Exhibit
10.2


 




 





MASTER
LEASE AGREEMENT


 


Dated
November 7, 2007


 


Between


 


FCP
PROPCO, LLC, a Delaware limited liability company


 


as
Landlord,


 


and


 


STATION
CASINOS, INC., a Nevada corporation


 


as
Tenant




 





 

















 


TABLE
OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  I

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Leased Property

  	
  1

  
	
  1.2

  	
  Release of Unimproved Parcels

  	
  2

  
	
  1.3

  	
  Term

  	
  2

  
	
  1.4

  	
  No Merger of Landlord’s Interest

  	
  3

  
	
  1.5

  	
  Limitation of Term as a Result of
  Ground Lease Terms; Other Releases

  	
  3

  
	
  1.6

  	
  Renewal Right

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II

  	
  5

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Definitions

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III

  	
  15

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Rent

  	
  15

  
	
  3.2

  	
  Net Lease

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV

  	
  18

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  No Termination, Abatement, etc

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V OWNERSHIP OF THE LEASED PROPERTY

  	
  18

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Ownership of the Leased Property

  	
  18

  
	
  5.2

  	
  Tenant’s Personalty

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI AFFIRMATIVE COVENANTS; PERMITTED USE

  	
  19

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Tenant Covenants

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII NEGATIVE COVENANTS

  	
  22

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Tenant’s Negative Covenants

  	
  22

  
	
   

  	
  0

  	
   

  
	
  ARTICLE
  VIII ALTERATIONS; LEASING

  	
  23

  
	
  0

  	
   

  	
   

  
	
  8.1

  	
  Alterations

  	
  23

  
	
  8.2

  	
  Subletting and Assignment

  	
  24

  
	
   

  	
  0

  	
   

  
	
  ARTICLE
  IX

  	
  28

  
	
  005

  	
   

  	
   

  
	
  9.1

  	
  Maintenance and Repair.

  	
  28

  
	
  9.2

  	
  Immaterial Encroachments,
  Restrictions, etc

  	
  29

  



 

















 


	
  ARTICLE
  X CASUALTY AND CONDEMNATION

  	
  29

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Insurance

  	
  29

  
	
  0

  	
  Casualty; Application of Proceeds.

  	
  32

  
	
  10.3

  	
  Condemnation.

  	
  33

  
	
  0

  	
   

  	
   

  
	
  ARTICLE
  XI ACCOUNTS AND RESERVES

  	
  34

  
	
  0

  	
   

  	
   

  
	
  11.1

  	
  Cash Management Procedures

  	
  34

  
	
  00

  	
   

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XII

  	
  35

  
	
   

  	
   

  	
   

  
	
  12.1

  	
  Events of Default

  	
  35

  
	
  12.2

  	
  Certain Remedies

  	
  36

  
	
  12.3

  	
  Damages

  	
  36

  
	
  12.4

  	
  Landlord’s Security Interest

  	
  38

  
	
  12.5

  	
  Application of Funds

  	
  39

  
	
  12.6

  	
  Waiver of Right to Jury Trial

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XIII

  	
  40

  
	
   

  	
   

  	
   

  
	
  13.1

  	
  Landlord’s Right to Cure Tenant’s
  Default

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XIV

  	
  40

  
	
   

  	
   

  	
   

  
	
  14.1

  	
  Holding Over

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XV SUBORDINATION

  	
  41

  
	
   

  	
   

  	
   

  
	
  15.1

  	
  Subordination

  	
  41

  
	
  15.2

  	
  Attornment

  	
  41

  
	
  15.3

  	
  Notice of Default to Landlord’s
  Lender

  	
  41

  
	
  15.4

  	
  Modifications to Secure Financing

  	
  42

  
	
  15.5

  	
  Delivery of Notices to Landlord’s
  Lender

  	
  42

  
	
  15.6

  	
  Right of Landlord’s Lender to
  Enforce Lease

  	
  42

  
	
  15.7

  	
  Exercise of Landlord’s Discretion

  	
  42

  
	
  15.8

  	
  Cure of Landlord Defaults

  	
  42

  
	
  15.9

  	
  Indemnification

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XVI

  	
  43

  
	
   

  	
   

  	
   

  
	
  16.1

  	
  No Waiver

  	
  43

  
	
  0

  	
   

  	
   

  
	
  ARTICLE
  XVII

  	
  43

  
	
   

  	
   

  	
   

  
	
  17.1

  	
  Remedies Cumulative

  	
  43

  



 

















 


	
  ARTICLE
  XVIII

  	
  44

  
	
   

  	
   

  	
   

  
	
  18.1

  	
  Acceptance of Surrender

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XIX

  	
  44

  
	
   

  	
   

  	
   

  
	
  19.1

  	
  No Merger of Title

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XX

  	
  44

  
	
   

  	
   

  	
   

  
	
  20.1

  	
  Conveyance by Landlord

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XXI

  	
  44

  
	
   

  	
   

  	
   

  
	
  21.1

  	
  Quiet Enjoyment

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XXII

  	
  45

  
	
   

  	
   

  	
   

  
	
  22.1

  	
  Notices

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XXIII

  	
  45

  
	
   

  	
   

  	
   

  
	
  23.1

  	
  Appraisers

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XXIV CONFIDENTIALITY

  	
  46

  
	
   

  	
   

  	
   

  
	
  24.1

  	
  Confidentiality

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XXV ENVIRONMENTAL INDEMNITY

  	
  46

  
	
   

  	
   

  	
   

  
	
  25.1

  	
  Environmental Indemnity Provisions

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XXVI MISCELLANEOUS

  	
  47

  
	
   

  	
   

  	
   

  
	
  26.1

  	
  Survival of Claims

  	
  47

  
	
  26.2

  	
  Severability

  	
  47

  
	
  26.3

  	
  Maximum Permissible Rate

  	
  47

  
	
  26.4

  	
  Headings

  	
  47

  
	
  26.5

  	
  Exculpation

  	
  47

  
	
  26.6

  	
  Exhibition of Leased Property

  	
  47

  
	
  26.7

  	
  Entire Agreement

  	
  47

  
	
  26.8

  	
  Governing Law

  	
  47

  
	
  26.9

  	
  No Waiver

  	
  47

  
	
  26.10

  	
  Successors and Assigns

  	
  48

  
	
  26.11

  	
  Modifications in Writing

  	
  48

  
	
  26.12

  	
  Effect of Delay or Omission

  	
  48

  
	
  26.13

  	
  Third Party Beneficiaries;
  Landlord’s Lender Rights

  	
  48

  
	
  26.14

  	
  Gaming License

  	
  48

  



 

















 


	
  26.15

  	
  [Intentionally Omitted]

  	
  48

  
	
  26.16

  	
  Notification of Ownership Changes

  	
  48

  
	
  26.17

  	
  Cooperation with Gaming Authorities

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XXVII

  	
  49

  
	
   

  	
   

  	
   

  
	
  27.1

  	
  Memorandum of Lease

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XXVIII

  	
  49

  
	
   

  	
   

  	
   

  
	
  28.1

  	
  Statement of Intent

  	
  49

  
	
  28.2

  	
  Acknowledgment of Law

  	
  49

  



 

















 


	
  LIST
  OF EXHIBITS AND SCHEDULES

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  A – Legal Description of the Land

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  B – [Reserved]

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  C – [Reserved]

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  D – Subordination, Nondisturbance and Attornment Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  E – Control Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  F – Form of Sublease

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  1 – Ground Lease

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  3.1(d) – Designated Account

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  8.2.2 –Sublease Approvals

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  9.1(a) – Deferred Maintenance and Environmental Remediation Work

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  10.1 – Insurance Requirements

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  15.4 - Arbitration Procedures

  	
   

  



 

















 


MASTER
LEASE AGREEMENT (this “Lease”), dated as of the 7th day of
November, 2007, between FCP PROPCO, LLC, a Delaware limited liability company (“Landlord”)
having its principal office at 1505 South Pavilion Center Drive, Las Vegas,
Nevada 89135, and STATION CASINOS, INC., a Nevada corporation (“Tenant”),
having its principal offices at 1505 South Pavilion Center Drive, Las Vegas,
Nevada 89135.


 


RECITALS


 


WHEREAS,
Landlord has agreed to let to Tenant, and Tenant has agreed to lease from
Landlord, certain parcels of real property and improvements and related
property and interests defined hereinbelow as the “Leased Property” (all
capitalized terms used but not elsewhere defined herein shall have the meaning
provided therefor in Article II hereof).


 


NOW,
THEREFORE, in consideration of the foregoing, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant hereby agree as follows:


 


ARTICLE I


 


1.1           Leased Property.
Upon and subject to the terms and conditions hereinafter set forth, Landlord
leases to Tenant and Tenant leases from Landlord all of Landlord’s right, title
and interest in and to all of the following (collectively, the “Leased
Property”):


 


(i)            those certain tracts,
pieces and parcels of land, as more particularly described in Exhibit A
attached hereto and made a part hereof (collectively, the “Land”),
including, without limitation, the interests of Landlord under the Ground
Lease;


 


(ii)           all buildings,
structures and other improvements of every kind, including alleyways,
sidewalks, utility pipes, conduits and lines, parking areas and roadways
appurtenant to such buildings and structures presently or hereafter situated
upon the Land (collectively, and together with the Fixtures, the “Leased
Improvements”);


 


(iii)          all easements, rights
and appurtenances relating to the Land and the Leased Improvements;


 


(iv)          all permanently affixed
equipment, machinery, fixtures (as defined in the Uniform Commercial Code as in
effect in the State of Nevada) (including all HVAC equipment, elevators,
escalators and lighting, together with all equipment, parts and supplies used
to service, repair, maintain and equip the foregoing), and other items of real
and/or personal property, including all components thereof, now and hereafter
located in, on or used in connection with, and permanently affixed to or
incorporated into the Leased Improvements, including all furnaces, boilers,
heaters, electrical equipment, heating, plumbing, lighting, ventilating,
refrigerating, incineration, air- and water-pollution-control, waste-disposal,
air-cooling and air-conditioning systems and apparatus, sprinkler systems and
fire- and theft-protection equipment, all of which, to the greatest extent
permitted by law, are hereby deemed 


 

















 


by the parties hereto to constitute real estate,
together with all replacements, modifications, alterations and additions
thereto (collectively the “Fixtures”); and


 


(v)           all other real and
personal property (including interests as lessor under the Preapproved Space
Leases) acquired by Landlord, as successor-by-merger to the Seller Subsidiary
Entities (as defined in the Purchase Agreement) pursuant to the Purchase
Agreement.


 


1.2           Release of
Unimproved Parcels. Notwithstanding anything herein to the contrary, but
subject to the applicable release requirements under the Landlord’s Loan
Documents, Tenant shall have the right from time to time to terminate this
Lease, with respect to, and to acquire from Landlord, at no cost to Tenant and
with no adjustment in Rent, any Unimproved Parcels located at the Leased
Property, and each of Landlord and Tenant shall grant to the other in
connection therewith in respect of such Unimproved Parcels, on the one hand,
and the Leased Property remaining subject to this Lease, on the other hand,
reasonable easements, restrictions, covenants, reservations and rights of way
for, among other things, traffic circulation, ingress, egress, parking, access,
water and sewer lines, telephone and telegraph lines, electric lines or other
utilities or for other similar purposes at no cost to Landlord and with no
adjustment in Rent (and in no event shall either of Landlord or Tenant pay to
the other monetary compensation for the granting of such easements,
restrictions, covenants, reservations and rights of way); provided,
in each such case, (x) such Unimproved Parcel shall be used for the purpose of
erecting, maintaining and operating other structures and improvements not
inconsistent with the use of the related Leased Property, and (y) such
termination will not materially adversely affect either the value of the
remaining portion of the related Leased Property (as distinguished from the
value of the entire Leased Property) or the net operating income of the
remaining portion of the Leased Property (taking into account, to the extent
applicable, any potential loss of revenue resulting if the transfer and
development of the Unimproved Parcel by Landlord were not to occur), as
reasonably determined by Landlord. As used herein, “Unimproved Parcel” shall
mean, with respect to a Leased Property, any undeveloped portion of such Leased Property as to which Landlord’s
Lender has reasonably determined that such portion is not required for the
Primary Intended Use of such Leased 
Property and that the release of such portion will not adversely affect
either the “as leased” appraised value or the net operating income of the
remaining portion of Leased Property. For the avoidance of doubt, the
erecting, maintaining and operating of residential apartment or condominium
complexes on Unimproved Parcels shall not be deemed to be inconsistent with the
use of the related Leased Property. In connection with any termination
permitted pursuant to this Section, Landlord and Tenant agree to execute and
deliver any instrument reasonably necessary or appropriate to facilitate said
action (including instruments reasonably required under the Landlord’s Loan
Documents), subject to Landlord’s receipt of:


 


1.             a
plot plan identifying the location of the applicable Unimproved Parcel;


 


2.             a
metes and bounds description of such Unimproved Parcel; and


 


3.             an
amendment to the legal description attached as an exhibit to this Lease
implementing the proposed release, including a metes and bounds description of
the portion of the Land at the relevant Leased Property that will continue to
be subject to this Lease after the proposed termination.


 


1.3           Term. The
initial term of this Lease (the “Initial Term” and, together with any
Renewal Term(s), the “Term”) shall commence on the Commencement Date and
shall expire on the day 


 


2

















 


immediately preceding the
fifteenth (15th) anniversary of the Commencement Date, unless otherwise
terminated as provided herein, subject to the terms of Sections 1.5 and 1.6.


 


1.4           No Merger of
Landlord’s Interest. If Landlord or any Affiliate of Landlord shall
purchase any fee or other interest in a Leased Property that is superior to the
interest of Landlord, such as the ground lessor’s interest in a Ground Leased
Property, then the estate of Landlord and such superior interest shall not
merge and, without limiting the foregoing, Tenant shall continue to be liable
hereunder to perform any other obligations of the lessee under such Ground
Lease.


 


1.5           Limitation of Term
as a Result of Ground Lease Terms; Other Releases. With respect to any
Ground Leased Property, the Ground Lease for which has an expiration date
(taking into account any renewal options thereunder as of the date hereof or
hereafter exercised) prior to the expiration of the Term (taking into account
any exercised renewal options hereunder), (i) this Lease shall expire with
respect to such Ground Leased Property on the business day immediately
preceding such Ground Lease expiration date (taking into account the terms of
the following clause (ii)), and (ii) if a Ground Lease renewal option is not
exercised as of the date hereof and Landlord has not (in its sole discretion)
determined to exercise such renewal option, then Tenant may require Landlord to
exercise such renewal option on the following terms and conditions: (1) no
default on the part of Tenant hereunder or Event of Default shall have occurred
and be continuing, and (2) Tenant shall notify Landlord, on a date reasonably
prior to the date on which such renewal option must be exercised, that Tenant
wishes Landlord to exercise such renewal option. Landlord shall provide Tenant
with a copy of Landlord’s exercise of such renewal option.


 


1.6           Renewal Right. Provided
that no Event of Default has occurred and is continuing at the time such Notice
is given, and no Noticed Default or Event of Default is continuing at the time
the corresponding Renewal Term is to take effect, Tenant shall have the right
and option, in its sole discretion (each such right and option, a “Renewal
Option”) to extend and renew this Lease upon all the same terms and
conditions (except as this Lease otherwise expressly states), as follows (each
such extended term, a “Renewal Term”): (i) the Initial Term may be
extended for an additional term of five (5) years (the “First Extended Term”);
and (ii) the First Extended Term may be extended for an additional term of five
(5) years. Tenant shall exercise each Renewal Option, if at all, by giving
written Notice to Landlord of such exercise not less than three (3) months, nor
more than twelve (12) months, before the expiration of the then current Term. After
the last Renewal Term, Tenant shall have no further right to renew or extend
the Term. If Tenant fails to validly and timely exercise any Renewal Option,
then all subsequent Renewal Options shall terminate.


 


1.7           The Ground Lease.


 


(a)           This Lease, to the
extent affecting and solely with respect to the Ground Leased Property, is and
shall be subject and subordinate to all of the terms and conditions of the
Ground Lease. Tenant hereby acknowledges that Tenant has reviewed and agreed to
all of the terms and conditions of the Ground Lease. Tenant hereby agrees that
Tenant shall not to do, or fail to do, anything that would cause any violation
of the Ground Lease. Without limiting the foregoing, (i) to the extent Landlord
is required to obtain the written consent of the lessor under the Ground Lease
(the “Ground Lessor”) to alterations of or the subleasing of all or any
portion of the Ground Leased Property pursuant to the Ground Lease, Tenant
shall likewise obtain Ground Lessor’s written consent to alterations of or the
subleasing of all or any portion of the Ground Leased Property, and (ii).Tenant
shall carry and maintain general liability, automobile liability, property and
casualty, worker’s 


 


3

















 


compensation and
employer’s liability insurance in amounts and with policy provisions, coverages
and certificates as required of Landlord as tenant under the Ground Lease.


 


(b)           In the event of
cancellation or termination of the Ground Lease for any reason whatsoever
whether voluntary or involuntary (by operation of law or otherwise) prior to
the expiration date of this Lease, including extensions and renewals granted
thereunder, then, at Ground Lessor’s option, Tenant shall make full and
complete attornment to Ground Lessor with respect to the obligations of
Landlord to Ground Lessor in connection with the Ground Leased Property for the
balance of the term of the Lease (notwithstanding that this Lease shall have
expired with respect to the Ground Leased Property as a result of the
cancellation or termination of the Ground Lease). Tenant’s attornment shall be
evidenced by a written agreement which shall provide that the Tenant is in
direct privity of contract with Ground Lessor (i.e. that all obligations
previously owed to Landlord under this Lease with respect to the Ground Lease
or the Ground Leased Property shall be obligations owed to Ground Lessor for
the balance of the term of this Lease, notwithstanding that this Lease shall
have expired with respect to the Ground Leased Property as a result of the
cancellation or termination of the Ground Lease) and which shall otherwise be
in form and substance reasonably satisfactory to Ground Lessor. Tenant shall
execute and deliver such written attornment within thirty (30) days after
request by Ground Lessor. Unless and until such time as an attornment agreement
is executed by Tenant pursuant to this subsection, nothing contained in this
Lease shall  create, or be construed as
creating, any privity of contract or privity of estate between Ground Lessor
and Tenant.


 


(c)           In the event Tenant
receives a written notice from Ground Lessor stating that an event of default
has occurred or exists under the Ground Lease, the Tenant shall thereafter,
during the continuance of such event of default, pay and perform all of
Landlord’s obligations pursuant to the Ground Lease directly to or for Ground
Lessor including, without limitation, the payment of all rentals accruing under
this Lease to the extent related to the Ground Leased Property and the Landlord’s
obligations under the Ground Lease directly to Ground Lessor (or Ground Lessor’s
lender if Ground Lessor shall so direct); provided that nothing in this
provision shall entitle Tenant to reduce the amount of Base Rent payable to
Landlord under this Lease (subject to a reservation of any right or claim
against the Landlord). Similarly, in the event Tenant receives a written notice
from any lessor under any master lease of any portion of the Ground Leased
Property to Ground Lessor stating that an event of default has occurred or
exists under such master lease, the Tenant shall thereafter, during the
continuance of such event of default, so long as the terms of this Lease are
recognized and honored, attorn to such master lessor and pay and perform all of
Ground Lessor’s obligations pursuant to such master lease directly to or for
such lessor under such master lease including, without limitation, the payment
of rentals accruing under this Lease to the extent related to that portion of
the Ground Leased Property subject to such master lease and the Ground Lessor’s
obligations under such master lease directly to such lessor; provided that
nothing in this provision shall entitle Tenant to reduce the amount of Base
Rent payable to Landlord under this Lease (subject to a reservation of any
right or claim against the Landlord).


 


(d)           Nothing contained in
this Lease amends, or shall be construed to amend, any provision of the Ground
Lease.


