Exhibit 10.1

 

LEASE AGREEMENT
TABLE OF CONTENTS

 

DEFINED TERMS

IV

ARTICLE I GRANT AND TERM

1

1.1

Background

1

1.2

Agreement to Lease

1

1.3

Property

1

1.4

Term

2

1.5

Options to Extend Lease Period

2

1.6

Title Commitment

2

ARTICLE II RENT AND OTHER CHARGES

3

2.1

Rent

3

2.2

Additional Rent

4

2.3

Property Taxes

4

2.4

Personal Property Taxes

4

2.5

Utilities

5

2.6

Cost of Maintaining Property

5

2.7

Operating Cost

5

2.8

Interest on Past Due Obligations

5

ARTICLE III BUILD-TO-SUIT IMPROVEMENTS

5

3.1

Improvements to the Property

5

ARTICLE IV USE OF PROPERTY

7

4.1

Signage

7

4.2

Use of Property

7

4.3

Hazardous Materials

8

4.4

No Partnership

10

4.5

Compliance with Government Regulations and Requirements

10

4.6

Condition of Property; Alterations, Repairs, Maintenance and Replacement

10

4.7

Quiet Enjoyment and Landlord’s Right of Entry

11

4.8

Indemnity

12

4.9

Rules and Regulations

12

ARTICLE V PARKING AND COMMON USE AREAS AND FACILITIES

13

 

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5.1

Parking

13

5.2

Control of Common Areas by Lessor

14

5.3

Use of Common Areas

14

ARTICLE VI INSURANCE

14

6.1

Liability Insurance

14

6.2

Hazard And Rental Income Insurance

15

6.3

Increase in Fire Insurance Premium

15

6.4

Waiver of Subrogation

15

ARTICLE VII ACKNOWLEDGEMENT AND PRESERVATION OF OPTION TO PURCHASE

15

7.1

Acknowledgement of Purchase Option

15

7.2

Preservation of Purchase Option

16

ARTICLE VIII ASSIGNMENT OR SUBLETTING AND PLEDGING

16

8.1

Lessor’s Consent Required

16

ARTICLE IX DEFAULTS: REMEDIES

17

9.1

Covenants and Conditions

17

9.2

Defaults

17

9.3

Default by Lessor

18

9.4

Remedies

18

9.5

The Right to Relet the Premises

19

9.6

Landlord’s Right to Cure

19

9.7

Cumulative Remedies

20

9.8

Late Charges

20

ARTICLE X DAMAGE TO PROPERTY; CONDEMNATION

20

10.1

Damage to the Property

20

10.2

Condemnation of Property

20

10.3

Distribution of Condemnation Award

20

ARTICLE XI ESTOPPEL CERTIFICATES, SUBORDINATION AND MORTGAGEE PROTECTION

21

11.1

Estoppel Certificates

21

11.2

Financial Statements

21

11.3

Attornment

21

11.4

Subordination/Superiority

22

11.5

Mortgagee Protection

22

ARTICLE XII SURRENDER AND HOLDOVER

22

 

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12.1

Surrender of Property at Termination of Lease

22

12.2

Holding Over

23

ARTICLE XIII MISCELLANEOUS PROVISIONS

23

13.1

Waiver

23

13.2

Time of Essence

23

13.3

Attorneys’ Fees

23

13.4

Corporate Authority

23

13.5

Successors and Assigns

23

13.6

Real Estate Brokers

24

13.7

Service of Notice

24

13.8

Entire Agreement and Miscellaneous Provisions

24

 

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DEFINED TERMS

 

ADA

8

Additional Rent

4

Affiliate of Lessee

17

Anniversary Date

3

Atlantis

1

Beginning Index

3

Commencement Date

2

Commitment

2

Common Areas

14

Comparison Index

3

Construction Defect

7

Final Plans and Specifications and Working Drawings

6

Fountain Lease

1

Fountain Lease Amendment

1

Fountain Property

1

Hazardous Material

9

Improvements

6

Index

3

Lease

1

Lessee

1

Lessor

1

Minimum Monthly Rent

3

mortgagee

22

Preliminary Plans and Specifications

6

Property

1

Property Interests

15

Purchase Option

15

Real Property Taxes

4

Renewal Term

2

Rent

4

Shopping Center

1

Shopping Center Remainder

1

Term

2

Transfer

16

worth at the time of the award

19

 

iv

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LEASE AGREEMENT

 

THIS LEASE AGREEMENT (this “Lease”)  is made and entered into this 28th day of
August, 2015, between Biggest Little Investments, L.P., a Delaware limited
partnership (“Lessor”), and Golden Road Motor Inn, Inc., a Nevada corporation
(“Lessee”).

 

GRANT AND TERM

 

Background

 

Lessee is the owner of the Atlantis Casino Resort Spa located in Reno, Nevada
(including any resort, casino or spa operated on the Fountain Property by Lessee
or its successors and/or assigns, the “Atlantis”).  Pursuant to that certain
Lease Agreement and Option to Purchase dated January 29, 2004 (the “Fountain
Lease”), Lessor leased to Lessee and Lessee leased from Lessor certain real
property described in Exhibit A (the “Fountain Property”) adjacent to the
Property (as defined below).  Lessee desires to lease the Property from Lessor
and Lessor agrees to lease the Property to Lessee, in each case on the terms and
conditions of this Lease.  Lessee desires to demolish the buildings located on
the Property and to convert the Property to additional Atlantis surface parking.

 

Lessor and Lessee have agreed to modify the terms of the Fountain Lease in order
to, among other things, set forth Lessee’s agreement to exercise the three
(3) remaining renewal options set forth in Section 1.4 of the Fountain Lease, as
will be set forth in that certain First Amendment to Lease Agreement and Option
to Purchase Fountain Space dated of even date and to be executed concurrently
herewith (the “Fountain Lease Amendment” ).

 

Lessor has agreed to subdivide the Shopping Center (as defined below) into three
(3) parcels, each to have its own separate assessor’s parcel number and billing
for purposes of Real Property Taxes.  One such subdivided parcel shall be the
Fountain Property, the second such subdivided parcel shall be the Property (as
defined below), and the third such subdivided parcel shall be the “Shopping
Center Remainder”.

 

Agreement to Lease

 

Lessor hereby leases the Property to Lessee, and Lessee hereby leases the
Property from Lessor for the term and according to the terms, covenants,
agreements, representations and conditions set forth herein.

 

Property

 

The subject property is all that certain property described in Exhibit B
attached hereto consisting of approximately 46,363 square feet of building
space, and surrounding surface parking, located in the City of Reno, County of
Washoe, State of Nevada (the “Property”), including the improvements to be
constructed by Lessee.  The Property is part of a Shopping Center known as The
Sierra Marketplace (the “Shopping Center”).  Lessor represents, to its

 

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knowledge, that this Lease is subject only to the easements and encumbrances of
record against the Property as shown in the Commitment (as defined below).

 

Term

 

The term (“Term”) of this Lease shall be twenty (20) years commencing on the
Commencement Date (as defined below) and expiring at 5:00 p.m. on the last day
of the Term, unless sooner terminated under any provisions hereof.  The Term of
this Lease shall commence on August 28, 2015 (the “Commencement Date”).

 

In the event that the Commencement Date does not occur on the first day of the
month, then this Lease shall be effective from and after the Commencement Date,
and the Term shall commence on the first day of the month next succeeding the
Commencement Date, provided Lessee shall pay Minimum Monthly Rent and Additional
Rent as provided in 0 below, for the fractional month from the Commencement Date
through the first day of the next succeeding month on a per diem basis,
calculated on the basis of a thirty (30) day month, in advance.  All Lease
expirations, renewal dates, notices of options to renew, and any other provision
relating to the commencement of the Term of this Lease shall be determined by
reference to (i) the Commencement Date where same occurs of the first day of the
month, or (ii) on the first day of the next succeeding month where the
Commencement Date does not occur on the first day of the month.

 

Options to Extend Lease Period

 

Lessor hereby grants to Lessee one (1) option to renew the Term of this Lease
for an additional ten (10) year term.  The renewal option is granted at the
expiration of this original Lease Term, provided Lessee is not in default under
this Lease.  The option to extend and renew this Lease is exercisable only if
Lessee is not in default under this Lease at the time thereof.  Said renewal
term shall be referred to herein as the “Renewal Term.”  The option to renew
this Lease shall be exercised by Lessee giving written notice thereof to Lessor
at least ninety (90) days prior to expiration of the original Term, but not
before one hundred eighty (180) days prior to said expiration.  If Lessee
exercises the option to renew this Lease, all of the terms and provisions of
this Lease shall continue in full force and effect and shall apply in all
respects to the Renewal Term.  If this Lease is not otherwise terminated by
Lessee due to a default by Landlord prior to the expiration of the initial Term
and Lessee does not exercise the option to renew this Lease, then Lessee shall
pay to Lessor the sum of One Million Six Hundred and No/100 Dollars
($1,600,000.00) on or before the last day of the Term for the residual value of
the buildings demolished by Lessee.  All references in this Lease to Term shall
hereinafter include the Renewal Term; provided, that during the Renewal Term,
the Minimum Monthly Rent shall be adjusted upward and increased as provided in
Section 0 hereof.

