Document:

Exhibit
10.19(A)

 

Form of Release

 

This Release (the “Release”)
is made as of [                  
    ], 200  , by and between TROPICANA
ENTERTAINMENT HOLDINGS, LLC, a Delaware limited liability company (the “Company”),
and SCOTT C. BUTERA (“Executive”).

 

PRELIMINARY RECITALS

 

A.                                   Executive’s employment with the Company
has terminated.

 

B.                                     Executive and the Company are parties to
an Employment Agreement, dated as of [                  
    ], 200   (the “Agreement”).

 

AGREEMENT

 

In consideration of the
payments due Executive under the Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

 

1.                                       Executive, intending to be legally bound,
does hereby, on behalf of himself and his agents, representatives, attorneys,
assigns, heirs, executors, and administrators (collectively, the “Executive
Parties”) REMISE, RELEASE AND FOREVER DISCHARGE the Company, its affiliates,
subsidiaries, parents, joint ventures, and its and their officers, directors,
shareholders, members, and managers, and its and their respective successors
and assigns, heirs, executors, and administrators (collectively, the “Company
Parties”) from all causes of action, suits, debts, claims, and demands whatsoever
in law or in equity, which Executive or any of the Executive Parties ever had,
now has, or hereafter may have, by reason of any matter, cause, or thing
whatsoever, from the beginning of Executive’s initial dealings with the Company
to the date of this Release, and particularly, but without limitation of the
foregoing general terms, any claims arising from or relating in any way to
Executive’s employment relationship with Company, the terms and conditions of
that employment relationship, and the termination of that employment
relationship, including, without limitation, any claims arising under the Age
Discrimination in Employment Act, as amended, 29 U.S.C. § 621 et seq. (“ADEA”),
Title VII of The Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et
seq., the Civil Rights Act of 1966, 42 U.S.C. §1981, the Civil Rights Act of
1991, Pub. L. No. 102-166, the Americans with Disabilities Act, 42 U.S.C.
§12101 et seq., the Age Discrimination in Employment Act, as amended, 29 U.S.C.
§621 et seq., the Fair Labor Standards Act, 29 U.S.C. §201 et seq., the
National Labor Relations Act, 29 U.S.C. §151 et seq., and any other claims
under any federal, state, or local common law, statutory, or regulatory
provision, now or hereafter recognized. 
This Release is effective without regard to the legal nature of the
claims raised and without regard to whether any such claims are based upon
tort, equity, implied or express contract, or discrimination of any sort.  Except as specifically provided herein, it is
expressly understood and agreed that this Release shall operate as a clear and
unequivocal waiver by Executive of any claim for accrued or unpaid wages,
benefits, or any other type of payment.

 

 

2.                                       Executive expressly waives all rights
afforded by any statute that limits the effect of a release with respect to
unknown claims.  Executive understands
the significance of his release of unknown claims and his waiver of statutory
protection against a release of unknown claims.

 

3.                                       Executive agrees that he will not be entitled
to or accept any benefit from any claim or proceeding within the scope of this
Release that is filed or instigated by him or on his behalf with any agency,
court, or other government entity.

 

4.                                       The parties agree and acknowledge that
the Agreement, and the settlement and termination of any asserted or unasserted
claims against the Company and the Company Parties pursuant to this Release,
are not and shall not be construed to be an admission of any violation of any
federal, state, or local statute or regulation, or of any duty owed by the
Company or any of the Company Parties to Executive.

 

5.                                       Executive certifies and acknowledges as
follows:

 

(a)                                  That he has read the terms of this
Release, and that he understands its terms and effects, including, without
limitation, the fact that he has agreed to RELEASE AND FOREVER DISCHARGE the
Company and all Company Parties from any legal action or other liability of any
type related in any way to the matters released pursuant to this Release other
than as provided in the Agreement and in this Release.

 

(b)                                 That he understands the significance of
his release of unknown claims and his waiver of statutory protection against a
release of unknown claims.  Accordingly,
Executive expressly waives any and all rights and benefits under Section 1542
of the California Civil Code, which states:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.

 

(c)                                  That he is waiving all rights to sue or
obtain equitable, remedial, or punitive relief from any or all Company Parties
of any kind whatsoever, including, without limitation, reinstatement, back pay,
front pay, attorneys’ fees, and any form of injunctive relief.  Notwithstanding the above, he further
acknowledges that he is not waiving and is not being required to waive any
right that cannot be waived under law, including the right to file an
administrative charge or to participate in an administrative investigation or
proceeding; provided, however, that he disclaims and waives any
right to share or participate in any monetary award resulting from the
prosecution of such charge or investigation or proceeding.

 

(d)                                 That he has signed this Release
voluntarily and knowingly in exchange for the consideration described herein,
which he acknowledges is adequate and satisfactory to him and which he
acknowledges is in addition to any other benefits to which he is otherwise
entitled.

 

2

 

(e)                                  That he has been and is hereby advised in
writing to consult with an attorney prior to signing this Release.

 

(f)                                    That he does not waive rights or claims
that may arise after the date this Release is executed or those claims arising
under the Agreement with respect to payments and other rights due Executive on
the date of, or during the period following, the termination of his Employment.

 

(g)                                 That the Company has provided him with adequate
opportunity, including a period of twenty-one (21) days from the initial
receipt of this Release and all other time periods required by applicable law,
within which to consider this Release (it being understood by Executive that
Executive may execute this Release less than 21 days from its receipt from the
Company, but agrees that such execution will represent his knowing waiver of
such 21-day consideration period), and he has been advised by the Company to
consult with counsel in respect thereof.

 

(h)                                 That he has seven (7) calendar days
after signing this Release within which to rescind, in a writing delivered to
the Company, the portion of this Release related to claims arising under ADEA
or any other claim arising under any other federal, state, or local that
requires extension of this revocation right as a condition to the valid release
and waiver of such claim.

 

(i)                                     That at no time prior to or
contemporaneous with his execution of this Release has he filed or caused or
knowingly permitted the filing or maintenance, in any state, federal, or
foreign court, or before any local, state, federal, or foreign administrative
agency or other tribunal, any charge, claim, or action of any kind, nature, and
character whatsoever (“Claim”), known or unknown, suspected or unsuspected,
which he may now have or has ever had against the Company Parties which is
based in whole or in part on any matter referred to in Section 1 hereof;
and, subject to the Company’s performance under this Release, to the maximum
extent permitted by law, Executive is prohibited from filing or maintaining, or
causing or knowingly permitting the filing or maintaining, of any such Claim in
any such forum.  Executive hereby grants
the Company his perpetual and irrevocable power of attorney with full right,
power, and authority to take all actions necessary to dismiss or discharge any
such Claim.  Executive further covenants
and agrees that he will not encourage any person or entity, including, without
limitation, any current or former employee, officer, director, or stockholder
of the Company, to institute any Claim against the Company Parties or any of
them, and that except as expressly permitted by law or administrative policy or
as required by legally enforceable order he will not aid or assist any such
person or entity in prosecuting such Claim.

 

6.                                       The Company (meaning, solely for this
purpose, the Company’s directors and executive officers, and other individuals
authorized to make official communications on the Company’s behalf) will not disparage
Executive or Executive’s performance or otherwise take any action that could
reasonably be expected to adversely affect Executive’s personal or professional
reputation.  Similarly, Executive will
not disparage any Company Party or otherwise 

 

3

 

take any action that could reasonably be expected to
adversely affect the personal or professional reputation of any Company Party.

 

7.                                       Executive agrees that he will not
disparage or denigrate to any person any aspect of his relationship with the
Company or any of its affiliates, nor the character of the Company or any of
its affiliates or their respective agents, representatives, products, or
operating methods, whether past, present, or future, and whether or not based
on or with reference to their past relationship; provided, however,
that this paragraph shall have no application to any evidence or testimony
requested of Executive by any court or government agency.  In the event any government agency or any of Company’s
or any of its affiliates’ present or future labor unions, adverse parties in
actual or potential litigation, suppliers, service providers, employees, or
customers initiate communications with the Executive, the Executive agrees that
he will only inform any such persons, consistent with this paragraph, of his
change in status and direct such persons to an appropriate office or current
employee of the Company.

 

8.                                       Miscellaneous

 

(a)                                  This Release and the Agreement, and any
other documents expressly referenced therein, constitute the complete and
entire agreement and understanding of Executive and the Company with respect to
the subject matter hereof, and supersedes in its entirety any and all prior
understandings, commitments, obligations, and/or agreements, whether written or
oral, with respect thereto; it being understood and agreed that this Release
and including the mutual covenants, agreements, acknowledgments, and
affirmations contained herein, is intended to constitute a complete settlement
and resolution of all matters set forth in Section 1 hereof.

 

(b)                                 The Company Parties are intended third-party
beneficiaries of this Release, and this Release may be enforced by each of them
in accordance with the terms hereof in respect of the rights granted to such
Company Parties hereunder.  Except and to
the extent set forth in the preceding sentence, this Release is not intended
for the benefit of any Person other than the parties hereto, and no such other
person or entity shall be deemed to be a third party-beneficiary hereof.  Without limiting the generality of the
foregoing, it is not the intention of the Company to establish any policy,
procedure, course of dealing, or plan of general application for the benefit of
or otherwise in respect of any other employee, officer, director, or
stockholder, irrespective of any similarity between any contract, agreement,
commitment, or understanding between the Company and such other employee,
officer, director, or stockholder, on the one hand, and any contract, agreement,
commitment, or understanding between the Company and Executive, on the other
hand, and irrespective of any similarity in facts or circumstances involving
such other employee, officer, director, or stockholder, on the one hand, and
Executive, on the other hand.

 

(c)                                  The invalidity or unenforceability of any
provision of this Release shall not affect the validity or enforceability of
any other provision of this Release, which shall otherwise remain in full force
and effect.

 

4

 

(d)                                 This Release may be executed in separate
counterparts, each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.

 

(e)                                  The obligations of each of the Company
and Executive hereunder shall be binding upon their respective successors and
assigns.  The rights of each of the
Company and Executive and the rights of the Company Parties shall inure to the
benefit of, and be enforceable by, any of the Company’s, Executive’s and the
Company Parties’ respective successors and assigns.  The Company may assign all rights and
obligations of this Release to any successor in interest to the assets of the
Company.

 

(f)                                    No amendment to or waiver of this Release
or any of its terms shall be binding upon any party hereto unless consented to
in writing by such party.

 

(g)                                 ALL
ISSUES AND QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT, AND
INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF
DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAW
OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.

 

*   *   *  
*   *

 

5

 

Intending to be legally
bound hereby, Executive and the Company have executed this Release as of the
date first written above.

 

 

	
  TROPICANA ENTERTAINMENT
  HOLDINGS, LLC

  	
   

  	
  SCOTT C. BUTERA

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  

 

 

READ CAREFULLY BEFORE SIGNING

 

I have read this Release and have been given adequate
opportunity,  including twenty-one
(21) days from my initial receipt of this Release, to review this Release and
to consult legal counsel prior to my signing of this Release.  I understand that by executing this Release I
will relinquish certain rights or demands I may have against the Company
Parties or any of them.

 

 

	
   

  	
   

  	
  SCOTT C. BUTERA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  

 

 

Witness:

 

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  

 

6Exhibit 10.20

 

AMENDED AND RESTATED

NET LEASE AGREEMENT

 

Between

 

PARK CATTLE CO.

A Nevada Corporation

The Landlord

 

and

 

DESERT PALACE, INC.

