Exhibit 10.16


 


DEED OF TRUST,
ASSIGNMENT OF

RENTS AND LEASES, FIXTURE FILING AND SECURITY AGREEMENT 

(Arizona)


 


THIS DEED OF TRUST, ASSIGNMENT OF RENTS AND
LEASES, FIXTURE FILING AND SECURITY AGREEMENT (as amended, supplemented or
otherwise modified from time to time, this “Deed
of Trust”) is dated as of January 23, 2004, is made by and from GNL, CORP, a Nevada corporation (“Grantor”), whose address is 2300 South
Casino Drive, Laughlin, Nevada 89028 to TRANSNATION
TITLE INSURANCE COMPANY (“Trustee”),
with an address at 1316 Stockton Hill Road, Kingman, Arizona 86401, for the
benefit of WELLS FARGO FOOTHILL, INC.,
a California corporation, in its capacity as lender, arranger, administrative
agent and documentation agent (the “Agent”)
pursuant to the Loan Agreement (as defined below), having an address at 2450
Colorado Avenue, Suite 3000 West, Santa Monica, California 90404 (Agent,
together with its successors and assigns, is referred to herein as “Beneficiary”).


 


RECITALS:


 


WHEREAS, Grantor is the
owner of a fee estate in the real property described in Exhibit A
attached hereto.


 


WHEREAS, Poster Financial
Group, Inc. (referred to herein as the context requires as “Parent”) and its subsidiaries GNLV, Corp.,
a Nevada corporation, and Grantor (Parent, GNLV, Corp. and Grantor collectively
referred to herein as “Borrowers,” or individually as “Borrower”), Agent and Lehman Brothers Inc.,
a Delaware corporation, as syndication agent, have entered into that
certain Loan and Security Agreement dated as of January 23, 2004 (as
amended, supplemented or otherwise modified heretofore or hereinafter from time
to time, the “Loan Agreement”), which Loan Agreement provides for a term
loan, a revolving loan and other extensions of credit in the principal amount
as specified in said Loan Agreement. 
Agent and the Lender Group (as defined in the Loan Agreement) are
unwilling to enter into the Loan Agreement and make available to Borrowers the
credit facilities provided therein unless Grantor, among other things, secures
the obligations of Borrowers under the Loan Agreement and the other Loan
Documents (as defined in the Loan Agreement) by delivering this Deed of Trust.


 


WHEREAS, Grantor is
receiving a good and valuable benefit, the sufficiency and receipt of which is
hereby acknowledged, from Agent and Lender Group entering into the Loan
Agreement with Borrowers.


 

















 


ARTICLE 1

DEFINITIONS


 


Section 1.1                                   Definitions.  All capitalized terms used herein without
definition shall have the respective meanings ascribed to them in the Loan Agreement.  As used herein, the following terms shall
have the following meanings:


 


(a)                                  “Event of
Default”: shall have the meaning ascribed to such term in Article 4
hereof.


 


(b)                                 “Indebtedness”:
All obligations of Grantor and any of the Borrowers to Beneficiary, including,
without limitation, (1) the repayment of all amounts outstanding from time to
time under the Loan Agreement and the other Loan Documents, with such
indebtedness maturing on the Maturity Date (as defined in the Loan Agreement),
including principal, interest (including all interest that, but for the
provisions of the Bankruptcy Code, would have accrued), and other amounts which
may now or hereafter be advanced as Advances, (2) the full and prompt
performance of any and all repayment, fee, and indemnification obligations with
respect to any Letters of Credit, (3) fees, costs, expenses, charges and
indemnification obligations accrued, incurred or arising in connection with any
Loan Document, (4) any and all future advances made pursuant to the terms of
the Loan Agreement, and (5) all other payment Obligations.  The Loan Agreement contains a revolving
credit facility that permits Borrowers to borrow certain principal amounts,
repay all or a portion of such principal amounts, and reborrow the amounts previously
paid to Beneficiary, all upon satisfaction of certain conditions stated in the
Loan Agreement.  This Deed of Trust
secures all Advances and re-advances under the revolving credit feature of the
Loan Agreement.


 


(c)                                  “Obligations”:
All of the agreements, covenants, conditions, warranties, representations and
other obligations of Grantor and the Borrowers under the Loan Agreement and the
other Loan Documents, including, but not limited to, the “Obligations,” as
defined under the Loan Agreement.


 


(d)                                 “Trust
Property”:  All of Grantor’s
interest in (1) the fee estate in the real property described in Exhibit
A attached hereto, together with all existing and future appurtenances,
privileges, easements, franchises, hereditaments and tenements of the real
property (including all minerals, oil, gas and other hydrocarbons and
associated substances) which may be in, under or produced from any part of the
real property, all air, water or other interests or development rights and
credits and any greater estate therein as hereafter may be acquired by Grantor
(the “Land”),
(2) all improvements now leased, owned or hereafter acquired by Grantor,
now or at any time situated, placed or constructed upon the Land (the ”Improvements”;
the Land and Improvements are collectively referred to herein as the “Premises”),
(3) the Operating Assets and all materials, supplies, equipment, apparatus and
other items of personal property now owned or hereafter acquired by Grantor and
now or hereafter located on the Premises (excluding, however, the Excluded
Assets (as defined in the Loan Agreement)) (the “Operational Property”), (4)
all materials, supplies, equipment,


 


2

















 


apparatus and other items
of personal property now owned or hereafter acquired by Grantor and now or
hereafter attached to or installed in any of the Improvements or the Land so as
to constitute fixtures (excluding, however, the Excluded Assets) and water,
gas, electrical, telephone, storm and sanitary sewer facilities and all other
utilities whether or not situated in easements (the “Fixtures”), (5) all
reserves, escrows or impounds and deposit accounts maintained by Grantor with
respect to the Trust Property (excluding, however, the Excluded Assets) (the “Deposit Accounts”),
(6) all existing and future leases, subleases, licenses, concessions,
occupancy agreements or other agreements (written or oral, now or at any time
in effect), granted by Grantor or a direct or indirect lessee or sublessee of
Grantor, which grant to any Person a possessory interest in, or the right to
use or occupy, all or any part of the Trust Property, whether made before or
after the filing by or against Grantor of any petition for relief under the
Bankruptcy Code, together with any extension, renewal or replacement of the
same and together with all related security and other deposits (the “Leases”),
(7) all of the rents, additional rents, revenues, royalties, income,
proceeds, profits, early termination fees or payments, security and other types
of deposits, and other benefits paid or payable by parties to the Leases for
using, leasing, licensing, possessing, operating from, residing in, selling or
otherwise enjoying the Trust Property or any part thereof, whether paid or
accruing before or after the filing by or against Grantor of any petition for
relief under the Bankruptcy Code (the “Rents”), (8) all other agreements,
such as construction contracts, architects’ agreements, engineers’ contracts,
utility contracts, maintenance agreements, management agreements, service
contracts, listing agreements, guaranties, warranties, permits (including the
Permits), licenses, certificates and entitlements in any way relating to the
construction, use, occupancy, operation, maintenance, enjoyment or ownership of
the Trust Property (the “Property Agreements”), (9) all rights,
privileges, tenements, hereditaments, rights-of-way, easements, appendages and
appurtenances appertaining to the foregoing, (10) all property tax
refunds, utility refunds and rebates, earned or received at any time (the “Tax Refunds”),
(11) all accessions, replacements and substitutions for any of the foregoing
and all proceeds thereof and all rents, fees, charges, accounts, issues,
profits, revenues and payments for or from the use or occupancy of the guest
rooms, banquet facilities, ballrooms, spas, salons, pools, restaurants, meeting
rooms and other guest facilities at or in the Hotel (excluding, however, the
Excluded Assets) (the “Proceeds”), (12) all insurance policies,
unearned premiums therefor and proceeds from such policies covering any of the
above property now or hereafter acquired by Grantor (the “Insurance”), (13) all of
Grantor’s right, title and interest in and to any awards, damages,
remunerations, reimbursements, settlements or compensation heretofore made or
hereafter to be made by any governmental authority pertaining to the Land,
Improvements or Fixtures (the “Condemnation Awards”), (14) all of
Grantor’s rights to appear and defend any action or proceeding brought with
respect to the Trust Property and to commence any action or proceeding to
protect the interest of Beneficiary in the Trust Property, and (15) all rights,
powers, privileges, options and other benefits of Grantor under the Leases,
including, without limitation, the immediate and continuing right to claim for,
receive, collect and receive all Rents payable or receivable under the Leases
or pursuant thereto (and to apply the same to the payment of the Indebtedness
and the Obligations), and to do all other things which Grantor or any lessor is
or may become entitled to do under the Leases. 
As used in this Deed of Trust, the term “Trust Property” shall mean all
or, where the context permits or requires, any portion of 


 


3

















 


the above or any interest
therein.  THE TERM “TRUST PROPERTY” IS
INTENDED TO EXCLUDE ALL ITEMS OF PERSONAL PROPERTY IN WHICH BENEFICIARY HAS
OBTAINED AND/OR PERFECTED A SECURITY INTEREST UNDER SEPARATE INSTRUMENTS.


 


(e)                                  “Permitted Liens”: shall have the meaning
ascribed to such term in the Loan Agreement, to the extent the same do not
materially impair the normal operation of the Hotel in accordance with all
Legal Requirements and all Permits.


