Document:

Exhibit 10.19

 

RAMPART CASINO
MANAGEMENT AGREEMENT

 

THIS RAMPART CASINO MANAGEMENT AGREEMENT (the
“Agreement”), is made and entered into effective as of the 1st day of
April, 2002 (the “Effective Date”), by and between Rampart Resort Management,
LLC, a Nevada limited liability company (together with its permitted successors
and assigns under this Agreement, “Operator”), and Millennium Management
Group II, LLC, a Nevada limited liability company (together with its permitted
successors and assigns under this Agreement, “Manager”).

 

RECITALS

 

A.            Operator
subleases the casino facilities described in Exhibit A attached hereto, located
in the casino hotel known as the JW Marriott Resort, located at the
intersection of Rampart Boulevard and Canyon Run Drive, Las Vegas, Nevada,
pursuant to that certain Casino Sublease Agreement made and entered, into as of
April 1, 2002, as amended, by and between Hotspur Casinos Nevada, Inc., a
Nevada corporation (“Landlord”) and Operator for an initial term of ten
(10) years (the “Casino Sublease”), and in which Operator operates a “first-class,
‘neighborhood casino” similar in quality to casinos located in existing casino
hotels located in Clark County, Nevada, such as the Hard Rock Hotel and Casino,
containing dining rooms, restaurants, bars, lounges and a casino, totaling
approximately 50,000 square feet (the “Casino”).

 

B.            Manager
is experienced in planning, developing and managing casinos of the type and
nature similar to the Casino.

 

C.            Operator
represents that on or about March 22, 2002, it has securing all approvals,
licenses and permits necessary to operate the Casino (collectively, the “Licenses”),
including any approvals, licenses and permits required by the Gaming
Authorities (collectively, the “Gaming Licenses”).

 

D.            Operator
desires to engage Manager as its agent to provide consulting and management
services to Operator in connection with the planning, developing, furnishing,
equipping, refurbishing, staffing, operating and managing the Casino for the
Initial Term and each Extension Term (as defined below), and Manager desires to
be so engaged.

 

NOW, THEREFORE, in consideration of the
mutual covenants, promises and undertakings of the parties hereafter set forth
and for other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged by the parties hereto, it is agreed:

 

1.             THE ENGAGEMENT: 
PHASES OF DEVELOPMENT AND OPERATION

 

Upon and subject to the terms and conditions
herein, Operator hereby engages and retains Manager, and Manager hereby agrees
to be so engaged and retained by Operator, to provide the management services
provided herein (collectively, the “Management Services”). The parties
agree and acknowledge that, unless expressly stated herein to the contrary,
Operator shall be responsible for all direct costs, fees, reimbursements, or
expenses incurred by Manager on behalf of Operator for the provision of the
Management Services. Notwithstanding the foregoing, Manager shall be
responsible for and pay its own expenses of operations, rent, overhead, 

 

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employee
expenses and general business expenses relating to its business of casino
management services. In the event that Manager dedicates one or more of its own
employees on a temporary basis to the Casino, Operator shall reimburse Manager
for the gross payroll of such person(s) for the relevant time.

 

2.             TERM

 

The initial term of this Agreement shall
commence upon the approval of the Nevada Gaming Commission for Cannery Casino
Resorts, LLC, a Nevada limited liability company, to hold an interest in
Operator (the “Commencement Date”) and shall terminate ten (10) years
from the Commencement Date (the “Initial Term”). The Initial Term shall
automatically renew thereafter for successive one (1) year extension terms
(each an “Extension Term”), unless terminated by either party upon
written notice to the other not less than one hundred eighty (180) days prior
to the expiration of the Initial Term or any Extension Term.

 

3.             OPERATION OF THE CASINO ON AND AFTER THE
COMMENCEMENT DATE

 

Upon the Commencement Date and during the
Initial Term and each Extension Term, Management Services will include Manager
having uninterrupted control over the operations of the Casino, including, but
not limited to, the gaming, entertainment and restaurant facilities of the
Casino, and will, among other services, set various rates and prices, issue
casino credit, grant complimentaries, hire personnel and select marketing and
promotional campaigns. In addition and more specifically, the following
provisions shall govern certain of the duties and obligations of Operator and
Manager:

 

3.1.         General
Duties of Manager

 

Manager shall provide such management
services as are usually and customarily performed by managers of a “first class
neighborhood casino” similar to the Casino, all at Operator’s expense,
generally in accordance with the Annual Plan (as defined below), and Manager
shall:

 

3.1.1.       Maximize Patronage

 

Use all reasonable efforts, to maximize
patronage of the Casino.

 

3.1.2.       Prepare Budgets/Annual
Plan

 

Prepare the Annual Plan in consultation with,
and subject to the approval of, Operator, and revise and update the Annual Plan
as required.

 

3.1.3.       Sales, Marketing and
Advertising

 

Develop and update advertising, public
relations, sales and marketing plans; implement and supervise sales and
marketing campaigns; develop tour packages; develop and implement player
development programs for gaming activities; book entertainment appropriate for
the casino; and generally promote the Casino and its facilities.

 

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3.1.4.       Incentives and
Extensions of Credit to Promote Patronage

 

Consistent with the Annual Plan and in
conjunction with player development programs, provide complimentary rooms,
amenities and extensions of credit to Casino patrons to promote gaming
activities at the Casino. In the exercise of its reasonable business judgment
and in conjunction with player development programs, Manager shall obtain from
patrons receiving credit, to the extent permitted, and in accordance with the
applicable gaming laws and regulations (the “Gaming Laws”) as
promulgated by such applicable governmental authority supervising gaming
activities (the “Gaming Authorities”), appropriate “markers” or “I.O.U.’s”
(all forms of credit, including the foregoing, collectively referred to as “Markers”),
in accordance with overall credit policies established for the Casino from, time
to time in consultation with Operator.

 

3.1.5.       Employment of Staff

 

Arrange for the employment, payment,
supervision and discharge of all of the Casino employees in accordance with
Operator-approved policies.

 

3.1.6.       Purchase of Supplies;
Engage Professionals

 

Arrange as necessary for the purchase of
food, beverages, operating supplies, merchandise required for furnishings,
fixtures and equipment (“FF&E”), and all other supplies necessary
for the proper operation of the Casino as a “first class neighborhood casino”;
arrange for the engagement of advisors, consultants, or other professionals
from time to time as reasonably necessary to promote the sound and efficient
operation of the Casino, including accountants, financial advisors, real estate
advisors, computer consultants, attorneys (subject to the limitations otherwise
set forth herein), and such other professionals as appropriate.

 

3.1.7.       Maintenance 

 

Arrange and provide for the maintenance and
repair of the Casino in accordance with the Annual Plan and standards consistent
with the Casino.

 

3.1.8.       Refurbish

 

Make available such of Manager’s personnel,
and arrange for such other personnel that, in Manager’s reasonable judgment,
are needed to prepare, review and implement plans and specifications for minor
and routine alteration or refurbishment of the Casino as proposed by Operator from
time to time; arrange for the design, selection, and scope of replacement of
FF&E deemed appropriate by Manager.

 

3.1.9.       Improve Operations

 

Improve operations or eliminate operational
problems as necessary in the, manner deemed appropriate by Manager.

 

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3.1.10.     Comply with Laws

 

Cause all such other things to be done in or
about the Casino as shall be necessary to comply with the Gaming Laws and
requirements of the Gaming Authorities and of any other governmental authority
having jurisdiction over the use, maintenance or operation of the Casino.

 

3.1.11.     Utility Services

 

Arrange for utility services, telephone,
vermin extermination, security, trash removal and other services necessary or
reasonably required for the operation of the Casinos as a “first class
neighborhood casino”.

 

3.1.12.     Collection of Revenue

 

Use all reasonable efforts to collect all
charges, rents, Markers and other amounts due on account of the Casino and
cause the recovery and/or cause the surrender of space, as applicable and
necessary from the Casino guests, patrons, tenants, subtenants, parties
providing exclusive services and concessionaires.

 

3.1.13.     Legal Actions

 

Subject to the limitations described
hereafter, commence legal actions concerning the Casino on behalf of Operator
as are necessary or reasonably required, in the opinion of Manager, to preserve
and protect the assets constituting the Casino and to collect sums due on
account of the operation of the Casino; advise Operator of the commencement of
material legal actions concerning the Casino; and to retain counsel, in the
manner set forth hereafter on behalf of Operator and Manager, in connection
with any action or proceeding commenced by or against Manager or Operator or
concerning the Casino.

 

3.1.14.     Concessions and Leases

 

On behalf of Operator, grant concessions and
leases for services customarily subject to concession or lease, if, in Manager’s
reasonable opinion, the granting of such concessions and leases are deemed
necessary or desirable.

 

3.1.15.     Licenses

 

Obtain and maintain all licenses, as may be
required by law to operate the Casino, including all alcoholic beverage
facilities and gaming facilities as shall be operated within the Casino.

 

3.1.16.     Accounting and Financial
Controls

 

Establish such accounting systems and
internal controls as may be required by applicable Gaming Laws and render such
periodic financial reports and other reports with respect to operations of the
Casino from time to time as may be specifically required hereunder.

 

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3.1.17.     Insurance

 

Advise Operator with respect to, and assist
Operator in obtaining, insurance coverage and insurance policies hereafter
described.

 

3.1.18.     Consultation with Operator

 

At Operator’s reasonable request, make
Manager’s personnel available, upon reasonable notice, to consult with and
advise Operator concerning all policies and procedures affecting the conduct o
the business of the Casino and to consider suggestions with respect thereto
made by Operator.

 

3.2.         Annual
Plan

 

The following provisions shall apply to the
Annual Plan:

 

3.2.1.       Proposed Annual Plan 

 

Manager shall submit a business plan for the
Casino to Operator for Operator’s approval not later than thirty (30) days
prior to the Commencement Date, and at least thirty (30) days prior to the
beginning of each Fiscal Year (as defined below) thereafter (the “Annual
Plan”), in a form reasonably satisfactory to Operator which shall include for
the ensuing Fiscal Year or portion thereof, as applicable:

 

(i)            Profit
& Loss Statement: An estimated monthly profit and loss statement
prepared generally in accordance with GAAP with any variations based on the
Gaming Laws or applicable local laws or regulations being duly noted;

 

(ii)           Receipts
& Expenditures: A budget of receipts and expenditures required for the
operation of the Casino pursuant to the terms of this Agreement, including
rates to be charged and expenditure proposals for:

 

(A)          payroll,
including wages, other remuneration, and fringe benefits;

 

(B)           food
and beverage and other operating supplies;

 

(C)           FF&E,

 

(D)          repair
and maintenance;

 

(E)           revisions,
alterations, rebuilding, replacements, additions and improvements in and to the
Casino;

 

(F)           advertising,
marketing and public relations;

 

(G)           the
engagement of experts and consultants; and

 

(H)          other
operations;

 

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(iii)          Sales
and Marketing Plan: A plan for the sales, marketing, and public relations
for the Casino.

 

(iv)          Assumptions:
Each Annual Plan shall also contain in narrative form, the assumptions used as
the basis of its preparation.

 

3.2.2.       Procedure for Annual Plan
Approval and Dispute Resolution

 

(i)            Disputed
Item. Operator shall provide to Manager its written approval or disapproval
(including written comments setting forth in reasonable detail the reasons for
Operator’s disapproval, if any) of each Annual Plan not later than thirty (30)
days after Operator’s receipt of such, Annual Plan (the “Owner’s Review
Period”), if Operator objects to or disputes all or any portion of such
Annual Plan (a “Disputed Item”), Manager shall attempt to reach an
agreement with Operator with respect to the Disputed Items. Both Operator and
Manager will proceed with due diligence and in good faith to attempt to reach agreement
with respect to the Disputed Items. If Operator and Manager have not reached an
agreement with respect to the Disputed Items within a thirty (30) day period
after Manager’s receipt of the Disputed Items (“Manager’s Review Period”),
the parties are required, no later than seven (7) days after the expiration of
Manager’s Review Period, to submit the Disputed Item(s) and all relevant
information pertaining thereto, without regard to the strict rules of evidence,
to Piercy Bowler Taylor and Kern, CPAs, of Las Vegas, Nevada (or, if the
foregoing is unable to serve, a similar accounting firm mutually agreeable to
Operator and Manager) (the “Determining Accountants”). Within thirty
(30) days after the receipt of the dispute for resolution, the Determining
Accountants shall determine the appropriate amount to be budgeted for the
Disputed Item(s) based upon all relevant factors, including the desire of
Operator and Manager to maintain and operate the Casino in accordance with
standards for a “first class neighborhood casino hotel”, the Gaming Laws, and
applicable local laws and customs (to the extent such local customs are
consistent with the terms and intent of this Agreement). The determination of
the Determining Accountants with respect to the Disputed Item(s) shall be final
and conclusively binding upon Operator and Manager. Pending Manager’s receipt
of Operator’s approval of an Annual Plan pursuant to this Subparagraph
3.2.2.(i) and/or a decision of the Determining Accountants, Manager shall be
entitled to, operate the Casino in accordance with the proposed Annual Plan
submitted by Manager; provided, however, that Manager shall endeavor in good
faith to preserve Operator’s objections to any Disputed Items pending the
Determining Accountants’ decision. The final Annual Plan resulting from the
Determining Accountant’s decision as to any Disputed item(s) shall be effective
immediately upon receipt by Manager of the Determining Accountants’ written
decision, but such Annual Plan shall not affect any expenditures made or
committed to by Manager in accordance with the immediately preceding sentence.
Notwithstanding anything to the contrary provided herein, any disputes pertaining
to amounts budgeted for capital improvements which exceed the amount available
in any reserves shall not be submitted to the Determining Accountants for
resolution, and if Operator and 

 

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Manager cannot reach an agreement with
respect to such expenditures for capital improvements, then: (i) unless
Operator has changed its position with respect to such capital improvement; or
(ii) unless the expenditure is of an emergency nature or necessary for the
preservation of safety to persons or property, the amount(s) provided by
Operator for such capital improvements shall be utilized in the Annual Plan.

 

(ii)           Deemed
Disapproval: If and only if the managers of Operator (as the term “managers”
is defined in Nevada Revised Statutes 86.071) cannot consent to the approval of
the proposed plan pursuant to the Operating Agreement of Operator, as amended,
Operator shall provide Manager with notice of same within Operator’s Review
Period and Operator shall be deemed to have disapproved such Annual Plan as
submitted by Manager until such time as Operator provides its written approval
or disapproval of such Annual Plan. Pending Manager’s receipt of Operator’s
approval of an Annual Plan, pursuant to this Subparagraph 3.2.2.(ii), Manager
shall be entitled to operate the Casino in accordance with the most recently
prior approved Annual Plan.

 

3.2.3.       Compliance with Modification
to the Annual Plan

 

During each Fiscal Year, Manager shall, in
the performance of the Management Services, use and employ its reasonable efforts,
to generally comply with the Annual Plan relating to such Fiscal Year. Manager
shall nevertheless retain the discretion to re-allocate part or all of the
amount budgeted with respect to any line item to another line item in the
budget provided the overall budget is maintained, and to make expenditures not
authorized under the applicable Annual Plan under certain circumstances if, in
Manager’s good-faith judgment, such expenditures are justifiable as a result of
changes in circumstances, such as increased bookings, increased staffing needs
or emergency repairs. Notwithstanding the foregoing, in no event shall Manager
modify or adjust the Management Fees (as defined below) as provided in the
Annual Plan without the prior written approval of Operator.

 

3.2.4.       Modification to the
Annual Plan

 

If at any time during any Fiscal Year Manager
shall, in the performance of the Management Services, determine the Annual Plan
relating to such Fiscal Year is no longer appropriate due to significant
changes in conditions, circumstances or otherwise, Manager shall submit to
Operator for Operator’s approval, a revised Annual Plan (the “Revised Annual
Plan”) for the remainder of such Fiscal Year, indicating in narrative form,
the reasons why the assumptions used in preparing the original Annual Plan for
such Fiscal Year are no longer valid. Operator shall give its written approval
or disapproval of the Revised Annual Plan not later than thirty (30) days after
receipt thereof. If Operator does not deliver its written approval or
disapproval of such Revised Annual Plan within such thirty (30) day period,
then Operator shall be deemed to have approved the Revised Annual Plan as
submitted by Manager. If Operator objects to all or any portion of the Revised
Annual Plan, then Operator shall furnish Manager with its written comments, in
reasonable detail, setting forth the reasons for its objections, and Operator
and Manager shall attempt to agree with respect to the items to which Operator
objects. If an agreement is not reached before the expiration of a thirty (30)
day period immediately 

 

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following the
receipt of the objections, the dispute shall be submitted to the Determining
Accountants for resolution in accordance with the procedures set forth in
Subparagraph 3.2.2; provided, however, that in connection with any disputes
pertaining to capital improvements which exceed the amount available in
reserves, Operator’s reasonable good faith decision shall control. Pending such
final determination, the Revised Annual Plan shall be deemed the operating
budget for the remainder of the current Fiscal Year.

 

3.2.5.       Emergency Expenditures

 

Whenever, by reason of circumstances beyond
the reasonable control of Manager, emergency expenditures are required to be
made to ensure that the operating standards of a “first-class neighborhood
casino hotel” are maintained or to protect life, person, or property, Manager
may make emergency expenditures beyond the provisions of the applicable Annual
Plan without the prior written consent of Operator, provided that: (i) the
expenditures for any one such occurrence may not exceed Twenty-Five Thousand
Dollars ($25,000); and (ii) the aggregate of such expenditures may not exceed
One Hundred Thousand Dollars ($100,000) in any Fiscal Year.

 

3.3.         Legal
Proceedings

 

The following provisions shall apply to any
legal proceedings affecting the Casino:

 

3.3.1.       Insured Claims

 

All claims against Operator or Manager (or
Manager’s Affiliates who may be joined), arising out of the operation of the
Casino that are covered in whole or in part by insurance, shall be forwarded by
Manager to the appropriate insurance carrier or its agent for defense.

 

3.3.2.       Non-Extraordinary
Proceedings

 

(i)            Claims:
Manager shall have the right to commence legal proceedings utilizing counsel
designated by Manager and approved by Operator of a non-extraordinary nature
and involving monetary claims of less than $50,000 relating to the operation of
the Casino, such as collections, enforcement of contracts and leases and
proceedings against the Casino guests, patrons, vendors, service contractors,
and tenants.

 

(ii)           Defense:
Other than insured claims in which the liability carrier has the right to
choose counsel, Manager shall have the right to defend, through counsel
designated by Manager and approved by Operator, legal proceedings of a non-extraordinary
nature against Operator or Manager (or Manager’s Affiliates who may be joined)
resulting from the operation of the Casino, such as guest claims for loss of
property, or injury to persons, and claims relating to employment at the
Casino.

 

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3.3.3.       Extra-Ordinary
Proceedings

 

(i)            Claims:
Manager shall commence legal proceedings that are of an unusual nature or
involving monetary claims in excess of Fifty Thousand Dollars ($50,000) relating
to the operation of the Casino upon Operator’s approval of the proceeding and
counsel designated by Manager. Manager shall furnish Operator with periodic
status reports with respect to such proceedings.

 

(ii)           Defense:
All claims against Operator or Manager (or Manger’s Affiliates who may be
joined) arising out of the operation of the Casino of a more significant nature
and involving in excess of $25,000 and as to which any insurance company denies
coverage (or reserves rights as to coverage), shall be coordinated with
Operator and counsel designated by Manager shall be subject to Operator’s
approval. Manager shall furnish Operator with periodic status reports with
respect thereto.

 

3.3.4.       Coordinated Defense

 

In the event that a suit is instituted
against Manager or its Affiliates, in which Operator is also named as a party
defendant, Operator and Manager shall coordinate the defense of such suit.
Nothing herein contained shall be construed as preventing Operator from joining
with Manager in any legal proceedings or any action on behalf of or against the
Casino, whether of an extraordinary or non-extraordinary nature. If a conflict
of interest arises between the legal positions taken by Operator and Manager
that the parties are unable to waive or otherwise agree upon, then the parties
may each engage counsel of their own choosing.

 

3.4.         Centralized
Purchasing and Related Services

 

If any other hotels, casinos, resorts,
restaurants, casinos, gaming facilities, or related facilities operated by
Manager or its Affiliates maintain or adopt a centralized purchasing system
whereby operating supplies, food, FF&E, consumables, computer services,
insurance coverages under a group plan, public relation services, sales and
marketing services, group advertising, reservation systems, or other items or
services or programs are purchased or contracted for on behalf of the
participants from suppliers or providers designated by Manager or its Affiliates,
then Manager shall have the option (but not the obligation) to cause the Casino
to participate in such centralized system for so long as Manager is operating
the Casino provided that the cost to the Casino of such items, services, or
programs (taking into account the quality of the items, services, or programs
purchased or contracted for and the payment terms relating to such items,
services, or programs) are not less favorable to the Casino than the cost that
could be obtained by the Casino from unaffiliated third parties.

 

3.5.         Bank
Accounts

 

The following shall be applicable tall bank
accounts maintained in connection with the Casino:

 

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3.5.1.       Hotel and Casino
Accounts

 

Manager shall establish bank accounts bearing
the name of the Casino at a commercial bank or banks selected by Manager in
consultation with Operator that shall, in all respects, have: (i) the
capability of servicing all of the Casino operations; (ii) a substantial
capital base; (iii) insured accounts, if applicable; and (iv) armored or other
available security services. The accounts shall be designated as the “Operating
Account” and the “Payroll Account” and collectively, the “Casino
Accounts”.

