EXHIBIT 10.1

 

“RCT” means the material omitted has been filed separately with the Securities
and Exchange Commission with an application requesting confidential treatment.

 

TWENTY-SECOND AMENDMENT TO

LEASE AND SUBLEASE AGREEMENT

 

THIS TWENTY-SECOND AMENDMENT TO LEASE AND SUBLEASE AGREEMENT (“Twenty-Second
Amendment”) is made and entered effective the 30th day of June, 2009, by and
between SMITH’S FOOD & DRUG CENTERS, INC., an Ohio corporation qualified to do
business in Nevada (hereinafter called “Smith’s”) and HERBST GAMING, INC. a
Nevada corporation, and MARKET GAMING, INC., a Nevada corporation (hereinafter
collectively called “Herbst”), successor to ANCHOR COIN, a licensed slot route
operator in the State of Nevada (hereinafter called “Anchor”).

 

WITNESSETH:

 

WHEREAS, Smith’s and Anchor entered into that certain Lease and Sublease
Agreement dated July 28, 1993, whereby Smith’s leases or subleases space to
Anchor within those certain properties listed on Exhibit “A” to the Agreement
and identified as either “Leased Properties” or “Owned Properties,” for the
operation of certain gaming devises, which Agreement was amended by that certain
First Amendment to Lease and Sublease Agreement dated June 30, 1994; that
certain Second Amendment to Lease and Sublease Agreement dated January 25, 1995;
that certain Third Amendment to Lease and Sublease Agreement dated March 28,
1995; that certain Fourth Amendment to Lease and Sublease Agreement dated
February 27, 1996; that certain Fifth Amendment to Lease and Sublease Agreement
dated April 26, 1996; that certain Sixth Amendment to Lease and Sublease
Agreement dated November 13, 1996; that certain Seventh Amendment to Lease and
Sublease Agreement dated February 21, 1997; that certain Eighth Amendment to
Lease and Sublease Agreement dated December 19, 1997; that certain Ninth
Amendment to Lease and Sublease Agreement dated August 4, 1998; that certain
Tenth Amendment to Lease and Sublease Agreement dated September 28, 1998; that
certain Eleventh Amendment to Lease and Sublease Agreement dated May 3, 1999;
that certain Twelfth Amendment to Lease and Sublease Agreement dated March 29,
2000: that certain Thirteenth Amendment to Lease and Sublease Agreement dated
January 12, 2001; that certain First Affiliate Amendment to Lease and Sublease
Agreement dated August 23, 2002; that certain Fourteenth Amendment to Lease and
Sublease Agreement dated October 9, 2002; that certain Fifteenth Amendment to
Lease and Sublease Agreement dated August 29, 2003; that certain Sixteenth
Amendment to Lease and Sublease Agreement dated December 2, 2003; that certain
Seventeenth Amendment to Lease and Sublease Agreement dated March 12, 2004; that
certain Eighteenth Amendment to Lease and Sublease Agreement dated October 5,
2004; that certain Nineteenth Amendment to Lease and Sublease Agreement dated
April 6, 2005; that certain Twentieth Amendment to Lease and Sublease Agreement
dated October 17, 2005; and that certain Twenty-First Amendment to Lease and
Sublease Agreement dated July 25, 2006 (collectively, the “Agreement”); and

 

WHEREAS, Anchor assigned all of its rights, title, and interest in the Agreement
to Herbst by the certain Asset Purchase Agreement dated November 11, 2002; and

 

WHEREAS, Smith’s and Herbst now desire to further amend the Agreement as more
fully set forth hereinafter and for Herbst to assume the Agreement as provided
for in 11 U.S.C 365 (the “Bankruptcy Code”);

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, Smith’s and Herbst hereby agree as follows:

 

1.             Term.  Notwithstanding anything contained in the Agreement, the
Term of the Agreement is hereby extended to and including RCT.

