EXHIBIT 10.8


 


ASSIGNMENT AND ASSUMPTION OF LEASE
(ARLINGTON)


 


This Assignment and
Assumption Agreement (the “Agreement”) is entered into as of this 11th day of
March, 2004 by and between  the Horseshoe Club Operating Company, a
Nevada Corporation (“Assignor”) and Speakeasy Gaming of Fremont, Inc., a Nevada
corporation (“Assignee”), based upon the following:


 


A.                                   Assignor
and Harrah’s Operating Company, Inc., a Delaware corporation (“Harrah’s”) are
parties to that certain Asset Purchase Agreement dated as of January 21,
2004 (the “Asset Purchase Agreement”), as subsequently assigned by Harrah’s to
HHLV Management Company, LLC, a Nevada limited liability company (“HHLV”), by
the terms of which Seller has agreed to transfer to Harrah’s and its assignee,
HHLV, all of its interest in and to certain Real Property, as therein defined,
including certain leased property.


 


B.                                     HHLV
and Assignee have entered into that certain Purchase and Sale Agreement dated
February 9, 2004, pursuant to which Assignee has acquired all of HHLV’s
rights, title and interest in and to certain Leased Property, as therein
defined.


 


C.                                     Assignor
is the current lessee of that parcel of Real Property described on Exhibit “A”
hereto (the “Leased Property”).


 


D.                                    The
Leased Property is leased to Assignor pursuant to the lease agreement
identified on Exhibit “B” hereto (the “Lease”).


 


NOW THEREFORE, based upon
the foregoing and in consideration for the mutual covenants hereinafter set
forth it is agreed as follows:


 


1.                                       Assignor
hereby assigns to Assignee all of its right, title and interest in and to the
Lease and its leasehold estate in the Leased Property to Assignee.


 


2.                                       Assignee
hereby assumes all liabilities and obligations of Assignor under the Lease
arising from and after the date hereof.


 


3.                                       This
Agreement shall be binding on and inure to the benefit of the successors and
assigns of the parties hereto.


 


4.                                       NOTICES.  Any notice, demand or document which any
party is required or may desire to give, deliver or make to any other party
shall be in writing, and may be personally delivered or given or made by United
States registered or certified mail, return receipt requested, by overnight
delivery service (e.g., Federal Express), or by telecopied transmission
addressed as follows:


 


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To Assignor:


 


Horseshoe Club Operating
Company


1900 Silver Street


Las Vegas, NV 89102


Attn:  Becky Binion Behnen


 


With a
copy to:


 


Jerome A. DePalma, Esq.


7040 Laredo, Suite C


Las Vegas, NV 89117


Telecopy:  (702) 794-0479


 


To Assignee:


 


Speakeasy Gaming of
Fremont, Inc.


3227 Civic Center Drive


Las Vegas, NV 89030


Telecopy: (702) 399-4108


Attn: Roger Szepelak


 


With a
copy to:


 


Ruben & Aronson, LLP


4800 Montgomery Lane,
Suite 150


Bethesda, MD 20814


Telecopy: (301) 951-9636


Attn: Robert L. Ruben,
Esq.


 


5.                                       VALIDITY.  Assignor represents and warrants that (i)
Assignor has not assigned or executed any assignment of, and will not assign or
execute any assignment of its interest in the Lease to anyone other than the
Assignee, and any assignment, designation or direction by Assignor inconsistent
herewith shall be void; and (ii) Assignor has not done any act or executed
any document that impairs the rights of the Assignee to the Lease under this
Assignment.


 


6.                                       FURTHER ASSURANCES.  Each of the undersigned agrees to execute
and deliver to the other, upon demand, such further documents, instruments and
conveyances and shall take such further actions as are necessary or desirable
to effectuate this Assignment.


 


7.                                       ATTORNEYS’ FEES.  If any party
hereto brings any judicial action or proceeding to enforce its rights under
this Assignment, the prevailing party shall be entitled, in addition to any
other remedy, to recover from the others, regardless of whether such action or
proceeding is prosecuted to judgment, all costs and expenses, including,
without limitation, reasonable attorneys’ fees, incurred therein by the
prevailing party.


