EXHIBIT 10.1

Execution Version
 
 
GROUND LEASE AGREEMENT

 
AMONG

 
MARINE LIFE VENTURES, LLC AND MC MARINE, LLC,

 
AS LESSORS

 
AND
 
ROTATE BLACK MS, LLC, AS LESSEE
 
 
 
 
 
 

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GROUND LEASE AGREEMENT
 
THIS GROUND LEASE AGREEMENT (this “Lease”) is entered into by and among MARINE
LIFE VENTURES, LLC, a Mississippi limited liability company (“Marine Life”), MC
MARINE, LLC, a Mississippi limited liability company (“MC Marine”),
(collectively the “Lessors”), and ROTATE BLACK MS, LLC, a Mississippi limited
liability company (the “Lessee”) as of the Effective Date.
 
WITNESSETH:
 
WHEREAS, Lessors are the fee simple owners of the Leased Premises (as
hereinafter defined);
 
WHEREAS, principal companies of the Lessors and Lessee entered into a letter of
intent (“LOI”) dated March 9, 2010, to allow Lessee to perform due diligence in
order to determine whether the Leased Premises is feasible for use by Lessee as
a site for the operation of a legal gaming facility; and
 
WHEREAS, Lessee has determined that the Leased Premises is feasible for
operation of a legal gaming facility, and Lessee desires to lease from Lessors,
and Lessors desire to lease to Lessee the Leased Premises pursuant to the terms
of this Lease;
 
NOW, THEREFORE, in consideration of the mutual promises, covenants and
undertakings hereinafter contained, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
 
1. Description of Lease Property.  Lessors do hereby lease and let unto Lessee,
and Lessee does hereby hire, take, and lease from Lessors, the following
described parcels of real property, lying and being situated in the City of
Gulfport, Harrison County, First Judicial District, Mississippi, with said
properties being located adjacent to the Gulfport Harbor, and described as
follows:
 
Parcel I—(“Marine Life Parcel”)
 
Property identified by tax parcel numbers 0811K-02-006.000 and 0811K-02-007.000
and more particularly described in Exhibit “A” attached hereto and made apart
hereof
 
Parcel II—(“MC Marine Parcel”)
 
Property identified by tax parcel number 0811K-02-007.001 and more particularly
described in Exhibit “B” attached hereto and made apart hereof
 
together with all water rights, water frontage, riparian and/or littoral rights
appurtenant, associated, or appertaining thereto (the Marine Life Parcel and MC
Marine Parcel collectively are referred to as the “Leased Premises”).  For
purposes of this Lease, Leased Premises shall include any and all Improvements
now existing or hereafter constructed on the Leased Premises (collectively, the
“Improvements”).  Nothing herein shall be deemed a conveyance of anything other
than a leasehold in the Leased Premises.
 
 
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Except to the extent otherwise stated in this Lease, it is the purpose and
intent of the parties to treat both Marine Life Parcel and MC Marine Parcel as
one unified parcel.  Notwithstanding treating both parcels as the unified Leased
Premises, the Lessors’ percentage of the rental payments (whether such rental
payments are Minimum Rent, Percentage Rent or otherwise) shall be as follows:
 
Marine Life
66%
MC Marine
34%
Total
100%

 
The above percentages shall be referred to as the “Lessors’
Percentages.”  Notwithstanding the foregoing, if Lessors deliver a written
notice to Lessee signed by both Lessors which provides for a different
allocation of the Lessors’ Percentages, then upon receipt of such notice, the
Lessors’ Percentages shall be automatically amended for all purposes of this
Lease.
 
2. Purpose and Quiet Enjoyment. This Lease shall be primarily for the purpose of
carrying out legal gaming operations (hereinafter referred to as “Gaming
Operations”) pursuant to the Mississippi Gaming Control Act, as codified in
Mississippi Code Annotated § 75-76-1, et seq., its regulations, and any
amendments thereto and other legislation and regulations applicable thereto
(hereinafter referred to as “Gaming Control Act”), together with related
activities as set forth herein.  Additionally, Lessee agrees to use commercially
reasonable efforts to occupy the Leased Premises in a careful, safe and proper
manner.  Lessee agrees that it will, at its sole expense, use the Leased
Premises for only the purposes pursuant to this Lease herein and Lessee further
agrees to use the Leased Premises substantially in accordance with all
applicable laws, rules, orders, ordinances, directions, regulations, or
requirements of any federal, state, county or municipal authorities.  Lessee
agrees not to commit or allow to be committed any waste or nuisance or other act
against public policy, deface or damage the Leased Premises in any
manner.  Lessee shall have the right of quiet and peaceable possession of the
Leased Premises as herein set forth.  In addition to any Gaming Operations,
non-gaming structures, including, without limitation, hotels, restaurants, bars,
parking garages, and entertainment facilities (collectively “Gaming Structures”)
may be built on the Leased Premises for use by the Lessee and/or sale to third
parties; provided, however, such uses and sales of the casino structures shall
be subject to this Lease. Additionally, the Lessee may construct a marina with
boat slips for lease and/or sale to third parties; provided, however, such
leasing and sales of the marina facilities or boat slips shall be subject to
this Lease.  Notwithstanding anything in this Lease to the contrary, Lessee
shall be prohibited from constructing or developing condominiums on the Leased
Premises without the express written consent of Lessors.
 

 
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3. Acceptance of Title and Condition of Property.  The Lessee, during a due
diligence period granted to it by the Lessors in the LOI, has examined the
Leased Premises, the title thereto, all environmental matters, sub-surface
conditions, the present uses, non-uses, and zoning thereof.  The Lessee accepts
the Leased Premises in an “as-is where is” condition in which it is at the
Effective Date hereof without any representation or warranty, express or
implied, in fact or in law, by the Lessors, and without recourse to the Lessors,
except where such conditions, whether they be title conditions, physical
conditions or otherwise, have been intentionally concealed by the Lessors from
the Lessee.
 
4. Rent.  This Lease shall consist of a Preliminary Term (defined below) and a
Primary Term (defined below) as set forth in the remaining provisions of this
paragraph 4.  All rent is to be paid without offset or deduction, except as
expressly provided herein, and without notice or demand to the Lessors at their
addresses provided in paragraph 27.
 
(a) Effective Date.  The effective date (the “Effective Date”) of this Lease
shall be 12:00 a.m. on October 20, 2010.
 
(b) Preliminary Term.  Commencing on the Effective Date, there shall be a
preliminary term (the “Preliminary Term”), and the Preliminary Term shall remain
in force and effect until the earlier of: (i) 11:59 p.m. on the last day of the
ninth (9th) month following the Effective Date; or (ii) the date Gaming
Operations begin on the Leased Premises.  During the Preliminary Term, the rent
paid by the Lessee to the Lessors shall be equal to Twenty Thousand Dollars
($20,000) per month (the “Preliminary Rent”), paid to the Lessors according to
the Lessors’ Percentages.  Notwithstanding anything contained in this paragraph
4(b) to the contrary, the Preliminary Rent shall accrue and the Lessee shall be
under no obligation to make any such payment of Preliminary Rent until the
earlier of: (i) the date the Lessee commences any construction on the Leased
Premises; or (ii) February 1, 2011.  Upon the earlier date reference in the
aforementioned sentence, all accrued and unpaid Preliminary Rent shall be due
and payable, with the remaining Preliminary Rent payable in monthly installments
on the first (1st) day of each month hereafter throughout the remainder of the
Preliminary Term as provided in this paragraph; provided, however, that if
Lessee does not receive an approval to proceed with the development of a casino
on the Leased Premises from the Mississippi Gaming Commission on or prior to
March 1, 2011, then this Lease shall be immediately terminable with no
obligations due from either party to each other with the exception of the
amounts required to be paid pursuant to paragraph 37, which shall be prorated
through the date of any termination.
 
(c) Primary Term. The primary term (the “Primary Term”) shall commence on the
day immediately succeeding the expiration of the Preliminary Term until 11:59
p.m. October 19, 2109.  During the Primary Term of this Lease, the Lessee shall
pay to the Lessor the greater of (i) the Minimum Rent as set forth in paragraph
4(c)(i) hereof, or (ii) the Percentage Rent as defined in paragraph 4(c)(ii) in
the manner as provided in paragraph 4(d).  The rent payments set forth in this
paragraph 4 and its various sub-paragraphs and subparts shall be subject to the
provisions of paragraph 4(f).
 
(i) Minimum Rent.  For purposes of this Lease, the term “Minimum Rent” shall be
as follows:

 
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(1)  For the first (1st) six (6) months of the Primary Term, the Minimum Rent
shall be equal to Fifty Thousand Dollars ($50,000) per month;
 
(2)  Beginning on the first (1st) day of the seventh (7th) month of the Primary
Term, the Minimum Rent shall be Seventy Five Thousand Dollars ($75,000) per
month until such time as sub-paragraph (3) immediately below is applicable; and
 
(3)  Beginning on the first (1st) day of the seventh (7th) month following the
commencement of Gaming Operations at the Permanent Facility (as defined below),
the Minimum Rent shall be One Hundred Ten Thousand Dollars ($110,000) per month
adjusted annually as provided in the following provisions of this sub-paragraph
(3).  Once the Minimum Rent has been increased to One Hundred Ten Thousand
Dollars ($110,000) per month, then upon the first annual anniversary date of the
Minimum Rent being increased to One Hundred Ten Thousand Dollars ($110,000), and
on each annual anniversary date thereafter, the Minimum Rent shall be increased
by the corresponding change in the CPI compared to the prior calendar year’s CPI
in an amount not to exceed three percent (3%) per year, and such increase shall
be automatic requiring no notice or calculation thereof.  As used herein, CPI
means the consumer price index as published by the Bureau of Labor Statistics,
U. S. Department of Labor, or if discontinued, the most comparable and similar
index then in use.  The CPI for the immediate preceding calendar year and the
CPI for the calendar year preceding that shall be used to determine if there has
been an annual increase.  If there has been no increase, the rent shall not,
under any circumstances, be decreased.  The index to be used herein shall be the
“All Urban Consumers - South Urban - All Items” or the most comparable index
then in use.  Such CPI increase shall be calculated and compounded.  For
purposes of this Lease, the term “Permanent Facility” shall mean the land-based
gaming and entertainment facilities developed subsequent to the Lessee’s initial
Gaming Operations, which shall be conducted on a gaming vessel docked adjacent
to the Leased Premises.  The CPI shall be calculated according to the following
illustration:
 
CPI for current period
    133.0  
Less CPI for previous period
    129.9  
Equals index point change
    3.1  
Divided by previous period CPI
    129.9  
Equals
    0.0239  
Result multiplied by 100
    0.0239 x 100  
Equals percent change
    2.39            

 
 
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(ii) Percentage Rent. After the commencement of Gaming Operations by Lessee,
Lessee shall calculate the Lessors’ an annual percentage rent (the “Percentage
Rent”) on a monthly basis, as set forth herein below:
 
(1)  The Percentage Rent shall be equal to four percent (4%) of the Gross Gaming
Revenues, with such amount paid to the Lessors according to the Lessors’
Percentages.  For purposes of this Lease, the term “Gross Gaming Revenues” shall
have the same meaning as gross gaming revenue for the purpose of reporting and
payment of license fees under the Gaming Control Act and any applicable
regulations, as amended. The Percentage Rent shall be subject to the terms of
paragraph 4(f) hereof.
 