A Nevada Corporation

The Tenant

 

Effective January 1, 2000

 

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE
  I

  	
  2

  
	
  Premises And Term Of Lease

  	
  2

  
	
  Section 1.1

  	
  2

  
	
  Section 1.2

  	
  2

  
	
  Section 1.3

  	
  2

  
	
  ARTICLE
  II

  	
  2

  
	
  Net Rent

  	
  2

  
	
  Section 2.1

  	
  2

  
	
  Section 2.2

  	
  3

  
	
  Section 2.3

  	
  3

  
	
  Section 2.4

  	
  3

  
	
  Section 2.5

  	
  5

  
	
  Section 2.6

  	
  5

  
	
  Section 2.7

  	
  5

  
	
  Section 2.8

  	
  5

  
	
  ARTICLE
  III

  	
  6

  
	
  Net Lease; Impositions and Adjustments

  	
  6

  
	
  Section 3.1

  	
  6

  
	
  Section 3.2

  	
  6

  
	
  Section 3.3

  	
  7

  
	
  Section 3.4

  	
  8

  
	
  Section 3.5

  	
  8

  
	
  Section 3.6

  	
  8

  
	
  Section 3.7

  	
  8

  
	
  ARTICLE
  IV

  	
  8

  
	
  Option to Renew

  	
  8

  
	
  Section 4.1

  	
  8

  
	
  Section 4.2

  	
  9

  
	
  ARTICLE
  V

  	
  9

  
	
  Use of Premises

  	
  9

  
	
  Section 5.1

  	
  9

  
	
  Section 5.2

  	
  9

  
	
  Section 5.3

  	
  9

  
	
  ARTICLE
  VI

  	
  10

  
	
  Condition and Maintenance of Premises

  	
  10

  
	
  Section 6.1

  	
  10

  
	
  Section 6.2

  	
  10

  
	
  ARTICLE
  VII

  	
  10

  
	
  Alterations and New Construction

  	
  10

  
	
  Section 7.1

  	
  10

  
	
  Section 7.2

  	
  11

  

 

i

 

	
  Section 7.3

  	
  11

  
	
  Section 7.4

  	
  12

  
	
  Section 7.5

  	
  12

  
	
  Section 7.6

  	
  12

  
	
  ARTICLE
  VIII

  	
  13

  
	
  Pedestrian Separation

  	
  13

  
	
  ARTICLE
  IX

  	
  13

  
	
  Insurance

  	
  13

  
	
  Section 9.1

  	
  13

  
	
  Section 9.2

  	
  14

  
	
  Section 9.3

  	
  14

  
	
  Section 9.4

  	
  14

  
	
  Section 9.5

  	
  14

  
	
  Section 9.6

  	
  15

  
	
  Section 9.7

  	
  16

  
	
  Section 9.8

  	
  16

  
	
  Section 9.9

  	
  16

  
	
  ARTICLE
  X

  	
  16

  
	
  Right of First Refusal to Purchase

  	
  16

  
	
  Section 10.1

  	
  16

  
	
  Section 10.2

  	
  17

  
	
  Section 10.3

  	
  18

  
	
  ARTICLE
  XI

  	
  18

  
	
  Default

  	
  18

  
	
  Section 11.1

  	
  18

  
	
  Section 11.2

  	
  19

  
	
  Section 11.3

  	
  21

  
	
  Section 11.4

  	
  21

  
	
  Section 11.5

  	
  21

  
	
  Section 11.6

  	
  21

  
	
  ARTICLE
  XII

  	
  22

  
	
  Landlord’s Covenant of Quiet Enjoyment

  	
  22

  
	
  Section 12.1

  	
  22

  
	
  Section 12.2

  	
  22

  
	
  ARTICLE
  XIII

  	
  22

  
	
  Recording

  	
  22

  
	
  Section 13.1

  	
  22

  
	
  ARTICLE
  XIV

  	
  23

  
	
  Termination of Lease

  	
  23

  
	
  Section 14.1

  	
  23

  
	
  Section 14.2

  	
  23

  
	
  Section 14.3

  	
  23

  
	
  Section 14.4

  	
  24

  
	
  Section 14.5

  	
  24

  
	
  Section 14.6

  	
  26

  

 

ii

 

	
  Section 14.7

  	
  26

  
	
  Section 14.8

  	
  26

  
	
  ARTICLE
  XV

  	
  27

  
	
  Assignment

  	
  27

  
	
  Section 15.1

  	
  27

  
	
  Section 15.2

  	
  27

  
	
  Section 15.3

  	
  28

  
	
  Section 15.4

  	
  28

  
	
  ARTICLE
  XVI

  	
  29

  
	
  Indemnification

  	
  29

  
	
  Section 16.1

  	
  29

  
	
  Section 16.2

  	
  30

  
	
  ARTICLE
  XVII

  	
  30

  
	
  Condemnation

  	
  30

  
	
  Section 17.1

  	
  30

  
	
  Section 17.2

  	
  30

  
	
  Section 17.3

  	
  31

  
	
  ARTICLE
  XVIII

  	
  31

  
	
  Fee Mortgages

  	
  31

  
	
  Section 18.1

  	
  31

  
	
  ARTICLE
  XIX

  	
  31

  
	
  Leasehold Mortgages

  	
  31

  
	
  Section 19.1

  	
  31

  
	
  Section 19.2

  	
  32

  
	
  Section 19.3

  	
  32

  
	
  Section 19.4

  	
  32

  
	
  Section 19.5

  	
  33

  
	
  Section 19.6

  	
  33

  
	
  Section 19.7

  	
  34

  
	
  Section 19.8

  	
  34

  
	
  ARTICLE
  XX

  	
  35

  
	
  Certificates

  	
  35

  
	
  Section 20.1

  	
  35

  
	
  Section 20.2

  	
  35

  
	
  ARTICLE
  XXI

  	
  36

  
	
  Confidentiality

  	
  36

  
	
  Section 21.1

  	
  36

  
	
  Section 21.2

  	
  36

  
	
  Section 21.3

  	
  36

  
	
  Section 21.4

  	
  37

  
	
  Section 21.5

  	
  37

  
	
  ARTICLE
  XXII

  	
  37

  
	
  Discharge of Liens

  	
  37

  
	
  Section 22.1

  	
  37

  

 

iii

 

	
  ARTICLE XXIII

  	
  38

  
	
  Licenses

  	
  38

  
	
  Section 23.1

  	
  38

  
	
  Section 23.2

  	
  38

  
	
  Section 23.3

  	
  38

  
	
  Section 23.4

  	
  39

  
	
  Section 23.5

  	
  39

  
	
  Section 23.6

  	
  39

  
	
  Section 23.7

  	
  41

  
	
  Section 23.8

  	
  41

  
	
  Section 23.9

  	
  41

  
	
  ARTICLE
  XXIV

  	
  42

  
	
  Golf Course

  	
  42

  
	
  Section 24.1

  	
  42

  
	
  Section 24.2

  	
  42

  
	
  ARTICLE
  XXV

  	
  42

  
	
  Bankruptcy

  	
  42

  
	
  Section 25.1

  	
  42

  
	
  ARTICLE
  XVI

  	
  44

  
	
  Miscellaneous

  	
  44

  
	
  Section 26.1

  	
  44

  
	
  Section 26.2

  	
  44

  
	
  Section 26.3

  	
  44

  
	
  Section 26.4

  	
  45

  
	
  Section 26.5

  	
  45

  
	
  Section 26.6

  	
  45

  
	
  Section 26.7

  	
  45

  
	
  Section 26.8

  	
  45

  
	
  Section 26.9

  	
  45

  
	
  Section 26.10

  	
  45

  
	
  Section 26.11

  	
  46

  
	
  Section 26.12

  	
  46

  
	
  Section 26.13

  	
  47

  
	
  Section 26.14

  	
  47

  
	
  ARTICLE
  XXVII

  	
  47

  
	
  Reservation of Space

  	
  47

  
	
  Section 27.1

  	
  47

  
	
  ARTICLE
  XXVIII

  	
  47

  
	
  Compliance Committee

  	
  47

  

 

iv

 

 

AMENDED AND RESTATED NET LEASE AGREEMENT

 

THIS
AMENDED AND RESTATED NET LEASE AGREEMENT, effective as of the 1st of January, 2000,
by and between PARK CATTLE CO. (the “Landlord”), a Nevada corporation, and
DESERT PALACE, INC., (the “Tenant”), a Nevada corporation.

 

W I T N E S S E T H:

 

WHEREAS,
Landlord and Tenant, entered into that certain lease dated October 15, 1979, covering
the premises described on Exhibit “A” attached hereto and by this
reference made a part hereof, a short-form of said lease having been recorded
in the Official Records of Douglas County, State of Nevada, at Book
   , Page     ; and

 

WHEREAS,
said Lease has been amended by instruments dated July 31, 1980, January 1, 1981,
December 1, 1982, March 1, 1986, October 1, 1986, December 31, 1992 and June 30,
1995 (said Lease as so amended is the “Original Lease”); and

 

WHEREAS,
Tenant is a Nevada corporation, the stock of which is one hundred percent (100%)
owned by Caesars Palace Corporation, a Nevada corporation, which is wholly
owned by Caesars World, Inc., a Florida corporation, which is wholly owned
by Park Place Entertainment Corporation, a Delaware corporation;

 

WHEREAS,
Landlord and Tenant desire that the Original Lease be amended and restated (said
Original Lease as amended and restated is referred to herein as the “Lease”); and

 

WHEREAS,
Landlord and Tenant desire that the Lease fully and completely supersede and
restate all of the terms and provisions of the Original Lease.

 

1

 

NOW,
THEREFORE, in consideration of the foregoing, and the mutual covenants and
conditions herein contained, Landlord and Tenant hereby agree that the
foregoing recitals are true and correct and as follows:

 

ARTICLE I

 

Premises And Term Of Lease

 

Section 1.1 The Landlord hereby demises and leases to
the Tenant, and the Tenant hereby hires and leases from the Landlord, the
property (the “Premises”) in Douglas County, Nevada, consisting of (a) the
parcel of land described on Exhibit A and the parcel of land described on Exhibit B,
and (b) all the buildings and other improvements on the land included in
the Premises and all additions to, and replacements of, those buildings and
improvements. The parcels of land described on Exhibits A and B above are more
particularly described on Exhibit C to this Restated Net Lease Agreement.

 

Section 1.2 The Original Term of this Lease shall
commence at 12:01 A.M. on January 1, 2000 (the “Commencement Date”) and
shall end at 11:59 P.M. on December 31, 2028 (the “Original Term”).

 

Section 1.3 During the term of this Lease (which will
include the Original Term and any renewal terms) the Tenant will have the right
to occupy and use the Premises, enjoy all the rights and privileges relating to
the Premises, and receive, subject to its obligation to pay rent and make other
payments as required by this Lease, all the rents and profits from the
Premises.

 

ARTICLE II

 

Net Rent

 

Section 2.1 The Tenant shall pay to the Landlord as rent
for the Premises during the original term of this Lease and any renewal terms
(a) a fixed rent computed as provided in

 

2

 

Section 2.2,
plus (b) an annual percentage rent equal to one percent (1%) of Gross
Gaming Winnings computed as provided in Section 2.3, plus (c) all
property and excise taxes and other impositions described in Article III.

 

Section 2.2 The fixed rent for the first Lease Year is
$4,400,000.00. During each subsequent Lease Year the fixed rent will be equal
to the product of (a) the fixed rent during the preceding Lease Year
multiplied by 1.025. If this Lease terminates at a date which is not the end of
a Lease Year, the fixed rent for the last Lease Year will be the sum which
bears the same proportion to the rent which would be payable for a full year as
the number of days in the last Lease Year bears to 365. For the purposes of
this Lease, (a) the term “Lease Year” means the twelve-month period
beginning on January 1, 2000 and each twelve-month period thereafter, and
(b) the term “preceding Lease Year” means the Lease Year ending on the day
immediately prior to the first day of the Lease Year for which fixed rent is
being determined.

 

Section 2.3 The annual percentage rent for a Lease Year
will be equal to one percent (1%) of Gross Gaming Winnings. The term “Gross
Gaming Winnings” shall be computed identically to “gross revenue” as defined in
Nev. Rev. Stat. § 463.0161 in effect on the Commencement Date.

 

Section 2.4 (a) Within thirty (30) days after the
close of each calendar quarter, Landlord shall be furnished with a statement
certified by the Tenant’s Controller or Treasurer setting forth the amount of
the Gross Gaming Winnings so reported for the immediately preceding calendar
quarter. Accompanying each such quarterly statement shall be payment of the
percentage rent due for that calendar quarter.

