Exhibit 10.2


 


LEASE
AGREEMENT


 


THIS AGREEMENT (“Lease”
or “Lease Agreement”) is made and entered into as of the 22 day of June, 2009,
by and between Tropicana Las Vegas, Inc., a Nevada corporation (“Landlord”)
and Armenco Holdings, LLC, a California limited liability company (“Tenant” and
together with Landlord, the “Parties” and each, a “Party”):


 


RECITALS


 


1.     Landlord is, or will be as of the
Commencement Date as defined in Section 2.1, the owner of the real and
personal property commonly known as the Tropicana Resort and Casino, 3801 Las
Vegas Boulevard South, Las Vegas, Nevada, which real property is more
particularly described in Exhibit “A” (the “Real Property”) and personal
property more particularly described in Exhibit “B” (the “Personal
Property”). The Real Property and the Personal Property shall be referred to
collectively as the “Tropicana Assets.”


 


2.     Landlord has acquired or will acquire its
ownership interest in the Tropicana Assets under the terms of the First Amended
Joint Plan of Reorganization of Tropicana Las Vegas Holdings, LLC and certain
of its Debtor Affiliates under Chapter 11 of the Bankruptcy Code, as approved
in In re: Tropicana Entertainment, LLC, et
al., Case No. 08-10856 (KJC) in the United States Bankruptcy
Court for the District of Delaware (the “Plan”).


 


3.     The Parties have reached an understanding
with respect to the lease of the Tropicana Assets by Tenant from Landlord.


 


4.     Tenant currently possesses, or will as of
the Commencement Date possess, all state and local licenses and approvals
necessary to operate the Tropicana Assets.


 


NOW, THEREFORE, in
consideration of the mutual covenants and promises set forth herein, the
parties hereto agree as follows:


 


SECTION 1

PROPERTY


 


1.1.          Landlord, in
consideration of the rents herein reserved and the covenants, conditions and
agreements herein contained on the part of Tenant to be observed and performed,
does hereby lease to Tenant, and Tenant does hereby take from Landlord, subject
to the covenants, conditions and agreements herein contained to be observed and
performed by Landlord the Tropicana Assets, together with all rights,
privileges, easements and appurtenances thereunto belonging, and all rights
relating to employees of the Tropicana Resort and Casino (the “Employees”) (all
of which is hereinafter referred to as the “leased property”).


 


1.2.          Landlord and Tenant specifically
acknowledge that Tenant has acquired or will acquire all of the LandCo Debtors’
(as defined in the Plan) right, title and interest in and to the Gaming Assets,
as that term is defined in the Bill of Sale to be entered into on the Effective
Date (as defined in the Plan) by and among the LandCo Debtors and Tenant (the “Bill
of Sale”) and all right, title and interest in, to and under the Gaming Assumed
Contracts, as that term is defined


 

















 


in the Bill of Sale, and
that none of the Gaming Assets or Gaming Assumed Contracts are included as part
of the leased property.


 


1.3.          Landlord hereby authorizes Tenant to
exercise all of Landlord’s rights and delegates to Tenant its duties, if any,
pursuant to those certain leases for retail shops located on the leased
property (the “Shop Leases”), and pursuant to those certain contracts (the “Assumed
Contracts”) identified in Exhibit “C” attached hereto, for a period
co-extensive with the term of this Lease. Tenant hereby accepts such
authorization and agrees to faithfully perform all of Landlord’s duties under
said Shop Leases and Assumed Contracts.


 


1.4.          In addition to the Tropicana Assets,
Landlord shall lease to Tenant (and the “leased property” shall be deemed to
include) a sum of money to be provided by Landlord, in an amount equal to all
cash of Landlord in all of its accounts as of the Commencement Date (the “Operating
Accounts”). The Operating Accounts may be used by Tenant solely for Tenant’s
start-up and takeover expenses, Operating Expenses (as defined in Section 4.2,
below) and/or any other expenses necessary or appropriate to enable Tenant to
operate the Tropicana Resort and Casino as a hotel and gaming casino, together
with restaurants, lounges and shops and other related support facilities for
the hotel and casino (the “Business”) pursuant to this Lease. The Operating
Accounts may be increased by Landlord, if necessary or appropriate under
prudent business practices, based on actual operating experience. Tenant shall
deposit in such Operating Accounts all revenue and other amounts received
through the operation of the Business.


 


1.5.          At the conclusion of this Lease, the
funds remaining in the Operating Accounts, less Tenant’s retention (as defined
below) (the “Ending Balance”) shall be disbursed as follows:


 


(a)     If the amount of the Ending Balance is less
than the total amount in the Operating Accounts on the Commencement Date (the “Opening
Balance”), then all of the Ending Balance shall be delivered to Landlord.


 


(b)    If the Ending Balance exceeds the Opening
Balance, then (i) such excess amount shall be placed in a separate account
designated as the capital reserve account (the “Capital Reserve Account”), and (ii) an
amount equal to the Opening Balance shall be delivered to the Landlord.
Landlord may utilize funds from the Capital Reserve Account only for capital
expenditures in connection with the Tropicana Assets. “Capital expenditures”
means expenditures, which, in accordance with generally accepted accounting
principles, are not fully chargeable to current expense in the year the
expenditure is incurred.


 


1.6.          As used above, the term “Tenant’s
retention” shall mean two percent (2%) of Net Revenue (the “Preferred Fee”) plus five percent (5%) of EBITDA resulting
from the operation of the Business during the term of the Lease after EBITDA is
reduced by the amount of the Preferred Fee, provided, however, that in no event
shall the difference be deemed to equate to a negative number. For the purpose
of this Lease, “Net Revenue” means all revenue from the operation of the
Business less complimentary housing, meals and other items granted to third
parties by Tenant for promotional purposes consistent with gaming industry practice.
Such revenues shall be computed on an accrual basis in accordance with
generally accepted accounting principles. For the purposes of this Lease, the
term “EBITDA” means the amount of Earnings Before Interest, Taxes, Depreciation
and Amortization from the operation of the


 


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Business during
the term of the Lease as determined pursuant to generally accepted accounting
principles in accordance with gaming industry practices.