 

Title Commitment

 

Lessor has delivered to Lessee a copy of an ALTA Plain Language Commitment,
Form No. 1068-2, prepared by First American Title (Order No. 121-2489073), dated
as of July 9, 2015 (the “Commitment”).  Lessee has reviewed and satisfied itself
as to all aspects of and the content of the Commitment, including without
limitation, the Exceptions in Schedule B, Section Two

 

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thereof, and Lessee accepts this Lease based on its review of, and satisfaction
with, the Commitment.

 

RENT AND OTHER CHARGES

 

Rent

 

As and for rent for the Property, Lessee shall pay Lessor monthly rent as
follows:

 

Minimum Monthly Rent.  Lessee shall pay to Lessor monthly rent (the “Minimum
Monthly Rent”) in an amount equal to Fifty-seven Thousand Nine Hundred
Fifty-three and 75/100 Dollars ($57,953.75) for the initial sixty (60) months of
the Term. Thereafter, the Minimum Monthly Rent shall be increased as set forth
in Section 2.1B of this Lease on each of the fifth (5th) anniversary of the
Commencement Date, the tenth (10th) anniversary of the Commencement Date, the
fifteenth (15th) anniversary of the Commencement Date, and if applicable, the
twentieth (20th) anniversary of the Commencement Date and the twenty-fifth
(25th) anniversary of the Commencement Date (each, an “Anniversary Date”).

 

Adjustments to Minimum Monthly Rent.  The base for computing the increase in
Minimum Monthly Rent (the “Beginning Index”) is the All Urban Consumers Index,
U.S. Cities Average, All Items category published by the United States
Department of Labor, Bureau of Labor Statistics (the “Index”), which is in
effect for the month in which the Commencement Date occurs.  The Index published
and in effect the three (3) months preceding each Anniversary Date (the
“Comparison Index”) is used in determining the amount of the increase from one
sixty (60) month period to the next.  Beginning on the first Anniversary Date,
and thereafter on each subsequent Anniversary Date, the Minimum Monthly rent as
indicated in Section 0 will be increased by multiplying the Minimum Monthly Rent
in effect during the preceding sixty (60) month period by a fraction, the
numerator being the Comparison Index and the denominator being the Beginning
Index.  In no event, however, will the amount of Minimum Monthly Rent for one
sixty (60) month period be less than the Minimum Monthly Rent for the preceding
sixty (60) month period.  Further, the cost of living adjustment will be applied
to the Minimum Monthly Rent amount only.

 

If, in the future, the Index shall be changed then the Index shall be converted
in accordance with the conversion factor published by the United Stated
Department of Labor, Bureau of Labor Statistics.  In the event the Index is
discontinued or revised during the Term hereof, such other governmental index or
computation with which it is replaced shall be used in order to obtain
substantially the same result that would be obtained if the Index had not been
discontinued or revised.

 

No later than five (5) days after each Anniversary Date, Lessor will give Lessee
written notice of the adjusted Minimum Monthly Rent payable for the next
succeeding five (5) year period; provided, however, failure of Lessor to give
such notice shall not be construed as a waiver of any increase in the Minimum
Monthly Rent.

 

Payment of Rent.  Lessee shall pay Rent (as defined below) to Lessor in advance
on the first (1st) day of each month during the Term commencing on November 17,
2015 , provided, however,

 

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that such Rent payments shall be prorated for any partial month of the Term, and
shall be payable on a per diem basis calculated on the basis of a thirty (30)
day month.  Notwithstanding the foregoing, in the event that Lessee is in
default under this Lease prior to November 17, 2015, , Lessee shall immediately
commence payment of Rent.  Rent shall be paid to Lessor at the address provided
herein for service of notice, unless otherwise directed in writing by the
Lessor.

 

Additional Rent

 

All charges payable by Lessee hereunder, other than Minimum Monthly Rent, are
collectively referred to as “Additional Rent”.  Unless this Lease provides
otherwise, all Additional Rent shall be paid with the next monthly installment
of Minimum Monthly Rent.  The term “Rent” shall mean Minimum Monthly Rent and
Additional Rent.

 

Property Taxes

 

Payment of Taxes.  Lessee agrees to pay all Real Property Taxes (as defined
below) which may be levied or assessed by any lawful authority against the
Property and the Improvements (as defined below).  Lessee shall pay such Real
Property Taxes upon receipt of a statement from Lessor or the applicable taxing
authority delineating the same, which amount shall be paid within ten (10) days
after receipt of such statement.  All Real Property Taxes for the year in which
this Lease commences shall be apportioned and adjusted. Between the signing of
this Lease by the parties hereto and completion of the subdivision of the
Shopping Center, Lessor is responsible for payment of Real Property Taxes for
the Property and shall be reimbursed for same by Lessee at the rate or $84.07
per day.

 

Definition of “Real Property Taxes”.  “Real Property Taxes” means: (i) any fee,
license fee, license tax, business license fee, commercial rental tax, levy,
charge, assessment, penalty or tax (other than inheritance or estate taxes)
imposed by any authority having the direct or indirect power to tax, including
any city, county, state or federal government, or any school, agriculture,
lighting, drainage or other improvement district thereof, as against any legal
or equitable interest of in the Property, including the Improvements; (ii) any
tax on the Lessor’s right to receive, or the receipt of, rent or income from the
Property or against Lessor’s business of leasing the Property; (iii) any tax or
charge for fire protection, streets, sidewalks, road maintenance, refuse or
other services provided to the Property by any governmental agency; (iv) any tax
imposed upon this transaction or based upon a reassessment of Property due to a
change in ownership or transfer of all or part of Lessor’s interest in the
Property; and (v) any charge or fee replacing any tax previously included within
the definition of Real Property Taxes.  “Real Property Taxes” shall not,
however, include Lessor’s federal or state income, franchise, inheritance,
estate taxes or any real property transfer taxes.

 

Personal Property Taxes

 

Lessee shall pay prior to delinquency all taxes charged against the trade
fixtures, furnishings, equipment or any other personal property belonging to
Lessee.  Lessee shall use its best efforts to have such personal property taxed
separately from the Property.

 

If any such taxes on Lessee’s personal property are levied against Lessor or
Lessor’s property, or if the assessed value of the Property is increased by the
inclusion therein of a value

 

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placed upon such personal property or trade fixtures of Lessee, then Lessor,
after written notice to Lessee, shall have the right to pay the taxes based upon
such increased assessments, regardless of the validity thereof, but only under
proper protest if requested by Lessee in writing.  If Lessor shall do so, then
Lessee shall, upon demand, repay to Lessor the taxes levied against Lessor, or
the proportion of such taxes resulting from such increase in the assessment.  In
any such event, however, Lessee, at Lessee’s sole cost and expense, shall have
the right, in the name of Lessor and with· Lessor’s full cooperation, to bring
suit in any court of competent jurisdiction to recover the amount of any such
taxes so paid under protest; any amount so recovered to belong to Lessee.

 

If any of Lessee’s personal property is taxed with the Property, Lessee shall
pay Lessor the taxes for the personal property within fifteen (15) days after
Lessee receives a written statement from Lessor for such personal property
taxes.

 

Utilities

 

Lessee shall pay directly to the appropriate supplier, the cost of all natural
gas, heat, light, power, sewer service, telephone, water, refuse disposal and
other utilities and services supplied to the Property.  Lessee reserves the
right to install and maintain, at Lessee’s sole expense, separate meters for any
public utility servicing the Property for which a separate meter is not
presently installed.

 

Cost of Maintaining Property

 

Except as otherwise set forth in this Lease, Lessee shall maintain and repair
the Property in a good, clean and presentable condition and state of repair as
provided in Section 0 of this Lease, at Lessee’s sole expense.  Lessee’s cost of
maintaining and repairing the Property shall include, without limitation, all
costs or expenses that are operating costs associated with the Property.

 

Operating Cost

 

Lessee shall pay no portion of the Shopping Center Remainder’s operating or any
other costs.

 

Interest on Past Due Obligations

 

Any amount owed by Lessee to Lessor which is not paid when due shall bear
interest from the due date of such amount at the lower of (i) ten percent (10%)
per annum, or (ii) the maximum legal interest rate permitted by law.  However;
interest shall not be payable on late charges to be paid by Lessee under this
Lease.  The payment of interest on such amounts shall not excuse or cure any
default by Lessee under this Lease.