(2)   Percentage Rent Not Limited to Leased Premises.  The Percentage Rent
(including the Percentage Rent under paragraph 4(h), if applicable) described by
this Lease shall apply even though the Gaming Operations or other Improvements,
including but not limited to Gaming Structures, may be located on the
Development Property, or any property located within one thousand (1,000) feet
of the Development Property or on any other property so long as the Development
Property is in any way used by, required by or associated in any way with the
Lessee’s gaming license and such total rent amount shall be paid to the Lessors
according to the Lessors’ Percentages.  The Marine Life Parcel, the MC Marine
Parcel and any property leased from the City of Gulfport or Gulfport
Redevelopment Commission along with the other property described above as it may
exist on the Effective Date or at any time thereafter is hereby defined as the
“Development Property”) for all purposes of this Lease.  The Percentage Rent is
of the essence of this Lease and so long as the Development Property is used in
any way or leased in conjunction with Gaming Operations or related activities,
such Percentage Rent shall apply, regardless of the particular use (or non-use)
made of the Leased Premises.
 
(d)  Payment of Rent During Primary Term.
 
(i) Minimum Rent.  The Lessee shall make a payment equal to the amount of
Minimum Rent on the first (1st) day of the Primary Term which shall be prorated
for the number of days remaining in the first (1st) month of the Primary Term.
Thereafter, the Lessee shall pay an amount equal to the Minimum Rent in monthly
installments, in advance, on the first (1st) day of each and every month during
the Primary Term.
 
(ii) Percentage Rent.  The Lessee shall pay an amount equal to the Percentage
Rent less the amount paid for such month pursuant to clause (i) immediately
above on or before the twentieth (20th) day of the next succeeding month.  Such
payment of Minimum Rent shall be accompanied by a copy of the monthly revenue
reports which must be submitted to the Mississippi Gaming Commission or the
Mississippi Department of Revenue for purposes of calculating the licenses
fees.  Lessee shall also provide to the Lessors copies of any and all financial
statements, reports or audits required of Lessee by the Mississippi Gaming
Commission or the Mississippi Department of Revenue pursuant to the Gaming
Control Act within ten (10) days after the same are submitted to the Mississippi
Gaming Commission.
 
 
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(e) Adjustment of Rent Annually.  Within thirty (30) days of the last day of
each calendar year hereunder it shall be determined, for the entire preceding
calendar year, the amount of rent due for that year according to the terms
hereof.  If the amount of rent paid by Lessee to the Lessors exceeds or is less
than the rent provided for herein, then, in such event, there shall be an
adjustment made and, if underpaid, the Lessee shall pay any difference to the
Lessors within thirty (30) days of the end of such lease year and, if overpaid,
the overpayment shall be taken as a credit in favor of the Lessee, and shall
reduce the future rent owed by Lessee to the Lessors (whether such rent is
Minimum Rent or Percentage Rent), until such overpayment is completely recouped.
 
(f) Cessation of Gaming Operations.  Should any Governmental Authority (defined
below) having control over Gaming Operations, zoning or any other matter or
issue affect the Gaming Operations, outlaw or deny gaming upon the Leased
Premises, then the Lessee shall have the full option to terminate this Lease,
which termination shall be effective on the fifth (5th) day following the date
upon which the Gaming Operations are effectively outlawed or denied.
 
(g) Delinquent Rent Payments.  In addition to Lessors’ remedies for Lessee’s
failure to timely pay rent described under paragraph 8(a), if any payment of
Rent is not paid within fifteen (15) days after the due date, then such past-due
payment will bear interest at the lesser of (i) the maximum non-usurious rate of
interest or (ii) Prime Rate plus two percent (2%) per annum calculated from the
fifteenth (15th) day after the due date until paid.  In addition to the late
payment interest charge, a late charge of Five Thousand and No/100 Dollars
($5,000) shall be added to each Rent payment not paid within fifteen (15) days
after the due date.  In no event shall such late payment interest charge and
late payment charge (total of both) exceed the maximum allowed by the then
current laws of the State of Mississippi and, in the event such charges (total
of both) exceed such maximum allowed by the then current laws of the State of
Mississippi, then the maximum late fee as allowed by the then current law of the
State of Mississippi shall be due and payable.  The late payment interest charge
and late payment charge are to compensate the Lessors for the additional costs
incurred in collecting the Rent and/or for liquidated damages and are not a
penalty.  The term “Prime Rate” means the prime rate reported (on the business
day closest to the relevant day) by the Wall Street Journal, or its successors,
in its Money Rates chart in the Money & Investing section (or such successor
section).  If the Wall Street Journal, or its successor, is not longer
published, then the prime rate reported by the largest (measured by assets) bank
based in the United States will be the Prime Rate.  The parties agree the late
payment interest charge and late payment charge do not create a Lender and
Debtor relationship between the parties and do not constitute a finance charge.
 
(h) Percentage Rent for Unrelated Activities.  If the revenue generated by the
Lessee’s Gaming Operations on the Development Property falls below fifty (50%)
percent of all of the revenue sources generated by the Lessee on the Development
Property on an annual basis, then the Lessee shall pay to Lessors a Percentage
Rent equal to one and one-half percent (1½%) of the Gross Non-Gaming Revenue and
four percent (4%) of the Gross Gaming Revenue, with such amount paid to the
Lessors according to the Lessors’ Percentages.  For purposes of this Lease, the
term “Gross Non-Gaming Revenue” shall mean the total revenues received from
revenue generated by Lessee’s non-gaming activities on the Development Property
(e.g., hotel, restaurant dining, bars, liquor services, etc.) for which it
collects retail sales tax under the sales tax laws of the State of
Mississippi.  If the State of Mississippi repeals the sales tax law, then Gross
Non-Gaming Revenue shall be calculated in a manner that would reach an
equivalent result if it were still enacted.

 
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(i) Construction Required as Additional Rent.  As additional rent for this
Lease, and subject to the default provisions of paragraph 8 hereof, Lessee shall
be required to initially, and for fifty-four (54) months after the Effective
Date, place and/or construct its Gaming Structures and Improvements (including
the Permanent Facility) on the Leased Premises; provided, however, Lessee shall
be entitled to construct parking facilities anywhere on the Development
Property.  During the Preliminary Term, the obligation under this paragraph 4(i)
shall mean the Improvements necessary to support and facilitate the operation of
a gaming vessel having at least twenty thousand (20,000) square feet of gaming
space.  Also, as additional rent hereunder and subject to the default provision
of paragraph 8 hereof, Lessee shall be required to construct on the Leased
Premises the Permanent Facility which shall consist of no less than a casino
hotel having at least three hundred (300) rooms within fifty-four (54) months of
the Effective Date of this Lease.  Furthermore, Lessee shall be required to
place a minimum amount of Improvements physically located within the boundaries
of the Leased Premises equal to or exceeding Fifty Million Dollars ($50,000,000)
(valued at the time construction is completed) within such fifty-four (54) month
period.  Notwithstanding the initial development of the Gaming Structures and
Improvements on the Leased Premises as described in this paragraph 4(i), Lessee
shall also have the right to develop the Development Property, provided that all
of the Gaming Operations are initially, and for fifty-four (54) months after the
Effective Date, located on the Leased Premises; and provided, further, that upon
expiration of such fifty-four (54) month period, at least sixty percent (60%) of
all Gaming Operations are located on the Leased Premises.  At least sixty
percent (60%) of all Gaming Operations shall mean Gaming Operations producing at
least sixty percent (60%) of Lessee’s Gross Gaming Revenue.
 
(j) Payment Upon Execution of Lease.  Within ten (10) days of the execution of
this Lease, Lessee shall pay Ten Thousand Dollars ($10,000) to Lessors according
to Lessors’ Percentages, which payment shall be non-refundable under any and all
circumstances and may be immediately deposited and used by Lessors, and it shall
not be applied toward any rent due under this Lease.
 
5. Gaming Provision.
 
(a)  If necessary and required by any federal, state, or local gaming licensing
authorities, including, without limitation, the Mississippi Gaming Commission
(or any successor thereto) (collectively “Governmental Authorities”) for the
operation by Lessee of its Gaming Operations on the Development Property,
Lessors, at the Lessee’s sole cost and expense, shall promptly apply for and use
its best efforts to obtain the necessary and required gaming licenses or
approvals.  Lessors and Lessee shall fully cooperate with the Governmental
Authorities in connection with any approval or permit applications of the
Lessors and/or Lessee, or otherwise, which shall include, without limitation,
provision of such information, books and records as may be requested by the
Governmental Authorities and compliance with all orders and requirements of the
Governmental Authorities.

 
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(b)  Lessors hereby acknowledge that Lessors and their Affiliates (as defined
below) of Lessors may be required to be licensed or approved by certain
Governmental Authorities in order to be eligible to receive payments pursuant to
this Lease (collectively “Approvals”).  If at any time: (a) Lessors or any
Affiliates of Lessors or any Person (as defined below) required by the
appropriate Government Authority to be approved are denied an Approval, or does
not apply for an Approval within any required time limit, or withdraws any
application for an Approval; or (b) any Governmental Authority commences or
threatens to commence any administrative proceeding or court action against
Lessors or Affiliate of Lessors or any Person required by the appropriate
Government Authority to be approved to terminate or deny any Approval of such
Persons (all of the foregoing events described in (a) and (b) above are
collectively referred to as a (“Denial”), the Lessors shall be afforded the
right to cure the Denial in any manner approved by the Governmental Authority
(any such action being collectively referred to as a “Cure”).  Lessors shall
cause such Cure to become effective within thirty (30) days from the date of
such Denial (or any other time prescribed by the applicable Governmental
Authority) (the “Cure Period”).  If, after the Cure Period, a Cure approved by
the Governmental Authority is not feasible or permitted, then Lessee shall have
the right, in addition to all its other rights and remedies, to purchase the
interest of the Lessor, Affiliate or Person who received the Denial as provided
in this Lease.  Anything in this paragraph to the contrary notwithstanding, all
Cures shall be effected as expeditiously as possible.  For purposes of this
Lease, the term “Affiliate” shall mean, with respect to any Person (1) any
Person directly or indirectly controlling, controlled by or under common control
with such person or (2) any Person owning directly or indirectly fifty percent
(50%) or more of the outstanding securities of such Person.  For purposes of
this Lease, the term “Person” means any individual, partnership, corporation,
limited liability company, trust, or other entity.
 
(c)  Lessors hereby grant to Lessee an option (the “Purchase Right”) to purchase
the interest of the Lessor, Affiliate, or Person but only upon Lessors,
Affiliate or Person receiving a Denial and being unable to cure such Denial as
provided in paragraph 5(b).
 
(d)  Lessee may only exercise the Purchase Right following a Denial and the cure
period specified in paragraph 5(b) by delivering written notice to Lessors,
Affiliate or Person, as applicable, specifying a time and place at which the
close of escrow (“Escrow”) shall occur, which date shall not be less than
forty-five (45) days after the date of such notice.
 
(e)  The total purchase price for the interest being purchased (the “Purchase
Price”) shall be an amount determined by dividing the Capitalization Rate
(hereafter defined) into the average annual income stream realized by Lessors
pursuant this Lease for the previous five (5) years of this Lease and thereafter
applying the appropriate percentage of the interest being purchased.
 