 


(f)                                    “UCC”:  The Uniform Commercial Code of the state in
which the Land is located or, if the creation, perfection and enforcement of
any security interest herein granted is governed by the laws of a state other
than the state in which the Land is located, then, as to the matter in
question, the Uniform Commercial Code in effect in that state.


 


(g)                                 “FF&E
Financing Arrangements”: 
Only to the extent same constitutes permitted indebtedness under the
Loan Agreement, an agreement which creates a Lien upon any after-acquired
tangible personal property and/or other items constituting operating assets,
which are financed, purchased or leased for the purposes of the operation of
the Hotel.


 


(h)                                 “Hotel”:  That portion of the Improvements being a
hotel.


 


(i)                                     “Investment
Property”:  investment
property (as that term is defined in the UCC), and any and all supporting
obligations in respect thereof.


 


(j)                                     “Junior Deed
of Trust”:  that certain Deed
of Trust, Assignment of Rents and Leases, Fixture Filing and Security Agreement
by and from Grantor to Trustee for the benefit of Wells Fargo Bank, N.A., Inc.
as collateral agent for the holders pursuant to the Indenture (as defined in
the Loan  Agreement) and documentation
date of the same date as this Deed of Trust securing the Trust Property.


 


(k)                                  “Legal
Requirements”:  All laws,
statutes, codes, acts, ordinances, orders, judgments, decrees, injunctions,
rules, regulations, permits (including the Permits), licenses, authorizations,
directions and requirements of all governments, departments, commissions,
boards, courts, authorities, agencies (including Liquor Authorities) and all
officials and officers thereof, applicable to the Trust Property and the use
thereof, including Liquor Laws.


 


(l)                                     “Liquor
Authorities”:  the Department
of the Treasury Bureau of Alcohol, Tobacco and Firearms, and any agency,
authority, board, bureau, commission, department, office or instrumentality or
any nature whatsoever of the United States, the State of Arizona, or any
foreign government, any other state, or any province or any city or other
political subdivision, whether now or hereafter existing, or any officer or
official thereof, including any other agency with authority to regulate the
sale or distribution of alcoholic beverages.


 


4

















 


(m)                               “Liquor Laws”:  the statutes and ordinances regarding the
sale and distribution of alcoholic beverages enforced by the Liquor Authorities
and the rules and regulations of the Liquor Authorities.


 


(n)                                 “Liquor
License”:  any license,
permit, registration, qualification or other approval required to sell,
dispense or distribute alcoholic beverages under the Liquor Laws.


 


(o)                                 “Operating
Assets”:  (a) bookings for
the use of guest rooms, banquet facilities, ballrooms, spas, salons, pools,
restaurants, meeting rooms and other guest facilities at the Hotel or at any
other Improvements now or hereafter located on any of the Land; (b) contract
rights, trademarks, trade names, service marks, logos, copyrights, warranties
and other types of intangible personal property, and any and all goodwill
associated with the same relating to the ownership or operation of the Hotel or
of any other Improvements now or hereafter located on any of the Land,
including, without limitation, (1) telephone and other communication numbers,
(2) all software licensing agreements as are required to operate computer
software systems at the Hotel or at any other Improvements now or hereafter
located on any of the Land and books and records relating to the software
programs and (3) lessee’s interest under leases of Tangible Personal Property;
(c) Tangible Personal Property; (d) drawings, designs, plans and specifications
prepared by architects, engineers, interior designers, landscape designers and
any other professionals or consultants for the design, development,
construction and/or improvement of the Hotel, or for any other development of
the Land, as amended from time to time; (e) customer lists utilized in the
operation of the Hotel including lists of transient guests and restaurant and
bar patrons; and (f) all of the goodwill in connection with the foregoing
Operating Assets and in connection with the operation of the Hotel.


 


(p)                                 “Permits”:  the Liquor Licenses and any other license,
franchise, authorization, statement of compliance, certificate of operation, certificate
of occupancy and permit required for the lawful ownership, operation, occupancy
and use of all or any material portion of the Improvements, in accordance with
applicable Legal Requirements.


 


(q)                                 “Tangible
Personal Property”:  the
following items of personal property now or hereafter acquired by Grantor
(directly or by way of lease) which are located on, or to be located on, or
which are in use or held in reserve storage for future use in connection with
the operations of the Hotel or any other Improvements, which are on hand or on
order whether stored on-site or off-site:


 


(i)                           furniture,
furnishings, machinery, appliances, fixtures and fittings and other articles of
tangible personal property;


 


(ii)                        china,
glassware, linens, kitchen utensils, silverware and uniforms; and


 


5

















 


(iii)                     consumables
and operating supplies of every kind and nature, including accounting supplies,
guest supplies, forms, printing, stationery, food and beverage stock, bar
supplies and laundry supplies.


 


ARTICLE 2

GRANT


 


Section 2.1                                   Grant.  For and in consideration of good and
valuable consideration, the receipt and sufficiency whereof are hereby
acknowledged, and in order to secure the indebtedness and other obligations of
Grantor herein set forth, to secure the full and timely payment of the
Indebtedness and the full and timely performance of the Obligations, Grantor
GRANTS, BARGAINS, ASSIGNS, SELLS, WARRANTS and CONVEYS, to Trustee the Trust
Property, subject, however, to the Permitted Liens, TO HAVE AND TO HOLD
the Trust Property and all parts, rights and appurtenances thereof to Trustee,
IN TRUST, WITH POWER OF SALE, and Grantor does hereby bind itself, its
successors and assigns to WARRANT AND FOREVER DEFEND the title to the Trust
Property unto Trustee.


 


TO HAVE AND TO
HOLD the Trust Property, together with all and singular the parts, rights,
privileges, hereditaments, and appurtenances thereto in any ways belonging or
appertaining, to the use, benefit, and behoof of Trustee, its successors and
assigns, in trust for the benefit of Beneficiary, forever.  Notwithstanding anything to the contrary
contained in the immediately preceding sentence, Grantor hereby agrees and
acknowledges that the Indebtedness secured by this Deed of Trust includes a
revolving loan and is intended to secure future advances; accordingly, this
Deed of Trust shall not be canceled except pursuant to the terms and conditions
set forth in the Loan Agreement.


 


ARTICLE 3

WARRANTIES, REPRESENTATIONS AND COVENANTS


 


Grantor warrants,
represents and covenants to Beneficiary as follows:


 


Section 3.1                                   Title
to Trust Property and Lien of this Instrument.  Grantor (i) has good and indefeasible title
to the real property described in Exhibit A attached hereto, in fee simple,
free and clear of any liens, claims or interests, except the Permitted Liens,
(ii) has good and indefeasible title or holds valid leasehold interests in the
remainder of the Trust Property, in each case free and clear of any liens,
claims or interests, except the Permitted Liens, and (iii) has full power and
lawful authority to encumber the Trust Property in the manner and form set
forth in this Deed of Trust.  This Deed
of Trust creates valid, enforceable first priority liens and security interests
against the Trust Property.


 


Section 3.2                                   First
Lien Status.  Grantor shall
preserve and protect the first lien and security interest status of this Deed
of Trust and the other Loan Documents. 
If any lien or security interest, other than the Permitted Liens, is
asserted against the Trust Property, Grantor shall promptly, and at its
expense, (a) give Beneficiary a detailed written notice of such lien or
security interest (including origin, amount and other terms), and (b) pay the
underlying claim in


 


6

















 


full or take such other
action so as to cause it to be released or contest the same in compliance with
the requirements of the Loan Agreement (including the requirement of providing
a bond or other security satisfactory to Beneficiary), and act in compliance
with any other requirements of the Loan Agreement.


 


Section 3.3                                   Payment
and Performance.  Grantor shall
pay or cause Parent or the other Guarantors to pay the Indebtedness when due
under the Loan Documents and shall perform or cause the Borrowers to perform
the Obligations in full when they are required to be performed.


 


Section 3.4                                   Replacement
of Fixtures.  Grantor shall not,
without the prior written consent of Beneficiary, permit any of the Fixtures to
be removed at any time from the Land or Improvements, unless the removed item
is removed temporarily for maintenance and repair or, if removed permanently,
is obsolete and is replaced by an article of equal or better suitability
and value, owned by Grantor subject to the liens and security interests of this
Deed of Trust and the other Loan Documents, and free and clear of any other
lien or security interest except such as may be permitted under the Loan
Agreement or first approved in writing by Beneficiary.


 


Section 3.5                                   Inspection.  Subject to the terms of Section 4.6
of the Loan Agreement, Grantor shall permit Beneficiary and its agents,
representatives and employees to inspect the Trust Property and all books and
records of Grantor located thereon, and to conduct such environmental and
engineering studies as Beneficiary may require.  Provided that no Event of Default exists, all such testing and
investigation shall be conducted at reasonable times and upon reasonable prior
notice to Grantor.  Beneficiary shall
restore the Trust Property to at least as good condition as the condition it
was in immediately prior to such testing and investigation.


 


Section 3.6                                   Other
Covenants.  All of the covenants
in the Loan Agreement are incorporated herein by reference and, together with
covenants in this Article 3, shall, to the extent applicable, be
covenants running with the land.


 


Section 3.7                                   Condemnation Awards and Insurance Proceeds.


