Exhibit 10.55


 


SECURITY AGREEMENT


 


This SECURITY AGREEMENT (this “Agreement”), dated as of September 30,
2004, is entered into by and between PHASE II
MALL HOLDING, LLC, a Nevada limited liability company (“Phase II Mall Subsidiary Holding”), PHASE II MALL SUBSIDIARY, LLC, a Delaware
limited liability company (“Phase II Mall
Subsidiary”), and each Subsidiary (as defined below) from time to
time a party to this Agreement (individually each a “Debtor” and collectively, the “Debtors”), and THE BANK OF
NOVA SCOTIA, a Canadian chartered bank (“Scotiabank”), in its capacity as Administrative Agent under
the Construction Loan Agreement (as defined below) (in such capacity, “Administrative Agent”) for and on behalf of
each Secured Party (as defined below).


 


RECITALS


 


WHEREAS,
LCR (such capitalized term and other capitalized terms used herein have the
meanings given in Section 1.1 of this Agreement), an indirect,
wholly-owned subsidiary of LVSI and Venetian, owns the Site and intends to
design, develop, and construct the Phase II Project and, after the Substantial
Completion Date, operate the Phase II Hotel/Casino;


 


WHEREAS,
Phase II Mall Subsidiary Holding is an indirect wholly-owned Subsidiary of LVSI
and Venetian and owns 100% of the Securities of Phase II Mall Subsidiary;


 


WHEREAS,
Phase II Mall Subsidiary owns or will own the Phase II Mall Air Parcel and
leases or will lease the portion of the Phase II Mall Space covered by the
Phase II Mall Lease, the Walgreens Lease and the Master Lease;


 


WHEREAS,
it is contemplated that, after the Phase II Mall Substantial Completion Date,
Phase II Mall Subsidiary will operate the Phase II Mall;


 


WHEREAS,
concurrently herewith, Phase II Mall Subsidiary
Holding, Phase II Mall Subsidiary, Scotiabank, as administrative agent, sole lead
arranger and sole bookrunner, Sumitomo Mitsui Banking Corporation, as
syndication agent, and the financial institutions from time to time party
thereto (the “Lenders”) have
entered into the Construction Loan Agreement, dated as of the date hereof (as amended,
amended and restated, supplemented, or otherwise modified from time to time,
the “Construction Loan Agreement”)
pursuant to which the Lenders have agreed, subject to the terms thereof and
hereof, to make Credit Extensions to Phase II Mall Subsidiary Holding and Phase
II Mall Subsidiary; and


 


WHEREAS,
it is a condition precedent to entering into the Construction Loan Agreement
and consummating the transactions contemplated therein (including the extension
of credit thereunder) that Debtors enter into this Agreement.


 






















 


AGREEMENT


 


In
consideration of the promises contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Debtors hereby agree as follows:


 


1.                                       Definitions.


 


1.1                                 Certain Defined Terms.


 


The following
terms used in this Agreement shall have the following meanings:


 


“Administrative Agent” is defined in the preamble.


 


“Agreement” means this Security Agreement as
it may be amended, supplemented, amended and restated or otherwise modified
from time to time.


 


“Assigned Agreements” means all of the
agreements and documents, as amended, supplemented or otherwise modified from
time to time described in clauses (A) through (H) of Section 2.1.


 


“Collateral” is defined in Section 2.1.


 


“Construction Loan Agreement” is defined in
the fifth recital.


 


“Copyrights” is defined in clause (V)
of Section 2.1.


 


“Debtor” is defined in the preamble.


 


“Excluded Collateral” is defined in Section 2.1.


 


“LCR” shall mean Lido Casino Resort, LLC, a
Nevada limited liability company.


 


“Lenders” is defined in the fifth recital.


 


“Marks” is defined in clause (U) of Section 2.1.


 


“Patents” is defined in clause (V) of
Section 2.1.


 


“Permitted Liens” shall have the meaning
assigned to such term in the Construction Loan Agreement.


 


“Phase
II Hotel/Casino Retail Stores” means certain retail
stores and restaurant space that are to be leased by LCR to Phase II Mall
Subsidiary pursuant to the Master Lease.


 


“Phase II Mall” means the Phase II Mall
Space (a portion of which shall be initially leased by Phase II Mall Subsidiary
from LCR pursuant to the Phase II Mall Lease and eventually transferred from
LCR to Phase II Mall Subsidiary upon its designation as one or more separate
legal parcels in accordance with the Disbursement Agreement to become the Phase
II Mall Air 


 


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Parcel, a portion of which shall be leased by Phase II Mall Subsidiary
pursuant to the Walgreens Lease and a portion of which shall be leased by
PhaseII Mall Subsidiary pursuant to the Master Lease) and the Phase II Mall
Improvements located therein, in each case to be integrated with the Phase II
Hotel/Casino and the Existing Facility.


 


“Phase II Mall Air Parcel” means the one or
more separate legal parcels owned or to be owned in fee simple by Phase II Mall
Subsidiary after the Phase II Mall Air Space is subdivided in accordance with
Section 5.11 of the Disbursement Agreement and within which a portion of
the Phase II Mall Improvements is to be constructed.


 


“Phase II Mall Air Space” shall have the
meaning assigned to such term in the Deed of Trust.


 


“Phase II Mall Cash Management Account”
shall have the meaning assigned to such term in the Disbursement Agreement.


 


“Phase II Mall Equity Account” shall have the
meaning assigned to such term in the Disbursement Agreement.


 


“Phase II Mall Improvements” shall have the
meaning assigned to such term in the Deed of Trust.


 


“Phase II Mall Lease” means that certain
Indenture of Lease, dated as of the date hereof by and between LCR and Phase II
Mall Subsidiary covering the Phase II Mall Air Space, as the same may be
amended, supplemented, amended and restated, or otherwise modified in
accordance with the terms hereof.


 


“Phase II Mall Loan Proceeds Account” shall
have the meaning assigned to such term in the Disbursement Agreement.


 


“Phase
II Mall SA Assignment Agreement” means that certain
Assignment and Assumption Agreement and First Amendment to Agreement, dated as
of the date hereof, among LCR, as the assignor, Phase II Mall Subsidiary
Holding, as the assignee, and GGP.


 


“Phase II Mall Sale Agreement” means the
Agreement, dated as of April 12, 2004 between LCR and GGP, as amended by
the Phase II Mall SA Assignment Agreement, and as the same may be further
amended, supplemented, amended and restated, or otherwise modified in
accordance with the terms hereof.


 


“Phase II Mall Sale Agreement Proceeds” has
the meaning set forth in Granting Clause G of the Deed of Trust.


 


“Phase II Mall Space” means, collectively,
the space in which the Phase II Hotel/Casino Retail Stores will be situated
(which shall be leased by Phase II Mall Subsidiary pursuant to the Master
Lease), the Phase II Mall Air Space (which shall be initially leased by Phase
II Mall Subsidiary from LCR pursuant to the Phase II Mall Lease and eventually
transferred from LCR to Phase II Mall Subsidiary upon its designation as one or
more separate legal parcels in 


 


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accordance
with the Disbursement Agreement to become the Phase II Mall Air Parcel), the
Phase II Mall Air Parcel and the Walgreens Air Space.


 


“Phase II Mall Subsidiary” is defined in the
preamble.


 


“Phase II Mall Subsidiary Holding” is
defined in the preamble.


 


“Phase II Mall Substantial Completion Date”
shall have the meaning assigned to such term in the Disbursement Agreement.


 


“Potential Event of Default” shall have the
meaning assigned to such term in the Construction Loan Agreement.


 


“Project Costs” is defined in the
Disbursement Agreement.


 


 “Receivables”
shall mean all of the Debtor’s accounts and accounts receivable, including,
without limitation, all rights to payment for goods sold or leased or secured
or for services rendered which are not evidenced by an instrument or chattel
paper, all other present or future rights for money due or to become due, all
of the accounts, chattel paper, instruments, promissory notes, contract rights,
documents, other obligations and general intangibles for money due or to become
due of any kind, in each case whether now existing or hereafter arising and
wherever arising and whether or not earned by performance.


 


“Scotiabank” is defined in the preamble.


 


“Secured Obligations” is defined in Section 3.1.