 


1.7.          The parties acknowledge and agree that
Landlord is an independent contractor, and that all of the Employees leased by
Landlord are employees of Landlord. Notwithstanding anything to the contrary
contained herein, for purposes of compliance with Tenant’s duties, obligations
and responsibilities under Nevada Revised Statute Chapter 463 and the
regulations promulgated thereunder (collectively, the “Nevada Gaming Control
Act”), Tenant shall have the absolute and complete control, authority and
discretion over all Employees, including without limitation, taking any actions
regarding the Employees that may be necessary, appropriate or prudent to ensure
compliance with the Nevada Gaming Control Act.


 


SECTION 2

TERM OF LEASE


 


2.1.          The term of this Lease shall be for
twelve (12) months, unless sooner terminated under the provisions hereinafter
contained. The term of this Lease shall commence (the “Commencement Date”) at
12:00 Midnight on the Effective Date. This Lease Agreement can be terminated
for any reason by Landlord or Tenant upon thirty (30) days written notice to
the other Party. In addition to the foregoing, Tenant may terminate this Lease
should (i) the funds in the Operating Accounts become deficient for Tenant’s
continued operation of the Business, and (ii) Landlord shall fail to
provide adequate funding to the Operating Accounts within ten (10) days
after notice from Tenant to Landlord of such deficiency.


 


2.2.          Notwithstanding any other provision of
this Article II, this Lease shall terminate thirty (30) days after
Landlord has received all licenses and approvals necessary to operate a hotel
and casino on the leased property.


 


2.3.          Should Tenant hold over and continue
to be in possession of the leased property after the term hereof, with Landlord’s
consent, such holding over shall be considered to be a tenancy from month to
month only, subject to the conditions and provisions of this Lease, and Tenant
agrees to pay rent for the leased property at the monthly rate applicable
hereunder.


 


2.4.          Provided Landlord has received the appropriate
licenses and approvals from the Nevada Gaming Authorities (as defined in Section 12.3),
upon the termination of this Lease, Tenant shall convey to Landlord all of its
right, title and interest in and to the Gaming Assets and all of its right, title
and interest in, to and under the Gaming Assumed Contracts for a price of One (1) Dollar
($1.00). Tenant and Landlord shall each execute and deliver all documents and
instruments necessary or appropriate to evidence the sale of the Gaming Assets
and the Gaining Assumed Contracts from Tenant to Landlord.


 


2.5.          Upon the termination of this Lease,
Landlord shall assume all outstanding liabilities of the leased property.


 


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SECTION 3

RENT


 


3.1           Tenant shall pay to Landlord as rent
for the leased property the sum of One (1) Dollar ($1.00) for each month
of the term hereof and each and every month thereafter. The first month of the
term hereof shall commence on the Commencement Date, and each subsequent month
shall begin on the same day of each and every calendar month thereafter (i.e.,
if the Commencement Date falls on the 17th of a month, the first full month
shall be from the Commencement Date to the 16th day of the following calendar month, and the
second full month would start on the 17th day of said following calendar month). Monthly
rent for the first full month shall be due and payable in advance on the
Commencement Date, and on the same day of each successive month during the term
of the Lease.


 


3.2           All rents and other monies required
to be paid by Tenant hereunder shall be paid to Landlord without prior notice
or demand, in lawful money of the United States of America, at such place as
Landlord may, from time to time, designate in writing.


 


SECTION 4

OPERATING EXPENSES


 


4.1.          It is specifically understood and
agreed by and between Landlord and Tenant that all rent payable by Tenant to
Landlord pursuant to Article III is “net” rent. Accordingly, Tenant shall
pay, in addition to all rent payable by Tenant to Landlord pursuant to Article III
hereof, all Operating Expenses.


 


4.2.          For the purposes of this Lease, “Operating
Expenses” shall be defined as all costs and expenses related to the leased
property and to the operation of the Business, including, but not limited to:
all real and personal property taxes and assessments; all gaming and business
license fees or taxes; all other federal, state and local taxes incurred as the
result of Tenant’s operations under the Lease; all utilities consumed or used
in or upon the Real Property; all employee wages, unemployment compensation
premiums or contributions, and payroll and other employment taxes incurred
during the term of the Lease, including without limitation wages of Employees
and executive compensation to Tenant’s chief executive officer, president and
chief operating officer; all premiums and other contributions with respect to
Landlord’s welfare plans; and Assumed Contracts, provided, however that
Landlord and Tenant have agreed that those costs and expenses required by
applicable federal tax laws or generally accepted accounting principals, evenly
applied, to be amortized over a period of years rather than expensed in the
year incurred and which were approved by Landlord pursuant to Section 7.2
are not Operating Expenses and shall be the sole expense of Landlord; and
further provided that “Operating Expenses” shall specifically exclude any and
all liability related to chips, tokens and other money substitutes, players
club and other discounts, in each case not issued by Tenant.


 


4.3.          Tenant shall pay from the Operating
Accounts any increases in the Operating Expenses during the term of this Lease
and any new or additional taxes, assessments, levies or penalties which may be
imposed against Tenant or the leased property or otherwise pertaining to the
operation of the Business by Tenant during term of this Lease.


 


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SECTION 5

LANDLORD/TENANT RELATIONSHIP


 


5.1.          Nothing herein shall be deemed to be a
contract for employment or create an employer-employee relationship between
Landlord and Tenant, or Landlord and any officer, director or employee of
Tenant.


 


SECTION 6

USE OF PREMISES


 


6.1.          During the term of this Lease, Tenant
shall use and occupy the leased property as a hotel and gaming casino, together
with restaurants, lounges and shops and other related support facilities for
the hotel and casino, and for no other purpose or purposes. Subject to the
closure of various portions of the leased property as from time to time may be
necessary to make repairs, replacements, restorations or improvements required
or permitted by this Lease, Tenant shall operate the leased property and shall
keep the leased property open for business continuously during all such hours
and on such days in accordance with state and local law.