(i)  The capitalization rate (the “Capitalization Rate”) to be used in the above
formula shall be determined by using the following procedure.  Within fifteen
(15) days of the event giving rise to this provision, the parties to the
transaction shall jointly appoint a mutually acceptable qualified appraiser
(“Qualified Appraiser”), who shall be a professional real estate appraiser with
an MAI designation and who is qualified by experience and ability to appraise
real estate on the Mississippi Gulf Coast, and in particular properties used in
the gaming industry.  Such Qualified Appraiser shall determine the appropriate
Capitalization Rate to be used in determining the value of the Leased Premises
and his or her written opinion of the appropriate Capitalization Rate shall be
conclusive and binding on the parties.  If the parties cannot agree on a
mutually acceptable Qualified Appraiser, then each of the parties, at their own
cost and expense, shall within fifteen (15) days following the expiration of the
fifteen-day (15-day) period provided in the previous sentence, appoint a
Qualified Appraiser to determine the appropriate Capitalization Rate.  If both
Qualified Appraisers agree on the appropriate Capitalization Rate, their written
opinions shall be conclusive and binding on the parties.  If only one of the
parties appoints a Qualified Appraiser, that appraiser’s written opinion on the
appropriate Capitalization Rate shall be conclusive and binding on the
parties.  If two Qualified Appraisers are appointed and disagree on the
appropriate Capitalization Rate, they shall appoint a third Qualified Appraiser
mutually acceptable to them.  The fees and expenses of the third Qualified
Appraiser shall be divided equally between the parties.  The third Qualified
Appraiser shall not make an independent determination of the appropriate
Capitalization Rate, but shall determine which of the opinions of the first two
Qualified Appraisers is a more appropriate representation of the Capitalization
Rate to be used to determine the value of the Leased Premises, and the
Capitalization Rate so determined shall be conclusive and binding on all the
parties.  Except otherwise specified in this Lease, the parties, in appointing
Qualified Appraisers, and the Qualified Appraisers, in deciding the appropriate
Capitalization Rate, shall act in accordance with the rules of the American
Arbitration Association.
 
 
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(ii)  If there is less than one (1) full year of income experience after Gaming
Operations have commenced when this paragraph 5 is put into force and effect,
then the Purchase Price shall be determined as provided in subparagraph (iii)
below.  If there is not five (5) years of lease income experience when this
paragraph 5 is put into force and effect, then the average annual income stream
shall be determined by a projection of the income stream from the average annual
income stream that has been paid for a number of years necessary to equal five
(5) years.  In order to determine such projection, the previous year’s income
shall be multiplied by one hundred five percent (105%) in order to determine the
next year’s projected income.  This process shall continue until there are five
(5) years of income, including actual and projected, to apply this
paragraph.  For purposes of calculating the Purchase Price, the interest of the
Lessor, Affiliate or Person who receives a Denial shall reflect the percentage
ownership as it bears to the entire Leased Premises as follows:  Assuming that
the average annual income stream for the entire Leased Premises is Five Million
Dollars ($5,000,000), and the Lessors’ Percentages are equal to sixty-six
percent (66%) for Marine Life and thirty-four percent (34%) for MC
Marine.  Further, assume that the Capitalization Rate as defined above is nine
and five tenths percent (9.5%), and that a Person owning five percent (5%) of MC
Marine receives a Denial that cannot be Cured.
 
[img001.jpg]      = $52,631,578.95 x .017 = $894,000
 
05 × .34 (or MC Marine’s current percentage) = 1.7%
 
 
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(iii)  Notwithstanding the foregoing, under no circumstance shall the Purchase
Price calculated under this paragraph 5 be less than an amount determined by
applying a square footage price of Two Hundred Dollars ($200) per square foot
for the area of fastlands within the Leased Premises.  The area of square feet
of the fastlands within the Leased Premises shall be determined by a certified
land surveyor selected by the Lessors licensed in the State of Mississippi.  By
way of example, and not by way of limitation, assume the same facts in the
example described above in subparagraph (ii), and further assume that that the
total area of fastlands within the Leased Premises is equal to two hundred
twenty thousand two hundred forty-five (220,245) square feet.  The minimum
Purchase Price of the entire Leased Premises would be Forty-Four Million Fifty
Thousand Eight Hundred Dollars ($44,050,800) [220,254 × $200].  After applying
the appropriate percentage of the Person who received the Denial (i.e., 1.7%),
the minimum Purchase Price for the five percent (5%) owner of MC Marine would be
equal to Seven Hundred Forty-Eight Thousand Eight Hundred Sixty-Four Dollars
($748,864) [$44,50,800 × 1.7%].  The Purchase Price as calculated hereby is for
the purpose of this paragraph 5 only and for no other purpose whatsoever under
any circumstances.
 
(f)  Upon exercise of the Purchase Right under this paragraph 5, the Lessor,
Affiliate or Person who receives a Denial shall convey his, her, or its interest
to Lessee at the close of Escrow by generally accepted conveyance or transfer,
including a warranty bill of sale, subject only to matters existing upon the
Effective Date and matters caused or incurred by Lessee.  Any indebtedness or
encumbrance upon such interest shall be satisfied at the close of Escrow.
 
6. Environmental Matter and Indemnification.
 
(a) Environmental Laws.  The term “Environmental Laws” means and includes any
and all present and future federal, state or local laws, statutes, ordinances,
rules, regulations, orders, judgments, decrees, concessions, grants, franchises,
agreements, codes, restrictions, or determinations of any governmental authority
regulating, relating to or imposing liability or standards of conduct
concerning, any environmental matters, as now or at any time hereafter in
effect, including, without limitation, the National Environmental Policy Act,
the Clean Water Act, the Clean Air Act, Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, and as may be further amended from time to time
(“CERCLA”), the Federal Water Pollution Control Act, the Occupational Safety and
Health Act of 1970, the Resource Conservation and Recovery Act of 1976 (“RCRA”),
the Hazardous Materials Transportation Act of 1975, the Safe Drinking Water Act,
the Toxic Substances Control Act, the Federal Insecticide, Fungicide and
Rodenticide Act, as amended by the Federal Environmental Pesticide Control Act
of 1972 and by the Federal Pesticide Act of 1978, the Emergency Planning and
Community Right-To-Know Act of 1986, the United States Environmental Protection
Agency’s Technical Standards and Corrective Action Requirements for Owners and
Operators of Underground Storage Tanks, 40 C.F.R. Part 280, The Atomic Energy
Act of 1954, the Acid Precipitation Act of 1980, the Low-Level Radioactive Waste
Policy Act, the Nuclear Waste Policy Act of 1982 and the Solid Waste Disposal
Act and any so-called “Superfund” or “Superlien” law and any comparable or
similar environmental laws (whether state or federal), together with all
amendments in effect from time to time, and all rules and regulations
promulgated from time to time, under or with respect to any or all of the
foregoing laws.

 
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(b) Hazardous Substances.  The term “Hazardous Substances” means, without
limitation, any flammable substances, explosives, radon, radioactive materials,
asbestos (and any substance containing asbestos), urea formaldehyde foam
insulation, the group of organic compounds known as polychlorinated biphenyls,
chemicals known to cause cancer or reproductive toxicity, pollutants, effluents,
contaminants, emissions or related materials that, because of their quantity,
concentration or physical, chemical or infectious characteristics, may cause or
pose a present or potential hazard to human health or the environment when
improperly used, treated, stored, disposed of, generated, manufactured,
transported or otherwise handled, petroleum and petroleum-based products,
including crude oil and any fraction thereof, natural gas or synthetic gas used
for fuel, methane, hazardous materials, hazardous wastes, underground storage
tanks or storage facilities and other substances or related materials defined as
hazardous or toxic in, or otherwise included within the scope of, any
Environmental Law.  Hazardous Substances shall not mean any existing concrete
structures visible from the surface of the Leased Premises or able to be
discovered just below the surface of the Leased Premises.
 
(c)Existing Environmental Issues.  As represented by Lessors in sub-paragraphs
7(a)(vii) and 7(a)(viii), Lessors do not have knowledge of any violation of
Environmental Laws with regard to the Leased Premises as of the Effective
Date.  Howe ver, should Lessee discover Hazardous Substances are located on the
Leased Premises that existed on the Effective Date and that Remedial Actions are
necessary to comply with the Environmental Laws, then Lessee shall undertake the
actions necessary to comply with the Environmental Laws, including any clean-up,
remediation, obtaining necessary permits, and such other actions necessary to
comply with the Environmental Laws (collectively, “Remedial Actions”); provided,
that, such costs are not reasonably estimated to exceed Ten Thousand Dollars
($10,000).  If such costs are reasonably estimated to exceed Ten Thousand
Dollars ($10,000) as provided by a report from a reputable environmental
engineer or environmental consulting firm, then Lessee shall immediately notify
Lessors as provided herein.  Lessors shall have forty-five (45) days after
receipt of notice to either:  (1) undertake at Lessors’ expense such necessary
Remedial Actions, or (2) notify Lessee as provided herein that they elect not to
undertake such necessary Remedial Actions.  In the event Lessors elect not to
take such necessary Remedial Actions, then Lessee may either (1) elect to
undertake such necessary Remedial Action at its sole expense, or (2) terminate
this Lease by providing notice to Lessors as provided herein.
 
(d) Compliance with Environmental Laws After Effective Date.  Lessee shall keep,
and shall cause all operators, managers, tenants, subtenants, licensees and
occupants of the Leased Premises, anybody who comes onto the Leased Premises
under Lessee’s authority or control and all agents, employees, contractors and
subcontractors of Lessee to keep, the Leased Premises free of all Hazardous
Substances, and Lessee shall not cause or permit the Leased Premises or any part
thereof to be used for the storage, treatment, generation, transportation,
processing, handling, production or disposal of any Hazardous Substances, except
as incidental and necessary to use the Leased Premises for the purposes stated
herein, which in all events will be in compliance with all Environmental Laws.
 
 
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(e) Indemnity for Environmental Claims.  Lessee agrees to indemnify, defend
(with counsel satisfactory to the Lessors) and hold Lessors and its
shareholders, members, managers, officers, employees, directors and agents
harmless from any claims, judgments, damages, penalties, fines, expenses,
liabilities or lawsuits arising during or after the term of this Lease out of or
in anyway related to its use of the Leased Premises or for any leak, peril,
release, discharge, emission or disposal of Hazardous Substances affecting the
Leased Premises during the occupancy of the Leased Premises by the Lessee,
unless such Hazardous Substances were present upon the Leased Premises prior to
the Effective Date hereof.  If such Hazardous Substances were present upon the
Leased Premises prior to the Effective Date, Lessors shall be solely responsible
for any claims, judgments, damages, penalties, fines, expenses, liabilities, or
lawsuits arising during or after the term of this Lease arising from any leak,
spill, release, discharge, emission, or disposal of Hazardous Substances, except
for the Ten Thousand Dollar ($10,000) threshold amount described above in
sub-paragraph (c) of this paragraph 6.  It is the purpose of this sub-paragraph
(e) is to indemnify and hold the Lessors harmless from any and all lawsuits,
claims, losses, damages and actions arising as the result of Lessee’s activity
upon the Leased Premises and to provide Lessors’ counsel at Lessors’ choosing
and at Lessee’s expense in the event Lessors are joined in any lawsuit involving
the Leased Premises, except if the same is the result of the fault or the
negligence of Lessors or their predecessors.  Lessee’s obligation to indemnify
Lessors pursuant to this sub-paragraph shall survive expiration or early
termination of this Lease.
 