 


(e)           Tenant shall indemnify,
defend and hold harmless the Ground Lessor, any master lessor to Ground Lessor
and any other party entitled to be indemnified pursuant to the terms of the
Ground Lease from and against any and all claims arising from Tenant’s use of
the Ground Leased Property, and from and against the conduct of Tenant’s
business thereon or from any other activity, work or thing done, permitted or
suffered by Tenant in, about or in respect of the Ground Leased Property, and 


 


4

















 


from and against
any and all claims arising from any breach or default in the performance of any
obligation on Tenant’s part to be performed under the terms of this Lease
relating to the Ground Leased Property, or arising from any act or omission of
Tenant or Tenant’s agents, contractors, invitees, subtenants, customers or
employees with respect to the Ground Leased Property, and from and against all
costs, attorneys’ fees, expenses and liabilities incurred in the defense of any
such claim or any action or proceeding brought thereon; and in case any action
or proceeding be brought against the Ground Lessor or any master lessor to
Ground Lessor or any such party by reason of any such claim, Tenant, upon
notice from Ground Lessor, any master lessor to Ground Lessor or any such
party, shall defend the same at Tenant’s expense by counsel satisfactory to the
party or parties indemnified pursuant to this paragraph or the Ground Lease.


 


(f)            Tenant hereby waives
any and all rights of recovery (including subrogation rights of its insurers)
from Ground Lessor, its agents, principals, employees and representatives for
any loss or damage, including consequential loss or damage, covered by any
insurance policy maintained by Tenant, whether or not such policy is required
under the terms of the Ground Lease.


 


ARTICLE II


 


2.1           Definitions. For
all purposes of this Lease, except as otherwise expressly provided or unless
the context otherwise requires, (i) the terms defined in this Article have the
meanings assigned to them in this Article and include the plural as well as the
singular, (ii) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as at the time applicable, (iii) all references in this Lease to
designated “Articles,” “Sections” and other subdivisions are to the designated
Articles, Sections and other subdivisions of this Lease, (iv) the words “herein,”
“hereof” and “hereunder” and other words of similar import refer to this Lease
as a whole and not to any particular Article, Section or other subdivision, (v)
the term “including” and words of similar import shall be deemed to be followed
by the phrase “without limitation,” (vi) the term “attorneys’ fees” and “attorneys’
fees and expenses” and words of similar import shall be deemed preceded with
the word “reasonable,” and (vii) the phrase “Leased Property” shall be deemed
to be followed by the phrase “or any portion thereof”.


 


Additional
Charges:  As defined in
Article III.


 


Affiliate:  A Person or Persons directly or indirectly,
through one or more intermediaries, controlling, controlled by or under common
control with the Person or Persons in question. The term “control”, as used in
the immediately preceding sentence, shall mean, with respect to a Person that
is a corporation, the right to exercise, directly or indirectly, more than 50%
of the voting rights attributable to the shares of the controlled corporation
and, with respect to a Person that is not a corporation, the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of the controlled Person.


 


Alteration:  As defined in Section 8.1.


 


Alteration
Cost Threshold:  As
defined in Section 8.1.


 


Award:
Any compensation paid by any Governmental Authority in connection with a
Condemnation in respect of all or any part of any Facility.


 


5

















 


Base
Rent:   As defined in
Article III.


 


Business
Day:  Any day other
than (a) a Saturday, Sunday and (b) any other day on which national banks in
New York, New York or Las Vegas, Nevada are not open for business.


 


Cash:  Coin or currency of the United States of
America or immediately available federal funds, including such funds delivered
by wire transfer.


 


Cash
Management Procedures: 
As defined in Article XI.


 


Casualty:  As defined in Section 10.2.


 


Commencement
Date:  The date of this
Lease.


 


Commencement
Date LCR:  The Lease
Coverage Ratio as of the Commencement Date.


 


Condemnation:  As defined in Section 10.3.


 


Default:  The occurrence of any event hereunder which,
but for the giving of notice or passage of time, or both, would be an Event of
Default hereunder.


 


Eligible
Collateral:  U.S.
Government Securities, Debt Securities, Cash and Cash Equivalents and a Letter
of Credit, or any combination of the foregoing.


 


Environmental
Laws:  Any and all of the
following as applicable to Tenant and/or the Facility:  any and all federal, state or local statutes,
regulations or ordinances or any judicial or administrative decrees or
decisions, whether now existing or hereinafter enacted, promulgated or issued, with
respect to the protection of human health from any environmental hazards (as
relating to exposure to such environmental hazards), or the environment, or any
Hazardous Substances, wetlands, landfills, open dumps, storage tanks,
underground storage tanks, solid waste, waste water, storm water run-off, waste
emissions or wells. Without limiting the generality of the foregoing, the term
shall encompass each of the following statutes, and regulations promulgated
thereunder, and amendments and successors to such statutes and regulations, as
may be enacted and promulgated from time to time:  (i) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (codified in scattered sections of 26
U.S.C.; 33 U.S.C.; 42 U.S.C. and 42 U.S.C. §9601 et  seq.); (ii)
the Resource Conservation and Recovery Act of 1976 (42 U.S.C. §6901 et  seq.);
(iii) the Hazardous Materials Transportation Act (49 U.S.C. §1801 et  seq.);
(iv) the Toxic Substances Control Act (15 U.S.C. §2061 et  seq.);
(v) the Clean Water Act (33 U.S.C. §1251 et  seq.); (vi) the Clean
Air Act (42 U.S.C. §7401 et  seq.); (vii) the Safe Drinking Water
Act (21 U.S.C. §349; 42 U.S.C. §201 and §300f et  seq.); (viii)
the National Environmental Policy Act of 1969 (42 U.S.C. §4321); (ix) the
Superfund Amendment and Reauthorization Act of 1986 (codified in scattered
sections of 10 U.S.C., 29 U.S.C., 33 U.S.C. and 42 U.S.C.); and (x) Title III
of the Superfund Amendment and Reauthorization Act (40 U.S.C. §1101 et  seq.).


 


Equity
Interest:  All or any
part of any direct or indirect equity or ownership interest(s) (whether stock,
partnership interest, beneficial interest in a trust, limited liability company
or member’s interest, or other interest of an ownership or equity nature) in
any entity at any tier of ownership that directly or indirectly owns or holds
any ownership or equity interest in a Person.


 


Event
of Default:  As defined
in Article XII.


 


6

















 


Facility:  As defined in Section 6.1(a)(iii).


 


Facility
Subtenant. The Subtenant under any Preapproved Facility
Sublease.


 


Fair
Market Rental:  With
respect to a Facility, the rental that a willing tenant not compelled to rent
would pay a willing landlord not compelled to let for such Facility, excluding
all capital improvements (as distinguished from necessary repairs and
replacements) paid for by Tenant, determined in accordance with the appraisal
procedures set forth in Article XXIII or in such other manner as shall be
mutually acceptable to Landlord and Tenant.


 


FF&E:  Tenant’s or Facility Subtenant’s right,
title, and interest in any of the following Tenant Personalty (but only to the
extent, for avoidance of doubt, such property shall not be included in Fixtures
comprising the Leased Property):  all furniture, fixtures, goods, inventory,
equipment, furnishings, objects of art, machinery, appliances, appurtenances and signage (as such terms are
defined in the Uniform Commercial Code, as applicable) together with tools and
supplies (including spare parts inventories) related to the foregoing, now or
in the future contained in, used in connection with, attached to, or otherwise
placed on any part of, the Leased Property. “FF&E” shall include, without
limitation: beds, bureaus, chiffonniers, chests, chairs, desks, lamps,
mirrors, bookcases, tables, rugs, carpeting, drapes, draperies, curtains,
shades, blinds, screens, paintings, hangings, pictures, divans, couches,
luggage carts, luggage racks, stools, sofas, chinaware, linens, pillows,
blankets, glassware, silverware, food carts, cookware, dry cleaning facilities,
dining room wagons, keys or other entry systems, bars, bar fixtures, liquor and
other drink dispensers, icemakers, radios, television sets, intercom and paging
equipment, electric and electronic equipment, dictating equipment, private
telephone systems, medical equipment, potted plants, fittings, plants,
apparatus, stoves, ranges, refrigerators, laundry machines, machinery,
switchboards, conduits, compressors, vacuum cleaning systems, floor cleaning,
waxing and polishing equipment, call systems, electrical signs, bulbs, bells,
ash and fuel, conveyors, cabinets, lockers, shelving, spotlighting equipment,
dishwashers, garbage disposals, washers and dryers, all gaming and financial equipment, computer equipment, calculators,
adding machines, gaming tables, video game and slot machines, any other
electronic equipment of every nature, and other hotel or casino
furniture, furnishings and equipment. Notwithstanding
anything to the contrary, “FF&E” shall not include any goods
purchased and held for sale or resale and any paper goods and business
supplies.


 


FF&E
Reserve:  As defined in
Article XI.


 


Fiscal
Quarter:  each quarter
within a Fiscal Year.


 


Fiscal
Year:  The fiscal year
of Tenant as the same may be modified from time to time.


 


Fixtures:  As defined in Article I.


 


Gaming
Authority:  Those
federal, state and local governmental, regulatory and administrative
authorities, agencies, boards and officials responsible for or involved in the
regulation of gaming or gaming activities in any jurisdiction, including within
the State of Nevada, specifically, the Nevada Gaming Commission, the Nevada
State Gaming Control Board, and applicable local authorities.


 


Gaming
Laws:  Those laws
pursuant to which any Gaming Authority possesses regulatory, licensing or
permit authority over gaming within any jurisdiction and, within the State of
Nevada, specifically, the Nevada Gaming Control Act, as codified in the Chapter
463 of the Nevada Revised 


 


7

















 


Statutes, and the regulations of the Nevada Gaming
Commission and Nevada State Gaming Control Board promulgated thereunder, as
amended from time to time.


 


Governmental
Authority:  Any court,
board, agency, commission, office or authority of any nature whatsoever of or
for any governmental unit (federal, state, county, district, municipal, city or
otherwise), whether now or hereafter in existence.


 


Ground
Leased Property:  The
Leased Property subject to the Ground Lease.


 


Ground
Lease: The ground lease identified on Schedule 1.


 


Ground
Lessor:  As defined in
Section 1.7.


 


Hazardous Substances:  Each and every element, compound, chemical
mixture, contaminant, pollutant, material, waste or other substance which is
defined, determined or identified as hazardous or toxic under any Environmental
Law. Without limiting the generality of the foregoing, the term shall mean and
include:


 


(i)            “hazardous substances” as defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Superfund Amendment and Reauthorization Act of 1986, or Title III of the
Superfund Amendment and Reauthorization Act, each as amended, and regulations
promulgated thereunder; excluding, however, common maintenance and cleaning
products regularly found at properties with a standard of operation and
maintenance comparable to the Property;


 


(ii)           “hazardous waste” and “regulated substances”
as defined in the Resource Conservation and Recovery Act of 1976, as amended,
and regulations promulgated thereunder;


 


(iii)          “hazardous materials” as defined in the
Hazardous Materials Transportation Act, as amended, and regulations promulgated
thereunder; and


 


(iv)          “chemical substance or mixture” as defined in
the Toxic Substances Control Act, as amended, and regulations promulgated
thereunder.


 


Improvements:
The improvements situated on the Leased Property.


 


Indemnitee:  As defined in Section 15.9.


 


Insurance
Premiums:  As defined
in Section 10.1(b).


 


Insurance
Requirements:  All
terms of any insurance policy required hereunder covering or applicable to the
Leased Property, all requirements of the issuer of any such policy, and all
orders, rules, regulations and other requirements of the National Board of Fire
Underwriters (or any other body exercising similar functions) applicable to or
affecting the Leased Property or any use of the Leased Property.


 


Land:  As defined in Article I with respect to the
Leased Property.


 


Landlord:  FCP PropCo, LLC, a Delaware limited liability
company, and its successors and assigns.


 


8

















 


Landlord
Liens:  Liens on or
against the Leased Property or this Lease or any payment of Rent (i) in favor
of any taxing authority by reason of any tax excluded from the definition of “Taxes”
hereunder owed by Landlord or (ii) securing Landlord’s Debt.


 


Landlord’s
Debt:  Collectively,
(a) that certain mortgage loan in the original principal amount of
$2,050,000,000 made by Landlord’s Lender to Landlord, (b) that certain first
mezzanine loan in the original principal amount of $150,000,000 made by
Landlord’s Lender to FCP MezzCo Borrower I, LLC, a Delaware limited liability
company, (c) that certain second mezzanine loan in the original principal
amount of $150,000,000 made by Landlord’s Lender to FCP MezzCo Borrower II,
LLC, a Delaware limited liability company, (d) that certain third mezzanine
loan in the original principal amount of $125,000,000 made by Landlord’s Lender
to FCP MezzCo Borrower III, LLC, a Delaware limited liability company, (e) as
to each of the foregoing loans, all accrued and unpaid interest thereon, all
other obligations or liabilities due or to become due the applicable Landlord’s
Lender pursuant to or in accordance with Landlord’s Loan Documents, and all
other amounts, sums and expenses paid by or payable to Landlord’s Lender under
or pursuant to Landlord’s Loan Documents, and (f) as to each of the foregoing
loans, all Modifications, increases, reinstatements and refinancings thereof as
may occur from time to time,.


 


Landlord’s
Lender:  German
American Capital Corporation and JPMorgan Chase Bank, N.A., together with their
respective successors and assigns, any other “Lender” as such term is defined
in Landlord’s Loan Documents and any other lender in respect of Landlord’s
Debt.


 


Landlord’s
Loan Documents:  The
instruments and agreements evidencing, establishing and securing Landlord’s
Debt, including (to the extent applicable) without limitation, any promissory
notes, loan agreements, mortgages, deeds of trust or deeds to secure debt, assignments
of leases and rents and pledge agreements, provided that with respect to any
Landlord’s Loan Documents other than those executed and delivered
contemporaneously herewith, in any instance in this Lease in which Tenant (and
any Person claiming by, through or under Tenant) is obligated to comply with or
perform in accordance with or subject to Landlord’s Loan Documents, Tenant (and
such Person) shall not be so obligated to the extent that any amended or new
Landlord’s Loan Documents impose any additional material obligation, duty or
liability on Tenant (or such Person) or diminish in any material respect any
right of Tenant (or such Person) provided for hereunder.


 


Lease
Coverage Ratio:   As of
any date, the ratio of Tenant’s TTM EBITDAR to the aggregate amount of
Scheduled Base Rent Payments payable under this Lease for the twelve preceding
months. For the first twelve months of the Term, the Lease Coverage Ratio shall
be calculated based on the Scheduled Base Rent Payments payable hereunder from
the Commencement Date through the full calendar month preceding the calculation
date, with such sum annualized to determine the aggregate Scheduled Base Rent
Payments for a full twelve month period. From and after the termination of this
Lease with respect to any Leased Property pursuant to Section 1.5 or otherwise,
the calculation of the Lease Coverage Ratio shall exclude such Leased Property
for the relevant calculation period.


 


Lease
Shortfall Reserve Period: 
shall mean any period (a)
commencing on the Rent Payment Date following the conclusion of any two (2)
consecutive Fiscal Quarters for which the Lease Coverage Ratio is less than
ninety percent (90%) of Commencement Date LCR and (b) ending on the day
immediately preceding the Rent Payment Date following the conclusion of any two
(2) consecutive Fiscal Quarters for which the Lease Coverage Ratio exceeds
ninety percent (90%) of Commencement Date LCR, provided that no Noticed
Default or Event of Default (as such terms are defined in Landlord’s Loan
Documents) is then continuing, and, for avoidance of doubt, subject to 


 


9

















 


resumption of the Lease Shortfall Reserve Period upon
any subsequent occurrence of the conditions set forth in clause (a) above.


 


Lease
Year:  the period
beginning on the Commencement Date, or any anniversary thereof, and ending on
the day immediately preceding the next succeeding anniversary of the
Commencement Date.


 


Leased
Improvements; Leased Property:  Each as defined in Article I.


 


Legal
Requirements:  All
federal, state, county, municipal and other governmental statutes, laws, rules,
orders, regulations, ordinances, judgments, decrees and injunctions of
Governmental Authorities affecting Landlord, Tenant or the Leased Property, or
the construction, use, alteration or operation thereof, whether now or
hereafter enacted and in force, and all permits, licenses and authorizations
and regulations relating thereto, and all covenants, agreements, restrictions
and encumbrances contained in any instruments, either of record or known to
Tenant, at any time in force affecting the Leased Property (other than any
subleases, this Lease, and service contracts and other similar agreements now
in effect or hereafter entered into in the ordinary course of Tenant’s
business), including any which may (i) require repairs, modifications or
alterations in or to the Leased Property, or (ii) in any way limit the use and
enjoyment thereof.


 


Letter
of Credit:  A clean,
irrevocable, unconditional, transferable letter of credit, payable on sight
draft only, which shall not be secured by any Leased Property or any
reimbursement agreement with Landlord, for the benefit of Landlord’s Lender and
entitling such beneficiary to draw thereon in New York, New York or in such
other city as the corporate trust office of Landlord’s Lender may be located at
the time of the issuance of such letter of credit, issued by a domestic bank or
the U.S. agency or branch of a foreign bank
by a bank with a long-term unsecured debt rating of not less than ‘A’ and a
short-term unsecured debt rating of not less than ‘A-1’. Such letter of
credit shall provide that (i) it will automatically renew unless the issuer of
such letter of credit delivers written notice to the beneficiary (and to
Landlord, if Landlord is not the beneficiary) at least thirty (30) days prior
to its expiration that such letter of credit will not be renewed and (ii) if
not so renewed, the beneficiary shall be entitled to draw upon the full amount
thereof. Without in any way limiting the generality of the foregoing, if any
Letter of Credit is not renewed or replaced with another Letter of Credit prior
to the date that is thirty (30) days prior to its expiration, the beneficiary
shall be entitled to draw upon the full amount thereof.


 


Lien:  Any mortgage, deed of trust, lien, pledge,
hypothecation, collateral assignment, security interest, or any other
encumbrance, charge or collateral transfer of, on or affecting the Leased
Property or Tenant, or any interest therein, including any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, the filing of any financing
statement, notice or other instrument and mechanics’, materialmen’s and other
similar liens and encumbrances.


 


Litigation
Costs:  All costs
reasonably incurred by Landlord in connection with the enforcement of any
provision of this Lease, including reasonable attorneys’ fees and expenses,
court costs and reasonable consultants’ fees and expenses.


 


Material
Alteration:  Any
Alteration which, when aggregated with all related Alterations, involves costs
estimated by Tenant (which costs shall be reasonably acceptable to Landlord and
Landlord’s Lender) to be incurred in implementing the Alterations exceeding $50
million.


 


10

















 


Modification:  Any amendments, supplements, modifications,
renewals, replacements, consolidations, substitutions and extensions of any
document or instrument from time to time; “modify”, “modified,” or related
words shall have meanings correlative thereto.


 


Notice:  As defined in Article XXII (regardless
whether the same is capitalized herein).


 


Noticed
Default: Any Default as to which Tenant has received Notice.


 


Officer’s
Certificate:  A
certificate made by an individual authorized to act on behalf of Tenant.


 


Operating
Agreements:  Reciprocal
easement and/or operating agreements; covenants, conditions and restrictions;
and similar agreements affecting any Leased Property and binding upon and/or
benefiting Landlord or Tenant and other third parties.


 


Operating
Budget:  With respect
to each Facility, an annual budget for the succeeding Fiscal Year with respect
to the operations of such Facility.


 


Other
Charges:  All
maintenance charges, impositions other than Taxes, and any other charges,
including vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Leased Property, now or hereafter levied or
assessed or imposed against the Leased Property or any part thereof (subject to
the same exclusion set forth in the proviso in the
definition of “Taxes”).


 


Overdue
Rate:  On any date, a
rate equal to the default rate of interest under Landlord’s Loan Documents, but
in no event greater than the maximum rate then permitted under applicable law.