 


6.2.          Tenant further agrees that:


 


(a)     Tenant shall always conduct its operations
in and from the leased property under the name “Tropicana Resort and Casino” or
“Tropicana Las Vegas” and Landlord hereby grants to Tenant a license to so
conduct its operation, which license shall expire or terminate with this Lease;


 


(b)    No auction, fire, distress, or bankruptcy
sales may be conducted within the leased property without the prior written
consent of the Landlord;


 


(c)     Tenant shall not use or permit the use of
any portion of the leased property for any unlawful purpose;


 


(d)    Subject to Tenant’s right to repair, replace
and/or improve the leased property, Tenant shall not perform any act or carry
on any practice which may injure the leased property or cause any offensive
odors or loud noise or constitute a nuisance or a menace;


 


(e)     Tenant shall, at all times during the term
of the Lease, comply with all governmental rules, regulations, ordinances,
statutes and laws, and the terms and conditions of any policies of insurance
now or hereafter in effect pertaining to the leased property. Tenant
specifically covenants and agrees to comply with all applicable provisions of
the Nevada Gaming Control Act and Regulations of the Nevada Gaming Commission
and State Gaming Control Board;


 


(f)     Tenant shall not, without prior written
consent of Landlord and all insurance companies which have issued any insurance
of any kind whatsoever with respect to the leased property, keep, use or store,
or allow to be kept, used or stored, upon or about the leased property any
hazardous or toxic substance in violation of applicable law which may endanger
any part of the leased property or its occupants, business patrons or invitees.
Tenant will not consent to or suffer any illegal act to be committed thereon.


 


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SECTION 7

MAINTENANCE OF DEMISED PREMISES


 


7.1.          From and after the date that
possession of the leased property is delivered to Tenant, and until the end of
the term of this Lease, Tenant shall, at its sole cost, keep neat and clean and
maintain in good order, condition and repair the leased property and every part
thereof in substantially the same condition as existed at the Commencement
Date, normal wear and tear excepted, including, without limitation, the
exterior and interior portions of all doors, windows and plate glass
surrounding the leased property, fixtures and interior walls, floors, ceilings,
signs (including exterior signs where permitted), and all wiring, all heating,
air conditioning and electrical systems, sprinkler systems within the leased
property, interior building appliances and similar equipment, all plumbing and
sewage facilities within the leased property including the free flow up to the
main sewerline. Tenant shall keep the leased property and any part and portion
thereof in a tenantable and attractive condition through-out the term of this
Lease, and consistent with the terms hereof. Tenant further agrees to keep and
maintain the leased property in a clean, sanitary and safe condition, normal
wear and tear excepted, in accordance with state and local law, provided,
however, that in no event shall Tenant be liable for the failure of the leased
property to comply with the state or local law if such failure to comply
occurred prior to the Commencement Date and continued thereafter.


 


7.2.          Tenant shall not make alterations,
improvements and/or additions to the leased property (“Tenant Improvements”) or
sell or otherwise transfer any of the leased property or the appurtenances
therein (other than in the ordinary course of business) without first
obtaining, in each instance, the prior written consent of Landlord (provided,
however, that non-structural alterations, improvements and/or additions based
on operational decisions are not subject to this provision).


 


7.3.          Landlord, at its sole cost and
expense, may make such alterations, improvements and/or additions to the leased
property as Landlord deems appropriate, provided such improvements shall not
materially interfere with Tenant’s operation of the Business unless Tenant so
consents.


 


7.4.          At the request of Landlord, Tenant
shall make such alterations, improvements and/or additions to the leased
property as Landlord deems appropriate, provided such improvements shall not
materially interfere with Tenant’s operation of the Business unless Tenant so
consents and Landlord funds all costs and expenses associated with such
alterations, improvements and/or additions.


 


7.5.          All additions, improvements, and
fixtures which may be made or installed by either Landlord or Tenant upon the
leased property during the term of this Lease, except for any additions,
improvements, and fixtures made or installed by any lessee under a Shop Lease,
shall remain upon the leased property, and at the termination of this Lease
shall be surrendered with the leased property as a part thereof.


 


7.6.          Upon any surrender of the leased
property, Tenant shall redeliver the leased property to Landlord.


 


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SECTION 8

FINANCIAL RECORDS OF BUSINESS


 


8.1.          Landlord and Tenant recognize that the
creation and maintenance of complete, accurate, and legible records of gaming
transactions is required of all Nevada gaming licensees and agree to cooperate
fully with each other to assure compliance by both Parties with this
requirement.


 


8.2.          During the term of the Lease, Tenant
agrees to maintain at all times at the leased property complete business and
financial records of its operation of the Business under the Lease. In the
event Tenant needs to remove originals of any records from the leased property,
Tenant shall (a) make a complete, legible copy of the original records
which shall remain on the leased property, and (b) maintain an accurate
log of all records (whether originals or copies) leaving the leased property
during the term of the Lease, including an identification of the party removing
the records, the purpose for removing such records, and the date the records
are returned to the leased property. This covenant shall survive the expiration
or termination of the Lease and Tenant shall, upon demand by Landlord, return
all originals of such documents as have been removed by the Tenant or at its
direction.


 


8.3.          After the expiration or termination of
the Lease, Landlord shall maintain the said books and records of Tenant at the
leased property in such a manner and for such period of time as will comply
with all relevant federal, state, and local record maintenance laws. Landlord shall
provide Tenant and such person or persons as may be designated by Tenant, on
the leased property, access to and space to review and copy, on Landlord’s
copying machine, at reasonable expense to Tenant, such books and/or records of
Tenant as may be designated by Tenant.


 


8.4.          Landlord and Tenant understand and
agree that, notwithstanding any provision or covenant contained in this
Article, the original books and records kept by Tenant, both prior to and
during the term of this Lease, are and shall remain the property of the Tenant.
Landlord shall, therefore, not later than ninety (90) days prior to destroying
or otherwise disposing of any record relevant to the operation of the Tropicana
Hotel and Casino by Tenant, provide written notice to Tenant of its intention
to destroy or dispose of such books and/or records. Thereafter, upon a request
by Tenant, Landlord shall turn over to Tenant any and all of the books and/or
records upon which its notice was based.


