SANDS REGENT
EXHIBIT 10.1
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>4
<FILENAME>a78279ex10-1.txt
<DESCRIPTION>EXHIBIT 10.1
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                                                                    EXHIBIT 10.1

                             GOLD RANCH CASINO LEASE

                                     BETWEEN

                                LAST CHANCE, INC.
                              A Nevada Corporation

                                       AND

                       PROSPECTOR GAMING ENTERPRISES, INC.
                              A Nevada Corporation

                                       AND

                           TARGET INVESTMENTS, L.L.C.
                       a Nevada limited liability company


<PAGE>


                             GOLD RANCH CASINO LEASE

        This Gold Ranch Casino Lease ("Lease") is made this 27th day of
December, 2001, by and between Last Chance, Inc., a Nevada Corporation (Last
Chance) and Prospector Gaming Enterprises, Inc., a Nevada Corporation, doing
business as Gold Ranch Casino & RV Resort (sometimes referred to as PGE) with
respect to the lease of the Gold Ranch Casino Property and improvements and the
FF&E; and

by and between Last Chance and Target Investments, L.L.C., a Nevada limited
liability company (Target) with respect to the lease of the Leach Field
Property, the Frontage Parcel and the Sign Easement.

PGE and Target are jointly referred to as Landlord.

                                 R E C I T A L S

        This Lease is made with reference to the following facts and objectives:

        A. Capitalized terms used in this Lease and not otherwise defined shall
have the meanings ascribed to such terms in Section 1.

        B. This Lease is one of the Integrated Agreements by and between Last
Chance and PGE and its Affiliates, for the acquisition by Last Chance of all of
the Integral Properties and Assets of the Gold Ranch Casino and RV Resort.

        C. PGE is the owner of the Gold Ranch Casino Property, the Premises and
the FF&E, and Target is the owner of the Leach Field Property, the Frontage
Parcel and the real property to be burdened by the Sign Easement;

        D. Last Chance desires to lease the Gold Ranch Casino Property, the
Premises and the FF&E from PGE and PGE desires to lease the Gold Ranch Casino
Property, Premises and FF&E to Last Chance; and

        E. Last Chance desires to lease the Leach Field Property and the
Frontage Parcel and to acquire the Sign Easement from Target and Target desires
to grant the Sign Easement and to lease the Leach Field Property and the
Frontage Parcel to Last Chance.

        NOW, THEREFORE, in consideration of the Recitals and the premises, the
execution and delivery of the other Integrated Agreements, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties, Landlord and Last Chance covenant and agree as
follows:


<PAGE>


1.  DEFINITIONS.

        1.1 "Affiliate" means as to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled by,
such Person and, if such Person is an individual, any member of the immediate
family (including parents, spouse, children, grandchildren, brothers and
sisters, of such individual and any trust the principal beneficiary of which is
such individual or one or more members of such individual's immediate family and
any Person who is controlled by any such member or trust. As used in this
definition, "control" (including its correlative meanings, "controlled by" and
"under common control with") means possession, directly or indirectly, of power
to direct or cause the direction of the management or policies, whether through
the ownership of securities, limited liability company or partnership or other
ownership interests, by contract or otherwise.

        1.2 "Asset Purchase Agreement" means the Asset Purchase Agreement by and
between Prospector Gaming Enterprises, Inc., a Nevada Corporation and Last
Chance, Inc., a Nevada Corporation, executed contemporaneously herewith and as
to which this Lease is an integral part.

        1.3 "Associated Equipment" shall have the meaning ascribed to that term
in NRS 463.0136.

        1.4 "Business Expenditures" means all costs incurred by Last Chance for
the purchase, replacement, maintenance or repair of and for the Integral
Properties and Assets other than sums expended for fixtures and items which are
expensed, as opposed to amortized or depreciated, in accordance with GAAP,
excluding the purchase of the Acquired Assets as provided in the Asset Purchase
Agreement.

        1.5 "California Lottery Property" means the real property and
improvements located in Washoe County, Nevada and Sierra County, California,
owned by Target Investments, L.L.C., and described in Exhibit 1 (APN 038-230-06
and APN 023-100-06) upon and from which California Prospectors, Ltd., a Nevada
limited liability company, operates the California Lottery Station.

        1.6 "California Lottery Station" means the improvements located on the
California Lottery Property from which California Prospectors, Ltd. operates as
a California Lottery game retailer, including the building containing the
lottery station and a convenience store, adjacent parking, landscaping and
associated improvements, furniture, fixtures and equipment not otherwise owned
by California Prospectors, L.L.C.

        1.7 "California Lottery Station Lease" means the California Lottery
Station Lease between California Prospectors, Ltd., and Target Investments, LLC,
as "Landlord", for the lease of the California Lottery Property and the
California Lottery Station.


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        1.8 "CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.

        1.9 "Closing" means the completion of the transaction contemplated by
the Integrated Agreements on the Closing Date.

        1.10 "Closing Date" means the last day of the month in which all
conditions precedent to the Closing have occurred as provided in the Asset
Purchase Agreement.

        1.11 "Environmental Claim" means, with respect to any Person, any
written notice, claim, demand or other communication (collectively, a "claim")
by any other person alleging or asserting such person's liability for
investigatory costs, cleanup costs, Governmental Authority response costs,
damages to natural resources or other premises, personal injuries, fines or
penalties arising out of, based on or resulting from (A) the presence, or into
the environment, of any Hazardous Material at any location, whether or not owned
by such person, or (B) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law. The term "Environmental Claim"
shall include, without limitation, any claim by any Governmental Authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and any claim by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence of Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.

        1.12 "Environmental Laws" means any law, regulation or order relating to
the regulation or protection of human health, safety or the environment or to
emissions, discharges Releases or threatened Releases of Hazardous Materials
into the environment (including without limitation ambient air, soil, surface
water, ground water, wetlands, land or subsurface strata), or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials.

        1.13 "Exhibit" shall mean those documents identified as such and
attached hereto and incorporated by this reference.

        1.14 "Extended Term" means the term of any extension of the Lease
arising from Last Chance's exercise of an option to extend under Section 2.3.

        1.15 "FF&E" means any and all furniture, fixtures and equipment
installed or used, or to be installed or used, in connection with the operation
of the Property or the Premises which is not owned by Last Chance, including,
but not limited to, the plumbing systems, HVAC systems, fire protection systems,
electrical systems, equipment, elevators, exterior sidings and doors,
landscaping and irrigation systems.


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        1.16 "Fixture" means an item or items of personal property which have
been permanently attached to the Premises or the Property the removal of which
will cause material damage.

        1.17 "Frontage Parcel" means a portion of that certain parcel or real
property (APN 038-241-08) located in Washoe County, Nevada, as more particularly
described in Exhibit 1.

        1.18 "GAAP" means generally accepted accounting principles applied on a
consistent basis from period to period.

        1.19 "Gaming Devices" shall have the meaning ascribed thereto by NRS
463.0155.

        1.20 "Gaming Revenue" shall mean Gross Revenue less: (i) all revenue
received from any game, gaming device or inter-casino linked gaming system
operated on the Premises which is shared with any other person or entity,
including, without limitation, the operator of an inter-casino linked gaming
system, and (ii) all sums paid by Last Chance to the Nevada Gaming Commission
under and pursuant to NRS 463.370.

        1.21 "Gold Ranch Casino Property" means the real property upon which the
Gold Ranch Casino, adjacent buildings, structures and parking facilities are
located at I-80 West, Exit 2, Gold Ranch Road, Verdi, Nevada 89439 (APN
038-230-24) as more particularly described in Exhibit 1.

        1.22 "Gold Ranch RV Resort " means the 105 space recreational vehicle
park operated by Gold Ranch RV Resort, LLC, a Nevada limited liability company,
on the RV Park Property, together with all improvements and furniture, fixtures
and equipment used in conjunction therewith.

        1.23 "Governmental Authority" shall mean any federal, state, regional,
county or municipal governmental agency, board, commission, officer or official
having or exercising or purporting to have or exercise jurisdiction over the
Property, the Premises or the FF&E.

        1.24 "Gross Revenue" means and shall be calculated as provided in NRS
463.0161, and NRS 463.3715.

        1.25 "Hazardous Materials" means and includes (1) any "hazardous
substance," as defined by CERCLA or any other similar substance or waste
regulated pursuant to any similar state or local law, regulation or ordinance;
(2) any "waste" or "hazardous waste," as defined by the Resource Conservation
and Recovery Act, as amended, or any other similar substance or waste regulated
pursuant to any similar state or local law, regulation or ordinance; (3) any
pollutant, contaminant, material, substance or waste regulated by the Clean
Water Act, as amended, or any other similar substance or waste regulated
pursuant to any similar state or local law, regulation or


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ordinance; (4) any pollutant, contaminant, material, substance or waste
regulated by the Clean Air Act, as amended, or any other similar substance or
waste regulated pursuant to any similar state or local law, regulation or
ordinance; (5) any petroleum product; (6) any polychlorinated biphenyls; or (7)
any radioactive material or substances.

        1.26 "Initial Term" means the term of this Lease and Last Chance's
obligation to pay Rent which shall commence on the Closing and shall, unless
terminated or extended as provided in this Lease, continue for a period of
twenty (20) years thereafter.

        1.27 "Integral Properties and Assets" means all of the assets, real and
personal, tangible and intangible, which constitute integral parts of the
businesses operated by Prospector Gaming Enterprises, Inc., and its Affiliates,
as the Gold Ranch Casino & RV Resort, as more particularly described in the
Asset Purchase Agreement.

        1.28 "Integrated Agreements" means this Lease and each of the agreements
and documents described as a component of that term in the Asset Purchase
Agreement, which constitute integral parts of the single transaction by which
Last Chance, Inc., will acquire the businesses and assets (real, personal,
tangible and intangible) operated by Prospector Gaming Enterprises, Inc., and
its Affiliates, as the Gold Ranch Casino & RV Resort.

