a) Immediately following the execution of this
Agreement, Beau Rivage shall cause to be deposited
with Nevada Title Company (the "Escrow Agent") in
Las Vegas, Nevada into escrow no. 940-12-0206-RMG
(the "Escrow") funds sufficient to increase the
deposit currently held in the Escrow (if any) to
the sum of Twenty-Five Thousand Dollars ($25,000)
(the "Deposit") to be held in an interest-bearing
account;
(b) At the Closing, the Deposit, together with all
interest accrued thereon, shall be paid to Denny's
and the balance of the Consideration (subject to
adjustments and prorations hereinafter set forth)
shall be paid to Denny's by Beau Rivage in cash or
readily available U.S. funds; and
(c) The parties agree to allocate the Consideration
among the Assets in a mutually acceptable manner,
as necessary for federal income tax purposes.
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<PAGE>
3. Conveyance of Assets. Title to the Assets shall be
conveyed to Beau Rivage by Denny's at Closing by deeds,
assignments (including, without limitation, an assignment of the
Lease), bills of sale and other instruments of conveyance
reasonably acceptable to Beau Rivage, free and clear of any and
all claims, liens, restrictions, exceptions to title or
encumbrances, except for those set forth in the Preliminary Title
Report issued by Nevada Title Company dated as of December 1,
1994, copy of which is attached hereto as Exhibit "D."
4. Denny's Representations and Warranties. Denny's
represents and warrants to Beau Rivage, which representations and
warranties are continuing in nature and shall survive the
Closing, as follows:
(a) That Denny's is the owner of the Assets and is
able to convey good and marketable title thereto,
and has or will have taken such corporate action
as may be required for it to perform its
obligations hereunder;
(b) That Denny's is a corporation duly organized and
validly existing under the laws of its state of
incorporation and qualified to do business and to
own its Assets in the State of Nevada;
(c) That the execution, delivery and performance of
this Agreement by Denny's will not, with or
without the giving of notice and/or the passage of
time, violate any provision of law or
administrative regulation, or any judicial or
administrative or arbitration order, award,
judgment or decree applicable to it or the Assets,
or conflict with, violate, result in a breach or
termination of, or cause a default under any of
its charter, bylaws, or other agreements,
instruments or documents by which it and/or the
Assets are bound;
(d) That no consent or approval of this Agreement is
required from any governmental agency or third
party, except as otherwise noted herein;
(e) That there are no actions or claims pending, or to
its knowledge threatened, before any court,
governmental agency, administrator or other
tribunal which would prevent the Closing in
accordance with the terms of this Agreement;
(f) That it has not received any notice of zoning
changes or any actions threatening condemnation of
any part of the Assets through exercise of eminent
domain by any governmental authority;
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<PAGE>
(g) That there are no mechanic's liens recorded
against the Assets and none threatened to its
knowledge; and all contractors, subcontractors,
workmen, materialmen and employees have been paid
in full for any labor, services or materials
supplied or delivered to the Assets;
(h) That all taxes, governmental assessments and
utility charges relating to the Assets are current
and not delinquent;
(i) That the obligations of Denny's as set forth in
this Agreement are valid, binding and legally
enforceable in accordance with the terms of this
Agreement; and
(j) That to its knowledge, Denny's is not in violation
of any applicable federal, state or local
environmental, health and safety laws, ordinances,
regulations or directives including those relating
to air and water pollution and Hazardous
Substances (as defined below) ("Environmental
Laws"), in connection with its ownership or
leasing of the Real Property or conduct of its
activities thereon. Denny's has not received any
notice from any governmental authority, and has no
knowledge of any governmental inquiry, with
respect to any actual or alleged violation of any
Environmental Laws in connection with the Real
Property or Denny's activities thereon. Denny's
has not generated, used, treated, stored,
transported to or from, or released or disposed of
any Hazardous Substances on the Real Property.
Without limiting the generality of the foregoing,
to the knowledge of Denny's, there are not now and
have not been during the leasing, ownership or
occupancy of the Assets by Denny's any underground
or above-ground storage tanks, asbestos or any
transformers or other electrical devices
containing polychlorinated biphenyls on the Real
Property. The Real Property has never been used
by Denny's as a dump or landfill. The term
"Hazardous Substances" for purposes of this
Agreement means (i) petroleum or petroleum
products, (ii) radioactive materials, (iii)
asbestos in any form, (iv) any item that contains
or has contained polychlorinated biphenyls, (v)
any other chemicals, materials or substances
defined as or included in the definition of
"Hazardous Substances," "Hazardous Waste,"
"Hazardous Materials," "Hazardous Air Pollutants,"
"Extremely Hazardous Substances," "Restricted
Hazardous Waste," "Toxic Substances,"
-4-
<PAGE>
"Pollutants," "Contaminants," or words of any
similar import under any applicable Environmental
Law, and/or any other chemical or substance,
exposure to which is prohibited, limited or
regulated by any governmental authority under
applicable Environmental Laws.
5. Representations and Warranties of Beau Rivage. Beau
Rivage represents and warrants to Denny's, which representations
and warranties are continuing in nature and shall survive the
Closing, as follows:
(a) That Beau Rivage has taken such corporate action
as may be required for it to perform its
obligations hereunder;
(b) That Beau Rivage is a corporation duly organized
and validly existing under the laws of its state
of incorporation and qualified to do business in
the State of Nevada;
(c) That the execution, delivery and performance of
this Agreement by Beau Rivage will not, with or
without the giving of notice and/or the passage of
time, violate any provision of law or
administrative regulation, or any judicial or
administrative or arbitration order, award,
judgment or decree applicable to it, or conflict
with, violate, result in a breach or termination
of, or cause a default under any of its charter,
bylaws, or other agreements, instruments or
documents by which it is bound;
(d) That no consent or approval of this Agreement is
required from any governmental agency or third
party, except as otherwise noted herein;
(e) That there are no actions or claims pending, or to
its knowledge threatened, before any court,
governmental agency, administrator or other
tribunal which would prevent the Closing in
accordance with the terms of this Agreement; and
(f) That the obligations of Beau Rivage as set forth
in this Agreement are valid, binding and legally
enforceable in accordance with the terms of this
Agreement.
6. Denny's Covenants Regarding Assets Pending Closing.
Pending the Closing,
(a) Denny's shall not assign, hypothecate, encumber or
convey all or any part of the Assets, except in
the ordinary course of the Restaurant business.
-5-
<PAGE>
Without limiting the generality of the foregoing,
Denny's shall not enter into any options, rights
of first refusal, leases or subleases affecting
the Assets;
(b) Denny's shall perform all of its obligations
pursuant to the Lease and shall not cause, suffer
or permit any event of default to occur
thereunder; and
(c) In the event of a destruction of the Assets, or a
condemnation by a public authority pursuant to the
right of eminent domain, Beau Rivage may at its
option terminate this Agreement, in which event
the Deposit together with all interest thereon
shall be returned to Beau Rivage, or Beau Rivage
may, in the alternative, proceed to Closing
notwithstanding such damage or condemnation, in
which event all insurance proceeds and
condemnation awards to which Denny's would
otherwise be entitled shall be made available to
Beau Rivage at the Closing as Sublessor under the
Sublease (as those terms are hereinafter defined).
7. Denny's Conditions to Closing. The obligation of
Denny's to proceed to Closing is subject to satisfaction of the
following conditions:
(a) All representations and warranties of Beau Rivage
shall be true and correct as though made at the
Closing;
(b) Beau Rivage shall have deposited into Escrow the
Consideration; and
(c) The Mack Trust shall have entered into the Lease
Amendment Agreement with Beau Rivage substantially
in the form attached hereto as Exhibit "C."
8. Beau Rivage's Conditions to Closing. The obligation
of Beau Rivage to proceed to Closing is subject to satisfaction
of the following conditions:
(a) All representations and warranties of Denny's
shall be true and correct as though made at the
Closing;
(b) No event of default shall have occurred under the
Lease and Denny's shall not be in default of any
of its obligations thereunder or hereunder;
-6-
<PAGE>
(c) Denny's shall have executed and delivered to
Escrow, acknowledged where necessary,
(i) an assignment of all of Denny's right, title
and interest and to the leasehold estate and
Lease to Beau Rivage (the "Assignment of
Lease");
(ii) Bills of sale and other instruments of
conveyance with respect to other items
comprising the Assets in a form reasonably
acceptable to Beau Rivage's counsel; and
(iii) such other and further escrow
instructions, documents and instruments as
may be reasonably required to effectuate the
transactions set forth herein in accordance
with the terms of this Agreement;
(d) Nevada Title Company shall be irrevocably
committed to issue to Beau Rivage an ALTA policy
of leasehold title insurance (the "Title Policy")
in the amount of the Consideration showing title
to the leasehold estate vested in Beau Rivage free
and clear of all liens, claims and encumbrances
except for those set forth on Exhibit "D," with
endorsements as follows: CLTA Form 100.29 (with
respect to surface entry by reason of the mineral
rights reservations in the patents); CLTA Form
103.7 (that the land abuts upon the public
thoroughfare known as the Las Vegas Strip); CLTA
Form 116.1 (that the land is the same as that
delineated in a Survey received from Baughman &
Turner, Inc. and approved in writing by Beau
Rivage); CLTA Form 116.4 (that the land is
contiguous to other properties owned by Beau
Rivage); CLTA Form 116.7 (that there is no
violation of the subdivision laws set forth in
Chapter 278 of Nevada Revised Statutes; and
(e) The Mack Trust shall have entered into the Lease
Amendment Agreement with Beau Rivage substantially
in the form attached hereto as Exhibit "C."
9. The Closing. The Closing shall occur at the offices
of the Escrow Agent or at such other place as the parties may
agree to in writing, and on such date as the parties may agree to
in writing, but in any event no later than 5:00 p.m. E.S.T. March
31, 1995 (the "Closing Date").
(a) At the Closing, Beau Rivage shall deposit the
balance of the Consideration into Escrow, together
with such copies of corporate resolutions, escrow
instructions and other documents as may be
necessary to effectuate the transactions set forth
in this Agreement;
-7-
<PAGE>
(b) Prior to Closing, Denny's shall deposit into
Escrow copies of corporate resolutions, escrow
instructions and other documents as may be
necessary to effectuate the transactions set forth
in this Agreement, including, without limitation,
the Assignment of Lease attached hereto as Exhibit
"E" and bills of sale and such other documents of
conveyance and transfer as may reasonably be
requested by Beau Rivage.
(c) All recording fees shall be paid by Beau Rivage.
The CLTA portion of the Title Policy premium shall
be paid by Denny's and the ALTA portion of the
premium shall be paid by Beau Rivage. Escrow fees
shall be shared equally by the parties.
(d) At the Closing, the Escrow Agent shall (i) record
the Memorandum of Lease executed by the Mack Trust
and Beau Rivage and the Assignment of Lease, (ii)
deliver to Beau Rivage the Title Policy and the
bills of sale and the other documents of transfer
and conveyance executed by Denny's that have been
deposited into Escrow, and (iii) deliver the
Consideration, adjusted for Closing costs and
Escrow fees, to Denny's. The Deposit, together
with all interest accrued on the Deposit, shall be
applied towards the Consideration.
10. The Sublease. Conditioned upon the Closing occurring
in the manner above-specified, Beau Rivage agrees to sublease the
Assets to Denny's, and Denny's agrees to sublease the Assets from
Beau Rivage, pursuant to the terms and provisions and for the
rent specified in Articles III through XXXI of the Lease (the
"Sublease"). Provided, however, that the Lease for purposes of
the Sublease shall be deemed amended to reflect that the same is
a Sublease from Beau Rivage as Sublessor to Denny's as Sublessee
and that Beau Rivage may terminate the Sublease at any time upon
not less than sixty (60) days' written notice to Denny's. The
sixty (60) days' notice given to Denny's shall specify the
effective date of the Sublease termination (the "Termination
Date"). Upon the Termination Date, Denny's shall peaceably quit
the Real Property and shall deliver possession of the Assets to
Beau Rivage. In no event shall Beau Rivage assume or succeed to
any of Denny's liabilities in connection with its subleasing of
the Assets. Without limitation of the foregoing, Denny's shall
be responsible for Closing the Restaurant and discontinuing all
operations upon the Real Property prior to the Termination Date,
paying all of its trade creditors, paying all utilities, taxes
and assessments apportioned to the Termination Date and
terminating and/or relocating its employees and complying with
the provisions of the W.A.R.N. Act, 29 U.S.C. 2102, et seq., if
applicable. Denny's shall indemnify, defend and hold Beau Rivage
harmless from any and all claims, demands, liabilities and
penalties arising under the W.A.R.N. Act as a result of the
transaction contemplated hereby.
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<PAGE>
11. Remedies. In the event Escrow should fail to close on
or before the Closing Date solely by reason of Beau Rivage's
default, notwithstanding satisfaction of all of Beau Rivage's
conditions to Closing, the Deposit shall be paid to Denny's as
liquidated damages, and the right to receive such Deposit shall
be Denny's sole and exclusive remedy in such event. The parties
agree that in the event of Beau Rivage's default, it would be
impossible to accurately determine Denny's damages, but the
parties agree that the amount of the Deposit is a fair and
adequate amount to be paid to Denny's as compensatory damages in
such an event. In the event the Escrow should fail to close by
reason of Denny's default, notwithstanding satisfaction of all of
Denny's conditions to Closing, Beau Rivage shall be entitled to
pursue all remedies available to it at law and equity, including,
without limitation, the right of specific performance, or to
terminate this Agreement and receive a refund of the Deposit and
interest earned thereon.
12. Indemnifications. Following the Closing, Denny's
shall indemnify, defend and hold Beau Rivage harmless from any
and all claims, demands, liabilities, judgments and expenses
(including, without limitation, attorneys' fees) arising from or
relating to (i) any breach of Denny's representations, warranties
or covenants set forth herein, or (ii) claims of third parties
accruing prior to the Termination Date and relating to Denny's
prior leasing and/or ownership of the Assets and its activities
thereon. Except as otherwise provided herein, it is agreed that
Beau Rivage shall not succeed to, assume or be responsible for
any liens, claims, charges, encumbrances, mortgages, obligations
or liabilities of any kind whatsoever, whether known or unknown,
fixed or contingent, contractual or statutory, of Denny's or
incurred by Denny's in any fashion. Beau Rivage shall indemnify,
defend and hold Denny's harmless from any and all claims,
demands, liabilities, judgments and expenses, including, without
limitation, attorneys' fees, accruing after the Termination Date
and relating to Beau Rivage's ownership of the Assets. Without
limiting the generality of the foregoing, Beau Rivage shall
assume and hold Denny's harmless from its obligations under the
Lease (as amended and restated) accruing after the Closing.
13. Brokers. The parties each represent one to the other
that no broker, finder or other financial consultant has acted on
their behalf in connection with this Agreement or the
transactions contemplated hereby. The parties each agree to
indemnify and hold the other harmless from any claim, settlement,
cost or demand for commission or other compensation by any
broker, finder, financial consultant or similar agent claiming to
have been employed by or on behalf of the indemnifying party, and
to bear the cost of legal expenses incurred in defending against
such claims.
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<PAGE>
14. Governing Law. The laws of the State of Nevada
applicable to contracts made in that state shall govern the
validity, construction, performance and effect of this Agreement.
15. Attorneys' Fees. Each party shall pay all attorneys'
fees incurred by that party in the negotiation and delivery of
this letter. However, in the event that any action or proceeding
is instituted to interpret or enforce the terms and provision of
this Agreement, the prevailing party shall be entitled to its
costs and attorneys' fees, in addition to any other relief it may
obtain or be entitled to.
16. Interpretation. In the interpretation of this
Agreement, the singular may be read as the plural, and vice
versa, the neuter gender as the masculine or feminine, and vice
versa, and the future tense as the past or present, and vice
versa, all interchangeably as the context may require in order to
fully effectuate the intent of the parties and the transactions
contemplated herein.
17. Entire Agreement. This Agreement sets forth the
entire understanding of the parties, and supersedes all previous
agreements, negotiations, memoranda and understandings, whether
written or oral.
18. Modifications. This Agreement shall not be modified,
amended or changed in any manner unless in writing executed by
the parties hereto.
19. Waivers. No waiver of any provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any
other provision, whether or not similar, nor shall any waiver
constitute a continuing waiver, and no waiver shall be binding
unless evidenced by an instrument in writing and executed by the
party making the waiver.