 

(b) Within
thirty (30) days after the close of each calendar year, Landlord shall be
furnished with a statement certified by Tenant’s Controller or Treasurer of the
amount of the

 

3

 

Gross
Gaming Winnings so reported for the immediately preceding calendar year, together
with  an appropriate accounting setting forth the gross amount of percentage
rent to which Landlord  was entitled for the immediately preceding
calendar year, the amounts paid to Landlord on  account thereof, and the
resulting balance due Landlord or the amount of overpayment which  Landlord has
received in the event that payments on account exceeded the percentage rent for
the  immediately preceding calendar year. Landlord will be paid any such
balance due at the time of  delivery of said certified
statement, or, if there has been such an overpayment, the amount of said  overpayment
shall be credited against the percentage rent obligations accruing for the
first or subsequent quarters of the following calendar year until such credit
has been reduced to zero.

 

(c) In
the event that the appropriate officials of the State of Nevada finally
determine that Tenant’s Gross Gaming Winnings for a calendar year are different
than as reported to Landlord under this Section 2.4 Tenant shall pay
Landlord any balance of percentage rent due within fifteen (15) days of such
final determination and shall be entitled to a credit for any overpayment
against the percentage rent obligations accruing after such final determination
until the credit is reduced to zero. For purposes of this subsection (c) “final
determination” means after all appeals available to Tenant have been exhausted
or the time for taking such appeals has expired.

 

(d) There shall be
placed on file with the appropriate officials of the State of Nevada and remain
on file, the continuous consent of Tenant or any other person permitted under
this Lease to operate gaming facilities on the Premises authorizing Landlord to
examine all reports and returns specifically relating to the Premises filed by
Tenant or such other person with such officials.

 

(e) In
order to permit computation of the percentage rent to be paid under this Section 2.4,
the Tenant shall keep all accounting records presently or which may be
hereafter required by

 

4

 

Nevada
Gaming Statutes and Regulations (“Nevada Gaming Law”). Said accounting records
shall be sufficient to furnish all of the information necessary to compute
Gross Gaming Winnings. All accounting records required to be kept shall be
available for inspection and copying by Landlord or it’s authorized agents, attorneys,
or accountants at all reasonable times and places during the term of this
Lease.

 

Section 2.5 The fixed rent provided by Section 2.1(a) shall
be paid in equal monthly installments in advance on the first day of each month.
The rent provided by Section 2.1 (c) shall be paid as provided in Article III.
Within 30 days after the end of each calendar quarter the Tenant will pay to
the Landlord the rent provided by Section 2.1(b).

 

Section 2.6 Each payment of rent will be made to the
Landlord by the Tenant without demand, in good funds, at such place in the
United States of America as may be designated in writing by the Landlord to the
order of the Landlord or such other person as the Landlord may from time to
time specify in writing. Until further notice by the Landlord, the Tenant shall
pay all rent to the Landlord at Landlord’s offices located in the Premises.

 

Section 2.7 Because a portion of the rent is based on
Gross Gaming Winnings, the Tenant must continuously operate a resort hotel, casino
and related facilities (the “Enterprise”) on the Premises which are furnished, maintained,
equipped and operated in a manner which makes the Enterprise competitive with
other hotel-casinos at Stateline, Nevada.

 

Section 2.8 Except as expressly provided in this Section 2.8,
Landlord and Tenant waive any claims each may have against the other with
respect to the calculation and payment of rent pursuant to the Original Lease. Upon
execution of this Lease, Tenant shall pay Landlord the sum of $68,000.00 as
additional percentage rent for the year ended July 31, 1994.

 

5

 

ARTICLE III

 

Net Lease; Impositions and Adjustments

 

Section 3.1 This Lease is intended to be a net lease
under which, during the term of this  Lease, the rents will be
absolutely net to the Landlord and the Tenant will pay all costs, expenses,  obligations and
impositions of every kind relating directly or indirectly in any way, foreseen
or  unforeseen, to the Premises. As used herein, “Impositions” means
without limitation all taxes,  assessments, water, storm
and sanitary sewer rents, license and permit fees, and other  governmental
levies, charges and impositions, general and special, ordinary and
extraordinary, unforeseen as well as foreseen,
of every kind and nature whatsoever imposed, assessed or levied,  or which may
become a lien upon the Premises, at any time during the term of this Lease upon
or  against the Premises or any portion of the Premises, this Lease itself,
the rent payable under this Lease or on the Landlord solely by reason of its
ownership of the Premises or the Tenant’s use of the Premises, but not
including any income, corporate franchise, unincorporated business, estate, inheritance
or similar taxes which may be imposed against the Landlord or any successor in interest.
The Tenant will also pay all utility charges, storm water runoff treatment
system fees, and other costs related to the Premises during the term of this
Lease. Except as provided in Section 3.4, the Tenant will pay all
Impositions or installments of Impositions before any fine,  penalty, interest
or cost may be added to them, except that the Tenant may pay any Imposition in
installments if permitted by law to do so, even if interest accrues on the
unpaid balance of the Imposition. The Tenant will, at the Landlord’s request, provide
the Landlord with evidence of payment of any or all Impositions.

 

Section 3.2  If the holder of any mortgage loan incurred
by the Landlord in accordance with Section 18.1 (a “Permitted Fee Mortgage”)
requires the Landlord to deposit with the holder

 

6

 

of
the Permitted Fee Mortgage (a “Permitted Fee Mortgagee”) monthly or less
frequently sums equal to pro-rata portions of Impositions for the then current
year, the Tenant will at the request of the Landlord pay to the Permitted Fee
Mortgagee the sums the Landlord is required to pay to the Permitted Fee
Mortgagee as estimated Impositions. To the extent the Tenant pays estimated
Impositions to a Permitted Fee Mortgagee, the Tenant will be relieved of the
obligation to pay the Impositions. If a Permitted Fee Mortgagee fails to pay
any Imposition for which it has received an estimated payment from the Tenant, the
Tenant may, but will not be required to, pay that Imposition and credit the
amount paid plus interest at the rate of 8% per annum against the fixed rent
payments due under this Lease in the order in which they are due.

 

Section 3.3 The Landlord and the Tenant will adjust
between them the payment of all Impositions as of the end of the term of this
Lease, and all refunds or rebates of Impositions allocable to periods after
termination of the term of this Lease, so that the Tenant will bear the cost of
all portions of Impositions allocable to the term of this Lease and the
Landlord will bear the cost of all Impositions allocable to periods after the
term of this Lease. Allocations will be  made in accordance with
generally accepted accounting principles. For the purposes of this Section, a
deposit by the Landlord or the Tenant of funds with a Permitted Fee Mortgagee
with regard to an Imposition will be deemed to be, or to have been, payment of
the Imposition to the extent of the deposit at the time the deposit is made. At
any time after the commencement of the term of this Lease, the Landlord may
bill the Tenant,  and at any time
after termination of the term of this Lease, the Tenant may bill the Landlord, for
the estimated portion of the Impositions paid by the Landlord or the Tenant, as
the case may be, allocable to the other party and the other party will pay the
sum shown on the bill within 30 days after the bill is received. Estimates will
be

 

7

 

based
on the prior year’s Impositions. Any additional payments or refunds due after
Impositions are finally determined will be made promptly upon request.

 

Section 3.4 The Tenant may, at its own cost, contest the
amount or validity of any Imposition. The Tenant may postpone payment of an
Imposition while the Tenant is contesting it if the Tenant notifies the
Landlord of the postponement and (a) the postponement will not place all
or a portion of the Premises in danger of being forfeited or lost, and
(b) no Permitted Fee Mortgage will be put in default because of the
postponement.

 

Section 3.5 The Tenant may at its own cost seek a
reduction in the assessed valuation of the Premises for tax purposes and
prosecute any action or proceeding for that purpose in the name of the Tenant, the
Landlord, or both. The Tenant will be entitled to retain any tax refund
resulting from a reduction in assessed valuation, except to the extent the
Tenant is required by Section 3.3 to pay a portion of a refund to the
Landlord.

 

Section 3.6 The Landlord will cooperate with the Tenant
in connection with my proceedings of the type described in
Sections 3.4 and 3.5, and will execute all documents, and do all other
things, reasonably requested of it by the Tenant in connection with
those proceedings.

 

Section 3.7 Landlord shall timely notify Tenant of any
matter or claim which may directly or indirectly affect Tenant’s obligations or
rights under this Lease.

 

ARTICLE IV

 

Option to Renew

 

Section 4.1 If not in default on any of its monetary
obligations under Sections 2.1(a), (b) and (c), the Tenant will have the
option to renew this Lease at its expiration for an additional term of 25 years
(the “Second Term”). The option to renew will be exercisable by a notice from

 

8

 

the
Tenant to the Landlord given at least one year prior to the expiration of the
Original Term of this Lease.

 

Section 4.2 During the renewal period the Tenant will
pay to the Landlord net rent computed in accordance with Articles II and III
and will perform all the Tenant’s other duties and obligations under this
Lease.

 

ARTICLE V

 

Use of Premises

 

Section 5.1 The Tenant shall use the Premises for a
first-class resort hotel and casino, and uses reasonably related thereto, and
for no other purpose.

 

Section 5.2 To the extent necessary in connection with
the remodeling, expansion or operation of the improvements on the Premises, the
Tenant may, with the consent of the  Landlord, which will not be
unreasonably withheld, cause utility easements to be created on the Premises (even
if extending beyond the term of this Lease), cause streets to be widened and
sidewalks to be installed, dedicate plats, cause zoning variances to be
obtained with regard to the Premises, or otherwise change the zoning
classification applicable to the Premises and agree to restrictions relating to
the Premises in order to obtain zoning variances or changes in zoning
classifications. The Landlord will execute such documents as may be reasonably
necessary to perfect any easements, restrictions or other actions consented to
under this Section.

 

Section 5.3 The Tenant will not use any portion of the Premises
in any manner which violates the laws, ordinances or regulations of any
governmental authority having jurisdiction over the Premises.

 

9

 

 

ARTICLE VI

 

Condition and Maintenance of Premises

 

Section 6.1 At all times during the term of this Lease, the
Tenant shall, at its sole cost, maintain the Premises and the furniture, furnishings
and equipment thereon in first class condition and maintain the entire Premises
in a manner which complies in all material respects with all laws and
regulations of all governmental authorities having jurisdiction over the
Premises. The Tenant shall not at any time during the term of this Lease permit
waste of the Premises or allow the Premises or the buildings included in the
Premises to depreciate in value by reason of any neglect of the Tenant. At such
time as any furniture, furnishings, equipment and other personal property
included in the Premises must be replaced, the Tenant shall, at its sole costs,
replace items to the extent replacement of such items is necessary in
connection with operation of the Enterprise.

 

Section 6.2 The Tenant has been in possession of the
Premises pursuant to the Original Lease and will be retaining possession of the
Premises in the condition in which it is at date of commencement of the term of
this Lease. The Tenant has executed this Lease on the basis of the Tenant’s own
inspection and knowledge of the Premises and of the laws and regulations
relating to the Premises, and the Tenant has not relied on any representations
or warranties of the  Landlord which are not expressly set forth in
this Lease.

 

ARTICLE VII

 

Alterations and New Construction

 

Section 7.1  Landlord’s
prior written consent, which will not be unreasonably withheld, will be
required for those alterations to the Premises which involve:

 

10

 

(a)  The structural soundness or fundamental purpose of the
existing hotel/casino building on the Premises;

 

(b)  Demolition of existing hotel casino buildings on the Premises
except for the removal or deletion of portions to facilitate alterations
otherwise permitted hereunder;

 

(c)  Construction of permanent, substantial and free-standing new
buildings on the Premises;

 

(d)  Governmental conditions, requirements or land use changes
which affect or may affect the Premises beyond the original term of the Lease
or beyond any renewal term for which the option has been exercised; or

 

(e) Any of the actions by Tenant referred to in Section 5.2
of the Lease.

 

For
purposes of this Article VII, “alterations” shall include construction of
new improvements, modifications or replacement of existing improvements or any
substantial parts thereof, and demolition of existing improvements or
substantial parts thereof.

 

Section 7.2 Except as provided in Section 7.1, Tenant
may undertake alterations on the Premises without Landlord’s prior written
consent.