 

3.5.2.       Deposit and Transfer of
Funds

 

All funds of any kind or nature received
either by Manager or Operator in connection with the operation of the Casino
shall be deposited into the Operating Account. Payment of all expenses and
other expenditures in respect of the Casino operations shall be made from the
Operating Account, except for payroll and payroll-related expenditures, which
shall be made from the Payroll Account. Manager may transfer from the Operating
Account to the Payroll Account such monies as shall be required from time to
time to satisfy the Casino payroll obligations. Subject to the requirements and
prohibitions of applicable laws, in no event will any of the monies deposited
in the Casino Accounts be commingled with other funds. Manager may transfer
funds between the Casino Accounts checks and other documents of withdrawal on
the Casino Account need be signed only by duly authorized representatives of
Manager, such funds which in Manager’s reasonable business judgment may be
needed for any area of operations.

 

3.5.3.       Interest  

 

All interest, if any, earned on the Casino
Accounts shall accrue to the benefit of Operator. Manager shall make available
to Operator, from time to time, when reasonably requested by Operator, all
records with respect to the Casino Accounts.

 

3.5.4.       Statements

 

Manager shall use its best efforts to provide
to Operator a report of the cash receipts of the Casino on a weekly basis or as
soon as practicable. Manager shall provide a monthly statement to Operator
summarizing all activity in the Casino Accounts and reconciling the balances
within the Casino Accounts with the monthly financial statements provided in accordance
with Paragraph 3.8.

 

3.5.5.       Fidelity Bonds

 

All of Operator’s employees or
representatives who are authorized signatories on any of the Casino Accounts
shall be bonded or otherwise insured as to fidelity. The form and content of
such bond or insurance shall be subject to the reasonable approval of Operator.
Operator and Manager shall both be named as obligees or insureds, as
appropriate, under such bond or insurance policy and Manager and Operator shall
both have the right to enforce the terms of any such bond or insurance policy.

 

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3.5.6.       Other Accounts, Funds Of
Owner

 

Manager shall open such other bank accounts
with respect to the Casino as may be agreed upon from time to time by Operator
and Manager or as required by law. All funds in the Casino Accounts and all
other accounts relating to the Casino maintained pursuant to this Agreement
shall, at all times, be deemed to be the funds of Operator.

 

3.6.         Operator’s
Obligation to Provide Funding

 

The following shall apply to the funding
needs of the Casino:

 

3.6.1.       Funding an Essential
Requirement

 

It is of the essence in this Agreement that
Operator shall, at all times, maintain sufficient funds in the Casino Accounts
or other reserve accounts, to pay all duly and properly incurred obligations of
the Casino on a current basis, and to comply with the Gaming Laws and any other
applicable laws or regulations pertaining to any accounts or required reserves.
The parties acknowledge and agree that Manager shall have no obligation to pay
or satisfy any obligation or other cost or expense of development,
capitalization, property acquisition, operation, employment, marketing or other
costs and expenses of operating the Casino that is the subject of this
Agreement except such costs and expenses as Manager may incur in connection
with its own operations and obligations.

 

3.6.2.       Initial Working Capital

 

Operator shall, by a date reasonably in
advance of the Commencement Date and reasonably acceptable to Manager and
Operator, provide Manager with sufficient working capital or reserves as may be
required by the Gaming Authorities and lenders or mortgagees to operate the
Casino and such sufficient additional working capital as may be adequate to
meet the needs of the table betting limits appropriate to the Casino operations
(collectively, the “Reserves”).

 

3.6.3.       Failure to Fund

 

If at any time the available Reserves, or any
other separate reserve, shall not be sufficient or available to pay all of the
current expenses, fees, bills or other charges incurred in connection with the
operation and maintenance of the Casino, including the payment of the Management
Fee, all of which are to be paid from the Operating Account, or to comply with
applicable laws or regulations, or to meet or maintain Reserve requirements at
a level sufficient to maintain established betting limits, Manager shall so
advise Operator, in writing, and shall provide Operator with a statement of the
amount of funds necessary to cure such insufficiencies. Thereupon, Operator
shall immediately provide sufficient monies to remedy any such insufficiency or
shortfall. The failure of Operator to provide such funds shall excuse Manager
from only those Management Services hereunder directly and materially affected
by any such insufficiency or shortfall during the occurrence thereof. Manager
shall be free in its reasonable business judgment to adjust betting limits to
the extent permitted under the Gaming Laws, in order to: first, meet payment
obligations for Operating Expenses; and second, continue gaming 

 

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operations and
table betting limits to the extent and to the level permitted by the available
Reserves.

 

3.7.         Financial
Statements

 

The financial statements for the Casino shall
be prepared in the following manner:

 

3.7.1.       Monthly Statement

 

Manager shall prepare and deliver to Operator
within twenty (20) days after the end of each month, a profit and loss
statement prepared generally in accordance with GAAP, showing the results of
the operation of the Casino for the immediately preceding month and for the
Fiscal Year, including a comparison with the projections contained in the
applicable Annual Plan. Such statement shall be prepared from the books of
account maintained by Manager and shall be in form and substance reasonably
satisfactory to Operator.

 

3.7.2.       Annual Statement

 

Not later than ninety (90) days immediately
following the end of each Fiscal Year, Manager shall cause to be prepared and
delivered to Operator reasonably detailed financial statements for such Fiscal
Year (the “Annual Statements”), which shall consist of: (i) a balance
sheet; (ii) a profit and loss statement showing, the results of operations;
(iii) a statement of earnings and retained earnings; (iv) a statement of change
in financial position; and (v) such other financial statements or reports as
are required by the Gaming Authorities or Gaming Laws. Such financial
statements shall be prepared by and shall contain a certificate of the
accountants, to the effect that, subject to such acceptable qualifications as
shall be contained therein, such financial statements fairly present the financial
position, results of the operations and changes in financial position of the
Casino for the Fiscal Year, or other reporting period then ended, in conformity
with GAAP.

 

3.8.         Payment
of Excess Funds to Operator

 

Upon the written request of Operator, Manager
shall pay to Operator all funds in the Operating Account in excess of those
reasonably required to meet all of the operating, capital, and other Reserves
imposed by any lender, and other financial requirements of the Casino,
including, without limitation, all minimum working capital requirements and
Reserve requirements imposed by law. Manager, at the request of Operator, shall
establish such cash management procedures and accounts from time to time at
institutions directed by Operator, for the deposit of such excess funds on
behalf of Operator. All income derived therefrom shall accrue to Operator.

 

3.9.         Books,
Records and Accounts

 

Manager shall keep full and adequate books of
account and other records reflecting the results of operations of the Casino on
an accrual basis, in accordance with GAAP. The books of account and all other
records relating to or reflecting the operation of the Casino shall be kept at
the Casino and shall be made available to Operator and its representatives and
any other supervisory or regulatory authority having jurisdiction over Operator
or the Casino, including the 

 

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Gaming
Authorities, at all reasonable times upon reasonable notice for examination,
audit, inspection and transcription. All of such books and records pertaining
to the Casino, including, without limitation, books of account, guest records
and front office records, shall at all times be the property of Operator and
shall not be removed from the Casino by Manager without Operator’s prior
written consent. Upon any termination hereof, all such books and records shall,
immediately be turned over to Operator, so as to ensure the orderly continuance
of the operation of the Casino with copies (at the expense of Operator)
retained by Manager.

 

3.10.       Employment
and Labor Issues

 

3.10.1.     Compensation

 

Manager shall establish employee compensation
for nonexecutive employment. Operator shall have the final determination with
respect to any labor negotiations and by virtue of its participation in the
preparation and approval of each Annual Plan, shall have general authority over
employee compensation. Executive compensation shall generally conform with the
estimates of the applicable Annual Plan.

 

3.10.2.     Employment Costs

 

All claims, liabilities or obligations
arising during or after the Initial Term and each Subsequent Term with respect
to the employees of the Casino relating to salaries, wages, compensation,
overtime pay, holiday pay, vacation pay, raises, bonuses, employee benefits,
severance pay, grievances under union contracts, unfair labor practice charges
before any governmental labor board or authority, worker’s compensation,
disability, unemployment benefit, breach of employment contracts, safety and
health matters, and employment discrimination of any nature whatsoever, and any
and all court costs and legal fees incurred in defending such claim
(collectively, “Employment Costs”) shall be charged to and payable by
the Casino as an Operating Expense (as defined below).

 

3.10.3.     Disputes With and Claims
By Employees

 

The defense of employment and labor claims
(collectively, “Employment Claims”) to the extent appropriate, may be
defended at the Casino’s administrative level with the assistance of the human
resources manager. Manager, on behalf of Operator and itself, may engage
employment and labor counsel as needed. The cost of defending Employment
Claims, as well as sums required for settlement, re-instatement, back pay and
the like, as required, shall be charged as an Operating Expense. Settlements
that exceed Twenty-Five Thousand Dollars ($25,000) shall be subject to Operator’s
approval, which approval shall not be unreasonably withheld.

 

3.11.       Payment
of Taxes

 

On behalf of Operator, Manager shall, as an
expense of the Casino and as reflected in the applicable Annual Plan, pay or
cause to be paid, before they become delinquent, all taxes, assessments,
excises, levies, License and permit fees and other charges (including all
penalties and interest relating thereto, regardless of such penalties or
interest are reflected in the applicable Annual Plan) general and special,
ordinary and extraordinary, foreseen and unforeseen, of any 

 

13

 

kind or nature
whatsoever, which shall or may during the term of this Agreement be levied,
assessed, charged and/or imposed by any public or quasi-public authority upon,
or accrue, or become due and payable, out of or on account of, or become a lien
on the Casino, the FF&E, or other real and personal property serving the
Casino, as applicable and any related facilities or improvements or personal
property now or hereafter situated within the Casino, and which are the
responsibility of Operator and not the responsibility of the Landlord.

 

3.12.       Payment
of Mortgages

 

Subject to the terms and provisions of each
of (i) the Casino Sublease, and (ii) that certain Casino Prime Lease Agreement
made and entered into as of April 1, 2002 by and between Hotspur Resorts
Nevada, Inc., a Nevada corporation and Landlord (the “Casino Lease”), on behalf
of Operator, Manager shall, as an expense of the Casino and as reflected in the
applicable Annual Plan, pay or cause to be paid before they become delinquent,
all mortgages, ground leases, leases, and other, liens secured, in whole or in
part, by a lien or leasehold on the Casino the FF&E and other real or
personal property serving the Casino, as applicable, and any related
facilities, improvements, or personal property, and which are the
responsibility of Operator and not the responsibility of the Landlord.

 

3.13.       Compliance
With Laws

 

Manager shall:

 

(i)            Not
use the Casino or any portion thereof, and Manager shall use diligent efforts
to see that others do not use the Casino or any portion thereof, for any use or
purpose in violation of the Gaming Laws or of any other valid and applicable
law or regulation of any lawful authority having jurisdiction over the Casino;

 

(ii)           In
all respects use all reasonable efforts to cause the use and operation of the
Casino to comply with all valid and applicable laws and regulations of all
governmental authorities;

 

(iii)          Comply
with the requirements of the City of Las Vegas, Clark County, and the State of
Nevada, or any other governmental authority that may exercise governmental or
quasi-governmental control over the Casino (provided that Manager shall have no
obligation not to so comply or to correct any alleged defect unless the same is
specifically called to the attention of Manager by Operator or by any such
governmental authority); and

 

(iv)          Comply
with all requirements of the Gaming Authorities and the Gaming Laws as modified
from time to time, as if such Gaming Laws were fully set forth herein.

 

3.14.       Physical
Plant and Property Maintenance

 

Subject to the terms and provisions of the
Casino Sublease and the Casino Lease, the following provisions shall apply to
the Casino’s physical plant, fixtures and personality:

 

14

 

3.14.1.     No Changes Without
Operator’s Consent

 

Except as set forth in Subparagraph 3.14.2,
no changes shall be made to the Casino’s structure or any improvements now or
hereafter situated within the Casino without Operator’s consent, which consent
Operator shall be entitled to withhold in its sole discretion; provided,
however, that such withholding of consent has not and will not cause the Casino
to fall below a “first-class-neighborhood casino” level of quality.

 

3.14.2.     Alterations, Remodeling,
Demolition 

 

Manager shall, as reflected in the applicable
Annual Plan, and in accordance with the provisions of the Casino Sublease, have
the right to alter, remodel and/or demolish the Casino’s structure, any
improvements now or hereafter situated within the Casino, or to replace or add
to any of the FF&E located within the Casino without any additional prior
consent of Operator.

 

3.14.3.     Repairs, Replacements,
Maintenance 

 

Manager shall, from time to time and as
reflected in the applicable Annual Plan and in accordance with the provisions
of the Casino Sublease, make such expenditures as an Operating Expense for
repairs and maintenance of FF&E, for the replacements, renewals and
additions to minor operating equipment, and for minor capital improvements
(meaning those capital improvements other than structural repairs and changes
and extraordinary repairs to or replacement of FF&E as necessary or
required, in Manager’s reasonable opinion), to keep the Casino operating as a “first-class
neighborhood casino” If any repairs or maintenance shall constitute corrective
work for which Operator has received or is entitled to the benefit of the guarantee
or warranty of any builder, contractor or any supplier of labor or material in
connection with the construction or maintenance of the Casino or with respect
to the FF&E installed therein, then Manager may invoke such guarantees or
warranties in either Operator’s or Manager’s name and Operator shall cooperate
fully with Manager in the enforcement thereof. Operator reserves the right to
sell any of the FF&E located in the Casino from time to time, provided that
Operator substitutes FF&E of like kind, quality and utility.

 

3.14.4.     Required Structural
Repairs

 

If structural repairs or changes to the
Casino or extraordinary repairs to, or replacement of any FF&E shall be
required during the Initial Term or any Extension Term by the provisions of any
mortgage encumbering the Casino, any loan agreement with respect to the Casino,
in order to maintain the Casino in the operating condition of a “first-class
neighborhood casino, by reason of any laws or regulations now or hereafter in
force, or by order of any governmental authority or otherwise, or because
Manager and Operator jointly agree upon the desirability thereof, then, in any
such event, such repairs, changes or replacements shall be made by Operator, or
at the request of Operator, by Manager, at Operator’s sole expense, and shall
be made with as little hindrance to the operation of the Casino as is
reasonably possible. Notwithstanding the foregoing, Operator shall have the
right to contest the need for any such repairs, changes or replacements
required by any law, regulation, or order of governmental authority and may
postpone compliance therewith, if so permitted by law.

 

15

 

3.15.       Insurance

 

Manager, shall at all times throughout the
Initial Term and each Extension Term, provide and maintain, or cause to be
provided and maintained, for the Casino and related facilities as an expense of
the Casino, the types and amounts of insurance coverages stated in the Casino
Sublease.

 

4.             MANAGER’S FEES

 

For Management Services rendered,
encompassing operation of the Casino on and after the Commencement Date, for
each Fiscal Year or fraction thereof during the Initial Term and each Extension
Term, Operator shall pay Manager and Manager shall accept from Operator, an
annual management fee (the “Management Fee”) equal to the sum of Two
Million Dollars ($2,000,000), payable in equal monthly installments of One
Hundred Sixty-Six Thousand Six Hundred and Sixty-Seven Dollars ($166,667). In
addition, upon completion of, the merger of Rampart Casino, LLC with and into
Operator, with Operator as the surviving entity (the “Rampart Merger”),
Operator will pay to Manager an amount equal to the pro rata portion of the Management Fee that Manager would
have earned for the period commencing as of the initial date of the Casino
Sublease and ending as of the Commencement Date.

 

4.1.         Definitions

 

In addition to the definitions provided
throughout this Agreement, the following definitions shall be applicable to
this Agreement.

 

4.1.1.       Affiliate 

 

“Affiliate” means, as to any person
any other person that directly or indirectly through one or more intermediaries
controls, or is under common control with, or is controlled by, such
person. As used in this definition, “control” (and the correlative terms “controlled
by” and “under common control with”) shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or
policies, whether though ownership of membership interests, by contract, or
otherwise. As used in this definition, “person” shall mean any natural
person, corporation, limited liability company, general partnership, limited
partnership, proprietorship, other business organization, trust, union or
association.

 

4.1.2.       Change in Control 

 

“Change in Control” means an event
which results in change in the ownership of more than fifty percent (50%) of,
the membership interests of Operator.

 

4.1.3.       EBITDA

 

“EBITDA” means the amount determined
by subtracting Operating Expenses from Gross Revenues for a Fiscal Year.

 

16

 

4.1.4.       Fiscal Year 

 

“Fiscal Year” means and coincides with
and is identical to the calendar year for all purposes; provided, however, it
is understood that the first Fiscal Year under the Agreement may be a partial
calendar year.

 

4.1.5.       GAAP

 

“GAAP”
means generally accepted accounting principles applied on a consistent basis to
the hotel and gaming industry generally in accordance with the Uniform System of
Accounts.

 

4.1.6.       Gross Revenues

 

“Gross
Revenues” means, for any Fiscal Year, all receipts, revenues, income and
proceeds of sale of every kind or nature derived directly or indirectly from
the operation of the Casino, and services rendered to, and rentals of all kinds
received from tenants, subtenants, licensees and occupants of space located in
the Casino, including, without limitation, all receipts, revenues and income
derived from: food and beverage operations, bar and lounge operations; gross
revenues from gaming operations within the Casino less sums paid out as
winnings (“Gaming Revenues”) meeting room facilities, space rentals to
stores and other tenants within the Casino; proceeds from any “business
interruption” or “use and occupancy, policy of insurance; and any amount
recovered in any legal action or proceeding or settlement thereof which arose
out of the operation of the Casino, which amount under GAAP is properly
included as an income item. All of the foregoing shall be calculated on an
accrual basis whether in cash or in credit. The following revenues are excluded
from the definition of “Gross Revenues”:

 

(i)            All
taxes collected as direct taxes from guests or patrons of the Casino or in
respect of any business conducted in the Casino to be paid to duly constituted taxing
authorities having jurisdiction, such as local gaming taxes, or withholding taxes
assessed against gaming patrons’ winnings, if applicable, or sales taxes;

 

(ii)           Tips
and service charges collected for payment to employees; and

 

(iii)          Proceeds
of sales of property, real and personal, other than sales in the ordinary
course of the Casino’s business.

 

4.1.7.       Operating Expenses

 

“Operating
Expenses” means all operating expenses related to the Casino for the
applicable Fiscal Year determined in accordance with GAAP, including, without
limitation, Employment Costs, employer’s liability and similar, operating
insurance premiums, Licensing Fees, professionals, fees pertaining to operational
matters, the Management Fee, and all real estate and personal property taxes
and assessments levied against the Casino and which are the responsibility of
Operator. The following shall be excluded from the definition of Operating Expense:
debt service, if any; lease payments or finance or carrying charges for
FF&E; depreciation; and the interest on monies borrowed by Operator.

 

17

 

4.2.         Time
of Payment of Management Fee

 

The Management Fee shall be paid by Operator
to Manager on the first day of each calendar month, for the preceding calendar
month. Operator hereby authorizes Manager to pay itself the Management Fee,
monthly, from the Operating Account.

 

4.3.         Reimbursement
for Costs and Expenses

 

Operator shall at all times be responsible
for providing sufficient working capital for the operation of the Casino, and
Manager shall be reimbursed by Operator for the costs and expenses incurred in
connection with the development and operation of the Casino including, but not limited
to:

 

4.3.1.       Operator’s
Responsibility for Working Capital and Costs

 

Operator shall
at all times make available sufficient working capital to finance and support
the uninterrupted and efficient development and operation of the Casino as a “firstclass
neighborhood casino” including, without limitation, those funds and expenses
enumerated in Paragraph 3.7 hereof and as projected in the Annual Plan.

 

4.3.2.       Reimbursement Out of
Operating Account

 

Manager may
reimburse itself from the Operating Account for all reimbursable out-of-pocket
costs and expenses paid or incurred on behalf of Operator.

 

4.4.         Place
of Payment

 

The Management Fee and reimbursement of
out-of-pocket costs and expenses shall be paid to Manager in U.S. Dollars at
Las Vegas, Nevada or such other reasonably convenient situs as may be
reasonably determined by Manager from time to time.

 

5.             ASSIGNMENT

 

5.1.         By
Manager

 

Manager shall have no right to assign this
Agreement or any interest herein without the prior written consent of Operator.

 

5.2.         By
Operator

 

Operator shall have the right to assign this Agreement as follows:

 

5.2.1.       Assumption By Assignee

 

Operator shall have the right to assign this
Agreement in connection with any sale or other disposition of Operator’s
interest in the Casino and related facilities, without the consent of Manager,
and Operator shall thereupon be relieved of any obligation or liability arising
from and after such assignment, provided that:

 

18

 

(i)            The
assignee of Operator’s interest assumes, in writing, all of the obligations of
Operator hereunder;

 

(ii)           Written
notice of such assignment is given by Operator to Manager within five (5)
business days after the making of such assignment, along with an executed
duplicate counterpart of the instrument of assignment pursuant to which the
assignee assumed all of the obligations of Operator hereunder;

 

(iii)          Approval
is given of any such assignee, Transfer and Transferee (as defined below) by
the Gaming Authorities; and

 

(iv)          The
conditions of subparagraph 5.2.2 are fully met.

