Exhibit 10.1





Exhibit 10.1




EXECUTION VERSION




CASINO OPERATIONS LEASE




THIS CASINO OPERATIONS LEASE (“Lease”) is made and entered into as of the 28th day
of June, 2011 (the “Effective Date”), by and among Hyatt Equities, L.L.C., a Delaware limited
liability company, as Landlord (“Landlord”) and Gaming Entertainment (Nevada) LLC, a Nevada limited
liability company, as Tenant (“Tenant”).



RECITALS




A. Landlord is the owner of the Hyatt Regency Lake Tahoe Resort, Spa & Casino
located in Incline Village, Nevada, and more particularly described in Exhibit A (the
“Project”).



B. Landlord has entered into a certain Amended and Restated Management Agreement (the
“Management Agreement”) assigned to Hyatt Corporation (“Hotel Operator”) on October
1, 2002 pursuant to which Hotel Operator manages a first class hotel at the Project (the
“Hotel”).



C. Landlord desires to lease to Tenant, and Tenant desires to lease from Landlord (i) a
portion of the Project in which gaming or gambling (as defined in NRS 463.0153) is presently being
conducted, comprising approximately twenty-thousand nine-hundred and ninety (20,990) square feet,
including bar tops, as reflected in Exhibit “A” (“Casino”) and (ii) the associated offices,
back-of-the-house count rooms, casino cages, and all surveillance area within the Project
(collectively, the “Casino Office Space”) as depicted in Exhibit “B” attached hereto for
use by Tenant for the operation of nonrestricted gaming under and pursuant to the Applicable Laws,
as defined below. The Casino and the Casino Office Space are sometimes collectively referred to
herein as the “Premises” (the “Premises”).



NOW, THEREFORE, in consideration of the mutual promises set forth herein, the parties hereto
agree that the foregoing recitals are true and correct and incorporated into this Lease and the
parties further agree that Landlord will lease to Tenant, and Tenant will lease from Landlord, the
Premises on the following terms and conditions:



ARTICLE I

APPROVALS, GAMING ACTIVITIES AND GAMING EQUIPMENT




1.1 Approvals.



(a) On or prior to June 15, 2011, at Tenant’s sole cost and expense, Tenant shall submit, all
applications, filings and other submissions required by the Nevada Gaming Authorities (as defined
below) to obtain the Gaming Approvals (as defined below). Tenant shall respond to any requests
from the Nevada Gaming Authorities and promptly file any additional information required in
connection with such filings as soon as practicable after receipt of
requests for such additional information. Landlord shall reasonably cooperate with Tenant in
making all such filings, and, upon request, Landlord shall make any filings requested to be made by
Landlord by any Nevada Gaming Authority in connection with the operation of the Casino on the
Premises by Tenant. Landlord shall be responsible for the costs of any such filings by Landlord
related to its suitability and Tenant shall be responsible for any such filings by Landlord related
to its suitability. Tenant shall keep Landlord promptly and regularly apprised of the status of
any communications with and any inquiries or requests for additional information from, the Nevada
Gaming Authorities and shall comply promptly with any such inquiry or request.


 


 









 





(b) Tenant acknowledges and agrees that it will at all times during the Term (as defined
below) maintain in full force and effect and in good standing, at its sole cost and expense, all
permits, licenses and approvals (“Approvals”) required by all laws, statutes, regulations,
rules, ordinances, codes, licenses, permits and orders, from time to time in existence, of all
courts of competent jurisdiction and government agencies, and all applicable judicial and
administrative and regulatory decrees, judgments and orders that now or hereafter are required to
be obtained for the operation of the Casino within the Project, including, without limitation, the
Premises, or any portion thereof, including those relating to the regulation and licensing of
gaming, the sale of alcoholic beverages, employees, health, safety and environmental matters and
accessibility of public facilities (collectively, “Applicable Laws”), and including,
without limitation, all Approvals required by the Nevada State Gaming Control Board, the Nevada
Gaming Commission, the Washoe County Commission and the City of Incline Village, Nevada
(collectively, the “Nevada Gaming Authorities”) relating to the Premises and the conduct of
Gaming Operations on the Premises (collectively, “Gaming Approvals”). Except as otherwise
expressly provided herein, it is understood and agreed that Landlord shall be solely responsible
for the compliance of the building structure, parking areas, and surrounding facilities (other than
the Premises) with all federal, state and local laws, regulations, rules, ordinances, codes,
licenses, permits and orders, in all material respects; except to the extent any non-compliance is
caused by Tenant. Tenant hereby agrees not to do anything within the Project to cause the Project
to be in non-compliance with all federal, state and local laws, regulations, rules, ordinances,
codes, licenses, permits and orders.



1.2 Gaming Activities. Tenant shall have the sole and exclusive right to conduct
gaming and gambling at the Project and in the Casino (“Gaming Operations”) and shall have
complete control over its Gaming Operations during the Term without interference by Landlord.
Neither Landlord nor any agent or representative of Landlord shall exercise, either directly or
indirectly, management or control of any kind whatsoever, over the conduct of gaming on the
Premises. Tenant expressly covenants and agrees that it shall, at all times during the Term, at
its sole cost and expense:



(a) comply, in all material respects, with all Applicable Laws, and the requirements of the
Nevada Gaming Authorities; and



(b) in accordance with Applicable Law, including, without limitation, the Nevada Gaming
Act (Chapter 463 of the Nevada Revised Statutes, as amended from time to
time, or any successor statute thereto, and the regulations promulgated thereunder, and any
other requirements of the Nevada Gaming Authorities) provide supervision of its Gaming Operations
to prevent play by or loitering of minors in or about the Casino.


 


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ARTICLE II

LEASED PROPERTY




2.1 Lease of Premises and Grant of Easements through Public Areas. Landlord
hereby leases the Premises to Tenant and Tenant hereby leases the Premises from Landlord.



2.2. Use of Public Areas. Landlord hereby grants to Tenant, its employees, agents,
representatives, customers, business invitees and licensees a non-exclusive easement and right of
free and unfettered access through and across the public areas of the Project (as the public areas
may exist and as they may be modified by Landlord from time to time, provided that any such
modification shall not hinder or prevent commercially reasonable access to and from the Premises)
for the purposes of ingress and egress to the Premises. Tenant hereby grants to Landlord, its
employees, agents, customers and invitees a non-exclusive easement and right of access through and
across the public areas of the Premises for purposes of ingress and egress to the other portions of
the Project, and for other purposes consistent with the intended uses of the public areas.



2.3 Parking. Landlord agrees that non-dedicated parking areas of the Project (as
determined by Landlord in its absolute discretion, provided that the number of parking spaces shall
be no less than currently available to the existing Tenant) may be used by Tenant’s gaming
customers. Tenant’s employees shall be permitted to use Project parking facilities on the same
basis and under the same terms and conditions as employees of the Project, provided, however, that
Landlord may, in the exercise of its reasonable discretion, determine the number and location of
spaces allocated for use by Tenant’s employees and Tenant agrees to abide by and cause its
employees to abide by such determination. Notwithstanding the foregoing, in no event shall parking
for the Premises be less that the minimum parking spaces required by Applicable Laws.



2.4 Landlord’s Reservation. Landlord reserves to itself the roof and exterior walls of
the building containing the Premises, and all space above the ceilings within the Premises, to
accommodate the Project’s structural, mechanical and electrical conduit piping, ducting and venting
requirements. Landlord further reserves the right to run utility lines, pipes, conduits and
ductwork through the air space above ceilings, and through the columns and walls of the Premises,
in locations that will minimize interference with Tenant’s use of the Premises and subject to any
required conduits, wiring, pipes, ductwork or related mechanical systems related to the operation
of the Casino or its surveillance functions.


 


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2.5 Changes to Project. Landlord reserves the right at any time and from time to time
(a) to make or permit changes or revisions in the site plan for or layout of the Project including,
without limitation, additions to, subtractions from, rearrangements of, alterations of,
modifications of or supplements to the public areas or the building areas, walkways, parking
areas, driveways or other areas within or without the Project and upon the property on which the
Project is located, (b) to construct other buildings or improvements in or as additions to the
Project and to make alterations thereof or additions thereto and to build additional stories on any
such building or buildings and to construct other buildings or improvements adjoining the same
(however no such modification may materially and adversely affect the conduct of operations of the
Casino unless approved by Tenant, which approval shall not be unreasonably withheld, conditioned or
delayed), and (c) to make or permit changes or revisions in the Project, including additions
thereto, and to convey portions of the Project and the property on which the Project is located to
others for the purpose of constructing thereon other buildings or improvements, including additions
thereto and alterations thereof. Landlord will have the right without abatement of Rent to (i)
enter into, modify and terminate easements and other agreements pertaining to the use and
maintenance of the parking area portions of the Project and the property on which the Project is
located (however, in no event, shall parking for the Premises be less than the minimum number of
parking spaces required by Applicable law), (ii) close such portions of the Project and the
property on which the Project is located as may, in the reasonable opinion of Landlord, be
necessary to prevent a dedication thereof or the accrual of any right therein to any person or to
the public, (iii) close portions of the Project and the property on which the Project is located
for any other reason reasonably determined by Landlord to be in the best interest of the Project,
(iv) close temporarily any or all portions of the Project and the property on which the Project is
located for repairs or refurbishing (provided, however, that in no event shall any portion of the
Casino be closed unless approved by Tenant, which approval shall not be unreasonably withheld,
conditioned or delayed, in accordance with Section 2.7 hereinbelow) (v) discourage non-guest
parking , (vi) move, remove, relocate and/or replace seats, trees, planters and other amenities
commonly found in similar resorts, and (vii) do such other acts in and to said areas and
improvements, as Landlord, in the exercise of its reasonable business judgment, deems advisable.
Provided that nothing herein shall materially and adversely interfere with or cause the suspension
or cessation of gaming activity within the Casino substantially as it is currently functioning, or
cause the loss of use of any of Tenant’s security, surveillance, accounting, cash counting or other
casino related back of house areas within the Premises.