 

Section 7.3 Subject to the provisions of Article XXI
concerning confidentiality, Tenant will provide Landlord with the details of
its annual  capital budget
for alterations on the Premises and for furniture, fixtures and equipment to be
placed on the Premises. It will further provide copies of all information
relevant to such alterations on the Premises and for furniture, fixtures and
equipment to be placed on the Premises estimated to cost in excess of $100,000,
and which have been approved by the Board of Directors of its Affiliate. The
term “affiliate” as used in this Lease shall mean any corporation which
controls Tenant, is controlled by Tenant, any division of Tenant other than the
Enterprise, or any corporation under common control with Tenant. For

 

11

 

purposes
of the foregoing, control (and the correlative terms “controlled by” and “common
control”) shall mean ownership of fifty percent (50%) or more of the securities
having non-contingent voting power for the election of directors.

 

Landlord
will receive a quarterly report from the Tenant on the status of approved
alteration requests and approved acquisitions of furniture, fixtures and
equipment for the Premises.

 

Section 7.4 As to Tenant’s alterations, (a) the
Tenant will complete with diligence all permitted alterations on the Premises
undertaken by it, (b) all alterations on the Premises will be completed in
a good and workmanlike manner, in accordance with all applicable laws,  ordinances and
regulations, and (c) the Tenant will first obtain all required licenses
and permits relating to any such alterations on the Premises.

 

Section 7.5 The Tenant will pay all costs of alterations,
permitted under this Article during the term of this Lease, and except as
otherwise provided, will be entitled to all salvage in connection with
demolition or replacement (including replacing of furniture, furnishings and equipment) during
the term of this Lease. Tenant shall
timely notify Landlord of all demolition of portions of the Premises owned by
Landlord.

 

Section 7.6 The Tenant will pay for  all alterations
in time to prevent the imposition of any workman’s or materialman’s lien upon
the Premises or, if a workman’s or materialman’s lien is imposed upon the
Premises because of a claim which the Tenant is contesting, within sixty (60) days
of the filing of such lien the Tenant will take such measures as provided by
law to cause the discharge of the lien, including obtaining a bond therefor.

 

12

 

ARTICLE VIII

 

Pedestrian Separation

 

If
required by any governmental authority having jurisdiction, Tenant shall
cooperate in the design and construction of and shall pay up to fifty percent (50%)
of the cost of constructing a pedestrian walkway under or over U.S. Highway 50
between the Premises and the Lake Tahoe Horizon, and the Landlord shall
cooperate in the same.

 

ARTICLE IX

 

Insurance

 

Section 9.1 At all times during the term
of this Lease, the Tenant will, at its own costs and expense:

 

(a) Keep
all buildings and other improvements on the Premises insured against loss or damage
by fire, and all risk of direct physical loss, including flood, earthquake, boiler
explosion and machinery breakdown, in an amount or amounts at least sufficient
to (i) insure that if any buildings or improvements are substantially
destroyed the proceeds of the insurance will be sufficient to pay for removal
of all remnants of the destroyed buildings or improvements, and (ii) provide
at least 100% of the replacement cost of the buildings, improvements and
furniture, furnishings and equipment included in the Premises, and (iii) comply
with the requirements of any Permitted Fee Mortgage to which this Lease is
subordinate, and (b) Keep in force general public liability insurance
naming the Landlord and the Tenant as insureds in the amount of $10,000,000, or such greater amount as is customary for a
property in Douglas County, Nevada, used for the purposes for which the Tenant
uses the Premises.

 

13

 

Section 9.2 If the estimated cost of any alteration or
new construction will be more than $1,000,000, during the period of
construction the Tenant will maintain, at its own cost and expense, or cause
contractors to maintain at their cost and expense,

 

(a) completed value builders risk insurance for the Premises,
including building materials on the Premises, with all standard extended
coverage, in an amount not less than the Tenant’s estimate of the cost of
construction; and

 

(b) workmen’s compensation insurance covering the contractor’s and
owner’s full liability.

 

Section 9.3 All insurance required by this article will
insure the Landlord and the Tenant as their respective interest may appear and
in the case of insurance against damage to the Premises, will, if requested by
the Landlord, also insure the interest of the holder of any Permitted Fee
Mortgage and provide that proceeds, if any, will be payable to the Landlord,
the Tenant, and/or the Permitted Fee Mortgagee, as their respective interests
may appear.

 

Section 9.4 All insurance
will be with companies rated at least AA in Best’s Key Rating Index and
authorized to do business in the State of Nevada. The Tenant may carry any
insurance required by this Article in a blanket policy carried by it or an
affiliate. To the extent obtainable each policy under which insurance coverage
is obtained in order to comply with this Section will provide that it may
not be canceled without thirty days’ prior written notice to the Landlord. If
such a provision cannot be obtained, the Tenant will, at the request of the
Landlord, provide the Landlord with proof of each premium payment made with
regard to each policy when the payment is made.

 

Section 9.5 If there is a loss, the Landlord and the
Tenant will cooperate in efforts to recover any insurance proceeds which may
become due.

 

14

 

Section 9.6 Except as otherwise expressly provided, no
damage or destruction of any portion of the Premises by fire or any other cause
will cause an abatement of rent or in any other way affect the obligations of
the Tenant under this Lease. If any building which is part of the Premises is
wholly or partially destroyed by fire or other casualty, the Tenant shall
continue to utilize any such building for the operation of the Enterprise to
the extent that it is practicable to do so from the standpoint of good business
practices. If, as a result of such a casualty, Tenant is unable to use
twenty-five percent (25%) of the hotel-casino building on the Premises, the rent
provided for in Section 2.1(a) shall be equitably abated in the
proportion that the area of the unused part of the hotel-casino building bears
to the whole area of that building. If, as a result of such a casualty, Tenant
is unable to use forty percent (40%) of the parking spaces in the parking structure
on the Premises, the rent provided for in Section 2.1(a) shall be
equitably abated in the proportion that the unused parking spaces bear to all
of the parking spaces on the Premises. Nothing in this Section shall be
construed to abate or diminish the payment, and duty to make payment, by Tenant
of rent required by Section 2.1(b), Section 2.1(c) and of its
other monetary obligations contained in this Lease. The Tenant will at its own
expense and with diligence make any repairs necessary to restore the Premises
to at least as good condition as it was in immediately prior to the damage or
destruction, whether or not the cost of those repairs is reimbursed by
insurance. The net proceeds of insurance resulting from any property damage or
destruction (after collection of expenses, if any) will be paid to the Tenant,
which will apply the proceeds to reimburse itself for the cost of repairs, and
will retain any excess. The abatement of rent provided for herein will continue
until the earlier of the date when Tenant’s use of the Premises exceeds the
threshold which allows the abatement of rent in the first instance, or until

 

15

 

the
date by which Premises could have been restored had such restoration proceeded
with diligence.

 

Section 9.7 Within 30 days after the Commencement Date
and thereafter at least ten (10) days prior to the expiration date of any
expiring policy of insurance maintained to meet the requirements of this Lease,
the Tenant will furnish the Landlord a certificate or memorandum of each policy
of insurance maintained to comply with this Article.

 

Section 9.8 The Landlord and the Tenant each waives as
to the other and its agents and employees all claims and rights of recovery for
any damage to the Premises (whether or not the damage was the fault of the
Landlord or the Tenant or its agents and employees) to the extent, but only to
the extent, of any proceeds recoverable under policies of insurance required to
be maintained under this Lease (including proceeds of coverage in excess of the
minimum amounts required by this Lease). The Tenant and the Landlord each
waives as to its insurers, and will use its best efforts to cause each policy
of insurance maintained by it which relates to the Premises to include a waiver
of any rights or claims against the other by reason of subrogation, assignment
of claim or otherwise.

 

Section 9.9 If any type or amount of insurance Tenant is
required by Landlord to maintain hereunder
ceases to be generally available for properties similar to the Premises, Tenant
will not be required to maintain that type or amount of insurance but will
maintain the most nearly comparable insurance which is generally available for
properties similar to the Premises.

 

ARTICLE X

 

Right of First Refusal to Purchase

 

Section 10.1
If the Landlord receives a bona fide offer to purchase the Premises or the
Landlord’s rights under this Lease (other than solely as security for
indebtedness which the 

 

16

 

nuiord
in good faith intends to repay), or subject to the provisions of Article XV,
if the Tenant receives a bona fide offer to purchase the Tenant’s rights under
this Lease, and the party which receives the offer (the “Selling Party”) is
willing to accept the offer, the Selling Party will comptly give the other
party (the “Other Party”) a written notice of the offer (a “Notice offer”),
including its terms, a statement that the Selling Party is willing to accept
the offer, and to identity of the offeror, and the Other Party will have the
option (the “Matching Option”), exercisable by a notice in writing given to the
Selling Party not later than 60 days after the elling Party gives the Other Party the Notice of Offer, to purchase the Premises, or the, andlord’s or the
Tenant’s rights under this Lease, as the case may be, on the terms set forth in
the Notice of Offer, except that if the consideration to be paid is to be other
than cash, the Other Party may pay the Selling Party cash with a value equal to
the consideration specified in the ce of  Offer. The Selling Party may not complete the transaction described in
the Notice of Offer unless and until the Matching Option expires unexercised.
If the Other Party does not exercise the Matching Option before it expires, the
Selling Party may for six months after the Matching Option expires, sell the
Premises or assign its rights under this Lease, as specified in the Notice of
Offer, to any person on terms not more favorable to the purchaser than those
set forth in the Notice of  Offer.

 

Section 10.2 If the Other Party exercises a Matching
Option, the closing of the sale of the Premises or the assignment of the
Landlord’s or the Tenant’s rights under this Lease, as the case may be, from
the Selling Party to the Other Party will take place at the Enterprise at 11
o’clock A. M. on a day specified by the Other Party
in the notice of exercise of the Matching Option, which will be not later than
120 days after the notice of exercise of a Matching Option is given.

 

that
closing:

 

17

 

(a) The Other Party will deliver to the Selling Party such other
payment or consideration s may be required upon exercise of the Matching
Option.

 

(b) The Tenant will make all payments of rent and other payments
to the Landlord due to have been paid prior to the date of the closing.

 

(c) The Selling Party will deliver to the Other Party either (i) a
Grant Bargain and Sale eed transferring to the Other Party title to the
Premises free and clear of any liens or encumbrances other than liens and
encumbrances which arise after the date of this Lease as a result of acts of,
or with the consent of, the Tenant, and (ii) a bill of sale and such other
documents as may be required to transfer to the Tenant all the personal
property owned by the andlord with is included in the Premises at the time of
transfer or (iii) if the option relates to an assignment of the Landlord’s
or the Tenant’s rights under this Lease, such documents of ignment, financing
statements, and other documents as are necessary to perfect that assignment.

 

Section 10.3 If the term of this Lease terminates for any
reason, the provisions of this Article X will terminate simultaneously with
termination of the term of this Lease.

 

ARTICLE XI

 

Default

 

Section 11.1 Subject to the provisions of any applicable
law in effect at the time, each of he following events will be an Event of
Default under this Lease:

 

(a) The
Tenant fails to pay any rent required by Sections 2. 1(a), (b), or (c) by
20 days after notice from the Landlord, except that if in any calendar year the
Landlord gives two notices of default in payment, any subsequent failure in
that calendar year to pay rent within 20 days after s due will be an event of
default without any notice from the Landlord.

 

18

 

(b) The
Tenant fails to perform or comply with any of the other terms, covenants, reements
or conditions contained in this Lease and the failure continues for more than
30 days ter the Landlord notifies the Tenant in writing of the failure, except that if the
failure cannot be tred within 30 days, there will not be an Event of Default if
within the 30 day period the Tenant gins to cure the failure, and thereafter
the Tenant proceeds diligently to cure it. Provided,
owever, there shall be no grace  period for a failure to perform
the duty imposed on the Tenant y Section 9.1.

 

(c) The
Tenant files or consents to the filing  of any petition seeking debtor’s
relief or a etition seeking relief is filed against the Tenant and not
dismissed within 60 days.

