MASTER LEASE

Exhibit 10.40

MASTER LEASE

BETWEEN

THE CITY OF BOONVILLE, MISSOURI

AND

DAVIS GAMING BOONVILLE, INC.

TABLE OF CONTENTS

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MASTER ^. LEASE

BETWEEN

THE CITY OF BOONVILLE, MISSOURI

AND

DAVIS GAMING BOONVILLE, INC. _,

THIS LEASE (this “Lease”) is made on July 18, 1997 by the City of Boonville, Missouri, a Missouri third class city (the “City”) and Davis Gaming Boonville, Inc. (f/k/a Gold River’s Boonville , Resort, Inc.) a Nevada corporation (“Tenant”).

The City and Tenant entered into a Master Agreement for Boonville, Missouri Riverboat Gaming Project dated March 7, 1994 and an Amendment to Master Agreement for Boonville, Missouri Riverboat Gaming Project dated November 10, 1994, a Second Amendment to Master Agreement dated May 1, 1995, a Third Amendment to Master Agreement and Amendment to Development Agreement dated February 5, 1996, all as amended and restated pursuant to an Amended and Restated Master Agreement dated as of July 18, 1997 (collectively the “Master Agreement”) for the development of the Riverboat Gaming Project on the Project Site, a map of which is attached as Exhibit A .

Under the Master Agreement, Water Street or Tenant is to acquire the Project Site and transfer the Project Site, as acquired, to the City and construct the Land Based Project pursuant to the Master Agreement and this Lease. The City is to lease the Project Site to Tenant pursuant to this Lease.

Any capitalized term used in this Lease and not defined in this Lease shall have the same meaning given, such term in the Master Agreement except that the term “Project Site” shall for purposes of this Lease only refer to that portion of the Project Site as defined in the Master Agreement which is actually acquired by Tenant and transferred to the City. It is intended that for purposes of this Lease, the Project Site shall change as additional property is acquired and transferred to the City by Tenant under the Master Agreement and references to Project Site shall refer to only those parcels of property otherwise within the entire Project Site as contemplated in the Master Agreement and that at the time have been transferred to or are owned by the City.

ARTICLE 1
LEASED PREMISES

1.1           Leased Premises . The City leases to Tenant, and Tenant leases from the City, the Project Site, as it may exist from time to time, when acquired by the Tenant or Water Street and conveyed to the City. The legal description of the Project Site as of the date of this Lease is attached as Exhibit B . As additional parcels become part of the Project Site, the legal description of such parcels will be added to Exhibit B . The parties acknowledge that, in accordance with Section 1.3 of the Master Agreement, the City’s rights in the Railroad Portion may arise under the Railroad Lease or by acquisition and that the City’s rights in the DNR Portion may arise under the DNR Lease or by acquisition. The parties acknowledge that the City does not currently own the entire Project Site and that it is the sole responsibility of Tenant and Water Street to acquire and transfer the Project Site to the City, but only to the extent required under the Master Agreement.

1.2           Permitted Use . The sole permitted use of the Project Site is the construction and operation of an integrated gaming and entertainment facility. Tenant will operate the Riverboat Gaming Project in a manner consistent with (i) the terms of the Master Agreement and this Lease, and (ii) all applicable laws, rules and regulations.

1.3           Physical Condition . Except as otherwise provided in this Lease, - Tenant accepts the Project Site, as is, without any representations or warranties of any kind by the City.

1.4           Lease Term . The term (the “Term”) of this Lease shall commence on the date hereof (the “Commencement Date”) and unless terminated earlier, pursuant to this Lease, shall expire on the date (the “Expiration Date”) ninety-nine (99) years after the Commencement Date, except that with respect to those parts of the Subleased Portions which are subject to a Prime Lease, if the Prime Lease for such Subleased Portion is earlier terminated, then the Expiration Date with regard only to such Subleased Portion shall be the date on which the Prime Lease for such Subleased Portion terminates. For purposes of this Lease and the Project Documents, the term “Opening Date” shall mean the date on which the Missouri Gaming Commission first issues a license to Tenant to open the Riverboat/Floating Facility for business to the public.

