Document:

Exhibit 10.9

 

GROUND LEASE

 

This GROUND LEASE (“Lease”),
is made and effective as of              
    , 2006 (the “Commencement Date”)
by and between NP LAND, LLC, a Nevada limited-liability
company (“Lessor”), and NEVADA
PALACE, LLC, a Nevada limited-liability company (“Lessee”) (collectively, the “Parties,”
and each sometimes singularly, a “Party”), with
reference to the following facts:

 

RECITALS

 

A.            Lessor
owns certain land in fee located in the City of Las Vegas, County of Clark,
State of Nevada, commonly known as 5255 Boulder Highway and 5335 Boulder
Highway, Assessor’s Parcel Nos. 161-21-204-002, 161-21-302-001 and
161-21-302-002, as more particularly described in Exhibit A
(the “Land”), and the Improvements (as defined
in Section 1.1) located thereon. The Land and the Improvements are
currently used for a hotel, casino and recreational vehicle park and such other
purposes as are normally and usually incident to such business.

 

B.            A
certain portion of the Land (the “D.R. Horton Leasehold”)
was leased to D.R. Horton, Inc., a Delaware corporation (“D.R. Horton”),
under that certain lease agreement (the “D.R. Horton Lease”)
made between D.R. Horton and Lessor’s predecessor-in-interest on April 30, 2005
(attached hereto as Exhibit B).
The term of the D.R. Horton Lease ends on October 29, 2006 with no provision
for extension.

 

C.            Lessee
desires to lease the Land (subject to the D.R. Horton Leasehold) and
Improvements from Lessor and to use them for the Permitted Uses (as defined in Section
5.1) while constructing a new hotel and casino defined as the Project in Section
6.2(A), and in conjunction with such Project, Lessee desires to demolish
and remove some or all of the Improvements located on the Land.

 

NOW,
THEREFORE, in consideration of the mutual covenants
and agreements set forth in this Lease, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties, in accordance with the terms and subject to the conditions set forth
herein, agree as follows:

 

Agreement

 

ARTICLE 1. 
PREMISES AND TITLE

 

1.1           Lease
of Premises. All improvements, structures, fixtures and appurtenances
presently located on the Land or which may be located on the Land from time to
time, including any and all new improvements that Lessee shall construct or
cause to have constructed (the “Improvements”)
together with the Land (shall constitute the “Premises,”
excepting that the D.R. Horton Leasehold shall be excluded from the Premises

 

 

until such
time as the D.R. Horton Lease expires or is terminated at which time the D. R.
Horton Leasehold shall automatically become part of the Premises, subject to
the terms and provisions of this Agreement, without any further action by the
Parties. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor,
the Premises.

 

1.2           Title.
Lessee acknowledges that Lessee has obtained a leasehold title insurance policy
insuring the Leasehold Estate.

 

1.3           No
Modification, Amendment or Extension of the D.R. Horton Lease. Lessor may
not, modify, amend or extend the D.R. Horton Lease without Lessee’s express
written consent (which it may withhold at its sole and absolute discretion).

 

ARTICLE 2. 
TERM

 

2.1           Term.
The Premises are leased for the term of thirty-five (35) years (the “Term”), commencing on the Commencement Date, and terminating
at midnight on the thirty-fifth (35th)
Anniversary (as defined in Section 3.1 (A)) occurs (the “Termination Date”).

 

2.2           Holding
Over. If Lessee holds over the Premises or any part thereof after
expiration of the Term of this Lease, such holding over, at Lessor’s option, shall
constitute a month-to-month tenancy, at rent equal to two hundred percent (200%)
of the last applicable rent in effect immediately prior to such holding over,
which shall not be prorated for any partial month, and shall otherwise be governed
by all of the other terms and conditions of this Lease. Notwithstanding any of the
foregoing to the contrary, Lessee shall have no right to occupy the Premises or
any portion thereof after the expiration or termination of this Lease or of
Lessee’s right to possession, without Lessor’s prior written consent, which
consent may be withheld in Lessor’s sole and absolute discretion. Acceptance of
any holdover rent shall not constitute a waiver by Lessor of any re-entry or
other rights of Lessor provided for under this Lease or by law nor shall it be
deemed an extension or renewal of the Term
of this Lease without a written election thereof by Lessor. If Lessee fails to
surrender the Premises upon expiration or earlier termination of this Lease,
Lessee shall be liable for and shall indemnify, defend and hold Lessor harmless
from and against all claims against, or damages suffered by, Lessor resulting
from or arising out of Lessee’s failure to surrender the Premises, including,
but not limited to, any amounts required to be paid to any lessee or
prospective lessee who was to have occupied the Premises after the expiration
or earlier termination of this Lease and any related attorneys’ fees and costs and
brokerage commissions.

 

ARTICLE 3.  RENT

 

3.1           Amount
of Rent. Lessee agrees to pay Lessor rent for the use and occupancy of the
Premises, as follows:

 

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A.            From
the Commencement Date until the first (1st) anniversary of the first day of the first month
following the Commencement Date (“Anniversary”) the
rent shall be One Hundred Sixty-Three Thousand Six Hundred Dollars ($163,600),
payable monthly in advance on the first day of each month. If the Term
commences on a day other than the first day of a month or terminates on a day
other than the last day of a month, then the installments of rent for such
month or months shall be prorated, based on the number of days in such month.

 

B.            Commencing
on the first (1st) Anniversary
and at every Anniversary thereafter (excepting the tenth (10th) Anniversary, the twentieth (20th) Anniversary and the
thirtieth (30th)
Anniversary) during the Term of this Lease (each, a “CPI Rent
Adjustment Date”), the monthly rent shall be adjusted pursuant to a
cost of living factor, calculated as follows: the cost of living factor shall
be a fraction whose numerator is the index figure stated in the Consumer Price
Index for All Consumers (1982-1984=100) specified for All Items relating to the
West Region published by the Bureau of Statistics of the United States
Department of Labor in effect on such date, and whose denominator is the index
figure for such Consumer Price Index in effect on the Commencement Date of this
Lease; provided, however, that the cost of living factor shall never be less
than one (1). If such Consumer Price Index is discontinued, the cost of living
factor shall be based on comparable statistics on changes in the purchasing
power of the consumer dollar for the applicable periods, as published by a
responsible financial periodical report of a recognized governmental or private
authority. The rent so calculated shall be the monthly rent for each month
during the one (1) year period from each CPI Rent Adjustment Date until the
next CPI Rent Adjustment Date, FRV Rent Adjustment Date (as defined in Section
3.1(C)) or Termination Date, payable monthly in advance, beginning on the
first day of each and every month during each such one (1) year period.

 

C.            On
the tenth (10th) Anniversary,
the twentieth (20th)
Anniversary and the thirtieth (30th)
Anniversary (each, a “FRV Rent Adjustment Date”),
the monthly rent shall be adjusted to the “Fair Rental Value”
for the Premises, calculated pursuant to Paragraph 3.2 hereof. The Fair Rental Value
so calculated shall be the monthly rent for each month during the one (1) year
period from each FRV Rent Adjustment Date until the next CPI Rent Adjustment
Date or Termination Date, payable monthly in advance, beginning on the first
day of each and every month during each such one (1) year period.

 

3.2           Determination
of Fair Rental Value.

 

A.            The
term “Fair Rental Value” shall mean an amount
equal to the product of: (1) the then prevailing rate of return being realized
by landowners for comparable property located in Clark County, Nevada;
provided, however, that in no event shall such rate of return be less than
eight percent (8%) per year; times (2) the market value of the Land. Notwithstanding
the foregoing, in no event shall the rent for any rental period be less than
the rent in effect immediately preceding the commencement of such rental period.
The market value for the Land shall be based upon the assumption that the Land
is free and clear of this Lease and any Improvements, but is subject to similar
restrictions on use, as herein set forth, and giving due consideration to
amenities furnished, and any other factors which would ordinarily be considered
in establishing the prevailing market value, all as

 

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applicable to
the use permitted in this Lease in other comparable commercial developments and
resort casino ground leases in Clark County, Nevada.

 

B.            Not
later than one hundred eighty (180) days prior to each FRV Rent Adjustment
Date, Lessor and Lessee shall meet in an effort to negotiate, in good faith,
the Fair Rental Value of the Premises as of the FRV Rent Adjustment Date. If
Lessor and Lessee have not agreed upon the Fair Rental Value of the Premises at
least ninety (90) days prior to the applicable FRV Rent Adjustment Date, the
Fair Rental Value shall be determined by appraisal, by one or more appraisers
(herein called “Appraiser(s)”), as provided below
in this Paragraph 3.2. Such Appraiser(s) shall have at least fifteen (15) years’
experience in the appraisal of commercial real property in Clark County,
Nevada, and shall be members of professional organizations such as MAI or the
equivalent.

 

C.            If
Lessor and Lessee are not able to agree upon the Fair Rental Value of the
Premises within the prescribed time period, then Lessor and Lessee shall
attempt to agree in good faith upon a single Appraiser not later than seventy-five
(75) days prior to the applicable FRV Rent Adjustment Date. If Lessor and
Lessee are unable to agree upon a single Appraiser within such time period,
then Lessor and Lessee shall each appoint one Appraiser not later than sixty-five
(65) days prior to the applicable FRV Rent Adjustment Date. Within ten (10)
days thereafter, the two (2) appointed Appraisers shall appoint a third
Appraiser. If either Lessor or Lessee fails to appoint its Appraiser within the
prescribed time period, the single Appraiser appointed shall determine the Fair
Rental Value of the Premises as of the applicable FRV Rent Adjustment Date. Each
Party shall bear the cost of its own Appraiser and the Parties shall share
equally the cost of the single or third Appraiser, if applicable.

 

D.            If
a single Appraiser is chosen, then such Appraiser shall determine the Fair
Rental Value of the Premises. Otherwise, the Fair Rental Value of the Premises
shall be the arithmetic average of the two (2) of the three (3) appraisals
which are closest in amount, and the third appraisal shall be disregarded;
provided, however, if the highest appraisal exceeds the middle appraisal by the
same amount that the middle appraisal exceeds the lowest appraisal, then the
middle appraisal shall be the Fair Rental Value of the Premises. Lessor and
Lessee shall instruct the Appraiser(s) to complete the determination of the
Fair Rental Value not later than thirty (30) days prior to the applicable FRV
Rent Adjustment Date.

 

E.             If
the determination of adjusted rent is made after the applicable FRV Rent
Adjustment Date, Lessee shall continue to pay rent at the rate applicable to
the preceding period until the adjusted rate is determined. Promptly after the
determination, Lessee shall pay any difference for the period affected by the
adjustment, with interest which has accrued from the applicable FRV Rent
Adjustment Date at the rate of ten percent (10%) per year.

 

3.3           Net
Lease. Notwithstanding any other provision in this Lease to the contrary,
this Lease is what is commonly known as a “net lease,” it being understood that
Lessor shall receive the rent set forth in this Lease free and clear of any and
all taxes, liens, charges, expenses, offsets, defenses, reductions, deductions,
claims, counterclaims,

 

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or adjustments
of any nature whatsoever in connection with the ownership and operation of the
Premises. It is the intention of the Parties that this Lease shall not be
terminable for any reason by the Lessee and that the Lessee shall in no event
be entitled to any abatement of, or reduction in, Rent payable hereunder,
except as herein expressly provided. To the extent (a) any present or future law
(whether common law or statutory) may be contrary to this Section 3.3 and
(b) may be waived by the agreement of the Parties, the Parties agree to waive
the portion of such law to the extent that it would modify the terms of this Section
3.3.

 

3.4           Past
Due Rents. If Lessee shall fail to pay any rents or other charges
characterized herein as additional rent, such unpaid amounts shall bear
interest from the due date thereof to the date of payment at the Default Rate,
as hereinafter defined, and such interest shall be collectible as additional
rent.

 

A.            As
used in this Lease, the term, “Default Rate,”
shall mean an annual rate of interest equal to the lesser of: (i) two percent (2%)
above the reference interest rate then in effect, and as adjusted from time to
time, at Bank of America, NA; or (ii) the highest rate allowable by law.

 

B.            Any
payment by Lessee or acceptance by Lessor of a lesser amount than shall be due
from Lessee to Lessor shall be treated as a payment on account. The acceptance
by Lessor from Lessee of payment for a lesser amount with an endorsement or
statement thereon, or upon any letter accompanying such a check, that such
lesser amount is payment “in full,” or language to like effect, shall not
constitute an accord and satisfaction, shall be given no effect, and Lessor may
accept such check without prejudice to any other rights or remedies which
Lessor may have against Lessee.

 

3.5           Other
Financial Obligations of Lessee.  In
addition to the rent set forth herein, Lessee shall pay to the persons or
entities respectively entitled thereto all impositions, insurance premiums,
operating charges, maintenance charges, construction costs, claims, taxes, liens
and any other charges, costs and expenses which arise or may be contemplated
under any provisions of this Lease (including compliance with the Applicable
Requirements as defined in Section 6.4(A) below). All of such charges,
costs and expenses shall constitute additional rent, and upon the failure of Lessee
to pay any such additional rent, Lessor shall have the same rights and remedies
as otherwise provided in this Lease for the failure of Lessee to pay rent.

 

ARTICLE 4. 
TAXES

 

4.1           Lessee
to Pay Taxes. In addition to the payment of rent, Lessee shall pay through
the Term of this Lease, beginning as of the Commencement Date, directly to the
appropriate taxing or other applicable authority at least ten (10) days before
the same become delinquent, all real property taxes and assessments of every
kind attributable to the Premises or any part thereof or Improvement thereon,
or for which Lessor or Lessee in respect thereof, are now or may during the Term
be assessed or become liable, whether

 

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assessed to or
payable by Lessor or Lessee. Lessee shall furnish to Lessor, within thirty (30)
days after the date of payment satisfactory evidence that the tax has been
paid.

 

4.2           Installment
Payment. If by any law any such tax is payable or may at the option of the
taxpayer be paid in installments, Lessee may pay the tax, together with any
accrued interest on the unpaid balance of the tax, in installments as they
become due.

 

4.3           Proration
for Time. All such taxes and assessments for the first and, if the Lessee
is not in default under this Lease, the last year of this Lease, shall be
prorated between the Lessor and Lessee on the basis of the applicable tax
fiscal year.

 

4.4           Contest-Surety
Bond. Lessee shall have the right to contest the amount or validity of any
such imposition by appropriate legal proceedings, but this right shall not be
deemed or construed in any way as relieving or modifying or extending Lessee’s
covenant to pay any such imposition at the time and in the manner as in this Section
provided. Lessor shall, upon request, join in any such proceedings if Lessee
determines that it shall be necessary or convenient for Lessor to do so in
order for Lessee to prosecute properly such proceedings, but Lessor shall not
be subject to any costs or expenses in connection with any such proceeding
brought by Lessee. Lessee hereby covenants to indemnify and save Lessor
harmless from any such costs and expenses, including reasonable attorneys’ fees
and costs. Lessee, upon commencing such contest, shall deliver to Lessor a good
and sufficient surety bond guaranteeing payment of any taxes, penalties,
interest and other costs thereof, found due as a result of such contest.

 

4.5           Separate
Assessment of Lessee’s Personal Property. During the Term of this Lease, Lessee
shall attempt to cause all taxes, assessments, and other charges levied upon or
imposed upon any personal property situated in, on or about the Premises to be
levied or assessed separately from the Premises and not as a lien thereon.