2.6 Relocation. Throughout the Term and from time to time, Landlord shall have a right
to relocate all or a portion of the Casino Office Space within the Project provided that the total
size thereof after such relocation is approximately the same square footage as the original Casino
Office Space. Landlord shall notify Tenant of such relocation not less than thirty (30) days prior
to the date thereof. Landlord shall reconstruct on the relocated Casino Office Space improvements
substantially similar in quality, style and design to those constructed at the original Casino
Office Space in accordance with plans and specifications approved by Landlord and Tenant, which
approval shall not be unreasonably withheld by either party. Landlord shall pay the cost of moving
and reinstalling the fixtures, furnishings and equipment of Tenant into the relocated Casino Office
Space. As of the later of the date specified in Landlord’s notice to Tenant or ten (10) days after
Landlord has notified Tenant that it has completed the improvements to be constructed by Landlord
on the relocated Casino Office Space, Tenant shall surrender the original Casino Office Space (or
the portion thereof that is to be relocated), and shall move to the relocated Casino Office Space,
and the relocated Casino Office Space shall be deemed the Casino Office Space hereunder as fully as
if originally described in this Lease.
Tenant agrees that promptly, on demand, it shall execute an amendment to this Lease designating the
location of the relocated Casino Office Space.



 


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2.7 Remodeling. If at any time from time to time during the Term Landlord remodels all
or any portion of the Project, and such remodeling includes all of the Premises or a portion
thereof, then Landlord shall have the right to change the dimensions or reduce the size of the
Premises and to close all or a portion of the Project, for such period as Landlord deems advisable;
provided, however that if any such renovation requires the closing of the Premises, or any portion
thereof, Landlord shall obtain the prior consent of Tenant, which consent shall not be unreasonably
withheld, conditioned or delayed, including without limitation, consent as to the schedule for the
renovations affecting the Premises so as to minimize any disruption to Tenant’s operations within
the Premises. If Tenant is required to close all or a portion of the Premises in connection with
such remodeling, then, as Tenant’s sole and exclusive remedy for such closure, Rent will be
equitably abated based upon the portion of the floor area of the Premises that is rendered
untenantable by such remodeling as a proportion of the total floor area of the Premises prior to
such remodeling. In the event of any remodeling pursuant to this Section 2.7, Landlord shall
repair any damage to the Premises caused thereby, and in the event of any reduction in the area of
the Premises, as Tenant’s sole and exclusive remedy therefore, Rent shall be equitably reduced
based upon the portion of the floor area of the Premises that is rendered untenantable by such
remodeling as a proportion of the total floor area of the Premises prior to such remodeling.



ARTICLE III

TERM OF LEASE




3.1 Initial Term. The term of this Lease shall begin (“Commencement Date”) at
such time as Tenant commences its Gaming Operations at the Project, and, unless extended as
provided below, shall end at 11:59 p.m. on the date immediately preceding the fifth
(5th) anniversary of the Commencement Date (“Initial Term”).



3.2 Additional Terms. Provided that Tenant is not then in material default under this
Lease, Tenant, shall have one option to extend the term of this Lease for five (5) consecutive
years (the “Additional Term”) by giving Landlord written notice of exercise of such option
at least six (6) months prior to the expiration of the then-expiring initial Term or Additional
Term, subject to and provided that Landlord consents, in its sole discretion, in writing to extend
this Lease for an Additional Term by providing written notice of its consent within thirty (30)
days after the receipt of the notice from Tenant. In the event that the Tenant does not provide
the notice or Landlord does not consent, the Lease will terminate as provided herein. As used in
this Lease, “Term” means the Initial Term together with the duly exercised Additional Term. Except
as expressly provided in this Lease (and in particular, subject to Section 4.2 below) or as
Landlord and Tenant may otherwise agree, the terms and conditions applicable to the Additional
Term will be the same as the terms and conditions of the Initial Term, and Rent and other charges
will continue to be adjusted as provided in this Lease as though such Additional Term were part of
the Initial Term.


 


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3.3 Early Termination by Landlord.



(a) If at any time Tenant, or its “Affiliates” (as defined in NRS 463.0133) or their
respective officers, directors, employees or agents or equity holders, (i) is denied a license,
found unsuitable, or is denied or otherwise unable to obtain any other Approval or Regulatory
Approval required for Tenant to continue to lawfully lease the Casino or conduct nonrestricted
gaming at the Casino (“Gaming Operations”), (ii) does not obtain such Approval or
Regulatory Approval within any required time limit, as the same may be extended by any Nevada
Gaming Authority or other state, county or local governmental authority having jurisdiction to
grant or deny any such Approval of the Gaming Operations, or (iii) withdraws any application for
any Approval or Gaming Approval, (iv) directly or indirectly causes a termination or denial of any
Approval or Gaming Approval of Landlord or any person as a result of this Lease, then Landlord may
terminate this Lease effective upon the later of (a) one (1) business day after notice is given to
Tenant by Landlord, or (b) the date Tenant is not permitted to conduct Gaming Operations at the
Project, unless such failure is cured before such later date.



(b) Notwithstanding any other provision of this lease, Landlord shall have the option,
exercisable at any time from and after thirty (30) calendar months following the Commencement Date,
by written notice to Tenant, to purchase Tenant’s leasehold interest in the Premises and all of
Tenant’s right, title and interest in, to and under this Lease (“Tenant’s Leasehold”),
together with all of Tenants assets (the “Assets”) used in its Gaming Operations,
including, but not limited to, (i) Tenant’s furniture, fixtures and equipment, including all gaming
devices and associated equipment (collectively, “Tenant’s Personal Property”), (ii)
Tenant’s gaming inventories and operating supplies, (iii) trade names, trademarks, customer lists,
good will and other related intangible assets related to the Gaming Operations, and specifically
including the names “Grand Lodge Casino” and “Player Advantage Club”, all internet domain names and
URL’s related thereto, all other intangible property owned or leased by Tenant required for the
Gaming Operations, including, without limitation, goodwill, operating and training manuals,
federal, state and local certifications and other permits (to the extent assignable), manuals and
plans relating to the Gaming Operations, customer lists, supplier lists and similar documents, and
trademarks and trade names used in the Gaming Operations, (iii) all assignable rights and
obligations under contracts, agreements, leases, instruments or other documents or commitments,
arrangements, undertakings, practices or authorizations related to the Assets or the Gaming
Operations, (iv) all documents, book and records related to the Assets or the Gaming Operations,
and (v) subject to the assumption of Tenant’s obligations thereunder, excluding obligations for
breach of any such agreement prior to the Closing, all of Tenant’s rights under any slot machine
participation agreement or lease and any agreement for the operation of a satellite race and sports
book at the Premises (the “Assumed Liabilities”). The purchase price for Tenant’s
Leasehold and the Assets shall be as follows, without duplication: (A) an amount equal to Tenant’s
EBITDA for the twelve (12) month period preceding the Closing or for such 

 


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period of time remaining
on the Term, whichever is less, plus (B) an amount equal to the (x) the fair market value
of Tenant’s Personal Property at Closing, as determined by a third party appraiser selected by
Landlord and approved by Tenant, which approval shall not be unreasonably withheld, conditions or
delayed, plus (y) an amount equal to Tenant’s Working Capital at the Closing, if a positive
number, under the calculations set forth below ((A) and (B)
are collectively referred to herein as the “Purchase Price”), on the following terms
and conditions:



(i) “EBITDA” shall mean the net income (or loss), as determined in accordance
with GAAP applied on a consistent basis, of Tenant from its Gaming Operations (after
eliminating all extraordinary or nonrecurring items of income or loss), plus to the
extent deducted in computing such net income (or loss), without duplication, (i) all
interest and other similar expense in respect of indebtedness for borrowed money and similar
expense in respect of capitalized leases, plus (ii) all expenses for income taxes
(whether paid, accrued or deferred), plus (iii) all depreciation and amortization of
any assets or other non-cash charges (including any depreciation, amortization or write-off
of intangible assets, transaction costs or goodwill), plus (iv) all dividend
payments on common or preferred stock or similar equity interests in Tenant, whether or not
paid in cash. In determining EBITDA for any period, to the extent that as a result of
conduct outside the ordinary course of business (x) any items of income of Tenant have been
shifted out of such period, or (y) any items of expense have been shifted into such period,
such items of income or expense shall be reclassified into the appropriate period.




(ii) “Working Capital” means current cash in the operating accounts of the
Gaming Operations, less the respective current liabilities of the Gaming Operations, as
determined in accordance with GAAP applied on a consistent basis.




(iii) The “Closing” shall occur within five (5) days following the date upon
which Landlord receives the last Gaming Approval necessary for it or its tenant to conduct
non-restricted gaming on the Premises.




(iv) Payment of Purchase Price. The Purchase Price shall be paid in cash, by
wire transfer, to Tenant at the Closing.




(v) Title. Tenant’s Leasehold and the Assets shall be conveyed to Landlord free
and clear of all liens, claims and encumbrances.




(vi) Indemnities. Tenant shall indemnify, protect and defend Landlord from and
against any and all liabilities arising from Tenant’s conduct of its Gaming Operations,
excluding the Assumed Liabilities but including liabilities arising from or predicated upon
facts occurring prior to the Closing. Landlord shall indemnify, protect and defend Tenant
from and against the Assumed Liabilities but excluding liabilities from or predicated upon
facts occurring prior to the Closing.




(vii) Pre-Closing Obligations. Following receipt of Landlord’s exercise of its
purchase rights under this Section 3.3(c), Tenant shall continue to conduct Gaming
Operations as required by this Lease. Within fifteen (15) days following the giving of
notice hereunder, Landlord shall or Landlord shall file of cause to be filed, applications
for all Gaming Approvals necessary for the conduct of non-restricted gaming on the Premises
by Tenant’s successor.


 


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3.4 Early Termination by Tenant. If at any time Landlord (including its successors
and assigns and subsequent purchasers of the Project), or any other person 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 in order for Tenant to be able to conduct Gaming Operations at
the Project, (ii) is required by the Nevada Gaming Authorities to apply for an Approval required in
order for Tenant to be able to conduct Gaming Operations at the Project and does not obtain such
Approval within any required time limit, as the same may be extended by such Gaming Authority, or
(iii) withdraws any application for Approval other than upon a determination by the Nevada Gaming
Authorities that such Approval is not required in order for Tenant to be able to conduct Gaming
Operations at the Project, (iv) directly or indirectly causes a termination or denial of any Gaming
Approval of Tenant or any such person as a result of this Lease, then Tenant may, notwithstanding
any contrary provision of this Lease, terminate this Lease effective upon the later of (a) one (1)
business day after notice is given to Landlord by Tenant, or (b) the date Tenant is not permitted
to conduct Gaming Operations at the Project, unless such failure is cured before such later date.
In the event of such termination by Landlord, Landlord shall purchase Tenant’s Leasehold pursuant
to Section 3.3(b).



3.5 Holding Over. In the event Tenant remains in possession of the Premises after the
expiration of the Term or earlier termination of this Lease, after written objection from Landlord,
Tenant shall, at the option of Landlord, be considered a month-to-month tenant, at twice the Rent
(as defined herein) but otherwise subject to all of the other terms and conditions hereof, and
Landlord shall have all rights and remedies available at law or in equity.