 

BUILD-TO-SUIT IMPROVEMENTS

 

Improvements to the Property

 

Except as set forth in Section 00 of this Lease, Lessee, at its sole cost and
expense, will obtain all applicable governmental approvals and will, at Lessee’s
sole cost and expense, cause all

 

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existing improvements located on the Property to be demolished and will cause to
be constructed, at Lessee’s sole cost and expense, improvements, in a good and
workmanlike and lien-free manner, on and adjacent to the Property consisting of
grading, paving, lighting and landscaping necessary or beneficial to convert the
Property to its intended use as a parking lot and for ingress and egress to
adjacent property owned or leased by Lessee and the Shopping Center Remainder,
other parking areas, pedestrian walkways and landscaping, consistent with the
Preliminary Plans and Specifications and Preliminary Cost Estimates (the
“Preliminary Plans and Specifications”),which are attached hereto as Exhibit C
and by this reference made a part hereof (the “Improvements”).  Subject to
Lessor’s consent set forth in Section 3.10 of this Lease, the Improvements shall
conform to the Preliminary Plans and Specifications unless modification is
necessary to comply with local building codes or other requirements of local
municipalities.

 

Lessor shall cause to be remediated and shall pay all costs and expenses
associated with, arising from or related to any required or beneficial asbestos
remediation with respect to the demolition of the current improvements on the
Property.  At Lessor’s cost, Lessor shall promptly cause the Property and the
Fountain Property to be legally subdivided and separated from the Shopping
Center (resulting in a third parcel which will be the Shopping Center
Remainder), and shall obtain a separate assessor’s parcel number and separate
Real Property Tax billing for each of the three (3) subdivided parcels.

 

Lessee and Lessor have approved and agreed upon the Preliminary Plans and
Specifications for the Improvements to the Property.

 

As soon as received from the contractor or designer, Lessee shall deliver to
Lessor copies of the final plans and specifications and working drawings
covering the construction of the Improvements, based upon the approved
Preliminary Plans and Specifications (the “Final Plans and Specifications and
Working Drawings”).  Prior to commencing construction of the Improvements,
Lessee shall obtain approval of the Final Plans and Specifications and Working
Drawings from Lessor and from all appropriate governmental agencies, and after
they have been approved, a copy of them shall be initialed and dated by each of
Lessor and Lessee.  Lessee shall exercise due diligence in attempting to obtain
such approval.

 

If a governmental agency requires modification of the Final Plans and
Specifications and Working Drawings, then (i) the party receiving notice of such
required modification shall promptly notify the other party, and (ii) Lessee and
Lessor shall cooperate with each other and such governmental agency to complete
such required modification.  Notwithstanding anything in this Section 0, Lessor
shall not unreasonably withhold its consent to the Final Plans and
Specifications and Working Drawings.

 

Lessee shall construct the Improvements in accordance with the Final Plans and
Specifications and Working Drawings.  Lessee agrees to secure all necessary
permits for the construction.  Lessee agrees that such construction shall be
completed in a good workman-like manner; that materials and workmanship will be
of such quality as is usual and customary in the Washoe County, Nevada, area;
that such construction shall be free of mechanic’s liens; that such construction
shall comply with applicable building and safety codes and comport with the
Final Plans and Specifications as set forth above.

 

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Within fifteen (15) days after Lessee notifies Lessor that the Improvements have
been substantially completed and are available for inspection by Lessor, whether
or not Lessee is then in possession of the Property, Lessor shall deliver to
Lessee a list of items that Lessor deems it necessary under the Final Plans and
Specifications and Working Drawings that Lessee completes or corrects in order
for the Property to be acceptable to Lessor.  Lessee shall immediately commence
to complete or correct such items, except for items that Lessee reasonably
disputes as not being within the scope of the Improvements.  If Lessor does not
deliver the list to Lessee within the fifteen (15) day period, Lessor shall be
deemed to have approved the Property and approved construction of the
Improvements as completed.

 

Lessee’s taking possession of the Property and Lessor’s failure to deliver the
list described in Section 3.10 of this Lease shall not constitute a waiver of
any claim under Section 0 of this Lease or a waiver of any warranty or of any
defect in regard to workmanship or material of the Improvements (each, a
“Construction Defect”).  Lessor shall have the period of time contained within
Lessee’s warranty from the contractor within which to notify Lessee of any
Construction Defect covered by said warranty.  In the event of a Construction
Defect, it is Lessee’s duty to fully enforce all legal remedies to achieve cure.

 

Lessee shall be responsible for, and shall bear the cost of, restoring any
improvement not located on the Property that becomes physically damaged by
Lessee’s demolition of the buildings currently existing on the Property.

 

USE OF PROPERTY

 

Signage

 

Lessee shall pay for all signs and maintenance and removal of said signs located
or constructed on the Property.  All sign design, color, layout, graphics,
location and size shall first be submitted to Lessor for approval prior to
fabrication.  All signs shall be constructed and installed by contractors
qualified to fabricate and install commercial signs.  No signs shall be
installed until after Lessor has approved the construction drawings and
specifications of the signs, including all connections.  Lessee agrees to apply
for any necessary permits or zoning changes for signs to be located or erected
on the Property as a result of the Improvements, at Lessee’s expense.  Lessee
shall maintain all signs in a neat and attractive condition.

 

Use of Property

 

The Property shall be used by Lessee solely as a parking lot, for ingress and
egress to adjacent property owned or leased by Lessee and the Shopping Center
Remainder, other parking areas, pedestrian walkways and landscaping, and uses
reasonably related or incidental thereto and for landscaping features.  Lessee
shall not use, or permit to be used, any portion of the Property for any purpose
other than those stated above.

 

Lessee shall maintain the Property in a clean and sanitary condition and shall
comply with all laws, health and policy requirements with respect to the
Property and appurtenances and agrees to hold Lessor harmless from all fines,
penalties and costs for violations, or non-compliances by

 

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Lessee of said laws, requirements, or regulations, and from all liability
arising out of any such violations or noncompliance, unless said liability
results from the conduct of Lessor.

 

Lessee shall not permit upon the Property any unlawful acts, or any condition,
act or thing constituting a nuisance, nor do or permit any act which shall
annoy, harass, disturb or imperil others; and shall abide by all laws,
ordinances and regulations of the City of Reno, County of Washoe, the State of
Nevada, and the United States of America, including without limitation, the
Americans with Disabilities Act, 42 U.S.C. 12101-12213, as amended from time to
time (and any rules and regulations, restrictions, guidelines, requirements or
publications promulgated or published pursuant thereto, collectively referred to
as the “ADA”) and Lessee agrees to hold Lessor harmless from all fines,
penalties and costs for violations, or non-compliances by Lessee, of said laws,
requirements, or regulations, and from all liability arising out of any such
violations or noncompliance.

 

Lessee shall not use the Property for any purpose deemed hazardous by any
insurance company carrying insurance thereof.

 

Either party, at its sole expense, has the right to install fencing in the
planter areas between the Property and the Shopping Center Remainder as
designated on Exhibit C1.

 

Lessor, its tenants and customers have the right to use the sidewalk (the
“Sidewalk”) in the Property on the south side of the building area as shown on
Exhibit C1.  Lessor may also place utility panels and meters on the Sidewalk.

 

Lessor has the right through the life of the Lease to install, at Lessor’s sole
expense, underground utility lines in the Property in the most efficient and
least disruptive manner to Lessee.  Such installation shall not require that
more than eight (8) parking spaces in the Property be removed from service for
more than two (2) weeks.  Lessor agrees to restore the Property, at Lessor’s
sole expense, to the Property’s condition prior to installation.

 

Hazardous Materials

 

Indemnity by Lessee.  Lessee shall not cause or permit any Hazardous Material
(as defined below) to be brought upon, kept, or used in or about the Property by
Lessee, its agents, employees, contractors or invitees.  If (i) Lessee breaches
the obligations stated in the preceding sentence, (ii) the presence of Hazardous
Material on the Property or on or in the soil or ground water under or adjacent
to the Property caused or permitted by Lessee, its agents, employees,
contractors or invitees results in contamination of the Property or such soil or
ground water, (iii) contamination of the Property or such soil or ground water
by Hazardous Material otherwise occurs for which Lessee is legally liable to
Lessor for damage resulting therefrom, or (iv) contamination occurs elsewhere in
connection with the transportation by Lessee of Hazardous Material to or from
the Property, then Lessee shall indemnify, protect, defend and hold Lessor
harmless from any and all claims, judgment, damages, penalties, fines, costs,
expenses, liabilities or losses (including, without limitation, sums paid in
settlement of claims, attorneys’ fees, consultant fees and expert fees) which
arise during or after the Term of this Lease as a result of such contamination. 
The foregoing obligation of Lessee to indemnify, protect, defend and hold Lessor
harmless (i) is subject to Lessor’s requirement to pay all costs and expenses
associated with, arising from or

 

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related to any required asbestos remediation with respect to the demolition of
the existing improvements on the Property, and (ii) includes, without
limitation, costs incurred in connection with any investigation of site
conditions or any cleanup, remedial, removal, restoration or other response work
required by any federal, state, or local governmental agency or political
subdivision because of Hazardous Material present as a result of any action or
inaction on the part of Lessee, its agents, employees, contractors or invitees
in any improvements constituting the Property or the soil or ground water on,
under or adjacent to the Property or elsewhere in connection with the
transportation by Lessee of Hazardous Material to or from the Property.  Without
limiting the foregoing, if the presence of any Hazardous Material on or in the
Property or the soil or ground water under or adjacent to the Property caused or
permitted by Lessee, or its agents, employees, contractors or invitees, results
in any contamination of the Property, Lessee shall promptly take all actions at
its sole expense as are necessary to return the Property or such soil or ground
water to the condition existing prior to the introduction of any such Hazardous
Material to the Property or to such soil or ground water.