 


SECTION 9

INDEMNITY AND LIABILITY


 


9.1.          As used herein, the phrase, “defend,
indemnify and save and hold harmless,” with respect to the Tenant Parties shall
mean: Tenant and its officers, partners, directors, members, employees and
agents (together with Tenant, the “Tenant Parties”) shall not be liable to
Landlord or any person who has acquired an interest in the leased property, for
any losses sustained or liabilities incurred, including monetary damages, as a
result of any act or omission of the Tenant Parties if the acts or omissions of
the Tenant Parties did not constitute gross negligence, actual fraud, or
willful, wanton or reckless misconduct, or criminal misconduct (the “Tenant
Conduct Standard”). The negative disposition of any action, suit or proceeding
by judgment, order, settlement, conviction or plea of nolo contendere, or its
equivalent, shall not, of itself, create a presumption that the Tenant Parties
acted in a manner contrary to the Tenant Conduct Standard.


 


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9.2.          On and after the Commencement date,
subject to the provisions of Section 9.1 and 9.3 hereof, the Parties
(each, an “Indemnitor”) shall indemnify and hold harmless each other, their
respective affiliates and any of their respective officers, partners, members,
directors, employees and agents (each individually, an “Indemnitee”), from and
against any and all losses, claims, damages, liabilities, expenses (including
reasonable legal fees and expenses which shall be paid by Indemnitor
immediately upon receipt of appropriate invoices therefore), judgments, fines,
settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or
investigative, in which an Indemnitee may be involved, or threatened to be
involved, as a party or otherwise, which relates to, or arises out of, this
Lease or the leased property, regardless of whether the liability or expense
accrued at or relates to, in whole or in part, any time before, on or after the
date hereof; provided, however, that Tenant shall only be required to indemnify
and hold harmless the Landlord Parties (as defined below) upon the breach of
the Tenant Conduct Standard by any of the Tenant Parties.


 


9.3.          Landlord and its officers, directors,
partners, members, employees and agents (together with Landlord, the “Landlord
Parties”) shall not be entitled to indemnification under this Article IX
with respect to any claim, issue or matter unless it has been finally adjudged
in a nonappealable order that the Tenant Parties have breached the Tenant
Conduct Standard and then only to the extent that the court in which such
action was brought, or another court of competent jurisdiction, determines upon
application that, despite the adjudication of liability, in view of all of the
circumstances of the case, the Landlord Parties are fairly and reasonably
entitled to indemnification for such liabilities and expenses as the court may
deem proper.


 


9.4.          In the event that any legal
proceedings shall be instituted or any claim or demand shall be asserted by any
person in respect of which payment may be sought by an Indemnitee under the
provisions of this Article IX, the Indemnitee shall promptly cause written
notice of the assertion of any such proceeding or claim of which it has actual
knowledge to be forwarded to the Indemnitor. Upon receipt of such notice, the
Indemnitor shall have the right, at its option and expense, to be represented
by counsel of their choice, and to defend against, negotiate, settle or
otherwise deal with any proceeding, claim or demand which relates to any loss,
liability, damage or deficiency indemnified against hereunder; provided,
however, that no settlement shall be made without prior written consent of the
Indemnitee which shall not be unreasonably withheld and; provided further, that
the Indemnitee may participate in any such proceeding with counsel of its
choice and at its expense.


 


9.5.          It is the understanding and agreement
of the Parties that, notwithstanding anything to the contrary herein, the
Tenant Parties shall not be liable or responsible for the failure to pay or
discharge Landlord’s debts and obligations relative to the leased property
(except for any debts of Landlord under any obligations or contracts defined as
Operating Expenses hereunder, for which Tenant agrees to pay as provided in
this Lease).


 


9.6.          On and after the Commencement date,
Landlord hereby covenants and agrees to defend, indemnify and save and hold
harmless, the Tenant Parties from any and all liabilities, obligations,
judgments, damages, claims, and demands of any kind whatsoever in connection
with or arising out of any loans, leases, guarantees, equipment financing
agreements, or other contracts/agreements made and/or entered into by or with
Landlord or any other person or entity which relates to, or arises out of, this
Lease or the leased property where Tenant is not a party to


 


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the specific agreement,
contract or other instrument (except for any debts of Landlord under any
obligations or contracts defined as Operating Expenses hereunder, for which
Tenant agrees to pay as provided in this Lease).


 


9.7.          Landlord hereby covenants and agrees
to defend, indemnify and save and hold harmless the Tenant Parties from any and
all liabilities, obligations, judgments, damages, claims, and demands of any
kind whatsoever in connection with or arising out of any leases or other
obligations assumed by Landlord in its agreement to acquire the Tropicana
Resort and Casino or pursuant otherwise to the Plan, from and after the
termination of this Lease and further agrees not to interfere in any manner
with Tenant’s performance of any obligations thereunder during the term of this
Lease.


 


9.8.          Landlord and Tenant agree that nothing
contained in this Lease is intended, nor should it be construed, to result in
Tenant’s assumption of any of the debts and obligations of Landlord and/or any
other person or entity relative to the real and personal property used in the
operation of the Tropicana Resort and Casino (except for any debts of Landlord
under any obligations or contracts defined as Operating Expenses hereunder, for
which Tenant agrees to pay as provided in this Lease).


 


9.9.          Landlord hereby covenants and agrees
to defend, indemnify and save and hold harmless the Tenant Parties from any and
all wrongful termination and/or other claims resulting from the termination of
employees at the Tropicana Resort and Casino due to a closure of the business
conducted on the leased property for any reason other than a breach by Tenant.