 


Permitted
Encumbrances: Collectively, (a) all Liens disclosed in the
Title Policies, (b) Liens, if any, for Taxes or Other Charges not yet payable
or delinquent or which are being diligently contested in good faith in
accordance with this Lease, (c) Liens arising after the Commencement Date in
respect of property or assets imposed by law which were incurred in the
ordinary course of business, such as carriers’, warehousemen’s, landlord’s,
mechanics’, materialmen’s, repairmen’s and other similar Liens arising in the
ordinary course of business, and Liens for workers’ compensation, unemployment
insurance and similar programs, in each case arising in the ordinary course of
business which are being diligently contested in good faith in accordance with
the terms hereof, (d) Subleases permitted pursuant to this Lease, (e)
easements, rights-of-way, restrictions, minor defects or irregularities in
title and other similar charges or encumbrances (including any of such matters
incurred or entered into by Tenant or a Facility Subtenant in the ordinary
course of business) which in each case do not diminish in any material respect
the value of the affected Leased Property or affect in any material respect the
validity, enforceability or priority of this Lease or the Liens created by
Landlord’s Loan Documents, and (f) such other title and survey exceptions as
Landlord has approved or may approve in writing. In addition, “Permitted
Encumbrances” shall include any Landlord Liens.


 


Person:  Any individual, sole proprietorship,
corporation, general partnership, limited partnership, limited liability
company or partnership, joint venture, association, joint stock company, bank,
trust, estate, unincorporated organization, any federal, state, county or
municipal government (or any agency or political subdivision thereof),
endowment fund or any other form of entity.


 


Policies:  As defined in Section 10.1.


 


Preapproved
Facility Subleases:  As
defined in Section 8.2.2(a).


 


11

















 


Preapproved
Space Leases:  As
defined in Section 8.2.2(a).


 


Primary
Intended Use:  As
defined in Section 6.1.


 


Property
Documents:  
Collectively, the Permitted Encumbrances, Ground Lease and Operating
Agreements.


 


Proprietary
Information:  As
defined in Section 24.1.


 


Purchase
Agreement:  That
certain Amended and Restated Purchase and Sale Agreement made as of October 31,
2007, by and among Boulder Station, Inc., a Nevada corporation, Charleston
Station, LLC, a Nevada limited liability company, Palace Station Hotel &
Casino, Inc., a Nevada corporation, and Sunset Station, Inc., a Nevada
corporation, collectively as sellers, FCP
NewCo, LLC, a Delaware limited
liability company, as purchaser, and the other parties thereto, as assigned by
FCP NewCo, LLC to Landlord pursuant to that certain Assignment and Assumption
Agreement dated as of November 5, 2007.


 


Qualified
Architect:  Any
architect, engineer or construction consultant (which can be an employee of
Tenant or an Affiliate thereof) licensed or registered in the jurisdiction
where the applicable Leased Property is located, if required by the laws of
such jurisdiction, having at least five (5) years of architectural or
construction management experience, and approved by Landlord’s Lender, which
approval shall not be unreasonably withheld, delayed or conditioned.


 


Rating
Agencies:  Any one or
more of the following designated by Landlord: Standard & Poor’s Ratings
Group, a division of McGraw-Hill, Inc., Moody’s Investors Service, Inc., and
Fitch Ratings, Inc. or any other nationally-recognized statistical rating
agency selected by Landlord.


 


Rent:  Collectively, (i) the Base Rent and (ii)
Additional Charges.


 


Rental
Period. As defined in Article III.


 


Rent
Payment Date. As defined in Article III.


 


Requesting
Parties:  As defined in
Section 24.1.


 


Required
Insurance Coverage:  As
defined in Section 3.1(b).


 


Restoration:  As defined in Section 10.2.


 


Scheduled
Additional Charges:  As
defined in Section 3.1(b).


 


Scheduled
Base Rent Payments: means the payments of Base Rent payable
under Section 3.1 hereof on each Rental Payment Date during a particular
period.


 


Scheduled
Lease Payments:  As
defined in Section 3.1(b).


 


State:  The State of Nevada.


 


Sublease.
Any lease, sublease, license agreement or occupancy agreement entered into by
Tenant affecting all or any portion of the Leased Property.


 


12

















 


Subleasing
Standards:  As defined
in Section 8.2.2(a).


 


Subtenant:  A subtenant, licensee, occupant or other
party to any Sublease.


 


Superior
Interests:  As defined
in Article XV.


 


Superior
Party:  As defined in
Article XV.


 


Taxes:  All real estate and personal property taxes,
assessments, fees, taxes on rents or rentals, water rates or sewer rents and
other governmental charges now or hereafter levied or assessed or imposed
against Landlord, Tenant or the Leased Property or rents therefrom or which may
become Liens on Tenant’s Personalty, provided that
Taxes shall not include any income, franchise, estate, inheritance or gift
taxes, or any other tax imposed on or measured by the net income of Landlord,
except to the extent that the same is in direct substitution for a tax that
would otherwise be included within the definition of “Taxes” hereunder.


 


Tenant
Security Period:   Any period (a) commencing on the Rent Payment
Date following the conclusion of any two (2) consecutive Fiscal Quarters for
which the Lease Coverage Ratio is less than 80% of Commencement Date LCR and
(b) ending on the day immediately preceding the Rent Payment Date following the
conclusion of any two (2) consecutive Fiscal Quarters for which the Lease
Coverage Ratio exceeds 80% of Commencement Date LCR, provided that no
Noticed Default or Event of Default (as such terms are defined in Landlord’s
Loan Documents) is then continuing, and, for avoidance of doubt, subject to
resumption of the Tenant Security
Period upon any subsequent occurrence of the conditions set forth in
clause (a) above.


 


Tenant’s
Personalty: Tenant’s right, title and interest in and to the
following, now owned or hereafter acquired:


 


A. Equipment.
All “equipment,” as such term is defined in Article 9 of the Uniform Commercial
Code (as hereinafter defined) which is used at or in connection with the
Improvements or the Land or is located thereon or therein (including all
machinery, equipment, furnishings, and electronic data-processing and other
office equipment and any and all additions, substitutions and replacements of
any of the foregoing), together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto (collectively,
the “Equipment”). Notwithstanding the foregoing, Equipment shall not
include any Fixtures (including, but not limited to, all HVAC equipment,
elevators, escalators and lighting, together with all equipment, parts and
supplies used to service, repair, maintain and equip the foregoing) or property
belonging to tenants or other occupants under leases or other agreements except
to the extent that Tenant shall have any right or interest therein; and


 


B. Personal
Property. All inventory, furniture, furnishings, objects of art, machinery,
goods, tools, supplies, appliances, general intangibles, contract rights,
accounts, accounts receivable, franchises and licenses, certificates and
permits obtained by Tenant for its own business, in each case, of any kind or
character whatsoever (as defined in and subject to the provisions of the
Uniform Commercial Code as hereinafter defined) which are located within or
about the Land and the Improvements, together with all accessories,
replacements and substitutions thereto or therefor and the proceeds thereof
(collectively, the “Personal Property”). Notwithstanding the foregoing,
Personal Property shall not include any Fixtures (including, but not limited
to, all HVAC equipment, elevators, escalators and lighting, together with all
equipment, parts and supplies used to service, repair, maintain 


 


13

















 


and equip the foregoing) or property belonging to
tenants or other occupants under leases or other agreements except to the
extent that Tenant shall have any right or interest therein.


 


Term:  As defined in Article I.


 


Title
Policies:  The ALTA (or
equivalent) title insurance policies acquired by Landlord or Landlord’s
predecessor-in-interest most recently prior to the date hereof (i) naming
Landlord or Landlord’s predecessor-in-interest as the insured and (ii) insuring
Landlord’s or Landlord’s predecessor-in-interest’s fee or leasehold interest in
the Leased Property subject to the exceptions and exclusions set forth therein.


 


Transfer:  With respect to the Leased Property or any
portion thereof or any interest or estate therein, any of the following,
whether by operation of law or otherwise, whether voluntary or involuntary, and
whether direct or indirect: (a) any assignment, conveyance, grant,
hypothecation, mortgage, pledge, sale, or other transfer, whether direct or
indirect, of all or any part of such property, or of any legal, beneficial, or
equitable interest or estate in such property or any part of it (including the
grant of any easement, lien, or other encumbrance); (b) any conversion, exchange, issuance, modification, reallocation,
sale, or other transfer of any direct or indirect Equity Interest(s) in the
owner of such property by the holder of such Equity Interest(s); (c) any
transaction described in “b” affecting any Equity Interest(s) or any other
interest in such property or in any such owner (or in any other direct or
indirect owner at any higher tier of ownership) through any manner or means
whatsoever; or (d) any transaction that is in substance equivalent
to any of the foregoing. A transaction
affecting Equity Interests, as referred to in clauses “b” through “d,” shall be
deemed a Transfer by Tenant even though Tenant is not technically the
transferor.


 


TTM
EBITDAR:  As of any
date, on a trailing twelve months basis, earnings from hotel and casino
operations at the Leased Property before interest expense/income, taxes, depreciation
and amortization, any rental expense on real property (other than ground rent),
distribution expense, direct and allocated corporate overhead expense, regional
office allocation, royalty charges from affiliates and restructuring expense
plus any non-cash charges/less any non-cash income, including but not limited
to losses on sales of assets and non-cash compensation expense.


 


Unavoidable
Delays:  Delays due to
strikes, lockouts, inability to procure materials, power failure, acts of God,
governmental restrictions, enemy or terrorist action, civil commotion, fire,
unavoidable casualty or other causes beyond the control of the party
responsible for performing an obligation hereunder, provided that lack of funds
shall not be deemed a cause beyond the control of either party hereto unless
such lack of funds is caused by the failure of the other party hereto to
perform any obligations of such party under this Lease.


 


Uniform
Commercial Code:  The
Uniform Commercial Code as in effect in the State of Nevada.


 


Unimproved
Parcel:  As defined in
Article I.


 


Variable
Additional Charges:  As
defined in Section 3.1(c).


 


14

















 


ARTICLE III


 


3.1           Rent. Tenant
will pay to Landlord, in lawful money of the United States of America which
shall be legal tender for the payment of public and private debts, at Landlord’s
address set forth above or at such other place or to such other Person as
Landlord may designate in writing from time to time annual base rent as follows
(“Base Rent”):


 


	
  Lease

  Year

  	
   

  	
  Base Rent

  	
   

  
	
  1

  	
   

  	
   

  	
  $

  	
  249,450,019

  	
   

  
	
  2

  	
   

  	
   

  	
  $

  	
  249,450,019

  	
   

  
	
  3

  	
   

  	
   

  	
  $

  	
  249,450,019

  	
   

  
	
  4

  	
   

  	
   

  	
  $

  	
  249,450,019

  	
   

  
	
  5

  	
   

  	
   

  	
  $

  	
  249,450,019

  	
   

  
	
  6

  	
   

  	
   

  	
  $

  	
  324,285,025

  	
   

  
	
  7

  	
   

  	
   

  	
  $

  	
  324,285,025

  	
   

  
	
  8

  	
   

  	
   

  	
  $

  	
  324,285,025

  	
   

  
	
  9

  	
   

  	
   

  	
  $

  	
  324,285,025

  	
   

  
	
  10

  	
   

  	
   

  	
  $

  	
  324,285,025

  	
   

  
	
  11

  	
   

  	
   

  	
  $

  	
  372,927,778

  	
   

  
	
  12

  	
   

  	
   

  	
  $

  	
  372,927,778

  	
   

  
	
  13

  	
   

  	
   

  	
  $

  	
  372,927,778

  	
   

  
	
  14

  	
   

  	
   

  	
  $

  	
  372,927,778

  	
   

  
	
  15

  	
   

  	
   

  	
  $

  	
  372,927,778

  	
   

  



 


At the commencement of
each Renewal Term, if any, Base Rent shall be reset to be equal to the greater
of (a) the annual Fair Market Rental for the Leased Property and (b) one
hundred ten percent (110%) of the annual aggregate interest payments payable on
the then-existing Landlord’s Debt.


 


In
addition, Tenant will pay to Landlord or the Person otherwise entitled thereto
all Additional Charges during the Term on or before the same are delinquent. Base
Rent for each Fiscal Year shall be payable in advance in twelve (12) equal
installments, on the day (the “Rent Payment Date”) that is the third (3rd)
Business Day preceding the fifteenth (15th) day of each calendar month
of the Term. Base Rent shall be paid for the period of the fifteenth (15th)
day of each month (or, if applicable, the Commencement Date) through the
fourteenth (14th) day of the next month (or, if applicable, the
expiration of the Term) (each, a “Rental Period”), provided
that the first and last payments of Base Rent shall be prorated as to any
partial Rental Period, based on the number of days within the Term during such
Rental Period and the number of days in such Rental Period. Tenant hereby
agrees to make any reasonable changes with respect to the definitions of “Rent
Payment Date” or “Rental Period,” including, without limitation, changing the
Rent Payment Date and Rental Period, as may be reasonably requested in
connection with any Landlord’s Debt. The first installment payment of Base Rent
has been made as of the date hereof. The second installment shall be payable on
November 12, 2007, for the Rental Period beginning November 15, 2007 and ending
December 14, 2007.


 


(a)           Survival. The
obligations of Tenant and Landlord contained in this Section 3.1 shall survive
the expiration or earlier termination of this Lease, as provided in Article XII
of this Lease.


 


(b)           Scheduled Additional
Charges. In addition to the Base Rent payable with respect to the Leased
Property, Tenant shall pay, or cause to be paid, to Landlord, on a monthly
installment basis on 


 


15

















 


each Rent Payment
Date, the following (collectively, “Scheduled Additional Charges” and,
together with Base Rent, “Scheduled Lease Payments”):


 


(1)           Taxes and Other
Charges. Tenant shall pay, or cause to be paid, all Taxes and Other Charges
as set forth in Section 6.1(b) herein, in advance in equal monthly
installments.


 


(2)           Insurance Premiums.
Tenant shall pay, or cause to be paid, on each Rent Payment Date one twelfth
(1/12) of the annual amount of all premiums for the insurance coverage required
to be maintained pursuant to Article X hereof (the “Required Insurance
Coverage”); provided that the foregoing obligation shall be suspended and
not be applicable during any period that (a) a Noticed Default or Event of
Default shall not have occurred and be continuing and (b) the Required
Insurance Coverage is maintained by Tenant and/or its Facility Subtenants and
Affiliates in whole or in part through blanket policies in a form approved by
Landlord and Landlord’s Lender and evidence is provided to Landlord and
Landlord’s Lender that the premiums payable with respect to such policies have
been paid at least 60 days in advance of the expiration dates of such policies.


 


(3)           Periodic Property
Document Payments.           Tenant
shall pay, or cause to be paid, those sums required to be paid on a specified,
scheduled basis under the Property Documents (other than the Ground Lease and
Landlord’s Loan Documents, to the extent such constitute Property Documents),
provided that with respect to each such scheduled payment, the amount thereof
exceeds $250,000. For such amounts as are payable on a monthly basis, Tenant
shall pay on each Rent Payment Date the amount next coming due. For such
amounts as are payable on some other basis, Tenant shall pay on each Rent
Payment Date, the portion of the amount next coming due.


 


(c)           Variable Additional
Charges. In addition to the Scheduled Lease Payments payable with respect
to the Leased Property, Tenant shall pay and discharge, or cause to be paid and
discharged, as and when due and payable the following (collectively, “Variable
Additional Charges” and, together with Scheduled Additional Charges, “Additional
Charges”):


 


(1)           Property Documents;
Utility Charges. Tenant shall pay or cause to be paid (a) all amounts
due under the Property Documents other than the Ground Lease, the Landlord’s
Loan Documents (to the extent such constitute Property Documents) or sums paid
pursuant to Section 3.1(b)(3) above; and (b) all charges for electricity,
power, gas, oil, water, sanitary and storm sewer, refuse collection, security,
common area or association charges, dues or assessments and other utilities
used or consumed in connection with the Leased Property during the Term.


 


(2)           Other Charges. Tenant
shall pay or cause to be paid, as Additional Charges, all other amounts,
liabilities and obligations that Tenant assumes or agrees to pay or cause to be
paid under this Lease, including all of its indemnification obligations set
forth herein


 


(3)           Late Payment of Base
Rent. If any Scheduled Lease Payment shall not be paid on its due date,
Tenant will pay to Landlord on demand, as Variable Additional Charges, a late
charge (to the extent permitted by law) computed at the Overdue Rate (or at the
maximum rate permitted by law, whichever is the lesser) on the amount of such
Scheduled Lease Payment, from the due date of such Scheduled Lease Payment to
the date of payment thereof.


 


16

















 


(4)           Late Payment of
Variable Additional Charges. If any payment of Variable Additional Charges
(but only as to those Variable Additional Charges which are payable directly to
Landlord, if any) shall not be paid within five (5) Business Days after such
payments are due and payable, Tenant will pay to Landlord on demand, as
Variable Additional Charges, a late charge (to the extent permitted by law)
computed at the Overdue Rate (or at the maximum rate permitted by law,
whichever is the lesser) on the amount of such payment, from the due date of
such payment to the date of payment thereof.


 


(d)           To the extent that
Tenant timely pays, or causes to be paid, any Additional Charges to Landlord
pursuant to any requirement of this Lease, Tenant shall be relieved of its
obligation hereunder to pay such Additional Charges to the Person to which they
would otherwise be due. Landlord and Tenant acknowledge and agree that Landlord’s
Loan Documents require the deposit of all Scheduled Lease Payments into an
account (the “Designated Account”) designated by, and under the sole
dominion and control of, Landlord’s Lender, which initial Designated Account is
more particularly identified on Schedule 3.1(d). Tenant shall deposit,
or cause to be deposited, each Scheduled Lease Payment into the Designated
Account on the Rental Payment Date on which such Scheduled Lease Payment is due
hereunder. Landlord shall apply the amounts so deposited to the payment of
Scheduled Lease Payments, and, upon an Event of Default under the Lease, to
such other amounts due and owing to Landlord from Tenant as Landlord shall
elect. In the event of any failure by Tenant to pay, or cause to be paid, any
Additional Charges when due, Tenant shall promptly pay and discharge, or cause
to be paid and discharged, as Additional Charges, every fine, penalty, interest
and cost that may be added for non-payment or late payment of such items. Landlord
shall have all legal, equitable and contractual rights, powers and remedies
provided either in this Lease or by statute or otherwise in the case of
non-payment of the Rent. To the extent that Tenant timely pays or causes to be
paid any Additional Charges (other than Scheduled Additional Charges described
in Section 3.1(b)(1)) to the Person legally entitled thereto, Tenant shall be
relieved of its obligation to pay such Additional Charges to Landlord.


 


3.2           Net Lease. The
Base Rent, as well as such Additional Charges as are due and payable to
Landlord, shall be paid absolutely net to Landlord, so that this Lease shall
throughout the Term yield to Landlord the full amount of the installments of
Base Rent, as well as any payments of Additional Charges payable to Landlord,
subject only to those provisions of this Lease which expressly provide for
adjustment or abatement of Rent or other charges.


 


ARTICLE IV


 


4.1           No Termination,
Abatement, etc. Except as otherwise specifically provided herein, Tenant,
to the fullest extent permitted by law, shall remain bound by this Lease in
accordance with its terms and shall neither take any action without the consent
of Landlord to Modify, surrender or terminate the same, nor seek nor be
entitled to any abatement, deduction, deferment or reduction of Rent, or
set-off against the Rent, nor shall the respective obligations of Landlord and
Tenant be otherwise affected by reason of (a) any damage to, or destruction of,
the Leased Property from whatever cause or any taking of the Leased Property,
(b) the interruption or discontinuance of any service or utility servicing the
Leased Property, (c) any claim which Tenant has or might have against Landlord
or by reason of any default or breach of any warranty by Landlord under this
Lease or any other agreement between Landlord and Tenant, or to which Landlord
and Tenant are parties, (d) any bankruptcy, insolvency, reorganization,
composition, readjustment, liquidation, dissolution, winding up or other
proceedings affecting Landlord or any assignee or transferee of Landlord, or
(e) for any 


 


17

















 


other cause whether
similar or dissimilar to any of the foregoing other than a discharge of Tenant
from any such obligations as a matter of law. Except as otherwise specifically
provided herein, Tenant hereby specifically waives all rights, arising from any
occurrence whatsoever, which may now or hereafter be conferred upon it by law
to (i) Modify, surrender or terminate this Lease or quit or surrender the
Leased Property, or (ii) entitle Tenant to any abatement, reduction, suspension
or deferment of the Rent or other sums payable by Tenant hereunder. The
obligations of Landlord and Tenant hereunder shall be separate and independent
covenants and agreements and the Rent and all other sums payable by Tenant
hereunder shall continue to be payable in all events unless the obligations to
pay the same shall be terminated pursuant to the express provisions of this
Lease. In any instance where, after the occurrence of an Event of Default,
Landlord retains funds which, but for the occurrence of such Event of Default,
would be payable to Tenant, Landlord shall refund such funds to Tenant to the
extent the amount thereof exceeds all amounts then payable by Tenant under this
Lease plus the amount necessary to compensate Landlord for any cost, loss or
damage incurred by Landlord in connection with such Event of Default.