7. Representations and Warranties.
 
(a) Representations and Warranties of Lessors.  Lessors hereby represent to
Lessee as follows:
 
(i)  Lessors believe they have good and marketable title to the Leased Premises,
including all water rights, riparian rights and littoral rights, necessary for
the use contemplated by Lessee, and full power and authority to enter into this
Lease.  Excluded from such representation are the following: (i) Lessors do not
represent that said property is free and clear of the claim of the Secretary of
State or State of Mississippi (as sovereign or as trustee), due to the possible
former status of the property as water bottoms; (ii) the Lessors do not
represent that its riparian and/or littoral rights include the right to float a
gaming vessel south or east of the property without the Lessee first obtaining
permission and/or paying a fee or charge to the Secretary of State or other
appropriate state agency.  Any such charge shall be the sole obligation and
responsibility of the Lessee.
 
(ii)  Each of Lessors has full power and authority to enter into this Lease.
 
(iii)  The execution, delivery and performance of this Lease by the person
executing the same on behalf of Lessors have been duly and validly authorized
and this Lease constitutes the legal, valid and binding obligation of the
Lessors enforceable in accordance with its terms.
 
(iv)  This Lease constitutes the legal, valid and binding obligation of the
Lessors, enforceable in accordance with its terms.
 
(v)  Lessors are not aware of any adverse condition undisclosed to Lessee which
would materially adversely affect Lessee’s use of the Leased Premises, except
those set forth herein, and those discovered by Lessee during its due diligence
period.

 
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(vi)  Neither Lessors nor, to the best of the Lessors’ knowledge, any Affiliate
of Lessors are unwilling to file all necessary applications to obtain whatever
Approvals may be required of such Persons in connection with the Leased
Premises.  Neither Lessors nor, to the best of the Lessors’ knowledge, any
Affiliate of Lessors have ever engaged in any conduct or practices which any of
the foregoing Persons should reasonably believe would cause such Person or
entity to be denied any Approval and/or cause any of the buy-out triggering
events described in paragraph 5.
 
(vii)  Lessors have not received any notice or other communication concerning
any alleged violation of Environmental Laws or party notices or other
communications concerning liability for Hazardous Materials in connection with
the Leased Premises, and there exists no writ, injunction, decree, order or
judgment outstanding, nor any lawsuit, claim, proceeding, citation or
investigation, pending or threatened, relating to the ownership, use,
maintenance or operation of the Leased Premises by any person, or to any alleged
violation of any Environmental Law or to the suspected presence of Hazardous
Materials thereon, nor, to the best of Lessors’ knowledge do there exist any
basis for any such lawsuit, claim, proceeding, citation or investigation being
instituted or filed.
 
(viii)  Except as provided herein, to the best of Lessors’ knowledge, there are
no Hazardous Materials stored, deposited, or otherwise located in, on or under
the Leased Premises nor has the Leased Premises ever been used as a landfill or
waste disposal site, or used or occupied for the purpose of, or in any way
involving, the handling, manufacture, treatment, storage, use, generation,
release, discharge, refining, dumping or disposal of any Hazardous Material to,
from or across the Leased Premises.
 
(b) Representations and Warranties of Lessee.  Lessee hereby represents and
warrants to the Lessors as follows:
 
(i)  Lessee has full power and authority to enter into this Lease.
 
(ii)  The execution, delivery and performance of this Lease by the person
executing the same on behalf of the Lessee have been duly and validly authorized
and this Lease constitutes the legal, valid and binding obligation of Lessee
enforceable in accordance with its terms.
 
(iii)  This Lease constitutes a legal, valid, and binding obligation of Lessee,
enforceable in accordance with its terms.
 
(iv)  Lessee represents that it has performed its due diligence as set forth in
paragraph 3 hereof and accepts the Leased Premises in the condition in which it
now is without representation or warranty, all as set forth in paragraph 3
hereof.
 
8. Default.  Lessors may terminate this Lease after expiration of the following
notices and cure periods:
 
(a)  If rent or delinquent rent payments as provided in Paragraph 4(g) are not
paid within ninety (90) days after the written notice from the Lessors to Lessee
and to any and all Leasehold Mortgagee(s) (if any);

 
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(b)  If Lessee or any and all Leasehold Mortgagee(s) shall have failed to cure a
default in the performance of any covenant or other material representation,
warranty, obligation or duty of this Lease (except the payment of rent) within
ninety (90) days after written notice thereof from Lessors to the Lessee and any
and all Lessor Mortgagee(s);
 
(c)  If Lessee, after the commencement of Gaming Operations, through its own
fault, shall cease to conduct Gaming Operations on the Leased Premises for a
continuous period of one-hundred eighty (180) days, then Lessors shall have the
option to declare this Lease terminated, except for where the cessation of
Gaming Operations is caused by a natural disaster beyond the control of Lessee;
or
 
(d)  For any other grounds providing for termination as may be otherwise
expressly provided in this Lease.
 
In the event a bona fide dispute arises between the parties as to whether a
default exists on the part of the Lessee, which dispute cannot be cured within
the time periods provided above, then Lessee or any Leasehold Mortgagee(s) may
post a bond or a letter of credit (satisfactory to a reasonable man in a similar
transaction) in an amount adequate to assure that any such default is cured, and
thereafter Lessee or such Leasehold Mortgagee(s) may have a reasonable time (not
to exceed one-hundred eighty (180) days after notice of default) to cure any
such default, during which time the obligation to pay rent shall continue
according to the terms hereof.
 
9. Damage and Destruction.
 
(a) Notice.  In the event of any damage to or destruction of all or any part of
the Leased Premises, Lessee will promptly give written notice thereof to
Lessors, which notice shall generally describe the nature and extent of such
damage or destruction.
 
(b) Restoration.  Except as provided in paragraph 9(d), (e) and (f), and, in the
event of any damage to or destruction of all or any part of the Leased Premises
and whether or not the insurance proceeds on account of such damage or
destruction shall be sufficient for the purpose, Lessee shall promptly commence
and shall thereafter diligently and continuously prosecute to completion the
restoration, replacement or rebuilding of the Leased Premises as nearly as
practicable to their value, architectural condition and character as existed
immediately prior to such damage or destruction so as to permit resumption of
the use of the Leased Premises for the permitted use(s) to as nearly the same
degree as possible (pending completion of the work, such restoration,
replacement or rebuilding, together with any temporary repairs and property
protection, are herein collectively referred to as “Restoration”).
 
(c) Application of Proceeds.  Except as otherwise provided in this paragraph 9,
insurance proceeds received on account of any damage to or destruction of the
Leased Premises or any part thereof shall be paid to a third party insurance
trustee to be agreed upon by the parties, for application to pay for the cost of
Restoration (“Insurance Trustee”). In the event the parties cannot agree on an
Insurance Trustee to receive and hold the funds from any such loss, either party
may petition the Chancery Court of Harrison County, Mississippi, First Judicial
District to appoint an Insurance Trustee.  The parties acknowledge that any FDIC
insured banking institution is qualified to serve as the Insurance Trustee
provided that said banking institution has no relationship to any party to this
Lease.  To the extent any such proceeds shall be inadequate to pay such cost, it
shall be Lessee’s sole cost and obligation to pay all additional costs of
Restoration, unless Lessee exercises its right of termination as provided in
paragraph 9(d) or (e).  Lessee shall provide written notice to Lessors of the
availability of such funds.
 
 
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(d) Damage Covered by Insurance.  If the Leased Premises shall be damaged by
fire or other casualty which is covered by insurance required to be maintained
by Lessee, Lessee shall commence Restoration within thirty (30) days after such
insurance proceeds have been made available or no later than one hundred and
eighty (180) days after the casualty and shall continue said repairs with due
diligence to complete the Restoration; provided, however, if such damage is
seventy percent (70%) or more of the Replacement Cost of the Leased Premises,
Lessee shall have the option, exercisable by written notice to Lessors within
sixty (60) days after the date of such casualty, to terminate this Lease
effective as of the date provided below.  In such event, (i) if the Improvements
are structurally sound following the casualty, then the term shall cease ten
(10) days after Lessee has delivered a certification from the architect that the
Improvements are structurally sound notwithstanding the casualty and Lessee has
cleared all debris and materials from the Leased Premises and secured the
Improvements against the weather or (ii) if the Improvements are not
structurally sound following the casualty, then the term shall cease ten (10)
days after Lessee has cleared all debris and materials from the Leased Premises
and restored the parcel to a clear, clean, filled, compacted and graded surface
(the obligations in (i) and (ii) of this sentence are collectively the
(“Casualty Termination Work”).  In the event of such termination, any proceeds
payable under any of Lessee’s policies for debris removal shall be applied to
the cost of the Casualty Termination Work (or paid to Lessor if Lessee does not
perform the Casualty Termination Work) and any other proceeds of Lessee’s
policies shall be used to pay off Lessee’s permitted mortgagees and the balance
shall be paid fifty percent (50%) to Lessors and fifty percent (50%) to
Lessee.  If Lessee does not exercise such right to terminate or is required to
complete the Restoration, all insurance proceeds shall be paid to the Trustee
and shall thereafter be made available to Lessee as Restoration continues and
such funds shall be disbursed by the Insurance Trustee, based upon the actual
work satisfactorily completed by the Lessee (or its contractor), which work
shall be certified by an architect licensed and bonded to conduct business in
the State of Mississippi, and following Lessee’s execution of such documents
required by the Insurance Trustee to evidence that all bills for Restoration
have been paid and there are no outstanding materialman’s liens or bills which
could create a lien against the property, and Lessee shall with due diligence
proceed with the Restoration.  As used in this paragraph 9, the term
“Replacement Cost” shall mean the replacement cost agreed to by Lessees and its
insurer in the insurance policies required hereunder. In the event such policies
do not contain a determination of replacement cost, then replacement cost shall
be determined by other reasonable and appropriate means.
 
(e) Damage Near the End of the Term.  If, during the last ten (10) years of this
Lease, the Leased Premises is damaged by fire or other casualty, the Restoration
cost of which exceeds Forty Million Dollars ($40,000,000), Lessee and Lessors
shall have the option, exercisable by written notice to the other within sixty
(60) days after the date of such casualty to terminate this Lease effective as
of the date of such casualty. In such event, Lessors shall be entitled to all
the insurance proceeds except for any insurance proceeds insured separately by
the Lessee which are attributable to the Lessee’s personalty and the amount
actually expended by Lessee (at Lessors’ written request) for Casualty
Termination Work (i.e., demolishing and removing all damaged Improvements and
surrender the Leased Premises to Landlord in a clean condition, free of any and
all debris).  If neither party elects to terminate this Lease, then Lessee shall
with due diligence cause such Restoration and all insurance proceeds shall be
made available to Lessee for such Restoration, as described in paragraph 9(d).

 
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(f) Non Abatement of Rent.  The parties expressly acknowledge and agree that
there will be no abatement of rent following any such casualty loss, and that
any and all rent or other amounts due hereunder shall remain due and payable
following any casualty loss and during any period of Restoration, without
setoff, claim or demand.
 
10. Right of Refusal to Purchase Leased Premises.
 
(a) Offer to Purchase Leased Premises from Both Lessors.  Lessors hereby grant
to Lessee a first right of first refusal to purchase the Leased Premises in the
event that both Lessors shall desire to sell the Leased Premises as a whole, and
both Lessors have received a single definitive bona fide offer to purchase the
Leased Premises as a whole.  In such event, the Lessors’ shall notify Lessee in
writing, which writing shall include an exact copy of such definitive offer, and
Lessee shall thereafter have a thirty (30) day period of time within which to
purchase the Leased Premises from the Lessors on the same terms and conditions
and at the same price as set forth in such offer.  If the Lessee does not elect
to exercise its right of first refusal within such thirty (30) day period or
notifies the Lessors in writing that it will not exercise such right of first
refusal, then Lessors may proceed to sell the Leased Premises pursuant to such
bona fide offer under the same terms and conditions as those provided to the
Lessee.
 