 


8.                                       AMENDMENTS.  This
Assignment shall not be amended except by a written instrument signed by the
parties hereto.


 


9.                                       GOVERNING
LAW.  This Assignment shall be governed
by the law of the State of Nevada.


 


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10.                                 BINDING
ON SUCCESSORS.  This Assignment shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors, assigns and representatives.


 


11.                                 HEADINGS.  The subject headings or captions of the
paragraphs of this Assignment shall not affect the construction or
interpretation of the any provisions contained herein.


 


12.                                 COUNTERPARTS.  This Assignment may be signed in multiple
counterparts, with each counterpart having the same force and effect as if this
single instrument were executed by the parties.


 


13.                                 THIRD
PARTY BENEFICIARIES.  There are no
third-party beneficiaries to this Assignment.


 


14.                                 ENTIRE
AGREEMENT.  This Agreement and all
documents and instruments referred to herein constitute the entire agreement
and supersede all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.


 


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


 


	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  
	
   

  	
  HORSESHOE CLUB
  OPERATING COMPANY,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Becky Binion Behnen

  	
   

  
	
   

  	
  Name:

  	
   Becky Binion Behnen

  	
   

  
	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  
	
   

  	
  SPEAKEASY GAMING OF
  FREMONT, INC.,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/  Roger M. Szepelak

  	
   

  
	
   

  	
  Name:

  	
  Roger M. Szepelak

  
	
   

  	
  Its:

  	
  Vice President and
  Chief Operating Officer

  
						



 


 


EXHIBIT A  TO ASSIGNMENT
AND ASSUMPTION OF LEASE (ARLINGTON)


 


Lots Thirteen (13), Fourteen
(14), Fifteen (15), Sixteen (16), and Seventeen (17), in Block 15 of Clark’s
Las Vegas Townsite, including any property now vacated or which may hereinafter
be vacated as adjacent alleys, as shown by map thereof on file in Book 1 of
Plats, Page 37, in the Office of the County Recorder of Clark County, Nevada.


 


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Second Amendment
of Restated Lease Agreement


 


This Second Amendment of
Restated Lease Agreement (this “Agreement”), dated as of the 10th day of
March, 2004, is by and between Arlington Realty Co.
Limited Partnership, a Nevada limited partnership (“Lessor”) and
Speakeasy Gaming of Fremont, Inc., a Nevada corporation (“Lessee”).


 


Recitals


 


WHEREAS, Lessor is the
owner of that certain real property comprised of lots thirteen (13), fourteen
(14), fifteen (15), sixteen (16) and seventeen (17) in block fifteen (15) of
Clark’s Las Vegas Townsite, in the City of Las Vegas, Nevada, together with that
portion of the alley vacated by an Order of Vacation dated May 24, 1961 and
recorded on July 6, 1961 in Book 306 of Official Records as Document No.
247945 and an Order of Vacation dated February 19, 1993 and recorded on
March 24, 1993 in Book 930324 as Document No. 00839, excepting therefrom
all buildings and improvements (the “Property”).


 


WHEREAS, Lessor’s
predecessor, Sage Realty Co., a Nevada limited partnership
(“Sage”), was a party to a Restated Lease Agreement made as of
June 1, 1982 by and between Sage as lessor and Sahara-Nevada Corporation,
a Nevada corporation (“Sahara-Nevada”), as lessee (the “1982 Lease”).


 


WHEREAS, the Lease was
amended pursuant to an Amendment of Restated Lease Agreement made as of
December 28, 1984 (the “1984 Amendment”).


 


WHEREAS, Sahara-Nevada’s
lessee’s interest in the 1982 Lease, as modified by the 1984 Amendment
(collectively, the “Existing Lease”) was conveyed to Horseshoe Club
Operating Company, a Nevada corporation (“HCOC”), by deed recorded
August 12, 1988 in Book 880812 as Document No. 00274.