 


ARTICLE V


 


OWNERSHIP OF THE
LEASED PROPERTY


 


5.1           Ownership of the
Leased Property. Tenant acknowledges that the Leased Property is the
property of Landlord and that Tenant has only the right to the exclusive
possession and use of the Leased Property upon the terms and conditions of this
Lease, provided that, until the expiration or
earlier termination of this Lease, all capital improvements, alterations,
additions and replacements made by Tenant, at Tenant’s expense, to any Leased
Property shall be the property of Tenant and, upon the expiration or earlier
termination of this Lease, title to such improvements, alterations, additions
and replacements shall vest in Landlord.


 


5.2           Tenant’s Personalty.
Tenant may (and shall as provided hereinbelow), at its expense, assemble or
place on any parcels of the Land or in any of the Leased Improvements any items
of Tenant’s Personalty, and Tenant may, subject to the conditions set forth
below, remove the same upon the expiration or any prior termination of the Term
(provided, however, that upon the occurrence and during the continuation of an
Event of Default, without the prior consent of Landlord and Landlord’s Lender,
Tenant shall not be permitted to remove, and shall not permit or suffer any
Facility Subtenant to remove, any FF&E with respect to which Landlord has a
security interest pursuant to Section 12.4 or otherwise, other than FF&E
which is replaced in the ordinary course of Tenant’s or Facility Subtenants’
business). Tenant shall provide and maintain during the entire Lease Term all
such Tenant’s Personalty as shall be necessary to operate each Leased Property
in compliance with all applicable Legal Requirements and Insurance Requirements
and otherwise in accordance with customary practice in the industry for the
Primary Intended Use. Subject to the rights and remedies of Landlord with
respect to its lien on the FF&E, all of Tenant’s Personalty not removed by
Tenant within forty-five (45) days following the expiration or earlier
termination of this Lease with respect to such Leased Property where such
Tenant’s Personalty is located shall be considered abandoned by Tenant and may
be appropriated, sold, destroyed or otherwise disposed of by Landlord without
first giving notice thereof to Tenant and without any payment to Tenant and
without any obligation to account therefor.


 


18

















 


ARTICLE VI


 


AFFIRMATIVE
COVENANTS; PERMITTED USE


 


6.1           Tenant Covenants.
Tenant hereby covenants and agrees with Landlord that:


 


(a)           Existence; Use of
Leased Property; Legal Compliance; Insurance.


 


(i)            Tenant shall do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its existence, rights, licenses, permits and franchises and comply
in all material respects with all Legal Requirements and all Property Documents
applicable to it and the Leased Property, including all gaming-related licenses
and permits, provided that, except where the
terms of this Lease expressly require Tenant to comply with or perform the
covenants and obligations of Landlord’s Loan Documents, Tenant shall not be
deemed to have agreed to comply with or perform said covenants or obligations
of Landlord’s Loan Documents, notwithstanding that Tenant is obligated to
observe or perform the Property Documents. Tenant shall at all times maintain
and preserve the Leased Property and shall keep the Leased Property in good
working order and repair, reasonable wear and tear excepted, and from time to
time make, or cause to be made, all reasonably necessary repairs, renewals,
replacements, betterments and improvements thereto. Tenant will operate,
maintain, repair and improve the Leased Property in material compliance with
all Legal Requirements and all Property Documents, and will not cause or allow
the same to be misused or wasted or to deteriorate, reasonable wear and tear
excepted.


 


(ii)           Tenant may use the
Leased Property and the Leased Improvements thereof for (x) their current
purpose and, provided the same are permitted pursuant to the terms of the
applicable Property Documents, for such other uses as may be necessary or
incidental to such use (such use, the “Primary Intended Use”), and (y)
such other uses as shall not be prohibited by the applicable Property
Documents, the Landlord’s Loan Documents or other provisions hereof. Tenant
shall not use the Leased Property or any portion thereof for any other use
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed. No use shall be made or
permitted to be made of the Leased Property, and no acts shall be done, that
will cause the cancellation of any insurance policy covering the Leased
Property, nor shall Tenant sell or otherwise provide, or permit to be kept,
used or sold in or about the Leased Property any article which may be
prohibited by law or by Insurance Requirements. Tenant shall, at its sole cost,
comply with all of the requirements pertaining to the Leased Property or other
improvements of any insurance board, association, organization or company
necessary for the maintenance of insurance, as herein provided, covering the
Leased Property.


 


(iii)          Tenant shall cause each
of the hotel and casino facilities located on the Leased Property (each such
hotel and casino facility, together with all other portions of the Leased
Property related thereto, a “Facility”) to be continuously and
uninterruptedly used and operated for its Primary Intended Use, open for
business to the public during all business hours usual for such use for
comparable properties in Clark County, Nevada (including, without limitation,
causing to be maintained at each of the Facilities FF&E sufficient to
support such continuous and uninterrupted use and operation, which FF&E
shall be of a caliber at least equivalent to the FF&E maintained at each of
the Facilities on the Commencement Date), subject to periods of closure that:
(i) are due to Alterations (and
provided that not more than one Facility may be 


 


19

















 


closed in connection with an
Alteration at any one time unless such concurrent closure is expressly
pre-approved by Landlord’s Lender in writing or is unavoidable in order for Landlord,
Tenant or the applicable Facility Subtenant to comply with Legal Requirements)
or any event described in the definition of Unavoidable Delays; and (ii) do not
in any event exceed (A) solely with respect to a closure due to Casualty for
which business interruption insurance proceeds are payable to Tenant (or
Landlord or Landlord’s Lender) under the policy of business interruption
insurance maintained by Tenant pursuant to the terms of this Lease, the period
of time for which such business interruption insurance proceeds are payable, or
(B) as to any other closure, thirty (30) consecutive days.


 


(b)           Taxes and Other
Charges; Contest for Taxes and Other Charges, Legal Requirements and Liens.


 


(i)            Subject to the
provisions of Section 6.1(b)(ii) and Section 3.1(d), Tenant shall pay, or cause
to be paid, all Taxes and Other Charges now or hereafter levied or assessed or
imposed against the Leased Property prior to the date on which such sums become
delinquent. Tenant will deliver to Landlord, upon request, receipts for payment
or other evidence satisfactory to Landlord that the Taxes and Other Charges
have been so paid (provided Tenant
shall not be required to furnish such receipts for payment of Taxes in the
event such Taxes have been (or were to have been) paid by Landlord or Landlord’s
Lender pursuant to Section 3.1(d) or (f) or Landlord’s Loan Documents). Subject
to the provisions of Section 6.1(b)(ii) and other than Permitted Encumbrances,
Tenant shall not suffer and shall promptly cause to be paid and discharged any
lien or charge whatsoever which may be or become a lien or charge against the
Leased Property, and shall promptly pay for all utility services provided to
the Leased Property. Subject to Section 6.1(b)(ii), Tenant shall pay, bond or
otherwise discharge, from time to time when the same shall become due, all
claims and demands of mechanics, materialmen, laborers and others that, if
unpaid, might result in, or permit the creation of, a lien or encumbrance on
the Leased Property, or on the rents arising therefrom.


 


(ii)           After prior written
notice to Landlord, Tenant, at its own expense, may contest by appropriate
legal, administrative or other proceeding, promptly initiated and conducted in
good faith and with due diligence, the amount or validity or application in
whole or in part of any Taxes or Other Charges or Lien therefor or any Legal
Requirement or Insurance Requirement or the application of any instrument of
record affecting the Leased Property (other than this Lease or Landlord’s Loan
Documents) or any claims or judgments of mechanics, materialmen, suppliers,
vendors or other Persons or any Lien therefor, and may withhold payment of the
same pending such proceedings if permitted by law; provided
that (A) no Event of Default has occurred and remains uncured, except for an
Event of Default caused by the matter being contested, (B) such proceeding
shall suspend any collection of the contested Taxes, Other Charges or Liens
from the Leased Property, Tenant or Landlord, (C) such proceeding shall be
permitted under and be conducted in accordance with the provisions of any other
instrument to which Tenant is subject and shall not constitute a default
thereunder, (D) neither the Leased Property nor any part thereof or interest
therein will be in danger of being sold, forfeited, terminated, canceled or
lost, (E) (x) with respect to any contested Taxes or Other Charges or Liens
where the failure to pay the same, if the contest is determined adversely to
Tenant, would result in a Lien senior to the Lien of Landlord’s Lender or the
interest of Tenant hereunder (excluding, however, any “CAM” or common area
maintenance or similar charges payable under Property Documents), then Tenant
shall have furnished Landlord with Eligible Collateral as security (in an amount
reasonably approved by Landlord and required by 


 


20

















 


Landlord’s Loan Documents) to insure the payment of
any such Taxes or Other Charges, in each case together with all reasonably
anticipated interest and penalties thereon, and 
(y) with respect to other matters contested under this clause (ii),
including “CAM” or common area maintenance and similar charges payable under
Property Documents, Tenant shall have made adequate reserves on its financial
statements for such contests; provided that, to the extent matters contested
under this clause (y) exceed $10 million in the aggregate or any individual
matter contested under this clause (y) exceeds $2 million, the Tenant shall
furnish Landlord with Eligible Collateral as security in the amount of such
excess, (F) in the case of an Insurance Requirement, the failure of Tenant to
comply therewith shall not impair the validity of any insurance required to be
maintained by Tenant hereunder or the right to full payment of any claims
thereunder, (G) in the case of any essential or significant service with
respect to the Leased Property, any contest or failure to pay will not result
in a discontinuance of any such service without replacement thereof, (H) in the
case of any instrument of record affecting the Leased Property or any part
thereof, the contest or failure to perform under any such instrument shall not
result in the placing of any Lien on the Leased Property or any part thereof
(except if such Lien would be removed upon completion of such proceedings and
the compliance by the parties with the terms of the resulting order, decision
or determination and the removal costs for such Lien have been escrowed with
Landlord or in the proceeding or bonded or otherwise deposited or paid in
connection with such proceedings), (I) Tenant shall promptly upon final
determination thereof pay the amount of any such Taxes, Other Charges or Liens,
together with all costs, interest and penalties which may be payable in
connection therewith, (J) Tenant shall keep Landlord and Landlord’s Lender
informed of the status of such contest at reasonable intervals, and (L) shall
otherwise comply with any applicable requirements of Landlord’s Loan Documents
to the extent the same do not impose any additional material condition on
Tenant’s ability to conduct such contest to the conditions imposed under this
Lease. Landlord may pay over any such cash deposit or part thereof held by or
on behalf of Landlord to the claimant entitled thereto at any time when, in the
judgment of Landlord, the entitlement of such claimant is finally established,
and Landlord shall otherwise remit any remaining such amounts to Tenant. Landlord
shall give Tenant written notice of any such payments promptly following the making
thereof. Subject to the foregoing, at Tenant’s timely request, Landlord shall
not pay and shall not cause to be paid from any tax or insurance reserve
account that may be maintained in connection with Landlord’s Debt the contested
Taxes or Other Charges being contested.


 


(c)           Litigation. Tenant
shall give prompt written notice to Landlord of any litigation or governmental
proceedings pending or threatened in writing against Landlord (to the extent
known by Tenant), Tenant or against or affecting the Leased Property which, if
determined adversely to Landlord, Tenant or the Leased Property, might
reasonably be expected to materially adversely affect Landlord, or Tenant’s
condition (financial or otherwise) or business or the operation or value of the
Leased Property.


 


(d)           Inspection. Subject
to applicable Gaming Laws, Tenant shall permit agents, representatives and
employees of Landlord and/or Landlord’s Lender (including any servicer or
special servicer on behalf of Landlord’s Lender) to inspect the Leased Property
on any Business Day at reasonable hours upon reasonable advance notice.


 


(e)           Notice of Default.
Tenant shall promptly advise Landlord of the occurrence of any Default or Event
of Default under this Lease of which Tenant has knowledge.


 


21

















 


(f)            Cooperate in Legal
Proceedings. Tenant shall cooperate fully with Landlord (and with Landlord’s
Lender) with respect to any proceedings before any court, board or other
Governmental Authority which may in any way affect the rights of Landlord (or
Landlord’s Lender, as the case may be) hereunder or in respect of the Leased
Property and, in connection therewith, permit Landlord (and Landlord’s Lender,
as applicable), at its election, to participate in any such proceedings.


 


(g)           Insurance Benefits.
Tenant shall cooperate with Landlord (and Landlord’s Lender) in obtaining for
Landlord (and Landlord’s Lender, as applicable) the benefits of any insurance
proceeds lawfully or equitably payable in connection with the Leased Property,
and Landlord (and Landlord’s Lender, as applicable) shall be reimbursed for any
out-of-pocket expenses reasonably incurred in connection therewith (including
attorneys’ fees and disbursements, and, if reasonably necessary to collect such
proceeds, the expense of an appraisal on behalf of Landlord in case of a fire
or other casualty affecting any Leased Property) out of such insurance
proceeds.


 


(h)           Financial Reporting
and Other Information.


 


1.             Generally. Tenant will keep and maintain or will cause to be
kept and maintained on a Fiscal Year basis proper and accurate books, records
and accounts sufficient in scope and substance to determine whether a Tenant
Security Period has occurred and to comply with applicable reporting
requirements under Landlord’s Loan Documents to the extent Landlord provides
such reporting requirements to Tenant.


 


2.             Landlord’s Lender’s Requirements. So long as Landlord’s Debt
is outstanding, Tenant shall comply with the information keeping and reporting
requirements set forth in Landlord’s Loan Documents, subject in all instances
to the confidentiality provisions of Article XXIV hereof.


 


3.             Governmental Notices. Tenant shall furnish to Landlord,
promptly after receipt, a copy of any material notice received by or on behalf
of Tenant from any Governmental Authority having jurisdiction over the Leased
Property with respect to the Leased Property.


 


(i)            Business and
Operations. Tenant will qualify to do business and will remain in good
standing under the laws of each jurisdiction as and to the extent the same are
required for the conduct of its business at the Leased Property.


 


(j)            Property Documents.
Tenant shall observe and perform, or cause to be observed and performed, all of
the obligations of Landlord under each Property Document other than the
obligation of Landlord to pay Rent (as defined in the Ground Lease) under the
Ground Lease which Landlord agrees to timely pay so long as Tenant shall not be
in default in its obligation to pay Base Rent hereunder.


 


ARTICLE VII


 


NEGATIVE COVENANTS


 


7.1           Tenant’s Negative
Covenants. Tenant covenants and agrees with Landlord that it will not do,
directly or indirectly, any of the following:


 


22
















 


(a)           Liens. Subject
to Section 6.1(b)(ii), Tenant shall not, without the prior written consent of
Landlord, create, incur, assume, permit or suffer to exist any Lien on any
portion of the Leased Property or any expansions or alterations that remain
Tenant’s property during the Term, except (i) Permitted Encumbrances, (ii)
Liens created by or permitted pursuant to Landlord’s Loan Documents and (iii)
Liens for Taxes or Other Charges not yet delinquent.


 


(b)           Zoning and Uses.
Without the prior written consent of Landlord, which shall not be unreasonably
withheld, delayed or conditioned unless the action for which consent is sought
could adversely affect the Primary Intended Use of a Facility (in which event
Landlord may withhold its consent it is sole and absolute discretion), Tenant
shall not (i) initiate or support any limiting change in the permitted uses of
the Leased Property (or to the extent applicable, limiting zoning
reclassification of the Leased Property); (ii) seek any variance under existing
land use restrictions, laws, rules or regulations (or, to the extent
applicable, zoning ordinances) applicable to the Leased Property or use or
permit the use of the Leased Property in each case in a manner that would
result in the existing use becoming a non-conforming use under applicable
land-use restrictions (and, if any, zoning ordinances) with any materially
adverse effect on the value of the Leased Property or that would violate the
terms of any Legal Requirements or any Property Document; (iii) Modify, amend
or supplement any of the terms of any Property Document in a manner adverse in
any material respect to the interests of Landlord; (iv) impose or permit or
suffer the imposition of any restrictive covenants, easements or encumbrances
upon the Leased Property in any manner that adversely affects in any material
respect the value or utility of the Leased Property; (v) execute or file any
subdivision plat affecting the Leased Property, or institute, or permit the
institution of, proceedings to alter any tax lot comprising the Leased
Property; or (vi) permit or suffer the Leased Property to be used by the public
or any Person in such manner as might make possible a claim of adverse usage or
possession or of any implied dedication or easement (provided that the proscription
in this clause (vi) is not intended to restrict Tenant in any way from
complying with any obligation it may have under applicable Legal Requirements,
including, without limitation, gaming regulations, to afford to the public
access to the Leased Property).


 


ARTICLE VIII


 


ALTERATIONS;
LEASING


 


8.1           Alterations. Tenant
will not make any demolition, alteration, installation, improvement, expansion,
reduction or decoration (each, an “Alteration”) of or to the Leased
Property or any part thereof except in accordance with the following terms and
conditions:


 


(a)           The Alteration shall be
undertaken in accordance with the applicable provisions of this Lease, Landlord’s
Loan Documents, the Property Documents and all Legal Requirements.


 


(b)           No Event of Default
shall have occurred and be continuing and no Default shall occur as a result of
such action.


 


(c)           The Alteration, upon
completion, shall not materially adversely affect the Primary Intended Use of
the Leased Property in question.


 


(d)           A Material Alteration
shall be conducted under the supervision of a Qualified Architect and shall not
be undertaken until ten (10) Business Days after there shall have been
delivered to 


 


23

















 


Landlord and
Landlord’s Lender, for information purposes only and not for approval by
Landlord (unless Landlord’s approval shall be required for such Material
Alteration under paragraph (g) of this Section 8.1), (i) detailed plans and
specifications and cost estimates therefore and (ii) an estimated date of
completion therefore, which date, so long as any of Landlord’s Debt is
outstanding, shall be not later than the date which is six (6) months prior to
the maturity date of such Landlord’s Debt (unless otherwise consented to in
writing by Landlord’s Lender, which consent shall not be unreasonably withheld,
conditioned or delayed) (the “Target Completion Date”), all prepared and
approved in writing by such Qualified Architect. Such plans and specifications
may be revised at any time and from time to time, provided that material
revisions of such plans and specifications shall be delivered to Landlord and
Landlord’s Lender for information purposes only unless Landlord’s approval
shall be required for such Material Alteration under paragraph (g) of this
Section 8.1.


 


(e)           All work done in
connection with any Alteration shall be performed with due diligence (and in
any event shall be substantially completed prior to the Target Completion Date
subject to Unavoidable Delays), in a good and workmanlike manner, all materials
used in connection with any Alteration shall be not less than the standard of
quality of the materials generally used at the applicable Leased Property as of
the date hereof and all work shall be performed and all materials used in
accordance with all applicable Legal Requirements and Insurance Requirements.


 


(f)            The cost of any
Alteration shall be promptly and fully paid for by Tenant or a Facility
Subtenant, subject to a five percent (5%) retainage, provided that such retainage
shall not be required if such Alteration is being performed by Tenant, an
Affiliate of Landlord, or an Affiliate of Tenant. No Alteration the cost of
which, when aggregated with all related Alterations, involves estimated costs
exceeding $100 million (the “Alteration Cost Threshold”) shall be
performed by or on behalf of Tenant unless Tenant shall have delivered to
Landlord’s Lender Eligible Collateral as security in an amount not less than
the amount by which the estimated cost (as set forth in the Qualified Architect’s
written estimate referred to above) of such Alteration exceeds the Alteration
Cost Threshold. Such Eligible Collateral shall be returned to Tenant (or
replaced with Eligible Collateral in a lesser amount if the Eligible Collateral
shall have been delivered in the form of a Letter of Credit) as Tenant shall
provide written evidence, in form reasonably satisfactory to Landlord and
Landlord’s Lender of the payment of the costs of such Material Alteration in
such amount, free and clear of Liens (i.e., assuming that the first costs paid
are those in excess of the Alteration Cost Threshold).


