Exhibit 10.1

 

 

Loan No. 1301687001

 

AMENDED AND RESTATED CREDIT AGREEMENT

Dated effective as of November 30, 2015

 

among

 

NEVADA GOLD & CASINOS, INC., a Nevada corporation,

NG WASHINGTON, LLC, a Washington limited liability company,

NG WASHINGTON II HOLDINGS, LLC, a Delaware limited liability company,

NG WASHINGTON II, LLC, a Washington limited liability company,

NG WASHINGTON III, LLC, a Washington limited liability company,

NG SOUTH DAKOTA, LLC, a South Dakota limited liability company,

A.G. TRUCANO, SON & GRANDSONS, INC., a South Dakota corporation,

CGC HOLDINGS, L.L.C., a Nevada limited liability company,

CGE ASSETS, INC. (formerly Colorado Grand Enterprises, Inc.),

a Colorado corporation,

GOLD MOUNTAIN DEVELOPMENT, A LIMITED LIABILITY COMPANY,

a Colorado limited liability company, also known as GOLD MOUNTAIN DEVELOPMENT,
LLC,

NEVADA GOLD BVR, L.L.C., a Nevada limited liability company, and

NEVADA GOLD & CASINOS LV, LLC, a Nevada limited liability company,

 

as Borrowers

 

and

 

MUTUAL OF OMAHA BANK,

 

as Lender

 

 

 

 

 

TABLE OF CONTENTS

 

      RECITALS   1       ARTICLE I - DEFINITIONS 3       Section 1.01.
Definitions 3 Section 1.02. Interpretation and Construction 45 Section 1.03. Use
of Defined Terms 47 Section 1.04. Cross-References 47 Section 1.05. Exhibits and
Schedules 47       ARTICLE II - AMOUNT AND TERMS OF THE CREDIT FACILITY 47      
Section 2.01. The Revolving Credit Facility 47 Section 2.02. Use of Proceeds of
the Credit Facility 48 Section 2.03. Notice of Borrowings 49 Section 2.04.
Conditions of Borrowings 50 Section 2.05. The Revolving Credit Note and Interest
Rate 50 Section 2.06. Place and Manner of Payment 51 Section 2.07. Net Payments
51 Section 2.08. Fees 52 Section 2.09. Interest on Overdue Amounts and Default
Rate 53 Section 2.10. Security for the Credit Facility 53       ARTICLE III -
CONDITIONS PRECEDENT TO THE RESTATEMENT CLOSING DATE 54       A. Closing
Conditions 54       Section 3.01. Credit Agreement 54 Section 3.02. The Note 54
Section 3.03. Security Documentation 54 Section 3.04. Other Loan Documents 54
Section 3.05. Organizational Documents, Resolutions, Certificates of Good
Standing, Authorized Representative Certificates and Closing Certificate 55
Section 3.06. Title Policy and Endorsements 56 Section 3.07. Insurance 56
Section 3.08. Payment of Upfront Fee and Purchase Price 56 Section 3.09.
Reimbursement for Expenses and Fees 56 Section 3.10. Phase I Environmental Site
Assessments and Environmental Indemnity 56 Section 3.11. Schedule of Slot Route
Locations 57 Section 3.12. Adjacent Site Lease, Washington Casino Leases and
Deadwood Slot Route Leases 57

 

 

 

 

Section 3.13. Gaming Permits 57 Section 3.14. Survey 57 Section 3.15. Schedule
of all Significant Litigation 57 Section 3.16. Opinion of Counsel 58 Section
3.17. Compliance Under Existing Credit Agreement and Pro Form Financial
Compliance 58 Section 3.18. Conditions Related to the Purchase Transaction 58
Section 3.19. Regulatory Approvals, Permits, Consents, Etc. 59 Section 3.20. No
Injunction or Other Litigation 59 Section 3.21. Additional Documents and
Statements 60       B.  Conditions Precedent to all Borrowings under the Credit
Facility 60       Section 3.22. Notice of Borrowing 60 Section 3.23. Certain
Statements 60 Section 3.24. Gaming Permits 60       ARTICLE IV - REPRESENTATIONS
AND WARRANTIES 61       Section 4.01. Organization; Power and Authorization 61
Section 4.02. No Conflict With, Violation of or Default Under Laws or Other
Agreements 62 Section 4.03. Litigation 62 Section 4.04. Agreements Legal,
Binding, Valid and Enforceable 62 Section 4.05. Information and Financial Data
Accurate; Financial Statements; No Adverse Event; Deposit Accounts 62 Section
4.06. Governmental Approvals 63 Section 4.07. Payment of Taxes 63 Section 4.08.
Title to Properties 64 Section 4.09. No Untrue Statements 64 Section 4.10.
Brokerage Commissions 64 Section 4.11. No Defaults 65 Section 4.12. Employee
Retirement Income Security Act of 1974 65 Section 4.13. Availability of Utility
Services 65 Section 4.14. Policies of Insurance 65 Section 4.15. Gaming Permits
and Approvals 65 Section 4.16. Environmental Certificate 65 Section 4.17. Labor
Relations 65 Section 4.18. Trademarks, Patents, Licenses, Franchises, Formulas
and Copyrights 66 Section 4.19. Contingent Liabilities 66 Section 4.20.
Subsidiaries 66 Section 4.21. Washington Casino Leases 66 Section 4.22. Deadwood
Slot Route Leases 66 Section 4.23. Adjacent Site Lease 67

 

 ii 

 

 

ARTICLE V - GENERAL COVENANTS OF BORROWERS 67       Section 5.01. FF&E 67
Section 5.02. Permits; Licenses and Legal Requirements 67 Section 5.03.
Protection Against Lien Claims 68 Section 5.04. Notice to Gaming Authorities 68
Section 5.05. No Change in Character of Business or Location of Chief Executive
Office 68 Section 5.06. Preservation and Maintenance of Properties and Assets;
Acquisition of Additional Property 68 Section 5.07. Repair of Properties and
Assets 69 Section 5.08. Financial Statements; Reports; Certificates and Books
and Records 69 Section 5.09. Insurance 73 Section 5.10. Taxes 74 Section 5.11.
Permitted Encumbrances Only 74 Section 5.12. Advances 74 Section 5.13. Further
Assurances 75 Section 5.14. Indemnification 75 Section 5.15. Inspection of the
Collateral and Appraisal 76 Section 5.16. Compliance With Other Loan Documents
76 Section 5.17. Suits, Actions or Material Changes Affecting Borrowers 76
Section 5.18. Consents of and Notice to Gaming Authorities 76 Section 5.19.
Tradenames, Trademarks and Servicemarks 77 Section 5.20. Notice of Hazardous
Materials 77 Section 5.21. Compliance with Access Laws 77 Section 5.22.
Compliance with Adjacent Site Lease, Washington Casino Leases and Deadwood Slot
Route Leases 78 Section 5.23. Restriction on Payment of Seller Subordinated Debt
78 Section 5.24. Prohibition on Prepayment or Defeasance of Permitted Indenture
Subordinated Debt 79 Section 5.25. Interest Rate Protection 79 Section 5.26.
Restriction on Development or Use of Gold Mountain Real Property 79 Section
5.27. Compliance With Other Loan Documents, Execution of Subsidiary Guaranties
and Pledge of Restricted Subsidiary Stock 80       ARTICLE VI - FINANCIAL
COVENANTS 80       Section 6.01. Total Leverage Ratio 80 Section 6.02. Lease
Adjusted Fixed Charge Coverage Ratio 81 Section 6.03. Maintenance Capital
Expenditure Requirements 81 Section 6.04. Limitation on Indebtedness 81

 

 iii 

 

 

Section 6.05. Restriction on Distributions 82 Section 6.06. Contingent
Liability(ies) 82 Section 6.07. Investment Restrictions 82 Section 6.08. Total
Liens 83 Section 6.09. No Change of Control 84 Section 6.10. Sale of Assets,
Consolidation, Merger, or Liquidation 84 Section 6.11. No Transfer of Ownership;
Equity Offerings 85 Section 6.12. ERISA 85 Section 6.13. Margin Regulations 86
Section 6.14. Transactions with Affiliates 86 Section 6.15. Limitation on
Additional Subsidiaries 86 Section 6.16. Limitation on Consolidated Tax
Liability 86 Section 6.17. Change in Accounting Principles 87       ARTICLE VII
- EVENTS OF DEFAULT 87       Section 7.01. Events of Default 87 Section 7.02.
Default Remedies 91 Section 7.03. Application of Proceeds 91 Section 7.04.
Notices 92 Section 7.05. Agreement to Pay Attorney's Fees and Expenses 92
Section 7.06. No Additional Waiver Implied by One Waiver 92 Section 7.07.
Licensing of Lender 92 Section 7.08. Exercise of Rights Subject to Applicable
Law 93 Section 7.09. Discontinuance of Proceedings 93       ARTICLE VIII -
DAMAGE, DESTRUCTION AND CONDEMNATION 93       Section 8.01. No Abatement of
Payments 93 Section 8.02. Distribution of Capital Proceeds Upon Occurrence of
Fire, Other Perils or Condemnation 93       ARTICLE IX - GENERAL TERMS AND
CONDITIONS 94       Section 9.01. Severability of Provisions. 94 Section 9.02.
Failure to Exercise Rights 94 Section 9.03. Notices and Delivery 94 Section
9.04. Modification in Writing 95 Section 9.05. Other Agreements 95 Section 9.06.
Counterparts 95 Section 9.07. Rights, Powers and Remedies are Cumulative 95
Section 9.08. Continuing Representations 95 Section 9.09. Successors and Assigns
95 Section 9.10. Time of Essence 95 Section 9.11. Choice of Law and Forum 96
Section 9.12. Arbitration 96

 

 iv 

 

 

Section 9.13. Waiver of Jury Trial 97 Section 9.14. Scope of Approval and Review
97 Section 9.15. Cumulative Nature of Covenants 97 Section 9.16. Costs to
Prevailing Party 97 Section 9.17. Expenses 98 Section 9.18. Setoff 98 Section
9.19. Borrowers’ Waivers and Consents 99 Section 9.20. Confidentiality 102
Section 9.21. Schedules Attached 103

 

  Schedule 2.01(c) - Aggregate Commitment Reduction Schedule   Schedule 3.11 -
Schedule of Slot Route Locations – Form   Schedule 3.15 - Schedule of
Significant Litigation   Schedule 4.01(c) - Schedule of Significant Shareholders
  Schedule 4.05(b) - Schedule of Depository Accounts   Schedule 4.19 - Schedule
of Contingent Liabilities   Schedule 4.20 - Schedule of Restricted and
Unrestricted Subsidiaries   Schedule 5.08(d)(i) - Lease Summary Schedule

 

Section 9.22. Exhibits Attached 103

 

Exhibit A - Revolving Credit Note Exhibit B - Notice of Borrowing - Form Exhibit
C - Authorized Representative Certificate - Form Exhibit D - Closing Certificate
- Form Exhibit E - Compliance Certificate - Form Exhibit F - Subsidiary Guaranty
- Form Exhibit G - Payment Subordination Agreement - Form Exhibit H - Legal
Opinion - Form Exhibit I - Crazy Moose Pasco Real Property Description Exhibit J
- Gold Mountain Real Property Description Exhibit K - Club Fortune Real Property
Description

 

 v 

 

 

Loan No. 1301687001

 

AMENDED AND RESTATED

CREDIT AGREEMENT

 

THIS AMENDED AND RESTATED CREDIT AGREEMENT (“Credit Agreement”) is dated
effective as of November 30, 2015, by and among NEVADA GOLD & CASINOS, INC., a
Nevada corporation (“NGC”), NG WASHINGTON, LLC, a Washington limited liability
company (“NGW”), NG WASHINGTON II HOLDINGS, LLC, a Delaware limited liability
company (“NGWII Holdings”), NG WASHINGTON II, LLC, a Washington limited
liability company (“NGWII”), NG WASHINGTON III, LLC, a Washington limited
liability company (“NGWIII”), NG SOUTH DAKOTA, LLC, a South Dakota limited
liability company (“NGSD”), A.G. TRUCANO, SON & GRANDSONS, INC., a South Dakota
corporation (“AGTSG”), CGC HOLDINGS, L.L.C., a Nevada limited liability company
(“CGC”), CGE ASSETS, INC. (formerly Colorado Grand Enterprises, Inc.), a
Colorado corporation (“CGE”), GOLD MOUNTAIN DEVELOPMENT, A LIMITED LIABILITY
COMPANY, a Colorado limited liability company, also known as GOLD MOUNTAIN
DEVELOPMENT, LLC (“Gold Mountain”) and NEVADA GOLD BVR, L.L.C., a Nevada limited
liability company (“NGBVR” and, together with NGC, NGW, NGWII Holdings, NGWII,
NGWIII, NGSD, AGTSG, CGC, CGE and Gold Mountain, each individually an “Existing
Borrower” and, collectively, the “Existing Borrowers”), NEVADA GOLD & CASINOS
LV, LLC, a Nevada limited liability company (“NGCLV” and, together with the
Existing Borrowers, each individually a “Borrower” and collectively, the
“Borrowers”), and MUTUAL OF OMAHA BANK (together with its successors and
assigns, the “Lender”).

 

RECITALS:

 

WHEREAS:

 

A.           In this Credit Agreement all capitalized words and terms shall have
the respective meanings and be construed herein as hereinafter provided in
Section 1.01 of this Credit Agreement and shall be deemed to incorporate such
words and terms as a part hereof in the same manner and with the same effect as
if the same were fully set forth.

 

B.           NGCLV, NGW, NGW Holdings, NGWII, NGWIII, NGSD, CGC, Gold Mountain
and NGBVR are wholly owned subsidiaries of NGC. AGTSG is a wholly owned
Subsidiary of NGSD. CGE is a wholly owned Subsidiary of CGC.

 

 

 

 

C.           NGW is the owner and operator of the Crazy Moose Pasco Casino and
Coyote Bob’s Casino. NGW is the operator of the Crazy Moose Mountlake Casino,
which is leased by NGW pursuant to the Crazy Moose Mountlake Lease.

 

D.           NGWII is the operator of (i) the Silver Dollar SeaTac Casino which
is leased by NGWII pursuant to the Silver Dollar SeaTac Lease; (ii) the Silver
Dollar Renton Casino which is leased by NGWII pursuant to the Silver Dollar
Renton Lease; (iii) Silver Dollar Bothell Casino which is leased by NGWII
pursuant to the Silver Dollar Bothell Lease; (iv) the Club Hollywood Casino
which is leased by NGWII pursuant to the Club Hollywood Lease; and (v) the Royal
Casino which is leased by NGWII pursuant to the Royal Casino Lease.

 

E.           NGWIII is the operator of the Red Dragon Casino which is leased by
NGWIII pursuant to the Red Dragon Lease.

 

F.           AGTSG is the owner and operator of the Deadwood Slot Route
Operation.

 

G.           Gold Mountain is the owner of the Gold Mountain Real Property.

 

H.           Existing Borrowers and Lender entered into a Credit Agreement dated
as of December 10, 2013 (the “Existing Credit Agreement”) under the terms of
which Lender established a reducing revolving line of credit (the “Existing
Credit Facility”) in the initial amount of Twelve Million Seven Hundred Fifty
Thousand Dollars ($12,750,000.00), under the terms of which, as of the date
hereof, the aggregate commitment for available borrowings thereunder is Nine
Million Five Hundred Ninety-Eight Thousand Nine Hundred Forty-Five Dollars and
Seventy-Eight Cents ($9,598,945.78) (the “Existing Aggregate Commitment”).

 

I.           NGCLV has agreed to purchase the Club Fortune Casino, together with
the real property upon which it is located, all improvements situate thereon and
related assets (collectively, the “Purchase Assets”) more particularly defined
as the “Assets” in the Asset Purchase Agreement dated as of May 22, 2015 (the
“Purchase Agreement”) executed among NGCLV as the “Buyer”, NGC, as the sole
member of NGCLV, Gaming Ventures of Las Vegas, Inc., a Nevada corporation
(“GVLVI”) d/b/a Club Fortune Casino, as the “Seller” and Carl E. Giudici
(“Giudici”), as the sole shareholder of GVLVI, for the considerations and
subject to the terms, covenants and conditions set forth therein.

 

J.           Borrowers and Lender desire to continue the Existing Funded
Outstandings under the Existing Credit Agreement as Funded Outstandings under
the Credit Facility and to increase the Existing Aggregate Commitment to
Twenty-Three Million Dollars ($23,000,000.00) and extend the maturity date to
November 30, 2020, together with other modifications to the terms, provisions
and conditions of the Existing Credit Facility by fully amending and restating
the Existing Credit Agreement on the terms and subject to the conditions,
covenants and understandings hereinafter set forth and contained in each of the
Loan Documents for the purposes of financing (i) a portion of the Purchase Price
for the Purchase Assets, (ii) the costs, fees and expenses incurred in
connection with the Purchase Transaction, and (iii) the working capital needs
and general business purposes of the Borrower Consolidation.

 

 2 

 

 

NOW, THEREFORE, in consideration of the foregoing, and other valuable
considerations as hereinafter described, the parties hereto do promise, covenant
and agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01.         Definitions. For the purposes of this Credit Agreement,
each of the following terms shall have the meaning specified with respect
thereto, unless a different meaning clearly appears from the context:

 

“Account Control Agreement” shall mean individual reference and “Account Control
Agreements” shall mean collective reference to the Account Control Agreements to
be executed on or before the Restatement Closing Date by and among each Borrower
that maintains one or more Depository Accounts, Lender and each applicable
Depository Institution for the purpose of perfecting Lender’s security interest
in such Depository Accounts.

 

“Acquisition” means any transaction, or any series of related transactions,
consummated after the Restatement Closing Date, by which any member of the
Borrower Consolidation directly or indirectly acquires (i) any real property,
(ii) any New Venture, or (iii) all or substantially all of the assets of any
firm, partnership, joint venture, limited liability company, corporation or
division thereof, whether through purchase of assets, merger or otherwise for
the purpose of acquiring a New Venture.

 

“Adjacent Site Lease” shall have the meaning ascribed to such term in
Schedule 1.01 of the Purchase Agreement.

 

“Adjusted Coverage Denominator” shall mean the sum of: (i) Interest Expense
(expensed and capitalized), plus (ii) the aggregate amount of any Scheduled
Reduction Payments, plus (iii) all payments of principal and interest actually
paid on Seller Subordinated Debt, plus (iv) all payments of interest actually
paid on Permitted Indenture Subordinated Debt, plus (v) all mandatory payments
on all other interest bearing Indebtedness, plus (vi) mandatory payments on
Capitalized Lease Liabilities, plus (vii) Facilities Lease Expense, in each case
determined, without duplication, for the Fiscal Quarter under review together
with the most recently ended three (3) preceding Fiscal Quarters, unless
otherwise noted in the definition of Annualized Adjusted Coverage Denominator.

 

 3 

 

 

“Affiliate”, as applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.

 

“Aggregate Commitment” shall mean reference to the aggregate amount committed by
Lenders for advance to or on behalf of the Borrower Consolidation as Borrowings
under the Credit Facility in the initial principal amount of Twenty-Three
Million Dollars ($23,000,000.00), as may be reduced from time to time by:
(i) Scheduled Reductions, (ii) Voluntary Permanent Reductions, and/or
(iii) Mandatory Commitment Reductions.

 

“Aggregate Commitment Reduction Schedule” shall mean the schedule setting forth
the amount of the Scheduled Reductions as of each Reduction Date under the
Credit Facility, which schedule shall be the Aggregate Commitment Reduction
Schedule marked “Schedule 2.01(c)”, affixed hereto and by this reference
incorporated herein and made a part hereof.

 

“AGTSG” shall have the meaning ascribed to such term in the Preamble of this
Credit Agreement.

 

“Annualized Adjusted Coverage Denominator” shall mean with reference to the
Borrower Consolidation, as of the last day of each Fiscal Quarter (a) the actual
aggregate amount of Adjusted Coverage Denominator for each Fiscal Quarter ending
on and after January 31, 2017, together with the three (3) Fiscal Quarters
immediately preceding each such Fiscal Quarter, or (b) with respect to each of
the Fiscal Quarters ending January 31, 2016, April 30, 2016, July 31, 2016, and
October 31, 2016, such amount as is necessary to reflect the annualization of
the Adjusted Coverage Denominator using the following calculations:

 

(i)          For the Fiscal Quarter ending January 31, 2016, the actual
aggregate amount of the Adjusted Coverage Denominator calculated for the
calendar months ending December 31, 2015 and January 31, 2016 shall be
multiplied by six (6);

 

 4 

 

 

(ii)         For the Fiscal Quarter ending April 30, 2016, the actual aggregate
amount of the Adjusted Coverage Denominator for that Fiscal Quarter shall be
multiplied by four (4);

 

(iii)        For the Fiscal Quarter ending July 31, 2016, the actual aggregate
amount of the Adjusted Coverage Denominator for the Fiscal Quarters ending
April 30, 2016 and July 31, 2016 shall be multiplied by two (2); and

 

(iv)        For the Fiscal Quarter ending October 31, 2016, the actual aggregate
amount of the Adjusted Coverage Denominator for the Fiscal Quarters ending
April 30, 2016, July 31, 2016 and October 31, 2016, shall be multiplied by
four-thirds (4/3).

 

“Annualized EBITDA” shall mean with reference to EBITDA realized by NGCLV at the
Club Fortune Casino Facility, as of the last day of the Fiscal Quarters ending
January 31, 2016, April 30, 2016, July 31, 2016, and October 31, 2016, such
amount as is necessary to reflect the annualization of such EBITDA using the
following calculations:

 

(i)          For the Fiscal Quarter ending January 31, 2016, the actual EBITDA
realized by NGCLV at the Club Fortune Casino Facility during the calendar months
ending December 31, 2015 and January 31, 2016 shall be multiplied by six (6);

 

(ii)         For the Fiscal Quarter ending April 30, 2016, the actual amount of
the EBITDA realized by NGCLV at the Club Fortune Casino Facility for that Fiscal
Quarter shall be multiplied by four (4);

 

(iii)        For the Fiscal Quarter ending July 31, 2016, the actual amount of
EBITDA realized by NGCLV at the Club Fortune Casino Facility for the Fiscal
Quarters ending April 30, 2016 and July 31, 2016 shall be multiplied by two (2);
and

 

(iv)        For the Fiscal Quarter ending October 31, 2016, the actual amount of
EBITDA realized by NGCLV at the Club Fortune Casino Facility for the Fiscal
Quarters ending April 30, 2016, July 31, 2016 and October 31, 2016, shall be
multiplied by four-thirds (4/3).

 

“Applicable Margin” means the applicable percentage amount to be added to the
LIBO Rate, subject to adjustment pursuant to the provisos set forth below, as
follows: (i) commencing on the Restatement Effective Date and continuing until
April 1, 2016, four and one-half percent (4.50%) to be added to the applicable
LIBO Rate; and (ii) commencing on April 1, 2016 and continuing until Credit
Facility Termination, the margin rates as set forth below, in each instance
based on the Total Leverage Ratio calculated with regard to the Borrower
Consolidation as of each Fiscal Quarter end, commencing with the Fiscal Quarter
ending January 31, 2016, together with the immediately preceding three (3)
Fiscal Quarters on a four (4) Fiscal Quarter basis, any change in the applicable
percentage amount by reason thereof to be effective as of the Rate Adjustment
Date immediately following each such Fiscal Quarter end:

 

 5 

 

 

Total Leverage Ratio  Applicable
Margin  Greater than or equal to 2.50 to 1.00   4.50% Greater than or equal to
2.00 to 1.00 but less than 2.50 to 1.00   4.00% Greater than or equal to 1.50 to
1.00 but less than 2.00 to 1.00   3.50% Less than 1.50 to 1.00   3.00%

 

Provided, however, the Applicable Margins, as set forth above, shall be:
(a) reduced by one-quarter of one percent (0.25%) during all periods during
which the Borrower Consolidation has agreed to and has authorized the Automatic
Payment Authorization, and (b) reduced by an additional one quarter of one
percent (0.25%), so long as the Borrower Consolidation has satisfied the
requirements for the Collected Balances Rate Adjustment during the most recently
ended Fiscal Quarter.

 

“Asset Purchase Closing” shall have the meaning ascribed to the term “Closing”
in Section 4.1 of the Purchase Agreement.

 

“Authorized Representative” shall mean, relative to the Borrower Consolidation,
those of the respective officers whose signatures and incumbency shall have been
certified to Lender as required in Section 3.05(d) of the Credit Agreement with
the authority and responsibility to deliver Notices of Borrowing, Compliance
Certificates and all other requests, notices, reports, consents, certifications
and authorizations on behalf of Borrowers and the Borrower Consolidation.

 

“Automatic Payment Authorization” shall mean the Automatic Transfer
Authorization pursuant to which Lender is authorized by NGC, on behalf of the
Borrower Consolidation, to deduct from the Designated Deposit Account: (i) the
interest payments on the Credit Facility when due, and (ii) any principal
reductions required as a consequence of the Funded Outstandings being in excess
of the Aggregate Commitment as of any date of determination as a result of a
Scheduled Reduction, Voluntary Permanent Reduction or Mandatory Commitment
Reduction or otherwise.

 

 6 

 

 

“Automatic Sweep” shall have the meaning ascribed to such term in Section
2.03(b).

 

“Available Borrowings” shall mean, at any time, and from time to time, the
aggregate amount available to Borrowers for a Borrowing not exceeding the amount
of the Maximum Availability, as of each date of determination.

 

“Banking Business Day” means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of Nevada or a Federal
holiday under the laws of the United States, or is a day on which banking
institutions located in Nevada are required or authorized by law or other
governmental action to close.

 

“Bankruptcy Code” shall mean the United States Bankruptcy Code, as amended, 11
U.S.C. Section 101, et seq.

 

“Borrower Consolidation” shall mean collective reference to Borrowers and each
Restricted Subsidiary created in accordance with Section 5.27 on a consolidated
basis, without regard to any Unrestricted Subsidiary.

 

“Borrower(s)” shall have the meaning ascribed to such term in the Preamble of
this Credit Agreement.

 

“Borrowing(s)” shall mean such amounts (i) as may be funded under the Automatic
Sweep from time to time, and (ii) as Borrower may request from Lender from time
to time to be advanced under the Credit Facility as Restatement Closing
Disbursements or by Notice of Borrowing during the Revolving Credit Period in
the manner provided in Section 2.03(a).

 

“BSA/AML Program” shall mean a written program designed by the Borrower
Consolidation to provide reasonable assurance that the Business Operations are
in compliance with the requirements of 31 CFR Chapter X and rules and
regulations promulgated thereunder regarding compliance with the Bank Secrecy
Act and anti-money laundering laws.

 

“Business Operations” shall mean collective reference to the Club Fortune Casino
Operation, Washington Casino Operations, the Deadwood Slot Route Operation and
any additional business enterprises acquired in an Acquisition that is owned and
operated by any member of the Borrower Consolidation and/or any Restricted
Subsidiary.

 

 7 

 

 

“Capital Expenditures” shall mean, for any period, without duplication, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
during that period and including Capitalized Lease Liabilities) by a Borrower or
the Borrower Consolidation, as the context may require, during such period that,
in conformity with GAAP, are required to be included in or reflected by the
property, plant or equipment or similar fixed or capital asset accounts
reflected in the balance sheet of a Borrower or the Borrower Consolidation, as
the context may require (including equipment which is purchased simultaneously
with the trade-in of existing equipment owned by Borrower or the Borrower
Consolidation, as the context may require, to the extent of (a) the gross amount
of such purchase price less (b) the cash proceeds of trade-in credit of the
equipment being traded in at such time), but excluding capital expenditures made
in connection with the replacement or restoration of assets, to the extent
reimbursed or refinanced from insurance proceeds paid on account of the loss of
or damage to the assets being replaced or restored, or from awards of
compensation arising from the taking by condemnation of or the exercise of the
power of eminent domain with respect to such assets being replaced or restored.

 

“Capital Proceeds” shall mean the proceeds received by the Borrower
Consolidation from (i) partial or total condemnation or destruction of any part
of the Collateral, (ii) insurance proceeds (other than rent insurance and
business interruption insurance) received in connection with damage to or
destruction of the Collateral, and (iii) the sale, transfer, conveyance or other
disposition of any portion of the Collateral in accordance with the provisions
of this Credit Agreement (not including, however, any proceeds received by
Borrowers, or any of them, from a sale, condemnation, damage or destruction of
FF&E or other personal property if such FF&E or other personal property is
replaced by items of equivalent value and utility, in each case such exclusion
to apply only during any period in which no Default or Event of Default has
occurred and is continuing).

 

“Capitalized Lease Liabilities” means all monetary obligations of the Borrower
Consolidation under any leasing or similar arrangement which, in accordance with
GAAP, would be classified as capitalized leases, and, for purposes of this
Credit Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP, and the stated maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.

 

“Cash” shall mean, when used in connection with any Person, all monetary and
non-monetary items owned by that Person that are treated as cash in accordance
with GAAP.

 

“Cash Equivalents” shall mean, when used in connection with any Person, that
Person’s Investments in:

 

 8 

 

 

(a)          Government Securities due within one (1) year after the date of the
making of the Investment;

 

(b)          readily marketable direct obligations of any State of the United
States of America given on the date of such Investment a credit rating of at
least Aa by Moody’s Investors Service, Inc. or AA by Standard & Poor’s
Corporation, in each case due within one (1) year from the making of the
Investment;

 

(c)          certificates of deposit issued by, bank deposits in, eurodollar
deposits through, bankers’ acceptance of, and repurchase agreements covering
Government Securities executed by, Lender or any bank incorporated under the
laws of the United States of America or any State thereof and having on the date
of such Investment combined capital, surplus and undivided profits of at least
Two Hundred Fifty Million Dollars ($250,000,000.00), or total assets of at least
Five Billion Dollars ($5,000,000,000.00), in each case due within one (1) year
after the date of the making of the Investment;

 

(d)          certificates of deposit issued by, bank deposits in, eurodollar
deposits through, bankers’ acceptances of, and repurchase agreements covering
Government Securities executed by, any branch or office located in the United
States of America of Lender or a bank incorporated under the laws of any
jurisdiction outside the United States of America having on the date of such
Investment combined capital, surplus and undivided profits of at least Five
Hundred Million Dollars ($500,000,000.00), or total assets of at least Fifteen
Billion Dollars ($15,000,000,000.00) in each case due within one year after the
date of the making of the Investment;

 

(e)          repurchase agreements covering Government Securities executed by a
broker or dealer registered under Section 15(b) of the Securities Exchange Act
of 1934 having on the date of the Investment capital of at least One Hundred
Million Dollars ($100,000,000.00), due within thirty (30) days after the date of
the making of the Investment; provided that the maker of the Investment receives
written confirmation of the transfer to it of record ownership of the Government
Securities on the books of a “primary dealer” in such Government Securities on
the books of such registered broker or dealer, as soon as practicable after the
making of the Investment;

 

(f)          readily marketable commercial paper of corporations doing business
in and incorporated under the laws of the United States of America or any State
thereof or of any corporation that is the holding company for a bank described
in clauses (c) or (d) above given on the date of such Investment a credit rating
of at least P-1 by Moody’s Investors Service, Inc. or A-1 by Standard & Poor’s
Corporation, in each case due within three hundred sixty-five (365) days after
the date of the making of the Investment;

 

 9 

 

 

(g)          “money market preferred stock” issued by a corporation incorporated
under the laws of the United States of America or any State thereof given on the
date of such Investment a credit rating of at least Aa by Moody’s Investors
Service, Inc. or AA by Standard & Poor’s Corporation, in each case having an
investment period not to exceed fifty (50) days; provided that (i) the amount of
all such Investments issued by the same issuer does not exceed Five Million
Dollars ($5,000,000.00) and (ii) the aggregate amount of all such Investments
does not exceed Fifteen Million Dollars ($15,000,000.00); and

 

(h)          a readily redeemable “money market mutual fund” sponsored by a bank
described in clauses (c) or (d) hereof, or a registered broker or dealer
described in clause (e) hereof, that has and maintains an investment policy
limiting its investments primarily to instruments of the types described in
clauses (a) through (g) hereof and having on the date of such Investment total
assets of at least One Billion Dollars ($1,000,000,000.00).

 

“Casino Facility” shall mean individual reference and “Casino Facilities” shall
mean collective reference to the Club Fortune Casino, Crazy Moose Pasco Casino,
Coyote Bob’s Casino, Crazy Moose Mountlake Casino, Silver Dollar SeaTac Casino,
Silver Dollar Renton Casino, Silver Dollar Bothell Casino, Club Hollywood
Casino, Royal Casino and Red Dragon Casino, together with any other casino
and/or gambling businesses operated by any member of the Borrower Consolidation
from time to time.

 

“CGC” shall have the meaning ascribed to such term in the Preamble of this
Credit Agreement.

 

“CGE” shall have the meaning ascribed to such term in the Preamble of this
Credit Agreement.

 

“Change of Control” shall mean the occurrence of any of the following:

 

(a)          Any “person” or “group” (as such terms are defined in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) or
their Affiliates, own or control, more than forty percent (40%) of the common
voting stock of NGC; or

 

 10 

 

 

(b)          During any period of twenty-four (24) consecutive months commencing
after the Restatement Closing Date, individuals who at the beginning of such
period constituted NGC’s Board of Directors (together with any new or
replacement directors whose election by NGC’s Board of Directors or whose
nomination for election by NGC’s shareholders, was approved by a vote of at
least a majority of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
directors then in office; or

 

(c)          NGC fails to own, directly or indirectly, one hundred percent
(100%) of the capital stock interests of each other member of the Borrower
Consolidation, without the prior written consent of Lender.

 

“Closing Certificate” shall have the meaning ascribed to such term in
Section 3.05(e).

 

“Club Fortune Casino” shall mean the casino and related improvements located on
the Club Fortune Real Property.

 

“Club Fortune Casino Facility” shall mean Club Fortune Real Property, Club
Fortune FF&E and Club Fortune Casino Operation and related activities conducted
under the name of Club Fortune Casino located in Henderson, Nevada.

 

“Club Fortune Casino Operation” shall mean the casino and gambling business
enterprise to be conducted on and after the Restatement Closing Date by NGCLV at
the Club Fortune Casino Facility.

 

“Club Fortune Collateral” shall mean collective reference to all of Borrower’s
right, title and interest in and to: (i) all of the Club Fortune Casino Facility
and the Club Fortune Real Property and the personal property, FF&E, contract
rights, leases, stock, intangibles and other interests of NGCLV which are
subject to the liens, pledges and security interests created by the Security
Documentation; (ii) all rights of NGCLV assigned and/or pledged as additional
security pursuant to the terms of the Loan Documents and Security Documentation;
and (iii) any and all other property and/or intangible rights, interest or
benefits inuring to or in favor of NGCLV which are in any manner assigned,
pledged, encumbered or otherwise hypothecated in favor of Lender to secure
payment of the Credit Facility.

 

“Club Fortune Deed of Trust” shall mean the Deed of Trust, Fixture Filing and
Security Agreement with Assignment of Rents to be executed by NGCLV on or before
the Restatement Closing Date in favor of the Lender, encumbering the Club
Fortune Real Property, Club Fortune FF&E and other Collateral therein described,
for the purpose of securing the Credit Facility and Borrowers’ payment and
performance under each of the Loan Documents (other than the Environmental
Certificate), as such deed of trust may be amended, modified, extended, renewed
or restated from time to time.

 

 11 

 

 

“Club Fortune Real Property” shall mean the real property more particularly
described on Exhibit K affixed hereto, together with all improvements located
thereon, commonly known and described as 725 Racetrack Road, Henderson, NV
89015, Assessor’s Parcel Number 179-21-714-003.

 

“Club Fortune Title Commitment” shall refer to the Commitment for Title
Insurance (2nd Amended), issued by Nevada Title Company, dated effective May 19,
2015, under its Order No. 15-04-1040-DTL.

 

“Club Fortune Title Insurance Policy” shall mean the ALTA Loan Policy of Title
Insurance (2006 Form), and the endorsements thereto, which are to be issued by
Nevada Title Company as of the Restatement Closing Date, in the amount of
Fifteen Million Nine Hundred Thousand Dollars ($15,900,000.00), in favor of
Lender, insuring the Club Fortune Deed of Trust as a first priority mortgage
lien encumbering the Club Fortune Real Property subject only to the exceptions
shown therein in Schedule B, Part I, all in accordance with the Restatement
Closing Instructions.

 

“Club Hollywood Casino” shall mean the mini-casino gaming operation conducted by
NGWII on the Club Hollywood Leasehold consisting of various house-banked table
games, including a full service restaurant with a bar.

 

“Club Hollywood Estoppel Certificate” shall mean the Lease Estoppel Certificate
and Agreement executed by and among Club Hollywood Landlord as of December 9,
2013, and NGWII and Lender, each as of December 10, 2013, with respect to the
Club Hollywood Lease.

 

“Club Hollywood Landlord” shall mean Old 99 Property Group, L.L.C., a Washington
limited liability company.

 

“Club Hollywood Lease” shall mean the lease evidenced by the following
documents: (i) Commercial Premises Lease dated as of March 5, 2007, by and
between the Club Hollywood Landlord and Hollydrift Gaming, Inc., d/b/a Club
Hollywood, a Washington corporation, as the original tenant (“Hollydrift
Gaming”); and (ii) Bill of Sale and Assignment and Assumption Agreement dated
July 23, 2010 by and between Grant Thornton Limited in its capacity as
court-appointed receiver for Hollydrift Gaming and NGWII and recorded on August
24, 2010, as Document No. 20100824000441 and re-recorded as Document
No. 20100726001046 in the Official Records of King County, Washington, in each
case together with any modifications and amendments thereof that hereafter may
be executed and approved in writing in advance by Lender.

 

 12 

 

 

“Club Hollywood Leasehold” shall mean the right of NGWII to occupy and operate
the Club Hollywood Casino pursuant to the terms of the Club Hollywood Lease.

 

“Club Hollywood Leasehold Deed of Trust” shall mean the Leasehold Deed of Trust,
Assignment of Rents and Leases, Security Agreement and Fixture Filing executed
by NGWII on or about the Original Closing Date in favor of Lender and recorded
December 24, 2013, in the records of King County, Washington, as Document
No. 20131224001404, encumbering the Club Hollywood Leasehold and other
Collateral therein described for the purpose of securing the Credit Facility and
the payment and performance under each of the Loan Documents, as such Club
Hollywood Leasehold Deed of Trust may be amended, modified, extended, renewed or
restated from time to time.

 

“Collateral” shall mean collective reference to all of the Borrower
Consolidation’s right, title and interest in and to: (i) the Collateral
Properties, the Deadwood Slot Route Operation and the personal property, FF&E,
contract rights, leases, accounts, equity interests, stock, intangibles and
other interests of the Borrower Consolidation which are subject to the liens,
pledges and security interests created by the Security Documentation; (ii) all
rights of the Borrower Consolidation assigned and/or pledged as additional
security pursuant to the terms of the Loan Documents and Security Documentation;
(iii) any and all other property and/or intangible rights, interest or benefits
inuring to or in favor of the Borrower Consolidation which are in any manner
assigned, pledged, encumbered or otherwise hypothecated in favor of Lender to
secure payment of the Credit Facility, including, without limitation, in
connection with any Acquisition; and (iv) any and all proceeds of the foregoing.

 

“Collateral Properties” shall mean collective reference to the fee real
properties, leasehold interests, improvements and associated fixtures which are
pledged and encumbered as Collateral securing repayment of the Credit Facility
from time to time, which shall consist of the Club Fortune Real Property, Crazy
Moose Pasco Real Property, Crazy Moose Mountlake Leasehold, Coyote Bob’s Real
Property, Silver Dollar SeaTac Leasehold, Silver Dollar Renton Leasehold, Silver
Dollar Bothell Leasehold, Club Hollywood Leasehold, Royal Casino Leasehold and
Red Dragon Leasehold, together with any other real property or interests therein
which may be held by Lender from time to time to secure repayment of the Credit
Facility.

 

“Collected Balances Rate Adjustment” shall mean:

 

a.           In the event the Borrower Consolidation has Consolidated Adjusted
Average Collected Balances on deposit with Lender or its Affiliates on the
Restatement Closing Date in an amount in excess of Two Million Dollars
($2,000,000.00), so long as the average of such Consolidated Adjusted Average
Collected Balances are maintained in excess of such amount during each Fiscal
Quarter following the Restatement Closing Date until the occurrence of the first
Rate Adjustment Date, the Applicable Margin accruing under the Credit Facility
shall be reduced by one-quarter of one percent (0.25%);

 

 13 

 

 

b.           As of any Rate Adjustment Date, the Borrower Consolidation has
maintained an average of total Consolidated Adjusted Average Collected Balances
with Lender or its Affiliates in excess of Two Million Dollars ($2,000,000.00)
during the most recently ended Fiscal Quarter, the Applicable Margin accruing
under the Credit Facility shall be reduced by one-quarter of one percent (0.25%)
during the period commencing on such Rate Adjustment Date and continuing until
the next occurring Rate Adjustment Date.

 

“Commitment Fee” shall mean the non-refundable commitment fee in the amount of
One Hundred Forty-Nine Thousand Five Hundred Dollars ($149,500.00) paid on
behalf of the Borrowers to Lender concurrently with the acceptance and execution
of the Commitment Letter.

 

“Commitment Letter” shall mean the Commitment Letter executed by Lender dated
June 8, 2015 and accepted by NGC on June 8, 2015.

 

“Compliance Certificate” shall mean a compliance certificate as described in
Section 5.08(e) which is more particularly described on “Exhibit E”, affixed
hereto and by this reference incorporated herein and made a part hereof.

 

“Consolidated Adjusted Average Collected Balances” shall mean the amount of
adjusted average collected balances determined by deducting from the average
daily ledger balance, the amount of the average daily float calculated for each
calendar month during each Fiscal Quarter, determined by Lender for the Borrower
Consolidation as shown on the “Account Analysis Combined Relationships
Statement” to be prepared by Lender as of the end of each Fiscal Quarter.

 

“Contractual Obligation” means, as to any Person, any provision of any
outstanding securities issued by that Person or of any material agreement,
instrument or undertaking to which that Person is a party or by which it or any
of its assets is bound.

 

 14 

 

 

“Contingent Liability(ies)” shall have the meaning as determined in accordance
with GAAP, as to any Person any obligation of such Person guaranteeing or having
the economic effect of guaranteeing any Indebtedness, leases or dividends
(“primary obligations”) of any other Person that is not a member of the Borrower
Consolidation hereunder (the “primary obligor”) in any manner, whether directly
or indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation, (d) to make payment in respect of
any net liability arising in connection with any Interest Rate Hedges, foreign
currency exchange agreement, commodity hedging agreement or any similar
agreement or arrangement in any such case if the purpose or intent of such
agreement is to provide assurance that such primary obligation will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such primary obligation will be protected (in whole or in
part) against loss in respect thereof or (e) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Liability shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business, trade payables incurred in the ordinary course of business and less
than ninety (90) days in arrears. It is specifically understood and agreed that
the obligation of any member of the Borrower Consolidation to reimburse the
issuer of a letter of credit for draws which may be made thereunder constitutes
a Contingent Liability hereunder. The amount of any Contingent Liability shall
be deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Liability is made or, if
not stated or determinable, the reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as determined
by such Person in good faith.

 

“Coyote Bob’s Casino” shall mean the mini-casino gaming operation conducted by
NGW on the Coyote Bob’s Real Property consisting of various house-banked table
games, including a full service restaurant with a bar.

 

“Coyote Bob’s Deed of Trust” shall mean the Existing Coyote Bob’s Deed of Trust
as amended by the First Amendment to Coyote Bob’s Deed of Trust for the purpose
of securing the Credit Facility and the payment and performance under each of
the Loan Documents, as such Deed of Trust may be amended, modified, extended,
renewed or restated from time to time.

 

“Coyote Bob’s Permitted Encumbrances” shall mean, at any particular time: (i)
liens for taxes, assessments or governmental charges not then due and payable or
not then delinquent; (ii) statutory liens for labor and/or materials and liens
for taxes, assessments or governmental charges the validity of which, in either
instance, are being contested in good faith by Borrowers by appropriate
proceedings, and as provided in Sections 5.03 and 5.10 hereof, respectively,
provided that, Borrowers shall have maintained adequate reserves in accordance
with GAAP for payment of same; (iii) liens incurred or deposits made in the
ordinary course of business in connection with workers’ compensation,
unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the payment of
borrowed money); (iv) leases or subleases granted to others not interfering in
any material respect with the ordinary conduct of the business of the Coyote
Bob’s Casino; (v) liens created or contemplated by the Security Documentation;
(vi) the liens, encumbrances and restrictions on the Coyote Bob’s Real Property
which are shown as exceptions on Schedule B of the Coyote Bob’s Title Insurance
Policy; (vii) liens consented to in writing by Lender, (viii) liens of legally
valid capital leases and purchase money security interests to the extent
permitted by Section 6.08(c); (ix) each and every easement, restriction, license
or right-of-way that (A) is hereafter granted to any Governmental Authority or
public utility providing services to the Coyote Bob’s Real Property and (B) does
not interfere in any material respect with the Coyote Bob’s Casino Facilities;
and (x) judgment liens, writs, warrants, levies, distraints, attachments and
other similar process which do not constitute an Event of Default.

 

 15 

 

 

“Coyote Bob’s Real Property” shall mean Lot 2, Block 1, the Highlands West,
according to the Plat thereof recorded in Volume 11 of Plats, Page 4, Records of
Benton County, Washington, Assessor’s Parcel No. 103891040001002, commonly
described as 3014 W. Kennewick Avenue, Kennewick, Washington 99336.

 

“Coyote Bob’s Title Insurance Policy” shall mean the Loan Policy of Title
Insurance, Policy Number 5011300-1145437e, and the endorsements thereto,
including, without limitation, an aggregation (tie-in) endorsement issued with
respect to the Crazy Moose Pasco Title Insurance Policy issued by Escrow and
Title Services, Inc., dba Frontier Title and Escrow Company as the authorized
agent for First American Title Insurance Company as of the Original Closing Date
with coverage in the amount of One Million Dollars ($1,000,000.00) in favor of
Lender, insuring the Coyote Bob’s Deed of Trust as a first priority mortgage
lien encumbering the Coyote Bob’s Real Property, together with the Restatement
Endorsement to be issued as of the Restatement Closing Date.