 

5.2.2.       Criteria as to Permitted
Assignee

 

Operator warrants and represents to Manager
that any proposed assignee or transferee of Operator in connection with a sale
or transfer of any legal, beneficial or equitable interest of Operator of any
kind in whole or in part in the Casino Sublease (a “Transfer”) and the parties
and any entity in which they have an interest to whom such assignment or
Transfer is being made, or the party or entity making the investment shall be
collectively referred to as a “Transferee”), shall meet the following
conditions:

 

(i)            Each
such Transferee shall be subject to prior review and approval by the Gaming
Authorities;

 

(ii)           Each
such Transferee shall be a person of good character, good reputation for
honesty and integrity and shall have that degree of financial stability
appropriate to an investment in Operator’s interest in the Casino;

 

(iii)          Each
such Transferee and Operator, as applicable, shall submit to the Gaming
Authorities on a timely basis: all requested information regarding the Transfer
and Transferees; and all documentation, statements and applications or such
appropriate forms as may be required, providing sufficient information
regarding each such Transferee’s financial stability, integrity, and good
reputation for honesty and integrity (collectively, the “Transfer Support
Documents”);

 

(iv)          Operator
shall cause the Transfer Support Documents and any other pertinent information
reasonably sufficient to permit Manager to conduct its own due diligence
investigation of each such Transferee to be delivered to Manager in order for
Manager to ascertain to its satisfaction that each such Transferee meets the
Gaming Authorities criteria; and

 

(v)           No
Transfer shall be consummated until the Gaming Authorities have approved of
each such Transfer and Transferee, as required by the Gaming Authorities.

 

19

 

5.2.3.       Failure of Transferee to
Meet Criteria

 

In no event shall Operator have the right to
complete any Transfer to any Transferee who does not meet the standards of good
character, good reputation for honesty and integrity and financial stability as
required by the Gaming Authorities and the approval by the Gaming Authorities
of such Transfer to such Transferee shall be a precondition to any such
Transfer. The failure to obtain such approval of the Gaming Authorities for
such Transfer to any Transferee shall constitute a material default by Operator
(and successor to Operator if applicable) of this Agreement.

 

5.2.4.       Manager’s Right to
Terminate

 

Notwithstanding
the foregoing, it is agreed that Manager shall have the right to terminate this
Agreement in the event of a permitted Transfer by Operator to any Transferee,
if Manager so elects.

 

6.             DAMAGE AND DESTRUCTION

 

If the Casino or any portion thereof shall be
damaged or destroyed at any time during the Initial Term or any Extension Term
by fire, casualty or other cause to such an extent that it would be either impossible
or impracticable, in Operator’s sole discretion, to repair the Casino or to
continue to operate the Casino as a “first-class neighborhood casino” then
Operator may terminate this Agreement by giving written notice of termination
to Manager, whereupon this Agreement shall be terminated and of no further
force and effect, except with respect to the duties, liabilities and
obligations of the parties which arose or accrued prior to termination and continue
to exist, or have cause to exist, post-termination. Otherwise, this Agreement
shall remain in full force and effect, and, subject to the terms and provisions
of the Casino Sublease and the Casino Lease, Operator shall promptly rebuild
the Casino as a “first-class neighborhood casino, at its sole cost and expense.

 

7.             CONDEMNATION

 

If the entire Casino shall be taken in
eminent domain or condemnation proceedings, or the equivalent thereto, or if
such portion of the Casino shall be taken in eminent domain or condemnation
proceedings, or the equivalent thereto, to such an extent that in the sole
discretion of Operator, it is impossible or impracticable to continue to
operate the Casino, then, in either of such events, Operator shall have the
right to terminate this Agreement by giving written notice of such termination
to Manager and upon the giving of such notice, this Agreement shall be
terminated and of no further force and effect, except with respect to the
duties, liabilities and obligations of the parties which arose Or accrued prior
to termination and continue to exist, or have cause to exist, post-termination.
In the event of termination under this Paragraph 7, such termination shall be
effective upon the date of taking. The provisions of this Paragraph 7 with
respect to termination shall be applicable if Operator makes a conveyance in
lieu of condemnation, in which event the day of the execution and delivery of
such conveyance shall be the date of termination. If this Agreement is not
terminated in accordance with the terms of this Paragraph 7, then this
Agreement shall remain in full force and effect, and subject to the terms 

 

20

 

and provisions
of the Casino Sublease and the Casino Lease, Operator shall promptly rebuild or
restore the Casino as a “first-class neighborhood casino” at its sole cost and
expense:

 

8.             NON-DISTURBANCE

 

Operator hereby covenants and agrees, and it
is the essence of this Agreement and as an inducement to execution, that
Manager, subject to the terms and conditions of this Agreement, shall have
uninterrupted control of and the exclusive responsibility for the operation of
and the right to operate and manage the Casino during the Initial Term and each
Extension Term. Except as set forth in this Agreement, Operator will not interfere
or involve itself with the day-to-day operation of the Casino. Operator further
agrees to take such action as is from time to time necessary to preserve such
rights in Manager for the Initial Term and each Extension Term. Manager
acknowledges that it is a fiduciary with respect to Operator, and agrees that
it will discharge its fiduciary duties and responsibilities in the control and
operation of the Casino in good faith and for the purposes of maximizing Gross
Revenues; provided, however, that in no event shall Operator make any claim
against Manager on account of any alleged errors of judgment made in good faith
in connection with operation of the Casino, unless such error results from the
gross negligence or recklessness of Manager.

 

9.             DEFAULT

 

9.1.         Default
By Manager

 

The following events shall be deemed to be “Events
of Default by Manager under this Agreement:

 

9.1.1.       Non-Compliance with
Terms 

 

Manager shall fail to comply, in any material
respect, with any of the terms, conditions, provisions or covenants of this
Agreement to be complied with by Manager and Manager shall not cure such
failure within thirty (30) days after written notice thereof given by Operator
to Manager, or, if such failure is not reasonably susceptible of being cured
within said thirty (30) day period, if Manager shall fail to commence to cure
such failure within said thirty (30) day period, or, having commenced, shall
thereafter fail to complete the curing of such failure with reasonable
diligence.

 

9.1.2.       Insolvency

 

Manager shall become insolvent, shall make a
transfer in fraud of its creditors, or shall make an assignment for the benefit
of creditors.

 

9.1.3.       Bankruptcy Filing

 

Manager shall file a petition under any
section or chapter of the United States Bankruptcy Code, as amended, or under
any similar law or statute of the governmental authority, or if Manager shall
be adjudged bankrupt or insolvent in proceedings filed against Manager
thereunder.

 

21

 

9.1.4.       Appointment of Receiver

 

A receiver or trustee shall be appointed for
Manager or for all or substantially all of the assets of Manager, and such
appointment is not vacated or otherwise caused to be set aside within ninety
(90) days from the occurrence thereof.

 

9.1.5.       Loss of License

 

Manager’s
License to operate the Casino shall at any time be suspended for any reason by
the Gaming Authorities and Manager shall fail to cure such suspension within
thirty (30) days from such suspension, or Manager or any holder of any equity interest
in Manager shall be temporarily or permanently prohibited from deriving any
benefit from the operations of the Casino as a direct result of the
investigation or License process by the Gaming Authorities and Manager shall
fail to cure or take substantial steps to cure if said default cannot
reasonably be cured within said thirty (30) day period, such prohibition within
thirty (30) days thereafter.

 

9.2.         Default
By Operator

 

The following events shall be deemed to be
Events of Default by Operator under this Agreement:

 

9.2.1.       Failure Fund 

 

Operator shall
fail to provide sufficient funds in the Operating Account to pay all of the
current expenses, fees, bills or other charges in connection with the Casino,
or to maintain the required working capital deposits or Reserves as required
herein, within thirty (30) days after receiving written request therefor by
Manager.

 

9.2.2.       Non-Compliance with
Terms

 

Operator shall
fail to comply in any material respect with any other term, provision or
covenant of this Agreement to be complied with or performed by Operator, and
shall not cure such failure within thirty (30) days after written notice from
Manager to Operator; or, if such failure is not susceptible of being cured
within said thirty (30) day period, if Operator shall fail to commence to cure
such failure within said thirty (30) day period, or, having commenced, shall,
thereafter, fail to complete the curing of such failure with reasonable
diligence

 

9.2.3.       Insolvency

 

Operator shall
become insolvent, shall make a transfer in fraud of its creditors, or shall
make an assignment for the benefit of its’ creditors.

 

22

 

9.2.4.       Bankruptcy Filing

 

Operator shall
file a petition under any bankruptcy law or similar law for a relief of debtor
or if Operator shall be adjudged bankrupt or insolvent in proceedings filed
against Operator thereunder.

 

9.2.5.       Appointment of Receiver

 

A receiver or
trustee shall be appointed for Operator or for all or substantially all of the
assets of Operator and such appointment is not vacated or otherwise caused to
be set aside within ninety (90) days from the occurrence thereof.

 

9.2.6.       Loss of Gaming or
Operating License

 

Operator’s
License to operate the Casino shall at any time be suspended for any reason by
the Gaming Authorities and Operator shall fail to cure such suspension within
thirty (30) days from such suspension, or Operator or any holder of any equity
interest in Operator shall be temporarily or permanently prohibited from deriving
any benefit from the operations of the Casino as a direct result of the
investigation or License process by the Gaming Authorities and Operator shall
fail to cure such prohibition, within thirty (30) days thereafter, provided
that any such suspension or prohibition shall not be as a direct result of
Manager’s properly funded operation of the Casino or caused by any acts or
omissions of Manager, its officers, employees, and agents.

 

9.3.         Remedies
for Default

 

Should either party default in its obligations
under the terms, conditions and provisions of this Agreement, the other party
shall have the right to terminate this Agreement without any prior notice to
the defaulting party, and to enforce this Agreement and further, shall have
such other rights and remedies on account of such default, both at law and in
equity (including the right to seek injunctive relief without the posting of a
bond which bond requirement, if applicable, is hereby waived) as is provided,
established or allowable under applicable law.

 

10.          MANAGEMENT STANDARDS

 

Manager shall exclusively manage and maintain
the Casino in a manner utilizing standards and procedures which are comparable
to the management of a “first-class neighborhood casino” similar in quality to
existing casinos located in Clark County, Nevada, such as the casino located in
the Hard Rock Hotel and Casino, subject to such adjustments as Manager in its
reasonable discretion deems necessary. Manager shall establish such standards
and procedures in its reasonable discretion, subject to standards and
procedures required by law.

 

11.          COOPERATION OF OPERATOR AND MANAGER

 

Operator and Manager shall cooperate frilly
with each other during the Initial Term and each Extension Term to facilitate
the performance by ‘Manager of Manager’s obligations and responsibilities set
forth in this Agreement and to procure and maintain all necessary Licenses.
Operator shall provide Manager with such information pertaining to the Casino
necessary to the 

 

23

 

performance by
Manager of its obligations hereunder as may be reasonably and specifically
requested by Manager from time to time.

 

12.          NON-COMPETITION

 

For a period commencing on the date hereof
and ending on the first anniversary of the expiration or termination of this Agreement
(the “Non-Compete Period”), Manager, for itself and its Affiliates,
agrees not to, except as set forth below, directly or indirectly, either as an
employee, employer, consultant, agent, principal, partner, member, stockholder,
officer, director, manager or in any other individual or representative
capacity, engage or participate in any business or activity involving the
operation of a “first-class neighborhood casino” within a three’ (3) mile
radius of the Casino; provided, however, that nothing in this Paragraph 12
shall prevent Manager, or any member, manager, officer, employee or Affiliate
of Manager, from: (i) engaging or participating in such business or activity at
the request of and on behalf of either Operator or Cannery Casino Resorts, LLC,
a Nevada limited liability company (“Cannery Casino Resorts”) (ii)
owning beneficially, as an investment, up to an aggregate of one percent of a
class of equity securities that is publicly traded and registered under Section
12 of the Securities and Exchange Act of 1934, or (iii) owning beneficially a
membership interest in Cannery Casino Resorts. Manager, for itself and its
Affiliates, represents to Operator that the enforcement of the restrictions
contained in this Paragraph 12 would not be unduly burdensome to it.

 

Manager, for itself and its Affiliates,
agrees that a breach or violation of the non-competition covenant set forth in
this Paragraph 12 (the “Covenant”) shall entitle Operator, as a matter
of right, to an injunction issued by any court of competent jurisdiction,
restraining any further or continued breach or violation of the Covenant. Such
right to an injunction shall be cumulative and in addition to, and not in lieu
of, any other remedies to which Operator may show itself justly entitled.
Further, during any period in which Manager or any of its Affiliates are in
breach of the Covenant, the time period of the Covenant shall be extended for
an amount of time that Manager or any of its Affiliates are in breach hereof,
with the effect that the total duration of the Covenant shall be the original
period plus the actual amount of time that Manager or any of its Affiliates is
in breach.

 

The representations and Covenant contained in
this Paragraph 12 will be construed as ancillary to and independent of any
other provisions of this Agreement, and the existence of any claim or cause of
action of Manager against Operator or any member or manager of Operator,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by Operator of the Covenant.

 

Further, Manager, for itself and its
Affiliates, agrees that the Covenant set forth herein is appropriate and
reasonable when considered in light of the nature and extent of the business
conducted by Operator. Manager, for itself and its Affiliates, acknowledges and
agrees that: Operator would not enter into this Agreement unless Manager, for
itself and its Affiliates, agreed to the Covenant; and (ii) it has read and
understands the terms of this Agreement, including, without limitation, the
Covenant, and has been provided the opportunity to discuss this Agreement and
the Covenant with Operator and counsel of its choice and has carefully
considered the nature and extent of the restrictions upon it and the rights and
remedies conferred upon Operator hereunder. Manager, for itself and its
Affiliates, hereby acknowledges and agrees 

 

24

 

that Operator
has a legitimate interest in protecting its business and that the Covenant is
reasonable in limitations as to time, scope, geographical area and activity,
and is fully required and is no greater than necessary to protect the
legitimate business interests of Operator.

 

Manager, for itself and its Affiliates, farther
agrees that the Covenant is not unduly harsh or oppressive to Manager, or any
of its Affiliates, in curtailing their legitimate efforts to earn a livelihood
and does not stifle the inherent skill and experience of Manager, or any of its
Affiliates, or confer a benefit upon Operator disproportionate to the detriment
to Manager, or any of its Affiliates, or harm in any manner whatsoever the
public interest or operate as a bar to the sole means of support of Manager, or
any of its Affiliates.

 

Manager, for itself and its Affiliates,
agrees that if the Covenant should be held by any court or other constituted
legal authority to be void or unenforceable in any particular area or
jurisdiction, then Manager and Operator shall consider this Agreement to be modified
so as to eliminate that particular area or jurisdiction as to which the
Covenant is held to be void or otherwise unenforceable, and as to all other
areas and jurisdictions and scope covered by this Agreement, the terms hereof
shall remain in full force and effect as originally written. Further, if the
Covenant should be held by any court or other constituted legal authority to be
effective in any particular area or jurisdiction or scope only if said covenant
is modified to limit its duration or scope, then Manager and Operator shall
consider such Covenant to be amended and modified with respect to that
particular area or jurisdiction so as to comply with the order of any court or
other constituted legal authority, and as to all other political subdivisions
of the United States, the Covenant shall remain in full force and effect as
originally written.

 

In addition to such other remedies, including
the injunctive relief described above, as Operator may be entitled to if
Manager, or any of its Affiliates, shall violate any legally enforceable
provision of this Paragraph 12, Manager shall pay as and for liquidated damages
to Operator an amount equal to $50,000 for each month, or portion thereof, that
Manager, or any of its Affiliates, is in violation of any legally enforceable
provision of this Paragraph 12. If Operator is not entitled to seek both
liquidated damages and injunctive relief, Operator shall be entitled to elect,
in its sole discretion, between the two remedies.

 

13.          INDEMNIFICATION

 

13.1.       Manager’s
Indemnification

 

Except ‘as otherwise set forth herein,
Manager covenants and agrees that it will protect, keep and defend Operator
forever harmless and indemnified against and from any penalty or damage or
charges imposed for any violation of any laws or ordinances, including, without
limitation, Gaming Laws, occasioned by the negligence of Manager or those
holding under Manager and that Manager will at all times protect, indemnify,
defend and save and keep Operator harmless against and from any and all claims
and against and from any and all loss, cost, damage or expense, including
reasonable attorneys, fees, arising out of any negligence of Manager in any
respect to comply with and perform all the requirements and provisions hereof
except to the extent that any penalty, damage, charge, loss, cost or expense is
caused by the negligent or wanton or willful acts of Operator or its members,
managers, officers, employees, or agents. Without limiting the generality of
the foregoing, and with, the inclusion of the same 

 

25

 

exceptions as
set forth above, Manager covenants and agrees that it will protect, keep and
defend Operator forever harmless and indemnified against any and all debt,
claim, demand, suit or obligation of every kind, character and description that
may be asserted, claimed, filed or brought against Operator where such claim
arises out of or is asserted in connection with any Management Services,
including, without limitation, any claim by any subtenant, guest, licensee or
invitee of Manager. This indemnity does not apply to loss or damage occasioned
by defects in the Casino. Nothing in this Paragraph 15 shall override the right
of Manager to employ counsel as an Operating Expense and assert defenses as set
forth in Paragraph 3.3 above. Notwithstanding the foregoing, this indemnity
does not apply to any claim, loss, cost, damage, expense; penalty or obligation
in the event such claim, loss, cost, damage, expense, penalty or obligation is
within the scope of or is the subject of one or more policies of insurance
obtained by Manager or Operator. Under no circumstances shall the liability of
Manager for indemnification hereunder exceed the amount of One Million Dollars
($1,000,000). The foregoing indemnity shall survive the expiration or early
termination of this Agreement.

 

13.2.       Operator’s
Indemnification

 

Except as otherwise set forth herein,
Operator covenants and agrees that it will protect, keep and defend Manager
forever harmless and indemnified against and from any penalty or damage or
charges imposed for any violation of any laws or ordinances, including, without
limitation, Gaming Laws, occasioned by the negligence of Operator or those
holding under Operator, and that Owner will at all times protect; indemnify,
defend and save and keep Manager harmless against and from any and all claims
and against and from any and all loss, cost, damage or expense, including
reasonable attorneys’ fees, arising out of any negligence of Operator in any
respect to comply with and perform all of the requirements and provisions
hereof; except to the extent that any penalty, damage, charge, loss, cost or
expense is caused by the negligent or wanton or willful acts of Manager or its
members, managers, officers, employees or agents. Without limiting the
generality of the foregoing, and with the inclusion of the same exceptions as
set forth above, Operator covenants and agrees that it will protect, keep and
defend Manager forever harmless and indemnified against any and all debt, claim,
demand, suit or obligation of every kind, character and description that may be
asserted, claimed, filed or brought against Manager where such claim arises out
of or is asserted in connection with Operator ownership of the Casino or the Land.
Notwithstanding the foregoing, this indemnity does not apply to loss or damage
occasioned by defects in the Casino and Operator shall not indemnify Manager as
to any claim, loss, cost, damage, expense, penalty or obligation in the event
such claim, loss, cost, damage, expense, penalty or obligation is within the
scope of or is the subject of one or more policies of insurance obtained by
Operator or Manager. Under no circumstances shall the liability of Operator for
indemnification hereunder exceed the amount of One Million Dollars ($1,000,000).

 

13.3.       Defense
Counsel

 

Defense counsel engaged by Manager or
Operator, as indemnitor, shall be reasonably acceptable to Manager and
Operator, as indemnitee. Without limiting the generality of the foregoing, indemnitee
shall be promptly provided with copies of all claims and pleadings, as well as
correspondence, memos, documents and discovery with respect thereto, unless
within the scope of any applicable privilege, relating to any such matters. Indemnitee
shall be given prior 

 

26

 

written notice
of all meetings, conferences and judicial proceedings, and shall be afforded an
opportunity to attend and participate in same. Indemnitee shall have the right
to engage independent counsel, at its sole expense, to represent indemnitee as
additional and/or co-counsel in all such proceedings, trials, appeals and
meetings with respect thereto.

 

14.          CONFIDENTIAL INFORMATION

 

Manager agrees for itself and its Affiliates,
agents, representatives and consultants to hold in the strictest confidence and
not to disclose to any person, entity, party, firm or corporation (other than
agents or representatives of Manager who are also bound by this Paragraph 14)
without the prior express written consent of Operator (except as such
disclosure are required by applicable securities laws, Gaming Laws, Gaming
Authorities, or under order of a court of competent jurisdiction) any of
Operator’s confidential data, whether related to the Casino or to general
business matters, which shall come into their possession or knowledge. In
addition, Manager agrees that it shall cause all documents, drawings, plans or
other materials developed by Operator in connection with the Casino to be
returned to Operator upon the termination or expiration of this Agreement and
that Manager shall not make use of such information in connection with the
Casino or any other undertaking by Manager without the prior express written
consent of Operator.