 


(a)                                  Condemnation
Awards.  Grantor, immediately upon
obtaining knowledge of the institution of any proceedings for the condemnation
of the Trust Property or any portion thereof, will notify Beneficiary of the
pendency of such proceedings.  Except as
set forth in the Loan Agreement, Beneficiary may participate in any such
proceedings and Grantor from time to time will deliver to Beneficiary all
instruments requested by it to permit such participation.  Grantor assigns all awards and compensation
to which it is entitled for any condemnation or other taking, or any purchase
in lieu thereof, to Beneficiary and authorizes Beneficiary to collect and
receive such awards and compensation and to give proper receipts and
acquittances therefor, subject to the terms of the Loan Agreement. Grantor
hereby waives all rights to such awards and compensation described in the
foregoing sentence.  Grantor, upon
request by Beneficiary, shall make, execute and deliver any and all instruments
requested for


 


7

















 


the purpose of confirming
the assignment of the aforesaid awards and compensation to Beneficiary free and
clear of any liens, charges or encumbrances of any kind or nature whatsoever.


 


(b)                                 Insurance
Proceeds.  Without limitation to the
requirements of the Loan Agreement, Grantor shall maintain such insurance
coverage as is customarily carried by owners and operators of comparable hotels
in Mohave County, Arizona.  Grantor
assigns to Beneficiary all proceeds of any insurance policies insuring against
loss or damage to the Trust Property. 
Except as set forth in the Loan Agreement, Grantor authorizes
Beneficiary to collect and receive such proceeds and authorizes and directs the
issuer of each of such insurance policies to make payment for all such losses
directly to Beneficiary, instead of to Grantor and Beneficiary jointly, as more
specifically described in the Loan Agreement. 
In the event that the issuer of such insurance policy fails to disburse
directly or solely to Beneficiary but disburses instead either solely to
Grantor or to Grantor and Beneficiary, jointly, Grantor shall immediately
endorse and transfer such proceeds to Beneficiary.  Upon Grantor’s failure to do so, Beneficiary may execute such
endorsements or transfers from and in the name of Grantor, and Grantor hereby
irrevocably appoints Beneficiary as Grantor’s agent and attorney-in-fact so to
do.


 


(c)                                  Beneficiary
acknowledges that, notwithstanding the foregoing provisions of this
Section 3.7, Grantor has granted certain rights in and to condemnation
awards and insurance proceeds pursuant to the Junior Deed of Trust and, subject
to the terms of the Intercreditor Agreement, the provisions of this
Section 3.7 are entered into subject to such rights.


 


Section 3.8                                   Costs
of Defending and Upholding the Lien. 
If any action or proceeding is commenced to which action or proceeding
Trustee or Beneficiary is made a party or in which it becomes necessary for
Trustee or Beneficiary to defend or uphold the lien of this Deed of Trust
including any extensions, renewals, amendments or modifications thereof,
Grantor shall, on demand, reimburse Trustee and Beneficiary for all expenses
(including, without limitation, reasonable attorneys’ fees and reasonable
appellate attorneys’ fees) incurred by Trustee or Beneficiary in any such
action or proceeding and all such expenses shall be secured by this Deed of
Trust.  In any action or proceeding to
foreclose this Deed of Trust or to recover or collect the Indebtedness, the
provisions of law relating to the recovering of costs, disbursements and allowances
shall prevail unaffected by this covenant.


 


Section 3.9                                   Transfer of the Secured Property.  EXCEPT AS EXPRESSLY PERMITTED PURSUANT TO
THE TERMS OF THE LOAN AGREEMENT, GRANTOR SHALL NOT SELL, ASSIGN, TRANSFER,
PLEDGE, ENCUMBER, CREATE A SECURITY INTEREST IN, LEASE, OR OTHERWISE
HYPOTHECATE, ALL OR ANY PORTION OF THE TRUST PROPERTY WITHOUT THE PRIOR WRITTEN
CONSENT OF BENEFICIARY.  THE CONSENT BY
BENEFICIARY TO ANY SALE, TRANSFER, PLEDGE, ENCUMBRANCE, CREATION OF A SECURITY
INTEREST IN, LEASE, OR OTHER HYPOTHECATION OF, ANY PORTION OF THE TRUST
PROPERTY SHALL NOT BE DEEMED TO CONSTITUTE A NOVATION OR A CONSENT TO ANY


 


8

















 


FURTHER SALE, ASSIGNMENT,
TRANSFER, PLEDGE, ENCUMBRANCE, CREATION OF A SECURITY INTEREST IN, LEASE, OR
OTHER HYPOTHECATION, OR TO WAIVE THE RIGHT OF BENEFICIARY, AT ITS OPTION, TO
DECLARE THE INDEBTEDNESS SECURED HEREBY IMMEDIATELY DUE AND PAYABLE, WITHOUT
NOTICE TO GRANTOR OR ANY OTHER PERSON OR ENTITY, UPON ANY SUCH SALE,
ASSIGNMENT, TRANSFER, PLEDGE, ENCUMBRANCE, CREATION OF A SECURITY INTEREST,
LEASE, OR OTHER HYPOTHECATION TO WHICH BENEFICIARY SHALL NOT HAVE CONSENTED.


 


Section 3.10                            Security Deposits.  If required by Beneficiary, all security
deposits of tenants of the Trust Property shall be treated as trust funds not
to be commingled with any other funds of Grantor.  Within twenty (20) days after request by Beneficiary, Grantor
shall furnish satisfactory evidence of compliance with this Section 3.10,
as necessary, together with a statement of all security deposits deposited by
the tenants and copies of all Leases not theretofore delivered to Beneficiary,
as requested thereby, certified by Grantor.


 


Section 3.11                            Lease Representations, Warranties and
Covenants.  Grantor
hereby represents, warrants and covenants as follows:


 


(a)                                  as
of the date of this Deed of Trust, no Leases are in effect and no Leases have
been entered into that are due to come into effect at a later date;


 


(b)                                 Grantor
shall, upon request, furnish Beneficiary with executed copies of all Leases
hereafter entered into and all amendments, modifications and supplements
thereto;


 


(c)                                  Grantor
shall (i)  observe and perform in all material respects all the
obligations imposed upon the lessor under the Leases and shall not do or permit
to be done anything to materially impair the value of the Leases as security
for the Indebtedness and the Obligations; (ii) promptly send copies to
Beneficiary of all notices of default which Grantor shall send or receive
thereunder; (iii) enforce all the material terms, covenants and conditions
contained in the Leases upon the part of the lessee thereunder to be observed
or performed, (iv) not collect any of the Rents more than one (1) month in
advance, except as may be specifically required in the applicable Lease;
(v) not execute any other assignment of the lessor’s interest in the
Leases or the Rents; and (vi) use reasonable efforts to obtain and deliver to
Beneficiary, upon request, tenant estoppel certificates from each tenant at the
Premises in the form required under the applicable Lease, or if no such form is
provided, in form and substance reasonably satisfactory to Beneficiary; and


 


(d)                                 Grantor
shall not, except to the extent Grantor has received the prior written consent
of Beneficiary, (A) alter, modify or change the terms of any Lease in any
material respect; (B) consent to any assignment of or subletting under any
Lease not in accordance with its terms; and (C) cancel or terminate any
Lease or accept a surrender thereof,


 


9

















 


unless such tenant is in
default thereunder and a new Lease has been entered into on substantially the
same terms or more favorable terms as the canceled Lease.


 


Section 3.12                            Additional
Lease Covenants.


 


(a)                                  Grantor
shall give Beneficiary and Trustee not less than thirty (30) days prior written
notice of the date on which Grantor shall apply to any court or other
governmental authority for authority and permission to reject any of the Leases
in the event that there shall be filed by or against Grantor any petition,
action or proceeding under the Bankruptcy Code or under any other similar
federal or state law now or hereafter in effect and if Grantor determines to
reject any of the Leases.  Beneficiary
and Trustee shall have the right, but not the obligation, to serve upon Grantor
within such thirty (30) day period a notice stating that (i) Beneficiary
or Trustee demands that Grantor assume and assign any of the Leases to
Beneficiary or Trustee subject to and in accordance with the Bankruptcy Code
and (ii) Beneficiary covenants to cure or provide reasonably adequate
assurance thereof with respect to all defaults reasonably susceptible of being
cured by Beneficiary or Trustee and of future performance under the applicable
Leases.  If Beneficiary or Trustee
serves upon Grantor the notice described above, Grantor shall not seek to
reject any of the Leases and shall comply with the demand provided for in
clause (i) above within fifteen (15) days after the notice shall have been
given by Beneficiary and Trustee.