 


(g)           Tenant shall obtain
Landlord’s and Landlord’s Lender’s prior written approval (which approval shall
not be unreasonably withheld, conditioned or delayed so long as no Noticed
Default or Event of Default shall then exist, and shall be deemed given unless
Landlord’s Lender shall give notice of its disapproval with the reasons
therefor within ten (10) business days after Landlord’s Lender’s receipt of the
notice of Material Alteration described in paragraph (d) of this Section 8.1
above) for any Material Alteration if (x) a Tenant Security Period shall then
be in effect or existence, or (y) such proposed Material Alteration is
reasonably likely to result in more than a ten percent (10%) reduction in the
pro forma Lease Coverage Ratio during the twelve (12) months following the
commencement of such proposed Material Alteration.


 


8.2           Subletting and
Assignment.


 


8.2.1        Generally. Except as expressly provided
herein or in Landlord’s Loan Documents, Tenant shall not, without the prior
written consent of Landlord and Landlord’s Lender, which each may grant or
withhold in its sole and absolute discretion, assign, mortgage, pledge,
hypothecate, encumber, sell, convey, grant, bargain or otherwise transfer this
Lease or sublease all or 


 


24

















 


any part of the
Leased Property or suffer or permit this Lease or the leasehold estate created
hereby or thereby or any other rights arising under this Lease to be assigned,
transferred, mortgaged, pledged, hypothecated, sold, conveyed, granted,
bargained, encumbered or otherwise transferred, in whole or in part, whether
voluntarily or involuntarily or by operation of law, or permit the use or
occupancy of the applicable Leased Property to be offered or advertised for
assignment or subletting except as hereinafter provided.


 


8.2.2        Certain Sublettings and Assignments. Subject
to the provisions of Section 8.2.3 and any other express conditions or
limitations set forth herein, provided no Event of Default shall have occurred
and be continuing,


 


(a)           without the consent of
Landlord, (i) Tenant may sublet the Leased Property to its Affiliates specified
on, and pursuant to the Subleases described on Part I of Schedule 8.2.2
(the “Preapproved Facility Subleases”), which Preapproved Facility
Subleases, among other things, expressly shall require such Affiliates to
maintain an FF&E Reserve as more particularly described in Section 11.1 of
this Lease and shall otherwise be in the form attached hereto as Exhibit F
and shall not be Modified without Landlord’s prior written consent, which shall
not be unreasonably withheld, delayed or conditioned; (ii) Tenant or any
Facility Subtenant may enter into those commercial and retail leases described
in Part II of Schedule 8.2.2 (“Preapproved Space Leases”),
provided that any Modifications to such Preapproved Space Leases shall be
subject to approval of Landlord’s Lender as specified in the Landlord’s Loan
Documents and Landlord’s approval as set forth in the Subleasing Standards; and
(iii) Tenant or any Facility Subtenant may enter into or Modify commercial and
retail leases of portions of the Leased Property subject to the terms and
conditions set forth in Part III of Schedule 8.2.2 (the “Subleasing
Standards”).


 


(b)           except as expressly
permitted under clause (a) of this Section 8.2.2 or in a transaction which does
not violate any provision of Landlord’s Loan Documents, Tenant may not Transfer
or permit the Transfer of this Lease or all or any part of, or interest in, the
Leased Property without the prior written consent of Landlord and Landlord’s
Lender, which each may grant or withhold in its sole and absolute discretion. It
is expressly acknowledged that the foregoing restriction does not restrict or
limit any transfer of any Equity Interest in Tenant to the extent such transfer
is not a violation of Landlord’s Loan Documents.


 


8.2.3        Landlord’s Right to Collect from Assignees
and Subtenants. If this Lease is assigned or if the Leased Property or any
part thereof is sublet (or occupied by any entity other than Tenant and its
employees), Landlord, after an Event of Default occurs and so long as it is
continuing, may collect the rents from such assignee, Subtenant or occupant, as
the case may be, and apply the net amount collected to the Rent herein
reserved, but no such collection shall be deemed (i) a waiver of the provisions
set forth in Section 8.2.1, (ii) the acceptance by Landlord of such assignee,
Subtenant or occupant, as the case may be, as a tenant or (iii) release of
Tenant from the future performance of its covenants, agreements or obligations
contained in this Lease.


 


8.2.4        No Release. No subletting or assignment
shall in any way impair or release the continuing primary liability hereunder
of the Tenant named herein, as well as of each subsequent Tenant, and no
consent to any subletting or assignment in any particular instance shall be
deemed a waiver of the prohibition set forth in this Section 8.2 with respect
to any other subletting or assignment. Any subletting, assignment or other
transfer of Tenant’s interest in this Lease in contravention of this Section
8.2 shall be void at Landlord’s option.


 


25

















 


8.2.5        Required Assignment and Subletting
Provisions. Any assignment and/or Sublease entered into on or after the
Commencement Date must provide that:


 


(a)           it shall be subject and
subordinate to all of the terms and conditions of this Lease and the lien of
Landlord’s Loan Documents,


 


(b)           the use of the Leased
Property shall not conflict with Landlord’s Loan Documents, any Legal
Requirement, Property Document, Insurance Requirement or any other provision of
this Lease,


 


(c)           no Subtenant or
assignee shall be permitted to further sublet all or any part of the Leased
Property or assign this Lease or its sublease except insofar as the same would
be permitted if it were a sublease by Tenant under this Lease,


 


(d)           in the event of
cancellation or termination of this Lease for any reason whatsoever or of the
surrender of this Lease (whether voluntary, involuntary or by operation of law)
prior to the expiration date of such Sublease, including extensions and
renewals granted thereunder, then, at Landlord’s option, the Subtenant shall
make full and complete attornment to Landlord for the balance of the term of
the Sublease, which attornment shall be evidenced by an agreement in form and
substance satisfactory to Landlord and which the Subtenant shall execute and
deliver within thirty (30) days after request by Landlord and the Subtenant
shall waive the provisions of any law now or hereafter in effect which may give
the Subtenant any right of election to terminate the Sublease or to surrender
possession in the event any proceeding is brought by Landlord to terminate this
Lease, and


 


(e)           in the event the
Subtenant receives a written notice from Landlord stating that an Event of
Default exists under this Lease, the Subtenant shall thereafter during the
continuance of an Event of Default be obligated to pay all rentals accruing
under said Sublease directly to Landlord (or Landlord’s Lender if Landlord
shall so direct); all rentals received from the Subtenant by Landlord shall be
credited against the amounts owing by Tenant under this Lease.


 


(f)            If the Sublease shall
relate to the Ground Leased Property, the Sublease shall be subject and
subordinate to all of the terms and conditions of the Ground Lease; and
Subtenant shall agree, in the Sublease, not to do, or fail to do, anything that
would cause any violation of the Ground Lease. Without limiting the foregoing,
(i) to the extent Landlord or Tenant is required to obtain Ground Lessor’s
written consent to alterations of or the subleasing of all or any portion of
the Ground Leased Property or the assignment of the Sublease, Subtenant shall
likewise obtain Ground Lessor’s written consent to alterations of or the
subleasing of all or any portion of the Ground Leased Property or the
assignment of the Sublease, and (ii) Subtenant shall carry and maintain general
liability, automobile liability, property and casualty, worker’s compensation
and employer’s liability insurance in amounts and with policy provisions,
coverages and certificates as required of Landlord as tenant under the Ground
Lease.


 


(g)           If the Sublease shall
relate to any portion of the Ground Leased Property, in the event of
cancellation or termination of the Ground Lease and this Lease for any reason
whatsoever whether voluntary or involuntary (by operation of law or otherwise)
prior to the expiration date of the Sublease, including extensions and renewals
granted thereunder, then, at 


 


26

















 


Ground Lessor’s option, the Subtenant shall make full
and complete attornment to Ground Lessor with respect to the obligations of
Landlord to Ground Lessor in connection with that portion of the subleased
property theretofore covered by the Ground Lease for the balance of the term of
the Sublease (notwithstanding that the term of the Sublease shall have
terminated with the cancellation or termination of this Lease). Subtenant’s
attornment shall be evidenced by a written agreement which shall provide that
the Subtenant is in direct privity of contract with Ground Lessor (i.e. that
all obligations owed to Tenant under the Sublease with respect to the Ground
Leased Property shall be obligations owed to Ground Lessor for the balance of
the term of the Sublease, notwithstanding that the term of the Sublease shall
have terminated with the cancellation or termination of this Lease) and which
shall otherwise be in form and substance reasonably satisfactory to Ground
Lessor. Subtenant’s written attornment shall be executed and delivered within
thirty (30) days after request by Ground Lessor. Unless and until such time as
an attornment agreement is executed by Subtenant pursuant to the provision
required by this subsection, nothing contained in the Sublease shall  create, or be construed as creating, any
privity of contract or privity of estate between Ground Lessor and Subtenant.
Similarly, if the Sublease shall relate to any portion of the Ground Leased
Property, in the event Subtenant receives a written notice from any lessor
under any master lease of any portion of the Ground Leased Property to Ground
Lessor stating that an event of default has occurred or exists under such
master lease, the Subtenant shall thereafter, during the continuance of such
event of default, so long as the terms of the Sublease are recognized and
honored, attorn to such master lessor and pay and perform all of Ground Lessor’s
obligations pursuant to such master lease directly to or for such lessor under
such master lease including, without limitation, the payment of rentals
accruing under the Sublease directly to such lessor to the extent related to
that portion of the Ground Leased Property subject to such master lease and the
Ground Lessor’s obligations under such master lease directly to such lessor.


 


(h)           If the Sublease shall
relate to any portion of the Ground Leased Property, nothing contained in the
Sublease shall amend, or be construed to amend, any provision of the Ground
Lease.


 


(i)            If the Sublease shall
relate to any portion of the Ground Leased Property, Subtenant shall indemnify,
defend and hold harmless the Ground Lessor, any master lessor to Ground Lessor
and any other party entitled to be indemnified pursuant to the terms of the
Ground Lease from and against any and all claims arising from Subtenant’s use
of the Ground Leased Property, and from and against the conduct of Subtenant’s
business thereon or from any other activity, work or thing done, permitted or
suffered by Subtenant in, about or in respect of the Ground Leased Property,
and from and against any and all claims arising from any breach or default in
the performance of any obligation on Subtenant’s part to be performed under the
terms of the Sublease relating to the Ground Leased Property, or arising from
any act or omission of Subtenant or Subtenant’s agents, contractors, invitees,
subtenants, customers or employees with respect to the Ground Leased Property,
and from and against all costs, attorneys’ fees, expenses and liabilities
incurred in the defense of any such claim or any action or proceeding brought
thereon; and in case any action or proceeding be brought against the Ground
Lessor or any master lessor to Ground Lessor or any such party by reason of any
such claim, Subtenant, upon notice from Ground Lessor, any master lessor to
Ground Lessor or any such party, shall defend the same at Subtenant’s expense by
counsel satisfactory to the party or parties indemnified pursuant to the
provision contemplated by this paragraph or the Ground Lease.


 


27

















 


(j)            If the Sublease shall
relate to any portion of the Ground Leased Property, Subtenant shall waive any
and all rights of recovery (including subrogation rights of its insurers) from
Ground Lessor, its agents, principals, employees and representatives for any
loss or damage, including consequential loss or damage, covered by any
insurance policy maintained by Subtenant, whether or not such policy is
required under the terms of the Ground Lease.


 


8.2.6        Reimbursement of Landlord’s Costs. Tenant
shall pay to Landlord, within ten (10) business days after request therefor, all
costs and expenses, including reasonable attorneys’ fees, reasonably incurred
by Landlord (including, to the extent Landlord is liable for the same, by
Landlord’s Lender) in connection with any request made by Tenant to Landlord to
consent to an assignment of this Lease or a sublease of the applicable Leased
Property for which Landlord’s consent is required.


 


ARTICLE IX


 


9.1           Maintenance and
Repair.


 


(a)           Tenant, at its sole
cost and expense, shall keep the Leased Property and all private roadways,
sidewalks and curbs appurtenant thereto in good order and repair, reasonable
wear and tear excepted (whether or not the need for such repairs occurs as a
result of Tenant’s use, any prior use, the elements or the age of the Leased
Property, or any portion thereof) and shall promptly make all necessary and
appropriate repairs and replacements thereto, of every kind and nature, whether
interior or exterior, structural or non-structural, ordinary or extraordinary,
foreseen or unforeseen, arising by reason of a condition (concealed or
otherwise) occurring subsequent or prior to the Commencement Date, including
any and all deferred maintenance work (including the work described on Schedule
9.1(a) attached hereto and incorporated herewith by this reference, which
work is to be completed within one (1) year of the Commencement Date) and
capital repairs and replacements. All repairs shall, to the extent reasonably
achievable, be made in good, workmanlike and first-class manner, in accordance
with all applicable Legal Requirements. Tenant will not take or omit to take
any action the taking or omission of which might materially impair the value or
usefulness of the Leased Property or any part thereof for the Primary Intended
Use.


 


(b)           Except as otherwise
expressly provided herein, Landlord shall not be required to build or rebuild
any improvements on the Leased Property, or to make any repairs, replacements,
alterations, restorations or renewals of any nature or description to the
Leased Property, whether ordinary or extraordinary, structural or
non-structural, foreseen or unforeseen, or to make any expenditure whatsoever
with respect thereto, or to maintain the Leased Property in any way. Tenant
hereby waives, to the extent permitted by law, the right to make repairs at the
expense of Landlord pursuant to any law in effect at the time of the execution
of this Lease or thereafter enacted.


 


(c)           Nothing contained
herein and no action or inaction by Landlord shall be construed as (i)
constituting the consent or request of Landlord, expressed or implied, to any
contractor, subcontractor, laborer, materialman or vendor to or for the
performance of any labor or services or the furnishing of any materials or
other property for the construction, alteration, addition, repair or demolition
of or to the Leased Property, or (ii) giving Tenant any right, power or
permission to contract for or permit the performance of any labor or services
or the furnishing of any materials or other property in such fashion as would
permit the making of any claim against Landlord in respect thereof or to enter
into 


 


28

















 


any agreement that
purports to create any right, title, interest, lien, claim or other encumbrance
upon the estate of Landlord in the Leased Property.


 


(d)           Tenant will, upon the
expiration or prior termination of the Term with respect to any Leased
Property, vacate and surrender the same to Landlord in good condition, except
as repaired, rebuilt, altered or added to as permitted or required by the provisions
of this Lease and except for ordinary wear and tear (subject to the obligation
of Tenant to maintain the Leased Property in good order and repair during the
Term) and damage by fire or other Casualty to the extent not required to be
repaired or restored pursuant to the terms of this Lease. In addition, subject
to the rights and remedies of Landlord with respect to its lien on the
FF&E, upon expiration of the Lease, Tenant shall remove Tenant’s Personalty
from the Leased Property in a manner that will not damage the Leased Property
in any material respect or if it does, Tenant shall promptly repair the same.


 


9.2           Immaterial
Encroachments, Restrictions, etc


 


. If
(A) any of the Leased Improvements shall, at any time, encroach upon any
property, street or right-of-way adjacent to the Leased Property, or shall
violate the agreements or conditions contained in any lawful restrictive
covenant or other agreement affecting the Leased Property, or shall impair the
rights of others under any easement or right-of-way to which the Leased
Property is subject and (B) the same can be cured by Tenant without the
expenditure of a material amount of money, then promptly upon the request of
Landlord or at the behest of any person affected by any such encroachment, violation
or impairment, Tenant shall, at its expense, subject to its right to contest
the existence of any encroachment, violation or impairment and in such case, in
the event of any adverse final determination, either (i) obtain valid and
effective waivers or settlements of all claims, liabilities and damages
resulting from each such encroachment, violation or impairment or (ii) make
such changes in the Leased Improvements, and take such other actions, as Tenant
in good faith exercise of its judgment deems reasonably practicable, to remove
such encroachment, and to end such violation or impairment, including, if
necessary, the alteration of any of the Leased Improvements, and in any event
take all such actions as may be necessary in order to be able to permit the
continued operation by Tenant of the Leased Improvements for the Primary
Intended Use substantially in the manner and to the extent the Leased
Improvements were operated prior to the assertion of such violation or
encroachment.


 


ARTICLE X


 


CASUALTY AND
CONDEMNATION


 


10.1         Insurance. Tenant
shall keep the Leased Property, and all property located in or on the Leased
Property, including Tenant’s Personalty, insured at Tenant’s sole cost and
expense with the kinds and amounts of insurance, and issued by such insurance
companies, as set forth on Schedule 10.1 hereto and as otherwise
required pursuant to Landlord’s Loan Documents.


 


(a)           All policies of
insurance (the “Policies”) required pursuant to this Section 10.1 with
respect to the Leased Property shall name Landlord and Landlord’s Lender (if
any) and its successors and/or assigns, as their interest may appear, as
additional insureds or loss payees (except that in the case of general
liability insurance, Landlord and Landlord’s Lender shall be named as additional
insureds and not a loss payee) and (i) shall contain, for the benefit of
Landlord’s Lender, a Non-Contributory Standard Lender Clause and, except with
respect to general liability insurance, a Lender’s Loss Payable Endorsement, or
their equivalents, naming Landlord’s Lender as the person to which all payments
made by such insurance company in respect of the Leased Property shall be paid;
(ii) shall


 


29

















 


 include effective waivers by the insurer of
all claims for insurance premiums against all loss payees, additional insureds
and named insureds (other than Tenant) and all rights of subrogation against
any loss payee, additional insured or named insured; (iii) except as otherwise
provided above, shall be subject to a deductible, if any, not greater in any
material respect, in proportion to the coverage maintained, than the deductible
for such coverage on the date hereof; (iv) shall contain such other provisions
as are required by Landlord’s Loan Documents or as Landlord deems reasonably
necessary or desirable to protect its interest (and that of Landlord’s Lender,
to the extent so requested by Landlord on behalf of Landlord’s Lender),
including endorsements providing that: none of Tenant, Landlord, Landlord’s
Lender or any other party shall be a co-insurer under said Policies and that no
Modification that would result in non-compliance with the provisions of this
Section 10.1, cancellation or termination of any of the Policies shall be
effective until at least thirty (30) days after receipt by each named insured,
additional insured and loss payee of written notice thereof; (v) shall permit
Landlord or Landlord’s Lender to pay the premiums and continue any insurance
upon failure of Tenant to pay premiums when due, upon the insolvency of Tenant
or through foreclosure or other transfer of title to the Leased Property (or
any portion thereof) (it being understood that Tenant’s rights to coverage
under such policies may not be assignable without the consent of the insurer);
and (vi) (A) shall provide that the insurance shall not be impaired or
invalidated by virtue of any act, failure to act, negligence of, or violation
of declarations, warranties or conditions contained in such policy by Tenant,
Landlord, Landlord’s Lender or any other named insured, additional insured or
loss payee, except for the willful misconduct of Landlord or Landlord’s Lender
knowingly in violation of the conditions of such policy or (B) Landlord and
Landlord’s Lender shall not be liable for any insurance premiums thereon or
subject to any assessments thereunder.


 


(b)           Insurance Premiums;
Certificates of Insurance.