 


“Supplemental Mall Cash Account” shall have
the meaning assigned to such term in the Disbursement Agreement.


 


“UCC” shall mean the Uniform Commercial Code
as the same may, from time to time, be in effect in the State of New York; provided,
however, in the event that, by reason of mandatory provisions of law,
any or all of the attachment, perfection or priority of the security interest
in any of the Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of New York, the term “UCC” shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions.


 


“Walgreens Air Space” shall have the meaning
assigned to such term in the Deed of Trust.


 


“Walgreens Lease” means that certain
commercial lease dated as of February 2004 between LCR, as tenant, and CAP
II – Buccaneer, LLC, a New Mexico limited liability company, as landlord,
assigned in accordance with the terms of the Construction Loan Agreement by LCR
to Phase II Mall Subsidiary.


 


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1.2                                 Construction Loan Agreement Terms.  Unless otherwise defined herein, all
capitalized terms used herein which are defined in the Construction Loan
Agreement shall have their respective meanings as used in the Construction Loan
Agreement.  The rules of interpretation
contained in the Construction Loan Agreement shall apply to this Agreement.


 


1.3                                 UCC Terms.  Unless otherwise defined herein or in the Construction Loan
Agreement or the context otherwise requires, terms for which meanings are
provided in the UCC are used in this Agreement (whether or not capitalized
herein), including its preamble and recitals, with such meanings.


 


2.                                       Assignment, Pledge and Grant of Security Interests.


 


2.1                                 Grant in Favor of Secured Parties.  To secure the timely payment and performance
of the Secured Obligations, subject to compliance with applicable Nevada Gaming
Laws, each Debtor does hereby grant and pledge to the Administrative Agent, on
behalf and for the benefit of the Secured Parties, a First Priority security
interest in all the estate, right, title and interest of such Debtor, whether
now owned or hereafter acquired or arising and wheresoever located, whether or
not of a type which may be subject to a security interest under the UCC, in, to
and under the following “Collateral”):


 


(A)                              Construction
Management Agreement (if, as or when any Debtor shall become party thereto);


 


(B)                                HVAC
Services Agreements (if, as or when any Debtor shall become party thereto);


 


(C)                                COREA;


 


(D)                               Cooperation
Agreement (if, as and when applicable to the Phase II Project);


 


(E)                                 Site
Easements;


 


(F)                                 to
the extent assignable, all Contracts;


 


(G)                                to
the extent assignable, all other contracts, documents and agreements entered
into on, prior to or after the date hereof, as the same may be amended from
time to time in accordance with the terms and conditions of the Construction
Loan Agreement and to the extent assignable any other agreements to which such
Debtor is or becomes a party;


 


(H)                               Phase
II Mall Sale Agreement and Phase II Mall SA Assignment Agreement;


 


(I)                                    to
the extent assignable, the insurance policies now or hereafter maintained or
required to be maintained by such Debtor under the Cooperation Agreement (if,
as and when applicable to the Phase II Project), the COREA, Construction Loan
Agreement or any other Project Document, including any such 


 


5






















 


policies
insuring against loss of revenues by reason of interruption of the operation of
the Phase II Mall and all loss proceeds and other amounts payable to such
Debtor thereunder, and all eminent domain proceeds;


 


(J)                                   to
the extent assignable, all other agreements, now existing or hereafter entered
into, including vendor warranties, indemnities, and guarantees running to such
Debtor or assigned to such Debtor, including all such agreements relating to
the construction, maintenance, improvement, operation or acquisition of the
Phase II Mall or any part thereof, or the transport of material, equipment and
other parts of the Phase II Mall or any part thereof;


 


(K)                               to
the extent assignable, any other lease or sublease agreements or easement
agreements, now existing or hereafter entered into, including all such
agreements relating to the Phase II Mall or any part thereof or any ancillary
facilities to which such Debtor is or becomes a party;


 


(L)                                 to
the extent assignable, all amendments, supplements, substitutions and renewals
to any of the aforesaid agreements;


 


(M)                            all
rights of such Debtor to receive (i) monies due or to become due under or
pursuant to the aforesaid agreements and (ii) proceeds of any insurance,
indemnity, warranty or guaranty with respect to the aforesaid agreements;


 


(N)                               all
claims of such Debtor for damages arising out of breach or default under any of
the aforesaid agreements;


 


(O)                               the
rights of such Debtor to terminate, amend, supplement, or modify any of the
aforesaid agreements, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder;


 


(P)                                 to
the extent assignable, all Permits, including those described on Annex 5
hereto, necessary for or relating to the construction of the Phase II Mall;


 


(Q)                               the
Phase II Mall Sale Agreement Proceeds and, to the extent assignable, all rents,
profits, income, royalties, revenues, accounts, contracts, contract rights,
chattel paper (whether tangible or electronic), documents, instruments
(including promissory notes) and general intangibles (including tax refunds,
all payment intangibles and software) and other rights of any kind and all
rights in, to and under all security agreements, leases and other contracts
securing or otherwise relating to any such rents, profits, income, royalties,
revenues, accounts, contracts, contract rights, chattel paper (whether tangible
or electronic), documents, instruments (including promissory notes), general
intangibles (including tax refunds, all payment intangibles and software) or
other rights and claims to the payment or receipt of money or other forms of
consideration (including any intercompany notes held by any Debtor);


 


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(R)                                all
equipment in all of its forms and all parts thereof and accessions thereto
(except to the extent such Debtor’s interest therein may not be assigned or a
security interest therein may not be granted), including all plant, machinery,
tools, engines, and equipment of any type, including control equipment and
general equipment and devices, all computer equipment, calculators, adding
machines and any other electronic equipment of every nature, appliances,
mechanical and electrical systems, elevators, lighting, alarm systems, fire
control systems, furnishings, furniture, service equipment, motor vehicles,
building or maintenance equipment, building or maintenance materials, pipes and
pipelines, spare parts, maps, plans, specifications, architectural,
engineering, construction or shop drawings, manuals or similar documents and
any replacements, renewals or substitutions for any of the foregoing;


 


(S)                                 all
plant fixtures, business fixtures and other fixtures and storage and office
facilities and accessions thereto and replacements thereof and products
thereof;


 


(T)                                all
inventory in all of its forms, including (i) all goods held by such Debtor
for sale or lease or to be furnished under contracts of service or so leased or
furnished, (ii) all supplies, raw materials, work in process, finished
goods, and materials used or consumed in such Debtor’s business, (iii) all
goods covered by any warehouse receipts, bills of lading or other such
documents or in which such Debtor has an interest in mass or a joint or other
interest or right of any kind and (iv) all goods which are returned to or
repossessed by such Debtor and all accessions thereto and products thereof;


 


(U)                               all
trademarks and service marks now owned or hereafter acquired by any Debtor
which are registered in the United States Patent and Trademark Office or in any
similar office or agency of the United States or any state thereof or any
political subdivision thereof and any application for such trademarks and
service marks, as well as any unregistered marks used and owned by such Debtor
in the United States and trade dress, including logos, designs, trade names,
business names, fictitious business names and other business identifiers in
connection with which any of these registered or unregistered marks are used
and owned by such Debtor in the United States (collectively, the “Marks”) including the Marks listed on Annex 2,
together with the registration and right to renewals thereof, and the goodwill
of the business of such Debtor symbolized by the Marks and all licenses
associated therewith, it being understood that the rights and interests
included herein shall include all rights and interests pursuant to licensing or
other contracts in favor of such Debtor pertaining to the Marks presently or in
the future owned or used by third parties but, in the case of third parties
which are not Affiliates of such Debtor, only to the extent permitted by such
licensing or other contracts and, if not so permitted, except with respect to
the rights of such Debtor to receive payments thereunder, only with the consent
of such third parties and provided, that the grant of a security
interest shall not include any application for a Mark that may be deemed
invalidated, canceled or abandoned due to the grant and/or enforcement of such
security interest unless and until such time that 


 


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the grant
and/or enforcement of the security interest will not affect the validity of
such Mark;


 