ARTICLE IV

RENT




4.1 Rent. Tenant shall pay to Landlord rent in the amount of One Million Five Hundred
Thousand US Dollars (US$1,500,000.00) per year (the “Initial Rent”) in equal monthly
installments of One Hundred Twenty Five Thousand US Dollars (US$125,000.00), payable in advance, in
the manner prescribed in Section 4.4.



4.2 Rent During Additional Terms. Upon Tenant’s election to extend this Lease for an
Additional Term as provided in Section 3.2, and upon each such election, either party may request
that the rent for the Additional Term be adjusted to reflect the then fair market rental value of
the Premises as determined by an independent real estate appraiser selected by mutual consent of
the parties familiar with the fair market rental values of casino space in the Lake Tahoe, Nevada,
area (“Renewal Rent”). The Renewal Rent shall be determined not later than sixty (60) days
prior to the commencement of the applicable Additional Term. The decision of the real estate
appraiser shall be final, binding and conclusive on the parties, provided, however, that Tenant may
withdraw its exercise of its election to extend this Lease for an Additional Term within ten (10)
days of its receipt of the appraiser’s determination the Renewal Rent. The costs and fees
associated with the appraisal shall be divided equally between Landlord and Tenant.


 


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4.3 Reference to Rent. All references to “Rent” in this lease shall mean,
collectively, Initial Rent, Renewal Rent and any other sum due and owing by Tenant to Landlord.



4.4 Payment of Rent. All Rent and other monies required to be paid to Landlord
hereunder shall be paid without offset, deduction, prior notice or demand, in lawful money of the
United States of America, to Landlord, addressed at Hyatt Equities, L.L.C., Hyatt Center, 71 South
Wacker Drive, Chicago, Illinois 60606, Attn: Finance Department, or at such other place as
Landlord may from time to time designate in writing on or before the tenth (10th) day of
each month during the Term.




4.5 Late Charges and Interest.



(a) Notwithstanding anything in this Lease to the contrary, if Tenant fails to pay any Rent or
any other sum due and owing Landlord within five (5) days following the due date of said Rent or
other sum, then Tenant shall pay, as additional rent, a late charge of five percent (5%) of the
amount due.



(b) In addition to any late charges provided for herein, any amount not paid by Tenant within
five (5) days after its due date in accordance with the terms of this Lease shall bear interest
from such due date until paid in full at five percent (5%) per year, payable as additional rent
(and not as an Operating Expense). It is expressly the intent of Landlord and Tenant at all times
to comply with applicable law governing the maximum rate or amount of any interest payable on or in
connection with this Lease. If applicable law is ever judicially interpreted so as to render
usurious any interest called for under this Lease, or contracted for, charged, taken, reserved, or
received with respect to this Lease, then it is Landlord’s and Tenant’s express intent that all
excess amounts theretofore collected by Landlord be credited on the applicable obligation (or, if
the obligation has been or would thereby be paid in full, refunded to Tenant), and the provisions
of this Lease immediately shall be deemed reformed and the amounts thereafter collectible hereunder
reduced, without the necessity of the execution of any new document, so as to comply with the
applicable law, but so as to permit the recovery of the fullest amount otherwise called for
hereunder.



ARTICLE V

LANDLORD OBLIGATIONS




5.1 Utilities. Landlord shall provide or cause to be provided, throughout the Term to
the Premises, the following utility services: heated and refrigerated central air, heated and
cooled water at the points of service currently located on the Premises or as replaced or remodeled
pursuant to sections 2.5, 2.6 or 2.7, sewer services, electricity, gas and solid waste management,
including any and all charges for initiating and terminating such services (other than satellite
and race fees related to any race and sports book operated on the Premises). Landlord shall
promptly pay all charges for these utilities. Landlord shall not be responsible for any loss, cost,
damage, expense or liability Tenant, may sustain, including loss of revenue or goodwill, resulting
from fire or other casualty or an interruption in service, change in character of electric or other
utility service or as a result of any public or private company’s failure to supply or reduction in
any of
the foregoing utility services to the Premises. All such Utility services shall be provided
without any additional payment by Tenant and shall be included as the Landlord’s obligation in
consideration of the Rent payment.


 


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5.2 Compliance with Applicable Laws. Landlord shall comply with all Applicable Laws
affecting the Project (other than the Premises).



5.5 Maintenance of Non-Gaming Fixtures. Landlord shall, at its sole cost and expense,
be responsible for the maintenance and upkeep of all non-gaming fixtures on the Premises including,
but not limited to (i) plumbing and restroom fixtures, (ii) ductwork associated with the heating,
cooling and ventilation systems, (iii) all electrical wiring providing electricity to the Premises,
(iv) fire suppression systems, including any free standing fire extinguishers, (v) the central
sound system currently in use on the Premises (collectively, the items referred to in (i) through
(v), and any other alterations, improvements or fixtures installed by Landlord of a similar nature
on the Premises, are referred to as the “Non-Gaming Fixtures”). Landlord agrees to use
commercially reasonable efforts to cause any construction within the Project (excluding the
Premises) to be conducted with the due regard to Tenant’s gaming operations and to avoid
unreasonable noise levels as a result of construction, and to take commercially reasonable steps to
prevent dust and debris from the areas of the construction from entering into the Casino. During
the term of this Lease, Landlord shall maintain the Project in good condition and repair, and cause
all areas of the Project (except for the Premises) to be adequately illuminated.



5.6 Maintenance of Exterior of Project. Landlord shall, at its sole cost and expense,
be responsible for the maintenance and upkeep of the exterior of the Premises and parking and
vehicular access areas, including, but not limited to, all exterior doors, the roof, and the
exterior of all windows and snow removal.



5.7 Landlord’s Right to Inspect. Except as limited by the Nevada Gaming Act, Landlord
and its agents shall have access to the Premises at any and all reasonable times, except in the
case of an emergency, in which case, Landlord and Hotel Manager, and/or each of their respective
representatives and agents, shall have the absolute right to immediate enter and inspect the
Premises at any time. Landlord’s exercise of such right of access shall be conducted in a manner
and at times to minimize interruption with the operation of Tenant’s Gaming Operations as provided
in Article XIII and in accordance with the Nevada Gaming Act and Regulations of the Nevada Gaming
Commission.



5.8 Real and Personal Property Taxes. Landlord, at its sole expense, shall pay when
due all real property taxes assessed on the Premises and any federal, state or local personal
property or use tax assessed on Landlord’s personal property located at the Project.


 


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ARTICLE VI

USE OF LEASED PREMISES FOR GAMING OPERATIONS,

OBLIGATIONS OF TENANT




6.1 Conduct of Gaming Operations. It is understood, and Tenant so agrees,
that the Casino, at all times during the Term, shall be used and occupied by Tenant solely for the
conduct of the Gaming Operations in compliance with all Applicable Laws and for purposes directly
related thereto and for no other purpose or purposes. At all times during the Term, Tenant shall
keep the Gaming Area open for conduct of the Gaming Operations except during renovation by Landlord
and/or construction activities of Landlord that makes the continuing Gaming Operations impractical,
subject to the terms of this Agreement, including without limitation Section 2.7 and Section 11.2.
At all times during the Term, Tenant shall maintain sufficient numbers of competently trained and
supervised employees necessary to adequately conduct the Gaming Operations consistent with past
operations at the Project and in accordance with all Applicable Laws. In addition to any other
remedies available to Landlord under this Lease or at law or in equity, if Tenant, through no fault
of the Landlord or any Force Majeure Event, fails to continuously operate the Gaming Area in
accordance with Section 13.1(d) hereof, Landlord shall have the right to require Tenant to pay to
Landlord, as additional Rent, and not as an Operating Expense, but as liquidated damages and not as
a penalty, an amount equal to one hundred percent (100%) of 1/365ths of the annual Rent for each
day on which Tenant fails to operate the Gaming Area as required under this Lease. Such additional
rent is to compensate Landlord for Landlord’s and Tenant’s estimate of the losses Landlord would
suffer as a result of lost Project occupancy and traffic resulting from such a failure and for
other actual and substantial losses that Landlord may suffer, all of which losses Landlord and
Tenant acknowledge are extremely difficult to forecast. Nothing contained in this Section 6.1 may
be construed to waive any rights and remedies Landlord may have against Tenant. Landlord may offset
any amounts payable by Tenant hereunder against any amounts Landlord may owe Tenant.



6.2 Surveillance and Security. Tenant shall be responsible for the installation, if
applicable, maintenance, repair and (if necessary) replacement of all surveillance devices
(“Surveillance Equipment”) for the Project as required by the Nevada Gaming Authorities and
applicable Nevada Gaming Laws and as customary for the operation of the Casino at the Project. All
installation, maintenance, repair and replacement of Surveillance Equipment by Tenant shall be
performed in accordance with Nevada Gaming Laws. Tenant shall be responsible for the operation of
the Surveillance Equipment and shall employ and supervise adequate numbers of surveillance
personnel to provide surveillance services to the Project, and an adequate number of trained
security officers and other security personnel to provide security services to the Premises, as
required by the Nevada Gaming Authorities and in compliance with applicable Nevada Gaming. The
security services at portions of the Project other than the Casino shall be the sole responsibility
and liability of Landlord, but Landlord and Tenant shall meet quarterly to discuss and agree on the
adequacy of such security services.


 


11









 






6.3 Employees.




(a) Tenant shall have the sole right to hire, promote, discharge, and supervise all
employees engaged, directly or indirectly in Tenant’s Gaming Operations all of whom shall be
employees of Tenant. Tenant shall be solely responsible for the wages and other compensation
of all personnel employed by Tenant hereunder, including medical and health insurance,
pension plans, social security taxes, worker’s compensation insurance and shall comply with
all applicable Laws with respect to such employees. Tenant shall be solely liable for all
employment and personnel actions (including wrongful termination and discrimination claims)
and all claims arising out of injuries occurring at the Project regarding Tenant’s
employees.




(b) Employee Screening. All of Tenant’s employees will be screened prior to
being hired. The screening process shall include, but not be limited to: (i) completion of
Tenant’s application which shall provide for references, employment history and disclosure
of criminal convictions; (ii) reference checks; and (ii) drug testing and criminal
background checks, where required for the position. Tenant will provide safety training to
all of its employees assigned to the Premises.