 

“Crazy Moose Mountlake Casino” shall mean the mini-casino gaming operation
conducted by NGW on the Crazy Moose Mountlake Leasehold consisting of various
house-banked table games, including a full service restaurant with a bar.

 

“Crazy Moose Mountlake Estoppel Certificate” shall mean the Lease Estoppel
Certificate and Agreement executed by and among Crazy Moose Mountlake Landlord,
NGW and Lender, recorded on December 19, 2013 in the records of Snohomish
County, Washington as Document No. 201312190256.

 

 16 

 

 

“Crazy Moose Mountlake Landlord” shall have the meaning ascribed to such term in
subparagraph (i) of the definition of Crazy Moose Mountlake Lease.

 

“Crazy Moose Mountlake Lease” shall mean the lease evidenced by the following
documents: (i) Shopping Center Lease Agreement dated as of February 14, 2001, by
and between Chin Partnership, as landlord (together with its successors and/or
assigns as their interests may appear, “Crazy Moose Mountlake Landlord”), and
Wally and Gilbert Chin, as original tenant (“Chin”); (ii) Agreement dated as of
October 18, 2002 by and among Crazy Moose Mountlake Landlord, Chin and C&C
Investments, LLC, a Washington limited liability company (“C&C”);
(iii) Assignment of Lease dated as of July 11, 2003 by and among Crazy Moose
Mountlake Landlord, Chin and Gullwing III, LLC, a Washington limited liability
company (“Gullwing”), pursuant to which Gullwing assumed all of Chin’s
obligations thereunder; (iv) Lease Addendum dated as of November 30, 2005 by and
between Crazy Moose Mountlake Landlord and Gullwing; (v) First Amendment to
Retail Lease Agreement dated as of April 19, 2006, between Crazy Moose Mountlake
Landlord and Gullwing; (vi) Second Amendment to Retail Lease Agreement dated as
of December 10, 2008, by and between Crazy Moose Mountlake Landlord and
Gullwing; (vii) Assignment and Assumption of Lease dated as of May 12, 2009 by
and between Gullwing and NGW; (viii) Third Amendment to Retail Lease Agreement,
dated as of January 24, 2011, by and between Crazy Moose Mountlake Landlord and
NGW; and (ix) Fourth Amendment to Retail Lease Agreement dated as of January 17,
2013, by and between Crazy Moose Mountlake Landlord and NGW, in each case
together with any modifications and amendments thereof that hereafter may be
executed and approved in writing in advance by Lender.

 

“Crazy Moose Mountlake Leasehold” shall mean the right of NGW to occupy and
operate the Crazy Moose Mountlake Casino pursuant to the terms of the Crazy
Moose Mountlake Lease.

 

“Crazy Moose Mountlake Leasehold Deed of Trust” shall mean the Leasehold Deed of
Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing
executed by NGW on or about the Original Closing Date in favor of Lender and
recorded in the records of Snohomish County, Washington as Document
No. 201312190257, encumbering the Crazy Moose Mountlake Leasehold and other
Collateral therein described for the purpose of securing the Credit Facility and
the payment and performance under each of the Loan Documents, as such Deed of
Trust may be amended, modified, extended, renewed or restated from time to time.

 

“Crazy Moose Pasco Casino” shall mean the mini-casino gaming operation conducted
by NGW on the Crazy Moose Pasco Real Property consisting of various house-banked
table games, including a full service restaurant with a bar.

 

 17 

 

 

“Crazy Moose Pasco Deed of Trust” shall mean the Existing Crazy Moose Pasco Deed
of Trust as amended by the First Amendment to the Crazy Moose Pasco Deed of
Trust, for the purpose of securing the Credit Facility and the payment and
performance under each of the Loan Documents, as such Deed of Trust may be
amended, modified, extended, renewed or restated from time to time.

 

“Crazy Moose Pasco Permitted Encumbrances” shall mean, at any particular time:
(i) liens for taxes, assessments or governmental charges not then due and
payable or not then delinquent; (ii) statutory liens for labor and/or materials
and liens for taxes, assessments or governmental charges the validity of which,
in either instance, are being contested in good faith by Borrowers by
appropriate proceedings, and as provided in Sections 5.03 and 5.10 hereof,
respectively, provided that, Borrowers shall have maintained adequate reserves
in accordance with GAAP for payment of same; (iii) liens incurred or deposits
made in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts, performance and
return-of-money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money); (iv) leases or subleases granted to others
(including, without limitation, any Subsidiary) not interfering in any material
respect with the ordinary conduct of the business of the Crazy Moose Pasco
Casino; (v) liens created or contemplated by the Security Documentation; (vi)
the liens, encumbrances and restrictions on the Crazy Moose Pasco Real Property
and which are shown as exceptions on Schedule B of the Crazy Moose Pasco Title
Insurance Policy, (vii) liens consented to in writing by Lender, (viii) liens of
legally valid capital leases and purchase money security interests to the extent
permitted by Section 6.08(c); (ix) each and every easement, restriction, license
or right-of-way that (A) is hereafter granted to any Governmental Authority or
public utility providing services to the Crazy Moose Pasco Real Property and (B)
does not interfere in any material respect with the Crazy Moose Pasco Casino;
and (x) judgment liens, writs, warrants, levies, distraints, attachments and
other similar process which do not constitute an Event of Default.

 

“Crazy Moose Pasco Real Property” shall mean the real property more particularly
described on Exhibit I, affixed hereto, Assessor’s Parcel No. 119481053,
commonly described as 510 S. 20th Street, Pasco, Washington 99330.

 

“Crazy Moose Pasco Title Insurance Policy” shall mean the Loan Policy of Title
Insurance, Policy Number 5011300-1145429e, and the endorsements thereto,
including, without limitation, an aggregation (tie-in) endorsement issued with
respect to the Coyote Bob’s Title Insurance Policy, issued by Escrow and Title
Services, Inc., dba Frontier Title and Escrow Company as the authorized agent
for First American Title Insurance Company as of the Original Closing Date with
coverage in the amount of Two Million Dollars ($2,000,000.00) in favor of
Lender, insuring the Crazy Moose Pasco Deed of Trust as a first priority
mortgage lien encumbering the Crazy Moose Pasco Real Property, together with the
Restatement Endorsement to be issued as of the Restatement Closing Date.

 

 18 

 

 

“Credit Agreement” shall mean this Amended and Restated Credit Agreement
together with all Schedules and Exhibits attached thereto, executed by and among
Borrowers and Lender setting forth the terms and conditions of the Credit
Facility, as may be amended, modified, extended, renewed or restated from time
to time, which shall fully amend and restate the Existing Credit Agreement as of
the Restatement Closing Date.

 

“Credit Facility” shall mean the agreement of Lender to fund a reducing
revolving line of credit, subject to the terms and conditions set forth in this
Credit Agreement and the Revolving Credit Note, up to the Aggregate Commitment
as reduced from time to time in accordance with the terms of this Credit
Agreement and the Revolving Credit Note.

 

“Credit Facility Termination” shall mean indefeasible payment in full of all
sums owing under the Credit Facility and each of the other Loan Documents and
the irrevocable termination of the obligation of Lender to advance Borrowings
under the Credit Facility.

 

“Deadwood Slot Route Leases” shall mean collective reference to each of the
leases, spaceleases and occupancy arrangements, and all addendums, exhibits,
schedules, amendments and modifications thereof, executed in connection with
each location constituting a portion of the South Dakota Slot Route Operation,
which locations are more particularly described on the Schedule of Slot Route
Locations

 

“Deadwood Slot Route Operation” shall mean the slot route business enterprise
conducted by AGTSG in Deadwood, South Dakota, consisting, as of the Restatement
Closing Date, of approximately nine hundred fifteen (915) Gaming Devices
situated at approximately twenty (20) locations as more particularly described
on the Schedule of Slot Route Locations.

 

“Deeds of Trust” shall mean collective reference to the Club Fortune Deed of
Trust, Crazy Moose Paseo Deed of Trust, Crazy Moose Mountlake Leasehold Deed of
Trust, Coyote Bob’s Deed of Trust, Silver Dollar SeaTac Leasehold Deed of Trust,
Silver Dollar Renton Leasehold Deed of Trust, Silver Dollar Bothell Leasehold
Deed of Trust, Club Hollywood Leasehold Deed of Trust, Royal Casino Leasehold
Deed of Trust and Red Dragon Leasehold Deed of Trust, together with any other
deeds of trust or mortgages which may be executed by a member of the Borrower
Consolidation in favor of Lender from time to time for the purpose of securing
Borrowers’ payment and performance under the Credit Facility, in each case as
the same may be amended, modified, extended, renewed or restated from time to
time.

 

 19 

 

 

“Default” shall mean the occurrence or non-occurrence, as the case may be, of
any event that with the giving of notice or passage of time, or both, would
become an Event of Default.

 

“Default Rate” shall have the meaning set forth in Section 2.10(b) with respect
to defaults occurring under the Revolving Credit Note and shall mean the LIBO
Rate plus the then Applicable Margin plus five percent (5.0%) per annum for all
other purposes.

 

“Depository Account” shall mean individual reference and “Depository Accounts”
shall mean collective reference to each demand, time, savings, passbook,
checking or like account, now or hereafter maintained by or for the benefit of
any member of the Borrower Consolidation or in which any member of the Borrower
Consolidation holds or acquires any interest with a Depository Institution and
all funds and amounts contained therein, including the Depository Accounts
(i) described on the Schedule of Depository Accounts as of the Restatement
Closing Date, and (ii) maintained by any member of the Borrower Consolidation at
any time and from time to time following the Restatement Closing Date, but
exclusive of the Excluded Deposit Accounts as shown on the Schedule of
Depository Accounts, as the same may be supplemented, amended, updated and
revised from time to time by Borrowers and delivered to Lender.

 

“Depository Institution” shall mean bank or other financial institutions in
which any member of the Borrower Consolidation maintains a depository account
that is the subject of an Account Control Agreement in favor of Lender.

 

“Designated Deposit Account” shall mean the deposit account to be maintained by
NGC with Lender, as from time to time designated in writing by an Authorized
Representative.

 

“Designated Replacement Assets” shall have the meaning ascribed to such term in
Section 6.10(c).

 

“Disposition” shall have the meaning ascribed to such term in Section 6.10(c).

 

“Dispute” shall have the meaning set forth in Section 9.12(a).

 

 20 

 

 

“Disqualified Equity Offering” shall mean any Equity Offering that, by its terms
(or by the terms of any security or other Equity Offerings into which it is
convertible or for which it is exchangeable), or upon the happening of any event
or condition (a) matures or is mandatorily redeemable (other than solely for
common voting stock), pursuant to a sinking fund obligation or otherwise, (b) is
redeemable at the option of the holder thereof (other than solely for common
voting stock), in whole or in part, (c) provides for the scheduled payments of
dividends in cash, or (d) is or becomes convertible into or exchangeable for the
Indebtedness or any other Equity Offering that would constitute a Disqualified
Equity Offering, in each case, prior to the date that is one hundred eighty
(180) days after the Maturity Date.

 

“Distributions” shall mean and collectively refer to any and all Treasury Stock
Acquisitions, cash dividends on stock, loans, management fees, payments,
advances or other distributions, fees or compensation of any kind or character
whatsoever, other than within the Borrower Consolidation, but shall not include
(i) consideration paid in the ordinary course of business for tangible and
intangible assets in an arms length exchange for fair market value, (ii) trade
payments made and other payments for liabilities incurred in the ordinary course
of business, or (iii) compensation to officers, directors and employees of
Borrowers in the ordinary course of business. For the purpose of clarification,
capital contributions, advances and other Investments made by the Borrower
Consolidation in Unrestricted Subsidiaries shall constitute Distributions.

 

“Documents” shall have the meaning set forth in Section 9.12(a).

 

“Dollars” and “$” means the lawful money of the United States of America.

 

“EBITDA” shall mean with reference to the Borrower Consolidation, for any fiscal
period under review, the sum of (i) Net Income for that period, less (ii) any
one-time non-Cash gain reflected in such Net Income, plus (iii) any losses on
sales of assets and other extraordinary losses and one-time non-Cash charges,
plus (iv) Interest Expense (expensed and capitalized) for that period, plus
(v) the aggregate amount of federal and state taxes on or measured by income for
that period (whether or not payable during that period), plus (vi) depreciation,
amortization and all other non-cash expenses for that period, plus (vii)
non-recurring fees incurred as a result of the Credit Facility for that period,
in each case determined in accordance with GAAP and, in the case of items (iii),
(iv), (v), (vi) and (vii), only to the extent deducted in the determination of
Net Income for that period. For purposes of Financial Covenants and pricing
calculations EBITDA shall include: (a) only Cash distributions actually funded
by an Unrestricted Subsidiary that are received by the Borrower Consolidation,
and (b) Annualized EBITDA realized by NGCLV at the Club Fortune Casino during
the Fiscal Quarters following the Restatement Closing Date ending January 31,
2016, April 30, 2016, July 31, 2016 and October 31, 2016.

 

 21 

 

 

“Environmental Certificate” shall mean the Amended and Restated Certificate and
Indemnification Regarding Hazardous Substances to be executed by Borrowers on or
before the Restatement Closing Date and delivered to Lender as a further
inducement to the Lender to establish the Credit Facility, as such certificate
may be amended, modified, extended, renewed or restated from time to time.

 

“Equity Offering” shall mean the issuance and sale of shares of common voting
stock by NGC to the public after the Restatement Closing Date in exchange for
Cash or Cash Equivalents but shall not include, however, shares of stock
utilized in a stock-for-stock Acquisition, a stock-for-assets Acquisition, or
stock issued upon the exercise of employee stock options.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.

 

“Event of Default” shall mean any event of default as defined in Section 7.01
hereof.

 

“Excess Capital Proceeds” shall have the meaning ascribed to such term in
Section 6.12(c) of this Credit Agreement.

 

“Excluded Deposit Accounts” shall mean collective reference to those Depository
Accounts which are held and maintained by any member of the Borrower
Consolidation that are prohibited or restricted by any Gaming Law from being
pledged, hypothecated or the subject of a security interest, each as shown and
described on the Schedule of Depository Accounts, as the same may be
supplemented, amended, updated and revised from time to time by Borrowers and
delivered to Lender.

 

“Existing Aggregate Commitment” shall have the meaning ascribed to such term in
Recital Paragraph H.

 

“Existing Borrower” or “Existing Borrowers” shall have the meaning ascribed to
such term in the Preamble of this Credit Agreement.

 

“Existing Coyote Bob’s Deed of Trust” shall mean the Deed of Trust, Assignment
of Rents and Leases, Security Agreement and Fixture Filing executed by NGW on or
about the Original Closing Date in favor of Lender and recorded on December 18,
2013 in the records of Benton County, Washington, as Document No. 2013-040912,
encumbering the Coyote Bob’s Real Property and other collateral therein
described.

 

 22 

 

 

“Existing Crazy Moose Pasco Deed of Trust” shall mean the Deed of Trust,
Assignment of Rents and Leases, Security Agreement and Fixture Filing executed
by NGW on or about the Original Closing Date in favor of Lender and recorded in
the records of Franklin County, Washington as Document No. 1809639, encumbering
the Crazy Moose Pasco Real Property and other collateral therein described.

 

“Existing Credit Agreement” shall have the meaning ascribed to such term in
Recital Paragraph H.

 

“Existing Credit Facility” shall have the meaning ascribed to such term in
Recital Paragraph H.

 

“Existing Fee Deeds of Trust” shall mean collective reference to the Coyote
Bob’s Deed of Trust and the Crazy Moose Pasco Deed of Trust.

 

“Existing Funded Outstandings” shall mean the outstanding unpaid principal
balance of the Existing Credit Facility as of the Restatement Closing Date.

 

“Existing Revolving Credit Note” shall mean the Revolving Credit Promissory Note
dated as of December 10, 2013, in the principal sum of Twelve Million Seven
Hundred Fifty Thousand Dollars ($12,750,000.00), executed by the Existing
Borrowers, payable to the order of Lender, which shall be fully amended and
restated as of the Restatement Closing Date by the Revolving Credit Note.

 

“Facilities Lease Expense” shall mean all lease and rent payments made by the
Borrower Consolidation during the period under review, including, without
limitation, under the Adjacent Site Lease and each of the Washington Casino
Leases, but exclusive of any payments made under the Deadwood Slot Route Leases,
and further excluding, however, any common area maintenance expenses and
property taxes associated with the Borrower Consolidation’s occupancy/rent
expense that are expensed in the calculation of Net Income.

 

“FF&E” shall mean collective reference to any and all furnishings, fixtures and
equipment, including, without limitation, all Gaming Devices and associated
equipment, which have been installed or are to be installed and used in
connection with the operation of the Casino Facilities and in connection with
any other Business Operation conducted on the Collateral Real Properties and
those items of furniture, fixtures and equipment which have been purchased or
leased or are hereafter purchased or leased by a member of the Borrower
Consolidation in connection with the Casino Facilities and in connection with
any other Business Operation conducted on the Collateral Properties.

 

“Financial Covenants” shall mean collective reference to the financial covenants
set forth in Article VI of this Credit Agreement.

 

 23 

 

 

“Financing Statements” shall mean the Uniform Commercial Code financing
statements each naming one (1) or more members of the Borrower Consolidation as
the Debtor and filed in the Office of the Secretaries of State of the States of
Washington, South Dakota, Nevada, Colorado and Delaware, as applicable, all in
order to perfect the security interests granted to Lender under the Deeds of
Trust and under other Security Documentation, all in accordance with
requirements of the Uniform Commercial Code of each respective State listed
above, as such financing statements may be amended, modified, extended, renewed,
restated, substituted or replaced from time to time.

 

“FIRREA” shall mean the Financial Institutions Reform, Recovery and Enforcement
Act of 1989.

 

“First Amendment to Coyote Bob’s Deed of Trust” shall mean that certain First
Amendment to Deed of Trust, Fixture Filing and Security Agreement with
Assignment of Rents which is to be executed by NGW and Lender on or before the
Restatement Closing Date and is to be recorded in the records of Benton County,
Washington concurrently, or substantially concurrent, with the Restatement
Closing Date for the purpose of amending the Existing Coyote Bob’s Deed of Trust
in order to confirm that the Existing Coyote Bob’s Deed of Trust, as amended
thereby, secures performance of the Credit Facility, as amended and restated
under the Credit Agreement.

 

“First Amendment to Crazy Moose Pasco Deed of Trust” shall mean that certain
First Amendment to Deed of Trust, Fixture Filing and Security Agreement with
Assignment of Rents which is to be executed by NGW and Lender on or before the
Restatement Closing Date and is to be recorded in the records of Snohomish
County, Washington, concurrently, or substantially concurrent, with the
Restatement Closing Date for the purpose of amending the Existing Crazy Moose
Pasco Deed of Trust in order to confirm that the Existing Crazy Moose Pasco Deed
of Trust, as amended thereby, secures performance of the Credit Facility, as
amended and restated under the Credit Agreement.

 

“Fiscal Quarter” shall mean the consecutive three (3) month periods during each
Fiscal Year beginning on May 1, August 1, November 1 and February 1 and ending
on July 31, October 31, January 31 and April 30, respectively.

 

“Fiscal Year” shall mean the fiscal year period beginning May 1 of each calendar
year and ending on the following April 30.

 

“Fiscal Year End” shall mean April 30 of each calendar year.

 

 24 

 

 

“Funded Outstandings” shall mean the unpaid principal amount outstanding on the
Credit Facility as of any given date of determination for Borrowings made
thereunder.

 

“Funding Date” shall mean each date upon which Lender funds Borrowings requested
by Borrowers in accordance with the provisions of Section 2.03.

 

“GAAP” means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination.

 

“Gaming Authority(ies)” shall mean, without limitation, collective reference to
the Nevada Gaming Authorities, Washington State Gambling Commission, South
Dakota Commission on Gaming and any other agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States federal or foreign government, any state, province or any city
or other political subdivision or otherwise and whether now or hereafter in
existence or any officer or official thereof with authority to regulate any
gaming operation owned, managed or operated by any member of the Borrower
Consolidation or any Restricted Subsidiary.

 

“Gaming Devices” shall mean slot machines and other devices which constitute
gaming devices and related equipment.

 

“Gaming Laws” means all statutes, rules, regulations, ordinances, codes and
administrative or judicial precedents pursuant to which any Gaming Authority
possesses regulatory, licensing or permit authority over gambling, gaming or
casino activities conducted by any member of the Borrower Consolidation or any
Restricted Subsidiary within its jurisdiction.

 

“Gaming Permits” shall mean collective reference to every license, permit or
other authorization required to own, operate and otherwise conduct the Club
Fortune Casino Operation, the Washington Casino Operations, the Deadwood Slot
Route Operation or any New Venture.

 

“Giudici” shall have the meaning ascribed to such term in Recital Paragraph I.

 

“Gold Mountain” shall have the meaning ascribed to such term in the Preamble of
this Credit Agreement.

 

 25 

 

 

“Gold Mountain Negative Pledge” shall mean the Negative Pledge Agreement
executed by Gold Mountain on or about the Original Closing Date in favor of
Lender and recorded on December 20, 2013 in the Official Records of Gilpin
County, Colorado, as Document No. 150634, for the purpose of providing certain
agreements and assurances to Lender with respect to the Gold Mountain Real
Property, as such Negative Pledge may be amended, modified, extended, renewed or
restated from time to time.

 

“Gold Mountain Permitted Encumbrances” shall mean, at any particular time: (i)
liens for taxes, assessments or governmental charges not then due and payable or
not then delinquent; (ii) statutory liens for labor and/or materials and liens
for taxes, assessments or governmental charges the validity of which, in either
instance, are being contested in good faith by Borrowers by appropriate
proceedings, and as provided in Sections 5.03 and 5.10 hereof, respectively,
provided that, Borrowers shall have maintained adequate reserves in accordance
with GAAP for payment of same; (iii) liens incurred or deposits made in the
ordinary course of business in connection with workers’ compensation,
unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the payment of
borrowed money); (iv) leases or subleases granted to others (including, without
limitation, any Subsidiary); (v) liens created or contemplated by the Security
Documentation; (vi) liens consented to in writing by Lender, (vii) liens of
legally valid capital leases and purchase money security interests to the extent
permitted by Section 6.08(c); (viii) each and every easement, restriction,
license or right-of-way that (A) is hereafter granted to any Governmental
Authority or public utility providing services to the Gold Mountain Real
Property and (B) does not interfere in any material respect with the intended
use of the Gold Mountain Real Property; and (ix) judgment liens, writs,
warrants, levies, distraints, attachments and other similar process which do not
constitute an Event of Default.

 

“Gold Mountain Real Property” shall mean collective reference to the unimproved
real property consisting of approximately two hundred sixty-five (265) acres
located in Blackhawk, Colorado, more particularly described on Exhibit J,
affixed hereto and by this reference incorporated herein and made a part hereof.

 

“Government Securities” means readily marketable (a) direct full faith and
credit obligations of the United States of America or obligations guaranteed by
the full faith and credit of the United States of America and (b) obligations of
an agency or instrumentality of, or corporation owned, controlled or sponsored
by, the United States of America that are generally considered in the securities
industry to be implicit obligations of the United States of America.

 

 26 

 

 

“Governmental Authority” or “Governmental Authorities” shall mean any federal,
state, regional, county or municipal governmental agency, board, commission,
officer or official whose consent or approval is required or whose regulations
must be followed as a requirement to (i) the continued operation and occupancy
of the Collateral Properties, the Casino Facilities, the Deadwood Slot Route
Operation or any New Venture, (ii) compliance with Hazardous Materials Laws, or
(iii) the performance of any act or obligation or the observance of any
agreement, provision or condition of whatever nature herein contained.

 

“GVLVI” shall have the meaning ascribed to such term in Recital Paragraph I.

 

“Hazardous Materials Laws” shall have the meaning set forth in Section 5.20.

 

“Indebtedness” of any Person includes all obligations, contingent or otherwise,
which in accordance with GAAP should be classified upon such Person’s balance
sheet as liabilities, but in any event including liabilities for borrowed money
or other liabilities secured by any lien existing on property owned or acquired
by such Person, Affiliate or a Subsidiary thereof (whether or not the liability
secured thereby shall have been assumed), obligations which have been or under
GAAP should be capitalized for financial reporting purposes, and all guaranties,
endorsements, and other contingent obligations with respect to Indebtedness of
others, including, but not limited to, any obligations to acquire any of such
Indebtedness, to purchase, sell, or furnish property or services primarily for
the purpose of enabling such other Person to make payment of any of such
Indebtedness, or otherwise to assure the owner of any of such Indebtedness
against loss with respect thereto.

 

“Indemnified Party” and “Indemnified Parties” shall have the meaning ascribed to
such terms in Section 5.14.

 

“Interest Expense” shall mean with respect to any Person, as of the last day of
any fiscal period under review, the sum of (i) all interest, fees, charges and
related expenses paid or payable (without duplication but including capitalized
interest) for that fiscal period by such Person to a lender in connection with
borrowed money (including any obligations for fees, charges and related expenses
payable to the issuer of any letter of credit) or the deferred purchase price of
assets that are considered “interest expense” under GAAP, plus (ii) the portion
of the up-front costs and expenses for Interest Rate Hedges (to the extent not
included in (i)) fairly allocated to such interest rate hedges as expenses for
such period, plus (iii) the portions of Capital Lease Liabilities paid or
payable with respect to such period that should be treated as interest in
accordance with GAAP.

 

 27 

 

 

“Interest Rate Hedges” shall mean, with respect to any Person, all liabilities
of such Person under interest rate swap agreements, interest rate cap
agreements, basis swap, forward rate agreement and interest collar or floor
agreements and all other agreements or arrangements designed to protect such
Person against fluctuations in interest rates or currency exchange rates.

 

“Investment” shall mean, when used in connection with any Person: (i) any
investment by or of that Person, whether by means of purchase or other
acquisition of stock or other securities of any other Person or by means of a
loan, advance creating a debt, capital contribution, guaranty or other debt or
equity participation or interest in any other Person, including any partnership
and joint venture interests of such Person, (ii) any Acquisition, and (iii) any
other item that is or would be classified as an investment on a balance sheet of
such Person prepared in accordance with GAAP, as in effect as of the Restatement
Closing Date. The amount of any Investment shall be the amount actually invested
without adjustment for subsequent increases or decreases in the value of such
Investment.

 

“Laws” means, collectively, all international, foreign, federal, state and local
statutes, maritime laws, treaties, rules, regulations, ordinances, codes and
administrative or judicial precedents.

 

“Lease Adjusted Cash Flow” shall mean for any fiscal period under review, EBITDA
for such period, minus (i) income tax expense actually paid and/or accrued taxes
net of tax benefits, plus (ii) non-recurring expenses (less non-recurring
income) permitted by Lender, minus (iii) Distributions, minus (iv) the aggregate
amount of Non-Financed Capital Expenditures, plus (v) Net Proceeds of any Equity
Offering permitted by Lender, plus (v) Facilities Lease Expense, in each case
determined for a fiscal period consisting of the Fiscal Quarter under review,
together with the most recently ended three (3) preceding Fiscal Quarters.

 

“Lease Adjusted Fixed Charge Coverage Ratio” as of the end of any Fiscal Quarter
shall mean with reference to the Borrower Consolidation:

 

Lease Adjusted Cash Flow divided by (¸) the Annualized Adjusted Coverage
Denominator

 

“Lender” shall have the meaning ascribed to such term in the Preamble of this
Credit Agreement.

 

“Liabilities and Costs” means all claims, judgments, liabilities, obligations,
responsibilities, losses, damages (including lost profits), punitive or treble
damages, costs, disbursements and expenses (including, without limitation,
reasonable attorneys’, experts’ and consulting fees and costs of investigation
and feasibility studies), fines, penalties and monetary sanctions, interest,
direct or indirect, known or unknown, absolute or contingent, past, present or
future.

 

 28 

 

 

“LIBO Rate” shall mean the higher of: (i) the LIBO Rate for a one (1) month
period as quoted and published in the Wall Street Journal as of any given date
of determination, and (ii) the LIBO Rate for a one (1) month period as quoted
and published by Lender for all borrowers of Lender as of any given date of
determination, so long as not materially different from the rate quoted and
published by the Wall Street Journal as of such date of determination.

 

“Lien” means any lien, mortgage, pledge, assignment, security interest, charge
or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.

 

“Loan Documents” shall mean collective reference to the Credit Agreement, the
Revolving Credit Note, the Security Documentation, the Environmental Certificate
and all other documents and instruments which may hereafter be executed and
delivered by or on behalf of Borrowers or any other Person in connection with
the Credit Facility for the benefit of Lender, as the same may be amended,
modified, supplemented, replaced, renewed or restated from time to time.

 

“Maintenance Capital Expenditures” shall mean collective reference to Capital
Expenditures made to or for the benefit of or for use in connection with the
Casino Facilities, the Deadwood Slot Route Operation or any New Venture which
are for the purpose of maintaining, repairing and/or replacing existing assets
of the Borrower Consolidation.

 

“Mandatory Commitment Reduction(s)” shall mean a permanent reduction of the
Aggregate Commitment which shall be made from time to time as may be required
under Sections 5.12, 6.10(c) or (d) and/or 8.02.

 

“Margin Stock” shall have the meaning provided in Regulation U of the Board of
Governors of the Federal Reserve System.

 

“Material Adverse Change” shall mean: (i) any set of circumstances of events
which, other than with respect to the Representations and Warranties set forth
in Article IV of the Credit Agreement which shall be construed to be applicable
to circumstances and events existing both as of the Restatement Closing Date (or
such earlier date as may be referenced in each particular provision) and
subsequent to the Restatement Closing Date, are not in existence as of the
Restatement Closing Date, which are material and adverse to (a) the Collateral
or (b) the condition (financial or otherwise) or Business Operations of the
Borrower Consolidation taken as a whole, or (c) the ability of any of the
Lenders to enforce any of their material rights or remedies under any of the
Loan Documents, or (ii) any events or changes, which, other than with respect to
the Representations and Warranties set forth in Article IV of the Credit
Agreement which shall be construed to be applicable to events and changes
existing both as of the Restatement Closing Date (or such earlier date as may be
referenced in each particular provision) and subsequent to the Restatement
Closing Date, are not in existence as of the Restatement Closing Date and which
have or result in a material adverse effect upon (a) the value of the Casino
Facilities or Deadwood Slot Route Operation or any New Venture or the priority
of the security interests granted to Lender, (b) the validity of any of the Loan
Documents, or (c) the use, occupancy or operation of the Casino Facilities or
Deadwood Slot Route Operation or any New Venture.

 

 29 

 

 

“Maturity Date” shall mean November 30, 2020.

 

“Maximum Availability” shall mean the Aggregate Commitment less the Funded
Outstandings as of any date of determination.

 

“Net Income” shall mean with respect to the Borrower Consolidation for any
fiscal period, the net income of the Borrower Consolidation during such fiscal
period determined in accordance with GAAP.

 

“Net Proceeds” shall mean the aggregate cash proceeds received by the Borrower
Consolidation in respect of (a) Capital Proceeds net of the direct costs
relating to such sale, transfer, conveyance or disposition of FF&E or other
items of Collateral, amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the asset or assets that were the subject of
such sale, transfer, conveyance or disposition of FF&E or other items of
Collateral and all Indebtedness assumed by the purchaser in connection with such
sale, transfer, conveyance or disposition of FF&E or other items of Collateral
and all taxes paid or payable as a result of such sale, transfer, conveyance or
disposition, and (b) any Equity Offering issued by NGC, in each case less all
costs, fees and expenses (including without limitation underwriting, placement,
financial advisory and similar fees and expenses) incurred in connection with
the issuance of such Equity Offering.

 

“Nevada Gaming Authorities” shall mean any Governmental Authority that, at the
time in question, holds regulatory, licensing, permit, approval or suitability
authority with respect to gambling, gaming or casino activities conducted at the
Club Fortune Casino Facility, including, without limitation, the Nevada Gaming
Commission, the Nevada State Gaming Control Board and the City of Henderson.

 

“Nevada Title Company” shall mean shall mean Nevada Title Company, with offices
located at 3993 Howard Hughes Parkway, Suite 120, Las Vegas, Nevada 89169, as
the issuing agent for First American Title Insurance Company, together with such
reinsurers with direct access as are requested by Lender or other title
insurance company or companies as may be reasonably acceptable to Lender.

 

 30 

 

 

“New Acquisition Certifications” shall mean the requirements and certifications
to be made by Borrowers concurrently with the Acquisition of any real property
to be added as Collateral under the Credit Facility, consisting of each of the
following (a) evidence that such additional real property and improvements
located thereon, if any, are protected by insurance coverages as required for
Collateral under Section 5.09, (b) certification that such additional real
property is not within an area designated as a one hundred (100) year flood zone
(or, in the alternative, that Borrowers have obtained sufficient flood insurance
coverage to satisfy all applicable legal requirements relating to encumbrance of
property situated within such a flood zone by Lender), and (c) a Phase I
Environmental Site Assessment prepared in conformance with the scope and
limitations of ASTM Standard Designation E 1527-93, approved by Lender, with a
remediation plan, if required, that has been approved by the applicable
Governmental Authorities and Lender, or in the absence of such requirement as
approved by Lender.

 

“New Venture” means each mini-casino, card room, casino, casino/hotel, riverboat
casino, dock casino, or slot route business or similar gaming business
enterprise owned in whole by any member of the Borrower Consolidation (including
each Restricted Subsidiary created in accordance with Section 5.27).

 

“New Venture Investment” shall mean any Investment made by the Borrower
Consolidation in or to any Acquisition or New Venture following the Restatement
Closing Date.

 

“New Venture Investments” shall mean collective reference to each and every New
Venture Investment.

 

“NGBVR” shall have the meaning ascribed to such term in the Preamble of this
Credit Agreement.

 

“NGC” shall have the meaning ascribed to such term in the Preamble of this
Credit Agreement.

 

“NGCLV” shall have the meaning ascribed to such term in the Preamble of this
Credit Agreement.

 

“NGSD” shall have the meaning ascribed to such term in the Preamble of this
Credit Agreement.

 

 31 

 

 

“NGW” shall have the meaning ascribed to such term in the Preamble of this
Credit Agreement.

 

“NGWII” shall have the meaning ascribed to such term in the Preamble of this
Credit Agreement.

 

“NGWII Holdings” shall have the meaning ascribed to such term in the Preamble of
this Credit Agreement.

 

“NGWIII” shall have the meaning ascribed to such term in the Preamble of this
Credit Agreement.

 

“Non-Financed Capital Expenditures" shall mean Capital Expenditures which are
paid by the Borrower Consolidation from its assets and not from the Credit
Facility or through any other loan, credit arrangement, lease or financing from
any source.

 

“Nonusage Fee” shall have the meaning ascribed to such term in Section 2.08(b).

 

“Notice” shall have the meaning ascribed to such term in Section 9.03.

 

“Notice of Borrowing” shall have the meaning set forth in Section 2.03.

 

“Obligations” means, from time to time, all Indebtedness of Borrowers owing to
Lender or any Person entitled to indemnification pursuant to Section 5.14, or
any of their respective successors, transferees or assigns, of every type and
description, whether or not evidenced by any note, guaranty or other instrument,
arising under or in connection with this Credit Agreement, any other Loan
Document or any Interest Rate Hedge, whether or not for the payment of money,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired. The term includes, without limitation, all interest, charges,
expenses, fees, reasonable attorneys’ fees and disbursements, reasonable fees
and disbursements of expert witnesses and other consultants, and any other sum
now or hereinafter chargeable to Borrowers under or in connection with Credit
Agreement or any other Loan Document. Notwithstanding the foregoing definition
of “Obligations”, Borrowers’ obligations under any environmental indemnity
agreement constituting a Loan Document, or any environmental representation,
warranty, covenant, indemnity or similar provision in this Credit Agreement or
any other Loan Document, shall be secured by the Collateral only to the extent,
if any, specifically provided in the Security Documentation.

 

“Original Closing Date” shall mean December 10, 2013.

 

 32 

 

 

“Owned Properties” shall mean collective reference to the Club Fortune Real
Property, Coyote Bob’s Real Property, Crazy Moose Pesco Real Property and the
Gold Mountain Real Property.

 

“Payment Subordination Agreement” shall mean the Payment Subordination Agreement
to be executed by each holder of Seller Subordinated Debt intending to loan or
advance all or any portion of Seller Subordinated Debt to any member of the
Borrower Consolidation, which shall be executed in favor of the Lender prior to
the consummation of the sale of assets giving rise to such Seller Subordinated
Debt substantially in the form of the Payment Subordination Agreement marked
“Exhibit G”, affixed hereto and by this reference incorporated herein and made a
part hereof.

 

“Pension Plan” means any “employee pension benefit plan” (other than a
“multi-employer plan” as defined in Title IV of ERISA which is maintained by any
Person which is not a member of the Borrower Consolidation) that is subject to
Title IV of ERISA and which is maintained for employees of Borrowers or any of
its ERISA Affiliates.

 

“Permitted Encumbrances” shall mean, at any particular time, collective
reference to the Club Fortune Permitted Encumbrances, Coyote Bob’s Permitted
Encumbrances, Crazy Moose Pasco Permitted Encumbrances, Gold Mountain Permitted
Encumbrances, Restricted Subsidiary Permitted Encumbrances and the following
items: (i) liens for taxes, assessments or governmental charges not then due and
payable or not then delinquent; (ii) liens created or contemplated by the
Security Documentation; (iii) liens consented to in writing by Lender;
(iv) liens of legally valid capital leases and purchase money security interests
for FF&E to the extent permitted by Section 6.08(c); and (v) judgment liens,
writs, warrants, levies, distraints, attachments and other similar process which
do not constitute an Event of Default.

 

“Permitted Indenture Subordinated Debt” shall mean Indebtedness that (i) does
not have any scheduled principal payment, mandatory principal prepayment,
sinking fund payment or similar payment due prior to the date that is no less
than twelve (12) months after the Maturity Date, (ii) is not secured by any Lien
on any assets of the Borrower Consolidation, (iii) is subordinated on terms and
conditions satisfactory to the Lender, including, without limitation, provisions
allowing the cash payment of interest only so long as (a) no Event of Default
has occurred and remains continuing under the Credit Agreement, and (b) the
Borrower Consolidation will be in compliance with the Lease Adjusted Fixed
Charge Coverage Ratio after giving pro-forma effect to the payment proposed to
be paid, and (iv) is subject to such covenants and events of default as may be
acceptable to the Lender, including, without limitation, the agreement of such
subordinated lenders or the indenture trustee or administrative agent on behalf
of such subordinated lenders to not exercise any enforcement rights for the
collection of such Permitted Indenture Subordinated Debt prior to the occurrence
of Credit Facility Termination.

 

 33 

 

 

“Person” means an individual, firm, corporation, limited liability company,
trust, association, partnership, joint venture, tribunal or other entity.

 

“Policies of Insurance” shall mean the insurance to be obtained and maintained
by Borrowers throughout the term of this Credit Agreement as provided by Section
5.09 herein.

 

“Principal Prepayments” shall have the meaning set forth in Section 2.06(a) of
this Credit Agreement.

 

“Protective Advance” means all sums expended as determined by Lender to be
necessary to: (a) protect the priority, validity and enforceability of the
Security Documentation on, and security interests in, any Collateral and the
instruments evidencing or securing the Obligations, or (b) prevent the value of
any Collateral from being materially diminished (assuming the lack of such a
payment within the necessary time frame could potentially cause such Collateral
to lose value), or (c) protect any of the Collateral from being materially
damaged, impaired, mismanaged or taken, including, without limitation, any
amounts expended in accordance with Section 9.17 or post-foreclosure ownership,
maintenance, operation or marketing of any Collateral.

 

“Purchase Agreement” shall have the meaning ascribed to such term in Recital
Paragraph I.

 

“Purchase Assets” shall have the meaning ascribed to such term in Recital
Paragraph I.

 

“Purchase Closing Documents” shall mean collective reference to the documents
and instruments to be delivered by GVLVI and/or NGCLV on or before the
Restatement Closing Date for the purpose of consummating the Purchase
Transaction and transfer of the Purchase Assets to NGCLV, all as more
particularly described in Section 4.2 of the Purchase Agreement.

 

“Purchase Escrow” shall mean Escrow No. 15-04-1040-DTL established at Nevada
Title Company for the consummation of the Purchase Transaction.

 

“Purchase Price” shall have the meaning ascribed to such term in Section 3.1 of
the Purchase Agreement.

 

 34 

 

 

“Purchase Transaction” shall mean the transaction pursuant to which NGCLV will
acquire ownership of the Purchase Assets in accordance with the terms of the
Purchase Agreement.

 

“Qualified Appraisal” shall mean reference to an appraisal or appraisals of the
Casino Facilities, Deadwood Slot Route Operation, any Acquisition and/or other
Collateral, or any portion thereof, acceptable to Lender, prepared at Borrowers’
expense in compliance with FIRREA by an appraiser acceptable to Lender.

 

“Rate Adjustment Date” shall mean April 1, 2016 and, thereafter, the first (1st)
day of the third (3rd) month immediately following each Fiscal Quarter end,
commencing with the Fiscal Quarter ending January 31, 2016.

 

“Red Dragon Casino” shall mean the mini-casino gaming operation conducted by
NGWIII on the Red Dragon Leasehold consisting of various house-banked table
games, including a full service restaurant with a bar.

 

“Red Dragon Landlord” shall have the meaning ascribed to such term in the
definition of Red Dragon Lease.

 

“Red Dragon Lease” shall mean the lease evidenced by that certain Lease
Agreement dated as of July 18, 2011, by and between GMC 220th, LLC, a Washington
limited liability company (together with its successors and/or assigns as their
interests may appear, “Red Dragon Landlord”), and NGWIII, together with any
modifications and amendments thereof that hereafter may be executed and approved
in writing in advance by Beneficiary.

 

“Red Dragon Leasehold” shall mean the right of NGWIII to occupy and operate the
Red Dragon Casino pursuant to the terms of the Red Dragon Lease.

 

“Red Dragon Leasehold Deed of Trust” shall mean the Leasehold Deed of Trust,
Assignment of Rents and Leases, Security Agreement and Fixture Filing executed
by NGWIII on or about the Original Closing Date in favor of Lender and recorded
December 19, 2013, in the records of Snohomish County, Washington, as Document
No. 201312190255, encumbering the Red Dragon Leasehold and other Collateral
therein described for the purpose of securing the Credit Facility and the
payment and performance under each of the Loan Documents, as such Deed of Trust
may be amended, modified, extended, renewed or restated from time to time.

 

“Reduction Date(s)” shall mean reference to each date or the dates, as the
context may require upon which the Aggregate Commitment is reduced by a
Scheduled Reduction as set forth on the Aggregate Commitment Reduction Schedule.

 

 35 

 

 

“Related Entities” shall mean collective reference to all stockholders,
employees, Affiliates and Subsidiaries of the Borrowers, or any of them, other
than another Borrower.

 

“Reportable Event” shall mean any of the events described in Section 4043(b) of
ERISA, other than an event for which the thirty (30) day notice requirement is
waived by regulations.

 

“Restatement Closing Date” shall mean the date upon which: (i) each condition
precedent required under Article IIIA of this Credit Agreement has been
satisfied or waived, (ii) the Asset Purchase Closing has occurred, and (iii) the
Security Documentation have been filed and/or recorded in accordance with and in
the manner required herein and by the Restatement Closing Instructions; or such
other date as to which Lender and Borrowers agree in writing.

 

“Restatement Closing Disbursements” shall have the meaning set forth in
Section 2.02(a).

 

“Restatement Closing Instructions” shall mean the Closing Instructions to be
given by Lender (i) to Nevada Title Company on or before the Restatement Closing
Date setting forth the requirements of Lender for issuance of the Club Fortune
Title Insurance Policy, (ii) incorporating instructions to the Washington Title
Company for the issuance of the Restatement Endorsements to the Coyote Bob’s
Title Insurance Policy and the Crazy Moose Pasco Title Insurance Policy, and
(iii) setting forth each other condition for the occurrence of the Restatement
Closing Date, as such instructions may be amended or modified prior to the
Restatement Closing Date to the reasonable satisfaction of Lender.

 

“Restatement Endorsements” shall mean collective reference to the ALTA Form Date
Down Endorsements to the Coyote Bob’s Title Insurance Policy and the Crazy Moose
Pasco Title Insurance policy in a form and content acceptable to Lender insuring
that the Existing Fee Deeds of Trust have been validly amended and continue as
first priority liens encumbering the respective property therein described.

 

“Restricted Subsidiary” shall mean a wholly owned Subsidiary of NGC (other than
the other members of the Borrower Consolidation) which: (a) has not incurred any
Indebtedness other than in connection with a Subsidiary Guaranty, and accrued
expenses, tax liability, deferred taxes and trade accounts payable less than
ninety (90) days past due and other accrued or deferred liabilities incurred in
the ordinary course of business, (b) is not subject to any Liens except
Restricted Subsidiary Permitted Encumbrances and in connection with a Restricted
Subsidiary Stock Pledge, (c) has executed and delivered to Lender a Subsidiary
Guaranty and has executed and delivered to Lender such security instruments, and
other documents as Lender may reasonably require for the purpose of adding its
assets, real and personal, as additional Collateral securing repayment of the
Credit Facility and the Subsidiary Guaranty, (d) all of the stock or other
evidence of ownership thereof has been pledged in favor of Lender by a
Restricted Subsidiary Security Agreement, and (e) has been designated by NGC to
be a Restricted Subsidiary by written notice thereof to Lender. NGC shall not
redesignate a Restricted Subsidiary as an Unrestricted Subsidiary without the
prior written consent of the Lender, which consent shall not be unreasonably
withheld, so long as: (i) no Default or Event of Default has occurred and
remains continuing, and (ii) giving effect to such redesignation as of the end
of the most recently ended Fiscal Quarter on a pro forma basis, no Default or
Event of Default would exist under the Financial Covenants.

 

 36 

 

 

“Restricted Subsidiary Ownership Pledge” shall mean the Security Agreement and
Pledge Agreement in a form to the reasonable satisfaction of Lender, to be
executed by NGC in favor of Lender for the purpose of pledging and granting a
security interest in the capital stock or other ownership/equity interests which
it may have in any Restricted Subsidiary, as it may be amended, modified,
supplemented, extended, renewed or restated from time to time.