(b) Offer to Purchase Leased Premises from a Single Lessor.  Each Lessor hereby
grants to Lessee a second right of first refusal to purchase its Parcel of the
Leased Premises in the event that a single Lessor shall desire to sell its
Parcel of Leased Premises, and such Lessor has received a definitive bona fide
offer to purchase such Lessor’s Parcel of the Leased Premises.  In such event,
the Lessor desiring to sell shall first notify the other Lessor hereof or their
successors and/or assigns in writing, which writing shall include an exact copy
of such definitive offer, and such other Lessor shall have a thirty (30) day
period of time within which to purchase the selling Lessor’s Parcel of the
Leased Premises from the selling Lessor on the same terms and conditions and at
the same prices as set forth in said offer.  If the Lessors have a written
agreement as to such right of first refusal it shall supersede this paragraph,
except that if the non-selling Lessor refuses to purchase pursuant thereto, the
balance of this paragraph shall apply.  In the event such non-selling Lessor
does not exercise its right of first refusal within such thirty (30) day period
or such non-selling Lessor notifies the selling Lessor in writing that it will
not exercise its right of first refusal, then the selling Lessor shall notify
the Lessee in writing, which writing shall include an exact copy of such
definitive offer, and Lessee shall thereafter have a thirty (30) day period of
time within which to purchase the selling Lessor’s Parcel of the Leased Premises
from the selling Lessor on the same terms and conditions and at the same price
as set forth in such offer.  If the Lessee does not elect to exercise its right
of first refusal within such thirty (30) day period or notifies the selling
Lessor in writing that it will not exercise such right of first refusal, then
the selling Lessor may proceed to sell selling Lessor’s Parcel pursuant to such
bona fide offer under the same terms and conditions as those provided to the
Lessee.

 
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(c) Rights of Refusal Shall Apply to Transfers of One Hundred Percent of
Lessors.  The provisions of this paragraph 10 shall be applicable to a
transaction or to a series of related transactions the purpose of which is
circumvent the Lessee’s rights of first refusal provided in paragraph 10(a) and
(b), but only if one hundred percent (100%) of the effective ownership of the
entire Leased Premises (or one hundred percent (100%) of the effective ownership
interest of a single Lessor’s entire Parcel) is transferred.
 
(d) Limitations of Applicability.  This paragraph 10 shall not prohibit any
transfer among the owners of a Lessor or any respective Lessor entity in which
less than one hundred percent (100%) of the effective ownership of the entire
Leased Premises (or one hundred percent (100%) of the effective ownership
interest of a single Lessor’s entire Parcel) is transferred.  Furthermore, this
paragraph 10 shall not be applicable to any reorganization of a Lessor or a
reorganization of an Affiliate of a Lessor.  The provisions of this paragraph 10
shall not prohibit the liquidation of a Lessor and distribution to the owners of
the Lessor or an Affiliate of such Lessor.  This paragraph 10 shall not apply to
a sale from one Lessor to the other Lessor.  This paragraph 10 shall not
prohibit any transfer of ownership interests within the respective Lessor
entities or their Affiliates or to or from any Persons owning an interest in
Lessors or an Affiliate of a Lessor unless such transfer would result in a
transfer of one hundred percent (100%) of the effective ownership of the entire
Leased Premises (or one hundred percent (100%) of the effective ownership
interest of a single Lessor’s entire Parcel).  In addition to the foregoing, no
provision of this Lease shall restrict or otherwise have any effect on a
buy-sell agreement among the respective Lessor entities or their Affiliates or
any Persons owning an interest in Lessors, a Lessor entity or an Affiliate of a
Lessor.
 
11. Right to Convey, Assign, or Sublet.  Lessee may, without Lessors’ consent,
convey, sublease, and/or assign its rights, but not its obligations, hereunder,
and Lessee may sublease a part or parts of the Leased Premises for such uses as
gift shops, restaurants, hotels, marinas or similar use or concession; provided,
however, that any conveyance, assignment and/or sublease shall be subject to
this Lease, and neither Lessee nor any of its successors, assigns, or sublessees
shall create any lien or encumbrance on Lessors’ fee simple title to the Leased
Premises.  Lessee shall notify the Lessors, as provided in paragraph 11 hereof,
within five (5) days thereafter, of any conveyance, sublease or assignments of
rights hereunder.  Lessee shall only be relieved of its obligations hereunder by
written release of same from Lessors.  Notwithstanding anything in this Lease to
the contrary, no conveyance, sublease, assignment, or Mortgage created by or
through the Lessee shall in any way impair the Lessors’ fee ownership interest
in the Leased Premises, and any Person taking an interest in the Leased Premises
by or through the Lessee shall at all times be subject to and bound by all terms
and provisions of this Lease.
 
12. Lessee’s Requirements to Carry Certain Insurance and Lessee’s
Indemnification.  Commencing with the Primary Term, Lessee will cause to be
carried, and pay the premiums, for the insurance required in this paragraph
12.  Lessee’s insurance shall be issued by an insurance company of recognized
standing, authorized to do business in the State of Mississippi with a Best’s
Insurance Guide with a minimum rating of (or equivalent to) A+.  Upon the
request of Lessors, Lessee shall periodically provide Lessors with certificates
of insurance evidencing compliance with the requirements of this paragraph
12.  Lessee’s insurance shall include a waiver of subrogation favoring Lessors
regarding the Leased Premises and shall provide or cause its insurer to provide
Lessors at least thirty (30) days in advance of any termination, reduction or
other material change in Lessee’s coverage on the following policies.
 

 
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(a) Premises Insurance.  A cause of loss special form (all risks) policy
insuring the Leased Premises and all Improvements thereon in an amount not less
than one hundred percent (100%) of the full replacement value of the Leased
Premises as evidenced by “Replacement Costs” or “Restoration” endorsements
thereto.  The term “Full Replacement Value” as used herein means actual
replacement value without deduction for physical depreciation, as determined
upon the request of Lessors, at the expense of Lessee, by appraisals at
intervals not more frequently than may be required in order for the company
issuing such insurance to provide the required “Replacement Cost” or
“Restoration” endorsements.  Any property insurance policy issued pursuant to
the forgoing shall name the Lessors as additional insureds on said policy.  Such
coverage will provide coverage for debris removal.
 
(b) Liability Insurance.  A combined single limit policy of commercial general
public liability insurance for bodily injury, property damage and personal
injury liability of not less than Five Million Dollars ($5,000,000) per
occurrence and Five Million Dollars ($5,000,000) in the aggregate.  The
insurance required by this subsection shall be maintained for coverage for
events occurring during the period of this Lease without regard to when the
claim is asserted.  Lessors will be named as additional insureds on said policy.
 
(c) Business Interruption Insurance.  Lessee shall maintain business
interruption insurance (“Business Interruption Insurance”) sufficient to cover
any Rent and all other amounts due under this Lease for a period of six (6)
months commencing with the date of loss.
 
(d) Other Insurance.  Lessee shall also carry such other insurance as it may
deem prudent or advisable or which is otherwise required by law or customary
under the circumstances, including but not limited to, workers’ compensation
insurance.
 
(e) Waiver of Subrogation.  Lessee waives any claims that it may have against
Lessors on account of any loss or damage occasioned by Lessee, arising from any
and all risk covered or required to be covered by the insurance required to be
carried under the terms of this Lease, EVEN IF SUCH LOSS OR DAMAGE IS CAUSED BY
THE NEGLIGENCE OF THE LESSORS AND EVEN IF THE LESSORS WOULD OTHERWISE BE
STRICTLY LIABLE FOR SUCH LOSS OR DAMAGE UNDER APPLICABLE LAW.  Lessee agrees to
immediately give its insurance company written notification of the terms of the
waiver contained in this paragraph 12(e) and to have its insurance policies
properly endorsed, if necessary, to prevent the invalidation of insurance
coverage by reason of this waiver.
 
13. Indemnification.  Lessee hereby expressly agrees to indemnify and hold
Lessors harmless, or cause Lessors to be indemnified and held harmless, from and
against all liabilities, obligations, damages, penalties, claims, causes of
action, costs, charges and expenses, including attorney’s fees and costs
(collectively “Losses”), which may be imposed upon or incurred by or asserted
against Lessors by reason of the following:

 
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(i)  Any construction, alterations, renovations, additions, maintenance or
repairs or other work or thing done in or on the Leased Premises or any part
thereof;
 
(ii)  Any use, non-use, possession, occupation, alteration, repair, condition,
operation, maintenance or management of the Leased Premises or any part thereof
or of any street, alley, sidewalk, curb, vault, passageway or space comprising a
part of or adjacent to the Leased Premises or any part thereof;
 
(iii)  Any accident, injury (including death at any time resulting therefrom) or
damage to any Person or property occurring in or on the Leased Premises or any
part thereof;
 
(iv)  Any failure on the part of Lessee to perform or comply with any
requirements or with any of the covenants, agreements, terms or conditions
contained in this Lease on its part to be performed or complied with;
 
(v)  Any lien or claim which may have arisen out of any act of Lessee or any
agent, contractor, subcontractor, servant or employee or Lessee against or on
the Leased Premises, or any lien or claim created or permitted to be created by
Lessee in with respect to the Leased Premises, or against any assets of any of
the Lessors under the laws of the State of Mississippi or of any other
governmental authority or any liability which may be asserted against any of the
Lessors with respect thereto;
 
(vi)  Any failure on the part of Lessee to keep, observe and perform any of the
terms, covenants, agreements, provisions, conditions or limitations contained in
any contract for construction of Improvements at the Premises or in connection
with any subleases, on Lessee’s part to be kept, observed or performed; or
 
(vii)  Any and all construction, alterations, renovations, additions, or repairs
to the Leased Premises the condition of any improvement or any part thereof.
 
Lessee agrees to indemnify Lessors for any such Losses except such matters
caused by or resulting from Lessors’ willful or intentional
misconduct.  Lessee’s obligation to indemnify Lessors pursuant to this paragraph
12 shall survive expiration or earlier termination of this Lease.  In case any
action or proceeding is brought against Lessor by reason of any such occurrence,
Lessee, upon Lessors’ request and at Lessee’s expense, will resist and defend
such action or proceeding, or cause the same to be resisted and defended either
by legal counsel designated by Lessee or, where such occurrence is covered by
liability insurance, by legal counsel designated by the insurer if so required
by such insurer.
 
14. Lessee Will Obtain Gaming License. Lessee (and/or its principals, as the
case may be) will, at its sole cost and expense, and to the best of its ability
proceed to obtain any and all governmental licenses, requirements, or approvals
which may be necessary under any applicable laws or regulations or rules for the
legal operation of a gaming facility on the Leased Premises, and Lessors will
co-operate with Lessee to the best of its ability toward accomplishment of the
same without cost or expense to the Lessors.  No later than one hundred twenty
(120) days after certification by the appropriate Governmental Authorities that
the site is zoned for Gaming Operations, Lessee shall submit application for
site plan and development plan approval to the Mississippi Gaming Commission and
shall diligently proceed to do all things necessary to procure said approvals
and a gaming license.
 

 
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15. Lessee’s Right to Enter Into Possession of the Leased Premises. Lessee shall
have the right to enter upon and take full possession of the Leased Premises
immediately upon the Effective Date.
 