(c) Removal of Employees. Tenant agrees to remove any of its employees from
the Hotel, for cause, at Landlord’s reasonable request. Tenant agrees to assist and
cooperate with any investigation initiated by Landlord involving any employee of Tenant
assigned to the Premises. In addition, Tenant’s employees shall wear such uniforms as are
standard for Tenant’s employees and in no event shall such uniforms contain any marks of
Hotel Manager.




(f) No Solicitation. Tenant agrees that at no time during the Term of this
Lease and for a period of twelve (12) months immediately following the termination (except
for termination due to a default by Landlord) or expiration of this Lease, will it call upon
or solicit any of the Hotel employees for the purpose of employing, hiring, or otherwise
interfering with the contractual relationship of such employees with Landlord, nor will
Tenant in any way directly or indirectly, for itself or on behalf of, or in conjunction with
any other person, firm, partnership, corporation or association, solicit, hire, employ or
take away such Hotel employees during the Term of this Lease and for twelve (12) months
immediately following the termination or expiration of this Lease, without the prior written
consent of Landlord. Nothing in this provision shall prohibit Tenant from offering
employment in solicitations of general circulation or accepting requests of employment from
Hotel employees in response to solicitations of general circulation.



6.4 Additional Obligations of Tenant. Tenant further agrees, at all times during the
Term, that:



(a) Tenant shall, and shall direct all of its employees and other personnel to use
commercially reasonable efforts to keep the Premises clean and in good working order,
subject to ordinary wear and tear. Tenant agrees to submit to Landlord, from time to time,
proposals for capital expenditure projects that are in the best interests of the Gaming Operations
and, with Landlord’s concurrence, to implement and execute such projects in a manner so as to
permit the continuance of Gaming Operations and as not to interfere with the operation of the
Project.


 


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(b) Tenant shall not, without Landlord’s prior written consent, operate or permit to be
operated at the Project any coin or token-operated vending machines or similar devices for the sale
or leasing to the public of any goods, wares, merchandise, food, beverages, and/or service,
excluding automated teller machines if permitted by and pursuant to Applicable Laws. To remove any
uncertainty or doubt, this provision shall not apply to machines for the redemption of gaming
tickets, tokens or similar representations of cash.



(c) Except as expressly permitted in this Lease or as permitted by Landlord’s written consent,
Tenant shall not do, permit or suffer anything to be done or kept upon the Premises which will
obstruct or interfere with the rights of Landlord. Except as expressly permitted in this Lease or
as permitted by Tenant’s written consent, Landlord shall not do, permit or suffer anything to be
done or kept upon the Premises which will obstruct or interfere with the rights of Tenant under
this Lease.



(d) The use of the Premises by Tenant, its agents, employees, customers or business invitees,
shall at all times be in compliance, in all material respects, with all covenants, conditions and
restrictions, easements, reciprocal easement agreements, rights of access, and other matters
presently of public record or which may hereafter be placed of public record, which affect the
Premises or the Hotel, or any part thereof. Tenant expressly acknowledges and agrees that Landlord
shall have the right to record against the Hotel, including the Premises, additional covenants,
conditions, restrictions, easements, reciprocal easement agreements, rights of access and/or other
matters without the consent of Tenant, subject in all cases to Section 11.1 herein. Tenant’s rights
under this Lease shall be subordinate to usual and customary covenants, conditions, restrictions,
easements, reciprocal easement agreements, rights of access and other comparable encumbrances
restrictions that are intended to encumber or benefit the Hotel, subject in all cases to Section
11.1 herein.



(e) Tenant shall not, without prior express written consent of Landlord, which consent shall
not be unreasonably withheld, to the extent that such materials are consistent with materials used
in the ordinary course of business for the Casino, keep, use or store or allow to be kept, used or
stored, upon or about the Project any Hazardous Materials. “Hazardous Materials” shall
mean and include any substance or material containing one or more of any of the following:
“hazardous material,” “hazardous waste,” “hazardous substance,” “regulated substance,” “petroleum,”
“pollutant,” “contaminant, “polychlorinated biphenyls,” “lead or lead-based paint”, “mold” or
“asbestos” as such terms are defined in any applicable Environmental Laws in such concentration(s)
or amount(s) as may impose clean-up, removal, monitoring or other responsibility under the
Environmental Laws, as the same may be amended from time to time, or which may present a risk of
harm to guests, invitees or employees at the Premises. “Environmental Laws” shall mean all
federal, state and local laws, rules and regulations (now or
hereafter in effect) dealing with the use, generation, treatment, storage, disposal or
abatement of Hazardous Materials.


 


13









 





(f) Tenant shall not, without Landlord’s prior written consent, operate or permit to be
operated within the Premises any food and beverage outlets, or cause any food and beverage to be
brought into the Premises other than through the Project. Tenant hereby acknowledges and agrees
that the sole source of food and beverage to be provided to guests within the Casino shall be from
the Project (excluding the Premises).



(g) Tenant shall purchase hotel guest rooms and suites for its Casino guests as necessary from
the Project, at such rates as agreed by the Hotel Operator. Tenant shall use good faith efforts to
maximize its purchase of guest rooms and suites at the Project for its guests.



6.5 Maintenance by Tenant. Except and only to the extent otherwise provided in
Section 9.2, Tenant agrees that, from and after the Commencement Date of this Lease and at all
times during the Term, it will keep the Premises neat and clean, and maintain the Premises in good
order, condition and repair and every part and portion thereof, in a tenantable and attractive
condition, consistent with the terms hereof (whether or not the need for such maintenance and
repairs occurs as a result of Tenant’s use, any prior use, the elements or the age of the Project
or any portion thereof), and Tenant shall with commercially reasonable promptness and diligence
make all necessary and appropriate repairs and replacements thereto. All repairs shall be made in
a good, workmanlike manner, consistent with industry standards and in accordance with all
Applicable Laws relating to any such work. Tenant further agrees that the Premises shall be kept
in a clean, sanitary and safe condition, normal wear and tear excepted, in accordance with all
Applicable Laws and in accordance with all directions, rules and regulations of all governmental
authorities, including, without limitation, the health officers, fire marshal, building inspector,
business license department, and other proper officers of all such governmental authorities having
jurisdiction over the Project.



6.6 Compliance with Applicable Laws; Tenant Maintenance. Tenant shall comply with all
Applicable Laws during the term affecting the Premises or Tenant’s use thereof in all material
respects. Tenant shall not use the Premises so as to create waste or constitute a nuisance or
disturbance. Tenant shall keep all of Tenant’s furniture, fixtures and equipment located on the
Premises neat and clean and in good working order, condition and repair. All such repairs shall be
made in good, workmanlike manner, consistent with industry standards, in accordance with all
Applicable Laws.



6.7 Alterations. Tenant shall not make any structural or non-structural alterations or
replacements of any nature or description to the Premises without having first obtained Landlord’s
prior written approval which approval shall not be unreasonable withheld or delayed.



6.8 Signs. Tenant shall not place or install any sign on the exterior of the Premises
or the Project without first obtaining, in each instance, Landlord’s prior written approval. Tenant
shall have the right to post reasonable signs on the interior of the Premises which might
facilitate
Tenant’s business, provided the same are in accordance with applicable law, ordinances or
statutes.


 


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6.9 Surrender of Improvements. All additions, improvements and fixtures which may be
made or installed by either Landlord or Tenant, upon the Premises during the Term shall remain upon
the Premises and, at the termination of this Lease, shall be surrendered with the Premises as a
part thereof and shall be the property of Landlord; provided that, except as provided in Section
3.3(b), Tenant shall have the right to remove any Gaming Assets constituting trade fixtures. Any
damage caused by such removal shall be repaired by Tenant and the Project shall be surrendered to
Landlord in “broom clean” condition. Tenant shall remove its equipment and trade fixtures from the
Project as soon as reasonably possible after the expiration or earlier termination of the Lease
Term. In the event Tenant shall fail to remove any personal property or trade fixtures of Tenant
within thirty (30) calendar days of the expiration or earlier termination of the Term, Landlord
may, subject to the Nevada Gaming Laws, at Tenant’s cost and expense, remove all of such equipment,
property and trade fixtures not so removed and reasonably repair all damage to the Project
resulting from such removal, and Tenant shall pay the cost thereof within ten (10) days after
receipt of an invoice therefore from Landlord.



6.10 Personal Property and Use Taxes. Tenant shall be responsible for and shall pay
when due all federal, state and local income, gaming, employment, and all other fees and/or taxes
due and owing upon Tenant’s income, revenue from gaming, property, employees and the fees and costs
for Regulatory Approvals arising or assessed as a result of Tenants Gaming Operations and/or use
and occupation of the Premises.



6.11 Surrender of the Premises. Upon expiration or earlier termination of this Lease,
Tenant shall surrendered the Premises to Landlord generally in the same condition as at the
commencement of the Term, ordinary wear and tear excepted, except to the extent of improvements
made by Landlord or Tenant. Upon such termination of this Lease, except as provided in Section 3.3
(b),Tenant shall remove all of its furniture, furnishings, and all gaming devices and associated
equipment (as such Terms are defined in from the Premises and the Premises shall be surrendered to
Landlord in “broom clean” condition. Tenant shall comply with all Applicable Laws and directives of
the Nevada Gaming Authorities with respect to the termination of Tenant’s Gaming Operations on the
Premises.



ARTICLE VII

INDEMNITY AND LIABILITY




7.1 Indemnification of Landlord. Except to the extent directly arising from
the gross negligence or intentional misconduct of Landlord, Hotel Manager or any of their
respective agents, contractors or employees, Tenant hereby agrees to defend (with counsel
reasonably acceptable to Landlord), indemnify and save and hold harmless Landlord from and against
all Claims of whatever nature (a) arising from or in connection with the operation of the Premises
or any wrongful act, omission or negligence of Tenant or the contractors, licensees, agents,
servants or employees of Tenant (collectively, the “Tenant Parties”), or arising from any
accident, injury or damage whatsoever caused to any person, or to the property of any person,
including that of Landlord or any Tenant Party,


 


15









 






occurring during the Term on or about or as a result of Tenants use
of the Premises, including any claim by a third person in connection with damage to the Project or
any Tenant Party’s property located therein or property of any person within the Project, (b)
arising from any accident, injury or damage occurring outside of the Premises, where such accident,
injury or damage results from a wrongful act, omission or negligence on the part of Tenant or any
Tenant Party, (c) arising from any and all claims by any Tenant Party’s employees, including,
without limitation, wrongful termination and/or other claims resulting from the termination of any
Tenant Party’s employees, (d) arising due to the failure of any Tenant Party to obtain or maintain
any necessary Approvals, (e) arising due to any breach or violation of this Lease by Tenant,
including, without limitation, any holdover at the Premises or the presence of any Hazardous
Materials on or about the Premises as a result of the acts or omissions of any Tenant Party, or (f)
arising as a result of Landlord, Hotel Manager or any of their respective agents, contractors or
employees taking any direction from any Tenant Party. In furtherance of the responsibility set
forth herein, the parties agree that Tenant shall obtain and pay for all insurance as set forth in
Article VIII hereof, and have Landlord named as an additional insured or loss payee, as applicable,
under all such policies.