 

Section 11.2 If there is an Event of Default under this
Lease (regardless of the pendency of
any proceeding which has or
might have the effect of preventing the Tenant  from complying the terms of
this Lease), the Landlord may at any time while the situation which constitutes
an Event of Default continues, exercise any one or more of the following
remedies:

 

(a) The
Landlord may terminate this Lease by a notice in writing to the Tenant on a
date (the “Early Termination’ Date”) specified in the notice (which may be the
date the notice is given), without any further right by the Tenant to reinstate
its rights by paying any rent or other sum which is due or otherwise curing the
situation which constituted an Event of Default. On the Early Termination Date
the term of this Lease will terminate as fully and with the same effect as if
that were the last day of the term of this Lease specified in Article I
and IV, the Tenant shall immediately
surrender possession of the Premises to the Landlord, the Tenant will have no
further rights under this Lease, and the Landlord will immediately become
entitled to receive damages from the Tenant equal to the difference between (i) the
aggregate rent for the balance of term (not including subsequent renewal
periods), discounting all future payments at 9% per

 

19

 

urn,
and (ii) the fair net lease rental value of the Premises for the balance
of the term (not including subsequent renewal options) based on discounting all
future payments at 9% per annum. In addition, upon
termination of this Lease under this subsection, the Landlord will be entitled to
recover from the Tenant (i) any cost of repairing the Premises to first
class condition, normal wear and tear excepted, less any insurance or other
proceeds available to the Landlord for that purpose,. (ii) all rent and
other sums due up to the Early Termination Date, and (iii) any reasonable
costs, including but not limited to reasonable attorneys’ fees, incurred by the
Landlord in recovering possession of the Premises.

 

(b) With
or without terminating this Lease, as the Landlord may elect, the Landlord may
reenter and repossess the Premises and lease it to any other person upon such
terms as the Landlord may deem reasonable, for a term or terms which may be
longer or shorter than the term this Lease, provided however, that the Landlord
has a duty to mitigate its damages to the extent reasonably possible to do so.
Any reletting with regard to periods prior to the termination of this Lease
will be for the account of the Tenant. The Tenant will remain liable for (i) all
rent and other sums which would be payable under this Lease by the Tenant in
the absence of the repossession, less (ii) the net proceeds, if any, of any
reletting effected for the account of the Tenant, after deducting all the
Landlord’s expenses in connection with the reletting (including, but not
limited to, repossession costs, brokerage commissions, reasonable attorneys’
fees and other legal expenses, employee expenses, reasonable alteration costs,
and other expenses of preparation for reletting).

 

(c) If
any portion of the Premises is sublet or leased by the Tenant to others,
during the continuance of the situation which constitutes the Event of Default,
the Landlord may, as the tenant’s agent, collect rents due from any sub-tenant
and apply those rents to the rent and other

 

20

 

ns
the Tenant is required to pay under this Lease, without in any way affecting
the Tenant’s remaining obligations under this Lease. This agency is being given
for security and is hereby declared to be irrevocable.

 

Section 11.3 If the Landlord terminates this Lease or
relets the Premises as provided in subsection (a) and (b) of Section 11.2,
the Landlord may remove the Tenant, all persons claiming under the Tenant,
(except subtenants with space leases for five (5) years or less), and
their respective property, from the Premises, and store that property in a
public warehouse or elsewhere at the cost of, and for the account of, the
Tenant, without service or notice or resort to legal process (all of which the
Tenant expressly waives) and without being deemed guilty of trespass or
becoming liable for any resulting loss, damage or injury.

 

Section 11.4 The Tenant waives, for itself and all
persons claiming under or through it, all rights under present or future law to
redeem any portion of the Premises or otherwise reinstate this Lease if the
term of this Lease is terminated or the Landlord takes possession of the
Premises in accordance with this Article XI.

 

Section 11.5 The remedies in this Article XI are
intended to be cumulative, except that the remedy in Section 11.2(a) is
exclusive of any other remedy. No remedy made available to the Landlord in this
Article XI is intended to preclude the Landlord from using any other
remedy provided in this Lease or by law.

 

Section 11.6 No waiver by the Landlord of, or failure of
the Landlord to seek a remedy for, any breach by the Tenant of any of its
obligations under this Lease will be a waiver of any subsequent or continuing
breach of that or any other obligation.

 

21

 

 

ARTICLE XII

 

Landlord’s Covenant of Quiet Enjoyment

 

Section 12.1 Landlord covenants, warrants and represents
that it has full right and power to execute and perform all of the provisions
of this Lease and to grant the estate demised herein; and covenants that, so
long as there shall be no default under this Lease, Tenant shall peaceably and
quietly have, hold and enjoy the Premises and all of the tenements,
hereditaments and appurtenances thereunto belonging during the full term of
this Lease.

 

Section 12.2 The Tenant will not have the right to
terminate this Lease because of any breach by the Landlord of a warranty or
covenant contained in this Lease unless the situation which constitutes a
breach materially interferes with the Tenant’s ability to operate the
Enterprise in Tenant’s usual and customary manner. The Tenant’s sole remedy for
any other breach will be obtain reimbursement for the cost, including
reasonable attorneys’ fees, of correcting the situation which constitutes a
breach or, if that situation cannot be corrected, a reduction in the fixed rent
proportionate to the resulting reduction in the value of the Premises caused by
that situation.

 

ARTICLE XIII

 

Recording

 

Section 13.1 Simultaneously with the execution of this
Lease, the Landlord and the Tenant will agree upon, execute, acknowledge and
deliver to each other a Memorandum of Lease and Purchase Option in form
suitable for recording in the office in Douglas County, Nevada, in which such
records are kept, which sets forth the names of the Landlord and the Tenant, a
description of the Premises, the term of this Lease, and the provisions of Article X
relating to the, landlord’s and the Tenant’s
rights of first refusal and other such provisions, if any, as may be

 

22

 

required
under the laws of the State of Nevada to permit the recording of the Memorandum
and to make it effective to make this Lease and the Matching Options superior
to any subsequently recorded document of title or mortgage relating to the
Premises to which this Lease is not expressly subordinated. Either the Landlord
or the Tenant may at any time after the Commencement Date, record the
Memorandum of Lease and Purchase Option in the office in Douglas County,
Nevada, in which records relating to title to real property are kept.

 

ARTICLE XIV

 

Termination of Lease

 

Section 14.1 Upon the termination of this Lease, whether
by lapse of time or otherwise, the Tenant will at once surrender the Premises
to the Landlord in the condition in which they are required to be kept under
this Lease, and the Landlord and the Tenant will have no further ligations
under this Lease, except the Tenant’s obligation to pay rent for periods prior
to the termination of this Lease and the Tenant’s obligations on termination of
this Lease set forth in Article XIV and in Sections 14.4 through 14.8.

 

Section 14.2 All buildings and improvements which are
fixtures when they are surrendered will belong to the Landlord and the Landlord
will not be required to pay any compensation for therein.

 

Section 14.3 Tenant shall surrender to Landlord all keys
to or for the Premises and inform Landlord of all combinations of locks, safes
and vaults, if any in the Premises. Tenant shall offer to sell to Landlord all
furniture, furnishings, equipment and other items of personal property which
are not fixtures placed in or on any portion of the Premises by the Tenant
during the term of this Lease for a price not to exceed
its book value at termination of the Lease. Such offer shall be made in writing
at least thirty (30) days prior to termination of the Lease. If

 

23

 

Landlord
does not accept Tenant’s offer, Tenant, at its expense, shall promptly remove
all such personal property of Tenant, repair all damage to the Premises caused
by such removal and restore the Premises to the condition which existed prior
to the installation of the property so removed. Any personal property of Tenant
not removed within ten (10) days  following the expiration or
earlier termination of the Lease shall be deemed to have been abandoned by
Tenant and to have become the property of the Landlord, and may be retained or
disposed of by Landlord, as Landlord shall desire. Tenant’s obligation to
observe or perform the covenants set forth in this Section shall survive
the termination of this Lease.

 

Section 14.4 Except as expressly stated below and subject
to all required gaming and regulatory approvals, the Enterprise will in all
respects be operated for the Tenant’s benefit until the time when this Lease
terminates and for the Landlord’s benefit after that time. The Tenant will
retain all cash and cash items (including, but not limited to, trade
acceptance, bills of change, checks, drafts and notes) and all accounts
receivable, including, but not limited to, city and guests  ledgers,
and time accounts receivable from travel agents, on hand at that time. The
Landlord will cooperate with the Tenant in the collection of all accounts
receivable, notes and similar items, and will permit representatives of the
Tenant to enter the Premises and use its facilities from time to time during
reasonable business hours after the termination in connection with the
collection of those accounts receivable, notes and similar items.

 

Section 14.5 Except as specifically provided below, the
following items will be apportioned as of 12:01 a.m. on the date this Lease
terminates:

 

(a) All
prepaid rents, all deferred rents, as and when collected, all prepaid guest
charges, and all charges due from guests and other occupants, as and when
collected. Guest room revenues for the night which begins on the day before the
date of termination, whenever received,

 

24

 

will
belong to the Tenant. Any deposits held by the Tenant under leases relating to
space on the Premises which continue on or after the date of termination, will be
paid over, and belong, to the Landlord, which will to the extent, but only to
the extent, of the deposits received by the Landlord, be responsible for
returning all or portions of these deposits in accordance with the applicable
leases or agreements;

 

(b) Charges and fees due or prepaid under telephone contracts and
contracts for petroleum products, electricity and lighting. All deposits made
by the Tenant under public service contracts (whether paid before or after the
date of this Lease) will remain on deposit after the termination date, for the
benefit of the Landlord, and will be credited to the Tenant;

 

(c) Charges for electricity or other utilities, to the extent not
adjusted under subsection (b);

 

(d)           Charges and receipts
under all hotel contracts (other than union or employment contracts);

 

(e)           Charges and fees
paid or payable for transferable licenses and permits;

 

(f)            Advance payments under
booking agreements for the Enterprise’s facilities;

 

(g)           Prepaid advertising
expenses and outstanding due bills and similar items paid prior to the date of
termination, or consented to by the Landlord;

 

(h) Fees and expenses for music and other broadcasting rights,
trade association dues and trade subscriptions, coin machine income, telephone
and washroom and checkroom income;

 

(i) Commissions of credit and referral organizations;

 

(j) Such other items as are customarily adjusted upon the sale of
a similar enterprise.

 

In making apportionments, all prepaid rents, prepaid guest charges, and
similar items will be prorated on the basis of the number of days of occupancy
before and after the termination

 

25

 

date,
except that, with regard to guest room revenues the Tenant will get credit for
revenues allocable to the night which begins on the day before the termination
date. All other charges and expenses will be prorated on the basis of unit
costs or, if this is not practicable, on the basis of the number of days before
and after the date of termination.

 

Section 14.6 The Tenant’s cost of the food and beverage
inventory at the Enterprise and the Tenant’s book value of the china,
silverware, glassware, linens, uniforms, paper products, bathroom, laundry and
cleaning supplies, other hotel supplies and similar items (together “Inventory
Items”) at the Enterprise at 12:01 a.m. on the date of termination, will be
determined by representatives of the Landlord and of the Tenant. The Landlord
will be deemed to have acquired and owned all the Inventory Items on hand at
the Enterprise at 12:01 a.m. on the date of termination, and the Landlord will
pay the Tenant the Tenant’s cost or book value for those items as the case may
be.

 

Section 14.7 At 12:01 a.m. on the date of termination,
all the Tenant’s chips which are on tables or in the casino cashier’s cage at
the Enterprise will be removed and the Landlord will place its chips on the tables and in the
cashier’s cage. Pursuant to applicable state law, Tenant may elect the location
at which its chips will be redeemed for 90 days after the date of termination
or such other period as may be required by law. Landlord agrees, upon request
by Tenant, to redeem Tenant’s chips at the Premises.
The Tenant will, promptly upon request, purchase from the Landlord at their
face value any of the Tenant’s chips redeemed by the Landlord.