20. Severability. If any term, provision, covenant or
condition of this Agreement, or any application thereof, should
be held or found to be invalid, void or unenforceable, that
provision shall be deemed severable, and all other provisions,
covenants, and conditions of this Agreement, and all applications
thereof not held invalid, void or unenforceable, shall continue
in full force and effect and shall in no way be affected,
impaired or invalidated thereby.
21. Binding Effect. This Agreement shall be binding on
and inure to the benefit of the successors and assigns of the
parties hereto.
22. Multiple Counterparts. This Agreement may be executed
in multiple counterparts, which together shall constitute one and
the same document.
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<PAGE>
23. Further Assurances. Each party covenants and agrees
to execute and to deliver to the other such further documents or
instruments as may reasonably be required to fully effectuate the
intent of the parties and transactions contemplated hereby.
24. Negotiated Agreement. This is a negotiated Agreement.
Both parties have participated in its preparation. In the event
of any dispute regarding its interpretation, it shall not be
construed for or against any party based upon the grounds that
the Agreement was prepared by any one of the parties.
25. Relationship of Parties. Nothing herein contained
shall be construed as creating a partnership, joint venture or
agency agreement between the parties. Nothing herein contained
shall be interpreted or construed as being for the benefit of any
third party. Neither party shall hold itself out contrary to the
terms of this clause. Neither party shall be bound by or become
liable for any representation, commitment, act or omission
whatsoever of the other contrary to the provisions hereof.
26. Additional Actions. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to
use its best efforts to take, or cause to be taken, all action
and to do, or cause to be done, all things necessary, proper and
advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated hereby.
27. Time of the Essence. Time is of the essence of this
Agreement and all of its provisions.
28. Fixtures Sold As Is. Beau Rivage acknowledges and
agrees that the Assets consisting of fixtures and equipment are
being sold "as is" and that Denny's makes no representation or
warranty as to their physical condition.
29. Notices. All Notices required or desired to be given
hereunder shall be in writing addressed as follows:
IF TO DENNY'S: Denny's, Inc., c/o Flagstar
203 East Main Street
Spartanburg, South Carolina 29319
Attention: Mr. Brian Hammond
IF TO BEAU RIVAGE: Beau Rivage
c/o Mirage Hotel and Casino
3400 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Attention: Mr. Daniel R. Lee
WITH A COPY TO: Schreck, Jones, Bernhard,
Woloson & Godfrey
600 E. Charleston Boulevard
Las Vegas, Nevada 89104
Attention: L.T. Jones, Esq.
/ / /
/ / /
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<PAGE>
All notices shall be in writing and either personally delivered
or sent by certified U.S. mail, return receipt requested, postage
prepaid.
IN WITNESS WHEREOF, we have set forth our hands as of
the day and year first above-written.
DENNY'S, INC.,
a California corporation
By: GAYLON SMITH
_____________________________
Name: Gaylon Smith
_____________________________
Title: Vice President
_____________________________
BEAU RIVAGE,
a Nevada corporation
By: HENRY M. APPLEGATE III
_____________________________
Name: Henry Applegate
_____________________________
Title: Asst. Treasurer
_____________________________
-12-
AMENDED AND RESTATED LEASE
THIS AMENDED AND RESTATED LEASE is made and entered
into as of this 26th day of April, 1995 (the "Effective Date"),
by and between MKB COMPANY, a Nevada Limited Liability Company,
hereinafter referred to as "Landlord," and BEAU RIVAGE, a Nevada
corporation, hereinafter referred to as "Tenant."
W I T N E S S E T H:
WHEREAS, Landlord is the owner in fee of that certain
improved parcel of real property located at 3680 Las Vegas
Boulevard South in the County of Clark, State of Nevada, more
specifically described in Exhibit "A" attached hereto and by this
reference made a part hereof, which real property and
improvements are sometimes hereinafter referred to as the
"Demised Premises;" and
WHEREAS, Landlord claims a non-exclusive easement for
vehicular ingress and egress to and from the Demised Premises to
and from Las Vegas Boulevard South over an easement area
described in Exhibit "B" attached hereto (the "Easement Area");
and
WHEREAS, as owner of the Demised Premises, Landlord is
also the successor-in-interest as Landlord under that certain
lease for the Demised Premises dated July 28, 1989, in which
Denny's Inc. was named as tenant (the "Original Lease"). The
Original Lease is the same as that referred to in a Short Form of
Lease recorded October 4, 1990 in Book No. 901004 as Document
No. 00401 in the Office of the County Recorder of Clark County,
Nevada; and
WHEREAS, Tenant is the successor-in-interest as tenant
under the Original Lease; and
WHEREAS, Tenant now desires to utilize the Demised
Premises for a totally different use than was contemplated by the
Original Lease, and requires an extension of the term of the
Lease to accommodate its proposed new use; and
WHEREAS, by reason of the foregoing, the parties have
determined that it is in their mutual and best interest to
totally amend and restate the Original Lease in its entirety;
EXHIBIT 10(e)
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<PAGE>
NOW, THEREFORE, in consideration of the rents mentioned
herein, and of the covenants, conditions and agreements
hereinafter set forth, it is hereby agreed by and between the
parties that as of the Effective Date described below, the
Original Lease is hereby amended and restated in its entirety as
provided below, and that the Lease as amended and restated as
herein set forth shall henceforth govern the relationship of the
parties as Landlord and Tenant of the Demised Premises from and
after the Effective Date:
I. LEASE OF DEMISED PREMISES
Effective April 27th, 1995 ("Effective Date"), Landlord
does hereby lease and deliver unto Tenant, and Tenant does hereby
take and hire from Landlord, the Demised Premises for the uses
and purposes and upon the terms and conditions hereinafter set
forth. Landlord claims that it has the right and easement in
common with others to use the Easement Area for vehicular ingress
to and egress from the Demised Premises to and from Las Vegas
Boulevard South. Tenant shall have and is hereby granted the
right to use such easement rights as long as Landlord has the
right to use such easement or is able to utilize the same and so
long as Tenant is not in default under this Lease.
II. TERM
A. Initial Term. Commencing upon the Effective Date, the
term of this Lease is extended to and shall continue until the
thirty-eighth (38th) annual anniversary of the Effective Date,
subject to early termination in the event of Tenant's default as
hereinafter provided. For convenience, the period between the
Effective Date and the end of the term shall be referred to as
the Initial Term.
B. Options for Extension of Term. Provided Tenant is not
in default under this Lease both as of the date it exercises its
option or on the date of commencement of the option term, Tenant
shall have two (2) successive options to extend the term of this
Lease for a period of twenty (20) years each. Tenant may not
exercise the second option unless it has previously exercised the
first option and completed the first option term without uncured
default. Tenant shall exercise its option to extend this Lease
by giving written notice to Landlord of Tenant's election to
exercise such option no later than one (1) year prior to the end
of the then current Lease term. If the option is not timely
exercised, then Tenant's right to extend shall lapse and be of no
further force and effect. With the exception of rent adjustments
as set forth in Article III, below, the terms and conditions of
this Lease shall remain in full force and effect during any
extension of the Lease, except that Tenant by exercising an
option to extend shall not thereby be deemed to have acquired a
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<PAGE>
further right to extend the term of this Lease. In the event
that Tenant does not elect to exercise an option to extend the
Lease term in the manner above stated, this Lease shall terminate
and be of no further force and effect following the expiration of
the then current Lease term. In any event, this Lease shall
terminate no later than the anniversary of the Effective Date in
the year 2073.
This Lease is subject to the following matters to the
extent that they affect the Demised Premises:
1. The title exceptions set forth in Preliminary
Title Report No. 94-12-0206-RMG, Second Amen dment, issued by
Nevada Title Company in Las Vegas, Nevada and dated as of
March 23, 1995, a copy of which is attached hereto as
Exhibit "C".
2. The effect of all present and future building
restrictions and regulations and present and future zoning laws,
ordinances, resolutions and regulations of the City of Las Vegas,
the County of Clark and the State of Nevada and all present
ordinances, regulations and orders of all boards, bureaus,
commissions and bodies of the City and any county, state or
federal agency, now having, or hereafter having acquired,
jurisdiction of the Demised Premises and the use and improvement
thereof.
3. The condition and state of repair of the Demised
Premises on the Effective Date.
(a) All taxes (including local improvement
rates), duties, assessments, special assessments, water charges
and sewer rents, and any other similar impositions, accrued or
unaccrued, fixed or not fixed.
(b) Violations of law, ordinances, rules,
regulations, orders or other governmental requirements that might
be disclosed by an examination and inspection or search of the
Demised Premises on the Effective Date by any federal, state,
county or municipal department or authority having jurisdiction.
III. RENT
A. Rent During Initial Term. During the first year of the
Initial Term, from and after the Effective Date, Tenant shall pay
to Landlord as and for rent for the Demised Premises the sum of
Two Hundred Twenty-Five Thousand Dollars ($225,000) per annum in
equal monthly installments of Eighteen Thousand Seven Hundred
Fifty Dollars ($18,750). Such monthly installments of rent shall
be paid on or before the first business day of each calendar
month. Rent for the period of time between the Effective Date
and the first business day of the next succeeding calendar month
shall be apportioned according to the number of calendar days
during such period of time, if any.
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<PAGE>
1. Annual Rent Adjustments. Commencing on the first
annual anniversary date of the Effective Date and thereafter on
each annual anniversary of the Effective Date (the "Adjustment
Dates"), rent shall be increased (but not decreased) as follows:
On each Adjustment Date, the Consumer Price Index, All Urban
Consumers All Items ("CPI-U") published by the United States
Department of Labor, Bureau of Labor Statistics (the "Index")
which is published for the calendar month most immediately
preceding the month in which occurs the Adjustment Date (the
"Extension Index") shall be compared with the Index published for
March 1995 (the "Beginning Index"). If the Extension Index is
greater than both the Beginning Index and the previous Extension
Index used as the case may be, the rent payable during the twelve
(12) month period following such current Adjustment Date shall be
set by multiplying the rent set forth above ($225,000 per annum)
by a fraction, the numerator of which is the Extension Index and
the denominator of which is the Beginning Index. If the
Extension Index is not greater than both the Beginning Index and
the last previous Extension Index used to determine rent
adjustments, rent shall continue in the amount then currently
payable. If the Index is changed so that the Base Year differs
from that used as of the date hereof the Index shall be converted
in accordance with the Conversion Factor published by the United
States Department of Labor, Bureau of Labor Statistics. If the
Index is discontinued or revised at any time, then such other
government index or computation with which it is replaced or is
generally recognized as authoritative shall be used in order to
obtain substantially the same rent increase result as would have
been obtained if the Index had not been discontinued or revised.
If publication of the Extension Index is delayed, Tenant shall
continue to pay rent at the previous amount until the Extension
Index is published. At that time, the rent adjustment
contemplated hereby shall be made, and Tenant shall pay any
additional rent then due from the Adjustment Date because of any
adjustment in rent and shall also commence to pay the adjusted
rent.
2. One-Time Specific Increase of Rent During Initial
Term. For the nineteenth (19th) year of the Initial Term from
and after the Effective Date, the annual rent shall be an amount
equal to what the annual rent, as adjusted in the manner above
specified would have been for such nineteenth (19th) year of the
Initial Term pursuant to the adjustment made as provided in
subsection 1 above, plus the sum of Seventy-Five Thousand Dollars
($75,000). Such rent shall continue to be payable monthly in
advance in equal monthly installments.
3. Continued Annual Adjustments. Commencing on the
nineteenth (19th) Adjustment Date and thereafter to the end of
the Initial Term, annual rent, as the same shall have been
increased by the Seventy-Five Thousand Dollar ($75,000) increase
for the nineteenth (19th) year of the Lease term as provided
above, shall continue to be adjusted in accordance with the
formula set forth in subsection 1 above on each Adjustment Date
during the balance of the Initial Term.
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<PAGE>
B. Rent During Extension Terms. In the event that Tenant
elects to exercise its option or options to extend the term of
the Lease beyond the Initial Term, the Annual Rent for the first
year of the extension term(s) shall be the Annual Rent during the
final year of the immediately preceding term, adjusted in
accordance with the formula set forth in subsection 1 above,
payable monthly in advance in equal monthly installments.
Thereafter, rent shall continue to be adjusted annually in
accordance with the formula set forth in subsection 1 above on
each annual Adjustment Date occurring during the option term or
terms as the case may be.
C. Manner of Payment. All payments of rent hereinabove
provided shall be made to Landlord as the same become due in
lawful money of the United States of America, at such place as
hereafter may be designated by Landlord by written notice
directed to Tenant from time to time. Landlord's receipt of rent
by check or other form of payment shall not be satisfaction of
the obligation to pay rent if the check or other form of payment
is not honored or not collected.
IV. RENT NET TO LANDLORD
It is the purpose and intent of Landlord and Tenant
that all rental payable hereunder and all other sums and charges
hereunder shall be absolutely net to Landlord so that this Lease
shall yield to Landlord the rents specified herein during the
term of this Lease, free of any charges, assessments, or
impositions of any kind or nature charged, assessed, or imposed
on or against the Demised Premises, and without abatement,
deduction or set-off by Tenant. Landlord shall not be expected
or required to pay any charge, assessment or imposition, or be
under any obligation or liability hereunder for such matters.
All costs, charges, expenses and obligations of any kind or
nature against, or relating to the Demised Premises, or the use,
occupancy, possession, operation, management, maintenance or
repair thereof, which may arise or become due during the term
hereof, including but not limited to taxes as hereinafter
provided in Article V below, insurance, maintenance, alterations,
repairs and replacements shall be paid by Tenant, and Landlord
shall be indemnified and saved harmless by Tenant from and
against any and all such costs, charges, expenses and
obligations.
V. TAXES AND ASSESSMENTS
A. Payment of Taxes and Assessments. As part of the
consideration of this Lease and in addition to the rent
hereinabove provided, Tenant shall during the term hereof bear
and pay to the public officers charged with the collection
thereof promptly as the same becomes due, and shall indemnify and
save harmless Landlord from all taxes, special and general
assessments, use and occupancy taxes, rent taxes, license fees,
excises, imposts and charges and all levies, general and special,
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<PAGE>
ordinary and extraordinary, of any name, nature and kind
whatsoever, that are now or may hereafter be fixed, charged,
levied, assessed or otherwise imposed by any governmental or
public authority or assessment district upon the Demised
Premises, or any part thereof or upon buildings and other
improvements and personal property at any time thereon or upon
this Lease, the rent thereof or therefrom, and the estate thereby
created or upon Landlord by reason of ownership of the fee
underlying this Lease other than Landlord's income taxes. The
foregoing taxes, assessments and other charges to be paid, as
aforesaid, by Tenant are hereinafter in this Lease referred to as
"taxes" or "tax." For purposes of this Lease, taxes include any
increase in taxes occasioned by the creation of this Lease, and
the construction of improvements on the Demised Premises. Tenant
further covenants and agrees that it shall pay all of said taxes
at least ten (10) days before the same become delinquent, and
Tenant shall obtain and deliver to Landlord at least ten (10)
days before delinquency at the same place as the rent is then
payable, the original or duplicate original receipts or other
evidence of payment satisfactory to Landlord. It is expressly
understood and agreed, however, that Tenant shall pay no
inheritance, succession or estate tax under any existing or
future laws of the United States or the State of Nevada, or any
other state, that may be payable by reason of the devolution by
descent or testamentary disposition of Landlord's estates in said
premises, and Tenant shall not pay any tax on net income payable
by Landlord to the United States or the State of Nevada, or any
other State, or any subdivision thereof under existing or future
income tax laws.
B. Change in Method of Taxation. If at any time during
the term hereof the methods of taxation in effect on the
Effective Date shall be altered so that the whole or any part of
the taxes commonly considered as real estate taxes now levied,
assessed or imposed on real estate and the improvements thereon
shall be discontinued and as a substitute therefor, or in
addition thereto, taxes on the gross rents derived from the
Demised Premises or any other charges of any kind or nature shall
be imposed upon Landlord, and the purpose of the new tax is more
closely akin to that of an ad valorem or use tax than to an
income or franchise tax on Landlord's income, then all such
substitute taxes, assessments, levies, impositions or charges, to
the extent that they are so measured or based, shall be deemed to
be included within the term "taxes" for the purposes hereof.