 

Operator agrees for itself and its
Affiliates, agents, representatives and consultants to hold in the strictest
confidence and not to disclose to any person, entity, party, firm or
corporation (other than agents or representatives of Operator who are also
bound by this Paragraph 14) without the prior express written consent of
Manager (except as such disclosures are required in applications or by
applicable securities laws, Gaming Laws, Gaming Authorities, or under order of
a court of competent jurisdiction) any of Manager’s confidential data, whether
related to the Casino or to general business matters, which shall come into
their possession or knowledge. In addition, Operator agrees that it shall cause
all documents, drawings, plans or other materials developed by Manager in
connection with ‘the Casino to be returned to Manager upon the termination or
expiration of this Agreement and that Operator shall not make use of such
information in connection with the Casino or any other undertaking by Operator
without the prior express written consent of Manager.

 

15.          HAZARDOUS MATERIALS

 

During the Initial Term and each Extension
Term; Operator will not utilize Hazardous Substances (as defined in the Casino
Sublease) at the Casino.

 

16.          ESTOPPEL CERTIFICATES

 

Operator and Manager shall, at any time and
from time to time upon not less than ten (10) days prior written request by the
other, execute, acknowledge Sand deliver a statement in writing certifying that:

 

(i)            This
Agreement is unmodified and in full force and effect (or, if modified, that the
same is in full force and effect, as modified, stating the modifications);

 

(ii)           The
date to which payments have been made under this Agreement; and

 

27

 

(iii)          To
the knowledge of Operator or Manager, as the case may be, no Event of Default
hereunder on the part of the other party exists (except that if any such Event
of Default does exist, the certifying party shall specify such Event of Default),
it being intended that any such statements delivered pursuant to this

 

With copies
to:                     Schreck
Brignone Godfrey

300 South Fourth Street, Suite 1200

Las Vegas, Nevada 89101

Attn:  Frank Sebreck

Facsimile:  (702) 382-8135

 

Kummer Kaempfer Bonner & Renshaw

3800 Howard Hughes Parkway, 7th Floor

Las Vegas, Nevada 89109

Attn:  David A. Barksdale

Facsimile:  (702) 796-7181

Mendenhall, LLC

4420 South Decatur Boulevard

Las Vegas, Nevada 89103 

Attn:  Robert Mendenhall 

Facsimile:  (702) 251-4891

 

17.          APPROVAL

 

In any instance where the approval or consent
of Operator or Manager is required or permitted hereunder, such approval or
consent shall be in writing and such consent or approval except as may
otherwise be specified in this Agreement, shall not be unreasonably withheld or
delayed.

 

18.          RELATIONSHIP OF PARTIES

 

Nothing set forth in this Agreement shall
constitute, or be construed to’ be or to create, a partnership, joint venture
or agency relationship between Operator and Manager with respect to the
management of the Casino.

 

19.          NO WAIVER

 

No waiver of any covenant, term or condition
of this Agreement by either party shall be construed as a waiver of a
subsequent breach of the same covenant, term or condition, The consent or
approval by either party to or of any act by the other party requiring such
consent or approval shall not be deemed to waive or render unnecessary, consent
to or approval of any subsequent similar act.

 

20.          CHOICE OF LAW AND FORUM

 

This Agreement shall be governed and
construed in accordance with the laws of the State of Nevada, regardless of the
places of its negotiation or execution and without regard to 

 

28

 

principles of
conflicts of law. The parties acknowledge that there are substantial and not
isolated connections with the State of Nevada and that each of them is subject
to the jurisdiction of the courts of such State pursuant to Nevada’s “Long-Arm”
Statute.

 

Each of the parties submits to the exercise
of personal jurisdiction over them in the State of Nevada in connection with
any action or proceeding brought by either party relating to, arising from, or
based on this Agreement, and each of the parties waives any objection to the
exercise of personal jurisdiction over each of them in connection with any such
action or proceeding.

 

The parties agree that any litigation or court
action of any kind relating to, or arising from, or based on this Agreement
shall be filed in Clark County, Nevada.

 

If either party shall institute legal
proceedings against the other party based on a cause of action arising from
this Agreement, the non-prevailing party in such proceeding shall pay the costs
and expenses incurred by the prevailing party in such proceedings including
reasonable attorneys’ fees and any and all costs and fees incurred on appeal of
any lower court decision.

 

21.          ENTIRE AGREEMENT; MODIFICATION

 

No employee, agent or representative of
either party has the authority to bind the other party to any oral ‘additions,
modifications, representations or warranties concerning this Agreement. This
Agreement contains the entire agreement between the parties with respect to its
subject matter, and no agreement shall be effective to change, modify or
terminate this Agreement, in whole or in part, unless such agreement is in
writing and duly signed by the authorized representative of the party against
whom enforcement of such change, modification or termination is sought. This
Agreement shall not be construed more strictly against one party than against
the other merely by virtue of the fact that this Agreement may have been
physically prepared by one of the parties, or such party’s counsel, it being
agreed that both parties and their respective counsel have mutually
participated in the negotiation and preparation of this Agreement.

 

22.          SURVIVAL AND CONTINUATION

 

Notwithstanding the termination of this
Agreement, all terms, provisions and obligations of either party contained
herein which in order to give them effect and to accomplish their intent or
purpose, need to survive such termination shall, by agreement between Operator
and Manager, survive and continue until they have been fully satisfied or
performed.

 

23.          DESCRIPTIVE HEADINGS

 

The descriptive headings set forth in this
Agreement are inserted for convenience and for reference only and do not in any
way limit or amplify the terms and provisions of this Agreement.

 

29

 

24.          SUCCESSORS AND ASSIGNS

 

The terms, provisions and covenants contained
in this Agreement shall apply to, inure to the benefit of, and be binding upon,
the parties hereto and their respective successors and permitted assigns;
except as otherwise provided in this Agreement.

 

25.          FORCE MAJEURE

 

The terms and conditions of this Agreement
(with the exception of the obligation of Operator to pay any fee, cost or
expense or to transfer any funds or fund any Reserve or working capital reserve
or fund the amounts required by the terms of this Agreement or with regard to
matters pertaining to an approved Transfer or Transferee) shall be subject to
force majeure. Neither Operator nor Manager shall be considered in default in
the performance of its obligation hereunder, if such performance is prevented
or delayed because of war, hostilities, revolution, civil commotion, strike,
lock-out, epidemic, fire, earthquake, wind, flood, or because of any law,
order, proclamation, regulation, or ordinance of any governmental authority, or
because of any act of God or any other cause whether of similar or dissimilar
nature beyond the, reasonable control of the party affected.

 

26.          AUTHORIZATION

 

Each of the parties hereto represents to the
other party that it has full power and authority to execute this Agreement and
to be bound by and shall perform in accordance with the terms hereof On
request, each party shall furnish to the other evidence of such authority.

 

27.          COUNTERPARTS

 

Any number of counterparts of this Agreement
may be executed and delivered and each shall be considered an original and
together they shall constitute one agreement.

 

28.          SEVERABILITY

 

If any of the provisions of this Agreement or
its application shall be held by any court, regulatory agency, Or other
governmental authority having competent jurisdiction over this Agreement, to be
invalid, illegal, or unenforceable in any respect, the parties shall forthwith
cure such invalidity to the extent permitted by Jaw, and notwithstanding the
fact that such provisions may be held to be of no force and effect, the
validity, legality, and enforceability of the remaining provisions contained
herein and any other application thereof shall not in any way be affected or
impaired thereby. If any such provision or portion thereof is declared invalid,
illegal, or unenforceable, the parties to this agreement intend that, in lieu
of the invalid, illegal, or unenforceable provision or portion thereof, there
be added to this agreement a provision or portion thereof as similar in
substance to such invalid, illegal, or unenforceable provision or portion
thereof as may be possible so as to accomplish the purposes of such invalid,
illegal, or unenforceable provision or portion thereof

 

IN WITNESS WHEREOF, Operator and Manager have
hereunto set their hands and seals on the day and year first above written.

 

30

 

	
   

  	
  OPERATOR:

  
	
   

  	
   

  
	
   

  	
  RAMPART RESORT MANAGEMENT, LLC,

  
	
   

  	
  a Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Paulos

  
	
   

  	
   

  	
  William J. Paulos

  
	
   

  	
   

  	
  Sole Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MANAGER:

  
	
   

  	
   

  
	
   

  	
  MILLENNIUM MANAGEMENT GROUP II,

  
	
   

  	
  LLC, a Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William C. Wortman

  
	
   

  	
   

  	
  William C. Wortman

  
	
   

  	
   

  	
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Paulos

  
	
   

  	
   

  	
  William J. Paulos

  
	
   

  	
   

  	
  Sole Member

  
				

 

31

 

EXHIBIT A

PROPERTY
DESCRIPTION FOR THE LAND

 

A-1Exhibit 10.20

 

THE
CANNERY MANAGEMENT AGREEMENT

 

THIS, THE CANNERY MANAGEMENT AGREEMENT (the “Agreement”),
is made and entered into effective as of the      day of
May, 2002 (the “Effective Date”), by and between The Cannery Hotel and
Casino, LLC, a Nevada limited liability company (together with its permitted
successors and assigns under this Agreement, “Owner”), and Millennium
Management Group II, LLC, a Nevada limited liability company (together with its
permitted successors and assigns under this Agreement, “Manager”).

 

RECITALS

 

A.            Owner
owns the property more fully described in Exhibit A attached hereto, located at
the intersection of Craig Road and Losee Road approximately 7/10 of a mile west
of Craig Road and the Interstate 15 interchange, North Las Vegas, Nevada (the “Land”),
upon which Owner is developing, constructing and intends to operate a “first-class
neighborhood casino hotel” project similar in quality to existing casino hotels
located in Clark County, Nevada, containing approximately 201 rooms and suites,
with dining rooms, meeting rooms, restaurants, bars, lounges and other hotel
facilities and amenities, and a casino of approximately 50,000 square feet
(collectively, “The Cannery”).

B.            Manager
is experienced in planning, developing and managing casino hotels and casino
hotel projects of the type and nature similar to The Cannery.

C.            Owner
represents that, as of the Effective Date, it has received preliminary approval
from appropriate governmental authorities, including Gaming Authorities (as
defined below), to develop, construct, and operate The Cannery and Owner knows
of no facts that may prevent Owner from securing appropriate Licenses (as
defined below), including Gaming Licenses (as defined below), for constructing,
developing and operating The Cannery.

 

D.            Owner
desires to engage Manager as its agent to provide consulting and management
services to Owner in connection with planning, developing, constructing,
furnishing, equipping, staffing and opening The Cannery, and upon its opening,
managing The Cannery for the Initial Term and each Extension Term (as defined
below), and Manager desires to be so engaged.

 

NOW,
THEREFORE, in consideration of the mutual covenants, promises and undertakings
of the parties hereafter set forth and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, it is agreed:

 

1.             THE
ENGAGEMENT: PHASES OF DEVELOPMENT AND OPERATION

 

Upon and
subject to the terms and conditions herein, Owner hereby engages and retains
Manager, and Manager hereby agrees to be so engaged and retained by Owner, to
provide the management services provided herein (collectively, the “Management
Services”). The parties agree and acknowledge that, unless expressly stated
herein to the contrary, Owner shall be responsible for all direct costs, fees,
reimbursements, or expenses incurred by Manager on behalf 

 

1

 

of Owner for the provision of
Management Services. Notwithstanding the foregoing, Manager shall be
responsible for and pay its own expenses of operations, rent, overhead,
employee expenses and general business expenses relating to its business of
casino hotel management services. In the event that Manager dedicates one or more
of its employees on a temporary basis to The Cannery, Owner shall reimburse
Manager for the gross payroll of such person(s) for the relevant time. The
services to be rendered by Manager to Owner pursuant to the terms of this
Agreement shall involve three (3) phases of operations, which are defined
generally as:

 

A.            The
planning, construction and development phase (“Phase I”);

 

B.            The
pre-opening phase (“Phase II”); and

 

C.            The
operations phase (“Phase III”).

 

Phase I will
overlap Phase II and may overlap, to some extent, Phase III. Phase II may, to
some extent, overlap Phase III.

 

2.             TERM

 

The initial
term of this Agreement shall commence as of the Effective Date and shall
terminate ten (10) years after the Opening Date (as defined below) (the “Initial
Term”). The Initial Term shall automatically renew thereafter for
successive one (1) year extension terms (each, an “Extension Term”),
unless terminated by either party upon written notice to the other not less
than one hundred eighty (180) days prior to the expiration of the Initial Term
or any Extension Term.

 

3.             PHASE
I

 

3.1          Phase
I Services

 

During Phase
I, which shall commence as of the Effective Date, the Management Services shall
include consulting, pre-opening and technical services to Owner in connection
with planning, developing, constructing, furnishing, equipping and staffing The
Cannery. Such services will include assisting Owner and the various Design
Professionals (as defined below) and contractors in the provision and
coordination of their services, including, but not limited to:

 

3.1.1        Architect

 

Review and
critique architectural plans and specifications for The Cannery prepared and
developed by the architect, as selected by Owner (the “Architect”); and
advise and consult with the Architect regarding the location and layout of all
hotel facilities and amenities, including, but not limited to, guest rooms,
public spaces, meeting and conference rooms, the casino, security and counting
rooms, and food and beverage facilities.

 

3.1.2        Interior Designer

 

Assist Owner
in selecting and retaining an interior designer (the “Interior Designer”);
advise and consult with the Interior Designer regarding the theme, layouts,
design, 

 

2

 

and utility of The Cannery from
an operational point of view; and review and critique design proposals from the
Interior Designer.

 

3.1.3        Project Manager

 

Meet with the
project manager, as selected by Owner (the “Project Manager”), on a
regularly scheduled basis to develop a construction schedule for The Cannery;
and assist the Project Manager in coordinating the work of the Design
Professionals (as defined below).

 

3.1.4        Other Design
Professionals

 

Assist Owner
in selecting and retaining design, technical and installation experts and consultants
(collectively with the Architect, the Interior Designer and the Landscape
Designer (as defined below), the “Design Professionals”) required for
the design, selection and installation of equipment for systems required by The
Cannery, including, but not limited to, kitchen, laundry, telephone,
communications, sound, computer, security and surveillance systems; advise and
consult with the Design Professionals with respect to hotel and casino
operations and systems.

 

3.1.5        Purchasing Agent

 

Assist Owner
in selecting and retaining a purchasing agent (the “Purchasing Agent”)
for the purchase, delivery and installation of all furnishings, fixtures and
equipment required for The Cannery (“FF&E”).

 

3.1.6        Landscape Designer

 

Assist Owner
in selecting and retaining a landscape designer (the “Landscape Designer”).

 

3.1.7        Budgets

 

Assist Owner
in developing budgets for FF&E, including, but not limited to, kitchen
equipment, laundry equipment, telephone and communications equipment, sound
equipment, casino and gaming equipment, security, surveillance and
closed-circuit television equipment, and other individual categories of
FF&E; and assist Owner and the Architect in developing an overall budget
for the design, development and construction of The Cannery, which budget will
form part of the Pre-Opening Plan (as defined below).

 

3.1.8        Equipment Selection

 

Assist Owner
in selecting equipment for The Cannery, including, but not limited to, kitchen
equipment, laundry equipment, telephone and communications equipment, office
equipment, accounting and business machines, casino and gaming equipment,
security, surveillance and closed-circuit television equipment and other
equipment and systems required for the operation of The Cannery.

 

3

 

3.1.9        Periodic Inspections

 

Conduct
inspections and reviews from time to time in coordination with the Project
Manager during the construction period, as Owner may reasonably request with
regard to such matters as Owner determines may be useful to Owner in Owner’s
overall supervision of the construction of The Cannery. For purposes of this
Subparagraph 3.1.9, the construction period shall commence as of the Effective
Date and terminate on the Opening Date.

 

3.2          Responsibility
for Construction

 

Manager shall
be responsible for supervising construction of The Cannery and all phases or
portions thereof, and the Project Manager shall report to Manager.

 

4.             PHASE
II

 

During Phase
II, which shall commence sufficiently in advance of the scheduled Opening Date
to permit the timely opening of The Cannery, the Management Services shall
include all necessary pre-opening services in preparation for the opening of
The Cannery.

 

4.1          Opening
Date; Commencement of Services

 

The “Opening
Date” for purposes of this Agreement means the first date agreed upon by
Manager and Owner, that:

 

(i)            The construction of
The Cannery is substantially completed;

 

(ii)           The FF&E, including
all gaming, security, surveillance and related equipment and financial
controls, is substantially installed;

 

(iii)          All Licenses, whether
temporary or permanent, required for the operation of The Cannery have been
obtained;

 

(iv)          Adequate working capital
and minimum required cash reserves, as provided in the Pre-Opening Plan, have
been duly deposited or furnished as applicable; and

 

(v)           The Cannery is ready to
render “first-class” service to patrons on a fully operational basis.

 

4.2          Phase
II Pre-Opening Services

 

In general,
Manager shall be responsible, on behalf of Owner, for coordinating the
activities necessary or reasonably required to open The Cannery for business,
including (i) assuring that Owner has properly staffed and equipped The
Cannery, and (ii) coordinating and implementing a program for marketing the
guest rooms, gaming operations, facilities, and services of The Cannery. Phase
II shall continue through the Opening Date and conclude when the following
services are completed by Manager:

 

4

 

4.2.1        Operating Budgets

 

Prepare,
revise and update from time to time the operating budgets for The Cannery and
its various departments, which budgets will form a part of the Pre-Opening
Plan.

 

4.2.2        Concepts For Food And
Beverage, Lounge And Other Specialized Facilities

 

Develop
operating concepts in consultation with Owner for food, beverage and lounge
facilities and other specialized facilities of The Cannery and assist Owner in
selecting and establishing menus, pricing and uniforms.

 

4.2.3        Staffing Tables

 

Prepare and
cause The Cannery to implement staffing tables, employment timetables, employee
hiring and training guidelines and other programs relating to staffing The
Cannery.

 

4.2.4        Staff Retention

 

Recruit and
hire on behalf of Owner at an appropriate time prior to the Opening Date a
general manager, a resident manager, if applicable, a human resources manager,
a food and beverage manager, a casino manager, a controller, a director of
sales, a head housekeeper, and other required department heads in accordance
with hiring criteria approved by Owner. Thereafter, with the assistance of such
department heads, Manager will cause to be hired on behalf of Owner a full
staff of employees for The Cannery.

 

4.2.5        Casino Concepts

 

Assist Owner
in developing casino operating concepts, selecting gaming equipment, preparing
a casino marketing strategy and player development programs, and developing a
credit policy and credit collection system.

 

4.2.6        Advertising and
Marketing

 

Prepare
pre-opening advertising, marketing and public relations budgets which will form
part of the Pre-Opening Plan, hire on behalf of Owner advertising and public
relations firms, and manage and coordinate their activities so as to develop a
cohesive and coordinated pre-opening program for advertising, marketing and
public relations, all subject to Owner’s approval.

 

4.2.7        Sales Personnel and
Sales Office

 

Hire on behalf
of Owner sales and marketing personnel; establish a sales and marketing
program, which may include, with Owner’s consent, participation in or
maintenance of one or more remote sales and marketing offices to attract group,
corporate and package tour accounts (collectively, the “Sales Office”)
for the purpose of selling and marketing rooms, meeting rooms, casino and
gaming activities and other facilities of The Cannery prior to the 

 

5

 

Opening Date and thereafter.
Manager may cause the Sales Office and its staff to be shared and used in
common with other casinos, hotels, or other related facilities under management
by Manager, or any of its Affiliates, or other compatible gaming, hospitality,
or travel industry organizations in order to promote operational efficiencies.

 

4.2.8        Centralized Bookings

 

Cause the
participation of The Cannery in a centralized telephone booking system,
including the use of “800” numbers, computerized bookings with
computer-assisted confirmations, or include such services as part of the
services provided by a “Flag” or franchise, if applicable.

 

4.2.9        Licenses and Permits

 

Assist Owner
in securing all approvals, licenses and permits necessary to own, open and
operate The Cannery (collectively, the “Licenses”), including any
approvals, licenses and permits required by the Gaming Authorities
(collectively, “Gaming Licenses”).

 

4.2.10      Market Studies

 

Cause the
update of any market study previously prepared on behalf of The Cannery, as may
be reasonably required prior to the Opening Date.

 

4.2.11      Accounting Systems

 

Establish
appropriate accounting systems, internal financial controls, financial
reporting systems, and such other systems and methods of reporting, including
those required by applicable gaming laws and regulations (the “Gaming Laws”)
as promulgated by such applicable governmental authority supervising gaming
activities (the “Gaming Authorities”), and as may be necessary or
appropriate for The Cannery and all of its activities.

 

4.2.12      Tenants and
Concessionaires

 

Assist Owner
in procuring tenants and concessionaires, taking into account local custom and
usage, including the leasing, and when applicable, the operating of sundry
shops, beauty shops, boutiques, health clubs, recreational facilities and such
other shops and facilities as may be deemed appropriate for the operation of
The Cannery.

 

4.2.13      Entertainment

 

Book
entertainment appropriate for the facilities of The Cannery.

 

5.             PHASE
III

 

During Phase
III, which shall commence upon the Opening Date, the Management Services will
include Manager having uninterrupted control over the operations of The
Cannery, including, but not limited to, the casino, hotel, entertainment and
restaurant facilities of The Cannery, and will, among other services, set
various rates and prices, issue casino credit, grant 

 

6

 

complimentaries, hire personnel
and select marketing and promotional campaigns. In addition and more
specifically, the following provisions shall govern certain of the duties and
obligations of Owner and Manager:

 

5.1          General
Duties of Manager

 

Manager shall
provide such management services as are usually and customarily performed by
managers of a “first-class neighborhood casino hotel” similar to The Cannery,
all at Owner’s expense, generally in accordance with the Pre-Opening Plan, as
applicable, and the Annual Plan (as defined below), and Manager shall:

 

5.1.1        Maximize Patronage

 

Use all
reasonable efforts to maximize patronage of The Cannery.