 


WHEREAS, HCOC’s lessee’s
interest in the Existing Lease was conveyed to Lessee, a wholly owned
subsidiary of MTR Gaming Group, Inc. (“MTR”), pursuant to an Assignment
and Assumption of Lease of even date hereof, in connection with Lessee’s
purchase of the Binion’s Hotel and Casino.


 


WHEREAS, concurrently
with the acquisition by Lessee of HCOC’s lessee’s interest in the Lease, Lessor
and Lessee desire to make certain amendments to the terms and conditions of the
Existing Lease.


 


NOW, THEREFORE, for good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:


 


1.                                       Recitals.  The foregoing recitals are hereby
incorporated herein as more fully set forth above.


 


2.                                       Scope
of Amendment.  This Agreement amends
the Existing Lease in the manner described herein.  For the purposes of this Agreement, the term “Lease” shall
refer to the Existing Lease as modified by this Agreement.  To the extent of any conflict between this
Agreement and the Existing Lease, the provisions of this Agreement shall
govern.  The parties acknowledge that
certain provisions of this Agreement are inconsistent with the Existing Lease.  Accordingly, the parties agree to negotiate
in good faith to enter into an Amended and Restated Lease within six (6) months
of the date hereof.  It is the parties’
intention that the terms and conditions of such Amended and Restated Lease
shall be consistent with the terms and conditions of this Agreement and shall
otherwise be commercially reasonable. 
Unless otherwise defined herein, capitalized terms shall have the
meaning ascribed to them in the Existing Lease.


 


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3.                                       Rental.


 


(a)                                  Monthly
Rental during HHLV Management.  Pursuant
to a Joint Operating License Agreement of even date hereof (the “Operating Agreement”)  between
Lessee and HHLV Management Company (“HHLV”), HHLV shall operate the
Binion’s Hotel and Casino (the “Hotel/Casino”) for a term of from one
(1) to three (3) years (the “Operating Agreement Term”).  During the Operating Agreement Term, the
monthly rental amount shall be One Hundred Fifty Three Thousand Dollars
($153,000.00) per month.  For purposes
of this Agreement, the monthly rental amounts paid to the Lessor shall be net
of, without limitation,
utility charges, insurance premiums, maintenance and repairs, and taxes
relating to the Hotel/Casino (other than any inheritance, transfer, estate or
succession tax or any income or other tax or excise on rents that may be
imposed upon Lessor by reason of any existing or subsequently enacted law).


 


(b)                                 Monthly
Rental during Lessee Management.


 


(i)                                     Definition
of “Rental Year”.  For purposes of
this Agreement, the one year period between the expiration of the Operating Agreement
Term and the first anniversary of such expiration shall be referred to as the “First
Rental Year”, the one year period between such expiration of the First
Rental Year and the second anniversary of the expiration of the Operating
Agreement Term shall be referred to as the “Second Rental Year”, and
subsequent rental years (“Rental Years”) commencing on each anniversary
of the expiration of the Operating Agreement shall be referred to
correspondingly based upon the time that has passed since the expiration of the
Operating Agreement Term.  Although
Average EBITDA will be calculated on a calendar year basis, the commencement
date and expiration date of Rental Years shall be determined by reference to
the expiration of the Operating Agreement Term and not by reference to the
calendar year.


 


(ii)                                  Monthly
Rental Amount.  During the First
Rental Year and Second Rental Year, the monthly rental amount shall remain at
the Base Rent (defined below).  During
the Third Rental Year and in subsequent Rental Years, the monthly rental amount
shall be the Base Rent less the Rent Credit (defined below) plus the Rent
Credit Recapture (defined below) [Base Rent – Rent Credit + Rent Credit
Recapture].


 


(iii)                               Rent
Credit.  The “Rent Credit”
shall be equal to the difference between the Base Rent and the Floor multiplied
by the Adjustment Percentage [(Base Rent – Floor) X  Adjustment Percentage].