Tenant shall pay and discharge the substitute tax or additional
tax, as the case may be, upon receipt from Landlord of a
statement setting forth in reasonable detail the basis on which
the substitute tax constitutes a "tax" hereunder and the
calculation of the amount due.
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<PAGE>
C. Manner of Assessment. The Demised Premises and any
improvements at any time thereon, if permitted by law, shall for
the purpose of taxation, be assessed in the name of Landlord, and
the taxes, assessments and other governmental charges thereon
shall be paid in the name of Landlord. As between the parties
hereto, Tenant alone shall have the duty of preparing and filing
any statement or report which may be required or provided by law
in connection with the determination, equalization, reduction, or
payment of said taxes. Landlord shall not be responsible
therefor or for the contents of any such statement or report
prepared or filed by or on behalf of Tenant, nor shall Landlord
be obligated to make, join in or become party to any protest or
objection to any law, governmental act or proceeding which might
impose or increase any obligation or liability upon Tenant, but
in all such matters Landlord hereby irrevocably grants to Tenant
and its successors in interest and assigns as the owner of the
leasehold created hereby the necessary power and authority to act
in the name of Landlord to the full extent permitted by law but
without any cost to or liability upon Landlord. Tenant will pay
and indemnify and save Landlord harmless from all charges, lien,
penalties, claims and damages chargeable to or payable for or in
respect of this Lease, the premises described herein, the
improvements hereafter thereon, the rent thereof or therefrom,
and the estate hereby created, during the term hereof, save the
excepted taxes on the interest of Landlord which are not to be
paid by Tenant as provided in subparagraph A above, and upon
written application of Landlord, Tenant shall furnish to Landlord
for inspection and for such use as may be necessary or proper for
the protection of Landlord's interest in said premises, written
evidence, duly certified, that any and all such claims are duly
satisfied or otherwise discharged.
D. Contest by Tenant. Tenant shall at all times have the
right to contest in good faith and upon reasonable grounds in any
proper proceeding prior to delinquency the validity of any tax,
upon the express condition that written notice thereof shall be
given to Landlord by Tenant not less than ten (10) days before
any delinquency could occur and upon the further condition that
such contest shall not be maintained after the aforesaid time
limited for the payment by Tenant of any such obligation, unless
Tenant shall have duly paid under protest the amount involved, or
shall have procured and maintained a stay of all proceedings to
enforce collection thereof, and also shall have provided for the
payment thereof, together with all penalties, interest, costs and
expenses by the deposit of a sufficient sum of money or by a good
and sufficient undertaking, if required or permitted by law.
Upon the giving of such undertaking, Landlord shall have no right
to pay any such disputed tax or other charge until such times as
the same may have been finally decided and determined to be valid
and legal. Upon the aforesaid conditions Tenant in its own name
or behalf, or if appropriate, in the name or behalf of Landlord,
but at Tenant's sole expense and without any expense or liability
to Landlord, may exercise all or any rights, remedies or defenses
against or to prevent the enforcement or collection of any such
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<PAGE>
tax, and after payment of any such tax may claim, recover or
obtain the repayment or return of all money paid in satisfaction
thereof. In the event of any such contest, within five (5) days
after the final determination thereof adverse to Tenant, the
amounts involved in or affected thereby, together with all
penalties, interest, cost and expenses that may have accrued
thereon or resulted from such action shall be fully paid and
discharged by Tenant. Tenant indemnifies Landlord against and
agrees to hold said Landlord harmless from any damage, loss,
liability or expense, including reasonable attorney's fees,
accruing to Landlord by reason of any such contest.
E. Payment of Tax by Landlord. If Tenant defaults in the
payment of any of said taxes as above required, Landlord shall
have the option to pay, discharge, compromise or adjust such
taxes with respect to which Tenant is in default, and likewise
Landlord may redeem the Demised Premises or any part thereof, or
the improvements thereon, from any sale or sales made in
connection with any such tax. In making such payment or
redemption, Landlord's decision shall be final. Any such amount
so paid by Landlord shall be repaid by Tenant to Landlord on or
before the due date of the next installment of rent together with
interest thereon at the rate of ten (10%) percent per annum from
the date of payment by Landlord until repaid by Tenant; this
provision shall not relieve Tenant from any default in the making
of any payment of taxes at the time and in the manner required by
this Lease.
VI. USE OF DEMISED PREMISES
A. Protection of Landlord's Title. Tenant shall not
suffer or permit the Demised Premises, or any portion thereof to
be used by the public, as such, without restriction or in such
manner as would impair Landlord's title to the Demised Premises
or its reversionary interest in the Demised Premises or any
portion thereof which results in a claim or claims of adverse
usage or adverse possession by the public, or of implied
dedication of the Demised Premises or any portion thereof.
B. Tenant's Rights to Use. Tenant may use the Demised
Premises for any legal commercial or residential purposes as
opposed to industrial purposes ("Permitted Use"). Tenant may use
the Easement Area solely for purposes permitted by the easement
for the Easement Area.
C. Acceptance of Demised Premises in "As-Is" Condition.
Tenant acknowledges that it is fully familiar with the condition
of the Demised Premises, and Tenant hereby accepts the Demised
Premises in the condition existing as of the Effective Date.
Tenant further acknowledges that neither Landlord nor any agent
of Landlord has made any representation or warranty as to (i) the
present or future suitability of the Demised Premises for any use
whatsoever; (ii) the structural integrity or condition of the
present improvements on the Demised Premises; (iii) the zoning or
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development potential of the Demised Premises; (iv) the soil
conditions thereof; (v) the sufficiency of drainage from the
Demised Premises; (vi) flood hazards on or with respect to the
Demised Premises; (vii) ingress and egress rights and
availability of utilities to the Demised Premises; (viii) the
existence of Hazardous Substances on, adjacent or nearby to the
Demised Premises; (ix) or any other matters of any kind or
nature. Additionally, Tenant acknowledges it has been afforded
the opportunity to make and has made its own inspection of the
Demised Premises, the condition of the soil thereof and
improvements thereon, the availability of access and utilities to
serve the Demised Premises, the zoning and other applicable
governmental regulations pertaining thereto, and all other
matters of any kind or nature relating thereto, and based on said
inspection accepts the Demised Premises AS-IS, and waives any
claim of any kind of nature against Landlord relating to the
condition of the Demised Premises.
D. Construction.
1. During the term of the Lease, Tenant shall have
the right to demolish existing improvements on the Demised
Premises and from time to time construct, reconstruct, remodel
and/or demolish such improvements on the Demised Premises as
Tenant may, in its sole discretion, deem necessary or advisable.
Provided however, all such improvements shall be stand alone,
and will not be physically integrated or incorporated into any
project being built by Tenant or others on land adjoining the
Demised Premises in a manner which would preclude the same being
physically divided and partitioned and separated from the balance
of such project without jeopardizing, compromising or adversely
affecting the structural integrity of such project or the
improvements on the adjoining lands, all to the effect that at
the end of the term the improvements on the Demised Premises can
be demolished without adversely affecting such physical
structures on such adjoining lands, and so that Landlord can
lawfully repossess the Demised Premises and the Easement Area and
occupy and enjoy the same as a separate and stand alone parcel of
land without liability of any kind or nature to owners of such
adjoining lands. Provided further, prior to commencing any
demolishment of existing improvements or construction of
improvements in the future, Tenant shall comply with all of the
following conditions or obtain Landlord's written waiver of the
conditions specified in the waiver.
(a) Plans. Tenant shall deliver to Landlord for
Landlord's reasonable approval preliminary construction plans and
specifications for such improvements ("Plans").
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(i) The Plans shall be prepared by an
architect or engineer licensed to practice as such in Nevada
reasonably approved by Landlord. The Plans shall include
grading and drainage plans, soil tests, utilities, sewer and
service connections, elevations, engineering calculations,
structural and working drawings, locations of ingress and
egress to and from public thoroughfares and the curbs,
gutters, driveways, parkways, street lighting, parking
areas, storage areas, plazas, public areas and landscaping
and all other items customarily required by construction
lenders to be included in plans and specification for
similar projects located in Clark County, Nevada.
(ii) Landlord shall have the right to
disapprove the Plans only if the same disclose that the
improvements will be used for a non-Permitted Use or that
the improvements contemplated by such Plans are not stand
alone and will be physically integrated or incorporated into
any project being built by Tenant or others on land
adjoining the Demised Premises in a manner which would
preclude the same being physically divided and partitioned
and separated from the balance of such project without
jeopardizing, compromising, or adversely affecting the
structural integrity of such project or the improvements on
the adjoining lands, all to the effect that at the end of
the term the improvements on the Demised Premises can be
demolished without adversely affecting such physical
structures on such adjoining lands, and so that Landlord can
lawfully repossess the Demised Premises and the Easement
Area and occupy and enjoy the same as a separate and stand
alone parcel of land without liability of any kind or nature
to owners of such adjoining lands.
(iii) Landlord shall have a period of
twenty-five (25) days after Landlord's receipt of the Plans
within which to notify Tenant of its approval or disapproval
thereof. Landlord's failure to timely disapprove shall be
deemed approval, but such approval shall not diminish
Tenant's obligation to make such improvements severable from
any project on adjoining lands so that the same can be
demolished without adversely affecting the physical
structures on the adjoining lands as provided in (ii) above.
If Landlord disapproves the Plans, Landlord will set forth
the grounds therefor and will specify all items which must
be corrected, revised or changed. Within fifteen (15) days
after receipt of Landlord's notice of disapproval, Tenant
shall submit revised Plans corrected to satisfy those items
reasonably disapproved by Landlord. If the Plans have been
corrected to meet Landlord's reasonable objections, Landlord
will approve the resubmitted Plans within ten (10) days
after the receipt thereof. If the items previously
disapproved by Landlord have not been corrected to
Landlord's reasonable satisfaction, Tenant shall correct and
resubmit the Plans and Landlord shall approve or disapprove
the same within the time frames set forth above in this
subsection (iii).
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(iv) Once approved by Landlord, the Plans
shall be the plans utilized by Tenant in the construction of
the improvements and no material, substantial, or
significant changes or modifications may be made to the
Plans, and no changes of any kind may be made to the
architecture, engineering or location of the improvements
which would preclude the same being physically divided and
partitioned and separated from structures located in
adjacent land without jeopardizing, compromising or
adversely affecting the structural integrity of the
improvements on the adjacent land so that at the end of the
term of this Lease the improvements on the Demised Premises
can be demolished without adversely affecting such physical
structures on such adjoining lands as provided in
subparagraph (ii) above, except with the prior written
approval of Landlord.
(b) Changes in the Plans. The approval or
disapproval of any changes in the Plans after their original
approval by Landlord shall be within Landlord's reasonable
judgment based on the criteria set forth in subparagraph (a)(ii)
above. Approval or disapproval shall be communicated in the
manner provided herein for notices, and disapproval shall be
accompanied by specification of the grounds for disapproval.
Following Landlord's first or any subsequent disapproval, Tenant
shall continue to construct the improvements only in accordance
with the Plans as previously approved by Landlord until such time
as the Plans have been revised to correct Landlord's objections
and the revised Plans approved by Landlord.
(c) Bond. If at the time of commencement of the
construction of any improvements on the Demised Premises the cost
thereof exceeds Two Hundred Thousand Dollars ($200,000), adjusted
annually for any increase in the Index, and both (i) the Tangible
Net Worth of Tenant is less than Two Hundred Million Dollars
($200,000,000) and (ii) the MRI Guarantee described in
Article XIV below has been withdrawn, then prior to and as a
condition precedent to commencement of the construction of such
improvements, Tenant shall deliver to Landlord a performance bond
and lien and completion bond issued by a reputable bonding
company authorized to do business in Nevada, in an amount equal
to one hundred percent (100%) of the cost of construction of the
improvements based on the contracts for same naming Landlord as
beneficiary.
(d) Building Permit. If Tenant desires to
construct the improvements, Tenant shall at its own cost and
expense (i) cause the Plans, or such appropriate parts thereof as
may be necessary, to be filed with the appropriate governmental
agencies ("Building Department") and (ii) as a condition to
commencing any phase of construction for which a permit is
necessary, obtain such permits. After such permit or permits are
issued based upon the Plans theretofore approved by Landlord, if
Tenant desires to proceed with construction, then Tenant shall,
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at Tenant's sole cost and expense, proceed with diligence and
continuity to construct the improvements in accordance with the
Plans and the requirements of all applicable governmental
agencies. Landlord agrees, if requested by Tenant, to join in
any request for authorization or application in connection with
Tenant's construction of the improvements on the Demised Premises
or conducting business thereon at no cost to Landlord. Tenant
may deliver working drawings and plans to any governmental body
or institutional lender in connection with its application for a
building permit or other permits provided that the same are
simultaneously delivered to Landlord for approval as herein
provided.
(e) Notice of Nonresponsibility. Landlord shall,
at any and all times during the term of the Lease, have the right
to post and maintain on the Demised Premises and to record as
required by law any notice or notices of nonresponsibility
provided for by the mechanic's lien laws of the State of Nevada.
Tenant shall give Landlord written notice of commencement of any
work of improvement on the Demised Premises not later than
fifteen (15) days prior to the commencement of such work so that
Landlord may post appropriate notices of nonresponsibility.
(f) Compliance With Law and Quality. The
improvements shall be constructed, and all work performed on the
Demised Premises, including the Construction Work, in accordance
with the Plans, and all valid laws, ordinances, regulations, and
orders of all federal, state, county, or local governmental
agencies or entities having jurisdiction over the Demised
Premises and the improvements. Any improvement erected on the
Demised Premises, shall be deemed to have been constructed in
full compliance with all valid laws, ordinances, regulations, and
orders in force at the time when: (i) as to the improvements
(exclusive of interior tenant improvements) such portion of the
improvements have been approved in writing by the governmental
agencies or entities with jurisdiction over same, and (ii) as to
the interior tenant improvements, when a final Certificate of
Occupancy (or such other equivalent certificate or permit has
been obtained) entitling Tenant and subtenants to occupy and use
the improvements has been duly issued by proper governmental
agencies or entities. All work performed on the Demised Premises
pursuant to this Lease, or authorized by this Lease, shall be
done in a good workmanlike manner and only with materials of good
quality and high standard.
(g) Inspection. Landlord shall have the right to
inspect the Demised Premises and/or improvements in relation to
the construction work to determine whether the work has been or
is being performed in accordance with the approved Plans so that
nothing is being done which would prevent or make more difficult
or costly the physical severance, partition, and separation of
such improvements from structures located on adjacent land
without jeopardizing, compromising or adversely affecting the
structural integrity of the improvements on the adjacent land, so
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that at the end of the lease term the improvements on the Demised
Premises can be demolished without adversely affecting the
physical structures on such adjoining land as provided in
subparagraph (a)(ii) above. Such inspections shall be made at
reasonable times during normal business hours, upon reasonable
prior notice to Tenant. Landlord's inspections shall not
unreasonably interfere with the progress of such Construction
Work. Landlord agrees to indemnify and hold Tenant harmless from
and against any loss, cost, expense, damages, liability or causes
of action for bodily injury, death or property damage arising
from or in any way related to Landlord's inspections of the
Demised Premises. This paragraph shall in no way control any
right of governmental inspection necessary and permitted under
applicable codes and ordinances. Landlord shall, within five (5)
business days after the receipt thereof, furnish to Tenant a copy
of all inspection reports, or other writings, from Landlord's
architects, engineers and/or designated inspector including,
without limitation, all reports and writings setting forth any
deficiency, omission or other respect in which construction does
not accord with the Plans. Unless Tenant disputes the matters
set forth in any such report or other writing, Tenant shall take
the immediate steps necessary to cause corrections to be made as
to any such deficiencies, omissions or otherwise. If Tenant
disputes the need for any correction, Tenant shall so notify
Landlord within five (5) business days after receipt of written
notice from Landlord setting forth the correction allegedly
required. Within five (5) business days after the receipt by
Landlord of Tenant's notice disputing any need for correction,
Landlord shall designate an independent architect licensed in the
State of Nevada to conduct an inspection of the improvements,
which architect shall be subject to the prior written approval of
Tenant. The determination of such third party independent
architect that correction of a deficiency or omission is required
shall control, and Tenant shall promptly correct any such
deficiencies or omissions. Tenant shall, after the initial
receipt from Landlord of written notice that correction is
required, attempt to isolate the area or portion of the
construction work allegedly requiring correction and shall
continue construction, to the extent possible, of all other areas
of the improvements. If Tenant is required to discontinue
construction pending resolution by the third party independent
architect of the need for correction, and if such architect
determines that no corrective measures are necessary, then Tenant
shall be entitled to complete the work as soon as reasonably
possible if it chooses to do so. Provided however, nothing in
this Lease shall require Tenant to construct any improvements on
the Demises Premises or complete the construction of improvements
which has been commenced, so long as Tenant maintains the Demised
Premises in accordance with applicable law.