 

5.1.2        Prepare Budgets/Annual
Plan

 

Prepare the
Pre-Opening Plan and the Annual Plan in consultation with, and subject to the
approval of, Owner, and revise and update the Annual Plan as required.

 

5.1.3        Sales, Marketing and
Advertising

 

Develop and
update advertising, public relations, sales and marketing plans; implement and
supervise sales and marketing campaigns; develop tour packages; develop and
implement player development programs for gaming activities; book entertainment
appropriate for The Cannery; and generally promote The Cannery and its
facilities.

 

5.1.4        Centralized Booking
System

 

Participate in
and monitor centralized computerized booking and reservations systems, or, if
The Cannery is operated under a “Flag” or franchise and is participating in the
franchise reservation system, monitor same for efficiency and productivity.

 

5.1.5        Incentives and
Extensions of Credit to Promote Patronage

 

Consistent
with the Annual Plan and in conjunction with player development programs,
provide complimentary rooms, amenities and extensions of credit to The Cannery
patrons to promote gaming activities at The Cannery. In the exercise of its
reasonable business judgment and in conjunction with player development
programs, Manager shall obtain from patrons receiving credit, to the extent
permitted, and in accordance with the Gaming Laws, appropriate “markers” or “I.O.U.’s”
(all forms of credit, including the foregoing, collectively referred to as “Markers”),
in accordance with overall credit policies established for The Cannery from
time to time in consultation with Owner.

 

5.1.6        Employment of Staff

 

Arrange for
the employment, payment, supervision and discharge of all of The Cannery
employees in accordance with Owner-approved policies.

 

7

 

5.1.7        Purchase of Supplies;
Engage Professionals

 

Arrange as
necessary for the purchase of food, beverages, operating supplies, merchandise,
required FF&E and all other supplies necessary for the proper operation of
The Cannery as a “first-class neighborhood casino hotel”; arrange for the
engagement of advisors, consultants, or other professionals from time to time
as reasonably necessary to promote the sound and efficient operation of The
Cannery, including accountants, financial advisors, real estate advisors,
computer consultants, attorneys (subject to the limitations otherwise set forth
herein), and such other professionals as appropriate.

 

5.1.8        Maintenance

 

Arrange and
provide for the maintenance and repair of The Cannery in accordance with the
Annual Plan and standards consistent with The Cannery.

 

5.1.9        Refurbish

 

Make available
such of Manager’s personnel, and arrange for such other personnel that, in
Manager’s reasonable judgment, are needed to prepare, review and implement
plans and specifications for minor and routine alteration or refurbishment of
The Cannery as proposed by Owner from time to time; arrange for the design, selection,
and scope of replacement of FF&E.

 

5.1.10      Improve Operations

 

Improve
operations or eliminate operational problems as necessary in the manner deemed
appropriate by Manager.

 

5.1.11      Comply with Laws

 

Cause all such
other things to be done in or about The Cannery as shall be necessary to comply
with the Gaming Laws and requirements of the Gaming Authorities, and of any
other governmental authority having jurisdiction over the use, maintenance or
operation of The Cannery.

 

5.1.12      Utility Services

 

Arrange for
utility services, telephone, vermin extermination, security, trash removal and
other services necessary or reasonably required for the operation of The
Cannery as a “first-class neighborhood casino hotel.”

 

5.1.13      Collection of Revenue

 

Use all reasonable
efforts to collect all charges, rents, Markers and other amounts due on account
of The Cannery and cause the recovery and/or cause the surrender of space, as
applicable and necessary from The Cannery guests, patrons, tenants, subtenants,
parties providing exclusive services and concessionaires.

 

8

 

5.1.14      Legal Actions

 

Subject to the
limitations described hereafter, commence legal actions concerning The Cannery
on behalf of Owner as are necessary or reasonably required, in the opinion of
Manager, to preserve and protect the assets constituting The Cannery and to
collect sums due on account of the operation of The Cannery; advise Owner of
the commencement of material legal actions concerning The Cannery; and to
retain counsel, in the manner set forth hereafter on behalf of Owner and
Manager, in connection with any action or proceeding commenced by or against
Owner or Manager or concerning The Cannery.

 

5.1.15      Concessions and Leases

 

On behalf of
Owner, grant concessions and leases for services customarily subject to
concession or lease, if, in Manager’s reasonable opinion, the granting of such
concessions and leases is deemed necessary or desirable.

 

5.1.16      Licenses

 

Obtain and
maintain all Licenses as may be required by law in order to operate The
Cannery, including all alcoholic beverage facilities and gaming facilities as
shall be operated within The Cannery.

 

5.1.17      Accounting and Financial
Controls

 

Establish such
accounting systems and internal controls as may be required by applicable
Gaming Laws and render such periodic financial reports and other reports with
respect to operations of The Cannery from time to time as may be specifically
required hereunder.

 

5.1.18      Insurance

 

Advise Owner
with respect to, and assist Owner in obtaining, insurance coverage and
insurance policies hereafter described.

 

5.1.19      Consultation with Owner

 

At Owner’s
reasonable request, make Manager’s personnel available, upon reasonable notice,
to consult with and advise Owner concerning all policies and procedures
affecting the conduct of the business of The Cannery and to consider
suggestions with respect thereto made by Owner.

 

5.2          The
Plans

 

The following
provisions shall apply to the Pre-Opening Plan and the Annual Plan:

 

9

 

5.2.1        The Plans

 

Manager shall
submit a business plan for The Cannery to Owner for Owner’s approval not later
than thirty (30) days prior to the scheduled Opening Date (the “Pre-Opening
Plan”), and at least thirty (30) days prior to the beginning of each Fiscal
Year (as defined below) thereafter (the “Annual Plan” and together with
the Pre-Opening Plan, the “Plans”), in a form reasonably satisfactory to
Owner, which shall include for the ensuing Fiscal Year or portion thereof, as
applicable:

 

(i)            Profit & Loss
Statement: An estimated monthly profit and loss statement prepared
generally in accordance with GAAP generally with any variations based on the
Gaming Laws or applicable local laws or regulations being duly noted;

 

(ii)           Receipts &
Expenditures: A budget of receipts and expenditures required for the
operation of The Cannery pursuant to the terms of this Agreement, including
rates to be charged and expenditure proposals for:

 

(A)          payroll, including
wages, other remuneration, and fringe benefits;

 

(B)           food and beverage and
other operating supplies;

 

(C)           FF&E;

 

(D)          repair and maintenance;

 

(E)           revisions, alterations,
rebuilding, replacements, additions and improvements in and to The Cannery;

 

(F)           advertising, marketing
and public relations;

 

(G)           the engagement of
experts and consultants; and

 

(H)          other operations.

 

(iii)          Sales and Marketing
Plan: A plan for the sales, marketing, and public relations for The
Cannery.

 

(iv)          Assumptions: Each
Plan shall also contain, in narrative form, the assumptions used as the basis
of its preparation.

 

5.2.2        Procedure for Plan
Approval and Dispute Resolution

 

(i)            Disputed Item:
Owner shall provide to Manager its written approval or disapproval (including
written comments setting forth in reasonable detail the reasons for Owner’s
disapproval, if any) of each Plan not later than thirty (30) days after Owner’s
receipt of such Plan (the “Owner’s Review Period”). If Owner objects to
or disputes all or any portion of such Plan (a “Disputed Item”), Manager
shall attempt to reach an agreement with Owner with respect to the Disputed
Items. Both Owner and Manager will 

 

10

 

proceed with
due diligence and in good faith to attempt to reach agreement with respect to
the Disputed Items, If Owner and Manager have not reached an agreement with
respect to the Disputed Items within a thirty (30) day period after Manager’s
receipt of the Disputed Items (“Manager’s Review Period”), the parties
are required, no later than seven (7) days after the expiration of Manager’s
Review Period, to submit the Disputed Item(s) and all relevant information
pertaining thereto, without regard to the strict rules of evidence, to Piercy
Bowler Taylor and Kern, CPAs, of Las Vegas, Nevada (or, if the foregoing is
unable to serve, a similar accounting firm mutually agreeable to Owner and
Manager) (the “Determining Accountants”). Within thirty (30) days after
the receipt of the dispute for resolution, the Determining Accountants shall
determine the appropriate amount to be budgeted for the Disputed Item(s) based
upon all relevant factors, including the desire of Owner and Manager to
maintain and operate The Cannery in accordance with standards for a “first-class
neighborhood casino hotel,” the Gaming Laws, and applicable local laws and
customs (to the extent such local customs are consistent with the terms and
intent of this Agreement). The determination of the Determining Accountants
with respect to the Disputed Item(s) shall be final and conclusively binding
upon Owner and Manager. Pending Manager’s receipt of Owner’s approval of a Plan
pursuant to this Subparagraph 5.2.2(i) and/or a decision of the Determining
Accountants, Manager shall be entitled to operate The Cannery in accordance
with the proposed Plan submitted by Manager; provided, however, that Manager
shall endeavor in good faith to preserve Owner’s objections to any Disputed
Items pending the Determining Accountants’ decision. The final Plan resulting
from the Determining Accountant’s decision as to any Disputed Item(s) shall be
effective immediately upon receipt by Manager of the Determining Accountants’
written decision, but such Plan shall not affect any expenditures made or
committed to by Manager in accordance with the immediately preceding sentence.
Notwithstanding anything to the contrary provided herein, any disputes
pertaining to amounts budgeted for capital improvements which exceed the amount
available in any reserves shall not be submitted to the Determining Accountants
for resolution, and if Owner and Manager cannot reach an agreement with respect
to such expenditures for capital improvements, then: (i) unless Owner has
changed its position with respect to such capital improvement; or (ii) unless
the expenditure is of an emergency nature or necessary for the preservation of
safety to persons or property, the amount(s) provided by Owner for such capital
improvements shall be utilized in the Plan.

 

(ii)           Deemed Disapproval:
If and only if the managers of Owner (as the term “managers” is defined in
Nevada Revised Statutes 86.071) cannot consent to the approval of the proposed
plan pursuant to the Operating Agreement of Owner, as amended, Owner shall
provide Manager with notice of same within Owner’s Review Period and Owner
shall be deemed to have disapproved such Plan as submitted by Manager until
such time as Owner provides its written approval or disapproval of such Plan.
Pending Manager’s receipt of Owner’s approval of a Plan, pursuant to this
Subparagraph 5.2.2(ii), Manager shall be entitled to operate The Cannery in
accordance with the most recently prior approved Plan.

 

5.2.3        Compliance with
Modification to the Plans

 

During each
Fiscal Year, Manager shall, in the performance of the Management 

 

11

 

Services, use and employ its
reasonable efforts to generally comply with the Plan relating to such Fiscal
Year. Manager shall nevertheless retain the discretion to re-allocate part or
all of the amount budgeted with respect to any line item to another line item
in the budget provided the overall budget is maintained, and to make
expenditures not authorized under the applicable Plan under certain
circumstances if, in Manager’s good-faith judgment, such expenditures are
justifiable as a result of changes in circumstances, such as increased
bookings, increased staffing needs or emergency repairs. Notwithstanding the
foregoing, in no event shall Manager modify or adjust the Management Fees (as
defined below) as provided in the Plan without the prior written approval of
Owner.

 

5.2.4        Modification to the
Plan

 

If at any time
during any Fiscal Year Manager shall, in the performance of the Management
Services, determine the Plan relating to such Fiscal Year is no longer. appropriate
due to significant changes in conditions, circumstances or otherwise, Manager
shall submit to Owner for Owner’s approval a revised Plan (the “Revised Plan”)
for the remainder of such Fiscal Year, indicating in narrative form the reasons
why the assumptions used as the basis of preparing the original Plan for such
Fiscal Year are no longer valid. Owner shall give its written approval or
disapproval of the Revised Plan no later than thirty (30) days after receipt
thereof. If Owner does not deliver its written approval or disapproval of such
Revised Plan within such thirty (30) day period, then Owner shall be deemed to
have approved the Revised Plan as submitted by Manager. If Owner objects to all
or any portion of the Revised Plan, then Owner shall furnish Manager with its
written comments, in reasonable detail, setting forth the reasons for its
objections, and Owner and Manager shall attempt to agree with respect to the
items to which Owner objects. If an agreement is not reached before the
expiration of a thirty (30) day period immediately following the receipt of the
objections, the dispute shall be submitted to the Determining Accountants for
resolution in accordance with the procedures set forth in Subparagraph 5.2.2;
provided, however, that in connection with any disputes pertaining to capital
improvements which exceed the amount available in reserves, Owner’s reasonable
good faith decision shall control. Pending such final determination, the
Revised Plan shall be deemed the operating budget for the remainder of the
current Fiscal Year.

 

5.2.5        Emergency Expenditures

 

Whenever, by
reason of circumstances beyond the reasonable control of Manager, emergency
expenditures are required to be made to ensure that the operating standards of
a “first-class neighborhood casino hotel” are maintained or to protect life,
person, or property, Manager may make emergency expenditures beyond the
provisions of the applicable Plan without the prior written consent of Owner,
provided that: (i) the expenditures for any one such occurrence may not exceed
Twenty-Five Thousand Dollars ($25,000); and (ii) the aggregate of such
expenditures may not exceed One Hundred Thousand Dollars ($100,000) in any
Fiscal Year.

 

5.3          Legal
Proceedings

 

The following
provisions shall apply to any legal proceedings affecting The Cannery:

 

12

 

5.3.1        Insured Claims

 

All claims
against Owner or Manager (or Manager’s Affiliates who may be joined) arising
out of the operation of The Cannery that are covered in whole or in part by
insurance, shall be forwarded by Manager to the appropriate insurance carrier
or its agent for defense.

 

5.3.2        Non-Extraordinary
Proceedings

 

(i)            Claims: Manager
shall have the right to commence legal proceedings utilizing counsel designated
by Manager and approved by Owner of a non-extraordinary nature and involving
monetary claims of less than $50,000 relating to the operation of The Cannery,
such as collections, enforcement of contracts and leases and proceedings
against The Cannery guests, patrons, vendors, service contractors, and tenants.

 

(ii)           Defense: Other
than insured claims in which the liability carrier has the right to choose
counsel, Manager shall have the right to defend, through counsel designated by
Manager and approved by Owner, legal proceedings of a non-extraordinary nature
against Owner or Manager (or Manager’s Affiliates who may be joined) resulting
from the operation of The Cannery, such as guest claims for loss of property,
or injury to persons, and claims relating to employment at The Cannery.

 

5.3.3        Extraordinary
Proceedings

 

(i)            Claims: Manager
shall commence legal proceedings that are of an unusual nature or involving
monetary claims in excess of Fifty Thousand Dollars ($50,000) relating to the
operation of The Cannery upon Owner’s approval of the proceeding and counsel
designated by Manager. Manager shall furnish Owner with periodic status reports
with respect to such proceedings.

 

(ii)           Defense: All
claims against Owner or Manager (or Manager’s Affiliates who may be joined)
arising out of the operation of The Cannery of a more significant nature and
involving in excess of $25,000 and as to which any insurance company denies
coverage (or reserves rights as to coverage), shall be coordinated with Owner
and counsel designated by Manager shall be subject to Owner’s approval. Manager
shall furnish Owner with periodic status reports with respect thereto.

 

5.3.4        Coordinated Defense

 

In the event
that a suit is instituted against Manager or its Affiliates, in which Owner is
also named as a party defendant, Owner and Manager shall coordinate the defense
of such suit. Nothing herein contained shall be construed as preventing Owner
from joining with Manager in any legal proceedings or any action on behalf of
or against The Cannery, whether of an extraordinary or non-extraordinary
nature. If a conflict of interest arises between the legal positions taken by
Owner and Manager that the parties are unable to waive or otherwise agree upon,
then the parties may each engage counsel of their own choosing.

 

13

 

5.4          Centralized
Purchasing and Related Services

 

If any other
hotels, casino hotels, resorts, restaurants, casinos, gaming facilities, or
related facilities operated by Manager or its Affiliates maintain or adopt a
centralized purchasing system whereby operating supplies, food, FF&E,
consumables, computer services, insurance coverages under a group plan, public
relation services, sales and marketing services, group advertising, reservation
systems, or other items or services or programs are purchased or contracted for
on behalf of the participants from suppliers or providers designated by Manager
or its Affiliates, then Manager shall have the option (but not the obligation)
to cause The Cannery to participate in such centralized system for so long as
Manager is operating The Cannery provided that the cost to The Cannery of such
items, services, or programs (taking into account the quality of the items,
services, or programs purchased or contracted for and the payment terms
relating to such items, services, or programs) are not less favorable to The
Cannery than the cost that could be obtained by The Cannery from unaffiliated
third parties.

 

5.5          Bank
Accounts

 

The following
shall be applicable to all bank accounts maintained in connection with The
Cannery:

 

5.5.1        Hotel and Casino
Accounts

 

Manager shall
establish bank accounts bearing the name of The Cannery at a commercial bank or
banks selected by Manager in consultation with Owner that shall, in all
respects, have: (i) the capability of servicing all of the hotel (“Hotel”)
and casino (“Casino”) operations of The Cannery; (ii) a substantial
capital base; (iii) insured accounts, if applicable; and (iv) armored or other
available security services. The accounts shall be designated as the “Operating
Account” and the “Payroll Account,” and collectively, “The
Cannery Accounts.”

 

5.5.2        Deposit and Transfer of
Funds

 

All funds of
any kind or nature received either by Manager or Owner in connection with the
operation of The Cannery shall be deposited into the Operating Account. Payment
of all expenses and other expenditures in respect of The Cannery operations
shall be made from the Operating Account, except for payroll and
payroll-related expenditures, which shall be made from the Payroll Account.
Manager may transfer from the Operating Account to the Payroll Account such
monies as shall be required from time to time to satisfy The Cannery payroll
obligations. Subject to the requirements and prohibitions of applicable laws,
in no event will any of the monies deposited in The Cannery Accounts be
commingled with other funds. Manager may transfer between The Cannery Accounts
such funds which in Manager’s reasonable business judgment may be needed for
any area of operations. Checks and other documents of withdrawal on The Cannery
Account need be signed only by duly authorized representatives of Manager.

 

14

 

5.5.3        Interest

 

All interest,
if any, earned on The Cannery Accounts shall accrue to the benefit of Owner.
Manager shall make available to Owner, from time to time, when reasonably
requested by Owner, all records with respect to The Cannery Accounts.

 

5.5.4        Statements

 

Manager shall
use its best efforts to provide to Owner a report of the cash receipts of The
Cannery on a weekly basis or as soon as practicable. Manager shall provide a
monthly statement to Owner summarizing all activity in The Cannery Accounts and
reconciling the balances within The Cannery Accounts with the monthly financial
statements provided in accordance with Paragraph 5.7.

 

5.5.5        Fidelity Bonds

 

All of Owner’s
employees or representatives who are authorized signatories on any of The
Cannery Accounts shall be bonded or otherwise insured as to fidelity. The form
and content of such bond or insurance shall be subject to the reasonable
approval of Owner. Owner and Manager shall both be named as obligees or
insureds, as appropriate, under such bond or insurance policy and Manager and Owner
shall both have the right to enforce the terms of any such bond or insurance
policy.

 

5.5.6        Other Accounts, Funds
Of Owner

 

Manager shall
open such other bank accounts with respect to The Cannery as may be agreed upon
from time to time by Owner and Manager or as required by law. All funds in The
Cannery Accounts and all other accounts relating to The Cannery maintained
pursuant to this Agreement shall, at all times, be deemed to be the funds of
Owner.

 

5.6          Owner’s
Obligation to Provide Funding

 

The following
shall apply to the funding needs of The Cannery:

 

5.6.1        Funding an Essential
Requirement

 

It is of the
essence in this Agreement that Owner shall, at all times, maintain sufficient
funds in The Cannery Accounts, or other reserve accounts, to pay all duly and
properly incurred obligations of The Cannery on a current basis and to comply
with the Gaming Laws and any other applicable laws or regulations pertaining to
any accounts or required reserves. The parties acknowledge and agree that
Manager shall have no obligation to pay or satisfy any obligation or other cost
or expense of development, capitalization, property acquisition, operation,
employment, marketing or other costs and expenses of owning and operating The
Cannery that is the subject of this Agreement except such costs and expenses as
Manager may incur in connection with its own operations and obligations.

 

15

 

5.6.2        Initial Working Capital

 

Owner shall,
by a date reasonably in advance of the Opening Date and reasonably acceptable
to Manager and Owner, provide Manager with sufficient initial working capital
to commence Hotel operations and sufficient working capital or reserves as may
be required by the Gaming Authorities and lenders or mortgagees to commence
Casino operations and such sufficient additional Casino working capital as may
be adequate to meet the needs of the table betting limits appropriate to the
Casino operations (collectively, the “Reserves”).