 


(iv)                              Adjustment
Percentage; Average EBITDA Thresholds. 
The “Adjustment Percentage” is equal to a percentage determined
by whether Average EBITDA achieves the following thresholds (the “Average
EBITDA Thresholds”):


 


	
  Average EBITDA Thresholds

  	
   

  	
  Adjustment Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  $0 - $999,000

  	
   

  	
  100.00

  	
  %

  
	
  $1,000,000 - $1,999,999

  	
   

  	
  83.33

  	
  %

  
	
  $2,000,000 - $2,999,999

  	
   

  	
  66.67

  	
  %

  
	
  $3,000,000 - $3,999,999

  	
   

  	
  50.00

  	
  %

  
	
  $4,000,000 - $4,999,999

  	
   

  	
  33.33

  	
  %

  
	
  $5,000,000 - $5,999,999

  	
   

  	
  16.67

  	
  %

  
	
  More than $6,000,000

  	
   

  	
  0

  	
  %

  



 


5

















 


As the Base Rent and
Floor are increased every five years pursuant to Section 3(c), below, the
Average EBITDA Thresholds shall be increased correspondingly.


 


(v)                                 EBITDA.  For purposes of this Agreement, “Average
EBITDA” means the average EBITDA for the preceding three full calendar year
period subsequent to the expiration of the Operating Agreement Term  (or, if shorter, the number of full calendar
years subsequent to the expiration of the Operating Agreement Term).


 


(A)                              For
purposes of calculating the Rent Credit, there shall be no Rent Credit for the
Second Rental Year, the Rent Credit for the Third Rental Year shall be based
upon Average EBITDA for the preceding full calendar year period, the Rent
Credit for the Fourth Rental Year shall be based upon Average EBITDA for the
preceding two full calendar year periods, and the Rent Credit for the Fifth Rental
Year and for subsequent Rental Years shall be based upon Average EBITDA for the
preceding three full calendar year periods.


 


(B)                                For
purposes of this Agreement, “EBITDA” means, for any calendar year, the
net income of the Lessee with respect to the Hotel/Casino (including, but not
limited to, net income from gaming, lodging, food and beverage) for such
calendar year adjusted to add thereto (to the extent deducted in determining
net income), without duplication, the sum of (i) interest expense, (ii) income
taxes (excluding any state or local gaming fees, charges or taxes), and (iii)
depreciation and amortization expense as reported in the income statement of
the Lessee.


 


(C)                                Lessor
acknowledges that Lessee is a Nevada gaming licensee and is a subsidiary of
MTR, a publicly traded company. 
Accordingly, the Lessor agrees that, if MTR and/or Lessee disclose the
EBITDA for the Hotel/Casino in any filings with the Nevada Gaming Control Board
or the United States Securities and Exchange Commission, such disclosure shall
be dispositive and Lessor shall have no right to audit Lessee’s books and
records.  If neither MTR nor Lessee
disclose the EBITDA for the Hotel/Casino in such filings, Lessee shall disclose
the amount of EBITDA to Lessor in commercially reasonable detail, including, without limitation, the calculation thereof,  and
Lessor shall have the right, at reasonable times and with reasonable notice, to
cause an independent public accounting firm to audit Lessee’s books and
records.  If such audit discloses that
EBITDA amount provided by the Lessee to the Lessor is erroneous and that such
erroneous understatement represents more than three percent (3%) of the actual
EBITDA in any calendar year, Lessee shall pay to Lessor the amount of
additional rent that would have otherwise have been payable if the actual
EBITDA had been properly utilized plus interest at the rate of ten percent
(10%) per annum, compounded monthly.  In
addition, if there is such an erroneous understatement of EBITDA, Lessee shall
reimburse Lessor for Lessor’s reasonable auditing fees.  If, however, such audit does not disclose an
understatement of EBITDA representing more than three percent (3%) of actual
EBITDA in any calendar year, Lessor shall pay Lessee’s documented costs
resulting from such audit.  Lessor’s
right to cause an independent public accounting firm to audit Lessee’s books
and records shall be subject to the following limitations:  (i) Lessor shall exercise its right to an
audit no more frequently than once every twelve (12) months, (ii) the audit
shall be conducted in a manner that does not unreasonably interfere with the
Lessee’s business, (iii) Lessee and its independent public accounting firm
shall have entered into a commercially reasonable confidentiality agreement
that protects Lessee against damage to its business and against violations of
the securities laws by Lessor.