16. Ad Valorem Taxes and Other Charges. Upon the Effective Date, the Lessee
shall become liable for the payment of all ad valorem taxes and/or special
assessments against the Leased Premises and upon Improvements, Gaming
Structures, Permanent Facility and any personal property used thereon.  Ad
valorem taxes for the initial year shall be prorated and assumed by the
Lessee.  Upon that year’s taxes becoming due and payable, Lessee shall pay its
pro rata share and the Lessors shall contribute its pro rata share upon Lessee
giving it five (5) days notice of the amount.  In addition, Lessee shall pay on
or before the due date, and before any fine, penalty, interest or costs may be
added thereto:
 
(a)  All taxes, license fees, assessments, levies, tidelands lease payments,
water and sewer rents and charges, and all other governmental charges, general
and special, ordinary and extraordinary, foreseen and unforeseen, whether or not
now customary or within the contemplation of Lessors and Lessee, which are at
any time during the duration of this Lease, imposed or levied upon, reasonably
attributable to, or assessed against (i) the Leased Premises, (ii) this Lease or
the leasehold estate hereby created, (iii) the operation, possession or use of
the Leased Premises, (iv) the cost or value of any equipment, furniture,
fixtures and other personal property located in or upon the Premises, or the
cost or value of any leasehold Improvements made in or to the Leased Premises by
or for Lessee, whether such Improvements are owned by the Lessors or Lessee, and
(v) the possession, leasing, operation, management, maintenance, alteration,
repair, use or occupancy by Lessee of the Premises or any portion thereof;
 
(b)  All sales, value added, ad valorem, use and similar taxes at any time
levied, assessed or payable on account of the acquisition, ownership, leasing,
operation, possession or use of the Leased Premises; and
 
(c)  All charges of utilities, communications and similar services serving the
Leased Premises.
 
17. Lessee’s Right to Mortgage.  Lessee is given and has the absolute right,
without the Lessors’ consent, to mortgage its interest in this Lease, or to
pledge, sale-leaseback, or otherwise assign this Lease as security for
financing, provided that no such mortgage, pledge, sale-leaseback, and/or
assignment shall extend to or affect the fee or the reversionary interest of the
Lessors.  Herein any mortgage, pledge, sale-leaseback, and/or assignment for
security shall be referred to as a “Mortgage,” and the holder thereof shall be
referred to as “Leasehold Mortgagee.”
 
(a)  No Mortgage of this Lease shall be binding upon the Lessors in the
enforcement of its rights under this Lease, nor shall the Lessors be deemed to
have any notice thereof, unless and until a fully conformed copy of each
instrument pertaining to such Mortgage shall have been delivered to Lessors by
the method provided in paragraph 27.
 
 
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(b)  If the holder of any such Mortgage shall give the Lessors, before any
default shall have occurred in this Lease, a written notice as required in
paragraph 27, containing the name and post office address of such Leasehold
Mortgagee, Lessors shall thereafter give to each such Leasehold Mortgagee a copy
of each notice of default by the Lessee, or demand made on the Lessee pursuant
to this Lease, at the same time as such notice of default or demand shall be
given by Lessors to Lessee.
 
(c)  Lessors will accept performance by the Leasehold Mortgagee of any such
Mortgage of any term of this Lease required to be performed by Lessee, with the
same force and effect as though performed by Lessee.
 
(d)  Lessee shall have the right, without Lessors’ consent, to assign income or
percentages of gaming revenue for the purposes of obtaining financing, and the
Leasehold Mortgagees thereof shall have the same right, duties, and obligations
as a Leasehold Mortgagee of Mortgages, pledges, or assignments have in the
preceding and remaining portions of this paragraph 17; provided, that, no such
assignment shall in any way vitiate the obligation of Lessee to pay any and all
rent or other amounts due hereunder.
 
(e)  Lessors, within fourteen (14) days after a request in writing by Lessee,
shall furnish a written statement, duly acknowledged, that this Lease is in full
force and effect and that there is no default hereunder by Lessee, or if there
is a default such statement shall specify the default which Lessors claim to
exist.
 
(f)  If, after Lessors are notified of the Leasehold Mortgagee of any Mortgage,
then Lessors will not accept any surrender or enter into any modifications of
this Lease without the additional written consent of said Leasehold Mortgagee.
 
(g)  In the event a Leasehold Mortgagee shall be entitled to become the owner of
this Lease by foreclosure, by assignment in lieu of foreclosure, or otherwise,
such Leasehold Mortgagee shall, within a reasonable time, deliver to Lessors an
assumption agreement executed in recordable form, pursuant to which such
Leasehold Mortgagee assumes the performance of all of the terms, covenants, and
conditions of this Lease as Lessee.
 
18. Lessors’ Cooperation with Lessee and Lessee’s Lender Regarding
Financing.  Anything in this Lease notwithstanding, Lessors hereby acknowledge
that Lessee will seek financing for the casino, hotel, and other developments on
the Leased Premises.  Lessors hereby acknowledge that lender(s) of the Lessee
may require that certain terms of this Lease be modified as a condition of
providing the financing.  Lessors hereby agree and covenant that it will
negotiate in good faith any proposed changes that may be requested by such
lender(s).
 
19. Uses of the Property. The Lessee may use the Leased Premises for Gaming
Operations and/or any other use not prohibited by the laws of the United States
of America, the State of Mississippi, or ordinances or regulations of the City
of Gulfport, Mississippi.
 
 
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20. Construction, Improvements, Alterations and Maintenance.
 
(a) Aesthetics.  Lessee shall, in the required construction, maintenance, and
operation of Gaming Operations upon the Leased Premises, construct, operate, and
maintain such property and Improvements, including a vessel to be used for
dockside gaming so as to be pleasing and attractive aesthetically.
 
(b) Improvements and Gaming Structures.  Any and all construction, alterations,
renovations, additions, or repairs to the Leased Premises, including but not
limited to, any Improvements, Gaming Structures and any Permanent Facility
constructed after the Effective Date shall be made at the sole cost and expense
of Lessee, including any and all costs and expenses regarding or in any way
relating to the Improvements.  Lessors’ consent to any Improvements shall not be
required; however, in advance of commencing any improvement to the Leased
Premises, Lessee shall submit to Lessors complete and appropriate plans,
drawings and specifications regarding such Improvements which Lessee desires for
the Leased Premises.  Promptly after completion of any Improvements, Lessee
shall furnish to Lessors final as-built plans.  The parties agree that any and
all Improvements to the Leased Premises shall not reduce any rents due under
this Lease.  Further, any and all Improvements constructed by Lessee or on
behalf of through Lessee shall be the property of Lessee or any successor in
interest (“Owner”) and shall, until they become the property of Lessors at the
expiration or earlier termination of the Primary Term as herein specifically
provided, be subject to the assessment for ad valorem taxes in the name of the
Owner.
 
(c) Lessee Fixtures and Equipment.  Lessee may remove any furniture, trade
fixture and fixed equipment purchased or acquired by Lessee and installed in or
on the Leased Premises, the cost of which removal shall be paid by
Lessee.  Lessee shall fully repair all material damage occasioned by the removal
of any such fixtures or equipment and shall leave the Leased Premises in good
condition, reasonable wear and tear excluded.  The foregoing notwithstanding,
all personal property of Lessee remaining on or within the Leased Premises more
than ninety (90) days beyond the termination of the Lease, whether by lapse of
time or otherwise, shall be deemed abandoned by Lessee and may be removed and
sold or disposed of by Lessors.  Any reasonable costs and damages actually
incurred by the Lessors caused or made necessary by reason of removal or
disposal of abandoned property shall be paid by Lessee within thirty (30) days
of receipt of invoice from Lessors.
 
(d) Liens for Improvements.  Within five (5) days after the commencement of any
Improvements, Lessee shall post and keep posted until completion of such work,
in a conspicuous place, and shall personally serve upon all contractors or
subcontractors performing such work, any required or permitted notice advising
them that Lessors’ interests in the Leased Premises shall not be subject to any
lien for such work.  If any lien is filed against all or any part of the Leased
Premises for work claimed to have been done for, or materials claimed to have
been furnished to, Lessee or its agents, servants, contractors, subcontractors,
employees or independent contractors, Lessee, at its sole cost and expenses,
shall cause such lien to be discharged within twenty (20) days after receipt of
notice that such lien has been filed, by payment thereof or by filling a bond or
a letter of credit sufficient to discharge the lien.
 
(e) Maintenance.  Throughout the term of the Lease, Lessee agrees to maintain
and keep the Leased Premises and any Improvements in good order, condition and
repair, ordinary wear, and damage by fire or other casualty excepted. All damage
or injury to the Leased Premises caused by Lessee, or carelessness, omission,
neglect or improper conduct of Lessee, its agents, employees, patients, guests,
invitees, contractors, subcontractors, or licensees shall be repaired, restored
or replaced promptly by Lessee at its sole costs and expense.
 
 
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21. Condemnation.  In the event the whole or a substantial part of the Leased
Premises is condemned by eminent domain or otherwise acquired by a public
agency, or other agency having the right of eminent domain, the Lease shall
terminate upon the date that such agency takes possession of the Leased
Premises, and the parties hereto shall share in the settlement or award, as the
case may be, according to the provisions of the then current Mississippi
law.  If less than the whole is taken in such proceedings, and the Leased
Premises is still susceptible for use as a legal gaming site, this Lease shall
not be terminated and a reduced Minimum Rent shall be negotiated, but the
Percentage Rent shall remain the same.  In such instance any recovery shall
first apply to restore the Leased Premises to be used as a legal gaming site and
any balance shall be distributed according to then existing Mississippi law.
 
22. Surrender of Premises.  Lessee shall surrender the subject premises to
Lessors at the expiration or earlier termination of this Lease in good order and
condition, reasonable wear and tear accepted.  Upon the expiration or earlier
termination of this Lease, fee simple title to the Leased Premises, including
without limitation, all Improvements or Gaming Structures shall vest in Lessors
free and clear of any liens and encumbrances of any type other than those
created by Lessors without any obligation by Lessors to pay any compensation to
Lessee or any other person or entity.  To this end, Lessee agrees to execute and
deliver a limited warranty deed for any Improvements, Gaming Structures and
Permanent Facility then located on the Leased Premises promptly upon the request
of the Lessors for no additional consideration.  Further, at the expiration or
earlier termination of this Lease, Lessee shall execute, acknowledge and deliver
to Lessors, within fifteen (15) days after written demand from Lessors to
Lessee, any document in a form reasonably requested by Lessors quitclaiming any
right, title or interest in the Leased Premises to Lessors, or other document
required by any reputable title company to resolve the cloud of this Lease from
the Leased Premises.  Lastly, prior to the last day of the Primary Term, or upon
any earlier termination of this Lease, Lessee shall deliver to Lessors, to the
extent in Lessee’s possession, Lessee’s executed counterparts of all space
leases/subleases and all service and maintenance records for the Leased
Premises, all original licenses and permits then pertaining to the Leased
Premises, permanent or temporary certificates of occupancy then in effect for
the Improvements, and all warranties and guarantees then in effect which Lessee
has received in connection with any work or services performed in, on or under
the Leased Premises.
 