 

“Restricted Subsidiary Permitted Encumbrances” shall mean, at any particular
time with respect to a Restricted Subsidiary, (i) Liens for taxes, assessments
or governmental charges not then due, payable and delinquent, (ii) statutory
Liens for labor or materials or liens for taxes, assessments or governmental
charges not then required to be paid pursuant to Section 5.10, (iii) Liens in
favor of Lender created or contemplated by the Security Documentation, (iv)
Liens consented to in writing by Lender, (v) Liens of legally valid capital
leases and purchase money security interests for acquired FF&E up to the maximum
amount permitted under Section 6.08(c), and only to the extent of the lesser of
the purchase money loan or the fair market value of the acquired FF&E at the
time of the acquisition thereof, (vi) Liens of legally valid leases for FF&E,
(vii) easements, licenses or rights-of-way, now existing or hereafter granted to
any Governmental Authority or public utility providing services to the
Restricted Subsidiary or Restricted Subsidiary Venture, (viii) judgment and
attachment Liens which do not constitute an Event of Default, (ix) statutory or
other Liens of landlords and Liens of carriers, warehousemen, mechanics, customs
and revenue authorities and materialmen and other similar Liens imposed by law
incurred in the ordinary course of business which could not reasonably be
expected to cause a Material Adverse Change and which are discharged in
accordance with Section 5.03, (x) Liens incurred or deposits made in the
ordinary course of business in connection with workers’ compensation,
unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations; (xi) leases or subleases granted to others
not interfering in any material respect with the ordinary conduct of the
business of such Restricted Subsidiary; (xii) the replacement or renewal of any
Lien otherwise permitted hereunder; (xiii) minor defects, encroachments or
irregularities in title not interfering in any material respect with the
ordinary conduct of the business of such Restricted Subsidiary; and (xiv) Liens
in existence at the time of acquisition or designation of any Restricted
Subsidiary, so long as such Lien is not created or perfected in contemplation of
such acquisition or designation.

 

 37 

 

 

“Restricted Subsidiary Venture” shall mean a New Venture wholly owned by a
Restricted Subsidiary.

 

“Revolving Credit Note” shall mean the Amended and Restated Revolving Credit
Note, a copy of which is marked “Exhibit A”, affixed hereto and by this
reference incorporated herein and made a part hereof, to be executed by
Borrowers on the Restatement Closing Date, payable to the order of Lender,
evidencing the Credit Facility, as may be amended, modified, extended, renewed,
restated or replaced in whole or in part from time to time.

 

“Revolving Credit Period” shall mean the period commencing on the Restatement
Closing Date and terminating on the Maturity Date.

 

“Royal Casino” shall mean the mini-casino gaming operation conducted by NGWII on
the Royal Casino Leasehold consisting of various house-banked table games,
including a full service restaurant with a bar.

 

“Royal Casino Estoppel Certificate” shall mean the Lease Estoppel Certificate
and Agreement dated as of December 9, 2013, executed by and among Royal Casino
Landlord, NGWII and Lender, with respect to the Royal Casino Lease.

 

“Royal Casino Landlord” shall have the meaning ascribed to such term in
subparagraph (i) of the definition of Royal Casino Lease.

 

“Royal Casino Lease” shall mean the lease evidenced by the following documents:
(i) Commercial Premises Lease dated as of December 22, 2006, by and between
Allen and Sharon Hemmat, husband and wife (collectively and together with their
successors and/or assigns as their interests may appear, “Royal Casino
Landlord”), and Royal Casino Holdings, Inc., a Washington corporation, as the
original tenant (“RCHI”); and (ii) Bill of Sale and Assignment and Assumption
Agreement dated July 23, 2010 by and between Grant Thornton Limited in its
capacity as court-appointed receiver for RCHI and NGWII and recorded as Document
No. 20100824000441 and re-recorded as Document No. 20100726001046 in the
Official Records of King County, Washington, in each case together with any
modifications and amendments thereof that hereafter may be executed and approved
in writing in advance by Lender.

 

 38 

 

 

“Royal Casino Leasehold” shall mean the right of NGWII to occupy and operate the
Royal Casino pursuant to the terms of the Royal Casino Lease.

 

“Royal Casino Leasehold Deed of Trust” shall mean the Leasehold Deed of Trust,
Assignment of Rents and Leases, Security Agreement and Fixture Filing executed
by NGWII on or about the Original Closing Date in favor of Lender and recorded
in the records of Snohomish County, Washington as Document No. 201312190254,
encumbering the Royal Casino Leasehold and other Collateral therein described
for the purpose of securing the Credit Facility and the payment and performance
under each of the Loan Documents, as such Deed of Trust may be amended,
modified, extended, renewed or restated from time to time.

 

“Schedule of Depository Accounts” shall mean the schedule to be marked as
Schedule 4.05(b) and delivered by Borrowers to Lender on or before the
Restatement Closing Date showing each Depository Account and each Excluded
Deposit Account maintained by each member of the Borrower Consolidation,
together with the name and address of each applicable Depository Institution and
the applicable account number of each such Depository Account and each such
Excluded Deposit Account, as such schedule may be supplemented, amended, updated
and revised from time to time by Borrowers and delivered to Lender.

 

“Schedule of Restricted and Unrestricted Subsidiaries” shall mean the Schedule
of Restricted and Unrestricted Subsidiaries, a copy of which is set forth as
Schedule 4.20, affixed hereto and by this reference incorporated herein and made
a part hereof, setting forth the information described in Section 4.20 with
respect to each Restricted and Unrestricted Subsidiary which exists as of the
Restatement Closing Date.

 

“Schedule of Significant Litigation” shall mean the Schedule of Significant
Litigation, a copy of which is set forth as Schedule 3.15, affixed hereto and by
this reference incorporated herein and made a part hereof, setting forth the
information described in Section 3.15 with respect to each Significant
Litigation.

 

“Schedule of Significant Shareholders” shall mean the Schedule of Significant
Shareholders, a copy of which is set forth as Schedule 4.01(c), affixed hereto
and by this reference incorporated herein and made a part hereof, setting forth
the name, address and number of shares owned by each Significant Shareholder.

 

“Schedule of Slot Route Locations” shall mean the Schedule of Slot Route
Locations, the form of which is set forth as Schedule 3.11 affixed hereto and by
this reference incorporated herein and made a part hereof, setting forth the
information thereon described with respect to the Deadwood Slot Route Operation.

 

“Scheduled Reduction Payment” shall mean for any Fiscal Quarter, the amount, if
any, by which the highest amount of Funded Outstandings during such Fiscal
Quarter exceeds the amount of the Aggregate Commitment as reduced by any
Scheduled Reduction required to be made to such Aggregate Commitment at the end
of such Fiscal Quarter.

 

 39 

 

 

“Scheduled Reductions” shall mean the amount by which the Aggregate Commitment
is reduced on each Reduction Date as set forth on the Aggregate Commitment
Reduction Schedule.

 

“SEC” shall mean Securities and Exchange Commission.

 

“Secured Interest Rate Hedge(s)” shall mean any Interest Rate Hedge entered into
between any Borrower and any Lender, or Affiliate of any Lender, which is
secured by the Security Documentation.

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

“Security Agreement” shall mean the Amended and Restated Security Agreement to
be executed by Borrowers, as debtors, on or before the Restatement Closing Date,
pursuant to which, among other things, the Borrower Consolidation grants a
blanket security interest to Lender in and to all assets and personal property
of the Borrower Consolidation, all as security for payment and performance under
the Credit Facility, as such Security Agreement may be renewed, extended,
amended, restated, replaced, substituted or otherwise modified from time to
time.

 

“Security Documentation” shall mean a collective reference to (i) the Deeds of
Trust, (ii) Security Agreement, (iii) each Account Control Agreement,
(iv) Trademark Security Agreement, (v) Financing Statements, (vi) Restricted
Subsidiary Ownership Pledges, (vii) the Gold Mountain Negative Pledge, and
(viii) all other instruments and agreements to be executed by or on behalf of
Borrowers or other applicable Persons, in favor of the Lender securing repayment
on the Credit Facility.

 

“Seller Subordinated Debt” shall mean collective reference to all Indebtedness,
owing by any member of the Borrower Consolidation to a seller of assets
purchased by such member in an Acquisition which: (a) has been first approved in
writing by Lender, (b) has been structurally and contractually subordinated to
the Credit Facility prior to the incurrence of such Seller Subordinated Debt by
execution of a Payment Subordination Agreement by the applicable member of the
Borrower Consolidation and such seller in favor of and delivered to Lender, and
(c) if such Seller Subordinated Debt is secured, shall only encumber the assets
purchased from such seller which lien or liens shall be fully subordinated to
the liens encumbering such assets in favor of Lender.

 

 40 

 

 

“Senior Officer” shall mean each of (a) the president and (b) the chief
financial officer of NGC as an Authorized Representative on behalf of the
Borrower Consolidation.

 

“Significant Litigation” shall mean each action, suit, proceeding, litigation
and controversy involving Borrowers, or any of them, involving claims in excess
of Two Million Five Hundred Thousand Dollars ($2,500,000.00) or which if
determined adverse to the interests of Borrowers, or any of them, could result
in a Material Adverse Change.

 

“Significant Shareholder” shall have the meaning ascribed to such term in
Section 4.01(c).

 

“Silver Dollar Bothell Casino” shall mean the mini-casino gaming operation
conducted by NGWII on the Silver Dollar Bothell Leasehold consisting of various
house-banked table games, including a full service restaurant with a bar.

 

“Silver Dollar Bothell Estoppel Certificate” shall mean the Lease Estoppel
Certificate and Agreement executed by and among Silver Dollar Bothell Landlord,
NGWII and Lender, recorded on December 19, 2013, in the records of Snohomish
County, Washington, as Document No. 201312190252.

 

“Silver Dollar Bothell Landlord” shall have the meaning ascribed to such term in
subparagraph (i) of the definition of Silver Dollar Bothell Lease.

 

“Silver Dollar Bothell Lease” shall mean the lease evidenced by the following
documents: (i) Lease Agreement dated as of December 3, 2001, by and between
Colin W. & Merlyna M. Radford and Tri-Western Syndicated Investment Co. d/b/a
TriWest North Creek Partnership (together with its successors and/or assigns as
their interests may appear, “Silver Dollar Bothell Landlord”), and Timothy B.
and Michael E. Iszley both single men and/or assigns d/b/a Golden Nugget Casino,
as the original tenant (“Iszley”); (ii) Addendum A to Lease dated as of December
3, 2001, by and between Silver Dollar Bothell Landlord and Iszley; (iii) First
Amendment to Lease dated as of April 15, 2002, by and between Silver Dollard
Bothell Landlord and Iszley; (iv) Second Amendment to Lease, undated, by and
between Silver Dollar Bothell Landlord and Iszley; (v) Third Amendment to Lease,
undated, by and between Mill Creek Gaming d/b/a Golden Nugget Casino (formerly
as Timothy B. and Michael E. Iszley d/b/a Golden Nugget Casino), as tenant
(“Mill Creek”), and Silver Dollar Bothell Landlord; (vi) Fourth Amendment to
Lease dated as of August 15, 2003, by and between Silver Dollar Bothell Landlord
and Mill Creek; (vii) Fifth Lease Amendment dated June 3, 2004, by and between
Silver Dollar Bothell Landlord and Mill Creek; and (viii) Bill of Sale and
Assignment and Assumption Agreement dated July 23, 2010 by and between Grant
Thornton Limited in its capacity as court-appointed receiver for Mill Creek and
NGWII and recorded as Document No. 20100824000441 and re-recorded as Document
No. 20100726001046 in the Official Records of King County, Washington, in each
case together with any modifications and amendments thereof that hereafter may
be executed and approved in writing in advance by Lender.

 

 41 

 

 

“Silver Dollar Bothell Leasehold” shall mean the right of NGWII to occupy and
operate the Silver Dollar Bothell Casino pursuant to the terms of the Silver
Dollar Bothell Lease.

 

“Silver Dollar Bothell Leasehold Deed of Trust” shall mean the Leasehold Deed of
Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing
executed by NGWII on or about the Original Closing Date in favor of Lender and
recorded in the records of Snohomish County, Washington, as Document
No. 201312190253, encumbering the Silver Dollar Bothell Leasehold and other
Collateral therein described for the purpose of securing the Credit Facility and
the payment and performance under each of the Loan Documents, as such Deed of
Trust may be amended, modified, extended, renewed or restated from time to time.

 

“Silver Dollar Renton Casino” shall mean the mini-casino gaming operation
conducted by NGWII on the Silver Dollar Renton Leasehold consisting of various
house-banked table games, including a full service restaurant with a bar.

 

“Silver Dollar Renton Estoppel Certificate” shall mean the Lease Estoppel
Certificate and Agreement dated as of December 9, 2013, executed by and among
Silver Dollar Renton Landlord, NGWII and Lender, with respect to the Silver
Dollar Renton Lease.

 

“Silver Dollar Renton Landlord” shall have the meaning ascribed to such term in
subparagraph (i) of the definition of Silver Dollar Renton Lease.

 

“Silver Dollar Renton Lease” shall mean the lease evidenced by the following
documents: (i) Lease Agreement dated as of March 8, 2004, by and between Little
Family, LLC (together with its successors and/or assigns as their interests may
appear, “Silver Dollar Renton Landlord”), and Little Nevada, Inc., a Washington
corporation, as the original tenant (“Little Nevada”); (ii) Sublease Agreement
dated as of December 21, 2007 by and between Little Nevada, as sublessor, and
Ruth Dykeman Children’s Center, a Washington Nonprofit Public Benefit
Corporation, as sublessee (“WNPBC”), as amended by that certain Amendment to
Sublease effective as of December 1, 2008 by and between Little Nevada and
WNPBC, and as further amended by that certain letter dated February 11, 2008
from Cory Coyle, as President of Gaming Consultants, Inc., to Thomas E.
Rembiesa, as President/CEO of Sublessee; and (iii) Bill of Sale and Assignment
and Assumption Agreement dated July 23, 2010 by and between Grant Thornton
Limited in its capacity as court-appointed receiver for Little Nevada and NGWII
and recorded as Document No. 20100824000441 and re-recorded as Document
No. 20100726001046 in the Official Records of King County, Washington, in each
case together with any modifications and amendments thereof that hereafter may
be executed and approved in writing in advance by Lender.

 

 42 

 

 

“Silver Dollar Renton Leasehold” shall mean the right of NGWII to occupy and
operate the Silver Dollar Renton Casino pursuant to the terms of the Silver
Dollar Renton Lease.

 

“Silver Dollar Renton Leasehold Deed of Trust” shall mean the Leasehold Deed of
Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing
executed by NGWII on or about the Original Closing Date in favor of Lender and
recorded in the records of King County, Washington, as Document
N. 20131224001402, encumbering the Silver Dollar Renton Leasehold and other
Collateral therein described for the purpose of securing the Credit Facility and
the payment and performance under each of the Loan Documents, as such Deed of
Trust may be amended, modified, extended, renewed or restated from time to time.

 

“Silver Dollar SeaTac Casino” shall mean the mini-casino gaming operation
conducted by NGWII on the Silver Dollar SeaTac Leasehold consisting of various
house-banked table games, including a full service restaurant with a bar.

 

“Silver Dollar SeaTac Estoppel Certificate” shall mean the Lease Estoppel
Certificate and Agreement executed by and among Silver Dollar SeaTac Landlord,
NGWII and Lender, recorded on December 24, 2013, in the records of King County,
Washington, as Document No. 20131224001398.

 

“Silver Dollar SeaTac Landlord” shall have the meaning ascribed to such term in
subparagraph (i) of the definition of Silver Dollar SeaTac Lease.

 

“Silver Dollar SeaTac Lease” shall mean the lease evidenced by the following
documents: (i) 192nd Properties Lease dated as of June 1, 2002, by and between
192nd Pacific Properties L.L.C., a Washington limited liability company, and Roy
R. Toland and Audrey V. Toland, husband and wife (collectively and together with
their successors and/or assigns as their interests may appear, “Silver Dollar
SeaTac Landlord”), and Big Nevada Inc. d/b/a “The Silver Dollar Casino”, as the
original tenant (“Big Nevada”); and (ii) Bill of Sale and Assignment and
Assumption Agreement dated July 23, 2010 by and between Grant Thornton Limited
in its capacity as court-appointed receiver for Big Nevada and NGWII and
recorded as Document No. 20100824000441 and re-recorded as Document No.
20100726001046 in the Official Records of King County, Washington, in each case
together with any modifications and amendments thereof that hereafter may be
executed and approved in writing in advance by Lender.

 

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“Silver Dollar SeaTac Leasehold” shall mean the right of NGWII to occupy and
operate the Silver Dollar SeaTac Casino pursuant to the terms of the Silver
Dollar SeaTac Lease.

 

“Silver Dollar SeaTac Leasehold Deed of Trust” shall mean the Leasehold Deed of
Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing
executed by NGWII on or about the Original Closing Date in favor of Lender and
recorded in the records of King County, Washington, as Document
No. 20131224001403, encumbering the Silver Dollar SeaTac Leasehold and other
Collateral therein described for the purpose of securing the Credit Facility and
the payment and performance under each of the Loan Documents, as such Deed of
Trust may be amended, modified, extended, renewed or restated from time to time.

 

“Subsidiary” shall mean, on the date in question, any Person of which an
aggregate of fifty percent (50%) or more of the stock of any class or classes
(or equivalent interests) is owned of record or beneficially, directly or
indirectly, by another Person and/or any of its Subsidiaries, if the holders of
the stock of such class or classes (or equivalent interests) (a) are ordinarily,
in the absence of contingencies, entitled to vote for the election of a majority
of the directors (or individuals performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of such a
contingency, or (b) are entitled, as such holders, to vote for the election of a
majority of the directors (or individuals performing similar functions) of such
Person, whether or not the right so to vote exists by reason of the happening of
a contingency.

 

“Subsidiary Guaranty” shall mean the General Continuing Subsidiary Guaranty to
be executed by each Subsidiary in favor of the Lender in the form of the General
Continuing Subsidiary Guaranty marked “Exhibit F”, affixed hereto and by this
reference incorporated herein and made a part hereof, under the terms of which
each Subsidiary irrevocably and unconditionally guarantees to Lender the full
and prompt payment and performance of all Obligations.

 

“Title Insurance Policies” shall mean collective reference to the Club Fortune
Title Insurance Policy, Coyote Bob’s Title Insurance Policy and the Crazy Moose
Pasco Title Insurance Policy.

 

“Total Funded Debt” shall mean with reference to the Borrower Consolidation for
any period: (i) the total of the Funded Outstandings as of the last day of such
period, plus (ii) the total as of the last day of such period of both the
long-term and current portions (without duplication) of all other interest
bearing Indebtedness (including Contingent Liabilities and Seller Subordinated
Debt, but excluding Permitted Indenture Subordinated Debt) and Capitalized Lease
Liabilities, minus (iii) Unrestricted Cash on deposit with the Lender as of the
last day of such period.

 

 44 

 

 

“Total Leverage Ratio” as of the end of any Fiscal Quarter shall mean the ratio
resulting by dividing (a) Total Funded Debt as of the end of the Fiscal Quarter
under review by (b) the sum of EBITDA determined for the Fiscal Quarter under
review, plus EBITDA for each of the most recently ended three (3) preceding
Fiscal Quarters.

 

“Treasury Stock Acquisitions” shall mean one or more re-purchases of issued and
outstanding shares of the common voting stock of NGC for Cash or Cash
Equivalents at no greater than the then prevailing market price.

 

“Unrestricted Cash” shall mean, as of any date of determination, Cash belonging
to the Borrower Consolidation that is on deposit with Lender that is not subject
to any Lien or security interests, other than in favor of Lender, nor earmarked
or reserved for any particular purpose such as bankroll requirements of any
Gaming Authority or held on behalf of any third Person.

 

“Unrestricted Subsidiary shall mean each Subsidiary of NGC which is not a
Restricted Subsidiary or a Borrower.

 

“Upfront Fee” shall have the meaning ascribed to such term in Section 2.08(a).

 

“Voluntary Permanent Reduction” shall have the meaning set forth in
Section 2.01(c).

 

“Washington Casino Leases” shall mean collective reference to the Club Hollywood
Lease, Crazy Moose Mountlake Lease, Red Dragon Lease, Royal Casino Lease, Silver
Dollar Bothell Lease, Silver Dollar SeaTac Lease and Silver Dollar Renton Lease,
together with any modifications or amendments thereof that hereafter may be
executed and approved in writing in advance by Lender from time to time.

 

“Washington Casino Operations” shall mean the casino and gambling business
enterprises conducted by the Borrower Consolidation at the Casino Facilities
located in the State of Washington.

 

“Washington Title Company” shall mean Escrow and Title Services, Inc. dba
Frontier Title and Escrow Company, 6921 West Grandridge Boulevard, Kennewick, WA
99336 as the issuing agent for First American Title Insurance, for the purpose
of issuing the Restatement Endorsements to the Existing Fee Deeds of Trust
incorporated into and required by the Nevada Closing Instructions.

 

Section 1.02.         Interpretation and Construction. In this Credit Agreement,
unless the context otherwise requires:

 

 45 

 

 

(a)          Articles and Sections mentioned by number only are the respective
Articles and Sections of this Credit Agreement as so numbered;

 

(b)          Words importing a particular gender mean and include every other
gender, and words importing the singular number mean and include the plural
number and vice versa;

 

(c)          All times specified herein, unless otherwise specifically referred,
shall be the time in Las Vegas, Nevada;

 

(d)          Any headings preceding the texts of the several Articles and
Sections of this Credit Agreement, and any table of contents or marginal notes
appended to copies hereof, shall be solely for convenience of reference and
shall not constitute a part of this Credit Agreement, nor shall they affect its
meaning, construction or effect;

 

(e)          If any clause, definition, provision or Section of this Credit
Agreement shall be determined to be apparently contrary to or conflicting with
any other clause, definition, provision or Section of this Credit Agreement then
the clause, definition, provision or Section containing the more specific
provisions shall control and govern with respect to such apparent conflict. The
parties hereto do agree that each has contributed to the drafting of this Credit
Agreement and all Loan Documents and that the provisions herein contained shall
not be construed against either Borrowers or Lenders as having been the person
or persons responsible for the preparation thereof;

 

(f)          The terms “herein”, “hereunder”, “hereby”, “hereto”, “hereof” and
any similar terms as used in the Credit Agreement refer to this Credit
Agreement; the term “heretofore” means before the date of execution of this
Credit Agreement; and the term “hereafter” means after the date of the execution
of this Credit Agreement;

 

(g)          All accounting terms used herein which are not otherwise
specifically defined shall be used in accordance with GAAP;

 

(h)          If any clause, provision or Section of this Credit Agreement shall
be ruled invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any of the remaining
provisions hereof;

 

(i)          Each reference to this Credit Agreement or any other Loan Document
or any of them, as used in this Credit Agreement or in any other Loan Document,
shall be deemed a reference to this Credit Agreement or such Loan Document, as
applicable, as the same may be amended, modified, supplemented, replaced,
renewed or restated from time to time; and

 

 46 

 

 

(j)          Every affirmative duty, covenant and obligation of Borrowers
hereunder shall be equally applicable to each of the Borrowers individually and
where the context would result in the best interests or rights of Lender shall
be construed to mean “Borrowers or any of them” or “Borrowers and each of them”,
as applicable.

 

Section 1.03.       Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this Credit
Agreement shall have such meanings when used in the Revolving Credit Note and in
each Loan Document and other communication delivered from time to time in
connection with this Credit Agreement or any other Loan Document.

 

Section 1.04.       Cross-References. Unless otherwise specified, references in
this Credit Agreement and in each other Loan Document to any Article or Section
are references to such Article or Section of this Credit Agreement or such other
Loan Document, as the case may be, and, unless otherwise specified, references
in any Article, Section or definition to any clause are references to such
clause of such Article, Section or definition.

 

Section 1.05.       Exhibits and Schedules. All Exhibits and Schedules to this
Credit Agreement, either as originally existing or as the same may from time to
time be supplemented, modified or amended, are incorporated herein by this
reference.

 

ARTICLE II

 

AMOUNT AND TERMS OF THE CREDIT FACILITY

 

Section 2.01.       The Revolving Credit Facility.

 

(a)          Subject to the conditions and upon the terms hereinafter set forth
and in accordance with the terms and provisions of the Revolving Credit Note, on
and after the Restatement Closing Date, Lender agrees to continue the Existing
Funded Outstandings as Funded Outstandings under the Credit Facility and to lend
and advance Borrowings to Borrowers, all up to the Aggregate Commitment,
consisting of the Existing Funded Outstandings, the Restatement Closing
Disbursements on the Restatement Closing Date and such amounts as Borrowers may
request by Notice of Borrowing duly executed by an Authorized Representative and
delivered to Lender from time to time for Borrowings under the Credit Facility
as provided in Section 2.03, subject to the uses and purposes set forth in
Section 2.02.

 

(b)          Subject to the uses and purposes set forth in Section 2.02, on and
after the Restatement Closing Date Borrowers may borrow, repay and reborrow the
Available Borrowings up to the Aggregate Commitment from time to time. The
Credit Facility shall be for a term commencing on the Restatement Closing Date
and terminating on the Maturity Date, on which date the entire outstanding
balance of the Credit Facility shall be fully paid and Credit Facility
Termination shall occur.

 

 47 

 

 

(c)          Notwithstanding the Scheduled Reductions to the Aggregate
Commitment as set forth on the Aggregate Commitment Reduction Schedule,
Borrowers may voluntarily further permanently reduce the Aggregate Commitment
from time to time (a “Voluntary Permanent Reduction”) on the following
conditions:

 

(i)          that each such Voluntary Permanent Reduction be in the minimum
amount of One Million Dollars ($1,000,000.00) and in increments of One Hundred
Thousand Dollars ($100,000.00) and is made in writing by an Authorized
Representative, effective on the fifth (5th) Banking Business Day following
receipt by Lender;

 

(ii)         that each such Voluntary Permanent Reduction shall be irrevocable
and a permanent reduction to the Aggregate Commitment; and

 

(iii)        in the event any Voluntary Permanent Reduction reduces the
Aggregate Commitment to less than the sum of the Funded Outstandings, the
Borrower Consolidation shall immediately cause the Funded Outstandings to be
reduced by such amount as may be necessary to cause the Funded Outstandings to
be equal to or less than the Aggregate Commitment.

 

(d)          In addition to the requirements set forth in Section 2.01(c), in
the event any Scheduled Reduction or Voluntary Permanent Reduction or Mandatory
Commitment Reduction reduces the Aggregate Commitment to less than the sum of
the Funded Outstandings, the Borrowers shall, on or before the next ensuing
Banking Business Day, cause the Funded Outstandings to be reduced by such amount
as may be necessary to cause the Funded Outstandings to be equal to or less than
the Aggregate Commitment.

 

Section 2.02.       Use of Proceeds of the Credit Facility. Available Borrowings
shall be used for the purposes of:

 

(a)          On the Restatement Closing Date (collectively the “Restatement
Closing Disbursements”):

 

(i)          continuing the Existing Funded Outstandings under the Existing
Credit Facility as Funded Outstandings under the Credit Facility;

 

(ii)         funding the Purchase Escrow with all or a portion of the “Cash
Purchase Funds” as defined in the Purchase Agreement and any related costs,
fees, prorations and expenses, as directed by Borrowers in the request for the
Restatement Closing Disbursement;

 

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(iii)        paying in full the costs, fees and expenses of Nevada Title Company
incurred in connection with the satisfaction of the Closing Conditions set forth
in Article III A, the costs, fees and expenses of the attorneys for Borrowers
and the costs, fees and expenses of Henderson & Morgan, LLC, attorneys for
Lender, and associate counsel retained by them incurred to the Restatement
Closing Date;

 

(iv)        paying the balance of the Upfront Fee and other expenses to Lender
to the extent not previously paid; and

 

(v)         paying the balance of the fee owing by Borrowers to Rossoff &
Company, LLC in the amount of Three Hundred Nine Thousand Seven Hundred
Eighty-Nine Dollars ($309,789.00).

 

(b)          During the Revolving Credit Period, funding the ongoing Capital
Expenditure requirements and working capital needs of the Borrower Consolidation
relating to the Business Operations.

 

Section 2.03.       Notice of Borrowings.

 

(a)          An Authorized Representative may give Lender, no later than 11:00
a.m. on any Banking Business Day at Lender’s office specified in Section 2.06,
one (1) full Banking Business Day prior notice by telephone or email and
thereafter immediately confirmed in writing by delivery to Lender of a written
notice in the form of the Notice of Borrowing (“Notice of Borrowing”), a copy of
which is marked “Exhibit B”, affixed hereto and by this reference incorporated
herein and made a part hereof, for each proposed Borrowing, specifying the date
and amount of each proposed Borrowing. Not later than 11:00 a.m. on the Funding
Date specified, Lender shall make the proceeds of such fundings available to
Borrowers by depositing the amount of such Borrowing in the Designated Deposit
Account maintained with Lender. No Borrowing may exceed the Available
Borrowings. Each Borrowing shall be in a minimum amount of One Hundred Thousand
Dollars ($100,000.00) and in increments of Ten Thousand Dollars ($10,000.00).
Borrowers shall be entitled to no more than three (3) Borrowings during each
calendar month.

 

(b)          Notwithstanding the foregoing, Lender may permit, in its sole
discretion, the Credit Facility to be linked to the Designated Deposit Account
with an automatic sweep mechanism (“Automatic Sweep”) as outlined in the
Treasury Management Services Agreement executed by NGC on behalf of the Borrower
Consolidation in connection with such link. During all periods in which the
Automatic Sweep is in effect, a Notice of Borrowing shall not be required for
advances made thereunder.

 

 49 

 

 

Section 2.04.       Conditions of Borrowings. Borrowings will only be made so
long as Borrowers are in full compliance with each of the requirements and
conditions precedent set forth in Article III B of this Credit Agreement.
Provided, however, Lender may, in its sole and absolute discretion, advance
Borrowings notwithstanding the existence of less than full compliance with the
requirements of Articles III and Borrowings so made shall be deemed to have been
made pursuant to this Credit Agreement.

 

Section 2.05.       The Revolving Credit Note and Interest Rate.

 

(a)          The Credit Facility shall be further evidenced by the Revolving
Credit Note payable to the order of Lender. Lender shall record manually or
electronically the date and amount of each Borrowing and the amount of each
repayment of principal made thereunder and the entry of such records shall be
conclusive absent manifest or demonstrable error; provided, however, the failure
to make such a record or notation with respect to any Borrowing or repayment
thereof, or an error in making such a record or notation, shall not limit or
otherwise affect the obligations of Borrowers hereunder or under the Revolving
Credit Note.

 

(b)          Commencing on the Restatement Closing Date and continuing until the
tenth (10th) day of the month immediately following the month during which the
Restatement Closing Date occurs, interest shall accrue at the LIBO Rate plus the
Applicable Margin as determined by Lender as of the Restatement Closing Date.
Commencing on the tenth (10th) day of the month immediately following the month
during which the Restatement Closing Date occurs and continuing until the
Maturity Date, interest shall accrue on the unpaid principal balance of the
Credit Facility at a rate per annum equal to the LIBO Rate plus the Applicable
Margin as determined by Lender as of the tenth (10th) day of each consecutive
month commencing on the tenth (10th) day of the month immediately following the
month during which the Restatement Closing Date occurs as provided above. In the
event the tenth (10th) day of a month is not a Banking Business Day, the LIBO
Rate for such month shall be determined with reference to the one (1) month LIBO
Rate on the last Banking Business Day immediately preceding such tenth (10th)
day of the month. Interest accrued on the unpaid principal balance of the Credit
Facility shall be due and payable on the tenth (10th) day of each and every
calendar month commencing on December 10, 2015 and on the Maturity Date.

 

(c)          Each determination of the applicable LIBO Rate shall be conclusive
and binding upon the Borrowers, in the absence of manifest or demonstrable
error. The Lender shall, on no less than a monthly basis, deliver to Borrowers
an invoice statement showing the payment due and the computations used by the
Lender in determining the LIBO Rate hereunder. Computation of interest on the
Credit Facility and Nonusage Fees shall be calculated on the basis of a year of
three hundred sixty (360) days and the actual number of days elapsed.

 

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Section 2.06.       Place and Manner of Payment.

 

(a)          All amounts payable by Borrowers to the Lender shall be made to
Lender pursuant to the terms of the Credit Agreement and the Revolving Credit
Note and shall be made on a Banking Business Day in lawful money of the United
States of America and in immediately available funds. Other than in connection
with: (i) the Scheduled Reductions of principal, (ii) repayments made under the
Automatic Sweep, or (iii) principal payments which may be required to decrease
the Funded Outstandings to an amount equal to or less than the Aggregate
Commitment, Borrowers shall not make repayments (“Principal Prepayments”) of the
outstanding balance of principal owing under the Revolving Credit Note more
frequently than three (3) such Principal Prepayments during each calendar month.
Each such Principal Prepayment shall be in a minimum amount of Fifty Thousand
Dollars ($50,000.00) (or, if less, the outstanding principal amount of the
Credit Facility) and in increments of Ten Thousand Dollars ($10,000.00) in
excess thereof.

 

(b)          Other than payments made under the Automatic Sweep, all amounts
payable by Borrowers under the Credit Facility shall be made to Lender by check
or wire transfer to its office located at 8945 W. Russell Road, Ste. 300, Las
Vegas, Nevada 89148 or at such other address as may be directed in writing by
Lender from time to time, and shall be designated by Borrowers as payments on
the Credit Facility. If such payment is received by Lender prior to 11:00 a.m.,
Lender shall credit Borrowers with such payment on the day so received. If such
payment is received by Lender after 11:00 a.m., Lender shall credit Borrowers
with such payment as of the next Banking Business Day. If the Revolving Credit
Note or any payment required to be made thereon or hereunder, is or becomes due
and payable on a day other than a Banking Business Day, the due date thereof
shall be extended to the next succeeding Banking Business Day and interest
thereon shall be payable at the then applicable rate during such extension.

 

(c)          Subject to Section 2.06(a), the outstanding principal owing under
the Credit Facility and the Revolving Credit Note may be prepaid at any time in
whole or in part without penalty.

 

Section 2.07.       Net Payments. All payments under this Credit Agreement
and/or the Revolving Credit Note shall be made without set-off, counterclaim,
recoupment or defense of any kind.

 

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Section 2.08.       Fees.

 

(a)          In consideration of the Credit Facility, Borrowers shall pay the
following non-refundable fees (collectively, the “Upfront Fee”) to Lender in the
aggregate amount of One Hundred Fifty-One Thousand Five Hundred Eighty-Nine
Dollars ($151,589.00), each of which shall be deemed fully earned by Lender and
payable by Borrowers as of the Restatement Closing Date, and consist of the
following fees and cost reimbursements:

 

(i)          Origination fee in the amount of One Hundred Forty-Nine Thousand
Five Hundred Dollars ($149,500.00) in consideration of the Credit Facility;

 

(ii)         Two Hundred Fifty-Two Dollars ($252.00) for UCC searches;

 

(iii)        Phase I Environmental Due Diligence (Club Fortune) in the amount of
Five Hundred Fifty Dollars ($550.00);

 

(iv)        Flood certifications in the amount of Two Hundred Forty Dollars
($240.00); and

 

(v)         Tax monitoring fee in the amount of One Thousand Forty-Seven Dollars
($1,047.00).

 

Lender acknowledges that Borrowers have previously paid the Commitment Fee in
the amount of One Hundred Forty-Nine Thousand Five Hundred Dollars ($149,500.00)
to Lender for application to the Upfront Fee and the Phase I Due Diligence Fee
in the amount of Five Hundred Fifty Dollars ($550.00), which amounts shall be
fully credited to the amount due on the Restatement Closing Date, resulting in a
balance of the Upfront Fee due on the Restatement Closing Date in the amount of
One Thousand Five Hundred Thirty-Nine Dollars ($1,539.00).

 

(b)          Commencing on the Restatement Closing Date, Borrowers shall be
obligated to pay a quarterly nonusage fee (the “Nonusage Fee”) for the account
of Lender. The Nonusage Fee shall begin to accrue on the Restatement Closing
Date and shall be calculated as of the last day of each Fiscal Quarter
thereafter occurring as the product of (i) one-half of one percent (0.500%) per
annum, multiplied by (ii) as of the end of such Fiscal Quarter, the amount of
the Maximum Availability in excess of One Million Dollars ($1,000,000.00) as of
the last day of the Fiscal Quarter under review, all on the basis of a three
hundred sixty (360) day year. Each Nonusage Fee shall be payable in arrears on a
quarterly basis on or before the date the Compliance Certificate applicable to
such Fiscal Quarter is delivered pursuant to Section 5.08(e), but in any event
no later than sixty (60) days following the end of such Fiscal Quarter,
commencing with the Fiscal Quarter in which the Restatement Closing Date occurs,
and upon Credit Facility Termination, whether at maturity, by acceleration or
otherwise. Borrowers may pay any Nonusage Fee by wire transfer or under the
Automatic Sweep, as Borrowers may direct.

 

 52 

 

 

(c)          On the Restatement Closing Date, Borrowers shall also reimburse
Lender for the reasonable attorney’s fees of Henderson & Morgan, LLC and
associate counsel retained by them which have been previously paid by Lender or
are remaining unpaid as of such date relating to the negotiation and
documentation of the Credit Facility.

 

Section 2.09.         Interest on Overdue Amounts and Default Rate.

 

(a)          If any payment due under the Revolving Credit Note is not paid
within ten (10) calendar days after receipt by Borrowers of written notice of
such nonpayment from Lender, Borrowers promise to pay a late charge in the
amount of five percent (5%) of the amount of such delinquent payment and Lender
need not accept any late payment made unless it is accompanied by such five
percent (5%) late payment charge.

 

(b)          In the event of the existence of an Event of Default, commencing on
the tenth (10th) calendar day following the receipt by Borrowers of written
notice of the occurrence of such Event of Default from Lender, the total of the
unpaid balance of the principal and the then accrued and unpaid interest owing
under the Credit Facility shall collectively commence accruing interest at a
rate equal to five percent (5%) over the rate or rates then in effect hereunder
(the “Default Rate”) until such time as all payments and additional interest are
paid, together with the curing of any Events of Default which may exist, at
which time the interest rate shall revert to that rate of interest otherwise
accruing pursuant to the terms of the Revolving Credit Note.

 

(c)          In the event of the occurrence of an Event of Default, Borrowers
agree to pay all reasonable costs of collection, including a reasonable
attorneys’ fees and costs, in addition to and at the time of the payment of such
sum of money and/or the performance of such acts as may be required to cure such
default. In the event legal action is commenced for the collection of any sums
owing hereunder or under the terms of the Revolving Credit Note, the Borrowers
agree that any judgment issued as a consequence of such action against Borrowers
shall bear interest at a rate equal to the Default Rate until fully paid.

 

Section 2.10.       Security for the Credit Facility. As security for the due
and punctual payment and performance of the terms and provisions of this Credit
Agreement, the Revolving Credit Note and all of the other Loan Documents, the
Security Documentation required under Section 3.03 and Section 3.04 shall be
executed and delivered to Lender, as of the Restatement Closing Date, by the
respective parties to each of the Security Documentation and recorded and/or
filed as required by the Closing Instructions.

 

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ARTICLE III

 

CONDITIONS PRECEDENT TO THE RESTATEMENT CLOSING DATE

 

A.           Closing Conditions. The obligation of Lender to advance Borrowings
under the Credit Facility is subject to the following conditions precedent, each
of which shall be satisfied prior to January 31, 2016 (unless Lender, in its
sole and absolute discretion, shall agree otherwise). The occurrence of the
Restatement Closing Date is subject to and contingent upon Lender having
received, in each case in form and substance reasonably satisfactory to Lender,
or in the case of an occurrence, action or event, the occurrence of, each of the
following:

 

Section 3.01.       Credit Agreement. Two (2) duplicate originals of this Credit
Agreement.

 

Section 3.02.       The Note. The Revolving Credit Note duly executed by the
Borrowers in favor of Lender.

 

Section 3.03.       Security Documentation. On or before the Restatement Closing
Date, the Security Documentation described below, duly executed by each of the
Borrowers, where required, or each applicable other party thereto, shall be
delivered to Lender:

 

(a)          The Club Fortune Deed of Trust;

 

(b)          The First Amendment to Coyote Bob’s Deed of Trust;

 

(c)          The First Amendment to Crazy Moose Pasco Deed of Trust;

 

(d)          The Nevada Financing Statement;

 

(e)          Amended and Restated Security Agreement; and

 

(f)          An Account Control Agreement for each of the Depository Accounts
shown on the Schedule of Depository Accounts, Schedule 4.05(b) affixed hereto as
of the Restatement Closing Date, other than the Excluded Deposit Accounts.

 

Section 3.04.       Other Loan Documents. The following Loan Documents duly
executed by Borrowers and any other applicable party thereto, consisting of the
following shall be delivered or caused to be delivered to Lender on or before
the Restatement Closing Date:

 

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(a)          Amended and Restated Environmental Certificate.

 

Section 3.05.       Organizational Documents, Resolutions, Certificates of Good
Standing, Authorized Representative Certificates and Closing Certificate. Lender
shall have received:

 

(a)          a Certificate of Good Standing issued by the Secretary of State of
each respective State of organization for each of the Borrowers, dated within
thirty (30) calendar days of the Restatement Closing Date;

 

(b)          a copy of the articles of organization and operating agreement and
all amendments thereto for each of NGCLV, NGW, NGWII Holdings, NGWII, NGWIII,
NGSD, CGC, Gold Mountain and NGBVR, and a copy of the Articles of Incorporation
and Bylaws and all amendments thereto for each of NGC, AGTSG and CGE;

 

(c)          an original Certificate of Corporate or Membership Resolution, as
applicable, authorizing each member of the Borrower Consolidation to enter into
all documents and agreements to be executed by them, respectively, pursuant to
this Credit Agreement and further authorizing and empowering the Authorized
Representative who will execute such documents and agreements with the authority
and power to execute such documents and agreements on behalf of each member of
the Borrower Consolidation, respectively;

 

(d)          designation by certificate (“Authorized Representative
Certificate”), in the form of the Authorized Representative Certificate marked
“Exhibit C”, affixed hereto and by this reference incorporated herein and made a
part hereof, of the officers, managers or other representatives of each of the
Borrowers who are authorized to give Compliance Certificates and all other
notices, requests, reports, consents, certifications and authorizations on
behalf of the Borrowers, respectively (collectively the “Authorized
Representatives”); and

 

(e)          an original closing certificate (“Closing Certificate”),
substantially in the form of the Closing Certificate marked “Exhibit D”, affixed
hereto and by this reference incorporated herein and made a part hereof, duly
executed by an Authorized Representative of each of the Borrowers.

 

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Section 3.06.       Title Policy and Endorsements.

 

(a)          Irrevocable Commitment by Nevada Title Company for the issuance of
the Club Fortune Title Insurance Policy, together with the required endorsements
issued by Nevada Title Company in accordance with the Restatement Closing
Instructions; and

 

(b)          Irrevocable commitment by the Washington Title Company for the
issuance of the Restatement Endorsement to the Coyote Bob’s Title Insurance
Policy and to the Crazy Moose Pasco Title Insurance Policy.

 

Section 3.07.       Insurance. Copies of the declaration pages of each of the
insurance policies certified to be true and correct by an Authorized
Representative of the Borrowers, together with original binders evidencing
Borrowers as named insured, and original certificates of insurance, loss payable
and mortgagee endorsements naming Lender as mortgagee, loss payee and additional
insured, as required by the applicable insurance provisions set forth in
Section 5.09 of this Credit Agreement.

 

Section 3.08.       Payment of Upfront Fee and Purchase Price.

 

(a)          Payment by Borrowers of the Upfront Fee as provided in Section
2.08; and

 

(b)          Payment in full of the Purchase Price under the Purchase Agreement.

 

Section 3.09.       Reimbursement for Expenses and Fees. Reimbursement to Lender
by Borrowers for all reasonable fees and out-of-pocket expenses incurred by
Lender in connection with the Credit Facility, including, but not limited to,
escrow charges, title insurance premiums, recording fees, reasonable attorney’s
fees of Henderson & Morgan, LLC, and associate counsel retained by Henderson &
Morgan, LLC and all other like expenses remaining unpaid as of the Restatement
Closing Date.

 

Section 3.10.       Phase I Environmental Site Assessments and Environmental
Indemnity.

 

(a)          A Phase I Environmental Site Assessment or Assessments of the Club
Fortune Real Property prepared in conformance with the scope and limitations of
ASTM Standard Designation E1527-00 and approved by Lender. Lender hereby
confirms that no recommended action is required under such assessment with
respect to the Club Fortune Real Property;

 

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(b)          Borrowers shall have paid all applicable fees for the preparation
and review of the Environmental Assessments and related work performed on the
Collateral Properties in connection with the Credit Facility; and

 

(c)          Borrowers hereby confirm the representations contained in
Section 2.1 of the Environmental Certificate are true and correct in all
respects.

 

Section 3.11.       Schedule of Slot Route Locations. The Schedule of Slot Route
Locations (Schedule 3.11) fully completed with the lease and payment information
described on the form of Schedule 3.11 affixed hereto.

 

Section 3.12.       Adjacent Site Lease, Washington Casino Leases and Deadwood
Slot Route Leases. A true and correct copy of each of the Adjacent Site Lease,
Washington Casino Leases and Deadwood Slot Route Leases and of all amendments
and modifications to such documents.

 

Section 3.13.       Gaming Permits.  Each member of the Borrower Consolidation
shall have received all necessary approvals for all Gaming Permits required for
the conduct of the Business Operations and such Gaming Permits shall not then be
suspended, enjoined or prohibited (for any length of time) by any Gaming
Authority or any other Governmental Authority.

 

Section 3.14.       Survey. A current boundary and location survey for the Club
Fortune Real Property delivered to Lender no less than ten (10) Banking Business
Days prior to the Restatement Closing Date, which must (a) be certified to
Lender and Nevada Title Company, (b) show the Club Fortune Real Property to be
free of encroachments, overlaps, and other survey defects, (c) show the courses
and distances of the lot lines for the Club Fortune Real Property, (d) show that
all existing improvements are located within said lot and building lines, and
(e) show the location of all above and below ground easements, improvements,
appurtenances, utilities, rights-of-way, water rights and ingress and egress, by
reference to book and page numbers and/or filed map reference. On or before the
Restatement Closing Date, all other survey requirements of Nevada Title Company
for the issuance of the Club Fortune Title Insurance Policy.