 

2.             Rent.  Herbst agrees to pay Smith’s as monthly rental for the use
and occupancy of each of the Supermarkets and the exclusive right to operate
Gaming Devices in each of the Supermarkets listed, for each of the Lease Months
(“Lease Months”) the rental specified opposite such Supermarket on Exhibit “A”
attached hereto and incorporated herein by reference (the “Rent”).

 

Commencing January 1, 2011, and each calendar year thereafter, the Rent paid by
Herbst to Smith’s shall be RCT for all stores listed on Exhibit A RCT.  In no
event shall Rent be decreased for any store.  Thus, for example, if RCT for all
stores in 2010 is RCT, then, beginning January 1, 2011, the Rent for each store
shall be RCT.  Conversely, if RCT in 2010 is RCT, then Rent will not be
adjusted.  The term “RCT” shall mean RCT.

 

In order to determine RCT, Herbst will provide to RCT approved by Smith’s a
detailed listing of RCT. Any new Supermarkets opened during a year will not be
included in this listing for purposes of determining RCT for that year, but they
shall be included for each full calendar year they are in operation.  Herbst
shall also provide to RCT a detailed listing of RCT, which shows RCT for all
Supermarkets for RCT and RCT for all Supermarkets RCT.

 

--------------------------------------------------------------------------------

 

The RCT shall prove the RCT of RCT for all Supermarkets for each calendar year
and RCT for all Supermarkets, and shall confirm in writing to Herbst and Smith’s
RCT for each calendar year.  Smith’s shall be entitled to and shall be provided
RCT, but not RCT by RCT.

 

Any increase in Rent pursuant to this paragraph 2 shall be calculated within
ninety (90) days following the end of each calendar year and shall be paid
retroactively as of January 1 of each year.   The Rent for any New Supermarket
shall be subject to increase after it has been in operation for a full calendar
year, even though RCT will not be included in the RCT of that year for purposes
of comparing against the prior year.

 

3.             RCT.  In addition to the Rent under the Agreement, Herbst shall
pay to Smith’s the sum of RCT upon execution of this Twenty-Second Amendment
(“RCT”).

 

4.             Additional Consideration.  As additional consideration, Herbst
shall, upon execution of this Twenty-Second Amendment, release all of the
remaining funds currently held as a Security Deposit by Smith’s, pursuant to
Section 5 of the Agreement, which amount totals RCT.

 

5.             Change Persons and Jackpot Payouts.  Notwithstanding anything
contained in Section 11 of the Agreement, should the Nevada Gaming Control Board
allow Herbst to reduce hours of change persons or allow for their use to be
discontinued altogether, then Herbst shall be allowed to do so.

 

6.             New Supermarkets.  In addition to the Rent called for in the
Agreement, as it may be adjusted pursuant to paragraph 2 of this Twenty-Second
Amendment, Herbst shall pay to Smith’s, for each new supermarket, a pro rata
amount of RCT, up to a maximum of RCT per new Supermarket (the “New Supermarket
RCT”).  The actual amount of the New Supermarket RCT payable for any new
Supermarket shall be based on the total number of months remaining on the Term
at the time of commencement of gaming operations at that specific new
Supermarket divided by RCT, multiplied by RCT.  Thus, for example, for a new
Supermarket commencing gaming operations in January 2011, Herbst would pay to
Smith’s the amount of RCT.  This New Supermarket RCT shall be payable upon
commencement of gaming operations at each specific new Supermarket.

 

7.             Demised Premises Upgrade.  On or before January 1, 2011, Herbst
shall, at its own expense, upgrade all of the Demised Premises so that they are
current, clean and attractive.