 

Section 14.8 The net amount of the adjustments provided
for in Section 14.5 and the purchase price of the Inventory Items provided
for in Section 14.6 will be paid by check
by the

 

26

 

Landlord
to the Tenant, or by the Tenant to the Landlord, within ten days after the
amount is computed.

 

ARTICLE XV

 

Assignment

 

Section 15.1 Subject to the provisions of Article X,
and except as provided in Section 15.5, Tenant may assign or transfer this
Lease or sublease the Premises or any material segment thereof by paying
Landlord an assignment fee equal to the amount of the fixed rent for the Lease
Year in which the assignment takes place. Provided however, the Tenant may at
any time sublease or provide other contractual rights to use the Premises to
stores, restaurants and athletic facilities for terms not longer than the
Original Term or for any renewal term for which the option to renew has been
exercised of this Lease without such payment. Except as provided in this Section 15.1,
subject to Article X, the Tenant may assign or transfer this Lease or
sublease the Enterprise or any material segment thereof without the prior
written consent of the Landlord. If an assignee or transferee of this Lease
agrees in writing to be obligated to the Landlord to fulfill all the
obligations of the Tenant under this Lease, Landlord will consent in writing to
release Tenant from any further obligations under this Lease, except that,
unless the net worth of the assignee or transferee at the end of its fiscal
year prior to the one in which the assignment or transfer took place is equal
at least to the product of the fixed rent for the Lease Year in which the
assignment or transfer takes place multiplied by twenty, the Tenant will not be
released from its monetary obligations hereunder.

 

Section 15.2 On Tenant’s assignment or transfer of this
Lease or its subletting of the entire Enterprise or any material segment
thereof the rent for each Lease Year provided for in Sections 2.1(a) and
2.1(b) will be, at the election of Landlord to be exercised within the
time

 

27

 

provided
in Section 10.1 for exercising its right of first refusal, either (a) the
fixed and percentage rent computed in accordance with Sections 2.2 and 2.3 or (b) the
highest total fixed and percentage rent paid by Tenant in any of the 5 Lease
Years preceding the Year of assignment, transfer or subletting, increased
annually by the lower of five percent (5%) or based on the Consumer Price Index
for all Urban Wage Earners and Clerical Workers, United States City Average,
All Items, published by the Bureau of Labor Statistics of the United States
Department of Labor using the period 1982-1984=100 as the base period (the
“Consumer Price Index”), and computed as provided in Section 15.3 and paid
as provided in Section 15: 4.

 

Section 15.3 If the Landlord elects to have the rent
computed as provided in Section 15.2 (b), the rent shall be computed by
dividing the highest total fixed and percentage rent paid by Tenant in any of
the 5 Lease Years preceding the year of assignment, transfer, or subletting by
the index number for December of the Lease Year for which that fixed and
percentage rent was paid and then multiplying that quotient by the index number
for the month of December of the Lease Year preceding the Lease Year in
question. In the event that the Bureau of Labor Statistics shall change the
cycle for publication of the Consumer Price Index described above, so that no
index number is published for the month in question, then the index number for
the nearest month before the month in question shall be substituted. If the
Bureau of Labor Statistics changes the Consumer Price Index described above so
that no index is published, then the most nearly comparable index published
shall be substituted.

 

Section 15.4 The rent provided for in Section 15.3
will be paid in equal monthly installments in advance on the first day of each
month and will be deemed rent payable under Section 2.1 (a) and (b).

 

28

 

Section 15.5 Without payment of the assignment fee
referenced in Section 15.1, the Tenant may at any time assign this Lease
to (a) a corporation all of whose stock is owned directly or indirectly by
Park Place Entertainment Corporation, Caesars World, Inc. or Desert Palace, Inc.,
including their parent, subsidiary and affiliate corporations, or (b) to a
corporation or entity which is the successor to Park Place Entertainment
Corporation as a result of a merger or consolidation with Park Place
Entertainment. Assignment of this Lease by the Tenant to such a corporation
will not relieve the Tenant of its obligations under this Lease.

 

ARTICLE XVI

 

Indemnification

 

Section 16.1 The Tenant will indemnify the Landlord
against, and hold the Landlord harmless from, (i) any and all claims
arising from the use or management of the Premises or from any work or other
things done (other than by the Landlord) on the Premises during the term of this
Lease, including, but not limited to, all Impositions and utility charges
relating to the term of this Lease, (ii) any and all claims for loss or
damage arising during the term of this Lease from the condition of any building
included in the Premises or any street, curb or sidewalk adjoining the land
included in the Premises, or any vaults, tunnels, passageways or space in or
appurtenant to the Premises, or arising from a failure by the Tenant to fulfill
any of its obligations under this Lease, or arising from any other cause,
except the willful act of its agents, contractors, servants or employees, and (iii) all
liabilities, costs and expenses, including reasonable attorney’s fees, incurred
in connection with any such claim or any action or proceeding
brought with regard to any such claim. If any action or proceeding is brought
against the Landlord by reason of any such claim, the Landlord will promptly
notify the Tenant of the commencement of the action or

 

29

 

 

proceeding
and will offer the Tenant the opportunity to assume the defense of the action
or proceeding.

 

Section 16.2 Landlord will indemnify Tenant against and
hold Tenant harmless from any and all claims, including costs, expenses and
reasonable attorney’s fees arising out of Landlord’s breach of this Agreement.

 

ARTICLE XVII

 

Condemnation

 

Section 17.1 If at any time during the term of this Lease
any portion of the Premises is taken by any authority by the exercise of any
right of eminent domain or in any condemnation proceeding, or by agreement
between the Landlord, the Tenant and those authorized to exercise such right,
the Tenant will give the Landlord prompt notice of the occurrence, describing
the nature and extent of the taking or the nature of the proceedings and
negotiations and the nature and extent of the taking which might result from
them as the case may be. Subject to the prior rights, if any, of Permitted
Mortgagees, the Landlord will receive all awards and other compensation for the
taking, except that if the laws of the State of Nevada permit compensation for
termination of business of a tenant which is in addition to, and will not
reduce, the awards and other compensation to the Landlord, the Landlord will
cooperate in attempting to have the compensation include an award for
termination of the business being conducted  on the Premises, and the
Tenant will be entitled to receive that portion of the compensation for the
taking.

 

Section 17.2 If a portion, but not all, of the Premises
is taken or condemned, the Landlord will promptly make such repairs as are necessary  to make each  building which
is part of the Enterprise a whole architectural unit whether or not the cost
exceeds the net proceeds of the condemnation award. Any excess will be retained
by the Landlord. If Landlord does not fulfill its

 

30

 

obligation
to repair, Tenant may make such repairs as are necessary to make each such
building which is a part of the Enterprise a whole architectural unit and may
recover its costs from fixed rent and percentage rent in the order in which
they are due. If a taking reduces the number of guest  rooms by more than 25%, or
includes more than 25% of the gaming floor space which cannot be reasonably reestablished,
the taking may, at the election of the Tenant, exercised by a notice in writing
to the Landlord given within 60 days after legal title to the portion of the
Premises passes to the governmental authority, be considered a taking of the
entire Premises to which Section 17.3 will apply. There shall be no
abatement of rent for any taking which is not considered a taking of the entire
Premises.

 

Section 17.3 If the entire Premises is taken or
condemned, this Lease will terminate as of the date the governmental authority
takes possession of the Premises, with the same force and effect as though that
were the date specified in Article I or Article IV.

 

ARTICLE XVIII

 

Fee Mortgages

 

Section 18.1 During the term of this Lease the Landlord
will not place any mortgage on, or security interest in the Premises. or permit
any mortgage on, or security interest in, the Premises to exist except (a) mortgages
which by their terms are subordinate to this Lease and (b) other secured
loans consented to in writing in advance by the Tenant.

 

ARTICLE XIX

 

Leasehold Mortgages

 

Section 19.1 The Tenant may at any time
or times mortgage or otherwise encumber its rights as Tenant under this Lease
for purposes of alterations to the Premises as defined in Article VII;
provided that  any such
mortgage or encumbrance shall contain a provision granting

 

31

 

Landlord
the right and option, exercisable by written notice within the 30-day period
following the recordation of a notice of default, to purchase the Leasehold
Mortgagee’s position for cash in an amount equal to the entire balance of
principal and interest due and owing by tenant and providing further that
Landlord shall have 90 days after the recordation of a notice of default in which
to complete said purchase.

 

Section 19.2 Subject to the provisions of
Article X, the Landlord will be deemed to have expressly consented to the
assignment of this Lease to any person who purchases this Lease and the rights
created by it at a sale resulting from foreclosure or an assignment in lieu of
foreclosure, of a mortgage on, or other security interest in, the Tenant’s
rights under this Lease (a “Leasehold Mortgagee”).

 

Section 19.3 If the
Landlord gives any notice of default or termination to the Tenant, the Landlord
will send a copy of the notice to each person of whom the Landlord has received
written notice who holds a Leasehold Mortgage (a “Leasehold Mortgagee”) at as
nearly as possible the same time as the notice is given to the Tenant, at the
address specified in writing to the Landlord in the notice of the existence of
the Leasehold Mortgage. In no event may the Landlord give a notice of
termination to the Tenant unless a copy of the prior notice of default, if any,
has been given to each Leasehold Mortgagee as provided in this Section and
in time to permit the Leasehold Mortgagee to cure the default as provided in Section 19.4.

 

Section 19.4 The Landlord will accept
performance by any Leasehold Mortgagee of any  obligation of the Tenant under this Lease
with the same effect as though timely performed by the Tenant, if performance
by the Leasehold Mortgagee is lawful and occurs within the following time
periods:

 

32

 

(a) With regard to any payment of rent or any other sum of money
due under this Lease from the Tenant, within 10 days after notice of the
default in payment is given to the Leasehold Mortgagee; and

 

(b) As to all other defaults, within 30 days after notice of the
Tenant’s default is given to the Leasehold Mortgagee. Any default of a type
which cannot with due diligence be cured within 30 days  will, for the purposes of this Section, be
deemed cured by the Leasehold Mortgagee if within the 30-day period the
Leasehold Mortgagee undertakes in writing to the Landlord to cure the default
and thereafter proceeds diligently to cure it. If the event of default
specified in a notice of default or termination is one of the events specified
in Sections 11. 1 (c) or 23.7 the default will be deemed cured if the
Leasehold Mortgagee notifies the Landlord within 30 days after the notice of
the Tenant’s default is given to the Leasehold Mortgagee that the Leasehold
Mortgagee intends to foreclose its Leasehold Mortgage, the Leasehold Mortgagee
proceeds diligently to foreclose the Leasehold Mortgage, the Leasehold
Mortgagee or its designee in fact acquires the rights of the Tenant under this
Lease, and all other obligations of the Tenant under this Lease are. fulfilled as provided in
this Section.

 

Section 19.5 While there exists an unpaid Leasehold
Mortgage of which the Landlord has received written notice, this Lease will not
be modified or amended, and the Landlord will not accept a voluntary
termination of this Lease or a surrender of the Premises, without the prior
written consent of the holder of each such Leasehold Mortgage.

 

Section 19.6 The Tenant may add the name of any Leasehold
Mortgagee as an insured party under any insurance policy the Tenant is required
to obtain under this Lease if it is specified in the Leasehold Mortgage or
another document that the proceeds of the insurance are to be divided as
provided in this Lease.

 

33

 

Section 19.7 If following foreclosure of a Leasehold
Mortgage of all the Tenant’s rights under this Lease, a Leasehold Mortgagee or
its designee asks the Landlord to enter into a lease of the Premises with the
Leasehold Mortgagee or its designee for the remainder of the term of this
Lease, the Landlord will enter into a new lease with the Leasehold Mortgagee or
its designee for the remainder of the term of this Lease, at the rent provided
in this Lease and containing all the other terms and provisions of this Lease
relating to periods after commencement of the term of the new  lease, including, but not limited to, the
provisions of Article X, subject to the existing rights of any other
person to possession of all or a portion of the Premises, if

 

(a) at the time the new lease is executed, all rent, Impositions
and utility charges the Tenant is required to pay under this Lease to the date
the new lease is executed have been paid by the Tenant, the Leasehold Mortgagee
or its designee;

 

(b) in case any of the Tenant’s other obligations in this Lease
have not been fulfilled, the Leasehold Mortgagee or its designee agrees at the
time the new lease is executed that failure to fulfill those obligations within
the time and in the manner specified in this Lease will constitute an event of default
under the new lease;

 

(c) the Leasehold Mortgagee or its designee pays the Landlord at
the time of execution of the new lease an amount equal to all previously
unreimbursed expense, including reasonable attorneys’ fees, incurred by the
Landlord because of any prior defaults by the Tenant; and

 

(d) the new lease will be made subject to the rights, if any, of
the Tenant under this Lease.