 


(D)                               On
or before April 1 of each calendar year, Lessee shall have calculated and
disclosed its EBITDA for the preceding calendar year.  In the event that a new Rental Year shall have already commenced,
the monthly rental amount shall remain at the prior year level until the Lessee
has calculated its EBITDA for the preceding calendar year (at which point there
shall be a lump sum adjustment).


 


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(vi)                              Rent
Credit Recapture.  In the event that
an increase in EBITDA for a calendar year causes an increase in Average EBITDA
over the prior years, there shall be a recapture of the Rental Credit taken
into account in each of the prior two Rental Years.  Such Rent Credit Recapture (the “Rent Credit Recapture”)
shall be equal to the difference between the Rent Credit which would have been
taken into account in each such Rental Year if the current Adjustment
Percentage (based upon the current Average EBITDA) had been used in computing
the Rent Credit over the Rent Credit taken into account in such prior Rental
Year using the Adjustment Percentage then in effect.  The Rent Credit Recapture for each of the two prior Rental Years
shall be aggregated and then amortized and paid by Lessee to Lessor in twelve
(12) monthly amounts during the current Rental Year.


 


(c)                                  Base Rent & Floor; Increases Every Five Years.  The “Base Rent” and the “Floor” shall be
determined as set forth in this Section 3(c).


 


(A)                              The Base Rent shall be initially equal to One Hundred Fifty Three
Thousand Dollars ($153,000.00) and the Floor shall be initially equal to One
Hundred Twenty Five Thousand Dollars ($125,000).  The initial Base Rent, Floor and Average EBITDA Thresholds shall
be increased, in the manner provided for herein, on March 1, 2009 and
every five (5) years thereafter during the term of the Lease.


 


(B)                                On March 1, 2009, the initial Base Rent, Floor and Average EBITDA
Thresholds shall all be increased by either (i) Twelve and One-Half Percent
(12.5%) if HHLV manages the Hotel/Casino under the Operating Agreement for a
period in excess of one (1) year, or (ii) Fifteen Percent (15%) if HHLV manages
the Hotel/Casino under the Operating Agreement for a period of one (1) year or
less.


 


(C)                                On March 1, 2014 and every five (5) years thereafter during the term
of the Lease (each an “Adjustment Date”), the 
Base Rent, Floor and Average EBITDA Thresholds in effect immediately
prior to the Adjustment Date shall all be adjusted upward by the greater of ten
percent (10%) or the increase in the National Consumer Price Index for Urban
Wage Earners and Clerical Workers for all items (1982-84 = 100), published by
the Bureau of Labor Statistics of the U.S. Department of Labor (the “Index”)
during the five (5) year period immediately preceding the Adjustment Date (the
“Adjustment Period”).


 


(D)                               On each Adjustment Date, the increase in the Index for the Adjustment
Period shall be computed  by multiplying
the Base Rent, Floor and Average EBITDA Thresholds in effect immediately prior
to the Adjustment Date by a fraction, the numerator shall be the Index number
at the Adjustment Date and the denominator shall be the Index Number on the
date five (5) years prior to the Adjustment Date.


 


7

















 


4.                                       Assignment
and Encumbrance.


 


(a)                                  Assignment.  Subject to the provisions of this
Section 4(a), Lessee shall have the right, at any time and from time to
time during the term of the Lease, with the express prior written
consent of Lessor, which shall not be unreasonably withheld, delayed or
conditioned, to assign, sell or otherwise transfer its
interest, in whole or in part, in this Lease and the estate created by this
Lease.  Lessor and Lessee agree that it
shall not be reasonable for Lessor to withhold its consent to any proposed assignment if the proposed assignee has obtained  all  required gaming
approvals to operate  the Property as a Hotel/Casino.  Lessee shall not
be released from liability hereunder in the event of such assignment, sale or
other transfer without the prior written agreement of Lessor releasing Lessee
from such liability, which agreement shall not be unreasonably withheld,
delayed or conditioned.