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(h) Insurance. Prior to and as a condition
precedent to the commencement of the Construction Work, Tenant
shall acquire and maintain general public liability insurance as
elsewhere provided in this Lease with course of construction
coverage. Tenant shall also acquire and maintain and/or cause
its architect to maintain errors and omissions insurance with
respect to the construction of the improvements and, in addition,
worker's compensation insurance with respect to all parties who
may have claims which could arise from the construction and
equipping of the improvements. Landlord shall be named as a
co-insured in such liability policies. Such insurance policy or
policies provided for in this paragraph shall provide that the
insurer waives its right of subrogation against Landlord, and
that no cancellation thereof or material change in such insurance
shall be made unless Landlord shall have been first given thirty
(30) days' prior written notice thereof. Tenant shall furnish
Landlord a certificate of insurance for each policy required
hereunder, setting forth the limits of liability, the type of
coverage, the name of the carrier, the policy number and the
period of coverage.
(i) Tenant's Construction Indemnity. Tenant
hereby assumes entire responsibility and liability for any and
all damages or injury of any kind or nature whatever to all
persons, whether employees or otherwise, and to all property,
arising from the conduct of the construction work on the Demised
Premises or on adjacent property or on surrounding or nearby
public streets, and shall indemnify and hold harmless Landlord,
and its agents, servants and employees from and against any and
all loss, costs and expenses, including reasonable attorneys'
fees, damages or injury, incurred or suffered by Landlord or the
Demised Premises and arising from or occurring in connection with
the construction work.
(j) As-Built Plans. Promptly after completion of
construction of the improvements, Tenant shall deliver to
Landlord a copy of the as-built plans and specifications used in
connection with the building of the improvements as well as
copies of all operating manuals furnished by equipment suppliers.
(k) Right to Alter. Tenant shall have the right
at any time and from time to time during the term of this Lease
to make, at its sole cost and expense, changes, modifications,
restorations and alterations in or to the improvements or to any
new improvements constructed hereunder. Such changes,
modifications, restorations or alterations are subject, however,
in all cases to the following:
(i) No change, modification, restoration or
alteration shall be undertaken until Tenant shall have
procured and paid for, so far as the same may be required
from time to time, the permits and authorizations required
for work from all municipal departments and governmental
subdivisions having jurisdiction. Landlord shall join in the
application for such permits or authorizations whenever such
action is necessary, but at no cost to Landlord.
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(ii) No change, modification, restoration or
alteration involving the structure of the improvements, the
exterior of the improvements, the Landscape Plan, the Site
Plan and the Scope of Development, the hardscape or the
softscape or the public areas of the buildings of an
estimated cost of more than Two Hundred Thousand Dollars
($200,000) ("Minimum Amount") (except for normal repairs
determined in accordance with generally accepted accounting
principles) shall be commenced unless and until Tenant shall
have submitted to Landlord, and obtained Landlord's consent
to and approval of, detailed plans, specifications and cost
estimates therefor for the limited purposes as provided in
subparagraph (a)(ii) above and in the same manner as
provided for in the original construction of such
improvements. The Minimum Amount shall be adjusted annually
as of the first day of January of each calendar year by any
increase in the Index from the previous January 1. In no
event shall this subparagraph (ii) apply to interior tenant
improvements that do not involve structural matters.
(iii) No change, modification,
restoration or alteration shall change the exterior
architecture or engineering of the improvements or the use
of the improvements for any use other than the Permitted
Uses or the severability of the improvements from the
balance of any project on adjoining land without Landlord's
prior written consent.
(iv) Any demolition, change, modification,
restoration or alteration shall be made in compliance with
all applicable permits and authorizations and building and
zoning laws and with all other laws, ordinances, orders,
rules, regulations and requirements of all federal, state
and municipal governments, departments, commissions, boards
and officers and in accordance with the rules and
regulations of the National Board of Fire Underwriters and
other similar bodies then in effect.
(v) The cost of any such demolition, change,
modification, restoration or alteration shall be promptly
paid or caused to be paid by Tenant, so that the Demised
Premises shall at all times be free of liens for services
performed, labor and material supplied, or claimed to have
been supplied to the Demised Premises, subject, however, to
Tenant's right to contest and bond.
(vi) Worker's compensation insurance,
covering all persons employed in connection with the work,
and with respect to whom death or bodily injury claims could
be asserted against Landlord, Tenant or the Premises, shall
be maintained by Tenant at Tenant's sole cost and expense at
all times when any construction work is in process in
connection with any change, modification, restoration or
alteration. In addition thereto, Tenant shall obtain
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appropriate endorsements to the liability insurance policy
required to be carried under this Lease (if not already in
existence) covering any loss or damage arising out of such
change, modification, restoration or alteration. All such
insurance shall be carried with a company or companies rated
Class A or better by recognized rating organizations and all
policies or certificates therefor issued by the respective
insurers, bearing notations evidencing the payment of
premiums or accompanied by other evidence satisfactory to
Landlord of such payment, shall be delivered to Landlord.
All such insurance shall contain an appropriate waiver of
subrogation in favor of Landlord.
2. Tenant shall pay all costs for construction done
by it or caused to be done by it on the Demised Premises. Tenant
shall keep the fee title to the Demised Premises free and clear
of all mechanics' liens resulting from construction done by or
for Tenant; provided, however, that Tenant shall have the right
to contest mechanics' liens upon the posting of surety bonds for
release of such liens, pursuant to the provisions of Chapter 108
of Nevada Revised Statutes. Landlord shall not have any
responsibility of any kind to maintain the Demised Premises.
E. Maintenance.
1. Maintenance by Tenant. Throughout the term of
this Lease, Tenant, at its sole cost and expense, will take good
care of the Demised Premises and the improvements and
appurtenances thereto and every part of and portion thereof and
any sidewalks, parking lots, garages, driveways, walls, gardens,
sprinkler systems, curbs and vaults adjoining and/or appurtenant
to the Demised Premises and improvements and will keep the same
in good order and condition, and will make all necessary repairs
thereto, interior and exterior, structural and non-structural,
ordinary and extraordinary, and unforeseen and foreseen, all to
the effect that the Demised Premises and improvements shall
throughout the term of this Lease be maintained in accordance
with applicable law and so that Landlord shall have no
responsibility whatsoever for compliance with any orders of
applicable authority with respect to the condition of the Demised
Premises. To the foregoing ends, at all times during the term of
the Lease, Tenant, at Tenant's own cost and expense, shall:
(a) Make all alterations, additions, or repairs
to the Demised Premises and/or the improvements required by the
terms of any applicable law, ordinance, statute, order, or
regulation now or hereafter made or issued by any federal, state,
county or city or other governmental agency, entity, board or
other division thereof;
(b) Observe and comply with all applicable laws,
ordinances, statutes, orders, and regulations now or hereafter
made or issued respecting the Demised Premises and/or the
improvements by any federal, state, county, city or any other
governmental agency, entity, board or division thereof;
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(c) Indemnify and hold Landlord and the Demised
Premises free and harmless from any and all liability, costs,
damages, fines, penalties, claims, and actions resulting from
Tenant's failure to comply with and perform the requirements of
this subsection 1.
2. No Duties on Landlord. Landlord shall not be
required to furnish any services or facilities whatsoever or to
make any repairs or alterations in or to the Demised Premises or
the improvements. Tenant hereby assumes the full and sole
responsibility for the condition, operation, repair, replacement,
maintenance, development and management of the Demised Premises
and the improvements throughout the entire term of this Lease.
Tenant accepts the Demised Premises in its condition existing as
of the date of this Lease and acknowledges that Landlord has not
made any representation or warranty as to the present suitability
or future suitability of the Land for the proposed development of
the improvements or for the conduct of Tenant's business on the
Demised Premises. The foregoing obligations shall include, but
shall not be limited to, the duty of Tenant to obtain and
maintain at Tenant's sole cost and expense any Certificate of
Occupancy with respect to the Demised Premises which may at any
time be required by any governmental agency having jurisdiction
thereof. Landlord shall, at Tenant's expense, join in any
application or request for such Certificate of Occupancy, if such
joinder is required under applicable law, but without liability
or cost to Landlord.
F. Compliance With Underwriter's Requirements. Throughout
the term of this Lease, Tenant, at its sole cost and expense,
will promptly comply with all orders, rules and regulations of
the National Board of Fire Underwriters, Nevada Board of Fire
Underwriters, the Nevada Fire Insurance Rating Organization or
any other body exercising similar functions, relating to the
Demised Premises and/or adjoining sidewalks, curbs or vaults, or
which may be required for maintenance of insurance policies
herein required at normal premiums, whether or not such law,
ordinance, order, rule, regulation or requirement shall
necessitate structural changes or improvements or interfere with
the use and enjoyment of the Demised Premises.
VII. HOLDING OVER
At the expiration of the term of the Lease or sooner
termination hereof Tenant agrees to peaceably quit and surrender
possession of the Demised Premises. In the event that Tenant
shall occupy the Demised Premises after the date of the
expiration of the term of this Lease, or any extension hereof,
such possession shall be construed to be a tenancy only from
month to month, and Tenant agrees to pay as rent the aggregate of
(i) the monthly rental for the last year of the expired term plus
(ii) an amount equal to one-half (1/2) of the amount provided in
(i) as above stated for each month or fraction thereof as Tenant
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may hold over. Nothing herein shall imply any right of Tenant to
hold over. Thus, for example, if the rent for the last month of
the term is Twenty-Five Thousand Dollars ($25,000), Tenant shall
pay the sum of Thirty-Seven Thousand Five Hundred Dollars
($37,500) per month as rent for each month or fraction thereof as
Tenant may hold over.
VIII. UTILITIES
Tenant does hereby agree and promise to pay to said
Landlord the rent reserved in the manner herein specified and
Tenant further agrees to pay, before delinquency, all costs for
utilities used on the Demised Premises by Tenant during said
term. Landlord shall not be liable for any interruption in
utility service, and no interruption of utility service shall
entitle Tenant to rent abatement.
IX. INSURANCE
A. Requirement to Maintain Insurance. Tenant shall,
during the entire term of the Lease, at its sole expense, keep in
force a policy or policies of comprehensive broad form general
public liability insurance insuring Tenant and Landlord against
liability for death, bodily injury or property damage occurring
on or caused by the use or occupancy of the Demised Premises,
providing protection of at least $5,000,000 combined single limit
for bodily injury and property damage.
B. Fire and Casualty Insurance.
1. If Landlord shall not theretofore have been paid
the Restaurant Reconstruction Fee and the Demolition Fee, then
Tenant, at its sole cost and expense, shall keep all improvements
located on the Demised Premises insured for the mutual benefit of
Landlord and Tenant during the term of this Lease, against loss
or damage by fire and against loss or damage by other risks now
or hereafter embraced by the broadest form of "Extended Coverage"
endorsement available in the State of Nevada, and against such
other risks as are commonly insured by operators of similar
improvements, in an amount not less than the aggregate of (i) if
Tenant has theretofore constructed improvements on the Demised
Premises other than a sign and roadway, then an amount sufficient
to cover the cost of demolition of such improvements and the cost
to regrade and restore the Demised Premises to a level building
pad ready to receive new improvements, and (ii) the amount of the
Restaurant Reconstruction Fee described in Article XI below.
2. If Tenant commits, permits, or causes the conduct
of any activity or the bringing or operation of any equipment on
or about the Demised Premises which creates an increased risk
which activity or operation can be separately insured, Tenant
shall procure and maintain in force, during such activity or
operation, insurance, if available, sufficient to cover the risks
represented thereby. Tenant shall procure and maintain in force
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other insurance, in amounts from time to time reasonably required
by Landlord, against other insurable risks, if and to the extent
such risks are commonly insured against by other tenants of
premises similarly situated and containing comparable
improvements.
C. Waiver of Subrogation. Each party ("insured") hereby
waives its entire right to recovery against the other party and
the other party's officers, directors, agents, representatives,
employees, successors and assigns with respect to any loss or
damage, including consequential damage to the insured's property
caused or occasioned by any peril (including negligent acts)
which is actually covered by any policy or policies of insurance
required to be carried by the insured under this Lease and agrees
to obtain a similar waiver of subrogation from its carriers in
connection with such insurance.
D. Policy Requirements. Each policy of liability
insurance required to be maintained by Tenant pursuant to this
Article IX shall expressly name Landlord and Tenant as insured
and shall include as additionally named assured or assureds, such
other persons, firms or corporations designated by Landlord or
Tenant and having an insurable interest thereunder (such as
Landlord's or Tenant's mortgagees), as their respective interests
may appear. Each such policy to be maintained by Tenant pursuant
to this Article IX shall be deemed to be primary and
noncontributing with any policy of similar insurance maintained
by Landlord. The insurance required by this Lease shall be
carried only with responsible insurance companies reasonably
satisfactory to Landlord and its lender, if any, licensed to do
business in Nevada rated A by Best's Insurance Rating Service or
similarly nationally known rating service. All such policies
shall be nonassessable and shall contain language to the effect
that (1) any loss shall be payable notwithstanding any act or
negligence of Landlord that might otherwise result in a
forfeiture of the insurance, (2) the insurer waives the right of
subrogation against Landlord and against Landlord's agents and
representatives, (3) the policies are primary and noncontributing
with any insurance that may be carried by Landlord, and (4) the
policies cannot be canceled or materially changed except after
thirty (30) days' notice by the insurer to Landlord. At the
expiration of the term of this Lease, in the event Tenant is able
to assign to Landlord its right, title, and interest in insurance
required to be maintained hereunder, and Landlord requests such
assignment, Landlord shall reimburse Tenant pro rata for all
prepaid premiums on such insurance. Tenant may effect for its own
account any insurance not required under the Lease.
E. Failure to Maintain Insurance. If Tenant fails or
refuses to procure or to maintain insurance as required by this
Lease or fails or refuses to furnish Landlord with required proof
that the insurance has been procured and is in force and paid
for, Landlord shall have the right, at Landlord's election and
upon reasonable prior notice (unless the time required to give
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notice would result in the Demised Premises being uninsured, in
which event Landlord shall give Tenant written notice of having
obtained such insurance within three (3) business days
thereafter) to procure and maintain such insurance. The premiums
paid by Landlord shall be treated as added rent due from Tenant
with interest at the Late Payment Rate, to be paid on the first
day of the month following the date on which the premiums were
paid. Landlord shall give Tenant prompt written notice of the
payment of such premiums, stating the amounts paid and the names
of the insurer or insurers, and interest shall run from the date
of the notice.
F. Evidence of Insurance. Not later than thirty (30) days
after commencement of the term of this Lease, and before the
expiration or other termination of Tenant's existing policies
therefor, Tenant shall furnish Landlord with certificates
evidencing the insurance Tenant is required to maintain under
this Lease. Tenant may effect for its own account any insurance
not required under this Lease. Tenant may provide the insurance
required under this Lease by blanket insurance covering the
Demised Premises and any other location or locations, provided
that such insurance meets the requirements of this paragraph and
contains separate allocated endorsements for the Demised Premises
in the amounts required hereunder.
G. Self Insurance. Tenant shall have the right to satisfy
its insurance obligations under this Lease by means of self
insurance, but only so long as Tenant shall have a net worth
equal to the Minimum Net Worth Amount and such self insurance
provides for loss reserves which are actuarially derived in
accordance with accepted standards of the insurance industry and
are accrued and funded in accordance with such standards. Tenant
shall also have the right to provide insurance by means of
insurance through MRI's self-insurance plan subject to the
reasonable approval of Landlord.