 

5.6.3        Failure to Fund

 

If at any time
the available Reserves, or any other separate reserve, shall not be sufficient
or available to pay all of the current expenses, fees, bills or other charges
incurred in connection with the operation and maintenance of The Cannery,
including the payment of the Management Fee, all of which are to be paid from
the Operating Account, or to comply with applicable laws or regulations, or to
meet or maintain Reserve requirements at a level sufficient to maintain
established betting limits, Manager shall so advise Owner, in writing, and
shall provide Owner with a statement of the amount of funds necessary to cure
such insufficiencies. Thereupon, Owner shall immediately provide sufficient
monies to remedy any such insufficiency or shortfall. The failure of Owner to
provide such funds shall excuse Manager from only those Management Services
hereunder directly and materially affected by any such insufficiency or
shortfall during the occurrence thereof. Manager shall be free in its
reasonable business judgment to adjust betting limits to the extent permitted
under the Gaming Laws, in order to: first, meet payment obligations for
Operating Expenses; and second, continue gaming operations and table betting
limits to the extent and to the level permitted by the available Reserves.

 

5.7          Financial
Statements

 

The financial
statements for The Cannery shall be prepared in the following manner:

 

5.7.1        Monthly Statement

 

Manager shall
prepare and deliver to Owner, within twenty (20) days after the end of each
month, a profit and loss statement prepared generally in accordance with GAAP,
showing the results of the operation of The Cannery for the immediately
preceding month and for the Fiscal Year, including a comparison with the
projections contained in the applicable Plan. Such statement shall be prepared
from the books of account maintained by Manager and shall be in form and
substance reasonably satisfactory to Owner.

 

5.7.2        Annual Statement

 

Not later than
ninety (90) days immediately following the end of each Fiscal Year, Manager
shall cause to be prepared and delivered to Owner reasonably detailed financial
statements for such Fiscal Year (the “Annual Statements”), which shall
consist of: (i) a balance sheet; (ii) a profit and loss statement showing the
results of operations; (iii) a statement of earnings and retained earnings;
(iv) a statement of change in financial position; and (v) such other financial
statements or reports as are required by the Gaming Authorities or Gaming Laws.
Such financial statements shall be prepared by and shall contain a certificate
of the accountants, 

 

16

 

to the effect that, subject to
such acceptable qualifications as shall be contained therein, such financial
statements fairly present the financial position, results of the operations and
changes in financial position of The Cannery for the Fiscal Year, or other
reporting period then ended, in conformity with GAAP.

 

5.8          Payment
of Excess Funds to Owner

 

Upon the
written request of Owner, Manager shall pay to Owner all funds in the Operating
Account in excess of those reasonably required to meet all of the operating,
capital, and other Reserves imposed by any lender, and other financial
requirements of The Cannery, including, without limitation, all minimum working
capital requirements and Reserve requirements imposed by law. Manager, at the
request of Owner, shall establish such cash management procedures and accounts
from time to time at institutions directed by Owner, for the deposit of such
excess funds on behalf of Owner. All income derived therefrom shall accrue to
Owner.

 

5.9          Books,
Records and Accounts

 

Manager shall
keep full and adequate books of account and other records reflecting the
results of operations of The Cannery on an accrual basis, in accordance with
GAAP. The books of account and all other records relating to or reflecting the
operation of The Cannery shall be kept at The Cannery and shall be made
available to Owner and its representatives and any other supervisory or
regulatory authority having jurisdiction over Owner or The Cannery, including
the Gaming Authorities, at all reasonable times upon reasonable notice, for
examination, audit, inspection and transcription. All of such books and records
pertaining to The Cannery, including, without limitation, books of account,
guest records and front office records, shall at all times be the property of
Owner and shall not be removed from The Cannery by Manager without Owner’s
prior written consent. Upon any termination hereof, all such books and records
shall immediately be turned over to Owner, so as to ensure the orderly
continuance of the operation of The Cannery with copies (at the expense of
Owner) retained by Manager.

 

5.10        Employment
and Labor Issues

 

5.10.1      Compensation

 

Manager shall
establish employee compensation for nonexecutive employment. Owner shall have
the final determination with respect to any labor negotiations and by virtue of
its participation in the preparation and approval of each Plan, shall have
general authority over employee compensation. Executive compensation shall
generally conform with the estimates of the applicable Plan.

 

5.10.2      Employment Costs

 

All claims,
liabilities or obligations arising during or after the Initial Term and each
Subsequent Term with respect to the employees of the Cannery relating to
salaries, wages, compensation, overtime pay, holiday pay, vacation pay, raises,
bonuses, employee benefits, severance pay, grievances under union contracts,
unfair labor practice charges before any governmental labor board or authority,
worker’s compensation, disability, unemployment 

 

17

 

benefit, breach of employment
contracts, safety and health matters, and employment discrimination of any
nature whatsoever, and any and all court costs and legal fees incurred in
defending such claim (collectively, “Employment Costs”) shall be charged
to and payable by The Cannery as an Operating Expense (as defined below).

 

5.10.3      Disputes With and Claims
By Employees

 

The defense of
employment and labor claims (collectively, “Employment Claims”), to the
extent appropriate, may be defended at The Cannery’s administrative level with
the assistance of The Cannery’s human resources manager. Manager, on behalf of
Owner and itself, may engage employment and labor counsel as needed. The cost
of defending Employment Claims, as well as sums required for settlement,
reinstatement, back pay and the like, as required, shall be charged as an
Operating Expense. Settlements that exceed Twenty-Five Thousand Dollars
($25,000) shall be subject to Owner’s approval, which approval shall not be
unreasonably withheld.

 

5.11        Payment
of Taxes

 

On behalf of
Owner, Manager shall, as an expense of The Cannery and as reflected in the
applicable Plan, pay or cause to be paid, before they become delinquent, all
taxes, assessments, excises, levies, License and permit fees and other charges
(including all penalties and interest relating thereto, regardless of whether
such interest or penalties are reflected in the applicable Plan) general and
special, ordinary and extraordinary, foreseen and unforeseen, of any kind or
nature whatsoever, which shall or may during the term of this Agreement be
levied, assessed, charged and/or imposed by any public or quasi-public authority
upon, or accrue, or become due and payable, out of or on account of, or become
a lien on, the Land, The Cannery, FF&E, or other real and personal property
serving The Cannery, as applicable, and any related facilities, improvements or
personal property now or hereafter situated upon the Land or within The
Cannery.

 

5.12        Payment
of Mortgages

 

On behalf of
Owner, Manager shall, as an expense of The Cannery and as reflected in the
applicable Plan, pay or cause to be paid before they become delinquent, all
mortgages, ground leases, leases, and other liens secured, in whole or in part,
by a lien or leasehold on the Land, The Cannery, the FF&E and other real or
personal property serving The Cannery, as applicable, and any related
facilities, improvements or personal property now or hereafter situated upon
the Land or within The Cannery.

 

5.13        Compliance
with Laws

 

Manager shall:

 

(i)            Not use The Cannery or
any portion thereof, and Manager shall use diligent efforts to see that others
do not use The Cannery or any portion thereof, for any use or purpose in
violation of the Gaming Laws or of any other valid and applicable law or
regulation of any lawful authority having jurisdiction over The Cannery;

 

18

 

(ii)           In all respects use all
reasonable efforts to cause the use and operation of The Cannery to comply with
all valid and applicable laws and regulations of all applicable governmental
authorities;

 

(iii)          Comply with the
requirements of the City of North Las Vegas, Clark County, and the State of
Nevada, or any other governmental authority that may exercise governmental or
quasi-governmental control over The Cannery (provided that Manager shall have
no obligation not to so comply or to correct any alleged defect unless the same
is specifically called to the attention of Manager by Owner or by any such
governmental authority); and

 

(iv)          Comply with all
requirements of the Gaming Authorities and the Gaming Laws as modified from
time to time, as if such Gaming Laws were fully set forth herein.

 

5.14        Physical
Plant and Property Maintenance

 

The following provisions shall apply to The Cannery’s
physical plant, fixtures and personalty:

5.14.1      No Changes Without Owner’s
Consent

 

Except as set forth in Subparagraph 5.14.2, no changes
shall be made to The Cannery’s structure or any improvements now or hereafter
situated upon the Land or within The Cannery without Owner’s consent, which
consent Owner shall be entitled to withhold in its sole discretion; provided,
however, that such withholding of consent has not and will not cause The
Cannery to fall below a “first-class neighborhood casino hotel” level of
quality.

 

5.14.2      Alterations, Remodeling,
Demolition

 

Manager shall, as reflected in the applicable Plan,
have the right to alter, remodel and/or demolish The Cannery’s structure, any
improvements now or hereafter situated upon the Land or within The Cannery, or
to replace or add to any of the FF&E located within The Cannery without any
additional prior consent of Owner.

 

5.14.3      Repairs, Replacements,
Maintenance

 

Manager shall, from time to time and as reflected in
the applicable Plan, make such expenditures as an Operating Expense for repairs
and maintenance of FF&E, for the replacements, renewals and additions to
minor operating equipment, and for minor capital improvements (meaning those
capital improvements other than structural repairs and changes and
extraordinary repairs to or replacement of FF&E as necessary or required,
in Manager’s reasonable opinion) to keep The Cannery operating as a “first-class
neighborhood casino hotel.” If any repairs or maintenance shall constitute
corrective work for which Owner has received or is entitled to the benefit of
the guarantee or warranty of any builder, contractor or any supplier of labor
or material in connection with the construction of The Cannery or with respect
to the FF&E installed therein, then Manager may invoke such guarantees or
warranties in either Owner’s or Manager’s name and Owner shall cooperate fully
with Manager in the enforcement thereof. 

 

19

 

Owner reserves the right
to sell any of the FF&E located in The Cannery from time to time, provided
that Owner substitutes FF&E of like kind, quality and utility.

 

5.14.4      Required Structural
Repairs

 

If structural repairs or changes to The Cannery or
extraordinary repairs to, or replacement of, any FF&E shall be required
during the Initial Term or any Extension Term by the provisions of any mortgage
encumbering The Cannery, any loan agreement with respect to The Cannery, in
order to maintain The Cannery in the operating condition of a “first-class
neighborhood casino hotel,” by reason of any laws or regulations now or
hereafter in force, by order of any governmental authority or otherwise, or
because Manager and Owner jointly agree upon the desirability thereof, then, in
any such event, such repairs, changes or replacements shall be made by Owner,
or at the request of Owner, by Manager, at Owner’s sole expense, and shall be
made with as little hindrance to the operation of The Cannery as is reasonably
possible. Notwithstanding the foregoing, Owner shall have the right to contest
the need for any such repairs, changes or replacements required by any law,
regulation, or order of governmental authority and may postpone compliance
therewith, if so permitted by law.

 

5.15        Insurance

 

The following
provisions shall apply to insurance coverages for The Cannery:

 

5.15.1      Types of Coverages

 

Manager shall, at all times throughout the Initial
Term and each subsequent Extension Term, provide and maintain, or cause to be
provided and maintained, for The Cannery and related facilities as an expense
of The Cannery, the following types of insurance coverages, each of which are
stated as a minimum:

 

(i)            Property Insurance:
Building and structures are to be insured for “all risks of loss,” and are to
be covered for their full replacement cost or completed contract value
(including soft-cost coverage). Personal property, including inventories, is to
be insured for “all risks of loss” at current replacement value, including
coverages for transit, or installation, storage, etc. Unique or specific
high-valued property such as gold and silver objects, art objects, special
glass (windows or personal use items), statuary, blueprints, etc., should be
specifically insured for “all risks of loss” for their current values. Flood,
earthquake and/or other special perils and hazards are to be insured where
necessary or reasonably required by Manager.

 

(ii)           Business
Interruption: All risks coverage shall be provided for loss of gross
earnings including the Management Fee; flood, earthquake, riot, civil
commotion, expropriation, and other special perils or hazards are to be insured
to the extent appropriate and necessary. Similar insurance will be provided
during construction for loss of projected gross earnings.

 

(iii)          Boiler and Machinery
Insurance: Coverage shall be provided on a comprehensive form for all
boiler and machinery equipment, including air conditioning 

 

20

 

equipment, and
shall include all piping, valves, pressure tanks, hoses, lines and related
apparatus and shall include coverages for “on site,” “in transit,” and while
testing.

 

(iv)          Liability Insurance:

 

(A)          General Limits:
Coverage shall be obtained and maintained for comprehensive general liability,
automobile liability, employment liability, professional liability (if
applicable), and excess liability exposures as set forth on the attached Schedule
5.16 (except as modified below) for each occurrence and may include primary
policies and “umbrella” excess coverages.

 

(B)           Automobile Liability
Insurance: Automobile liability insurance coverage shall provide bodily
injury and property damage liability coverage as well as any “no-fault” or
other benefits required by law, uninsured motorists coverage, medical payments
coverage and other coverages, if required, and must include coverage for all
owned, non-owned, employee, and hired or borrowed vehicles. Underinsured and
uninsured motorists coverage limits shall be at least One Million Dollars
($1,000,000), each person, per occurrence. Medical payments coverage shall be
at least Five Thousand Dollars ($5,000), each person, per accident.

 

(C)           Employment Liability
Insurance: Coverage, to the extent available and appropriate, shall be
provided for claims asserted by employees against Owner or Manager in the
nature of wrongful discharge, discrimination, harassment and other work place
liabilities in an amount of not less than Five Hundred Thousand Dollars
($500,000), each loss.

 

(D)          Scope of Liability
Coverages: All coverages must provide for the defense of claims in any
jurisdiction or forum in which such claim may be initiated or pending. General
liability coverage shall be provided on a comprehensive occurrence form
insuring against claims for personal injury, sickness, disease or death and
property damage and shall include: premises and operations; innkeepers
liability, personal injury liability and medical coverage, contractual
liability for all oral or written agreements; safety deposit box liability (if
applicable); independent contractor liability; elevator liability; host liquor
liability; liquor liability or “dram shop” liability for Five Million Dollars ($5,000,000)
per occurrence for bodily injury and property damage; employees as insureds;
employee benefit liability; and such other coverage deemed reasonable and
necessary.

 

(v)           Worker’s
Compensation Insurance: Coverage shall be provided for worker’s compensation
benefits in accordance with local law, and custom. Employer’s liability
coverage shall be included for at least One Million Dollars ($1,000,000) for
each accident and Five Hundred Thousand Dollars ($500,000) for disease for each
person.

 

(vi)          Health Insurance:
Manager shall cause The Cannery to provide such health insurance coverages to
The Cannery employees as may be required by law or as may otherwise be mutually
agreed upon between Owner and Manager from time to time.

 

21

 

(vii)         Crime Insurance:
Manager shall cause The Cannery to provide coverage for money, securities, and
other property for loss inside and outside the premises including
transportation by messenger, in an amount of at least One Hundred Thousand
Dollars ($100,000), each loss. Coverages should include depositor’s forgery,
counterfeit currency and other such coverages as may be necessary. Employee
dishonesty coverage shall be provided in an amount of at least One Million
Dollars ($1,000,000) for each loss and will provide coverage for all employees
having access to money, securities, and other property.

 

5.15.2      Other Coverages

 

Manager shall cause The Cannery to provide such
coverages in respect of such other risks against which it is now, or hereafter,
may be customary to ensure in the operation of similar properties, having
regard for the nature of the business and the geographical, geological and
climatic nature of The Cannery’s location.

 

5.15.3      Concessionaire’s Coverage

 

Upon Manager granting any leases, licenses or
concessions in accordance with the provisions of this Agreement, Manager shall
require such tenants, licensees or concessionaires to carry such insurance as
is normal and customary for the relevant tenant, licensee or concessionaire,
and to furnish certificates evidencing such insurance in such reasonable
amounts as may be specified in the lease, license or concession or otherwise
agreed upon between Manager and the tenant, licensee and concessionaire.

 

5.15.4      General Requirements as
to Form of Policies

 

Owner, Manager, and any of their respective designated
Affiliates shall be named insureds and loss payees, as appropriate, in all
policies maintained pursuant to this Agreement, as their interests may appear,
and each such policy shall contain a waiver by the insurer of the rights of
recourse or subrogation by the insurer against Owner, Manager or their
designated Affiliates. All insurance shall be in such form and with such
companies as shall be satisfactory to Owner and Manager and shall comply with
the requirements of any mortgage encumbering The Cannery; provided, however,
that Owner shall use its best efforts to require any mortgage or loan agreement
relating to The Cannery to provide that the proceeds of insurance shall be made
available for the repair and restoration of The Cannery as a “first-class
neighborhood casino hotel.” Manager’s policies shall specify that they are
primary and if any other policies of insurance, including policies maintained
by Owner, are determined to apply to any claim, such other policy coverage
shall be deemed to be in excess of Manager’s policies, as applicable.

 

5.15.5      Claim Investigation

 

Manager shall promptly investigate or cause to be
investigated all accidents and claims for damage relating to the operation and
maintenance of The Cannery and related facilities, shall report to Owner any
such incident which is material, and Manager shall investigate or cause to be
investigated all damage to or destruction of The Cannery or related facilities
and shall report to Owner any such incident which is material, together with
the 

 

22

 

estimated cost of repair
thereof. In addition, Manager shall prepare any and all reports required by any
insurance company as a result of any such incident.

 

5.15.6      Premium Advance

 

If Manager, or any of its Affiliates, shall pay or
advance on behalf of Owner any insurance premiums or related insurance costs,
Owner shall repay same to Manager promptly upon demand of Manager.

 

5.15.7      Access to Insurance
Information

 

Manager shall at all times make available to Owner or
Owner’s insurance agents or insurance brokers, all information relating to
existing coverages, claims histories as applicable, copies of policies,
certificates, binders and the like. Manager further authorizes Owner and its
insurance agents or brokers, to obtain such information directly from Manager’s
insurance agents, brokers, and insurance carriers, and hereby grants to Owner
and its insurance agents or brokers full access to all such information.

 

5.15.8      Quality of Insurance
Carrier

 

All insurance coverages shall be written by insurance
companies that are “A.M. Best rated,” “A/XI” or higher, if applicable, or such
companies shall meet similar or equivalent criteria or otherwise be acceptable
to Owner taking into account such carriers’ financial strength, good
reputation, and ability to obtain reinsurance. Carriers shall be authorized to
do business in the jurisdiction of the situs of The Cannery and shall have
demonstrated a ready willingness to defend and settle claims or actions brought
in jurisdictions other than the situs of The Cannery.

 

6.             MANAGER’S
FEES

 

Owner shall
pay to Manager the following fees, as compensation for the Management Services
to be rendered hereunder:

 

6.1          Phase I

 

No fees shall
be paid to Manager for Management Services rendered during Phase I.

 

6.2          Phase II

 

No fees shall
be paid to Manager for Management Services rendered during Phase II.

 

6.3          Phase III

 

6.3.1        Management Fee

 

For Management Services rendered during Phase III,
encompassing operation of The Cannery on and after the Opening Date, for each
Fiscal Year or fraction thereof during the Initial Term and each Extension
Term, Owner shall pay Manager, and Manager shall accept from Owner, an annual
management fee (the “Management Fee”) equal to the sum of three percent 

 

23

 

(3%) of the Gross
Revenues (as defined below), plus five percent (5%) of EBITDA (as defined
below), derived from the operation of The Cannery.

 

6.3.2        Maximum Management Fee

 

Notwithstanding Subparagraph 6.3.1 and other than as
set forth in Subparagraph 6.3.3, in no event shall the Management Fee exceed
One Million Dollars ($1,000,000) in any Fiscal Year or fraction thereof (the “Maximum
Amount”); provided, however, such Maximum Amount shall be adjusted
annually, as of the beginning of each Fiscal Year, in an amount equal to the
change in the Consumer Price Index for all Urban Consumers from the first day
of the immediately preceding Fiscal Year as determined by the Bureau of Labor
Statistics, U.S. Department of Labor; and further provided, however, that the
Maximum Amount shall never be decreased.

 

6.3.3        Change of Control

 

Should Owner cease to own The Cannery at any time
during the Initial Term or any subsequent Extension Term or in the event that
Owner suffers a Change in Control (as defined below), the provisions of
Subparagraph 6.3.2 shall not apply to limit the amount payable as the
Management Fee in any Fiscal Year subsequent to the date of such Change of
Control.

 

6.4          Definitions

 

In addition to
the definitions provided throughout this Agreement, the following definitions
shall be applicable to this Agreement.

 

6.4.1        Affiliate

 

“Affiliate” means, as to any person, any other
person that directly or indirectly through one or more intermediaries controls,
or is under common control with, or is controlled by, such person. As used in
this definition, “control” (and the correlative terms “controlled by”
and “under common control with”) shall mean possession, directly or
indirectly, of power to direct or cause the direction of management or
policies, whether though ownership of membership interests, by contract, or
otherwise. As used in this definition, “person” shall mean any natural
person, corporation, limited liability company, general partnership, limited
partnership, proprietorship, other business organization, trust, union or
association.

 

6.4.2        Change in Control

 

“Change in Control” means an event which
results in change in the ownership of more than fifty percent (50%) of the
membership interests of Owner.

 

6.4.3        EBITDA

 

“EBITDA” means the amount determined by
subtracting Operating Expenses from Gross Revenues for a Fiscal Year.

 

24

 

6.4.4        GAAP

 

“GAAP” means generally accepted accounting
principles applied on a consistent basis to the hotel and gaming industry
generally in accordance with the Uniform System of Accounts.