 


(b)                                 Subletting.  Lessee shall have the right, at its sole
option, at any time and from time to time during the term of the Lease to
sublet all or any part or parts of the Property and to assign, encumber,
extend, or renew any sublease; provided, however, Lessee shall ensure that such
sublease entered into after the date hereof shall contain a provision requiring
such sublessee, so long as the terms of such sublease are recognized and
honored, to attorn to Lessor if Lessee defaults under this Lease, and if the
sublessee is notified of Lessee’s default and instructed to make sublessee’s
rental payments to Lessor.


 


(c)                                  Encumbrances.


 


A.                                   By
Lessor.  At all times during the
Term, Lessor shall have the right to encumber or hypothecate to any mortgagee
of any mortgage or beneficiary of a deed of trust encumbering Lessor’s
leasehold estate in this Lease or Lessor’s fee interest in the Property.  If the interest of Lessor shall be acquired
by any person (a “Purchaser”) by reason of foreclosure of an encumbrance
or deed in lieu thereof, and such Purchaser succeeds to the interest of Lessor
hereunder, Lessee hereby attorns to such Purchaser as lessor and agrees to be
bound to such Purchaser under all provisions of this Lease for the balance of
the term of the Lease.  Lessor agrees to
execute any documents required by Lessee to be executed to affect such
attornment.  Notwithstanding the
foregoing, Lessor shall not encumber the Property unless such lender or
beneficiary provides to Lessee a certificate of non-disturbance in form and
substance reasonably acceptable to Lessee’s counsel agreeing that so long as
Lessee pays the rent hereunder, and otherwise complies with its obligations
hereunder, its leasehold estate and possession of the Property shall not be
affected by any default under the encumbrance placed upon the Property by
Lessor.


 


B.                                     By
Lessee.  Without the necessity of
the consent of Lessor, Lessee shall have the right from time to time and at any
time during the term of the Lease to encumber or hypothecate its leasehold
estate in this Lease and in the Property, and its interest in any buildings,
improvements, fixtures and personal property thereon, in favor of  any mortgagee of any mortgage or beneficiary
of a deed of trust (a “Lender”); provided that (i)
the form of any mortgage or deed of trust shall require Lender to provide to
Lessor, substantially concurrently with the provision thereof to Lessee, a copy
of any notice of default or breach by Lessee thereunder, and (ii) Lender will
enter into an agreement with Lessor providing that Lessor will have the option,
to be exercised in its sole discretion to cure any default or breach of which
notice is given to Lessee pursuant to the Lease and that such cure will be
accepted by Lender, and such other provisions as are customarily included in agreements
between lenders and lessors with respect to ground leases as the parties may
agree to.  The
execution and delivery of an encumbrance shall not be deemed to constitute an
assignment or transfer of this Lease nor shall any Lender be deemed an assignee
or transferee of this Lease so as to require such Lender to assume the
performance of any of the covenants or agreements on the part of Lessee to be
performed under this Lease.  Promptly after execution and delivery of an  encumbrance instrument and all documents, agreements, 


 


8

















 


instruments and
other writings relating thereto, Lessee shall send to
Lessor a copy of said encumbrance and all such other relevant documentation connection
therewith for Lessor’s files.


 


C.                                     Delivery
of Additional Documents.  Each of
Lessor and Lessee agrees that from time to time, if so requested by the other
and if doing so will not substantially and adversely affect its economic
interests under this Lease, it will cooperate with the other in providing
documentation concerning the terms of this Lease so as to meet the reasonable
needs or requirements of any lender which is considering furnishing or which
has furnished any of the financing referred to this Section 4; provided,
however, that nothing herein shall be construed as a requirement or agreement
on the part of either party that the Lease be amended.  Without limiting the foregoing, Lessee and
Lessor shall, at any time and from time to time during the Term and upon not
less than fifteen (15) calendar days’ prior request by the other party,
execute, acknowledge and deliver to the other an estoppel certificate in
recordable form executed by an authorized representative or officer of the
requested party, stating that this Lease is in full force and effect,
unmodified and unamended (or stating the modifications or amendments in
effect), such defenses or offsets as are claimed by the requested party, if
any, the date to which all Rent has been paid, and such other information concerning
the Lease, the Property and the requested party as the requesting party or said
designee may reasonably request, it being intended that any such statement
delivered pursuant to this Section 4(c)(C) may be relied upon by any
prospective lender or assignee of any interest in the Property.  Failure to deliver such estoppel certificate
within thirty (30) calendar days shall be conclusive upon the party failing to
deliver that the provisions and statements set forth in any proposed estoppel
certificate delivered with the request are true and correct in all respects.