        1.29 "Jack In The Box Lease" shall mean that certain lease agreement by
and between the PGE and Foodmaker, Inc., a Delaware corporation, dated November
16, 1998, to be to be assigned by PGE to Last Chance for delivery on the
Closing.

        1.30 "Leach Field Property" means a portion of that certain parcel of
real property located in Washoe County, Nevada, designated as APN 038-230-02 and
more particularly described in Exhibit 1.

        1.31 "Lease Term" means the total of the Initial Term and any and all
Extended Terms of this Lease.

        1.32 "Nevada Gaming Authorities" means the Nevada Gaming Commission and
the State Gaming Control Board.

        1.33 "Option to Purchase the Gold Ranch Casino Property" means the
Option to Purchase the Gold Ranch Casino Property and Improvements, the Leach
Field Property, the Frontage Parcel, the California Lottery Station and the
California Lottery Property, and Right of First Refusal executed on even date
herewith by and between Prospector Gaming Enterprises, Inc. and Target
Investments, L.L.C., and Last Chance, as one of the Integrated Agreements.

        1.34 "Option to Purchase Gold Ranch RV Resort Business" means the Option
To Purchase All Assets of Gold Ranch RV Resort Business and Right Of First
Refusal executed on even date herewith pursuant to the Asset Purchase Agreement
by which


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Gold Ranch RV Resort L.L.C., grants to Last Chance an option to purchase the
Gold Ranch RV Resort business and a right of first refusal with respect thereto.

        1.35 Option To Purchase The RV Park Property" means the Option to
Purchase the RV Park Property and Right of First Refusal executed on even date
herewith pursuant to the Asset Purchase Agreement by which Prospector Gaming
Enterprises, Inc. grants to Last Chance an option to purchase the RV Park
Property and a right of first refusal.

        1.36 "Permitted Exceptions" means those liens and encumbrances, approved
by Last Chance, to which the Property, Premises, or FF&E re or will be subject
at the Closing as set forth on Exhibit 2 attached hereto.

        1.37 "Person" means an individual, firm, corporation, trust,
association, partnership, joint venture, tribunal or other entity.

        1.38 "Preliminary Title Reports" shall mean, cumulatively, the
preliminary title reports prepared by Western Title Company, Inc., dated
December 21, 2001 and Inter-County Title Co., dated August 27, 2001, copies of
which are attached to the "Asset Purchase Agreement as Exhibit 24.

        1.39 "Premises" means all improvements located upon the Property
including, but not limited to, the Gold Ranch Casino, adjacent buildings,
structures and parking facilities otherwise known as the Gold Ranch Casino & RV
Resort located at I-80 West, Exit 2, Gold Ranch Road, Verdi, Nevada 89439.

        1.40 "Property" means the Gold Ranch Casino Property, the Leach Field
Property, the Frontage Parcel and the Sign Easement, as more particularly
described in Exhibit 1.

        1.41 "Purchase Options" means the Option to Purchase the Gold Ranch
Casino Property, the Option to Purchase the RV Park Property, the Option to
Purchase the Gold Ranch RV Resort Business and the options to purchase contained
in the Water and Sewer Service Agreement including, in each case, the rights of
first refusal granted to Last Chance in those documents.

        1.42 "Readerboard Sign" means the double column elevated electric
readerboard sign located on that certain parcel of real property designated as
APN 038-241-08, at the site depicted in Exhibit 1.

        1.43 "Release" means release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment or into or out of any real or personal
property or any fixture, including the movement of Hazardous Materials through
or in the air, soil, surface water or groundwater.


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        1.44 "RV Park Property" means the real property described in Exhibit 1
(APN 038-241-07 and APN 023-100-13), and the improvements located thereon, upon
which the Gold Ranch RV Resort is located.

        1.45 "Sign Easement" means the easement granted by Target hereunder for
the placement, use, maintenance and enjoyment of the double column elevated
electric reader-board sign located on APN 038-241-08 at the site depicted in
Exhibit 1, as provided in Section 2.4 of this Lease.

        1.46 "Title Company" shall mean, collectively, Western Title Company,
Inc. located at 241 Ridge Street, Reno, Nevada 89501, the authorized agent for
Ticor Title Insurance Company, and Inter-County Title Co. of Nevada County, with
offices at 11851 Sutton Way, Grass Valley, California 95945.

        1.47 "Water and Sewer Service Agreement" means the agreement by and
between PGE, Target, Stremmel Capital Group, Ltd. and Last Chance pursuant to
which water and sewer service is to be provided by PGE, Target and Stremmel
Capital Group, Ltd. to the Integrated Properties and Assets.

2.      GRANT AND TERM.

        2.1 Lease Grant. Landlord leases the Property, the Premises and the
FF&E, to Last Chance free and clear of all liens, claims, encumbrances, and
interests of third parties, subject only to the Permitted Exceptions. This Lease
shall be a triple net lease except where otherwise provided herein. Landlord
shall deliver possession of the Property, the Premises and the FF&E to Last
Chance on the Closing.

        2.2 Initial Term. The Initial Term of this Lease and Last Chance's
obligation to pay Rent shall commence at the Closing and shall, unless
terminated or extended as provided in this Lease, continue for a period of
twenty (20) years thereafter. At the Closing, the parties shall insert the
Closing Date and the date of termination of the Initial Term in the spaces
provided below:

          Closing Date:_________________________________________________

          Date of Termination of the Initial Term:______________________

        2.3 Option to Extend Lease. Last Chance is given the option to extend
this Lease following the Initial Term, on the terms and conditions thereof as
exist at the time of the exercise of any such option, for four (4) five (5) year
periods. Last Chance shall exercise its option(s) to extend by giving written
notice thereof to Landlord at least ninety (90) days before the expiration of
the Initial Term or any Extended Term.

        2.4 Easement Grant, Sign Easement. Target hereby grants to Last Chance a
perpetual exclusive easement over that portion of the real property (as depicted
on


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Exhibit 1 and more specifically described therein) upon which the Readerboard
Sign (Sign) is located for the purposes of the continued location thereon of the
Sign, or any replacement or substitute therefor, ingress to and egress from the
Sign and the right to repair, replace, reconstruct and maintain the Sign. Target
shall execute a grant, bargain and sale deed, in the form of Exhibit 3 attached
hereto, confirming the conveyance of the easement hereby created and shall
deliver same to Last Chance at the Closing.

3.      RENT.

        3.1 Rent. The annual rent shall be equal to the greater of (i) $560,000
("Minimum Annual Rent") or (ii) the "Percentage Rent", paid monthly commencing
on the first day of the first full month following the Closing. Rent for any
partial calendar month of actual occupancy of the Property and Premises by Last
Chance shall be prorated as provided in Section 3.3. The Percentage Rent shall
be equal to 7% of the first Twelve Million Dollars ($12,000,000) of annual
Gaming Revenue, 5.5% of annual Gaming Revenue in excess of Twelve Million
Dollars ($12,000,000) but less than or equal to Fifteen Million Dollars
($15,000,000), and 4.5% of annual Gaming Revenue in excess of Fifteen Million
Dollars ($15,000,000). In all cases, the Percentage Rent shall be reduced by the
rent paid by California Prospectors, L.L.C. under and pursuant to the California
Lottery Station Lease. Last Chance shall pay Minimum Annual Rent in twelve (12)
equal monthly installments (except as provided above) during each year of the
Lease Term, on the first day of each calendar month following the Closing.

        3.2    Percentage Rent.

               (A) In General. Percentage Rent shall be payable monthly, in
arrears, commencing with the calendar month following the month in which Gaming
Revenue first exceeds the Minimum Annual Rent for such fiscal year, PROVIDED,
HOWEVER, that there shall be no payment or accrual of Percentage Rent until
Landlord shall have satisfied the gaming licensing requirements of Section
3.2(C) and any and all requirements of Chapter 463 of the Nevada Revised
Statutes and the Regulations of the Nevada Gaming Commission, the State Gaming
Control Board and Washoe County, Nevada.

        The total Percentage Rent due and payable for a fiscal year shall be
computed based on Last Chance's annual statement of Gaming Revenue for the
respective year, prepared and delivered pursuant to Section 3.2(B), and if Last
Chance paid an amount greater than the actual Percentage Rent payable
thereunder, the amount of such overpayment shall be refunded to Last Chance by
the Landlord within five (5) business days following the delivery of Last
Chance's annual statement of Gaming Revenue; if Last Chance paid an amount less
than the required Percentage Rent, then Last Chance shall pay such difference to
Landlord within five (5) days following the delivery of Last Chance's annual
statement of Gaming Revenues for said fiscal year.

               (B) Reporting of Gaming Revenue. Last Chance agrees to furnish to
Landlord a statement of Gaming Revenue within twenty business (20) days after
the


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close of each calendar month, and an annual statement, including a monthly
breakdown of Gaming Revenue, within ninety (90) days after the close of each
fiscal year of Last Chance during the Lease Term and any partial fiscal year at
the end of the Lease Term. All statements shall itemize all elements of Gaming
Revenues and any respective adjustments, and shall be certified as true and
correct by a responsible officer of Last Chance. Last Chance shall keep (i) full
and accurate books of account and records in accordance with GAAP and the
Regulations of the Nevada Gaming Authorities. Such books, receipts, and records
shall be kept by Last Chance for a period of three (3) years after the close of
each fiscal year and shall, at the Landlord's sole expense, be available for
inspection and audit by Landlord and its representatives, at Landlord's expense,
at the Premises or Last Chance's principal place of business, at all times
during regular business hours. Any objection or dispute which Landlord may wish
to raise with respect to Percentage Rent payable hereunder, shall be made in
writing by Landlord to Last Chance within twenty (20) days following the receipt
by Landlord of each monthly or annual statement of Gaming Revenue, or within
thirty (30) days following: (i) receipt by Landlord of any amendment or
modification to a monthly or annual statement of Gaming Revenue resulting from
any audit by Landlord or (ii) receipt by Landlord of notice from Last Chance of
any such amendment or modification resulting from an internal or external audit
of Last Chance's Gaming Revenue by other than Landlord. Each of Landlord and
Last Chance shall, within ten (10) days of receipt by them of any such audit
adjustment, give written notice thereof to the other. The notice shall include a
copy of the audit and the audit report, or that portion thereof which deals with
the calculation of Last Chance's Gaming Revenue. Any sum payable by Last Chance
or to be rebated by Landlord shall be paid over to the party entitled thereto
within thirty (30) days following receipt of the notice from the other. Any
objection or dispute not timely made or raised by Landlord shall be deemed to
have been waived by Landlord. Further, the failure of Landlord to object to a
monthly statement shall preclude Landlord from raising any issue or objection
thereto in conjunction with other objections Landlord may have to the annual
statement of Gaming Revenue.