 

Section 3.15.       Schedule of All Significant Litigation. A Schedule of
Significant Litigation (Schedule 3.15) involving any member of the Borrower
Consolidation, in each instance setting forth the names of the other parties
thereto, a brief description of such litigation, whether or not such litigation
is covered by insurance and, if so, whether the defense thereof and liability
therefor has been accepted by the applicable insurance company indicating
whether such acceptance of such defenses with or without a reservation of
rights, the commencement date of such litigation and the amount sought to be
recovered by the adverse parties thereto or the amount which is otherwise in
controversy.

 

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Section 3.16.       Opinion of Counsel. The opinion of counsel to the Borrower
Consolidation, dated as of the Restatement Closing Date and addressed to the
Lender, together with its successors and assigns, substantially in the form of
the legal opinion marked "Exhibit H", affixed hereto and by this reference
incorporated herein and made a part hereof, as a supplement to the Legal Opinion
dated December 10, 2013, delivered to Lender in connection with the Original
Closing Date and Existing Credit Agreement.

 

Section 3.17.       Compliance Under Existing Credit Agreement and Pro Forma
Financial Compliance.

 

(a)          Borrowers shall deliver a duly executed and completed Compliance
Certificate prepared in compliance with the Existing Credit Agreement for the
Fiscal Quarter ended October 31, 2015, showing no Default or Event of Default
has occurred and remains continuing; and

 

(b)          The Borrowers shall also deliver a duly executed and completed
Compliance Certificate, prepared as of the end of the Fiscal Quarter ended
October 31, 2015, prepared on a pro forma basis based on the assumption that the
Restatement Closing Date had occurred one (1) year prior to the end of such
Fiscal Quarter, demonstrating pro forma compliance with the Financial Covenants.

 

Section 3.18.       Conditions Related to the Purchase Transaction.

 

(a)          There shall have been no Material Adverse Change in the Club
Fortune Casino Operation since the date of the Purchase Agreement;

 

(b)          Each of the “Conditions to Closing” set forth at Article VIII of
the Purchase Agreement shall be fully satisfied or waived as of the Restatement
Closing Date, which waiver shall have been approved by the Lender, and no event
or circumstance known to the Borrowers exists that would prevent or reduce the
likelihood of the consummation of the Purchase Transaction on the Restatement
Closing Date;

 

(c)          There shall not exist (i) any order, decree, judgment, ruling or
injunction which restrains the consummation of the Purchase Transaction in the
manner contemplated by the Purchase Closing Documents, or (ii) any pending or
threatened action, suit, investigation or proceeding which, in the Lender’s
reasonable judgment, is expected to materially and adversely affect the
Borrowers, taken as a whole, or the ability of NGCLV to consummate the Purchase
Transaction in the manner contemplated by the Purchase Closing Documents, or the
ability of the Borrower Consolidation to perform their respective material
obligations under the Loan Documents or the ability of Lender to exercise its
rights thereunder;

 

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(d)          All governmental and third party consents and approvals necessary
in connection with the Purchase Transaction contemplated by the Purchase Closing
Documents shall have been obtained; all such consents and approvals shall be in
force and effect; and all applicable waiting periods shall have expired without
any action being taken by any authority that could, in the Lender’s reasonable
judgment, be expected to restrain, prevent or impose any material adverse
conditions on the Purchase Transaction, and no law or regulation shall be
applicable which in the reasonable judgment of Lender could have such effect;

 

(e)          Delivery of a true and correct copy of all of the Purchase Closing
Documents;

 

(f)          The “Closing” as defined in the Purchase Agreement shall occur
concurrently with the Restatement Closing Date; and

 

(g)          As of the Restatement Closing Date, NGCLV shall have acquired free
and clear ownership of the Purchase Assets relating to the Club Fortune Casino
Facility, subject only to the Club Fortune Permitted Encumbrances.

 

Section 3.19.       Regulatory Approvals, Permits, Consents, Etc.

 

(a)          On or before the Restatement Closing Date, copies of those material
permits, approvals or consents by all Governmental Authorities permitting the
use and operation of the Business Operations, together with all supporting
documents and materials, reasonably requested by Lender at least three (3)
Banking Business Days prior to the Restatement Closing Date.

 

(b)          Evidence that each of the Business Operations: (i) have a written
BSA/AML Program and has provided Lender with the name and contact information
for the officer responsible for compliance with the BSA/AML Program, and (ii)
are subject to examination for BSA/AML Program compliance by the Internal
Revenue Service or the State of Nevada with respect to the Club Fortune Casino
Facility or the State of Washington with respect to the Casino Facilities
located in Washington or the State of South Dakota with respect to the Deadwood
Slot Route Operation.

 

Section 3.20.       No Injunction or Other Litigation. No law or regulation
shall prohibit, and no order, judgment or decree of any Governmental Authority
shall, and no litigation shall be pending or threatened which in the reasonable
judgment of the Lender would or would reasonably be expected to, enjoin,
prohibit, limit or restrain the execution and delivery of this Credit Agreement
or the making of the Credit Facility or the performance by the Borrowers of any
other material obligations in respect thereof or the ability of the Borrowers to
conduct their business substantially as presently conducted.

 

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Section 3.21.       Additional Documents and Statements. Such additional
documents, affidavits, certificates and opinions as Lender may reasonably
require to insure compliance with this Credit Agreement. The statements set
forth in Section 3.23 shall be true and correct.

 

B.           Conditions Precedent to all Borrowings under the Credit Facility.
The obligation of Lender to advance any Borrowing requested to be made or issued
under the Credit Facility on any Funding Date, other than an advance under the
Automatic Sweep, is subject to the occurrence of each of the following
conditions precedent as of such Funding Date:

 

Section 3.22.       Notice of Borrowing. With respect to any Borrowing requested
by Borrowers, the Lender shall have received in accordance with Section 2.03, on
or before each Funding Date an original Notice of Borrowing duly executed by an
Authorized Representative or facsimile copy thereof, to be promptly followed by
an original.

 

Section 3.23.       Certain Statements. On each Funding Date and as of the
Restatement Closing Date the following statements shall be true and correct:

 

(a)          The representations and warranties contained in Article IV hereof
and in each of the Loan Documents (other than representations and warranties
which expressly speak only as of a different date which shall be true and
correct in all material respects as of such date) are true and correct on and as
of the Funding Date and as of the Restatement Closing Date in all material
respects as though made on and as of that date, except to the extent that such
representations and warranties are not true and correct as a result of a change
which is permitted by this Credit Agreement;

 

(b)          The representations and certifications contained in the
Environmental Certificate are true and correct (other than representations and
warranties which expressly speak only as of a different date which shall be true
and correct in all material respects as of such date); and

 

(c)          No event has occurred or as a result of any Borrowings contemplated
hereby would occur and is continuing, or would result from the making thereof,
which constitutes an Event of Default hereunder or would constitute an Event of
Default hereunder but for the requirement that notice be given or time elapsed,
or both.

 

Section 3.24.         Gaming Permits. The Borrower Consolidation shall have all
Gaming Permits material to or required for the conduct of its gaming businesses
and the conduct of games of chance at the Business Operations and such Gaming
Permits shall not then be suspended, enjoined or prohibited (for any length of
time) by any Gaming Authority or any other Governmental Authority.

 

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ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

To induce Lender to enter into this Credit Agreement, Borrowers make the
following representations and warranties:

 

Section 4.01.       Organization; Power and Authorization.

 

(a)          NGC is a corporation duly organized and validly existing under the
laws of the State of Nevada. NGW, NGWII, NGWII Holdings, and NGWIII are each a
limited liability company duly organized and validly existing under the laws of
the State of Washington. NGSD is a limited liability company duly organized and
validly existing under the laws of the State of South Dakota. AGTSG is a
corporation duly organized and validly existing under the laws of the State of
South Dakota. CGE is a corporation duly organized and validly existing under the
laws of the State of Colorado; Gold Mountain is a limited liability company duly
organized and existing under the laws of the State of Colorado; and NGCLV, CGC
and NGBVR are each a limited liability company duly organized and existing under
the laws of the State of Nevada. Each Borrower (i) has all requisite corporate
power, authority and legal right to execute and deliver each document, agreement
or certificate to which it is a party or by which it is bound in connection with
the Credit Facility, to consummate the transactions and perform its obligations
hereunder and thereunder, and to own its properties and assets and to carry on
and conduct its business as presently conducted or proposed to be conducted, and
(ii) has taken all necessary corporate action to authorize the execution,
delivery and performance of this Credit Agreement and the other Loan Documents
to which it is a party or by which it is bound and to consummate the
transactions contemplated hereunder and thereunder.

 

(b)          Each of NGCLV, NGW, NGWII Holdings, NGWIII, CGC, Gold Mountain,
NGSD and NGBVR is a wholly owned Subsidiary of NGC. NGWII is a wholly owned
Subsidiary of NGWII Holdings. CGE is a wholly owned Subsidiary of CGC. AGTSG is
a wholly Subsidiary of NGSD.

 

(c)          Other than as described on the Schedule of Significant
Shareholders, Schedule 4.01(c) affixed hereto, as of the Restatement Closing
Date, there is no single shareholder that owns five percent (5.0%) or more of
the issued and outstanding capital stock of NGC (any such shareholder owning
five percent (5.0%) or more of the outstanding shares being deemed a
“Significant Shareholder”).

 

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Section 4.02.       No Conflict With, Violation of or Default Under Laws or
Other Agreements. Neither the execution and delivery of this Credit Agreement,
the Revolving Credit Note or any other Loan Document, or any other agreement,
certificate or instrument to which any Borrower is a party or by which it is
bound in connection with the Credit Facility, nor the consummation of the
transactions contemplated hereunder or thereunder, nor the compliance with or
performance of the terms and conditions herein or therein, is prevented by,
limited by, conflicts in any material respect with, or will result in a material
breach or violation of, or a material default (with due notice or lapse of time
or both) under, or the creation or imposition of any lien, charge, or
encumbrance of any nature whatsoever upon any of their respective property or
assets by virtue of, the terms, conditions or provisions of (a) any indenture,
evidence of indebtedness, loan or financing agreement, or other agreement or
instrument of whatever nature to which any Borrower is bound, or (b) any
provision of any existing law, rule, regulation, order, writ, injunction or
decree of any court or Governmental Authority to which Borrowers are subject.

 

Section 4.03.       Litigation. Except as disclosed on the Schedule of
Significant Litigation delivered in connection with Section 3.15, to the best
knowledge of Borrowers, after due inquiry and investigation, there is no action,
suit, proceeding, inquiry, hearing or investigation pending or threatened, in
any court of law or in equity, or before any Governmental Authority, which
reasonably would be expected to (a) result in any Material Adverse Change in the
Business Operations, (b) materially adversely affect the Borrowers’ ability to
perform their respective obligations under the Credit Agreement and the other
Loan Documents, or (c) materially adversely affect the validity or
enforceability of this Credit Agreement and the other Loan Documents. To the
best knowledge of Borrowers, after due inquiry and investigation, no Borrower is
in violation of or default with respect to any order, writ, injunction, decree
or demand of any Governmental Authority.

 

Section 4.04.       Agreements Legal, Binding, Valid and Enforceable. This
Credit Agreement, the Revolving Credit Note, the Security Documentation and all
other Loan Documents, when executed and delivered by Borrowers in connection
with the Credit Facility will constitute legal, valid and binding obligations of
Borrowers, enforceable against Borrowers in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws of general application relating to or affecting the
enforcement of creditors’ rights and the exercise of judicial discretion in
accordance with general principles of equity (regardless of whether enforcement
is considered in a proceeding in equity or at law).

 

Section 4.05.       Information and Financial Data Accurate; Financial
Statements; No Adverse Event; Deposit Accounts.

 

(a)          All information and financial and other data previously furnished
in writing by Borrowers in connection with the Credit Facility was true, correct
and complete in all material respects as of the date furnished (unless
subsequently corrected prior to the date hereof), and there has been no Material
Adverse Change with respect thereto to the date of this Credit Agreement since
the dates thereof. No information has been omitted which would make the
information previously furnished in such financial statements to Lender
misleading or incorrect in any material respect to the date of this Credit
Agreement. Any and all financial statements heretofore furnished to Lender by
Borrowers: (i) present fairly the financial position of Borrowers as of their
respective dates and the results of operations and changes in financial position
for the periods to which they apply, and (ii) have been prepared in conformity
with GAAP applied on a consistent basis throughout the periods involved. Since
the date of the financial statements referred to in this Section 4.05, there has
been no Material Adverse Change in the financial condition, assets, liabilities,
business or operations of Borrowers.

 

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(b)          A complete list of all Depository Accounts maintained by Borrowers
as of the Restatement Closing Date is set forth on the Schedule of Depository
Accounts marked “Schedule 4.05(b)” to be delivered to Lender not later than
fifteen (15) Banking Business Days prior to the Restatement Closing Date.
Borrowers represent that Borrowers shall not at any time establish or maintain
any Depository Accounts that are not the subject of a Control Agreement in favor
of Lender, other than the Excluded Deposit Accounts.

 

Section 4.06.       Governmental Approvals. All timely consents, approvals,
orders or authorizations of, or registrations, declarations, notices or filings
with any Governmental Authority which are required in connection with the valid
execution and delivery of this Credit Agreement and the other Loan Documents by
Borrowers and the carry-out or performance of any of the transactions required
or contemplated hereunder, or thereunder, by Borrowers, have been obtained or
accomplished and are in full force and effect, or can be obtained or
accomplished by Borrowers. To the best of Borrowers’ knowledge, all timely
consents, approvals, orders or authorizations of, or registrations,
declarations, notices or filings with any Governmental Authority which are
required by Borrowers in connection with the use and operation of the Business
Operations have been obtained or accomplished and are in full force and effect.

 

Section 4.07.       Payment of Taxes. Borrowers have duly filed or caused to be
filed all federal, state and local tax reports and returns which are required to
be filed by them and have paid or made provisions for the payment of, all
material taxes, assessments, fees and other governmental charges which have or
may have become due pursuant to said returns or otherwise pursuant to any
assessment received by Borrowers except such taxes, assessments, fees or other
governmental charges, if any, as are being contested in good faith by Borrowers
by appropriate proceedings and for which Borrowers have maintained adequate
reserves for the payment thereof in accordance with GAAP.

 

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Section 4.08.         Title to Properties. Borrowers shall have good and
marketable title to the Owned Properties and shall be the tenants under each
respective Washington Casino Lease as of the Restatement Closing Date and at all
times during the term of the Credit Facility. Each of the Borrowers has good and
marketable title to: (a) all of its properties and assets reflected in the most
recent financial statements referred to in Section 4.05 hereof as owned by them
(except those properties and assets disposed of since the date of said financial
statements in the ordinary course of business or those properties and assets
which are no longer used or useful in the conduct of its businesses), including,
but not limited to, Borrowers’ interest in patents, trademarks, tradenames,
servicemarks, and licenses relating to or pertaining to the Collateral
Properties, the Casino Facilities, the Deadwood Slot Route Operation and each
other Business Operation, and (b) all properties and assets acquired by them
subsequent to the date of the most recent financial statements referred to in
Section 4.05 hereof. All such properties and assets are not subject to any
liens, encumbrances or restrictions except Permitted Encumbrances. All roads,
easements and rights of way necessary for the full utilization of the Collateral
Properties have been completed and/or obtained.

 

Section 4.09.         No Untrue Statements.  All statements, representations and
warranties made by Borrowers in this Credit Agreement, any other Loan Document
and any other agreement, document, certificate or instrument previously
furnished or to be furnished by Borrowers to Lender pursuant to the provisions
of this Credit Agreement, at the time they were made and on and as of the
Restatement Closing Date: (a) are and shall be true, correct and complete in all
material respects, (b) do not and shall not contain any untrue statement of a
material fact, and (c) do not and shall not omit to state a material fact, the
absence of which makes the information contained herein or therein materially
misleading or incomplete. Borrowers understand that all such statements,
representations and warranties shall be deemed to have been relied upon by
Lender as a material inducement to establish the Credit Facility.

 

Section 4.10.         Brokerage Commissions. Other than the fees and commissions
to be paid by Borrowers to Rossoff & Company, LLC, no person is entitled to
receive any brokerage commission, finder’s fee or similar fee or payment in
connection with the extensions of credit contemplated by this Credit Agreement.
No brokerage or other fee, commission or compensation is to be paid by Lender
with respect to the extensions of credit contemplated hereby and Borrowers agree
to indemnify Lender against any such claims for brokerage fees or commissions
and to pay all expenses including, without limitation, reasonable attorney’s
fees incurred by Lender in connection with the defense of any action or
proceeding brought to collect any such brokerage fees or commissions.

 

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Section 4.11.         No Defaults. No Borrower has received any notice,
declaration or similar correspondence or communication, oral or written,
evidencing, declaring or claiming a violation of any applicable law and/or
regulations, the violation of which materially and adversely affects the
business, financial condition or operations of the Casino Facilities or the
Deadwood Slot Route Operation or any other Business Operation. Borrowers are not
in violation or default (nor is there any waiver in effect which, if not in
effect, would result in a violation or default) in any material and adverse
respect under any indenture, evidence of indebtedness, loan or financing
agreement or other agreement or instrument of whatever nature to which they are
a party or by which they are bound (except for any defaults previously brought
to Lender’s attention in writing, for which Borrowers have received a waiver
from Lender), a default under which would reasonably be expected to result in a
Material Adverse Change.

 

Section 4.12.         Employee Retirement Income Security Act of 1974. No
Reportable Event has occurred and is continuing with respect to any Pension Plan
under ERISA that gives rise to liabilities that would constitute a Material
Adverse Change.

 

Section 4.13.         Availability of Utility Services. All utility services and
facilities necessary for the Casino Facilities and the Collateral Properties
including, without limitation, electrical, water, gas and sewage services and
facilities are available at the boundaries of the Collateral Properties.

 

Section 4.14.         Policies of Insurance. Each of the copies of the
declaration pages, original binders and certificates of insurance evidencing the
Policies of Insurance relating to the Business Operations delivered to Lender by
Borrowers (i) is a true, correct and complete copy of the respective original
thereof as in effect on the date hereof, and no amendments or modifications of
any of said documents or instruments not included in such copies have been made,
and (ii) has not been terminated and is in full force and effect. Borrowers are
not in default in the observance or performance of their respective obligations
under said documents and instruments, and Borrowers have done all things
required to be done as of the Restatement Closing Date to keep unimpaired their
respective rights thereunder.

 

Section 4.15.         Gaming Permits and Approvals. All Gaming Permits required
to be held by Borrowers are current and in good standing and Borrowers presently
hold all Gaming Permits necessary for the continued operation of the Business
Operations.

 

Section 4.16.         Environmental Certificate. The representations and
certifications contained in the Environmental Certificate are true and correct
in all material respects.

 

Section 4.17.         Labor Relations. There is no strike or work stoppage in
existence, or to the best knowledge of Borrowers threatened, involving any
Borrower or the Business Operations that reasonably would be expected to result
in a Material Adverse Change.

 

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Section 4.18.         Trademarks, Patents, Licenses, Franchises, Formulas and
Copyrights. Except as otherwise disclosed in the Security Agreement, each of the
Borrowers owns all the patents, trademarks, permits, servicemarks, tradenames,
copyrights, licenses, franchises and formulas, or has a valid license or
sublicense of rights with respect to the foregoing, and has obtained assignments
of all leases and other rights of whatever nature, necessary for the present
conduct of its respective businesses, without any known conflict with the rights
of others which, or the failure to obtain which, as the case may be, could
reasonably be expected to result in a Material Adverse Change on the business,
operations, property, assets or condition (financial or otherwise) of Borrowers.
Each of the patents, trademarks, servicemarks, tradenames and copyrights owned
by Borrowers under the common law or which is registered with any Governmental
Authority is set forth on Schedule 6 attached to the Security Agreement.

 

Section 4.19.         Contingent Liabilities. As of the Restatement Closing
Date, Borrowers have incurred no material Contingent Liabilities (any Contingent
Liability in excess of One Million Dollars ($1,000,000.00) being deemed
material) other than those described on Schedule 4.19.

 

Section 4.20.         Subsidiaries. As of the Restatement Closing Date, no
member of the Borrower Consolidation has any Subsidiaries that are not members
of the Borrower Consolidation, other than those Subsidiaries existing as of the
Restatement Closing Date which are described on the Schedule of Restricted and
Unrestricted Subsidiaries attached hereto as Schedule 4.20.

 

Section 4.21.         Washington Casino Leases. The copies of each of the
Washington Casino Leases delivered to Lender by Borrowers: (a) are true, correct
and complete copies of the originals thereof, as in effect on the Restatement
Closing Date, and no amendments or modifications to any of them which are not
included in such copies have been made; and (b) have not been terminated and are
all in full force and effect. No Borrower is in default in the observance or
performance of its obligations under any of the Washington Casino Leases and
each Borrower has done all things required to be done as of the Restatement
Closing Date to keep unimpaired its rights under the Washington Casino Leases.

 

Section 4.22.         Deadwood Slot Route Leases. The copies of each of the
Deadwood Slot Route Leases delivered to Lender by Borrowers: (a) are true,
correct and complete copies of the originals thereof, as in effect on the
Restatement Closing Date, and no amendments or modifications to any of them
which are not included in such copies have been made; and (b) have not been
terminated and are all in full force and effect. AGTSG is not in default in the
observance or performance of its obligations under any of the Deadwood Slot
Route Leases and AGTSG has done all things required to be done as of the
Restatement Closing Date to keep unimpaired its rights under the Deadwood Slot
Route Leases. Each of the Deadwood Slot Route Leases are particularly described
by Schedule 3.11 attached hereto and incorporated by reference herein.

 

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Section 4.23.       Adjacent Site Lease. The copy of the Adjacent Site Lease
delivered to Lender by Borrowers: (a) is a true, correct and complete copy of
the original thereof, as in effect on the Restatement Closing Date, and no
amendments or modifications which are not included in such copy have been made;
and (b) has not been terminated and is in full force and effect. NGCLV is not in
default in the observance or performance of its obligations under the Adjacent
Site Lease and NGCLV has done all things required to be done as of the
Restatement Closing Date to keep unimpaired its rights under the Adjacent Site
Lease.

 

ARTICLE V

 

GENERAL COVENANTS OF BORROWERS

 

To induce the Lender to enter into this Credit Agreement, Borrowers covenant to
Lender as follows:

 

Section 5.01.       FF&E. The Borrower Consolidation shall furnish, fixture and
equip the Business Operations with FF&E it reasonably deems appropriate for the
operation of the Business Operations. All FF&E that is purchased and installed
in the Business Operations shall be purchased free and clear of any liens,
encumbrances or claims, other than Permitted Encumbrances.

 

Section 5.02.       Permits; Licenses and Legal Requirements.

 

(a)          Borrowers shall comply in all material respects with and keep in
full force and effect, as and when required, all Gaming Permits and all material
permits, licenses and approvals obtained from any Governmental Authorities which
are required for the operation and use of the Business Operations. Borrowers
shall comply in all material respects with all applicable material existing and
future laws, rules, regulations, orders, ordinances and requirements of all
Governmental Authorities, and with all recorded restrictions affecting the
Collateral Properties.

 

(b)          At all times until Credit Facility Termination, the Business
Operations shall (i) be registered with FinCEN, (ii) maintain a written BSA/AML
Program and provide Lender with the name and contact information for the officer
responsible for compliance with the BSA/AML Program, and (iii) be subject to
examinations for BSA/AML Program Compliance by the Internal Revenue Service or
the State of Nevada with respect to the Club Fortune Casino Facility or the
State of Washington with respect to the Casino Facilities located in Washington
or the State of South Dakota with respect to the Deadwood Slot Route Operation.

 

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Section 5.03.       Protection Against Lien Claims. Borrowers shall promptly pay
and discharge or cause to be paid and discharged all claims and liens for labor
done and materials and services supplied and furnished in connection with the
Business Operations in accordance with this Section 5.03, except such claims and
liens, if any, as are being contested in good faith by Borrowers by appropriate
proceedings and for which Borrowers have maintained adequate reserves for the
payment thereof in accordance with GAAP. If any mechanic’s lien or materialman’s
lien shall be recorded, filed or suffered to exist against the Collateral
Properties or any of them or any interest therein by reason of work, labor,
services or materials supplied, furnished or claimed to have been supplied and
furnished in connection with the Business Operations, upon Borrowers receipt of
written notice from Lender demanding the release and discharge of such lien,
said lien or claim shall be paid, released and discharged of record within
ninety (90) days following its receipt of such notice, or, in lieu of such
payment Borrowers shall cause said mechanic’s lien to be released of record
pursuant to a bonding or similar statutory procedure, which statutory procedures
shall be reasonably acceptable to Lender and accomplished within one hundred
twenty (120) days of the date of such notice.

 

Section 5.04.       Notice to Gaming Authorities. The Borrower Consolidation
shall make all required reports and disclosures to the Gaming Authorities,
including, but not limited to, reporting this Credit Facility and the Loan
Documents to the extent required under the applicable Gaming Laws.

 

Section 5.05.       No Change in Character of Business or Location of Chief
Executive Office. At all times throughout the term of the Credit Facility
(a) the chief executive office of Borrowers shall be located at 133 East Warm
Springs Road, Suite 102, Las Vegas, NV 89119; provided, however, Borrowers shall
be entitled to move their chief executive office to another location upon no
less than thirty (30) days prior written notice to Lender, (b) the Business
Operations shall be conducted by the Borrower Consolidation, and (c) Borrowers
shall not effect a material change in the nature and character of the business
at the Business Operations as presently conducted and as presently contemplated
and disclosed to Lender.

 

Section 5.06.       Preservation and Maintenance of Properties and Assets;
Acquisition of Additional Property.

 

(a)          At all times throughout the term of the Credit Facility, (i) the
Borrower Consolidation shall operate, maintain and preserve all rights,
privileges, franchises, licenses, Gaming Permits and other properties and assets
necessary to conduct its businesses and the Business Operations, in accordance
with all applicable governmental laws, ordinances, approvals, rules and
regulations and requirements, including, but not limited to, zoning, sanitary,
pollution, building, environmental and safety laws and ordinances, rules and
regulations promulgated thereunder, and (ii) without the prior written consent
of Lender, Borrowers shall not consolidate with, remove, demolish, materially
alter, discontinue the use of, sell, transfer, assign, hypothecate or otherwise
dispose of to any Person, any part of its properties and assets necessary for
the continuance of its business, as presently conducted and as presently
contemplated, other than in the normal course of business, alterations or
modifications as are reasonably expected to increase the value of the
Collateral, or as otherwise permitted pursuant to this Credit Agreement.

 

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(b)          Furthermore, in the event any Borrower, or any Affiliate and/or
Related Entity thereof, shall acquire any other real property or rights to the
use of real property which is: (i) adjacent to any of the Collateral Properties
and used in a material manner in connection with the use and/or operation at the
Collateral Properties, the Casino Facilities, or any of them, or (ii) if not so
adjacent, necessary and required for the use and operation of such Collateral
Property, Casino Facilities, or any of them, Borrowers shall concurrently with
the acquisition of such real property or the rights to the use of such real
property, execute or cause the execution of such documents as may be necessary
to add such real property or rights to the use of real property as Collateral
under the Credit Facility, together with each of the New Acquisition
Certifications.

 

Section 5.07.         Repair of Properties and Assets. At all times throughout
the term of the Credit Facility, Borrowers shall, at their own cost and expense,
(a) maintain, preserve and keep in a manner consistent with gaming casino
operating practices, as the case may be, applicable to casino operations
operating in the jurisdictions in which the Business Operations are located, its
assets and properties, including, but not limited to, the Collateral Properties
and all FF&E owned or leased by Borrowers in good and substantial repair,
working order and condition, ordinary wear and tear excepted, (b) from time to
time, make or cause to be made, all necessary and proper repairs, replacements,
renewals, improvements and betterments thereto, and (c) from time to time, make
such substitutions, additions, modifications and improvements as may be
necessary and as shall not impair the structural integrity, operating efficiency
and economic value of said assets and properties. All alterations, replacements,
renewals, or additions made pursuant to this Section 5.07 shall become and
constitute a part of said assets and property and subject, inter alia, to the
provisions of Section 5.01 and subject to the lien of the Loan Documents.

 

Section 5.08.         Financial Statements; Reports; Certificates and Books and
Records. Until Credit Facility Termination, Borrowers shall, unless the Lender
otherwise consents, at Borrowers’ sole expense, deliver to the Lender a full and
complete copy of each of the following and shall comply with each of the
following financial requirements:

 

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(a)          Quarterly Financial Reporting. With respect to the Fiscal Quarter
ending January 31, 2016 and as of each Fiscal Quarter thereafter ending with the
occurrence of Credit Facility Termination, the Borrower Consolidation shall
deliver to Lender, as soon as practicable, and in any event within sixty (60)
days after the end of each Fiscal Quarter (including the fourth Fiscal Quarter
in any Fiscal Year), the consolidated and consolidating balance sheet, income
statement, statement of cash flows, statement of retained earnings and operating
statement for the Fiscal Quarter under review and reflecting year-to-date
performance of the Borrower Consolidation and a comparison of the financial
performance of the Borrower Consolidation to the prior Fiscal Year’s operations
and projected results from operations at the Business Operations, including,
without limitation, the Casino Facilities and the Deadwood Slot Route Operation
(in each case compared to budget and prior year period) of the Borrower
Consolidation all in reasonable detail. Such financial statements shall be
certified by a Senior Officer of the Borrower Consolidation as fairly presenting
the financial condition, results of operations and cash flows of the Borrower
Consolidation in accordance with GAAP (other than footnote disclosures) as at
such date and for such periods, subject only to normal year-end accruals and
audit adjustments and shall be accompanied by a management discussion and
analysis of any material changes to the condition (financial or otherwise) of
the Business Operations during the Fiscal Quarter under review;

 

(b)          Annual Financial Reporting. As soon as practicable, and in any
event within one hundred twenty (120) days after the end of each Fiscal Year,
(i) the consolidated and consolidating balance sheet, income statement,
statement of retained earnings and cash flows (reconciled with year end audited
statements) of the Borrower Consolidation as at the end of such Fiscal Year, all
in reasonable detail. Such financial statements shall be prepared in accordance
with GAAP and shall be accompanied by a report of independent public accountants
of recognized standing selected by Borrowers and reasonably satisfactory to the
Lender (it being understood that any “Big 4” accounting firm shall be
automatically deemed satisfactory to the Lender), which report shall be prepared
in accordance with generally accepted auditing standards as at such date, and
shall not be subject to any qualifications or exceptions as to the scope of the
audit nor to any other qualification or exception determined by the Lender in
its good faith business judgment to be adverse to the interests of the Lender.
Such accountants’ report shall be accompanied by a certificate stating that, in
making the examination pursuant to generally accepted auditing standards
necessary for the certification of such financial statements and such report,
such accountants have obtained no knowledge of any Default or, if, in the
opinion of such accountants, any such Default shall exist, stating the nature
and status of such Default, and stating that such accountants have reviewed the
Financial Covenants as at the end of such Fiscal Year (which shall accompany
such certificate) under Sections 6.01 through 6.07, have read such Sections
(including the definitions of all defined terms used therein) and that nothing
has come to the attention of such accountants in the course of such examination
that would cause them to believe that the same were not calculated by the
Borrower Consolidation in the manner prescribed by this Credit Agreement. Such
financial statements shall be certified by an Authorized Officer of the Borrower
Consolidation in the same manner as required with respect to financial
statements delivered pursuant to Section 5.08(a) and shall be accompanied by a
management discussion and analysis of any material changes to the condition
(financial or otherwise) of the Business Operations during the Fiscal Year under
review;

 

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(c)          Budgets and Projections. As soon as practicable, and in any event
no later than thirty days (30) following the commencement of each Fiscal Year, a
budget (including a Capital Expenditure budget) and projection by Fiscal Quarter
for that Fiscal Year and by Fiscal Year for the longer period of the next two
(2) succeeding Fiscal Years or the remaining term of the Credit Facility,
including for the first such Fiscal Year, projected consolidated and
consolidating balance sheets, statements of operations and statements of cash
flow and, for the second (2nd) and, where applicable, the third (3rd) such
Fiscal Years, projected consolidated and consolidating condensed balance sheets
and statements of operations and cash flows, of the Borrower Consolidation, all
in reasonable detail;

 

(d)          Lease Reporting.

 

(i)          As soon as practicable, and in any event within sixty (60) days
after the end of each Fiscal Quarter (including the fourth (4th) Fiscal Quarter
in any Fiscal Year), the Borrower Consolidation shall submit an updated Lease
Summary Schedule, Schedule 5.08(d)(i), showing any changes to all leases (other
than the Deadwood Slot Route Leases) maintained by the Borrower Consolidation or
in the event no changes have occurred, a Senior Officer shall so certify where
provided in the Compliance Certificate and shall further certify that each of
such leases are in effect, and that all rents owing thereunder are current and
paid in the agreed amounts; and

 

(ii)         As soon as practicable, and in any event within sixty (60) days
after the end of each Fiscal Quarter (including the fourth (4th) Fiscal Quarter
in any Fiscal Year), the Borrower Consolidation shall submit Schedule of Slot
Route Locations, Schedule 3.11, showing any changes to the Deadwood Slot Route
Leases or, in the event no changes have occurred, a Senior Officer shall so
certify where provided in the Compliance Certificate and shall further certify
that each of the Deadwood Slot Route Leases are operated by AGTSG and that all
revenue splits and other payments owing thereunder are current and paid in the
agreed amounts.

 

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(e)          Compliance Certificate. As soon as practicable, and in any event
within sixty (60) days after the end of each Fiscal Quarter (including the
fourth (4th) Fiscal Quarter in any Fiscal Year), a Compliance Certificate signed
by a Senior Officer of the Borrower Consolidation in the form marked
“Exhibit E”, affixed hereto and by this reference incorporated herein and made a
part hereof, setting forth preliminary calculations of the Financial Covenants,
Applicable Margin, and other matters set forth thereon, and providing reasonable
detail as to the calculation thereof, which calculations shall be based on the
preliminary unaudited financial statements of the Borrower Consolidation for
such Fiscal Quarter, and as soon as practicable thereafter, in the event of any
material variance in the actual calculations from such preliminary calculation,
a revised Compliance Certificate setting forth the actual calculation thereof;
provided, however, that in the event that the Borrowers do not deliver a
Compliance Certificate when due, then until such Compliance Certificate is
delivered as provided herein, the Total Leverage Ratio shall be deemed, for the
purpose of determining the Applicable Margin, to be the highest permitted
Maximum Total Leverage Ratio and the Applicable Margin determined with respect
thereto;

 

(f)          Additional Depository Accounts. Following the Restatement Closing
Date, on or before ten (10) days following the creation or establishment of any
Depository Account or Excluded Deposit Account by any member of the Borrower
Consolidation that is not subject to a Control Agreement, Borrowers shall notify
Lender in writing of such account and shall not deposit any material amounts
into such account until such account, other than with respect to an Excluded
Deposit Account, is subject to a Control Agreement in favor of Lender. Borrowers
shall promptly deliver a revised Schedule of Depository Accounts showing such
additional Depository Accounts and/or Excluded Deposit Accounts;

 

(g)          SEC Reporting. Promptly after the same are available, copies of
each annual report, proxy or financial statement or other report or
communication that shall have been sent to the stockholders of NGC, and copies
of all annual, regular, periodic and special reports (including, without
limitation, each 10Q and 10K report) and registration statements which NGC shall
have filed or be required to file with the Securities and Exchange Commission
under Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended,
and not otherwise required to be delivered to the Lender pursuant to other
provisions of this Section 5.08;

 

(h)          Significant Shareholder Reporting. Concurrently with the delivery
of each Compliance Certificate, a Senior Officer shall certify as to whether or
not there are any Significant Shareholders, and, if so, the name and address of
such Significant Shareholder and the number of shares held.

 

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(i)          Books and Records. Until Credit Facility Termination, Borrowers,
and each of them, shall keep and maintain complete and accurate books and
records in accordance with GAAP, consistently applied. Subject to compliance
with all applicable Gaming Laws and the Securities and Exchange Act of 1934, as
amended, Borrowers, and each of them, shall permit Lender and any authorized
representatives of Lender to have reasonable access to and to inspect, examine
and make copies of the books and records, any and all accounts, data and other
documents of Borrowers at all reasonable times upon the giving of reasonable
notice of such intent. In addition: (i) in the event of the occurrence of any
Default or Event of Default, or (ii) in the event any Material Adverse Change
occurs, Borrowers shall promptly, and in any event within three (3) days after
actual knowledge thereof, notify Lender in writing of such occurrence;

 

(j)          Each member of the Borrower Consolidation shall deliver to Lender a
copy of its annual Federal income tax return, together with all attachments and
schedules affixed thereto, as filed with the Internal Revenue Service on or
before July 15th of each Fiscal Year or by January 15th of each Fiscal Year if
filed on extension; and

 

(k)          Other Information. Until Credit Facility Termination, Borrowers,
and each of them, shall furnish to Lender any financial information or other
information bearing on the financial status of the Borrowers, or any of them,
which is reasonably requested by Lender. In addition: (i) in the event of the
occurrence of any Event of Default, or (ii) in the event any Material Adverse
Change occurs, the Borrower Consolidation shall promptly, and in any event
within three (3) days after actual knowledge thereof, notify Lender in writing
of such occurrence.

 

Section 5.09.       Insurance. The Borrower Consolidation shall obtain, or cause
to be obtained, and shall maintain or cause to be maintained with respect to the
Collateral Properties and Business Operations, at all times throughout the term
of the Credit Facility, at their own cost and expense, and shall deposit with
Lender policies or certified copies of policies of fire and hazard insurance
with extended coverage, reasonably acceptable to Lender, issued by a company or
companies authorized to issue such insurance within the States of Nevada,
Washington, South Dakota, Colorado and any other jurisdiction in which the
Business Operations are conducted, insuring all buildings, improvements,
inventory and contents in an amount equal to the maximum full insurable value of
such buildings, improvements, furnishings, fixtures, inventory and equipment
(such policies shall not contain a co-insurance provision whereby any Borrower
in the event of loss becomes a co-insurer, other than deductibles reasonably
acceptable to Lender), with property damage, public liability and such other
insurance coverage as required by the Lender. All policies shall provide that
the insurer shall notify Lender in writing not less than twenty (20) days prior
to the cancellation of any such policy. The property damage and public liability
insurance policies shall name Lender as additional insured and shall contain
minimum limits of coverage reasonably acceptable to Lender. Certified copies of
policies, or certificates thereof, shall be delivered to and held by Lender and
shall contain a loss payable endorsement for each of the Owned Properties naming
Lender as an additional loss payee and a mortgagee endorsement.

 

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Section 5.10.         Taxes. Throughout the term of the Credit Facility,
Borrowers shall prepare and timely file or cause to be prepared and timely filed
all federal, state and local tax returns required to be filed by it, and
Borrowers shall pay and discharge prior to delinquency all taxes, assessments
and other governmental charges or levies imposed upon it, or in respect of any
of any of its properties and assets except such taxes, assessments and other
governmental charges or levies, if any, as are being contested in good faith by
Borrowers in the manner which is set forth for such contests by Section 4.07
herein.

 

Section 5.11.         Permitted Encumbrances Only. At all times throughout the
term of the Credit Facility, Borrowers shall not create, incur, assume or suffer
to exist any mortgage, deed of trust, pledge, lien, security interest,
encumbrance, attachment, levy, distraint, or other judicial process and burdens
of every kind and nature except the Permitted Encumbrances on or with respect to
the Collateral, except (a) with respect to matters described in Sections 5.03
and 5.10 such items as are being contested in the manner described therein, and
(b) with respect to any other items, if any, as are being contested in good
faith by appropriate proceedings and for which Borrowers have maintained
adequate reserves for the payment thereof.

 

Section 5.12.         Advances. At any time during the term of the Credit
Facility, if Borrowers should fail (a) to perform or observe, or (b) to cause to
be performed or observed, any covenant or obligation of Borrowers under this
Credit Agreement or any of the other Loan Documents, then Lender, upon the
giving of reasonable notice may (but shall be under no obligation to) take such
steps as are necessary to remedy any such non-performance or non-observance and
provide for payment thereof. All amounts advanced by Lender pursuant to this
Section 5.12 shall become an additional obligation of Borrowers to Lender
secured by the Deeds of Trust and other Loan Documents, shall constitute a
Mandatory Commitment Reduction until repaid and shall become due and payable by
Borrowers on the next interest payment date, together with interest thereon at a
rate per annum equal to the Default Rate (such interest to be calculated from
the date of such advancement to the date of payment thereof by Borrowers).

 

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Section 5.13.         Further Assurances. Borrowers will do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged and
delivered, such amendments or supplements hereto or to any of the Loan Documents
and such further documents, instruments and transfers as Lender may reasonably
require for the curing of any defect in the execution or acknowledgement hereof
or in any of the Loan Documents, or in the description of the Collateral
Properties or other Collateral or for the proper evidencing of giving notice of
each lien or security interest securing repayment of the Credit Facility.
Further, upon the execution and delivery of the Deeds of Trust and each of the
Loan Documents and thereafter, from time to time, Borrowers shall cause the
Deeds of Trust and each of the Loan Documents and each amendment and supplement
thereto to be filed, registered and recorded and to be refiled, re-registered
and re-recorded in such manner and in such places as may be reasonably required
by the Lender, in order to publish notice of and fully protect the liens of the
Deeds of Trust and the Loan Documents and to protect or continue to perfect the
security interests created by the Deeds of Trust and Loan Documents in the
Collateral Properties and Collateral and to perform or cause to be performed
from time to time any other actions required by law and execute or cause to be
executed any and all instruments of further assurance that may be necessary for
such publication, perfection, continuation and protection.

 

Section 5.14.         Indemnification. Borrowers agree to and do hereby jointly
and severally indemnify, protect, defend and save harmless Lender and its
trustees, officers, employees, agents, attorneys and shareholders (individually
an “Indemnified Party” and collectively the “Indemnified Parties”) from and
against any and all losses, damages, expenses or liabilities of any kind or
nature from any suits, claims, or demands, including reasonable counsel fees
incurred in investigating or defending such claim, suffered by any of them and
caused by, relating to, arising out of, resulting from, or in any way connected
with this Credit Agreement, with any other Loan Document or with the
transactions contemplated herein and thereby; provided, however, Borrowers shall
not be obligated to indemnify, protect, defend or save harmless an Indemnified
Party if, and to the extent, the loss, damage, expense or liability was caused
by (a) the gross negligence or intentional misconduct of such Indemnified Party,
or (b) the breach of this Credit Agreement or any other Loan Document by such
Indemnified Party or the breach of any laws, rules or regulation by such
Indemnified Party (other than those breaches of laws arising from any Borrowers’
default). In case any action shall be brought against any Indemnified Party
based upon any of the above and in respect to which indemnity may be sought
against Borrowers, Lender shall promptly notify Borrowers in writing, and
Borrowers shall assume the defense thereof, including the employment of counsel
selected by Borrowers and reasonably satisfactory to Indemnified Party, the
payment of all costs and expenses and the right to negotiate and consent to
settlement upon the consent of the Indemnified Party. Upon reasonable
determination made by Indemnified Party that such counsel would have a conflict
representing such Indemnified Party and Borrowers, the applicable Indemnified
Party shall have the right to employ separate counsel in any such action and to
participate in the defense thereof. Borrowers shall not be liable for any
settlement of any such action effected without their consent, but if settled
with Borrowers’ consent, or if there be a final judgment for the claimant in any
such action, Borrowers agree to indemnify, defend and save harmless such
Indemnified Parties from and against any loss or liability by reason of such
settlement or judgment. The provisions of this Section 5.14 shall survive the
termination of this Credit Agreement and the repayment of the Credit Facility.

 

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Section 5.15.         Inspection of the Collateral and Appraisal. At all times
during the term of the Credit Facility and subject to compliance with all
applicable Gaming Laws, Borrowers shall provide or cause to be provided to
Lender and any authorized representatives of Lender, accompanied by
representatives of Borrowers, the reasonable right of entry and free access to
the Collateral Properties to inspect same on reasonable prior notice to
Borrowers. Provided, however, Lender shall use commercially reasonable efforts
to avoid undue interference with Borrowers’ business operations. If at any time
any Qualified Appraisal of the Collateral Properties, or any of them, is
required to be made by any banking regulatory authority or determined to be
necessary by Lender after the occurrence of an Event of Default, Borrowers agree
to pay all fees, costs and expenses incurred by Lender in connection with the
preparation of such Qualified Appraisal.

 

Section 5.16.         Compliance With Other Loan Documents. Borrowers shall
comply with each and every term, condition and agreement contained in the Loan
Documents including, without limitation, the Environmental Certificate and all
of the Security Documentation.

 

Section 5.17.         Suits, Actions or Material Changes Affecting Borrowers.
Throughout the term of the Credit Facility, Borrowers shall promptly give notice
to and advise Lender in writing within ten (10) days after Borrowers obtain
knowledge of (a) any claims, litigation, proceedings or disputes (whether or not
purportedly on behalf of Borrowers) against, or to the actual knowledge of
Borrowers, threatened or affecting Borrowers which, if adversely determined,
would result in a Material Adverse Change in the Collateral Properties or the
Business Operations or financial conditions of Borrowers, (b) any material labor
controversy resulting in or threatening to result in a strike against any of the
Collateral Properties or Casino Facilities, (c) any proposal by any Governmental
Authority to acquire any of the material assets or business of Borrowers,
(d) any changes to material contracts, Washington Casino Leases or Deadwood Slot
Route Leases that are adverse to the interests of Lender or the Borrower
Consolidation, or (e) any material changes to any Gaming Permits.

 

Section 5.18.         Consents of and Notice to Gaming Authorities. Borrowers
shall comply in all material respects with all applicable statutes, rules and
regulations requiring reports and disclosures to all applicable Gaming
Authorities.

 

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Section 5.19.       Tradenames, Trademarks and Servicemarks. Borrowers shall not
assign or in any other manner alienate their respective interests in any
material tradenames, trademarks or servicemarks relating or pertaining to the
Business Operations during the term of the Credit Facility. No Borrower shall
change its name without first giving at least thirty (30) days prior written
notice to Lender.