7.2 Tenant’s Own Risk. Except as provided in Sections 7.3 and 7.4 of this Lease,
Tenant agrees to use and occupy the Premises as it is herein given the right to use, at its own
risk, and Landlord shall have no responsibility or liability for any loss of or damage to fixtures
or other property of Tenant or any property leased to Tenant (including property leased hereunder)
or for use and operations relating to the Premises.



7.3 Liability of Landlord. Landlord shall not be responsible or liable to Tenant, or
to those claiming by, through or under Tenant, for any loss or damage that may be occasioned by or
through the acts or omissions, negligent or otherwise, of third persons or for any loss or damage
resulting to Tenant or Tenant’s agents, employees, or invitees, or those claiming by, through or
under Tenant, except for acts caused by the intentional or grossly negligent acts or omissions of
Landlord or Landlord agents, contractors, licensees or employees.



7.4 Indemnification by Landlord. Except to the extent arising from the gross
negligence or intentional misconduct of Tenant or any of its agents, contractors or employees,
Landlord hereby agrees to defend (with counsel reasonably acceptable to Tenant), indemnify and save
and hold harmless Tenant from and against all claims of whatever nature (a) arising from or in
connection with the operation of the Hotel or the Project (except for the Premises) or arising from
any wrongful act, omission or negligence of Landlord or Landlord’s contractors, licensees, agents,
servants or employees, or arising from any accident, injury or damage whatsoever caused to any
person, or to the property of any person, including that of Tenant’s or Landlord’s agents or
employees, occurring during the Term, at the Project (excluding the Premises) including any claim
by a third person in connection with damage to the property of any person within the Project
(excluding the Premises), (b) arising from any accident, injury or damage occurring outside of the
Premises, where such accident, injury or damage results from a wrongful act or omission on the part
of Landlord or Landlord’s agents or employees, or (c) arising from any and all claims by Landlord’s
employees, including, without limitation, wrongful termination and/or other claims resulting from
the termination of Landlord’s employees, if any, at the Project,
including such claims arising due to (i) the failure of Landlord to obtain or maintain any
necessary Approvals, or (ii) a closure of the business (other than the Gaming Operations) conducted
on the Project for any reason. Landlord further covenants and agrees to defend, indemnify and save
and hold harmless Tenant from any and all claims in connection with or arising out of any
obligations assumed by Landlord and accruing after the termination of this Lease, except for any
debts under any obligations or contracts defined as Gaming Expenses hereunder, for which Tenant
agrees to defend, indemnify and hold Landlord harmless.


7.5 Survival. All indemnities set forth herein shall survive expiration or earlier
termination of this Lease.



 


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ARTICLE IIX

INSURANCE




8.1 Landlord Insurance Required. Except for the insurance Tenant is
required to obtain and maintain pursuant to Section 8.2 below, Landlord shall carry and maintain,
at Landlord’s expense, insurance in type and amount as required pursuant to this Lease, which shall
in amounts and types no less than is usual and customary in the industry for similar commercial
property.



8.2 Tenant Insurance Required. Tenant shall obtain and maintain, or cause to be
maintained, at all times insurance during the Term the following insurance coverages with insurance
companies possessing a minimum A.M. Best rating of A-XII and in form satisfactory to Landlord the
following coverages:



(a) Commercial general liability insurance (and, if applicable, including Products Liability)
covering bodily injury (including personal injury) and property damage, however occasioned in or
about the Premises and to the extent caused by Tenant or Tenant’s employees, agents, subtenants,
sub-concessionaires, suppliers or independent contractors, all other portions of the Project, in an
amount not less than $5,000,000 per occurrence. The insurance shall include contractual liability
coverage. Such limit may be satisfied through any combination of primary and umbrella liability
policies, provided that if umbrella liability coverage is obtained, said umbrella limits should
also be excess over any auto liability policy;



(b) Property and Business Interruption (“BI”) Insurance on an all-risk or special risk
form covering all of Tenant’s furniture, fixtures, equipment and any other personal property owned
or used in Tenant’s operations and found in, on or about the Premises or elsewhere in the Project,
and any leasehold improvements to the Premises, in an amount not less than the full replacement
cost, including, without limitation, plate glass insurance. The BI coverage shall cover any
contractual continuing rental obligation may have after an insured loss, provided that Landlord’s
only interest shall be to the extent of payment of the Rent and other amounts payable to Landlord
hereunder and Tenant shall have all right, title and interest in and to the proceeds of any other
BI payments or reimbursements. All property insurance policy proceeds shall be used for the repair
or replacement of the property damaged or destroyed.


 


17









 





(c) Comprehensive “all risk” insurance on the Gaming Assets, in each case (i) in an amount
equal to the full insurable replacement cost thereof, which for purposes of this Lease shall mean
actual replacement value with a waiver of depreciation; and (ii) containing such endorsements and
covering such additional risks as Tenant shall determine in its discretion;



(b) business income insurance (i) with loss payable to Tenant; (ii) covering all risks covered
by the insurance provided for in subsection (a) above; and (iii) in such amounts and for such terms
of loss as Tenant shall determine in its discretion; and



(c) workers’ compensation, subject to the statutory limits of the State of Nevada, and
employer’s liability insurance relating to Tenant’s employees in respect of any work or operations
on or about the Project, or in connection with the Project or its operation (if applicable)
excluding Landlord’s employees, if any.



(d) If Tenant operates owned, hired or non-owned vehicles as a normal part of its operations
and activities at the Premises or the Project, automobile liability insurance covering bodily
injury and property damage with a combined single limit of not less than $1,000,000.



8.3 Insurers. All insurance provided for in this Lease shall be obtained under valid
and enforceable policies (collectively, the “policies” or in the singular, the “policy”), and shall
be issued by financially sound and responsible insurance companies, each with a AM Best rating as
required by Section 8.2, authorized to do business in the State of Nevada. All policies maintained
by Tenant hereunder (except Workers’ Compensation insurance) shall name Landlord and any other
parties as requested by Landlord as Additional Insureds. All policies maintained by Tenant shall
provide thirty (30) days prior written notice to the Additional Insureds of any termination,
cancellation or material change to such policies. All policies maintained by Tenant shall be
written as primary policies, not contributing with or supplemental to the coverage maintained for
any of the Additional Insureds. Prior to the commencement of the term hereunder, and from time to
time during the term hereof, Lessee shall furnish to Lessor certificates of insurance, naming
Landlord as certificate holder, and otherwise evidencing continuously current compliance with the
provisions of this paragraph. Not less than ten (10) days prior to the expiration dates of the
policies evidenced by such certificates of insurance, revised certificates evidencing renewal
policies shall be delivered by Tenant to Landlord.



8.4 Blanket Coverage. Any blanket insurance policy shall specifically allocate to the
Project the amount of coverage from time to time required hereunder and shall otherwise provide the
same protection as would a separate policy insuring only the Project in compliance with these
provisions.



8.5 Clauses. All policies provided shall contain clauses or endorsements to the
effect that:



(a) no act or negligence of the insured, or anyone acting for the insured, or any tenant or
other occupant, or failure to comply with the provisions of any policy, which might
otherwise result in a forfeiture of the insurance or any part thereof, shall in any way affect the
validity or enforceability of the insurance insofar as any party named as additional insured is
concerned;


 


18









 





(b) the policies by either party shall not be materially changed (other than to increase the
coverage provided thereby) or canceled without at least thirty (30) days’ prior written notice to
the other party and any other party named therein as an additional insured;



(c) any party named therein as an additional insured shall not be liable for any insurance
premiums thereon or subject to any assessments thereunder; and



(d) the policies shall not contain an exclusion for acts of terrorism or similar acts of
sabotage if such exclusion may be deleted at commercially-reasonable cost.



If at any time Landlord is not in receipt of written evidence that all insurance required hereunder
to be maintained by Tenant is in full force and effect, Landlord shall have the right, after
reasonable prior notice to Tenant, to take such action as Landlord deems necessary to protect its
interests, including, without limitation, obtaining such insurance coverage as Landlord in its
reasonable discretion deems appropriate. All premiums incurred by Landlord in connection with such
action or in obtaining such insurance and keeping it in effect shall be paid by Tenant as
additional Rent upon demand.



8.6 Payment of Premiums. Tenant shall pay all premiums for each policy of insurance
required by this Article IIX to be maintained by it when due and shall forward a certificate of
insurance evidencing the aforesaid coverage together with all appropriate endorsements and riders
to Landlord showing Landlord as an additional insured therein, as applicable.



8.7 Hazardous Activities. Tenant shall not use or occupy or permit the Project to be
occupied or used in a manner which will materially increase the rates of any insurance for the
Project or the overall development within which the Project is situated or that will make void or
voidable any insurance then in force with respect to the Project or the overall development within
which the Project is situated, or which will make it impossible to obtain fire or other insurance
with respect to the Project or the overall development within which the Project is situated. If
Tenant shall fail to comply with the provisions of this Section 8.7, Tenant shall reimburse
Landlord for any increases in insurance premium charged to Landlord as a result of Tenant’s
non-compliance with this Section 8.7 as additional Rent.



8.8 No Prohibited Activity. Tenant agrees that it will not keep, use, sell or offer
for sale in or upon the Project any article or permit any activity which may be prohibited by any
standard form of insurance policy.




8.9 Intentionally deleted.


 


19









 





8.10 Waiver of Subrogation. Landlord and Tenant each waive any and all rights to
recover against the other, or against any of the related parties or patrons or the other, for any
loss or damage to such waiving party arising from any cause covered by any property insurance
required to be carried by Tenant pursuant to this Article IIX or any property insurance actually
carried by Landlord, to the extent of the limits of such policy. Landlord and Tenant, from time to
time, shall cause their respective insurers to issue appropriate waiver of subrogation rights
endorsements to all property insurance policies carried in connection with the Project or the
Premises or the contents of the Project or the Premises. Tenant shall cause all subtenants or
other occupants of the Premises claiming by, under or through Tenant to execute and deliver to
Landlord such a waiver of claims and to obtain such waiver of subrogation rights endorsements.