               (C) Gaming License Requirement. Landlord shall not receive or
accrue any Percentage Rent unless and until it has been found suitable by the
Nevada Gaming Authorities to participate in the Gaming Revenue derived from the
Premises and has provided evidence of such to Last Chance. Once Landlord has
obtained a finding of suitability to participate, it shall comply with all
conditions thereto and all regulations of the Nevada Gaming Authorities. In the
event that the Landlord's suitability status is suspended or revoked by the
Nevada Gaming Authorities, Last Chance shall cease all Percentage Rent payments
or accruals immediately upon notification thereof, and the Landlord shall not
make any demands therefor. It is the sole responsibility of the Landlord to
submit whatever applications are necessary to the Nevada Gaming Authorities for
permission to participate in Gaming Revenues from the Premises. The Landlord
shall bear all costs and expenses associated with the application process.

        3.3 Proration of Rent for Partial Month. Rent payable by Last Chance for
any partial calendar month at the beginning or end of the Lease Term which is
calculated on the basis of a full calendar year shall be computed on a daily
basis to reflect the actual


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number of days in said partial month at an amount equal to one-three hundred
sixty-fifth (1/365th) of such annual Rent for each day of said partial month.

        3.4 Certain Rent Abatement. In the event that the Landlord or any
Affiliate is in default under a deed of trust, mortgage or other lien secured by
any of the Integrated Properties and Assets, Last Chance may cure the default
and setoff any amounts so paid against its Rent obligation under this Lease. In
the event that any setoff to which Last Chance is entitled under this Section
3.4 exceeds Last Chance's accrued Rent obligation on the date Last Chance
exercises its option to purchase or right of first refusal under any of the
Purchase Options, the purchase price or prices thereunder shall be reduced by
such excess with the excess being allocated and applied as Last Chance, in its
sole discretion, may elect.

4.  TAXES.

        4.1 Personal Property Taxes and Assessments. Except as provided in
Section 4.3 of the Water and Sewer Service Agreement, Last Chance shall, during
the Lease Term, pay all taxes, assessments, license fees and other charges that
are levied and assessed against the FF&E, and Last Chance's personal property,
installed, affixed or located in or on the Property or the Premises. On demand
by Landlord, Last Chance shall furnish Landlord with satisfactory evidence of
these payments.

        4.2 Real Property Taxes. During the Lease Term, Last Chance shall pay
all real property taxes and, except as provided in Section 4.3 of the Water and
Sewer Service Agreement, all general and special assessments levied and assessed
against the Property and the Premises.

        4.3 Contests and Protests. Last Chance shall have the right to contest
or protest any levy or assessment for which it is liable under this Section 4
and may withhold payment or pay under protest, as permitted by law, pending any
such contest. Landlord shall execute such powers of attorney or other documents
as may be necessary for Last Chance to contest or protest hereunder.

5.  USE.

        5.1 Use. Last Chance may use the Property, the Premises and the FF&E for
any lawful purpose or use. Last Chance shall have no express or implied
obligation to use or continue operation of the Premises, PROVIDED, HOWEVER, that
Last Chance shall at all times take such actions as may be necessary to continue
the eligibility of the Premises for a nonrestricted gaming license under
legislative exemptions to NRS 463.1605.

        5.2 Limitations on Use. Last Chance's use of the Property, the Premises
and the FF&E as provided in this Lease shall be in accordance with the
following:


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               (A) Last Chance shall not do, bring or keep anything in or about
the Property or the Premises that will cause the cancellation of any insurance
covering the Premises;

               (B) Last Chance shall comply will all laws concerning the
Property, the Premises and the FF&E or Last Chance's use of the Property,
Premises or the FF&E, including, without limitation, the obligation at Last
Chance's cost to alter, maintain or restore the Premises in compliance with all
laws relating to the condition, use or occupancy of the Property and the
Premises as provided in Section 6.2. Such costs and expenses incurred by Last
Chance under this Section 5.2(B) and Section 6.2 as constitute Business
Expenditures shall be applied to the satisfaction of Last Chance's obligation to
make minimum annual Business Expenditures under Section 6.3;

               (C) Last Chance shall not use the Property, the Premises or the
FF&E in any manner that will constitute waste, nuisance or unreasonable
annoyance to owners or occupants of adjacent properties; and

               (D) Last Chance's use of the Property, the Premises and the FF&E
shall conform to the zoning classifications of the Property and the Premises.

6.      MAINTENANCE, UTILITIES, AND ALTERATIONS.

        6.1 Landlord's Maintenance Obligations. During the first year of the
Initial Term, Landlord shall be obligated to repair and maintain, at its sole
cost and expense, the structural components, roof and foundation of all
buildings and improvements on the Property and the Premises. In the event that
Landlord defaults in the performance of its obligations under this Section 6.1,
Last Chance may, in its sole discretion and without obligation to do so, cure
the default, after fifteen (15) days written notice to Landlord, and setoff any
amounts paid against Last Chance's Rent obligation under this Lease. In the
event that any setoff to which Last Chance is entitled under this Section 6.1
exceeds Last Chance's accrued Rent obligation on the date Last Chance exercises
its option to purchase or right of first refusal under any of the Purchase
Options, the purchase price or prices thereunder shall be reduced by such excess
with the excess being allocated and applied as Last Chance, in its sole
discretion, may elect.

        Before commencing any work in the performance of its obligations under
this Section 6.1, Landlord shall provide Last Chance with a written copy of the
proposed contract and the construction schedule. Last Chance shall have ten (10)
business days within which to deliver its written objections to the construction
schedule to Landlord. Landlord shall modify the construction schedule to
accommodate Last Chance's reasonable objections and shall require that: (a) the
contract for the work incorporates the construction schedule as modified, and
(b) that contractor and any subcontractor engaged in the performance of the work
shall cooperate with Last Chance and so perform the work as not to interfere
with Last Chance's operations, use and enjoyment of the Property, Premises and
FF&E. Landlord shall further insure that Last Chance is, for all purposes, a
third party beneficiary of the contract for the work, without any


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obligation to pay for work or materials, and shall provide Last Chance with a
copy of the final contract and construction schedule.

        Landlord shall pay, when due, all claims for labor performed or
materials furnished to or for Landlord at or for use on, in or about the
Property, the Premises or the FF&E. Landlord shall not permit any mechanics' or
materialmen's liens to be levied against the Property, the Premises or the FF&E
for any labor or materials furnished to Landlord or claimed to have been
furnished to Landlord or to Landlord's agents or contractors in connection with
work of any character performed or claimed to have been performed on the
Property, the Premises or the FF&E by or at the direction of Landlord.

        6.2 Maintenance By Last Chance. Upon Expiration of Landlord's
maintenance obligation under Section 6.1, Last Chance, at its sole cost and
expense, shall: (A) repair and maintain the structural components, roof and
foundation of all buildings and improvements on the Property and the Premises
for the remainder of the Lease Term, and (B) keep and maintain the Premises in
good working order and repair, reasonable wear and tear excepted. All such
maintenance and repairs shall be in quality and class equal to or better than
the original work or installations. If Last Chance fails to perform its
obligations under this Section 6.2, Landlord may cure Last Chance's default, at
Landlord's cost and expense, and shall be entitled to collect the reasonable
costs thereof as additional Rent. Landlord shall give Last Chance thirty (30)
days written notice of any alleged deficiency in Last Chance's maintenance or
repair of the Property or the Premises prior to the performance of any work by
Landlord under this Section 6.2.

        6.3 Minimum Annual Business Expenditures. Last Chance shall incur
minimum Business Expenditures of Two Hundred Thousand Dollars ($200,000) per
annum during the Lease Term, pro rated for any partial year, in connection with
the Integral Properties and Assets being acquired pursuant to the Integrated
Agreements. In addition, Last Chance shall receive credit for all Business
Expenditures made by California Prospectors, L.L.C. under and pursuant to the
California Lottery Station Lease. Within sixty (60) days following the end of
each fiscal year of Last Chance during the Lease Term (currently June 30, but
subject to change by written notice to Landlord), Last Chance shall provide
Landlord with a written report of Business Expenditures for the preceding year.

        6.4 Last Chance's Personal Property, Title and Removal. Furnishings,
fixtures, equipment and inventory purchased or owned by Last Chance, shall
remain the property of Last Chance at the expiration or earlier termination of
this Lease and shall be removed by Last Chance within thirty (30) days following
such expiration or termination.

        6.5 Alterations, Additions and Other Improvements. Last Chance may, at
its option and at its own cost and expense, at any time and from time to time,
make such alterations, additions and improvements to the Property and the
Premises, as it may deem desirable. All such alterations, additions and
improvements shall be completed


                                       12
<PAGE>


expeditiously, in a good and workmanlike manner and in compliance with all
applicable laws, regulations and ordinances and shall be and become subject to
this Lease. Last Chance shall give Landlord thirty (30) days written notice
prior to the commence of any alteration, addition or improvement hereunder
having a projected cost in excess of $50,000 (Project) which notice shall
include a detailed description of the Project. Last Chance shall, upon written
request from Landlord, meet and confer with Landlord about the Project,
provided, however, that Landlord shall have no right to veto any Project and
Last Chance shall be entitled to proceed therewith notwithstanding any objection
by Landlord.