 


9.10.        Landlord hereby covenants and agrees to
defend, indemnify, and save and hold harmless the Tenant Parties from any and
all liabilities, obligations, judgments, damages, claims, and demands of any
kind whatsoever in connection with or arising out of any construction projects
or other capital improvements commenced by or at the instance of Landlord,
except such liabilities as may arise due to a breach of the Tenant Conduct
Standard.


 


SECTION 10

INSURANCE


 


10.1.        Landlord shall, from the commencement of
the term of this Lease, maintain in full force and effect, a policy or policies
of commercial general liability insurance under which the Tenant (and such
other persons as are in privity of estate with Tenant as may be set out in
notice from Tenant to Landlord from time to time) and the Landlord are named as
insured, with contractual liability endorsements covering the agreements of
Landlord to indemnify Tenant from and against all cost, expense and/or
liability as contractually undertaken by Landlord under the terms of this
Lease. Each such policy shall provide that it cannot be amended or modified
with respect to the Tenant or Tenant’s said designees without thirty (30) days
prior written notice to Tenant and Tenant’s designees, and a duplicate original
or certificate thereof evidencing such coverage shall be delivered to Landlord
no less than ten (10) days prior to the date Tenant commences occupancy of
the leased property. The minimum limits of liability of such insurance shall be
Two Hundred Fifty Million Dollars ($250,000,000.00), which may be covered, in
part, by an umbrella policy. Either Landlord or Tenant may, at its sole
expense, provide for additional liability coverage.


 


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10.2.        Landlord shall keep the buildings
constituting the leased property insured against loss or damage by fire and
against loss or damage by other risks now or hereafter embraced by
comprehensive “all risk” insurance (A) in an amount equal to one hundred
percent (100%) of the “Full Replacement Cost,” which for purposes of this Lease
shall mean actual replacement value (exclusive of costs of excavations,
foundations, underground utilities and footings) with a waiver of depreciation;
(B) containing an agreed amount endorsement with respect to the leased
property waiving all co-insurance provisions; (C) providing for no
deductible in excess of $100,000,000 for all such insurance coverage; and (D) if
any of the improvements or the use of the leased property shall at any time
constitute legal non-conforming structures or uses, providing coverage for
contingent liability from Operation of Building Laws, Demolition Costs and
Increased Cost of Construction Endorsements and containing an “Ordinance or Law
Coverage” or “Enforcement” endorsement. In addition, Landlord shall obtain: (y) if
any portion of the leased property is currently or at any time in the future
located in a “special flood hazard area” designated by the Federal Emergency
Management Agency, flood hazard insurance in an amount equal to the maximum
amount of such insurance available under the National Flood Insurance Act of
1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance
Reform Act of 1994, as each may be amended; and (z) earthquake insurance in
amounts and in form and substance reasonably satisfactory to Landlord or a
lender under a mortgage or deed of trust encumbering the leased property in the
event the leased property is located in an area with a high degree of seismic
risk, provided that the insurance pursuant to clauses (y) and (z) hereof
shall be on terms consistent with the comprehensive all risk insurance policy
required under this Section 10.2.


 


10.3.        Landlord shall, from the commencement of
the term of this Lease, maintain in full force and effect, a policy or policies
of workers’ compensation, subject to the statutory limits of the State of
Nevada, and employer’s liability insurance in respect of any work or operations
on or about the leased property, or in connection with the leased property or
its operation, to the extent applicable.


 


10.4.        Landlord shall keep all Tenant
Improvements, including, without limitation, its fixtures, merchandise and
equipment, insured against loss or damage by fire with the usual extended
coverage endorsements. It is understood and agreed that Tenant assumes all risk
of damage to its own property arising from any cause whatsoever including,
without limitation, loss by fire, theft or otherwise, whether or not occasioned
in part by the negligence of Landlord or Landlord’s agents.


 


10.5.        Landlord shall submit any proposed
substitution of insurance policies or modification of insurance policies to
Tenant for Tenant’s approval not less than thirty (30) days’ prior to the date
on which Landlord desires to substitute or modify insurance policies provided
for under the terms of this Lease.


 


10.6.        Landlord and Tenant mutually agree that
with respect to any loss which is covered by insurance then being carried by
them respectively, the party hereto carrying such insurance and suffering said
loss hereby releases the other of and from any and all claims with respect to
such loss, including claims with respect to the negligence of the parties
hereto; and Landlord and Tenant further mutually agree that their respective insurance
companies shall have no right of subrogation against the other party hereto on
account of any such loss.


 


10














 


10.7.        If either party desires that any
increased, additional or substitute insurance coverage be provided for public
liability and/or property damage for the leased property, the requesting party
shall provide the other party with not less than thirty (30) days’ written
notice of such desired changes and shall further provide Tenant with any and
all information, including but not limited to premium charges and any other
fees for such changed coverages, sufficient for the other party to be included
as an additional insured under such coverage.


 


10.8.        All insurance provided for in this Lease
shall be obtained under valid and enforceable policies (collectively, the “policies”
or in the singular, the “policy”), and may be subject to the approval of a
lender under a mortgage or deed of trust encumbering the leased property (“Mortgagee”)
as to insurance companies, amounts, deductibles, loss payees and insureds,
which such approval shall not be unreasonably withheld, conditioned or delayed.
The policies shall be issued by financially sound and responsible insurance
companies authorized to do business in the State of Nevada and having a claims
paying ability rating of “A-VIII” (or its equivalent) or better under the A.M.
Best rating system. The policies described in this Lease may designate a
Mortgagee and its successors and assigns as primary or additional insureds,
mortgagees and/or loss payee as deemed appropriate by Landlord. Not less than
ten (10) days prior to the expiration dates of the policies theretofore
furnished to a lender under a mortgage or deed of trust encumbering the leased
property, renewal policies accompanied by evidence satisfactory to Landlord or
a Mortgagee of payment of the premiums due thereunder shall be delivered to
Landlord a Mortgagee. If for any reason the requisite insurance coverage cannot
be renewed ten (10) days or more prior to expiration, written confirmation
must be received from the Tenant that coverage will be in place by expiration,
and evidence of such coverage will be provided immediately upon renewal.