(V)                                all
United States copyrights which such Debtor now or hereafter owns or has
registered with the United States Copyright Office, as well as any application
for a United States copyright registration now or hereafter made with the
United States Copyright Office by such Debtor (collectively, the “Copyrights”) including, the Copyrights
listed on Annex 3, and all United States patents to which such Debtor
now or hereafter has title and any divisions or continuations thereof, as well
as any application for a United States patent now or hereafter made by such
Debtor (collectively, the “Patents”),
including all Patents listed on Annex 4, and all reissues, renewals
or extensions of each of them, it being understood that the rights and
interests included herein shall include all rights and interests pursuant to
licensing or other contracts in favor of such Debtor pertaining to the
Copyrights and Patents presently or in the future owned or used by third
parties but, in the case of third parties which are not Affiliates of such
Debtor, except with respect to the rights of such Debtor to receive payments
thereunder, only to the extent permitted by such licensing or other contracts
and, if not so permitted, only with the consent of such third parties;


 


(W)                           all
computer programs and software owned by such Debtor and all intellectual
property rights therein and all other proprietary information of such Debtor,
including trade secrets, it being understood that the rights and interests
included herein shall include all rights and interests pursuant to licensing or
other contracts in favor of such Debtor pertaining to computer programs and
software presently or in the future owned or used by third parties but, in the
case of third parties which are not Affiliates of such Debtor, only to the
extent permitted by such licensing or other contracts and, if not so permitted,
except with respect to the rights of such Debtor to receive payments
thereunder, only with the consent of such third parties;


 


(X)                               to
the extent not covered by any other clause of this Section 2.1 but
subject to the exclusions specified above, all other trademarks, tradenames,
tradesecrets, goodwill, business names, patents, patent applications, licenses
and copyrights, registrations, and franchise rights owned by such Debtor;


 


(Y)                                to
the extent not covered by any other clause of this Section 2.1 but
subject to the exclusions specified above, all other general intangibles
(including tax refunds, rights to payment or performance, choses in action and
judgments taken on any rights or claims included in the Collateral);


 


(Z)                                contract
rights in respect of agreements entered into with regard to the purchase of any
furniture, fixtures and equipment for use in the Phase II Mall and any deposits
paid in respect thereof;


 


(AA)                    all deposit
accounts, securities accounts, securities entitlements, investment property and
financial assets (including, without limitation, the Phase 


 


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II Mall Equity
Account, the Phase II Mall Loan Proceeds Account, the Phase II Mall Cash
Management Account and the Supplemental Mall Cash Account);


 


(BB)                        all letter
of credit rights (whether or not the letter of credit is evidenced by a
writing);


 


(CC)                        all
commercial tort claims in which such Debtor has rights as set forth on Item
G of Annex 1 or any supplement thereto;


 


(DD)                      all books,
records, writings, data bases, information and other property relating to, used
or useful in connection with, evidencing, embodying, incorporating or referring
to, any of the foregoing in this Section 2.1; and


 


(EE)                          the
proceeds of all of the foregoing, including (a) all rights of such Debtor
to receive proceeds, rents, profits and moneys due and to become due under or
pursuant to the Assigned Agreements or any other Collateral; (b) all
rights of such Debtor to receive the return of any premiums for, or proceeds
of, any insurance, indemnity, warranty or guaranty with respect to the Assigned
Agreements or any other Collateral or to receive any condemnation proceeds with
respect thereto; (c) all claims of such Debtor for damages arising out of,
or for breach of or default under, any Assigned Agreement or any other Collateral;
(d) all rights of such Debtor to payment for goods or other property sold or
leased or services performed by such Debtor; and (e) to the extent not
included in the foregoing, all proceeds receivable or received when any and all
of the Assigned Agreements or other foregoing other Collateral or proceeds
thereof are sold, collected, exchanged or otherwise disposed of, whether
voluntarily or involuntarily and (f) all rights of such Debtor to terminate,
amend, supplement, modify or waive performance under the Assigned Agreements,
to perform thereunder and to compel performance and otherwise exercise all
remedies thereunder.


 


Notwithstanding
anything to the contrary contained herein, the term “Collateral” for purposes
of this Section 2.1 shall not include (i) any capital stock,
common stock, preferred stock, membership interest, partnership interest or any
other equity interest of Phase II Mall Subsidiary Holding, Phase II Mall
Subsidiary, any of their Subsidiaries or any other Person held by Phase II Mall
Subsidiary Holding, Phase II Mall Subsidiary or any of their Subsidiaries, (ii)
gaming equipment, gaming tables, and video game and slot machines,
(iii) any assets which if pledged, hypothecated or given as collateral
security would require any Debtor to seek approval of any Nevada Gaming
Authority of the pledge, hypothecation or collateralization, or require the
Administrative Agent or any Secured Party to be licensed, qualified or found
suitable by an applicable Nevada Gaming Authority, and (iv) any contracts,
contract rights, permits or general intangibles, which by their terms or the
operation of law prohibit or do not allow assignment or require any consent for
assignment which has not been obtained or which would be breached by virtue of
a security interest being granted therein (collectively, the “Excluded Collateral”).


 


2.2                                 Delivery of Assigned Agreements.  Each Debtor has heretofore delivered, or
concurrently with the delivery hereof, is delivering to the Administrative
Agent an executed 


 


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counterpart or
certified copy of each of the Assigned Agreements executed on or prior to the
Closing Date .  Each Debtor will
likewise deliver to the Administrative Agent an executed copy of each Assigned
Agreement not yet delivered and each Material Contract entered into by Debtors
and amendments and supplements to the foregoing, as they are entered into by
Debtor promptly upon the execution thereof. 
Each Debtor will, at the reasonable request of the Administrative Agent,
further:  (1) mark conspicuously
each item of chattel paper and each of its records pertaining to the
Collateral, with a legend, in form and substance reasonably satisfactory to the
Administrative Agent, indicating that such Collateral is subject to the
security interest granted hereby, (ii) at the reasonable request of the
Administrative Agent, deliver and pledge to the Administrative Agent hereunder
all promissory notes and other instruments and all original counterparts of
chattel paper constituting Collateral, duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Administrative Agent. 
Notwithstanding anything to the contrary contained herein, no such
future lease, construction agreement, operation agreement or other material
agreement may be entered into by Debtor unless such lease, construction
agreement, operation agreement or other material agreement is not in violation
of the Construction Loan Agreement.


 


2.3                                 Debtors to Remain Liable.  Notwithstanding anything to the contrary
contained herein, Debtors shall remain liable under each of the Assigned
Agreements to perform all of the obligations undertaken by them thereunder, all
in accordance with and pursuant to the terms and provisions thereof and take
such action to such end as requested by the Administrative Agent, and the
Secured Parties shall have no obligation or liability under any of such
Assigned Agreements by reason of or arising out of this Agreement, nor shall the
Administrative Agent or any other Secured Party be required or obligated in any
manner to perform or fulfill any obligations of Debtors thereunder or to make
any payment or inquiry as to the nature or sufficiency of any payment received
by it, or present or file any claim or take any action to collect or enforce
the payment of any amounts which may have been assigned to the Secured Parties
or to which such Secured Party may be entitled at any time.


 


2.4                                 Action by Administrative Agent and Secured Parties to
Cure Certain Defaults.  If
any default by a Debtor under any of the Assigned Agreements shall occur and be
continuing that constitutes an Event of Default, then any of the Administrative
Agent and the Secured Parties shall be permitted (but shall not be obligated)
to remedy any such default by giving written notice of such intent to Debtors
and to the parties to the Assigned Agreement or Assigned Agreements for which
such of the Administrative Agent and the Secured Parties intends to remedy the
default.  After giving such notice of
its intent to cure such default and upon the commencement thereof, the
Administrative Agent or the Secured Parties, as applicable, will proceed
diligently to cure such default.  Any
cure by the Administrative Agent or any of the Secured Parties of Debtor’s
default under any of the Assigned Agreements shall not be construed as an
assumption by the Administrative Agent or any of the other Secured Parties of
any obligations, covenants or agreements of Debtors under such Assigned Agreement,
and neither the Administrative Agent nor any of the Secured Parties shall be
liable to any Debtor or any other Person as a result of any actions undertaken
by the Administrative Agent or any of the Secured Parties pursuant hereto or
pursuant to any Consent or in curing or attempting to cure any such
default.  This Agreement shall not be
deemed to release or to affect in any way the obligations of Debtors under the
Assigned Agreements or the rights of Administrative Agent hereunder with
respect to the exercise of remedies.