        Unless Landlord requires their removal, all alterations, improvements or
additions which may be made to the Premises or the Property shall become the
property of Landlord and remain upon and be surrendered with the Premises at the
expiration of the Lease Term other than by reason of the exercise of the Option
to Purchase the Gold Ranch Casino Property in which case the alterations,
improvements and additions shall be the sole property of Last Chance.
Notwithstanding the provisions of this Section 6.5, Last Chance's machinery,
equipment and other trade fixtures, other than those which are affixed to the
Premises in such a manner that they cannot be removed without material damage to
the Property or the Premises reasonably requiring repair by Landlord in order to
render the Premises usable by a subsequent tenant, shall remain the property of
Last Chance and may be removed by Last Chance.

        Last Chance shall pay, when due, all claims for labor or materials
furnished to or for Last Chance at or for use on, in or about the Property or
the Premises. Last Chance shall not permit any mechanics' or materialmen's liens
to be levied against the Property or the Premises for any labor or materials
furnished to Last Chance or claimed to have been furnished to Last Chance or to
Last Chance's agents or contractors in connection with work of any character
performed or claimed to have been performed on the Property or the Premises by
or at the direction of Last Chance.

        6.6 Utilities. Last Chance shall furnish, at its sole cost and expense,
all utilities and services supplied to and used for or upon the Property or the
Premises, including, but not limited to, heat, electricity, gas, fuel, oil,
telephone, the garbage service, waste disposal service. Water and sewer service
shall, however, be provided to Last Chance under and pursuant to the Water and
Sewer Service Agreement.

7.  INSURANCE AND INDEMNITY

        7.1 Fire and Other Insurance. Last Chance shall, at its sole cost and
expense, at all times during the Lease Term keep the Property and Premises
insured against loss or destruction by fire and other perils, including
vandalism and malicious mischief, commonly covered under the standard extended
coverage endorsement in Washoe County, Nevada. The insurer shall be rated at
least A+ by A.M. Best or a comparable rating by a similar rating agency.
Attached hereto as Exhibit 4 is a schedule of all such policies and coverages
maintained by Landlord as of the date of execution of this Lease. Subject to the
insurer rating requirements provided herein, Last Chance shall, at


                                       13
<PAGE>


a minimum, maintain like policies and coverages. The amount of such insurance
shall be increased or decreased periodically upon the renewal of each insurance
policy provided by Last Chance under this Section 7 to account for inflation.

        Any loss payable under any policy described in this Section 7.1 shall be
paid by the insurance company to Landlord to be used solely to fund the repair
or replacement of the damaged building or improvement pursuant to this Lease.
Any amount not used to fund repairs or replacements shall be paid over to or
retained by Last Chance, without restriction on use. In the event of a loss Last
Chance may, if it is entitled to do so under the terms of the Option To Purchase
the Gold Ranch Casino Property, exercise its option to purchase or, if
appropriate, its right of first refusal, subsequent to the loss. In the event
Last Chance exercises its option to purchase or right of first refusal, any
insurance proceeds for loss payable under any policy described in this Section 7
shall be paid by the insurance company to Last Chance, as the loss payee, to be
applied to the purchase price under the Option To Purchase the Gold Ranch Casino
Property. Any insurance proceeds in excess of the purchase price shall become
the sole and exclusive property of Last Chance.

        Landlord shall be named as an additional insured on the policies and the
policies shall also contain cross-liability endorsements. All insurance required
under this Lease shall contain an endorsement requiring thirty (30) days'
written notice from the insurance company to both parties before cancellation or
change in the coverage, scope or amount of any policy.

        Each policy, or a certificate of the policy, together with evidence of
payment of premiums, shall be deposited with the Landlord at the commencement of
the term, and on renewal of the policy when provided to Last Chance by the
insurance company.

        7.2 Liability Insurance. Last Chance, at its sole cost and expense,
shall obtain and keep in force during the term of this Lease, a policy of
comprehensive public liability and property insurance insuring Landlord and Last
Chance, as co-insureds, against any liability arising out of the ownership, use,
occupancy or maintenance of the Property, the Premises and the FF&E with
combined single limits of not less than $2,000,000. Last Chance shall provide
Landlord with a copy of such insurance policies upon request.

        7.3 Waiver of Subrogation. The parties hereby release each other, and
their respective authorized representatives, from any claims for damage to any
person or to the Property, the Premises and the FF&E and to the fixtures,
personal property, and any improvements, or alterations of either Landlord or
Last Chance in or on the Property or the Premises for claims which are insured
against under any insurance policies carried by the parties and in force at the
time of any such damage.

        Each party shall cause each insurance policy obtained by it to provide
that the insurance company waives all right of recovery by way of subrogation
against either party in connection with any damage covered by any policy.
Neither party shall be liable to the other for any damage caused by fire or any
of the other risks insured


                                       14
<PAGE>


against under any insurance policy required by this Lease. If any insurance
policy cannot be obtained with a waiver of subrogation, or is obtainable only by
the payment of an additional premium charge above that charged by insurance
companies issuing policies without a waiver of subrogation, Last Chance shall
notify Landlord of this fact. Landlord shall have a period of ten (10) days
after receiving the notice either to place the insurance with a company that is
reasonably satisfactory to the other party and that will carry the insurance
with a waiver of subrogation, or to agree to pay the additional premium if such
a policy is obtainable at additional cost. If the insurance cannot be obtained
or the party in whose favor a waiver of subrogation is desired refuses to pay
the additional premium charged, the other party is relieved of the obligation to
obtain a waiver of subrogation rights with respect to the particular insurance
involved.

        7.4 Last Chance's Indemnities. Last Chance shall fully and completely
indemnify, defend and hold Landlord harmless from any and all claims arising
from Last Chance's use of the Property, Premises or FF&E, from the conduct of
Last Chance's business, from any activity or work which may be permitted or
suffered by Last Chance in or about the Property, Premises or FF&E, based on
events occurring after the Closing, and against any and all claims arising from
any breach or default by Last Chance under this Lease, from any gross negligence
or higher tort of Last Chance or any of Last Chance's agents, contractors,
employees or invitees, and from any and all costs, attorneys' fees, expenses and
liabilities incurred in the defense of any such claim or any action or
proceeding brought thereon. This provision shall provision shall survive the
termination of this Lease.

        7.5 Landlord's Indemnities. Landlord shall fully and completely
indemnify, defend and hold Last Chance harmless from any and all claims arising
from Landlord's use of the Property, Premises or FF&E, from the conduct of
Landlord's business, from any activity or work which may have been permitted or
suffered by Landlord in or about the Property, Premises or FF&E, based on events
occurring prior to the Closing and the completion by Landlord of its maintenance
obligations under Section 6.1, and from and against any and all claims arising
from any breach or default by Landlord under this Lease, from any gross
negligence or higher tort of Landlord or any of Landlord's agents, contractors,
employees or invitees, and from any and all costs, attorneys' fees, expenses and
liabilities incurred in the defense of any such claim or any action or
proceeding brought thereon. This provision shall provision shall survive the
termination of this Lease.

8.      REPRESENTATIONS AND WARRANTIES.

        8.1 Representations and warranties of Landlord. Except as set forth in
Exhibit 5, Landlord represents and warrants to Last Chance that each of the
following representations and warranties are true and correct as of the date
hereof and, except as otherwise expressly provided herein, will be true and
correct at the Closing and on and closing following a purchase by Last Chance
under the Option to Purchase the Gold Ranch Casino Property. The truth and
accuracy of the representations and warranties herein shall constitute a
condition to the Closing.


                                       15
<PAGE>


               (A) Organization, PGE. PGE is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada and
every other jurisdiction in which PGE does business or owns property, and has
all requisite power and authority to own and lease the Property, the Premises
and the FF&E.

               (B) Organization, Target. Target is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Nevada and every other jurisdiction in which Target does business or
owns property and has all requisite power and authority to own and lease the
Leach Field Property and the Frontage Parcel and to grant the Sign Easement.

               (C) Power, Authority, Due Execution, Binding Obligation. PGE and
Target have full power and authority to execute and deliver this Lease and to
consummate the transactions contemplated hereby. The execution and delivery of
this Lease and the consummation of the transactions contemplated hereby have
been duly and validly authorized in accordance with PGE's Articles of
Incorporation, Bylaws and applicable provisions of Chapter 78 of the Nevada
Revised Statutes and any requisite approvals of shareholders and directors have
been obtained. The execution and delivery of this Lease and the consummation of
the transactions contemplated hereby have been duly and validly authorized in
accordance with Target's Articles of Organization and Operating Agreement and
applicable provisions of Chapter 86 of the Nevada Revised Statutes and any
requisite approvals of its members have been obtained. This Lease has been duly
and validly executed and delivered by PGE and Target or their respective
authorized representatives and is a valid and binding obligation of each of PGE
and Target, enforceable against each of them in accordance with its terms.
Neither this Lease nor the performance of the obligations of either PGE or
Target thereunder, will violate any contractual obligations with any third party
or contravene any law, governmental rule, regulation, order, writ, injunction or
decree applicable to PGE or Target.

               (D) Ownership and Compliance. Landlord hereby represents and
warrants that it is the legal owner of the Property, the Premises and the FF&E,
that it has the requisite authority and power to enter into this Lease, that
this Lease does not violate any of its contractual obligations with any third
party, including recorded documents such as deeds of trusts, mortgages or
security agreements, or violate or contravene any law, governmental rule,
regulation, order, writ, injunction or decree applicable to it or its officers,
directors, managers, employees or agents, that there are no consents necessary
from any person, association, entity, or Governmental Authority necessary to
render the Lease herein lawful, or effective in accordance with its the terms,
and that the Landlord is in compliance with all of applicable laws of the U.S.
Federal Government, the State of Nevada and State of California and any and all
jurisdictions with power over the Landlord. Landlord acknowledges that the
execution and delivery of this Lease is a to condition precedent to the
obligation of Last Chance to consummate the Asset Purchase Agreement and the
other Integrated Agreements.