H. Landlord's Additional Insurance. The parties recognize
that under some circumstances insurance policies obtained by
Tenant will not protect Landlord. Accordingly, the parties agree
that in addition to, and not in lieu of the insurance to be
provided by Tenant under and pursuant to this Lease, Landlord
shall also have the right to maintain at Landlord's expense
liability insurance of the same form and as to the same limits
provided under this Article IX. Such policy shall insure
performance by Tenant of the indemnity provisions set forth in
this Lease. However, the limits of said policy shall not limit
the liability of Tenant hereunder.
I. Indemnity. Tenant shall indemnify and hold harmless
Landlord from and against any and all liability, claims, loss,
damages, penalties, fines, causes of action and expenses arising
from Tenant's occupation and use of the Demised Premises (except
for claims arising from the gross negligence or willful wrongful
conduct of Landlord), or from the conduct of Tenant's business or
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from any activity, work or things done, permitted or suffered by
Tenant in or about the Demised Premises or elsewhere, and shall
further indemnify and hold harmless Landlord from and against any
and all claims arising from any breach or default in the
performance of any obligation of Tenant's part to be performed
under the terms of this Lease, or arising from any negligence of
Tenant, or any of Tenant's agents, contractors, employees and
invitees, and from and against all costs, reasonable attorneys'
fees, expenses and liabilities incurred in the defense of any
such claim or any action or proceeding brought thereon; and in
any case any action or proceeding be brought against Landlord by
reason of any such claim, Tenant upon notice from Landlord shall
defend the same at Tenant's expense by counsel reasonably
satisfactory to Landlord. Tenant (except for Landlord's
negligent acts), as a material part of the consideration to
Landlord, hereby assumes all risk of damage to property or injury
to persons, in, upon or about the Demised Premises arising from
any cause and Tenant hereby waives all claims in respect thereof
against Landlord.
J. Limitation of Landlord's Liability. Tenant hereby
agrees that except for Landlord's gross negligence or willful
wrongful conduct, Landlord shall not be liable for injury to
Tenant's business or any loss of income therefrom or for damage
to the goods, wares, merchandise or other property of Tenant,
Tenant's employees, invitees, customers, or any other person in
or about the Demised Premises, nor shall Landlord be liable for
injury to the persons of Tenant's employees, agents or
contractors or invitees, whether such damage or injury is caused
by or results from fire, steam, electricity, gas, water or rain,
or from the breakage, leakage, obstruction or other defects of
the roof, walls, foundations, floors, pipes, sprinklers, wires,
appliances, plumbing, heating, air conditioning, electrical, gas
or sewer systems, appliances and facilities, the personal
property or from any other cause, whether the said damage or
injury results from conditions arising upon the Demised Premises,
or from other sources or places and regardless of whether the
cause of such damage or injury or the means of repairing the same
is inaccessible to Tenant.
X. DESTRUCTION
A. Tenant's Duty to Repair and Restore. In case of any
casualty which results in damage or destruction to the
improvements and/or the Demised Premises, Tenant will promptly
give written notice thereof to Landlord. Tenant, at its sole
cost and expense, shall either (i) restore, repair, replace or
rebuild the same or construct new improvements, in either case in
conformity with and subject to the conditions of this Lease; or
(ii) demolish such improvements and regrade and restore the
Demised Premises to a level building pad ready to receive new
improvements (all of the foregoing collectively being sometimes
referred to as the "Restoration").
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1. Adjustment of Loss. All insurance proceeds, if
any, paid on account of such damage or destruction, less the
actual costs, fees and expenses, if any, incurred in connection
with adjustment of the loss, shall be adjusted by and paid to
Tenant; provided, if Tenant's Tangible Net Worth is then less
than the Minimum Net Worth Amount and Landlord has not
theretofore been paid the Restaurant Reconstruction Fee and the
Demolition Fee provided in Article XI has not been deposited into
escrow, all as provided in Article XI, then the insurance
proceeds up to those amounts shall be paid to the Insurance
Trustee on behalf of any Leasehold Mortgagee, Tenant and
Landlord.
2. Use of Insurance Proceeds. The insurance proceeds
which are payable to Tenant shall be held in trust by Tenant to
pay for the cost of the Restoration. Upon completion of the
Restoration, any excess insurance proceeds shall be retained by
Tenant or paid to any Leasehold Mortgagee if permitted or
required under its Leasehold Mortgage.
The insurance proceeds payable to the Insurance
Trustee shall be held in trust until such time as Tenant has paid
to Landlord the Restaurant Reconstruction Fee and deposited into
escrow the Demolition Fee as provided in Article XI or until the
Restoration has been completed, whichever first occurs.
Upon receipt by the Insurance Trustee of
satisfactory evidence that either (i) the Restoration has been
completed in the manner required under the terms of this Lease
and has been paid for in full and that there are no liens of the
character referred to therein, or (ii) Tenant has paid to
Landlord the Restaurant Reconstruction Fee and deposited the
Demolition Fee into escrow, any balance of the money at the time
held by the Insurance Trustee shall be paid to Tenant or to any
Leasehold Mortgagee.
B. No Abatement of Rent. There shall be no abatement or
reduction of rent by reason of the destruction or damage to the
Demised Premises whether insured or uninsured, nor shall any such
destruction or damage relieve Tenant of any of its obligations
under the provisions of this Lease.
XI. TENANT'S OBLIGATIONS REGARDING IMPROVEMENTS
AT END OF LEASE TERM
The parties acknowledge and agree that there is
currently located upon the Demised Premises a building being
utilized as a restaurant by Denny's, Inc. Tenant intends to
demolish that building. If Tenant demolishes such building, then
Tenant covenants and agrees that upon the termination of this
Lease for any reason other than a default by Landlord, Tenant
shall pay to Landlord, unless the same has theretofore been paid
to Landlord pursuant to other provisions of this Lease, in cash,
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the greater of (i) One Million Dollars ($1,000,000) or (ii) an
amount determined by multiplying One Million Dollars by a
fraction, the numerator of which shall be the Index as of the
date of the termination of this Lease and the denominator of
which shall be the Beginning Index (the "Restaurant
Reconstruction Fee").
Additionally, if the Demised Premises are at the time
of the termination of this Lease improved with anything other
than a sign and roadway, Tenant shall either (i) demolish the
then existing improvements on the Demised Premises and restore
the Demised Premises to a level building pad ready to receive new
improvements, or (ii) pay to Landlord an amount equal to the
amount required to demolish the then existing improvements on the
Demised Premises and regrade and restore the Demised Premises to
a level building pad ready to receive new improvements (the
"Demolition Fee"). Provided, however, if the Demolition Fee has
been theretofore deposited into escrow by Tenant pursuant to
other provisions of this Lease, and Tenant shall elect option
(ii), then upon termination of this Lease, the Demolition Fee
shall be paid by escrow to Landlord without further instruction
of Tenant, and Tenant shall have no further obligations to
demolish the then existing improvements and restore the Demised
Premises to a level building pad. On the other hand, if the
Demolition Fee has theretofore been deposited by Tenant into
escrow and at the end of the Lease Term the Demised Premises are
returned to Landlord improved only with a sign and roadway or
graded and ready for construction of new improvements, then all
sums in such escrow shall be returned to Tenant without further
instruction from Landlord.
XII. NO LIENS
Tenant agrees to pay promptly when due all bills for
labor or materials in connection with said premises and not to
cause or create liens or encumbrances against Landlord's title;
and Landlord reserves the right to post and record notices of
nonresponsibility in conformity with Nevada law. If any
mechanic's, laborer's or materialman's lien shall at any time be
recorded against the Demised Premises or any part thereof,
Tenant, within thirty (30) days after notice to it of such lien
or claim of lien, or within ten (10) days after commencement of
foreclosure action thereon, shall cause the same to be discharged
of record by payment, deposit, bond, order of a court of
competent jurisdiction or otherwise. If Tenant shall fail to
cause such lien to be discharged as herein provided within the
period aforesaid, then, in addition to any other right or remedy
which Landlord may have under this Lease or otherwise, Landlord
may, but shall not be obligated to, discharge the same either by
paying the amount claimed to be due or by procuring the discharge
of such lien by deposit or by bonding proceedings, and in any
such event Landlord shall be entitled, if Landlord so elects, to
defend the prosecution of an action for the foreclosure of such
lien by the lienor and to pay the amount of any judgment in favor
of the lienor with interest, costs and allowances included in
such judgment, and recover such sums plus interest from Tenant as
additional rent hereunder.
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XIII. CONDEMNATION
If there is any taking of all or any part of the
Demised Premises or any interest therein because of the exercise
of the power of eminent domain, whether by condemnation
proceedings, inverse condemnation, or otherwise, or if any
transfer of any part of the Demised Premises or any interest
therein is made in avoidance of the exercise of the power of
eminent domain (all of the foregoing being hereinafter referred
to as "taking") during the Lease term, the rights and obligations
of the parties with respect to such taking shall be as provided
in this Article XIII.
A. Total Taking. If there is a taking of all of the
Demised Premises, this Lease shall terminate on the date of such
taking.
B. Partial Taking. If more than twenty-five percent (25%)
of the total surface area of the Demised Premises shall be taken,
then Tenant shall be entitled to elect to terminate this Lease.
Tenant shall give written notice to Landlord of its election
within 30 days after the date that Tenant has received notice of
such taking.
C. Termination. If this Lease is terminated in accordance
with the provisions of this Article XIII, such termination shall
become effective as of the date actual physical possession is
taken by the condemnor. Subject to the applicable provisions of
this Article XIII, the parties shall be released from all further
liability hereunder, except that Tenant shall pay to Landlord all
sums that it may be obligated to pay to Landlord to and including
the effective date of termination plus the Restaurant
Reconstruction Fee.
D. Non-Termination. If this Lease is not terminated as
provided in this Article XIII, the monthly rent shall be reduced
in that proportion which the area of the portion of the Demised
Premises taken bears to the total area of the Demised Premises
immediately before the date of taking.
E. Award. Landlord and Tenant shall mutually cooperate in
prosecuting all proceedings necessary to obtain the highest
possible award, and shall share in the award as follows:
In the event of a total taking, Landlord shall first be
entitled to receive such portion of the award or awards as shall
represent compensation for the value of the land, or the part
thereof so taken, considered as vacant and unimproved, but taking
into account the discounted rental value due and payable to
Landlord through the end of the then current term of the Lease
using for this purpose to compute rent the average increase in
the Index from the Effective Date to the date of taking. In
addition, if such amounts have not theretofore been paid to
Landlord, then Landlord shall be paid an amount equal to the
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Restaurant Reconstruction Fee. If the award exceeds the amount
allocated to Landlord as provided above, then Tenant shall then
be entitled to receive the balance of the award. Provided,
however, that Tenant shall be entitled to make a separate claim
for and to receive compensation or damages for the unamortized
cost of Tenant's leasehold improvements, and trade fixtures and
equipment, and for removal and relocation costs.
In the event of a partial taking, Landlord shall be
paid that portion of the award or awards with interest thereon,
if any, paid by condemnor as shall represent compensation for the
value of the land, or the part thereof so taken, plus
consequential damages to the portion or portions of the Land not
so taken, considered as vacant and unimproved and encumbered by
this Lease. The remainder of the award or awards, if any, shall
be paid to Tenant to be utilized and paid by Tenant in the same
manner as insurance proceeds as provided in Article X.
XIV. TENANT'S PARENT GUARANTEE
Tenant is currently a wholly-owned subsidiary of Mirage
Resorts, Incorporated, a Nevada corporation ("MRI"). MRI is
executing this Lease as a guarantor of Tenant's obligations
hereunder, and by its execution of this Lease MRI hereby
covenants and agrees to guarantee full, prompt and faithful
performance by Tenant of all of its obligations to Landlord
hereunder. Upon any default of Tenant hereunder not cured within
the applicable time periods provided in Article XVI below, MRI
will upon written demand of Landlord, immediately pay to Landlord
the Rent or perform the other undertakings of Tenant hereunder
regardless of whether Landlord has taken any steps to enforce any
rights against Tenant to collect any of said sums or to enforce
performance, and regardless of any other condition or
contingency, together with any and all costs (including
reasonable attorneys' fees) that may be paid or incurred by
Landlord in enforcing any rights thereunder or hereunder.
The obligations, covenants, agreements and duties of
MRI under this Guarantee shall in no way be affected or impaired
by reason of the happening from time to time of any of the
following with respect to this Lease, or any other document
referred to therein or arising therefrom, either without notice
to or the further consent of MRI:
1. The extension, in whole or in part of the time for
the payment by Tenant of any sums owing or payable under the
Lease, or of the time of performance by Tenant of any of its
other obligations under the Lease or any other document referred
to therein or arising therefrom;
2. The modification, amendment, renewal, extension,
acceleration, or other change (whether material or otherwise) of
any of the obligations of Tenant under the Lease or any other
document referred to therein or arising therefrom;
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3. Any failure, omission, delay or lack on the part
of Landlord to enforce, assert or exercise any right, power or
remedy conferred on Landlord in the Lease or any other document
referred to therein or arising therefrom or otherwise;
4. The happening of any event of default under the
Lease or any-other document referred to therein or arising
therefrom;
5. The release of Tenant by operation of law from the
performance or observance of any agreement, covenant, term or
condition of the Lease or any other document referred to therein
or arising therefrom; the taking and holding of security for the
performance of the obligations guaranteed; and exchanging,
enforcing, waiving and releasing any such security; and applying
such security and directing the order or manner of sales thereof
by Landlord as it in its discretion may determine; or
6. Any other circumstances that might otherwise
constitute or result in a legal or equitable discharge of MRI.
MRI hereby waives any right to require Landlord to (a)
proceed against Tenant, (b) proceed against or exhaust any
security held from Tenant, or (c) pursue any other remedy in
Landlord's power whatsoever.
MRI hereby waives notice of acceptance of this
Guarantee and notice of any obligations or liabilities contracted
or incurred by Tenant, and presentment, demand, protest and
notice of dishonor. MRI also waives any right of subrogation
with respect to the liabilities and obligations of Tenant
guaranteed hereunder until all such liabilities and obligations
shall be satisfied in full. This Guarantee shall continue to be
effective or be reinstated as the case may be, if at any time
payment, or any part thereof of any amounts paid by Tenant under
this Lease or any other document referred to therein or arising
therefrom, is rescinded or must otherwise be restored or returned
by Landlord upon the insolvency, bankruptcy or reorganization of
Tenant or otherwise, all as though such payment had not been
made.
No failure or delay on the part of Landlord in exer-
cising any rights, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy, preclude any other or future
exercise thereof or the exercise of any other right, power or
remedy hereafter.
MRI agrees to pay reasonable attorneys' fees and all
other costs and expenses which may be incurred by Landlord in the
enforcement of this Guarantee, as the same may be determined by a
court of competent jurisdiction.
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(a) MRI shall have the option to withdraw this
Guarantee at such time as both the following events have occurred
and continue to exist as of the date of withdrawal of the
Guarantee: (i) Tenant has constructed, completed, opened for
business and is operating a hotel of at least 2,000 guest rooms
with appropriate casino and other public areas (the "Hotel") on
lands adjoining the Demised Premises; and (ii) Tenant has
achieved a Minimum Tangible Net Worth in an amount equal to the
greater of (A) Two Hundred Million Dollars ($200,000,000) or
(B) Two Hundred Million Dollars ($200,000,000) multiplied by a
fraction, the numerator of which shall be the Index as of such
date and the denominator of which shall be the Beginning Index
("Minimum Net Worth Amount"). In the event MRI elects to
withdraw this Guarantee pursuant to this subparagraph (a) and
Tenant's Tangible Net Worth thereafter falls below the Minimum
Net Worth Amount, then concurrently with the decrease in Tenant's
Tangible Net Worth, MRI shall either reinstate the Guarantee or
shall pay to Landlord the then computed Restaurant Reconstruction
Fee.
(b) MRI shall also have the option to withdraw
this Guarantee at such time as Tenant's leasehold estate in the
Demised Premises is held by a Qualified Tenant or a Qualified
Hotel Tenant. Provided however, if the Qualified Tenant is not
then operating the Hotel, it shall be a condition of the
withdrawal of the Guarantee that the Restaurant Reconstruction
Fee shall be concurrently paid to Landlord. Provided further, if
thereafter the Tangible Net Worth of the Qualified Tenant or
Qualified Hotel Tenant falls below the Minimum Net Worth Amount,
then concurrently with the decrease in the Qualified Tenant's or
Qualified Hotel Tenant's Tangible Net Worth below the Minimum Net
Worth Amount, the Qualified Tenant or Qualified Hotel Tenant, as
the case may be, shall pay to Landlord the then computed
Restaurant Reconstruction Fee if not theretofore paid.