 


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2.5                                 Restrictions on Modification of Assigned Agreements.  Debtor shall not without the consent of the
Administrative Agent (such consent not to be unreasonably withheld):


 


(a)                                  cancel
or terminate any of the Assigned Agreements or consent to or accept any
cancellation or termination thereof;


 


(b)                                 amend
or otherwise modify the Assigned Agreements or give any consent, waiver or
approval thereunder;


 


(c)                                  waive
any default under or breach of the Assigned Agreements;


 


(d)                                 consent
to or permit or accept any prepayment of amounts to become due under or in
connection with the Assigned Agreements, except as expressly provided therein;
or


 


(e)                                  take
any other action in connection with the Assigned Agreements that would impair
the value of the interest or rights of Debtor thereunder or that would impair
the interest or rights of the Secured Parties.


 


Notwithstanding
the foregoing, Debtors may take any actions otherwise prohibited under this Section 2.6
to the extent such actions are not in violation of the Construction Loan
Agreement.  Further, Debtors shall not
sell, assign (by operation of law or otherwise) or otherwise dispose of any of
the Collateral except to the extent that such sale, assignment or other
disposition is not in violation of the Construction Loan Agreement, so long as
such agreement by its terms restricts the sale, assignment or other disposition
of Collateral.


 


3.                                       Obligations Secured.


 


3.1                                 Secured Obligations.  This Agreement secures, and all of the
Collateral is collateral security for (i) the Obligations, (ii) any
and all sums advanced by any of the Secured Parties in order to preserve the
Collateral or preserve Secured Parties’ security interest in the Collateral (or
the priority thereof), (iii) the expenses of any Secured Parties of
retaking, holding, preparing for sale or lease, selling or otherwise disposing
of or realizing on the Collateral, of any proceeding for the collection or
enforcement of any indebtedness, obligations or liabilities of Debtors referred
to above, or of any exercise by the Secured Parties of their rights hereunder,
together with reasonable attorneys’ fees and disbursements and court costs,
(iv) any and all obligations of Debtors to the Administrative Agent and
any other agents in respect of costs, fees, indemnification or otherwise under
this Agreement whether voluntary or involuntary, direct or indirect, absolute
or contingent, liquidated or unliquidated and whether or not jointly owed with
others and (v) any of the foregoing obligations that are paid to the
extent all or any portion of such payment is avoided or recovered directly or
indirectly from any Secured Party as a preference, fraudulent transfer or
otherwise (collectively, the “Secured Obligations”).


 


4.                                       Representations and Warranties of Debtor.


 


Each Debtor
represents and warrants as of the date hereof as follows:


 


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4.1                                 Such
Debtor has not assigned any of its rights under the Assigned Agreements except
as expressly permitted under the Construction Loan Agreement.


 


4.2                                 Except
as otherwise permitted by the Construction Loan Agreement such Debtor has not
executed and is not aware of any effective financing statement, security
agreement or other instrument similar in effect covering all or any part of the
Collateral, except such as may have been filed in accordance with the terms of
this Agreement in favor of the Secured Parties.


 


4.3                                 Except
as otherwise permitted by the Construction Loan Agreement and as provided in Sections
4.5 and 4.6 hereof, such Debtor is lawfully possessed of ownership
of the Collateral and has full right, title and interest in and to all rights
purported to be granted to it under the Assigned Agreements (to the extent such
Debtor is a party to such Assigned Agreements as of the date hereof), not
subject to any Liens except Permitted Liens. 
Such Debtor has full power and lawful authority to grant and assign the
Collateral hereunder and all consents of third parties required in connection
therewith have been obtained.


 


4.4                                 Except
as set forth in Item C of Annex 1, such Debtor does not do
business, and for the previous five years has not done business, under any
fictitious business names or trade names.


 


4.5                                 To
the knowledge of such Debtor, such Debtor is the true, lawful and exclusive
owner of the Marks listed in Annex 2 in connection with Debtor’s
present business, except those listed as being held under a non-exclusive
license, and said listed Marks include all of such Debtor’s United States
federal registrations or applications registered in the United States Patent
and Trademark office.  To the knowledge
of such Debtor, such Debtor owns or is licensed to use all Marks in connection
with its present business that are material to its business.  Such Debtor is aware of no material third
party claim that any aspect of such Debtor’s present or contemplated business
operations infringes or will infringe on any such third party’s rights to such Marks.  Such Debtor is the owner of record of all
United States registrations and applications listed in Annex 2
hereto and that, to the knowledge of such Debtor, said registrations are valid,
subsisting, have not been canceled and that such Debtor is not aware of any
material third-party claim that any of said registrations is invalid or
unenforceable.


 


4.6                                 To
the knowledge of such Debtor, such Debtor is the true, lawful and exclusive
owner of all rights in the Copyrights listed in Annex 3 hereto and
in the Patents listed in Annex 4 hereto.  Said listed Patents include all the United States patents and
applications for United States patents that such Debtor owns and said listed
Copyrights constitute all the United States copyrights registered in the United
States Copyright Office and applications for United States copyrights that it
now uses or practices under that are material to its business.  Such Debtor is aware of no material third
party claim that any aspect of such Debtor’s present or contemplated business
operations infringes or will infringe on any such third party’s rights to any
patent or any copyright.


 


4.7                                 All
notes and other instruments (excluding checks) comprising any and all items of
Collateral have been delivered to the Administrative Agent duly endorsed and
accompanied by duly executed instruments of transfer or assignment in blank.


 


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4.8                                 The
jurisdiction in which each Debtor is located for purposes of Sections 9-301 and
9-307 of the UCC is set forth in Item A of Annex 1 hereto.  Set forth in Item B of Annex 1 is
each location a secured party would have filed a UCC financing statement prior
to July 1, 2001 to perfect a security interest in equipment, inventory and
general intangibles owned by each Debtor. 
No Debtor has any trade names other than those set forth in Item C
of Annex 1 hereto.  During the
four (4) months preceding the date hereof, no Debtor has been known by any
legal name different from the one set forth on the signature page hereto, nor
has such Debtor been the subject of any merger or other corporate
reorganization, except as set forth in Item D of Annex 1
hereto.  The name set forth on the
signature page is the true and correct name of such Debtor.  Each Debtor’s federal taxpayer
identification number is (and, during the four (4) months preceding the date
hereof, such Debtor has not had a federal taxpayer identification number
different from that) set forth in Item E of Annex 1 hereto.  If the Collateral of any Debtor includes any
inventory located in the State of California, such Debtor is not a “retail
merchant” within the meaning of Section 9102 of the California UCC.  No Debtor is a party to any federal, state
or local government contract except as set forth in Item F of Annex 1
hereto.


 


4.9                                 This
Agreement creates a valid security interest in the Collateral securing the
payment of the Secured Obligations; provided that with respect to Marks,
Copyrights and Patents and any other intellectual property included as
Collateral herein, this representation shall only extend to such Marks,
Copyrights and Patents that are the subject of United States federal
registrations or applications.  Each
Debtor has filed or caused to be filed all financing statements in the
appropriate offices therefor (or has authenticated and delivered to the
Administrative Agent financing statements suitable for filing in such offices)
and has taken all of the actions necessary to create perfected and (subject to
Permitted Liens) first priority security interests in the Collateral, other
than (a) any deposit accounts, securities accounts and investment accounts (and
related investment property and financial assets) for which a control agreement
relating to such accounts is not required to be obtained by Debtors under Section 5.13,
(b) letter of credit rights except to the extent the issuer of such letter of
credit has consented to an assignment of the proceeds of such letter of credit,
(c) aircraft, and (d) motor vehicles and mobile goods.


 


5.                                       Covenants of Debtors.


 


Each Debtor
covenants as follows:


 


5.1                                 Any
action or proceeding to enforce this Agreement after an Event of Default has
occurred and is continuing under any Assigned Agreement may be taken by the
Administrative Agent either in such Debtor’s name or in the Administrative
Agent’s name, as the Administrative Agent may deem necessary.