1.5           Designation of Home Dock .  Pursuant to all applicable Missouri gaming laws, including but not limited to Chapter 313, RSMo., Tenant designates the City as its sole and exclusive “home dock” (as that term is defined in Chapter 313, RSMo, as amended). This designation shall not prevent the temporary docking of the Riverboat/Floating Facility at another location if the Project Site is damaged during the period of repairs as long as Tenant is using its best efforts to complete such repairs as expeditiously as

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possible, nor shall this designation prevent Tenant from acquiring additional riverboats and designating different home docks for the different boats.

ARTICLE 2
DEVELOPMENT AND CONSTRUCTION

2.1           General . Tenant will, at its sole cost, develop the Riverboat Gaming Project pursuant to the Project Documents and in the Phases set forth herein. The parties acknowledge that the Phases or any combination thereof may be pursued in whole or in part concurrently.

2.2           Construction of Improvements . Construction of all improvements in accordance with the Project Documents (including all exhibits and attachments to the Project Documents) is a condition of this Lease.

2.3           Riverboat Gaming Project Site Plan . Tenant, at its cost, will prepare plans and specifications for the Riverboat Gaming Project and the Land Based Project (the “Riverboat Gaming Project Site Plan”), including all buildings, infrastructure and other construction, consistent with the Project Documents. Tenant will submit the Riverboat Gaming Project ^. Site Plan for review and approval by the City. Prior to the date Tenant commences construction of the Riverboat Gaming Project, the Riverboat Gaming Project Site Plan will be attached to this Lease as Exhibit C and thereby made a part of this Lease, subject to subsequent revisions as are approved by the City in its reasonable discretion in the event of any substitution between the Preferred Site Configuration and the Alternate Site Configuration. The construction of the Riverboat Gaming Project will be completed substantially in accordance with the Riverboat Gaming Project Site Plan and all applicable laws, rules and regulations. Tenant will obtain the written approval of the City before making any material changes in the Riverboat Gaming Project Site Plan. The City agrees to act promptly and reasonably with respect to all requests for approval of the Riverboat Gaming Project Site Plan and/or modifications thereof.

2.4           Project Site . Tenant, with the City’s assistance, at Tenant’s sole cost, will prepare all plats, obtain all vacation of streets, easements, construction permits, floor plans, certificates, utility consents for relocation of utilities, surveys and perform all other actions necessary for the development and operation of the Riverboat Gaming Project. Tenant will grant to the City, in a form which is reasonably acceptable to Tenant and the City, all easements reasonably requested by the City with respect to the Project Site and normally granted to a City in a development. All streets within the Project Site shall be public streets provided that all land up to the curb line will remain, pursuant to this Lease, leased to Tenant.

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2.5           Construction of the Land Based Project .

2.5.1      Tenant will complete construction of the Land Based Project in two phases, Phase I/II and Phase III.

2.5.1.1           INTENTIONALLY DELETED

2.5.1.2           No later than June 23, 1997, Tenant will fund the Acquisition Escrow Account (as provided in the Acquisition Escrow Agreement) in the amount provided for in Section 2.5.2 of the Master Agreement. No later than the date on which Tenant begins construction of Phase I/II, Tenant will place into the Construction Escrow Account the sum of One Million Dollars ($1,000,000). During Phase I/II, and in all event (but subject to Section 17.5) no later than April 3, 2001, Tenant will (i) acquire and/or complete construction of the Riverboat/Floating Facility; (ii) complete the acquisition of the Project Site; and (iii) complete the construction of Phase I/II in accordance with the Project Documents and the final Riverboat Gaming Project Site Plan.