A Qualified Tenant shall be a tenant unaffiliated in
any way with MRI, who then has a Tangible Net Worth equal to the
Minimum Net Worth Amount and who has continuously had a Tangible
Net Worth equal to the Minimum Net Worth Amount for at least the
five (5) consecutive years previous to the MRI Guarantee
withdrawal.
A Qualified Hotel Tenant shall be a tenant unaffiliated
in any way with MRI, who then owns and operates the Hotel, who
then has a Tangible Net Worth equal to the Minimum Net Worth
Amount and who for the five (5) consecutive years previous to the
MRI Guarantee withdrawal has continuously had a Tangible Net
Worth equal to at least fifty percent (50%) of the Minimum Net
Worth Amount.
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"Tangible Net Worth" shall mean the total assets of the
applicable entity (other than Intangible Assets) minus the total
liabilities of the applicable entity determined in accordance
with generally accepted accounting principles consistently
applied ("GAAP") and as reflected on a quarterly or annual
balance sheet of the applicable entity. "Intangible Assets"
shall mean assets that are considered intangible assets under
GAAP, including but not limited to customer lists, goodwill,
copyrights, trade names, trademarks and patents, if any.
If MRI withdraws its Guarantee pursuant to
subparagraph (a) above and if thereafter the Tangible Net Worth
of the Tenant falls below the Minimum Net Worth Amount, and the
Demised Premises are then improved with anything other than a
sign and roadway, then concurrently with the decrease in Tangible
Net Worth below the Minimum Net Worth Amount, MRI or the Tenant
shall either concurrently deposit into escrow with a local Nevada
bank selected by Landlord an amount equal to the then determined
Demolition Fee or MRI shall reinstate the Guarantee.
If MRI withdraws its Guarantee pursuant to
subparagraph (b) above and if thereafter the Tangible Net Worth
of the Qualified Tenant, the Qualified Hotel Tenant, or the
successor to either falls below the Minimum Net Worth Amount, and
the Demised Premises are then improved with anything other than a
sign and roadway, then concurrently with the decrease in Tangible
Net Worth below the Minimum Net Worth Amount, the Qualified
Tenant or Qualified Hotel Tenant or successor, as the case may
be, shall concurrently deposit into escrow with a local Nevada
bank selected by Landlord an amount equal to the then determined
Demolition Fee.
No matter which party makes the escrow deposit,
interest earned on the escrowed Demolition Fee shall be retained
in escrow as additional security for the obligation to demolish
any improvements on the Demised Premises and redeliver the
Demised Premises at the end of the Lease Term as a level building
pad as provided in Article XI. The depositor shall bear all
costs to establish and maintain such escrow. Taxes owing on such
earned interest shall be paid from accrued interest amounts held
in escrow.
If MRI desires to withdraw its Guarantee in accordance
with the foregoing provisions of this Article XIV, MRI shall
concurrently provide to Landlord financial statements which shall
disclose Tenant's then Tangible Net Worth or five (5) years of
financial statements for the Qualified Tenant or Qualified Hotel
Tenant, as the case may be. The information contained in such
statements shall be consistent with financial information
required to be filed or reported to gaming or tax authorities of
the State of Nevada, or the Securities and Exchange Commission,
which filings and reports shall be made available to Landlord for
verification. Further, after withdrawal of the MRI Guarantee,
Tenant, the Qualified Tenant, or the Qualified Hotel Tenant, as
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the case may be, shall be required to furnish Landlord not less
often than annually with similar financial statements. Provided
however, if in connection with the withdrawal of the MRI
Guarantee or at any time after withdrawal of the MRI Guarantee,
Landlord has reasonable doubts as to the net worth of the then
tenant of the Demised Premises, Landlord shall have the right to
require financial statements for such tenant prepared by such
tenant and certified by independent third-party auditors which
shall disclose such tenant's then Tangible Net Worth.
XV. ASSIGNMENT OF LEASE BY TENANT; LEASEHOLD ENCUMBRANCES
A. Assignment. Except as provided below, until such time
as Tenant has completed the Hotel on land adjoining the Demised
Premises, and Tenant achieves and maintains a Tangible Net Worth
greater than the required Minimum Net Worth Amount, Tenant shall
have no right to assign, transfer, hypothecate or sublease
("Transfer") any or all of the Demised Premises without the prior
written consent of Landlord which may be granted or withheld at
Landlord's sole and uncontrolled discretion.
Notwithstanding the foregoing, Tenant shall have the
right prior to the completion of the Hotel by Tenant, upon
satisfaction of the conditions set forth in (a) through (d) of
subsection 2 below, to Transfer this Lease without Landlord's
prior written consent to (i) an Affiliate, (ii) a Qualified
Tenant who assumes all of Tenant's obligations under this Lease
and who concurrently pays to Landlord the required Restaurant
Reconstruction Fee and deposits in escrow the then determined
Demolition Fee if and to the extent such fees have not been
theretofore paid or deposited, or (iii) a sublessee of the
Demised Premises.
Following the completion of the Hotel, Tenant shall
have the right to Transfer the Demised Premises or any part
thereof on the following terms and conditions:
1. If the Transfer is a sublease or to an Affiliate
or to a Qualified Tenant who is then operating the Hotel or to a
Qualified Hotel Tenant, then Tenant shall, upon satisfaction of
the conditions set forth in (a) through (d) of subsection 2
below, have the right to make any such Transfer without obtaining
the prior written consent of Landlord;
2. On the other hand, if the Transfer is to a
Qualified Tenant who is not then operating the Hotel or to a
third party who does not meet any of the tests set forth in
paragraph 1 above or this paragraph 2, such Transfer shall
require the prior written consent of Landlord which may be
withheld or granted in the sole discretion of Landlord, provided
however, upon satisfaction of the conditions set forth in (a)
through (d) of subsection 2 below, (i) if the transferee is a
Qualified Tenant who is not then operating the Hotel, then if the
Tenant or such Qualified Tenant transferee concurrently pays to
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Landlord the required Restaurant Reconstruction Fee and
concurrently deposits in escrow the then determined Demolition
Fee (to the extent such fees have not been theretofore paid or
deposited), then the Transfer may be made without Landlord's
prior consent; or (ii) if the transferee is not a Qualified
Tenant then operating the Hotel, then the Transfer may also be
made without Landlord's prior consent, if (A) the Tenant or such
transferee concurrently pays to Landlord the required Restaurant
Reconstruction Fee and concurrently deposits in escrow the then
determined Demolition Fee (if such fees have not theretofore been
paid or deposited) and (B) the transferor delivers to Landlord a
written undertaking that if the transferee rejects the Lease in a
bankruptcy proceeding, the transferor shall waive any claim that
the Lease has thereby been terminated and shall remain liable for
the Tenant's obligations under this Lease the same as if the
transferee had simply breached the Lease and no bankruptcy had
been filed. Provided further, if the Transfer is to a successor
Qualified Tenant (i.e.: a second or later Qualified Tenant),
whether or not such successor tenant is then operating the Hotel,
the then tenant or such transferee shall (unless the same has
been previously paid or deposited) be required to concurrently
pay to Landlord the Restaurant Reconstruction Fee and deposit in
escrow the Demolition Fee in which event the Transfer may be made
without Landlord's prior consent. If such payment and deposit is
not made, the Transfer shall require Landlord's prior written
consent which shall not be unreasonably withheld.
In any event, each transferee must assume all of
Tenant's obligations under this Lease.
No Transfer in accordance with this Article XV, shall
relieve or release MRI of its obligations as guarantor of this
Lease unless the conditions of Article XIV as to such release
have been or are concurrently satisfied. No Transfer shall
release Tenant and/or any successor Tenant of any obligations
under this Lease, including but not limited to the obligations
with respect to payments of the Restaurant Reconstruction Fee and
the Demolition Fee to the extent not theretofore paid to Landlord
or deposited in escrow as the case may be unless the transferee
is either (i) a Qualified Tenant who is then operating the Hotel
or a Qualified Hotel Tenant or (ii) a Qualified Tenant who is not
operating the Hotel, and such Qualified Tenant concurrently pays
to Landlord the required Restaurant Reconstruction Fee and
deposits in escrow the then determined Demolition Fee if not
theretofore paid.
In the event of any Transfer:
(a) Tenant shall give Landlord thirty (30) days
prior notice of the proposed Transfer with appropriate
documentation as to the proposed transferee's proposed use of the
Demised Premises, the financial condition of the proposed
transferee and its history, business description and
qualifications to operate the improvements, and business
reputation.
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(b) The proposed transferee (other than a
sublessee) shall assume all covenants and conditions to be
performed by Tenant pursuant to this Lease accruing from and
after the date of such Transfer by execution of an instrument in
form and substance reasonably satisfactory to Landlord; provided,
however, that the proposed transferee shall not be required to
indemnify or defend Landlord against any liabilities or damages
resulting from any breach by a prior Tenant. Upon consummation
of any assignment of the leasehold estate, the assignee shall
cause to be recorded in the official records of Clark County,
Nevada, an appropriate instrument reflecting such assignment.
(c) No uncured Event of Default shall exist
hereunder on the date of Transfer.
(d) Tenant shall have paid, or caused to be paid,
to Landlord all reasonable costs and expenses incurred by
Landlord in connection with the Transfer, if any, including
without limitation all recording fees, transfer and other taxes,
attorneys' fees, escrow fees and fees for title insurance and
similar charges.
(e) Nothing contained in this subparagraph A
shall be deemed to prohibit Tenant's right to create Leasehold
Mortgages.
For purposes of this Lease, an Affiliate means any
person which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common
control with Tenant or MRI. Control means the possession of the
power, directly or indirectly, to determine the direction of the
management and policies of a person, whether through ownership of
voting securities, by contract, family relationship or otherwise.
B. Leasehold Mortgages. Landlord and Tenant agree that,
notwithstanding the provisions of subparagraph A above, Tenant
shall have the right, without Landlord's consent (i) to mortgage
or hypothecate Tenant's interest in this Lease, and any
amendments thereto, to an institutional lender or lenders such as
banks, savings associations, insurance companies or pension
funds, or a group thereof ("Leasehold Mortgagee"), by a recorded
mortgage, deed of trust, deed to secure debt, collateral
assignment of lease or other similar instrument creating a lien
or other encumbrance on Tenant's leasehold estate, as provided in
Nevada Revised Statutes 107.025 (the "Leasehold Mortgage");
provided that no Leasehold Mortgage shall encumber Landlord's
reversionary interest in the Demised Premises or Landlord's fee
interest in the Demised Premises or have priority over or affect
Landlord's fee or reversionary interest in the Demised Premises,
and/or (ii) to pledge the stock of Tenant as security for any
loan to be granted to Tenant by Leasehold Mortgagee.
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Upon notice from Leasehold Mortgagee to do so, Landlord
shall give to Leasehold Mortgagee copies of all notices of
default at the same time as, and whenever, Landlord shall give
the same to Tenant.
Prior to Landlord's exercise of any of its remedies
under this Lease, including terminating this Lease or Tenant's
right of possession hereunder, Leasehold Mortgagee shall have the
right to remedy the default of Tenant under the Lease, or to
cause the subject default under the Lease to be remedied within
the time period, if any, provided hereunder for Tenant to do so,
plus an additional ten (10) days in the case of a monetary
default or an additional thirty (30) days in the case of a non-
monetary default.
Landlord agrees to accept any required Tenant
performance from Leasehold Mortgagee as if Tenant had tendered
such performance, provided, however, that unless Leasehold
Mortgagee otherwise agrees in writing, any performance or partial
performance by Leasehold Mortgagee under the Lease shall not
constitute an assumption of Tenant's obligations hereunder.
The exercise and non-exercise of remedies under the
Leasehold Mortgage is solely at the election of Leasehold
Mortgagee. If Leasehold Mortgagee elects to exercise any of such
remedies by reason of Tenant's default under the Lease or the
Leasehold Mortgage, Leasehold Mortgagee is not obligated to
pursue such remedies if Tenant's defaults have been corrected or
cured.
In the event of termination of the Lease for any reason
other than expiration of the Lease Term, Landlord shall serve
upon Leasehold Mortgagee written notice that the Lease has been
terminated, together with a statement of any and all tenant
defaults and amounts which would at that time be due under the
Lease but for such termination, and of all other defaults, if any
under the Lease then known to Landlord. Leasehold Mortgagee, if
it or the group of lenders collectively then has a tangible net
worth of at least the Minimum Net Worth Amount, and if it
concurrently pays any and all amounts which would at that time be
due under the Lease but for such termination and if it
concurrently cures all other then existing defaults under the
Lease ("Qualifying Leasehold Mortgagee"), shall thereupon have
the option to obtain a new lease from Landlord in accordance with
and upon the following terms and conditions:
(a) Upon the written request of Qualifying
Leasehold Mortgagee, made within thirty (30) days after service
upon such Qualifying Leasehold Mortgagee of such notice that the
Lease has been terminated, Landlord shall enter into a new lease
of the Demised Premises with such Qualifying Leasehold Mortgagee
or with a designee of the Qualifying Leasehold Mortgagee,
provided there is concurrently paid to Landlord, if not
previously paid, the amount of the Restaurant Reconstruction Fee
and the Demolition Fee;
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(b) Such new lease shall be entered into at the
reasonable cost of such Qualifying Leasehold Mortgagee, shall be
effective as at the date of termination of the Lease, and shall
be for the remainder of the term of the Lease and at the same
rent and upon all the agreements, terms, covenants and conditions
hereof including any applicable rights of renewal. Such new
lease shall require the Qualifying Leasehold Mortgagee to perform
any unfulfilled obligation of Tenant under the Lease which is
reasonably susceptible of being performed by it. Upon the
execution of such new lease, the Qualifying Leasehold Mortgagee
shall (i) pay any and all sums which would at the time of the
execution thereof be due under the Lease but for such
termination, (ii) cure any default then susceptible of being
cured, and (iii) pay all reasonable expenses, including
reasonable counsel fees, court costs and other reasonable
disbursements incurred by Landlord in connection with such
defaults, termination, recovery of possession of the Demised
Premises and the preparation, execution and delivery of such new
lease. Upon the execution of such new lease, Landlord shall
allow the Qualifying Leasehold Mortgagee an adjustment in an
amount equal to any net income derived by Landlord from the
Demised Premises during the period from the date of termination
of the Lease to the date of execution of such new lease, if any.
Upon the exercise of any of the remedies contained in
the Leasehold Mortgage by a Leasehold Mortgagee such that the
interest of Tenant is foreclosed upon, sold, transferred or
otherwise terminated by Leasehold Mortgagee, Landlord agrees:
1. That any such termination or transfer of Tenant's
interest in the Lease shall not terminate the Lease, but the
Lease shall be fully assignable to any one or more of the
following: (1) a Qualifying Leasehold Mortgagee, or (2) a
designee of a Qualifying Leasehold Mortgagee or a non-Qualifying
Leasehold Mortgagee, but only if as a condition to such
assignment to such designee or non-Qualifying Leasehold
Mortgagee, the Leasehold Mortgagee or its designee shall pay to
Landlord any then unpaid amount of the Restaurant Reconstruction
Fee and the Demolition Fee as provided in Article XI. In any
event, such assignee shall assume all of Tenant's obligations
under the Lease;
2. To execute such reasonable instruments as may be
necessary or desirable to evidence or effectuate the transfer
described in the preceding subclause;
3. Upon the request of the Qualifying Leasehold
Mortgagee to execute a new lease with the Qualifying Leasehold
Mortgagee upon the same terms and conditions as the Lease.
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During such period of time as any Leasehold Mortgagee
is actually the owner of Tenant's interest in the Lease, such
Leasehold Mortgagee shall be liable to perform any of Tenant's
obligations under the Lease. In the event that Leasehold
Mortgagee shall at any time hold Tenant's interest under the
Lease or any new lease entered into in replacement thereof then,
upon any sale, transfer or assignment thereof by Leasehold
Mortgagee to (i) a designated assignee or transferee, having a
Tangible Net Worth in excess of the Minimum Net Worth Amount who
assumes all of Tenant's obligations under the Lease, or (ii) if
such designated assignee or transferee has a Tangible Net Worth
in an amount of less than the Minimum Net Worth if Leasehold
Mortgagee or such designee pays to Landlord the then unpaid
amount of the Restaurant Reconstruction Fee and Demolition Fee,
and such assignee also assumes all of Tenant's obligations under
this Lease, then such transfer shall automatically release the
Leasehold Mortgagee from any further liability under the Lease or
any successor lease occurring after the date of such sale,
transfer or assignment.