 

Indemnity By Lessor.  Lessor shall not cause or permit any Hazardous Material
(as defined below) to be brought upon, kept, or used in or about the Property by
Lessor, its agents, employees, contractors or invitees.  As to any contamination
of the Property by Hazardous Material which exists as of the Lease Commencement
Date hereof or if (i) Lessor breaches the obligations stated in the preceding
sentence, (ii) the asbestos remediation required of Lessor pursuant to Section 0
of this Lease results in further contamination of the Property or such soil or
ground water, (iii) the presence of Hazardous Material on the Property or on or
in the soil or ground water under or adjacent to the Property caused or
permitted by Lessor, its agents, employees, contractors or invitees results in
contamination of the Property or such soil or ground water, (iv) contamination
of the Property or such soil or ground water by Hazardous Material otherwise
occurs for which Lessor is legally liable to Lessee for damage resulting
therefrom, or (v) contamination occurs elsewhere in connection with the
transportation by Lessor of Hazardous Material; then Lessor shall indemnify,
protect, defend and hold Lessee harmless from any and all claims, judgment,
damages, penalties, fines, costs, expenses, liabilities or losses (including,
without limitation, sums paid in settlement of claims, attorneys’ fees,
consultant fees and expert fees) which arise during or after the term of this
Lease as a result of such contamination or the removal, containment or other
remediation thereof.  The foregoing obligation of Lessor to indemnify, protect,
defend and hold Lessee harmless includes, without limitation, costs incurred in
connection with any investigation of site conditions or any cleanup, remedial,
removal, restoration or other response work required by any federal, state or
local governmental agency or political subdivision because of Hazardous Material
present as a result of any action or inaction on the part of Lessor, its agents,
employees, contractors or invitees in any improvements constituting the Property
or the soil or ground water on, under or adjacent to the Property or elsewhere
in connection with the transportation by Lessor of Hazardous Material to or from
the Property.  Without limiting the foregoing, if the presence of any Hazardous
Material on or in the Property or the soil or ground water under or adjacent to
the Property caused or permitted by Lessor, or its agents, employees,
contractors or invitees results in any contamination of the Property, Lessor
shall promptly take all actions at its sole expense as are necessary to return
the Property or such soil or ground water to the condition existing prior to the
introduction of any such Hazardous Material to the Property or to such soil or
ground water.

 

Hazardous Material Defined.  As used herein, the term “Hazardous Material” means
any hazardous or toxic substance, chemical, toxicant, pollutant, contaminant,
material or waste

 

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which.is or becomes regulated by any local governmental authority, the State of
Nevada or the United States Government for the protection of health or the
environment.  The term “Hazardous Material” includes, without limitation, any
material or substance that is (i) defined as a “hazardous waste” under NRS
459.400 et seq. (Disposal of Hazardous Waste) or NRS 459.700 et seq.
(Transportation of Hazardous Waste); (ii) petroleum; (iii) asbestos;
(iv) designated as a “hazardous substance” pursuant to Section 311 of the Water
Pollution Control Act (33 U.S.C. 1321), (v) defined as a “hazardous waste”
pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42
U.S.C. 6901 et seq. (42 U.S.C. 6903), (vi) defined as a “hazardous substance”
pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. 9601 et seq. (42 U.S.C. 6901),
(vii) defined as a “regulated substance” pursuant to Subchapter IX, Solid Waste
Disposal Act (Regulation of Underground Storage Tanks), 42 U.S.C. 6991 et seq.,
(viii) defined as a “hazardous chemical substance or mixture” or “imminently
hazardous chemical substance or mixture” within the meaning of the Toxic
Substances Control Act, 15 U.S.C. 2601 et seq., (ix) defined as a “hazardous air
pollutant” within the meaning of the Federal Clean Air Act, 42 U.S.C. 7400 et
seq., (x) defined as a “toxic pollutant” or “oil” or “hazardous substance”
within the meaning of the Federal Water Pollution Control Act, 33 U.S.C. 1250 et
seq., (xi) defined as a “contaminant” within the meaning of the Safe Drinking
Water Act, 42 U.S.C. 3001, or (xii) defined as a “chemical known to the state to
cause cancer or reproductive toxicity”, in each case as such law or definition
may be amended from time to time.

 

No Partnership

 

This Lease shall in no way be deemed to be or considered evidence that a
partnership or joint venture exists between Lessor and Lessee.

 

Compliance with Government Regulations and Requirements

 

Lessor shall make any and all such improvements, alterations, repairs or do any
other act to or upon the Property as shall be required by any applicable
statute, law, ordinance or regulation, including, but not limited to those
relating to environmental quality or hazardous waste, by any competent
governmental authority.  The cost of any and all such improvements, alterations,
repairs or other acts shall be borne by Lessee and Lessor as provided in
Section 0 above, except as otherwise provided in this Lease.

 

Condition of Property; Alterations, Repairs, Maintenance and Replacement

 

Lessee shall repair and maintain (and as necessary, replace portions of) the
Property in a good, clean and presentable condition.  The cost of any and all
such maintenance and repairs (and as necessary, replace portions of) shall be
borne as provided in Section 0 above.  Lessee’s obligation to maintain, repair
(and as necessary, replace portions of) the Property shall include the
following:

 

The routine and ordinary maintenance of the landscaping, irrigation system and
grounds, including weed control and cleaning; and

 

The routine and ordinary maintenance of the parking lot, driveways and
pedestrian walkways, including snow removal; and

 

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Any repair or replacement of the parking lot, driveways and pedestrian walkways,
landscaping, irrigation system and grounds.

 

Lessee shall not make any alterations or improvements to or upon the Property
without Lessor’s prior written consent thereto, which consent shall not be
unreasonably withheld, provided that Lessee may, from time to time, make minor
alterations to the Improvements without Lessor’s consent.  All alterations and
improvements shall be accomplished in a good workmanlike manner and in strict
compliance with all county and state ordinances, requirements and regulations
pertaining thereto.

 

Lessee shall not allow or permit the filing or placement of any materialman,
mechanics or other liens upon the Property.  In the event that such a lien is
filed, Lessee will cause such lien to be fully discharged and released.  In the
event Lessee desires to contest any lien, Lessee must post a bond sufficient to
discharge the lien.  Lessee agrees to indemnify Lessor against all liability,
loss, damage, costs or expenses, including attorney’s fees, on account of
claims, or liens for laborers or materialmen or others who performed work or
supplied materials or supplies to Lessee.  At least ten (10) days before
undertaking any alteration, improvement or construction permitted by this
Section, Lessee will notify Lessor so that Lessor may record a notice of
non-responsibility with the County Recorder of Washoe County.

 

Upon the completion of any alterations or improvements, such alterations and
improvements to the Property shall become or remain a part of the Property. 
Furnishings, equipment and trade fixtures of Lessee, which are not part of any
building thereon, remain the Lessee’s property and are excepted from this clause
and provision.

 

Lessee shall return the Property to Lessor at the expiration or earlier
termination of this Lease in good and sanitary order, condition and repair, free
of rubble and debris, broom clean, reasonable wear and tear excepted.  All
damage to the Property caused by the removal of such trade fixtures and other
personal property that Lessee is permitted to remove under the terms of this
Lease and/or such restoration shall be repaired by Lessee at its sole cost and
expense prior to termination.