 


(i)            Tenant shall pay, or
cause to be paid, the premiums for such Policies (the “Insurance Premiums”)
as the same become due and payable and shall furnish to Landlord the receipts
for the payment of the Insurance Premiums or other evidence of such payment
reasonably satisfactory to Landlord (provided Tenant
is not required to furnish such evidence of payment if such Insurance Premiums are
to be paid pursuant to the Cash Management Procedures relating to any Landlord’s
Debt). Within thirty (30) days after request by Landlord, Tenant shall obtain
such increases in the amounts of coverage required hereunder as may be
reasonably requested by Landlord by reason of changes in liability laws and the
like. In the event Tenant satisfies the requirements under this Section 10.1
through the use of a Policy covering properties in addition to the Leased
Property, then, at Landlord’s request, Tenant shall provide to Landlord
evidence satisfactory to it that the Insurance Premiums for the Leased Property
are separately allocated under such Policy to the Leased Property and that
payment of such allocated amount shall maintain the effectiveness of such Policy
as to the Leased Property notwithstanding the failure of payment of any other
portion of premiums. If such allocation is required by the immediately
preceding sentence, but such allocation is not available, Landlord shall have
the right to increase any tax and insurance reserve account required in
connection with Landlord’s Debt in an amount sufficient to purchase a
non-blanket Policy covering the Leased Property covered by such Policy from
insurance companies which qualify under this Lease; provided that Tenant shall
have the right to cause any such increased reserve account requirement to be
reduced to pre-increase levels (and to have any increased amounts previously
paid to be released from such reserve account) upon the effectiveness of a
non-blanket policy covering the Leased Property.


 


30

















 


(ii)           Tenant shall deliver to
Landlord on or prior to the Commencement Date certificates setting forth in
reasonable detail the material terms (including any applicable notice
requirements) of all Policies from the respective insurance companies (or their
authorized agents) that issued the Policies, including that such Policies may
not be Modified in a manner that would result in such Policies not complying
with the provisions of this Section 10.1, canceled, terminated or not renewed
without thirty (30) days’ prior notice to Landlord, or ten (10) days’ notice
with respect to nonpayment of premium. Tenant shall deliver to Landlord,
promptly after each material change in any Policy, a certificate with respect
to such changed Policy certified by the insurance company issuing that Policy,
in substantially the same form and containing substantially the same
information as the certificates required to be delivered by Tenant pursuant to
the first sentence of this clause (b)(ii) and stating that all premiums then
due thereon have been paid to the applicable insurers and that the same are in
full force and effect (or if such certificate and report shall not be
obtainable by Tenant, Tenant may deliver an Officer’s Certificate to such
effect in lieu thereof).


 


(c)           Renewal and
Replacement of Policies.


 


(i)            Not less than ten (10)
Business Days prior to the expiration, termination or cancellation of any
Policy, Tenant shall renew such policy or obtain a replacement policy or
policies (or a binding commitment for such replacement policy or policies),
which shall be effective no later than the date of the expiration, termination
or cancellation of the previous policy, and shall deliver to Landlord (and, if
requested by Landlord, to Landlord’s Lender) a certificate in respect of such
policy or policies (A) containing the same information as the certificates
required to be delivered by Tenant pursuant to clause (b)(ii) above, or a copy
of the binding commitment for such policy or policies and (B) confirming that
such policy complies with all requirements hereof.


 


(ii)           If Tenant does not
furnish the certificates as required under clause (c)(i), Landlord may procure,
but shall not be obligated to procure, such replacement policy or policies and
pay the Insurance Premiums therefor, and Tenant agrees to reimburse Landlord
for the cost of such Insurance Premiums promptly on demand.


 


(iii)          Concurrently with the
delivery of each replacement policy or a binding commitment for the same
pursuant to this clause (c), Tenant shall deliver to Landlord a report from a
reputable and experienced insurance broker or from the insurer, setting forth
the particulars as to all insurance obtained by Tenant pursuant to this Section
10.1 and then in effect and stating that all Insurance Premiums then due
thereon have been paid in full to the applicable insurers and that such
insurance policies are in full force and effect (or if such report shall not be
available after Tenant shall have used its reasonable efforts to provide the
same, Tenant will deliver to Landlord an Officer’s Certificate containing the
information to be provided in such report) and Tenant shall deliver to Landlord
an Officer’s Certificate stating that such insurance otherwise complies in all
material respects with the requirements of this Section 10.1.


 


(d)           Tenant will not take
out separate insurance concurrent in form or contributing in the event of loss
with that required to be maintained pursuant to this Section 10.1 unless such
insurance complies with clause (c) above.


 


31

















 


(e)           Tenant shall name any
Person holding, servicing or administering Landlord’s Debt and reasonably
designated by Landlord (including any trustee, servicer or special servicer) as
a loss payee or additional insured, as applicable, with respect to any Policy
under which Landlord’s Lender is to be so named hereunder.


 


10.2         Casualty; Application
of Proceeds.


 


(a)           Right to Adjust.


 


(i)            If the Leased Property
is damaged or destroyed, in whole or in part, by fire or other casualty (a “Casualty”),
Tenant shall give prompt written notice thereof to Landlord generally
describing the nature and extent of such Casualty. Subject to Section 10.2(c),
following the occurrence of a Casualty, Tenant, using any insurance proceeds
and other amounts made available to Tenant pursuant to Section 10.2(b) for
restoration, shall in a reasonably prompt manner proceed to restore, repair,
replace or rebuild the affected portion of the Leased Property (a “Restoration”)
to the extent practicable to be of substantially the same character and quality
as prior to the Casualty. Tenant shall restore all Improvements such that when
they are fully restored and/or repaired, such Improvements and their
contemplated use fully comply with all applicable material Legal Requirements. Landlord
may settle and adjust the insurance claim in respect of any Casualty; provided that such adjustment is carried out in a reasonable
and timely manner and that Tenant shall be entitled, at its own expense, to
participate in any such adjustment and, unless an Event of Default shall have
occurred and be continuing, and subject to the rights of Landlord’s Lender
under Landlord’s Loan Documents, approve such adjustment, which approval shall
not be unreasonably withheld, delayed or conditioned.


 


(b)           Right to and
Application of Proceeds. Subject to the terms and conditions of Landlord’s
Loan Documents, Tenant shall use all proceeds received from the insurance
policies that are required to be maintained pursuant to Section 10.1 (but
excluding proceeds in respect of Tenant’s Property) to apply to the cost of the
Restoration and for the payment of Rent during such Restoration; Tenant shall
fund at its own expense an amount equal to any applicable deductibles or other
self-retained risks. If Tenant shall have defaulted upon its obligation to
maintain insurance in the amounts and of the types required under this Lease,
and such default results in insufficient Proceeds to restore or pay Rent owed
to Landlord, then Tenant shall fund at its own expense the amount of such
insufficiency. Tenant shall make available to Landlord, for payment of Tenant’s
Rent obligations payable to Landlord during the Restoration when and as due,
the proceeds of Tenant’s business interruption insurance payable in respect of
the Casualty up to the aggregate Rent obligations payable to Landlord during
the Restoration.


 


(c)           Termination of Lease
in Certain Circumstances.


 


(i)            Notwithstanding the
provisions of clauses (a) and (b) above, Tenant shall be required to restore,
repair, replace or rebuild the Leased Property affected by a Casualty if
Landlord is obligated to restore, repair, replace or rebuild the Leased
Property pursuant to the Landlord’s Loan Documents, but shall not be required
to restore, repair, replace or rebuild the Leased Property affected by a
Casualty if Landlord is not so obligated pursuant to Landlord’s Loan Documents.


 


32

















 


(ii)           In no event shall this
Lease terminate by reason of a Casualty (including by reason of any
insufficiency of insurance proceeds or unavailability of such insurance
proceeds under the Landlord’s Loan Documents), unless and only to the extent
the Leased Property has been released from the Lien under Landlord’s Loan
Documents in accordance with the terms thereof.


 


(d)           Abatement of Rent.
To the extent and for the time that a Casualty renders a Facility unusable for
the Primary Intended Use, the Base Rent in respect of such Facility (in an
amount equal to the Fair Market Rental of such Facility) and the Additional
Charges in respect of such Facility shall abate; provided,
however, that the Rent in respect of such Facility shall only abate if and to
the extent Landlord receives business interruption insurance proceeds for the
applicable Rental Period in an amount equal to the Fair Market Rental of such
Facility and to the extent not paid by Tenant or a Facility Subtenant, the
Additional Charges in respect of such Facility.


 


(e)           Surplus. Subject
to clause (b) of this Section 10.2 (respecting proceeds of business
interruption insurance), any surplus which may remain out of proceeds received
pursuant to a Casualty shall be paid to Landlord after payment of such costs of
Restoration.


 


10.3         Condemnation.


 


(a)           Tenant shall promptly
give Landlord written notice of the actual or threatened commencement of any
condemnation or eminent domain proceeding affecting the Leased Property (a “Condemnation”)
and shall deliver to Landlord copies of any and all papers served in connection
with such Condemnation. In no event shall this Lease terminate by reason of a
Condemnation (including by reason of any insufficiency of any recoveries or
claims in respect of such Condemnation or unavailability of such proceeds or
other sums under the Landlord’s Loan Documents), unless and only to the extent
the Leased Property has been released from the Lien of Landlord’s Loan
Documents in accordance with the terms thereof.


 


(b)           If a portion of the
Leased Property is the subject of a Condemnation and the Lease does not
terminate with respect to the Leased Property pursuant to clause (a) above,
then Tenant promptly shall proceed to restore, repair, replace or rebuild the
same to the extent practicable to be of substantially the same character as
prior to such Condemnation, and, subject to the terms and conditions of
Landlord’s Loan Documents, Landlord shall make available to Tenant for purposes
of such restoration, repair, replacement or rebuilding the net Condemnation
Proceeds paid to Landlord in connection with such Condemnation.


 


(c)           To the extent and for
the time that a Condemnation renders a Facility unusable for the Primary
Intended Use, the Base Rent in respect of such Facility (in an amount equal to
the Fair Market Rental of such Facility but in no event more than that amount
expressly permitted under Landlord’s Loan Documents to be abated as the result
of a Condemnation) and the Additional Charges in respect of such Facility shall
abate to the extent expressly permitted under Landlord’s Loan Documents to be
abated as the result of a Condemnation.


 


(d)           Landlord is hereby
irrevocably appointed as Tenant’s attorney-in-fact, coupled with an interest,
with exclusive power to collect, receive and retain any proceeds in respect of
a Condemnation and to make any compromise or settlement in connection with such
Condemnation, subject to the provisions of this Section, and such power shall
include the power to substitute Landlord’s Lender in Landlord’s discretion; provided that such compromise or settlement is carried out
in a reasonably 


 


33

















 


timely manner and
that Tenant shall be entitled, at its own expense, to participate in any such
compromise or settlement proceedings, and, unless an Event of Default shall
have occurred and be continuing, and subject to the rights of Landlord’s Lender
under Landlord’s Loan Documents, approve such compromise or settlement, which
approval shall not be unreasonably withheld, delayed or conditioned. Tenant
shall cause any proceeds that are payable to Tenant to be paid directly to
Landlord; provided that the foregoing shall not preclude Tenant from seeking
and retaining a separate award for moving expenses, business dislocation
damages or such other claim that does not reduce the award payable to Landlord.


 


(e)           Any surplus which may
remain out of proceeds or awards received pursuant to a Condemnation after
payment of such costs of Restoration shall be paid over to and belong to
Landlord unless required to be paid to Landlord’s Lender under Landlord’s Loan
Documents.


 


ARTICLE XI


 


ACCOUNTS AND
RESERVES


 


11.1         Cash Management
Procedures. Tenant hereby agrees to cooperate with Landlord and to execute
any and all instruments reasonably requested by Landlord (including, if
necessary, the execution of an amendment to this Lease), in the establishment
and maintenance of reserve accounts and cash management procedures reasonably
requested by any Landlord’s Lender in connection with Landlord’s Loan Documents
(the “Cash Management Procedures”). For the avoidance of doubt, such
Cash Management Procedures shall not affect Tenant’s or any Facility Subtenant’s
internal procedures for handling cash in conjunction with gaming operations or
complying with, and being subject to, applicable Gaming Laws. Without limiting
the foregoing, Tenant shall maintain with respect to each Facility (or to cause
its Affiliate to which such Facility has been subleased to maintain) a reserve
(“FF&E Reserve”) for capital and FF&E expenditures in the amount
of 2.5% of gross revenues derived from operations of such Facility (including,
without limitation, from operations of the hotel and casino components of such
Facility). So long as no Event of Default or Lease Reserve Shortfall Period
shall exist or be in effect, funds in the FF&E Reserve may be withdrawn at
the discretion of Tenant (or such Affiliate subtenant) for the payment or
reimbursement of FF&E expenditures. An Operating Budget shall be submitted
by Tenant to Landlord and Landlord’s Lender not later than the expiration of
the then current Fiscal Year, provided that neither Landlord nor Landlord’s
Lender shall have the right to approve same except as provided in the following
sentence. If a Lease Shortfall Reserve Period is in effect, Tenant shall submit
the then-current Operating Budget and, when due, all subsequent Operating
Budgets for Fiscal Years during a Lease Shortfall Reserve Period, and any
requested interim Modifications thereto, to Landlord and Landlord’s Lender, and
Landlord and Landlord’s Lender shall have the right to approve all aspects of
the Operating Budget relating to FF&E expenditures, which approval shall
not be unreasonably withheld, delayed or conditioned. During the continuance of
any Event of Default or Lease Reserve Shortfall Period, any disbursement from
the FF&E Reserve shall be subject to the prior review of and confirmation
by Landlord and Landlord’s Lender that the requested disbursement is in
accordance with the Operating Budget approved for such Fiscal Year by Landlord
and Landlord’s Lender and only amounts of expenses incurred consistent with (or
up to the amounts set forth in) such approved Operating Budget shall be
released from the FF&E Reserve to Tenant (or such Affiliate subtenant);
provided that in the event that cash expenditures exceed the budgeted amount or
amounts in the FF&E Reserve, expenditures for FF&E to be made in the
succeeding period will be credited with such excess cash expenditures during
the current period and Tenant (or the 


 


34

















 


applicable Affiliate
subtenant) shall be entitled to be reimbursed from the FF&E Reserve in the
succeeding period for such excess cash expenditures during the current period.


 


11.2         FF&E Reserve
Collateral. The FF&E Reserve and (i) all cash, checks, funds, drafts,
certificates, instruments and other property, including, without limitation,
all deposits and/or wire transfers from time to time deposited or held in,
credited to or made to the FF&E Reserve, (ii) all interest, dividends,
cash, instruments and other property from time to time received, receivable or
otherwise payable in respect of, or in exchange for, any or all of the
foregoing; (iii) any replacement deposit account designated by Landlord’s
Lender, and (iv) to the extent not covered by clauses (i), (ii), or (iii)
above, all proceeds (as defined under the Uniform Commercial Code) of any or
all of the foregoing and the funds deposited therein and any securities and
other assets credited thereto (the FF&E Reserve and all such other items
noted above are referred to, collectively, as “FF&E Reserve Collateral”)
shall serve as additional security for the Tenant’s obligations under this
Lease as further provided in Section 12.4. At all times the Landlord shall have
control over the FF&E Reserve Collateral (subject to Tenant’s rights to
withdraw funds from the FF&E Reserve in accordance with Section 11.1
above), as further set forth in the Deposit and Control Agreements of even date
herewith by and among Landlord, Tenant, Landlord’s Lender, the applicable
Facility Subtenant and the Deposit Bank (as defined therein), a true and
correct copy of each of which is attached hereto as Exhibit E (the “Control
Agreement”).


 


ARTICLE XII


 


12.1         Events of Default.
The occurrence of any one or more of the following events shall constitute an “Event
of Default” hereunder:


 


(a)           if Tenant shall fail to
pay any Scheduled Lease Payment on the date the same is due and payable
hereunder, or


 


(b)           if Tenant shall fail to
pay any item of Variable Additional Charges when due and payable and such
default shall continue for five (5) Business Days, or


 


(c)           if Tenant shall fail to
observe or perform any term, covenant or condition of this Lease not
specifically provided for in this Section 12.1 and such failure is not cured
within a period of thirty (30) days after receipt of notice from Landlord,
unless such failure is susceptible of cure but cannot reasonably be cured
within such thirty (30) day period and provided further that Tenant shall have
commenced to cure such failure within such thirty (30) day period and
thereafter diligently proceeds to cure the same, such cure period shall be
extended for such time as is reasonably necessary for Tenant in the exercise of
due diligence to cure such failure, such additional period not to exceed ninety
(90) days, or


 


(d)           if Tenant shall admit
in writing its inability to pay its debts generally as they become due; file a
petition in bankruptcy or a petition to take advantage of any insolvency act;
make an assignment for the benefit of its creditors; consent to the appointment
of a receiver of itself or of the whole or any substantial part of its
property; or file a petition or answer seeking reorganization or arrangement
under the Federal bankruptcy laws or any other applicable law or statute of the
United States of America or any State thereof, or


 


35

















 


(e)           any petition shall be
filed by or against Tenant or any subsidiary of Tenant that is a Facility
Subtenant under Federal bankruptcy laws, or any other proceeding shall be
instituted by or against Tenant or such subsidiary seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for Tenant, or for any substantial part of
the property of Tenant, and such proceeding is not dismissed within ninety (90)
days after institution thereof, or Tenant shall take any action to authorize or
effect any of the actions set forth above in this paragraph (e), or


 


(f)            if the estate or
interest of Tenant in the Leased Property or any part thereof shall be levied
upon or attached in any proceeding (other than a Condemnation) and the same
shall not be vacated or discharged within the later of ninety (90) days after commencement
thereof or thirty (30) days after receipt by Tenant of notice thereof from
Landlord, (unless Tenant shall be contesting such lien or attachment in good
faith in accordance with the terms of this Lease); or


 


(g)           if Tenant shall breach
any of its covenants in Section 6.1(a)(iii) and such breach shall cause
or result in an event of default under Landlord’s Loan Documents;


 


and in
any such event, Landlord may terminate this Lease with respect to one or more,
or all, of the Facilities by giving notice of such termination and upon the
expiration of the time fixed in such notice, if any, and the failure of the
applicable Event of Default to be cured prior to the expiration of such period,
the Term shall terminate with respect to the Facilities specified in such
notice and all rights of Tenant under this Lease with respect to such
Facilities shall cease. Landlord shall have all rights at law and in equity
available to Landlord as a result of Tenant’s breach of this Lease.


 


Tenant
shall, to the maximum extent permitted by law, pay as Additional Charges all
Litigation Costs as a result of any Event of Default hereunder.


 


12.2         Certain Remedies. Landlord
shall have the right to terminate this Lease, and otherwise exercise remedies,
at any time and from time to time, with respect to one or more, or all, of the
Facilities and the termination of this Lease or other exercise of remedies with
respect to one or more Facilities shall in no way constitute a waiver on the
part of Landlord to terminate this Lease on account of such Event of Default,
or otherwise exercise remedies, at any time and from time to time, in one or
more other instances, with respect to the balance of the Leased Property. Reentry by Landlord or any
action brought by Landlord to remove Tenant or any Person claiming through or
under Tenant from the Facilities pursuant to this Section 12.2 or Section 12.3,
or any other provision of this Lease, shall not operate to terminate this Lease
unless Landlord shall have given express written notice of termination to
Tenant. Tenant acknowledges and agrees that the service by Landlord of any
notice pursuant to the unlawful detainer statutes of Nevada and the surrender
of possession pursuant to such notice shall not be deemed to be a termination
of this Lease unless Landlord elects to the contrary at the time of or at any
time subsequent to the serving of such notices and such election is evidenced
by written notice to Tenant.


 


12.3         Damages. Neither
(a) the termination of this Lease pursuant to Section 12.1 or 12.2 with respect
to any or all of the Leased Property, (b) the repossession of the Leased
Property or any portion thereof, (c) the failure of Landlord, notwithstanding
reasonable good faith efforts to relet the Leased Property or any portion
thereof, (d) the reletting of all or any portion thereof, nor (e) the failure
of Landlord to collect or receive any rentals due upon any such reletting,
shall relieve Tenant of its 


 


36

















 


liability and obligations
hereunder, all of which shall survive any such termination, repossession or
reletting. In the event of any such termination, Tenant shall forthwith pay to
Landlord all Rent due and payable with respect to the Leased Property to and
including the date of such termination. Thereafter, Tenant, until the end of
what would have been the Term in the absence of such termination, and whether
or not the Leased Property or any portion thereof shall have been re-let, shall
be liable to Landlord for, and shall pay to Landlord, as current damages, the
Rent and other charges which would be payable hereunder for the remainder of
the Term had such termination not occurred, less the net proceeds, if any, of
any reletting of the Leased Property, after deducting all expenses in connection
with such re-letting, including all repossession costs, brokerage commissions,
legal expenses, attorneys’ fees, advertising costs, expenses of employees,
alteration costs and expenses of preparation for such reletting. Tenant shall
pay such current damages to Landlord monthly on the days on which the Base Rent
would have been payable hereunder if this Lease had not been terminated.


