Exhibit
10.5


 


FIRST AMENDMENT


 


TO


 


JOINT
OPERATING LICENSE AGREEMENT


 


THIS FIRST
AMENDMENT TO JOINT OPERATING LICENSE AGREEMENT (the “Amendment”) is made
as of March 10, 2004 by and between SPEAKEASY GAMING OF FREMONT, INC., a
Nevada  corporation (“Speakeasy”)
and HHLV MANAGEMENT COMPANY, LLC, a Nevada limited liability company (“HHLV”).


 


Recitals


 


A.                                   Speakeasy and HHLV are parties to that
certain Joint Operating License Agreement, dated as of March 5, 2004 (the
“Joint Operating Agreement”). 
Capitalized terms not otherwise defined herein shall have the meanings
given them in the Joint Operating Agreement.


 


B.                                     Speakeasy and HHLV desire to amend the
Joint Operating Agreement in the manner set forth herein in order to assure
that a final round of the World Series of Poker be held at the Project during
2005.


 


Agreement


 


FOR GOOD AND
VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:


 


1.                                       Amendments.  The parties
hereby agree to the following amendments to the Joint Operating Agreement:


 


A.                                   Section 3.14 of the Joint Operating
Agreement is hereby deleted and replaced in its entirety with the following
provision:


 


“3.14  Operating Contracts.


 


(a)   Commencing on the Effective Date and for a
period of sixty (60) days thereafter, the Committee will undertake a review of
the operations of the Project and the Assignment and Assumption of Assumed
Contracts to (i) establish as complete and accurate a list of Project vendors
and Operating Contracts as is commercially practicable, (ii) determine which
Operating Contracts have a term which extends beyond the Term and which
Operating Contracts have rights of termination, and (iii) prepare a plan
identifying those Operating Contracts which HHLV and Speakeasy desire to
replace, renegotiate or terminate.  HHLV
shall use commercially reasonable efforts to implement the plan with respect to
Operating Contracts which is established by the Committee.


 


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(b) 
Without any approvals from the Committee or Speakeasy (i) HHLV may enter
into any amendment or modification of any Operating Contract that is terminable
by Speakeasy at the end of the Term (so long as after any such amendment, such
Operating Contract remains terminable by Speakeasy at the end of the Term), and
(ii) HHLV may enter into any non-material amendment or modification to any
Operating Contract that is not terminable by Speakeasy at the end of the Term;
provided, however, that unless otherwise approved by the Committee, HHLV shall
not enter into any material amendment or modification to any Operating Contract
that is not terminable by Speakeasy at the end of the Term, and (iii) HHLV may
enter into any new Operating Contract provided that such Operating Contract is
terminable by Speakeasy at the end of the Term.”


 


B.                                     The following Section 3.16 is hereby
added to Article III of the Joint Operating Agreement:


 


“3.16  Indemnities.


 


(a)  HHLV hereby indemnifies Speakeasy
for any loss, damage, claim, cost, charge or expense, including direct,
indirect or consequential loss, damage, claim cost, charge or expense, and also
including reasonable attorney’s fees and other costs of litigation, arising
after the end of the Term pursuant to obligations under Operating
Contracts not listed in Exhibit A to this Agreement, but only to the
extent that HHLV is able to recover such amounts from Horseshoe Club
Operating Company.


 


(b)  HHLV hereby indemnifies
Speakeasy for any loss, damage, claim, cost, charge or expense, including direct,
indirect or consequential loss, damage, claim cost, charge or expense, and also
including reasonable attorney’s fees and other costs of litigation, arising out
of the Union Agreements and accruing prior to the Effective Date.


 


(c)                                     The indemnities described in
Section 3.16(a) and 3.16(b) shall terminate at the end of the Initial
Term.”