 

Quiet Enjoyment and Landlord’s Right of Entry

 

Quiet Enjoyment.  If and so long as Lessee shall pay the Rents specified herein
and observe and perform all covenants, agreements and obligations required by it
to be observed and performed hereunder, Lessee shall peaceably and quietly hold
and enjoy the Property for the Term without hindrance or interruption by Lessor
or any other person or persons lawfully or equitably claiming by through, or
under Lessor; subject, nevertheless, to the terms and conditions of this Lease
and the mortgages and other matters to which this Lease is subordinate.  Lessor
expressly reserves the right as to the Shopping Center at any time to do, or
permit to be done, any or all of the following: add or remove buildings or
structures; change the number and location of buildings and structures; change
building dimensions; change the number of floors in any of the buildings or
structures; enclose any mall; add to, alter or remove partially or wholly any
structure or structures used to enclose any plaza area; change the identity and
type of stores and tenancies and the dimensions thereof; change the name of the
Shopping Center in which the Property is located; change the address or
designation of the Property; provide subterranean and multiple level parking
decks;

 

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convert common areas into leasable areas; change the means of access to and
egress from the Shopping Center, except for the access driveway at the new
traffic control signal on South Virginia Street which Lessor shall not change or
alter without Lessee’s prior written consent (which consent shall not be
unreasonably withheld, conditioned or delayed); and expand or reduce the size of
the Shopping Center; provided, however, that (i) no such changes shall (A) deny
or materially interfere with the reasonable visibility of, ingress to, or egress
from the Property, or (B) diminish or materially interfere with the parking
requirements set forth in Section 0 of this Lease, and (ii) no heavy industrial
use will be permitted by Lessor within the Shopping Center, including, but not
limited to, truck and heavy equipment repair facilities.

 

Right of Entry.  Lessor, or Lessor’s agents or representatives may enter and be
present upon the Property at any time for purposes of discharging Lessor’s
obligations hereunder.

 

Indemnity

 

Lessee, as a material part of the consideration to be tendered to Lessor, shall
indemnify, defend, protect and hold harmless Lessor against all actions, claims,
demands, damages, liabilities, losses, penalties, or expenses of any kind which
may be brought or imposed upon Lessor or which Lessor may pay or incur by reason
of injury to person or property or business, from whatever cause, all or in any
way connected with the acts and omissions of Lessee, and Lessee’s use of the
Property or breach of any provision of this Lease, including without limitation
any liability or injury to the person or property or business of Lessee, its
agents, officers, employees or invitees.  Lessee agrees to indemnify, defend and
protect Lessor, and hold it harmless from any and all liability, loss, cost or
obligation on account of, or arising out of, any such injury or loss however
occurring, including breach of the provisions of this Lease and the negligence
of the parties hereto.  Nothing contained herein shall obligate Lessee to
indemnify Lessor against its own sole or gross negligence or willful acts, for
which Lessor shall indemnify Lessee.

 

Lessor, as a material part of the consideration to be tendered to Lessee, shall
indemnify, defend, protect and hold harmless Lessee against all actions, claims,
demands, damages, liabilities, losses, penalties, or expenses of any kind which
may be brought or imposed upon Lessee or which Lessee may pay or incur by reason
of injury to person or property or business, all or in any way connected with
the acts and omissions of Lessor, the condition of the Shopping Center,
including without limitation any liability or injury to the person or property
or business of Lessor, its agents, officers, employees or invitees.  Lessor
agrees to indemnify, defend and protect Lessee and hold it harmless from any and
all liability, loss, cost or obligation on account of or arising out of, any
such injury or loss however occurring, including breach of the provisions of
this Lease and the negligence of the parties hereto.  Nothing contained herein
shall obligate Lessor to indemnify Lessee against its own sole or gross
negligence or willful acts, for which Lessee shall indemnify Lessor.

 

Rules and Regulations

 

Lessee agrees as follows:

 

The plumbing facilities shall not be used for any other purpose than that for
which they are constructed, and no foreign: substance of any kind shall be
thrown therein, and the

 

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expense of any breakage, stoppage, or damage resulting from a violation of this
provision shall be borne by Lessee, who shall, or whose employees, agents or
invitees shall have caused it.

 

Lessee shall not burn any trash or garbage of any kind in or about the Property
or the Shopping Center.

 

All public entrances and exits to the Property shall be kept unobstructed and
open to the public at all times.

 

Lessee shall not cause or permit any obnoxious or foul odors that disturb the
public or other tenants.  Should such odors be evident, Lessee shall be required
to take immediate steps to remedy the same upon written notice from Lessor.

 

Lessor reserves the right from time to time in the exercise of its reasonable
discretion to amend or supplement the foregoing rules and regulations, and to
adopt and promulgate additional rules and regulations applicable to the Property
and Shopping Center.  Reasonable notice of such rules and regulations and
amendments and supplements thereto, if any, shall be given to the Lessee.

 

Lessee agrees to comply with all such rules and regulations upon reasonable
notice to Lessee from Lessor.

 

In the event any violation of any of the above rules and regulations, as amended
or supplemented, continues after five (5) days following notice to the Lessee of
such violation, beginning on such fifth day Lessee shall, in addition to any and
all other remedies of Lessor provided in this Lease for default by Lessee, pay
as liquidated damages, the sum of Two Hundred Fifty Dollars ($250.00) per day
for each violation for each day any such violation continues.  The parties
hereto agree that the aforementioned sum is a reasonable amount as liquidated
damages and does not constitute a penalty, the actual damage caused by such
conduct being extremely difficult to measure.

 

PARKING AND COMMON USE AREAS AND FACILITIES

 

Parking

 

Lessee is entitled to all the parking that is designated on the Property as
being leased (which also includes parking based on the Fountain Lease) and 32
other parking spaces adjacent to the Property as more particularly described on
Exhibit C as “Area A” of this Lease.  Lessor reserves the right, with Lessee’s
approval (which approval shall not be unreasonably withheld, conditioned or
delayed) to move the 32 parking spaces to another location adjacent to the
Property but in no event further than the distance from where such 32 parking
spaces are currently located to the Atlantis east entrance. Lessor is
responsible for all costs associated with the parking that is designated on the
Property as being leased and the 32 parking spaces.

 

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Control of Common Areas by Lessor

 

“Common Areas” means all areas, space, equipment and special services provided
by Lessor (excluding the Property) for the common or joint use and benefit of
the occupants of the Shopping Center, their employees, agents, servants,
customers and other invitees, including, without limitation, parking areas,
access roads, driveways, retaining walls, landscaped areas, truck service ways
or tunnels, loading docks, pedestrian malls, courts, stairs, ramps and
sidewalks, comfort and first aid stations, and parcel pick-up stations.  All
Common Areas shall at all times be subject to the exclusive control and
management of Lessor, and Lessor shall have the right from time to time to
establish, modify and enforce reasonable rules and regulations with respect to
the Common Areas.  Subject to Section 0 of this Lease, Lessor shall have the
right to construct, maintain and operate lighting facilities on all Common Areas
and improvements; to police the same; from time to time to change the area,
level, location and arrangement of parking areas and other facilities
hereinabove referred to; to restrict parking by tenants, their officers, agents
and employees to employee parking areas; to enforce parking charges only to the
extent required by governmental or quasi­governmental entities (by operation of
meters or otherwise), with appropriate provisions for free parking ticket
validating by tenants; to close all or any portion of the Common Areas or
facilities to such extent as may, in the opinion of Lessor’s counsel, be legally
sufficient to prevent a dedication thereof or the accrual of any rights to any
person or the public therein; to close temporarily all or any portion of the
parking areas or facilities: to discourage non-customer parking: and to do and
perform such other acts in and to said areas and improvements as, in the use of
good business judgment, the Lessor shall determine to be advisable with a view
to the improvement of the convenience and use thereof by tenants, their
officers, agents, employees and customers.  Lessor will operate and maintain the
Common Areas in such manner as Lessor, in its sole discretion, shall determine
from time to time.  Without limiting the scope of such discretion, Lessor shall
have the full right and authority to employ all personnel necessary for the
proper operation and maintenance of the Common Areas and facilities.

 

Use of Common Areas

 

The use and occupation by Lessee of the Property shall include the use of the
Common Areas in common with others entitled to the use thereof, subject however
to the terms and conditions of this Lease and to reasonable rules and
regulations for the use thereof as prescribed from time to time by Lessor.

 

INSURANCE

 

Liability Insurance

 

During the Lease Term, Lessee shall maintain a policy of commercial general
liability insurance, insuring Lessee against liability resulting out of the
ownership, use, occupancy or maintenance of the Property, the sidewalks in front
of the Property, and the business operated by Lessee and any subtenants of
Lessee on the Property.  The initial amount of such insurance shall be at least
Two Million Dollars ($2,000,000.00) combined single limit bodily injury,
property damage and personal injury, and shall be subject to periodic increase
based upon inflation, increased liability awards, recommendations of
professional insurance advisers, and other relevant

 

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factors.  However, the amount of such insurance shall not limit Lessee’s
liability nor relieve Lessee of any obligation hereunder.  The policy shall name
Lessor as an additional insured.  In addition, Lessee, at Lessee’s expense,
shall carry adequate workers’ compensation insurance coverage and provide
written evidence thereof to Lessor.  Lessee shall pay all premiums for the
general liability insurance policy covering the Property prior to delinquency.

 

Hazard And Rental Income Insurance

 

Not applicable; intentionally omitted.