 


SECTION 11

DAMAGE CLAUSE


 


11.1.        In the event that during the term hereof
the leased property shall be partially or substantially damaged or destroyed by
fire or other casualty, the risk of which is covered by Tenant’s insurance, Landlord
shall notify Tenant in writing within ten (10) days of such damage of
Landlord’s election to either (i) proceed forthwith to repair such damage
and restore the leased property, to the extent of insurance funds, to
substantially their condition at the time of such damage (subject, however, to
zoning laws and building codes then in existence), or (ii) forego
rebuilding the damaged portions of the leased property. Should Tenant receive
Landlord’s notice of its election to forego rebuilding any material portion of
the leased property, then Tenant may, upon ten (10) day’s written notice
to Landlord given within ten (10) days after receipt of Landlord’s notice,
terminate this Lease.


 


SECTION 12

LANDLORD’S COVENANT OF QUIET ENJOYMENT


 


12.1.        Tenant, on payment of the rent and
observing, keeping and performing all of the terms and provisions of this Lease
on its part to be observed, kept and performed, shall lawfully, peaceably, and
quietly have, hold, occupy and enjoy the leased property during the term hereof
without hindrance or ejection by the Landlord or by any persons lawfully
claiming under Landlord; but it is understood and agreed that this covenant and
any and all other covenants of


 


11

















 


Landlord contained
in this Lease shall be binding upon Landlord and its successors only with
respect to breaches occurring during its and their respective ownership of the
Landlord’s interest hereunder.


 


12.2.        Landlord understands and agrees that
Tenant will have complete control over the gaming and casino operations of the
leased property and shall have full authority to hire or discharge any and all
personnel employed at the leased property. Except as expressly provided herein,
Landlord understands and agrees that Tenant shall be free to operate gaming
operations at the leased property without interference from or direction by
Landlord or any of its affiliates. Neither Landlord nor any agent or
representative of Landlord shall exercise, either directly or indirectly, management
or control of any kind whatsoever, over any gaming operation of the leased
property. Tenant agrees, however, to permit agents and employees of Landlord to
have free and liberal access to Tenant’s business records and to all areas of
the leased property (unless limited or prohibited by gaming laws and
regulations), for the express purpose of observing the manner in which Tenant
conducts the Business; provided, however, that the said agents and employees of
Landlord shall neither influence nor attempt to influence, in any way, gaming
operations of Tenant.


 


12.3.        Tenant agrees and acknowledges that the
Nevada Gaming Commission, State Gaming Control Board and all other regulatory
bodies in the State of Nevada with the power and jurisdiction to regulate the
gaming activities conducted upon the Real Property (the “Nevada Gaming
Authorities”), as a condition of approving this Lease, may require that Tenant
provide access for an independent firm of Certified Public Accountants to be
engaged on behalf of said Nevada Gaming Authorities for various purposes.
Tenant agrees to provide any required access for such Certified Public
Accountants, and to furnish them with any documents, books or records necessary
or appropriate to such purposes. Tenant agrees and acknowledges that entry by
such Certified Public Accountants, and their activities while upon the leased
property, have been contemplated by the parties and shall not be deemed to
constitute any interference with Tenant’s leasehold estate nor any actual or constructive
eviction therefrom.


 


SECTION 13

LIENS


 


13.1.        Tenant shall at all times indemnify,
save and hold Landlord, the leased property and the leasehold created by this
Lease free, clear and harmless from any claims, liens, demands, charges,
encumbrances, litigation and judgments arising directly or indirectly out of
any use, occupancy or activity of Tenant, or out of any work performed,
material furnished, or obligations incurred by Tenant in, upon or otherwise in
connection with the leased property. With respect to any construction,
alteration or repair contemplated by N.R.S. § 108.234, Tenant shall give
Landlord written notice at least ten (10) business days prior to the
commencement of any such work on the leased property, and Tenant shall
undertake all appropriate requirements to allow Landlord the right of filing
appropriate notices of nonresponsibility. Tenant shall, at its sole cost and
expense, within fifteen (15) days after filing of any lien of record, obtain
the discharge and release thereof. Nothing contained herein shall prevent
Landlord, at the cost and for the account of Tenant, from obtaining said
discharge and release in the event Tenant fails or refused to do the same
within said fifteen (15) day period.


 


12

















 


SECTION 14

EVENTS OF DEFAULT AND REMEDIES


 


14.1.        The following shall constitute events of
default under the terms of this Lease:


 


(a)          if Tenant shall neglect or fail to
perform or observe any of the covenants, terms, provisions, or conditions
contained in this Lease on its part to be performed or observed (except for
payment of Rent or any other monetary charges due hereunder) within fifteen
(15) days after written notice thereof from Landlord, or such additional time
as is reasonably required to correct any such default but in no event more than
an additional fifteen (15) days, or


 


(b)          if Tenant shall neglect or fail to pay
Rent as provided for in Article III, or any other monetary obligation at
any time owing from Tenant to Landlord precisely when due; or


 


(c)          if the leasehold estate created by
this Lease shall be taken on execution or by other process of law, or


 


(d)          if Tenant abandons the leased property
or if Tenant fails to operate the Business and such abandonment or failure to
operate continues for five (5) consecutive days (other than as a result of
damage or other casualty to the leased property).


 


(e)          if Landlord materially breaches any of
the covenants, terms, provisions, or conditions contained in this Lease on its
part to be performed or observed.


 


14.2.        Upon the occurrence of any event of
default by Tenant, Landlord may immediately, or at any time thereafter, without
further demand or notice, terminate this Lease without any further liability,
hereunder, and exercise any and all other remedies available to Landlord at law
or in equity under the laws of the State of Nevada.


 


14.3.        Upon the occurrence of any event of
default by Landlord, Tenant may immediately, or at any time thereafter, without
further demand or notice, terminate this Lease without any further liability
hereunder, and exercise any and all other remedies available to Tenant at law
or in equity under the laws of the State of Nevada.