23. Recognition of Waterfront Status.  The parties hereto recognize that the
Leased Premises is waterfront property, and, as such, enjoys common law and
statutory riparian/littoral rights; and, that such rights are indivisible
property rights contributing to the use, desirability and value of the Leased
Premises.  The Lessee is granted such use of such riparian/littoral rights as
are necessary for the operations of its gaming vessel, however, the Lessee
convenants to honor, protect and preserve the waterfront nature of the property
and its attendant riparian/littoral rights and to nurture and preserve the same
so as not to diminish the nature and quality of such rights and the value of the
waterfront nature of the Leased Premises.  Except as necessary to dock and serve
its casino vessel, the Lessee convenants to maintain the shoreline and keep the
property and its shoreline from eroding, relicting or avulting so that the
present shoreline is faithfully maintained and preserved.  The Lessee convenants
to maintain the property so that the waterfront nature thereof will be enjoyed
by the Lessee’s guests and invitees and to maintain the waterfront nature of the
property and easy access thereto and enjoyment thereof.  There will be no
construction along the waterfront that interferes with the view or waterfront
nature of the Leased Premises so that upon the return of the Leased Premises to
the Lessors at the end of the Primary Term, or as otherwise herein provided, the
property will be returned as waterfront property with all riparian/littoral
rights fully intact and available for unrestricted enjoyment and use by the
balance of the property.
 
 
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24. Forum, Attorneys’ Fees, and Specific Performance.  The parties agree that in
the event of necessity of enforcement of this Lease or for any and all claims
regarding or relating to this Lease, any resulting litigation shall be
irrevocable and exclusively conducted in the state courts of the First Judicial
District of Harrison County, Mississippi, or the United States District Court
for the Southern District of Mississippi and shall be governed by Mississippi
law (without regard to Mississippi’s conflict of law principles).  Any
bankruptcy proceedings which might be filed by Lessee or Lessors shall be filed
in the Southern District of Mississippi Federal Bankruptcy Court.  In the event
of any litigation for enforcement of this Lease, the prevailing party shall be
reimbursed all reasonable costs and expenses of litigation, including attorneys’
fees by the unsuccessful party.  In addition to the remedies provided herein
both parties shall, at their option, have the remedy of specific performance.
 
25. Unenforceable Provision Shall Not Invalidate the Whole. Any provision of
this Lease which is prohibited or unenforceable shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.  To the extent permitted by applicable law, Lessee
and Lessors hereby waive any provision of law which renders any provision hereof
prohibited or unenforceable in any respect.
 
26. Amendment Provision. No terms or provisions of this Lease may be changed,
waived, discharged, or terminated orally, but only by an instrument in writing
signed by the party against which the enforcement of the change, waiver,
discharge, or termination is sought.
 
27. Notices. All notices required under this Lease shall be given to:
 
The Lessors:
 
MARINE LIFE VENTURES, LLC
Post Office Box 4078
Gulfport, Mississippi 39502
Phone:  (228) 669-6007
Fax:  (228) 822-2317
 
With Mandatory Copy to:
 
Roland F. Samson, III, Esq.
Samson & Powers, PLLC
1300 25th Avenue, Suite 130 (39501)
Post Office Box 1417
Gulfport, Mississippi 39502
Phone:  (228) 822-1109
Fax:  (228) 822-2317

 
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MC MARINE, LLC
1285 Spring Street
Gulfport, Mississippi 39507
Phone:  (228) 896-9008
Fax:  (228) 896-9917
 
With Mandatory Copy to:
 
Virgil G. Gillespie, Esq.
The Gillespie Law Firm
2213 15th Street
Post Office Box 850
Phone:  (228) 864-4520
Fax:  (228) 864-8464
 
The Lessee:
 
ROTATE BLACK MS, LLC
2510 14th Street, Suite 1125 (39501)
Post Office Box 160
Gulfport, MS 39501
Phone: (228) 424-7424
Fax: (228) 822-8535
 
With Mandatory Copy to:
 
J. William Williams, Esq.
Watkins Ludlam Winter & Stennis, PA
2510 14th Street, Suite 1125 (39501)
Post Office Box 160
Gulfport, MS 39501
Phone: (228) 864-3094
Fax: (228) 822-8535
 
 
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Or such other places as may be designated by the parties in writing from time to
time.  All notices to be given hereunder shall be given by United States
Certified Mail, postage prepaid, with the date of the receipt on the envelope to
be conclusively taken and treated as the date of the receipt by the person to
whom notice is given provided that said envelope is properly addressed and
postage properly prepaid.
 
28. Lessors or Lessee Approvals. All approvals and permissions which are
required by Lessors pursuant to the terms of this Lease will not be unreasonably
withheld by Lessors or by Lessee.
 
29. Parties Shall Co-Operate and Act in Good Faith With Each Other.  Lessee and
Lessors both agree that both parties shall at all times act in good faith in the
implementation of all aspects of this Lease.  Lessors also agree to advise
and/or assist Lessee in any permit applications, and to assist Lessee in all
zoning and/or permit applications, even to the extent of being the named
applicant therein.
 
30. Recording Memorandum.  This Lease shall not be recorded, but rather a short
form memorandum will be recorded which shall set forth the parties, the
description of the property, the length of the respective terms, which
memorandum shall advise interested parties to contact the parties hereto for
further information.
 
31. Parties Are Not Partners or Joint Ventures. The parties hereto have not
created and do not intend to create by this Lease a joint venture or partnership
relationship between them.
 
32. Parties Agree to Execute Additional Necessary Documents and Papers. The
parties hereto agree to execute all additional or necessary papers or documents
which may be necessary to carry out the intent and purpose of this Lease.
 
33. Holding Over.  If Lessor allows Lessee to continue to occupy the Leased
Premises after the expiration of the Primary Term, without any express agreement
as to such occupancy, then such holding over shall be considered a
month-to-month tenancy subject to all terms and conditions of this Lease, as
long as Lessee continues to pay Two Hundred Percent (200%) of all Minimum Rent
and Percentage Rent as provided in this Lease.  However, none of the terms in
this paragraph 33 shall be considered an assurance to Lessee that it may
continue occupancy of the Leased Premises after expiration of the Primary Term,
or an extension of the Primary Term by Lessors on any basis, nor as a waiver of
any of Lessors’ rights to terminate this Lease and re-enter the Leased Premises.
 
34. Lessors’ Access to Leased Premises.  Lessors and their representatives shall
have the right to enter the Leased Premises at all reasonable times to inspect
the same as long as Lessor is accompanied by a Lessee representative and
provides Lessee with at least twenty-four (24) hours prior notice, except in the
case of an emergency when only notice reasonably under the circumstances shall
be required, and notice has been sent to Lessee to make repairs which have not
been made after expiration of any application cure period, to make repairs and
to maintain the Leased Premises.
 
35. Mortgages Subordinate to Lease.  Any Mortgage given after this date by
Lessors shall be subject to and subordinate to the rights of Lessee
hereunder.  Any such mortgage executed by Lessors will contain a provision
requiring that the holder of the indebtedness secured by such mortgage mail to
Lessee, as required by Paragraph 27, a copy of each notice of breach of
covenant, default, or foreclosure given by such holder (or any trustee) to the
Lessors.  This requirement shall be self-operative and no further act by Lessee
shall be required.  Lessors shall deliver to Lessee a copy of any mortgage,
renewal, extension, modification, or consolidation within ten (10) days of the
execution thereof.  In the event Lessors shall at any time fail to pay any
installment of principal or interest or other sum under any mortgage now or
hereafter placed on the Leased Premises and to which this Lease shall be
subordinate, Lessee may make such payment and deduct the amount thereof, with
interest thereof from the date of payment, from the next succeeding installment
of rent which shall become due and payable hereunder.

 
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36. Real Estate Commission. The only real estate commission payable hereunder
shall be that commission incurred by the Lessors in favor of Sawyer Commercial
Real Estate, LLC, as evidenced by that separate agreement by and between Lessors
and Sawyer Commercial

Real Estate, LLC, providing that Sawyer Commercial Real Estate, LLC receives a
commission equal to five (5%) of gross rent received by Lessors, and such
commission shall be the sole obligation of Lessors.  In the event of any sale of
the Leased Premises by Lessors, said commission shall apply.  Notwithstanding
the foregoing, in the event of a conflict in this paragraph 36 and such separate
commission agreement among Lessors and Sawyer Commercial Real Estate, LLC, such
separate commission agreement shall govern.  Each party shall indemnify the
other parties for any demand made for real estate commission incurred contrary
to the above statement.
 
37. Triple Net Lease. This Lease shall always be interpreted as a triple net
lease in favor of the Lessors, it being understood that in addition to the
payment of rent (or any other financial obligation) as provided in this Lease,
Lessee shall, upon the Effective Date, be responsible for all construction,
maintenance, taxes, tidelands lease payments, insurance, fees, and any and all
other costs and expenses incurred as a result of the Lessee’s use or occupancy
of the Leased Premises or any other matter assessed against the Leased Premises
and any Improvements thereon.  Lessors shall suffer no tax, expense or cost of
any nature whatsoever.
 
38. Force Majeure.  In case by reason of force majeure either party hereto shall
be rendered unable wholly or in part to carry out its obligations under this
Lease, then except as otherwise expressly provided in this Lease, if such party
shall give notice and full particulars of such force majeure in writing to the
other party within a reasonable time after occurrence of the event or cause
relied on, the obligations of the party giving such notice, so far as they are
affected by such force majeure, shall be suspended during the continuance of the
inability then claimed which shall include a reasonable time for the removal of
the effect thereof, but for no longer period, and such party shall endeavor to
remove or overcome such inability with all reasonable dispatch. The term “force
majeure,” as employed herein, shall mean acts of God, strikes, lockouts or other
industrial disturbances, acts of the public enemy, orders of any kind of the
Government of the United States or of any state or any civil or military
authority, insurrections, riots, epidemics, landslides, lightning, earthquakes,
fires, hurricanes, storms, floods, washouts, droughts, arrest, restraining of
government and people, civil disturbances, explosions, partial or entire failure
of utilities, shortages of labor, material, supplies or transportation, or any
other similar or different cause not reasonably within the control of the party
claiming such inability.  It is understood and agreed that the settlement of
existing or impending strikes, lockouts, or other industrial disturbances shall
be entirely within the discretion of the party having the difficulty and that
the above requirements that any force majeure shall be reasonably beyond the
control of the party and shall be remedied with all reasonable dispatch shall be
deemed to be fulfilled even though such existing or impending strikes, lockouts,
and other industrial disturbances may not be settled but could have been settled
by acceding to the demands of the opposing person or persons.
 
39. Integration.  This Lease embodies the entire agreement and understanding
among the parties and supersedes all prior agreements and understandings, if
any, among and between the parties relating to the subject matter hereof.
 
40. Terminology.  All personal pronouns used in this Lease, whether used in the
masculine, feminine, or neuter gender, shall include all other genders; and the
singular shall include the plural, and vice versa.  The headings are for
convenience only and neither limit nor amplify the provisions of this Lease
itself.

 
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41. Amendment.  This Lease may be amended, modified or supplemented only by an
agreement in writing signed by all the parties.  No other written or oral
agreement, understanding, instrument or writing other than this Lease or any
amendment hereto shall constitute part of this Lease.
 
42. Waivers.  The failure of any party to seek redress for violation of or to
insist upon the strict performance of any covenant or condition of this Lease
shall not prevent a subsequent act, which would have originally constitute a
violation, from having the effect of an original violation.
 
43. Rights and Remedies Cumulative.  The rights and remedies provided by this
Lease are cumulative and the use of any one right or remedy by any party shall
not preclude or waive the right to seek any or all other remedies.  Said rights
and remedies are given in addition to any other rights the parties may have by
law, statute, ordinance or otherwise.
 