 


(b)                                 During
the continuance of an Event of Default, Beneficiary and Trustee shall have the
right, but not the obligation, (i) to perform and comply with all obligations
of Grantor under the Leases without relying on any grace period provided
therein, (ii) to do and take, without any obligation to do so, such action as
Beneficiary or Trustee deems necessary or desirable to prevent or cure any
default by Grantor under any of the Leases, including, without limitation, any
act, deed, matter or thing whatsoever that Grantor may do in order to cure a
default under the applicable Leases and (iii) to enter in and upon the Land or
any part thereof to such extent and as often as Beneficiary or Trustee  deems
necessary or desirable in order to prevent or cure any default of Grantor under
the Leases.  Grantor shall on demand,
reimburse Beneficiary for all advances made and expenses incurred by
Beneficiary in exercising the foregoing rights (including, without limitation,
reasonable attorneys’ fees and disbursements), together with interest thereon
at three percentage points above the “prime rate” announced by Wells Fargo
Bank, N.A. at its principal office in San Francisco from time to time (the “Applicable
Rate”) from the date that an advance is made or expense is incurred,
to and including the date the same is paid and such monies so expended by
Beneficiary with interest thereon shall be secured by this Deed of Trust.  Grantor shall, within five (5) days after
written request is made therefor by Beneficiary or Trustee, execute and deliver
to Beneficiary or to any party designated by Beneficiary or Trustee, such
further instruments, agreements, powers, assignments, conveyances or the like
as may be reasonably necessary to complete or perfect the interest, rights or
powers of Beneficiary pursuant to this paragraph or as may otherwise be
required by Beneficiary  or Trustee.


 


10

















 


(c)                                  During
the continuance of an Event of Default, in the event of any arbitration under
or pursuant to the Leases in which Beneficiary elects to participate, Grantor
hereby irrevocably appoints Beneficiary and Trustee as its true and lawful
attorney-in-fact (which appointment shall be deemed coupled with an interest)
to exercise, during the continuance of an Event of Default, all right, title
and interest of Grantor in connection with such arbitration, including, without
limitation, the right to appoint arbitrators and to conduct arbitration
proceedings on behalf of Grantor and Beneficiary.  All costs and expenses incurred by Beneficiary and Trustee in
connection with such arbitration and the settlement thereof shall be borne
solely by Grantor, including, without limitation, attorneys’ fees and
disbursements.  Nothing contained in
this paragraph shall obligate Beneficiary or Trustee to participate in any such
arbitration.


 


Section 3.13                            Estoppel Certificates.  Grantor shall use commercially reasonable
efforts to obtain and deliver to Beneficiary within twenty (20) days after
written demand by Beneficiary, an estoppel certificate from the applicable
lessee under the Leases setting forth (i) the name of the lessee and the
lessor thereunder, (ii) that the applicable Lease is in full force and
effect and has not been modified or, if it has been modified, the date of each
modification (together with copies of each such modification), (iii) the
basic rent payable under the applicable Lease, (iv) the date to which all
rental charges have been paid by the lessee under the applicable Lease,
(v) whether a notice of default has been received by the fee owner or
lessor which has not been cured, and if such notice has been received, the date
it was received and the nature of the default, (vi) whether there are any
alleged defaults of the lessee under the applicable Lease and, if there are,
setting forth the nature thereof in reasonable detail, and (vii) if the
lessee under the applicable Lease shall be in default, the default.


 


Section 3.14                            FF&E
Financing Arrangements.  Grantor
shall comply with the terms of all FF&E Financing Arrangements.  If Grantor has acquired or hereafter
acquires Operational Property or Fixtures 
subject to any FF&E Financing Arrangement, or becomes lessee under a
lease for any of the same, the Lien of this Deed of Trust on such acquired or
leased assets shall be subordinate to the Lien of such FF&E Financing
Arrangement and Beneficiary, at Grantor’s cost, shall execute and deliver to
Grantor such documents as Grantor may reasonably request evidencing such
subordination.


 


Section 3.15                            Maintenance
of Premises.  Grantor shall
maintain and keep the Premises in such good repair, working order and condition
and shall make or cause to be made all such needful and proper repairs,
renewals and replacements thereto consistent with the standards of comparable
hotels in Mohave County, Arizona. 
Grantor shall occupy and continuously operate the Hotel and keep the
Hotel supplied with Tangible Personal Property, all in a manner consistent with
the standards of comparable hotels in Mohave County, Arizona.


 


Section 3.16                            Alterations.  All alterations to the Premises (a) shall be
carried out in conformity with the Indebtedness Documents, Legal Requirements
and insurance requirements in a good and workmanlike manner and prosecuted with
reasonable dispatch subject to force majeure; (b) shall be undertaken only with
appropriate workers compensation


 


11

















 


insurance covering
workers engaged in such alterations and appropriate commercial general
liability insurance covering all hazards resulting from such alterations; and
(c) affecting the structure of any of the Improvements, the building systems or
any material portion of the Improvements, (i) shall be carried out under
the supervision of a reputable architect with no less than ten (10) years’ experience
in the design and construction of comparable hotels in Mohave County, Arizona,
(ii) shall be notified to Beneficiary prior to the commencement thereof and,
upon Beneficiary’s request, Grantor shall deliver to Beneficiary copies of all
drawings, plans, specifications and cost estimates therefor prepared and
approved in writing by said architect and accompanied by a certificate of such
architect stating that such drawings, plans and specifications are in
compliance with all Legal Requirements and insurance requirements, and (iii)
shall not be commenced until Grantor has furnished to Beneficiary, at Grantor’s
sole cost and expense, a surety bond or bonds, covering performance, labor and
material payments with respect to the work, naming Beneficiary as obligee (or
as co-obligee with the beneficiary under the Superior Deed of Trust and
Grantor), issued by a responsible surety company, authorized to do business in
the State of Arizona, in a form generally and customarily used by such surety
in an amount equal to the estimated cost of construction of the work,
guaranteeing the performance and completion of such construction, substantially
in conformity with the plans and specifications and within a reasonable time
subject to force majeure free and clear of all Liens, claims and liabilities
for the cost of such alterations (if such surety bond is unobtainable, Grantor
shall provide equivalent security in the form of cash, letter of credit or
other guarantee).  No alterations of any
kind shall be made which shall change the use of the Hotel from its use as a
hotel facility.


 


ARTICLE 4

DEFAULT


 


Section 4.1                                   Events
of Default.  The occurrence of
any of the following events shall constitute an event of default under this
Deed of Trust (each an “Event of Default”):


 


(a)                                  an
“Event of Default” (as such term is defined in the Loan Agreement) shall have
occurred;


 


(b)                                 the
revocation, termination, suspension or other cessation of effectiveness of (i)
any Liquor License which results in the cessation or suspension of the serving
of alcohol at the Hotel or a material portion thereof for more than
90 consecutive days or (ii) any other Permit which results in the
cessation or suspension of all or a substantial portion of the operations of
the Hotel for more than 90 consecutive days, in either case, other than as
a result of an Asset Sale permitted under the Indenture or any voluntary
relinquishment that is, in the judgment of the Board of Directors of Parent,
both desirable in the conduct of the business of Borrowers, taken as a whole,
and not disadvantageous in any material respect to the Beneficiary;


 


(c)                                  Grantor’s
breach of any of the covenants set forth in this Deed of Trust; or


 


12

















 


(d)                                 if
any misstatement or misrepresentation exists now or hereafter in any warranty
or representation set forth in Article 3 hereof.


 


ARTICLE 5

REMEDIES AND FORECLOSURE


 


Section 5.1                                   Remedies.  If an Event of Default exists, Beneficiary
may, at Beneficiary’s election and by or through Trustee or otherwise, exercise
any or all of the following rights, remedies and recourses:


 


(a)                                  To
the extent permitted under the Loan Agreement and in accordance with the
provisions hereof, declare the Indebtedness to be immediately due and payable,
without further notice, presentment, protest, notice of intent to accelerate,
notice of acceleration, demand or action of any nature whatsoever (each of
which hereby is expressly waived by Grantor), whereupon the same shall become
immediately due and payable.


 


(b)                                 Notify
all tenants of the Premises and all others obligated on leases of any part of
the Premises that all rents and other sums owing on leases have been assigned
to Beneficiary and are to be paid directly to Beneficiary, and to enforce
payment of all obligations owing on leases, by suit, ejectment, cancellation,
releasing, reletting or otherwise, whether or not Beneficiary has taken
possession of the Premises, and to exercise whatever rights and remedies
Beneficiary may have under any assignment of rents and leases.


 


(c)                                  As
and to the extent permitted by law, enter the Trust Property, either personally
or by its agents, nominees or attorneys, and take exclusive possession thereof
and thereupon, Beneficiary may (i) use, operate, manage, control, insure,
maintain, repair, restore and otherwise deal with all and every part of the
Premises and conduct business thereat; (ii) complete any construction on the
Premises in such manner and form as Beneficiary deems advisable in the
reasonable exercise of its judgment; (iii) exercise all rights and power of
Grantor with respect to the Premises, whether in the name of Grantor, or
otherwise, including, without limitation, the right to make, cancel, enforce or
modify leases, obtain and evict tenants, and demand, sue for, collect and
receive all earnings, revenues, rents, issues, profits and other income of the
Premises and every part thereof, which rights shall not be in limitation of
Beneficiary’s rights under any assignment of rents and leases securing the
Indebtedness; and (iv) pursuant to the provisions of the Loan Agreement,
apply the receipts from the Premises to the payment of the Indebtedness, after
deducting therefrom all expenses (including attorneys’ fees) incurred in
connection with the aforesaid operations and all amounts necessary to pay the
taxes, assessments, insurance and other charges in connection with the Trust
Property, as well as just and reasonable compensation for the services of
Beneficiary, its counsel, agents and employees.


 


(d)                                 Hold,
lease, develop, manage, operate or otherwise use the Trust Property upon such
terms and conditions as Beneficiary may deem reasonable under the circumstances
(making such repairs, alterations, additions and improvements and taking other


 


13

















 


actions, from time to
time, as Beneficiary deems necessary or desirable), and apply all Rents and
other amounts collected by Trustee in connection therewith in accordance with
the provisions of Section 5.7 hereof.