 


5.2                                 Such
Debtor will, so long as any Obligations shall be outstanding, warrant and
defend its title to the Collateral and the interests of the Administrative
Agent and the Secured Parties in the Collateral against any claim or demand of
any persons (other than Permitted Liens) which could reasonably be expected to
materially and adversely affect such Debtor’s title to, or the Secured Parties
right or interest in, such Collateral.


 


5.3                                 Such
Debtor will at all times keep accurate and complete records of the
Collateral.  Such Debtor shall, at its
own expense, permit representatives of the Administrative Agent, upon 


 


13






















 


reasonable prior notice, and in accordance with the Construction Loan
Agreement, at any time during normal business hours of such Debtor to inspect
and make abstracts from such Debtor’s books and records pertaining to the
Collateral subject to a confidentiality undertaking in form and substance
reasonably satisfactory to Debtors. 
Upon the occurrence and during the continuation of any Event of Default,
at the Administrative Agent’s request, Debtors shall promptly deliver copies of
any and all such records to the Administrative Agent.


 


5.4                                 Unless
waived in writing by the Administrative Agent, such Debtor shall give the
Administrative Agent at least forty-five (45) days’ notice before it changes
its name, identity, corporate structure, location of its principal place of
business or location of its chief executive office and shall at the expense of
such Debtor execute and deliver such instruments and documents as may
reasonably be required by the Administrative Agent to maintain a prior
perfected security interest in the Collateral.


 


5.5                                 Such
Debtor will keep and maintain the Collateral in good condition, working order
and repair and from time to time will make or cause to be made all repairs,
replacements and other improvements in connection therewith that are necessary
or desirable toward such end.  Such Debtor will not misuse the Collateral,
or allow it to deteriorate except for the ordinary wear and tear of its normal
and expected use in such Debtor’s business in accordance with such Debtor’s
policies as then in effect (provided that no changes are made to such
Debtor’s policies as in effect on the date hereof that would be materially
adverse to the interests of the Secured Parties), and will comply in all
material respects with all laws, statutes and regulations pertaining to the use
or ownership of the Collateral.  Such
Debtor will promptly notify the Administrative Agent regarding any material
loss or damage to any material Collateral or portion thereof; provided, however,
that the foregoing provisions exclude normal wear and tear to the Collateral,
items that such Debtor reasonably believes are no longer necessary to the
successful operation of its business and the disposition of obsolete
items.  Such Debtor will not use or
permit any Collateral to be used unlawfully or in violation of any provision of
this Agreement or any applicable statute, regulation or ordinance or any policy
of insurance covering the Collateral. 
Nothing contained in this Section 5.5 shall prohibit such
Debtor from taking any action or refraining from taking any action permitted by
the Construction Loan Agreement.


 


5.6                                 Upon
the reasonable request of the Administrative Agent, such Debtor will promptly
deliver to such Person records and schedules that show the status, condition
and location of the Collateral, including accounts receivable aging reports and
other reports reasonably requested by such Person, all in reasonable detail;
and will promptly notify the Administrative Agent in writing of any event, or
change of law, regulation, business practice, or business condition that may
materially adversely affect the value of the Collateral.  The Administrative Agent shall have the
right to review and verify such records, schedules, financial information and
notices, and such Debtor will reimburse each such Person for all costs incurred
thereby.  Such review and verification
shall include the right of the Administrative Agent to contact account debtors
to confirm balances owing on and the terms of Receivables, provided that
an Event of Default has occurred and is continuing.


 


5.7                                 Except
as otherwise provided in this Section 5.7, such Debtor shall
continue to collect at its own expense, all amounts due or to be become due to
such Debtor under the Receivables.  In
connection with such collections, such Debtor may take (and, at the 


 


14






















 


Administrative
Agent’s direction when an Event of Default has occurred and is continuing,
shall take) such action as such Debtor or the Administrative Agent after
consultation with such Debtor reasonably deem necessary or advisable to enforce
collection of the Receivables; provided, however, that such
Debtor shall not adjust, settle, sell with recourse, sell for less than face
value or compromise the amount or payment of any Receivable, or release wholly
or partly any account debtor or obligor thereof, or allow any credit or
discount thereon, other than adjustments, settlements, or discounts that are in
accordance with such Debtor’s policies as then in effect; provided that
no changes are made to such Debtor’s policies as in effect on the date hereof
that would be materially adverse to the interests of the Secured Parties.  The Administrative Agent shall have the
right at any time after the occurrence and during the continuation of an Event
of Default to notify the account debtors or obligors under any of the
Receivables of the assignment of such Receivables to the Secured Parties and to
direct such account debtors or obligors to make payment of all amounts due or
to become due to such Debtor thereunder directly to the Administrative Agent or
to such Secured Parties as Administrative Agent may direct in accordance with
the Construction Loan Agreement and, upon such notification and at the expense
of such Debtor, to enforce collection of any such Receivables, and to adjust, settle
or compromise the amount or payment thereof, as the Administrative Agent may
deem appropriate in its sole discretion. 
After the occurrence and during the continuation of an Event of Default
(i) all amounts and proceeds (including instruments) received by such
Debtor in respect of the Receivables shall be received in trust for the benefit
of the Secured Parties hereunder and, upon notice from the Administrative
Agent, shall be segregated from other funds of such Debtor and shall be
forthwith paid over to the Administrative Agent or to such Secured Parties as
Administrative Agent may direct in the same form as so received (with all
necessary or appropriate endorsements) to be held as cash collateral and
applied as provided by Section 8, and (ii) such Debtor shall
not adjust, settle or compromise the amount or payment of any Receivable, or
release wholly or partly any account debtor or obligor thereof, or allow any
credit or discount thereon.


 


5.8                                 Such
Debtor shall pay promptly when due all taxes, assessments and governmental
charges or levies imposed upon, and all claims against, the Collateral, except
to the extent the validity thereof is being contested in good faith; provided
that such Debtor shall in any event pay such taxes, assessments, charges, levies
or claims not later than five (5) days prior to the date of any proposed sale
under any judgment, writ or warrant of attachment entered or filed against such
Debtor or any of the Collateral as a result of the failure to make such
payment.


 


5.9                                 Each
Debtor hereby agrees to give notice to the Administrative Agent by delivering a
supplement to Item G of Annex 1, upon acquiring any commercial
tort claim it reasonably believes to be in excess of $2,000,000 and agrees to
take any actions reasonably requested by Administrative Agent to perfect a
security interest therein.


 


5.10                           Each
Debtor agrees to use commercially reasonable efforts to cause each issuer of a
letter of credit in an amount in excess of $1,000,000 under which such Debtor
has letter of credit rights to consent to an assignment of the proceeds of such
letter of credit to the Administrative Agent.


 


15






















 


5.11                           Marks.


 


(A)                              Each
such Debtor hereby agrees not to sell, assign (by operation of law or
otherwise) or otherwise dispose of any right under any material Mark that such
Debtor is required to maintain under Section 5.11 hereof except as
permitted by the Construction Loan Agreement, absent prior written approval of
the Administrative Agent, such approval not to be unreasonably withheld or
delayed.  Each such Debtor agrees to use
such Marks in interstate commerce in a manner that is sufficient to preserve
such Marks as trademarks or service marks registered under the laws of the
United States.


 


(B)                                Each
such Debtor shall, at its own expense, diligently prosecute all applications
for Marks listed in Annex 2 hereto and further, for all of its material
registered Marks, shall diligently process all documents required by the
Trademark Act of 1946, 15 U.S.C. §§ 1051 et  seq. to maintain
trademark registration, including affidavits of use and applications for
renewals of registration in the United States Patent and Trademark Office
pursuant to 15 U.S.C. §§ 1058(a), 1059 and 1065, and shall pay all fees
and disbursements in connection therewith and shall not abandon any such filing
or affidavit of use or any such application of renewal prior to the exhaustion
of all administrative and judicial remedies without the prior written consent
of the Administrative Agent, such consent not to be unreasonably withheld or
delayed; provided that such Debtor shall not be obligated to maintain
any Mark in the event that such Debtor determines, in its reasonable business
judgment, that the maintenance of such Mark is no longer necessary or desirable
in the conduct of its business.  Each
Debtor agrees to notify the Administrative Agent three (3) months prior to the
date on which the affidavits of use or the applications for renewal
registration are due with respect to any material registered Mark.