                                       16
<PAGE>


               (E) Status of Title. Landlord represents and warrants that: (i)
it will lease the Property, Premises and FF&E to Last Chance as provided in
Section 2.1 and that (ii) Landlord owns the Property, the Premises and the FF&E
free and clear of all liens, claims, encumbrances, and interests of third
parties, subject only to the Permitted Exceptions; (iii) Landlord has not
assigned or encumbered any interest in the Property, the Premises or the FF&E;
and (iv) there are no outstanding preferential rights to acquire any interest in
the Property, the Premises or the FF&E granted by Landlord to any third parties.
Last Chance acknowledges, however, that the Gold Ranch Casino Property is
encumbered by the Jack In The Box Lease which shall be a Permitted Exception and
assumed by Last Chance as provided in the Asset Purchase Agreement.

               (F) Approval of Conditions of Title.

                   (i) This Lease is contingent upon approval by Last Chance of
the condition of the title to the Property the Premises and the FF&E. Last
Chance shall review the Preliminary Title Report for the Property. If the
Preliminary Title Report contains exception(s) that are unacceptable to Last
Chance or in the event that there are other defects in title to the Property,
the Premises or the FF&E which are unacceptable to Last Chance, it shall give
written notice thereof to Landlord no less than thirty (30) days prior to the
Closing under the Asset Purchase Agreement.

                   (ii) Last Chance's notice of disapproval shall either state
that (a) the Lease shall be terminated, or (b) that Landlord shall have until
the Closing to remove, at Landlord's expense, any defects in title which are
disapproved. If the Landlord does not remove a disapproved defect, Last Chance
shall notify Landlord that: (c) Last Chance elects to terminate this Lease , or
(d) that the disapproved defects or one or more of them are waived and shall
constitute Permitted Exceptions, or (e) the Last Chance shall cure any remaining
defects in title and deduct the cost thereof from the Rent, or (f) that Last
Chance will seek specific performance of Landlords obligation to provide title
to the Property, the Premises and the FF&E as set forth in Sections 2.1 and 8.1
(E). In the event that Last Chance reasonably terminates this Lease under this
Section 8.1(F), Landlord shall reimburse Last Chance for all costs (including
attorneys' fees) incurred, by Last Chance in the negotiation and documentation
of this Lease and the Integrated Agreements .

                   (iii) All matters shown on the Preliminary Title Report,
which are not specifically disapproved by Last Chance within the period provided
in Section 8.1(F)(i), shall be deemed to be Permitted Exceptions.

                   (iv) The costs of the Preliminary Title Reports shall be
shared equally by Landlord and Last Chance.

                   (v) The cost of Last Chance's policy of title insurance shall
be shared equally by Landlord and Last Chance.


                                       17
<PAGE>


               (G) Encroachment. There are no structures or buildings on the
Property that encroach on a parcel of property not owned by the Landlord, no
structure or building is located on the Property in violation of any recorded
covenant or restriction. In the event of an encroachment on property owned by
Landlord or an Affiliate, Landlord shall and shall cause its Affiliates to grant
a lease or easement to Last Chance, without further consideration and that
portion of the property of Landlord or its Affiliates subject to the
encroachment shall become part of the Option Assets under the Option to Purchase
the Gold Ranch Casino Property . There are no encumbrances, easements, claims of
easement, rights, licenses, interest, conflicts in boundary lines, shortages in
area, encroachments, lack of water rights to the Property, mining claims,
reservations, releases, persons in possession, or other rights not disclosed by
public records.

               (H) Compliance With Law. The Property, Premises, and the FF&E
comply with, and are operated in accordance with, all material applicable laws
and ordinances affecting the Property, Premises, and the FF&E or the ownership,
improvement, development, possession, use, occupancy or operation thereof.
Zoning applicable to the Property, Premises, and the FF&E is consistent with and
permits all current uses thereon or thereof. There are no material defects in
the physical condition of the Property, Premises, or the FF&E. Except as
provided in Exhibit 5, the Landlord has not received any notice from any
Governmental Agency (i) requiring it to make any material repairs or changes to
the Property, Premises or the FF&E, or the improvements located thereon, or (ii)
giving notice of any material governmental actions pending or threatened
relating to the Property, Premises or the FF&E. All improvements on the
Property, Premises and the FF&E are in material compliance with current building
codes, to the extent applicable, and Landlord has not received any written
notices of any material violations of any applicable building codes relating to
the Property, Premises or the FF&E which have not been remedied,

               (I) Physical Condition. That, as of the date of execution of this
Lease, the Closing and for a period of one (1) year from and after the Closing,
the Property, the Premises and the FF&E are and shall be, in compliance with all
applicable laws, structurally sound, in good operating condition and repair,
free from patent and latent defects, and adequate for the uses to which they are
being put; and neither the Property, the Premises nor the FF&E are or will be in
need of maintenance or repairs on any of the dates herein specified.

               (J) Eminent Domain and Zoning. There is no action, proceeding,
investigation or litigation pending or contemplated or threatened: (i) to take
all or any portion of the Property, Premises or the FF&E , or any interest
therein, by eminent domain; (ii) to modify the zoning of, or other governmental
rules or restrictions applicable to, the Property, Premises or the FF&E or the
use or development thereof; (iii) for any street widening or changes in highway
or traffic lanes or patterns in the immediate vicinity of the Property, Premises
the FF&E; or (iv) otherwise relating to the Property, Premises or the FF&E or
the interests of Landlord therein, or which otherwise would interfere with the
use, ownership, improvement, development and/or operation of the Property,
Premises or the FF&E .


                                       18
<PAGE>


               (K) Environmental Matters.

                   (i) Except as provided in Exhibit 6, the Property, Premises,
and the FF&E at all times have been, and continue to be, operated by the
Landlord in material compliance with all Environmental Laws;

                   (ii) Except as provided in Exhibit 6, there have been no
past, and there are no pending or threatened (a) Environmental Claims,
complaints, notices, requests for information or investigations with respect to
any alleged material violation of any Environmental Law by Landlord, or (b)
complaints, notices or inquiries to or investigations of Landlord regarding
potential liability under any Environmental Law by the Landlord;

                   (iii) Except as provided in Exhibit 6, there have not been,
at the Property, Premises or the FF&E any Releases of Hazardous Materials and
there are no citations, notices or orders of noncompliance issued and
outstanding to Landlord under any Environmental Law;

                   (iv) Landlord is in material compliance with all permits,
certificates, approvals, licenses and other governmental authorizations relating
to environmental matters and necessary for the Property, Premises and FF&E, and
no order has been issued, no Environmental Claim has been made, no penalty has
been assessed and no investigation or review has occurred or is pending or
threatened, by any Person with respect to any alleged failure by the Landlord to
have any license or permit required under applicable Environmental Laws in
connection with the conduct of its business or operations or to comply with any
Environmental Laws or with respect to any generation, treatment, storage,
recycling, transportation, discharge, disposal or release of any Hazardous
Material generated by them;

                   (v) Except as provided in Exhibit 6 and Section 8.1(K)(vii),
there are no underground storage tanks, active or abandoned, including petroleum
storage tanks, under the Property or the Premises.

                   (vi) Except as provided in Exhibit 6 and Section 8.1(K)(vii),
Landlord warrants that no condition exists on the Property, Premises or the FF&E
that would represent an environmental liability to Last Chance, and that if such
a condition does exist, which was created by Landlord or any prior tenant of the
Landlord, that the Landlord shall indemnify, defend, and hold harmless, Last
Chance for any losses associated with such liability, including but not limiting
any and all claims, judgments, damages, penalties, fines, costs, liabilities or
losses surrounding sums paid in settlement of claims, attorney fees, consultant
fees and expert fees. The Landlord shall


                                       19
<PAGE>


be held harmless for environmental liability conditions created subsequent to
Last Chance taking possession of the Property, Premises, or the FF&E.

                   (vii) PGE and Target acknowledge that a petroleum Release
from an underground storage tank on the Gold Ranch Casino Property was
discovered in 1995. That Release resulted in the contamination of the well(s)
(Permit No. 48834 and Permit No. 49019; Certificate No. 12799 and Certificate
No. 12801) located inside the Casino building. Subsequent examination and
characterization led PGE to cease using these wells and to install numerous
monitoring wells, ground water recovery wells, soil vapor extraction points, and
a treatment system, which continue to operate. It is expected that remediation
will be concluded within twelve (12) months following the Closing. PGE and
Target shall indemnify Last Chance from and against liability for this Release
to the extent provided in Section 4(g)(vi) of the Asset Purchase Agreement.

               (L) Restrictive Covenant, No Lottery Business, Right of First
Refusal-Gaming.

                   (i) Restrictive Covenant, No Lottery Business. Landlord and
its Affiliates covenant that following the Closing and for the Lease Term, any
real property retained by Landlord or its Affiliates that is adjacent to or
located within one-half mile from any of the Integral Properties and Assets,
lying North or West of Interstate 80 (the "Restricted Properties" as described
in Exhibit 7) will be developed in a manner complementary to the Integrated
Properties and Assets. Landlord shall, prior to entering into any binding
agreement to sell, lease, transfer or develop any Restricted Properties disclose
to Last Chance its plans for sale, lease, transfer or development, consult with
Last Chance regarding any contemplated sale, lease, transfer or development and
give fair consideration to any objection communicated by Last Chance that a
proposed sale, lease, transfer or development will constitute a breach of this
Restrictive Covenant. Landlord and its Affiliates acknowledge and agree that a
lottery business of any kind would violate this Restrictive Covenant and that
such business shall be prohibited. Landlord shall cause each of its Affiliates
to comply with this Restrictive Covenant. Except as herein provided, this
Restrictive Covenant will not affect the right of Landlord or its Affiliates to
sell, lease, transfer or develop the Restricted Properties as they wish, though
Landlord or any affected Affiliate shall be liable, in law or in equity,
including actions for injunctive relief and for all damages, losses, costs and
expenses actually suffered or incurred by Last Chance as the proximate result of
any breach of this Restrictive Covenant.