 

4.6           Indemnification
of Lessor. Lessee shall protect and hold harmless Lessor and the Premises
and all Improvements in, on or about the same from all liability for any and
all such taxes, assessments and charges, together with any interest, penalties
or other sums thereby imposed, and from any sale or other proceeding to enforce
payment thereof.

 

ARTICLE 5. 
USE

 

5.1           Permitted
Uses. During the Term, Lessee shall have the right to use and occupy the
Premises, for all lawful purposes, except as may be otherwise provided in this
Lease (the “Permitted Uses”). Lessor shall obtain
and maintain, at Lessor’s sole cost, all licenses, approvals, and permits
required for operation of the Premises, including without limitation any
licenses, permits or approvals of any Gaming Authorities (as defined in Section
18.1).

 

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5.2           Limits
on Use; Licenses. During the Term of the Lease, the Premises and all Improvements
constructed and maintained thereon shall be used by Lessee for the Permitted Use
and for no other use or purpose.

 

5.3           Indemnity
for Violation of Law. Lessee covenants and agrees to indemnify and save Lessor
harmless from any penalties, damages or charges imposed for any violation of
any and all Laws (as defined in Section 5.3(A)) including Environmental
Laws (as defined Section 5.3(B)), whether occasioned by neglect,
omission or intentional act of Lessee or any person upon the Premises by
license or invitation of Lessee or holding or occupying the same or any part
thereof under or by right of Lessee; provided, however, this indemnity
contained in this Section 5.3 shall not apply if such penalties, damages
or charges are imposed for any violation of any Law including an Environmental
Law, occasioned by the gross negligence or intentional misconduct of Lessor,
its officers, members, agents, representatives, contractors, or employees.

 

A.            For
purposes of this Lease, “Laws” shall
mean all laws, statutes, rules, regulations, ordinances, judgments, and other
pronouncements, including Environmental Laws (as defined below), whether
statutory or common law, having the effect of law of the United States or any
state, county, city or other political subdivision or of any governmental
authority asserting jurisdiction over the Land, Improvements or either Party.

 

B.            For
purposes of this Lease, “Environmental Laws”
shall mean any present or future Law relating to the regulation or protection
of human health, safety or the environment or to emissions, discharges, release
or threatened release of pollutants, contaminants, chemicals or industrial,
toxic or Hazardous Substances (as defined in Section 15.7) or wastes
into the environment (including, without limitation, ambient air, soil, surface
water, ground water, wetlands, land or subsurface strata), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals or
industrial, toxic or Hazardous Substances.

 

5.4           Contest
of Validity of Law; Surety-Bond. Lessee shall have the right to contest by
appropriate legal proceedings, without cost or expense to Lessor, the validity
of any Law, if the terms of such Law may be legally held in abeyance without
subjecting Lessor to any liability whatsoever because of Lessee’s failure to
comply immediately therewith, in which event, such compliance may be postponed
until the final determination of any such proceeding. Lessee hereby covenants
to indemnify and save Lessor harmless from any costs and expenses, including
reasonable attorneys’ fees and costs arising from Lessee’s contestation of such
Law, and upon commencing such contest, Lessee shall deliver to Lessor a good
and sufficient surety bond guaranteeing payment of any fines, penalties,
interest, costs and expenses including reasonable attorneys’ fees which may be
reasonably expected to become a liability, either directly or indirectly for
Lessor as a result of such contest.

 

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ARTICLE 6. 
CONSTRUCTION BY LESSEE

 

6.1           Demolition
of Improvements. Lessee may, at its sole cost and expense, demolish any Improvements
(including those Improvements which are located upon the Land as of the
Commencement Date) upon receipt of all required permits and approvals for such
demolition. Lessee shall hold Lessor harmless for any and all liabilities,
claims or actions that result from the demolition of any Improvements
(including those which arise from the requirements of any Laws as they relate
to any remediation, abatement, transportation, or off-site storage of any Hazardous
Substance (as defined in Section 15.7) located in, on or about the Land
or Improvements, even if such Hazardous Substances are discovered after the
Commencement Date and are determined to have been present on the Premises prior
to the Commencement Date). All demolition shall be made in accordance with all
Laws.

 

6.2           Construction
of Project.

 

A.            Project
to Be Constructed by Lessee. Lessee may design, develop and build the
currently contemplated hotel and casino construction project (the “Project”), in accordance with the terms of this Article 6.
All construction shall be at Lessee’s sole cost and expense and in accordance
with all Laws including all applicable zoning and building code requirements.
No construction of the Project may be commenced by Lessee until Lessor has
approved Lessee’s plans and specifications, the contractor (who will have the
requisite construction experience) and the construction contract. If, in
addition to the Project, Lessee desires to construct a Major Work of
Construction, then no construction may be commenced by Lessee on such Major
Work of Construction until Lessor has approved Lessee’s plans and
specifications, the contractor (who will have the requisite construction
experience) and the construction contract. Lessor’s approval rights under this
Section 6.1.A. shall not be unreasonably, withheld, conditioned or delayed.

 

B.            Lessee
to Install and Pay for Utilities. Lessee shall determine the availability
of and shall, at its sole cost and expense, cause to be installed in, on or about
the Premises, all facilities necessary to supply all water, sewage, gas,
electricity, telephone, communications cable and other like services (collectively,
“Utilities”) required in Lessee’s
operations or otherwise desired by Lessee. During the Term of this Lease, Lessee
agrees to pay, without abatement, deduction or offset all charges and expenses
in connection with such Utility installation and service and to indemnify and
hold harmless Lessor from any and all such charges and expenses.

 

C.            Lessee’s
Payments for Off-Site Utilities. In the event that any off-site improvements,
capacity expansions or upgrades are required to any Utility, as a condition of
Lessee constructing the Project or otherwise, all such off-site Utility
improvements, capacity expansions or upgrades shall be at Lessee’s sole cost
and expense and Lessee shall indemnify and hold harmless Lessor for any and all
such costs or expenses.

 

D.            Lessee’s
Payments for All Off-Site Mitigations. In the event that Lessee agrees to
construct, constructs or causes to be constructed any off-site mitigations

 

8

 

as a condition
of receiving desired permits, entitlements, permissions, or any other rights to
construct or operate the Project or other Improvements, such off-site
mitigations shall be at the sole cost and expense of Lessee, Lessor shall have
no responsibility therefor and Lessee shall indemnify and hold Lessor harmless
for any charges, fines, costs, liabilities, or expenses arising from Lessee’s
off-site mitigation or its failure to complete and/or maintain such off-site
mitigations.

 

E.             Lessee’s
Indemnities. Lessee’s indemnities contained in this Section 6.2
shall survive the expiration or termination of this Lease.

 

6.3           Notice
of Commencement of a Major Work of Construction. Before the commencement (including
the receipt of materials) of any work of construction or of any substantial
repairs, alterations, additions, replacements or restoration in and about the Premises,
which are reasonably expected by Lessee to cost more than Two Hundred fifty Thousand
Dollars ($250,000) (a “Major Work of Construction”),
Lessee shall give to Lessor written notice thereof specifying the nature and
location of the intended work and the expected date of commencement thereof.

 

6.4           Conditions
of a Major Work of Construction. Before any Major Work of Construction is
commenced on the Premises, Lessee shall comply with all of the following
conditions or procure Lessor’s written waiver of the condition or conditions
specified in the waiver (which waiver may be given or denied in Lessor’s sole
and absolute discretion).

 

A.            Required
Governmental Approvals and Permits. Comply with all then applicable Laws
including codes, ordinances, regulations and requests for permits and approvals,
including, but not restricted to, a grading permit, building permits, zoning
and planning requests and approvals from various governmental or
quasi-governmental agencies, entities and bodies having jurisdiction, over the
Land, Improvements, the Project, the planned Major Work of Construction or the
Lessee (“Applicable Requirements”).

 

B.            Builder’s
Risk and Other Insurance. Deliver to Lessor: (i) certificates of insurance
evidencing coverage for “builder’s risk”; (ii) evidence of workmen’s compensation
insurance covering all persons employed in connection with the work and with
respect to whom death or bodily injury claims could be asserted against Lessor
or the Premises; (iii) and such other insurance as Lessor may reasonably
request, in each case as required by the Lender holding the Leasehold
Encumbrance. Lessee shall maintain, keep in force and pay all premiums required
to maintain and keep in force all insurance listed above at all times during
which such work is in progress.

 

6.5           Completion
of Construction. Once the work has begun, Lessee shall, with reasonable
diligence, prosecute to completion all Major Works of Construction. All work
shall be performed in a first-class manner, and shall comply with all applicable
governmental permits and Laws.

 

6.6           Ownership
of Improvements. Until the expiration or earlier termination of this Lease,
title to any Improvement constructed by Lessee, including the Project and other
items installed thereon, and any alterations, changes or additions thereto,
shall

 

9

 

remain solely
in Lessee; and Lessee alone shall be entitled to deduct all depreciation on Lessee’s
income tax return for such Improvements and any such building or building
equipment and/or other items, Improvements, additions, changes or alterations.

 

6.7           Notice
of Completion. Within ten (10) days after completion of any Major Work of
Construction, Lessee shall file or cause to be filed a notice of completion. Lessee
hereby appoints Lessor as Lessee’s attorney-in-fact to file such notice of
completion if Lessee fails to comply with the provisions of the preceding
sentence. Upon completion of the Project, Lessee shall deliver to Lessor a
complete set of the plans and specifications, certificates of occupancy and
other governmental approvals obtained by Lessee in connection with the
construction and occupancy of the Project.

 

6.8           Lessor’s
Assistance in Obtaining Governmental Approvals, Permits and Entitlements. Lessor
agrees to join with Lessee in obtaining any necessary permits or rezoning
needed or required by Lessee in the construction of Improvements on the Land,
but Lessor shall be without cost, expense or liability therefor. Lessor shall
reasonably cooperate with Lessee in connection with obtaining such approvals,
permits and entitlements and Lessor agrees to (a) execute all applications or
other documents relating to such governmental approvals, permits or
entitlements as are reasonably required to construct and develop Improvements
desired by Lessee; (b) at Lessee’s request attend any public hearing and
testify in support of those approvals, permits or entitlements as are
reasonably required to construct and develop Lessee’s desired Improvements; and
(c) convey, dedicate and/or grant easements over such portion of the Land as an
applicable public entity may require to be conveyed, dedicated and/or an
easement to be granted over, as a condition of Lessee obtaining an approval,
permit or entitlement reasonably required for Lessee to construct or develop its
desired Improvement; provided that in each case such actions do not (i) impose
any monetary obligations upon Lessor that Lessee does not agree in writing to
pay or perform, (ii) impose any material non-monetary obligations upon Lessor,
or (iii) materially affect the future use, or the value or marketability for
sale or lease, of the Land.

 

ARTICLE 7. 
ENCUMBRANCE OF LEASEHOLD ESTATE

 

7.1           Conditions
for Encumbrance.

 

A.            Lessee’s
Right to Encumber. Lessee, at any time and from time to time, may encumber its
rights under this Lease and any ownership interest it may have in any
Improvements or personal property located on the Land (collectively, the “Leasehold Estate”) by deed of trust, mortgage or other
security instrument (each a “Leasehold Encumbrance”);
provided, however, no Leasehold Encumbrance may constitute a lien on the fee
title of Lessor, and provided, further that Lessee obtains the prior written
consent of Lessor, which consent shall not be unreasonably withheld,
conditioned or delayed. Lessor approves and consents to construction finance to
be provided Lessee under the Credit Agreement among CANNERY CASINO RESORTS,
LLC, a Nevada limited liability company (“CCR”), THE CANNERY HOTEL AND
CASINO, LLC, a Nevada limited liability company

 

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(“CHC”),
NEVADA PALACE, LLC, a Nevada limited liability company (“Nevada Palace, LLC”)
and RAMPART RESORT MANAGEMENT, LLC, a Nevada limited liability company (“Rampart”;
Rampart, Nevada Palace, LLC, CHC, CCR and any other entity that may from time
to time be joined as a borrower thereunder are individually a “Borrower”
and collectively, the “Borrowers”), each lender from time to time party
thereto (collectively, the “Lenders” and individually, a “Lender”),
CIT LENDING SERVICES CORPORATION., as Syndication Agent, GENERAL ELECTRIC
CAPITAL CORPORATION, as Documentation Agent, and BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

 

B.            Lessor’s
Consent and Execution of Documents. Within ten (10) days of receipt of
Lessee’s written request, if Lessor and the Feeholder Lender shall have given
its consent to such Leasehold Encumbrance, Lessor shall execute a written
consent to an assignment of Lessee’s interest in this Lease to a trustee under
a deed of trust (“Leasehold Deed of Trust”) for the
benefit of a holder of a Leasehold Encumbrance (“Lender”),
and shall sign all necessary documents that Lender reasonably requires Lessor
to sign in order for Lender to make a Leasehold Encumbrance and for Lessee to
encumber its Leasehold Estate; provided, however, that no such Leasehold
Encumbrance nor the lien of any Leasehold Deed of Trust shall encumber the fee
title of Lessor, and such documentation shall be satisfactory to Lessor the
Feehold Lender.

 

C.            Leasehold
Encumbrance, Deed of Trust Subject to Lease. Any Leasehold Encumbrance, Leasehold
Deed of Trust and all rights acquired thereunder shall be subject to each and all
of the covenants, conditions and restrictions set forth in this Lease and to
all rights and interests of Lessor, except as otherwise provided in this Lease.

 

D.            Loan
Documents Furnished to Lessor. Within ten (10) days after the recordation
of a Leasehold Deed of Trust, Lessee shall furnish to Lessor (i) a complete
copy of such recorded Leasehold Deed of Trust, certified by the county
recorder, (ii) the note secured thereby, (iii) all other documents related to such
Leasehold Encumbrance, and (iv) the name and address of the Lender.

 

E.             Recording
of Request for Notice of Default. Concomitant with the recordation of the
Leasehold Deed of Trust, Lessee, at Lessee’s expense, shall cause to be
recorded in the Official Records of the County Recorder of Clark County,
Nevada, a written request executed and acknowledged by Lessor for a copy of any
notice of default and of any notice of sale under the Leasehold Deed of Trust as
provided by the laws of the State of Nevada.

 

7.2           Lessor’s
Right to Cure Default. Lessee shall be deemed to be in material default
under this Lease if there is a default under any Leasehold Encumbrance and Lessee
shall fail to cure such default within the period provided under the
instruments evidencing the Leasehold Encumbrance. In the event of such default,
including the non-payment of money under any Leasehold Encumbrance, Lessor
shall have the right to cure the same during the period provided under any such
Leasehold Encumbrance, or by Law, and if not reimbursed by Lessee for all
advances, costs and expenses of Lessor in connection with the curing of such
default within such period, Lessor shall further have the

 

11

 

right to
continue to keep and maintain any such Leasehold Encumbrance in good standing,
and, in which event, Lessor may, at its option, upon the expiration of the
original period within which said non-payment default is to be cured, declare Lessee
to be in default under this Lease. Lessor shall be subrogated to Lessee’s
position and Lessor shall be entitled to exercise the remedies provided in Article
13 for any default described in this Section 7.2.

 

7.3           Transfer
of Lessee’s Interest on Foreclosure under Leasehold Deed of Trust.

 

A.            Lessor’s
Consent Not Required for Transfer of Lessee’s Interest on Foreclosure. The consent
of Lessor shall not be required for a transfer of Lessee’s Leasehold Estate (and
assignment of this Lease) at foreclosure sale, judicial foreclosure or an
assignment in lieu of foreclosure on the lien of the Leasehold Deed of Trust.