 

Increase in Fire Insurance Premium

 

Lessee agrees that it will not keep, use, manufacture, assemble, sell or offer
for sale in or upon the Property any article which may be prohibited by the
standard form of fire insurance policy.  Lessee agrees to pay any increase in
premiums for fire and extended coverage insurance that may be charged during the
Term of this Lease on the amount of such insurance which may be carried by
Lessor on the Property, resulting from the acts or omission of the Lessee, its
agents, servants or employees, or the use or occupancy of the Property by the
Lessee or from the type of materials or products stored, manufactured, assembled
or sold by Lessee in the Property, whether or not Lessor has consented to the
same.  In determining whether increased premiums are the result of Lessee’s use
of the Property, a schedule, issued by the organization making the insurance
rate on the property, showing the various components of such rate, shall be
conclusive evidence of the several items and charges which make up the fire
insurance rate on the Property.

 

Waiver of Subrogation

 

Lessor and Lessee each hereby waive any and all rights of recovery against the
other or against the officers, employees, agents and representatives of the
other, on account of loss or damage occasioned to such waiving party or its
property or the property of others under its control, to the extent that such
loss or damage is insured against under any fire and extended coverage insurance
policy which either may have in force at the time of such loss or damage. 
Lessor and Lessee shall, upon the policies of insurance required under this
Lease, give notice to the insurance carrier or carriers that the foregoing
mutual waiver of subrogation is contained in this Lease.

 

ACKNOWLEDGEMENT AND PRESERVATION OF OPTION TO PURCHASE

 

Acknowledgement of Purchase Option

 

The parties hereby acknowledge that pursuant to Article 7 of the Fountain Lease,
Lessor granted to Lessee an option to purchase (the “Purchase Option”) the
Fountain Property subject to certain restrictions and together with the
easements described the Fountain Lease, (collectively, the “Property Interests”)
at the expiration of the third and final five (5) year Renewal Term of the
Fountain Lease, subject to acceleration for as set forth therein.

 

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Preservation of Purchase Option

 

In consideration of Lessee’s agreement to exercise the renewal options remaining
under the Fountain Lease as set forth in Section 0, Lessor and Lessee agree as
follows:

 

Lessor’s grant to Lessee of an additional leasehold interest in the Property is
not, and shall not be construed to be a sale, transfer or assignment of Lessor’s
interest in the Shopping Center.

 

Lessor’s interest in the Shopping Center has not been acquired, and is not being
acquired under this Lease, by any beneficiary of a deed of trust or purchaser at
a foreclosure sale.

 

By execution and delivery of this Lease, Lessee is neither exercising the
Purchase Option nor waiving its rights under Article 7 of the Fountain Lease. 
Neither the existence of, nor the terms and conditions set forth in, this Lease
constitutes justification for Lessee to accelerate the Purchase Option under
Section 0 of the Fountain Lease.

 

Lessee retains the right to exercise the Purchase Option at the end of the third
and final Renewal Term of the Fountain Lease.

 

The terms and conditions of the Purchase Option are hereby reaffirmed and
ratified by Lessor and Lessee.  The Purchase Option is unaffected by this
Lease.  For the avoidance of doubt, no modification of the Purchase Option is
contained in the terms and conditions of the Fountain Lease Amendment.

 

ASSIGNMENT OR SUBLETTING AND PLEDGING.

 

Lessor’s Consent Required

 

Lessee may not assign, transfer or convey any of its rights or liabilities under
this Lease, to any third person or entity, without the prior written consent of
Lessor, which consent shall not be unreasonably withheld.

 

Lessee may not, under any circumstances, sublet or underlet the Property, or any
part thereof, without the prior consent of Lessor.

 

Lessee shall reimburse Lessor as Additional Rent for Lessor’s reasonable costs
and attorneys’ fees incurred in conjunction with the processing and
documentation of any proposed assignment or subletting of the Property, whether
or not consent is granted.

 

Lessee may, however, pledge, hypothecate or otherwise apply its interests in
this Lease Agreement as collateral for loans, which shall not constitute a
transfer or assignment subject to the provisions of this Article.

 

Notwithstanding Sections 0 and 0 or any other provision of this Lease to the
contrary, Lessee may assign, transfer or sublease (collectively, a “Transfer”) 
all or any part of its rights and obligations under the Lease or in the Property
to an Affiliate of Lessee without Lessor’s consent; provided, however, that
Lessee shall not be released from liability under this Lease in connection

 

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with a Transfer except as otherwise provided in Section 0 below.  An “Affiliate
of Lessee” means any person or entity directly or indirectly controlling,
controlled by or under common control with, Lessee.  For purposes of this
definition, the terms “controlling,” “controlled by” and “under common control
with” shall mean the possession, whether direct or indirect, of the power to
direct or cause the direction of the management and policies of a person or
entity, whether through the ownership or control of voting securities, by
contract or otherwise, or the power to elect at least fifty percent (50%) of the
directors, managers, members or persons exercising similar authority with
respect to such persons or entities.

 

If Lessee Transfers its interest in the Property and the Lease Agreement
(whether pursuant to Lessor’s consent under Section 8.10 or Section 8.10, as
applicable, or to an Affiliate of Lessee without Lessor’s consent pursuant to
Section 8.10), Lessee shall remain firstly liable for the performance of this
Lease and all of the terms and provisions hereof except in conjunction with
Lessee’s transfer of its resort and casino located on real property adjacent to
the Property as provided herein below.  In no event shall any such assignment or
subletting relieve Lessee from its full obligation to perform each, every and
all of the provisions of this Lease Agreement, except that a transfer or
assignment of Lessee’s interest in the Property and Lease Agreement which is in
conjunction with a sale or transfer of Lessee’s resort and casino located on
real property adjacent to the Property, shall relieve, release and discharge
Lessee from liability and obligations under this Lease from and after the
effective date of the transfer or assignment. The transferee needs to fully
agree to assume all obligation of the lease.

 

DEFAULTS: REMEDIES

 

Covenants and Conditions

 

Lessee’s performance of each of Lessee’s obligations under this Lease is a
condition as well as a covenant.  Lessee’s right to continue in possession of
the Property is conditioned upon full performance of all such conditions.  Time
is of the essence in the performance of all covenants and conditions.

 

Defaults

 

Lessee shall be in material default under this Lease:

 

If Lessee abandons or vacates the Property;

 

If Lessee fails to pay Rent or any other charge required to be paid by Lessee,
within 21 days of the date due, Lessor provides written notice to Lessee of the
failure of Lessee to pay Rent or such other charge, and Lessee fails to pay Rent
or such other charge within seven (7) days after receipt of such written notice
from Landlord; or

 

If Lessee fails to perform any of Lessee’s nonmonetary obligations under this
Lease for a period of thirty (30) days after written notice from Lessor;
provided that if more time is required to complete such performance, Lessee
shall not be in default if Lessee commences such performance within the thirty
(30) day period and thereafter diligently pursues its completion.  However,
Lessor shall not be required to give such notice if Lessee’s failure to perform
constitutes a non-curable

 

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breach of this Lease.  The notice required by this Section is intended to
satisfy any and all notice requirements imposed by law on Lessor prior to the
commencement of an unlawful detainer action and is not in addition to any such
requirement.

 

Default by Lessor

 

Lessor shall not be in default unless Lessor fails to perform obligations
required of Lessor within a reasonable time, but in no event later than thirty
(30) days after written notice by Lessee to Lessor and to the holder of any
first mortgage or deed of trust covering the Property whose name and address
shall have theretofore been furnished to Lessee in writing, specifying wherein
Lessor has failed to perform such obligation; provided, however, that if the
nature of Lessor’s obligation is such that more than thirty (30) days are
required for performance, then Lessor shall not be in default if Lessor
commences performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion.  In the event Lessor fails to
perform an obligation required of it hereunder in the time periods allowed under
this Section and following notice from Lessee, Lessee may, but shall not be
obligated to, perform any obligation of Lessor under this Lease.  Lessee shall
be entitled to a credit against the next accruing rent for all reasonable costs
and expenses paid or incurred by Lessee in performing Lessor’s obligations as
provided in this Section, including without limitation, reasonable attorneys’
fees incurred.