 

Section 19.8 Upon request by the Tenant the Landlord will
execute, acknowledge and deliver to any Leasehold Mortgagee an agreement,
prepared at the Tenant’s expense, in which the Landlord agrees as between the
Landlord and the Leasehold Mortgagee to all the provisions of this Article XIX.

 

34

 

ARTICLE XX

 

Certificates

 

Section 20.1 At any time and from time to time on not less
than ten (10) days’ prior notice by the Landlord, the Tenant will execute,
acknowledge and deliver to the Landlord or the holder of any Permitted Fee
Mortgage a statement in writing certifying that this Lease is unmodified and in
full force and effect (or, if there have been modifications, that this Lease is
in full force and effect as modified and describing the modifications) and
stating (a) whether there are any offsets or defenses on the part of the
Tenant, (b) the dates to which the net rent, Impositions and other charges
have been paid in advance, if any, and (c) whether to the best knowledge
of the signer of the certificate the Tenant or the Landlord is in default. in
performance of any obligations under this Lease and, if so, specifying each
such default. It is intended that any such statement may be relied upon by a
prospective purchaser of the Premises or by a Permitted Fee Mortgagee. 

 

Section 20.2 At any time and from time to time on not
less than 10 days’ prior notice by the Tenant or a Leasehold Mortgagee, the
Landlord will execute, acknowledge and deliver to the Tenant or the holder of
such mortgage, as the case may be, a statement in writing certifying that this
Lease is unmodified and in full force and effect (or, if there have been modifications,
that the Lease is in full force and effect as modified and describing the
modifications) and stating (a) the dates to which the net rent,
Impositions and other charges have been paid in advance, if any, and (b) whether
or not to the best knowledge of the signer of the certificate the Tenant is in
default in performance of any obligations under this Lease, and, if so,
specifying each such default. It is intended that any such statement may be
relied upon by a prospective purchaser of the Tenant’s interest in this Lease
or a prospective assignee of a mortgage.

 

35

 

ARTICLE XXI

 

Confidentiality

 

Section 21.1  Landlord and
Tenant agree, on their own behalf and on behalf of their counsel, shareholders,
and employees, and any other person who has acquired or may acquire knowledge
of the matter through it or its counsel, to maintain the confidentiality of the
information each receives from the other pursuant to the provisions of this
Lease and not to disclose the same except as may be required by law or under
compulsion of a lawful order and to resist by all legitimate means any attempt
of any kind whatever to compel disclosure or otherwise breach the
confidentiality requirements of the terms of this Lease.

 

Section 21.2
Landlord and Tenant each agree to give the other timely notice
and opportunity to oppose any such attempt to compel disclosure and, even as to
disclosures required by law or under compulsion of a lawful order, will give
timely notice thereof to the other, and will cooperate with counsel for the
other in resisting any such disclosures beyond the requirements of law.

 

Section 21.3
Landlord and Tenant each agree that it will not disclose the confidential information to its officers, agents,
employees, auditors or bankers other than those who have a need to know such
information in order to perform their duties, and that the obligations of
confidentiality hereunder shall extend to those to whom any such disclosure is made, provided, however, Landlord and
Tenant shall each use its best efforts to obtain confidentiality agreements
containing the above commitments from its officers, agents, employees, auditors
or bankers prior to any such disclosures, provided however, that failure to do
so will not relieve Landlord or Tenant of its obligations under
Article XXI.

 

36

 

Section 21.4 The provisions of this Article shall
not apply to information which (i) becomes generally available to the
public other than as a result of a disclosure by Landlord or Tenant, its
counsel, shareholders, employees, agents, or advisors, or (ii) becomes
available to the Landlord or Tenant, its counsel, agents or advisors on a
non-confidential basis from a source other than the Tenant or Landlord as the
case may be, provided that such source has a legal right to make such
disclosure.

 

Section 21.5 The provisions of Article XXI do not
apply to any information required to be made public in Park Place Entertainment
Corporation filings made pursuant to the United States Securities and Exchange Commission statutes and
regulations.

 

ARTICLE XXII

 

Discharge of Liens

 

Section 22.1 Except as expressly permitted by this Lease,
the Tenant will not create or permit to exist any lien or other encumbrance on
the Premises resulting from any acts or omissions by the Tenant. If as a result
of the failure of the Tenant to pay any Imposition which the Tenant is required
by this Lease to pay, to make any payment to a contractor or sub-contractor
which the Tenant is required by this Lease to make, or to make any other
payment, a lien is placed upon the Premises and Tenant fails to take the
measures required in Section 7.6, the Landlord may, but will not be
required to, pay such sum as is required to obtain discharge of the lien, or
obtain the discharge of the lien by deposit or bonding. If the Landlord does
that, the Tenant will pay the Landlord, promptly on demand as additional rent
under this Lease, the entire sum spent by the Landlord plus the Landlord’s
reasonable expenses, including reasonable attorneys’ fees, in connection with
obtaining discharge of the lien.

 

37

 

 

ARTICLE XXIII

 

Licenses

 

Section 23.1 The Landlord and the Tenant will each use
its best efforts to
at all times maintain, all licenses and permits each of them is required
to have to enable the Tenant to operate the casino in the Enterprise. The
Landlord and Tenant will each cooperate fully with the other in efforts by the other to
obtain and maintain the licenses and permits referred to in this Section, and
the Landlord will cooperate fully with the Tenant in efforts by the Tenant to
obtain and maintain licenses and permits necessary to enable the Tenant to
serve alcoholic beverages on the Premises and to do any other things which may
be appropriate in connection with the operation of the Enterprise.

 

Section 23.2 The Landlord will not sell the Premises, or
any portion of it, or assign any of the Landlord’s rights under this Lease,
until the purchaser or assignee has received all licenses and permits necessary
to enable the Tenant to continue operating the casino in the Premises
notwithstanding the sale or assignment.

 

Section 23.3 In the event that the Landlord loses any
license required to enable Tenant to operate a casino in the Enterprise,
including any license required for Landlord to receive percentage rent under Section 2.1(b) then,
subject to the provisions of Article X of this Lease and provided it is
consistent with applicable law or order of any regulatory authority, Landlord
shall have a period of one year from the date of said loss in which to sell the
Premises. If Landlord under applicable law or order of any regulatory authority
does not have a period of one year to sell the Premises, or if Landlord fails
to sell the Premises during that one year period or such lesser period of time
as is allowed by applicable law or order of any regulatory authority, then
Tenant’s sole and exclusive remedy shall be to elect either to (a) terminate
this Lease, (b)

 

38

 

purchase
the Premises on the terms and conditions set forth in Section 23.6 or (c) if
lawful, have the percentage rent provided for in Section 2.1(b) cease
and the rent due under Section 2.1(a) for the entire Lease Year in
which the loss of license occurs and for each subsequent Lease Year be computed
and paid as provided in Sections 23.4 and 23.5. Tenant shall exercise this
option by notice to the Landlord within 10 days after the purchase price for
the Premises is determined in accordance with Section 23.6.

 

Section 23.4 If pursuant to Section 23.3 Tenant
elects to have the rent due under Section 2.1(a) computed pursuant to
this Section, then that rent will be increased annually by two and one-half
percent (21/2%). The fixed rent for each
Lease Year will be the fixed rent for the Lease Year in which the loss of
license occurs plus the average percentage rent paid by Tenant in the 5 Lease
Years preceding the Lease Year in which the loss of license occurs.

 

Section 23.5 The rent provided by Section 23.4 will
be paid in equal monthly installments in advance on the first day of each
month, and will be deemed rent payable under Section 2.1(a).

 

Section 23.6 Tenant shall purchase the Premises for cash
at its then fair market value without regard to this Lease as determined by the
mutual agreement of the Landlord and Tenant or by appraisal as hereinafter provided.
If the fair market value of the Premises cannot be determined by the mutual
agreement of the Landlord and Tenant within 30 days after expiration of the one
year period provided for herein, then it shall be determined by two appraisers,
both of whom shall be residents of the State of Nevada and each of whom shall
be a member of the American Institute of Real Estate Appraisers, or the
successor thereto. One shall be selected by the Landlord and one shall be
selected by the Tenant. Each appraiser shall independently determine the fair
market value of the Premises within 30 days of this appointment. If the

 

39

 

appraisals
submitted are within 10% of each other, then the two appraisals shall be added
together and divided by two and the average so obtained shall be the fair
market value of the Premises.

 

If
the appraisals are not within 10% of each other, then the two appraisers so
appointed shall confer jointly and, if possible, determine the fair market value
of the Premises. If the two appraisers cannot agree within 10 days from the
date on which the last appraisal was submitted, then the two appraisers shall
appoint a third appraiser who shall be a resident of the State of Nevada and a
member of the American Institute of Real Estate Appraisers, or the successor
thereto. The third appraiser shall independently determine the fair market
value of the Premises within 30 days of his appointment. If the third
appraiser’s determination is within 10% of one of the other appraisals, the two
appraisals that are within 10% of each other shall be added together and
divided by two and the average so obtained shall be determinative of the fair
market value of the Premises.

 

If
the third appraisal is not within 10% of either of the other appraisals, then
the third appraisal shall bind both Landlord and Tenant and shall be
determinative of the fair market value of the Premises.

 

The
Landlord shall pay the fee of its appraiser and the Tenant shall pay the fee of
its appraiser. The fee of the third appraiser shall be paid for equally by
Landlord and Tenant. In the event Landlord or Tenant refuses to appoint an
appraiser as is hereinabove provided, then it is mutually understood and agreed
that the appraisal by the appraiser appointed by the party willing to appoint
an appraiser, shall determine the fair market value of the Premises.

 

40

 

The
sale of the Premises will close within 120 days from the date the fair market
value of the Premises is determined. The obligations at the closing will be as
provided in Section 10.2 of this Lease.

 

Section 23.7 The lapse suspension, or revocation of
Tenant’s license to operate a casino on the Premises for a period of 60 days
constitutes an event of default under this Lease. The Landlord may exercise any
of the remedies provided in Section 11.2 of this Lease unless within 60
days of the lapse, suspension or revocation Tenant gives written notice that it
will attempt to sell all of its rights under this Lease, in which event,
subject to the provisions of Article X, Tenant will have one year from the
date of said written notice in which to sell all of its rights under this
Lease. If the Tenant fails to sell all of its rights under this Lease to someone
who is licensed to operate the Casino on the Premises within said one year
period then the Tenant shall be in default and Landlord may exercise any one or
more of the remedies provided for in Section 11.2 of this Lease.

 

Section 23.8 During the one year period provided for in Section 23.7,
the rent provided for in Sections 2.1(a) and 2.1(b) will be the
greater of (a) the fixed and percentage rent computed in accordance with
Sections 2.2 and 2.3 or (b) the fixed rent computed and paid as provided
in Sections 23.4 and 23.5.

 

Section 23.9 During the one year period provided for in Section 23.3
the rent provided for in Sections 2.1(a) and 2.1(b) will be computed
and paid as provided in Sections 23.4 and 23.5, if lawful, and if Tenant is
permitted to continue to operate a casino on the
Premises. If during that period it is not lawful to compute and pay the rent as
provided in Sections 23.4 and 23.5 or if Tenant is not able to operate a casino
on the Premises, then no rent shall be due under

 

41

 

Section 2.1(b) and
all other rent shall be computed and paid in accordance with the provisions of
Sections 2.1(a) and (c).