 

B.            Subsequent
Transfer. The consent of Lessor shall not be required for the subsequent
transfer of the Leasehold Estate and assignment of this Lease, if such
subsequent transfer of the Leasehold Estate and assignment of this Lease is made
by a Lender which (i) is a bank, investment bank, savings and loan association
or insurance company (or a subsidiary of any one of the preceding types of
entities) and (ii) was the purchaser of the Leasehold Estate at a foreclosure
sale held by the trustee under the Leasehold Deed of Trust; provided that, in
either such event, Lender promptly gives notice to Lessor in writing of any
such transfer, setting forth the name and address of the transferee, the effective
date of such transfer and the express agreement of the transferee assuming and
agreeing to perform all of Lessee’s obligations under this Lease, together with
a copy of the document by which such transfer was made.

 

C.            Liability
of Transferee. Any transferee or subsequent transferee under Section 7.3
shall be liable to perform the obligations of Lessee under this Lease only for so
long as such transferee holds title to the Leasehold Estate.

 

7.4           Lender’s
Rights on Termination of Lease - Cure Default or Exercise Power of Sale.

 

A.            Each
Lender under a Leasehold Encumbrance or Leasehold Deed of Trust, in addition to
the rights described in Sections 7.4(B) and 7.4(C), shall have the
right to perform any term, covenant, condition or agreement and to remedy, in
accordance with the terms of this Lease, any default by Lessee under this
Lease, and Lessor shall accept such performance by any such Lender with the
same force and effect as if furnished by Lessee. Lessor hereby consents to all
acts of such Lender in connection with any such performance, including, without
limitation, entry upon the Premises and commencement and prosecution of foreclosure
or other proceedings in order to obtain possession of the Premises from Lessee.

 

B.            Lessee
may delegate irrevocably to the Lender under any Leasehold Deed of Trust the
authority to exercise any or all of Lessee’s rights hereunder, but no such
delegation shall be binding upon Lessor unless and until either Lessee or the
Lender shall give to Lessor a true and correct copy of a written instrument
effecting such

 

12

 

delegation. Such
delegation of authority may be effected by the terms of the Leasehold Deed of
Trust itself, in which case the delivery to Lessor of a true and correct copy
of the Leasehold Deed of Trust, together with a written notice specifying the
provisions therein which delegate such authority to such Lender, shall be
sufficient to give Lessor notice of such delegation.

 

C.            In
case of a default by Lessee in the performance or observance of any term,
covenant, condition or agreement on Lessee’s part to be performed under this
Lease: (i) each Lender under a Leasehold Deed of Trust shall have an additional
twenty (20) business days beyond the applicable cure period set forth in Section
13.1 hereof, within which to cure or to commence the curing of such
defaults, as therein provided, during which additional period this Lease shall
remain in full force and effect; and (ii) if such default is: (1) other than
under a term, covenant, condition or agreement the breach of which can be cured
solely by the payment of rent or other sum of money; (2) of such a nature that
the same cannot practicably be cured by the Lender without taking possession of
the Premises from Lessee or (3) of such a nature that the same is not
susceptible of being cured by the Lender, then Lessor shall not terminate this
Lease pursuant to Section 13.1 hereof, or otherwise by reason of such
default, if and so long as:

 

(i)            In
the case of a default which cannot practicably be cured by the Lender without
taking possession of the Premises from Lessee: (1) the Lender shall deliver to Lessor
within fifteen (15) days of the date on which it received written notice of
Lessee’s default from Lessor, a written notice wherein the Lender
unconditionally guarantees to Lessor that it will proceed diligently to attempt
to cure such default and that, if this Lease thereafter is terminated prior to
the curing of such default because the Lender ceases its diligent efforts to
cure the same, the Lender shall pay to Lessor the cost of curing such default
and (2) the Lender shall proceed diligently to obtain possession of the
Premises from Lessee (including possession by a receiver), and, upon obtaining
such possession, shall proceed diligently to cure such default; and

 

(ii)           In
the case of a default which is not susceptible of being cured by the Lender,
the Lender shall institute foreclosure proceedings and diligently prosecute the
same to completion (unless in the meantime the Lender shall acquire the
Leasehold Estate, either in its own name or through a nominee, by assignment in
lieu of foreclosure or otherwise).

 

D.            No
Lender under a Leasehold Deed of Trust shall be required, pursuant to Section
7.4(C), to continue to proceed to obtain possession of the Premises from Lessee,
to continue in possession of the Premises as mortgagee or to continue to
prosecute foreclosure proceedings following the cure of such default. Nothing
herein shall preclude Lessor from exercising any of its rights or remedies with
respect to any other default by Lessee during the period of Lessor’s
forbearance under this Article 7, but in such event the Lender shall
have all of the rights and protections provided in this Article 7 with
respect to such other default. If the Lender, or its nominee, or a purchaser at
a foreclosure sale, shall cure all continuing defaults of Lessee hereunder and
non-continuing defaults susceptible of being cured, then the defaults of any
prior holder of the Leasehold Estate

 

13

 

which are not
continuing and are not susceptible of being cured by such Lender or by said
purchaser shall no longer be deemed to be defaults hereunder.

 

E.             Except
as provided in Section 7.4(C)(i), no Lender under a Leasehold Deed of
Trust shall be personally liable or obligated to perform the obligations of Lessee
under the Lease unless and until such Lender becomes the owner of the Leasehold
Estate by foreclosure, assignment or transfer in lieu of foreclosure or
otherwise. Thereafter, such Lender and its successors and assigns shall each
remain personally liable for the obligations of Lessee only so long as they are
the owner of the Leasehold Estate. Any such Lender which becomes the owner of
the Leasehold Estate shall be entitled to all of the rights and privileges of Lessee
under this Lease, and shall have the right to assign or sublet in the same
manner as Lessee as well as those rights granted a Lender pursuant to Section
7.3.

 

7.5           New
Lease. Upon written notice from any Lender or any successor or assign of a
Lender following the termination of this Lease as a result of Lessee’s default,
Lessor shall enter into a new lease with such Lender or successor or assign of
a Lender covering the Premises for the remainder of the Term of this Lease, at
the same rent and subject to the same covenants, agreements, conditions,
provisions, restrictions and limitations contained in this Lease; provided that
such Lender, or successor or assign of a Lender: (a) shall give written notice
of its intent to enter into such a new lease within sixty (60) days after it
has become the owner of the Leasehold Estate, whether by foreclosure, transfer
in lieu of foreclosure or otherwise and (b) cures all then existing uncured
defaults of Lessee under this Lease which can practicably be cured by such
Lender, or successor or assign of a Lender. Such new lease, and this covenant,
shall have the same priority with respect to any rights, liens and interests
intervening between the date of this Lease and the effective date of such new
lease as this Lease. Each sublessee of the Premises whose sublease was in force
and effect immediately prior to the termination of this Lease and did not by
its own terms expire prior to the effective date of the new lease, shall attorn
to the Lessee under the new lease. Each sublessee who hereafter enters into a
sublease of all or any portion of the Premises shall be deemed to have agreed
to the provisions of this Section 7.5. In the event that more than one
Lender holding a Leasehold Deed of Trust on the same portion of the Premises
attempts to exercise the right to obtain a new lease pursuant to this Section
7.5 for such portion of the Premises, then priority for determination of
which Lender is entitled to enter into a new lease, free and clear of the
rights of all other mortgages, shall be given to the Lender holding the
Leasehold Deed of Trust with the highest priority lien upon such portion of the
Premises. Lessee shall not be relieved of any liability to Lessor under this
Lease by reason of Lessor’s entering into a new lease pursuant to this Article
7.

 

7.6           Protection
of Lender.

 

A.            Except
in the exercise of any of Lender’s remedies under this Article 7, this
Lease shall not be cancelled, surrendered, modified or amended without the
written consent of a Lender, which consent shall not be unreasonably withheld.

 

B.            If
Lessor shall give any notice, demand, election or other communication to Lessee,
Lessor shall at the same time give a copy of each such notice to

 

14

 

each Lender at
the address previously designated by such Lender by written notice to Lessor. Such
copies of notices shall be sent by certified mail, return receipt requested, or
by Federal Express or similar overnight delivery service, and shall be deemed
given in the same manner as notices to Lessor and Lessee pursuant to Section
17.12. No notice given by Lessor to Lessee shall be binding upon or affect Lessee
or any such Lender unless a copy of such notice shall be given to such Lender
pursuant to this Section 7.6(B). In the case of an assignment of a
Leasehold Deed of Trust or a change in the address of the Lender thereunder,
the Lender or its assignee, by written notice to Lessor, may change the address
to which copies of notices are to be sent. Lessor shall not be bound to
recognize any assignment of a Leasehold Deed of Trust unless and until Lessor
shall receive a copy of the recorded assignment and the name and address of the
assignee. After Lessor has been given such notice, such assignee shall be
deemed to be the Lender for all purposes under this Article 7.

 

C.            Lessor
hereby agrees to execute such modifications and amendments to this Lease as may
be reasonably required by any Lender or prospective Lender under a Leasehold Deed
of Trust and/or Leasehold Encumbrance, provided that such modifications or
amendments do not materially diminish the rights of Lessor.

 

7.7           Asset
Based Lending. Lessee shall have the right at any time to encumber all or
any part of its interest in its inventory or trade fixtures in any Improvement
placed on the Land with a lien to secure financing, and Lessor agrees to
execute a waiver and such other agreements as such asset-based lender may
reasonably request in connection with such financing. Lessee agrees that any
such waiver by Lessor shall include a provision reasonably acceptable to Lessor
to the effect that: (a) such lender shall have the right to remove such
financed items only during the Term of the Lease and for a period of sixty (60)
days after Lessor has given written notice to such lender that the Lease has
terminated, for any reason; (b) if such lender undertakes such removal, such
lender shall be obligated to repair, at such lender’s expense, any damage to
the Improvements caused by the removal of any of such financed items; and (c)
if such lender fails to remove such financed items during the Term of this
Lease or within sixty (60) days after receiving written notice from Lessor of
the termination of this Lease, such financed items shall be deemed to have been
abandoned by such lender to Lessor.

 

7.8           Assumability
of any Leasehold Encumbrance. Any Leasehold Encumbrance shall provide the
Lessor with the right (but not the obligation) by payment of any assumption fee
and compliance with such Lender’s applicable underwriting criteria, to assume
any Leasehold Encumbrance in the event of any default by Lessee which results
in the termination of this Lease. Lessee shall cause a Lender to execute all
documentation to facilitate this right. Lessor’s exercise of this right shall
not constitute a waiver of any other right Lessor may have against Lessee, any
surety or guarantor or anyone else.

 

7.9           Event
of Conflict. In the event a court, arbitrator or other arbitral body
asserting jurisdiction over this Lease determines that a conflict exists
between any term of this Article 7 and any term of Article 13,
the term contained in this Article 7 shall be controlling.

 

15

 

ARTICLE 8. 
REPAIRS AND RESTORATION

 

8.1           Duty
to Maintain and Repair Premises.

 

A.            No
Responsibility of Lessor. Lessor shall not be required or obligated to make
any changes, alterations, additions, improvements or repairs in, on or about
the Premises, or any part thereof, during the Term of this Lease.

 

B.            Lessee’s
Duty to Maintain Premises. At all times during the Term, Lessee, at its
sole cost and expense, shall keep and maintain the Premises and all
Improvements thereon and all facilities appurtenant thereto in good repair and
in a safe condition, and the whole of the Premises, including the Land, all
Improvements, including, without limitation, the Project and landscaping in a
clean, sanitary, orderly and attractive condition. Lessee shall make any and
all additions to or alterations or repairs in and about the Premises and the Improvements
which may be required, and shall otherwise observe and comply with all Laws and
Applicable Requirements in effect from time to time; and Lessee shall indemnify
and save harmless Lessor against all actions, claims and damages by reason of Lessee’s
failure to comply with and perform the provisions of this Section 8.1(B).

 

8.2           Duty
to Repair or Restore Following Damage or Destruction.

 

A.            Repair
or Restoration Following Damage or Destruction. If during the Term hereof
any Improvement on the Land, including, without limitation, the Project, or any
part thereof, shall be damaged or destroyed by fire or other casualty, neither Lessor
nor Lessee shall have any obligation to repair or restore such Improvements;
but if Lessee elects to repair or restore such Improvements, any such repair or
restoration shall be made at Lessee’s sole cost and expense. If Lessee does not
elect to repair or to restore the damaged or destroyed portion of any Improvements,
Lessee shall nevertheless be obligated to keep the remaining portion of the
Premises in the manner prescribed in Section 8.1.

 

B.            Ownership
of Insurance Proceeds. All insurance proceeds collected by Lessee for such
damage or destruction shall be the sole property of Lessee or, if so specified
in any Leasehold Deed of Trust or any Leasehold Encumbrance, its Lender or
Lenders.

 

ARTICLE 9. 
MECHANIC’S LIENS

 

9.1           Prohibition
Against Mechanic’s Liens - Indemnification of Lessor. Lessee shall not
suffer or permit to be enforced against the Premises, or any part thereof, any
mechanic’s, materialman’s, contractor’s or subcontractor’s liens arising from
or any claim for damages growing out of the work of any construction, repair,
restoration, replacement or Improvement, or any other claim or demand howsoever
the same may arise, but Lessee shall pay or cause to be paid all of such liens,
claims or demands before any action is brought to enforce the same against the
Land; and Lessee agrees to

 

16

 

indemnify and
hold Lessor and the Land free and harmless from all liability for any and all
such liens, claims and demands, together with reasonable attorneys’ fees and
all costs and expenses in connection therewith.

 

9.2           Contest
by Lessee - Surety Bond. If Lessee shall in good faith contest the validity
of any such lien, claim or demand, then Lessee shall, at its expense, defend
itself and Lessor against the same and shall pay and satisfy any adverse
judgment that may be rendered thereon before the enforcement thereof against Lessor
or the Premises, upon the condition that if Lessor shall so require, Lessee
shall furnish to Lessor a surety bond satisfactory to Lessor in an amount equal
to such contested lien, claim or demand indemnifying Lessor against liability
for the same, and holding the Premises free from the effect of such lien or
claim, or if Lessor shall so request, Lessee shall procure and record a bond
freeing the Premises from the effect of such lien or claim or action thereon,
as provided in Nevada Revised Statutes Sections 108.2413 et seq.

 

9.3           Lessor’s
Right to Remove Lien. If Lessee fails to discharge such lien or furnish a
bond against the foreclosure thereof, as provided by the laws of the State of
Nevada, Lessor may, but shall not be obligated to, discharge the same or take
such other action as Lessor deems necessary to prevent a judgment of foreclosure
upon said lien from being executed against the property, and all costs and
expenses, including reasonable attorneys’ fees incurred by Lessor, shall be
repaid by Lessee upon demand, and, if unpaid, may be treated as additional
rent.

 

9.4           Notices
of Non-Responsibility. Nothing in this Lease shall be deemed or construed
in any way as constituting the consent or request of Lessor, express or
implied, by inference or otherwise, to any contractor, subcontractor, laborer
or materialman for the performance of any labor or the furnishing of any
materials for any specific improvement, alteration or repair of or to the
Premises, any Improvements, or any part thereof. Lessor shall have the right at
all reasonable times to post and keep posted on the Premises such notices of
non-responsibility as Lessor may deem necessary for the protection of Lessor
and the fee title of the Premises from mechanic’s and materialman’s liens. Lessor
hereby notifies Lessee that Lessee is required to record a surety bond before
undertaking a Major Work of Construction upon the Premises as provided in
Nevada Revised Statutes Section 108.234(4).