 

6.4.5        Gross Revenues

 

“Gross Revenues” means, for any Fiscal Year,
all receipts, revenues, income and proceeds of sale of every kind or nature
derived directly or indirectly from the operation of The Cannery, and services
rendered to, and rentals of all kinds received from tenants, subtenants, licensees
and occupants of space located in The Cannery, including, without limitation,
all receipts, revenues and income derived from: guest rooms, food and beverage
operations, bar and lounge operations; gross revenues from Casino Operations
less sums paid out as winnings (“Gaming Revenues”); meeting room
facilities, space rentals to stores and other tenants; proceeds from any “business
interruption” or “use and occupancy” policy of insurance; and any amount
recovered in any legal action or proceeding or settlement thereof which arose
out of the operation of The Cannery, which amount under GAAP, is properly
included as an income item. All of the foregoing shall be calculated on an
accrual basis, whether in cash or in credit. The following revenues are
excluded from the definition of Gross Revenues:

 

(i)            All taxes collected as
direct taxes from guests or patrons of The Cannery or in respect of any
business conducted in The Cannery to be paid to duly constituted taxing
authorities having jurisdiction, such as local gaming taxes, or withholding
taxes assessed against gaming patrons’ winnings, if applicable, sales taxes, or
“bed” taxes;

 

(ii)           Tips and service
charges collected for payment to employees; and

 

(iii)          Proceeds of sales of
property, real and personal, other than sales in the ordinary course of The
Cannery’s business.

 

6.4.6        Fiscal Year

 

“Fiscal Year” means and coincides with and is
identical to the calendar year for all purposes; provided, however, it is
understood that the first Fiscal Year under the Agreement may be a partial
calendar year.

 

6.4.7        Operating Expenses

 

“Operating Expenses” means all operating
expenses related to The Cannery for the applicable Fiscal Year determined in
accordance with GAAP, including, without limitation, Employment Costs, employer’s
liability and similar operating insurance premiums, License fees, professionals’
fees pertaining to operational matters, the Management Fee, and all real estate
and personal property taxes and assessments. The following shall be excluded
from the definition of Operating Expenses: debt service, if any; lease payments
or finance or carrying charges for FF&E; depreciation; and the interest on
monies borrowed by Owner.

 

25

 

6.5          Time of
Payment of Management Fee

 

The Management
Fee shall be paid by Owner to Manager on the first day of each calendar month,
for the preceding calendar month. Owner hereby authorizes Manager to pay itself
the Management Fee, monthly, from the Operating Account. The aggregate of the
Management Fee paid monthly shall also be adjusted annually between Owner and
Manager based upon the Annual Statements within thirty (30) days of the
rendition of each Annual Statement for the prior Fiscal Year.

 

6.6          Reimbursement
for Costs And Expenses

 

Owner shall at
all times be responsible for providing sufficient working capital for the
operation of The Cannery, and Manager shall be reimbursed by Owner for the
costs and expenses directly incurred by Manager in connection with the
development and operation of The Cannery, including, but not limited to:

 

6.6.1        Owner’s Responsibility
for Working Capital and Costs

 

Owner shall at all times make available sufficient
working capital to finance and support the uninterrupted and efficient
development, construction, pre-opening and operation of The Cannery as a “first-class
neighborhood casino hotel” including, without limitation, those funds and
expenses enumerated in Paragraph 5.7 hereof and as projected in the Plans.

 

6.6.2        Manager’s Statements
for Out-of-Pocket Costs

 

During Phases I and II, Owner shall reimburse Manager
for all reasonable out-of-pocket costs and expenses paid or incurred by Manager
on behalf of Owner, provided such costs and expenses were approved by Owner in
writing prior to incurrence, or were costs and expenses authorized in the
operative Plan.

 

6.6.3        Reimbursement Out of
Operating Account

 

During Phase III, Manager may reimburse itself from
the Operating Account for all reimbursable out-of-pocket costs and expenses
paid or incurred by Manager on behalf of Owner, provided such costs and
expenses were approved by Owner in writing prior to incurrence, or were costs
and expenses authorized in the operative Plan.

 

6.7          Place of
Payment

 

The Management
Fee and reimbursement of out-of-pocket costs and expenses shall be paid to
Manager in U.S. Dollars at Las Vegas, Nevada or such other reasonably
convenient situs as may be reasonably determined by Manager from time to time.

 

26

 

7.             ASSIGNMENT

 

7.1          By Manager

 

Manager shall
have no right to assign this Agreement or any interest herein without the prior
written consent of Owner.

 

7.2          By Owner

 

Owner shall
have the right to assign this Agreement as follows:

 

7.2.1        Assignment to Vestin

 

(i)            Owner shall have the
right, immediately following the execution of this Agreement, to assign all of
its right, title and interest, but not its obligations, in and to this
Agreement to Vestin Mortgage, Inc. (“Vestin”), a Nevada corporation, to
be evidenced by a separate Assignment of Management Agreement in form and
substance to be determined by Owner and Vestin.

 

(ii)           Upon an Event of
Default (as defined in that certain Construction Loan Agreement by and between
Owner and Vestin, dated May 16, 2002 (the “Loan Agreement”), and Owner’s
failure to cure such Event of Default in accordance with the provisions of the
Loan Agreement, Vestin shall have the right, in its sole and absolute
discretion, to appoint a receiver in the place and stead of Manager (the “Appointment
of Receiver”). Upon the Appointment of Receiver, all of Manager’s
obligations under the Agreement shall immediately terminate and Manager shall
have all remedies for default as set forth in Subparagraph 11.3 herein.

 

7.2.2        Assumption By Assignee

 

In addition to the provisions of Subparagraph 7.2.1,
Owner shall have the right to assign this Agreement in connection with any sale
or other disposition of Owner’s interest in The Cannery and related facilities,
without the consent of Manager, and Owner shall thereupon be relieved of any
obligation or liability arising from and after such assignment, provided that:

 

(i)            The assignee of Owner’s
interest assumes, in writing, all of the obligations of Owner hereunder;

 

(ii)           Written notice of such
assignment is given by Owner to Manager within five (5) business days after the
making of such assignment, along with an executed duplicate counterpart of the
instrument of assignment pursuant to which the assignee assumed all of the
obligations of Owner hereunder;

 

(iii)          Approval is given of any
such assignee, Transfer and Transferee (as defined below) by the Gaming
Authorities; and

 

(iv)          The conditions of
Subparagraph 7.2.3 are fully met.

 

27

 

7.2.3        Criteria as to
Permitted Assignee

 

Owner warrants and represents to Manager that any
proposed assignee or transferee of Owner or any investor in The Cannery in
connection with: (i) a sale or other disposition of The Cannery; (ii) a sale or
transfer of any legal, beneficial or equitable interest of Owner in The Cannery
of any kind in whole or in part; or (iii) an investment or transfer of any kind
in The Cannery or in any entity making up the ownership of The Cannery (all of
the foregoing being collectively referred to hereinafter as a “Transfer,”
and the parties and any entity in which they have an interest to whom such
assignment or Transfer is being made, or the party or entity making the
investment shall be collectively referred to as a “Transferee”), shall
meet the following conditions:

 

(i)            Each such Transferee
shall be subject to prior review and approval by the Gaming Authorities;

 

(ii)           Each such Transferee
shall be a person of good character, good reputation for honesty and integrity
and shall have that degree of financial stability appropriate to an investment
in The Cannery;

 

(iii)          Each such Transferee and
Owner, as applicable, shall submit to the Gaming Authorities on a timely basis
all requested information regarding the Transfer and Transferees, and all
documentation, statements and applications or such appropriate forms as may be
required, providing sufficient information regarding each such Transferee’s
financial stability, integrity, and good reputation for honesty and integrity
(collectively, the “Transfer Support Documents”);

 

(iv)          Owner shall cause the
Transfer Support Documents and any other pertinent information reasonably
sufficient to permit Manager to conduct its own due diligence investigation of
each such Transferee to be delivered to Manager in order for Manager to ascertain
to its satisfaction that each such Transferee meets the Gaming Authorities
criteria; and

 

(v)           No Transfer shall be
consummated until the Gaming Authorities have approved of each such Transfer
and Transferee, as required by the Gaming Authorities.

 

7.2.4        Failure of Transferee
to Meet Criteria

 

In no event shall Owner have the right to complete any
Transfer to any Transferee who does not meet the standards of good character,
good reputation for honesty and integrity and financial stability as required
by the Gaming Authorities and the approval by the Gaming Authorities of such
Transfer to such Transferee shall be a precondition to any such Transfer. The
failure to obtain such approval of the Gaming Authorities for such Transfer to
any Transferee shall constitute a material default by Owner (and successor to
Owner, if applicable) of this Agreement.

 

28

 

7.2.5        Manager’s Right to
Terminate

 

Notwithstanding the foregoing, it is agreed that
Manager shall have the right to terminate this Agreement in the event of a
permitted Transfer by Owner to any Transferee, if Manager so elects.

 

8.             DAMAGE AND
DESTRUCTION

 

If The Cannery
or any portion thereof shall be damaged or destroyed at any time during the
Initial Term or any Extension Term by fire, casualty or other cause to such an
extent that it would be either impossible or impracticable, in Owner’s sole
discretion, to repair The Cannery or to continue to operate The Cannery as a “first-class
neighborhood casino hotel,” then Owner may terminate this Agreement by giving
written notice of termination to Manager, whereupon this Agreement shall be
terminated and of no further force and effect, except with respect to the
duties, liabilities and obligations of the parties which arose or accrued prior
to termination and continue to exist, or have cause to exist, post-termination.
Otherwise, this Agreement shall remain in full force and effect, and Owner
shall promptly rebuild The Cannery as a “first-class neighborhood casino hotel”
at its sole cost and expense.

 

9.             CONDEMNATION

 

If the entire
The Cannery shall be taken in eminent domain or condemnation proceedings, or
the equivalent thereto, or if such portion of The Cannery shall be taken in
eminent domain or condemnation proceedings, or the equivalent thereto, to such
an extent that in the sole discretion of Owner, it is impossible or
impracticable to continue to operate The Cannery, then, in either of such
events, Owner shall have the right to terminate this Agreement by giving written
notice of such termination to Manager and upon the giving of such notice, this
Agreement shall be terminated and of no further force and effect, except with
respect to the duties, liabilities and obligations of the parties which arose
or accrued prior to termination and continue to exist, or have cause to exist,
post-termination. In the event of termination under this Paragraph 9, such
termination shall be effective upon the date of taking. The provisions of this
Paragraph 9 with respect to termination shall be applicable if Owner makes a
conveyance in lieu of condemnation, in which event the day of the execution and
delivery of such conveyance shall be the date of termination. If this Agreement
is not terminated in accordance with the terms of this Paragraph 9, then this
Agreement shall remain in full force and effect and Owner shall promptly
rebuild or restore The Cannery as a “first-class neighborhood casino hotel” at
its sole cost and expense.

 

10.          NON-DISTURBANCE

 

Owner hereby
covenants and agrees, and it is the essence of this Agreement and as an
inducement to execution, that Manager, subject to the terms and conditions of
this Agreement, shall have uninterrupted control of and the exclusive
responsibility for the operation of and the right to operate and manage The
Cannery during the Initial Term and each Extension Term. Except as set forth in
this Agreement, Owner will not interfere or involve itself with the day-today
operation of The Cannery. Owner further agrees to take such action as is from
time to time necessary to preserve such rights in Manager for the Initial Term
and each Extension Term. Manager acknowledges that it is a fiduciary with
respect to Owner, and agrees that it will 

 

29

 

discharge its fiduciary duties
and responsibilities in the control and operation of The Cannery in good faith
and for the purposes of maximizing Gross Revenues; provided, however, that in
no event shall Owner make any claim against Manager on account of any alleged
errors of judgment made in good faith in connection with operation of The
Cannery, unless such error results from the gross negligence or recklessness of
Manager.

 

11.          DEFAULT

 

11.1        Default By
Manager

 

The following
events shall be deemed to be “Events of Default” by Manager under this
Agreement:

 

11.1.1      Non-Compliance with Terms

 

Manager shall fail to comply, in any material respect,
with any of the terms, conditions, provisions or covenants of this Agreement to
be complied with by Manager and Manager shall not cure such failure within
thirty (30) days after written notice thereof given by Owner to Manager, or, if
such failure is not reasonably susceptible of being cured within said thirty
(30) day period, if Manager shall fall to commence to cure such failure within
said thirty (30) day period, or, having commenced, shall thereafter fail to
complete the curing of such failure with reasonable diligence.

 

11.1.2      Insolvency

 

Manager shall become insolvent, shall make a transfer
in fraud of its creditors, or shall make an assignment for the benefit of
creditors.

 

11.1.3      Bankruptcy Filing

 

Manager shall file a petition under any section or
chapter of the United States Bankruptcy Code, as amended, or under any similar
law or statute of the governmental authority, or if Manager shall be adjudged
bankrupt or insolvent in proceedings filed against Manager thereunder.

 

11.1.4      Appointment of Receiver

 

A receiver or trustee shall be appointed for Manager
or for all or substantially all of the assets of Manager, and such appointment
is not vacated or otherwise caused to be set aside within ninety (90) days from
the occurrence thereof.

 

11.1.5      Loss of License

 

Manager’s License to operate The Cannery shall at any
time be suspended for any reason by the Gaming Authorities and Manager shall
fail to cure such suspension within thirty (30) days from such suspension, or
Manager or any holder of any equity interest in Manager shall be temporarily or
permanently prohibited from deriving any benefit from the operations of The Cannery
as a direct result of the investigation or License process by the Gaming
Authorities 

 

30

 

and Manager shall fail to
cure, or take substantial steps to cure if said default cannot reasonably be
cured within said thirty-day period, such prohibition within thirty (30) days
thereafter.

 

11.2        Default By
Owner

 

The following
events shall be deemed to be Events of Default by Owner under this Agreement:

 

11.2.1      Failure to Fund

 

Owner shall fail to provide sufficient funds in the
Operating Account to pay all of the current expenses, fees, bills or other
charges in connection with The Cannery, or to maintain the required working
capital deposits or Reserves as required herein, within thirty (30) days after
receiving written request therefor by Manager.

 

11.2.2      Non-Compliance with Terms

 

Owner shall fail to comply in any material respect
with any other term, provision or covenant of this Agreement to be complied
with or performed by Owner, and shall not cure such failure within thirty (30)
days after written notice thereof from Manager to Owner; or, if such failure is
not susceptible of being cured within said thirty (30) day period, if Owner
shall fail to commence to cure such failure within said thirty (30) day period,
or, having commenced, shall, thereafter, fail to complete the curing of such
failure with reasonable diligence.

 

11.2.3      Insolvency

 

Owner shall become insolvent, shall make a transfer in
fraud of its creditors, or shall make an assignment for the benefit of its
creditors.

 

11.2.4      Bankruptcy Filing

 

Owner shall file a petition under any bankruptcy law
or similar law for a relief of debtor or if Owner shall be adjudged bankrupt or
insolvent in proceedings filed against Owner thereunder.

 

11.2.5      Appointment of Receiver

 

A receiver or trustee shall be appointed for Owner or
for all or substantially all of the assets of Owner and such appointment is not
vacated or otherwise caused to be set aside within ninety (90) days from the
occurrence thereof.

 

11.2.6      Loss of License

 

Owner’s License to own or operate The Cannery shall at
any time be suspended for any reason by the Gaming Authorities and Owner shall
fail to cure such suspension within thirty (30) days from such suspension, or
Owner or any holder of any equity interest in Owner shall be temporarily or
permanently prohibited from deriving any benefit from the operations of The
Cannery as a direct result of the investigation or License process by the
Gaming Authorities 

 

31

 

and Owner shall fail to
cure such prohibition within thirty (30) days thereafter, provided that any
such suspension or prohibition shall not be as a direct result of Manager’s
properly funded operation of The Cannery or caused by any acts or omissions of
Manager, its officers, employees, and agents.

 

11.3        Remedies for
Default

 

Should either
party default in its obligations under the terms, conditions and provisions of
this Agreement, the other party shall have the right to terminate this Agreement
without any prior notice to the defaulting party, and to enforce this Agreement
and further, shall have such other rights and remedies on account of such
default, both at law and in equity (including the right to seek injunctive
relief without the posting of a bond which bond requirement, if applicable, is
hereby waived) as is provided, established or allowable under applicable law.

 

11.4        Automatic
Termination

 

Upon the
transfer of The Cannery at a trustee sale or other foreclosure proceeding by or
on behalf of Vestin and pursuant to that certain Deed of Trust and Security
Agreement and Fixture Filing executed and delivered to Vestin by Owner, this
Agreement shall automatically and immediately terminate and Manager shall have
all remedies for default as set forth in Subparagraph 11.3 herein.

 

12.          MANAGEMENT
STANDARDS

 

Manager shall
exclusively manage and maintain The Cannery in a manner utilizing standards and
procedures which are comparable to the management of a “first-class
neighborhood casino hotel” similar in quality to existing casino hotels located
in Clark County, Nevada, such as the Fiesta Hotel Casino, subject to such
adjustments as Manager in its reasonable discretion deems necessary. Manager
shall establish such standards and procedures in its reasonable discretion,
subject to standards and procedures required by law.

 

13.          COOPERATION
OF OWNER AND MANAGER

 

Owner and
Manager shall cooperate fully with each other during the Initial Term and each
Extension Term to facilitate the performance by Manager of Manager’s
obligations and responsibilities set forth in this Agreement and to procure and
maintain all necessary Licenses. Owner shall provide Manager with such
information pertaining to The Cannery necessary to the performance by Manager
of its obligations hereunder as may be reasonably and specifically requested by
Manager from time to time.

 

14.          NON-COMPETITION

 

For a period
commencing on the date hereof and ending on the first anniversary of the
expiration or termination of this Agreement (the “Non-Compete Period”),
Manager, for itself and its Affiliates, agrees not to, except as set forth
below, directly or indirectly, either as an employee, employer, consultant,
agent, principal, partner, member, stockholder, officer, director, manager or
in any other individual or representative capacity, engage or participate in
any business or activity involving the development, construction, or operation
of a “first-class 

 

32

 

neighborhood casino hotel”
within a three (3) mile radius of The Cannery; provided, however, that nothing
in this Paragraph 14 shall prevent Manager, or any member, manager, officer,
employee or Affiliate of Manager, from: (i) engaging or participating in such
business or activity at the request of and on behalf of either Owner or Cannery
Casino Resorts, LLC, a Nevada limited liability company (“Cannery Casino
Resorts”); or (ii) owning beneficially a membership interest in Cannery
Casino Resorts; or (iii) owning beneficially, as an investment, up to an
aggregate of one percent of a class of equity securities that is publicly
traded and registered under Section 12 of the Securities and Exchange Act of
1934. Manager, for itself and its Affiliates, represents to Owner that the
enforcement of the restrictions contained in this Paragraph 14 would not be
unduly burdensome to it.

 

Manager, for
itself and its Affiliates, agrees that a breach or violation of the
non-competition covenant set forth in this Paragraph 14 (the “Covenant”)
shall entitle Owner, as a matter of right, to an injunction issued by any court
of competent jurisdiction, restraining any further or continued breach or
violation of the Covenant. Such right to an injunction shall be cumulative and
in addition to, and not in lieu of, any other remedies to which Owner may show
itself justly entitled. Further, during any period in which Manager or any of
its Affiliates are in breach of the Covenant, the time period of the Covenant
shall be extended for an amount of time that Manager or any of its Affiliates
are in breach hereof, with the effect that the total duration of the Covenant
shall be the original period plus the actual amount of time that Manager or any
of its Affiliates is in breach.

 

The
representations and Covenant contained in this Paragraph 14 will be construed
as ancillary to and independent of any other provisions of this Agreement, and
the existence of any claim or cause of action of Manager against Owner or any
member or manager of Owner, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Owner of the Covenant.

 

Further,
Manager, for itself and its Affiliates, agrees that the Covenant set forth
herein is appropriate and reasonable when considered in light of the nature and
extent of the business conducted by Owner. Manager, for itself and its
Affiliates, acknowledges and agrees that: (i) Owner would not enter into this
Agreement unless Manager, for itself and its Affiliates, agreed to the
Covenant; and (ii) it has read and understands the terms of this Agreement,
including, without limitation, the Covenant, and has been provided the
opportunity to discuss this Agreement and the Covenant with Owner and counsel
of its choice and has carefully considered the nature and extent of the
restrictions upon it and the rights and remedies conferred upon Owner
hereunder. Manager, for itself and its Affiliates, hereby acknowledges and
agrees that Owner has a legitimate interest in protecting its business and that
the Covenant is reasonable in limitations as to time, scope, geographical area
and activity, and is fully required and is no greater than necessary to protect
the legitimate business interests of Owner. Manager, for itself and its
Affiliates, further agrees that the Covenant is not unduly harsh or oppressive
to Manager, or any of its Affiliates, in curtailing their legitimate efforts to
earn a livelihood and does not stifle the inherent skill and experience of
Manager, or any of its Affiliates, or confer a benefit upon Owner disproportionate
to the detriment to Manager, or any of its Affiliates, or harm in any manner
whatsoever the public interest, or operate as a bar to the sole means of
support of Manager or any of its Affiliates.