 


14.4.        Failure on the part of Landlord or
Tenant to complain of any action or non-action on the part of Tenant or
Landlord, respectively, no matter how long the same may continue, shall not be
deemed to be a waiver by Landlord or Tenant of any of either’s rights
hereunder. Further, it is covenanted and agreed that no waiver at any time of any
of the provisions hereof by Landlord or Tenant shall be construed as a waiver
of any of the other provisions hereof and that a waiver at any time of any of
the provisions hereof shall not be construed as a waiver at any subsequent time
of the same provisions. The consent or approval of Landlord or Tenant to or of
any action by Tenant or Landlord requiring Landlord’s or Tenant’s consent or
approval, respectively, shall not be deemed to waive or render unnecessary
Landlord’s or Tenant’s consent or approval to or of any subsequent similar act
by Tenant or Landlord.


 


13

















 


SECTION 15

NOTICE


 


15.1.        Unless otherwise provided herein, any
notice, communication, request, reply or advice (herein severally and collectively
for convenience, called “notice” in this Lease) provided or permitted to be
given, made or accepted by either Party to the other, must be in writing and
may, unless otherwise expressly provided in this Lease, be given or be served
by depositing the same in the United States mail, postpaid and certified, or by
a nationally recognized overnight delivery service, and addressed to the other
party to be notified, with return receipt requested, or by delivering the same
in person to such party. Notice deposited in (a) the mail shall be
effective from and after the expiration of three (3) days after it is so
deposited, and (b) overnight delivery service shall be effective the next
business day following acceptance by such delivery service for next business
day delivery. Notice given in any other manner shall be effective only if and
when received by the other party to be notified. For purposes of notice, the
addresses of the Parties shall, until changed as herein provided, be as
follows:


 


Landlord:


Tropicana Las Vegas, Inc.



3801 Las Vegas Blvd South



Las Vegas, Nevada 89109 


Telephone: (702) 739-3530



Facsimile: (702) 739-5107



Attention: Joanne M.
Beckett


 


with copies similarly
delivered to: 


Goold Patterson Ales &
Day LLP 


4496 South Pecos Road


Las Vegas, Nevada 89121


Telephone: (702) 436-2600


Facsimile: (702) 436-2650


Attention: Jeffrey D.
Patterson


 


and:


Latham & Watkins
LLP


885 Third Avenue


New York, New York 10022 


Telephone: (212) 906-1770



Facsimile: (212) 751-4864



Attention: Jennifer S.
Perkins


 


Tenant:


Armenco Holdings, LLC 


3801 Las Vegas Blvd South



Las Vegas, NV 89109


Telephone: (     )     -


Facsimile: (     )     -


Attention: Alex
Yemenidjian


 


14

















 


with a copy similarly
delivered to: 


Lionel Sawyer &
Collins LLP 


1700 Bank of America
Plaza


300 South Fourth Street


Las Vegas, Nevada 89101


Telephone: (702) 383-8904


Facsimile: (702) 383-8845


Attention: Ellen
Whittemore


 


However, the Parties (and
those entitled to receive notice hereunder) and their respective heirs,
successors, legal representatives and assigns shall have the right from time to
time and at any time to change their respective addresses and each shall have
the right to specify as its address any other address within the United States,
by the same manner of giving notice as set forth hereunder.


 


SECTION 16

SUBORDINATION


 


16.1.        Tenant agrees upon request of Landlord
to subordinate this Lease and its rights hereunder to the lien of any mortgage,
deed of trust or other encumbrance, together with any renewals, extensions or
replacements thereof, now or hereafter placed, charged or enforced against the
leased property, or any portion thereof, or any property of which the leased
property is a part, and to execute and deliver at any time, and from time to
time, upon demand by Landlord, such documents as may be required to effectuate
such subordination. In the event that Tenant shall fail, neglect or refuse to
execute and deliver any such documents to be executed by it, Tenant hereby
appoints Landlord, its successors and assigns, the attorney-in-fact of Tenant
irrevocable to execute and deliver any and all such documents for and on behalf
of Tenant; provided, however, Tenant shall not be required to effectuate such
subordination, nor shall Landlord be authorized to effectuate such
subordination on behalf of Tenant, unless the mortgagee or beneficiary named in
such mortgage, deed of trust, or other encumbrance shall first agree in
writing, for the benefit of Tenant, that so long as Tenant is not in default under
any of the provisions, covenants or conditions of this Lease on the part of
Tenant to be kept and performed, that neither this Lease nor any of the rights
of Tenant hereunder shall be terminated or modified or be subject to
termination of obligation, nor shall Tenant’s possession of the leased property
be disturbed by proceedings to foreclose said mortgage, deed or trust or other
encumbrance.


 


16.2.        In the event that the mortgagee or
beneficiary of any mortgage or deed of trust encumbering the leased property
elects to have this Lease a prior lien to its mortgage or deed of trust, then
and in such event, upon such mortgagee’s or beneficiary’s written notice to
Tenant to that effect and subject to Section 16.1 of this Lease, this
Lease shall be prior in lien to such mortgage or deed of trust, whether this
Lease is dated prior or subsequent to the date or recordation of such mortgage
or deed of trust.


 


15

















 


16.3.        Tenant shall, in the event any
proceedings are brought for the foreclosure of the leased property or in the
event of the exercise of the power of sale under any deed of trust made by
Landlord covering the lease property, attorn to the purchaser upon any such
foreclosure or sale and recognize such purchaser as the Landlord under this
Lease.