 


(e)                                  Require
Grantor to assemble any collateral under the UCC and make it available to
Beneficiary, at Grantor’s sole risk and expense, at a place or places to be
designated by Beneficiary, in its sole discretion.


 


(f)                                    Institute
proceedings for the complete foreclosure of this Deed of Trust, either by
judicial action or by power of sale, in which case the Trust Property may be
sold for cash or credit in accordance with applicable law in one or more
parcels as Beneficiary may determine. 
Except as otherwise required by applicable law, with respect to any
notices required or permitted under the UCC, Grantor agrees that ten (10) days’
prior written notice shall be deemed commercially reasonable.  At any such sale by virtue of any judicial
proceedings, power of sale, or any other legal right, remedy or recourse, the
title to and right of possession of any such property shall pass to the
purchaser thereof, and to the fullest extent permitted by law, Grantor shall be
completely and irrevocably divested of all of its right, title, interest, claim,
equity, equity of redemption, and demand whatsoever, either at law or in
equity, in and to the property sold and such sale shall be a perpetual bar both
at law and in equity against Grantor, and against all other Persons claiming or
to claim the property sold or any part thereof, by, through or under
Grantor.  Beneficiary or any of the
Lenders may be a purchaser at such sale. 
If Beneficiary is the highest bidder, Beneficiary may credit the portion
of the purchase price that would be distributed to Beneficiary against the
Indebtedness in lieu of paying cash.  In
the event this Deed of Trust is foreclosed by judicial action, appraisement and
valuation of the Trust Property is waived. In the event of any sale made under
or by virtue of this Article 5 (whether made by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale) the entire
Indebtedness, if not previously due and payable, immediately thereupon shall
become due and payable. The failure to make any such tenants of the Premises
party to any such foreclosure proceedings and to foreclose their rights will
not be, nor be asserted to be by Grantor, a defense to any proceedings
instituted by Beneficiary to collect the sums secured hereby.


 


(g)                                 With
or without entry, to the extent permitted and pursuant to the procedures
provided by applicable law, institute proceedings for the partial foreclosure
of this Deed of Trust for the portion of the Indebtedness then due and payable
(if Beneficiary shall have elected not to declare the entire Indebtedness to be
immediately due and owing), subject to the continuing lien of this Deed of
Trust for the balance of the Indebtedness not then due; or (1) as and to the
extent permitted by law, sell for cash or upon credit the Trust Property or any
part thereof and all estate, claim, demand, right, title and interest of
Grantor therein, pursuant to power of sale or otherwise, at one or more sales,
as an entity or in parcels, at such time and place, upon such terms and after
such notice thereof as may be required or permitted by law, and in the event of
a sale, by foreclosure or otherwise, of less than all of the Trust
Property, this Deed of Trust shall continue as a lien on the remaining portion
of the Trust Property; or (2) institute an action, suit or proceeding in equity
for the specific performance of any covenant, condition or agreement contained
herein or in any Loan Document; or (3) to the extent


 


14

















 


permitted by applicable
law, recover judgment on the Loan Agreement either before, during or after any
proceedings for the enforcement of this Deed of Trust.


 


(h)                                 Make
application to a court of competent jurisdiction for, and obtain from such
court as a matter of strict right and without notice to Grantor or regard to
the adequacy of the Trust Property for the repayment of the Indebtedness, the
appointment of a receiver of the Trust Property, and Grantor irrevocably
consents to such appointment.  Any such
receiver shall have all the usual powers and duties of receivers in similar
cases, including the full power to rent, maintain and otherwise operate the
Trust Property upon such terms as may be approved by the court, and shall apply
such Rents in accordance with the provisions of Section 5.7 hereof.


 


(i)                                     Exercise
all other rights, remedies and recourses granted under the Loan Documents or
otherwise available at law or in equity, and including without limitation, that
Beneficiary shall have all of the rights and remedies available under Revised
Statutes Section 33-702.


 


Section 5.2                                   Separate
Sales.  The Trust Property may
be sold in one or more parcels and in such manner and order as Trustee in its
sole discretion may elect; the right of sale arising out of any Event of
Default shall not be exhausted by any one or more sales.


 


Section 5.3                                   Remedies
Cumulative, Concurrent and Nonexclusive.  Beneficiary and Trustee shall have all rights, remedies and
recourses granted in the Loan Documents and available at law or equity
(including the UCC), which rights (a) shall be cumulated and concurrent,
(b) may be pursued separately, successively or concurrently against
Grantor or others obligated under the Loan Documents, or against the Trust
Property, or against any one or more of them, at the sole discretion of Beneficiary
or Trustee, as the case may be, (c) may be exercised as often as occasion
therefor shall arise, and the exercise or failure to exercise any of them shall
not be construed as a waiver or release thereof or of any other right, remedy
or recourse, and (d) are intended to be, and shall be, nonexclusive.  No action by Beneficiary or Trustee in the
enforcement of any rights, remedies or recourses under the Loan Documents or
otherwise at law or equity shall be deemed to cure any Event of Default.


 


Section 5.4                                   Release
of and Resort to Collateral. 
Beneficiary may release, regardless of consideration and without the
necessity for any notice to or consent by the holder of any subordinate lien on
the Trust Property, any part of the Trust Property without, as to the remainder,
in any way impairing, affecting, subordinating or releasing the lien or
security interest created in or evidenced by the Loan Documents or their status
as a first and prior lien and security interest in and to the Trust Property.  For payment of the Indebtedness, Beneficiary
may resort to any other security in such order and manner as Beneficiary may
elect.


 


Section 5.5                                   Waiver
of Redemption, Notice and Marshalling of Assets.  To the fullest extent permitted by law,
Grantor hereby irrevocably and unconditionally waives and releases (a) all
benefit that might accrue to Grantor by virtue of any present or future statute
of


 


15

















 


limitations or law or
judicial decision exempting the Trust Property from attachment, levy or sale on
execution or providing for any stay of execution, exemption from civil process,
redemption or extension of time for payment, (b) all notices of any Event
of Default or of any election by Trustee or Beneficiary to exercise or the actual
exercise of any right, remedy or recourse provided for under the Loan
Documents, and (c) any right to a marshalling of assets or a sale in inverse
order of alienation.


 


Section 5.6                                   Discontinuance
of Proceedings.  If Beneficiary
or Trustee shall have proceeded to invoke any right, remedy or recourse
permitted under the Loan Documents and shall thereafter elect to discontinue or
abandon it for any reason, Beneficiary or Trustee, as the case may be, shall
have the unqualified right to do so and, in such an event, Grantor, Beneficiary
and Trustee shall be restored to their former positions with respect to the
Indebtedness, the Obligations, the Loan Documents, the Trust Property and
otherwise, and the rights, remedies, recourses and powers of Beneficiary and
Trustee shall continue as if the right, remedy or recourse had never been
invoked, but no such discontinuance or abandonment shall waive any Event of
Default which may then exist or the right of Beneficiary or Trustee thereafter
to exercise any right, remedy or recourse under the Loan Documents for such
Event of Default.


 


Section 5.7                                   Application
of Proceeds.  The proceeds of
any sale made under or by virtue of this Article 5, together with
any Rents and other amounts generated by the holding, leasing, management,
operation or other use of the Trust Property, shall be applied by Beneficiary
or Trustee (or the receiver, if one is appointed) in the following order unless
otherwise required by applicable law:


 


(a)                                  to
the payment of the costs and expenses of taking possession of the Trust
Property and of holding, using, leasing, repairing, improving and selling the
same, including, without limitation (1) trustee’s and receiver’s fees and
expenses, including the repayment of the amounts evidenced by any receiver’s
certificates, (2) court costs, (3) attorneys’ and accountants’ fees and
expenses, and (4) costs of advertisement;


 


(b)                                 to
the payment of the Indebtedness and performance of the Obligations in such
manner and order of preference as set forth in the Loan Agreement; and


 


(c)                                  the
balance, if any, to the payment of the Persons legally entitled thereto.


 


Section 5.8                                   Occupancy
After Foreclosure.  Except as
otherwise required by applicable law, any sale of the Trust Property or any
part thereof in accordance with Section 5.1(e) or Section 5.1(f)
hereof will divest all right, title and interest of Grantor in and to the
property sold.  Subject to applicable
law, any purchaser at a foreclosure sale will receive immediate possession of
the property purchased.  If Grantor
retains possession of such property or any part thereof subsequent to such
sale, Grantor will be considered a tenant at sufferance of


 


16

















 


the purchaser, and will,
if Grantor remains in possession after demand to remove, be subject to eviction
and removal, forcible or otherwise, with or without process of law.


 


Section 5.9                                   Additional Advances and Disbursements; Costs
of Enforcement.


 


(a)                                  If
any Event of Default exists, Beneficiary shall have the right, but not the
obligation, to cure such Event of Default in the name and on behalf of
Grantor.  All sums advanced and expenses
incurred at any time by Beneficiary under this Section 5.9, or
otherwise under this Deed of Trust or any of the other Loan Documents or
applicable law, shall bear interest from the date that such sum is advanced or
expense incurred, to and including the date of reimbursement, computed at the
rate or rates at which interest is then computed on the Indebtedness, and all
such sums, together with interest thereon, shall be secured by this Deed of
Trust.