In the event that a trustee in bankruptcy, or Tenant as
debtor-in-possession under the Federal Bankruptcy Code (the
"Code"), as now or hereafter in effect, or any similar such
officer or official shall exercise any right or power to reject
the Lease under the provisions of the Code or any similar law,
Landlord agrees that, if Leasehold Mortgagee can obtain the
approval of the Bankruptcy Court having applicable jurisdiction
over Tenant to the same prior to terminating the Lease, Landlord,
at the option of Leasehold Mortgagee, will enter into a new lease
with Leasehold Mortgagee or its nominee upon the terms and
conditions of the Lease as provided hereinabove. Rejection of
the Lease by Landlord or on Landlord's behalf under the Code
shall not operate to terminate Leasehold Mortgagee's security in
the Lease, but such interest shall attach to Tenant's rights to
possession and other rights under the provisions of Section
365(h) of the Code.
Leasehold Mortgagee shall have the right, without
Landlord's consent, to foreclose the Leasehold Mortgage or accept
an assignment of Tenant's interest in this Lease in lieu of
foreclosure of the Leasehold Mortgage pursuant to any loan
documents or any applicable law. In the event Leasehold
Mortgagee forecloses the Leasehold Mortgage, or accepts an
assignment of the Lease in lieu of foreclosure of the Leasehold
Mortgage pursuant to any loan documents or any applicable law,
and in such event Leasehold Mortgagee acquires Tenant's interest
in the Lease either as a purchaser at any foreclosure sale, or by
reason of the assignment of the Lease in lieu of foreclosure, or
otherwise, then Leasehold Mortgagee shall have the right to
further assign the Lease subject to the terms of this Lease.
Nothing in this Section shall limit compliance with any
applicable notice and cure period requirements, or the right of
Landlord to require performance hereunder during any foreclosure
proceeding.
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Landlord hereby consents to Tenant's grant to Leasehold
Mortgagee of a security interest in any personal property of
Tenant (for purposes of this Section, the "Personal Property
Collateral") and recognizes that each and every right which
Landlord now has or hereafter may have, either to levy upon such
Personal Property Collateral or to claim or assert title to the
Personal Property Collateral, whether under the Lease or the laws
of the State of Nevada, or under any other applicable federal,
state, municipal or local law, ordinance or otherwise, whether by
reason of a default under the Lease or otherwise, shall be
subject and subordinate in every respect to all of the terms,
provisions and conditions of the Leasehold Mortgage as to such
Personal Property Collateral and to the Leasehold Mortgagee's
security interest in the Personal Property Collateral.
Leasehold Mortgagee may, without affecting the validity
of this Section, extend the time of payment of any indebtedness
of Tenant to Leasehold Mortgagee or alter the performance of any
of the terms and conditions of any agreement between Tenant and
Leasehold Mortgagee and any loan documents, without the consent
of Landlord and without in any manner whatsoever impairing or
affecting the Leasehold Mortgage or the security interest in
Tenant's interest in the Demised Premises or the pledge of the
stock of Tenant.
The provisions of this Section are binding upon and
inure to the benefit of the parties hereto, their successors and
assigns, including specifically a Leasehold Mortgagee, on its
behalf and as agent for other lenders, and its successors and
assigns. Any other lender (i) who makes a loan to Tenant, all or
a portion of the proceeds of which are used to pay in full all
amounts due to Leasehold Mortgagee, and (ii) whose loan is
secured by a first priority security interest in Tenant's
interest hereunder, shall thereafter be recognized as the
"Leasehold Mortgagee," as shall any such subsequent generation
refinancier.
Notwithstanding anything to the contrary contained
herein, any time periods within which Leasehold Mortgagee is
required to act hereunder shall be extended by a period equal to
the time Leasehold Mortgagee is restrained from exercising its
remedies under the Leasehold Mortgage pursuant to the automatic
or any other stay provision or order or injunction issued or in
force pursuant to the Code.
Notwithstanding anything contained herein to the
contrary, Landlord retains the right to mortgage, pledge,
hypothecate or otherwise assign as security all or any portion of
Landlord's right, title and interest in and to the fee to the
Demised Premises and improvements or arising under this Lease or
pertaining to its reversionary estate.
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When, under this Lease, Tenant is required to execute a
document, Tenant shall also cause necessary ancillary documents
to be executed and delivered to Leasehold Mortgagee (and/or any
encumbrance holder) where necessary to fully effectuate the
purposes hereof.
XVI. DEFAULT; REMEDIES
A. Events of Default. Should default be made in the
payment of any of the rent or other obligations to be paid by
Tenant hereunder when due, which failure shall continue for ten
(10) days after written notice, or should Tenant or its officers,
agents or employees violate any of the other terms, conditions or
provisions of this Lease, which failure shall continue for thirty
(30) days after written notice (unless the nature of the
nonmonetary default is such that it cannot be cured within such
thirty (30) days, in which event the 30-day period shall be
extended for a period of time necessary to effectuate such cure
conditioned upon Tenant's commencement of the cure within such
30-day period of time and its continuous and diligent effort to
complete the cure as soon as reasonably practicable, or should
Tenant vacate or abandon the leased premises or any part thereof,
Landlord may, at Landlord's option at any time thereafter without
terminating the Lease, perform such duty or obligation on
Tenant's behalf and/or continue the Lease and recover rent as it
becomes due, and/or re-enter and take possession of said
premises, remove Tenant's signs and property therefrom, place
Tenant's property in storage in a public warehouse at the expense
and risk of Tenant, make any repairs, changes, alterations or
additions in, to or on said premises which may be necessary or
convenient, re-let said premises or any part thereof for the
account of Tenant, on such terms, conditions and rentals as
Landlord may deem proper. Tenant hereby waives any provisions of
law otherwise limiting the foregoing provisions or any other
rights now or hereafter given Tenant by law after default.
Further, Landlord may, at Landlord's option, at any time
thereafter either terminate and cancel this Lease and Tenant's
right to possession of the Demised Premises, or apply the
proceeds that may be obtained from re-letting the premises after
the deduction of costs and expenses as the rent due under this
Lease, and hold Tenant liable for any balance of rent which may
remain unsatisfied and unpaid. Additionally, Landlord may in the
event of Tenant's default pursue any remedy now or hereafter
available to Landlord under the Laws of Nevada.
If Landlord declares this Lease terminated, Tenant
shall immediately surrender the Demised Premises to Landlord and
Landlord may re-enter the Demised Premises by process of law,
eject all parties in possession thereof therefrom and repossess
said Demised Premises, in which event, Landlord shall have the
right to recover from Tenant: (1) the worth at the time of the
award of the unpaid rent that had been earned at the time of
termination of this Lease; (2) the worth, at the time of the
award, of the amount by which the unpaid rent that would have
been earned after the date of termination of this Lease until the
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time of award exceeds the amount of loss of rent that Tenant
proves could have been reasonably avoided; (3) the worth, at the
time of the award, of the amount by which the unpaid rent for the
balance of the term after the time of award exceeds the amount of
the loss of rent that Tenant proves could have reasonably been
avoided; (4) the then amount of the Restaurant Reconstruction Fee
and the Demolition Fee; and (5) any other amount, and court
costs, necessary to compensate Landlord for all detriment
proximately caused by Tenant's default, including but not limited
to the cost of recovering possession, expenses, of reletting
including necessary renovation and alterations, Tenant
concessions and brokerage fees. The term "the worth at the time
of the award," as used in (1) and (2) of this subparagraph A
above is to be computed by allowing interest at the Default Rate;
the term "the worth, at the time of the award," as referred to in
subparagraph (3) of this subparagraph A, is to be computed by
discounting the amount at the discount rate of the Federal
Reserve Bank of San Francisco, California at the time of the
award, plus one percent (1%), or the Default Rate, whichever is
the lesser.
Time is of the essence of this Lease. All rent in
arrears and all amounts otherwise payable hereunder as if rent
which are in arrears shall bear interest at the statutory rate
then provided by law for unsatisfied judgments at the rate
established pursuant to NRS 17.130 from their respective due
dates until paid, provided that this shall in no way limit,
lessen, or affect any claim for damages by Landlord for any
breach or default by Tenant. In this latter connection, Tenant
hereby acknowledges that late payment by Tenant to Landlord of
rent and other sums due hereunder will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which
will be extremely difficult to ascertain. Such costs include,
but are not limited to, processing and accounting charges, and
late charges which may be imposed on Landlord by the terms of any
mortgage or trust deed covering the Demised Premises.
Accordingly, if any installment of rent or any other sum due from
Tenant shall not be received by Landlord or Landlord's designee
within ten (10) days after notice to Tenant that such amount
shall be due, then, without any requirement for notice to Tenant,
and in addition to interest at the rate of two percent (2%) over
then Bank of America prime rate of interest (the "Default Rate")
on the amount unpaid from date due to date paid, Tenant shall pay
to Landlord a late charge equal to three percent (3%) of such
overdue amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Landlord
will incur by reason of late payment by Tenant. Acceptance of
such late charge by Landlord shall in no event constitute a
waiver of Tenant's default with respect to such overdue amount,
nor prevent Landlord from exercising any of the other rights and
remedies granted hereunder. In the event that a late charge is
payable hereunder, whether or not collected, for three (3)
installments of rent in any one (1) calendar year, then rent
shall automatically become due and payable quarterly in advance,
rather than monthly, notwithstanding any other provision of this
Lease to the contrary.
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B. Impounds. In the event that a late charge is payable
hereunder, whether or not collected, for three (3) installments
of rent in any one (1) calendar year, Tenant shall pay to
Landlord, if Landlord shall so request, in addition to any other
payments required under this Lease, a monthly advance
installment, payable at the same time as the monthly rent, as
estimated by Landlord, for real property taxes on the Demised
Premises which are payable by Tenant under the terms of this
Lease. Such fund shall be established to insure payment when
due, before delinquency of any or all such real property taxes.
If the amounts paid to Landlord by Tenant under the provisions of
this paragraph are insufficient to discharge the obligations of
Tenant to pay such real property taxes as the same become due,
Tenant shall pay to Landlord, upon Landlord's demand, such
additional sums necessary to pay such obligations. All moneys
paid to Landlord under this paragraph may be intermingled with
other moneys of Landlord and shall not bear interest. In the
event of a default in the obligations of Tenant to perform under
this Lease, then any balance remaining from funds paid to
Landlord under the provisions of this paragraph may, at the
option of Landlord, be applied to the payment of any monetary
default of Tenant in lieu of being applied to the payment of real
property taxes.
XVII. WAIVER OF CLAIMS AGAINST LANDLORD
Landlord shall not be liable and Tenant hereby waives
any and all claims for damages which may arise by action of
Landlord in re-entering and taking possession of the premises as
herein provided, and all claims for damages which may result from
injury to the premises or improvements thereon in connection
therewith except for Landlord's gross negligence or willful
wrongful actions.
XVIII. ATTORNEYS' FEES
The prevailing party in any suit involving the rights,
duties and obligations of the parties hereto under this Lease
shall be entitled in any judgment so recovered to reasonable
attorneys' fees to be fixed by the Court.
XIX. WAIVERS
Landlord's waiver of performance of any obligations of
Tenant shall not be construed as a waiver of performance by
Tenant due at any subsequent time under this Lease. No waiver
shall be binding or effective between the parties and no change
or modification of this Lease shall be effective unless the same
is in writing and is signed by the parties hereto.
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XX. SIGNAGE
Tenant shall have the right to maintain at its own
expense a lighted exterior tower sign on the Demised Premises and
such other signs advertising its business on the Demised Premises
of such color, size, form and location as it may desire; provided
however, such signs shall at all times conform to the
requirements of the governmental authorities having jurisdiction
over the Demised Premises. Tenant shall at Landlord's election
remove such existing signs at Tenant's sole cost on the
expiration of this Lease and Tenant shall restore any damage to
the remainder of the Demised Premises caused by such removal.
XXI. INSPECTION OF DEMISED PREMISES
Landlord and its authorized agents shall be entitled to
enter the Demised Premises at reasonable times after reasonable
notice, except in case of emergency, for the following purposes:
inspecting them, showing them to prospective purchasers, tenants
and lenders, and posting such notices as may be required by law
to protect Landlord's interest in the Demised Premises.
XXII. ABANDONED PROPERTY
Any personal property of Tenant or any subtenant which
shall remain on the Demised Premises after the termination of
this Lease and the removal of Tenant and such subtenant from the
Demised Premises may, at the option of Landlord, be deemed to
have been abandoned by Tenant or such subtenant and either may be
retained by Landlord as its property or be disposed of, without
accountability, in such manner as Landlord may see fit. However,
Landlord shall also have the right to require Tenant or any
subtenant to remove any such personal property at any such time
at Tenant's own cost and expense, provided that Landlord shall
give Tenant written notice requesting the removal of the personal
property of Tenant or such subtenant from the Demised Premises.
XXIII. COVENANT OF QUIET ENJOYMENT
Landlord covenants and agrees that so long as Tenant
shall comply with the terms and conditions of this Lease, it
shall quietly and peaceably enjoy possession of the Demised
Premises, free from any claims or interference with its
possession and use of the Demised Premises by Landlord or any
persons claiming under Landlord.
XXIV. NONDISTURBANCE
In the event Landlord shall encumber its reversionary
fee interest in the Demised Premises, such mortgage or trust deed
shall contain a provision to the effect that the exercise of any
remedies thereunder shall not affect the rights of Tenant or any
Leasehold Mortgagee hereunder.
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XXV. BINDING EFFECT
The terms and conditions of this Lease shall bind and
inure to the benefit of the parties hereto and their respective
heirs, devisees, personal representatives, successors and assigns
of the parties hereto.
XXVI. NOTICES
Rents are to be paid to Landlord and any notices or
communications are to be directed to Landlord at the following
address:
MKB Company,
a Nevada Limited Liability Company
c/o Jerome Mack
Thomas and Mack Company
2300 West Sahara Boulevard
Las Vegas, Nevada 89102
and communications to Tenant shall be addressed as follows:
Beau Rivage
c/o Mirage Resorts, Incorporated
3400 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Attention: General Counsel's Office
Either party may from time to time change the mailing address by
written notice to the other. All notices shall be in writing and
personally delivered or sent by certified U.S. mail, postage
prepaid, return receipt requested.
XXVII. GOVERNING LAW
This Lease shall be governed by the laws of the State
of Nevada.
XXVIII. HAZARDOUS MATERIALS
A. Hazardous Materials. "Hazardous Materials" means and
includes petroleum, asbestos, polychlorinated biphenyls, urea
formaldehyde, and any flammable explosives, radioactive materials
or hazardous, toxic or dangerous wastes, substances or related
materials or any other chemicals, materials or substances,
exposure to which is prohibited, limited or regulated by any
federal, state, county, regional or local authority, including,
but not limited to, substances defined as such in (or for
purposes of) Comprehensive Environmental Response, Compensation,
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and Liability Act, as amended (42 U.S.C. Section 9601, et seq.);
the Hazardous Materials Transportation Act (49 U.S.C. Section
1801, S& sec.); the Resource Conservation and Recovery Act (42
U.S.C. Section 6901, et seq.); and any so-called "Superfund" or
"Superlien" law, or any other federal, state or local statute,
law, ordinance, code, rule, regulation, order or decree
regulating, relating to or imposing liability or standards of
conduct concerning any hazardous, toxic or dangerous waste,
substance or material.
B. Hazardous Materials Laws. "Hazardous Materials Laws"
means all federal, state and local environmental laws, ordinances
and regulations relating to Hazardous Materials and applicable to
the Demised Premises the violation of which would have a material
adverse impact upon the Demised Premises.
C. Landlord's Limited Warranty. As of the Effective Date,
Landlord represents and warrants that it has not received any
notices from applicable governmental authority of the existence
of Hazardous Materials on the Demised Premises and that to its
knowledge, but without any duty of investigation, it knows of no
Hazardous Materials on the Demised Premises.