 

33

 

Manager, for
itself and its Affiliates, agrees that if the Covenant should be held by any
court or other constituted legal authority to be void or unenforceable in any
particular area or jurisdiction, then Manager and Owner shall consider this
Agreement to be modified so as to eliminate that particular area or
jurisdiction or scope as to which the Covenant is held to be void or otherwise
unenforceable, and as to all other areas and jurisdictions covered by this
Agreement, the terms hereof shall remain in full force and effect as originally
written. Further, if the Covenant should be held by any court or other
constituted legal authority to be effective in any particular area or
jurisdiction or scope only if said Covenant is modified to limit its duration or
scope, then Manager and Owner shall consider such Covenant to be amended and
modified with respect to that particular area or jurisdiction so as to comply
with the order of any court or other constituted legal authority, and as to all
other political subdivisions of the United States, the Covenant shall remain in
full force and effect as originally written.

 

In addition to
such other remedies, including the injunctive relief described above, Owner may
be entitled to if Manager, or any of its Affiliates, shall violate any legally
enforceable provision of this Paragraph 14, Manager shall pay as and for
liquidated damages to Owner an amount equal to $50,000 for each month, or
portion thereof, that Manager, or any of its Affiliates, is in violation of any
legally enforceable provision of this Paragraph 14. If Owner is not entitled to
seek both liquidated damages and injunctive relief, Owner shall be entitled to
elect, in its sole discretion, between the two remedies.

 

15.          INDEMNIFICATION

 

15.1        Manager’s
Indemnification

 

Except as
otherwise set forth herein, Manager covenants and agrees that it will protect,
keep and defend Owner forever harmless and indemnified against and from any
penalty or damage or charges imposed for any violation of any laws or
ordinances, including, without limitation, Gaming Laws, occasioned by the
negligence of Manager or those holding under Manager and that Manager will at
all times protect, indemnify, defend and save and keep Owner harmless against
and from any and all claims and against and from any and all loss, cost, damage
or expense, including reasonable attorneys’ fees, arising out of any negligence
of Manager in any respect to comply with and perform all the requirements and
provisions hereof; except to the extent that any penalty, damage, charge, loss,
cost or expense is caused by the negligent or wanton or willful acts of Owner
or its members, managers, officers, employees, or agents. Without limiting the
generality of the foregoing, and with the inclusion of the same exceptions as
set forth above, Manager covenants and agrees that it will protect, keep and
defend Owner forever harmless and indemnified against any and all debt, claim,
demand, suit or obligation of every kind, character and description that may be
asserted, claimed, filed or brought against Owner where such claim arises out
of or is asserted in connection with any Management Services, including,
without limitation, any claim by any subtenant, guest, licensee or invitee of
Manager. This indemnity does not apply to loss or damage occasioned by defects
in The Cannery. Nothing in this Paragraph 15 shall override the right of
Manager to employ counsel as an Operating Expense and assert defenses as set
forth in Paragraph 5.3 above. Notwithstanding the foregoing, this indemnity
does not apply to any claim, loss, cost, damage, expense, penalty or obligation
in the event such claim, loss, cost, damage, expense, penalty or obligation is
within the scope of or is the subject of one or more policies of insurance
obtained by Manager or 

 

34

 

Owner. Under no circumstances
shall the liability of Manager for indemnification hereunder exceed the amount
of One Million Dollars ($1,000,000). The foregoing indemnity shall survive the
expiration or early termination of this Agreement.

 

15.2        Owner’s
Indemnification

 

Except as
otherwise set forth herein, Owner covenants and agrees that it will protect,
keep and defend Manager forever harmless and indemnified against and from any
penalty or damage or charges imposed for any violation of any laws or
ordinances, including, without limitation, Gaming Laws, occasioned by the
negligence of Owner or those holding under Owner, and that Owner will at all
times protect, indemnify, defend and save and keep Manager harmless against and
from any and all claims and against and from any and all loss, cost, damage or
expense, including reasonable attorneys’ fees, arising out of any negligence of
Owner in any respect to comply with and perform all of the requirements and
provisions hereof; except to the extent that any penalty, damage, charge, loss,
cost or expense is caused by the negligent or wanton or willful acts of Manager
or its members, managers, officers, employees or agents. Without limiting the
generality of the foregoing, and with the inclusion of the same exceptions as
set forth above, Owner covenants and agrees that it will protect, keep and
defend Manager forever harmless and indemnified against any and all debt,
claim, demand, suit or obligation of every kind, character and description that
may be asserted, claimed, filed or brought against Manager where such claim
arises out of or is asserted in connection with Owner’s ownership of The
Cannery or the Land. Notwithstanding the foregoing, this indemnity does not
apply to loss or damage occasioned by defects in The Cannery and Owner shall
not indemnify Manager as to any claim, loss, cost, damage, expense, penalty or
obligation in the event such claim, loss, cost, damage, expense, penalty or
obligation is within the scope of or is the subject of one or more policies of
insurance obtained by Owner or Manager. Under no circumstances shall the
liability of Owner for indemnification hereunder exceed the amount of One
Million Dollars ($1,000,000).

 

15.3        Defense
Counsel

 

Defense
counsel engaged by Manager or Owner, as indemnitor, shall be reasonably
acceptable to Manager and Owner, as indemnitee. Without limiting the generality
of the foregoing, indemnitee shall be promptly provided with copies of all
claims and pleadings, as well as correspondence, memos, documents and discovery
with respect thereto, unless within the scope of any applicable privilege,
relating to any such matters. Indemnitee shall be given prior written notice of
all meetings, conferences and judicial proceedings and shall be afforded an
opportunity to attend and participate in same. Indemnitee shall have the right
to engage independent counsel, at its sole expense, to represent indemnitee as
additional and/or co-counsel in all such proceedings, trials, appeals and
meetings with respect thereto.

 

16.          CONFIDENTIAL
INFORMATION

 

Manager agrees
for itself and its Affiliates, agents, representatives and consultants to hold
in the strictest confidence and not to disclose to any person, entity, party,
firm or corporation (other than agents or representatives of Manager who are
also bound by this Paragraph 16) without the prior express written consent of
Owner (except as such disclosures are required by applicable securities laws,
Gaming Laws, Gaming Authorities or under order of a court of 

 

35

 

competent jurisdiction) any of
Owner’s confidential data, whether related to The Cannery or to general
business matters, which shall come into their possession or knowledge. In
addition, Manager agrees that it shall cause all documents, drawings, plans or
other materials developed by Owner in connection with The Cannery to be
returned to Owner upon the termination or expiration of this Agreement and that
Manager shall not make use of such information in connection with The Cannery
or any other undertaking by Manager without the prior express written consent
of Owner.

 

Owner agrees
for itself and its Affiliates, agents, representatives and consultants to hold
in the strictest confidence and not to disclose to any person, entity, party,
firm or corporation (other than agents or representatives of Owner who are also
bound by this Paragraph 16) without the prior express written consent of
Manager (except as such disclosures are required in applications or by
applicable securities laws, Gaming Laws, Gaming Authority or under order of a
court of competent jurisdiction) any of Manager’s confidential data, whether
related to The Cannery or to general business matters, which shall come into
their possession or knowledge. In addition, Owner agrees that it shall cause
all documents, drawings, plans or other materials developed by Manager in
connection with The Cannery to be returned to Manager upon the termination or
expiration of this Agreement and that Owner shall not make use of such
information in connection with The Cannery or any other undertaking by Owner
without the prior express written consent of Manager.

 

17.          HAZARDOUS
MATERIALS

 

“Hazardous
Materials,” as used in this Agreement, shall be any substance or material
if defined or designated as a hazardous or toxic substance, or other similar
term, by any federal, state or local law, statute, regulation, or ordinance
affecting the Land and The Cannery.

 

Prior to date
of the substantial completion of the construction of The Cannery, Owner will
provide Manager with an Environmental Site Assessment Phase I Investigation
relating to the Land and The Cannery. Owner will represent and warrant after
inquiry and investigation prior to the completion of construction, that: (i)
any handling, removing, transportation, storage, treatment or usage of
Hazardous Materials or toxic substances that has occurred in connection with
the Land or The Cannery to date has been in compliance with all applicable
federal, state and local laws, regulations and ordinances; (ii) no leak, spill,
release, discharge, emission or disposal of Hazardous Materials or toxic
substances has occurred in connection with the Land or The Cannery to date; and
(iii) the Land and The Cannery is free of asbestos, toxic or Hazardous
Materials as of the date that the term of this Agreement commences.

 

Owner agrees
to comply with all federal, state and local environmental and real estate laws,
including the Americans With Disabilities Act, relating to Owner’s ownership of
The Cannery. Manager agrees to comply with all federal, state and local
environmental and real estate laws, including the Americans With Disabilities
Act, relating to Manager’s management and operation of The Cannery. All
expenses incurred in such compliance shall be Operating Expenses.

 

Without
limiting the provisions of Paragraph 15.2, Owner expressly agrees to indemnify,
defend and hold Manager and its managers, members, officers, employees and
agents harmless 

 

36

 

from any claims, judgments,
damages, penalties, fines, costs, liabilities (including sums paid in
settlements of claims) or loss including reasonable attorneys’ fees, consultant
fees, and expert fees (consultants and experts to be selected by Manager) which
arise during or after the Initial Term or any Extension Term as a result of any
breach of Owner’s representation and warranty contained in this Paragraph 17 or
as a result of Owner’s failure to perform its covenant contained in this
Paragraph 17. Without limiting the generality of the foregoing, the
indemnification provided by this Paragraph 17 shall specifically cover costs
incurred in connection with any investigation of site conditions or any clean-up,
remedial, removal or restoration work required by any federal, state or local
governmental agency or political subdivision because of the presence or
suspected presence of asbestos, other toxic or Hazardous Materials in the Land
or The Cannery, or the soil, groundwater or soil vapor on or under The Cannery,
unless the Hazardous Materials are present solely as a result of the actions of
Manager, its managers, members, employees or agents. The foregoing indemnity
shall survive the expiration or earlier termination of this Agreement.

 

Without
limiting the provisions of Paragraph 15.1, Manager expressly agrees to
indemnify, defend and hold Owner and its managers, members, employees and
agents harmless from any claims, judgments, damages, penalties, fines, costs,
liabilities (including sums paid in settlements of claims) or loss, including
reasonable attorneys’ fees, consultant fees, and expert fees (consultants and
experts to be selected by Owner) which arise during or after the Initial Term
or any Extension Term as a result of any breach of Manager’s representation and
warranty contained in this Paragraph 17. Without limiting the generality of the
foregoing, the indemnification provided by this Paragraph 17 shall specifically
cover costs incurred in connection with any investigation of site conditions or
any clean-up, remedial, removal or restoration work required by any federal,
state or local governmental agency or political subdivision because of the
presence or suspected presence of asbestos, other toxic or Hazardous Materials
in the Land or The Cannery, or the soil, groundwater or soil vapor on or under
The Cannery if the Hazardous Materials, or any portion thereof, are present
solely as a result of the actions of Owner, its members, managers, employees or
agents. The foregoing indemnity shall survive the expiration or earlier
termination of this Agreement.

 

18.          ESTOPPEL
CERTIFICATES

 

Owner and
Manager shall, at any time and from time to time upon not less than ten (10)
days’ prior written request by the other, execute, acknowledge and deliver a
statement in writing certifying that:

 

(i)            This Agreement is
unmodified and in full force and effect (or, if modified, that the same is in
full force and effect, as modified, stating the modifications);

 

(ii)           The date to which
payments have been made under this Agreement; and

 

(iii)          To the knowledge of
Owner or Manager, as the case may be, no Event of Default hereunder on the part
of the other party exists (except that if any such Event of Default does exist,
the certifying party shall specify such Event of Default), it being intended
that any such statements delivered pursuant to this Paragraph 18 may be relied 

 

37

 

upon by any
prospective purchaser, assignee, or mortgagee of Owner’s interest in The
Cannery, or of either party’s interest in this Agreement.

 

19.          NOTICES

 

All notices, offers or other communications required or permitted to be
given pursuant to this Agreement, including, without limitation, financial
statements delivered pursuant to Paragraph 5.7 and cash reports delivered
pursuant to Subparagraph 5.5.4, shall be in writing and shall be considered as
properly given or made: (i) upon the date of personal delivery (if notice is
delivered by personal delivery); (ii) upon the date of delivery, as confirmed
electronically (if notice is delivered by facsimile transmission and
immediately follows with another manner of notice as set forth in this
Paragraph 19); (iii) upon the date which is one (1) business day after deposit
with a nationally recognized overnight courier service (if notice is delivered
by a nationally recognized overnight courier service); or (iv) upon the date
which is three (3) business days after deposit with the U.S. Postal Service,
postage prepaid certified mail, return receipt requested (if notice is given in
such manner), and in any case addressed to the parties at the addresses set
forth after their respective names below, or at such different addresses as
they shall have advised the other in writing in accordance herewith.

 

To Owner:             The Cannery Casino
and Hotel, LLC

5255 Boulder
Highway

Las Vegas,
Nevada  89122

Attn: William
C. Wortman

Facsimile:
(702) 458-8397

 

With a copy to:    Schreck
Brignone Godfrey

300 South
Fourth Street, Suite 1200

Attn: Frank
Schreck

Facsimile:
(702) 382-8135

 

To Manager:         Millennium
Management Group II, LLC

5255 Boulder
Highway

Las Vegas,
Nevada  89122

Attn: William
C. Wortman

Facsimile:
(702) 458-8397

 

With a copy to:    Schreck
Brignone Godfrey

300 South
Fourth Street, Suite 1200

Attn: Frank
Schreck

Facsimile:
(702) 382-8135

 

With a copy to:    Kummer
Kaempfer Bonner & Renshaw

3800 Howard
Hughes Parkway, 7th Floor

Las Vegas,
Nevada  89109

Attn: David
Barksdale

Facsimile:
(702) 796-7181

 

38

 

With a copy to:    Mendenhall,
LLC

4420 South
Decatur Boulevard

Las Vegas,
Nevada  89103

Attn: Robert
Mendenhall

Facsimile:
(702) 251-4891

 

20.          APPROVAL

 

In any
instance where the approval or consent of Owner or Manager is required or
permitted hereunder, such approval or consent shall be in writing and such
consent or approval, except as may otherwise be specified in this Agreement,
shall not be unreasonably withheld or delayed.

 

21.          RELATIONSHIP
OF PARTIES

 

Nothing set
forth in this Agreement shall constitute, or be construed to be or to create, a
partnership, joint venture or agency relationship between Owner and Manager
with respect to the management of The Cannery.

 

22.          NO WAIVER

 

No waiver of
any covenant, term or condition of this Agreement by either party shall be
construed as a waiver of a subsequent breach of the same covenant, term or
condition. The consent or approval by either party to or of any act by the
other party requiring such consent or approval shall not be deemed to waive or
render unnecessary consent to or approval of any subsequent similar act.

 

23.          CHOICE OF
LAW AND FORUM

 

This Agreement
shall be governed and construed in accordance with the laws of the State of
Nevada, regardless of the places of its negotiation or execution and without
regard to principles of conflicts of law. The parties acknowledge that there
are substantial and not isolated connections with the State of Nevada and that
each of them is subject to the jurisdiction of the courts of such State
pursuant to Nevada’s “Long-Arm” Statute.

 

Each of the
parties submits to the exercise of personal jurisdiction over them in the State
of Nevada in connection with any action or proceeding brought by either party
relating to, arising from, or based on this Agreement, and each of the parties
waives any objection to the exercise of personal jurisdiction over each of them
in connection with any such action or proceeding.

 

The parties
agree that any litigation or court action of any kind relating to, or arising
from, or based on this Agreement shall be filed in Clark County, Nevada.

 

If either
party shall institute legal proceedings against the other party based on a
cause of action or arising from this Agreement, the non-prevailing party in
such proceeding shall pay the costs and expenses incurred by the prevailing
party in such proceedings including reasonable attorneys’ fees and any and all
costs and fees incurred on appeal of any lower court decision.

 

39

 

24.          ENTIRE
AGREEMENT; MODIFICATION

 

No employee,
agent or representative of either party has the authority to bind the other
party to any oral additions, modifications, representations or warranties
concerning this Agreement. This Agreement contains the entire agreement between
the parties with respect to its subject matter, and no agreement shall be
effective to change, modify or terminate this Agreement in whole or in part,
unless such agreement is in writing and duly signed by the authorized
representative of the party against whom enforcement of such change,
modification or termination is sought. This Agreement shall not be construed
more strictly against one party than against the other merely by virtue of the
fact that this Agreement may have been physically prepared by one of the
parties, or such party’s counsel, it being agreed that both parties and their
respective counsel have mutually participated in the negotiation and
preparation of this Agreement.

 

25.          SURVIVAL AND
CONTINUATION

 

Notwithstanding
the termination of this Agreement, all terms, provisions and obligations of
either party contained herein which, in order to give them effect and to
accomplish their intent or purpose, need to survive such termination shall, by
agreement between Owner and Manager, survive and continue until they have been
fully satisfied or performed.

 

26.          DESCRIPTIVE
HEADINGS

 

The
descriptive headings set forth in this Agreement are inserted for convenience
and for reference only and do not in any way limit or amplify the terms and
provisions of this Agreement.

 

27.          SUCCESSORS
AND ASSIGNS

 

The terms,
provisions and covenants contained in this Agreement shall apply to, inure to
the benefit of, and be binding upon, the parties hereto and their respective
successors and permitted assigns, except as otherwise provided in this
Agreement.

 

28.          FORCE
MAJEURE

 

The terms and
conditions of this Agreement (with the exception of the obligation of Owner to
pay any fee, cost or expense or to transfer any funds or fund any Reserve or
working capital reserve or fund the amounts required by the terms of this
Agreement or with regard to matters pertaining to an approved Transfer or
Transferee) shall be subject to force majeure. Neither Owner nor Manager shall
be considered in default in the performance of its obligation hereunder, if
such performance is prevented or delayed because of war, hostilities,
revolution, civil commotion, strike, lock-out, epidemic, fire, earthquake,
wind, flood, or because of any law, order, proclamation, regulation, or
ordinance of any governmental authority, or because of any act of God or any
other cause whether of similar or dissimilar nature beyond the reasonable
control of the party affected.

 

40

 

29.          AUTHORIZATION

 

Each of the
parties hereto represents to the other party that it has full power and
authority to execute this Agreement and to be bound by and shall perform in
accordance with the terms hereof. On request, each party shall furnish to the
other evidence of such authority.

 

30.          COUNTERPARTS

 

Any number of
counterparts of this Agreement may be executed and delivered and each shall be
considered an original and together they shall constitute one agreement.

 

31.          SEVERABILITY

 

If any of the
provisions of this Agreement or its application shall be held by any court,
regulatory agency, or other governmental authority having competent
jurisdiction over this Agreement, to be invalid, illegal, or unenforceable in
any respect, the parties shall forthwith cure such invalidity to the extent permitted
by law, and notwithstanding the fact that such provisions may be held to be of
no force and effect, the validity, legality, and enforceability of the
remaining provisions contained herein and any other application thereof shall
not in any way be affected or impaired thereby. If any such provision or
portion thereof is declared invalid, illegal, or unenforceable, the parties to
this agreement intend that, in lieu of the invalid, illegal, or unenforceable
provision or portion thereof, there be added to this agreement a provision or
portion thereof as similar in substance to such invalid, illegal, or
unenforceable provision or portion thereof as may be possible so as to
accomplish the purposes of such invalid, illegal, or unenforceable provision or
portion thereof.

 

41

 

IN WITNESS
WHEREOF, Owner and Manager have hereunto set their hands and seals on the day
and year first above written.

 

	
   

  	
  OWNER:

  
	
   

  	
   

  
	
   

  	
  The Cannery Casino and Hotel, LLC, a

  
	
   

  	
  Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
   

  	
  By: Cannery Casino Resorts, LLC, a

  Nevada limited liability company, its 

  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  William C.
  Wortman

  
	
   

  	
   

  	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  William
  Paulos

  
	
   

  	
   

  	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Robert
  Mendenhall

  
	
   

  	
   

  	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MANAGER:

  
	
   

  	
   

  
	
   

  	
  Millennium Management Group II, LLC, a

  
	
   

  	
  Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  William C. Wortman

  
	
   

  	
   

  	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  William J. Paulos

  
	
   

  	
   

  	
   

  	
   

  	
  Manager

  
								

 

42

 

IN WITNESS
WHEREOF, Owner and Manager have hereunto set their hands and seals on the day
and year first above written.

 

	
   

  	
  OWNER:

  
	
   

  	
   

  
	
   

  	
  The Cannery Casino and Hotel, LLC, a

  
	
   

  	
  Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
   

  	
  By: Cannery Casino Resorts, LLC, a

  Nevada limited liability company, its

  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ William
  C. Wortman

  
	
   

  	
   

  	
   

  	
   

  	
  William C.
  Wortman

  
	
   

  	
   

  	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ William
  Paulos

  
	
   

  	
   

  	
   

  	
   

  	
  William
  Paulos

  
	
   

  	
   

  	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Robert
  Mendenhall

  
	
   

  	
   

  	
   

  	
   

  	
  Robert
  Mendenhall

  
	
   

  	
   

  	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MANAGER:

  
	
   

  	
   

  
	
   

  	
  Millennium Management Group II, LLC, a

  
	
   

  	
  Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ William
  C. Wortman

  
	
   

  	
   

  	
   

  	
   

  	
  William C. Wortman

  
	
   

  	
   

  	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ William
  J. Paulos

  
	
   

  	
   

  	
   

  	
   

  	
  William J.
  Paulos

  
	
   

  	
   

  	
   

  	
   

  	
  Manager

  
								

 

43

 

EXHIBIT “A”

 

PROPERTY DESCRIPTION FOR THE LAND

 

A-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}]]