                   (ii) Right of First Refusal-Gaming.

                        (a) Right of First Refusal. In the event that Landlord
or any Affiliate intends to sell, lease, transfer or develop any of the
Restricted Properties during the Lease Term, Last Chance shall have the right of
first refusal to conduct all forms of commercial gaming under the laws of the
States of Nevada and California (Gaming) on such Restricted Properties. Landlord
and its Affiliates agree that they will not: (i) engage in Gaming on the
Restricted Properties without first offering Last Chance the opportunity to
conduct such Gaming on commercially reasonable terms and


                                       20
<PAGE>


conditions within the context of the purpose of this Restrictive Covenant which
is the protection of the investment of Last Chance in the Integral Properties
and Assets (Commercially Reasonable Terms), or (ii) transfer to or permit the
development of any of the Restricted Properties by any third party without first
securing in writing the right of first refusal of Last Chance with respect to
Gaming conducted or to be conducted thereon. This right of first refusal shall
be a covenant running with the title to the Restricted Properties and shall be
binding on the successors and assigns of Landlord and its Affiliates.

                        (b) Notice of Intent To Conduct Gaming. Prior to
engaging in Gaming or making application for a license or other authority to
engage in Gaming on the Restricted Properties, Landlord, its Affiliates and the
successors in interest of any of them (Gaming Proponent), shall give written
notice (Notice) to Last Chance stating and declaring: (i) the bona fide
intention to engage in Gaming (Gaming Enterprise), (ii) the Restricted
Properties upon which the Gaming Enterprise is proposed to be conducted, (iii)
the principles involved as owners or proposed key employees in the Gaming
Enterprise, (iv) a detailed description of the nature of the proposed Gaming
Enterprise, including the number of gaming devices and table games, (v) the
Commercially Reasonable Terms upon which the Gaming Enterprise is offered to
Last Chance, (vi) the projected date for commencement of the Gaming Enterprise,
and (vii) copies of any drafted documents evidencing the proposed Gaming
Enterprise, including letters of intent. The failure to offer Commercially
Reasonable Terms shall be a violation of the provisions of this Section 8.1(L)
and shall render the Notice voidable by Last Chance.

                        (c) Notice of Election. Within thirty (30) days
following receipt of the Notice, Last Chance shall have the right, but not the
obligation, to elect to conduct the Gaming Enterprise on the Commercially
Reasonable Terms set forth in the Notice. Within thirty (30) days following
receipt of the Notice, Last Chance shall notify the Gaming Proponent, in
writing, of the election of Last Chance to exercise its right of first refusal
(Notice of Election). The failure of Last Chance to give a timely Notice of
Election shall constitute an election not to exercise. In the event that Last
Chance elects to exercise its right of first refusal, the Gaming Proponent and
Last Chance shall execute such documents and instruments and make such
deliveries as may be reasonably required to consummate the transaction. Any
agreement reached by and between Last Chance and the Gaming Proponent shall be
subject to approval by Nevada and/or California Gaming Authorities and shall
terminate in the event that any such approval is denied.

                        (d) Non-Exercise. If Last Chance elects or is deemed to
have elected not to exercise its right of first refusal the Gaming Proponent may
proceed with the Gaming Enterprise providing that: (i) the Gaming Enterprise
commences within the period provided in the Notice or if none is provided,
within eighteen (18) months after the expiration of Last Chance's right of first
refusal, (ii) is conducted on terms identical to those specified in the Notice,
(iii) the transferee takes, and acknowledges in writing that it takes title to
the Restricted Properties subject to Last Chance's rights


                                       21
<PAGE>


under this Lease, specifically including, without limitation, the rights of Last
Chance under Section 8.1(L) of this Lease and the Integrated Agreements, and
(iv) all deeds and other documents by which the Restricted Properties are
conveyed recite that title thereto is taken subject to the rights of Last Chance
under Section 8.1(L) of this Lease and the other Integrated Agreements (with
specific reference to all pertinent recording information) and that the grantee,
lessee, transferee or assignee, as the case may be, is bound thereby. If the
Gaming Enterprise is not consummated, the Gaming Proponent giving the Notice, or
the successors thereto, must give notice anew in accordance with Section
8.1(L)(b) prior to engaging in any subsequent Gaming Enterprise. In the event
that a Gaming Enterprise is threatened or commenced on any of the Restricted
Properties, Landlord and its Affiliates, shall, upon demand by Last Chance and
at the sole cost and expense of Landlord and its Affiliates, take such actions
as may be necessary to protect the rights of Last Chance hereunder, including
actions for injunctive relief and damages, and indemnify, protect and defend
Last Chance (including costs and attorneys' fees incurred by Last Chance) from
and against the claims of any such Gaming Proponent.

                        (e) Enforcement by Injunctive Relief. Landlord and its
Affiliates have carefully considered the nature and extent of the restrictions
upon them and the rights and remedies conferred upon Last Chance under this
Section 8.1(L) and acknowledge that they are fully required to protect the
legitimate interests of Last Chance and do not confer a benefit upon Last Chance
disproportionate to the detriment of Landlord or its Affiliates. Landlord and
its Affiliates agree to provide a copy of this Section 8.1(L) to all persons
seeking to acquire an interest in the Restricted Properties by purchase, lease,
transfer, as a developer, or otherwise. Landlord and its Affiliates agree that
should they, or any of them, violate any of the terms and conditions of this
Section 8.1(L)(ii), they shall be liable, in law or in equity, including actions
for injunctive relief and for all damages, losses, costs and expenses actually
suffered or incurred by Last Chance as the proximate result of any breach of
Section 8.1(L)(ii).

        Nothing in this Lease shall be construed to prohibit Last Chance from
also pursuing any other remedy, at law or in equity, the parties having agreed
that all remedies shall be cumulative. Nothing in Section 8.1(L)(ii) or (iii)
shall constitute or be deemed to constitute a waiver by the right of Last Chance
to contend that any Gaming Enterprise constitutes or will constitute a violation
of the Restrictive Covenant under Section 8.1(L)(i).

               (iii) No Waiver. Nothing contained in Section 8.1(L)(ii) shall be
construed to constitute a waiver by Last Chance of the right to object to
development deemed by Last Chance not to be complimentary to the Integral
Properties and Assets.

        8.2 Representations and Warranties of Last Chance. Last Chance
represents and warrants to Landlord that each of the following representations
and warranties are true and correct as of the date hereof and, except as
otherwise expressly provided herein, will be true and correct on the as of the
Closing and the close of escrow in the


                                       22
<PAGE>


event of a purchase by it under the Option to Purchase the Gold Ranch Casino
Property.

               (A) Organization. Last Chance is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada and
every other jurisdiction in which the Last Chance does business, owns property
or has employees, and has all requisite power and authority to acquire the
rights granted or created by this Agreement.

               (B) Articles and By Laws. The execution and delivery of this
Lease does not, and the consummation of the transaction contemplated hereby will
not, conflict with the terms and provisions of the Articles of Incorporation or
the By Laws of Last Chance.

               (C) Proper Authority and Action, Binding Obligation. Last Chance
has all requisite corporate power and authority to enter into this Lease and to
perform its obligations thereunder. Last Chance has taken all action necessary
under its organizational documents and applicable corporate law to authorize the
execution and delivery of this Lease and the performance of its obligations
thereunder and has duly executed and delivered this Lease. The Lease is the
valid and binding obligation of Last Chance, enforceable against Last Chance in
accordance with its terms. Neither this Lease nor Last Chance's performance of
its obligations thereunder, will violate any contractual obligations with any
third party or contravene any law, governmental rule, regulation, order, writ,
injunction or decree applicable to Last Chance.

9.  DEFAULTS AND REMEDIES

        9.1 Defaults By Last Chance. The occurrence of any one or more of the
following events shall constitute a default and material breach of this Lease by
Last Chance:

               (A) the vacating or abandonment of the Property or the Premises
by Last Chance;

               (B) the failure by Last Chance to make any payment of Rent or any
other payment required to be made by Last Chance hereunder where such failure
shall continue for a period of ten (10) days after written notice thereof from
Landlord to Last Chance;

               (C) the failure by Last Chance to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed by
Last Chance, other than described in Paragraph 9.1(B) above, or to perform any
material obligation of Last Chance under any of the Integrated Agreements, where
such failure shall continue for a period of thirty (30) days after written
notice thereof from Landlord to Last Chance, provided, however, that if the
nature of Last Chance's default is such that


                                       23
<PAGE>


more than thirty (30) days are reasonably required for its cure, then Last
Chance shall not be deemed to be in default if Last Chance commences such cure
within said 30-day period and thereafter diligently prosecutes such cure to
completion;

               (D) the making by Last Chance of any general assignment or
general arrangement for the benefit of creditors;

               (E) the filing by or against Last Chance of a petition to have
Last Chance adjudged a bankrupt or a petition for reorganization or arrangement
under any law relating to bankruptcy (unless, in the case of petition filed
against Last Chance, the same is dismissed within sixty (60) days);

               (F) the appointment of a trustee or receiver to take possession
of substantially all of Last Chance's assets located on the Property or at the
Premises or of Last Chance's interest in this Lease, where possession is not
restored to Last Chance within thirty (30) days; and

               (G) the attachment, execution or other judicial seizure of
substantially all of Last Chance's assets located on the Property or in the
Premises or of Last Chance's interest in this Lease, where such seizure is not
discharged within thirty (30) days.