 


At any
time after such termination, whether or not Landlord shall have collected any
such current damages, as liquidated final damages and in lieu of all such
current damages beyond the date of such termination, at Landlord’s election in
its sole and absolute discretion, Tenant shall pay to Landlord an amount equal
to the excess, if any, of the Rent (assuming, with respect to items of Rent
that are not fixed or determinable, that the amounts payable by Tenant in
respect of such items of Rent during the preceding Lease Year would remain
constant throughout the Term) which would be payable hereunder from the date of
such termination for what would be the then unexpired term of this Lease if the
same remained in effect (with respect to the Leased Property), over the Fair
Market Rental (including, for the avoidance of doubt, items of additional rent
that would be paid by a third party tenant which shall, to the extent not fixed
or determinable, be based on the amounts payable by Tenant in respect of
Variable Additional Charges during the preceding Lease Year, without increase)
for the same period. In the event this Lease is so terminated prior the
expiration of the first full year of the Term, the liquidated damages which
Landlord may elect to recover pursuant to this Section shall be calculated as
if such termination had occurred on the first anniversary of the Commencement
Date. Nothing contained herein shall, however, limit or prejudice the right of
Landlord to prove and obtain in proceedings for bankruptcy or insolvency an
amount equal to the maximum allowed by any statute or rule of law in effect at
the time when, and governing the proceedings in which, the damages are to be
proved, whether or not the amount be greater than, equal to, or less than the
amount of the loss or damages referred to above.


 


In
case of any Event of Default, re-entry, expiration and dispossession by summary
proceedings or otherwise, provided Landlord has not
previously elected to terminate this Lease pursuant to Section 12.1 or 12.2,
Landlord may give Tenant notice of Landlord’s intention to terminate Tenant’s
right to possession of the Leased Property without terminating this Lease, on a
date specified in such notice (which date shall not be earlier than the date
such notice is given) and upon such date, Tenant shall immediately surrender
and deliver possession of the Leased Property, and
Landlord may (a) relet the Leased Property or any part or parts thereof, either
in the name of Landlord or otherwise, for a term or terms which may, at
Landlord’s option, be equal to, less than or exceed the period which would
otherwise have constituted the balance of the Term and may grant concessions or
free rent to the extent that Landlord considers advisable and necessary to
relet the same, and (b) make such alterations, repairs and decorations in the
Leased Property or any portion thereof as Landlord, in its sole judgment,
considers advisable and necessary for the purpose of reletting the Leased
Property; and the making of such alterations, repairs and decorations shall not
operate or be construed to release Tenant from liability hereunder as
aforesaid.


 


37

















 


If Tenant does not surrender and deliver
possession of all of the Leased Property as required by this Section 12.3,
Landlord may repossess any of the Leased Property not surrendered, with legal
process, by summary proceedings, ejectment or any other lawful means or
procedure. Upon or at any time after taking possession of any of the Leased
Property, Landlord may, by peaceable means or legal process, remove any Persons
or property therefrom. Landlord shall be under no liability for or by reason of
any such entry, repossession or removal. Notwithstanding such entry or
repossession, Landlord may collect the damages set forth in this Section 12.3.


 


12.4         Landlord’s Security
Interest. The parties acknowledge and agree that the operating covenant set
forth in Section 6.1(a)(iii) above constitutes material consideration for
Landlord’s willingness to enter into this Lease on the terms and conditions set
forth herein, and that any discontinuation of operations of the Primary
Intended Use other than as expressly permitted under this Lease may have a
material adverse effect on the Leased Property. The parties further acknowledge
and agree that the Tenant’s obligation to maintain the Leased Property and the
FF&E as otherwise provided in this Lease, constitutes further material
consideration to Landlord for entering into the Lease on the terms provided
herein, and that the failure to maintain the FF&E as required hereunder
would have a direct and material adverse effect on the Leased Property, and
interfere with the timely reletting of the Leased Property were the Lease to be
terminated following an Event of Default. Accordingly, to implement the
intentions of the parties, and for the purpose of securing the payment and
performance obligations of Tenant hereunder, Landlord and Tenant agree as
follows:


 


12.4.1      As security for payment and performance of Tenant’s
obligations under this Lease, subject to applicable Gaming Laws, Tenant, as
debtor, hereby pledges, assigns and grants a security interest to Landlord, as
secured party, in and to: (i) all FF&E; and (ii) the FF&E Reserve
Collateral (collectively, the “Collateral”). This Section 12.4
constitutes a security agreement covering all such Collateral and shall remain
in full force and effect until payment and performance in full of all
obligations of Tenant under this Lease and shall survive any termination of
this Lease pursuant to Sections 12.1 and 12.2 or termination of Tenant’s right
of possession pursuant to Section 12.3. Upon full satisfaction of such
obligations, Landlord agrees to execute such instruments as Tenant may
reasonably request in order to evidence the termination of such security
interest and the release of the Collateral.


 


12.4.2      Tenant hereby authorizes Landlord to file such financing
statements, continuation statements and other documents as may be necessary or
desirable to perfect or continue the perfection of Landlord’s security interest
in the Collateral. In addition, if required by Landlord at any time during the
Term, Tenant shall execute and/or deliver to Landlord, in form reasonably
satisfactory to Landlord, additional security agreements, financing statements,
fixture filings and such other documents as Landlord may reasonably require to
perfect or continue the perfection of Landlord’s security interest in the
Collateral. Tenant hereby appoints Landlord as its true and lawful
attorney-in-fact to execute and/or file any such documents on its behalf in the
event Tenant fails to do so, which power of attorney shall be irrevocable and
is deemed to be coupled with an interest.


 


12.4.3      Tenant will give Landlord at least thirty (30)
days’ prior written notice of any change in Tenant’s name, identity or
jurisdiction of organization. With respect to any such change, Tenant will promptly execute and deliver such
instruments, documents and notices and take such actions, as Landlord deems
necessary or desirable to create, perfect and protect the security interests of
Landlord in the Collateral.


 


38

















 


12.4.4      Tenant shall not pledge, assign or grant any
security interest in the Collateral, or permit any Lien or encumbrance to
attach thereto, or any levy to be made thereon, or any Uniform Commercial Code
financing statements or any other notice or instrument as may be required under
the Uniform Commercial Code, as appropriate (except those naming Landlord or
Landlord’s Lender, as the secured party) to be filed with respect thereto. Further,
except for the Control Agreement, the Tenant shall not enter into any
depository bank, control agreement or similar agreement with respect to the
FF&E Reserve Collateral.


 


12.4.5      Upon the occurrence and during the continuance of an Event of Default,
Landlord shall be entitled to exercise any and all rights or remedies available
to a secured party under the Uniform Commercial Code, or available to a
landlord under the laws of the State of Nevada, with respect to the Collateral
subject to the applicable provisions of the Gaming Laws. Without limiting the
foregoing, upon the occurrence of an Event of Default, Landlord may pursue any
of the following separately, successively or simultaneously subject to the
applicable provisions of the Gaming Laws:


 


(a)           exercise all of its rights and remedies under the Control Agreement;


 


(b)           enter onto the Leased Property where any FF&E is located and take
possession thereof with or without judicial process;


 


(c)           without notice except as required under the Uniform Commercial Code and
the Gaming Laws, sell, assign, lease, license (on an exclusive or nonexclusive
basis) or otherwise dispose of the FF&E or any part thereof in one or more
parcels at public or private sale, for cash, on credit or for future delivery,
at such time or times and at such price or prices and upon such other terms as
the Landlord may deem commercially reasonable; and


 


(d)           take such actions, give such notices, obtain such consents, and do such
other things as the Landlord may deem required or appropriate in the event of a
sale or disposition of any of the Collateral.


 


Notwithstanding
the foregoing or any other provision contained in this Lease, the remedies
provided by this Lease shall in no way include the right to take any action in
contravention of applicable Gaming Laws.


 


12.4.6      The rights of the Landlord hereunder shall not be conditioned or
contingent upon the pursuit by the Landlord of any other right or remedy
against Tenant (including terminating the Lease or Tenant’s rights of occupancy
or possession of the Leasehold Property) or against any other collateral
security for the performance of Tenant’s obligations. Without limiting the
foregoing, any termination of the Lease pursuant to Sections 12.1 and 12.2 and
any termination of the Tenant’s right of possession pursuant to Section 12.3,
shall not affect Landlord’s rights and remedies under this Section 12.4. Neither
the Landlord nor any nominee or designee of Landlord shall be liable for any
failure to demand, collect or realize upon all or any part of the Collateral or
for any delay in doing so, nor shall they be under any obligation to sell or
otherwise dispose of any Collateral upon the request of Tenant or to take any
other action whatsoever with regard to the Collateral or any part thereof.


 


12.4.7      To the extent the prior approval of
any Gaming Authorities is required pursuant to applicable Gaming Laws for the
exercise of any remedy hereunder or under any of Landlord’s Loan Documents, or
for the taking of any action by Landlord or Landlord’s Lender, including the
disposition (including the sale or distribution for use or play in Nevada or
for distribution outside of Nevada) of 


 


39

















 


Collateral consisting of gaming
devices, cashless wagering systems and mobile gaming systems (as those terms
are defined in Nevada Revised Statutes Chapter 463 and the regulations
promulgated thereunder), the exercise of such remedy or taking of such action
shall be subject to the prior approval of the applicable Gaming Authorities.


 


12.5         Application of Funds.
Any payments received by Landlord under any of the provisions of this Lease
during the existence or continuance of any Event of Default (and such payment
is made to Landlord rather than Tenant due to the existence of an Event of
Default) shall be applied to Tenant’s obligations in the order which Landlord
may determine or as may be prescribed by the laws of the State where the
applicable Leased Property is located.


 


12.6         Waiver of Right to Jury Trial. THE PARTIES HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY, WITH AND UPON THE ADVICE OF COMPETENT
COUNSEL, WAIVE THE RIGHT EACH OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, WHETHER SOUNDING IN CONTRACT, TORT OT OTHERWISE,
OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LEASE, AND ANY AGREEMENT
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR THE COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY (INCLUDING, WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS
LEASE AND ANY CLAIMS OR DEFENSES ASSERTING THAT THIS LEASE WAS FRAUDULENTLY
INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE UNDERSIGNED TO EXECUTE THIS LEASE.


 


ARTICLE XIII


 


13.1         Landlord’s Right to
Cure Tenant’s Default. If an Event of Default shall have occurred and be
continuing, Landlord, without waiving or releasing any obligation or Event of
Default, may (but shall be under no obligation to) at any time thereafter make
such payment or perform such act for the account and at the expense of Tenant,
and may, to the extent permitted by law, enter upon the Leased Property or any
portion thereof for such purpose and take all such action thereon as, in
Landlord’s opinion, may be necessary or appropriate therefor including, without
limitation, to the fullest extent permitted by law, repossessing the Leased
Property and ejecting any Person or property thereon. No such entry shall be
deemed an eviction of Tenant. All reasonable sums so paid by Landlord and all
costs and expenses (including attorneys’ fees and expenses, in each a case, to
the extent permitted by law) so incurred, together with interest thereon (to
the extent permitted by law) at the Overdue Rate from the date on which such
sums or expenses are paid or incurred by Landlord, shall be paid by Tenant to
Landlord on demand. The obligations of Tenant and rights of Landlord contained
in this Article shall survive the expiration or earlier termination of this
Lease.


 


ARTICLE XIV


 


14.1         Holding Over. If
Tenant shall for any reason remain in possession of the Leased Property after
the expiration of the Term or earlier termination of the Term without the prior
written consent of Landlord, such possession shall be as a month-to-month
tenant during which time Tenant shall pay as rental each month, one and
one-half times the aggregate of (i) one-twelfth of the Base Rent payable with
respect to the last Lease Year of the Term; (ii) all Additional Charges
accruing during 


 


40

















 


the month and (iii) all other
sums, if any, payable by Tenant pursuant to the provisions of this Lease with
respect to the Leased Property. During such period of month-to-month tenancy,
Tenant shall be obligated to perform and observe all of the terms, covenants
and conditions of this Lease, but shall have no rights hereunder other than the
right, to the extent given by law to month-to-month tenancies to continue its
occupancy and use of the Leased Property. Nothing contained herein shall
constitute the consent, express or implied, of Landlord to the holding over of
Tenant after the expiration or earlier termination of this Lease.


 


ARTICLE XV


 


SUBORDINATION


 


15.1         Subordination. This
Lease and all rights of Tenant hereunder are subject and subordinate to the
Lien affecting the Leased Property created pursuant to Landlord’s Loan
Documents, whether now or hereafter existing, or the interest of any landlord
under a lease senior in title to this Lease, whether now or hereafter existing
and to all Property Documents (all such Liens and interests, collectively, the “Superior
Interests”), and to all renewals, Modifications, consolidations,
replacements and extensions of Superior Interests,  provided
that the holder of such Superior Interest shall have executed and delivered to
Tenant, and Landlord agrees to cause such holder of a Superior Interest to
execute and deliver to Tenant, a “subordination, nondisturbance and attornment
agreement” in favor of Tenant substantially on the same terms and conditions as
are contained in the form attached hereto as Exhibit D or such
other terms and conditions upon which the parties may agree. Tenant agrees to
execute and deliver promptly an agreement in the form attached as Exhibit D
hereto or any commercially reasonable form of instrument (in recordable form,
if requested) that Landlord or the holder of any Superior Interest (each, a “Superior
Party”) may request to evidence such subordination.


 


15.2         Attornment. If the
interests of Landlord under this Lease are transferred by reason of, or
assigned in lieu of, foreclosure or other proceedings for enforcement of any
such Superior Interest, then Tenant shall, at the option of such purchaser,
assignee or any Superior Party, as the case may be, (x) attorn to such party
and perform for its benefit all the terms, covenants and conditions of this
Lease on Tenant’s part to be performed with the same force and effect as if
such party were the Landlord originally named in this Lease, or (y) enter into
a new lease with such party, as Landlord, for the remaining Term and otherwise
on the same terms and conditions of this Lease except that such successor
Landlord shall not be (i) liable for any previous act, omission or negligence
of Landlord under this Lease; (ii) bound by any previous Modification or
amendment of this Lease or by any previous prepayment of more than one month’s
rent in advance of its due date, unless such Modification, amendment or
prepayment shall have been approved in writing by the Superior Party through or
by reason of which such successor Landlord shall have succeeded to the rights
of Landlord under this Lease; or (iii) liable for any security (if any)
deposited pursuant to this Lease unless such security has actually been
delivered to such successor Landlord. Nothing contained in this Section shall
be construed to impair any right otherwise exercisable by any such owner,
holder or Tenant.


 


15.3         Notice of Default to
Landlord’s Lender. In the event of any act or omission by Landlord which
would give Tenant the right, either immediately or after the lapse of a period
of time, to terminate this Lease, or to claim a partial or total eviction,
Tenant will not exercise any such right (A) until it has given written notice
of such act or omission to Landlord’s Lender, and (B) until a reasonable period
of time (not less than thirty (30) days) for remedying such act or omission
shall have elapsed following giving of such notice and following the time when
Lender shall have become 


 


41

















 


entitled under the
Landlord’s Loan Documents to remedy the same, provided
Lender, with reasonable diligence, shall (i) have pursued such remedies as are
available to it under Landlord’s Loan Documents so as to be able to remedy the
act or omission, and (ii) thereafter shall have commenced and continued to
remedy such act or omission or cause the same to be remedied.


 


15.4         Modifications to
Secure Financing. If any Superior Party or prospective Superior Party shall
request Modifications of this Lease as a condition to the provision, continuance
or renewal of any such financing, Tenant will not unreasonably withhold, delay
or defer its consent thereto, provided that
(i) either such Modifications do not materially increase the obligations of
Tenant hereunder or materially adversely affect Tenant’s rights under this
Lease or (ii) if such Modifications would materially increase the obligations
of Tenant hereunder or materially adversely affect Tenant’s rights under this
Lease, then Landlord shall compensate Tenant for the same. Disputes as between
Landlord and Tenant regarding whether a proposed Modification would materially
increase the obligations of Tenant hereunder or materially adversely affect
Tenant’s rights under this Lease, and the compensation that would be payable to
Tenant as a result thereof shall be determined by arbitration in accordance
with the terms of Schedule 15.4 hereto.


 


15.5         Delivery of Notices to
Landlord’s Lender. Subsequent to the receipt by Tenant of Notice from
Landlord as to the identity and address of any Superior Party, no Notice from
Tenant to Landlord shall be effective unless and until a duplicate original of
such Notice shall be given to such Superior Party at the address set forth in
the above described Notice. The curing of any of Landlord’s defaults by such
Superior Party shall be treated as performance by Landlord.


 


15.6         Right of Landlord’s
Lender to Enforce Lease. To the extent permitted under the Landlord’s Loan
Documents and applicable Legal Requirements (including Gaming Laws), Landlord’s
Lender may exercise the rights of Landlord hereunder, including the right on
the part of Landlord to obtain insurance in the circumstances set forth in
Section 10.1(c)(ii) hereof.


 


15.7         Exercise of Landlord’s
Discretion. In any instance hereunder in which Landlord must be reasonable
in making a request or granting or withholding an approval or consent, Tenant
acknowledges and agrees that Landlord may take into account the reasonable
objections of Landlord’s Lender.


 


15.8         Cure of Landlord
Defaults. No Landlord default under this Lease shall be deemed to exist as
long as any Landlord’s Lender, in good faith, (i) shall have commenced promptly
to cure the default in question and prosecutes the same to completion with
reasonable diligence and continuity, or (ii) if possession of the Leased
Property is required in order to cure the default in question, such Landlord’s
Lender (x) shall have entered into possession of the Leased Property with the
permission of Tenant for such purpose or (y) shall have notified Tenant of its
intention to institute foreclosure proceedings to obtain possession of Landlord’s
interest directly or through a receiver and thereafter prosecutes such
proceedings with reasonable diligence and continuity.


 


15.9         Indemnification. Notwithstanding
the existence of any insurance required to be provided hereunder, and without
regard to the policy limits of any such insurance, Tenant will protect,
indemnify, save harmless and defend Landlord and Landlord’s Lender and their
respective partners, shareholders, officers, directors and employees (each, an “Indemnitee”)
from and against all liabilities, obligations, claims, damages, penalties,
causes of action, costs and reasonable expenses (including Litigation Costs),
to the maximum extent permitted by law, imposed upon or incurred by or asserted
against such Indemnitee by reason of: 
(a) any accident, injury to or death of persons or loss of or 


 


42

















 


damage to property
occurring on or about the Leased Property or adjoining sidewalks while Tenant
is in possession of the Leased Property, including any claims made by employees
at the Leased Property, (b) any use, misuse, non-use, condition, maintenance or
repair by Tenant or anyone claiming by, through or under Tenant, including agents,
contractors, invitees or visitors of the Leased Property or Tenant’s
Personalty, (c) any Taxes or Other Charges, (d) any failure on the part of
Tenant or anyone claiming by, through or under Tenant to perform or comply with
any of the terms of this Lease, (e) any failure by Tenant to perform its
obligations under any Sublease and any claims made thereunder, and (f) any
contest of any Legal Requirement or Insurance Requirement, regardless of
whether the same is conducted in accordance with the terms hereof. Any amounts
which become payable by Tenant under this Section shall be paid within ten (10)
days after liability therefor on the part of Tenant is determined by litigation
or otherwise, and if not timely paid, shall bear interest (to the extent
permitted by law) at the Overdue Rate from the date of such determination to
the date of payment. Tenant, at its expense, shall contest, resist and defend
any such claim, action or proceeding asserted or instituted against Indemnitee
or may compromise or otherwise dispose of the same as Tenant sees fit. Nothing
herein shall be construed as indemnifying an Indemnitee against its own grossly
negligent acts or omissions or willful misconduct. If at any time an Indemnitee
shall have notice of a claim, such Indemnitee shall give reasonably prompt
written notice of such claim to Tenant; provided that
(i) such Indemnitee shall have no liability for a failure to give notice of any
claim of which Tenant has otherwise been notified or has knowledge and (ii) the
failure of such Indemnitee to give such a notice to Tenant shall not limit the
rights of such Indemnitee or the obligations of Tenant with respect to such
claim except to the extent that Tenant incurs actual expenses or suffers actual
monetary loss as a result of such failure. Tenant shall have the right to
control the defense or settlement of any Claim, provided
that (A) if the compromise or settlement of any such claim shall not result in
the complete release of such Indemnitee from the claim so compromised or
settled, the compromise or settlement shall require the prior written approval
of such Indemnitee and (B) no such compromise or settlement shall include any
admission of wrongdoing on the part of such Indemnitee. An Indemnitee shall
have the right to approve counsel engaged to defend such claim and, at its
election and sole cost and expense, shall have the right, but not the
obligation, to participate in the defense of any claim. Tenant’s liability
under this Article with respect to matters arising or accruing during the Term
hereof shall survive any termination of this Lease.