 

Remedies

 

On the occurrence of any default by Lessee hereunder, Lessor may, at any time
thereafter, with or without notice or demand and without limiting Lessor in the
exercise of any right or remedy that Lessor may have:

 

Terminate Lessee’s right to possession of the Property by any lawful means, in
which case this Lease shall terminate and Lessee shall immediately surrender
possession of the Property to Lessor.  In such event Lessor shall have the
immediate right to re-enter the Property and remove all persons and property and
such property may be removed and stored in a public warehouse or elsewhere at
the cost of, and for the account of Lessee, all without service of notice or
resort to legal process and without being deemed guilty of trespass, or becoming
liable for any loss or damage which may be occasioned thereby; and Lessor shall
be entitled to recover from Lessee all damages incurred by Lessor by reason of
Lessee’s default, including (i) the worth at the time of the award of all
Minimum Monthly Rent, Additional Rent and other charges which were earned or
were payable at the time of the termination; (ii) the worth at the time of the
award of the amount by which the unpaid Minimum Monthly Rent, Additional Rent
and other charges which would have been earned or were payable after termination
until the time of the award exceeds the amount of such rental loss that Lessee
proves could have been reasonably avoided; (iii) the worth at the time of the
award of the amount by which the unpaid Minimum Monthly Rent, Additional Rent
and other charges which would have been payable for the balance of the Term
after the time of award exceeds the amount of such rental loss that Tenant
proves could have been reasonably avoided; and (iv) any other amount necessary
to compensate Lessor for all the detriment proximately caused by Lessee’s
failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom whether provided by this
Lease or allowed by applicable law, including, but not limited to, any costs or
expenses incurred by Lessor in maintaining or preserving the Property after such
default, the cost of recovering possession of the

 

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Property, expenses of reletting, including necessary renovation or alteration of
the Property, Lessor’s reasonable attorneys’ fees, and any real estate
commissions or other such fees paid or payable.  As used in subparts (i) and
(ii) above, the “worth at the time of the award”  is computed by allowing
interest on unpaid amounts at the rate of nine percent (9%) per annum, or such
lesser amount as may then be the maximum lawful rate.  As used in subparts
(i) and (ii) above, the worth at the time of the award is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of the award, plus one percent (1%).  If Lessee hall have
abandoned the Property, Lessor shall have the option of (i) retaking possession
of the Property and recovering from Lessee the amount specified in this
Section 0, or (ii) proceeding under Section 0.

 

Maintain Lessee’s right to possession, in which case this Lease shall continue
in effect whether or not Lessee shall have abandoned the Property.  In such
event, Lessor shall be entitled to enforce all of Lessor’s rights and remedies
under this Lease, including the right to recover the Rent as it becomes due
hereunder.  Lessee acknowledges that Lessor may continue the Lease in effect
after Lessee’s breach and abandonment and recover Rent as it becomes due;

 

Pursue any other remedy now or hereafter available to Lessor under the laws or
judicial decisions of the state in which the Property is located.

 

The Right to Relet the Premises

 

Should Lessor elect to re-enter, as herein provided, or should it take
possession pursuant to legal proceedings or pursuant to any notice provided for
by law, it may either terminate this Lease or it may from time to time without
terminating this Lease, make such alterations and repairs as may be necessary in
order to relet the Property, and relet the Property or any part thereof for such
term or terms (which may be for a term extending beyond the Term of this Lease)
and at such rent or rents and upon such other terms and conditions as Lessor in
its sole discretion may deem advisable; upon each such reletting, all rent
received by the Lessor from such reletting shall be applied, first, to the
repayment of any indebtedness other than rent due hereunder from Lessee to
Lessor; second, to the payment of any costs and expenses of such reletting,
including brokerage fees and attorneys’ fees and of costs of such alterations
and repairs; third, to the payment of rent due and unpaid hereunder, and the
residue, if any, shall be held by Lessor and applied in payment of future rent
as the same may become due and payable hereunder.  If such rentals received from
such reletting during any month are less than that to be paid during that month
by Lessee hereunder, Lessee shall pay any such deficiency to Lessor.  Such
deficiency shall be calculated and paid monthly.  No such re-entry or taking
possession of said Property by Lessor shall be construed as an election on its
part to terminate this Lease unless a written notice of such intention be given
to Lessee or unless the termination thereof be decreed by a court of competent
jurisdiction.

 

Landlord’s Right to Cure

 

Lessor may, but shall not be obligated to, cure any default by Lessee after
complying with the notice provisions herein set forth, and whenever Lessor
elects, all costs and expenses paid or incurred by Lessor in curing such
default, including without limitation reasonable attorneys’ fees, shall be so
much Additional Rent due on demand with interest as provided in 0 of this Lease.

 

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Cumulative Remedies

 

Lessor’s exercise of any right or remedy shall not prevent it from exercising
any other right or remedy.

 

Late Charges

 

Lessee hereby acknowledges that late payment by Lessee to Lessor of Rent and
other sums due hereunder will cause Lessor to incur costs not contemplated by
this Lease, the exact amount of which will be extremely difficult and costly to
ascertain.  Such costs include, but are not limited to, processing,
administrative and accounting charges, and late charges that may be imposed on
Lessor by the terms of any mortgage or trust deed covering the Property. 
Accordingly, if any installment of Rent or any other sum due from Lessee shall
not be received by Lessor or Lessor’s designee within fifteen (15) days after
such amount shall be due, Lessee shall pay to Lessor a late charge equal to ten
percent (10%) of such overdue amount.  The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Lessor will incur
as a consequence of late payment by Lessee.  Acceptance of such late charge by
Lessor shall in no event constitute a waiver of Lessee’s default with respect to
such overdue amount, nor prevent Lessor from exercising any of the other rights
and remedies granted hereunder.

 

DAMAGE TO PROPERTY; CONDEMNATION.

 

Damage to the Property

 

Not applicable; intentionally omitted.

 

Condemnation of Property

 

If any part or the whole of the Property shall be acquired or condemned by
eminent domain for any public or quasi­ public use or purpose, and in the event
that such partial taking or condemnation shall render the Property not
reasonably suitable for the uses of Lessee, then Lessor shall use commercially
reasonable efforts and take all reasonable steps to make other property within
the Shopping Center available for Lessee to lease for vehicular and pedestrian
ingress and egress to Lessee’s adjacent parcel.  In the event of a partial
taking or condemnation which is not extensive enough to render the Property
unsuitable for the uses of Lessee, then Lessor shall with all due diligence
restore the Property to a condition comparable to its condition at the time of
such condemnation less the portion lost in the taking, and this Lease shall
continue in full force and effect.  During the time that the restoration is
being completed or in the event that a portion of the land constituting the
Property is removed by the partial condemnation, Lessee’s rent shall be abated
for any portion of the Property which cannot be used by Lessee.  In the event
that substitute property restoration of the Property cannot be completed to
Lessee’s reasonable satisfaction, then Lessee may elect to terminate the Lease
by giving written notice to the Lessor.

 

Distribution of Condemnation Award

 

Any condemnation award or payment shall be distributed in the following order: 
(a) first, to any ground lessor, mortgagee or beneficiary under a deed of trust
encumbering the Property, the

 

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amount of its interest in the Property; (b) second, to Lessee, only the amount
of any award specifically designated for loss of or damage to Lessee’s rights
and interests in the Property and the Lessee hereby assigns any other rights
which the Lessor may have now or in the future to any other award to the Lessor;
and (c) third, to Lessor, the remainder of such award, whether as compensation
for reduction in the value of the leasehold, the taking of the fee, or
otherwise.  Lessee shall have the right to pursue its claim against the
condemning authority for any damages which it suffers in connection with any
eminent domain proceeding.

 

ESTOPPEL CERTIFICATES, SUBORDINATION

 

AND MORTGAGEE PROTECTION

 

Estoppel Certificates

 

Within ten (10) days of request therefor by Lessor, Lessee shall execute a
written certificate, in the form presented by Lessor, acknowledging and
certifying to matters requested by Lessor, including without limitation, the
following; (a) that Lessee is in full and complete possession of the Property,
such possession having been delivered by Lessor or its predecessor and accepted
by Lessee; (b) that this Lease is in full force and effect and has not been
amended, modified, supplemented, or superseded except as specifically noted;
(c) that there is no existing default on the part of Lessor in the performance
of any covenant, agreement or condition contained in the Lease to be performed
by Lessor; (d) that the Lessee does not have any actual or pending claim against
the Lessor; (e) that no Rents or other charges have been prepaid by Lessee;
(f) that the addressee of said certificate may rely on the representations
therein made; (g) certifying as to the Commencement Date, termination date, the
date on which Rents commenced to accrue under this Lease, and the date through
which Rents and other charges hereunder have been paid; and (h) providing any
other pertinent information as Lessor or their agent might reasonably request. 
Failure to comply with this Article shall be a material breach of this Lease by
Lessee giving Lessor all rights and remedies under 0 hereof, as well as a right
to damages caused by the loss of a loan or sale which may result from such
failure by Lessee.

 

Financial Statements

 

If Lessor desires to finance or refinance the Shopping Center, the Property, or
any part thereof, Lessee hereby agrees, within ten (10) days of request therefor
by Lessor, to deliver to any lender designated by Lessor such financial
statements of Lessee, its guarantors and its parent company, if any, as may be
reasonably required by such party.  Such statements shall include the past three
(3) years’ financial statements of Lessee.  All such financial statements shall
be received by Lessor in confidence and shall be used only for the purposes
herein set forth.