 

8.             Bankruptcy Court Approval.  Smith’s understands that Herbst is a
debtor-in-possession under Chapter 11 proceedings before the United States
Bankruptcy Court for the District of Nevada (“Bankruptcy Court”), being Case
No.               .  As such, Smith’s acknowledges and understands that Herbst
intends to seek the approval of this Twenty-Second Amendment on the part of
Herbst by the Bankruptcy Court and the assumption of the Agreement pursuant to
Section 365 of the Bankruptcy Code.  Herbst agrees to file a motion to approve
this Twenty-Second Amendment with the Bankruptcy Court pursuant to Section 363
of the Bankruptcy Court and to assume the Agreement pursuant to Section 365 of
the Bankruptcy Court RCT.  The Effective Date of this Twenty-Second Amendment
shall be the first business day following the date the Bankruptcy Court order
becomes final.  Smith’s agrees to reasonably cooperate with and assist Herbst in
this regard.  Should RCT, then Smith’s shall return RCT previously paid by
Herbst to Smith’s under paragraph 3 herein and shall release the additional
consideration previously released by Herbst to Smith’s under paragraph 4, which
shall then be retained by Smith’s as a Security Deposit.  Additionally, this
Twenty-Second Amendment shall be null and void and the parties shall continue to
be bound by the July 28, 1993 Agreement, as amended.

 

9.             Notice.   All notices or demands required or permitted to be
given or served pursuant to the Agreement shall be deemed to have been given or
served only if in writing forwarded by registered or certified mail~ postage
prepaid, and addressed as follows:

 

To Smith’s

 

Smith’s Food & Drug Center, Inc

1550 South Redwood Road

Salt Lake City, Utah 89104

 

To Herbst

 

Market Gaming, Inc.

3440 W. Russell Road

Las Vegas, NV 89118

Attn: General Counsel

 

 

Either party hereto may change such address by giving written notice to the
other party

 

--------------------------------------------------------------------------------

 

10.           Miscellaneous.  This Twenty-Second Amendment shall be binding on
the parties hereto and their respective successors and assigns.  The individuals
executing this Twenty-Second Amendment represent and warrant that they are duly
empowered so to do and have authority to bind their respective party.  The
Agreement remains in full force and effect and remains unmodified except to the
extent specifically amended herein.  Unless otherwise specified herein, the
capitalized terms of this Twenty-Second Amendment shall have the same meaning as
set forth in the Agreement.

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have executed this Twenty-Second Amendment on
the date and year first above written.

 

 

SMITH’S FOOD & DRUG CENTERS, INC.

 

 

 

 

 

By:

/s/ Kyle McKay

 

Its:

Vice President

 

 

 

 

 

HERBST GAMING, INC.

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

Its:

CEO

 

 

 

 

 

MARKET GAMING, INC.

 

 

 

 

 

By:

/s/ Troy D. Herbst

 

Its:

Secretary / Treasurer

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

Location - Address

 

CITY

 

ZIP

 

Monthly
Rental $

0 - Smiths Advertising allowance, Advertising Allowance,

 

 

 

 

 

 

311 – Smith’s Food & Drug #311, 8050 S Rainbow, Las Vegas

 

Las Vegas

 

89139

 

RCT

344 – Smith’s Food & Drug #344, 175 Lemmon Drive, Reno

 

Reno

 

89506

 

RCT

356 – Smith’s Food & Drug #356, 599 East William Street, Carson City

 

Carson City

 

89702

 

RCT

357 – Smith’s Food & Drug #357, 1255 Baring Boulevard, Sparks

 

Sparks

 

89431

 

RCT

378 – Smith’s Food & Drug #378, 750 South Meadows Parkway, Reno

 

Reno

 

89521

 

RCT

388 – Smith’s Food & Drug #388, 1740 Mountain City Highway, Elko

 

Elko

 

89801

 

RCT

389 – Smith’s Food & Drug #389, 1341 Highway 395, Gardnerville

 

Gardnerville

 

89410

 

RCT

390 – Smith’s Food & Drug #390, 1855 West Wendover Boulevard, Wendover

 

Wendover

 

89883

 

RCT

392 – Smith’s Food & Drug #392, 2200 Highway 50 East, Dayton

 

Dayton

 

89403

 

RCT

332 – Smith’s Food & Drug #332, 7130 North Durango Drive, Las Vegas

 

Las Vegas

 

89149

 

RCT

334 – Smith’s Food & Drug #334, 2255 E. Centennial Parkway, North Las Vegas

 

North Las Vegas

 

89081

 

RCT

338 – Smith’s Food & Drug #338, 6855 Aliante Parkway, North Las Vegas

 