44. Heirs, Successors and Assigns.  Each and all of the covenants, terms,
provisions and agreements herein contained shall be binding upon and inure to
the benefit of the parties hereto, their respective heirs, legal
representatives, successors and assigns.
 
45. Counterparts.  This Lease may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument.
 
46. Vacation of 23rd Avenue.  Lessee and Lessors both agree that both parties
shall assist each other in good faith to negotiate with the City of Gulfport and
undertake any such action as commercially reasonable to cause the City of
Gulfport to vacate or transfer ownership in that portion of 23rd Avenue that is
contiguous or adjacent to the Leased Premises so that the title to such portion
of 23rd Avenue is vested in the Lessors.  The parties hereby recognize that the
City of Gulfport recently placed a significant amount of utilities for
electrical power, water and sewer under that portion of 23rd Avenue, and,
therefore, any vacation or conveyance of such property will be subject to a
utility easement for the benefit of the City of Gulfport.  Furthermore, the
parties recognize that 23rd Avenue also serves as secondary access for ingress
and egress to and from the U.S. Coast Guard facility that is located contiguous
and adjacent to a portion of the Leased Premises, and that any vacation or
conveyance from the City of Gulfport will be contingent upon finding another
suitable secondary access to and from the U.S. Coast Guard
facility.  Notwithstanding the foregoing, when and if any property is vested in
the Lessors pursuant to the foregoing, such property shall automatically become
part of the Leased Premises without any further action of the parties.
 
47. Collateral Assignment of Gulfport Redevelopment Commission Lease to
Lessors.  In addition to this Lease, Lessee intends to enter into a long-term
ground lease with the Gulfport Redevelopment Commission (the “GRC Lease”) for
approximately four and five tenths (4.5) acres of real property contiguous and
adjacent to the Leased Premises.  Any property leased by the Lessee pursuant to
the GRC Lease shall automatically comprise part of the Development Property.  As
additional security for this Lease, Lessee shall collaterally assign its
interest in the GRC Lease to the Lessors, and Lessee shall take any and all
commercially reasonable actions to accomplish the forgoing to the extent
permitted by the terms of GRC Lease, including, without limitation, obtaining
the consent of the Gulfport Redevelopment Commission to such collateral
assignment.  Notwithstanding the foregoing, the collateral assignment made
pursuant to this paragraph 47 shall be subordinate to any assignment for the
benefit of any Leasehold Mortgagee, and Lessors shall upon request execute any
document reasonably requested by a Leasehold Mortgagee to evidence that the
Lessors’ interest in such collateral assignment of the GRC Lease is subordinate
to the Leasehold Mortgagee’s rights in the GRC Lease.
 
[Signatures on following page]

 
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  LESSORS:           MARINE LIFE VENTURES, LLC, a Mississippi limited liability
company          
 
By:
Marine Life Incorporated, its sole member                       By: /s/ David C.
Lion       Name: David C. Lion       Title: President             MC MARINE,
LLC, a Mississippi limited liability company             By: /s/ Sherman Muths,
Jr.     Name: Sherman Muths, Jr.     Title: Manager             LESSEE:        
  ROTATE BLACK MS, LLC, a Mississippi limited liability company           By:
/s/ Jake Vanderlei     Name: Jake Vanderlei     Title:   President  

 
 
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Exhibit “A”
 
Legal Description of Parcel I—Marine Life Parcel
 
Parcel A
 
A parcel of land situated and being located in Fractional Section 9, Township 8
South, Range 11 West, City of Gulfport, First Judicial District of Harrison
County, Mississippi and being more particularly described as follows, to wit:
 
Commencing at the Northeast corner of Section 9, Township 8 South, Range 11
West; thence run South 00 degrees 00 minutes 00 seconds East 2469.95 feet;
thence run North 90 degrees 00 minutes 00 seconds West 1622.46 feet to a point
on the southerly margin of 23rd Avenue and the Point of Beginning of the parcel
herein described; thence run from said Point of Beginning, South 20 degrees 52
minutes 52 seconds East 173.97 feet; thence run North 68 degrees 45 minutes 14
seconds East 106.61 feet; thence run South 21 degrees 09 minutes 06 seconds East
65.35 feet; thence run North 70 degrees 17 minutes 59 seconds East 169.37 feet;
thence run North 64 degrees 14 minutes 03 seconds East 122.79 feet to a point on
a bulkhead; thence run the following courses and distances along said bulkhead;
North 59 degrees 48 minutes 01 seconds East 9.45 feet; North 46 degrees 26
minutes 53 seconds East 20.02 feet; North 28 degrees 22 minutes 15 seconds East
25.18 feet; North 10 degrees 29 minutes 23 seconds West 50.31 feet; North 65
degrees 01 minutes 39 seconds West 30.23 feet; South 58 degrees 34 minutes 25
seconds West 4.12 feet; North 65 degrees 10 minutes 37 seconds West 19.85 feet;
North 82 degrees 49 minutes 15 seconds West 20.11 feet; South 87 degrees 38
minutes 51 seconds West 48.37 feet; North 02 degrees 18 minutes 49 seconds East
52.44 feet; North 02 degrees 24 minutes 44 seconds West 16.03 feet; North 01
degrees 32 minutes 24 seconds East 34.26 feet; North 59 degrees 18 minutes 05
seconds West 3.60 feet; thence leaving the aforementioned bulkhead and run South
68 degrees 53 minutes 22 seconds West 389.26 feet along the southerly margin of
23rd Avenue to the Point of Beginning.  Containing 90,315 square feet or 2.07
acres.
 
And:
 
A parcel of land situated and being located in Fractional Section 9, Township 8
South, Range 11 West, City of Gulfport, First Judicial District of Harrison
County, Mississippi and being more particularly described as follows, to-wit:
 
Commencing at the Northeast corner of Section 9, Township 8 South, Range 11
West; thence run South 00 degrees 00 minutes 00 seconds East 2330.17 feet;
thence run North 90 degrees 00 minutes 00 seconds West 1260.46 feet to a point
on a bulkhead and the Point of Beginning of the parcel herein described; thence
run from said Point of Beginning, North 89 degrees 54 minutes 53 seconds East
160.00 feet; thence run South 00 degrees 23 minutes 13 seconds East 203.69 feet;
thence run South 70 degrees 17 minutes 59 seconds West 190.10 feet; thence run
North 64 degrees 14 minutes 03 seconds East 122.79 feet to a point on a
bulkhead; thence run the following courses and distances along said bulkhead;
North 59 degrees 48 minutes 01 seconds East 9.45 feet; North 46 degrees 26
minutes 53 seconds East 20.02 feet; North 28 degrees 22 minutes 15 seconds East
25.18 feet; North 10 degrees 29 minutes 23 seconds West 50.31 feet; North 65
degrees 01 minutes 39 seconds West 30.23 feet; South 58 degrees 34 minutes 25
seconds West 4.12 feet; North 65 degrees 10 minutes 37 seconds West 19.85 feet;
North 82 degrees 49 minutes 15 seconds West 20.11 feet; South 87 degrees 38
minutes 51 seconds West 48.37 feet; North 02 degrees 18 minutes 49 seconds East
52.44 feet; North 02 degrees 24 minutes 44 seconds West 16.03 feet; North 01
degrees 32 minutes 24 seconds East 34.26 feet; North 59 degrees 18 minutes 05
seconds West 3.60 feet to the Point of Beginning.  Containing 22,386 square feet
or 0.51 acre.

 
A-1

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Parcel B
 
Commence at the Northeast corner of Section 9, Township 8 South, Range 11 West,
Harrison County, Mississippi, and thence run South 00 degrees 00 minutes East a
distance of 2,324.25 feet to a point; and thence run North 90 degrees 00 minutes
West a distance of 1,372.44 feet to the POINT OF BEGINNING; and from said point
of beginning, thence run North 00 degrees 00 minutes East a distance of 136.37
feet to a point; and thence run South 68 degrees 53 minutes 22 seconds West a
distance of 457.06 feet to a point; and thence run South 32 degrees 59 minutes
26 seconds East a distance of 130 feet to a point; and thence run North 68
degrees 53 minutes 22 seconds East a distance of 381.18 feet to the point of
beginning of the parcel hereby described; said parcel contains 1.227 acres, more
or less, as indicated by James R. Clark, Miss. Registered Land surveyor #1653.
 
Plus any property acquired by Marine Life as a result of a conveyance, vacation,
or abandonment of Twenty-Third Avenue.

 
A-2

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Exhibit “B”
 
Legal Description of Parcel II—MC Marine Parcel
 
That certain parcel of land situated and being in the City of Gulfport, Section
9, T8S, R11W, 1st. Judicial District, Harrison County, MS, described more
particularly as follows:
 
Commencing at the Northeast corner of Section 9, T8S, R11W, 1st Judicial
District, Harrison Co., MS; thence S 0° East, a distance of 2469.95 ft. to a
point;
thence N 90° W a distance of 1622.46 ft. to the POINT OF BEGINNING;
thence S 68° 53’ 22” W a distance of 98.65 ft. to a point;
thence S 33° 11’ 56” E a distance of 447.55 ft. to a point;
thence N 68° 49’ 34” E a distance of 102.61 ft. to a point;
thence N 51° 09’ 36” E a distance of 116.01 ft. to a point;
thence N 55° 31’ 44” E a distance of 38.91 ft. to a point;
thence N 17° 41’ 38” W a distance of 49.9 ft. to a point;
thence N 6° 57’ 37” W a distance of 103.63 ft to a point;
thence S 70° 22’ 45” W a distance of 169.37 ft. to a point;
thence N 20° 54’ 19” W a distance of 65.35 ft. to a point;
thence S 68° 45’ 55” W a distance of 106.83 ft. to a point;
thence N 20° 52’ 52” W a distance of 173.80 ft. to the point of beginning.
Said parcel contains 1.756 acres, more or less.
 
AND:
 
That certain parcel of land situated and being in the City of Gulfport, Section
9 T8S, R11W, 1st. Judicial District, Harrison County, Ms., described more
particularly as follows:
 
 
B-1

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Commencing at the Northeast corner of Section 9, T8S, R11W, 1st. Judicial
District, Harrison County., MS; thence S 0° E, a distance of 2469.95 ft. to a
point;
 
thence N 90° W a distance of 1622.46 ft. to a point;
thence S 20° 52’ 52” E a distance of 173.80 ft. to a point;
thence N 68° 45’ 55” E a distance of 106.83 ft. to a point;
thence S 20° 54’ 19” E a distance of 65.35 ft. to a point;
thence N 70° 22’ 45” E a distance of 169.37 ft. to the POINT OF BEGINNING;
thence N 70° 22’ 45” E a distance of 160.93 ft. to a point;
thence S 17° 43’ 20” E a distance of 164.27 ft. to a point;
thence S 32° 40’ 22” W a distance of 230.23 ft to a point;
thence N 18° 52’ 22” W a distance of 73.68 ft. to a point;
thence N 55° 31’ 44” E a distance of 38.91 ft. to a point;
thence N 17° 41’ 38” W a distance of 49.9 ft. to a point;
thence N 6° 57’ 37” W a distance of 103.63 ft. to the point of beginning.
Said parcel contains 0.84 acres, more or less.
 
Plus any property acquired by MC Marine as a result of a conveyance, vacation or
abandonment of Twenty-Third Avenue.
 
B-2