 


(b)                                 Grantor
shall pay all expenses (including reasonable attorneys’ fees and expenses and
all costs and expenses related to legal work, research and litigation) of or
incidental to the perfection and enforcement of this Deed of Trust and the
other Loan Documents, or the enforcement, compromise or settlement of the
Indebtedness or any claim under this Deed of Trust and the other Loan
Documents, and for the curing thereof, or for defending or asserting the rights
and claims of Beneficiary in respect thereof, by litigation or otherwise.


 


Section 5.10                            No
Mortgagee in Possession. 
Neither the enforcement of any of the remedies under this Article 5,
the assignment of the rents and leases under Article 6, the security
interests under Article 7, nor any other remedies afforded to
Beneficiary under the Loan Documents, at law or in equity shall cause
Beneficiary or Trustee to be deemed or construed to be a mortgagee in
possession of the Trust Property, to obligate Beneficiary or Trustee to lease
the Trust Property or attempt to do so, or to take any action, incur any
expense, or perform or discharge any obligation, duty or liability whatsoever
under any of the Leases or otherwise.


 


Section 5.11                            WAIVER OF GRANTOR’S RIGHTS.  BY EXECUTION
OF THIS DEED OF TRUST, GRANTOR EXPRESSLY: 
(A) ACKNOWLEDGES THE RIGHT OF BENEFICIARY TO ACCELERATE THE
INDEBTEDNESS EVIDENCED BY THE LOAN AGREEMENT OR OTHER LOAN DOCUMENTS UPON THE
OCCURRENCE OF AN EVENT OF DEFAULT; 
(B) TO THE EXTENT ALLOWED BY APPLICABLE LAW, WAIVES ANY AND ALL
RIGHTS WHICH GRANTOR MAY HAVE UNDER THE CONSTITUTION OF THE UNITED STATES, THE
VARIOUS PROVISIONS OF THE CONSTITUTIONS FOR THE SEVERAL STATES, OR BY
REASON OF ANY OTHER APPLICABLE LAW, TO NOTICE AND TO JUDICIAL HEARING PRIOR TO
THE EXERCISE BY BENEFICIARY OF ANY RIGHT OR REMEDY HEREIN PROVIDED TO
BENEFICIARY;  (C) ACKNOWLEDGES THAT
GRANTOR HAS READ THIS DEED OF TRUST AND ITS PROVISIONS HAVE BEEN EXPLAINED FULLY
TO GRANTOR AND GRANTOR HAS CONSULTED WITH


 


17

















 


LEGAL
COUNSEL OF GRANTOR’S CHOICE PRIOR TO EXECUTING THIS DEED OF TRUST; AND
(D) ACKNOWLEDGES THAT ALL WAIVERS OF THE AFORESAID RIGHTS OF GRANTOR HAVE
BEEN MADE KNOWINGLY, INTENTIONALLY AND WILLINGLY BY GRANTOR AS PART OF A
BARGAINED FOR LOAN TRANSACTION.


 


ARTICLE 6

ASSIGNMENT OF RENTS AND LEASES


 


Section 6.1                                   Assignment.  In furtherance of and in addition to the
assignment made by Grantor in Section 2.1 of this Deed of Trust,
Grantor hereby absolutely and unconditionally assigns, sells, transfers and
conveys to Trustee (for the benefit of Beneficiary) and to Beneficiary all of
its right, title and interest in and to all Leases, whether now existing or
hereafter entered into, and all of its right, title and interest in and to all
Rents.  This assignment is an absolute
assignment and not an assignment for additional security only.  So long as no Event of Default shall have
occurred and be continuing and to the extent not prohibited by the Loan
Agreement, Grantor shall have a revocable license from Trustee and Beneficiary
to exercise all rights extended to the landlord under the Leases, including the
right to receive and collect all Rents and to hold the Rents in trust for use
in the payment and performance of the Obligations and to otherwise use the
same.  The foregoing license is granted
subject to the conditional limitation that no Event of Default shall have
occurred and be continuing.  Upon the
occurrence and during the continuance of an Event of Default, whether or not
legal proceedings have commenced, and without regard to waste, adequacy of
security for the Obligations or solvency of Grantor, the license herein granted
shall automatically expire and terminate, without notice by Trustee or
Beneficiary (any such notice being hereby expressly waived by Grantor).


 


Section 6.2                                   Perfection
Upon Recordation.  Grantor
acknowledges that Beneficiary and Trustee have taken all actions necessary to
obtain, and that upon recordation of this Deed of Trust Beneficiary and Trustee
shall have, to the extent permitted under applicable law, a valid and fully
perfected, first priority, present assignment of the Rents arising out of the
Leases and all security for such Leases, subject only to the assignment of such
Rents pursuant to the Junior Deed of Trust and/or any separate assignment of
Leases executed in connection therewith. 
Grantor acknowledges and agrees that upon recordation of this Deed of
Trust Trustee’s and Beneficiary’s interest in the Rents shall be deemed to be fully
perfected, “choate” and enforced as to Grantor and all third parties,
including, without limitation, any subsequently appointed trustee in any case
under Title 11 of the United States Code (the “Bankruptcy Code”), without
the necessity of commencing a foreclosure action with respect to this Deed of
Trust, making formal demand for the Rents, obtaining the appointment of a
receiver or taking any other affirmative action.


 


Section 6.3                                   Bankruptcy
Provisions.  Without limitation
of the absolute nature of the assignment of the Rents hereunder, Grantor,
Trustee and Beneficiary agree that (a) this Deed of Trust shall constitute a
“security agreement” for purposes of Section 552(b) of the Bankruptcy
Code, (b) the security interest created by this Deed of Trust extends to
property of


 


18

















 


Grantor acquired before
the commencement of a case in bankruptcy and to all amounts paid as Rents and
(c) such security interest shall extend to all Rents acquired by the estate after
the commencement of any case in bankruptcy.


 


Section 6.4                                   No
Merger of Estates.  So long as
part of the Indebtedness and the Obligations secured hereby remain unpaid and
undischarged, the fee and leasehold estates to the Trust Property shall not
merge, but shall remain separate and distinct, notwithstanding the union of
such estates either in Grantor, Beneficiary, any tenant or any third party by
purchase or otherwise.


 


ARTICLE 7

SECURITY AGREEMENT


 


Section 7.1                                   Security
Interest.  This Deed of Trust
constitutes a “security agreement” on personal property within the meaning of
the UCC and other applicable law and with respect to the Operational Property,
Fixtures, Leases, Rents, Deposit Accounts, Property Agreements, Tax Refunds,
Proceeds, Insurance and Condemnation Awards. 
To this end, Grantor grants to Beneficiary a first and prior security
interest in the Operational Property, Fixtures, Leases, Rents, Deposit
Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance and
Condemnation Awards and all other Trust Property which is personal property to
secure the payment of the Indebtedness and performance of the Obligations, and
agrees that Beneficiary shall have all the rights and remedies of a secured
party under the UCC with respect to such property.  Any notice of sale, disposition or other intended action by
Beneficiary with respect to the Operational Property, Fixtures, Leases, Rents,
Deposit Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance and
Condemnation Awards sent to Grantor at least five (5) days prior to any action
under the UCC shall constitute reasonable notice to Grantor.  THE TERM “TRUST PROPERTY” IS INTENDED TO
EXCLUDE ALL ITEMS OF PERSONAL PROPERTY IN WHICH BENEFICIARY HAS OBTAINED AND/OR
PERFECTED A SECURITY INTEREST UNDER SEPARATE INSTRUMENTS.


 


Section 7.2                                   Financing
Statements.  Grantor authorizes
Beneficiary to prepare and record, in form and substance satisfactory to
Beneficiary, financing statements (and shall make, execute and/or otherwise
deliver to Beneficiary, in form and substance satisfactory to Beneficiary, such
further documentation and assurances) as Beneficiary may, from time to time,
reasonably consider necessary to create, perfect and preserve Beneficiary’s
security interest hereunder and Beneficiary may cause such statements and
assurances to be recorded and filed, at such times and places as may be
required or permitted by law to so create, perfect and preserve such security
interest.  Grantor’s state of organization
is the State of Nevada.


 


Section 7.3                                   Fixture
Filing.  This Deed of Trust
shall also constitute a “fixture filing” for the purposes of the UCC against
all of the Trust Property which is or is to become fixtures.  Information concerning the security interest
herein granted may be obtained at the address of Debtor (Grantor) and Secured
Party (Beneficiary) as set forth in the first paragraph of this Deed of Trust.


 


19

















 


Section 7.4                                   Applicable Provisions of Liquor Laws.  The parties acknowledge and agree that all
rights, remedies, and powers provided in this Deed of Trust relative to the
Trust Property may be exercised only to the extent that the exercise thereof
does not violate any applicable mandatory provision of the applicable Liquor
Laws and all provisions of this Deed of Trust relative to the Trust Property
are intended to be subject to all applicable mandatory provisions of the
applicable Liquor Laws and to be limited solely to the extent necessary to not
render the provisions of this Deed of Trust invalid or unenforceable, in whole
or in part.  Beneficiary will timely
apply for and receive all required approvals of the applicable Liquor
Authorities for the sale of liquor and other alcoholic beverages regulated by
applicable Liquor Laws.