2.5.1.3           Phase III will occur in accordance with the terms hereof on an ongoing basis as cash for capital expenditures is generated from operations; provided, however, Phase III must be completed, subject to the provisions of Section 17.5 of this Lease, no later than April 3, 2000. Before proceeding with any Phase III Project Increments, Tenant will, pursuant to the Construction Escrow Agreement, fund the Construction Escrow Account with respect to the applicable Project Increment to the extent not then completed. Tenant, will allocate three and one half percent (3.5%) (“Applicable Gross Revenues”) of the gross revenues (“Gross Revenues”) from the Riverboat Gaming Project to pay for the Project Increments and will, within twenty days after each March 31, June 30, September 30 and December 31 occurring between the Opening Date and the date on which the Construction Escrow Account has been fully funded with respect to all of the Project Increments not then completed, deposit into the Construction Escrow Account the full amount of the Applicable Gross Revenues realized during the calendar quarter then ended. Tenant will provide to the City copies of all reports filed with the Missouri Gaming Commission relating to Gross Revenues as well as monthly financial statements and yearly audited financial statements for the Riverboat Gaming Project. Once the allocated and Applicable Gross. Revenues are sufficient to fund a Project Increment, the construction of which at such time is then appropriate in Tenant’s

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reasonable business judgment for the overall benefit of the Riverboat Gaming Project, Tenant shall submit and diligently pursue the building or other applicable permit. No later than thirty (30) days after the issuance of a building or other applicable permit from the City of Boonville to construct a Project Increment, Tenant shall (i) fund the Construction Escrow Account as provided in the Construction Escrow Agreement to the extent not then fully funded with respect to such Project Increment from deposits of Applicable Gross Revenues (it being understood that in all events and regardless of insufficient Applicable Gross Revenues, Phase III must be completed, including payment in full of the Additional Payment, subject to Section 17.5, no later than April 3, 2000); (ii) enter into Construction Contracts with contractors reasonably acceptable to the City; and (iii) commence construction of such Project Increment. This procedure will be repeated with respect to all Project Increments. Without affecting the obligation of the Developer to complete Phase III no later than April 3, 2000, including payment in full of the Additional Payment, subject to Section 17.5, in the event that all of the Project Increments have been completed other than payment of the Additional Payment, the funds thereafter from time to time on deposit in the Phase III Construction Escrow Subaccount shall be disbursed to the City as installments of the Additional Payment on each April 30, July 31, October 31, and January 31 until the Additional Payment has been paid in full.

2.5.2       Tenant will not commence construction of any portion of the Land Based Project or any Project Increment until the following conditions have been satisfied or waived with respect to such portion or Project Increment by the City, in addition to any other conditions and requirements imposed by this Lease or the Project Documents:

2.5.2.1     the City approves the Riverboat Gaming Project Site Plan;

2.5.2.2     INTENTIONALLY DELETED

2.5.2.3     Tenant has funded the Construction Escrow Account in the amount of $1,000,000 and has obtained all payment, performance and completion bonds in form and amount approved by the City as required under Article 6 of this Lease;

2.5.2.4     Tenant has obtained all permits and other governmental approvals necessary to commence construction;

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2.5.2.5     Tenant has provided to the City copies of the contract with each of its contractors. In addition, but not as a condition of commencement of construction, Tenant shall provide to the City a copy of each subcontractor’s contract within ten (10) days of receipt by Tenant of each contract;

2.5.2.6     the Commencement Date has occurred;

2.5.2.7     the applicable portions of the Project Site have been transferred to the City; and

2.5.2.8     the contracts (the “Contracts”) with any architect, other design professional and any general contractor shall provide, in form and substance reasonably satisfactory to the City, for the assignment of the Contracts to the City as security to the City for Tenant’s performance under this Lease, and Tenant shall provide the City copies of the Contracts, together with the further agreement of the respective parties to such Contracts, that if this Lease is terminated, the City may, at its election, use the Riverboat Gaming Project Site Plan as well as any other plans and specifications relating to the Land Based Project upon the payment of any future sums due to any party to the Contract. Tenant conditionally assigns the Contracts and the Riverboat Gaming Project Site Plan to the City, effective upon the termination of this Lease and notice by the City of its exercise of such assignment. Such assignment is self-operative upon the City giving such notice without requirement of further action or documentation by the parties. Notwithstanding anything to the contrary contained in this Section 2.5.2.8, a “Lender” (as defined in Article 15 below) shall not be prohibited from possessing a security interest in the Contracts during the term of a “Leasehold Encumbrance” (as defined in Article 15 below) as long as the City’s rights are superior to Lender’s rights if and when this Lease terminates.