 

ARTICLE 10. 
EMINENT DOMAIN

 

10.1         Definition
of Total and Partial Taking. The term “Total Taking”
as used in this Article 10 means the taking of the entire Premises (or
of so much of the Land as to prevent or substantially impair the conduct of
Lessee’s business thereon) through the power or threat of eminent domain by any
public or private authority lawfully possessed of that power. The term “Partial Taking” means the taking (other than a Total Taking)
of a portion of the Premises, through the power or threat of eminent domain by
any public or private authority lawfully possessed of that power.

 

17

 

10.2         Total
Taking - Termination. If during the Term there shall be a Total Taking,
then the Leasehold Estate shall cease and terminate as of the date the actual
physical possession of the Premises shall be so taken.

 

10.3         Partial
Taking - Partial Termination. If during the Term of this Lease there shall
be a Partial Taking, this Lease shall terminate as to the portion of the Premises
taken upon the date upon which actual possession of the portion of the Premises
is taken pursuant to eminent domain proceedings, but the Lease shall continue
in force and effect as to the remainder of the Premises. The rent payable by Lessee
for the balance of the Term shall not be abated, but the Lessee will receive an
allocation of the award as set forth in Section 10.4(B)(ii).

 

10.4         Allocation
of Award. All compensation and damages awarded for the taking of the Premises
or any portion thereof shall be allocated as follows:

 

A.            Total
Taking. In the event of a Total Taking, (i) Lessee shall be entitled to: (1)
any award for the loss of its Leasehold Estate, the Project or any Improvements
constructed on the Premises by Lessee, (2) any award on account of any cost or
loss Lessee may sustain in the removal of Lessee’s fixtures, equipment and
furnishings, and (ii) Lessor shall be entitled to the balance of the award.

 

B.            Partial
Taking. In the event of a Partial Taking, (i) Lessor shall be entitled to
any award for the loss of its fee interest in the Premises, as encumbered by
the Leasehold Estate and (ii) Lessee shall be entitled to: (1) any award for
diminution in value of its Leasehold Estate, (2) any award on account of any
cost or loss Lessee may sustain in the removal of Lessee’s fixtures, equipment
and furnishings, and (3)  any award which
may be made as a result of any alterations, modifications or repairs which may
be reasonably required by Lessee in order to place the remaining portion of the
Premises not so taken in a suitable condition for the continuance of Lessee’s
tenancy.

 

10.5         Effect
of Termination. If this Lease is terminated, pursuant to Section 10.2,
all rents and other charges payable by Lessee to Lessor hereunder, shall be
paid up to the date upon which actual physical possession shall be taken by the
condemning authority, and the Parties shall thereupon be released from all
further liability.

 

ARTICLE 11. 
INSURANCE AND INDEMNIFICATION

 

11.1         Lessee’s
Insurance.

 

A.            Insurance
Coverage of Premises. Lessee shall, at all times during the Term at Lessee’s
sole expense, keep all Improvements which are now or hereafter a part of the
Premises insured against loss or damage by fire and the extended coverage
hazards in accordance with the Schedule of Insurance attached hereto as Exhibit “C.”  All proceeds of casualty or hazard
insurance shall be paid to Lessee, subject to rights of Leasehold Lender, and
shall under no circumstances be paid to Feehold Lenders unless (i) pursuant to
some other express provision of this Agreement, Lessee is required to pay or

 

18

 

assign such proceeds
to Lessor and such payment or assignment is consistent with the rights of
Leasehold Lender under this Agreement and (ii) pursuant to a Feehold
Encumbrance such proceeds payable to Lessor shall be paid instead to the
Feehold Lender. Any loss adjustment shall require the written consent of both Lessor
and Lessee.

 

B.            Personal
Injury Liability Insurance. Lessee shall maintain in effect throughout the
Term personal injury liability insurance covering the Premises and its
appurtenances and the sidewalks fronting thereon in accordance with the
Schedule of Insurance attached hereto as Exhibit “C.”  Lessor shall be named as an additional
insured on said policies.

 

C.            Lessor’s
Right to Pay Premiums On Behalf Of Lessee. All of the policies of insurance
referred to in this section shall be written in form reasonably satisfactory to
Lessor and by insurance companies reasonably satisfactory to Lessor having an
A.M Best rating equal to or superior to the insurers listed on Exhibit “C.”.
Lessee shall pay all the premiums therefor and deliver such policies, or
certificates thereof, to Lessor, and in the event of the failure of Lessee
either to effect such insurance in the names herein called for or to pay the
premiums therefor or to deliver such policies, or certificates thereof to Lessor,
Lessor shall be entitled, but shall have no obligation, to effect such
insurance and pay the premiums therefor, which premiums shall be repayable to Lessor
with the next installment Rent, and failure to repay the same shall carry with
it the same consequences as failure to pay any installment of Rent.

 

D.            Adjustment
of Coverage. In the event that either Party shall at any time deem the
limits of the personal injury or property damage public liability insurance
then carried to be either excessive or insufficient, the Parties shall endeavor
to agree on the proper and reasonable limits for such insurance then to be
carried and such insurance shall thereafter be carried with the limits thus
agreed on until further change pursuant to the provisions of this section; but
if the Parties shall be unable to agree thereon, the proper and reasonable
limits for such insurance then to be carried shall be determined by an
impartial third person selected by the Parties or should they be unable to agree
on a selection, by an impartial third person chosen by the insurance carrier
carrying the greatest percentage of liability insurance on the Premises, or its
successors on application by either Party made after thirty (30) days written
notice to the other Party of the time and place of such application, and the
decision of such impartial third person as to the proper and reasonable limits
for such insurance then to be carried shall be binding on the Parties, and such
insurance shall be carried with the limits as thus determined until such limits
shall again be changed pursuant to the provisions of this section. The expenses
of such determination shall be borne equally by the Parties.

 

E.             Blanket
Insurance Policies. Notwithstanding anything to the contrary contained in
this section, Lessee’s obligations to carry the insurance provided for herein
may be brought within the coverage of a so called blanket policy or policies of
insurance carried and maintained by Lessee; provided, however, that the
coverage afforded Lessor shall not be reduced or diminished or otherwise be
different from that which would exist under a separate policy meeting all other
requirements of this Agreement by reason of the use of such blanket policy of
insurance, and provided further.

 

19

 

11.2         Indemnification
of Lessor. Except in the case of Lessor’s gross negligence or intentional
misconduct, Lessor shall not be liable for any loss, damage or injury of any
kind or character to any person or property arising from any use of the Premises,
or any part thereof, or caused by any defect in any Improvement thereon or in
any equipment or other facility therein, or caused by or arising from any act
or omission of Lessee, or of any of its agents, employees, licensees or
invitees, or by or from any accident on the Premises or any fire or other
casualty thereon, or occasioned by the failure of Lessee to maintain the
premises in safe condition, or arising from any other cause whatsoever; and Lessee,
as a material part of the consideration of this Lease, hereby waives on Lessee’s
behalf all claims and demands against Lessor for any such loss, damage or
injury of Lessee, and hereby agrees to indemnify and hold Lessor entirely free
and harmless from all liability for any such loss, damage or injury of other
persons, and from all costs and expenses arising therefrom.

 

11.3         Course
Of Construction; Builder’s Risk. In addition to the Builders Risk and
Course of Construction Insurance required pursuant to Section, 6.4B, Lessee
shall obtain and maintain at all times prior to the completion of a Major Work
of Construction, Builder’s Risk and Course of Construction Insurance, naming Lessor
and the construction lender as an additional insured and, where appropriate,
loss payee. When requested by Lessor to do so, Lessee shall provide Lessor with
a copy of all such insurance policies. Such insurance shall be in amounts, with
coverage and deductibles sufficient, to protect Lessor under any and all
circumstances. Any such policy shall require a thirty (30) day notice of
cancellation.

 

ARTICLE 12. 
ASSIGNMENTS AND SUBLETTING

 

12.1         Lease
is Assignable.

 

A.            Assignability.
This Lease shall be freely assignable by Lessee without Lessor’s written
consent to any entity or person that directly or indirectly acquires, through
merger, purchase or otherwise a (“Transfer”) (i) Lessee’s membership interests,
(ii) an entity which owns directly or indirectly all or part of Lessee’s
membership interests, (iii) control of Lessee or an entity which owns directly
or indirectly or controls Lessee, or (iv) substantially all of Lessee’s assets,
so long as such Transfer is not incident to a change of control that would be a
breach) under the Credit Facility of Cannery Casino Resorts, LLC, a Nevada limited
liability company and the parent entity of Lessee.

 

B.            If
Lessee desires to assign this Lease to an entity or person other than as set
forth in Section 12.1(A), Lessee shall provide Lessor with written
notice of its intent to assign and Lessor shall have thirty (30) days after
receipt of such notice in which to review and approve or disapprove Lessee’s
intended assignment (“Assignment Approval Period”).
Lessor shall be deemed to have approved an assignment unless it provides Lessee
with written notice of its disapproval not later than the end of the Assignment
Approval Period (“Disapproval Notice”). Such
Disapproval Notice shall list with specificity the reason or reasons for such
disapproval. Notwithstanding the preceding portion of this

 

20

 

Section 12.1(B), Lessor’s approval shall not
be unreasonably delayed, conditioned or withheld.

 

12.2         Lessee
has Right to Sublet. Provided that (a) Lessee continues to be responsible
for fulfilling all of its covenants and conditions under this Lease and (b)
Lessee is not then in default under this Lease, Lessee shall have the right to enter
into subleases or any portion of the Premises, so long as any such sublease
does not exceed 10,000 square feet in area. Any proposed sublease of a portion
of the Premises in excess of 10,000 square feet shall require Lessor’s consent
as provided in Section 12.1.B..

 

12.3         Lessor’s
Assignment. in the event that Lessor transfers, assigns, disposes of or
otherwise conveys any interest in this Lease, such transferor Lessor’s
liability and obligation under this Lease shall cease, and transferor Lessor
shall be released from any liability thereunder, as of the date transferor
Lessor no longer has an ownership interest in the underlying fee. Lessee waives
the protection of any statute or rule of law which gives or purports to give
Lessee any right to terminate this Lease or surrender possession of the
Premises upon the transfer of Lessor’s interest.

 

ARTICLE 13. 
DEFAULT AND REMEDIES

 

13.1         Termination
by Lessor on Specified Defaults. Should Lessee: (a) fail to pay or cause to
be paid any tax, assessment, insurance premium, lien, claim, charge, obligation
or demand herein provided to be paid or caused to be paid by Lessee at the
times and in the manner herein provided; (b) default in the payment of any
installment of rent or any other sum when due, as herein provided; or (c) fail
to use, maintain and operate the Premises, as herein required, or abandon the Premises;
or (d) default in the performance of or breach of any other covenant, condition
or restriction of this Lease herein provided to be kept or performed by Lessee;
and if any such default or breach shall continue uncured for a period of thirty
(30) days (unless such cure is commenced during such thirty (30) day period and
Lessee proceeds diligently to complete such cure), from and after service upon Lessee
of written notice by Lessor, then, and in any such event, Lessor, at its own
option, and otherwise subject to the terms of this Lease (including such Lender’s
rights as are specified in Article 7), may terminate this Lease by
giving Lessee written notice, and thereupon the rights of Lessee in and to the Land
and all Improvements thereon shall cease and end, and Lessor, without further
notice or demand or legal process, may reenter and take possession of the Land
and all Improvements thereon and oust Lessee and all persons claiming under Lessee
therefrom, and Lessee and all such persons shall quit and surrender possession
of the Land and all Improvements thereon to Lessor.

 

13.2         Other
Remedies. Any termination of this Lease, as herein provided, shall not
relieve Lessee from the payment of any sum or sums that shall then be due and
payable to Lessor hereunder or any claim for damages then or theretofore
accruing against Lessee hereunder, and any such termination shall not prevent Lessor
from enforcing the payment of any such sum or sums or claim for damages by any
remedy provided for by

 

21

 

law, or from
recovering damages from Lessee for any default thereunder. All rights, options
and remedies of Lessor contained in this Lease shall be construed and held to
be cumulative, and no one of them shall be exclusive of the other, and Lessor
shall have the right to pursue any one or all of such remedies or any other
remedy or relief which may be provided by law, whether or not stated in this
Lease. No waiver by Lessor of a breach of any of the covenants, conditions or
restrictions of this Lease shall be construed or held to be a waiver of any
succeeding or preceding breach of the same or any other covenant, condition or
restriction contained herein.

 

13.3         Measure
of Damages. In addition to any of the above, the damages that Lessor may
recover under this Lease include the worth, at the time of award, of the amount
by which the unpaid rent for the balance of the Term, after the time of award,
exceeds the amount of such rental loss for the same period that Lessee proves
could be reasonably avoided.

 

13.4         Continuation
of Lease During Breach. At Lessor’s option, if Lessee has breached this
Lease and has abandoned the Premises, no notice of termination will be given,
and this Lease will continue in effect for so long as Lessor does not terminate
Lessee’s right to possession. Lessor may in that case enforce all its rights
and remedies under this Lease, including the right to recover rent as it
becomes due.

 

13.5         Lenders
Rights. Nothing contained in this Article 13 or elsewhere in this
Lease shall modify, amend or restrict any rights to notice, cure, a new lease,
assignment, or other rights reserved for a lender pursuant to Article 7.

 

ARTICLE 14. 
SURRENDER AND REMOVAL

 

14.1         Surrender
of Possession. Upon the expiration of the Term of this Lease or any earlier
termination thereof, Lessee shall surrender to Lessor possession of the Premises
and all Improvements thereon (including the Project).

 

14.2         Removal
of Personal Property. If Lessee shall not then be in default under any of
the covenants and conditions hereof, Lessee may remove or cause to be removed
all movable furniture, furnishings and equipment installed in the buildings on
the Land. Any of such personal property that is not removed from the Premises
within thirty (30) days after the date of any termination of this Lease
thereafter shall be deemed to belong to Lessor without the payment of any
consideration.

 

14.3         Lessee’s
Quitclaim. Upon the expiration of the Lease Term, or any earlier
termination of this Lease, Lessee agrees to execute, acknowledge and deliver to
Lessor a proper instrument in writing, releasing and quitclaiming to Lessor all
right, title and interest of Lessee in and to the Premises and all Improvements.

 

22

 

ARTICLE 15. 
LESSOR’S GENERAL PROTECTIVE PROVISIONS

 

15.1         Lessor’s
Right of Entry and Inspection. On reasonable notice and with reasonable
frequency, Lessee shall permit Lessor or Lessor’s agent, representatives or
employees to enter upon the Premises (a) to determine whether Lessee is
complying with this Lease, (b) to show the Premises, to potential purchasers or
mortgagees of Lessor’s fee interest, (c) beginning three (3) years before the
scheduled expiration of the Term or at any time when Lessee is in breach or
default (and the time period for Lessee and/or any lender to cure has expired)
for the purpose of showing the Premises to a prospective tenant, or (d) where
this Lease otherwise grants Lessor the right to cure Lessee’s non-monetary breach
or default, for the purpose of curing such non-monetary breach or default by maintaining,
repairing or altering the Land or the Improvements.