 


5.                                       Notification
of Lender


 


(a)                                  Notice
of Breach or Default.  Concurrently
with the giving of any notice of a default under the Lease to Lessee, Lessor
shall also deliver a copy of such notice to any Lender at such address as such
Lender may have specified to Lessor. 
The time period for the applicable cure period shall be extended by a reasonable time, not to exceed ninety (90) days, to
permit such Lender to cure such default if such Lender notifies Lessor of its
intentions to cure any such default and diligently prosecutes such cure to
completion.


 


(b)                                 Notice
of Termination.  Concurrently with
the giving of any notice of election of termination to Lessee, Lessor shall
also deliver a copy of such notice to any Lender at such address as such Lender
may have specified to Lessor.  The time
period for termination shall be extended if such Lender notifies Lessor of its
election to proceed with reasonable diligence promptly (but no later than
180 days) to acquire possession of the Property or to
foreclose its encumbrance or otherwise to extinguish Lessee’s interest in this
Lease and delivers to Lessor an instrument in writing duly executed and
acknowledged in which the Lender agrees that (i) during the period that such
Lender or a receiver of rents and profits appointed upon application of such
Lender shall be in possession of the Property and/or during the pendency of any
such foreclosure or other proceedings and until the interest of Lessee in this
Lease shall terminate, as the case may be, it will pay or cause to be paid to
Lessor all rent hereunder from time to time becoming due under this Lease, and
(ii) if delivery of possession of the Property shall be made to such Lender or
such receiver, whether voluntarily or pursuant to any foreclosure or other
proceedings or otherwise, such Lender shall, promptly following such delivery
of possession, perform such of the covenants and agreements herein contained on
Lessee’s part to be performed as Lessee shall have failed to perform to the
date of delivery of possession, and to perform all other covenants and
agreements Lessee shall have failed to perform promptly after extinguishment of
Lessee’s interest in this Lease.


 


6.                                       Right
of First Refusal.  If during the term
of the Lease, Lessor shall receive a bona fide offer to purchase its fee
interest in the Property from a third party with demonstrable ability to
consummate such proposed purchase, and such offer is acceptable to Lessor,
Lessor shall immediately provide to Lessee a copy of


 


9

















 


such offer.  Lessor agrees that Lessee shall have and is
hereby granted the right of first refusal to purchase the fee interest in the
Property on terms substantially the same as such third party’s offer.  Lessee shall have thirty  (30) calendar days following written notice from
Lessor of the existence and terms of such offer to advise Lessor of its
election to exercise its right of first refusal.  In the event that Lessee elects to exercise its right of first
refusal, a closing of the transaction shall occur within one hundred eighty (180)
calendar days following exercise of such right of first refusal or within the
time by which closing is required pursuant to such third party’s offer,
whichever date is later.


 


7.                                       Deletions
of Provisions in 1982 Lease; Deletion of 1984 Amendment.  Sections 44, 45 and 46
of the 1982 Lease are hereby deleted. 
The 1984 Amendment is hereby deleted.  The above-mentioned provisions are hereby
deleted because the parties view them to be extraneous.  The parties agree that, if Lessor
subsequently determines that non-extraneous provisions were inadvertently
deleted, the parties shall negotiate in good faith as to whether to restore
such provisions in connection with the negotiation by the parties of an Amended
and Restated Lease.


 


8.                                       Ownership
of Buildings and Improvements. 
Notwithstanding any provision in the Lease to the contrary, the Lessor
shall not have any ownership interest in the buildings, improvements or
personal property situate on the Property.