2.6           Critical Path .

2.6.1        Simultaneously with the funding of the Construction Escrow Account, Tenant will provide a “Phase I/II Critical Path” to the City which will set forth the projected start date of each improvement in the Phase I/II Land Based Project and the Riverboat/Floating Facility, the manner in which each improvement in the Phase I/II Land Based Project and the Riverboat/Floating Facility will be constructed and a projected completion date for each improvement in the Phase I/II Land Based Project and the Riverboat/Floating Facility.

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2.6.2                         INTENTIONALLY DELETED

2.6.3                         Simultaneously with the funding of the Construction Escrow Account for each Project Increment in the Phase III Land Based Project, Tenant will provide the City a “Phase III Critical Path”, which will set forth the projected start date for each such Project Increment, the manner in which such Project Increment will be constructed and a projected completion date for such Project Increment.

2.6.4                         Tenant shall have the right to modify the Critical Path(1) for each Phase of the Riverboat Gaming Project with the City’s prior written consent which consent shall not be unreasonably withheld or delayed.

2.7                                 Project Engineer; Project Architect .   Throughout the period of construction of the Land Based Project, the Project Engineer and the Project Architect, engaged at Tenant’s sole cost, and approved by the City, which approval may not be unreasonably withheld or delayed, shall be retained on behalf of and for the benefit of Tenant and the City, to monitor and check the progress of Tenant’s work on the Land Based Project. The Project Engineer and the Project Architect will be given reasonable access to the Project Site and all plans, specifications and other permits, documents and reports relating to the construction of the Land Based Project.

2.8                                 Stoppage of Construction by the City .   Where there is a material deviation from the Riverboat Gaming Project Site Plan which has not been approved by the City, the City will have the right, after written notice to Tenant, and failure to cure as provided in this Lease, to order stoppage of construction and demand that such condition be corrected. After issuance of such an order in writing by the City, no further work will be done on the construction of the Land Based Project without the prior written consent of the City, until such conditions have been substantially corrected.

2.9                                 Completion of the Land Based Project .

2.9.1                         Neither any portion of the Phase I/II Land Based Project nor any Project Increment will be operated until the Project Engineer has certified the substantial completion of the infrastructure (i.e. the streets, sewers, utilities, and parking lots) with respect to such portion of the Phase I/II Land Based Project or Project Increment, as the case may be, and the Project Architect certifies that such portion or Project Increment has been substantially completed and the

(1)                                   The Phase I/II Critical Path and the Phase III Critical Path are collectively referred to as the “Critical Path.”

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City issues a temporary occupancy permit (each such date shall be the “Completion Date” with respect to the work which Tenant wishes to utilize).

2.9.2                         Upon completion of Phase I/II and each respective Project Increment, Tenant will provide the City with a complete and legible set of all as-built plans and specifications (including all operating manuals for mechanical systems but excluding surveillance and security systems and secure or sensitive areas) regarding the same, as such plans and specifications may be amended from time to time, within thirty (30) days after such as-built plans and specifications or amendments are received by Tenant. Notwithstanding the foregoing, the City, at its sole discretion, may permit operation of part of the Riverboat Gaming Project prior to certification of substantial completion.

2.9.3                         Tenant agrees not to open the Riverboat Gaming Project for business to the public until Phase I/II has been substantially completed.

2.10                           Acc ess to the Riverboat Gaming Project and Inspection .   Tenant will advise the city regarding the progress of negotiating and contracting for the construction of the Riverboat Gaming Project. The city and Tenant will meet on a mutually agreeable day and time, at a mutually agreeable place, on a monthly basis to discuss the status of the Riverboat Gaming Project generally. Until the construction of the Riverboat Gaming Project is completed, each party will use its reasonable best efforts to keep the other informed as to the status of its efforts and all material events occurring with respect to the Riverboat Gaming Project. The city or its duly appointed agents may, at all reasonable times, enter upon the Project Site and examine and inspect the Riverboat Gaming Project.

2.11                           Licenses and Permits .   Tenant will, using its best efforts, apply for and obtain all gaming licenses; occupational permits and construction licenses and approvals necessary for the Riverboat Gaming Project.