 

ARTICLE XXIV

 

Golf Course

 

Section 24.1 The Landlord will grant the
guests at the Enterprise privileges at the Golf Course in Stateline, Nevada,
owned by the Landlord at least as favorable as those enjoyed by guests at any  other hotel. The Landlord will not grant, to
guests at any other hotel, more favorable privileges at the Golf Course
than those enjoyed by guests at the Enterprise. With reasonable advance notice
the Landlord will also permit the Tenant to sponsor professional and amateur
golf tournaments on the Golf Course at Tenant’s cost, and when reasonably
required the Landlord will close the Golf Course to non-tournament play while
tournaments sponsored by the Tenant are being played on the Golf Course. During
the term of this Lease if Landlord sells or leases the Golf Course as a golf
course, Landlord will cause any purchase or lease agreement to contain
provisions consistent with this Section 24.1 and Section 24.2.

 

Section 24.2 The Tenant will have the right to feature
the Golf Course in advertising, promotions, and promotional materials relating
to the Enterprise, and to advertise the fact that guests at the Enterprise have
the privilege of playing on the Golf Course.

 

ARTICLE XXV

 

Bankruptcy

 

Section 25.1 If at any time during the term of this Lease
there shall be filed by or against Tenant in any court pursuant to any statute,
either of the United States or of any State, a petition in bankruptcy or
insolvency or for reorganization or for the appointment of a receiver
or trustee of all or a portion of Tenant’s property, or if Tenant makes
an assignment for the benefit of

 

42

 

creditors
or petitions for, or enters into, an arrangement (any of which are referred to
herein as “a Bankruptcy Event”), then the following provisions shall apply:

 

(a) In all cases any debtor in possession or trustee in bankruptcy
shall either expressly assume or reject this Lease within the time provided in
11 U.S.C. 5365(d).

 

(b) In the event of an assumption of the: Lease by a debtor or by
a trustee, such debtor or trustee shall immediately after such assumption (i) cure
any default or provide adequate assurances that defaults will be promptly
cured; and (ii) compensate Landlord for actual pecuniary loss; and (iii) provide
adequate assurance of future performance.

 

(c) Where a default exists in the Lease, the trustee or debtor
assuming the Lease may not require Landlord to provide services or supplies
incidental to the Lease before its assumption by such trustee or debtor, unless
Landlord is compensated under the terms of the Lease for such services and
supplies provided before the assumption of such Lease.

 

(d) The debtor in
possession or trustee may only assign this Lease after compliance with the
requirements of Article X, concerning Landlord’s right of first refusal
and subject to the provisions of Article XV
concerning assignment, including the provisions of Section 15.2 concerning
increased percentage rent, if: (i) it is assumed; and (ii) adequate
assurance of future performance by the assignee is provided, whether or not
there has been a default under the Lease.

 

(e) If the assignee of the debtor in possession or trustee is not
able to obtain all governmental approvals necessary for such person to operate
the casino on the Premises within one (1) year following the assignment,
then said person shall be required to sell all of its interest under
this Lease and in the Premises in accordance with Section 23.7 of this
Lease. During any period of time from and after a Bankruptcy Event, when the
casino is not being operated on the

 

43

 

Premises,
the rent will be calculated and paid in accordance with the provisions of Section 23.4
and Section 23.5 of this Lease.

 

(f) Landlord
specifically reserves any and all remedies available to Landlord in this Lease
or at law or in equity in respect of a Bankruptcy Event by Tenant to the extent
such remedies.

 

ARTICLE XVI

 

Miscellaneous

 

Section 26.1 This Lease will inure to the benefit of the
Landlord, the Tenant, the Landlord’s successors and assigns and the Tenant’s
successors and assigns permitted by this Lease. Provided, however, that nothing
in this Section shall impair any of the provisions in this Lease
inhibiting the transfer, assignment, subleasing and encumbering without the
written consent of Landlord.

 

Section 26.2 Whenever the approval or consent of the
Landlord or the Tenant is required for any purpose under this Lease, that
approval or consent will not be unreasonably withheld or delayed. Without
limiting the foregoing, if any approval or consent is requested by either
party, unless the consenting party notifies the requesting party within 60 days
that it will not grant the approval or consent, the consenting party will be
deemed to have given the approval or consent on the 61st day.

 

Section 26.3 The Landlord and the Tenant each represents
and warrants to the other that no person has acted as a broker or finder or in a similar capacity in connection with this Lease
or the transaction embodied in it. The Landlord hereby indemnifies the Tenant,
and the Tenant hereby indemnifies the Landlord, against, and each of them
agrees to hold the other harmless from, any liabilities, costs or expenses
(including reasonable attorneys’ fees) by reason of any

 

44

 

claim
for broker’s, finder’s or similar fees arising out of services allegedly
performed for the indemnifying party.

 

Section 26.4 The rights and privilege of the Landlord
under this Lease will be cumulative, and no one of them will preclude
the Landlord from taking advantage of any other of them. Neither the Landlord
nor the Tenant will have any rights not expressly granted in this Lease.

 

Section 26.5 This Lease will be governed by, and
construed under, the laws of the State of Nevada.

 

Section 26.6 The captions of the Articles of this Lease are
for convenience only and in no way affect the construction of the terms and
conditions of this Lease.

 

Section 26.7 The term “Landlord” as used in this Lease
means the owner of the fee interest in, or mortgagee in possession for the time
being of, the Premises.

 

Section 26.8 This Lease may not be changed except in
writing.

 

Section 26.9 The Landlord may at any reasonable time or
times enter upon the Premises to inspect and photograph them and make any
repairs which may be essential for the protection and maintenance of the
Premises which the Tenant fails to make after reasonable notice by Landlord and
an opportunity for Tenant to make such repairs. The cost of any such repairs
will be payable immediately upon demand by the Tenant to the Landlord as additional
rent under this Lease.

 

Section 26.10 All notices and other
communications required or permitted to be given by the Landlord or the Tenant
to the other or to the holder of a Leasehold Mortgage or a Permitted Fee
Mortgage must be in writing and will be deemed given on the day when delivered
in person or on the third business day after the day on which mailed from
within the United States of

 

45

 

America
by certified or registered, return receipt requested, postage prepaid, mail,
addressed as follows:

 

	
  If
  to the Landlord:

  	
  Park
  Cattle Co.

  
	
   

  	
  P.O. Box
  2249

  
	
   

  	
  Stateline,
  Nevada 89449

  
	
   

  	
   

  
	
  and
  to:

  	
  Gordon
  H. DePaoli, Esq.

  
	
   

  	
  Woodburn &
  Wedge

  
	
   

  	
  6100
  Neil Road, Suite 500

  
	
   

  	
  P.
  0. Box 2311

  
	
   

  	
  Reno,
  Nevada 89505

  
	
   

  	
   

  
	
  If
  to the Tenant:

  	
  Park
  Place Entertainment Corporation

  
	
   

  	
  Attn:
  President

  
	
   

  	
  3930
  Howard Hughes Parkway

  
	
   

  	
  Las
  Vegas, N V 89109-0943

  
	
   

  	
   

  
	
  and
  to:

  	
  Park
  Place Entertainment Corporation

  
	
   

  	
  Attn:
  General Counsel

  
	
   

  	
  3930
  Howard Hughes Parkway

  
	
   

  	
  Las
  Vegas, N V 89109-0943

  

 

or
to such other place as the Landlord or the Tenant may from time to time
designate in a written notice to the other. All notices to the holder of a
Leasehold Mortgage or a Permitted Fee Mortgage will be deemed given on the day
when delivered in person or on the third business day
after the day on which mailed as set forth above for notices to Landlord or
Tenant, addressed to the holder at the
address given to the Landlord by the Tenant or by the holder of the mortgage.

 

Section 26.11  This document contains the
entire agreement between the Landlord and the Tenant and supersedes all prior
written or oral agreements between them.

 

Section 26.12 If the Landlord or the
Tenant is required by this Lease to proceed diligently to
complete any construction or do anything else, or to complete construction by a
specified date, but the efforts to proceed or complete are delayed by
governmental action, work stoppages, extraordinary weather conditions or
similar factors entirely beyond the control of the Landlord or

 

46

 

the
Tenant, the delay will not be deemed a breach of the obligation to proceed
diligently and any date by which construction must be completed will be
extended by a number of days equal to the number of days of the delay.

 

Section 26.13 Except as expressly provided
in this Lease, each requirement that a sum be paid or an act performed by a
specified date is an essential term of this Lease.

 

Section 26.14 This Lease may be executed
in counterparts, all of which will constitute one and the same agreement.

 

ARTICLE XXVII

 

Reservation of Space

 

Section 27.1 Notwithstanding Section 1.1
Landlord reserves from this Lease for the use
and occupancy of Landlord those private offices now occupied by it on
the second floor of the existing Hotel building or substantially similar office
space in that building as determined by Tenant and agreed to by Landlord,
together with ingress  and egress
thereto and therefrom.

 

ARTICLE XXVIII

 

Compliance Committee

 

Landlord
acknowledges that as a condition precedent and a continuing condition to the
effectiveness of this Agreement, Landlord may be subject to the approval of the
Park Place Entertainment Corporation Compliance Committee (“Committee”). Tenant
agrees that Landlord’s current and continuing licensure by the Nevada Gaming
Commission shall be deemed conclusive proof
of approval and suitability under this provision.

 

If
Landlord ceases to be licensed by the Nevada Gaming Commission and if Tenant
does not elect to terminate this Lease when and to the extent allowed by Section 23.3,
then Landlord agrees to comply with all reasonable requests for information
from the Committee. Such

 

47

 

information
may include (1) documentation relating to Landlord’s organization, (2) the
identity of its officers, directors, and key employees, and (3) the nature
of its ownership or capitalization.

 

If
Landlord fails to comply with these requests for information, or if at any time
the Committee reasonably and in good faith determines that a continuing
business relationship with Landlord will have an adverse effect upon any
material gaming license held by Park Place Entertainment or any of its
subsidiaries or affiliates, Tenant, as its sole and exclusive remedy under this
Lease, may terminate this Agreement upon thirty (30) days written notice to
Landlord, without further liability to Landlord except for its monetary
obligations to the date of termination and its obligations on termination.

 

IN
WITNESS WHEREOF, the Landlord and the Tenant have executed this Amended and
Restated Net Lease Agreement effective as of the day and year first above
written.

 

	
  TENANT:

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
  DESERT
  PALACE, INC.

  	
   

  	
  PARK
  CATTLE CO.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Mark R. Dodson

  	
   

  	
  By:

  	
  /s/
  Bruce Park 

  
	
   

  	
  Mark
  R. Dodson

  	
   

  	
   

  	
  Bruce Park 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its

  	
  President

  	
   

  	
  Its
  

  	
  President

  

 

48

 

 

EXHIBIT
“A”

 

All
of the following real property located at Stateline, Lake Tahoe, Douglas
County, Nevada, more particularly described as follows, to-wit:

 

All
of Parcel 2 as shown on the Site Survey of Park Tahoe filed in the Office of
the County Recorder of Douglas County, Nevada on October 11, 1978 in Book
1978 of Maps at Page 634 File No. 26156.

 

49

 

EXHIBIT
“B”

 

All
of the following real property located at Stateline, Lake Tahoe, Douglas
County, Nevada, more particularly described as follows, to-wit:

 

Being
a portion of the Southeast 1/4 of the Northeast 1/4 of Section 27,
Township 13 North, range 18 East, M.D.B.&M. and being more particularly
described as follows:

 

Commencing
at the Section corner common to Sections 26, 27, 34 and 35, Township 13
North, Range 18 East, marked by a brass cap; thence North 0°19’55”
West, a distance of 284.76 feet to a brass cap marked 26.27 C.C.: thence North
48°36’ 30” West, a distance of 2414.21 feet along the Nevada-California State
Line; thence North 28°02’ East, along the East Right of Way Line of U.S.
Highway 50, a distance of 1375.64 feet to the True Point of Beginning; thence
North 28°02’ East, a distance of 175.00 feet to a point; thence South 61°58’
East, a distance of 250.00 feet to a point; thence South 28°02’ West, a
distance of 175.00 feet to a point; thence North 61°58’ West, a distance of
250.00 feet to the true point of beginning.

 

50

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