 

15.2         Lessor’s
Right to Cure Default. In the event Lessee shall fail to pay and discharge
or cause to be paid and discharged, when due and payable, any tax, assessment
or other charge upon or in connection with the Premises, or any lien or claim
for labor or material employed or used in or any claim for damages arising out
of the construction, repair, restoration, replacement, maintenance and use of
the Land and the Improvements, or any judgment on any contested lien or claim,
or any insurance premium or expense in connection with the Land and the Improvements,
or any other claim, charge or demand which Lessee has agreed to pay or cause to
be paid under the covenants and conditions of this Lease, and if Lessee, after thirty
(30) days’ written notice from Lessor to do so, shall fail to pay and discharge
the same, then Lessor may, but shall not be obligated to, at its option, pay
any such tax, assessment, insurance expense, lien, claim, charge or demand, or
settle or discharge any action therefor, or judgment thereon, and all costs,
expenses and other sums incurred or paid by Lessor in connection with any of
the foregoing, shall be paid by Lessee to Lessor upon demand, together with
interest thereon at the Default Rate from the date incurred or paid, and any
default in such repayment shall constitute a breach of the covenants and
conditions of this Lease. There are no third party beneficiaries to this Section
or any other provision or language of this Lease, whether named herein or not.

 

15.3         Transfer
by Lessor - Release From Liability. In the event Lessor shall sell or
transfer the Premises or any part thereof and, as a part of such transaction,
shall assign its interest as Lessor in and to this Lease, then from and after
the effective date of such sale, assignment or transfer, the transferor Lessor
shall have no further liability under this Lease to Lessee, except as to
matters of liability which shall have accrued and are unsatisfied as of the date
of transfer, it being intended that the covenants and obligations contained in
this Lease on the part of Lessor shall be binding upon any transferee lessor
and its successors and assigns only during and in respect of their respective
periods of ownership of the fee title.

 

15.4         Joint
and Several Liability. If more than one Lessee or Lessor is named under
this Lease the obligation of all such Lessees or Lessors shall be and is joint
and several.

 

23

 

15.5         “AS
IS WITH ALL FAULTS” CONDITION. As a material inducement for Lessor to enter
into this Lease, Lessee acknowledges that Lessee has previously conducted
physical inspections of the Premises and is satisfied that the Premises are appropriate
for Lessee’s intended use. LESSEE SPECIFICALLY ACKNOWLEDGES AND AGREES THAT
THIS LEASE IS AN AGREEMENT FOR LESSEE TO LEASE THE PREMISES ON AN “AS IS WITH
ALL FAULTS” BASIS AND THAT LESSEE IS NOT RELYING ON ANY REPRESENTATIONS OR
WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM LESSOR, ITS
MEMBERS, MANAGERS, OFFICERS, AGENTS, REPRESENTATIVES OR EMPLOYEES AS TO ANY
MATTERS CONCERNING THE CONDITION OF PREMISES, INCLUDING, WITHOUT
LIMITATION:  (a) the quality, nature,
adequacy and physical condition and aspects of the Land or the Improvements
including, but not limited to, the structural elements, foundation, roof,
appurtenances, access, landscaping, parking facilities and the electrical,
mechanical, plumbing, sewage, and Utility systems, facilities, appliances, and
the square footage within the Improvements; (b) the quality, nature, adequacy,
and physical condition of soils, geology and any groundwater; (c) the
existence, quality, nature, adequacy and physical condition of Utilities serving
the Land and Improvements; (d) the development potential of the Land, and the Land’s
and Improvements’ use, habitability, merchantability, or fitness, or the
suitability, value or adequacy of the Land or Improvements for any particular
purpose; (e) the zoning, entitlements or other legal status of the Land or
Improvements or any other public or private restrictions on use of the Land or
Improvements; (f) the placement or enforcement of a moratorium (including
utility moratorium) on issuing approvals, entitlements or permits; (g) the
location of the Land within an improvement district, a redevelopment district,
or any other special district; (h) the presence of any archaeological or
culturally significant remains or artifacts on the Land; (i) the presence of
any plant or animal species (or of their habitat) designated as endangered or
otherwise listed on any federal, states or local government catalogue of
species subject to protective measures or special study, interest or concern;
(j) the compliance of the Land or Improvements with any applicable codes, laws,
regulations, statutes, ordinances, covenants, conditions and restrictions of
any governmental or quasi-governmental entity or of any other person or entity;
(k) the presence of Hazardous Substances (as defined in Section 15.7, below) on,
under or about the Land and/or the Improvements or any adjoining, neighboring
or near-by property; (l) the quality of any labor and materials used in any
Improvements; (m) the proximity of the Land to any seismic fault or special
studies zone; (n) the location of the Land in relation to any designated flood
hazard zone; and (o) the condition of any personal property.

 

15.6         No
Other Warranties. Lessee represents, warrants and covenants that no
warranties whatsoever (whether express or implied) as to quality, condition,
merchantability, use or fitness for use of the Land or any Improvements (for
any purpose) have been made by Lessor.

 

15.7         Hazardous
Substances. The term “Hazardous Substances”
shall mean at any time, (a) any substance that is then defined or listed in, or
otherwise classified pursuant to, any Laws, Environmental Laws, Applicable
Requirements, or any occupational safety and health laws, rules or regulation
as a “hazardous substance,” “hazardous contaminants,” “hazardous constituents,”
“hazardous substances,” “hazardous waste,”

 

24

 

“infectious
waste,” “toxic substance,” “toxic pollutant,” “toxic emission,” “air
contaminant,” “hazardous material” or any other formulation intended to define,
list, or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, radioactivity, carcinogenicity,
toxicity, reproductive toxicity, or “EP toxicity,” (b) any oil, gas and other
petroleum hydrocarbons or any products, by-products or fractions thereof
(including, without limitation, gasoline, diesel fuel, and solvents), (c) PCBs,
(d) urea formaldehyde, (e) any substance potentially injurious to the public
health, safety or welfare, the environment or the Land or any Improvements, (f)
any mold or mold related conditions; (g) asbestos, lead, cadmium, mercury and
other heavy metals, cyanide, pesticides, chlorinated hydrocarbons, and (h) any
substance which is a basis for liability to any governmental authority or third
party under any applicable statute, regulation or common law theory; provided,
however, that any such substance listed in this definition shall not be
considered a Hazardous Substances for purposes of this Lease to the extent that
it is both: (i) reasonably necessary and customary to conduct the Permitted
Uses on the Premises in accordance with customary standards, or to construct,
demolish, operate and maintain the Land and/or any Improvements (including the
Project) for the Permitted Uses in accordance with customary standards and (ii)
the presence, use, handling, storage, transportation, and disposition of such
substance complies with all Laws including Environmental Laws and all
Applicable Requirements.

 

A.            Duty
to Inform. If Lessee knows, or has reasonable cause to believe, that a
Hazardous Substance has come to be located in, on, under or about the Premises,
other than as previously consented to by Lessor, Lessee shall immediately give
written notice of such fact to Lessor and provide Lessor with a copy of any
report, notice, claim or other documentation which it has concerning the
presence of such Hazardous Substance. In addition, Lessee shall promptly comply
with any duty to report to any third party (whether governmental or
non-governmental) arising from any Environmental Law.

 

B.            Lessee
Remediation. Lessee shall not cause or permit any Hazardous Substance to be
placed, deposited, spilled, released, or (to the extent controlled by Lessee)
to migrate in, on, under, or about the Land or any Improvements (including
through the plumbing or sanitary sewer system) and shall promptly, at Lessee’s sole
cost and expense, take all investigatory, abatement and/or remedial action
reasonably recommended, whether or not formally ordered or required, for the remediation
and abatement of any Hazardous Substance and for the maintenance, security
and/or monitoring of the Premises or neighboring properties.

 

C.            Lessee’s
Assumption of Responsibility. Lessee acknowledges that it is Leasing the
Premises in “as is where is” condition and that Hazardous Substances may be
present in, on, under, or about the Premises on the Commencement Date and that
to the extent that any Hazardous Substances was not placed, deposited, spilled,
or released by Lessor through its gross negligence or intentional misconduct,
Lessee agrees to assume all responsibility for remediating and/or abating (at
its sole cost and expense) any such Hazardous Substance in compliance with all
Environmental Laws and Applicable Requirements. To the extent that Lessee removes,
or causes to be removed, any Hazardous Substance from the Premises, Lessee’s
responsibility under this Section 15.7(C) shall be extended to cover the
off-site transportation and storage of such Hazardous

 

25

 

Substances,
and Lessee’s responsibilities under this sentence shall survive the expiration
or termination of this Lease.

 

D.            Lessee
Indemnification. Lessee shall indemnify, defend, reimburse and hold Lessor,
its partners, officers, members, agents, employees, lenders and each of their
respective successors and assigns harmless from and against any and all loss of
rents and/or damages, liabilities, judgments, claims, expenses, penalties and
attorneys’ and consultants’ fees and costs arising out of or involving any
Hazardous Substance that was not placed, deposited, spilled, or released by
Lessor through its gross negligence or intentional misconduct. Lessee’s
obligations shall include, but not be limited to, the effects of any
contamination or injury to person, property or the environment created or
suffered by Lessee, and the cost of investigation, removal, remediation,
restoration and/or abatement, and shall survive the expiration or termination
of this Lease. To the extent that Lessee removes, or causes to be removed, any
Hazardous Substance from the Premises, Lessee’s Indemnification of Lessor under
this Section 15.7(D) shall be extended to cover the off-site transportation
and storage of such Hazardous Substances. Lessee’s indemnity of Lessor, under
this Section 15.7(D) shall survive the expiration or termination of this
Lease.

 

E.             Lessor
Indemnification. Lessor shall indemnify, defend, reimburse and hold Lessee,
its shareholders, officers, directors, employees and lenders, and each of their
respective successors and assigns, harmless from and against any and all
environmental damages, including the cost of remediation or abatement which arises
as a result of any Hazardous Substance placed, deposited, spilled, or released
by Lessor, through its gross negligence or intentional misconduct, on the Premises,
before or after the Commencement Date. Lessor’s obligations under this Section
15.7(E) shall include, but not be limited to, the cost of investigation,
removal, remediation, restoration and/or abatement, and shall survive the
expiration or termination of this Lease.

 

15.8         Lessee’s
Compliance With All Laws (Including Environmental Laws) and Applicable
Requirements. Lessee, at Lessee’s sole expense, shall fully, diligently and
in a timely manner, materially comply with all Laws (including Environmental
Laws) and Applicable Requirements, and the requirements of any applicable fire
insurance underwriter or rating bureau, which relate in any manner to the Premises,
without regard to whether such requirements are now in effect or become
effective after the Commencement Date. Lessee, within ten (10) days after
receipt of Lessor’s written request, shall provide Lessor with copies of all
permits and other documents, and other information evidencing Lessee’s
compliance with any Laws (including Environmental Laws) and Applicable
Requirements specified by Lessor, and shall within fifteen (15) days of receipt
notify Lessor in writing (with copies of any documents involved) of any threatened
or actual claim, notice, citation, warning, complaint or report pertaining to
or involving the failure of Lessee or the Premises to comply with any Laws
(including Environmental Laws) or Applicable Requirements.

 

26

 

ARTICLE 16. 
REPRESENTATIONS AND WARRANTIES

 

16.1         Representations
and Warranties of Lessor. Lessor hereby represents and warrants to Lessee,
which representations and warranties shall survive the delivery of this Lease
by Lessor to Lessee, as follows:

 

A.            Lessor
has full and exclusive right and authority, without obtaining the consent of
any third party, to enter into this Lease and perform its obligations hereunder.

 

B.            Lessor
is not subject to any agreement or restriction which prevents it from entering
into this Lease and to perform its obligations hereunder.

 

C.            Lessor
is the fee title owner of the Premises.

 

D.            Except
as set forth in the title insurance policy described in Section 1.2, Lessor has
not encumbered or otherwise transferred any portion of its interest in the Premises
to any third party.

 

16.2         Representations
and Warranties of Lessee. Lessee hereby represents and warrants to Lessor,
which representations and warranties shall survive the delivery of this Lease
by Lessee to Lessor, as follows:

 

A.            Lessee
has full and exclusive right and authority, without obtaining the consent of
any third party, to enter into this Lease and perform its obligations hereunder.

 

B.            Lessee
is not subject to any agreement or restriction which prevents it from entering
into this Lease and performing its obligations hereunder.

 

ARTICLE 17. 
GENERAL PROVISIONS

 

17.1         Conditions
and Covenants. All of the provisions of this Lease shall be deemed as
running with the land, and construed to be “conditions” as well as “covenants”
as though the words specifically expressing or imparting covenants and
conditions were used in each separate provision.

 

17.2         No
Waiver of Breach. No failure by either Lessor or Lessee to insist upon the
strict performance by the other of any covenant, agreement, term or condition
of this Lease or to exercise any right or remedy consequent upon a breach
thereof, shall constitute a waiver of any such breach or of such covenant,
agreement, term or condition. No waiver of any breach shall affect or alter
this Lease, but each and every covenant, condition, agreement and Term of this
Lease shall continue in full force and effect with respect to any other then
existing or subsequent breach.

 

27

 

17.3         Time
of Essence. Time is of the essence of this Lease and of each provision.

 

17.4         Business
Day. The term “Business Day”
shall mean a day other than Saturday, Sunday or any day on which banks located
in the State of Nevada are authorized or obligated to close.

 

17.5         Unavoidable
Delay - Force Majeure. If either Party shall be delayed or prevented from
the performance of any act required by this Lease by reasons of strikes,
lockout, labor troubles, inability to procure materials, restrictive
governmental laws or regulations or other cause, without fault and beyond the
reasonable control of the Party obligated (financial inability excepted),
performance of such act shall be excused for the period of the delay; and the
period for the performance of any such act shall be extended for a period
equivalent to the period of such delay; provided, however, nothing in this
section shall excuse Lessee from the prompt payment of rental or other charges
required of Lessee, except as may be expressly provided elsewhere in this
Lease.

 

17.6         Successors
in Interest. Each and all of the covenants, conditions and restrictions in
this Lease shall inure to the benefit of and shall be binding upon the successors
in interest of Lessor, and, subject to the restrictions of Article 12, the
authorized encumbrances, assignees, transferees, sublessees, licensees and
other successors in interest of Lessor.

 

17.7         Partial
Invalidity. To the extent possible, each provision and portion of this
Lease will be interpreted in such manner as to be effective and valid under
applicable law; but if any provision or portion is held to be invalid or
unenforceable under applicable law, such invalidity or unenforceability will
not affect any other provision or portion and this Lease will be reformed,
construed and enforced as if such provision or portion had never been contained
herein, so long as the economic and legal substance of the transactions
contemplated hereby are not affected in a manner materially adverse to either Party.

 

17.8         Relationship
of Parties. Nothing contained in this Lease shall be deemed or construed by
the Parties or by any third person to create the relationship of principal and
agent or of partnership or of joint venture or of any association between Lessor
and Lessee, and neither the method of computation of rent, nor any other
provisions contained in this Lease, nor any acts of the Parties, shall be
deemed to create any relationship between Lessor and Lessee, other than the
relationship of Lessor and Lessee.

 

17.9         Interpretation
and Definitions. The language in all parts of this Lease shall, in all
cases, be simply construed according to its fair meaning and not strictly for
or against Lessor or Lessee. Unless otherwise provided in this Lease, or unless
the context otherwise requires, the following definitions and rules of
construction shall apply to this Lease.