2.12                           Additional Improvements .   Tenant may not materially alter or (other than as necessary for and as directly related to required repairs) enlarge or structurally change any improvements constructed in the Project Site or construct additional improvements on the Project Site without the City’s prior written consent and approval of plans and specifications for such changes or additions, which consent and approval will not be unreasonably withheld or delayed.

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ARTICLE 3
RENT AND OTHER COSTS

3.1                                 Rent .

3.1.1                         Notwithstanding anything to the contrary contained in any Project Document, Tenant will pay a rent payment (the “Lump Sum Rent”) of $1,700,000 to the City, as follows:

(1)                               the sum of Two Hundred Thousand Dollars ($200,000) has been paid, which the City acknowledges it has already received; and

(2)                               the sum of One Million Five Hundred Thousand Dollars ($1,500,000) shall be paid in two installments, as follows: (i) the first installment (the “First Installment”) shall be in the amount necessary to fund the design and/or engineering of the Traffic Improvements, and shall be payable no later than ten (10) days after such amount has been determined (and the parties acknowledge that in partial payment of the First Installment, the Tenant has advanced to the City the sum of One Hundred Fifty Thousand Dollars ($150,000)), and (ii) the second installment shall be in the amount of One Million Five Hundred Thousand Dollars ($1,500,000) less the First Installment (to the extent then previously paid), and shall be payable on or before Tenant begins construction of Phase I/II.

The Lump Sum Rent will be fully earned by the City upon the dates due in consideration of the lost opportunity to the City for alternative uses and development of the Project Site.

3.1.2                         Tenant’s payment of the Lump Sum Rent pursuant to Section 3.1.1 is a condition of this Lease.

3.1.3                         Except as otherwise expressly provided in this Lease, Tenant shall be solely responsible for all obligations, including all monetary requirements under each Prime Lease.

3.1.4                         Other than the Lump Sum Rent and the rent required in each Prime Lease, there shall be no other rent, percentage rent, or any equivalent payment constituting rent or docking fees, other than Impositions (defined below) and the Additional Payment (which is a Phase III Project Increment), required to be paid to the City under this Lease.

3.2                                 Rebate of Rent .   After the City has received Eight Hundred Thousand Dollars ($800,000) in Fees (defined below), Tenant

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will receive a dollar for dollar rebate (the “Rebate”), up to $200,000, of the Lump Sum Rent for every additional dollar which the City receives from the admission fees (the “Fees”) paid with respect to each gaming passenger of the Riverboat/Floating Facility pursuant to Section 313.820.1, RSMo, or any subsequent section of the Missouri statutes which imposes the same or similar admission fee (regardless of how such admission fee is identified), during the one-year period following the Opening Date. The City shall pay the Rebate to Tenant within thirty (30) days of the City’s receipt of the Fees from the State of Missouri. Except as provided by this Section 3.2, Tenant shall not be entitled to any rebate, refund or proration of the Lump Sum Rent for any reason.

3.3                                 Costs .   Except as otherwise provided in this Lease, the Riverboat Gaming Project will be developed and operated at the sole cost of Tenant and the City will have no liability and. will bear no expense whatsoever for any of the costs or expenses associated with the Riverboat Gaming Project.

3.4                                 Net Lease .   After the Commencement Date, except as expressly provided in this Lease, all costs, expenses and obligations of every kind and nature whatsoever relating to the Project Site and/or the operation of the Riverboat Gaming Project, which may arise or become due during or after the Term (but only with respect to the period of time within the Term of this Lease), shall be paid by Tenant, and the City shall be protected, defended, indemnified and held harmless by Tenant from and against the payment of same and/or any obligation or claimed obligation to pay the same.

ARTICLE 4
OPERATIONS AND USE

4.1                                 O perations .   Tenant will have the right (subject to the provisions of Article 12 of this Lease) and responsibility to continuously operate, subject to Section 17.5 of this Lease, the Riverboat Gaming Project in the manner set forth in this Lease; provided, however Tenant may change the nature and character of the businesses located within the Activity Center, in Tenant’s reasonable discretion. Tenant will keep the non-enclosed areas of the Land Based Project (including, without limitation, the amphitheater) open to the general public, without charge, as an outdoor public area provided that Tenant shall have the right to close the park areas after 11 p.m. and prior to 6 a.m. and at other times for reasonable security and safety reasons. Tenant agrees and acknowledges that the Riverboat Gaming Project is to be operated as an integrated entertainment and gaming facility and that Tenant’s operation of the Riverboat Gaming Project is part of the City’s consideration for selecting Tenant as operator of a riverboat casino facility, granting urban redevelopment rights to Water Street and entering into this Lease, the Master Agreement and the other Project Documents.