 


C.                                     The following Section 3.17 is hereby
added to the end of Article III of the Joint Operating Agreement:


 


“3.17 
Parry Lease Payment.  The
parties acknowledge and agree that a Lease Buyout (as such term is defined in the Purchase and
Sale Agreement) of that certain Lease dated May 3, 1957, between O.L. Parry and
Stewart Kennard, Junior, Trustee, recorded as Instrument 183143 in Book 225 of
the Official Records of Clark County, Nevada, as amended, assigned or affected
by that certain First Amendment of Lease and Consent to Assignment of Lease,
dated September 21, 1984, recorded as Instrument 1990886 in Book 2031 of
the Official Records of Clark


 


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County, Nevada; that certain Second Amendment of
Lease, dated as of December 12, 1984, recorded as Instrument 2000565 in
Book 2041 of the Official Records of Clark County, Nevada; and that certain
Third Amendment of Lease, dated as of December 25, 1984, recorded as
Instrument 2000566 in Book 2041 of the Official Records of Clark County, Nevada
(the “Parry Lease”), has occurred.  The parties further acknowledge and agree that the remaining
lease payments owing under the Parry Lease pursuant to Section 1.3(d) of
the Purchase and Sale Agreement shall be $12,669 per month, regardless of the
actual amount of lease payments otherwise payable under the Parry Lease.


 


D.                                    Subparagraph (b) of Article X of the
Joint Operating Agreement is hereby deleted and replaced in its entirety with
the following provision:


 


“(b)  Speakeasy may assign or transfer (i) this Agreement to
any Affiliate of Speakeasy; provided, that a counterpart original of such
assignment is delivered to HHLV on or before the effective date of such
assignment, and provided further that such Affiliate of Speakeasy expressly
assumes and agrees to be bound by all of the terms and conditions of this
Agreement, or (ii) its right to receive the Speakeasy’s Remittance Amount to
Wells Fargo Bank, National Association (“Wells Fargo”) as collateral to
secure the loan from Wells Fargo to Speakeasy Parent.”


 


E.                                      The following Section 5.08 is hereby
added to the end of Article V of the Joint Operating Agreement:


 


“5.08  Websites; Computer Systems; Databases.


 


(a)  Subject to and in
accordance with the Intellectual Property License Agreement, HHLV shall, during
or by the end of the Term as deemed appropriate by HHLV, remove or cause to be
removed, any references on the website at www.binions.com or www.binions.net or
www.binions.org to any content, trademarks, logos or other indicia relating to
“Horseshoe,” “World Series of Poker” or any other “Retained Marks” (as such
term is defined in the Intellectual Property License Agreement) or intellectual
property rights or marks reserved by HHLV in the Intellectual Property License
Agreement.  Thereafter, subject to the
foregoing, Speakeasy may modify said website(s) with content, trademarks or
indicia approved by Speakeasy. HHLV shall give Speakeasy reasonable notice of
its intention to remove the foregoing from the websites and cooperate with
Speakeasy in order to avoid any unnecessary interruption in the operation
thereof.


 


(b)  Subject to and in
accordance with the Intellectual Property License Agreement, HHLV shall, at the
time or times during the Term deemed appropriate by HHLV, remove or cause to be
removed, any references in the computer systems or databases operated in
connection


 


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with the Project any data, databases, software
programs or software applications (including any related customizations,
modifications, or adaptations)  any
specific references to “Horseshoe,” “World Series of Poker” or any other Retained
Marks or intellectual property rights or marks reserved by HHLV in the
Intellectual Property License Agreement. Thereafter, subject to the foregoing,
Speakeasy may modify the above referenced media to include information approved
by Speakeasy. HHLV shall give Speakeasy reasonable notice of its intention to
remove the foregoing items from the media and cooperate with Speakeasy in order
to avoid any unnecessary interruption in the use thereof.”


 


F.                                      Speakeasy hereby acknowledges that HHLV
has funded a $250,000.00 security deposit in connection with the assignment by
Horseshoe Club Operating Company to Speakeasy of Horseshoe Club Operating
Company’s interest as tenant under that certain Lease, dated as of
January 20, 1981, between Horseshoe Garage, a Nevada limited partnership,
as landlord, and Horseshoe Club Operating Company, as tenant.  At the end of the Term, Speakeasy will pay
$250,000.00 to HHLV as reimbursement of the security deposit funded by HHLV;
provided that HHLV shall have in fact funded the security deposit and (i) no
claim has been made against said security deposit and (ii) the full security
deposit remains in place at that time.