 


SECTION 17

ESTOPPEL CERTIFICATES


 


17.1.        Tenant shall at any time, and from time
to time, within ten (10) days of written from Landlord, execute,
acknowledge and deliver to Landlord a statement in writing (i) certifying
that this Lease is unmodified and in full force and effect (or, if modified,
state the nature of such modification and certifying that this Lease as so
modified, is in full force and effect) and the dates to which the rental and
other charges are paid in advance, if any; (ii) certifying the
commencement and termination dates of the Lease; (iii) certifying that
there has been no assignment or other transfer by Tenant of this Lease, or any
interest therein; and (iv) acknowledging that there are not, to Tenant’s
knowledge, any uncured defaults on the part of Landlord hereunder (or, if any,
specifying the nature of such uncured defaults) and that Tenant has no right of
offset, counterclaim or deduction against rent, or specifying such default if
any are claimed together with the amount of any offset, counterclaim or
deduction alleged by Tenant. Any such statements may be relied upon by any
existing owner or prospective purchaser or any present or prospective lender
upon the security of the leased property. Tenant’s failure to deliver such
statement within such time shall be conclusive and binding upon Tenant (i) that
this Lease is in full force and effect, without modification except as may be
represented by Landlord, (ii) that there are no uncured defaults in Landlord’s
performance and that Tenant has no right of offset, counterclaim or deduction
against rental, and (iii) that no more than one month’s rent has been paid in
advance.


 


SECTION 18

NO ASSIGNMENT OR SUBLETTING


 


18.1.        Tenant shall not assign, mortgage,
pledge, hypothecate or encumber this Lease nor the leasehold estate hereby
created or any interest herein, or sublet the leased property or any portion
thereof, or license the use of all or any portion of the leased property,
without the written consent of Landlord, which consent Landlord may, in its
sole discretion, withhold. In any case where Landlord shall consent to such
assignment or subletting, Tenant named herein shall remain fully liable for the
obligations of Tenant hereunder. In no event shall the granting of such written
consent by Landlord ever be construed as a waiver by Landlord of the
requirement that each subsequent assignment, if any, shall also require the
prior written consent of Landlord; and each subsequent assignor, if any, shall
likewise remain fully liable for the obligations of Tenant hereunder.


 


SECTION 19

NO PARTNERSHIP


 


19.1.        Nothing contained in this Lease shall be
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent or of partnership or of joint venture or of
any association between Landlord and Tenant. Neither the method of


 


16

















 


computation of rent nor
any other provisions contained in this Lease nor any acts of the parties hereto
shall be deemed to create any relationship between Landlord and Tenant other
than the relationship of Landlord and Tenant.


 


SECTION 20

REMEDIES CUMULATIVE


 


20.1.        The various styles, options, elections
and remedies of the Parties shall be cumulative and no one of them shall be
construed as exclusive of any other, or of any right, priority or remedy
allowed or provided for by law and not expressly waived in this Lease.


 


SECTION 21

TIME OF THE ESSENCE


 


21.1.        Time is of the essence of this Lease and
all of the terms, covenants and conditions hereof.


 


SECTION 22

MISCELLANEOUS PROVISIONS REGARDING LEASE


 


22.1.        This Lease shall be governed exclusively
by the provisions hereof and by the laws of the State of Nevada, as the same
may from time to time exist.


 


22.2.        The paragraph headings and the index to
this Lease are for convenience and reference only, and the words contained
therein shall in no way be held to explain, modify, amplify or aid in the
interpretation, construction or meaning of the provisions of this Lease.


 


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


 


22.4.        Except as herein otherwise expressly
provided, the terms hereof shall be binding upon and shall inure to the benefit
of the heirs, executors, administrators, successors and permitted assigns,
respectively, of Landlord and Tenant.


 


22.5.        If, on account of a continued default or
breach by Landlord or Tenant in Landlord’s or Tenant’s obligations under the
terms of this Lease after notice, it shall be necessary for Landlord or Tenant
to employ an attorney to enforce or defend any of Landlord’s or Tenant’s rights
or remedies hereunder, then, in such event, any reasonable amounts incurred by
Landlord or Tenant as attorney’s fees shall be paid by the Party required to
indemnify the other.


 


22.6.        This Agreement contains the entire
agreement of the parties and cannot be changed or terminated orally.


 


17

















 


22.7.        Masculine or feminine pronouns shall be
substituted for the neuter form and vice versa, and the plural shall be
substituted for the singular form and vice versa, in any place or places herein
in which the context requires such substitution or substitutions.


 


22.8.        Should any claim or lien be filed
against the leased property, or any action or proceeding be instituted
affecting the title to the leased property, Tenant shall give Landlord written
notice thereof as soon as practicable after Tenant obtains actual or
constructive knowledge thereof.


 


22.9.        This Agreement may be entered into in
counterparts and all of such counterparts shall be deemed part of one
instrument.


 


22.10.      In the event that either Party shall be
delayed or hindered in, or prevented from, the performance of any work,
service, or other act required under this Lease to be performed by the Party
and such delay or hindrance is due to strikes, lockouts, acts of God, governmental
restrictions, enemy act, civil commotion, unavoidable fire or other casualty,
or other causes of a like nature beyond the control of the party so delayed or
hindered, then performance of such work, service, or other act shall be excused
for the period of such delay and the period the performance of such work,
service, or other act shall be extended for a period equivalent to the period
of such delay. In no event shall such delay constitute a termination or
extension of this Lease. The provisions of this paragraph shall not operate to
excuse Tenant from the prompt payment of any monetary obligation due under any
provisions hereof.


 


SECTION 23

APPROVAL OF GAMING AUTHORITIES


 


23.1.        This Lease, and the obligations of the
parties hereunder, are hereby expressly conditioned upon the approval of this
Lease by the Nevada Gaming Authorities, and this Lease shall only be effective
if such approval has been obtained prior to the commencement of the term
hereof.


 


[Signature Pages Follow]


 


18

















 


IN WITNESS WHEREOF, the
parties hereto have set their names on the date above first mentioned.


 


	
  LANDLORD:

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
  Tropicana Las Vegas, Inc., a Nevada 

  corporation

  	
   

  	
  Armenco Holdings, LLC, a Nevada limited 

  liability company

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Joanne
  M. Beckett

  	
   

  	
  By:

  	
  /s/ Alex
  Yemenidjian

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  Vice President &
  General Counsel

  	
   

  	
  Its:

  	
  Manager

  



 


[SIGNATURE
PAGE TO INTERIM GAMING LEASE]