 

Attornment

 

Lessee shall, in the event any proceedings are brought for the foreclosure of,
or in the event of exercise of the power of sale under any mortgage or deed of
trust made by Lessor covering the Property, attorn to the purchaser upon any
such foreclosure or sale and recognize such purchaser as the Lessor under this
Lease.

 

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Subordination/Superiority

 

The rights and interests of Lessee under this Lease shall be subject and
subordinate to any mortgage, trust deed or deed of trust that is or may
hereafter by placed upon the Shopping Center, or any part thereof containing the
Property and to any and all advances to be made thereunder and to the interest
thereon and all renewals, amendments, modifications, replacements and extensions
thereof, if the mortgagee or trustee or secured party named in such mortgage or
trust deed or deed of trust shall elect to subject and subordinate the rights
and interests of Lessee under this Lease to the lien of its mortgage, trust deed
or deed of trust and shall agree by an instrument in form reasonably
satisfactory to Lessee to recognize this Lease in the event of foreclosure, if
and so long as Lessee is not in default hereunder.  Any mortgagee or trustee of
the Shopping Center or any part thereof containing the Property may elect to
give certain rights and interests of Lessee under this Lease priority over the
lien of its mortgage, trust deed, or deed of trust.  In the event of either such
election and upon notification by such mortgagee or trustee to that effect to
Lessee, the rights and interests of Lessee under this Lease shall be deemed to
be subordinate to or have priority over, as the case may be, the lien of said
mortgage or deed of trust whether this Lease is dated prior to or subsequent to
the date of said mortgage or deed of trust.  Lessee shall, within ten (10) days
following the request of Lessor or such secured party, execute and deliver
whatever instruments may be required for such purposes.  Failure to do so shall
constitute an event of default and a material breach of this Lease.

 

Mortgagee Protection

 

Lessee agrees to give any mortgagee or trustee of a deed of trust (the
“mortgagee”) of the Shopping Center, by registered or certified mail, a copy of
any notice of default served upon the Lessor by Lessee, provided that prior to
such notice Lessee has been notified in writing (by way of service on Lessee of
a copy of an Assignment of Rents and Leases, or otherwise) of the address of
such mortgagee.  Lessee further agrees that if Lessor shall have failed to cure
such default within thirty (30) days after such notice to Lessor (or if such
default cannot be cured or corrected within that time, then such additional time
as may be necessary if Lessor has commenced within such thirty days and is
diligently pursuing the remedies or steps necessary to cure or correct such
default), then the mortgagee shall have an additional thirty (30) days within
which to cure or correct such default (or if such default cannot be cured or
corrected within that time, then such additional time as may be necessary if
such mortgagee has commenced within such thirty days and is diligently pursuing
the remedies or steps necessary to cure or correct such default, including
without limitation commencement of foreclosure proceedings if necessary to
effect such a cure).  Until the time allowed as aforesaid for the mortgagee to
cure such default has expired without cure, Lessee shall have no right to, and
shall not, terminate this Lease on account of Lessor’s default.  This provision
inures to the express benefit of Lessor.

 

SURRENDER AND HOLDOVER

 

Surrender of Property at Termination of Lease

 

Lessee shall, upon the termination of this Lease, after the last day of the Term
or any extension thereof or upon any earlier termination of such Term, surrender
and yield up to Lessor

 

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the Property and all improvements thereto in the condition in which it was
required to be kept under this Lease, and the Lessor and Lessee will have no
further obligations under this Lease, except (i) the Lessee’s obligation to pay
Rent for the period prior to the termination of this Lease, (ii) the Lessor’s
and Lessee’s obligations on termination of this Lease for an event of default as
set forth herein, and (iii) the parties indemnification obligations under
Section 4.3.

 

Holding Over

 

Any holding over after expiration hereof, with the consent of Lessor, shall be
construed as a month-to-month tenancy in accordance with the terms hereof, as
applicable.

 

MISCELLANEOUS PROVISIONS

 

Waiver

 

Any forbearance, failure or delay by Lessor or Lessee in exercising any right,
power or remedy hereunder shall not be deemed a waiver of that right, power or
remedy or any other right, power or remedy Lessor or Lessee may have.

 

Time of Essence

 

Time is of the essence to this Lease Agreement.

 

Attorneys’ Fees

 

If either part shall institute any action or proceeding relating to the
provisions of this Lease, or any default or breach hereunder, then and in that
event, the prevailing party shall be entitled to reasonable expenses and
attorneys’ fees and disbursements incurred therein.

 

Corporate Authority

 

As Lessee is a corporation, the individual executing this Lease on behalf of
said corporation hereby represents and warrants that he or she is duly
authorized to execute and deliver this Lease on behalf of said corporation in
accordance with a duly adopted resolution of the Board of Directors of said
corporation or in accordance with the Bylaws of said corporation, and that this
Lease is binding upon said corporation in accordance with its terms.  Further,
Lessee shall, within thirty (30) days after Lessor’s request, deliver to Lessor
a certified copy of a resolution of the Board of Directors of said corporation
authorizing or ratifying the execution of this Lease.

 

Successors and Assigns

 

The terms, conditions and covenants of this Lease shall be binding upon and
shall inure to the benefit of each of the parties hereto, its successors or
assigns and shall run with the land; subject, however, to the provisions
hereinabove relating to assignment, conveying, subletting and pledging this
Lease or the Property.

 

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Real Estate Brokers

 

Lessor and Lessee each represent and warrant to the other party that it has not
authorized or employed, or acted by implication to authorize or employ, any real
estate broker or salesman to act for it in connection with this Lease.  Lessor
and Lessee shall each indemnify, defend and hold the other party harmless from
and against any and all claims by any real estate broker or salesman whom the
indemnifying party authorized or employed, or acted by implication to authorize
or employ, to act for the indemnifying party in connection with this Lease.

 

Service of Notice

 

Except as otherwise provided herein, every notice, approval, consent or other
communication authorized or required by this Lease shall be in writing and shall
be deemed given forty-eight (48) hours after deposit in the United States mail,
postage prepaid, certified mail, return receipt requested, and addressed to:

 

Lessor:

 

Biggest Little Investments, L.P.
c/o Maxum LLC
3652 S. Virginia Street; Suite C7
Reno, NV 89502

 

 

 

Lessee:

 

Golden Road Motor Inn, Inc.
Atlantis Casino and Resort
3800 S. Virginia Street
Reno, NV 89503

 

Entire Agreement and Miscellaneous Provisions

 

The captions appearing in this Lease are inserted only as a matter of
convenience and in no way define, limit, construe or describe the scope or
intent of such paragraphs of the Lease or in any way affect the Lease.

 

This Lease supersedes any and all other agreements, either oral or in writing,
between the parties hereto with respect to the lease and occupancy of the
Property and contains all of the covenants, agreements and other obligations
between the said parties in respect to the lease or occupancy of the Property.

 

No waiver, alterations or modifications of this Lease or any agreements in
connection herewith shall be valid, unless in writing duly executed by all
parties.

 

This Lease is the result of negotiations between the parties and has been agreed
to by both Lessor and Lessee after prolonged negotiations and shall not be
construed against the party responsible for having it reduced to writing.

 

This Lease is to be governed by and construed in accordance with the laws of the
State of Nevada as exist from time to time.

 

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If any term, covenant, condition or provision of this Lease or the application
thereof to any person or circumstance shall, at any time, or to any extent, be
invalid or unenforceable, the remainder of the Lease or the application of such
term or provision to persons or circumstances other than those as to which it is
held invalid or unenforceable, shall not be affected thereby, and each term,
covenant, condition and provision of the Lease shall be valid and enforceable to
the fullest extent permitted by law.

 

Intentionally Omitted.

 

Lessee may record against the Property and Shopping Center a memorandum to be
executed by Lessor and Lessee providing notice of:  (i) the existence of this
Lease, and (ii) Lessee’s rights to use the Common Areas of the Shopping Center
as provided in Section 0 hereof.

 

[Signatures follow on a separate page.]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Lease Agreement
effective as of the date first set forth above.

 

LESSOR:

LESSEE:

 

 

Biggest Little Investments, L.P.

a Delaware limited partnership

Golden Road Motor Inn, Inc.

a Nevada corporation

 

 

 

 

By:

/s/ Ben Farahi

 

By:

/s/ Ronald Rowan

 

 

 

 

 

Name:

Ben Farahi

 

Name:

Ronald Rowan

 

 

 

 

 

Title:

Managing Member of General Partner

 

Title:

CFO

 

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EXHIBIT A

 

Legal Description of the Fountain Property

[g188981ks09i001.gif]

 

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EXHIBIT B

 

Legal Description of the Property

 

[g188981ks09i002.gif]

 

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EXHIBIT C.

 

Preliminary Plans and Specifications

 

[g188981ks09i003.gif]

 

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Preliminary Plans and Specifications

 

Exhibit C.1.

[g188981ks09i004.gif]

 

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