8.11 Adequacy of Coverage. The Additional Insureds, and their respective employees,
representatives and agents make no representation or warranty that the limits of liability
specified to be carried by Tenant pursuant to this Article IIX are adequate to protect Tenant. If
Tenant believes that any of such insurance coverage is inadequate, Tenant shall obtain such
additional insurance coverage as Tenant deems adequate, at Tenant’s sole cost and expense. In
addition, Landlord hereby reserves the right to require Tenant to increase the coverage limits of
the policies to be carried by Tenant pursuant to this Article IIX from time to time (but not more
frequently than once a year) if such increase is reasonably deemed necessary or advisable based
upon what is commercially reasonable and prudent for commercial properties with operations similar
to Tenants in Nevada in order to protect the interests of Landlord.



8.12 No Co-Insurer. The parties do not intend for the Landlord to be a co-insurer of
the Tenant, and to that end, if the Tenant’s insurance proceeds are not adequate to cover Tenant’s
loss, Tenant, and not Landlord or Landlord’s insurance, will bear the difference between the
proceeds obtained and any legal or contractual obligation for the actual amount of the loss.
Further, the parties do not intend for the Tenant to be a co-insurer of the Landlord, and to that
end, if the Landlord’s insurance proceeds are not adequate to cover Landlord’s loss, Landlord, and
not Tenant or Tenant’s insurance, will bear the difference between the proceeds obtained and any
legal or contractual obligation for the actual amount of the loss.



ARTICLE IX

DELIVERY OF PREMISES AND COMPLIANCE WITH APPLICABLE LAWS




9.1 Delivery of Premises. Landlord and Tenant agree that Landlord has
delivered the Premises under this Lease in a clean, sanitary and safe condition in accordance with
Applicable Laws.



9.2 Operating Services. Landlord, at the option and upon the written request of
Tenant, shall provide janitorial services and miscellaneous building maintenance (collectively
(“Operating Services”) to Tenant for the Premises. Landlord shall invoice Tenant for the
Operating Services at Landlords cost (“Operating Expenses”). Tenant shall reimburse
Landlord for such Operating Expenses, as additional Rent, within thirty (30) days following the
receipt of the invoice from Landlord. Landlord shall provide to Tenant such supporting
documentation
regarding the allocation of Operating Expenses as Tenant may reasonably request from time to time.
For these purposes, Operating Services shall not include any obligations of Tenant or Landlord
under any other provision of this Lease.


 


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ARTICLE X

DAMAGE AND CONDEMNATION




10.1 Damage and Condemnation. In the event that during the Term the Project
shall be partially or substantially damaged or destroyed by fire or other casualty or taken by
condemnation or deed-in-lieu of condemnation, Landlord shall proceed forthwith to repair such
damage and restore the Project, to the extent of insurance funds (including the proceeds of
applicable policies maintained by Tenant) or condemnation proceeds, to substantially their
condition at the time of such damage, subject, however, to zoning laws and building codes then in
existence, or Landlord may opt to forego rebuilding the damaged portions of the Project and retain
all insurance or condemnation proceeds with respect to such casualty or condemnation, in which case
this Lease shall be deemed terminated and neither party shall have any continuing or further
obligation to the other.



10.2 Participation in Condemnation Award. In the event of any condemnation of the
Project or any portion thereof, Tenant shall not participate in any respect in any part of the
condemnation award that may be made. Nothing herein contained, however, shall preclude Tenant from
asserting as against the condemning authority its claim for injury or damages occasioned by such
condemnation to the Gaming Assets or for relocation benefits under Applicable Laws.



ARTICLE XI

LANDLORD’S COVENANT OF QUIET ENJOYMENT




11.1 Quiet Enjoyment. Tenant, on payment of the Rent and observing, keeping
and performing all of the terms and provisions of this Lease on its part to be observed, kept and
performed, shall lawfully, peaceably and quietly have, hold, occupy and enjoy the Premises during
the Term without hindrance or ejection by Landlord or by any persons lawfully claiming under
Landlord; provided, however, it is understood and agreed that this covenant and any and all other
covenants of Landlord contained in this Lease shall be binding upon Landlord and its successors
only with respect to breaches occurring during its and their respective ownership of Landlord’s
interest hereunder



11.2 Conduct of Gaming Operations. Landlord understands and agrees that Tenant will
have exclusive and complete control over Gaming Operations on the Premises and shall have full
authority to hire, discharge or discipline any and all of Tenant’s employees. Except as expressly
provided herein, Landlord understands and agrees that Tenant shall be free to conduct the Gaming
Operations on the Premises without interference from or direction by Landlord or any of its
affiliates. Neither Landlord nor any agent or representative of Landlord shall exercise,
either directly or indirectly, management or control of any kind whatsoever, over the conduct of
Gaming Operations on the Premises.


 


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ARTICLE XII

LIENS




12.1 Liens. Tenant shall at all times indemnify, save and hold Landlord,
the Project, the Premises and the leasehold created by this Lease free, clear and harmless from any
and all claims, liens, demands, charges, encumbrances, litigation and judgments arising directly or
indirectly out of any use, occupancy or activity of Tenant or out of any work performed, material
furnished or obligations incurred by Tenant in, upon or otherwise in connection with the Project.
With respect to any construction, alternation or repair contemplated by NRS 108.234, Tenant shall
give Landlord written notice at least ten (10) business days prior to the commencement of any such
work on the Premises to afford Landlord the opportunity of filing appropriate notices of
non-responsibility. Tenant shall, at its sole cost and expense, within thirty (30) days after
filing of any lien of record, obtain the discharge and release thereof. Nothing contained herein
shall prevent Landlord, at the cost and for the account of Tenant, from obtaining said discharge
and any discharge or release so obtained by Landlord shall be subject to Tenant’s reimbursement of
same as additional Rent payable within thirty (3) following written demand by Landlord.



ARTICLE XIII

EVENTS OF DEFAULT; REMEDIES; TERMINATION RIGHTS




13.1 Event of Default. The occurrence of any of the following events shall
constitute events of default by Tenant under the terms of this Lease, individually, an “Event
of Default,” and, collectively, “Events of Default.”



(a) Tenant shall neglect or fail to perform or observe any of the covenants, terms, provisions
or conditions contained in this Lease on its part to be performed or observed, except for payment
of Rent or any other monetary charges due hereunder or any of the events described in clauses
(c)-(i), below, within ten (10) days after written notice thereof from Landlord, or such additional
time as is reasonably required to correct any such default so long as Tenant commences the
correction within such ten (10) day period and proceeds thereafter with due diligence and in good
faith to cure same; in no event shall additional time to cure apply in cases where the Event of
Default in question may be cured on a timely basis by the payment of money in the amount due; or



(b) Tenant shall neglect or fail to pay Rent, as provided for in Article IV, or any other
monetary obligation at any time owing from Tenant to Landlord, whether or not expressed as
additional Rent, within ten (10) days after written notice thereof from Landlord; provided,
however, that Landlord need not give more than two (2) such notices in any twelve (12)-month period
for the payment of Rent and after the giving of such second notice, any further failures to pay
Rent within five (5) days after due during the remainder of such twelve (12)-month period will be
an Event of Default without any notice, cure or grace period; or


 


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



(d) Tenant fails to operate the Premises in accordance with the provisions hereof without the
consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed, and
such failure continues for more than two (2) consecutive hours or for more than two (2) hours in
the aggregate in any sixty (60)-day period, in violation of this Lease, except when due to or
caused by failure or lack of utility service, construction or other disruption by repair or
maintenance, a Force Majeure Event or any act or omission of Landlord or Landlord’s employees,
representatives or agents; or



(e) there is filed any petition in bankruptcy by Tenant, or Tenant is adjudicated as a
bankrupt or insolvent, or there is appointed a receiver or trustee to take possession of Tenant or
of all or substantially all of the assets of Tenant, or there is a general assignment by Tenant for
the benefit of creditors, or any action is taken by Tenant under any state of federal insolvency or
bankruptcy act, or any similar law now or hereafter in effect; or



(f) there is filed any petition in bankruptcy or for the appointment of a receiver or an
action for execution or attachment is filed against Tenant and such petition, action or levy
against Tenant is not dismissed within ninety (90) days after the filing thereof in effect for a
period of thirty (30) calendar days; or



(g) Tenant shall fail to maintain all necessary Approvals within grace periods provided by
applicable law; or



(h) Tenant commits any act or fails to take any action that is identified as an “Event of
Default” elsewhere in this Lease.



13.2 Remedies. Upon the occurrence of any Event of Default, Landlord may (i)
immediately, or at any time thereafter, without further demand or notice, terminate this Lease,
Tenant’s right of possession under this Lease without any further liability of Landlord hereunder
in accordance with Applicable Law, at which time all Rent and other amounts due for Operating
Expenses and other sums payable by Tenant to Landlord hereunder shall immediately become due and
Payable up to the time of termination; (ii) re-let the Premises, or any part of parts thereof,
either in Landlord’s name or otherwise, for a term or terms which may, at Landlord’s option, be
less than or exceed the remaining Term; (iii) recover from Tenant on a monthly basis, as liquidated
damages for Tenant’s failure to observe and perform its covenants under this Lease, the deficiency
between the Rent and Operating Expenses hereby reserved and/or agreed and all other amounts payable
by Tenant to Landlord hereunder and the net amount, if any, or the rents actually paid to Landlord
by the person or entity to which or whom the Premises are relet, for each month of the balance of
the Term, and (iv) exercise any and all other remedies available to Landlord at law or in equity
under the laws of the State of Nevada, including, without limitation, any damages resulting from
such Event of Default. All of Landlord’s remedies provided herein or at law or in equity are
cumulative with and non-exclusive of each other. In computing
liquidated damages there shall be added to the deficiency all reasonable expenses that Landlord may
incur in connection with re-letting, such as brokerage and preparation for re-letting.


 


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13.3 Waiver. It is covenanted and agreed that no waiver at any time of any of the
provisions hereof shall be construed as a waiver at any subsequent time of the same provisions.
The consent or approval of Landlord to or of any action by Tenant requiring Landlord’s consent or
approval shall not be deemed to waive or render unnecessary Landlord’s consent or approval to or of
any subsequent similar act by Tenant.



13.4 Default of Landlord. Landlord shall be in default under this Lease in the event
Landlord fails to perform any of the covenants, terms, provisions or conditions contained in this
Lease on its part to be performed within thirty (30) days after written notice thereof from Tenant,
or such additional time as is reasonably required to correct any such default, but in no event more
than an additional thirty (30) days (provided that such limitation to an additional thirty (30)
days shall not apply to Landlord’s obligations to perform construction or repair activities that
take longer than thirty (30) days to perform with the exercise of due diligence). In the event of
a default of Landlord Tenant may exercise any and all remedies available to Tenant at law or in
equity under the laws of the State of Nevada.