 


ARTICLE 8

CONCERNING THE TRUSTEE


 


Section 8.1                                   Certain
Rights.  With the approval of
Beneficiary, Trustee shall have the right to select, employ and consult with
counsel.  Trustee shall have the right
to rely on any instrument, document or signature authorizing or supporting any
action taken or proposed to be taken by it hereunder, believed by it in good
faith to be genuine.  Trustee shall be
entitled to reimbursement for actual, reasonable expenses incurred by it in the
performance of its duties and to reasonable compensation for Trustee’s services
hereunder as shall be rendered.  Grantor
shall, from time to time, pay the compensation due to Trustee hereunder and
reimburse Trustee for, and indemnify, defend and save Trustee harmless against,
all liability and reasonable expenses which may be incurred by it in the
performance of its duties, including those arising from joint, concurrent, or
comparative negligence of Trustee; however, Grantor shall not be liable under
such indemnification to the extent such liability or expenses result solely
from Trustee’s or Beneficiary’s gross negligence or willful misconduct.  Grantor’s obligations under this Section 8.1
shall not be reduced or impaired by principles of comparative or contributory
negligence.


 


Section 8.2                                   Retention
of Money.  All moneys received
by Trustee shall, until used or applied as herein provided, be held in trust
for the purposes for which they were received, but need not be segregated in
any manner from any other moneys (except to the extent required by law), and
Trustee shall be under no liability for interest on any moneys received by him
hereunder.


 


Section 8.3                                   Successor
Trustees.  If Trustee or any
successor Trustee shall die, resign or become disqualified from acting in the
execution of this trust, or Beneficiary shall, in Beneficiary’s sole and
absolute discretion, desire to appoint a substitute Trustee, Beneficiary shall
have full power to appoint one or more substitute Trustees and, if preferred,
several substitute Trustees in succession who shall succeed to all the estates,
rights, powers and duties of Trustee. 
Such appointment may be executed by any authorized agent of Beneficiary
and as so executed, such appointment shall be conclusively presumed to be
executed with authority, valid and sufficient, without further proof of any
action.


 


20

















 


Section 8.4                                   Perfection
of Appointment.  Should any
deed, conveyance or instrument of any nature be required from Grantor by any
successor Trustee to more fully and certainly vest in and confirm to such
successor Trustee such estates, rights, powers and duties, then, upon request
by such Trustee, all such deeds, conveyances and instruments shall be made,
executed, acknowledged and delivered and shall be caused to be recorded and/or
filed by Grantor.


 


Section 8.5                                   Trustee
Liability.  In no event or
circumstance shall Trustee or any substitute Trustee hereunder be personally
liable under or as a result of this Deed of Trust, either as a result of any
action by Trustee (or any substitute Trustee) in the exercise of the powers
hereby granted or otherwise.


 


ARTICLE 9

MISCELLANEOUS


 


Section 9.1                                   Notices.  Any notice required or permitted to be given
under this Deed of Trust shall be given in accordance with Section 12
of the Loan Agreement.


 


Section 9.2                                   Covenants
Running with the Land.  All
Obligations contained in this Deed of Trust are intended by Grantor,
Beneficiary and Trustee to be, and shall be construed as, covenants running
with the Trust Property.  As used
herein, “Grantor” shall refer to the party named in the first paragraph of this
Deed of Trust and to any subsequent owner of all or any portion of the Trust
Property.  All Persons who may have or
acquire an interest in the Trust Property shall be deemed to have notice of,
and be bound by, the terms of the Loan Agreement and the other Loan Documents;
however, no such party shall be entitled to any rights thereunder without the
prior written consent of Beneficiary.


 


Section 9.3                                   Attorney-in-Fact.  Grantor hereby irrevocably appoints
Beneficiary and its successors and assigns, as its attorney-in-fact, which
agency is coupled with an interest and with full power of substitution, (a) to
execute and/or record any notices of completion, cessation of labor or any
other notices that Beneficiary deems appropriate to protect Beneficiary’s
interest, if Grantor shall fail to do so within ten (10) days after written
request by Beneficiary, (b) upon the issuance of a deed pursuant to the
foreclosure of this Deed of Trust or the delivery of a deed in lieu of
foreclosure, to execute all instruments of assignment, conveyance or further
assurance with respect to the Operational Assets, Fixtures, Leases, Rents,
Deposit Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance and
Condemnation Awards in favor of the grantee of any such deed and as may be
necessary or desirable for such purpose, (c) to prepare, execute and file or
record financing statements, continuation statements, applications for
registration and like papers necessary to create, perfect or preserve
Beneficiary’s security interests and rights in or to any of the Trust Property,
and (d) while any Event of Default exists, to perform any obligation of Grantor
hereunder, however:  (1) Beneficiary
shall not under any circumstances be obligated to perform any obligation of
Grantor; (2) any sums advanced by Beneficiary in such performance shall be
added to and included in the Indebtedness and shall bear interest at the rate
or rates at which interest is then


 


21

















 


computed on the
Indebtedness; (3) Beneficiary as such attorney-in-fact shall only be
accountable for such funds as are actually received by Beneficiary; and (4)
Beneficiary shall not be liable to Grantor or any other person or entity for
any failure to take any action which it is empowered to take under this Section 9.3.  Notwithstanding the foregoing, Beneficiary
shall be liable for its gross negligence, willful misconduct, and bad faith in
connection with exercising its rights hereunder.


 


Section 9.4                                   Successors
and Assigns.  This Deed of Trust
shall be binding upon and inure to the benefit of Beneficiary, the Lenders,
Trustee and Grantor and their respective successors and assigns.  Grantor shall not, without the prior written
consent of Beneficiary, assign any rights, duties or obligations hereunder.


 


Section 9.5                                   No
Waiver.  Any failure by
Beneficiary, the Lenders or Trustee to insist upon strict performance of any of
the terms, provisions or conditions of the Loan Documents shall not be deemed
to be a waiver of same, and Beneficiary, the Lenders or Trustee shall have the
right at any time to insist upon strict performance of all such terms,
provisions and conditions.


 


Section 9.6                                   Loan
Agreement.  If any conflict or
inconsistency exists between this Deed of Trust and the Loan Agreement, the
Loan Agreement shall govern.


 


Section 9.7                                   Release
or Reconveyance.  Upon payment
in full of the Indebtedness and performance in full of the Obligations,
Beneficiary, at Grantor’s expense, shall release the liens and security
interests created by this Deed of Trust or reconvey the Trust Property to
Grantor.  Beneficiary shall also release
Beneficiary’s lien and security interest created by this Deed of Trust or
reconvey the Trust Property to Grantor upon the satisfaction of the release
conditions contained in Section 3.5 or elsewhere in the Loan
Agreement.


 


Section 9.8                                   Waiver
of Stay, Moratorium and Similar Rights.  Grantor agrees, to the full extent that it may lawfully do so,
that it will not at any time insist upon or plead or in any way take advantage
of any stay, marshalling of assets, extension, redemption or moratorium law now
or hereafter in force and effect so as to prevent or hinder the enforcement of
the provisions of this Deed of Trust or the Indebtedness secured hereby, or any
agreement between Grantor and Beneficiary or any rights or remedies of
Beneficiary or Trustee.


 


Section 9.9                                   Applicable
Law.  The provisions of this
Deed of Trust regarding the creation, perfection and enforcement of the liens
and security interests herein granted shall be governed by and construed under
the laws of the state in which the Trust Property is located.  All other provisions of this Deed of Trust
shall be governed by the laws of the State of California, without regard to
conflicts of law principles; provided, however, that whenever in this Deed of
Trust a right is given to Beneficiary, which right is affected by applicable
Liquor Laws or the enforcement of which is subject to applicable Liquor Laws, the
enforcement of any such right shall be subject to applicable Liquor Laws and
approval, if so required, of the applicable Liquor Authorities.


 


22

















 


Section 9.10                            Headings.  The Article, Section and Subsection titles
hereof are inserted for convenience of reference only and shall in no way
alter, modify or define, or be used in construing, the text of such Articles,
Sections or Subsections.


 


Section 9.11                            Entire
Agreement.  This Deed of Trust
and the other Loan Documents embody the entire agreement and understanding
between Grantor and Beneficiary and supersede all prior agreements and
understandings between such parties relating to the subject matter hereof and
thereof.  Accordingly, the Loan
Documents may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of the parties. 
There are no unwritten oral agreements between the parties.


 


Section 9.12                            Beneficiary as Agent; Successor Agents.


 


(a)                                  Agent
has been appointed to act as Agent hereunder by the Lender Group.  Agent shall have the right hereunder to make
demands, to give notices, to exercise or refrain from exercising any rights,
and to take or refrain from taking any action (including, without limitation,
the release or substitution of the Trust Property) in accordance with the terms
of the Loan Agreement, any related agency agreement among Agent and the Lender
Group (collectively, as amended, supplemented or otherwise modified or replaced
from time to time, the “Agency Documents”) and this Deed of
Trust.  Grantor and all other persons
shall be entitled to rely on releases, waivers, consents, approvals,
notifications and other acts of Agent, without inquiry into the existence of
required consents or approvals of the Lender Group therefor.