 

A.            Number
and Gender. In this Lease the neuter gender includes the feminine and
masculine, and the singular number includes the plural and the word

 

28

 

“person”
includes corporation, partnership, firm or association, whenever the context so
requires.

 

B.            Mandatory
and Permissive. “Shall,” “will,” and “agrees” are mandatory; “may” is
permissive.

 

C.            Captions.
Captions of the articles, sections and paragraphs of this Lease are for
convenience and reference only, and the words contained therein shall in no way
be held to explain, modify, amplify or aid in the interpretation, construction
or meaning of the provisions of this Lease.

 

D.            Term
Includes Extensions. All references to the Term of this Lease shall include
any extensions of such Term.

 

E.             Sublessee.
As used herein, the word “sublessee” shall mean and include, in addition to a
sublessee, a licensee, concessionaire or other occupant or user of any portion
of the Premises or Improvements thereon.

 

17.10       Attorneys’
Fees. In the event either Lessor or Lessee shall bring any action or
proceeding for damages for an alleged breach of any provision of this Lease to
recover rents, or to enforce, protect or establish any right or remedy of
either Party, the prevailing Party shall be entitled to recover as a part of
such action or proceedings reasonable attorneys’ fees and costs, up to an
including any appeals.

 

17.11       Modification.
This Lease may not be modified or amended, except in a writing signed by the Parties.

 

17.12       Delivery
of Rent and Notices - Method and Time. All rents or other sums, notices,
approvals, demands, or other communications required or desired to be given
pursuant to this Lease shall be in writing and shall be: (a) personally
delivered at the appropriate address indicted below in this Section 17.12
(including by means of professional messenger service) or sent via a recognized
overnight delivery service, provided that any such delivery is confirmed by
written receipt signed on behalf of the receiving Party or (b) sent by
facsimile transmission addressed to the addressee at the facsimile number set
forth in this Section 17.12, provided that (i) a written confirmation of
the transmission has been received by the transmitting Party and (ii) an
original copy of the notice is concurrently sent via a recognized overnight
delivery service to the appropriate addressee indicated below in this Section 17.12.
In each event, notice shall be effective upon the date of delivery, if received
before 5:00 p.m. on any Business Day, or on the following Business Day, if
received at any other time. The addresses and facsimile numbers for the Parties
for receipt of any notice, approval, demand or other communication required or
desired to be given pursuant to this Lease are as follows:

 

	
  To Lessor:

  	
   

  	
  NP Land, LLC

  
	
   

  	
   

  	
  5225 Boulder
  Highway

  
	
   

  	
   

  	
  Las Vegas,
  Nevada 89122

  
	
   

  	
   

  	
  Attention:
  Mr. William C. Wortman

  
	
   

  	
   

  	
  Fax No.:
  (702) 507-5992

  

 

29

 

	
  and to:

  	
   

  	
  OCM LandCo,
  LLC

  
	
   

  	
   

  	
  333 S. Grand
  Avenue, 28th Floor

  
	
   

  	
   

  	
  Los Angeles,
  CA 90071

  
	
   

  	
   

  	
  Attention:
  Mr. Christopher Brothers

  
	
   

  	
   

  	
  Attention:
  Mr. Skardon Baker

  
	
   

  	
   

  	
   

  
	
  and to:

  	
   

  	
  Snell &
  Wilmer, L.L.P.

  
	
   

  	
   

  	
  3800 Howard
  Hughes Parkway

  
	
   

  	
   

  	
  Suite 1000

  
	
   

  	
   

  	
  Las Vegas,
  Nevada 89109

  
	
   

  	
   

  	
  Fax: (702)
  784-5252

  
	
   

  	
   

  	
  Attn:
  Stephen B. Yoken, Esq.

  
	
   

  	
   

  	
   

  
	
  To Lessee:

  	
   

  	
  Nevada
  Palace, LLC

  
	
   

  	
   

  	
  5255 Boulder
  Highway

  
	
   

  	
   

  	
  Las Vegas,
  Nevada 89122

  
	
   

  	
   

  	
  Attention
  Mr. William C. Wortman

  
	
   

  	
   

  	
  Fax No.:
  (702) 597-5992

  
	
   

  	
   

  	
   

  
	
  and to:

  	
   

  	
  OCM
  AcquisitionCo, LLC

  
	
   

  	
   

  	
  333 S. Grand
  Avenue, 28th Floor

  
	
   

  	
   

  	
  Los Angeles,
  CA 90071

  
	
   

  	
   

  	
  Attention:
  Mr. Christopher Brothers

  
	
   

  	
   

  	
  Attention:
  Mr. Skardon Baker

  

 

Any Party from time to time may
change such Party’s address, facsimile number or other information for the
purpose of notices to that Party by giving notice specifying such change to the
other Party.

 

17.13       Arbitration.

 

A.            Arbitration.
In the event Lessor and Lessee cannot agree on any matter in this Lease other
than the determination of Fair Rental Value pursuant to Section 3.2,
above, arbitration shall be conducted under the rules of the American
Arbitration Association in the manner prescribed in this Section 17.13.

 

B.            Appointment
of Arbitrators. Within five (5) days after written request of either Party,
Lessor shall appoint in writing an arbitrator and give written notice thereto
to Lessee, and within five (5) days after the service of such notice, Lessee
shall in like manner appoint an arbitrator and give notice in writing thereof
to Lessor, or in case of the failure of either Party hereto so to do, the other
Party shall have the right to apply to the District Court of Clark County, Nevada,
to appoint an arbitrator to represent the defaulting Party. The two (2) arbitrators
thus appointed (in either manner) shall select and appoint in writing a third
arbitrator and give written notice to Lessor and Lessee, or if within five (5)

 

30

 

days after the
appointment of such second arbitrator, the two (2) arbitrators shall fail to
appoint a third, then either Party hereto shall have the right to make
application to the District Court to appoint such third arbitrator.

 

C.            Hearing.
The three (3) arbitrators so appointed (in either manner) shall promptly fix a
convenient time and place in Clark County for hearing the matter to be
arbitrated and shall give written notice thereof to each Party hereto at least ten
(10) days prior to the date so fixed, and said arbitrators shall with
reasonable diligence hear and determine the matter in accordance with the
provisions hereof and of the statutes and judicial decisions of the State of Nevada
at the time applicable thereto, and shall execute and acknowledge their award
in writing and cause a copy to by delivered to each of the Parties. Such award
may include equitable remedies.

 

D.            Enforcement
of Award. The award of a majority of such arbitrators shall determine the
question arbitrated and shall be binding upon the Parties hereto and shall be
enforceable in accordance with Nevada law.

 

E.             New
Arbitrators. If two (2) of the three (3) arbitrators first appointed shall
fail to reach an agreement in the determination of the matter in question, the
matter shall be decided by three (3) new arbitrators, who shall be appointed
and shall proceed in the same manner, and the process shall be repeated until a
decision is finally reached by two (2) of the three (3) arbitrators selected.

 

F.             Arbitration
Fees. Each of the Parties shall pay for the services of its appointee and
one-half of the fee charged by the arbitrator selected by their appointees and
of all other proper costs of arbitration, with the exception of attorneys’ fees
and witness’ fees.

 

17.14       Lessor
Financing. Lessee acknowledges that the feehold interest in the Premises is
currently subject to a first deed of trust in favor of Nevada State Bank. Except
as set forth below, nothing in this Lease shall prohibit Lessor from refinancing
the loan made by Nevada State Bank encumbering the feehold interest in the
premises an/or placing a subsequent mortgage or deed of trust on its feehold
interest in the Premises (“Feehold Encumbrance”).

 

A.            Lessor
shall request any lender under any Feehold Encumbrance (each a “Feehold Lender”) to send to Lessee notices of any default by
Lessor under such financing.

 

B.            Lessee
acknowledges that the rent due under this lease has been assigned as security
for the performance of Lessor’s obligations under the existing Feehold
Encumbrance, and that the rent due under this Lease may be assigned to a
subsequent Feehold Lender, but such assignment notwithstanding, rent due under
this Lease shall be payable to Lessor (or as Lessor may in writing direct from
time to time) as such rent becomes due hereunder, unless and until Lessee shall
have been notified by a Feehold Lender to pay rent due under this Lease to it. Upon
receipt of such notice from a Feehold Lender, Lessee shall pay rent due under
this Lease directly to said Feehold Lender

 

31

 

until said
mortgagee or beneficiary directs Lessee in writing to pay rent due under this
Lease to Lessor, and Lessor shall have no claim against Lessee for any rent so
paid to such Feehold Lender.

 

C.            Lessee
shall promptly execute such documents and instrument as Lessor or Lessor’s
lender shall reasonably request in connection with any such financing,
including estoppels and beneficiary statements and consents or acknowledgments
to any lien on Lessor’s interests under this Lease.

 

D.            Notwithstanding
anything to the contrary contained in this Lease, (i) Lessor shall use its
commercial best efforts to cause any Feehold Lender existing as of the
Commencement Date to enter into an attornment and non-disturbance agreement
with Lessee on commercially reasonable terms, and (ii) Lessee shall not be
required to enter into any attornment agreement with any Feehold Lender without
that Feehold Lender entering into a non-disturbance agreement with Lessee on
commercially reasonable terms.

 

17.15       Estoppel
Certificates. Upon Lessor’s or Lessee’s written request, each Party shall
execute, acknowledge and deliver to the other, a written statement
certifying:  (a) that none of the terms
or provisions of this Lease have been changed (or if they have been changed,
stating how they have been changed); (b) that this Lease has not been cancelled
or terminated; (c) the last date of payment of the rent and other charges and
the time period covered by such period; (d) that the other Party is not in
default under this Lease (or, if the other Party is claimed to be in default,
stating why); and (e) such other certifications as the requesting Party shall
reasonably request. Such Party shall deliver such statement to the Party
requesting the same without charge and within ten (10) days after the
requesting Party’s request. Any such statement may be given by the beneficiary
or the same to any prospective purchaser or encumbrancer of the leasehold or Premises.
Such purchaser or encumbrancer may rely conclusively upon such statement as
true and correct.

 

17.16       Quiet
Enjoyment

 

Lessor
covenants that, subject only to Lessor’s rights under Section 15.1,
Lessee shall have quiet and peaceful possession of the Premises as against Lessor
and its agents or assigns. In all events Lessor shall not unreasonably disrupt or
interfere with Lessee’s conduct of its operations or its construction of the
Project or other Improvements.

 

ARTICLE 18. GAMING

 

18.1         Lessee’s
Denials. If at any time:  (a) Lessee
or any person associated in any way with Lessee is denied a gaming license,
found unsuitable or is denied or is otherwise unable to obtain any other
approval with respect to the Premises by the Nevada Gaming Commission, any
other agency or subdivision of the State of Nevada or any other agency or
subdivision thereof or of any other government regulating gaming (collectively,
“Gaming Authorities”) or is
required by any Gaming Authority to apply for an approval and

 

32

 

does not apply
within any required time limit, as the same may be extended by such Gaming
Authority, or withdraws any application for approval other than upon a
determination by the applicable Gaming Authority that such approval is not
required, and if the result of the foregoing has or may have a material adverse
effect on Lessor or any affiliate of Lessor; or (b) any Gaming Authority
commences or threatens to commence any suit or proceeding against Lessor or any
affiliate of Lessor or to terminate or deny any required approval of Lessor or
any affiliate of Lessor as a result of Lessee or any person associated with Lessee
(all of the foregoing events described in (a) and (b) above are collectively
referred to as a “Denial”), Lessor
may terminate this Lease by written notice to Lessee; provided, however, if Lessor exercises its
right to terminate this Lease pursuant to this Section 18.1 solely as
the result of an association of Lessee or any person associated with Lessee
which is the subject of a Denial, this Lease shall not terminate if Lessee ends
such association within ninety (90) days of Lessor’s notice of termination or
within such longer period of time, if any, as the Gaming Authority gives for
terminating such association. Lessee and all such persons associated with Lessee
shall promptly, and in all events within any time limit established by law,
regulation or such Gaming Authority, furnish each Gaming Authority any
information requested by such Gaming Authority and shall otherwise fully
cooperate with all Gaming Authorities. A person shall be deemed associated with
Lessee if that person directly or indirectly owns any equity interest in Lessee,
any equity interest in such person is directly or indirectly owned by Lessee,
any equity interest in such person is directly or indirectly owned by a person
directly or indirectly having any equity interest in Lessee (all of the
foregoing are hereinafter referred to as “Lessee
Affiliates”), such person is employed by Lessee or a Lessee
Affiliate, is an officer, director or agent of Lessee or a Lessee Affiliate,
has any contractual relationship with Lessee or a Lessee Affiliate, furnishes
services or property to Lessee or a Lessee Affiliate or has the power to
exercise a significant influence over Lessee or a Lessee Affiliate. Without
limiting the generality of the foregoing, all Lenders holding a Leasehold Trust
Deed on all or any of Lessee’s interest in this Lease and/or the Premises and
all subtenants shall be deemed associated with Lessee.

 

18.2         Lessee’s
Representations. Lessee represents to Lessor that neither Lessee nor any member
of Lessee nor, to the best of Lessee’s knowledge, any person associated with Lessee
is unwilling to file all necessary applications to obtain whatever approvals
may be required of such persons in connection with the transactions provided
for herein. To the best of Lessee’s knowledge, neither Lessee nor any member of
Lessee nor any person associated with Lessee has ever engaged in any conduct or
practices which any of the foregoing persons should reasonably believe would
cause such person or entity to be denied any approval. Except as disclosed in
writing to Lessor on or before the execution hereof, neither Lessee, any member
of Lessee nor any officer, director or shareholder of any thereof has
ever:  (a) been arrested, detained,
charged, indicted or summoned to answer for any criminal offense or violation
for any reason whatsoever, regardless of disposition of the event, except for
minor traffic citations; (b) had a criminal indictment, information or
complaint returned against him for which he was not arrested or in which he was
named as an unindicted co-party; (c) been questioned by a city, state,
federal or law enforcement agency, commission or committee; (d) been
subpoenaed to appear to testify before a federal, state or county grand jury,
board or commission; (e) had a civil or criminal record expunged or sealed
by a court order; (f) received a pardon for any

 

33

 

criminal
offense; (g) had any member of his family or spouse’s family who has ever been
convicted of a felony; (h) held a privileged or professional license in
any state; (i) had any disciplinary action taken against him with respect
to any such license; or (j) been refused a gaming license or related
finding of suitability or a license for selling alcoholic beverages or been a
participant in any group which has been denied any such license or finding
based upon a finding of unsuitability.

 

ARTICLE 19. 
EXECUTION, RECORDING AND INCORPORATION BY REFERENCE

 

19.1         Recording.
Neither Party shall record this Lease without the written consent of the other Party;
however, upon the request of either Party, the other Party shall join in the
execution of a memorandum of “short form” of this Lease for the purpose of recordation
in the form of Exhibit D,
attached hereto and incorporated herein by this reference. The memorandum or
short form shall describe the Parties, the Premises, the Term of this Lease and
the Option, and shall incorporate this Lease by reference.

 

19.2         Counterparts.
This Lease may be executed in several counterparts, and all so executed shall
constitute one agreement, binding upon all of the Parties hereto.