 


G.                                     HHLV
shall have the right, at its option, to hold the final round of the World
Series of Poker or any preliminary rounds of the World Series of Poker prior to
the 2005 final round of the World Series of Poker (collectively, the “2005
WSOP”) at the Project; provided that, HHLV agrees to hold at least the two
final rounds of the World Series of Poker at the Project during 2005.  If
the 2005 WSOP or any portion thereof is held after the end of the Term at the
Project, then, subject to any applicable gaming laws or requirements and
receipt of any necessary gaming or other regulatory approvals, the following
shall apply:


 


(i)  HHLV or any of its Affiliates (the “2005
WSOP Operator”) shall have the right and license to conduct the
2005 WSOP at the Project at its own cost and expense in accordance with the
following provisions of this Paragraph F.


 


(ii)  Apart from the activities necessary to
conduct the 2005 WSOP at the Project, the 2005 WSOP Operator shall not hinder
or interfere with the operations of the Project.


 


(iii)  Speakeasy hereby grants the 2005 WSOP
Operator rights to access the Project and control the 2005 WSOP at the
Project as necessary or desirable to conduct the 2005 WSOP at the Project
in a first class manner that will not bring disrepute to the Project, including
such rights necessary or desirable to set up and prepare for the 2005 WSOP
and such rights necessary or desirable to dismantle and/or decommission the
2005 WSOP; provided that it is agreed and understood that Speakeasy shall have
exclusive control of all casino, hotel, food, beverage


 


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and other operations of
the Project not directly related to conducting the 2005 WSOP.


 


(iv)  The 2005 WSOP Operator shall obtain and
maintain any insurance necessary to conduct the 2005 WSOP in accordance
with the insurance requirements of the Joint Operating Agreement or Wells
Fargo, if applicable, as applicable to the 2005 WSOP.


 


(v)  The 2005 WSOP Operator shall have the
exclusive right to market the 2005 WSOP. 
The 2005 WSOP Operator shall retain all revenues generated from
television or other media coverage of the 2005 WSOP, any entrance fee requirements,
any shares of wagers customarily retained by the house or any other revenues
collected by the 2005 WSOP Operator directly in connection with conducting the
2005 WSOP at the Project. 
Notwithstanding the foregoing, any revenue generated at the Project from
poker games not conducted as part of the 2005 WSOP tournament shall be the sole
income of Speakeasy.


 


(vi)  Subject to the reimbursement requirements
set forth in Subparagraph (vii) of this Paragraph F, no Speakeasy Remittance
Amount or any other amounts shall be payable by the 2005 WSOP Operator to
Speakeasy in connection with the 2005 WSOP.


 


(vii)  Notwithstanding the expiration of the Term,
the Committee shall be reconstituted for purposes of determining the amount of
extraordinary costs (the “Extraordinary Costs”) incurred by Speakeasy in
operating the Project as a direct result of the conduct of the 2005 WSOP at the
Project by the 2005 WSOP Operator.  In
order to determine the amount of the Extraordinary Costs, the Committee shall
meet prior to the commencement of the 2005 WSOP to identify the physical
boundaries (the “Boundaries”) at the Project within which the 2005 WSOP
will be held, and shall in good faith prepare a plan (the “Plan”) to
identify and compute the amount of the Extraordinary Costs, which amount shall
be limited to event-related costs necessary to support the additional burdens
on the Project, including personnel and operations costs, that are primarily
incurred for the purpose of facilitating or supporting the conduct of the 2005
WSOP within the Boundaries.  Within a
reasonable time after the completion of the 2005 WSOP, Speakeasy shall compute
the amount of the Extraordinary Costs in accordance with the Plan (the “Reimbursement
Amount”).  After Speakeasy has
computed the Reimbursement Amount, the Committee shall again meet to in good
faith review the Plan and the Reimbursement amount, and shall either approve or
modify the Reimbursement Amount as it sees fit.  Once the Committee has approved or modified the Reimbursement
Amount, the 2005 WSOP Operator shall pay to Speakeasy the Reimbursement Amount,
as approved or modified by the Committee.