 

Section 5.20.       Notice of Hazardous Materials. Within ten (10) days after an
executive officer of any of the Borrowers shall have obtained actual knowledge
thereof, Borrowers shall promptly advise Lender in writing of and deliver a copy
of: (a) any and all enforcement, clean-up, removal or other governmental or
regulatory actions instituted or threatened by any Governmental Agency pursuant
to any applicable federal, state or local laws, ordinances or regulations
relating to any Hazardous Materials (as defined in the Environmental
Certificate) affecting the Collateral Properties (“Hazardous Materials Laws”);
(b) all written claims made or threatened by any third party against Borrowers,
the Collateral Properties, the Casino Facilities, or any of them, relating to
damage, contribution, cost recovery compensation, loss or injury resulting from
any Hazardous Materials (the matters set forth in clauses (a) and (b) above are
hereinafter referred to as “Hazardous Materials Claims”); and (c) the discovery
of any occurrence or condition on any real property adjoining or in the vicinity
of the Collateral Properties, the Casino Facilities, or any of them, that could
cause any Borrower or any part thereof to be held liable under the provisions
of, or to be otherwise subject to any restrictions on the ownership, occupancy,
transferability or use of the Collateral Properties or the Casino Facilities
under, any Hazardous Materials Laws.

 

Section 5.21.       Compliance with Access Laws.

 

(a)          Borrowers agree that Borrowers, the Casino Facilities and the
Collateral Properties shall at all times strictly comply with the requirements
of the Americans with Disabilities Act of 1990; the Fair Housing Amendments Act
of 1988; and other federal, state or local laws or ordinances related to
disabled access; or any statute, rule, regulation, ordinance, order of
Governmental Authorities, or order or decree of any court adopted or enacted
with respect thereto, as now existing or hereafter amended or adopted
(collectively, the “Access Laws”), as may be applicable to the respective Casino
Facilities. At any time, Lender may require a certificate of compliance with the
Access Laws and indemnification agreement in a form reasonably acceptable to
Lender. Lender may also require a certificate of compliance with the Access Laws
from an architect, engineer, or other third party acceptable to Lender.

 

(b)          Notwithstanding any provisions set forth herein or in any other
document, Borrowers shall not alter or permit any other person to alter the
Casino Facilities or the Collateral Properties in any manner which would
increase Borrowers’ responsibilities for compliance with the Access Laws without
the prior written approval of Lender. In connection with such approval, Lender
may require a certificate of compliance with the Access Laws from an architect,
engineer or other person acceptable to Lender.

 

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(c)          Borrowers agree to give prompt written notice to Lender of the
receipt by Borrowers of any claims of violation of any of the Access Laws and of
the commencement of any proceedings or investigations which relate to compliance
with any of the Access Laws.

 

(d)          Borrowers shall indemnify, defend and hold harmless Indemnified
Parties from and against any and all claims, demands, damages, costs, expenses,
losses, liabilities, penalties, fines and other proceedings including, without
limitation, reasonable attorneys’ fees and expenses arising directly or
indirectly from or out of or in any way connected with any failure of the Casino
Facilities or the Collateral Properties to comply with any of the Access Laws as
the same may have been applicable during the term of the Credit Facility. The
obligations and liabilities of Borrowers under this section shall survive Credit
Facility Termination, any satisfaction, assignment, judicial or nonjudicial
foreclosure proceeding, or delivery of a deed in lieu of foreclosure.

 

Section 5.22.       Compliance with Adjacent Site Lease, Washington Casino
Leases and Deadwood Slot Route Leases.

 

(a)          Until Credit Facility Termination, Borrowers shall fully perform
and comply with or cause to be performed and complied with all of the respective
material covenants, material terms and material conditions imposed or assumed by
it as lessee under each of the Adjacent Site Lease and Washington Casino Leases.
Borrower shall not amend, modify or terminate, or enter into any agreement to
amend, modify or terminate any of the Washington Casino Leases without the prior
written consent of Lender. Borrower shall promptly deliver to Lender a true and
correct copy of each Adjacent Site Lease and/or Washington Casino Lease
modification executed after the Restatement Closing Date.

 

(b)          Until Credit Facility Termination, Borrower shall cause AGTSG to
fully perform and comply with or cause to be performed and complied with all of
the respective material covenants, material terms and material conditions
imposed or assumed by it under each of the Deadwood Slot Route Leases.

 

Section 5.23.       Restriction on Payment of Seller Subordinated Debt. Until
Credit Facility Termination, no member of the Borrower Consolidation shall:

 

(a)          Make any payment of principal or interest on any Seller
Subordinated Debt during any period during which an Event of Default has
occurred and remains continuing; or

 

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(b)          Make any payment of principal or interest on any Seller
Subordinated Debt unless such payment will not result in a violation of the
Lease Adjusted Fixed Charge Coverage Ratio as provided in Section 6.02; or

 

(c)          Amend or modify, or enter into any agreement to amend or modify any
of the terms of the Seller Subordinated Debt without the prior written consent
of Lender.

 

Section 5.24.       Prohibition on Prepayment or Defeasance of Permitted
Indenture Subordinated Debt. Notwithstanding anything contained in the Credit
Agreement to the contrary, no member of the Borrower Consolidation shall, except
with the prior written consent of the Lender, purchase, redeem, retire or
otherwise acquire for value, or set apart any money for a sinking, defeasance or
other analogous fund for, the purchase, redemption, retirement or other
acquisition of, or make any voluntary payment or prepayment of the principal of
or interest on, or any other amount owing in respect of any Permitted Indenture
Subordinated Debt, except for the cash payment of interest only so long as
(a) no Event of Default has occurred and remains continuing under the Credit
Agreement, and (b) the Borrower Consolidation will be in compliance with the
Lease Adjusted Fixed Charge Coverage Ratio after giving pro-forma effect to the
interest payment proposed to be paid.

 

Section 5.25.       Interest Rate Protection. On or before thirty (30) days
following the Restatement Closing Date, Borrowers shall enter into a Secured
Interest Rate Hedge acceptable to Lender for at least fifty percent (50%) of the
amount of the Credit Facility for a period no less than the period commencing on
the date of such Secured Interest Rate Hedge and ending on the Maturity Date. In
no event shall the aggregate of Interest Rate Hedges maintained by Borrowers at
any time exceed the Aggregate Commitment as reduced from time to time pursuant
to the terms of this Credit Agreement. For the avoidance of doubt, it is
understood and agreed that there shall be no requirement for the amount of the
applicable Secured Interest Rate Hedge to reduce proportionately as the
Aggregate Commitment is reduced by Scheduled Reductions so long as the Aggregate
Commitment as so reduced remains in excess of the then aggregate amount of
Secured Interest Hedges maintained with Lender.

 

Section 5.26.       Restriction on Development or Use of Gold Mountain Real
Property. Borrowers agree that no development or use, including, without
limitation, any disturbance of the surface materials situate on the Gold
Mountain Real Property, shall be directly or indirectly undertaken by any member
of the Borrower Consolidation without the prior written consent of Lender.

 

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Section 5.27.       Compliance With Other Loan Documents, Execution of
Subsidiary Guaranties and Pledge of Restricted Subsidiary Stock. Each member of
the Borrower Consolidation shall comply with each and every term, condition and
agreement contained in the Loan Documents to which they, or any of them, are a
party. Borrowers shall notify Lender in writing on or before ten (10) days
following the creation thereof, of each Restricted Subsidiary and Unrestricted
Subsidiary, together with a description of each New Venture owned or to be
acquired by such Restricted Subsidiary or Unrestricted Subsidiary. Borrowers
shall further cause each Restricted Subsidiary created or otherwise occurring
from time to time following the Restatement Closing Date to join in the
execution of the Subsidiary Guaranty in favor of Lender and to deliver the
original thereof, or a duly executed Certificate of Joinder in the form attached
to the Subsidiary Guaranty as Exhibit A, to Lender promptly, but in no event
later than thirty (30) days following the creation or other occurrence of such
Restricted Subsidiary. NGC shall execute or cause to be executed a Restricted
Subsidiary Security Agreement no later than thirty (30) days following the
creation or other occurrence of each Restricted Subsidiary. In the case of a
Restricted Subsidiary which is the holder of Gaming Permits, NGC shall use its
best efforts to cause all necessary Governmental Authorities to consent to the
delivery of the applicable stock/ownership certificates, together with a stock
power executed in blank, to Lender as soon as reasonably practical. NGC shall
deliver the applicable stock certificates to Lender promptly following receipt
of such approval. In the case of a Restricted Subsidiary that is not the holder
of any Gaming Permits, the applicable stock certificates, together with a stock
power executed in blank, shall be delivered to Lender concurrently with the
execution of the Restricted Subsidiary Security Agreement.

 

ARTICLE VI

 

FINANCIAL COVENANTS

 

Until the occurrence of Credit Facility Termination, the Borrower Consolidation
agrees, as set forth below, to comply or cause compliance with the following
Financial Covenants:

 

Section 6.01.       Total Leverage Ratio. Commencing as of the Fiscal Quarter
ending on January 31, 2016 and continuing as of each Fiscal Quarter end until
Credit Facility Termination, the Borrower Consolidation shall maintain a Total
Leverage Ratio no greater than the ratios described hereinbelow as of the end of
each Fiscal Quarter in accordance with the following schedule, to be calculated
for a fiscal period consisting of each such Fiscal Quarter and the most recently
ended three (3) preceding Fiscal Quarters on a rolling four (4) Fiscal Quarter
basis:

 

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Fiscal Quarter End  Maximum Total
Leverage Ratio  As of the end of the Fiscal Quarter ending on January 31, 2016
through the Fiscal Quarter ending on January 31, 2017   3.00 to 1.00  As of the
Fiscal Quarter ending on April 30, 2017 through the Fiscal Quarter ending on
January 31, 2018   2.75 to 1.00  As of the Fiscal Quarter ending April 30, 2018
and as of each Fiscal Quarter end thereafter occurring until Credit Facility
Termination   2.50 to 1.00 

 

Section 6.02.       Lease Adjusted Fixed Charge Coverage Ratio. Commencing as of
the Fiscal Quarter ending January 31, 2016 and continuing as of each Fiscal
Quarter end until Credit Facility Termination, the Borrower Consolidation shall
maintain a Lease Adjusted Fixed Charge Coverage Ratio no less than 1.15 to 1.00.

 

Section 6.03.       Maintenance Capital Expenditure Requirements. During each
Fiscal Year, commencing with the Fiscal Year ending April 30, 2016, Borrowers
shall make or cause to be made, Maintenance Capital Expenditures to the Business
Operations in a minimum aggregate amount equal to or greater than Five Hundred
Thousand Dollars ($500,000.00) and during each Fiscal Year thereafter in a
minimum aggregate amount equal to or greater than One Million Dollars
($1,000,000.00).

 

Section 6.04.       Limitation on Indebtedness. The Borrower Consolidation shall
not owe or incur any Indebtedness, except as specifically permitted hereinbelow:

 

(a)          Funded Outstandings under the Credit Facility;

 

(b)          Interest Rate Hedges up to the aggregate notional amount no greater
than the Aggregate Commitment as of any date of determination;

 

(c)          Seller Subordinated Debt owing by the Borrower Consolidation up to
the maximum aggregate amount of One Million Dollars ($1,000,000.00) at any time
outstanding;

 

(d)          Additional Indebtedness that has satisfied each of the requirements
for Permitted Indenture Subordinated Debt;

 

(e)          Secured purchase money Indebtedness and Capital Lease Liabilities
relating to FF&E used and to be used in connection with the Business Operations
up to the maximum aggregate principal amount of Five Hundred Thousand Dollars
($500,000.00) at any time outstanding;

 

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(f)          Contingent Liabilities to the extent permitted under Section 6.06;

 

(g)          Unsecured trade payable incurred in the ordinary course of business
less than one hundred twenty (120) days past due;

 

(h)          Indebtedness and contractual obligations that are assumed by NGCLV
as “Assumed Liabilities”, as defined and described in Section 2.1 of the
Purchase Agreement, as of the Restatement Closing Date; and

 

(i)          Other unsecured Indebtedness up to the maximum aggregate amount of
Five Hundred Thousand Dollars ($500,000.00).

 

Section 6.05.       Restriction on Distributions. No member of the Borrower
Consolidation shall make any Distributions, other than: (a) Distributions to
other members of the Borrower Consolidation, and (b) Distributions, including,
without limitation, Treasury Stock Acquisitions, that will not cause a violation
of the Lease Adjusted Fixed Charge Coverage Ratio.

 

Section 6.06.       Contingent Liability(ies). The Borrower Consolidation shall
not directly or indirectly incur any Contingent Liability(ies) without the prior
written consent of Lender. In no event shall any Contingent Liabilities be
secured by a Lien on any property or assets of any member of the Borrower
Consolidation. No member of the Borrower Consolidation shall be directly or
indirectly liable for any Indebtedness, contingent or otherwise, of any
Unrestricted Subsidiary.

 

Section 6.07.       Investment Restrictions. Other than Investments permitted
hereinbelow or approved in writing by Lender, the Borrower Consolidation shall
not make any Investments (whether by way of loan, stock purchase, capital
contribution, or otherwise) other than the following:

 

(a)          Cash, Cash Equivalents and direct obligations of the United States
Government;

 

(b)          Prime commercial paper (AA rated or better);

 

(c)          Certificates of Deposit or Repurchase Agreement issued by a
commercial bank having capital surplus in excess of One Hundred Million Dollars
($100,000,000.00);

 

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(d)          Money market or other funds of nationally recognized institutions
investing solely in obligations described in (a), (b) and (c) above;

 

(e)          Capital Expenditures to the extent permitted under Section 6.07;

 

(f)          New Venture Investments subsequent to the Restatement Closing Date,
so long as:

 

(i)          the cumulative aggregate of such New Venture Investments, together
with all Seller Subordinated Debt (up to a maximum of One Million Dollars
($1,000,000.00)) incurred in connection with such New Venture Investment, shall
not exceed the cumulative maximum aggregate amount of Two Million Five Hundred
Thousand Dollars ($2,500,000.00) through Credit Facility Termination;

 

(ii)         in each instance the Acquisition and assets acquired by such New
Venture Investment is concurrently pledged as additional Collateral securing the
Credit Facility;

 

(iii)        each of the New Acquisition Certifications are made and delivered
by Borrowers with respect to any real property to be added as Collateral; and

 

(iv)        no Default or Event of Default shall have occurred and remains
continuing.

 

Section 6.08.       Total Liens. The Borrower Consolidation shall not directly
or indirectly, create, incur, assume or permit to exist any Lien on or with
respect to any of the Collateral, whether now owned or hereafter acquired, or
any income or profits therefrom, or file or permit the filing of, or permit to
remain in effect, any financing statement or other similar notice of any Lien
with respect to any of the Collateral under the Uniform Commercial Code of any
State or under any similar recording or notice statute, except:

 

(a)          Permitted Encumbrances;

 

(b)          Liens granted or permitted pursuant to the Security Documentation;

 

(c)          Liens on the FF&E and other goods securing Indebtedness to finance
the purchase price thereof; provided that (i) such Liens shall extend only to
the equipment and other goods so financed and the proceeds thereof, (ii) such
Liens shall not secure Indebtedness in excess of the limitations set forth in
Section 6.04(e) in the aggregate at any time; and

 

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(d)          Subordinated Liens securing Seller Subordinated Debt.

 

Section 6.09.       No Change of Control. Until the occurrence of Credit
Facility Termination, no Change of Control shall occur.

 

Section 6.10.       Sale of Assets, Consolidation, Merger, or Liquidation. Other
than as approved in writing by Lender, no member of the Borrower Consolidation
shall wind up, liquidate or dissolve its affairs or enter into any transaction
of merger or consolidation (except a merger or consolidation with another entity
within the Borrower Consolidation), or convey, sell, lease or otherwise dispose
of (or make an agreement to do any of the foregoing at any time prior to Credit
Facility Termination) all or any material part of its respective property or
assets (except to another entity within the Borrower Consolidation), except that
the following shall be permitted:

 

(a)          The Borrowers may make sales of inventory and other assets in the
ordinary course of business;

 

(b)          So long as no Default or Event of Default shall have occurred and
remains continuing the Borrowers may, in the ordinary course of business and
subject to the provisions of subsection (c) hereinbelow, sell FF&E and other
items of personal property Collateral that are, in Borrowers’ prudent business
judgment, obsolete or no longer necessary for the Borrower Consolidation’s
business objectives;

 

(c)          If the Borrower Consolidation should sell, transfer, convey or
otherwise dispose (“Disposition”) of any FF&E or other items of personal
property Collateral and, in the case of FF&E and other items of personal
property Collateral which have been designated at the time of such Disposition
by written notice to Lender for replacement (the “Designated Replacement
Assets”), not replace such Designated Replacement Assets with purchased items of
equivalent value and utility or with leased FF&E or other items of Collateral of
equivalent value and utility within the permissible leasing and purchase
agreement limitation set forth in Section 6.04(e) herein, to the extent the sum
of: (i) the Net Proceeds from the Disposition of FF&E and other items of
personal property Collateral which are not Designated Replacement Assets, plus
(ii) the Net Proceeds from the Disposition of Designated Replacement Assets
which are not used to replace such Designated Replacement Assets during the
consecutive twelve (12) month period following the date of such Disposition,
which twelve (12) month period ends during the Fiscal Year under review, plus
(iii) Cash payments received for principal owing under any promissory notes or
deferred payment arrangements payable to the order of any member of the Borrower
Consolidation from the Disposition of Collateral during the current or any prior
Fiscal Year, exceeds the cumulative aggregate amount of Two Hundred Fifty
Thousand Dollars ($250,000.00) during any single Fiscal Year (the “Excess
Capital Proceeds”), on or before March 1 of the immediately following Fiscal
Year Borrowers shall be required to permanently reduce the Aggregate Commitment
by a Mandatory Commitment Reduction in the amount of such Excess Capital
Proceeds, subject, however, to the right of Lender to verify to its reasonable
satisfaction the amount of such Excess Capital Proceeds. For the avoidance of
doubt, Lender and Borrowers agree that the obligations owing to CGE evidenced by
the Promissory Note dated May 25, 2012, in the original principal amount of Two
Million Three Hundred Twenty-Five Thousand Dollars ($2,325,000.00), executed by
G Investments, LLC, a Colorado limited liability company, payable to the order
of CGE shall not be subject to the provisions of this Section 6.10(c); and

 

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(d)          In the event the Gold Mountain Real Property, or any portion
thereof, is sold, Lender shall have the right to require all net proceeds of
such sale be applied to the Credit Facility as a Mandatory Permanent Reduction.
Unless otherwise approved in writing by Lender, no such sale shall be permitted
except: (i) pursuant to the terms of the Option Agreement dated effective as of
April 8, 2013, executed between Clear Creek County Development Company, LLC, a
Colorado limited liability company and Gold Mountain and NGC, or (ii) to a bona
fide third party for fair market value consideration. The Gold Mountain Real
Property may not be conveyed to any Unrestricted Subsidiary without the prior
written consent of Lender.

 

Section 6.11.       No Transfer of Ownership; Equity Offerings.

 

(a)          NGC shall not transfer or hypothecate its ownership interests in
any other member of the Borrower Consolidation, including, without limitation,
CGE and NGWII, except in connection with the Security Documentation.

 

(b)          NGC shall not make any Disqualified Equity Offering without the
prior written consent of Lender.

 

Section 6.12.       ERISA. No Borrower shall:

 

(a)          At any time, permit any Pension Plan which is maintained by any
Borrower or to which any Borrower is obligated to contribute on behalf of its
employees, in such case if to do so would constitute a Material Adverse Change,
to:

 

(i)          engage in any non-exempt “prohibited transaction”, as such term is
defined in Section 4975 of the Code;

 

(ii)         incur any material “accumulated funding deficiency”, as that term
is defined in Section 302 of ERISA; or

 

(iii)        suffer a termination event to occur which may reasonably be
expected to result in liability of any Borrower to the Pension Plan or to the
Pension Benefit Guaranty Corporation or the imposition of a lien on the
Collateral pursuant to Section 4068 of ERISA.

 

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(b)          Fail, upon any Borrower becoming aware thereof, promptly to notify
the Lender of the occurrence of any Reportable Event with respect to any Pension
Plan or of any non-exempt “prohibited transaction” (as defined in Section 4975
of the Code) with respect to any Pension Plan which is maintained by any
Borrower or to which Borrowers are obligated to contribute on behalf of their
employees or any trust created thereunder which Reportable Event or prohibited
transaction would constitute a Material Adverse Change.

 

(c)          At any time, permit any Pension Plan which is maintained by any
Borrower or to which any Borrower is obligated to contribute on behalf of its
employees to fail to comply with ERISA or other applicable laws in any respect
that would result in a Material Adverse Change.

 

Section 6.13.       Margin Regulations. No part of the proceeds of the Credit
Facility will be used by Borrowers to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any Margin
Stock. Neither the making of such loans, nor the use of the proceeds of such
loans will violate or be inconsistent with the provisions of Regulations G, T, U
or X of the Board of Governors of the Federal Reserve System.

 

Section 6.14.       Transactions with Affiliates. No Borrower shall engage in
any transaction with any Unrestricted Subsidiary or other Affiliate of Borrowers
which is not a member of the Borrower Consolidation, other than arms length
transactions for fair market value, except to the extent more favorable to the
Borrower Consolidation.

 

Section 6.15.       Limitation on Additional Subsidiaries. No Subsidiary of NGC
which is a member of the Borrower Consolidation shall create any additional
Subsidiaries without the prior written consent of Lender.

 

Section 6.16.       Limitation on Consolidated Tax Liability. No member of the
Borrower Consolidation shall be liable for federal income taxes relating to the
taxable income of any Unrestricted Subsidiary or Affiliate of NGC which is not a
member of the Borrower Consolidation, or any of them, in excess of the amount of
federal income taxes it would pay if reporting as a separate entity, unless such
member of the Borrower Consolidation is fully reimbursed by such Unrestricted
Subsidiary or Affiliate of NGC on or before the payment of such taxes.

 

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Section 6.17.       Change in Accounting Principles. Except as otherwise
provided herein, if any changes in accounting principles from those used in the
preparation of the most recent financial statements delivered to Lender pursuant
to the terms hereof are hereinafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) and are adopted by the Borrowers
with the agreement of their independent certified public accountants and such
changes result in a change in the method of calculation of any of the financial
covenants, standards or terms found herein, the parties hereto agree to enter
into negotiations in order to amend such provisions so as to equitably reflect
such changes with the desired result that the criteria for evaluating the
financial condition of Borrowers shall be the same after such changes as if such
changes had not been made; provided, however, that no change in GAAP that would
affect the method of calculation of any of the financial covenants, standards or
terms shall be given effect in such calculations until such provisions are
amended, in a manner satisfactory to Lender, to so reflect such change in
accounting principles.

 

ARTICLE VII

 

EVENTS OF DEFAULT

 

Section 7.01.       Events of Default. Any of the following events and the
passage of any applicable notice and cure periods shall constitute an Event of
Default hereunder:

 

(a)          Any representation or warranty made by Borrowers pursuant to or in
connection with this Credit Agreement, the Revolving Credit Note, the
Environmental Certificate, or any other Loan Document or in any report,
certificate, financial statement or other writing furnished by Borrowers in
connection herewith, shall prove to be false, incorrect or misleading in any
materially adverse aspect as of the date when made;

 

(b)          Borrowers shall have defaulted in the payment of any principal or
interest on the Revolving Credit Note when due, and such default continues for a
period of more than five (5) days;

 

(c)          Borrowers shall have defaulted under the terms of any other
obligation owing Lender under the terms of this Credit Agreement, which default
continues beyond any applicable grace period therein contained;

 

(d)          Borrowers shall have defaulted in the payment of any late charge,
Nonusage Fees, expenses, indemnities or any other amount owing under any Loan
Document for a period of five (5) days after notice thereof to Borrowers from
Lender;

 

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(e)          Borrowers or any Restricted Subsidiary shall fail duly and
punctually to perform or comply with: (i) any term, covenant, condition or
promise contained in Sections 6.01, 6.02, 6.03, 6.04, 6.05, 6.06, 6.07, 6.08,
6.09, 6.10, 6.11, 6.12 (as to wind up, liquidation, dissolution, merger or
consolidation) and 6.13, or (ii) any other term, covenant, condition or promise
contained in this Credit Agreement, the Revolving Credit Note, the Deeds of
Trust or any other Loan Document and, in the case of any term, covenant,
condition or promise covered by this clause (ii), such failure shall continue
thirty (30) days after written notice thereof is delivered to Borrowers by
Lender of such failure;

 

(f)          Any of the Security Documentation or any provision thereof:
(i) shall cease to be in full force and effect in any material respect and such
cessation results in a Material Adverse Change, or (ii) shall cease to give the
Lender in any material respect the liens, rights, powers and privileges
purported to be created thereby, or (iii) the Borrowers or any Restricted
Subsidiary shall default in the due performance or observance of any term,
covenant or agreement on their part to be performed or observed pursuant to the
Security Documentation for a period of thirty (30) days after written notice
thereof is delivered to Borrowers by Lender of such failure (or such shorter
period following such notice as may be specifically required in any Loan
Document), provided, however, that in the event the cure for such Event of
Default reasonably requires more than thirty (30) days, the cure period shall be
extended for an additional period so long as Borrowers diligently and promptly
undertake such cure and in no event shall the default remain uncured for a
period in excess of ninety (90) days following such written notice;

 

(g)          Any Borrower or any Restricted Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to it or its debts under the Bankruptcy Code or any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official, for all or substantially all of its property, or shall consent
to any such relief or to the appointment or taking possession by any such
official in any involuntary case or other proceeding against it;

 

(h)          An involuntary case or other proceeding shall be commenced against
any Borrower or any Restricted Subsidiary seeking liquidation, reorganization or
other relief with respect to itself or its debts under the Bankruptcy Code or
any bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official, for all or substantially all of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of ninety (90) days;

 

(i)          Any Borrower or any Restricted Subsidiary makes an assignment for
the benefit of its creditors or admits in writing its inability to pay its debts
generally as they become due;

 

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(j)          Borrowers default, beyond any applicable grace period, under the
terms of any Seller Subordinated Debt or Permitted Indenture Subordinated Debt
if the effect thereof is to permit the acceleration or require prepayment,
purchase or redemption thereof by the holders thereof, or any breach, default or
event of default shall occur, or any other event shall occur or condition shall
exist, under any instrument, agreement or indenture pertaining thereto if the
effect thereof is to accelerate, the maturity of any such Indebtedness; or any
such Indebtedness shall be declared to be due and payable or shall be required
to be prepaid, purchased or redeemed (other than by a regularly scheduled
required prepayment) prior to the stated maturity thereof, or the holder of any
lien in any amount, shall commence foreclosure of such lien upon property of
Borrowers having a value in excess of One Hundred Thousand Dollars ($100,000.00)
and such foreclosure shall continue against such property to a date less than
thirty (30) days prior to the date of the proposed foreclosure sale;

 

(k)          The occurrence of any event of default, beyond any applicable grace
period, under the terms of any agreement with Lender in connection with a
Secured Interest Rate Hedge relating to the Credit Facility;

 

(l)          Any Borrower or any Restricted Subsidiary shall be voluntarily or
involuntarily divested of title or possession of any Collateral Property or
shall lease or in any other manner, voluntarily or involuntarily alienate any of
its interest in any Collateral Property or any portion of the Casino Facilities,
other than the Permitted Encumbrances and as permitted in Section 6.08 or other
than within the Borrower Consolidation;

 

(m)          The occurrence of any Reportable Event with respect to a Pension
Plan which Lender determines in good faith constitutes proper grounds for the
termination of any Pension Plan by the Pension Benefit Guaranty Corporation or
for the appointment by an appropriate United States District Court of a trustee
to administer any such plan that would result in a Material Adverse Change,
should occur and should continue for thirty (30) days after written notice of
such determination shall have been given to Borrowers by Lender;

 

(n)          Commencement against any Borrower, any time after the execution of
this Credit Agreement, of any litigation which is not stayed, bonded, dismissed,
terminated or disposed of to the satisfaction of Lender within ninety (90) days
after its commencement, and which (i) has a reasonable probability of success,
and could, if successful, in the reasonable opinion of Lender, materially and
adversely affect the priority of the Liens granted Lender by the Deeds of Trust
in the Collateral Properties, or (ii) results in the issuance of a preliminary
or permanent injunction which is not dissolved or stayed pending appeal within
sixty (60) days of its issuance and which preliminary or permanent injunction
materially adversely affects any Borrowers’ right to use the Collateral
Properties as the Casino Facilities;

 

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(o)          The loss, revocation, non-renewal or suspension, other than on
account of forces majeure, of any Borrower’s unrestricted Gaming Permits or the
failure of any Borrower to maintain gaming activities at the Business Operations
other than on account of forces majeure at least to the same general extent as
is presently conducted thereon for a period in excess of thirty (30) consecutive
days;

 

(p)          Any money judgment, writ or warrant of attachment or similar
process or series of money judgments, writs or warrants of attachment or similar
processes involving at any time a cumulative aggregate amount in excess of Two
Hundred Fifty Thousand Dollars ($250,000.00) (not adequately covered by
insurance as to which a solvent and unaffiliated insurance company has
acknowledged coverage or released, bonded or expunged as provided in
Section 5.03) shall be entered or filed against any Borrower or any Restricted
Subsidiary or any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of sixty (60) days (or in any event
later than five (5) days prior to the date of any proposed sale thereunder);

 

(q)          Any order, judgment or decree shall be entered against any Borrower
decreeing its involuntary dissolution or split up and such order shall remain
undischarged and unstayed for a period in excess of thirty (30) days, or
Borrowers shall otherwise dissolve or cease to exist;

 

(r)          The occurrence of any Change of Control;

 

(s)          The occurrence of any default under any Subsidiary Guaranty
delivered to Lender or the revocation, termination or repudiation of such
Subsidiary Guaranty by any Subsidiary prior to Credit Facility Termination;

 

(t)          The occurrence of any Material Adverse Change that continues after
a written notice of Default is given by Lender for the lesser of (i) thirty (30)
days, or (ii) such shorter period as may be applicable hereunder if the basis of
the Material Adverse Change is a Default under any other provision of the Credit
Agreement; or

 

(u)          Any Subsidiary Guaranty shall cease to be in full force or effect
in any material respect, or any Subsidiary Guarantor shall deny or disaffirm
such Subsidiary Guarantor’s obligations under the Subsidiary Guaranty, or such
Subsidiary Guarantor shall default for a period of thirty (30) days after notice
thereof from Lender in the due performance or observance of any term, covenant
or agreement on its part to be performed or observed pursuant to the Subsidiary
Guaranty.

 

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Section 7.02.       Default Remedies.

 

(a)          Upon the occurrence and during the continuance of any Event of
Default, Lender may: (i) declare all of the outstanding unpaid Indebtedness
hereunder and under the Revolving Credit Note and the other Loan Documents,
together with all accrued interest thereon, to be fully due and payable without
presentation, demand, protest or notice of any kind, and, in the event of such
declaration; and (ii) shall terminate its obligation to make any advances for
Borrowings; provided, that, the remedies set forth in clauses (i) and (ii) above
will be deemed to have been automatically exercised on the occurrence of any
event set out in Sections 7.01(g), (h) or (i);

 

(b)          Additionally, while any Event of Default has occurred and remains
continuing, the Lender may (i) exercise any and all remedies available to Lender
under the Loan Documents; and/or (ii) exercise any other remedies available to
Lender at law or in equity, including requesting the appointment of a receiver
to perform any acts required of Borrowers, or any of them, under this Credit
Agreement.

 

For the purpose of carrying out this section and exercising these rights, powers
and privileges and subject to all applicable Gaming Laws, Borrowers hereby
irrevocably constitute and appoint Lender as their true and lawful
attorney-in-fact to execute, acknowledge and deliver any instruments and do and
perform any acts such as are referred to in this paragraph in the name and on
behalf of Borrowers. Lender may exercise one or more remedies simultaneously and
all its remedies are nonexclusive and cumulative. Lender shall not be required
to pursue or exhaust any Collateral or remedy before pursuing any other
Collateral or remedy. Lender’s failure to exercise any remedy for a particular
default shall not be deemed a waiver of (i) such remedy, nor their rights to
exercise any other remedy for that default, nor (ii) their right to exercise
that remedy for any subsequent default.

 

Section 7.03.       Application of Proceeds. During all periods during which an
Event of Default has occurred and remains continuing, all payments and proceeds
received and all amounts held or realized from the sale or other disposition of
the Collateral Properties and/or Collateral, which are to be applied hereunder
towards satisfaction of Borrowers’ obligations under the Credit Facility, shall
be applied in the following order of priority:

 

(a)          First, to the payment of all reasonable fees, costs and expenses
(including reasonable attorney’s fees and expenses) incurred by Lender, its
agents or representatives in connection with the realization upon any of the
Collateral;

 

(b)          Next, to the payment in full of any other amounts due under this
Credit Agreement, the Security Documentation, or any other Loan Documents (other
than the Revolving Credit Note and any liability under the Secured Interest Rate
Hedges);

 

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(c)          Next, to the balance of interest remaining unpaid on the Note;

 

(d)          Next, to the balance of principal remaining unpaid on the Revolving
Credit Note;

 

(e)          Next, to the payment of any other amounts owing to Lender which is
necessary to cause Credit Facility Termination, including, without limitation,
any amounts owing with respect to the Secured Interest Rate Hedges; and

 

(f)          Next, the balance, if any, of such payments or proceeds to whomever
may be legally entitled thereto.

 

Section 7.04.       Notices. In order to entitle Lender to exercise any remedy
available hereunder, it shall not be necessary for Lender to give any notice,
other than such notice as may be required expressly herein or by applicable law.

 

Section 7.05.       Agreement to Pay Attorney’s Fees and Expenses. Subject to
the provisions of Section 9.16, upon the occurrence of an Event of Default, as a
result of which Lender shall require and employ attorneys or incur other
expenses for the collection of payments due or to become due or the enforcement
or performance or observance of any obligation or agreement on the part of
Borrowers contained herein, Borrowers shall, on demand, pay to Lender the
reasonable fees of such attorneys and such other reasonable expenses so incurred
by Lender.

 

Section 7.06.       No Additional Waiver Implied by One Waiver. In the event any
agreement contained in this Credit Agreement should be breached by either party
and thereafter waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder.

 

Section 7.07.       Licensing of Lender. In the event of the occurrence of an
Event of Default hereunder or under any of the Loan Documents and it shall
become necessary, or in the opinion of Lender advisable, for an agent,
supervisor, receiver or other representative of Lender to become licensed under
the provisions of the laws and/or regulations of any Gaming Authority as a
condition to receiving the benefit of any Collateral encumbered by the Deeds of
Trust or other Security Documentation for the benefit of Lender or otherwise to
enforce its rights hereunder, Borrowers hereby give their consent to the
granting of such license or licenses and agree to execute such further documents
as may be required in connection with the evidencing of such consent.

 

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Section 7.08.         Exercise of Rights Subject to Applicable Law. All rights,
remedies and powers provided by this Article VII may be exercised only to the
extent that the exercise thereof does not violate any applicable provision of
the laws of any Governmental Authority and all of the provisions of this Article
VII are intended to be subject to all applicable mandatory provisions of law
that may be controlling and to be limited to the extent necessary so that they
will not render this Credit Agreement invalid, unenforceable or not entitled to
be recorded or filed under the provisions of any applicable law.

 

Section 7.09.         Discontinuance of Proceedings. In case Lender shall have
proceeded to enforce any right, power or remedy under this Credit Agreement, the
Revolving Credit Note, the Deeds of Trust or any other Security Documentation by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to Lender, then and in every such case Borrowers and Lender shall be restored to
their former positions and rights hereunder with respect to the Collateral, and
all rights, remedies and powers of Lender shall continue as if such proceedings
had not been taken, subject to any binding rule by the applicable court or other
tribunal in any such proceeding.

 

ARTICLE VIII

 

DAMAGE, DESTRUCTION AND CONDEMNATION

 

Section 8.01.         No Abatement of Payments. If all or any part of the
Collateral shall be materially damaged or destroyed, or if title to or the
temporary use of the whole or any part of any of the Collateral shall be taken
or condemned by a competent authority for any public use or purpose, there shall
be no abatement or reduction in the amounts payable by Borrowers hereunder or
under the Revolving Credit Note, and Borrowers shall continue to be obligated to
make such payments.

 

Section 8.02.         Distribution of Capital Proceeds Upon Occurrence of Fire,
Other Perils or Condemnation. All monies received by Borrowers pursuant to the
terms of the Casino Leases or otherwise from “All Risk” including flood and
earthquake insurance policies covering any of the Collateral or from
condemnation or similar actions in regard to said Collateral, shall be retained
by the Borrower Consolidation for repair or replacement of the property
destroyed or condemned or to reimburse the Borrower Consolidation for the costs
of such repair or replacement incurred prior to the date Borrower Consolidation
receives such funds, unless a Default or Event of Default shall have occurred
and then be continuing. If a Default or Event of Default has occurred hereunder
and is then continuing such amount may, at the option of Lender, be applied to
pay the outstanding balance of the Credit Facility as a Mandatory Commitment
Reduction. In the event the amount so collected is applied to pay or reduce the
Funded Outstandings, the amount received by Lender shall be applied in the
priority set forth in Section 7.03 and, if such application is made when a
Default or Event of Default has occurred and remains continuing, then the
Borrower Consolidation shall not be entitled to any further disbursements.

 

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ARTICLE IX

 

GENERAL TERMS AND CONDITIONS

 

The following terms and conditions shall be applicable throughout the term of
this Credit Agreement:

 

Section 9.01.         Severability of Provisions. In the event any one or more
of the provisions contained in this Credit Agreement shall be invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired thereby.

 

Section 9.02.         Failure to Exercise Rights. Nothing herein contained shall
impose upon Lender or Borrowers any obligation to enforce any terms, covenants
or conditions contained herein. Failure of Lender, in any one or more instances,
to insist upon strict performance by Borrowers or Lender of any terms, covenants
or conditions of this Credit Agreement or the other Loan Documents, shall not be
considered or taken as a waiver or relinquishment by Lender or Borrowers of
their right to insist upon and to enforce in the future, by injunction or other
appropriate legal or equitable remedy, strict compliance by Borrowers or Lender
with all the terms, covenants and conditions of this Credit Agreement and the
other Loan Documents. The consent of Lender or Borrowers to any act or omission
by Borrowers or Lender shall not be construed to be a consent to any other or
subsequent act or omission or to waive the requirement for Lender’s or
Borrowers’ consent to be obtained in any future or other instance.

 

Section 9.03.         Notices and Delivery. Unless otherwise specifically
provided herein, any consent, notice or other communication herein required or
permitted to be given shall be in writing and may be personally served, faxed or
sent by courier service or United States mail and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of a fax (or
on the next Banking Business Day if such fax is received on a non-Banking
Business Day or after 5:00 p.m. on a Banking Business Day) or four (4) Banking
Business Days after deposit in the United States mail (registered or certified,
with postage prepaid and properly addressed). For the purposes hereof, the
addresses of the parties hereto (until notice of a change thereof is delivered
as provided in this Section 9.03) shall be as set forth below each party’s name
on the signature pages hereof, or, as to each party, at such other address as
may be designated by such party in a written notice to the other parties. All
deliveries to be made to Lender shall be made to Lender at the address specified
for notice on the signature page hereto.

 

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Section 9.04.         Modification in Writing. This Credit Agreement and the
other Loan Documents constitute the entire agreement between the parties and
supersede all prior agreements whether written or oral with respect to the
subject matter hereof, including, but not limited to, any term sheets furnished
by Lender to Borrowers. Neither this Credit Agreement, nor any other Loan
Documents, nor any provision herein, or therein, may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against whom enforcement of the change, waiver, discharge or
termination is sought.

 

Section 9.05.         Other Agreements. If the terms of any documents,
certificates or agreements delivered in connection with this Credit Agreement
are inconsistent with the terms of the Loan Documents, Borrowers shall use their
best efforts to amend such document, certificate or agreement to the
satisfaction of Lender to remove such inconsistency.

 

Section 9.06.         Counterparts. This Credit Agreement may be executed by the
parties hereto in any number of separate counterparts with the same effect as if
the signatures hereto and hereby were upon the same instrument. All such
counterparts shall together constitute but one and the same document.

 

Section 9.07.         Rights, Powers and Remedies are Cumulative. None of the
rights, powers and remedies conferred upon or reserved to Lender or Borrowers in
this Credit Agreement are intended to be exclusive of any other available right,
power or remedy, but each and every such right, power and remedy shall be
cumulative and not alternative, and shall be in addition to every right, power
and remedy herein specifically given or now or hereafter existing at law, in
equity or by statute. Any forbearance, delay or omission by Lender or Borrowers
in the exercise of any right, power or remedy shall not impair any such right,
power or remedy or be considered or taken as a waiver or relinquishment of the
right to insist upon and to enforce in the future, by injunction or other
appropriate legal or equitable remedy, any of said rights, powers and remedies
given to Lender or Borrowers herein. The exercise of any right or partial
exercise thereof by Lender or Borrowers shall not preclude the further exercise
thereof and the same shall continue in full force and effect until specifically
waived by an instrument in writing executed by Lender.

 

Section 9.08.         Continuing Representations. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Credit Agreement, the making of the Credit Facility hereunder
and the execution and delivery of each other Loan Document until and final
payment of all sums owing under the Credit Facility and the occurrence of Credit
Facility Termination.

 

Section 9.09.         Successors and Assigns. All of the terms, covenants,
warranties and conditions contained in this Credit Agreement shall be binding
upon and inure to the sole and exclusive benefit of the parties hereto and their
respective successors and assigns.

 

Section 9.10.         Time of Essence. Time shall be of the essence of this
Credit Agreement.

 

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Section 9.11.       Choice of Law and Forum. This Credit Agreement and each of
the Loan Documents shall be governed by and construed in accordance with the
internal laws of the State of Nevada without regard to principles of conflicts
of law. Borrowers further agree that the full and exclusive forum for the
determination of any action relating to this Credit Agreement, the Loan
Documents, or any other document or instrument delivered in favor of Lender
pursuant to the terms hereof shall be either an appropriate Court of the State
of Nevada or the United States District Court or United States Bankruptcy Court
for the District of Nevada.

 

Section 9.12.       Arbitration.

 

(a)          Upon the request of any party, whether made before or after the
institution of any legal proceeding, any action, dispute, claim or controversy
of any kind (e.g., whether in contract or in tort, statutory or common law,
legal or equitable) (“Dispute”) now existing or hereafter arising between the
parties in any way arising out of, pertaining to or in connection with the
Credit Agreement, Loan Documents or any related agreements, documents, or
instruments (collectively the “Documents”), may, by summary proceedings (e.g., a
plea in abatement or motion to stay further proceedings), bring an action in
court to compel arbitration of any Dispute.

 

(b)          All Disputes between the parties shall be resolved by binding
arbitration governed by the Commercial Arbitration Rules of the American
Arbitration Association. Judgment upon the award rendered by the arbitrators may
be entered in any court having jurisdiction.

 

(c)          No provision of, nor the exercise of any rights under this
arbitration clause shall limit the rights of any party, and the parties shall
have the right during any Dispute, to seek, use and employ ancillary or
preliminary remedies, judicial or otherwise, for the purposes of realizing upon,
preserving, protecting or foreclosing upon any property, real or personal, which
is involved in a Dispute, or which is subject to, or described in, the
Documents, including, without limitation, rights and remedies relating to:
(i) foreclosing against any real or personal property collateral or other
security by the exercise of a power of sale under the Security Documentation or
other security agreement or instrument, or applicable law, (ii) exercising
self-help remedies (including setoff rights) or (iii) obtaining provisional or
ancillary remedies such as injunctive relief, sequestration, attachment,
garnishment or the appointment of a receiver from a court having jurisdiction
before, during or after the pendency of any arbitration. The institution and
maintenance of an action for judicial relief or pursuit of provisional or
ancillary remedies or exercise of self-help remedies shall not constitute a
waiver of the right of any party, including the plaintiff, to submit the Dispute
to arbitration nor render inapplicable the compulsory arbitration provision
hereof.

 

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Section 9.13.         Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY
LAW, BORROWERS AND LENDER EACH MUTUALLY HEREBY EXPRESSLY WAIVE ANY RIGHT TO
TRIAL BY JURY OF ANY ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING
ARISING UNDER OR WITH RESPECT TO THIS CREDIT AGREEMENT, THE REVOLVING CREDIT
NOTE OR ANY OF THE LOAN DOCUMENTS, OR IN ANY WAY CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE DEALINGS OF BORROWERS AND LENDER WITH RESPECT TO THIS CREDIT
AGREEMENT, THE REVOLVING CREDIT NOTE, OR ANY OF THE LOAN DOCUMENTS, OR THE
TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE.
TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWERS AND LENDER EACH MUTUALLY AGREE
THAT ANY SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDINGS SHALL BE
DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT THE DEFENDING PARTY MAY FILE AN
ORIGINAL COUNTERPART OF THIS SECTION WITH ANY COURT OR OTHER TRIBUNAL AS WRITTEN
EVIDENCE OF THE CONSENT OF THE COMPLAINING PARTY TO THE WAIVER OF ITS RIGHT TO
TRIAL BY JURY.

 

Section 9.14.         Scope of Approval and Review. Any inspection of the Casino
Facilities or other Business Operations shall be deemed to be made solely for
Lender’s internal purposes and shall not be relied upon by the Borrowers or any
third party. In no event shall Lender be deemed or construed to be a joint
venturer or partner of Borrowers.

 

Section 9.15.         Cumulative Nature of Covenants. All covenants contained
herein are cumulative and not exclusive of each other covenant. Any action
allowed by any covenant shall be allowed only if such action is not prohibited
by any other covenant.

 

Section 9.16.         Costs to Prevailing Party. If any action or arbitration
proceeding is brought by any party against any other party under this Credit
Agreement or any of the Loan Documents, the prevailing party shall be entitled
to recover such costs and attorney’s fees as the court in such action or
proceeding may adjudge reasonable.

 

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Section 9.17.       Expenses.

 

(a)          Generally. Borrowers agree upon demand to pay, or reimburse Lender
for, all of Lender’s documented reasonable out-of-pocket costs and expenses of
every type and nature incurred by Lender at any time (whether prior to, on or
after the date of this Credit Agreement) in connection with (i) any requests for
consent, waiver or other modification of any Loan Document made by Borrowers;
(ii) the negotiation, preparation and execution of this Credit Agreement
(including, without limitation, the satisfaction or attempted satisfaction of
any of the conditions set forth in Article III), the Security Documentation and
the other Loan Documents and the advance of Borrowings; (iii) the subordination
of any Collateral, including title charges, recording fees and reasonable
attorneys’ fees and costs incurred in connection therewith; (iv) any appraisals
performed after the occurrence of an Event of Default; (v) the creation,
perfection or protection of the Security Documentation on the Collateral
(including, without limitation, any fees and expenses for title and lien
searches, local counsel in various jurisdictions, filing and recording fees and
taxes, duplication costs and corporate search fees); and (vi) the protection,
collection or enforcement of any of the Obligations or the Collateral, including
Protective Advances.