 

19.3         Execution.
This Lease has been executed by Lessor and Lessee on the     
day of                   ,
2005.

 

[SIGNATURES ARE ON THE FOLLOWING PAGE]

 

34

 

	
   

  	
  LESSOR:

  
	
   

  	
   

  
	
   

  	
  NP LAND, LLC,

  
	
   

  	
  a Nevada limited-liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Manager

  
	
   

  	
   

  
	
   

  	
  LESSEE:

  
	
   

  	
   

  
	
   

  	
  NEVADA
  PALACE, LLC

  
	
   

  	
  a Nevada
  limited-liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Manager

  

 

35

 

SCHEDULE OF
EXHIBITS

 

	
   

  	
  EXHIBIT A

  	
  Legal Description of Land

  
	
   

  	
   

  	
   

  
	
   

  	
  EXHIBIT B

  	
  Preliminary Title Report

  
	
   

  	
   

  	
   

  
	
   

  	
  EXHIBIT C

  	
  Form of Memorandum of Lease

  

 

36Exhibit 10.10

 

MEMBERS’
GUARANTY

 

THIS LIMITED CONTINUING
GUARANTY (“Guaranty”), dated as of January 5, 2006 is executed and
delivered by Millennium Gaming, Inc. (“Millennium”), Esquire Ltd., Inc.
(“Esquire”) and MGIM, LLC, a Nevada limited liability company (“MGIM”)
(each a “Guarantor” and, collectively, the “Guarantors”), in
favor of the commercial lending institutions (the “Lenders”) from time
to time party to the Credit Agreement (as hereinafter defined) and Bank of
America, N.A. (“Bank of America”), as Administrative Agent (in such
capacity, together with any successor appointed pursuant to Section 9.06
of the Credit Agreement, the “Administrative Agent”) for the Lenders.

 

WHEREAS, the Lenders, the
Administrative Agent, the Swing Line Lender and the L/C Issuer are parties to a
Credit Agreement dated as of the date hereof (said Agreement, as it may hereafter
be amended, supplemented, modified or restated from time to time, being the “Credit
Agreement”; the terms defined therein and not otherwise defined herein
being used herein as therein defined) with Cannery Casino Resorts, LLC, a
Nevada limited liability company (“CCR”), The Cannery Hotel And Casino,
LLC, a Nevada limited liability company (“CHC”), Nevada Palace, LLC, a
Nevada limited liability company (“Nevada Palace, LLC”) and Rampart Resort
Management, LLC, a Nevada limited liability company (“Rampart”; Rampart,
Nevada Palace, LLC, CHC, CCR and any other entity that may from time to
time be joined as a borrower under the Credit Agreement are individually a “Borrower”
and collectively, the “Borrowers”);

 

WHEREAS, each of the
Guarantors will derive substantial direct and indirect benefit from the
transactions contemplated by the Credit Agreement;

 

NOW, THEREFORE, in
consideration of the foregoing and in order to induce the Lenders to make the
credit extensions contemplated under the Credit Agreement, the Guarantors
hereby agree, jointly and severally, as follows:

 

1.             Definitions and
Construction.

 

(a)           Definitions. The
following terms, as used in this Guaranty, shall have the following meanings:

 

“Bankruptcy Code” shall mean The Bankruptcy Reform Act
of 1978 (11 U.S.C. §§101-1330), as amended or supplemented from time to time,
and any successor statute, and any and all rules issued or promulgated in
connection therewith.

 

“Beneficiaries” shall mean Administrative Agent
and Lenders.

 

“Collateral” shall mean the property or assets
described in Section 17 hereof.

 

“Guaranteed Obligations” shall mean the due and
punctual payment of all Indebtedness owing by Borrowers.

 

“Indebtedness” shall mean any and all
obligations, indebtedness, or liabilities of any kind or character owed to
Beneficiaries by Borrowers and arising directly or

 

 

indirectly out of or in
connection with the Credit Agreement, the Notes, or the other Loan Documents
(in each case as amended, supplemented, modified or restated from time to time)
plus all of the obligations of the Borrowers or any of their Subsidiaries under
any and all Swap Contracts between the Borrowers and any Lender or Affiliate of
a Lender, including all such obligations, indebtedness, or liabilities, whether
for principal, interest (including any and all interest which, but for the
application of the provisions of the Bankruptcy Code, would have accrued on
such amounts), premium, reimbursement obligations, fees, costs, expenses
(including reasonable attorneys’ fees), or indemnity obligations, whether
heretofore, now, or hereafter made, incurred, or created, whether voluntarily
or involuntarily made, incurred, or created, whether secured or unsecured (and
if secured, regardless of the nature or extent of the security), whether
absolute or contingent, liquidated or unliquidated, or determined or
indeterminate, whether Borrowers are liable individually or jointly with
others, and whether recovery is or hereafter becomes barred by any statute of
limitations or otherwise becomes unenforceable for any reason whatsoever,
including any act or failure to act by Beneficiaries.

 

(b)           Construction. Unless
the context of this Guaranty clearly requires otherwise, references to the
plural include the singular, references to the singular include the plural, the
part includes the whole, the term “including” is not limiting, and the
term “or” has the inclusive meaning represented by the phrase “and/or.” The
words “hereof,” “herein,” “hereby,” “hereunder,” and other similar terms refer
to this Guaranty as a whole and not to any particular provision of this
Guaranty. Any reference in this Guaranty to any of the following documents
includes any and all alterations, amendments, extensions, modifications,
renewals, supplements or restatements thereto or thereof, as applicable: the
Loan Documents; the Credit Agreement; this Guaranty; and the Notes. Neither
this Guaranty nor any uncertainty or ambiguity herein shall be construed or
resolved against Beneficiaries or any Guarantor, whether under any rule of
construction or otherwise. On the contrary, this Guaranty has been reviewed by
Guarantors, Beneficiaries, and their respective counsel, and shall be construed
and interpreted according to the ordinary meaning of the words used so as to
fairly accomplish the purposes and intentions of Beneficiaries and Guarantors.

 

2.             Guaranteed
Obligations. Each Guarantor, jointly and severally, hereby irrevocably and
unconditionally guarantees to Beneficiaries, as and for its own debt, until
final and indefeasible payment thereof has been made, the due and punctual
payment of the Guaranteed Obligations, in each case when and as the same shall
become due and payable, whether at maturity, by acceleration, or otherwise; it
being the intent of each Guarantor that the guaranty set forth herein shall be
a guaranty of payment and not a guaranty of collection; provided, however,
that each Guarantor shall be liable under this Guaranty for the maximum amount
of such liability that can be incurred without rendering this Guaranty, as it
relates to such Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer, and not for any greater amount; provided,
further, notwithstanding anything to the contrary herein, recourse
against each of Millennium and MGIM shall be limited to their Equity Interests
in CCR that are the subject of the Pledge Agreement and recourse against
Esquire shall be limited to the principal amount of all Investments made by the
Borrowers in or to Esquire after the Effective Date.

 

2

 

3.             Continuing
Guaranty. This Guaranty includes Guaranteed Obligations arising under
successive transactions continuing, compromising, extending, increasing,
modifying, releasing, or renewing the Guaranteed Obligations, changing the
interest rate, payment terms, or other terms and conditions thereof, or
creating new or additional Guaranteed Obligations after prior Guaranteed
Obligations have been satisfied in whole or in part. To the maximum extent
permitted by law, each Guarantor hereby waives any right to revoke this
Guaranty as to future Indebtedness. If such a revocation is effective
notwithstanding the foregoing waiver, each Guarantor acknowledges and agrees
that (a) no such revocation shall be effective until written notice
thereof has been received by Beneficiaries, (b) no such revocation shall
apply to any Guaranteed Obligations in existence on such date (including any
subsequent continuation, extension, or renewal thereof, or change in the
interest rate, payment terms, or other terms and conditions thereof), (c) no
such revocation shall apply to any Guaranteed Obligations made or created after
such date to the extent made or created pursuant to a legally binding
commitment of Beneficiaries in existence on the date of such revocation, (d) no
payment by any Guarantor, Borrowers, or from any other source, prior to the
date of such revocation, shall reduce the maximum obligation of such Guarantor
hereunder, and (e) any payment by Borrowers or from any source other than
such Guarantor subsequent to the date of such revocation shall first be applied
to that portion of the Guaranteed Obligations as to which the revocation is
effective and which are not, therefore, guarantied hereunder, and to the extent
so applied shall not reduce the maximum obligations of such Guarantor
hereunder.

 

4.             [Intentionally
Omitted.]

 

5.             Primary
Obligations. This Guaranty is a primary and original obligation of each
Guarantor, is not merely the creation of a surety relationship, and is an
absolute, unconditional, and continuing guaranty of payment and performance
which shall remain in full force and effect without respect to future changes
in conditions, including any change of law or any invalidity or irregularity
with respect to the issuance of the Notes. Each Guarantor agrees that it is
directly liable to Beneficiaries (on a several and not joint and several basis),
that the obligations of such Guarantor hereunder are independent of the
obligations of Borrowers or any other Guarantor, and that a separate action may be
brought against such Guarantor, whether such action is brought against a
Borrower or another Guarantor or whether a Borrower or any such other Guarantor
is joined in such action. Guarantor agrees that its liability hereunder shall
be immediate and shall not be contingent upon the exercise or enforcement by
Beneficiaries of whatever remedies they may have against Borrowers or any
other Guarantor, or the enforcement of any lien or realization upon any
security Beneficiaries may at any time possess. Each Guarantor agrees that
any release which may be given by Beneficiaries to a Borrower or any other
Guarantor shall not release such Guarantor, except in the event of payment in
full of the Guaranteed Obligations. Each Guarantor consents and agrees that, to
the fullest extent permitted by applicable law, Beneficiaries shall be under no
obligation to marshal any property or assets of Borrowers or any other
Guarantor in favor of such Guarantor, or against or in payment of any or all of
the Guaranteed Obligations.

 

6.             Waivers.

 

(a)           Each Guarantor hereby
waives, to the fullest extent permitted by applicable law: (i) notice of
acceptance hereof; (ii) notice of any loans or other financial
accommodations made or extended under the Credit Agreement, or the creation or
existence of any Guaranteed

 

3

 

Obligations;
(iii) notice of the amount of the Guaranteed Obligations, subject,
however, to such Guarantor’s right to make inquiry of Administrative Agent to
ascertain the amount of the Guaranteed Obligations at any reasonable time; (iv) notice
of any adverse change in the financial condition of Borrowers or of any other
fact that might increase such Guarantor’s risk hereunder; (v) notice of
presentment for payment, demand, protest, and notice thereof as to the Notes or
any other instrument; (vi) notice of any Default or Event of Default under
the Credit Agreement; and (vii) all other notices (except if such notice
is specifically required to be given to a Guarantor under this Guaranty or any
other Loan Document to which such Guarantor is party) and demands to which such
Guarantor might otherwise be entitled.

 

(b)           To the fullest extent
permitted by applicable law, each Guarantor waives the right by statute or
otherwise to require Beneficiaries to institute suit against Borrowers or to
exhaust any rights and remedies which Beneficiaries have or may have
against Borrowers. In this regard, each Guarantor agrees that it is bound to
the payment of each and all Guaranteed Obligations, whether now existing or
hereafter accruing, as fully as if such Guaranteed Obligations were directly
owing to Beneficiaries by such Guarantor, subject to the limitation set forth
in Section 2 hereof. Each Guarantor further waives any defense arising by
reason of any disability or other defense (other than the defense that the
Guaranteed Obligations shall have been fully paid and the Commitments
terminated) of Borrowers or by reason of the cessation from any cause
whatsoever of the liability of Borrowers in respect thereof.

 

(c)           To the maximum extent
permitted by law, each Guarantor hereby waives (other than the defense that the
Guaranteed Obligations shall have been fully paid and the Commitments
terminated): (i) any rights to assert against Beneficiaries any defense
(legal or equitable), set-off, counterclaim, or claim which such Guarantor may now
or at any time hereafter have against Borrowers or any other party liable to
Beneficiaries; (ii) any defense, set-off, counterclaim, or claim, of any
kind or nature, arising directly or indirectly from the present or future lack
of perfection, sufficiency, validity, or enforceability of the Guaranteed
Obligations or any security therefor; (iii) any defense arising by reason
of any claim or defense based upon an election of remedies by Beneficiaries; (iv) the
benefit of any statute of limitations affecting such Guarantor’s liability
hereunder or the enforcement thereof, and any act which shall defer or delay
the operation of any statute of limitations applicable to the Guaranteed
Obligations shall similarly operate to defer or delay the operation of such
statute of limitations applicable to such Guarantor’s liability hereunder; and (v) to
the fullest extent permitted by law, any defense or benefit that may be
derived from or afforded by law which limits the liability of or exonerates
guaranties or sureties or requires Beneficiaries to exhaust remedies against
the Borrowers prior to commencing any action or foreclosure against such
Guarantor or its properties including, without limitation, the benefits of
Nevada Revised Statutes Sections 40.430 - 40.459, 40.475 and 40.485 as and to
the fullest extent permitted by Nevada Revised Statutes Section 40.495
(1989).

 

(d)           Each Guarantor agrees
that if all or a portion of the Indebtedness or this Guaranty is at any time
secured by a deed of trust or mortgage covering interests in real property,
Beneficiaries, in their sole discretion, without notice or demand and without
affecting the liability of such Guarantor under this Guaranty, may foreclose
pursuant to the terms of the Credit Agreement or otherwise the deed of trust or
mortgage and the interests in real property secured thereby by non-judicial
sale. Each Guarantor understands that the exercise by Beneficiaries of certain
rights and remedies contained in the Credit Agreement and any such deed of
trust or

 

4

 

mortgage
may affect or eliminate such Guarantor’s right of subrogation against
Borrowers and that such Guarantor may therefore incur a partially or
totally non-reimbursable liability hereunder. Nevertheless, each Guarantor
hereby authorizes and empowers Beneficiaries to exercise, in their sole
discretion, any rights and remedies, or any combination thereof, which may then
be available, since it is the intent and purpose of such Guarantor that the
obligations hereunder shall be absolute, independent and unconditional under
any and all circumstances. Notwithstanding any foreclosure of the lien of any
deed of trust or security agreement with respect to any or all of any real or
personal property secured thereby, whether by the exercise of the power of sale
contained therein, by an action for judicial foreclosure or by an acceptance of
a deed in lieu of foreclosure, each Guarantor shall remain bound under this
Guaranty to the fullest extent permitted by applicable law including its
obligation to pay any deficiency following a non-judicial foreclosure.

 

(e)           (1) Notwithstanding
anything to the contrary elsewhere contained herein or in any other Loan
Document, until full payment of the Guaranteed Obligations and termination of
the Commitments, each Guarantor hereby waives, to the fullest extent permitted
by applicable law, with respect to Borrowers and their respective successors
and assigns (including any surety) any and all rights at law or in equity, to
subrogation, to reimbursement, to exoneration, to contribution, to setoff or to
any other rights that could accrue to a surety against a principal, to a
guarantor against a maker or obligor, to an accommodation party against the
party accommodated, or to a holder or transferee against a maker and which such
Guarantor may have or hereafter acquire against Borrowers in connection
with or as a result of Borrowers’ execution, delivery and/or performance of the
Credit Agreement or any other Loan Document. Each Guarantor agrees that it
shall not have or assert any such rights against Borrowers or Borrowers’
successors and assigns or any other surety, either directly or as an attempted
setoff to any action commenced against such Guarantor by Borrowers (as borrower
or in any other capacity) or any other surety until the Guaranteed Obligations
have been fully repaid to the Beneficiaries and the Commitments terminated. Each
Guarantor hereby acknowledges and agrees that this waiver is intended to
benefit the Beneficiaries and shall not limit or otherwise affect any of the Borrowers’
liability hereunder, under any other Loan Document to which Borrowers are a
party, or the enforceability hereof or thereof.