North Las Vegas

 

89084

 

RCT

341 – Smith’s Food & Drug #341, 601 South Highway 160, Pahrump

 

Pahrump

 

89041

 

RCT

342 – Smith’s Food & Drug #342, 350 North Sandhill Boulevard, Mesquite

 

Mesquite

 

89024

 

RCT

345 – Smith’s Food & Drug #345, 5564 Camino El Norte, North Las Vegas

 

North Las Vegas

 

89031

 

RCT

346 – Smith’s Food & Drug #346, 10616 South Eastern Avenue, Henderson

 

Henderson

 

89012

 

RCT

347 – Smith’s Food & Drug #347, 9851 West Charleston, Las Vegas

 

Las Vegas

 

89117

 

RCT

348 – Smith’s Food & Drug #348, 1000 North Green Valley Parkway, Henderson

 

Henderson

 

89014

 

RCT

349 – Smith’s Food & Drug #349 , 10100 West Tropicana Ave., Las Vegas

 

Las Vegas

 

89147

 

RCT

350 – Smith’s Food & Drug #350, 4600 East Sunset Road, Henderson

 

Henderson

 

89014

 

RCT

351 – Smith’s Food & Drug #351, 6130 West Tropicana Avenue, Las Vegas

 

Las Vegas

 

89103

 

RCT

354 – Smith’s Food & Drug #354, 3850 East Flamingo Road, Las Vegas

 

Las Vegas

 

89121

 

RCT

355 – Smith’s Food & Drug #355, 450 North Nellis, Las Vegas

 

Las Vegas

 

89110

 

RCT

358 – Smith’s Food & Drug #358, 2540 South Maryland Parkway, Las Vegas

 

Las Vegas

 

89109

 

RCT

361 – Smith’s Store #361, 4700 West Ann Road, North Las Vegas

 

North Las Vegas

 

89031

 

RCT

363 – Smith’s Store #363 , 4015 South Buffalo Drive, Las Vegas

 

Las Vegas

 

89147

 

RCT

364 - Smith’s Food & Drug #364, 10600 Southern Highlands Parkway, Las Vegas

 

Las Vegas

 

89141

 

RCT

365 – Smith’s Store #365, 6150 West Flamingo Road, Las Vegas

 

Las Vegas

 

89103

 

RCT

366 – Smith’s Store #366, 55 South Valley Verde Drive, Henderson

 

Henderson

 

89012

 

RCT

370 – Smith’s Store #370, 3160 North Rainbow Blvd., Las Vegas

 

Las Vegas

 

89107

 

RCT

371 – Smith’s Food & Drug #371, 8555 West Sahara Avenue, Las Vegas

 

Las Vegas

 

89117

 

RCT

372 – Smith’s Store #372, 1421 North Jones Boulevard, Las Vegas

 

Las Vegas

 

89108

 

RCT

376 – Smith’s Food & Drug #376, 2385 East Windmill Lane, Las Vegas

 

Las Vegas

 

89123

 

RCT

377 – Smith’s Food & Drug #377, 850 South Rancho Drive, Las Vegas

 

Las Vegas

 

89106

 

RCT

381 – Smith’s Food & Drug #381, 830 South Boulder Highway, Henderson

 

Henderson

 

89015

 

RCT

383 – Smith’s Food & Drug #383, 4440 North Rancho Drive, Las Vegas

 

Las Vegas

 

89130

 

RCT

385 – Smith’s Food & Drug #385 , 2211 North Rampart Blvd., Las Vegas

 

Las Vegas

 

89128

 

RCT

394 – Smith’s Food & Drug #394, 9750 South Maryland Parkway, Las Vegas

 

Las Vegas

 

89123

 

RCT

396 – Smith’s Food & Drug #396, 9350 West Flamingo Road, Las Vegas

 

Las Vegas

 

89147

 

RCT

399 – Smith’s Food & Drug #399, 4840 West Desert Inn Road, Las Vegas

 

Las Vegas

 

89102

 

RCT

 

--------------------------------------------------------------------------------