 

(b)          After Event of Default. Borrowers further agree to pay, or
reimburse Lender, for all reasonable out-of-pocket costs and expenses, including
without limitation reasonable attorneys’ fees and disbursements incurred by
Lender after the occurrence of an Event of Default (i) in enforcing any
Obligation or in foreclosing against the Collateral or exercising or enforcing
any other right or remedy available by reason of such Event of Default; (ii) in
connection with any refinancing or restructuring of the credit arrangements
provided under this Credit Agreement in the nature of a “work-out” or in any
insolvency or bankruptcy proceeding; (iii) in commencing, defending or
intervening in any litigation or in filing a petition, complaint, answer, motion
or other pleadings in any legal proceeding relating to Borrower and related to
or arising out of the transactions contemplated hereby; (iv) in taking any other
action in or with respect to any suit or proceeding (whether in bankruptcy or
otherwise); (v) in protecting, preserving, collecting, leasing, selling, taking
possession of, or liquidating any of the Collateral; or (vi) in attempting to
enforce or enforcing any lien in any of the Collateral or any other rights under
the Security Documentation.

 

Section 9.18.       Setoff. In addition to any rights and remedies of the Lender
provided by law, if any Event of Default exists, Lender is authorized at any
time and from time to time, without prior notice to any Borrower, any such
notice being waived by the Borrowers to the fullest extent permitted by law, to
set-off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by Lender to or for the credit or the
account of Borrowers against any and all obligations of Borrowers under the
Credit Facility, now or hereafter existing, irrespective of whether or not the
Lender shall have made demand under this Credit Agreement or any Loan Document
and although such amounts owed may be contingent or unmatured. Lender agrees
promptly to notify the Borrowers after any such setoff and application made by
Lender; provided, however, that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of Lender under this
Section 9.18 are in addition to the other rights and remedies which Lender may
have.

 

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Section 9.19.       Borrowers’ Waivers and Consents.

 

(a)          Each Borrower shall be jointly and severally liable for the
repayment of all sums owing under the terms of this Credit Agreement and each
the Loan Documents.

 

(b)          Each Borrower agrees that Lender shall not have any responsibility
to inquire into the apportionment, allocation or disposition of any Borrowings
as among the Borrowers or within the Borrower Consolidation.

 

(c)          For the purpose of implementing the joint borrower provisions of
this Credit Agreement and each of the Loan Documents, each Borrower hereby
irrevocably appoints each Authorized Representative as its agent and
attorney-in-fact for all purposes of this Credit Agreement and each of the Loan
Documents, including without limitation the giving and receiving of notices and
other communications, the making of requests for, or conversions or
continuations of, Borrowings, the execution and delivery of certificates and the
receipt and allocation of disbursements from the Lender.

 

(d)          Each Borrower acknowledges that the handling of the Credit Facility
on a joint borrowing basis as set forth in this Credit Agreement is solely an
accommodation to Borrowers and is done at their request. Each Borrower agrees
that Lender shall not incur any liability to any Borrower as a result thereof.
To induce the Lender to enter into this Credit Agreement, and in consideration
thereof, in accordance with the provisions set forth in Section 5.14 of this
Credit Agreement, each Borrower hereby agrees to indemnify the Lender and hold
Lender harmless from and against any and all liabilities, expenses, losses,
damages and/or claims of damage or injury asserted against such entity by any
Borrower or by any other Person arising from or incurred by reason of the
structuring of the Credit Facility as herein provided, reliance by the Lender on
any requests or instructions from any Borrower or any Authorized Representative,
or any other action taken by the Lender under the terms of this Credit Agreement
or any of the Loan Documents at the request of any Borrower or Authorized
Representative. This Section 9.19(d) shall survive termination of this Credit
Agreement.

 

(e)          Each Borrower represents and warrants to the Lender that (i) it has
established adequate means of obtaining from each Borrower on a continuing basis
financial and other information pertaining to the business, operations and
condition (financial and otherwise) of each of the Borrowers and its respective
property, and (ii) each Borrower now is and hereafter will be completely
familiar with the business, operations and condition (financial and otherwise)
of each Borrower, and its property. Each Borrower hereby waives and relinquishes
any duty on the part of the Lender to disclose to such Borrower any matter, fact
or thing relating to the business, operations or condition (financial or
otherwise) of any Borrower, or the property of any Borrower, whether now or
hereafter known by the Lender at any time through Credit Facility Termination.

 

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(f)          Each Borrower acknowledges that the Funded Outstandings, or
portions thereof, may derive from value provided directly to another Borrower
and, in full recognition of that fact, each Borrower consents and agrees that
the Lender may, at any time and from time to time, without notice or demand, and
without affecting the enforceability or security of the Loan Documents:

 

(i)          accept partial payments on the Credit Facility;

 

(ii)         receive and hold additional security or guaranties for the Credit
Facility or any part thereof;

 

(iii)        release, reconvey, terminate, waive, abandon, subordinate,
exchange, substitute, transfer and enforce any security or guaranties, and apply
any security and direct the order or manner of sale thereof, as the Lender, in
its sole and absolute discretion, may determine;

 

(iv)        release any party or any guarantor from any personal liability with
respect to the Credit Facility or any part thereof;

 

(v)         settle, release on terms satisfactory to the Lender or by operation
of applicable laws or otherwise liquidate or enforce the Credit Facility and any
security or guaranty in any manner, consent to the transfer of any security and
bid and purchase at any sale; and/or

 

(vi)        consent to the merger, change or any other restructuring or
termination of the corporate existence of any other Borrower or any other
Person, and correspondingly restructure the Credit Facility, continuing
existence of any lien or encumbrance under any other Loan Document to which any
Borrower is a party or the enforceability hereof or thereof with respect to all
or any part of the Credit Facility.

 

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(g)          Each Borrower expressly waives any right to require the Lender to
marshal assets in favor of any Borrower, any other party or any other Person or
to proceed against any other Borrower or any other party or any Collateral
provided by any Borrower or any other party, and agrees that the Lender may
proceed against Borrowers and/or the Collateral in such order as it shall
determine in its sole and absolute discretion. The Lender may file a separate
action or actions against any Borrower, whether action is brought or prosecuted
with respect to any other security or against any other Person, or whether any
other Person is joined in any such action or actions. Each Borrower agrees that
the Lender and any other Borrower may deal with each other in connection with
the Credit Facility or otherwise, or alter any contracts or agreements now or
hereafter existing between any of them, in any manner whatsoever, all without in
any way altering or affecting the obligations of such Borrower under the Loan
Documents or the perfection of the Security Documentation. Each Borrower
expressly waives any and all defenses now or hereafter arising or asserted by
reason of: (a) any disability or other defense of any Borrower or any other
party with respect to the Credit Facility, (b) the unenforceability or
invalidity as to any Borrower, or any other party of the Credit Facility, (c)
intentionally omitted, (d) the cessation for any cause whatsoever of the
liability of any Borrower or any other party (other than by reason of the full
payment and performance of the Credit Facility and the occurrence of Credit
Facility Termination), (e) any failure of the Lender to give notice of sale or
other disposition to any Borrower or any defect in any notice that may be given
in connection with any sale or disposition, (f) any act or omission of the
Lender or others that directly or indirectly results in or aids the discharge or
release of any Borrower or any other Person or the Credit Facility or any other
security or guaranty therefor by operation of law or otherwise, (g) any law
which provides that the obligation of a surety or guarantor must neither be
larger in amount nor in other respects more burdensome than that of the
principal or which reduces a surety’s or guarantor’s obligation in proportion to
the principal obligation, (h) any failure of the Lender to file or enforce a
claim in any bankruptcy or other proceeding with respect to any Person, (i) the
election by the Lender, in any bankruptcy proceeding of any Person, of the
application or non-application of Section 1111(b)(2) of the United States
Bankruptcy Code, (j) any extension of credit or the grant of any lien or
encumbrance under Section 364 of the United States Bankruptcy Code, (k) any use
of cash collateral under Section 363 of the United States Bankruptcy Code,
(l) any agreement or stipulation with respect to the provision of adequate
protection in any bankruptcy proceeding of any Person, (m) the avoidance of any
lien or encumbrance in favor of the Lender for any reason, (n) any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt, liquidation or
dissolution proceeding commenced by or against any Person, including any
discharge of, or bar or stay against collecting, all or any of the obligations
(or any interest thereon) in or as a result of any such proceeding, or (o) any
election of remedies by the Lender, even if the effect thereof is to destroy or
impair any Borrower’s right to subrogation, reimbursement, exoneration,
indemnification or contribution.

 

(h)          Each Borrower authorizes the Lender, upon the occurrence of any
acceleration of the Indebtedness then owing under the Credit Facility, at its
sole option, without any other notice or demand and without affecting any of the
Credit Facility or the validity or enforceability of any liens or encumbrance in
favor of the Lender on any Collateral, to foreclose any or all of the Deeds of
Trust by judicial or nonjudicial sale. To the extent permitted by applicable
law, each Borrower expressly waives any defenses to the enforcement of the Loan
Documents or any liens or encumbrances created or granted under the Loan
Documents or to the recovery by the Lender against any other Borrower or any
guarantor or any other Person liable therefor of any deficiency after a judicial
or nonjudicial foreclosure or sale, even though such a foreclosure or sale may
impair the subrogation rights of a Borrower and may preclude a Borrower from
obtaining reimbursement or contribution from any other Borrower.

 

 101 

 

 

(i)          Notwithstanding anything to the contrary elsewhere contained herein
or in any other Loan Document to which any Borrower is a party, each Borrower
hereby expressly agrees with respect to the Borrowers and their successors and
assigns (including any surety) and any other Person which is directly or
indirectly a creditor of the other Borrowers or any surety for any other
Borrower, not to exercise, until Credit Facility Termination has irrevocably
occurred, any rights at law or in equity to subrogation, to reimbursement, to
exoneration, to contribution, to setoff or to any other rights that could accrue
to a surety against a principal, to a guarantor against a maker or obligor, to
an accommodation party against the party accommodated, or to a holder or
transferee against a maker, and which such Borrower may have or hereafter
acquire against any of the Borrowers or any other such Person in connection with
or as a result of such Borrower’s execution, delivery and/or performance of this
Credit Agreement or any other Loan Document to which such Borrower is a party.

 

Section 9.20.       Confidentiality. Lender agrees to hold any non-public
information that it may receive from Borrowers pursuant to this Credit Agreement
(or pursuant to any other Loan Document) in confidence and consistent with their
respective policies for handling material non-public information, except for
disclosure: (a) to legal counsel and accountants for Borrowers or Lender; (b) 
to the other professional advisors to Borrowers or Lender, provided that the
recipient has accepted such information subject to a confidentiality agreement
substantially similar to this Section 9.20; (c) to regulatory officials having
jurisdiction over Lender; (d) to any Gaming Authority having regulatory
jurisdiction over Borrowers or their respective Subsidiaries, provided that
Lender agrees to endeavor to notify Borrowers of any such disclosure; (e) to
required by law or legal process or in connection with any legal proceeding,
provided that Lender uses reasonable efforts to notify Borrowers prior to any
such disclosure; and (f) to another financial institution in connection with a
disposition or proposed disposition to that financial institution of all or part
of Lender’s interest hereunder or in the Revolving Credit Note, provided that
the recipient has accepted such information subject to a confidentiality
agreement substantially similar to this Section 9.20. For purposes of the
foregoing, “non-public information” shall mean any information respecting
Borrowers or their respective Subsidiaries reasonably considered by Borrowers to
be material and not available to the public, other than (i) information
previously filed with any governmental agency and available to the public,
(ii) information which is available to the general public at the time of use or
disclosure, (iii) information which becomes available to the general public,
other than by manner of unauthorized disclosure or use, or (iv) information
previously published in any public medium from a source other than, directly or
indirectly, Lender. Nothing in this Section shall be construed to create or give
rise to any fiduciary duty on the part of the Lender to Borrowers.

 

 102 

 

 

Section 9.21.         Schedules Attached. Schedules are attached hereto and
incorporated herein and made a part hereof as follows:

 

Schedule 2.01(c) - Aggregate Commitment Reduction Schedule     Schedule 3.11 -
Schedule of Slot Route Locations - Form     Schedule 3.15 - Schedule of
Significant Litigation     Schedule 4.01(c) - Schedule of Significant
Shareholders     Schedule 4.05(b) - Schedule of Depository Accounts     Schedule
4.19 - Schedule of Contingent Liabilities     Schedule 4.20 - Schedule of
Restricted and Unrestricted Subsidiaries     Schedule 5.08(d)(i) Lease Summary
Schedule

 

Section 9.22.         Exhibits Attached. Exhibits are attached hereto and
incorporated herein and made a part hereof as follows:

 

Exhibit A - Revolving Credit Note       Exhibit B - Notice of Borrowing - Form  
    Exhibit C - Authorized Representative Certificate - Form       Exhibit D -
Closing Certificate - Form       Exhibit E - Compliance Certificate - Form      
Exhibit F - Subsidiary Guaranty - Form       Exhibit G - Payment Subordination
Agreement - Form       Exhibit H - Legal Opinion - Form

 

 103 

 

 

Exhibit I - Crazy Moose Pasco Real Property Description       Exhibit J - Gold
Mountain Real Property Description       Exhibit K - Club Fortune Real Property
Description

 

[The remainder of this page is intentionally blank; and the signature pages
follow.]

 

 104 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be
executed as of the day and year first above written.

 

  BORROWERS:       NEVADA GOLD & CASINOS, INC.,   a Nevada corporation        
By /s/Michael P. Shaunnessy     Michael P. Shaunnessy,     President       NG
WASHINGTON, LLC,   a Washington limited liability company         By /s/Michael
P. Shaunnessy     Michael P. Shaunnessy,     Manager       NG WASHINGTON II
HOLDINGS, LLC,   a Delaware limited liability company         By /s/Michael P.
Shaunnessy     Michael P. Shaunnessy,     Manager       NG WASHINGTON II, LLC,  
a Washington limited liability company         By /s/Michael P. Shaunnessy    
Michael P. Shaunnessy,     Manager

 

Signature Page to Credit Agreement

 

 S-1 

 

 

  NG WASHINGTON III, LLC,   a Washington limited liability company         By
/s/Michael P. Shaunnessy     Michael P. Shaunnessy,     Manager       NG SOUTH
DAKOTA, LLC,   a South Dakota limited liability company         By /s/Michael P.
Shaunnessy     Michael P. Shaunnessy,     Manager       A.G. TRUCANO, SON &
GRANDSONS, INC.,   a South Dakota corporation         By /s/Michael P.
Shaunnessy     Michael P. Shaunnessy,     President       CGC HOLDINGS, L.L.C.,
  a Nevada limited liability company         By /s/Michael P. Shaunnessy    
Michael P. Shaunnessy,     Manager       CGE ASSETS, INC.   (formerly Colorado
Grand Enterprises, Inc.),   a Colorado corporation         By /s/Michael P.
Shaunnessy     Michael P. Shaunnessy,     President

 

Signature Page to Credit Agreement

 

 S-2 

 

 

  GOLD MOUNTAIN DEVELOPMENT,   A LIMITED LIABILITY COMPANY,   a Colorado limited
liability company,   also known as GOLD MOUNTAIN DEVELOPMENT, LLC         By
/s/Michael P. Shaunnessy     Michael P. Shaunnessy,     Manager       NEVADA
GOLD BVR, L.L.C.,   a Nevada limited liability company         By /s/Michael P.
Shaunnessy     Michael P. Shaunnessy,     Manager       NEVADA GOLD & CASINOS
LV, LLC,   a Nevada limited liability company         By /s/Michael P.
Shaunnessy     Michael P. Shaunnessy,     Manager       Address for Borrower
Consolidation:       133 East Warm Springs Road, Suite 102   Las Vegas,
NV  89119       Telephone: (702) 685-1000   Facsimile:  (702) 685-1265

 

Signature Page to Credit Agreement

 

 S-3 

 

 

  LENDER:       MUTUAL OF OMAHA BANK         By /s/Ashan S. Perera     Ashan S.
Perera,     Vice President       Address:       8945 W. Russell Rd., Ste. 300  
Las Vegas, NV  89148.       Telephone: (702) 492-5801   Facsimile: (602)
636-8618

 

Signature Page to Credit Agreement

 

 S-4 

 

SCHEDULE 2.01(c)

 

AGGREGATE COMMITMENT REDUCTION SCHEDULE

 

REDUCTION DATE   SCHEDULED REDUCTION   November 30, 2015 - Restatement Closing
Date   $ -0-   January 31, 2016     625,000.00   April 30, 2016     625,000.00  
July 31, 2016     625,000.00   October 31, 2016     625,000.00   January 31,
2017     625,000.00   April 30, 2017     625,000.00   July 31, 2017    
625,000.00   October 31, 2017     625,000.00   January 31, 2018     625,000.00  
April 30, 2018     625,000.00   July 31, 2018     625,000.00   October 31, 2018
    625,000.00   January 31, 2019     625,000.00   April 30, 2019     625,000.00
  July 31, 2019     625,000.00   October 31, 2019     625,000.00   January 31,
2019     625,000.00   April 30, 2019     625,000.00   July 31, 2019    
625,000.00  

November 30, 2020 (Maturity Date)

    Entire unpaid balance  

 

 

 

 

SCHEDULE 3.11

 

SCHEDULE OF SLOT ROUTE LOCATIONS

 

Name of Owner   Address   No. of
Gaming
Devices   Commitment Date
of Lease or
Occupancy
Agreement   Termination Date
of Lease or
Occupancy
Agreement   Description of
Payment
Arrangement Best Western   137 Charles Street, Deadwood, SD   27   3/21/2012  
3/21/2017   Divide net proceeds per lease agreement.                      
Bodega (#1, #2, #3)  

658, 660, 662 Main Street,

Deadwood, SD

  66   7/1/2012   5/16/2017   Divide net proceeds per lease agreement.          
            Bullock Hotel #1   633 Main Street, Deadwood, SD   30   8/1/2011  
7/31/2016   Divide net proceeds per lease agreement.                      
Bullock Hotel #2   633 Main Street, Deadwood, SD   30   8/1/2011   7/31/2016  
Divide net proceeds per lease agreement.                       Comfort Inn
(Gulches of Fun #1)   225 Cliff Street, Deadwood, SD   27   8/1/2011   7/31/2016
  Divide net proceeds per lease agreement.                       Comfort Inn
(Gulches of Fun #2)   225 Cliff Street, Deadwood, SD   22   8/1/2011   7/31/2016
  Divide net proceeds per lease agreement.                       Deadwood Dicks
 

51, 53, 55 Sherman Street,

Deadwood, SD

  3   5/1/1994   4/30/2018   Divide net proceeds per lease agreement.          
            Fairmont Hotel/Oyster Bar  

628-630 Main Street,

Deadwood, SD

  27   3/3/2010   3/3/2016   Divide net proceeds per lease agreement.          
            Hickok’s Hotel & Casino (#1, #2, #3, #4)   685 Main Street,
Deadwood, SD   74   12/1/2011   1/1/2020   Divide net proceeds per lease
agreement.                       Iron Horse Inn   27 Deadwood Street, Deadwood,
SD   23   12/1/2009   1/1/2020   Divide net proceeds per lease agreement.      
                McKenna’s Gold   470 Main Street, Deadwood, SD   41   11/17/2008
  11/16/2023   Divide net proceeds per lease agreement.                      
Midnight Star   677 Main Street, Deadwood, SD   53   11/1/2012   10/31/2017  
Divide net proceeds per lease agreement.                      

Peacock d/b/a

Mustang Sally’s

 

630-634 Min Street,

Deadwood, SD

  37   4/1/1997   3/30/2018   Divide net proceeds per lease agreement.          
            Old Style Saloon #10   657 Main Street, Deadwood, SD   41   4/9/1990
  4/8/2016   Divide net proceeds per lease agreement.                      

Lucky 8 Motel

(Jack Gunvordahl d/b/a Vendee)

  196 Cliff Street, Deadwood, SD   69   1/1/2012   12/31/2015   Divide net
proceeds per lease agreement.                       VFW Club   10 Pine Street,
Deadwood, SD   18   7/1/1989   6/30/2016   Divide net proceeds per lease
agreement.                       Martin Mason Hotel #1   48 Sherman Street,
Deadwood, SD   19   1/26/2009   1/25/2024   Divide net proceeds per lease
agreement.                       Martin Mason Hotel #2   44 Sherman Street,
Deadwood, SD   21   1/26/2009   1/25/2024   Divide net proceeds per lease
agreement.                       Wooden Nickel   9 Lee Street, Deadwood, SD   22
  1/26/2009   1/25/2024   Divide net proceeds per lease agreement.              
        Deadwood Station   84 Main Street, Deadwood, SD   30   10/25/2013  
10/25/2018   Divide net proceeds per lease agreement.                       Gold
Country Inn   801 Main Street, Deadwood, SD   25   10/25/2013   10/25/2018  
Divide net proceeds per lease agreement.                           Total # of
Machines   705            

  

 

 

 

SCHEDULE 3.15

 

SCHEDULE OF SIGNIFICANT LITIGATION

 

None.

 

 

 

 

SCHEDULE 4.01(c)

 

SCHEDULE OF SIGNIFICANT SHAREHOLDERS

 

Name of Shareholder  Address  Number of Shares
 Owned   Percentage of Total
Issued and Outstanding
Shares  Stephen Haberkorn  4802 Harbour Towne Ave.
Las Vegas, NV 89113   1,276,108    7.7% Louise H. Rogers  2512 Alta Mira
Tyler, TX 75701   941,288    5.7%

 

 

 

 

SCHEDULE 4.19

 

SCHEDULE OF CONTINGENT LIABILITIES

 

None.

  

 

 

 

SCHEDULE 4.20

 

SCHEDULE OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES

AS OF THE RESTATEMENT CLOSING DATE

 

Restricted Subsidiaries

 

NG Washington, LLC, a Washington limited liability company

 

NG Washington II Holdings, LLC, a Delaware limited liability company

 

NG Washington II, LLC, a Washington limited liability company

 

NG Washington III, LLC, a Washington limited liability company

 

NG South Dakota, LLC, a South Dakota limited liability company

 

A.G. Trucano, Son & Grandsons, Inc., a South Dakota corporation

 

CGE Assets, Inc. (formerly Colorado Grand Enterprises, Inc.), a Colorado
corporation

 

CGC Holdings, L.L.C., a Nevada limited liability company

 

Nevada Gold BVR, L.L.C., a Nevada limited liability company

 

Gold Mountain Development, a Limited Liability Company, a Colorado limited
liability company, also known as Gold Mountain Development, LLC

 

Nevada Gold & Casinos LV, LLC, a Nevada limited liability company

 

Unrestricted Subsidiaries

 

Gold River, LLC, a Nevada limited liability company

 

Nevada Gold Management Services, Inc., a Texas corporation

  

 

 

 

SCHEDULE 5.08(d)(i)

 

NV Gold Lease Schedule:

 

Casino  Address  Type  LTM Lease
Expense   Current Portion
Lease Liability   Lease Start
Date  Lease Expire
Date  Options
Exp. Date  Lease
Escalation
Amount   Lease
Escalation
Date  CAM   Annual
Property
Taxes   Lease
Remaining
(Years)   Lease
Option
(Years)  Coyote Bobs  3014 W Kennewick Ave Kennewick, WA  Fee Property  $-  
$-   N/A  N/A  N/A          $-   $-    -    -  Crazy Moose Casino  420 S 20th St
Pasco, WA  Fee Property  $-   $-   N/A  N/A  N/A          $-   $-    -    - 
Crazy Moose Casino  420 S 20th St Pasco, WA  Parking Lot  $6,600   $6,600  
2/1/2011  12/31/2013             $-   $-    (1.92)   -  Crazy Moose Casino 
22003 66th Ave Mountlake Terrace, WA  Building Lease  $208,134   $208,134  
6/1/2012  5/31/2016  5/31/2021          $-   $-    0.50    5.50  Silver Dollar
Casino  17917 Bothell-Everett Hwy Bothell, WA  Building Lease  $418,048  
$418,048   5/1/2012  4/30/2022  4/30/2032          $-   $-    6.42    16.42 
Silver Dollar Casino  19222 International Blvd SeaTac, WA  Building Lease 
$279,459   $279,459   6/1/2012  5/31/2022  5/1/2032   4%   5/31/2014  $-   $-  
 6.50    16.43  Silver Dollar Casino  3100 E Valley Hwy Renton, WA  Building
Lease  $522,795   $522,795   5/1/2012  4/30/2019  1/1/2039   8% every 3 yrs     
$-   $-    3.41    23.10  Royal Casino  13010 Hwy 99 S Everett, WA  Building
Lease  $403,888   $403,888   5/1/2012  1/31/2016  1/31/2036   3%   1/31/2014 
$-   $-    0.17    20.18  Club Hollywood Casino  16716 Aurora Ave N Shoreline,
WA  Building Lease & Parking Lot  $782,389   $782,389   4/1/2012  3/31/2022 
3/31/2037   3%   3/31/2014  $-   $-    6.33    21.35  Red Dragon Casino  21917
Hwy 99 Mountlake Terrace, WA  Building Lease  $406,172   $406,172   5/1/2012 
10/31/2016  10/31/2026   2%      $-   $-    0.92    10.92  Golden Nugget Casino 
14025 Interurban Ave Stukwila, WA  Building Lease  $149,310   $-   5/1/2012 
11/30/2015  Asset sold   3%   11/30/2013  $-   $-    (0.00)      Administrative
Offices  South Dakota  Building Lease  $55,200   $55,200   1/27/2012  1/27/2017 
1/27/2022          $-   $-    1.16    6.16  Corporate Headquarters  133 E Warm
Springs Rd Las Vegas, NV  Building Lease  $39,451   $39,451   2/1/2015 
1/31/2017  1/31/2019          $11,835   $-    1.17    3.17  Administrative
Offices  711 Powell Ave SW Renton, WA  Building Lease  $62,889   $62,889  
5/1/2012  10/31/2018  10/31/2026   2%   10/31/2013  $-   $-    2.92    10.92    
      $3,334,335   $3,185,025   Casino Average Lease Remaining    2.48    14.24 

 

 

 

 

EXHIBIT A

 

Loan No. 1301687001

 

AMENDED AND RESTATED

REVOLVING CREDIT NOTE

 

$23,000,000.00 Dated Effective as of November 30, 2015

 

FOR VALUE RECEIVED, the undersigned, NEVADA GOLD & CASINOS, INC., a Nevada
corporation, NEVADA GOLD & CASINOS LV, a Nevada limited liability company, NG
WASHINGTON, LLC, a Washington limited liability company, NG WASHINGTON II
HOLDINGS, LLC, a Delaware limited liability company, NG WASHINGTON II, LLC, a
Washington limited liability company, NG WASHINGTON III, LLC, a Washington
limited liability company, NG SOUTH DAKOTA, LLC, a South Dakota limited
liability company, A.G. TRUCANO, SON & GRANDSONS, INC., a South Dakota
corporation, CGC HOLDINGS, L.L.C., a Nevada limited liability company, CGE
ASSETS, INC. (formerly Colorado Grand Enterprises, Inc.), a Colorado
corporation, GOLD MOUNTAIN DEVELOPMENT, A LIMITED LIABILITY COMPANY, a Colorado
limited liability company, also known as GOLD MOUNTAIN DEVELOPMENT, LLC and
NEVADA GOLD BVR, L.L.C., a Nevada limited liability company (collectively, the
“Borrowers”), jointly and severally, promise to pay to the order of MUTUAL OF
OMAHA BANK (the "Lender") such sums as Lender may hereafter loan or advance or
re-loan to the Borrowers from time to time pursuant to the Credit Facility as
described in the Credit Agreement, hereinafter defined, up to the maximum
principal sum of Twenty Three Million Dollars ($23,000,000.00) (or such lesser
amount of such loans and advances as may be outstanding from time to time), the
unpaid balance of which shall not exceed in the aggregate the Aggregate
Commitment at any time, together with interest on the principal balance
outstanding from time to time at the rate or rates set forth in the Credit
Agreement.

 

A.            Incorporation of Credit Agreement.

 

1.          Reference is made to the Amended and Restated Credit Agreement dated
concurrently herewith (as may be amended, modified, extended, renewed or
restated from time to time, the "Credit Agreement"), executed by and between
Borrowers and Lender. Terms defined in the Credit Agreement and not otherwise
defined herein are used herein with the meanings defined for those terms in the
Credit Agreement. This is the Amended and Restated Revolving Credit Note
("Revolving Credit Note") referred to in the Credit Agreement, and any holder
hereof (in accordance with the Credit Agreement) is entitled to all of the
rights, remedies, benefits and privileges provided for in the Credit Agreement
as originally executed or as it may from time to time be supplemented, modified
or amended. The Credit Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
upon the terms and conditions therein specified.

 

 Page 1 of 6 

 

 

2.          The outstanding principal indebtedness evidenced by this Revolving
Credit Note shall be payable as provided in the Credit Agreement and in any
event on November 30, 2020, the Maturity Date.

 

3.          Interest shall be payable on the outstanding daily unpaid principal
amount of each Borrowing hereunder from the date thereof until payment in full
and shall accrue and be payable at the rates and on the dates set forth in the
Credit Agreement both before and after Default and before and after maturity and
judgment, with interest on overdue interest to bear interest at the Default
Rate, to the fullest extent permitted by applicable law.

 

4.          The amount of each payment hereunder shall be made to the Lender at
the Lender's office as specified in the Credit Agreement at the time or times
set forth therein, in lawful money of the United States of America and in
immediately available funds.

 

5.          Borrowings hereunder shall be made in accordance with the terms,
provisions and procedures set forth in the Credit Agreement.

 

B.           Default. The "Interest on Overdue Amounts and Default Rate"
provisions contained in Section 2.09 and the "Events of Default" provisions
contained in Article VII of the Credit Agreement are hereby incorporated by this
reference as though fully set forth herein.

 

C.           Waiver. Borrowers waive diligence, demand, presentment for payment,
protest and notice of protest.

 

D.           Collection Costs. In the event of the occurrence of an Event of
Default, the Borrowers agree to pay all reasonable costs of collection,
including reasonable attorneys fees, in addition to and at the time of the
payment of such sum of money and/or the performance of such acts as may be
required to cure such default. In the event legal action is commenced for the
collection of any sums owing hereunder the undersigned agrees that any judgment
issued as a consequence of such action against Borrowers shall bear interest at
a rate equal to the Default Rate until fully paid.

 

E.           Interest Rate Limitation. Notwithstanding any provision herein or
in any document or instrument now or hereafter securing this Revolving Credit
Note, the total liability for payments in the nature of interest shall not
exceed the limits now imposed by the applicable laws of the State of Nevada or
the United States of America.

 

 Page 2 of 6 

 

 

F.          Security. This Revolving Credit Note is secured by the Security
Documentation described in the Credit Agreement.

 

G.          Governing Law. This Revolving Credit Note shall be governed by and
construed in accordance with the laws of the State of Nevada.

 

H.          Partial Invalidity. If any provision of this Revolving Credit Note
shall be prohibited by or invalid under any applicable law, such provision shall
be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or any other provision of this
Revolving Credit Note.

 

I.           No Conflict with Credit Agreement. This Revolving Credit Note is
issued under, and subject to, the terms, covenants and conditions of the Credit
Agreement, which Credit Agreement is by this reference incorporated herein and
made a part hereof. No reference herein to the Credit Agreement and no provision
of this Revolving Credit Note or the Credit Agreement shall alter or impair the
obligations of Borrower, which are absolute and unconditional, to pay the
principal of and interest on this Revolving Credit Note at the place, at the
respective times, and in the currency prescribed in the Credit Agreement. If any
provision of this Revolving Credit Note conflicts or is inconsistent with any
provision of the Credit Agreement, the provisions of the Credit Agreement shall
govern.

 

J.           Restatement of Prior Revolving Credit Note. This Amended and
Restated Revolving Credit Note is a complete amendment to and restatement of
that certain Revolving Credit Promissory Note dated December 10, 2013, in the
original principal sum of Twelve Million Seven Hundred Fifty Thousand Dollars
($12,750,000.00), executed by the Existing Borrowers, payable to the order of
Lender (“Existing Revolving Credit Note”) and shall evidence all Indebtedness
previously evidenced by the Existing Revolving Credit Note and upon the
execution and delivery of this Revolving Credit Note to the Lender and the
occurrence of the Restatement Closing Date, the Existing Revolving Credit Note
shall be fully superseded and restated by this Revolving Credit Note and the
Existing Funded Outstandings thereunder continued as the Funded Outstandings
hereunder.

 

 Page 3 of 6 

 

 

IN WITNESS WHEREOF, this Revolving Credit Note has been executed effective as of
the date first hereinabove written.

 

  BORROWERS:       NEVADA GOLD & CASINOS, INC.,   a Nevada corporation        
By       Michael P. Shaunnessy,     President         NG WASHINGTON, LLC,   a
Washington limited liability company         By       Michael P. Shaunnessy,    
Manager         NG WASHINGTON II HOLDINGS, LLC,   a Delaware limited liability
company         By       Michael P. Shaunnessy,     Manager         NG
WASHINGTON II, LLC,   a Washington limited liability company         By      
Michael P. Shaunnessy,     Manager

 

Signature Page to Revolving Credit Note

 

 Page 4 of 6 

 

 

  NG WASHINGTON III, LLC,   a Washington limited liability company         By  
    Michael P. Shaunnessy,     Manager         NG SOUTH DAKOTA, LLC,   a South
Dakota limited liability company         By       Michael P. Shaunnessy,    
Manager         A.G. TRUCANO, SON & GRANDSONS, INC.,   a South Dakota
corporation         By       Michael P. Shaunnessy,     President         CGC
HOLDINGS, L.L.C.,   a Nevada limited liability company         By       Michael
P. Shaunnessy,     Manager         CGE ASSETS, INC.   (formerly Colorado Grand
Enterprises, Inc.),   a Colorado corporation         By       Michael P.
Shaunnessy,     President

 

Signature Page to Revolving Credit Note

 

 Page 5 of 6 

 

 

  GOLD MOUNTAIN DEVELOPMENT,   A LIMITED LIABILITY COMPANY,   a Colorado limited
liability company,   also known as GOLD MOUNTAIN DEVELOPMENT, LLC         By    
  Michael P. Shaunnessy,     Manager         NEVADA GOLD BVR, L.L.C.,   a Nevada
limited liability company         By       Michael P. Shaunnessy,     Manager  
      NEVADA GOLD & CASINOS LV, LLC,   a Nevada limited liability company      
  By       Michael P. Shaunnessy,     Manager

 

Signature Page to Revolving Credit Note

 

 Page 6 of 6 

 

EXHIBIT B

 

Loan No. 1301687001

 

FORM OF

NOTICE OF BORROWING

 

TO:MUTUAL OF OMAHA BANK, in its capacity as Lender under that certain Amended
and Restated Credit Agreement, dated effective as of November 30, 2015 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), by and between Nevada Gold & Casinos, Inc., a Nevada corporation,
Nevada Gold & Casinos LV, LLC, a Nevada limited liability company, NG
Washington, LLC, a Washington limited liability company, NG Washington II
Holdings, LLC, a Delaware limited liability company, NG Washington II, LLC, a
Washington limited liability company, NG Washington III, LLC, a Washington
limited liability company, NG South Dakota, LLC, a South Dakota limited
liability company, A.G. Trucano, Son & Grandsons, Inc., a South Dakota
corporation, CGC Holdings, L.L.C., a Nevada limited liability company, CGE
Assets, Inc. (formerly Colorado Grand Enterprises, Inc.), a Colorado
corporation, Gold Mountain Development, a Limited Liability Company, a Colorado
limited liability company, also known as Gold Mountain Development, LLC and
Nevada Gold BVR, L.L.C., a Nevada limited liability company (collectively, the
“Borrowers”) and the Lender. Capitalized terms used herein without definition
shall have the meanings attributed to them in Section 1.01 of the Credit
Agreement.

 

Pursuant to Section 2.03 of the Credit Agreement, this Notice of Borrowing
represents Borrowers' request for a Borrowing to be advanced on
____________________, 20____ (the "Funding Date") from the Lender in the
aggregate principal amount of
                                                                              ($                            ).
Proceeds of such Borrowing are to be disbursed on the Funding Date in
immediately available funds to the Designated Deposit Account, Account No.
_________________.

 

Each Borrower hereby certifies that (i) the representations and warranties
contained in Article IV of the Credit Agreement, in each of the Loan Documents
and in the Environmental Certificate (other than representations and warranties
which expressly speak only as of a different date, which shall be true and
correct in all material respects as of such date), shall be true and correct in
all material respects on and as of the Funding Date as though made on and as of
the Funding Date, except to the extent that such representations and warranties
are not true and correct as a result of a change which is permitted by the
Credit Agreement or by any other Loan Document or which has been otherwise
consented to by the Lender; (ii) no Default or Event of Default has occurred and
is continuing under the Credit Agreement or will result from the making of the
requested Borrowing; (iii) Borrowers have and shall have satisfied all
conditions precedent under the Credit Agreement required to be performed by them
on or before the Funding Date (unless otherwise waived pursuant to the terms of
the Credit Agreement); (iv) since the date of the most recent audited financial
statements referred to in Section 5.08 of the Credit Agreement, no Material
Adverse Change has or shall have occurred; and (v) the aggregate of all
Borrowings do not (and after giving effect to the requested Borrowing, will not)
exceed the Maximum Availability then in effect.

 

 

 

 

Borrower further certifies that as of the Funding Date, without regard to the
requested Borrowing:

 

A. The Aggregate Commitment is $           B. The Funded Outstandings are $    
      C. The Maximum Availability (A minus B) is $  

 

 2

 

 

Borrowers have caused this Notice of Borrowing to be executed and delivered, and
the certification and warranties contained herein to be made, by its Authorized
Representative this ____ day of _____________, __________.

 

  BORROWERS:       NEVADA GOLD & CASINOS, INC.,   a Nevada corporation;   A.G.
TRUCANO, SON & GRANDSONS, INC.,   a South Dakota corporation; and   CGE ASSETS,
INC.,   a Colorado corporation

 

  By       Michael P. Shaunnessy,     President      

 

  NG WASHINGTON, LLC,   a Washington limited liability company;   NG WASHINGTON
II HOLDINGS, LLC,   a Delaware limited liability company;   NG WASHINGTON II,
LLC,   a Washington limited liability company;   NG WASHINGTON III, LLC,   a
Washington limited liability company;   NG SOUTH DAKOTA, LLC,   a South Dakota
limited liability company;   CGC HOLDINGS, L.L.C.,   a Nevada limited liability
company;   GOLD MOUNTAIN DEVELOPMENT,   A LIMITED LIABILITY COMPANY,  

a Colorado limited liability company;

NEVADA GOLD BVR, L.L.C.,

  a Nevada limited liability company; and   NEVADA GOLD & CASINOS LV, LLC,   a
Nevada Limited liability company

 

  By       Michael P. Shaunnessy,     Manager

 

 3

 

 

EXHIBIT C

 

Loan No. 1301687001

 

AUTHORIZED REPRESENTATIVE'S CERTIFICATE OF

NEVADA GOLD & CASINOS, INC., NEVADA GOLD & CASINOS LV, LLC, NG WASHINGTON, LLC,
NG WASHINGTON II HOLDINGS, LLC, NG WASHINGTON II, LLC, NG WASHINGTON III, LLC,
NG SOUTH DAKOTA, LLC, A.G. TRUCANO, SON & GRANDSONS, INC., CGC HOLDINGS, L.L.C.,
CGE ASSETS, INC. (formerly COLORADO GRAND ENTERPRISES, INC.), GOLD MOUNTAIN
DEVELOPMENT, A LIMITED LIABILITY COMPANY, also known as GOLD MOUNTAIN
DEVELOPMENT, LLC, and NEVADA GOLD BVR, L.L.C.

 

The undersigned hereby certifies that the following persons currently have been
authorized to act on behalf of NEVADA GOLD & CASINOS, INC., a Nevada
corporation, NEVADA GOLD & CASINOS LV, LLC, a Nevada limited liability company,
NG WASHINGTON, LLC, a Washington limited liability company, NG WASHINGTON II
HOLDINGS, LLC, a Delaware limited liability company, NG WASHINGTON II, LLC, a
Washington limited liability company, NG WASHINGTON III, LLC, a Washington
limited liability company, NG SOUTH DAKOTA, LLC, a South Dakota limited
liability company, A.G. TRUCANO, SON & GRANDSONS, INC., a South Dakota
corporation, CGC HOLDINGS, L.L.C., a Nevada limited liability company, CGE
ASSETS, INC. (formerly Colorado Grand Enterprises, Inc.), a Colorado
corporation, GOLD MOUNTAIN DEVELOPMENT, A LIMITED LIABILITY COMPANY, a Colorado
limited liability company, also known as GOLD MOUNTAIN DEVELOPMENT, LLC and
NEVADA GOLD BVR, L.L.C., a Nevada limited liability company (collectively, the
“Borrowers”), holding the positions indicated next to their names, that the
signatures appearing opposite their names below are true and genuine signatures
of such persons, and that each of such persons shall be deemed an "Authorized
Representative" as defined in and for the purposes used in connection with the
Amended and Restated Credit Agreement (as may be amended or modified from time
to time, the "Credit Agreement"), dated effective as of November 30, 2015,
executed by and between the Borrowers and Mutual of Omaha Bank (together with
its successors and assigns, the "Lender") and, except as limited below, such
Authorized Representatives are authorized to deliver on behalf of the Borrower
Consolidation the Notices of Borrowings, Compliance Certificates and all other
notices, requests, reports, consents, certifications and authorizations on
behalf of the Borrower Consolidation under the Credit Agreement, and each has
been duly authorized by the Borrower Consolidation as "Authorized
Representative" for all purposes under the Credit Agreement and each related
Loan Document.

 

All capitalized terms used but not otherwise defined in this Certificate shall
have the same meanings as set forth in the Credit Agreement.

 

 

 

 

NAME POSITION IN
EACH MEMBER OF
THE BORROWER
CONSOLIDATION SIGNATURE       Michael P. Shaunnessy President/Manager
                                                       James Meier Chief
Financial Officer                                                             

 

IN WITNESS WHEREOF, the undersigned have executed the foregoing Certificate on
behalf of the Borrowers effective as of the 30th day of November, 2015.

 

  BORROWERS:         NEVADA GOLD & CASINOS, INC.,   a Nevada corporation        
By       Michael P. Shaunnessy,     President

 

  NG WASHINGTON, LLC,   a Washington limited liability company         By      
Michael P. Shaunnessy,     Manager

 

  NG WASHINGTON II HOLDINGS, LLC,   a Delaware limited liability company        
By       Michael P. Shaunnessy,     Manager      

 

 2 

 

 

  NG WASHINGTON II, LLC,   a Washington limited liability company         By    
  Michael P. Shaunnessy,     Manager

 

  NG WASHINGTON III, LLC,   a Washington limited liability company         By  
    Michael P. Shaunnessy,     Manager

 

  NG SOUTH DAKOTA, LLC,   a South Dakota limited liability company         By  
    Michael P. Shaunnessy,     Manager

 

  A.G. TRUCANO, SON & GRANDSONS, INC.,   a South Dakota corporation         By  
    Michael P. Shaunnessy,     President

 

  CGC HOLDINGS, L.L.C.,   a Nevada limited liability company         By      
Michael P. Shaunnessy,     Manager

 

 3 

 

 

  CGE ASSETS, INC.   (formerly Colorado Grand Enterprises, Inc.),   a Colorado
corporation         By       Michael P. Shaunnessy,     President

 

  GOLD MOUNTAIN DEVELOPMENT,   A LIMITED LIABILITY COMPANY,   a Colorado limited
liability company,   also known as GOLD MOUNTAIN DEVELOPMENT, LLC         By    
  Michael P. Shaunnessy,     Manager

 

  NEVADA GOLD BVR, L.L.C.,   a Nevada limited liability company         By      
Michael P. Shaunnessy,     Manager

 

  NEVADA GOLD & CASINOS LV, LLC,   a Nevada limited liability company         By
      Michael P. Shaunnessy,     Manager

 

 

 4 

 

EXHIBIT D

 

Loan No. 1301687001

 

CLOSING CERTIFICATE

 

TO:MUTUAL OF OMAHA BANK, in its capacity as the Lender under that certain
Amended and Restated Credit Agreement, dated effective as of November 30, 2015
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), by and between Lender and Nevada Gold & Casinos, Inc., a Nevada
corporation, Nevada Gold & Casinos LV, LLC, a Nevada limited liability company,
NG Washington, LLC, a Washington limited liability company, NG Washington II
Holdings, LLC, a Delaware limited liability company, NG Washington II, LLC, a
Washington limited liability company, NG Washington III, LLC, a Washington
limited liability company, NG South Dakota, LLC, a South Dakota limited
liability company, A.G. Trucano, Son & Grandsons, Inc., a South Dakota
corporation, CGC Holdings, L.L.C., a Nevada limited liability company, CGE
Assets, Inc. (formerly Colorado Grand Enterprises, Inc.), a Colorado
corporation, Gold Mountain Development, a Limited Liability Company, a Colorado
limited liability company, also known as Gold Mountain Development, LLC and
Nevada Gold BVR, L.L.C., a Nevada limited liability company (collectively, the
“Borrowers”). Capitalized terms used herein without definition shall have the
meanings attributed to them in Section 1.01 of the Credit Agreement.