 

(2)           To
the extent any waiver of subrogation contained in subparagraph (e)(1) is
unenforceable, each Guarantor shall, until the Guaranteed Obligations shall
have been paid in full and the Commitments shall have terminated and all
Letters of Credit shall have expired or been terminated or canceled, withhold
exercise of (a) any claim, right or remedy, direct or indirect, that such
Guarantor now has or may hereafter have against Borrowers or any of their
assets in connection with this Guaranty or the performance by such Guarantor of
its obligations hereunder, in each case whether such claim, right or remedy
arises in equity, under contract, by statute, under common law or otherwise and
including without limitation (i) any right of subrogation, reimbursement
or indemnification that such Guarantor now has or may hereafter have
against Borrowers, (ii) any right to enforce, or to participate in, any
claim, right or remedy that any Beneficiary now has or may hereafter have
against Borrowers, and (iii) any benefit of, and any right to participate
in, any collateral or security now or hereafter held by the Beneficiaries, and (b) any
right of contribution such Guarantor may have against any other Guarantor
(including without limitation any such right of contribution). Each

 

5

 

Guarantor further agrees
that, to the extent the agreement to withhold the exercise of its rights of
subrogation, reimbursement, indemnification and contribution as set forth
herein is found by a court of competent jurisdiction to be void or voidable for
any reason, any rights of subrogation, reimbursement or indemnification such
Guarantor may have against Borrowers or against any collateral or
security, and any rights of contribution Guarantor may have against any
such other Guarantor, shall be junior and subordinate to any rights the
Administrative Agent or Lenders may have against Borrowers, to all right,
title and interest the Beneficiaries may have in any such collateral or
security, and to any right the Beneficiaries may have against such other
Guarantor. The Administrative Agent, on behalf of Lenders, may use, sell or
dispose of any item of collateral or security as it sees fit without regard to
any subrogation rights any Guarantor may have, and upon any such
disposition or sale any rights of subrogation Guarantors may have shall
terminate. If any amount shall be paid to any Guarantor on account of any such
subrogation, reimbursement or indemnification rights at any time when all
Guaranteed Obligations shall not have been paid in full, such amount shall be
held in trust for the Administrative Agent on behalf of Lenders and shall
forthwith be paid over to the Administrative Agent for the benefit of Lenders
to be credited and applied against the Guaranteed Obligations, whether matured
or unmatured, in accordance with the Credit Agreement.

 

7.             Esquire
Indebtedness. After the date hereof, Esquire will not incur Indebtedness in
an aggregate principal amount in excess of $4,000,000.

 

8.             Releases. Each
Guarantor consents and agrees that, without notice to or by such Guarantor and
without affecting or impairing the obligations of such Guarantor hereunder,
Beneficiaries may, by action or inaction, compromise or settle, extend the
period of duration or the time for the payment, or discharge the performance
of, or may refuse to, or otherwise not enforce, or may, by action or
inaction, release all or any one or more parties to, any one or more of the
Credit Agreement, the Notes, or any of the other Loan Documents or may grant
other indulgences to Borrowers in respect thereof, or may amend or modify
in any manner and at any time (or from time to time) any one or more of the
Credit Agreement, the Notes, or any of the other Loan Documents, or may, by
action or inaction, release or substitute any other Guarantor, if any, of the
Guaranteed Obligations, or may enforce, exchange, release, or waive, by
action or inaction, any security for the Guaranteed Obligations (including the
Collateral) or any other guaranty of the Guaranteed Obligations, or any portion
thereof. It is understood and agreed that, notwithstanding anything to the
contrary herein, Esquire shall be released as a Guarantor hereunder on the date
of the Third Closing without further action by any party.

 

9.             No Election. Beneficiaries
shall have the right to seek recourse against any Guarantor to the fullest
extent provided for herein and no election by Beneficiaries to proceed in one form of
action or proceeding, or against any Guarantor or other party, or on any
obligation, shall constitute a waiver of Beneficiaries’ right to proceed in any
other form of action or proceeding or against any other Guarantor or other
parties unless Beneficiaries have expressly waived such right in writing. Specifically,
but without limiting the generality of the foregoing, no action or proceeding
by Beneficiaries under any document or instrument evidencing the Guaranteed
Obligations shall serve to diminish the liability of Guarantors under this
Guaranty

 

6

 

except
to the extent that Beneficiaries finally and unconditionally shall have
realized indefeasible payment by such action or proceeding.

 

10.           Indefeasible Payment.
In the event that, for any reason, all or any portion of any payments to
Beneficiaries is set aside or restored, whether voluntarily or involuntarily,
after the making thereof, the obligation or part thereof intended to be
satisfied thereby shall be revived and continued in full force and effect as if
said payment or payments had not been made and each Guarantor shall be liable
for the full amount Beneficiaries are required to repay plus any and all costs
and expenses (including attorneys’ fees) paid by Beneficiaries in connection
therewith.

 

11.           Financial Condition
of Borrowers. Each Guarantor represents and warrants to Beneficiaries that
it is currently informed of the financial condition of Borrowers and of all
other circumstances which a diligent inquiry would reveal and which bear upon
the risk of nonpayment of the Guaranteed Obligations. Each Guarantor further
represents and warrants to Beneficiaries that it has read and understands the terms
and conditions of the Credit Agreement, the Notes, and the other Loan Documents.
Each Guarantor hereby covenants that it will continue to keep itself informed
of Borrowers’ financial condition, the financial condition of other guarantors,
if any, and of all other circumstances which bear upon the risk of nonpayment
or nonperformance of the Guaranteed Obligations.

 

12.           [Intentionally
Omitted.]

 

13.           Payments;
Application. All payment to be made hereunder by any Guarantor shall be
made in lawful money of the United States of America at the time of payment,
shall be made in immediately available funds, and shall be made without setoff,
deduction (whether for Taxes or otherwise) or counterclaim. All payments made
by any Guarantor hereunder shall be applied as follows:  first, to all reasonable costs and expenses
(including attorneys’ fees) incurred by Beneficiaries in enforcing this
Guaranty or in collecting the Guaranteed Obligations; second, to all accrued
and unpaid interest, premium, if any, and fees owing to Beneficiaries
constituting Guaranteed Obligations; and third, to the balance of the
Guaranteed Obligations.

 

14.           Attorneys’ Fees and
Costs. Each Guarantor agrees to pay, on demand, all reasonable attorneys’
fees and all other reasonable costs and expenses which may be incurred by
Beneficiaries in the enforcement of this Guaranty or in any way arising out of,
or consequential to the protection, assertion, or enforcement of the Guaranteed
Obligations (or any security therefor), irrespective of whether suit is
brought.

 

15.           Notices. All
notices and other communications provided to any party hereto under this
Guaranty shall be in writing or by facsimile and addressed, delivered or
transmitted to such party at its address or facsimile number set forth below or
at such other address or facsimile number as may be designated by such
party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid, shall be deemed given when received; any
notice, if transmitted by facsimile, shall be deemed given when transmitted.

 

7

 

If to any
Guarantor:             221 North Rampart Blvd.

Las Vegas, NV 89145

Attn:       William
Wortman and

William Paulos

Facsimile number:  702-507-5992

 

With a copies to:                 Santoro,
Driggs, Walch, Kearney

Johnson & Thompson

400 S. Fourth Street, Suite 300

Los Vegas, Nevada 89101

Attn:       Mike
Kearney, Esq.

Facsimile number:  702-791-1921

 

and

 

Munger, Tolles & Olson LLP

355 South Grand Avenue, 35th Floor

Los Angeles, California 90071

Attn: Judith
Kitano, Esq.

Facsimile number: (213) 683-4052

 

If to
Beneficiaries:                Bank of America,
N.A., as Administrative Agent 

GCIB Agency Management Central I 

Mail Code: TX1-492-14-11

Bank of America Plaza 

901 Main Street, 14th Floor 

Dallas, TX 75202-3714

Attention: Chris M. Levine – AVP, Agency Management Officer 

Telephone: 214-209-4129

Facsimile: 214-290-9432

Email: chris.m.levine@bankofamerica.com

 

With a copy
to:                    Mayer, Brown,
Rowe & Maw LLP

350 South Grand Avenue

Suite 2500

Los Angeles, California  90071

Attn: Brian E. Newhouse, Esq.

Facsimile number: (213) 576-8135

 

16.           Cumulative Remedies.
No remedy under this Guaranty, under the Credit Agreement, the Notes, or any
Loan Document is intended to be exclusive of any other remedy, but each and every
remedy shall be cumulative and in addition to any and every other remedy given
under this Guaranty, under the Credit Agreement, the Notes, or any other Loan
Document, and those provided by law. No delay or omission by Beneficiaries to
exercise any right under this Guaranty shall impair any such right nor be
construed to be a waiver thereof. No failure on the part of Beneficiaries
to exercise, and no delay in exercising, any right under this Guaranty shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right under this Guaranty preclude any other or further exercise thereof or the
exercise of any other right.

 

8

 

17.           Collateral. The
obligations of Millennium and MGIM under this Guaranty are secured as provided
for in the Pledge Agreement of even date herewith, and recourse against the
Guarantors hereunder is limited to the Collateral (as defined in the Pledge
Agreement), to the extent set forth in the Pledge Agreement.

 

18.           Regulatory Matters.
Notwithstanding any other provision of this Guarantee, Administrative Agent
acknowledges and agrees that this Guarantee and the rights and remedies granted
hereunder remain subject to the limitations and other provisions set forth in Section 7.11
of the Pledge Agreement.

 

19.           Severability of
Provisions. Any provision of this Guaranty which is prohibited or
unenforceable under applicable law, shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof.

 

20.           Entire Agreement;
Amendments. This Guaranty and the Pledge Agreement together constitute the
entire agreement among each Guarantor and Beneficiaries pertaining to the
subject matter contained herein. This Guaranty may not be altered,
amended, or modified, nor may any provision hereof be waived or
noncompliance therewith consented to, except by means of a writing executed by
each Guarantor and Administrative Agent. Any such alteration, amendment,
modification, waiver, or consent shall be effective only to the extent
specified therein and for the specific purpose for which given. No course of
dealing and no delay or waiver of any right or default under this Guaranty
shall be deemed a waiver of any other, similar or dissimilar, right or default
or otherwise prejudice the rights and remedies hereunder.

 

21.           Successors and
Assigns. Subject to the terms of the Credit Agreement, this Guaranty shall
be binding each Guarantor and its successors and assigns and shall inure to the
benefit of the successors and assigns of Beneficiaries; provided, however,
no Guarantor shall assign this Guaranty or delegate any of its duties hereunder
without Beneficiaries’ prior written consent and any unconsented to assignment
shall be absolutely void. In the event of any assignment or other transfer of
rights by Beneficiaries, the rights and benefits herein conferred upon
Beneficiaries shall automatically extend to and be vested in such assignee or
other transferee.

 

22.           Choice of Law and
Venue; Service of Process. THE VALIDITY OF THIS GUARANTY, ITS CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF EACH GUARANTOR AND
BENEFICIARIES, SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEVADA, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY
GUARANTOR WITH RESPECT TO THIS GUARANTY MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEVADA, AND BY
EXECUTION AND DELIVERY OF THIS GUARANTY, GUARANTOR ACCEPTS, FOR ITSELF AND IN
CONNECTION WITH ITS ASSETS, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY
FINAL JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY FROM WHICH NO
APPEAL HAS BEEN TAKEN OR IS AVAILABLE.

 

9

 

23.           Waiver of Jury Trial.
TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH GUARANTOR HEREBY EXPRESSLY WAIVES
ANY RIGHT TO TRIAL BY JURY OF ANY ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR
PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS GUARANTY, OR IN ANY WAY
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE DEALINGS OF GUARANTORS AND
BENEFICIARIES WITH RESPECT TO THIS GUARANTY, OR THE TRANSACTIONS RELATED
HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE
MAXIMUM EXTENT PERMITTED BY LAW, EACH GUARANTOR HEREBY AGREES THAT ANY SUCH
ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDINGS SHALL BE DECIDED BY A
COURT TRIAL WITHOUT A JURY AND THAT BENEFICIARIES MAY FILE AN ORIGINAL
COUNTERPART OF THIS SECTION WITH ANY COURT OR OTHER TRIBUNAL AS
WRITTEN EVIDENCE OF THE CONSENT OF SUCH GUARANTOR TO THE WAIVER OF ITS RIGHT TO
TRIAL BY JURY.

 

10

 

IN WITNESS WHEREOF, each
of the undersigned has executed and delivered this Guaranty as of the day and
year first written above.

 

	
   

  	
  MILLENNIUM
  GAMING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William J. Paulos 

  	
   

  
	
   

  	
  Name: 

  	
  William J. Paulos

  
	
   

  	
  Title:

  	
  President

  
					

 

11

 

	
   

  	
  MGIM,
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William J. Paulos

  	
   

  
	
   

  	
  Name: 

  	
  William J. Paulos

  
	
   

  	
  Title:

  	
  Manager

  
					

 

12

 

	
   

  	
  ESQUIRE
  LTD., INC.,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William C. Wortman

  	
   

  
	
   

  	
  Name: 

  	
  William C. Wortman

  
	
   

  	
  Title:

  	
  President

  
					

 

13

 

AMENDMENT TO LIMITED CONTINUING
GUARANTY

 

This Amendment to Limited
Continuing Guaranty (this “Amendment”), dated as of                  ,
200  , relates to the General Continuing Guaranty dated as of January 5,
2006 (as amended to date, the “Guaranty”), among Millennium Gaming, Inc.,
Esquire Ltd., Inc. and MGIM, LLC (collectively the “Guarantors”) in
favor of the Lenders (as defined in the Credit Agreement (as hereinafter
defined)) and Bank of America, N.A. (“Bank
of America”), as Administrative Agent (the “Administrative Agent”).

 

In compliance with the
Credit Agreement dated as of January 5, 2006 (as amended, supplemented,
modified or restated from time to time, the “Credit Agreement”) among
Cannery Casino Resorts, LLC, The Cannery Hotel and Casino, LLC, Nevada Palace,
LLC, and Rampart Resort Management, LLC (the “Borrowers”), the Administrative
Agent, the L/C Issuer, the Swing Line Lender and the Lenders,                    
(the “Additional Guarantor”) and the Guarantors hereby agree as follows
(capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in the Credit Agreement):

 

1.             Amendment. The
Guaranty is hereby amended to add as a party, and more specifically, as a
Guarantor thereunder, the Additional Guarantor.

 

2.             Additional
Guarantor as Guarantor. The Additional Guarantor assumes all of the
obligations and liabilities of a Guarantor under the Guaranty, agrees to be
bound thereby as if the Additional Guarantor were an original party to the
Guaranty and shall be a Guarantor for all purposes under the Loan Documents.

 

3.             Effectiveness.
The Amendment shall become effective on the date hereof upon the execution
hereof by the Additional Guarantor and the Administrative Agent and delivery
hereof to the Administrative Agent.

 

14

 

4.             Governing Law.
This Amendment shall be governed by, and construed in accordance with, the laws
of the State of Nevada, without regard to principles of conflicts of law.

 

	
   

  	
  [Name of Additional Guarantor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Address:

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A., as Administrative

  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							

 

15

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