13.5 Remedies Not Cumulative. The various rights, options, elections and remedies of
the parties hereunder shall be cumulative and no one of them shall be construed as exclusive of any
other, or of any right, priority or remedy allowed or provided for by law and not expressly waived
in this Lease.



ARTICLE XIV

REPRESENTATIONS AND WARRANTIES




14.1 Representations and Warranties of Landlord. Landlord hereby makes the
following representations and warranties to Tenant as of the Commencement Date:



(a) Landlord has the full right, power and lawful authority to enter into and to carry out the
terms and provisions of the Lease and the other agreements provided herein and consummate the
transactions contemplated by this Lease, including, without limitation, the lease from Landlord of
the Casino, and other than the Approvals of the Nevada Gaming Authorities, which Tenant covenants
and agrees it shall have as of the Commencement Date and at all times during the Term, no Approval
of any Governmental Authority or any other third person is required in connection therewith and
this Lease constitutes the legal, valid and binding Lease of Landlord, enforceable in accordance
with its terms, except to the extent that enforcement may be affected by laws relating to
bankruptcy, reorganization, insolvency and creditors’ rights and by the availability of injunctive
relief, specific performance and other equitable remedies;



(b) neither the execution and delivery of this Lease, nor the consummation of the transactions
contemplated hereby, will conflict with or result in a violation or breach of term or provision of,
or constitute a default under (i) any order, judgment, writ, injunction, decree, license, permit,
statute, rule or regulation of any court, governmental, regulatory or public body; or (ii) any
license, franchise, permit, indenture, mortgage, deed of trust, lease, contract,
instrument, commitment or other lease or arrangement to which Landlord is a party or by which
Landlord or the Premises, as applicable, is bound;


 


24









 





(c) the Project has all necessary utilities, including electricity, water, sewerage and gas
available at the Project sufficient in nature and scope for the operations of a casino; and



(d) no representation or warranty by Landlord contained in this Lease contains any untrue
statement of a material fact or omits to state a material fact necessary in order to make the
statement and facts contained herein not misleading.



14.2 Representations and Warranties of Tenant. Tenant hereby makes the following
representations and warranties to Landlord as of the Commencement Date:



(a) Tenant has the full right, power and lawful authority to enter into and to carry out the
terms and provisions of the Lease, including, without limitation, the lease from Landlord of the
Casino, and other than the Approvals of the Nevada Gaming Authorities, which Tenant covenants and
agrees it shall have as of the Commencement Date and at all times during the Term, no Approval of
any Governmental Authority or any other third person is required in connection therewith and this
Lease constitutes the legal, valid and binding Lease of Tenant, enforceable in accordance with its
terms, except to the extent that enforcement may be affected by laws relating to bankruptcy,
reorganization, insolvency and creditors’ rights and by the availability of injunctive relief,
specific performance and other equitable remedies;



(b) neither the execution and delivery of this Lease, nor the consummation of the transactions
contemplated hereby, will conflict with or result in a violation or breach of any term or provision
of, or constitute a default under (i) any order, judgment, writ, regulatory or public body; or (ii)
any license, franchise, permit, indenture, mortgage, deed of trust, lease, contract, instrument,
commitment or other Lease or arrangement to which Tenant is a party or by which it or Tenant’s
property, as applicable, is bound; and



(c) no representation or warranty by Tenant contained in this Lease contains any untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statement and facts contained therein not misleading.



ARTICLE XV

ESTOPPEL CERTIFICATES




15.1 Estoppel Certificates. Tenant shall at any time and from time to time,
within ten (10) days of written notice from Landlord, execute, acknowledge and deliver to Landlord
and any prospective purchaser or lender identified by Landlord a statement in writing (a)
clarifying that this Lease is unmodified and in full force and effect, or, if modified, stating the
nature of such modification and certifying that this Lease as so modified, is in full force and
effect, and the date to which the rental and other charges are paid in advance or delinquent, if
any, (b) certifying the commencement and termination date of the Lease, (c) certifying that there
has been no assignment or other transfer by Tenant of this Lease, or any interest therein, and (d)
acknowledging that there are not, to Tenant’s knowledge, any uncured defaults on the part of
Landlord hereunder and that Tenant has no right of offset, counterclaim or deduction against Rent,
or specifying such default if any are claimed together with the amount of any offset, counterclaim
or deduction alleged by Tenant. Any such statements may be relied upon by any existing owner or
prospective purchaser or any present or prospective lender upon the security of the Premises.
Tenant’s failure to deliver such statement with such time shall be conclusive and binding upon
Tenant (x) that this Lease is in full force and effect, without modification except as may be
represented by Landlord, and that the status of Rent payments is as certified by Landlord (y) that
there are no uncured defaults in Landlord’s performance and that Tenant has no right of offset,
counterclaim or deduction against rental, and (z) that no more than one (1) month’s Rent has been
paid in advance.


 


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ARTICLE XVI

ASSIGNMENT OR SUBLETTING




16.1 Assignment. Tenant shall not assign, mortgage, pledge, hypothecate or
encumber this Lease nor leasehold estate hereby created or any interest herein, or sublet the
Premises or any portion thereof, or license the use of all or any portion of the Premises without
Landlord’s prior written consent, which consent shall not unreasonably be withheld; provided,
however, any such assignee must have all Approvals necessary for such assignee’s performance of its
respective obligations hereunder; provided further, however, no assignment shall release Tenant of
any of its obligations under this Lease or be construed as, or constitute a waiver of, any of
Landlord’s rights or remedies hereunder. The acceptance of Rent by Landlord from any other person
shall not be deemed to be a waiver of any provision of this Lease or consent to the assignment of
Tenant’s interest in this Lease. Absent a written agreement to the contrary which is executed by
Landlord, no assignment, mortgage, pledge, hypothecation or encumbrance of this Lease by Tenant
shall act as or effect a release of Tenant from any of the agreements, obligations and covenants of
this Lease to be performed by Tenant hereunder.



17.2 No Merger. The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation hereof, or the termination of this Lease by Landlord pursuant to any provision
contained herein, shall not work a merger, but at the option of Landlord, shall either terminate
any or all existing subleases or sub-tenancies, or operate as an assignment to Landlord of any and
all such subleases or sub-tenancies as determined by Landlord, exercisable in Landlord’s sole
discretion.



17.3 No Passage by Law. It is understood and agreed that neither this Lease nor any
interest herein or hereunder, nor any estate hereby created in favor of Tenant, shall pass by
operation of law under any state or federal insolvency; bankruptcy or inheritance act, or any
similar Applicable Law now or hereafter in effect, to any trustee, receiver, assignee for the
benefit of creditors, heir, legatee, devisee, or any other person whomsoever without the express
prior written consent of Landlord, exercisable in Landlord’s sole discretion.


 


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ARTICLE XVIII

RIGHT OF ACCESS




18.1 Right of Entry. Subject to Nevada Gaming Laws, Landlord and its authorized
agents and representatives shall be entitled to enter the Premises and any portion thereof at any
reasonable time for the purpose of (a) observing, posting or keeping posted thereon notices
provided for hereunder, and such other notices as Landlord may deem necessary or appropriate for
protection of Landlord, its interest or the Premises, (b) inspecting the Premises or any portion
thereof, (c) inspecting the Premises relative to concerns over use, storage or disposal of
Hazardous Materials, and (d) making repairs to the Premises or any portion thereof and performing
any work therein or thereon which Landlord may elect or be required to make hereunder, including,
without limitation, any maintenance and repairs, or which may be necessary to comply with any
Applicable Laws or any applicable standards that may, from time to time, be established by an
insurer, or which Landlord may deem necessary or appropriate to prevent waste, loss, damage or
deterioration to or in connection with the Premises or any other portion of the Project or for any
lawful purpose. In no event shall Landlord have access to any area for which access is restricted
in accordance with Nevada Gaming Laws, except pursuant to such laws. Except in emergency
situations, Landlord shall give Tenant at least twenty-four (24) hours prior notice of entry.
Landlord shall have the right to use any means which Landlord may deem proper to open all doors in
the Premises in an emergency. Entry into the Premises obtained by Landlord by any such means shall
not be deemed to be forcible or unlawful entry into, or a detainer of, the Premises, or an eviction
of Tenant from the Premises or any portion thereof. Nothing contained herein shall impose or be
deemed to impose any duty on the part of Landlord to do any work or repair, maintenance,
reconstruction or restoration, which under any provision of this Lease is required to be done by
Tenant, and the performance thereof by Landlord shall not constitute a waiver of Tenant’s default
in Tenant’s failure to do the same.



ARTICLE XIX

SUBORDINATION




19.1 Subordination by Tenant. Tenant agrees that this Lease and its rights
hereunder are subject and subordinate to the lien of any mortgage, deed of trust or other
encumbrance, together with any renewals, extensions or replacements thereof, now or hereafter
placed, charged or enforced against the Project, or any portion thereof, and Tenant agrees to
execute and deliver at any time, and from time to time, upon ten (10) calendar days written demand
by Landlord, such documents as may be reasonably requested to evidence and confirm such
subordination (but no such document shall be necessary to effectuate such subordination), and in
the event that Tenant shall fail, neglect or refuse to execute and deliver any such documents to
be executed by it within ten (10) calendar days after receipt of written request by Landlord,
Tenant hereby appoints Landlord, its successors and assigns, the attorney-in-fact of Tenant
irrevocably to execute and deliver any and all such documents for and on behalf of Tenant;
provided, however, that such subordination is and shall be subject to the condition that the
mortgagee or beneficiary named in such mortgage or deed of trust shall recognize this Lease and
shall not disturb the possession of Tenant hereunder so long as Tenant is not in default under this
Lease beyond
applicable periods of grace. Tenant acknowledges that the power of attorney granted hereby is
coupled with an interest.


 


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19.2 Deemed Prior Lien. In the event that the mortgagee or beneficiary of any such
mortgage, deed of trust, or other encumbrance elects to have this Lease deemed a prior lien to its
mortgage, deed or trust, or other encumbrance, then and in such event, upon such mortgagee’s or
beneficiary’s giving written notice to Tenant to that effect, this Lease shall be deemed a prior
lien to such mortgage, deed of trust, or other encumbrance, whether this Lease is dated prior to or
subsequent to the date or recordation of such mortgage, deed or trust, or other encumbrance.