 

THE UNDERSIGNED, as an Authorized Representative of Borrowers, does hereby make
the following certifications effective as of the Restatement Closing Date
pursuant to Article IIIA of the Credit Agreement:

 

a.        the representations and warranties contained in Article IV of the
Credit Agreement and contained in each of the other Loan Documents (other than
representations and warranties which speak only as of a different date, which
shall be true and correct as of such date) are true and correct on and as of the
Closing Date, except to the extent that such representations and warranties are
not true and correct as a result of a change which is permitted by this Credit
Agreement or by any other Loan Document, or which is otherwise consented to by
Lender;

 

b.        no event (i) has occurred and is continuing or (ii) would occur as a
result of advancing any Borrowing contemplated under the Credit Agreement on the
Closing Date, or (iii) would result from the making thereof, which (in the case
of (i), (ii) or (iii) above) constitutes a Default or Event of Default under the
terms of the Credit Agreement;

 

   

 

 

c.        each Borrower has, as of the Restatement Closing Date, performed and
complied with all agreements and conditions that are contained in the Credit
Agreement and that the Credit Agreement requires Borrowers to perform and comply
with prior to or as of the funding of the Closing Disbursements, including,
without limitation, each of the Conditions Related to the Purchase Transaction
set forth in Section 3.18 for the occurrence of the “Closing” as defined in the
Purchase Agreement;

 

d.        the Credit Agreement, the Revolving Credit Note, and each of the other
Loan Documents required to be executed and delivered on or prior to the
Restatement Closing Date have been duly authorized by all necessary action of
each Borrower's members and have been executed and delivered on behalf of each
Borrower by a duly authorized representative thereof;

 

e.        the Borrowers have received all necessary approvals with respect to
the Credit Agreement, the Revolving Credit Note, and each of the other Loan
Documents from all applicable Governmental Authorities;

 

f.         Each of NGW, NGWII, NGWIII and AGTSG hold all necessary licenses,
permits, approvals and authorizations from all necessary Gaming Authorities for
the operation of the Washington Casino Operations, as applicable, with respect
to NGW, NGWII and NGWIII, and for the operation of the Deadwood Slot Route
Operation, with respect to AGTSG. NGCLV holds all necessary licenses, permits,
approvals and authorizations from all necessary Nevada Gaming Authorities for
the ownership and operation of the Club Fortune Casino Operations; and

 

g.        concurrently herewith, Borrowers have delivered to Lender a true and
correct copy of the articles of incorporation or organization, as applicable,
and bylaws or operating agreement, as applicable, of each of the Borrowers,
together with all amendments thereto adopted through the date hereof. Other than
with respect to the Amendment to the Articles of Organization of NGCLV and the
Operating Agreement of NGCLV, there has been no amendments to the Articles of
Incorporation or Bylaws or Articles of Organization or Operating Agreements, as
applicable, to the other members of the Borrower Consolidation since
December 10, 2013.

 

[The remainder of this page is intentionally blank; and the signature pages
follow.]

 

  2 

 

 

IN WITNESS WHEREOF, the undersigned have executed this Closing Certificate
effective as of the 30th day of November, 2015.

 

  BORROWERS:       NEVADA GOLD & CASINOS, INC.,   a Nevada corporation

 

  By       Michael P. Shaunnessy,     President

 

  NG WASHINGTON, LLC,   a Washington limited liability company         By      
Michael P. Shaunnessy,     Manager

 

  NG WASHINGTON II HOLDINGS, LLC,   a Delaware limited liability company        
By       Michael P. Shaunnessy,     Manager

 

  NG WASHINGTON II, LLC,   a Washington limited liability company         By    
  Michael P. Shaunnessy,     Manager

 

  NG WASHINGTON III, LLC,   a Washington limited liability company         By  
    Michael P. Shaunnessy,     Manager

 

  3 

 

 

  NG SOUTH DAKOTA, LLC,   a South Dakota limited liability company         By  
    Michael P. Shaunnessy,     Manager

 

  A.G. TRUCANO, SON & GRANDSONS, INC.,   a South Dakota corporation         By  
    Michael P. Shaunnessy,     President

 

  CGC HOLDINGS, L.L.C.,   a Nevada limited liability company         By      
Michael P. Shaunnessy,     Manager

 

  CGE ASSETS, INC.   (formerly Colorado Grand Enterprises, Inc.), a Colorado
corporation         By       Michael P. Shaunnessy,     President

 

  4 

 

 

  GOLD MOUNTAIN DEVELOPMENT,   A LIMITED LIABILITY COMPANY,   a Colorado limited
liability company,   also known as GOLD MOUNTAIN DEVELOPMENT, LLC         By    
  Michael P. Shaunnessy,     Manager

 

  NEVADA GOLD BVR, L.L.C.,   a Nevada limited liability company         By      
Michael P. Shaunnessy,     Manager

 

  NEVADA GOLD & CASINOS LV, LLC,   a Nevada limited liability company         By
      Michael P. Shaunnessy,     Manager

 

  5 

 

 

EXHIBIT E

 

Loan No. 1301687001

 

COMPLIANCE CERTIFICATE

 

TO:                    MUTUAL OF OMAHA BANK, Lender

 

Reference is made to that certain Amended and Restated Credit Agreement, dated
effective as of November 30, 2015 (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”), by and between Lender and
Nevada Gold & Casinos, Inc., a Nevada corporation, Nevada Gold & Casinos LV,
LLC, a Nevada limited liability company, NG Washington, LLC, a Washington
limited liability company, NG Washington II Holdings, LLC, a Delaware limited
liability company, NG Washington II, LLC, a Washington limited liability
company, NG Washington III, LLC, a Washington limited liability company,
NG South Dakota, LLC, a South Dakota limited liability company, A.G. Trucano,
Son & Grandsons, Inc., a South Dakota corporation, CGC Holdings, L.L.C., a
Nevada limited liability company, CGE Assets, Inc. (formerly Colorado Grand
Enterprises, Inc.), a Colorado corporation, Gold Mountain Development, a Limited
Liability Company, a Colorado limited liability company, also known as Gold
Mountain Development, LLC and Nevada Gold BVR, L.L.C., a Nevada limited
liability company (collectively, the “Borrowers”). Terms defined in the Credit
Agreement and not otherwise defined in this Compliance Certificate
(“Certificate”) shall have the meanings defined and described in the Credit
Agreement. This Certificate is delivered in accordance with Section 5.08(e) of
the Credit Agreement.

 

The period under review is the Fiscal Quarter ended    [INSERT DATE] , together
with, where indicated, the three (3) immediately preceding Fiscal Quarters on a
rolling four (4) Fiscal Quarter basis.

 

I 

 

COMPLIANCE WITH AFFIRMATIVE COVENANTS

 

A. FF&E (Section 5.01): Please state whether or not all FF&E has been purchased
and installed in the Business Operations free and clear of all liens,
encumbrances or claims, other than Permitted Encumbrances.     yes/no          
B. Permits; Licenses and Legal Requirements  (Section 5.02):      

 

 

 

 

  a. State whether or not there have been any changes in the Gaming Permits or
material licenses with respect to the Business Operations. If so, please attach
a description of such changes.     yes/no               b. State whether or not
there have been any changes in the FinCEN registrations or BSA/AML Program
maintained with respect to the Business Operations. If so, please attach a
description of such changes.     yes/no

 

C. Liens Filed (Section 5.03): Report any liens filed against the Business
Operations or Collateral Properties and the amount claimed in such liens.
Describe actions being taken with respect thereto.               D. Additional
Real Property (Section 5.06(b)): Attach a legal description of any other real
property or rights to the use of real property acquired subsequent to the
Restatement Closing Date which is used in any material manner in connection with
the Business Operations and describe such use. Attach evidence that such real
property or rights to the use of such real property has been added as Collateral
under the Credit Agreement.             E. Significant Shareholder Reporting
(Section 5.08(h)): State whether or not there are any Significant Shareholder’s
that have not been previously reported or any change to the previously reported
Significant Shareholders. If so, please attach a revised Schedule of Significant
Shareholders, Schedule 4.01(c), with respect to such new Significant
Shareholders.     yes/no

 

2 

 

 

F. Permitted Encumbrances (Section 5.11): Describe any mortgage, deed of trust,
pledge, lien, security interest, encumbrance, attachment, levy, distraint or
other judicial process or burden affecting the Collateral other than the
Permitted Encumbrances. Describe any matters being contested in the manner
described in Sections 5.03 and 5.10 of the Credit Agreement.                 G.
Suits, Actions or Material Changes (Section 5.17): Describe on a separate sheet
any matters requiring notice and advice to Lender under Section 5.17(a) through
(e).                 H. Tradenames, Trademarks and Servicemarks (Section 5.19):
Describe on a separate sheet any matters requiring advice to Lender under
Section 5.19.                 I. Notice of Hazardous Materials (Section 5.20):
State whether or not to your knowledge there are any matters requiring notice to
Lender under Section 5.20. If so, attach a detailed summary of such matter(s).  
              J. Compliance with Adjacent Site Lease, Washington Casino Leases
and Deadwood Slot Route Leases (Section 5.22):      

 

  a. Describe all defaults, if any, which occurred during the period under
review under any of the Adjacent Site Lease, Washington Casino Leases or any of
the Deadwood Slot Route Leases. Describe any modifications or amendments to any
of the Adjacent Site Lease, Washington Casino Leases or any of the Deadwood Slot
Route Leases. State whether or not such modifications or amendments have been
consented to by Lender as required under Section 5.22 of the Credit Agreement.  
   

 

3 

 

 

  b. State whether or not there were any changes to the information set forth on
the Lease Summary Schedule (Schedule 5.08(d)(i)) during the Fiscal Quarter under
review. If so, please attach an updated Lease Summary Schedule setting forth
such changes.                     c. State whether or not there were any changes
to the information set forth on the Schedule of Slot Route Locations (Schedule
3.11) during the Fiscal Quarter under review. If so, please attach an updated
Schedule of Slot Route Locations setting forth such changes.      

 

K. Restriction on Payment of Seller Subordinated Debt (Section 5.23): Report the
amount of any payments made on the Seller Subordinated Debt:                  
Interest   $     Principal   $             L. Compliance with Restrictions on
Payment of Permitted Indenture Subordinated Debt (Section 5.24): Report the
amount of any Cash payments made on the Permitted Indenture Subordinated Debt:  
                Interest   $     Principal [None permitted]   $             M.
Restriction on Development or Use of Gold Mountain Real Property (Section 5.26):
State whether or not any development or use, including any disturbance of the
surface materials, was undertaken during the Fiscal Quarter under review. If so,
please attach a description of such development or use.     yes/no

 

4 

 

 

N. Restricted and Unrestricted Subsidiaries (Section 5.27): List on a separate
sheet the name and state of incorporation or origination of each Restricted and
Unrestricted Subsidiary, other than Restricted and Unrestricted Subsidiaries
which existed as of the Closing Date or which have been disclosed in prior
Compliance Certificates.                   Has each Restricted Subsidiary
executed a Subsidiary Guaranty?     yes/no

 

II.

 

FINANCIAL COVENANTS OF THE BORROWER CONSOLIDATION

  

A. Total Leverage Ratio (Section 6.01): To be calculated with reference to the
Borrower Consolidation as of each Fiscal Quarter, commencing with the Fiscal
Quarter ending January 31, 2016:         TOTAL FUNDED DEBT:                   a.
The total of the Funded Outstandings on the Credit Facility as of the last day
of the Fiscal Quarter under review.   $                 b. Plus the total, as of
the last day of the Fiscal Quarter under review, of both the long-term and
current portions (without duplication) of all other interest bearing
Indebtedness (including Contingent Liabilities and Seller Subordinated Debt, but
excluding Permitted Indenture Subordinated Debt).   + $                 c. Plus
the total, as of the last day of the Fiscal Quarter under review of both the
long-term and current portions (without duplication) of all Capitalized Lease
Liabilities.   + $  

 

5 

 

 

  d. Less the aggregate amount of all Unrestricted Cash on deposit with Lender
as of the last day of the Fiscal Quarter under review.   - $                 e.
TOTAL FUNDED DEBT   $       (a + b + c - d)           Divided (¸) by:   ¸  

 

    EBITDA                       To be calculated on a cumulative basis with
respect to the Fiscal Quarter under review and the most recently ended three (3)
preceding Fiscal Quarters on a rolling four (4) Fiscal Quarter basis:       f.
Net Income.   $               g. Less any one-time non-Cash gain to the extent
reflected in such Net Income   - $               h. Plus any losses on sales of
assets and other extraordinary losses and one-time non-Cash charges to the
extent reflected in such Net Income   + $               i. Plus Interest Expense
(expensed and capitalized) to the extent deducted in the determination of Net
Income   + $               j. Plus the aggregate amount of the provision for
federal and state taxes on or measured by income or profit for the period under
review (whether or not payable during such period) to the extent deducted in the
determination of Net Income   + $               k. Plus depreciation,
amortization and all other non-cash expenses for the period under review to the
extent deducted in the determination of Net Income   + $  

 

6 

 

 

  l. Plus non-recurring fees incurred as a result of the Credit Facility to the
extent deducted in the determination of Net Income   + $                 m.
Total EBITDA                       (f - g + h + i + j + k + l)                  
    Provided, however, with respect to the Fiscal Quarters ending January 31,
2016, April 30, 2016, July 31, 2016 and October 31, 2016, EBITDA realized by
NGCLV at the Club Fortune Casino Facility shall be annualized using the
following calculations:      

 

  (i) For the Fiscal Quarter ending January 31, 2016, the actual EBITDA realized
by NGCLV at the Club Fortune Casino Facility during the calendar months ending
December 31, 2015 and January 31, 2016 shall be multiplied by six (6);      $  
                          (ii) For the Fiscal Quarter ending April 30, 2016, the
actual amount of the EBITDA realized by NGCLV at the Club Fortune Casino
Facility for that Fiscal Quarter shall be multiplied by four (4);   $          
                  (iii) For the Fiscal Quarter ending July 31, 2016, the actual
amount of EBITDA realized by NGCLV at the Club Fortune Casino Facility for the
Fiscal Quarters ending April 30, 2016 and July 31, 2016 shall be multiplied by
two (2); and   $  

 

7 

 

 

  (iv) For the Fiscal Quarter ending October 31, 2016, the actual amount of
EBITDA realized by NGCLV at the Club Fortune Casino Facility for the Fiscal
Quarters ending April 30, 2016, July 31, 2016 and October 31, 2016, shall be
multiplied by four-thirds (4/3).      $  

 

  n. Total Leverage Ratio           (e ¸ m)     :1.0   Maximum Permitted:      

 

 Fiscal Quarter End   Maximum
Total Leverage
Ratio       As of the Fiscal Quarter ending January 31, 2016 and as of each
Fiscal Quarter end through the Fiscal Quarter ending January 31, 2017   3.00 to
1.00 As of the Fiscal Quarter ending April 30, 2017 and as of each Fiscal
Quarter end through the Fiscal Quarter ending January 31, 2018   2.75 to 1.00 As
of the Fiscal Quarter ending April 30, 2018 and as of each Fiscal Quarter end
through Credit Facility Termination   2.50 to 1.00

 

B. Lease Adjusted Fixed Charge Coverage Ratio (Section 6.02): To be calculated
with respect to the Borrower Consolidation for each Fiscal Quarter commencing
with the Fiscal Quarter ending January 31, 2016, in each instance with reference
to the Fiscal Quarter under review and the most recently ended three (3)
preceding Fiscal Quarters on a four (4) Fiscal Quarter basis (other than as
otherwise provided in the definition of Annualized Adjusted Coverage
Denominator):

 

8 

 

 

  Lease Adjusted Cash Flow      

 

  a. Total EBITDA (Enter II A (m) above)   $     b. Less the aggregate amount of
actually paid and/or accrued taxes net of tax benefits   - $                    
        c. Plus non-recurring expenses (less non-recurring income) permitted by
Lender   + $                 d. Less the aggregate amount of Distributions   - $
                e. Less the aggregate amount of Non-Financed Capital
Expenditures   - $                 f. Plus Net Proceeds of any Equity Offering
permitted by Lender   + $                 g. Plus Facilities Lease Expense   + $
    h. Lease Adjusted Cash Flow            (a - b + c - d - e + f + g)   $  

 

  Divided (¸) by:                   Adjusted Coverage Denominator - the sum of:
     

 

  i. The aggregate amount of Interest Expense (expensed and capitalized)   $    
            j. Plus the aggregate of Scheduled Reduction Payments, if any   + $
                k. Plus all payments of principal and interest actually paid on
Seller Subordinated Debt   + $                 l. Plus all payments of interest
actually paid on Permitted Indenture Subordinated Debt   + $                 m.
Plus the aggregate amount of mandatory payments required to be made on all other
interest bearing indebtedness.   + $                 n. Plus the aggregate
amount of mandatory payments required to be made on all Capitalized Lease
Liabilities.   + $  

 

9 

 

 

  o. Plus the aggregate of Facilities Lease Expense   + $                 p.
Total Adjusted Coverage Denominator.           (i + j + k + l + m + n + o)   $  

 

  Provided, however, for the Fiscal Quarters ending January 31, 2016, April 30,
2016, July 31, 2016 and October 31, 2016, the aggregate of the Adjusted Coverage
Denominator shall be determined on an annualized basis using the following
calculations:         

 

  (i) For the Fiscal Quarter ending January 31, 2016, the actual aggregate
amount of the Adjusted Coverage Denominator calculated for the calendar months
ending December 31, 2015 and January 31, 2016 shall be multiplied by six (6);  
         (ii) For the Fiscal Quarter ending April 30, 2016, the actual aggregate
amount of the Adjusted Coverage Denominator for that Fiscal Quarter shall be
multiplied by four (4);         (iii) For the Fiscal Quarter ending July 31,
2016, the actual aggregate amount of the Adjusted Coverage Denominator for the
Fiscal Quarters ending April 30, 2016 and July 31, 2016 shall be multiplied by
two (2); and         (iv) For the Fiscal Quarter ending October 31, 2016, the
actual aggregate amount of the Adjusted Coverage Denominator for the Fiscal
Quarters ending April 30, 2016, July 31, 2016, and October 31, 2016 shall be
multiplied by four-thirds (4/3).      

 

10 

 

 

  Adjusted Fixed Charge Coverage Ratio         (h ¸ p)        :1   Minimum
required: 1.15 to 1.00.                  

C. Maintenance Capital Expenditure Requirement (Section 6.03): To be calculated
with respect to the Borrower Consolidation for each Fiscal Year commencing with
the Fiscal Year ending April 30, 2016.                 Maintenance Capital
Expenditures      

 

  a. Set forth amount of Maintenance Capital Expenditures made during the Fiscal
Year under review.   $                   Minimum required: $500,000.00 for the
Fiscal Year ending April 30, 2016 and thereafter $1,000,000.00      

 

D. Limitation on Indebtedness (Section 6.04):      

 

  a. Set forth the aggregate amount of Interest Rate Hedges in effect as of the
end of the Fiscal Quarter under review.   $                 b. Set forth the
amount of the Aggregate Commitment as of the end of the Fiscal Quarter under
review.

 

 

$                   Requirement: (a) must not exceed (b).         c. Set forth
the aggregate amount of Seller Subordinated Debt owing by the Borrower
Consolidation   $                   Requirement: May not exceed $1,000,000.00  
                  d. Set forth aggregate outstanding amount of Permitted
Indenture Subordinated Debt.   $                   Requirement: Must satisfy
each requirement for Permitted Indenture Subordinated Debt.      

 

11 

 

 

  e. Set forth the aggregate amount of Unsecured Indebtedness, secured purchase
money Indebtedness and Capital Lease Liabilities.   $                   Maximum
Aggregate Permitted up to $500,000.00                     f. Indebtedness and
contractual obligations that are assumed by NGCLV as “Assumed Liabilities”, as
defined and described in Section 2.1 of the Purchase Agreement, as of the
Restatement Closing Date.   $                 g. Set forth the aggregate amount
of all other unsecured Indebtedness (other than trade payables and contingent
liabilities).   $                   Requirement: May not exceed $500,000.00.    
                h. Set forth the amount and a brief description of any
Indebtedness of the Borrower Consolidation not permitted under Section 6.04.   $
 

 

E. Limitation on Distributions (Section 6.05):      

 

  a. Set forth aggregate amount of Distributions (including all principal and
interest payments on Seller Subordinated Debt and interest payments on Permitted
Indenture Subordinated Debt).   $                 b. Set forth the date, amount
and a brief description of each Distribution made by the Borrower Consolidation
not permitted under Section 6.05.      

 

F. Contingent Liabilities (Section 6.06):

 

  a. Set forth the cumulative aggregate amount of Contingent Liabilities
incurred by the Borrower Consolidation.   $                   Requirement: None
permitted without consent of Lender.      

 

12 

 

 

G. Investment Restrictions (Section 6.07):

 

  a. Set forth the aggregate amount of New Venture Investments made during the
period commencing on the Closing Date through the end of the Fiscal Quarter
under review.   $                   Requirements:      

 

  (i) Must not exceed $2,500,000.00 in the aggregate (may include up to
$1,000,000.00 in Seller Subordinated Debt)                     (ii) Each
Acquisition acquired by such New Venture Investment must be added as Collateral.
     

 

H. Total Liens (Section 6.08): On a separate sheet describe in detail any and
all Liens on any assets of the Borrower Consolidation not permitted under
Section 6.08.                 I. Change of Control (Section 6.09): State whether
or not a Change of Control has occurred.                

 

J.

Sale of Assets, Consolidation, Merger or Liquidation (Section 6.10):      

 

  a. On a separate sheet describe any and all mergers, consolidations,
liquidations and/or dissolutions not permitted under Section 6.10.              
      b. With respect to the determination of Excess Capital Proceeds, please
set forth:      

 

  (i) The amount of Net Proceeds received by the Borrower Consolidation during
the current Fiscal Year from the Disposition of FF&E and other items of personal
property Collateral which have not been identified as Designated Replacement
Assets.   $  

 

13 

 

 

  (ii) Plus the amount of Net Proceeds from the Disposition of FF&E and other
items of personal property Collateral that have been identified as Designated
Replacement Assets but which have not been replaced by the end of the
consecutive 12 month period following such Disposition, which 12 month period
has ended during the current Fiscal Year.   + $                 (iii) Plus the
amount of Cash payments received during the current Fiscal Year for principal
owing under any promissory notes or deferred payment arrangements payable to the
order of any member of the Borrower Consolidation from the Disposition of
Collateral during the current or any prior Fiscal Year.   + $  

 

    Amount of Excess Capital Proceeds during the current Fiscal Year   $      
[(i) + (ii) + (iii)]                       Requirement: On or before July 1 of
the following Fiscal Year, must make a Mandatory Commitment Reduction for amount
of Excess Capital Proceeds in excess of $250,000                        c. Has
any Collateral been contributed to an Unrestricted Subsidiary?     yes/no      
          If so, attach a description and state whether or not the Borrower
Consolidation has complied with each requirement under 6.12(e).      

 

14 

 

 

          K. No Transfer of Ownership; Equity Offerings (Section 6.11):      

 

  a. On a separate sheet describe in detail any transfers or hypothecations of
NGC ownership interests in any other member of the Borrower Consolidation,
including, without limitation, CGE and NGWII not permitted under Section 6.11.  
                  b. Set forth aggregate amount of the Net Proceeds received by
the Borrower Consolidation from any Disqualified Equity Offerings during the
period under review.   $                   Requirement: Must first receive prior
written consent of Lender.      

 

L. ERISA (Section 6.12): Describe on a separate sheet any matters requiring
notice to Lender under Section 6.12.                 M. Margin Regulations
(Section 6.13): Set forth the amount(s) of and describe on a separate sheet of
paper any proceeds of the Credit Facility used by Borrowers in violation of
Section 6.13.   $             N. Transactions with Affiliates (Section 6.14):
Describe on a separate sheet any transactions with Affiliates not permitted
under Section 6.14.                 O. Limitation on Additional Subsidiaries
(Section 6.15): On a separate sheet, describe any Subsidiaries (other than
members of the Borrower Consolidation) created by any member of the Borrower
Consolidation. State whether or not the creation of such Subsidiaries has been
consented to by the Lender as required under Section 6.15 of the Credit
Agreement.                 P. Limitation on Consolidated Tax Liability (Section
6.16): Describe on a separate sheet any taxes paid in violation of Section 6.16.
     

 

15 

 

 

III.

 

APPLICABLE MARGIN DETERMINATION

 

Commencing with the Fiscal Quarter ending January 31, 2016, the Applicable
Margin, based on the Total Leverage Ratio (See II A(n) above) is:   %

 

The change in the Applicable Margin, if any, shall be effective on [insert date
which is the first (1st) day of the third (3rd) month immediately following the
Fiscal Quarter end set forth above] .

 

IV.

 

NONUSAGE FEE CALCULATION

 

(Section 2.08(b): To be calculated with respect to the
Fiscal Quarter under review:

 

  a. Amount of Maximum Availability in excess of $1,000,000 as of the end of the
Fiscal Quarter under review   $                 b. Nonusage Percentage:   x
0.500%               c. Gross Nonusage Fee   $       (a times b)                
    d. Number of days in Fiscal Quarter under review                     e.
Nonusage Fee for Fiscal Quarter under review   $       (c ¸ 360 x d)      

 

V.

 

PERFORMANCE OF OBLIGATIONS

 

A review of the activities of the Borrower Consolidation during the fiscal
period covered by the attached financial statements has been made under my
supervision with a view to determining whether during such fiscal period any
Default or Event of Default has occurred and is continuing. Except as described
in an attached document or in an earlier Certificate, to the best of my
knowledge, as of the date of this Certificate, there is no Default or Event of
Default that has occurred and remains continuing.

 

16 

 

 

VI.

 

NO MATERIAL ADVERSE CHANGE

 

To the best of my knowledge, except as described in an attached document or in
an earlier Certificate, no Material Adverse Change has occurred since the date
of the most recent Certificate delivered to the Lender.

 

DATED this ____ day of _____________, 20___.

 

  NEVADA GOLD & CASINOS, INC.,   NG WASHINGTON, LLC,   NG WASHINGTON II
HOLDINGS, LLC,  

NG WASHINGTON II, LLC,

NG WASHINGTON III, LLC,

NG SOUTH DAKOTA, LLC,

A.G. TRUCANO, SON & GRANDSONS, INC.,

CGC HOLDINGS, L.L.C.,

 

CGE ASSETS, INC. (formerly COLORADO GRAND ENTERPRISES, INC.),

GOLD MOUNTAIN DEVELOPMENT, A LIMITED LIABILITY COMPANY, also known as GOLD
MOUNTAIN DEVELOPMENT, LLC,

NEVADA GOLD BVR, L.L.C., and

  NEVADA GOLD & CASINOS LV, LLC       By           Name           Title: Senior
Officer

 

17 

 

 

EXHIBIT F

 

Loan No. 1301687001

 

FORM OF

GENERAL CONTINUING SUBSIDIARY GUARANTY

 

THIS GENERAL CONTINUING SUBSIDIARY GUARANTY (“Subsidiary Guaranty”), dated as of
___________, 20___, is executed and delivered by
________________________________, together with each other Person who may from
time to time become a party hereto by execution of a Certificate of Joinder as
described hereinbelow (each individually a “Guarantor” and collectively the
“Guarantors”), in favor of Beneficiary, as hereinafter defined, and in light of
the following:

 

WHEREAS, for the purpose of this Subsidiary Guaranty, all capitalized terms not
otherwise specifically defined herein shall have the same meaning given them in
Section 1.01 of the Credit Agreement as though fully restated verbatim;

 

WHEREAS, Borrowers and Lender entered into the Credit Agreement hereinafter
defined;

 

WHEREAS, Guarantors will directly or indirectly benefit from the Credit Facility
and financial accommodations established in favor of Borrowers by reason of the
contributions, capitalization and other financial and economic support to be
provided to the Guarantors by Borrowers; and

 

WHEREAS, in order to induce Lender to make Borrowings, loans, advances and
extend financial accommodations to and for the benefit of Borrowers pursuant to
the Credit Agreement, including, without limitation, all future advances made
thereunder, whether obligatory or at the option of Lender, and in consideration
thereof, and in consideration of any Borrowings, loans, advances, or other
financial accommodations heretofore or hereafter extended by Lender to
Borrowers, whether pursuant to the Credit Agreement or otherwise, Guarantors
have agreed to guaranty the Guaranteed Obligations.

 

NOW, THEREFORE, in consideration of the foregoing, Guarantors hereby jointly and
severally agree, in favor of Beneficiary, as follows:

 

1.          Definitions and Construction.

 

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

 

 

 

 

“Beneficiary” shall mean the Lender, together with its successors and assigns.

 

“Borrowers” shall mean collective reference to Nevada Gold & Casinos, Inc., a
Nevada corporation, Nevada Gold & Casinos LV, LLC, a Nevada limited liability
company, NG Washington, LLC, a Washington limited liability company, NG
Washington II Holdings, LLC, a Delaware limited liability company, NG Washington
II, LLC, a Washington limited liability company, NG Washington III, LLC, a
Washington limited liability company, NG South Dakota, LLC, a South Dakota
limited liability company, A.G. Trucano, Son & Grandsons, Inc., a South Dakota
corporation, CGC Holdings, L.L.C., a Nevada limited liability company, CGE
Assets, Inc. (formerly Colorado Grand Enterprises, Inc.), a Colorado
corporation, Gold Mountain Development, a Limited Liability Company, a Colorado
limited liability company, also known as Gold Mountain Development, LLC and
Nevada Gold BVR, L.L.C., a Nevada limited liability company.

 

“Credit Agreement” shall mean that certain Amended and Restated Credit
Agreement, dated effective as of November 30, 2015, executed by and among
Borrowers, on the one hand, and Beneficiary, on the other hand, together with
all Schedules, Exhibits and attachments thereto and all amendments,
modifications, restatements and revisions thereof.

 

“Credit Facility Indebtedness” shall mean any and all obligations, indebtedness,
or liabilities of any kind or character owed to Beneficiary and arising directly
or indirectly out of or in connection with the Credit Agreement, the Revolving
Credit Note, the Environmental Certificate, or any of the other Loan Documents,
including all such obligations, indebtedness, or liabilities, whether for
principal, interest (including post petition interest and including any and all
interest which, but for the application of the provisions of the Bankruptcy
Code, would have accrued on such amounts), premium, reimbursement obligations,
fees, costs, expenses (including attorneys' fees), or indemnity obligations,
whether heretofore, now, or hereafter made, incurred, or created, whether
voluntarily or involuntarily made, incurred, or created, whether secured or
unsecured (and if secured, regardless of the nature or extent of the security),
whether absolute or contingent, liquidated or unliquidated, or determined or
indeterminate, whether Borrowers are liable individually or jointly with others.

 

“Guaranteed Obligations” shall mean: (a) the due and punctual payment of the
principal of, and interest (including post petition interest and including any
and all interest which, but for the application of the provisions of the
Bankruptcy Code, would have accrued on such amounts) on, and premium, if any, on
the Revolving Credit Note; and (b) the due and punctual payment of all present
or future Credit Facility Indebtedness owing by Borrowers.

 

2 

 

 

“Guarantor(s)” shall have the meaning set forth in the preamble to this
Subsidiary Guaranty.

 

“Lender” shall mean Mutual of Omaha Bank, its successors and assigns.

 

“Subsidiary Guaranty” shall have the meaning set forth in the preamble to this
document.

 

(b)          Construction. Unless the context of this Subsidiary Guaranty
clearly requires otherwise, references to the plural include the singular,
references to the singular include the plural, the term “including” is not
limiting, and the term “or” has the inclusive meaning represented by the phrase
“and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and other similar
terms refer to this Subsidiary Guaranty as a whole and not to any particular
provision of this Subsidiary Guaranty. Any reference in this Subsidiary Guaranty
to any of the following documents includes any and all alterations, amendments,
extensions, modifications, renewals, or supplements thereto or thereof, as
applicable: the Loan Documents; the Credit Agreement; this Subsidiary Guaranty;
the Environmental Certificate; and the Revolving Credit Note.

 

2.          Guaranteed Obligations. Guarantors hereby jointly and severally,
irrevocably and unconditionally guaranty to Beneficiary, as and for their own
debt, until final and indefeasible payment thereof has been made, (a) the due
and punctual payment of the Guaranteed Obligations, in each case when the same
shall become due and payable, whether at maturity, pursuant to a mandatory
repayment requirement, by acceleration, or otherwise; it being the intent of
Guarantors that the guaranty set forth herein shall be a guaranty of payment and
not a guaranty of collection; (b) the punctual and faithful performance,
keeping, observance, and fulfillment by Borrowers of all of the agreements,
conditions, covenants, and obligations of Borrowers contained in the Credit
Agreement, the Revolving Credit Note, the Environmental Certificate and under
each of the other Loan Documents; and (c) in addition to the amounts stated
above, any and all reasonable expenses (including reasonable counsel fees and
expenses) incurred by the Beneficiary in enforcing any rights under this
Subsidiary Guaranty.

 

3 

 

 

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

 

4.          Performance under this Subsidiary Guaranty. In the event that
Borrowers fail to make any payment of any Guaranteed Obligations on or before
the due date thereof, or if Borrowers shall fail to perform, keep, observe, or
fulfill any other obligations referred to in clause (b) of Section 2 hereof in
the manner provided in the Credit Agreement, the Revolving Credit Note or the
other Loan Documents, as applicable, Guarantors immediately following demand
therefor shall cause such payment to be made or each of such obligations to be
performed, kept, observed, or fulfilled.

 

5.          Primary Obligations. This Subsidiary Guaranty is a primary and
original obligation of Guarantors, is not merely the creation of a surety
relationship, and is an irrevocable, absolute, unconditional, and continuing
guaranty of payment and performance which shall remain in full force and effect
without respect to future changes in conditions, including any change of law or
any invalidity or irregularity with respect to the issuance of the Revolving
Credit Note. Guarantors agree that they are directly, jointly and severally with
any other guarantor of the Guaranteed Obligations, liable to Beneficiary, that
the obligations of Guarantors hereunder are independent of the obligations of
Borrowers or any other guarantor, and that a separate action may be brought
against Guarantors, whether such action is brought against Borrowers or any
other guarantor or whether Borrowers or any such other guarantor is joined in
such action. Guarantors agree that their liability hereunder shall be immediate
and shall not be contingent upon the exercise or enforcement by Beneficiary of
whatever remedies it may have against Borrowers or any other guarantor, or the
enforcement of any lien or realization upon any security Beneficiary may at any
time possess. Guarantors agree that any release which may be given by
Beneficiary to Borrowers or any other guarantor shall not release Guarantors.
Guarantors consent and agree that Beneficiary shall be under no obligation to
marshal any property or assets of Borrowers or any other guarantor in favor of
Guarantors, or against or in payment of any or all of the Guaranteed
Obligations. Without limiting the generality of the foregoing, the liability of
each Guarantor under this Subsidiary Guaranty shall be absolute, unconditional
and shall not be affected or impaired by:

 

4 

 

 

(a)          any amendment or modification (whether material or otherwise) of
the Guaranteed Obligations or any direction as to application of payment by the
Borrowers, or any of them, or by any other Person;

 

(b)          any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other Person, as to the indebtedness of the
Borrowers, or any of them;

 

(c)          any payment on or in reduction of any such other guaranty or
undertaking;

 

(d)          any dissolution, termination or increase, decrease or change in
personnel by the Borrowers, or any of them;

 

(e)          the failure to give notice to any Guarantor of the occurrence of a
Default or an Event of Default under the provisions of the Credit Agreement or
the failure, omission or delay by Beneficiary to enforce or exercise any right
or remedy under the Guaranteed Obligations;

 

(f)          any taking, exchange, release or non-perfection of any security
(including the Collateral), or any taking, release or amendment or waiver of or
consent to departure from any other guaranty, for all or any of the Guaranteed
Obligations;

 

(g)          any manner of application of any security (including the
Collateral), or proceeds thereof, to all or any of the Guaranteed Obligations,
or any manner of sale or other disposition of any security or any other assets
of the Borrowers, or any of them;

 

(h)          the assignment of any right, title or interest of Lender in the
Credit Agreement or any other Loan Document to any other Person;

 

(i)          any change in the corporate structure, or termination, dissolution,
consolidation or merger of the Borrowers, or any of them, or any Guarantor with
or into any other entity, the voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all of the assets of the
Borrowers, or any of them, or any Guarantor, the marshalling of the asset and
liabilities of the Borrowers, or any of them, or any Guarantor, the
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition with creditors, or readjustment of, or
other similar proceedings affecting the Borrowers, or any of them, or any
Guarantor, or any of the assets of any of them;

 

5 

 

 

(j)          any payment made to Lender on the Guaranteed Obligations which the
Lender repays the Borrowers, or any of them, pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each Guarantor waives any right to the deferral or modification
of its obligations hereunder by reason of any such proceeding; or

 

(k)          any other event or circumstance (including, without limitation, any
statute of limitations), whether foreseen or unforeseen and whether similar or
dissimilar to any of the foregoing, that might otherwise constitute a defense
available to, or a discharge of, the Borrowers, or any of them, or a Guarantor,
other than payment in full of the Guaranteed Obligations;

 

it being the intent of each Guarantor that its obligations hereunder shall not
be discharged except by payment in full of the Guaranteed Obligations.

 

6.          Waivers.

 

(a)          Guarantors hereby waive; provided, however, that Guarantors shall
be entitled to raise those defenses set forth in Section 6(g) of this Subsidiary
Guaranty: (i) notice of acceptance hereof; (ii) notice of any Borrowings,
advances, loans or other financial accommodations made or extended under the
Credit Agreement, or the creation or existence of any Guaranteed Obligations;
(iii) notice of the amount of the Guaranteed Obligations, subject, however, to
Guarantors' right to make inquiry of Beneficiary to ascertain the amount of the
Guaranteed Obligations at any reasonable time; (iv) notice of any adverse change
in the financial condition of Borrowers or of any other fact that might increase
Guarantors' risk hereunder; (v) notice of presentment for payment, demand,
protest, and notice thereof as to the Revolving Credit Note or any other
instrument; (vi) notice of any Default or Event of Default under the Credit
Agreement; and (vii) all other notices (except if such notice is specifically
required to be given to Guarantors under this Subsidiary Guaranty or any other
Loan Document to which Guarantors are party) and demands to which Guarantors
might otherwise be entitled.

 

(b)          To the fullest extent permitted by applicable law, Guarantors waive
the right by statute or otherwise to require Beneficiary to institute suit
against Borrowers or to exhaust any rights and remedies which Beneficiary has or
may have against Borrowers. In this regard, Guarantors agree that they are bound
to the payment of each and all Guaranteed Obligations, whether now existing or
hereafter accruing, as fully as if such Guaranteed Obligations were directly
owing to Beneficiary by Guarantors. Guarantors further waive any defense arising
by reason of any disability or other defense (other than the defense that the
Guaranteed Obligations shall have been fully and finally performed and
indefeasibly paid) of Borrowers or by reason of the cessation from any cause
whatsoever of the liability of Borrowers in respect thereof, except as provided
in Section 6(g) hereof.

 

6 

 

 

(c)          To the maximum extent permitted by law, each Guarantor hereby
waives: (i) any rights to assert against Beneficiary any defense (legal or
equitable), set-off, counterclaim, or claim which Guarantors may now or at any
time hereafter have against Borrowers or any other party liable to Beneficiary;
(ii) any defense, set-off, counterclaim, or claim, of any kind or nature,
arising directly or indirectly from the present or future lack of perfection,
sufficiency, validity, or enforceability of the Guaranteed Obligations or any
security therefor; (iii) any defense arising by reason of any claim or defense
based upon an election of remedies by Beneficiary; (iv) any defense or benefit
that may be derived from or afforded by law which limits the liability of or
exonerates guaranties or sureties, including, without limitation, the benefits
of Nevada Revised Statutes §§ 40.430-40.459, 40.475 and 40.485 as permitted by
Nevada Revised Statutes § 40.495; and (v) any defense arising directly or
indirectly by reason of any invalidity, irregularity or unenforceability of all
or any part of the Credit Agreement, the Revolving Credit Note or any other Loan
Document or the Guaranteed Obligations or of any security therefor.

 

(d)          Guarantors agree that if all or a portion of the Credit Facility
Indebtedness or this Subsidiary Guaranty is at any time secured by a deed of
trust or mortgage covering interests in real property, Beneficiary, in its sole
discretion, without notice or demand and without affecting the liability of
Guarantors under this Subsidiary Guaranty, may foreclose pursuant to the terms
of the Credit Agreement or otherwise the deed of trust or mortgage and the
interests in real property secured thereby by judicial, or where applicable,
non-judicial sale. Guarantors understand that the exercise by Beneficiary of
certain rights and remedies contained in the Credit Agreement and any such deed
of trust or mortgage may affect or eliminate Guarantors' right of subrogation
against Borrowers and that Guarantors may therefore incur a partially or totally
non-reimbursable liability hereunder. Nevertheless, Guarantors hereby authorize
and empower Beneficiary to exercise, in its sole discretion, any rights and
remedies, or any combination thereof, which may then be available, since it is
the intent and purpose of Guarantors that the obligations hereunder shall be
absolute, independent and unconditional under any and all circumstances.
Notwithstanding any foreclosure of the lien of any deed of trust or security
agreement with respect to any or all of any real or personal property secured
thereby, whether by the exercise of the power of sale contained therein, by an
action for judicial foreclosure or by an acceptance of a deed in lieu of
foreclosure, Guarantors shall remain bound under this Subsidiary Guaranty
including their obligation to pay any deficiency following a non-judicial or
judicial foreclosure.

 

7 

 

 

(e)          Until the Guaranteed Obligations shall have been indefeasibly paid
in full and completely performed and the Credit Facility shall have terminated,
Guarantors shall withhold exercise of (a) any claim, right or remedy, direct or
indirect, that Guarantors now have or may hereafter have against the Borrowers
or any of their respective assets in connection with this Subsidiary Guaranty or
the performance by Guarantors of their respective obligations hereunder, in each
case whether such claim, right or remedy arises in equity, under contract, by
statute, under common law or otherwise and including without limitation (i) any
right of subrogation, reimbursement or indemnification that Guarantors now have
or may hereafter have against the Borrowers, (ii) any right to enforce, or to
participate in, any claim, right or remedy that Lender now has or may hereafter
have against the Borrowers, and (iii) any benefit of, and any right to
participate in, any Collateral or security now or hereafter held by Lender, and
(b) any right of contribution Guarantors may have against any other guarantor of
the Credit Facility. Guarantors further agree that, to the extent the agreement
to withhold the exercise of their respective rights of subrogation,
reimbursement, indemnification and contribution as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation, reimbursement or indemnification Guarantors may have
against the Borrowers or against any Collateral or security, and any rights of
contribution Guarantors may have against any such other guarantor, shall be
junior and subordinate to any rights Lender may have against the Borrowers, to
all right, title and interest Lender may have in any such Collateral or
security, and to any right Lender may have against such other guarantor. Lender
may use, sell or dispose of any item of Collateral or security as it sees fit
without regard to any subrogation rights Guarantors may have, and upon any such
disposition or sale any rights of subrogation Guarantors may have shall
terminate. If any amount shall be paid to Guarantors on account of any such
subrogation, reimbursement or indemnification rights at any time when all the
Guaranteed Obligations shall not have been indefeasibly paid in full or
completely performed, such amount shall be held in trust for Lender and shall
forthwith be paid over to Lender to be credited and applied against the
Guaranteed Obligations, whether matured or unmatured, in accordance with the
terms hereof.

 

(f)          To the fullest extent permitted by applicable law, each Guarantor
hereby waives (i) any defense, right of set-off, claim or counterclaim
whatsoever and any and all other rights, benefits, protections and other
defenses available to such Guarantor now or at any time hereafter, and all
successor sections, and (ii) all rights and defenses arising out of an election
of remedies by any Person, even though that election of remedies, such as a
nonjudicial foreclosure with respect to security for a Guaranteed Obligation has
destroyed such Guarantor's rights of subrogation and reimbursement against any
of the Borrowers or otherwise.

 

(g)          Notwithstanding anything to the contrary contained in this
Subsidiary Guaranty, Guarantors shall be entitled to raise as defenses that the
Guaranteed Obligations have been fully and indefeasibly paid and that the
Guaranteed Obligations are not then due and payable pursuant to the express
terms of the agreements evidencing the Guaranteed Obligations, and the defense
of statute of limitations, but not any defenses available as a result of any
failure of consideration, lack of authority by Borrowers or fraud by Borrowers.

 

8 

 

 

7.          Releases. Guarantors consent and agree that, without notice to or by
Guarantors and without affecting or impairing the obligations of Guarantors
hereunder, Beneficiary may, by action or inaction, compromise or settle, extend
the period of duration or the time for the payment, or discharge the performance
of, or may refuse to, or otherwise not enforce, or may, by action or inaction,
release all or any one or more parties to, any one or more of the Credit
Agreement, the Revolving Credit Note or any of the other Loan Documents or may
grant other indulgences to Borrowers in respect thereof, or may amend or modify
in any manner and at any time (or from time to time) any one or more of the
Credit Agreement, the Revolving Credit Note or any of the other Loan Documents,
or may, by action or inaction, release or substitute any other guarantor, if
any, of the Guaranteed Obligations, or may enforce, exchange, release, or waive,
by action or inaction, any security for the Guaranteed Obligations (including
the Collateral) or any other guaranty of the Guaranteed Obligations, or any
portion thereof.

 

8.          No Election. Beneficiary shall have the right to seek recourse
against Guarantors to the fullest extent provided for herein and no election by
Beneficiary to proceed in one form of action or proceeding, or against any
party, or on any obligation, shall constitute a waiver of Beneficiary's right to
proceed in any other form of action or proceeding or against other parties
unless Beneficiary has expressly waived such right in writing. Specifically, but
without limiting the generality of the foregoing, no action or proceeding by
Beneficiary under any document or instrument evidencing the Guaranteed
Obligations shall serve to diminish the liability of Guarantors under this
Subsidiary Guaranty except to the extent that Beneficiary finally and
unconditionally shall have realized indefeasible payment by such action or
proceeding.

 

9.          Indefeasible Payment. The Guaranteed Obligations shall not be
considered indefeasibly paid for purposes of this Subsidiary Guaranty unless and
until all payments to Beneficiary are no longer subject to any right on the part
of any person whomsoever, including Borrowers, any of the Borrowers as a debtor
in possession, or any trustee (whether appointed under the Bankruptcy Code or
otherwise) of any Borrower's assets to invalidate or set aside such payments or
to seek to recoup the amount of such payments or any portion thereof, or to
declare same to be fraudulent or preferential. In the event that, for any
reason, all or any portion of the payments by the Guarantors to Beneficiary are
set aside, whether voluntarily or involuntarily, after the making thereof, the
obligation or part thereof intended to be satisfied thereby shall be revived and
continued in full force and effect as if said payment or payments had not been
made and Guarantors shall be liable for the full amount Beneficiary is required
to repay plus any and all costs and expenses (including attorneys' fees) paid by
Beneficiary in connection therewith.