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4.2                                 Use of the Project Site .

4.2.1                         Tenant will conduct its gaming business, and operate the Riverboat Gaming Project, in all respects in a quality manner and in accordance with the highest standards of operation for similar businesses on the Missouri and Mississippi Rivers in Missouri. The Riverboat Gaming Project will not be operated in any manner which is unlawful, immoral or would constitute a nuisance. Toward that end, Tenant agrees that it will not sell, distribute, display or offer to sell any item, or permit any subtenant, licensee or concessionaire in the Project Site, to sell, distribute, display or offer to sell any item, which is inconsistent with the quality of operation and the ambiance and character of the Riverboat Gaming Project, or which might tend to injure or detract from the moral character or image of the Riverboat Gaming Project. Without limiting the generality of the foregoing, Tenant will not permit the sale, distribution, display or offer for sale of (i) any roach clip, water pipe, toke, coke spoon, cigarette papers, hypodermic syringe or other paraphernalia commonly used in the use or ingestion of illicit drugs, or (ii) any pornographic newspapers, books, magazines, films, performance pictures, video, representation or merchandise of any kind.

4.2.2                         Tenant will, at its expense: (i) keep the Riverboat Gaming Project clean, including but not limited to the removal of ice and snow from all streets, traffic ways, alleys, walkways, parking lots, and other areas within the Project Site reasonably requested by the City, and in a sanitary condition; (ii) replace promptly any broken glass; and (iii) keep any garbage, trash, rubbish or other refuse in City approved containers until removed, which will be done on a reasonable basis; and (iv) Tenant will, at its cost, use its reasonable best efforts to keep the Riverboat Gaming Project free of rodents, vermin and other pests.

4.3                                 Traffic .   Tenant and the City will agree upon a traffic flow plan which provides that traffic may gain access to the Riverboat Gaming Project while minimizing the usage of the residential streets in the vicinity of the Project Site.

4.4                                 Employment .   Tenant will give preference to residents of and businesses located in the City of Boonville as well as minority owned and women owned businesses with respect to employment in connection with the construction and operation of the Riverboat Gaming Project subject to all federal, state and local employment and anti-discrimination laws and subject to their ability to perform.

4.5                                 Security/Safety .   Tenant will implement and carry out reasonable security and safety measures for the Riverboat Gaming

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Project. This obligation shall in no way lessen the obligation of the City to provide normal police and law enforcement services to Tenant and the Riverboat Gaming Project as are available to other businesses located in the City of Boonville. The City and Tenant agree to cooperate to implement satisfactory coordination between the security provided by Tenant and the City’s police responsibilities.

4.6                                  Thespian Hall .   Tenant will coordinate activities at the Land Based Project with those of Thespian Hall to promote year round activities at Thespian Hall. Tenant will ensure that activities at. the Land Based Project will not compete with activities at Thespian Hall. It is expressly acknowledged that the operations of the Riverboat/Floating Facility shall not be deemed competition with the activities of Thespian Hall.

ARTICLE 5
REPAIRS AND MAINTENANCE

5.1                                  Maintenance and Repairs .   Tenant, at its sole cost, will repair, maintain and care for the Riverboat Gaming Project and shall keep the same in good order and condition, except for reasonable wear and tear, and shall make all necessary repairs, interior and exterior, structural and nonstructural. All repairs and maintenance will be of at least the same quality as the original work, ordinary wear and tear excepted.