 


(C)                                If
any material Mark registration certificate is issued hereafter to a Debtor as a
result of any application now or hereafter pending before the United States
Patent and Trademark Office, within thirty (30) days of receipt of such
certificate confirming such registration such Debtor shall deliver a copy of
such certificate, and a grant of security in such Mark on behalf of the Secured
Parties to the Administrative Agent, confirming the grant thereof hereunder
together with all cover sheets or other documents or instruments required to be
filed with the United States Patent and Trademark Office in order to create or
perfect a lien in respect of such Mark.


 


(D)                               Each
Debtor agrees, promptly upon learning thereof, to notify the Administrative Agent
in writing of the name and address of, and to furnish such pertinent
information that may be available with respect to, any party who such Debtor
believes is infringing or otherwise violating any of such Debtor’s rights to
any material Mark, or with respect to any party claiming that such Debtor’s use
of any such Mark violates in any material respect any property right of that
party.  Such Debtor further agrees,
unless otherwise agreed by the Administrative Agent, diligently to prosecute
any Person infringing any material Mark.


 


16






















 


5.12                           Patents and Copyrights.  Each Debtor hereby agrees not to sell,
assign (by operation of law or otherwise), or otherwise dispose of any right
under any material Patent or Copyright except as permitted by the Construction
Loan Agreement, absent prior written approval of the Administrative Agent, such
approval not to be unreasonably withheld or delayed.


 


(A)                              Each
Debtor shall, at its own expense, diligently prosecute all applications for
material Copyrights and material Patents listed in Annex 3 and Annex
4 hereto, respectively, and shall not abandon any such application prior to
exhaustion of all reasonable administrative and judicial remedies, absent
written consent of the Administrative Agent, such consent not to be
unreasonably withheld or delayed.  Each
Debtor shall do all acts and things reasonably necessary to maintain the
Copyrights and Patents listed in Annex 3 and Annex 4,
respectively, and all Patents and Copyrights hereafter obtained or acquired by
such Debtor, including, without limitation, making timely payment of all
post-issuance fees required pursuant to 35 U.S.C. § 41 to maintain in
force rights under each Patent.


 


(B)                                Within
thirty (30) days of acquisition of a Patent or Copyright, or of filing of an
application for a Patent or Copyright by a Debtor, such Debtor shall deliver to
the Administrative Agent a copy of said Patent or Copyright or such
application, as the case may be, with a grant of security as to such Patent or
Copyright, as the case may be, confirming the grant thereof hereunder together
with all cover sheets or other documents or instruments required to be filed
with the United States Patent and Trademark Office in order to create or
perfect a lien in respect of such Patent or Copyright.


 


(C)                                Each
Debtor agrees, promptly upon learning thereof, to notify the Administrative
Agent in writing of the name and address of, and to furnish such pertinent
information available to such Debtor with respect to any party who Debtor
believes is infringing or otherwise violating any of such Debtor’s rights in
any material Patent or material Copyright, or with respect to any party
claiming that Debtor’s practice of any Patent or use of any Copyright violates
any property right of that third party. 
Each Debtor further agrees, unless otherwise agreed by the
Administrative Agent, diligently to prosecute any Person infringing any
material Patent or material Copyright.


 


5.13                           Accounts.  With respect to any deposit accounts, securities accounts,
investment accounts or like accounts, at the request of the Syndication Agent
or the Administrative Agent, Debtors shall use commercially reasonable efforts
to obtain, within sixty (60) days from the Closing Date, from the financial institutions
with whom such accounts are maintained agreements with the Administrative Agent
and Debtors in form and substance reasonably satisfactory to the Administrative
Agent and Debtors pursuant to which control over such account is granted to the
Administrative Agent and pursuant to which such financial institution confirms
and acknowledges the security interest of Secured Parties in such account and
waives its right of set-off with respect to amounts held therein.  From and after sixty (60) days from the
Closing Date, Debtors will provide a list of such accounts and copies of such
control agreements to the Administrative Agent and take such further actions
and execute such further documents in 


 


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connection
therewith as the Administrative Agent may reasonably request in order to
perfect or maintain the perfection of the security interest of Secured Parties
in such accounts.


 


5.14                           Future Material Contracts.  If any Debtor enters into any Material
Contract related to the construction of the Phase II Mall after the date
hereof, such Debtor shall (i) deliver to the Administrative Agent an executed
counterpart or certified copy of such Material Contract and (ii) shall cause
the counterparty to such additional Material Contract to enter into a Consent
to such assignment, such Consent to be in substantially the form of Exhibit J
to the Construction Loan Agreement (subject to any changes thereto requested by
such party and reasonably satisfactory to the Administrative Agent).


 


6.                                       Remedies Upon Event of Default.


 


6.1                                 Subject
to compliance with applicable Nevada Gaming Laws, if any Event of Default shall
have occurred and be continuing, the Administrative Agent may exercise in
respect of the Collateral, in addition to all other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies
of a secured party on default under the UCC (whether or not the UCC applies to
the affected Collateral), and also may (a) require Debtors to, and Debtors
hereby agree that they will at their expense and upon request of the
Administrative Agent forthwith, assemble all or part of the Collateral as
directed by the Administrative Agent and make the same available to the
Administrative Agent at a place to be designated by the Administrative Agent
that is reasonably convenient to both parties, (b) enter onto the property
where any Collateral is located and take possession thereof with or without
judicial process, (c) prior to the disposition of the Collateral, store,
process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent the Administrative Agent
deems appropriate, (d) take possession of Debtors’ premises or place
custodians in exclusive control thereof, remain on such premises and use the
same and any of Debtors’ equipment for the purpose of completing any work in
process, taking any actions described in the preceding clause (c)
and collecting any Obligation, and (e) without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any of the Administrative Agent’s offices or elsewhere, for
cash, on credit or for future delivery, at such time or times and at such price
or prices and upon such other terms as the Administrative Agent may deem
commercially reasonable.  The
Administrative Agent or any of the Secured Parties may be the purchaser of any
or all of the Collateral at any such sale and the Administrative Agent as agent
for and representative of the Secured Parties shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Obligations as a credit on account of the purchase price for
any Collateral payable by the Administrative Agent at such sale.  Each purchaser at any such sale shall hold
the property sold absolutely free from any claim or right on the part of
Debtors, and Debtors hereby waive (to the extent permitted by applicable law)
all rights of redemption, stay and/or appraisal which they now have or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.  Debtors agree that,
to the extent notice of sale shall be required by law, at least ten (10) days’
notice to Debtors of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification.  The Administrative Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given.  The Administrative Agent
may adjourn any public or private sale (as the Administrative Agent may 


 


18






















 


elect), which
sale may be conducted by an employee or representative of the Administrative
Agent, from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to
which it was so adjourned.  Debtors, in
dealing with or disposing of the Collateral or any part thereof, hereby waive,
to the extent permitted by applicable Legal Requirements, all rights, legal and
equitable, it may now or hereafter have to require marshaling of assets or to
require, upon foreclosure, sales of assets in a particular order.  Each successor and assign of Debtors,
including a holder of a lien subordinate to the lien created hereby (without
implying that any Debtor has, except as expressly provided in the Construction
Loan Agreement, a right to grant an interest in, or a subordinate lien on, any
of the Collateral), by acceptance of its interest or lien agrees that it shall
be bound by the above waiver, to the same extent as if such holder gave the waiver
itself.  Debtors also hereby waive, to
the full extent permitted by applicable Legal Requirements, the benefit of all
laws providing for rights of appraisal, valuation, stay, extension or
redemption after foreclosure now or hereafter in force.  Debtors hereby waive all claims against the
Administrative Agent arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if the Administrative
Agent accepts the first offer received and does not offer such Collateral to
more than one offeree.  If the
Administrative Agent sells any Collateral upon credit, Debtors will be credited
only with payments actually made by the purchaser, received by the
Administrative Agent and applied to the indebtedness of the purchaser.  In the event the purchaser fails to pay for
the Collateral, the Administrative Agent may resell the Collateral and Debtors
shall be credited with the proceeds of the sale.  In the event the Administrative Agent shall bid at any
foreclosure or trustee’s sale or at any private sale permitted by applicable
Legal Requirements or this Agreement or the Construction Loan Agreement, the
Administrative Agent may bid all or less than the amount of the
Obligations.  If the proceeds of any
sale or other disposition of the Collateral are insufficient to pay all the
Obligations, Debtors shall be liable for the deficiency and the reasonable fees
of any attorneys employed by the Administrative Agent to collect such
deficiency.  Upon written demand from
the Administrative Agent, each Debtor shall execute and deliver to the
Administrative Agent an assignment or assignments of the Patents, Copyrights,
and Marks and such other documents as are necessary or appropriate to carry out
the intent and purposes of this Agreement. 
Each Debtor agrees that such an assignment and/or recording shall be
applied to reduce the Obligations outstanding only to the extent that the
Administrative Agent receives cash proceeds in respect of the sale of, or other
realization upon, the Collateral.