        9.2 Remedies in Default. If Landlord considers that Last Chance is in
default as provided in Section 9.1, other than a default in the payment of Rent
which shall be governed by Section 9.1(B), Landlord shall notify Last Chance
thereof in writing, setting out specifically in what respects it is claimed that
Last Chance has breached this Lease. The receipt of such notice by Last Chance
and the lapse of thirty (30) days thereafter without Last Chance's (i) curing
such alleged breach, (ii) commencing and diligently pursuing such action which
is necessary to cure the alleged breach, or (iii) commencing an action in a
court of competent jurisdiction contesting such alleged breach, shall be a
default hereunder. In the event of any such default by Last Chance, Landlord
may, at any time thereafter, Landlord may exercise any one or more of the
following remedies:

               (A) Terminate Last Chance's right to possession of the Premises
by any lawful means, in which case this Lease shall terminate, and Last Chance
shall immediately surrender possession of the Premises to Landlord. In such
event, Landlord shall be entitle to recover from Last Chance twenty-five
Thousand Dollars ($25,000.00) in liquidated damages by reason of the Last
Chance's default. In the event Last Chance shall have abandoned the Premises,
Landlord shall have the option of (i) retaking possession of the Premises and
recovering from Last Chance the amount specified in Section 9.2(A), or (ii)
proceeding under Section 9.2(B) and/or 9.2(C).

               (B) Maintain Last Chance's right to possession, in which case
this Lease shall continue in effect whether or not Last Chance shall have
abandoned the Premises. In such event, Landlord shall be entitled to enforce all
of Landlord's rights and remedies under this Lease, including the right to
recover the Rent as it becomes due hereunder subject to reasonable mitigation
efforts of the Landlord.


                                       24
<PAGE>


               (C) Pursue any other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the State of Nevada.

        9.3 Default by Landlord. Except as otherwise provided in this Lease,
Landlord shall not be in default unless Landlord fails to perform obligations
required of Landlord within a reasonable time, but in no event later than thirty
(30) days after written notice by Last Chance to Landlord, specifying the
default of Landlord; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for performance,
then Landlord shall not be in default if Landlord commences performance within
such thirty (30) day period and thereafter diligently prosecutes the same to
completion.

        9.4 Condemnation.

               (A) Definitions.

                   (i) "Condemnation" means (i) the exercise of any governmental
power, whether by legal proceedings or otherwise, by a Condemnor and (ii) a
voluntary sale or transfer by Landlord to any Condemnor, either under threat of
condemnation or while legal proceedings for condemnation is pending.

                   (ii) "Date of Taking" means the date the Condemnor has right
to possession of the property being condemned.

                   (iii) "Award" means all compensation, sums, or anything of
value awarded, paid or received on a total or partial condemnation.

                   (iv) "Condemnor" means any public or quasi-public authority,
or private corporation or individual, having the power of condemnation.

               (B) Parties' Rights and Obligation to be Governed by Lease. If
during the Lease Term there is any taking of all or any part of the Property,
the Premises , the FF&E or any interest in this Lease, by Condemnation, the
rights and obligations of the parties shall be determined pursuant to Paragraph
9.4(C), 9.4 (D) and 9.4(E).

               (C) Partial Taking. If any portion of the Property or the
Premises or the FF&E is taken by Condemnation, this Lease shall remain in
effect, except that Last Chance may elect to terminate this Lease if the
remaining portion of the Property, the Premises or the FF&E is rendered
unsuitable for Last Chance's continued use of the Property or the Premises or
the FF&E, in Last Chance's sole judgment, or Last Chance may, if it is entitled
to do so under the terms of the Option To Purchase the Gold Ranch Property,
exercise its option to purchase. In the event Last Chance exercises its option
to purchase, the Award shall be paid to Last Chance to be applied to the
purchase price under the Option To Purchase the Gold Ranch Property. Any Award
in excess of the purchase price shall become the sole and exclusive property of
Last Chance.


                                       25
<PAGE>


        If Last Chance elects to terminate this Lease, Last Chance must exercise
its right to terminate pursuant to this paragraph by providing notice to
Landlord within thirty (30) days after the nature and the extent of the taking
have been finally determined. If Last Chance elects to terminate this Lease as
provided in this paragraph, Last Chance also shall notify Landlord of the date
of termination, which shall not be earlier than thirty (30) days nor later than
ninety (90) days after Last Chance has notified Landlord of its election to
terminate, except that this Lease shall terminate on the Date of Taking if the
Date of Taking falls on a date before the date of termination as designated by
Last Chance. If Last Chance does not terminate this within the thirty-(30) day
period, this Lease shall continue in full force and effect, except that Minimum
Annual Rent shall be reduced pursuant to Paragraph 9.4(D).

               (D) Effect on Rent. If any portion of the Property, the Premises
or the FF&E is taken by condemnation and this Lease remains in full force and
effect, on the Date of Taking the Minimum Annual Rent shall be reduced by an
amount that bears the same ratio to the Minimum Annual Rent as the value of the
area of the portion of the Property, the Premises or the FF&E taken bears to the
total value of the Property, Premises and FF&E immediately before the Date of
Taking.

               (E) Award -- Distribution. In the event that Last Chance does not
elect to exercise its option to purchase under the Option To Purchase the Gold
Ranch Property in the event of either partial or full condemnation of the
Property the Premises or the FF&E, the Award shall belong to and be paid to
Landlord, except that Last Chance shall receive from the Award the following:

                   (i) As of the Date of Taking of the portion of the Property,
the Premises or the FF&E condemned, a sum attributable to 100% of any amount
attributable to the present value of the market value of the Lease for the
remainder of the Lease Term, as if all extensions were exercised less the
present value of the Minimum Annual Rent payable for the remainder of the Lease
Term;

                   (ii) As of the Date of Taking, a sum attributable to the
unamortized or unrecovered value of any Business Expenditures, improvements,
alterations or additions made by Last Chance;

                   (iii) Reasonable removal and relocation costs; and

                   (iv) A sum attributable to that portion of the Award
constituting: severance damages for the restoration of the Property, the
Premises and the FF&E and/or loss of goodwill.

               (F) Negotiation and litigation. Last Chance shall have the right
to negotiate directly with the Condemnor for the recovery of the portion of the
Award that Last Chance is entitled to herein and may participate in litigation
arising or instituted as a result of Condemnation.


                                       26
<PAGE>


        9.5 Destruction. If, at any time during the Lease Term, the Property,
the Premises or the FF&E are damaged or destroyed by fire or other casualty,
Landlord shall repair the Property, the Premises and/or the FF&E as herein
provided. Landlord shall complete such repairs within one hundred eighty (180)
days after the commencement of repairs, provided said repairs may be
accomplished under the applicable laws and regulations of the appropriate
governmental authorities within such time, and further provided that, if
Landlord received a reasonable estimate from competent personnel hired to make
such repairs that the repairs would be completed within the one hundred eighty
(180) day period, but that, beyond Landlord's control, such work is not
completed but could be concluded within a reasonable time after the end of such
period, Landlord shall have this additional reasonable time to complete such
work. Repairs shall commence within a reasonable time after the destruction of
the Property and/or Premises. If Landlord does not comply with the terms of this
paragraph, Last Chance may (i) terminate this Lease, or (ii) commence making
repairs to the Property, the Premises or the FF&E itself and abate any amount
paid for repairs immediately against the Rent, once the Property, the Premises
and the FF&E have become usable for the Last Chance's business; repairs made by
the Last Chance pursuant to this Section shall not be amortizable over the
remaining Lease Term, they shall be immediately deductible from the Rent.
Commencing with the date of damage or destruction and continuing during the
course of repairs, Last Chance shall only be required to pay Rent in proportion
to those portions of the Property, Premises and FF&E which Last Chance can
reasonably use; the remaining portion of the Rent during that period shall abate
until repairs or restoration are completed.

        Alternatively, if any time during the Lease Term, the Property, the
Premises or the FF&E are damaged or destroyed by fire or other casualty, Last
Chance may, if it is entitled to do so under the terms of the Option To Purchase
the Gold Ranch Casino Property, exercise its option to purchase. In the event
Last Chance exercises its option to purchase, insurance proceeds shall be
disbursed to Last Chance as provided in Section 7(A) of this Lease.

10.     DISPUTE RESOLUTION.

        10.1 Informal Dispute Resolution. As a condition precedent to the right
to commence litigation or demand arbitration, all disputes arising under this
Lease shall be submitted in writing for resolution, by either party, to the
Chief Executive Officer of each party who shall, in good faith, attempt to
resolve the matter within five (5) business days of submission. Upon their
failure to do so, the matter may be submitted by either party to arbitration as
provided in Section 10.2.

        10.2 Arbitration.. Upon the failure of the informal procedure set forth
in Section 10.1 to achieve a resolution of a dispute arising under this Lease,
the dispute shall be submitted to arbitration as provided in this Section 10.2:


                                       27
<PAGE>


               (A) Either party may demand arbitration by giving to the other
party a notice specifying with particularity the issue(s) in dispute, the amount
involved, and the remedy requested. Demand for arbitration must be given within
one (1) year after the date of the act or omission out of which the dispute
arose or within thirty (30) days after service of a summons and complaint in a
court of competent jurisdiction alleging claims subject to this Section 10,
whichever is later, as otherwise it shall be deemed to be conclusively waived.
Within twenty (20) days after receipt of the notice, the responding party shall
answer the demand in writing, specifying with particularity the facts or issues
that the responding party disputes.

               (B) Within ten (10) days after the responding party's answer,
each party shall select one qualified arbitrator. Each arbitrator shall be a
disinterested person qualified by education and experience to hear and determine
the issues and facts to be arbitrated. Within ten (10) days after their
selection, the arbitrators so chosen shall select a neutral arbitrator similarly
qualified. If the named arbitrators cannot agree on a neutral arbitrator, either
arbitrator may make application to any judge of a court of competent
jurisdiction, with a copy to both parties, requesting that court to appoint the
third arbitrator. The court's selection shall be final and binding on the
parties. If either party does not name an arbitrator, the arbitrator named by
the other party shall serve as the sole arbitrator.