5.2                                  Maintenance Reserve Fund .   Prior to Opening Date, Tenant will establish a repair and maintenance reserve fund (the “Maintenance Reserve Fund”) which will equal the annual estimated “Recurring Repair and Maintenance Expenditures” (as defined below) for the portion of the Land Based Project to be completed by the Opening Date. The Maintenance Reserve Fund will be adjusted yearly to the prior year’s Recurring Repair and Maintenance Expenditures for the portion of the Land Based Project completed on the first day of the prior year plus an amount equal to the reasonable annual estimated Recurring Repair and Maintenance Expenditures for any other portion of the Land Based Project to be used during the then commencing year. Tenant will each year deposit additional funds into the Maintenance Reserve Fund as needed to bring the balance of the Maintenance Reserve Fund to the level required for the year commencing. The Maintenance Reserve Fund will be held by the City, as landlord, in an interest bearing account with all interest to be paid to Tenant, and may be used by the City if Tenant defaults in its repair or maintenance obligations under the Project Documents or if this Lease and/or the Master Agreement terminates. As used herein, “Recurring Repair and Maintenance Expenditures” means expenditures, whether or not capitalized, for repair and maintenance in the ordinary course of operation of the Land Based Project: (i) of the improvements at the Land Based Project, and (ii) of the landscaping at the Project Site. Recurring Repair and Maintenance Expenditures shall not include, however: (a) costs of

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snow removal, lawn mowing, janitorial services and other routine operating expenses, or (b) the amount of any extraordinary capital expenditures by Tenant for major replacement of or additions to the landscaping at the Project Site or the improvements at the Land Based Project.

5.3                                  No Services Furnished .   The City shall not be required to furnish to Tenant any utilities, facilities or services of any kind whatsoever during the Term other than normal fire, police and other law enforcement services as are available to other businesses in the City of Boonville; provided, further, that if the City also operates any public utility, then such services from such public utility will be available to Tenant and Tenant shall pay to the City for such services the same rates as any other commercial customer of similar size. The City shall in no event be required to make any alterations, rebuildings, replacements, changes, additions, improvements or repairs during the Term.

ARTICLE 6
INSURANCE

6.1                                  Insu rance Coverages .   Tenant will continuously throughout the Term provide, at its sole cost, the following insurance for the Riverboat Gaming Project in amounts approved by the City: standard property peril insurance in the amount of full replacement value, excluding foundation and footers; flood and earthquake insurance to the extent reasonably available in the amount of replacement value for the Land Based Project; commercial (comprehensive) liability insurance policies, including (but not limited to) bodily injury, property damage, contractor’s liability coverage, with broad form property damage endorsement or its equivalent with initial limits of no less than $1,000,000 per occurrence and $2,000,000 in the aggregate; completion and performance bond in standard form and in an amount not less than the total amount of the contract for the work to be completed under such contract on the Riverboat Gaming Project; comprehensive automobile liability insurance with initial limits of no less than $1,000,000 per occurrence and $1,000,000 in the aggregate; builder’s risk and (if Tenant is contracting for a boat to be built) ship builder’s risk insurance; umbrella and excess umbrella insurance with initial limits of no less than $10,000,000; and Workers’ Compensation, Longshoreman and Harbor Workers and Maritime Liability (Jones Act Coverage) insurance policy or similar insurance in form and amounts required by law, including employer’s liability. All limits set forth in this Lease shall annually be adjusted for inflation. Notwithstanding the foregoing, in lieu of Tenant obtaining such completion and performance bond, Tenant may, at its option, provide a guaranty in form and content reasonably acceptable to the City on the part of a person or entity of financial strength reasonably acceptable to the City guaranteeing to the City, in the event the contractor fails to perform under the construction contract and the construction contract is terminated as a result thereof, the

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payment of that amount, if any, which is incurred by the City in causing the completion of the work which is the subject of the construction contract and which exceeds the contract price under the construction contract at the time of the contract’s termination (exclusive of any net increase solely attributable to change orders modifying the scope of the work and generated by the City after the contract’s termination or other cost increases solely attributable to acts or omissions of the City).

6.2                                  Named Insureds .   All policies of insurance provided for in this Article 6 shall name Tenant as the insured, and the City as an additional named insured, as their respective interests may appear. Prior to the Commencement Date, and at least thirty (30) days before the expiration of each policy then in force, Tenant shall deliver to the City certificates evidencing the existence of all required insurance policies.