 


The
parties hereto agree that this Article XV shall not apply to those matters
specifically covered by the provisions of Article XXV hereof.


 


ARTICLE XVI


 


16.1         No Waiver. No
failure by Landlord or Tenant to insist upon the strict performance of any term
hereof or to exercise any right, power or remedy consequent upon a breach
thereof, and no acceptance of full or partial payment of Rent during the
continuance of any such breach, shall constitute a waiver of any such breach or
of any such term. To the extent permitted by law, no waiver of any breach shall
affect or alter this Lease, which shall continue in full force and effect with
respect to any other then existing or subsequent breach.


 


ARTICLE XVII


 


17.1         Remedies Cumulative.
Except as otherwise expressly provided herein, to the extent permitted by law,
each legal, equitable or contractual right, power and remedy of Landlord or
Tenant 


 


43

















 


now or hereafter provided
either in this Lease or by statute or otherwise shall be cumulative and
concurrent and shall be in addition to every other right, power and remedy and
the exercise or beginning of the exercise by Landlord or Tenant of any one or
more of such rights, powers and remedies shall not preclude the simultaneous or
subsequent exercise by Landlord or Tenant of any or all of such other rights,
powers and remedies.


 


ARTICLE XVIII


 


18.1         Acceptance of
Surrender. No surrender to Landlord of this Lease or of the Leased
Property, or of any interest therein, shall be valid or effective unless agreed
to and accepted in writing by Landlord and Landlord’s Lender (if any) and no
act by Landlord or any representative or agent of Landlord, other than such a
written acceptance by Landlord and Landlord’s Lender (if any), shall constitute
an acceptance of any such surrender.


 


ARTICLE XIX


 


19.1         No Merger of Title.
There shall be no merger of this Lease or of the leasehold estate created
hereby by reason of the fact that the same Person may acquire, own or hold,
directly or indirectly, (a) this Lease or the leasehold estate created thereby
or any interest herein or in such leasehold estate and (b) the fee estate in
the applicable Leased Property,
unless and until all Persons having any interest in the interests described in
(a) and (b) above which are sought to be merged shall join in a written
instrument effecting such merger and shall duly record the same.


 


ARTICLE XX


 


20.1         Conveyance by Landlord.
Any
conveyance by Landlord of the Leased Property shall be in compliance with
applicable Gaming Laws. If Landlord or any successor owner of the Leased
Property shall convey the Leased Property other than as security for a debt,
and the grantee or transferee of the Leased Property shall expressly assume all
obligations of Landlord hereunder arising or accruing from and after the date
of such conveyance or transfer, Landlord or such successor owner, as the case
may be, shall thereupon be released from all future liabilities and obligations
of Landlord under this Lease arising or accruing from and after the date of
such conveyance or other transfer as to the Leased Property and all such future
liabilities and obligations shall thereupon be binding upon the new owner.


 


ARTICLE XXI


 


21.1         Quiet Enjoyment. So
long as Tenant shall pay all Rent as the same becomes due and no Event of
Default shall have occurred and be continuing, Tenant shall peaceably and
quietly have, hold and enjoy the Leased Property for the Term hereof, free of
any claim or other action by Landlord or anyone claiming by, through or under
Landlord, but subject to the terms of the Property Documents or liens and
encumbrances otherwise permitted to be created by Landlord hereunder, liens as
to the obligations of Landlord that are either not yet due or which are being
contested in good faith and by proper proceedings, and liens hereafter
consented to by Tenant.


 


44

















 


ARTICLE XXII


 


22.1         Notices. All
notices, demands, requests, consents, approvals and other communications
required or permitted to be given hereunder (collectively, “Notices” or “notices”)
shall be in writing and delivered by hand or mailed (by registered or certified
mail, return receipt requested or reputable nationally recognized overnight
courier service and postage prepaid), addressed to the respective parties, as
follows:


 


	
  If to Tenant:

  	
  Station Casinos, Inc.

  
	
   

  	
  1505 South Pavilion Center Drive

  
	
   

  	
  Las Vegas, Nevada 89135

  
	
   

  	
  Attention: General Counsel

  
	
   

  	
  Fax: (702) 495-4260

  
	
   

  	
   

  



 


	
  If to Landlord:

  	
  FCP PropCo, LLC

  
	
   

  	
  1505 South Pavilion Center Drive

  
	
   

  	
  Las Vegas, Nevada 89135

  
	
   

  	
  Attention: General Counsel

  
	
   

  	
  Fax: (702) 495-4260

  
	
   

  	
   

  



 


or to such other address as either party may hereunder
designate, and shall be effective upon receipt.


 


ARTICLE XXIII


 


23.1         Appraisers. In the
event that it becomes necessary to determine the Fair Market Rental of any
Facility for any purpose of this Lease, and the parties cannot agree amongst
themselves on such value within twenty (20) days after the first request made
by one of the parties to do so, then either party may notify the other of a
person selected to act as appraiser on its behalf (which person, if selected by
Landlord, shall be subject to the approval of Landlord’s Lender). Within fifteen
(15) days after receipt of any such notice, the other party shall by notice to
the first party appoint a second person as appraiser on its behalf. The
appraisers thus appointed, each of whom must be a member of The Appraisal
Institute/American Institute of Real Estate Appraisers (or any successor
organization thereto), shall, within 45 days after the date of the notice
appointing the first appraiser, proceed to appraise the applicable Facility to
determine the Fair Market Rental thereof as of the relevant date; provided that if one appraiser shall have been so appointed,
or if two appraisers shall have been so appointed but only one such appraiser
shall have made such determination within 50 days after the making of the
initial appointment, then the determination of such appraiser shall be final
and binding upon the parties. If two appraisers shall have been appointed and
shall have made their determinations within the respective requisite periods
set forth above and if the difference between the amounts so determined shall
not exceed ten percent (10%) of the lesser of such amounts, then the Fair
Market Rental shall be an amount equal to 50% of the sum of the amounts so
determined. If the difference between the amounts so determined shall exceed
ten percent (10%) of the lesser of such amounts, then such two appraisers shall
have 20 days to appoint a third appraiser, but if such appraisers fail to do
so, then either party may request the American Arbitration Association or any
successor organization


 


45

















 


 thereto to appoint an appraiser within 20 days
of such request, and both parties shall be bound by any appointment so made
within such 20 day period. If no such appraiser shall have been appointed
within such 20 days or within 90 days of the original request for a
determination of Fair Market Rental, whichever is earlier, either Landlord or
Tenant may apply to any court having jurisdiction to have such appointment made
by such court. Any appraiser appointed by the original appraisers, by the
American Arbitration Association or by such court shall be instructed to
determine the Fair Market Rental within 30 days after appointment of such
Appraiser. The determination of the appraiser which differs most in terms of
dollar amount from the determination of the other two appraisers shall be
excluded, and 50% of the sum of the remaining two determinations shall be final
and binding upon Landlord and Tenant as the Fair Market Rental for such
interest. This provision for determination by appraisal shall be specifically
enforceable to the extent such remedy is available under applicable law, and
any determination hereunder shall be final and binding upon the parties except
as otherwise provided by applicable law. Landlord and Tenant shall each pay the
fees and expenses of the appraiser appointed by it and their own legal fees,
and each shall pay one-half of the fees and expenses of the third appraiser and
one-half of all other cost and expenses incurred in connection with each
appraisal. Any consent or agreement by Landlord as to Fair Market Rental shall
be subject to the approval of Landlord’s Lender.


 


ARTICLE XXIV


 


CONFIDENTIALITY


 


24.1         Confidentiality. Landlord
(and Landlord’s Lender) shall keep confidential all financial statements and
any other proprietary information delivered pursuant to this Lease, (provided
any such other proprietary information is clearly marked by Tenant as
confidential) (collectively, “Proprietary Information”). Notwithstanding the
foregoing, Landlord’s Lender shall be permitted to freely deliver Proprietary
Information to such rating agencies, loan servicers and securitization
trustees, to prospective participants and purchasers of Landlord’s Debt and
interests therein and to prospective holders of securities backed by Landlord’s
Debt, and to its and their respective agents and representatives provided that
Landlord’s Lender shall inform such parties of the confidential nature of such
information. Tenant shall not identify any specific Facility to which any
Proprietary Information relates unless requested by Landlord’s Lender on behalf
of holders or prospective holders of (a) mezzanine loans in respect of Landlord
or any interest therein or (b) the unrated or lower-rated securities backed by
Landlord’s Debt (collectively, “Requesting Parties”). Landlord and
Landlord’s Lender shall be permitted to deliver Asset-Specific Proprietary
Information (as defined in Landlord’s Loan Documents) to Requesting Parties,
provided that each such person (i) executes a commercially reasonable
confidentiality agreement with respect to such information for the benefit of
Tenant and Landlord and (ii) is not identified on a list of disqualified
recipients provided by Tenant and approved by Landlord’s Lender, which approval
shall not be unreasonably withheld, delayed or conditioned.


 


ARTICLE XXV


 


ENVIRONMENTAL
INDEMNITY


 


25.1         Environmental
Indemnity Provisions. Tenant hereby agrees to hold harmless Landlord and
Landlord’s Lender, any successors to their respective interests in this Lease,
and the respective directors, officers, employees and agents of any of the
foregoing from and against any losses, claims, 


 


46

















 


damages (including consequential damages), penalties,
fines, liabilities (including strict liability), costs (including cleanup and
recovery costs), and expenses (including expenses of litigation and attorneys’
fees) incurred by Landlord, Landlord’s Lender or any other indemnitee or
assessed against the Leased Property by virtue of any claim or lien by any
Governmental Authority or quasi-governmental unit, body, or agency, or any
third party, for cleanup costs or other costs pursuant to any Environmental
Laws, but only to the extent that the same relate to the period from and after
the date hereof. Tenant’s indemnity shall survive the termination of this
Lease.


 


ARTICLE XXVI


 


MISCELLANEOUS


 


26.1         Survival of Claims.
Anything contained in this Lease to the contrary notwithstanding, all claims
against, and liabilities of, Tenant or Landlord arising prior to any date of
termination of this Lease shall survive such termination.


 


26.2         Severability. If
any term or provision of this Lease or any application thereof shall be invalid
or unenforceable, the remainder of this Lease and any other application of such
term or provision shall not be affected thereby.


 


26.3         Maximum Permissible
Rate. If any late charges provided for in any provision of this Lease are
based upon a rate in excess of the maximum rate permitted by applicable law,
the parties agree that such charges shall be determined at the maximum
permissible rate.


 


26.4         Headings. The
headings in this Lease are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.


 


26.5         Exculpation. Landlord’s
liability hereunder shall be limited solely to its interest in the Leased
Property, and no recourse under or in respect of this Lease shall be had
against any other assets of Landlord whatsoever. Furthermore, except as
otherwise expressly provided herein, in no event shall Landlord (original or
successor) ever be liable to Tenant for any indirect or consequential damages
suffered by Tenant from whatever cause.


 


26.6         Exhibition of Leased
Property. Subject to Tenant’s reasonable and customary security restrictions
and Gaming Laws, Landlord and Landlord’s agent shall have the right to enter
the Leased Property at all reasonable times and upon reasonable notice for the
purpose of exhibiting the Leased Property to others.


 


26.7         Entire Agreement. This
Lease contains the entire agreement between Landlord and Tenant with respect to
the subject matter hereof.


 


26.8         Governing Law. This
Lease shall be construed under the substantive laws of the State of Nevada.


 


26.9         No Waiver. No
waiver of any condition or covenant herein contained, or of any breach of any
such condition or covenant, shall be held or taken to be a waiver of any
subsequent breach of such covenant or condition, or to permit or excuse its
continuance or any future breach thereof or of any condition or covenant herein
construed as a waiver of such default, or of Landlord’s right to terminate this
Lease or exercise any other remedy granted herein on account of such existing
default.


 


47

















 


26.10       Successors and Assigns.
This Lease shall be binding upon and shall inure to the benefit of the heirs,
successors, personal representatives, and permitted assigns of Landlord and
Tenant.


 


26.11       Modifications in Writing.
This Lease may only be Modified by a writing signed by both Landlord and Tenant
and, unless expressly permitted by Landlord’s Loan Documents, any such
Modification shall not be effective until it is consented to by Landlord’s
Lender.


 


26.12       Effect of Delay or Omission. No delay or omission by
either party hereto to exercise any right or power accruing upon any
noncompliance or default by the other party with respect to any of the terms
hereof shall impair any such right or power or be construed to be a waiver
thereof.


 


26.13       Third Party
Beneficiaries; Landlord’s Lender Rights. Nothing in this Lease shall be
deemed to create any right in any Person (other than the Landlord’s Lender to
the extent provided herein) not a party hereto, and this Lease shall not be
construed in any respect to be a contract in whole or in part for the benefit
of any third Person (other than the Landlord’s Lender to the extent provided
herein). It is expressly understood and agreed that Landlord’s Lender is and
shall be a third party beneficiary of this Lease; provided that in the event
there shall be more than one Landlord’s Lender or if more than one party
comprises Landlord’s Lender, the rights of Landlord’s Lender under this Lease
shall be exercised only by, and any approval, consent or other action required
or to be taken by Landlord’s Lender hereunder shall be required or may be taken
only by, a single Landlord’s Lender (or a single agent) on behalf of multiple
parties comprising Landlord’s Lender, which shall be identified to Tenant by
Landlord in writing.


 


26.14       Gaming License. If at
any time Landlord or any other person or entity associated in any way with
Landlord (i) is denied a license, found unsuitable, or is denied or
otherwise unable to obtain any other approval required for Tenant or any of its
subsidiaries to continue to lawfully lease the Leased Property and own and
operate gaming thereon itself or through its subsidiaries, (ii) is required by
the Gaming Authorities to apply for a license or approval and does not do so or
does not obtain such license or approval within any required time period, or
(iii) withdraws any application for such license or approval with prejudice
other than upon a determination by the applicable Gaming Authorities that such
license or approval is not required, then Tenant may, notwithstanding any
contrary provision of this Lease, terminate this Lease effective upon the later
of (a) one Business Day after notice is given to Landlord by Tenant, or (b) the
date Tenant or any of its subsidiaries is not permitted to conduct gaming
operations at any premises comprising the Leased Property, unless such failure
is cured before such later date.


 


26.15       [Intentionally Omitted].


 


26.16       Notification of Ownership Changes. Landlord will
promptly notify Tenant and any Facility Subtenant in writing upon the happening
of any change in ownership in the Leased Property to permit Tenant and any such
Facility Subtenant, as applicable, to comply with Regulation 3.020 of the
Nevada Gaming Regulations. Landlord will use its commercially reasonable best
efforts to cooperate and provide all information necessary to comply with the
information and disclosure requirements applicable to compliance with said
Regulation 3.020 and all other applicable Gaming Laws, including without
limitation the requirements of the Nevada Gaming Control Act and the
regulations thereunder.


 


26.17       Cooperation with Gaming
Authorities. Landlord agrees to cooperate, at Tenant’s sole cost and expense,
with all applicable Gaming Authorities in connection with the administration of
their regulatory jurisdiction over Tenant and its subsidiaries, including the
provision of such documents or


 


48

















 


other information as may be requested by
such Gaming Authorities relating to Tenant or any of its subsidiaries or to the
Lease.


 


ARTICLE XXVII


 


27.1         Memorandum of Lease.
Landlord and Tenant shall, promptly upon the request of either enter into a
short form memorandum of this Lease, in form suitable for recording under the
laws of the state in which the applicable Leased Property is located, in which
reference to this Lease, and all options contained therein, shall be made. Tenant
shall pay all costs and expenses of recording such Memorandum of Lease.


 


ARTICLE XXVIII


 


28.1         Statement of Intent.
This Lease constitutes a single, unitary, indivisible, non-severable lease of
all the Leased Property. This Lease does not constitute separate leases
contained in one document each governed by similar terms. The use of the
expression “unitary lease” to describe this Lease is not merely for convenient
reference. It is the conscious choice of a substantive appellation to express
the intent of the parties in regard to an integral part of this transaction. To
accomplish the creation of an indivisible lease, the parties intend that from
an economic point of view the portions of the property locations leased
pursuant to this Lease constitute one economic unit and that the Base Rent and
all other provisions of this Lease have been negotiated and agreed to based on
a demise of all the portions of the property locations covered by this Lease as
a single, composite, inseparable transaction. Except as expressly provided in
this Lease for specific isolated purposes (and in such cases only to the extent
expressly so stated), all provisions of this Lease, including definitions,
commencement and expiration dates, rental provisions, use provisions, renewal
provisions, breach, default, enforcement and termination provisions and
assignment and subletting, shall apply equally and uniformly to all the Leased Property
as one unit and are not severable. Subject to the terms and conditions of
Section 12.1 hereof, a default of any of the terms or conditions of this Lease
occurring with respect to any portion of the Leased Property situated on a
particular property location shall be a default under this Lease with respect
to all the Leased Property. Except as expressly provided in this Lease for
specific isolated purposes (and in such cases only to the extent expressly so
stated), the provisions of this Lease shall at all times be construed,
interpreted and applied such that the intention of Landlord and Tenant to
create a unitary lease shall be preserved and maintained. For the purposes of
any assumption, rejection or assignment of this Lease under 11 U.S.C. Section
365 or any amendment or successor section thereof, this is one indivisible and
non-severable lease dealing with and covering one legal and economic unit which
must be assumed, rejected or assigned as a whole with respect to all (and only
all) the Leased Property covered hereby. It is the intent of Landlord and
Tenant that this Lease constitute a “true lease” of the Leased Property and not
a secured financing for Tenant. Landlord does not intend to convey any fee
interest in any of the Leased Property to Tenant. Tenant does not intend to
obtain an interest in the Leased Property other than a leasehold interest. This
Lease shall not be construed in any manner to create any relationship between
the parties other than a landlord-tenant relationship and, with respect to
Section 12.4, debtor and secured party.


 


28.2         Acknowledgment of Law.
This Lease is not an attempt by Landlord or Tenant to evade the operation of
any aspect of the law applicable to any of the Leased Property.


 


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49

















 


IN
WITNESS WHEREOF, the parties hereto have caused this Lease to be duly executed
as of the date first written above.


 


[Signature
blocks to be attached separately.]


 


50

















 


IN
WITNESS WHEREOF, the parties hereto have caused this Lease to be duly executed
and delivered as of the day and year first above written.


 


	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  FCP PROPCO, LLC, a Delaware limited liability

  
	
   

  	
  company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
         /s/ Thomas
  M. Friel

  	
   

  
	
   

  	
  Name:

  	
  Thomas M. Friel

  	
   

  
	
   

  	
  Title:

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  STATION CASINOS, INC., a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Thomas M. Friel

  	
   

  
	
   

  	
  Name:

  	
    Thomas M. Friel

  	
   

  
	
   

  	
  Title:

  	
    Executive Vice President, Chief

  	
   

  
	
   

  	
   

  	
    Accounting Officer & Treasurer