 


9.                                       No Joint Venture.  Nothing
contained in this Lease shall be deemed or construed by the parties hereto or
by any third party to create the relationship of principal and agent, or of
partnership, or of a joint venture between Lessor and Lessee.


 


10.                                 Notices.  The parties respective
addresses, for purposes of providing notice pursuant to Section 21 of the
Lease, is as follows:


 


	
  if to Lessee, to:

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
  Speakeasy Gaming of
  Fremont, Inc.

  	
   

  	
  Ruben & Aronson,
  LLP

  
	
  3227 Civic Center Drive

  	
   

  	
  4800 Montgomery Lane,
  Suite 150

  
	
  Las Vegas, NV 89030

  	
   

  	
  Bethesda, MD 20814

  
	
  Attention: Roger
  Szeplak

  	
   

  	
  Attention: Robert L.
  Ruben, Esq.

  
	
  Telecopy: (702)
  399-4108

  	
   

  	
  Telecopy: (301)
  951-9636

  



 


	
  if to Lessor, to:

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
  Arlington Realty
  Co. Limited Partnership

  	
   

  	
  Snell &
  Wilmer

  
	
  1001 Central
  Park Avenue,

  	
   

  	
  3800 Howard
  Hughes Parkway, # 1000

  
	
  Suite 2140

  	
   

  	
  Las Vegas, NV
  89109

  
	
  Scarsdale, NY
  10583

  	
   

  	
  Attention:  Patricia J. Curtis

  
	
  Attention:  Mark Steinberg

  	
   

  	
  Telecopy:  (702) 784-5252

  
	
  Telecopy:(914)
  725-8236

  	
   

  	
   

  



 


11.                                 Term.  Unless earlier terminated pursuant to the
terms and conditions of the Lease, the Lease shall continue until May 31, 2054
(the “Initial Expiration Date”).  Lessee
shall have the option, in its sole and absolute discretion, to extend the
Lease, pursuant to the terms and conditions of the Lease, for a period of ten
(10) years until May 31, 2064 (the “First Extension Expiration Date”) and to
further extend the Lease for an


 


10

















 


additional period of ten
(10) years until May 31, 2074 (the “Second Extension Expiration Date”).  Such extension options must be exercised at
least one hundred eighty (180) days prior to the applicable expiration date of
the Lease.


 


12.                                 Governing
Law; Jurisdiction; Litigation.  This
Lease has been prepared, executed and delivered in, and shall be interpreted
under, the internal laws of the State of Nevada, without giving effect to its
conflict of law provisions.  Each of the
parties hereto irrevocably and unconditionally waives any objection to the
laying of venue of any action, suit or proceeding arising out of this Lease or
the transactions contemplated hereby in (a) the courts of the State of Nevada,
Clark County, or (b) the United States District Court for the District of
Nevada, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient
forum.  In the event of litigation
arising hereunder, the prevailing party shall be entitled to recover from the
non-prevailing party its reasonable attorneys’ fees and expenses incurred in
connection with such litigation at all levels, including before the filing of
suit.  To the extent such waiver is permitted by Applicable Laws, the
parties hereto waive trial by jury in any action or proceeding brought in
connection with this Lease


 


13.                                 Effect
of Agreement.  Except as amended by
this Agreement, the Existing Lease remains in full force and effect.


 


IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date set forth above.


 


	
  LESSOR

  	
  LESSEE

  
	
   

  	
   

  
	
  Arlington Realty Co. Limited
  Partnership,

  	
  Speakeasy Gaming of
  Fremont, Inc.,

  
	
  a Nevada limited
  partnership

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  /S/  Mark Steinberg

  	
   

  	
  /S/  Roger M. Szepelak

  	
   

  
	
  By:

  	
  Mark Steinberg,
  Trustee

  	
  By: Roger M. Szepelak

  
	
   

  	
  of the Mark
  Steinberg

  	
  Its:  Vice President & Chief Operating
  Officer

  
	
   

  	
  Revocable Trust,
  its general partner

  	
   

  
					



 


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