 


7.                                       Remedies Cumulative; Delay Not Waiver.


 


7.1                                 No
right, power or remedy herein conferred upon or reserved to the Administrative
Agent is intended to be exclusive of any other right, power or remedy and every
such right, power and remedy shall, to the extent permitted by applicable Legal
Requirements, be cumulative and in addition to every other right, power and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise.  The assertion or employment
of any right or remedy hereunder or otherwise shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.  Resort to any or all security now or
hereafter held by the Administrative Agent or any other Secured Party may be
taken concurrently or successively and in one or several consolidated or
independent judicial actions or lawfully taken nonjudicial proceedings, or
both.  If the Administrative Agent may,
under applicable Legal Requirements, proceed to realize its benefits under this
Agreement or any other Loan Document giving the 


 


19






















 


Administrative
Agent a Lien upon any Collateral, whether owned by Debtors or by any other Person,
either by judicial foreclosure or by non-judicial sale or enforcement, the
Administrative Agent may, at its sole option, determine which of its remedies
or rights it may pursue without affecting any of the rights and remedies of the
Administrative Agent under this Agreement.


 


7.2                                 No
delay or omission of the Administrative Agent to exercise any right or power
accruing upon the occurrence and during the continuance of any Event of Default
as aforesaid shall impair any such right or power or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein; and every power
and remedy given by this Agreement may be exercised from time to time, and as
often as shall be deemed expedient, by the Administrative Agent.


 


8.                                       Application of Proceeds.


 


All proceeds
received by the Administrative Agent in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral shall be
applied to repay the Obligations as provided in the Construction Loan Agreement.


 


9.                                       Attorney-In-Fact.


 


Subject to
compliance with applicable Nevada Gaming Laws, each Debtor hereby irrevocably
appoints the Administrative Agent, acting for and on behalf of itself and the
other Secured Parties and each successor and assign of the Administrative Agent
and the other Secured Parties, the true and lawful attorney-in-fact of such
Debtor, with full power and authority in the place and stead of such Debtor and
in the name of such Debtor, the Administrative Agent or otherwise, subject to
the terms of the Construction Loan Agreement, this Agreement and applicable
Legal Requirements, to enforce all rights, interests and remedies of such
Debtor with respect to the Collateral from time to time upon and following the
occurrence and continuation of an Event of Default or Potential Event of
Default in the Administrative Agent’s discretion to take any action and to
execute any instrument that the Administrative Agent may deem necessary or
advisable to accomplish the purposes of this Agreement, including:


 


(a)                                  to
obtain and adjust insurance required to be maintained by Debtors or paid to the
Administrative Agent pursuant to this Agreement;


 


(b)                                 to
ask for, demand, collect, sue for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect
of any of the Collateral;


 


(c)                                  to
elect remedies thereunder and to receive, endorse and collect any drafts or
other instruments, documents and chattel paper in connection with clauses
(a) and (b) above;


 


(d)                                 to
file any claims or take any action or institute any proceedings that the
Administrative Agent may deem necessary or desirable for the collection of any
of the Collateral or otherwise to enforce the rights of the Administrative
Agent with respect to any of the Collateral;


 


20






















 


(e)                                  to
pay or discharge taxes or Liens (other than Permitted Liens) levied or placed
upon or threatened against the Collateral, the legality or validity thereof and
the amounts necessary to discharge the same to be determined by the
Administrative Agent in its sole discretion, any such payments made by the
Administrative Agent to become obligations of Debtor to the Administrative
Agent, due and payable immediately without demand;


 


(f)                                    to
sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts and other documents
relating to the Collateral; and


 


(g)                                 upon
the occurrence and during the continuation of an Event of Default, generally to
sell, transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Administrative
Agent were the absolute owner thereof for all purposes, and to do, at the
Administrative Agent’s option and Debtors’ expense, at any time or from time to
time, all acts and things that the Administrative Agent deems necessary to
protect, preserve or realize upon the Collateral and the Administrative Agent’s
security interest therein in order to effect the intent of this Agreement, all
as fully and effectively as Debtor might do.


 


10.                                 The Administrative Agent May Perform.


 


Upon the
occurrence and during the continuance of an Event of Default, if Debtor fails
to perform any agreement contained herein within the applicable period (if any)
provided for performance, the Administrative Agent may itself perform, or cause
performance of, such agreement, and the reasonable expenses of the Administrative
Agent incurred in connection therewith shall be part of the Obligations of the
relevant Secured Parties.


 


11.                                 Perfection; Further Assurances.


 


11.1                           Each
Debtor agrees that from time to time, at the expense of such Debtor, such
Debtor shall promptly execute and deliver all further instruments and
documents, and take all further action, that may be reasonably necessary, or
that the Administrative Agent may reasonably request, in order to perfect and
protect the assignment and security interest granted, ensure the continued
perfection of, purported or intended to be granted hereby in favor of the
Secured Parties or to enable the Administrative Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral.  Without limiting the generality of the
foregoing, each Debtor shall (i) if any Collateral shall be evidenced by a
promissory note or other instrument in excess of $50,000, deliver and pledge to
the Administrative Agent for the benefit of the Secured Parties granted a
security interest in such Collateral such note or instrument duly endorsed
without recourse, and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Administrative Agent,
(ii) execute and deliver to the Administrative Agent such financing or
continuation statements, or amendments thereto, and such other instruments,
endorsements or notices, as may be reasonably necessary or desirable or as such
Secured Parties may reasonably request or, in order to perfect and preserve the
assignments and security interests granted, purported or intended to be granted
hereby in favor of the relevant Secured Parties and (iii) at the Administrative
Agent’s reasonable 


 


21






















 


request,
appear in and defend any action or proceeding that may affect Debtor’s title to
or the Administrative Agent’s or any of the Secured Parties security interest
in all or any part of the Collateral. 
If any Debtor shall at any time acquire a material commercial tort
claim, as defined in the UCC, such Debtor shall promptly notify the
Administrative Agent in writing signed by such Debtor of the brief details
thereof and grant to the Administrative Agent in such writing a security
interest therein and in the proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance reasonably
satisfactory to the Administrative Agent.


 


11.2                           Each
Debtor hereby authorizes the Administrative Agent to file one or more financing
or continuation statements, and amendments thereto, relative to all or any part
of the Collateral in which such Secured Party has been granted a security
interest.


 


11.3                           Each
Debtor shall pay all filing, registration and recording fees and all refiling,
re-registration and re-recording fees, and all reasonable expenses incident to
the execution and acknowledgment of this Agreement, any assurance, and all
federal, state, county and municipal stamp taxes and other taxes (other than
income taxes), duties, imports, assessments and charges arising out of or in
connection with the execution and delivery of this Agreement, any agreement
supplemental hereto, any financing statements, and any instruments of further
assurance.


 


11.4                           Each
Debtor shall, promptly upon request, provide to the Administrative Agent, all
information and evidence it may reasonably request concerning the Collateral to
enable the Administrative Agent to enforce the provisions of this Agreement.


 


12.                                 Place of Business; Location of Records.


 


Unless the
Administrative Agent is otherwise notified under Section 5.4, the
place of business and chief executive office of each Debtor is, and all records
of such Debtor concerning the Collateral are and will be, located at the
address of such Debtor set forth on the signature pages to this Agreement.