               (C) Within five (5) days of the appointment of the third
arbitrator, each party shall present in writing to the arbitrators (with a copy
to the other party) its statement of the issues and facts in dispute. Any
question regarding the arbitrability of the dispute shall be decided by the
arbitrators. The arbitrators, as soon as possible, but not more than thirty (30)
days after their appointment, shall meet at a time and place reasonably
convenient for the parties, after giving each party at least ten (10) days
notice for the purpose of setting an arbitration hearing and establishing the
rules and timing of the arbitration. Unless otherwise agreed in writing,
arbitration shall be held in Reno, Nevada. The arbitration hearing shall be
conducted in accordance with the Commercial Arbitration Rules of the American
Arbitration Association. If there is any conflict between the provisions of this
Lease and the provisions of the Commercial Arbitration Rules of the American
Arbitration Association, the provisions of this Lease shall prevail. The failure
of a party to appear at the hearing shall not operate as a default. The
attendance of all arbitrators shall be required at all hearings. Action of the
arbitrators shall be by majority vote. After hearing the parties in regard to
the matter in dispute, taking such evidence and making such other investigations
as justice requires and as the arbitrators deem necessary, they shall decide the
issues submitted to them within ten (10) days thereafter and serve a written,
signed copy of the award upon each party.

               (D) The award shall be final and binding on the parties, and
judgment on the award may be entered by any court of competent jurisdiction. If
the parties settle the dispute in the course of the arbitration, the settlement
shall be approved by the arbitrators on request of either party and shall become
the award. Fees and expenses of the arbitration shall be allocated between the
parties as provided by the arbitrators.


                                       28
<PAGE>


The prevailing party in the arbitration proceedings shall be entitled to receive
from the other party reasonable attorneys' fees, costs and expenses to be
determined by the arbitrator(s).

11.     MISCELLANEOUS PROVISIONS.

        11.1 Severability. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision.

        11.2 Headings. The headings of this Lease are inserted for convenience
and identification only and are in no way intended to describe, interpret,
define or limit the scope, extent or intent of this Lease or any provision
hereof.

        11.3 Waivers. No waiver by any party hereto of any provision hereof
shall be deemed a waiver of any other provision hereof or of any subsequent
breach by the respective party of the same or any other provision. Any party's
consent to or approval of any act shall not be deemed to render unnecessary the
obtaining of that party's consent to or approval of any subsequent act by the
breaching party.

        11.4 Recording. The parties shall execute a Memorandum of Lease, in
recordable form, which may be recorded by either party.

        11.5 Right to Inspect. Landlord, or its agents, servants or employees,
may enter in and upon the Property or the Premises at any and all reasonable
times during normal business hours for the purposes of viewing the same and
inspecting the condition thereof.

        11.6 Rent During Holding Over. If Last Chance remains in possession of
the Premises, or any part thereof, after the expiration of the Lease Term
without the express written consent of Landlord, such occupancy shall be a
tenancy from month to month at a rental in the amount provided for in Section 3,
plus all other charges payable hereunder, and upon all the terms and conditions
of this Lease.

        11.7 Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive, but shall, wherever possible, be cumulative with all other
remedies at law or in equity.

        11.8 Covenants and Conditions. Each provision of this Lease performable
by Last Chance shall be deemed both a covenant and a condition.

        11.9 Binding Effect and Choice of Law. This Lease shall bind the
parties, their personal representatives, successors and assigns. The laws of the
State of Nevada shall govern the validity, construction, performance and effect
of this Lease. Venue of any action concerning this Lease shall be in Washoe
County, Nevada.


                                       29
<PAGE>


        11.10 Attorney's Fees. In the event a party must retain an attorney to
enforce this Lease or in the event of litigation which arises as a result of any
controversy, dispute, breach or construction of this Lease, the prevailing party
shall be entitled to recover, from the other party, all costs, expenses and
reasonable attorney's fees incurred in connection with the enforcement efforts
or litigation.

        11.11 Landlord's Access. Landlord and Landlord's agents shall have the
right to enter the Premises at reasonable times for the purpose of determining
Last Chance's compliance with the covenants and conditions of this Lease,
inspecting the same, showing the same to prospective purchasers, Last Chances or
lenders and making such alterations, repairs, improvements or additions to the
Premises as Landlord may deem necessary or desirable.

        11.12 Merger. The voluntary or other surrender of this Lease by Last
Chance, or a mutual cancellation thereof, shall not work a merger, and shall, at
the option of the Landlord, terminate all of any existing subtenancies, or may,
at the option of the Landlord, operate as an assignment to Landlord of any or
all of such subtenancies.

        11.13 Approvals. This Lease shall be contingent upon Last Chance
receiving any required approvals to operate gaming, bar, restaurant and other
commercial retail activities from the Nevada Gaming Authorities, State of
Nevada, Washoe County, or any other governmental board, commission or agency
that must provide Last Chance approval to operate the Premises. In the event
that the Last Chance is unable to secure the required approvals, this Lease
shall terminate with no damages claimed by any party against the other.

        11.14 Notices. Whenever under this Lease a provision is made for any
demand, notice or declaration of any kind, or whether it is deemed advisable or
necessary by either party to give or serve any such notice, demand or
declaration to the other party, the notice shall be in writing and served either
personally or sent by certified or registered mail, return receipt requested,
postage prepaid, addressed to addresses set forth below:

        To:    Prospector Gaming Enterprises, Inc., or
               Target Investments, L.L.C.:

                             Peter Stremmel
                             1400 S. Virginia
                             Reno, Nevada  89502

        With a copy to:
                             David R. Grundy, Esq.
                             Lemons, Grundy & Eisenberg
                             6005 Plumas Street, Suite 300
                             Reno, Nevada  89509


                                       30
<PAGE>


        To Last Chance:      Ferenc B. Szony, President
                             Last Chance, Inc.
                             345 Arlington Ave.
                             Reno, Nevada 89501

        With a copy to:      David R. Wood, Treasurer
                             The Sands Regent
                             345 Arlington Ave.
                             Reno, Nevada 89501

                             and

                             Paul A. Bible, Esq.
                             Bible, Hoy & Trachok
                             201 West Liberty Street, Third Floor
                             Reno, Nevada 89501.

        11.15 Additional Documents. The parties hereto agree to execute any
additional documents, including escrow instructions, as may be reasonable and
necessary to carry out the provisions of this Lease and option to purchase.

        11.16 No Construction Against Drafting Party. This Lease is not being
offered on a take-it-or-leave-it basis. Each party has been given an opportunity
to negotiate each term, propose new language or edits to existing language, and
has been given an opportunity to have the Lease reviewed by an independent
attorney. This Lease is a joint product of all parties and not one party.
Therefore, the rule of construction that an ambiguous contract should be
construed against the drafting party shall not apply to this Lease.

        11.17 Amendments. This Lease may not be amended, except in writing
signed by all parties to this Lease.

        11.18 Expenses. Each party shall pay its own attorneys' fees incurred to
document or negotiate this Lease.

        11.19 Integration. This Lease and the other Integrated Agreements
constitute the entire agreement by, among and between the parties and their
Affiliates hereto and thereto and shall be deemed to constitute a single
integrated transaction.


                                       31
<PAGE>


        IN WITNESS WHEREOF, the parties hereto have executed this Lease on the
date first written above.

Last Chance, Inc.,                          Prospector Gaming Enterprises, Inc.
a Nevada corporation (Last Chance)          a Nevada corporation (PGE)


By: /s/ Ferenc Szony                        By:    /s/ Peter Stremmel
Its: Pres/CEO                               Its:   President


Target Investments, L.L.C,
a Nevada limited liability company (Target)


By:  /s/ Peter Stremmel
Its:  Partner


                                       32
<PAGE>


        For the purposes of Sections 8.1(L)(i) of this Lease and in
consideration of the execution and delivery of the Integrated Agreements by all
parties to each of them, the following join in the execution of this Lease and
agree to be bound thereby.

/s/ Peter Stremmel                                 /s/ Steve Stremmel
Peter Stremmel                                     Steve Stremmel
Stremmel Capital Group, Ltd.                       Gold Ranch RV Resort, L.L.C.



By: /s/ Peter Stremmel                             By: /s/ Steve Stremmel
Its:  Partner                                      Its:  Manager


                                       33
<PAGE>


State of Nevada       )
                      ) ss.
County of Washoe      )

        This instrument was acknowledged before me on the 27th day of December,
2001, by Peter Stremmel, the Partner Target Investments, L.L.C.

                                                   /s/ Yvonne Cody
                                                   Notary Public

State of Nevada       )
                      ) ss.
County of Washoe      )

        This instrument was acknowledged before me on the 27th day of December,
2001, by Peter Stremmel, the President of Prospector Gaming Enterprises, Inc.

                                                   /s/ Yvonne Cody
                                                   Notary Public

State of Nevada       )
                      ) ss.
County of Washoe      )

        This instrument was acknowledged before me on the 27th day of December,
2001, by Ferenc Szony, the President/CEO, Last Chance, Inc.

                                                   /s/ Yvonne Cody
                                                   Notary Public

State of Nevada       )
                      ) ss.
County of Washoe      )

               This instrument was acknowledged before me on the 27th day of
December, 2001, by Peter Stremmel, the Partner Stremmel Capital Group, Ltd.

                                                   /s/ Yvonne Cody
                                                   Notary Public


                                       34
<PAGE>


State of Nevada       )
                      ) ss.
County of Washoe      )

               This instrument was acknowledged before me on the 27th day of
December, 2001, by Steve Stremmel, the Manager Gold Ranch RV Resort, L.L.C.

                                                   /s/ Yvonne Cody
                                                   Notary Public


                                       35

</TEXT>
</DOCUMENT>