 


(b)                                 Beneficiary
shall at all times be the same Person that is Agent under the Agency
Documents.  Written notice of
resignation by Agent pursuant to the Agency Documents shall also constitute
notice of resignation as Agent under this Deed of Trust.  Removal of Agent pursuant to any provision
of the Agency Documents shall also constitute removal as Agent under this Deed
of Trust.  Appointment of a successor
Agent pursuant to the Agency Documents shall also constitute appointment of a
successor Agent under this Deed of Trust. 
Upon the acceptance of any appointment as Agent by a successor Agent
under the Agency Documents, that successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
or removed Agent as the Beneficiary under this Deed of Trust, and the retiring
or removed Agent shall promptly (i) assign and transfer to such successor Agent
all of its right, title and interest in and to this Deed of Trust and the Trust
Property, and (ii) execute and deliver to such successor Agent such assignments
and amendments and take such other actions, as may be necessary or appropriate
in connection with the assignment to such successor Agent of the liens and
security interests created hereunder, whereupon such retiring or removed Agent
shall be discharged from its duties and obligations under this Deed of
Trust.  After any retiring or removed
Agent’s resignation or removal hereunder as Agent, the provisions of this Deed
of Trust and the Agency Documents shall inure to its benefit as to any actions
taken or omitted to be taken by it under this Deed of Trust while it was the
Agent hereunder.


 


23

















 


(c)                                  Each
reference herein to any right granted to, benefit conferred upon or power
exercisable, exercised or action taken by the “Beneficiary” shall be deemed to
be a reference to or be deemed to have been so taken, as the case may be, by
Beneficiary in its capacity as Agent pursuant to the Loan Agreement for the
benefit of the Lender Group and for the benefit of the issuer or supplier of
the Bank Product Obligations (as defined in the Loan Agreement), all as more
fully set forth in the Loan Agreement.


 


(d)                                 No Amendments.  This Deed of Trust shall not be
in any way amended or modified unless such amendment or modification is in
writing and signed by Beneficiary.


 


ARTICLE 10

LOCAL LAW PROVISIONS


 


Section 10.1                            Without
obtaining the prior written consent of Beneficiary, Grantor shall not consent
to, or vote in favor of, the inclusion of all or any part of the Trust Property
in any Community Facilities District formed pursuant to the Community
Facilities District Act, A.R.S. Section 48-701, et seq., as amended from
time to time.  Grantor shall immediately
give notice to Beneficiary of any notification or advice that Grantor may
receive from any municipality or other third party of any intent or proposal to
include all or any part of the Trust Property in a Community Facilities
District. Beneficiary shall have the right to file a written objection to the
inclusion of all or any part of the Trust Property in a Community Facilities
District, either in its own name or in the name of Grantor, and to appear at,
and participate in, any hearing with respect to the formation of any such
district.


 


Section 10.2                            Grantor,
upon the advice of legal counsel, and being fully informed of the consequences
thereof, hereby expressly waives and relinquishes any right or remedy which it
may have, or be otherwise entitled to assert, by reason of the provisions of
Arizona Revised Statutes, Sections 12-1641 and 12-1642, Arizona Revised
Statutes, Section 44-142, and 16 Arizona Rules of Civil Procedure, Rule
17(f), or by reason of any other provision of Arizona law (whether pursuant to
statute, case authority or otherwise) pertaining to or granting rights of or to
sureties or guarantors.


 


Section 10.3                            Throughout
this Deed of Trust, the term “Grantor” shall have the same meaning as and
include the term “Trustor” as such word is defined in ARS § 33-801(9).


 


Section 10.4                            Throughout
this Deed of Trust, the term “Agent” shall have the same meaning as and include
the term “Beneficiary” as such word is defined in ARS § 33-801(1).


 


Section 10.5                            Terms
and other provisions referenced in this Deed of Trust but not expressly set
forth herein may be obtained by contacting the Beneficiary at its address set
forth in the preamble to this Deed of Trust.


 


24

















 


Section 10.6                            In
accordance with Arizona Revised Statutes, Section 33-304, the Beneficiary
of this Deed of Trust hereby discloses that it is a grantee acting as a lender
and as agent and further discloses as follows: 
The Beneficiary’s name and address are set forth on the first page of
this Deed of Trust; the parties for whom the Beneficiary hereunder acts as
agent and holds title are the Beneficiary, as a lender, and certain
lenders/noteholders that may exist from time to time under, among other
instruments, the Loan Agreement; the names and addresses of such parties may be
obtained by contacting the Beneficiary at the address set forth on the first
page of this Deed of Trust.  Grantor
hereby certifies that Beneficiary is acquiring this deed of trust, mortgage and
lien on the Trust Property for value.


 


ARTICLE 11

INTERCREDITOR AGREEMENT


 


Section 11.1                            The
lien of this Deed of Trust is superior to the lien of the Junior Deed of Trust
to the extent set forth in the Intercreditor Agreement and this Deed of Trust
is subject to the terms of the Intercreditor Agreement.


 


[The remainder of this page has been intentionally left
blank]


 


25

















 


IN WITNESS WHEREOF, Grantor has on the date
set forth in the acknowledgement hereto, effective as of the date first above
written, caused this instrument to be duly EXECUTED AND DELIVERED by authority
duly given.


 


	
   

  	
  GRANTOR:

  	
  GNL, CORP., a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joanne Beckett

  	
   

  
	
   

  	
  Name:

  	
  Joanne Beckett

  	
   

  
	
   

  	
  Its:

  	
  Vice President and General Counsel

  	
   

  



 

















 


	
  STATE OF Nevada

  	
  )

  
	
   

  	
  )  ss.

  
	
  COUNTY OF Clark

  	
  )

  



 


This instrument
was acknowledged before me on January 13, 2004, by Joanne Beckett
as VP and General Counsel of GNLV, CORP., a Nevada Corporation.


 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Edna McAllister

  	
   

  
	
   

  	
   

  	
  Signature of Notarial
  Officer

  



 

















 


Exhibit
A


 


Legal Description


 


 


A parcel of land lying
within the North half of the South half of the Northeast quarter of the
Southeast quarter (N 1⁄2 of S 1⁄2 of NE 1⁄4 of SE 1⁄4) of Section 1, Township 20
North, Range 22 West of the Gila and Salt River Base and Meridian, Mohave
County, Arizona, and a portion of that unnumbered Lot in Block 10-A, Bullhead
City, Arizona, Unit No. 2, as shown on the plat thereof, recorded
August 5, 1942 at Fee No. 22210 in the office of the County Recorder,
Mohave County, Arizona, commonly referred to as a portion of Lot 3, Block 10-A,
Bullhead City, Unit 2, described as follows:


 


COMMENCING at a 1 inch
iron pipe described as the Southwest corner of Royal Rio Park, a subdivision
recorded April 26, 1961, at Reception No. 102858 and accepted as the
Northwest corner of said North half of the South half of the Northeast quarter
of the Southeast quarter of said Section 1 and running thence, South
00°02’00” West, a distance of 126.28 feet to a point at which found a 1⁄2 inch
rebar with yellow plastic cap (YPC), RLS 16617 and said point of being the TRUE
POINT OF BEGINNING;


 


Thence, South 00°02’00”
West, a distance of 102.40 feet to a point (fd. 1⁄2 inch rebar/YPC, RLS 16617);


 


Thence, South 07°51’04”
West, a distance of 105.70 feet (record = South 07°42’00” West, 106.75 feet) to
a point (fd. 5/8 inch rebar/RPC, RLS 19319);


 


Thence, South 87°20’14”
East, a distance of 13.81 feet (record = South 88°00’00” East, 14.25 feet) to a
point (fd. 1⁄2 inch rebar/YPC RLS 16617);


 


Thence, North 14°39’59”
East, 2.00 feet (record = North 00°02’00” East, 2.00 feet) to a point (fd. 1⁄2
rebar/RLS 16617);


 


Thence, South 89°41’46”
East, 485.00 feet (record = South 89°58’53” East, 485.00 feet) to a point (fd.
1⁄2 inch rebar/YPC, RLS 16617);


 


Thence, North 00°19’17”
East, 205.98 feet (record = North 00°02’00” East 206.00 feet) to a point (fd. 1⁄2
inch rebar/YPC, RLS 16617);


 


Thence, North 89°42’57”
West, 485.95 feet (record = North 89°54’00” West 485.00 feet) to the TRUE POINT
OF BEGINNING.


 

















 


PREPARED BY, RECORDING REQUESTED BY,


AND WHEN RECORDED MAIL TO:


 


Paul, Hastings, Janofsky & Walker LLP

515 South Flower Street, 25th Floor

Los Angeles, California 90071


Attention:  John
Francis Hilson, Esq.


 


DEED
OF TRUST, ASSIGNMENT

OF RENTS AND LEASES, FIXTURE FILING AND SECURITY AGREEMENT


 


 


by
and from


 


 


GNL,
CORP., “Grantor”


 


 


to


 


 


TRANSNATION
TITLE INSURANCE COMPANY, “Trustee”


 


for
the benefit of


 


WELLS
FARGO FOOTHILL, INC.,

in its capacity as lender, arranger, administrative agent and documentation
agent, “Beneficiary”


 


Dated
as of January 23, 2004






	
  Municipality:

  	
   

  	
  Bullhead
  City

  
	
  County:

  	
   

  	
  Mohave

  
	
  State:

  	
   

  	
  Arizona