 

9 

 

 

10.         Financial Condition of Borrowers. Guarantors represent and warrant
to Beneficiary that they are currently informed of the financial condition of
Borrowers and of all other circumstances which a diligent inquiry would reveal
and which bear upon the risk of nonpayment of the Guaranteed Obligations.
Guarantors further represent and warrant to Beneficiary that they have each read
and understand the terms and conditions of the Credit Agreement, the Revolving
Credit Note and the other Loan Documents. Guarantors hereby covenant that they
will continue to keep themselves informed of Borrowers' financial condition, the
financial condition of other guarantors, if any, and of all other circumstances
which bear upon the risk of nonpayment or nonperformance of the Guaranteed
Obligations.

 

11.         Subordination. Upon the occurrence of an Event of Default, any
indebtedness of Borrowers to Guarantors shall be postponed in favor of and
subordinated in full to the Guaranteed Obligations and any amounts collected or
received by Guarantors shall be held in trust for the Lender and paid over to
Lender on account of the Credit Facility Indebtedness.

 

12.         Deferral of Rights of Subrogation. Notwithstanding anything to the
contrary elsewhere contained herein or in any other Loan Document to which any
Guarantor is a party, Guarantors hereby expressly agree with respect to
Borrowers and their successors and assigns (including any surety) and any other
Person which is directly or indirectly a creditor of Borrowers or any surety for
Borrower, not to exercise, until the Guaranteed Obligations have been
indefeasibly paid in full, any and all rights at law or in equity to
subrogation, to reimbursement, to exoneration, to contribution (except as
specifically provided in Section 13 below), to setoff or to any other rights
that could accrue to a surety against a principal, to a guarantor against a
maker or obligor, to an accommodation party against the party accommodated, or
to a holder or transferee against a maker, and which Guarantors may have or
hereafter acquire against Borrowers or any other such Person in connection with
or as a result of Guarantors' execution, delivery and/or performance of this
Subsidiary Guaranty or any other Loan Document to which any Guarantor is a
party.

 

13.         Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of all
payments made hereunder, such Guarantor shall be entitled to seek and  receive
contribution from and against any other Guarantor hereunder who has not paid its
proportionate share of all such payments. The provisions of this Section 13
shall in no respect limit the obligations and liabilities of any Guarantor to
Beneficiary, and, subject to the provisions of Section 14 below, each Guarantor
shall remain liable to Beneficiary for the full amount guaranteed by such
Guarantor hereunder. The “proportionate share” of any Guarantor shall be a
fraction (which shall in no event exceed 1.00) the numerator of which is the
excess, if any, of the fair value of the assets of such Guarantor over a fair
estimate of the liabilities of such Guarantor and the denominator of which is
the excess (but not less than One Dollar ($1.00)) of the fair value of the
aggregate assets (without duplication) of all Guarantors over a fair estimate of
the aggregate liabilities (without duplication) of all Guarantors. All relevant
calculations shall be made as of the date such Guarantor became a Guarantor.

 

10 

 

 

14.         Liability. Notwithstanding anything to the contrary elsewhere
contained herein or in any Loan Document to which each Guarantor is a party, the
aggregate liability of all Guarantors hereunder for payment and performance of
the Guaranteed Obligations shall not exceed an amount which, in the aggregate,
is One Dollar ($1.00) less than that amount which if so paid or performed would
constitute or result in a “fraudulent transfer”, “fraudulent conveyance”, or
terms of similar import, under applicable state or federal law, including
without limitation, Section 548 of the United States Bankruptcy Code. The
liability of each Guarantor hereunder is independent of any other guaranties at
any time in effect with respect to all or any part of the Guaranteed
Obligations, and each Guarantor's liability hereunder may be enforced regardless
of the existence of any such guaranties. Any termination by or release of any
Guarantor in whole or in part (whether it be another Guarantor under this
instrument or not) shall not affect the continuing liability of any other
Guarantor hereunder, and no notice of any such termination or release shall be
required. The execution hereof by each Guarantor is not founded upon an
expectation or understanding that there will be any other Guarantor of the
Guaranteed Obligations.

 

15.         Bankruptcy. Guarantors hereby jointly and severally, unconditionally
and irrevocably guaranty to Beneficiary the payment of any and all Guaranteed
Obligations of the Borrowers, or any of them, whether or not due or payable by
the Borrowers, or any of them, upon the occurrence of any of the events
specified in Subsections (g), (h) or (i) of Section 7.01 of the Credit
Agreement, and unconditionally and irrevocably promise to pay such Guaranteed
Obligations to the Beneficiary, on demand, in lawful money of the United States.

 

16.         Representations, Warranties and Covenants. In order to induce the
Lender to make the Borrowings, loans, advances and extend financial
accommodations to and for the benefit of Borrowers pursuant to the Credit
Agreement, each Guarantor hereby represents, warrants and covenants that, as of
the date hereof or as of the date of each Certificate of Joinder, as applicable:

 

(a)          It (i) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
corporate power and authority to own its property and assets and to transact the
business in which its is engaged and presently proposes to engage and (iii) is
duly qualified and is authorized to do business and is in good standing in all
jurisdictions where the failure to be so qualified would have a material adverse
effect on the operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Guarantors and the Borrowers taken as a whole.

 

11 

 

 

(b)          It has the corporate power to execute, deliver and perform the
terms and provisions of this Subsidiary Guaranty and has taken all necessary
corporate action to authorize the execution, delivery and performance by it of
this Subsidiary Guaranty. It has duly executed and delivered this Subsidiary
Guaranty, and this Subsidiary Guaranty constitutes its legal, valid and binding
obligation enforceable against it in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium and other laws of
general application relating to or affecting the enforcement of creditors'
rights and the exercise of judicial discretion in accordance with general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).

 

(c)          Neither the execution, delivery or performance by it of this
Subsidiary Guaranty, nor compliance by it with the terms and provisions hereof,
(i) will contravene any provision of any existing law, statute, rule or
regulation or any order, writ, injunction or decree of any court or governmental
instrumentality applicable to the Guarantors, (ii) will conflict with or result
in any breach of any of the material terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any lien upon any of its property or
assets pursuant to the terms of any indenture, mortgage, deed of trust, credit
agreement or loan agreement, or any other material agreement, contract or
instrument, to which it is a party or by which it or any of its property or
assets is bound or to which it may be subject or (iii) will violate any
provision of its charter or by-laws.

 

(d)          No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with, or exemption by, any Governmental
Authority, is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of this Subsidiary Guaranty or (ii) the
legality, validity, binding effect or enforceability of this Subsidiary
Guaranty, the failure of which could reasonably be expected to have a material
adverse effect on the operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the Guarantors taken as a whole.

 

(e)          It has derived or expects to derive a financial advantage from each
Borrowing, loan or other extension of credit and each renewal, extension, or
other relinquishment of legal rights, made or granted or to be made or granted
by the Lender in connection with the Guaranteed Obligations. After giving effect
to this Subsidiary Guaranty and the transactions contemplated hereby, it is not
Insolvent or left with assets or capital that is unreasonably small in relation
to its business or the Guaranteed Obligations. “Insolvent” means, with respect
to any Guarantor, that (i) determined on the basis of a “fair valuation” or
their “fair saleable value,” the sum of such Guarantor's assets is less than its
debts, or (ii) such Guarantor is generally not paying its debts as they become
due.

 

12 

 

 

(f)          Each waiver set forth in this Subsidiary Guaranty is made with such
Guarantor's full knowledge of its significance and consequences and after
opportunity to consult with counsel of its own choosing and that, under the
circumstances, each such waiver is reasonable and should not be found contrary
to public policy or law.

 

(g)          There are no actions, suits or proceedings pending or, to the best
knowledge of such Guarantor, threatened (i) with respect to this Subsidiary
Guaranty or (ii) that are likely to have a material adverse effect on the
business, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Guarantors taken as a whole.

 

(h)          All factual information (taken as a whole) heretofore or
contemporaneously furnished by or on behalf of such Guarantor in writing to the
Beneficiary (including without limitation all information contained herein) for
purposes of or in connection with this Subsidiary Guaranty or any transaction
contemplated herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of such Guarantor in writing to the
Beneficiary will be true and accurate in all material respects on the date as of
which such information is dated or certified and not incomplete by omitting to
state any fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided.

 

(i)          It is not required to be registered as an “investment company”,
within the meaning of the Investment Company Act of 1940, as amended.

 

(j)          It is not a “holding company”, or a “subsidiary company” of a
“holding company”, or an “affiliate” of a “holding company” or a “subsidiary
company” of a “holding company”, within the meaning of the Public Utility
Holding Company Act of 1935, as amended.

 

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

 

13 

 

 

18.         Costs to Prevailing Party. If any action or proceeding is brought by
any party against any other party under this Subsidiary Guaranty, the prevailing
party shall be entitled to recover such costs and attorney's fees as the court
in such action or proceeding may adjudge reasonable.

 

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

 

  If to Beneficiary: Mutual of Omaha Bank     8945 W. Russell Rd., Ste. 300    
Las Vegas, NV  89148           Attn: Ashan S. Perera, V.P.         With a copy
to: Timothy J. Henderson, Esq.     Henderson & Morgan, LLC     4600 Kietzke
Lane, Suite K228     Reno, Nevada  89502         If to Guarantor: At the address
or facsimile number set forth on the signature page hereto           With a copy
to:                    

 

20.         Cumulative Remedies. No remedy under this Subsidiary Guaranty, under
the Credit Agreement, the Revolving Credit Note or any Loan Document is intended
to be exclusive of any other remedy, but each and every remedy shall be
cumulative and in addition to any and every other remedy given under this
Subsidiary Guaranty, under the Credit Agreement, the Revolving Credit Note or
any other Loan Document, and those provided by law. No delay or omission by
Beneficiary to exercise any right under this Subsidiary Guaranty shall impair
any such right nor be construed to be a waiver thereof. No failure on the part
of Beneficiary to exercise, and no delay in exercising, any right under this
Subsidiary Guaranty shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under this Subsidiary Guaranty preclude any other
or further exercise thereof or the exercise of any other right. No notice to or
demand on any Guarantor in any case shall entitle such Guarantor or any other
Guarantor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of Beneficiary to any other
or further action in any circumstances without notice or demand.

 

14 

 

 

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

 

22.         Joinder of Additional Guarantors. Each other Restricted Subsidiary
shall become a Guarantor under and become bound by the terms and conditions of
this Subsidiary Guaranty by executing and delivering to Beneficiary a
Certificate of Joinder substantially in the form attached hereto as Exhibit A,
accompanied by such documentation as Beneficiary may require to establish the
due organization, valid existence and good standing of such Restricted
Subsidiary, its qualification to engage in business in each material
jurisdiction in which it is required to be so qualified, its authority to
execute, deliver and perform this Subsidiary Guaranty, and the identity,
authority and capacity of each officer or representative thereof authorized to
act on its behalf.

 

23.         Entire Agreement; Amendments. This Subsidiary Guaranty, together
with any Certificate of Joinder, Exhibit A hereto, the Credit Agreement, the
Revolving Credit Note and the Loan Documents constitute the entire agreement
between Guarantors and Beneficiary pertaining to the subject matter contained
herein. This Subsidiary Guaranty may not be altered, amended, or modified, nor
may any provisions hereof be waived or noncompliance therewith consented to,
except by means of a writing executed by Guarantors and Beneficiary. Any such
alteration, amendment, modification, waiver, or consent shall be effective only
to the extent specified therein and for the specific purpose for which given. No
course of dealing and no delay or waiver of any right or default under this
Subsidiary Guaranty shall be deemed a waiver of any other, similar or
dissimilar, right or default or otherwise prejudice the rights and remedies
hereunder.

 

24.         Termination. Notwithstanding anything to the contrary, contained in
this Subsidiary Guaranty, this Subsidiary Guaranty shall terminate as to any
Guarantor that ceases to be a Restricted Subsidiary in accordance with the
Credit Agreement.

 

25.         Successors and Assigns. This Subsidiary Guaranty shall be binding
upon each Guarantor and its successors and assigns and shall inure to the
benefit of the Beneficiary and its successors and assigns; provided, however,
that no Guarantor shall assign any of its rights or obligations hereunder
without the prior consent of the Beneficiary. In the event of any assignment or
other transfer of rights by Beneficiary to a successor Lender, the rights and
benefits herein conferred upon Beneficiary shall automatically extend to and be
vested in such assignee or other transferee.

 

15 

 

 

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

 

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

 

16 

 

 

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

 

  ,     , a_________corporation     a_________corporation  

 

By     By             Title     Title  

 

Address:   Address:                         Telephone: (____) ___________  
Telephone: (____) __________ Facsimile: (____) ___________   Facsimile:
(____) _________

 

17 

 

 

EXHIBIT A

TO

GENERAL CONTINUING SUBSIDIARY GUARANTY

 

CERTIFICATE OF JOINDER

 

THIS CERTIFICATE OF JOINDER is executed as of __________________, _____, by
___________________, a ______________________ (“Joining Party”), and delivered
to Mutual of Omaha Bank, as beneficiary (“Beneficiary”) under the General
Continuing Subsidiary Guaranty (the “Subsidiary Guaranty”) dated as of
_________________, ______, made by _________________________ and
___________________________________ (each a “Guarantor”, collectively
“Guarantors”) in favor of the Beneficiary. Terms used but not defined in this
Certificate of Joinder shall have the meanings defined for those terms or
incorporated by reference in the Subsidiary Guaranty.

 

RECITALS:

 

A.           The Subsidiary Guaranty was executed by the Guarantors in favor of
the Beneficiary as the Lender under that certain Amended and Restated Credit
Agreement (as may be amended, restated or modified from time to time, the
“Credit Agreement”) dated effective as of November 30, 2015, by and among Nevada
Gold & Casinos, Inc., a Nevada corporation, Nevada Gold & Casinos LV, LLC, a
Nevada limited liability company, NG Washington, LLC, a Washington limited
liability company, NG Washington II Holdings, LLC, a Delaware limited liability
company, NG Washington II, LLC, a Washington limited liability company, NG
Washington III, LLC, a Washington limited liability company, NG South Dakota,
LLC, a South Dakota limited liability company, A.G. Trucano, Son & Grandsons,
Inc., a South Dakota corporation, CGC Holdings, L.L.C., a Nevada limited
liability company, CGE Assets, Inc. (formerly Colorado Grand Enterprises, Inc.),
a Colorado corporation, Gold Mountain Development, a Limited Liability Company,
a Colorado limited liability company, also known as Gold Mountain Development,
LLC and Nevada Gold BVR, L.L.C., a Nevada limited liability company
(collectively, the “Borrowers”) and Beneficiary.

 

B.           Joining Party has become a Restricted Subsidiary of NGC and as such
is required pursuant to Section 5.27 of the Credit Agreement to become a
Guarantor.

 

C.           Joining Party expects to realize direct and indirect benefits as a
result of the availability to Borrowers of the Credit Facility under the Credit
Agreement.

 

 

 

 

AGREEMENT

 

1.          By this Certificate of Joinder, Joining Party shall and does hereby
become and constitutes a “Guarantor” under and pursuant to Paragraph 22 of the
Subsidiary Guaranty. Joining Party agrees that, upon its execution hereof, it is
a Guarantor under the Subsidiary Guaranty with respect to all Guaranteed
Obligations of Borrowers heretofore or hereafter incurred under the Loan
Documents, and will be jointly and severally bound by all terms, conditions, and
duties applicable to a Guarantor under the Subsidiary Guaranty to the same
extent as if Joining Party had originally executed the Subsidiary Guaranty on
the Closing Date.

 

2.          The effective date of this Certificate of Joinder is
_______________, ______.

 

  “JOINING PARTY”:                 ,   a_______________________  

 

  By         Name           Title  

 

  Address:                   Telephone: (____)             Facsimile: (____)

 

2 

 

 

ACKNOWLEDGED:       MUTUAL OF OMAHA BANK,   Beneficiary         By       Ashan
S. Perera,     Vice President  

 

3 

 

 

EXHIBIT G

 

Loan No. 1301687001

 

PAYMENT SUBORDINATION AGREEMENT

(Seller - Form)

 

THIS PAYMENT SUBORDINATION AGREEMENT (the “Agreement”) is made and entered into
as of the ______ day of __________________, 20___, by
_____________________________________________ (hereinafter referred to as
“Subordinator”) and delivered to MUTUAL OF OMAHA BANK (“Lender”).

 

RECITALS:

 

WHEREAS:

 

A.           As of the date of this Agreement, there is outstanding and owing by
_________________________, a ___________________ (the “Company”) to Subordinator
indebtedness in the aggregate amount of _________________________________
Dollars ($__________________) (together with the interest thereon, the
“Subordinated Debt”) evidenced by that certain Promissory Note dated
________________, 20___ (the “Subordinated Note”), a copy of which is marked
“Exhibit A”, affixed hereto and by this reference incorporated herein and made a
part hereof.

 

Now, therefore, in and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Subordinator, the
Subordinator hereby agrees as follows:

 

1.          The Company, together with certain of its Affiliates, as Borrowers,
have entered into an Amended and Restated Credit Agreement dated effective as of
November 30, 2015, as it may be amended, modified or supplemented from time to
time, the “Credit Agreement”) with the Lender, under the terms of which Lender
agreed to establish and fund a reducing revolving line of credit in the amount
of Twenty-Three Million Dollars ($23,000,000.00) (“Credit Facility”), all
subject to the terms and conditions set forth in the Credit Agreement. The
reducing revolving line of credit is further evidenced by an Amended and
Restated Revolving Credit Note (“Revolving Credit Note”) in the principal sum of
Twenty-Three Million Dollars ($23,000,000.00).

 

2.          The Subordinated Note may not be transferred or assigned by
Subordinator without the prior written consent of Lender and, unless so
transferred or assigned, shall be owned by Subordinator at all times free and
clear of any lien, pledge, charge, security interest or other encumbrance.

 

 

 

 

3.          So long as any monetary obligation or other obligation or commitment
to advance funds under the Credit Agreement, the Revolving Credit Note or any
other Loan Document, as defined in the Credit Agreement (as such obligations may
be amended, modified, restated, renewed, increased or extended, including,
without limitation, post petition interest whether or not allowed in any
insolvency proceedings, and fees, attorneys costs and indemnities under the Loan
Documents, collectively referred to herein as the “Bank Debt”) shall remain
unpaid or unfunded, in whole or in part, the Subordinator may not:

 

(a)          Demand or receive any payment of principal or interest, directly or
indirectly, on the Subordinated Debt, if:

 

(i)          a Default or Event of Default, as defined in the Credit Agreement,
shall have occurred and is continuing under any Bank Debt; or

 

(ii)         the making of such payment is prohibited under the terms of the
Credit agreement or would create a Default or Event of Default, as defined in
the Credit Agreement; or

 

(b)          Receive any interest on the Subordinated Note in advance or prior
to the date such interest is due; or

 

(c)          Increase the rate of interest on the Subordinated Note without the
prior written consent of Lender; or

 

(d)          Exercise any remedies or enforcement rights under the Subordinated
Note for the collection of any sums of principal or interest owing thereunder
prior to the occurrence of Credit Facility Termination.

 

4.          In the event that any such payments of principal and/or interest are
made in violation of the foregoing provisions, such payments shall not be
accepted by Subordinator and, if so accepted, shall be held in trust for the
benefit of, and shall be paid forthwith over and delivered to Lender. The
subordination provisions set forth hereinabove are made for the benefit of
Lender and it is understood by Company and by Subordinator that Lender will take
certain actions in reliance upon such subordination provisions. It is further
understood that Lender's reliance upon the referenced subordination provisions
shall not constitute a waiver by Lender of its right to insist upon strict
compliance with all provisions of the Credit Agreement and with all provisions
of the Loan Documents as particularly defined by the Credit Agreement.

 

5.          (a)          In the event of:

 

 2 

 

 

(i)          any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to any member of the Borrower Consolidation, its creditors or property;

 

(ii)         any proceeding for the liquidation, dissolution or other winding-up
of any member of the Borrower Consolidation, voluntary or involuntary, whether
or not involving insolvency, reorganization or bankruptcy proceedings;

 

(iii)        any assignment by any member of the Borrower Consolidation for the
benefit of creditors; or

 

(iv)        any other marshalling of the assets of any member of the Borrower
Consolidation;

 

all Bank Debt (including any interest thereon accruing after the commencement of
any such proceedings and any other sums or premium due) shall first be paid in
full before any payment or distribution, whether in cash, securities or other
property, shall be made on account of any Subordinated Debt and any payment or
distribution, whether in cash, securities or other property which would
otherwise, but for these subordination provisions, be payable or deliverable in
respect of Subordinated Debt shall be paid or delivered directly to the holders
of Bank Debt until all Bank Debt (including any interest thereon accruing after
the commencement of any such proceedings) shall have been indefeasibly paid in
full.

 

The Subordinator shall file in any bankruptcy or other proceeding in which the
filing of claims is required by law, all claims which the Subordinator may have
against the Borrowers relating to any Subordinated Debt and will assign to the
holder of the Bank Debt all rights of the Subordinator thereunder. If
Subordinator does not file any such claim, the holder of the Bank Debt as
attorney-in-fact for Subordinator is hereby authorized to do so in the name of
Subordinator or, in such holder's discretion, to assign the claim to a nominee
and to cause proof of claim to be filed in the name of such holder's nominee.
The foregoing power of attorney is coupled with an interest and cannot be
revoked. The holder of the Bank Debt or its nominee shall have the sole right to
accept or reject any plan proposed in any such proceeding and to take any other
action which a party filing a claim is entitled to do. In all such cases,
whether in administration, bankruptcy or otherwise, the person or persons
authorized to pay such claim shall pay to the holder of the Bank Debt the amount
payable on such claim and, to the full extent necessary for that purpose, the
Subordinator hereby assigns to the holder of the Bank Debt all of the
Subordinator's rights to any such payments or distributions to which the
Subordinator would otherwise be entitled.

 

 3 

 

 

(b)          If any payment or distribution of any character or any security,
whether in cash, securities or other property, shall be received by the
Subordinator in contravention of any of the terms hereof and before all Bank
Debt shall have been indefeasibly paid in full, such payment or distribution or
security shall be received in trust for the benefit of, and shall be paid over
or delivered and transferred to, the holder of Bank Debt at the time outstanding
for application to the payment of all Bank Debt remaining unpaid, to the extent
necessary to pay all such Bank Debt in full. In the event of the failure of the
Subordinator to endorse or assign any such payment, distribution or security,
each holder of Bank Debt is hereby irrevocably authorized to endorse or assign
the same.

 

(c)          The Bank Debt shall not be deemed to have been paid in full unless
the holder thereof shall have indefeasibly received cash in lawful currency of
the United States of America equal to the amount of Bank Debt then outstanding.

 

(d)          The Subordinator will take such action (including, without
limitation, the execution and filing of a financing statement with respect to
this Agreement and including the execution, verification, delivery and filing of
proofs of claim, consents, assignments or other instructions which the holder of
Bank Debt may require in order to prove and realize upon any rights or claims
pertaining to Subordinated Debt and to effectuate the full benefit of the
subordination contained herein) as may, in the opinion of counsel designated by
the Lender, be necessary or appropriate to assure the effectiveness of the
subordination effected by these provisions.

 

(e)          The Subordinator understands and acknowledges by its execution
hereof that the actions of the Lender in connection with the Bank Debt are being
or have been made in reliance upon the absolute subordination of the
Subordinated Debt to Bank Debt as set forth herein.

 

6.          Subordination Legend; Further Assurances. The Company and the
Subordinator will cause each note and instrument (if any) evidencing the
Subordinated Debt to be endorsed with the following legend:

 

“The Indebtedness evidenced by this instrument is subordinated to the prior
payment in cash in full of all Bank Debt (as defined in the Payment
Subordination Agreement, dated as of _____________, 20__) pursuant to, and to
the extent provided in, the Payment Subordination Agreement by the maker hereof
and payee named herein in favor of the Lender therein named and its successors
and assigns.”

 

 4 

 

 

The Company and Subordinator each hereby agree to mark its respective books of
account in such a manner as shall be effective to give proper notice of the
effect of this Agreement. The Company and the Subordinator will at their expense
and at any time and from time to time promptly execute and deliver all further
instruments and documents and take all further action that may be necessary or
that the Lender may reasonably request in order to protect any right or interest
granted or purported to be granted hereunder or to enable the Lender to exercise
and enforce its rights and remedies hereunder.

 

7.          Subject to the terms of the Credit Agreement:

 

(a)          This Agreement shall continue in effect so long as any Bank Debt
shall remain unpaid and no action that the holder of the Bank Debt or the
Borrowers, with or without the written consent of the holder of the Bank Debt,
may take or refrain from taking with respect to any Bank Debt, any instrument
representing the same, any Collateral (as defined in the Credit Agreement)
therefor, or any agreement or agreements, including guaranties, in connection
therewith, shall affect this Agreement or the obligations of the Subordinator
hereunder.

 

(b)          All rights and interests of the Lender hereunder, and all
agreements and obligations of the Subordinator and the Company under this
Agreement, shall remain in full force and effect irrespective of:

 

(i)          any lack of validity or enforceability of the Credit Agreement, the
Revolving Credit Note or any other Loan Document, or any agreement or instrument
relating thereto;

 

(ii)         any change in the time, manner or place of payment of, or in any
other term of, all or any of the Bank Debt, or any other amendment,
modification, revision, restatement, extension or waiver of or any consent to
departure from the Credit Agreement, the Revolving Credit Note or any other Loan
Document;

 

(iii)        any taking and holding of Collateral or other security or
additional guarantees for all or any of the Bank Debt; or any amendment,
alteration, exchange, substitution, restatement, transfer, enforcement, waiver,
subordination, termination or release of any Collateral or such guarantees, or
any non-perfection of any Collateral, or any consent to departure from any such
guaranty;

 

(iv)        any manner of application of Collateral or proceeds thereof, to all
or any of the Bank Debt, or the manner of sale of any Collateral or other
security;

 

 5 

 

 

(v)         any consent by the Lender or any other Person to the change,
restructure or termination of the corporate structure or existence of any
Borrower or the Subordinator, or any Subsidiary thereof and any corresponding
restructure of the Bank Debt, or any other restructure or refinancing of the
Bank Debt or any portion thereof;

 

(vi)        any modification, compounding, compromise, settlement, release by
the Lender or any other Person (or by operation of law or otherwise), collection
or other liquidation of the Bank Debt or of the Collateral or other security in
whole or in part, and any refusal of payment to Lender in whole or in part, from
any obligor or guarantor in connection with any of the Bank Debt, whether or not
with notice to, or further assent by, or any reservation of rights against the
Subordinator; or

 

(vii)       any other circumstance (including, but not limited to, any statute
of limitations) which might otherwise constitute a defense available to, or a
discharge of the Borrowers or the Subordinator.

 

Without limiting the generality of the foregoing, the Subordinator hereby
consents to and agrees that the rights of Lender hereunder, and the
enforceability hereof, shall not be affected by any release of any Collateral or
security from the liens and security interests created by any of the Loan
Documents or any other agreement whether for purposes of sales or other
dispositions of assets or for any other purpose. This Agreement shall continue
to be effective or be reinstated, as the case may be, if at any time any payment
of any of the Bank Debt is rescinded or must otherwise be returned by Lender
upon the insolvency, bankruptcy or reorganization of the Company or otherwise,
all as though such payment had not been made.

 

(c)          The Subordinator waives the right to require the Lender to proceed
against the Borrowers or any other person liable on the Bank Debt, to proceed
against or exhaust any security held from any Borrower or any other person, or
to pursue any other remedy in the Lender's power whatsoever and the Subordinator
waives the right to have the property of the Borrowers first applied to the
discharge of the Bank Debt. The Lender may, at its election, exercise any right
or remedy it may have against the Borrowers or any security held by the Lender,
including, without limitation, the right to foreclosure upon any such security
by one or more judicial or nonjudicial sales, without affecting or impairing in
any way the obligations of the Subordinator hereunder, except to the extent the
Bank Debt has been paid, and the Subordinator waives any defense arising out of
the absence, impairment or loss of any right of reimbursement, contribution or
subrogation or any other right or remedy of the Subordinator against the
Borrowers or any such security, whether resulting from such election by the
Lender or otherwise. The Subordinator waives any defense arising by reason of
any disability or other defense of the Borrowers or by reason of the cessation
from any cause whatsoever (including, without limitation, any intervention or
omission by the Lender) of the liability either in whole or in part, of the
Borrowers to the Lender for the Bank Debt.

 

 6 

 

 

(d)          Until the Bank Debt is fully and indefeasibly paid, the
Subordinator shall not proceed against the Company for the recovery of all or
any portion of the Subordinated Debt, or proceed against or exhaust any security
held from the Company or any other person, or pursue any other right or remedy
in the Subordinator's power whatsoever for the collection of all or any portion
of the Subordinated Debt.

 

8.          The Subordinator hereby agrees to be responsible for and to pay all
costs and expenses, including, without limitation, attorneys' fees and costs and
accountants' fees, incurred by the holder of the Bank Debt in connection with
the enforcement by the holder of the Bank Debt of its rights or the protection
of the holder of the Bank Debt of its interests under this Agreement, whether
incurred pre-trial, at trial or on appeal.

 

9.          Time shall be of the essence of this Agreement.

 

10.         This Agreement shall be governed by and construed in accordance with
the law of the State of Nevada. The parties hereto further agree that, subject
to the Arbitration provisions set forth below in paragraph 11, the full and
exclusive forum for the determination of any action relating to this Agreement
shall be either an appropriate Court of the State of Nevada or the United States
District Court or United States Bankruptcy Court for the District of Nevada.

 

11.         Arbitration.

 

(a)          Upon the request of any party, whether made before or after the
institution of any legal proceeding, any action, dispute, claim or controversy
of any kind (e.g., whether in contract or in tort, statutory or common law,
legal or equitable) (“Dispute”) now existing or hereafter arising between the
parties in any way arising out of, pertaining to or in connection with this
Agreement, the Credit Agreement, Revolving Credit Note, Loan Documents or any
related agreements, documents, or instruments (collectively the “Documents”),
may, by summary proceedings (e.g., a plea in abatement or motion to stay further
proceedings), bring an action in court to compel arbitration of any Dispute.

 

 7 

 

 

(b)          All Disputes between the parties shall be resolved by binding
arbitration governed by the Commercial Arbitration Rules of the American
Arbitration Association. Judgment upon the award rendered by the arbitrators may
be entered in any court having jurisdiction.

 

(c)          No provision of, nor the exercise of any rights under this
arbitration clause shall limit the rights of any party, and the parties shall
have the right during any Dispute, to seek, use and employ ancillary or
preliminary remedies, judicial or otherwise, for the purposes of realizing upon,
preserving, protecting or foreclosing upon any property, real or personal, which
is involved in a Dispute, or which is subject to, or described in, the
Documents, including, without limitation, rights and remedies relating to:
(i) foreclosing against any real or personal property collateral or other
security by the exercise of a power of sale under the Documents or other
security agreement or instrument, or applicable law, (ii) exercising self-help
remedies (including setoff rights) or (iii) obtaining provisional or ancillary
remedies such as injunctive relief, sequestration, attachment, garnishment or
the appointment of a receiver from a court having jurisdiction before, during or
after the pendency of any arbitration. The institution and maintenance of an
action for judicial relief or pursuit of provisional or ancillary remedies or
exercise of self-help remedies shall not constitute a waiver of the right of any
party, including the plaintiff, to submit the Dispute to arbitration nor render
inapplicable the compulsory arbitration provision hereof.

 

12.         Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
LENDER, THE COMPANY AND SUBORDINATOR EACH MUTUALLY HEREBY EXPRESSLY WAIVE ANY
RIGHT TO TRIAL BY JURY OF ANY ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR
PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT, THE CREDIT
AGREEMENT, THE REVOLVING CREDIT NOTE OR ANY OF THE LOAN DOCUMENTS, OR IN ANY WAY
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE DEALINGS OF LENDER, THE COMPANY
AND SUBORDINATOR WITH RESPECT TO THIS AGREEMENT, THE CREDIT AGREEMENT, THE
REVOLVING CREDIT NOTE OR ANY OF THE LOAN DOCUMENTS, OR THE TRANSACTIONS RELATED
HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE
OF WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, LENDER, THE COMPANY AND SUBORDINATOR EACH MUTUALLY AGREE THAT
ANY SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDINGS SHALL BE DECIDED
BY A BENCH TRIAL WITHOUT A JURY AND THAT THE DEFENDING PARTY MAY FILE AN
ORIGINAL COUNTERPART OF THIS SECTION WITH ANY COURT OR OTHER TRIBUNAL AS WRITTEN
EVIDENCE OF THE CONSENT OF THE COMPLAINING PARTY TO THE WAIVER OF ITS RIGHT TO
TRIAL BY JURY.

 

 8 

 

 

13.         In the event any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

 

14.         The Company joins in the execution of this Agreement to evidence its
agreement to the terms hereof and to be legally bound hereby. This Agreement
shall be binding upon the parties hereto and their respective successors and
assigns and shall inure to the benefit of the parties hereto and their
respective successors and assigns.

 

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

 

  SUBORDINATOR:               COMPANY:                          ,

 

  a  

 

  By  

 

  Name  

 

  Title  

 

        LENDER:         MUTUAL OF OMAHA BANK         By       Ashan S. Perera,  
  Vice President

 

 9 

 

EXHIBIT H

 

FORM OF LEGAL OPINION

[Letterhead of Nevada Gold & Casinos, Inc.’s Counsel]

 

Dated effective as of November 30, 2015

 

Mutual of Omaha Bank

8945 W. Russell Rd.

Suite 300

Las Vegas, NV 89148

 

Attn: Ashan Perera, V.P.

 

Re:Amended and Restated Credit Agreement dated effective as of November 30, 2015
(the “Credit Agreement”), by and between Nevada Gold & Casinos, Inc., a Nevada
corporation, Nevada Gold & Casinos LV, LLC, a Nevada limited liability company,
NG Washington, LLC, a Washington limited liability company, NG Washington II
Holdings, LLC, a Delaware limited liability company, NG Washington II, LLC, a
Washington limited liability company, NG Washington III, LLC, a Washington
limited liability company, NG South Dakota, LLC, a South Dakota limited
liability company, A.G. Trucano, Son & Grandsons, Inc., a South Dakota
corporation, CGC Holdings, L.L.C., a Nevada limited liability company, CGE
Assets, Inc. (formerly Colorado Grand Enterprises, Inc.), a Colorado
corporation, Gold Mountain Development, a Limited Liability Company, a Colorado
limited liability company, also known as Gold Mountain Development, LLC and
Nevada Gold BVR, L.L.C., a Nevada limited liability company (collectively, the
“Borrowers”) and Mutual of Omaha Bank, a Federally Chartered Thrift (together
with its successors and assigns the “Lender”)

 

Ladies and Gentlemen:

 

All capitalized terms which are used herein, and which are not otherwise defined
herein, shall have the meaning which is set forth by Section 1.01 of the Credit
Agreement.

 

The undersigned is General Counsel of each of the Borrowers and has acted in
such capacity in connection with the preparation, execution and delivery of the
Credit Agreement and each of the Loan Documents. This opinion is delivered to
you pursuant to Section 3.16 of the Credit Agreement for the reliance of Lender
and its successors and assigns as a supplement to the Legal Opinion dated
December 10, 2013, delivered by the undersigned in connection with the Original
Closing Date and Existing Credit Agreement.

 

 

 

 

Mutual of Omaha Bank

Attn: Ashan Perera, V.P.

Dated effective as of November 30, 2015

Page 2

 

In rendering the opinions set forth herein I have: (i) examined, and am familiar
with, originals of each of the executed Loan Documents; and (ii) made such
inquiries of Borrowers, and reviewed such other documents, corporate
documentation and records of Borrowers, as I deemed appropriate under the
circumstances. In making such examination and review, I have assumed the
genuineness of all signatures (other than the signatures of the Borrowers) the
authenticity of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as certified or photostatic
copies and the authenticity of the originals of such copies. I have also assumed
the valid authorization, execution and delivery of each Loan Document by each
party thereto (other than the Borrowers), and I have assumed, where applicable,
that each such other party has been duly organized, is validly existing and in
good standing under its jurisdiction of organization and possesses the
corporate, limited liability company or other organization power to perform its
obligations thereunder.

 

I have not made or undertaken to make any investigation of, and express no
opinion as to: (a) the state of title to, or description of, the Collateral
Properties, or (b) the priority of the Deeds of Trust or any lien. In giving the
opinion set forth below, I have assumed that the First Amendments to the
Existing Fee Deeds of Trust will be properly recorded in the Official Records of
the applicable County Recorders in the State of Washington and that the Club
Fortune Deed of Trust will be properly recorded in the Official Records of Clark
County, Nevada. I understand that, as to the interest of NGW, NGWII, NGWIII and
NGCLV, as applicable, in, title to and the description of the Collateral
Properties, the due recordation of the Deeds of Trust and the priority of the
Deeds of Trust, you are relying upon title insurance policies insuring the Deeds
of Trust, in the case of the Coyote Bob’s Real Property, the Crazy Moose Pasco
Real Property and the Club Fortune Real Property and the representations of the
Borrowers and uninsured lien searches with respect to each of the other
Collateral Properties. Regarding the Collateral, I have assumed that the
description of the Collateral in the Financing Statements is sufficient to
enable the Collateral to be identified by a subsequent purchaser or mortgagee,
and I express no opinion concerning title to the Collateral or to the priority
of the lien or security interest therein.

 

In basing the opinions set forth in this opinion on “my knowledge”, the words
“my knowledge” signify that, in the course of my representation of Borrowers, as
General Counsel, no facts have come to my attention that would give me actual
knowledge or actual notice that any such opinions or other matters are not
accurate and complete or that any of the Loan Documents are not accurate and
complete. Except as otherwise stated in this opinion, I have undertaken no
investigation or verification of such matters. Further, the words “my knowledge”
as used in this opinion are intended to be limited to my actual knowledge.

 

 

 

 

Mutual of Omaha Bank

Attn: Ashan Perera, V.P.

Dated effective as of November 30, 2015

Page 3

 

I am not expressing any opinion as to the effect of the compliance or
noncompliance of Lender with any state or federal laws or regulations which are
applicable because of the legal or regulatory status, or the nature of the
business of Lender.

 

I am a member of the bars of the States of Arkansas, Texas and Nebraska, but in
the exercise of my duties as General Counsel have become familiar with the laws
of the States of Nevada, Washington, South Dakota, Delaware and Colorado (the
“Opinion States”). I express no opinion as to the laws of any other jurisdiction
other than the Opinion States and the federal laws of the United States of
America.

 

Based on the foregoing and subject to the qualifications set forth herein, I am
of the opinion that:

 

1.          NGC is a duly incorporated and validly existing corporation and in
good standing under the laws of the State of Nevada. AGTSG is a duly
incorporated and validly existing corporation and in good standing under the
laws of the State of South Dakota. CGE is a duly incorporated and validly
existing corporation and in good standing under the laws of the State of
Colorado. Each of NGC, AGTSG and CGE (i) has all requisite corporate power and
authority to execute and deliver each Loan Document to which it is a party or by
which it is bound in connection with the Credit Facility, to consummate the
transactions and perform its respective obligations thereunder, and to own its
properties and assets, and (ii) has taken all necessary corporate action to
authorize the execution, delivery and performance of the Credit Agreement and
the other Loan Documents to which it is a party or by which it is bound and to
consummate the transactions contemplated thereunder.

 

2.          Each of NGW, NGWII and NGWIII is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Washington. NGWII Holdings is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware.
NGSD is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of South Dakota. Each of NGCLV, CGC and
NGBVR is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Nevada. Gold Mountain is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Colorado. Each of NGW, NGWII, NGWIII, NGWII Holdings,
NGSD, NGCLV, CGC, NGBVR and Gold Mountain (i) has all requisite power, authority
and legal right to execute and deliver each document, agreement or certificate
to which it is a party or by which it is bound in connection with the Credit
Facility, to consummate the transactions and perform its obligations thereunder,
and to own its properties and assets and to carry on and conduct its business as
presently conducted or proposed to be conducted, and (ii) has taken all
necessary action to authorize the execution, delivery and performance of the
Credit Agreement and the other Loan Documents to which it is a party or by which
it is bound and to consummate the transactions contemplated thereunder.

 

 

 

 

Mutual of Omaha Bank

Attn: Ashan Perera, V.P.

Dated effective as of November 30, 2015

Page 4

 

3.          Each of the Borrowers has duly authorized the execution, delivery
and performance of each of the Loan Documents to which it is a party and the
taking of any and all action necessary to carry out and give effect to the
transactions contemplated to be performed on its respective part by the Credit
Agreement, the Revolving Credit Note, and each of the other Loan Documents and
each other document, agreement, certificate or instrument executed by it or any
of them in connection with the Credit Facility.

 

4.          Neither the execution and delivery of the Credit Agreement, the
Revolving Credit Note, or any other Loan Document, or any other agreement,
certificate or instrument to which any Borrower is a party or by which
Borrowers, or any of them, are bound in connection with the Credit Facility, nor
the consummation of the transactions contemplated thereunder, or the compliance
with or performance of the terms and conditions therein, is prevented by,
limited by, conflicts in any material respect with, or will result in a material
breach or violation of, or a material default (with due notice or lapse of time
or both) under, or the creation or imposition of any lien, charge, or
encumbrance of any nature whatsoever upon any of their respective property or
assets by virtue of, the terms, conditions or provisions of (a) the Articles of
Incorporation, Bylaws, Articles of Organization, Operating Agreement or other
documents of organization or charter of any Borrower, (b) to my knowledge, any
indenture, evidence of indebtedness, loan or financing agreement, or other
agreement or instrument of whatever nature to which they, or any of them, are a
party or by which they, or any of them, are bound, or (c) to my knowledge, any
provision of any existing law, rule, regulation, order, writ, injunction or
decree of any court or Governmental Authority to which they, or any of them, are
subject where such breach could reasonably be expected to result in a Material
Adverse Change.

 

5.          The Credit Agreement, the Revolving Credit Note, the Security
Documentation and all other Loan Documents have been duly executed and delivered
by each Borrower, as applicable, which is a party thereto and constitute legal,
valid and binding obligations of each Borrower, enforceable against each
Borrower, as applicable, which is a party thereto in accordance with their
respective terms.

 

6.          The Club Fortune Deed of Trust is in proper form for recording and
has been fully executed and delivered by NGCLV as the Grantor therein. The Club
Fortune Deed of Trust will, when recorded in the office of the Clark County
Recorder in the State of Nevada, create a valid and legally binding encumbrance
lien on the Club Fortune Real Property and other Collateral therein described.
No other filing or other registration of any document or instrument is necessary
or advisable to protect the priority of the liens so created and it is not
necessary to re-file or re-record the Club Fortune Deed of Trust in order to
maintain such priority.

 

 

 

 

Mutual of Omaha Bank

Attn: Ashan Perera, V.P.

Dated effective as of November 30, 2015

Page 5

 

7.          The Club Fortune Financing Statement is in proper form for filing.
Upon the filing of the Club Fortune Financing Statement in the office of the
Nevada Secretary of State, the security interests granted by NGCLV in the
Security Agreement will be a valid perfected security interests in the
Collateral therein described in accordance with the Uniform Commercial Code as
in force and effect in the applicable state of filing, and no refiling or
re-recording of such Financing Statements is required in order to maintain the
security interest of Lender in said Collateral, except continuation statements
which are required to be filed within six (6) months prior to the expiration of
five (5) years from the date of the filing of the original Financing Statements.

 

8.          Each of NGW, NGWII, NGWIII and AGTSG hold all necessary licenses,
permits, approvals and authorizations from all necessary Gaming Authorities for
the operation of the Washington Casino Operations, as applicable, with respect
to NGW, NGWII and NGWIII, and for the operation of the Deadwood Slot Route
Operation, with respect to AGTSG. NGCLV holds all necessary licenses, permits,
approvals and authorizations from all necessary Nevada Gaming Authorities for
the ownership and operation of the Club Fortune Casino Operations.

 

9.          It is not necessary under the laws of the States of Washington or
South Dakota (a) to enable the Lender to hold a pledge and security interest in
the membership interests and common stock of NGW, NGWII, NGWIII and AGTSG, as
applicable, or (b) by reason of the execution, delivery or performance of the
Loan Documents, that Lender be licensed, qualified or authorized to carry on
business in any such jurisdiction. All necessary approvals under the laws of the
State of Nevada have been granted to enable the Lender to hold a pledge and
security interest in the membership interests in NGCLV.

 

10.        The transactions contemplated by the Credit Agreement will not
violate the usury laws of the States of Nevada, Washington, South Dakota or
Colorado.

 

The opinions set forth in Paragraphs (4) through (7) above are subject to the
additional qualifications that: (a) the enforcement of the Loan Documents may be
subject to bankruptcy, insolvency, reorganization, moratorium or similar laws
now or hereinafter in effect relating to creditors' rights generally;
(b) certain of the provisions contained in the Loan Documents may be
unenforceable in whole or in part, to the extent that any such provision may
contravene the public policy of the States of Nevada, Washington, Colorado or
South Dakota; and (c) certain waivers contained in the Loan Documents may be
unenforceable in whole or in part under the applicable laws of the States of
Nevada, Washington, Colorado or South Dakota, as applicable, but the inclusion
of such provisions, as described in (b) and (c) above, does not affect the
validity of such Loan Documents and such Loan Documents contain adequate
provisions for enforcing payment of all monetary obligations thereunder and for
the practical realization of the rights and benefits afforded thereby, provided
such enforcement is conducted in accordance with the procedures established by
the laws of the States of Nevada, Washington, Colorado, Delaware or South
Dakota, as applicable.

 

 

 

 

Mutual of Omaha Bank

Attn: Ashan Perera, V.P.

Dated effective as of November 30, 2015

Page 6

 

This opinion is rendered to the Lender, and its successors and assigns, in
connection with the transactions referred to herein and may not be relied on in
any other context; nor may it be relied on by any other Person. This opinion may
not be quoted nor may copies hereof be furnished to any other Person without the
prior written consent of the undersigned, except that the Lender, and its
successors and assigns, and any of them, may furnish a copy hereof: (i) to their
respective in-house and independent auditors and attorneys; (ii) to any
Governmental Authority or authority having regulatory jurisdiction over any of
the Lender, or its successors and assigns; (iii) pursuant to order or legal
process of any court or Governmental Authority; (iv) in connection with any
legal action to which Lender, or its successors and assigns, are a party arising
out of the transactions referred to above; or (v) to a financial institution in
connection with a proposed assignment of any interest in the Credit Facility or
a proposed transfer of a participation interest in the Credit Facility.

 

  Sincerely,       Ernest East,   General Counsel to each of the Borrowers