19.3 Attornment. Tenant shall, in the event any proceedings are brought for the
foreclosure of any mortgage, deed of trust, or other encumbrance against the Project or the
Premises or in the event of exercise of the power of sale under any deed of trust covering the
Premises or the Project or termination of any ground lease of the Premises or the Project, attorn
to the purchaser upon such foreclosure or sale, and recognize such purchaser as Landlord under this
Lease so long as neither this Lease nor any of the rights of Tenant hereunder shall be terminated
or modified or be subject to termination or modification so long as Tenant is not in default under
this Lease beyond applicable periods of grace.



ARTICLE XX

MISCELLANEOUS PROVISIONS 




20.1 Governing Law; Consent to Jurisdiction. This Lease shall be construed
and interpreted in accordance with and shall be governed and enforced in all respects according to
the laws of the State of Nevada, without giving effect to conflicts of laws principles. Tenant and
Landlord each agree to the exclusive jurisdiction of any state or federal court within the County
of Washoe, State of Nevada, with respect to any claim or cause of action arising under or relating
to this Lease, and waive personal service of any and all process upon it and consent that all
services of process be made by registered mail, directed to it at its address as set forth in
Section 20.12 and service so made shall be deemed to be completed when received. Tenant and
Landlord each waive any objection based on forum non conveniens and waive any objection to venue of
any action instituted hereunder. Nothing in this Section 20.1 shall affect the right of Tenant or
Landlord to serve legal process in any other manner permitted by Applicable Laws.



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



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


 


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20.4 Binding. Except as herein otherwise expressly provided, the terms hereof shall
be binding upon and shall inure to the benefit of the heirs, executors, administrators, successor
and assigns of Landlord and Tenant, subject to restrictions on assignment of this Lease as provided
herein. Notwithstanding the foregoing, this Lease and Tenant’s obligations hereunder are not
assignable by Tenant without Landlord’s prior written consent which shall not be unreasonably
withheld subject to all required Gaming Approvals.



20.5 Attorney’s Fees. Each party hereto shall bear its own professional fees and
expenses incurred by such party in connection with, relating to or arising out of the execution,
delivery and performance of this Lease and the consummation of the transactions contemplated
hereby; provided, however, in the event any dispute between Landlord and Tenant should result in
litigation, the prevailing party shall be reimbursed for all costs incurred in connection with such
litigation, including, without limitation, reasonable attorneys’ fees and costs.



20.6 Entire Agreement; Amendments. This Lease contains the entire agreement and
understanding of the parties with respect to the subject matter hereof and cannot be changed or
terminated orally.



20.7 Interpretation. Plural shall be substituted for the singular form and vice versa
in any place of places herein in which the context required such substitution or substitutions.



20.8 Liens. Should any claim or lien be filed against the Project or the Leased
Premises, or any action or proceeding is instituted affecting the title to the Project, Tenant
shall give Landlord written notice thereof as soon as reasonably possible after Tenant obtains
actual or constructive knowledge thereof.



20.09 No Partnership. Nothing contained in this Lease shall be deemed or construed by
the parties hereto or by any third party to create any relationship between Landlord and Tenant
other than the relationship of Landlord and Tenant.



20.10 Recordation. This Lease or memorandum thereof may not be recorded by Tenant
without the written consent of the Landlord.



20.11 Time. Time of the essence of this Lease and all of the terms and conditions
hereof.



20.12 Notice. Any and all notices or demands that either party hereto desires or is
required to give to the other party pursuant to this Lease shall be in writing and delivered in
person, sent by overnight courier (with confirmation of delivery) or sent by express, certified or
priority U.S. mail postage prepaid (return receipt requested), addressed as follows:



	 	 	 
	If to Landlord:

	 	Hyatt Equities, L.L.C.
	 

	 	Hyatt Center
	 

	 	71 South Wacker Drive
	 

	 	Chicago, Illinois 60606
	 

	 	Attn: General Counsel





 


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	If to Tenant:

	 	Gaming Entertainment (Nevada) LLC
	 

	 	c/o Full House Resorts, Inc.
	 

	 	4670 So. Fort Apache Road, Suite 190
	 

	 	Las Vegas, NV 89147
	 

	 	Attn: General Counsel






or to such other person or place as either party hereto my designate in writing in the manner
provided herein for giving notice. Each such notice so delivered, couriered or mailed shall be
deemed delivered when personally delivered, as of the first business day after the date so sent by
courier, or as of the third business day after the date so sent by mail, as the case may be.



20.13 Counterparts. This Lease may be executed in counterparts and all of such
counterparts, taken together, shall be deemed part of one instrument.



20.14 Gaming Authorities Requirements. Landlord and Tenant agree that notwithstanding
any of the provisions herein, if at any time during the Term, the Nevada Gaming Authorities require
or prohibit any act on the part of Landlord or Tenant, Landlord or Tenant, as applicable, shall
comply with such requirement or prohibition as the case may be, and any such compliance shall not
be deemed a breach of this Lease.



20.15 Waiver of Jury Trial. TENANT AND LANDLORD WAIVE ANY RIGHT TO TRIAL BY JURY OR TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE,
BETWEEN LANDLORD AND TENANT ARISING OUT OF THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.



20.16 Landlord’s Lien/Security Interest. Subject to Applicable Laws, including
specifically the Nevada Gaming Laws, Tenant hereby grants Landlord a security interest, and this
Lease constitutes a security agreement, within the meaning of and pursuant to the Nevada Uniform
Commercial Code as to all of Tenant’s property situated in, or upon, or used in connection with the
Project (collectively, the “Collateral”) as security for all of Tenant’s obligations hereunder,
including without limitation, the obligation to pay Rent and such other sums as Tenant is required
to pay to Landlord hereunder whether or not denominated as Rent. Subject to Applicable Laws, such
personal property thus encumbered includes specifically all of Tenant’s gaming devices and
associated equipment (as those terms are defined in NRS 463.0155 and 463.0136), furniture, fixtures
and equipment and all trade and other fixtures and inventory, equipment, contract rights, accounts
receivable and the proceeds thereof. Tenant hereby irrevocably authorizes Landlord and/or
Landlord’s agent to file such Uniform Commercial Code and other filings as Landlord deems
appropriate in order to perfect such security interest. Tenant further agrees to sign such other
financing statements or other documents as reasonably requested by Landlord to further secure
Landlord’s interest under this paragraph as often as
Landlord in its discretion requires. Landlord understands and agrees that its lien and security
interest is subject and subordinate to the prior lien and security interests held by Wells Fargo
Bank, NA and its affiliates.


 


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20.17 Transfer of Landlord’s Interest. Landlord shall be liable under this Lease only
while owner of the Premises. If Landlord should sell or otherwise transfer Landlord’s interest in
the Premises, then such purchaser/transferee shall be responsible for all of the covenants and
undertakings thereafter accruing of Landlord. Tenant agrees that Landlord shall, after such sale or
transfer of Landlord’s interest, have no liability to Tenant under this Lease or any modification
or amendment thereof, or extensions or renewals thereof, except for such liabilities which have
accrued prior to the date of such sale or transfer of Landlord’s interest to such
purchaser/transferee.



20.18 Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser
amount than any payment of Rent herein stipulated shall be deemed to be other than on account of
the earliest stipulated Rent, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment of Rent be deemed an accord and satisfaction, and Landlord may
accept such check or payment without prejudice to Landlord’s right to recover the balance of such
Rent or pursue any other remedy provided for in this Lease or available at law or in equity. Any
check purporting to be an accord and satisfaction must be delivered to the address to which notices
are to be sent hereunder (with copies to the addresses to which copies of such notices are to be
sent) and not to the address for payments.



20.19 Confidentiality. Landlord and Tenant agree to keep the terms and conditions of
this Lease confidential, provided, however, that Landlord or Tenant may disclose the terms of this
Lease (i) as required by law, (ii) as required by any government agency having jurisdiction over
this Lease, the Project, the Premises or Tenant, (iii) as may be necessary in connection with a
dispute between the parties, or (iv) as necessary, to their respective affiliates, investors,
lenders, employees, agents, attorneys, advisors or consultants (who shall be instructed to comply
with the confidentiality provisions of this Section 20.19). Tenant shall not release any public
announcement or press release concerning this Lease or the terms hereof without obtaining the prior
written consent of Landlord, which consent shall not be unreasonably withheld, conditioned, or
delayed, except as may be required by any applicable law, rule, or regulation.



20.25 Force Majeure. Landlord and Tenant will be excused for the period of delay in
the performance of any of their respective obligations hereunder, except their respective
obligations to pay any sums of money due under the terms of this Lease, and shall not be considered
in default, when prevented from so performing by any labor disputes, civil commotion, war, fire or
other casualty, changes (after the date of this Lease) in governmental regulations, statutes,
ordinances, restrictions or decrees, or through acts of God (collectively, “Force Majeure Events”).



20.26 Casino Lease subject to Nevada Gaming Authorities. Notwithstanding anything to
the contrary in this Lease, this Lease and all the terms and conditions herein are subject to the
provisions of Chapter 463 of the Nevada Revised Statutes and the Regulations of the Nevada
Gaming Commission and State Gaming Control Board adopted pursuant thereto (“Gaming Statute and
Regulations”). In the event of any conflict between the Gaming Statutes and Regulations and the
terms of this Lease, the Parties acknowledge, understand and agree that the Gaming Statutes and
Regulations shall govern and the terms of the Lease shall be deemed amended to conform thereto.


 


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ARTICLE XXI

CONDITION PRECEDENT




It is a condition precedent to the effectiveness of this Lease and of Landlord’s and Tenant’s
obligations hereunder that the Commencement Date occur by December 31, 2011 (the “Outside Closing
Date”). If the Commencement Date has not occurred by the Outside Closing Date for any reason, then
either party may terminate this Lease upon written notice provided to the other party at any time
after the Outside Closing Date, and thereupon, neither party will have any further obligations
hereunder.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



 


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



	 	 	 	 	 	 	 	 	 
	 	 	“LANDLORD”

 	 	 
	 	 	Hyatt Equities, L.L.C.	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Jerry M. O’Connor	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Jerry M. O’Connor	 	 
	 

	 	 	 	Its:
	 	VP-Tax	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	“TENANT”

 	 	 
	 	 	Gaming Entertainment (Nevada) LLC,	 	 
	 	 	a Nevada limited liability company	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By	 	/s/ Mark J. Miller	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Mark J. Miller	 	 
	 

	 	 	 	Its:
	 	COO/CFO	 	 







 


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