 


(viii)  Speakeasy and Speakeasy Parent may market
the 2005 WSOP on-site at its Mountaineer Park casino property in West Virginia
and Scioto Downs


 


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horse racing property in
Ohio to the extent and so long as such marketing is conducted in accordance
with the marketing template and format being utilized by the 2005 WSOP
Operator, which template and format will be provided in writing to Speakeasy.


 


(ix)  The 2005 WSOP Operator shall indemnify
Speakeasy for any loss, damage, claim, cost, charge or expense, including
direct, indirect or consequential loss, damage, claim cost, charge or expense,
and also including reasonable attorney’s fees and other costs of litigation,
arising out of the actions of the 2005 WSOP at the Project by the 2005 WSOP
Operator.


 


H.                                    HHLV
and Speakeasy have agreed that each shall receive fifty percent (50%) of the
proceeds from that certain Promissory Note, dated March 2, 1994, in the
original principal of amount of $240,000 from Michael Hines, as sole
individual, and as Executor of the Estate of Margo Goumond, in favor of
Horseshoe Club Operating Company (the “Hines Note”).  When and as HHLV receives payments on the
Hines Note, HHLV shall pay to Speakeasy an amount equal to fifty percent (50%)
of any such payments.  Such payments to
Speakeasy shall be paid by HHLV concurrently with each monthly payment of the
Speakeasy Remittance Amount.


 


I.                                         Speakeasy’s
address for notice in Article XVI of the Joint Operating Agreement shall
be:


 


Speakeasy Gaming of Fremont, Inc.


c/o Ramada Inn and Speedway Casino


3227 Civic Center Drive


North Las Vegas, NV 89030


Attn: Roger Szepelak


Fax: (702) 399-4108


 


With a copy to:


 


Ruben & Aronson, LLP


4800 Montgomery Lane,
Suite 150


Bethesda, MD  20814


Attn: Robert L. Ruben, Esq.


Fax:  (301)
951-9636


 


2.                                       Governing Law. 
This Amendment shall be governed by, construed and enforced in
accordance with the laws of the State of 
Nevada without reference to its choice of law provisions.


 


3.                                       Counterparts. 
This Amendment may be executed in two or more counterparts and shall be
deemed to have become effective when and only when all parties hereto have
executed


 


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this Amendment, although it shall not be necessary that any single
counterpart be signed by or on behalf of each of the parties hereto, and all
such counterparts shall be deemed to constitute but one and the same
instrument.


 


4.                                       Continuing Effect. 
As amended hereby, the Joint Operating Agreement shall continue in full
force and effect following the date hereof. 
If there is any inconsistency between the provisions of this Amendment
and the provisions of the Joint Operating Agreement, the provisions of this
Amendment shall supercede and control.


 


5.                                       Amendments.  This
Amendment may be changed or modified only by an agreement in writing signed by
the parties hereto, and no oral understandings shall be binding as between the
parties.


 


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IN WITNESS
WHEREOF, the undersigned have executed this Amendment as of the date and year
first above written.


 


	
  HHLV:

  
	
   

  
	
  HHLV MANAGEMENT
  COMPANY, LLC,

  
	
  a Nevada limited
  liability company

  
	
   

  
	
   

  	
  By:

  	
  Harrah’s
  Operating Company, Inc.,

  a Delaware corporation

  Its sole member

  
	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan S.
  Halkyard

  	
   

  
	
   

  	
  Name:

  	
   Jonathan S. Halkyard

  	
   

  
	
   

  	
  Its:

  	
  VP and Treasurer

  	
   

  
	
   

  
	
   

  
	
  SPEAKEASY:

  
	
   

  
	
  SPEAKEASY GAMING
  OF FREMONT, INC.,

  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Roger M.
  Szepelak

  	
   

  
	
   

  	
  Name:

  	
   Roger M. Szepelak

  	
   

  
	
   

  	
  Its:

  	
  VP and Chief
  Operating Officer