D. Use of Hazardous Materials. Tenant shall keep and
maintain the Demised Premises in compliance with any and all
Hazardous Materials Laws. Tenant shall not cause or permit the
use, generation, manufacture, storage or disposal on, under or
about the Demised Premises, or the transportation to or from the
Demised Premises, of any Hazardous Materials in violation of any
Hazardous Materials Laws.
E. Tenant's Indemnity Obligations. If Tenant breaches the
obligations stated in subparagraph D above or if Hazardous
Materials are used, generated, manufactured, stored or disposed
of on, under or about the Demised Premises after the Effective
Date, or enter upon or migrate onto the Demised Premises after
the Effective Date from nearby properties, then Tenant shall at
Tenant's cost and expense remove the same, and Tenant shall
indemnify, defend and hold Landlord harmless from and against any
and all damage, cost, loss, liability and expense (including
reasonable attorneys' fees) which may be incurred by Landlord by
reason of, resulting from, in connection with, or arising in any
manner whatsoever as a result of the use, generation,
manufacture, storage, disposal, release or migration of any such
Hazardous Materials on or from or to the Demised Premises.
Further, Tenant shall be responsible for the removal of all
Hazardous Materials located on the Demised Premises, whether the
existence of same occurred prior to or after the Effective Date,
at its sole cost and expense and shall indemnify, defend and hold
Landlord harmless from any and all damage, cost, loss, liability
and expense (including reasonable attorneys' fees) which may be
incurred by Landlord as a result of the existence of such
Hazardous Materials.
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Tenant's indemnity obligations shall include, but not
be limited to, all liabilities, losses, claims, demands,
penalties, fines, settlements, damages, response, remedial,
closure or inspection costs, and any expenses (including, without
limit, attorney and consultant fees, investigation expenses, and
laboratory and litigation costs) of whatever kind or nature which
are incurred by Landlord, and any personal injuries or property
damages, real or personal, any violations of law or of orders,
regulations, requirements, or demands of governmental
authorities, and any lawsuit brought or threatened, settlement
reached, or government order arising out of or in any way related
to the existence of Hazardous Materials on the Demised Premises
as of the Commencement Date or the use, generation, manufacture,
storage, disposal, release or migration of Hazardous Materials on
or onto the Demised Premises after the Commencement Date,
including but not limited to remediation costs and third-party
claims.
F. Notice. Landlord agrees to give prompt written notice
to Tenant with respect to any suit or claim initiated or
threatened to be initiated against Landlord which Landlord has
reason to believe is likely to give rise to a claim for indemnity
hereunder, and Tenant shall promptly proceed to provide an
appropriate defense, compromise, or settlement of such suit or
claim at its sole expense; provided, however, that Landlord shall
be entitled to participate in and approve such defense,
compromise, or settlement which approval shall not be
unreasonably withheld or delayed. If Tenant shall fail, however,
in Landlord's reasonable judgment, to take reasonable and
appropriate action to defend, compromise, or settle any suit or
claim covered by Tenant's indemnity obligations described in this
Article XXVIII, Landlord shall have the right promptly to hire
counsel at Tenant's sole expense to carry out such defense,
compromise, or settlement, which expenses, as well as payments in
satisfaction, settlement or compromise of such suit or claim,
shall be immediately due and payable to Landlord upon receipt by
Tenant of an invoice therefor.
G. Remediation by Tenant and Survival. Without limiting
the foregoing, if Hazardous Materials exist on the Demised
Premises as of the Commencement Date, or if Tenant, its agents,
contractors, guests, invitees or Subtenants cause or permit
Hazardous Materials to be used, generated, manufactured, stored,
disposed of or released on the Demised Premises during the term
of this Lease in violation of any Hazardous Material Laws, or if
Hazardous Materials migrate onto the Demised Premises or offsite
from the Demised Premises, Tenant shall promptly take all actions
at its sole expense as are required by any environmental agency
having jurisdiction to comply with all laws and regulations
governing such use, generation, manufacture, storage, disposal or
release of such Hazardous Materials and/or to remediate the
condition created by such Hazardous Materials; provided that
except in an emergency Landlord's approval of such actions shall
first be obtained, which approval shall not be unreasonably
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withheld. The indemnities of Tenant provided in this Article
XXVIII shall survive the expiration or earlier termination of
this Lease and the assignment by Tenant of the leasehold estate
created hereby. Provided however, if Landlord fails to assert a
claim, suit or demand against Tenant pursuant to this
Article XXVIII within two (2) years after the expiration or
earlier termination of this Lease, then any and all obligations
of Tenant pursuant to this Article XXVIII shall automatically
cease and terminate. The covenants and undertakings of Tenant
hereunder shall be binding upon Tenant's successors and assigns
for the same two (2) year period.
H. Disclosure. Within ten (10) business days after the
receipt of written notice thereof, Tenant shall advise Landlord
and Landlord shall advise Tenant, as the case may be, in writing
of (i) any and all notices of enforcement or other governmental
or regulatory actions pursuant to which cleanup or remediation of
Hazardous Materials on the Demised Premises will be required, and
(ii) all written claims made by any third party against Tenant or
Landlord, as the case may be, or the Demised Premises relating to
damage, contribution, cost recovery compensation, loss or injury
resulting from Hazardous Materials on the Demised Premises.
Tenant shall disclose to Landlord the names of each Subtenant
whose business use under its Sublease includes the storage, use,
manufacture, generation, or disposal of Hazardous Materials on
the Demised Premises in amounts for which a permit is required to
be obtained pursuant to applicable Hazardous Materials Laws or
for which reports must be filed with governmental agencies.
I. Inspection. Landlord and its agents shall have the
right, but not the duty, at Landlord's sole cost and expense to
conduct reasonable inspections of the Demised Premises, to
determine whether Tenant (or its Subtenants) are complying with
this Article XXVIII. Such inspections shall be performed during
business hours, upon reasonable prior notice to Tenant, and shall
be accomplished in a manner reasonably calculated not to disturb
existing business operations of Tenant or any Subtenant.
Landlord shall use its best efforts to minimize interference with
the business of Tenant and Subtenants being conducted on the
Demised Premises but shall not be liable for any reasonable
interference caused thereby. If, as a result of any such
inspection, Landlord determines, in its reasonable judgment, that
Tenant or its Subtenants are not in compliance with this Article
XXVIII, Landlord shall promptly notify Tenant in writing of the
event or situation which gives rise to Tenant's or a Subtenant's
violation of such Section. Unless Tenant's or a Subtenant's
violation of this Article XXVIII creates an emergency situation,
in which event Tenant shall immediately take such action as may
be required by the nature of such situation to remedy the same
and if Tenant fails to do so Landlord shall have the right to
enter upon the Demised Premises and to take such action as
Landlord deems appropriate in its reasonable judgment to remedy
or correct such emergency situation, Tenant shall within sixty
(60) days after the receipt of notice of such violation from
-43-
<PAGE>
Landlord (provided that Tenant will, in any event proceed
diligently), submit to Landlord a written plan setting forth a
general description of the action that Tenant proposes to take
with respect thereto. The plan shall be subject to Landlord's
written approval, which approval shall not be unreasonably
withheld or delayed. Landlord shall notify Tenant in writing of
its approval or disapproval of the plan within fifteen (15) days
after receipt thereof by Landlord. If Landlord disapproves the
plan, Landlord's notice to Tenant of such disapproval shall
include a detailed explanation of the reasons therefor. Landlord
shall have no right to disapprove any plan if such plan is
approved by or is otherwise satisfactory to all environmental
agencies having and exercising jurisdiction with respect to the
matters which are the subject of the plan; however, Tenant shall
nonetheless provide a copy of such plan to Landlord. Within
thirty (30) days after receipt of such notice of disapproval;
Tenant shall submit to Landlord a revised plan that remedies the
defects reasonably identified by Landlord as reasons for
Landlord's disapproval of the initial plan. If Tenant fails to
submit a revised plan to Landlord within said thirty (30) day
period, such failure shall, at Landlord's option and upon notice
to Tenant, constitute an "Event of Default" hereunder. If
Landlord does not notify Tenant of its approval or disapproval of
the revised plan within fifteen (15) days after the receipt
thereof, the plan shall be deemed approved. Once any such plan
is approved in writing or deemed approved by Landlord, Tenant
shall promptly commence all action necessary to comply with all
requirements and conditions imposed by all environmental boards
or agencies having and exercising jurisdiction, and shall
diligently and continuously pursue such action to completion in
accordance with the terms thereof; provided that Tenant may
commence such actions sooner or on such other timetable if
required to do so by any such board or agency.
If Landlord's inspections of the Demised Premises
reflect a violation by Tenant or a Subtenant of the provisions of
this Article XXVIII which violation Landlord reasonably believes
may have caused the Demised Premises or any part thereof to have
become contaminated by Hazardous Materials, Landlord shall have
the right to initiate testing of the Demised Premises to
determine whether, or the extent to which such violation has in
fact caused the contamination of the Demised Premises by
Hazardous Materials. If such tests reveal that the Demised
Premises are contaminated by Hazardous Materials, Landlord shall
immediately deliver a copy of the test results to Tenant. Tenant
shall thereafter comply with the terms and provisions of the
preceding paragraph with respect to formulating a plan to
remediate any such contamination.
J. Governing Provisions for Environmental Matters.
Notwithstanding any other provision of this Lease, this Article
XXVIII shall supersede and take precedence over all other
provisions of this Lease regarding environmental matters
including, but not limited to, the indemnification of Landlord by
Tenant.
-44-
<PAGE>
K. Survivability. Tenant's covenants and indemnities
provided in this Article XXVIII shall survive the termination of
this Lease and any Dispositions of the Demised Premises by
Tenant.
XXIX. MISCELLANEOUS
A. Time of Essence. Time is of the essence of this Lease.
B. Severability. The invalidity of any provision of this
Lease as determined by a court of competent jurisdiction shall in
no way affect the validity of the balance of this Lease or any
other provision hereof.
C. Monetary Obligations as Rent. All monetary obligations
of Tenant hereunder shall be deemed to be rent.
D. Nonmerger. If both Landlord's and Tenant's estates in
the Demised Premises or the improvements or both become vested in
the same owner, this Lease shall nevertheless not be destroyed by
application of the doctrine of merger except at the express
election of the owner.
E. Estoppel Certificates. At any time and from time to
time within 20 days after request by either party, the other
party shall execute and deliver to the requesting party, or to
such other recipient as the notice shall direct, a statement
certifying that this Lease is unmodified and in full force and
effect, or, if there have been modifications, that it is in full
force and effect except as modified in the manner specified in
the statement, and that there are no defenses or offsets claimed
by the party making such statement other than those specified
therein. The statement shall also state the dates to which the
rent and any other charges have been paid in advance. The
statement shall be such that it can be relied upon by any person
specified in the request.
F. Cumulative Remedies. The various rights, elections,
and remedies of Landlord and Tenant contained in this Lease shall
be cumulative, and no one of them shall be construed as exclusive
of any of the others, or of any right, priority, or remedy
allowed or provided for by law.
G. Successors.
1. The term "successors" is used herein in its
broadest possible meaning and includes every person succeeding to
any interest in this Lease or to the Demised Premises of Landlord
or Tenant herein, whether such succession results from the act of
a party in interest, occurs by operation of law, or as the effect
of the operation of law together with the act or omission of such
party.
-45-
<PAGE>
2. No successor of Landlord's interest shall be
entitled to receive rent payments until Tenant shall have been
furnished with: (i) a notice signed by the transferor and
transferee of such interest setting forth the name and address of
the person or persons entitled to receive rent; and (ii) a
photocopy of the deed or other instrument by which such interest
passed.
XXX. BROKER FEES
Landlord and Tenant each represent and warrant to each
other that no brokers have been involved in the negotiations
leading to this Lease. Tenant agrees to hold Landlord free and
harmless of and from any brokerage claims with respect to this
transaction arising through the acts or omissions of Tenant.
Landlord agrees to hold Tenant free and harmless from any
brokerage claims with respect to this transaction arising through
the acts or omissions of Landlord.
XXXI. COVENANT OF GOOD FAITH AND FAIR DEALING
Landlord and Tenant acknowledge their duty to exercise
their rights and remedies, and perform their obligations
reasonably, in good faith and with fair dealing.
XXXII. CONSENTS NOT TO BE UNREASONABLY WITHHELD
Wherever in this Lease the consent or approval of
either Landlord or Tenant is required, such consent or approval
shall not be unreasonably withheld or delayed.
-46-
<PAGE>
IN WITNESS WHEREOF, said parties hereto have set their
hands the day and year first above-written.
TENANT: BEAU RIVAGE, a
Nevada corporation
By: HENRY M. APPLEGATE III
__________________________
Its: Asst. Treasurer
MIRAGE RESORTS, INCORPORATED
EXECUTES THIS LEASE TO
EVIDENCE ITS OBLIGATIONS AS
GUARANTOR PURSUANT TO AND FOR
THE PURPOSES SET FORTH IN
ARTICLE XIV.
MIRAGE RESORTS, INCORPORATED
By: BRUCE A. LEVIN
__________________________
Its: V.P. & General Counsel
LANDLORD: MKB COMPANY, a Nevada
Limited Liability Company
By: JEROME MACK
__________________________
-47-
EXHIBIT 11
MIRAGE RESORTS, INCORPORATED
COMPUTATION OF NET INCOME PER SHARE
OF COMMON STOCK
<TABLE>
<CAPTION>
For the Three-Month
Period Ended
March 31,
___________________________
1995 1994
__________ __________
<S> <C> <C>
Weighted-average shares outstanding 91,081,449 90,725,215
Assumed exercise of options at
average market price 4,198,666 7,008,087
___________ ___________
Weighted-average shares outstanding
and common stock equivalents used
in the computation of primary
earnings per share 95,280,115 97,733,302
Additional shares issuable upon
the assumed exercise of options
at period-end market price 621,681 -
___________ ___________
Total shares outstanding assuming
full dilution 95,901,796 97,733,302
=========== ===========
Net income $44,876,000 $23,348,000
=========== ===========
Primary earnings per share $0.47 $0.24
===== =====
Fully diluted earnings per share $0.47 $0.24
===== =====
</TABLE>
EXHIBIT 15
May 12, 1995
To Mirage Resorts, Incorporated:
We are aware that Mirage Resorts, Incorporated has incorporated
by reference in its Registration Statements on Form S-3 (File No.
2-87138), on Form S-3 (File No. 2-92051), on Form S-3 (File No.
2-96534), on Form S-3 (File No. 33-5693), on Form S-8 (File No.
33-16037), on Form S-3 (File No. 33-16572), on Form S-8 (File No.
33-48394), on Form S-8 (File No. 33-63804), and on Form S-3 (File
No. 33-50559) its Form 10-Q for the quarter ended March 31, 1995,
which includes our report dated May 12, 1995 covering the
unaudited interim financial information contained therein.
Pursuant to Regulation C of the Securities Act of 1933, that
report is not considered a part of these registration statements
or a report prepared or certified by our firm within the meaning
of Sections 7 and 11 of the Act.
Very truly yours,
ARTHUR ANDERSEN LLP
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1995
AND THE RELATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND CASH
FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 53,331
<SECURITIES> 0
<RECEIVABLES> 120,672
<ALLOWANCES> 44,864
<INVENTORY> 25,679
<CURRENT-ASSETS> 206,012
<PP&E> 1,802,591
<DEPRECIATION> 426,661
<TOTAL-ASSETS> 1,689,674
<CURRENT-LIABILITIES> 159,540
<BONDS> 329,336
<COMMON> 940
0
0
<OTHER-SE> 1,077,957
<TOTAL-LIABILITY-AND-EQUITY> 1,689,674
<SALES> 0
<TOTAL-REVENUES> 352,938
<CGS> 0
<TOTAL-COSTS> 192,810
<OTHER-EXPENSES> 21,041
<LOSS-PROVISION> 7,289
<INTEREST-EXPENSE> 7,238
<INCOME-PRETAX> 81,190
<INCOME-TAX> 29,529
<INCOME-CONTINUING> 51,661
<DISCONTINUED> 0
<EXTRAORDINARY> (6,785)
<CHANGES> 0
<NET-INCOME> 44,876
<EPS-PRIMARY> 0.47
<EPS-DILUTED> 0
</TABLE>