6.3                                  Waiver of Subrogation and Release .   Provided that the following can be obtained and at a reasonable cost. (Tenant acknowledging that as of the date of this Lease, the following can be obtained and at a reasonable cost), each such policy shall contain an endorsement containing a waiver of subrogation so that no act or omission of the City or anyone operating under rights granted by it shall affect or limit the obligation of the issuing insurance company to pay the amount of any loss sustained. Tenant for itself and all parties claiming by, through or under it, release and discharges the City, its officers and agents, from all losses, damages, claims or liabilities arising by reason of any peril insurable (subject to exceptions and exclusions of such policy) pursuant to the property peril insurance policy required under Section 6.1 hereof.

6.4                                  Cancellation/Modification Notice .   Each such policy or certificate issued by the insurer shall contain an agreement by the insurer that such policy shall not be canceled, modified, nonrenewed or amended without at least thirty (30) days prior written notice to the City.

ARTICLE 7
INDEMNIFICATION

7.1                                  Indemnification of the City .   Tenant will defend, indemnify and hold harmless the City against and in respect of any obligation, liability (excluding any exemplary damages) or expense (including court costs and reasonable attorneys’ fees) incurred by the City as a result of any claim or action brought against the City arising out of the acquisition, development or operation of the Riverboat Gaming Project or in connection with the Project Site or the Riverboat Gaming Project except damages arising out of the negligence or willful misconduct of the City, its agents and employees, or the City’s failure to properly follow the statutory

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and other governing rules and procedures required of the City to properly take an action.

7.2                                  Indemnification of Tenant .   The City will defend, indemnify and hold harmless Tenant against and in respect of any obligation, liability (excluding any exemplary damages) or expense (including court costs and reasonable attorneys’ fees) incurred by Tenant as a result of any claim or action brought against Tenant arising out of any (i) negligence or willful misconduct of the City or its agents or employees, as landlord, or (ii) any misfeasance or malfeasance of the City or its agents or employees in its capacity as a governing body, in connection with the Project Site or the Riverboat Gaming Project.

7.3                                  Notification .   The party seeking indemnification (the “Indemnitee”) shall notify the party from whom indemnification is sought (the “Indemnitor”) in writing of any action, suit or proceeding for which indemnification is sought and the Indemnitor shall have the right to retain counsel of the Indemnitor’s reasonable choice and at the sole cost of the Indemnitor, to defend the Indemnitee; provided, however, the Indemnitor shall not enter into any settlement without the prior written consent of the Indemnitee, which consent shall not be unreasonably withheld or delayed.

ARTICLE 8
TAXING AND DESTRUCTION OF PROJECT SITE

8.1                                  Taking of Facilities .   If all or any part of Tenant’s leasehold interest under this Lease is taken through powers of eminent domain exercised by a governmental entity other than the City, Tenant shall receive 90% and the City shall receive 10% of the condemnation award. If any part of the Project Site is taken through the exercise of eminent domain, Tenant shall have the right to reconfigure the Project Site and modify the Riverboat Gaming Project as necessary as the result of the eminent domain. The City shall not grant any eminent domain rights with respect to the Project Site other than to Water Street so long as this Lease remains in effect.

8.2                                  Destruction of Riverboat Gaming Project .   If nonmaterial damage or destruction occurs with respect to all or any part of the Riverboat Gaming Project during the Term, Tenant shall rebuild that portion of the Riverboat Gaming Project destroyed and all work performed shall be of at least equal quality to the original work, ordinary wear and tear excepted. If material damage or destruction occurs with respect to all or any part of the Riverboat Gaming Project during the Term, Tenant may rebuild that portion of the Riverboat Gaming Project destroyed and all work performed shall be of at least equal quality to the original work, ordinary wear and tear excepted; provided, however if Tenant elects not to rebuild then Tenant shall pay to the City (i) all insurance proceeds, other

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than any loss of income or loss of business proceeds, payable with respect to the Land Based Project together with the deductible amount under the insurance policy(ies) with respect to which Tenant is to pay the proceeds to the City or (ii) if the amount of the damage does not exceed the deductib