 


13.                                 Continuing Assignment and Security Interest; Transfer
of Debt.


 


This Agreement
shall create a continuing assignment of, and security interest in, the
Collateral and shall (a) remain in full force and effect until payment in
full of all Obligations, (b) be binding upon each Debtor, its successors
and assigns; provided, however, that the obligations of each
Debtor, its successors and assigns hereunder may not be assigned without the
prior written consent of the Administrative Agent, and (c) inure, together
with the rights and remedies of the Administrative Agent hereunder, to the
benefit of the Administrative Agent, its successors, transferees and assigns,
the other Secured Parties and their respective successors, transfers and
assigns (whether as a result of a refinancing or otherwise).  Without limiting the generality of the
foregoing but subject to the terms of the Construction Loan Agreement, the
Secured Parties may assign or otherwise transfer all or any part of or interest
in the Construction Loan Agreement or other evidence of indebtedness held by
them to any other Person to the extent permitted by the Construction Loan
Agreement, and such other Person shall thereupon become vested with all or an
appropriate part of the benefits in respect thereof granted to the Secured
Parties herein or otherwise.  The
release of the security interest in any or all of the Collateral, the taking or
acceptance of additional security, or the resort by any Secured Party or 


 


22






















 


the
Administrative Agent to any security it may have in any order it may deem
appropriate, shall not affect the liability of any person on the Obligations
secured hereby.  If this Agreement shall
be terminated or revoked by operation of law, each Debtor will indemnify and
save the Secured Parties harmless from any loss which may be suffered or
incurred by the Secured Parties in acting hereunder prior to the receipt by the
Administrative Agent, its successors, transfers, or assigns of notice of such
termination or revocation.  Each Debtor
acknowledges and agrees that, pursuant to and in accordance with the terms of
the Construction Loan Agreement, one or more additional or successor
Administrative Agents, or other agents or representatives of the Administrative
Agent or other secured Parties may be appointed, by written notice to each
Debtor, and such person or persons shall be entitled to exercise or perform all
or a portion of the duties or obligations of the Administrative Agent hereunder
in accordance with the terms of such appointment.


 


14.                                 Termination and Release of Security Interest.


 


14.1                           On
the Termination Date, the security interest granted under Section 2.1
in favor of the Administrative Agent on behalf of the Secured Parties shall
terminate.  Upon any such termination,
the Administrative Agent will, at Debtors’ expense, execute and deliver to
Debtors such documents (including, without limitation, UCC-3 termination
statements which, upon such delivery, Debtors shall be authorized to file in
the appropriate filing offices) as Debtors shall reasonably request to evidence
such termination.


 


14.2                           In
the event that any part of the Collateral is sold, transferred or otherwise
disposed of in accordance with the Construction Loan Agreement or is otherwise
released in accordance with the Construction Loan Agreement or with the consent
of the Requisite Lenders, such Collateral will be sold, transferred or
otherwise disposed of, and released free and clear of the Liens created by this
Agreement and the Administrative Agent, at the request and expense of the
relevant Debtor, will duly and promptly assign, transfer, deliver and release
to the applicable Debtor or its designee (without recourse and without any representation
or warranty) such of the Collateral as is then being (or has been) so sold,
transferred or otherwise disposed of or released.  In connection with any disposition or release pursuant to this Section 14.2,
the Administrative Agent shall, at Debtors’ expense, execute and deliver to
Debtors such documents (including UCC-3 termination statements which, upon such
delivery, Debtors shall be authorized to file in the appropriate filing
offices) as Debtors may reasonably request.


 


15.                                 Indemnity and Expenses.


 


To the extent
not covered by the Construction Loan Agreement, the Debtors agree, jointly and
severally, to indemnify the Administrative Agent and each other Secured Party
from and against any and all claims, losses and liabilities growing out of or
resulting from this Agreement (including enforcement of this Agreement), except
claims, losses or liabilities resulting from such Secured Party’s gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction.


 


23






















 


16.                                 Attorneys’ Fees.


 


In the event
any legal action or proceeding (including any of the remedies provided for
herein or at law) is commenced to enforce or interpret this Agreement or any
provision thereof, Debtors shall indemnify each of the Secured Parties and the
Administrative Agent for their reasonable attorneys’ fees and other costs and
expenses incurred therein, and if a judgment or award is entered in any such
action or proceeding, such reasonable attorneys’ fees and other costs and
expenses may be made a part of such judgment or award.


 


17.                                 Amendments; Waivers; Consents.


 


No amendment,
modification, termination or waiver of any provision of this Agreement, or
consent to any departure by Debtors therefrom, shall in any event be effective
unless effected in accordance with Section 9.6 of the Construction Loan
Agreement.


 


18.                                 Notices.


 


Unless
otherwise specifically provided herein or in the Construction Loan Agreement,
any notice or other communication herein required or permitted to be given
shall be in writing and may be personally served or sent by telefacsimile or
United States mail or courier service and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of telefacsimile
or telex, or three (3) Business Days after depositing it in the United States
mail with postage prepaid and properly addressed; provided that notices
to the Administrative Agent shall not be effective until received; provided
further, any such notice or other communication shall at the request of
the Administrative Agent be provided to any sub-agent appointed pursuant to
Section 8.2.F of the Construction Loan Agreement as designated by the
Administrative Agent from time to time. 
For the purposes hereof, the address of each party hereto shall be as
set forth under such party’s name on the signature pages hereto or such other
address as shall be designated by such Person in a written notice delivered to
the other parties hereto or, with respect to any Debtors that, subsequent to
the date hereof, are required to execute a supplement in accordance with Section 30,
at the address set forth for notices in such supplement.


 


19.                                 Governing Law.


 


Subject to the
application of Nevada Gaming Laws, this Agreement, including all matters of
construction, validity, performance and the creation, validity, enforcement or
priority of the lien of, and security interests created by, this Agreement in
or upon the Collateral shall be governed by the laws of the state of New York,
without reference to conflicts of law (other than Sections 5-1401 and
5-1402 of the New York General Obligations Law), except as required by
mandatory provisions of law and except to the extent that the validity or
perfection of the lien and security interest hereunder, or remedies hereunder,
in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the state of New York.


 


20.                                 Consent to Jurisdiction and Service of Process.


 


ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST DEBTORS ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR ANY OBLIGATIONS HEREUNDER MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK.


 


24






















 


BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH DEBTOR, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY


 


(I)                                    ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;


 


(II)                                WAIVES ANY DEFENSE OF FORUM
NON CONVENIENS;


 


(III)                            AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO DEBTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 18;


 


(IV)                           AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III)
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER DEBTOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT;


 


(V)                               AGREES THAT ADMINISTRATIVE AGENT RETAINS THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST EACH DEBTOR IN THE COURTS OF ANY OTHER JURISDICTION; AND


 


(VI)                           AGREES THAT THE PROVISIONS OF THIS SECTION 20
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.


 


21.                                 Reinstatement.


 


This Agreement
shall continue to be effective or be reinstated, as the case may be, if at any
time any amount received by any Secured Party in respect of the Obligations is
rescinded or must otherwise be restored or returned by such Secured Party upon
the insolvency, bankruptcy, reorganization or liquidation or otherwise of a
Debtor or upon the dissolution of, or appointment of any intervenor or
conservator of, or trustee or similar official for, a Debtor or any substantial
part of a Debtor’s assets, or otherwise, all as though such payments had not
been made.  Debtors shall pay the Administrative
Agent on demand all of its reasonable costs and expenses (including reasonable
fees of counsel) incurred by the Administrative Agent in connection with such
rescission or restoration.


 


22.                                 Severability.


 


The provisions
of this Agreement are severable, and if any clause or provision shall be held
invalid or unenforceable in whole or in part in any jurisdiction, then such
invalidity or unenforceability shall affect only such clause or provision, or
part thereof, in such jurisdiction and shall not in any manner affect such
clause or provision in any other jurisdiction, or any other clause or provision
of this Agreement in any jurisdiction.


 


25






















 


23.                                 Survival of Provisions.


 


All
agreements, representations and warranties made herein shall survive the
execution and delivery of this Agreement and the Construction Loan Agreement
and extensions of credit thereunder. 
Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements, representations and warranties of Debtors set forth
herein shall terminate only upon full repayment of the Obligations.


 


24.                                 Headings Descriptive.


 


The headings
in this Agreement are for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.


 


25.                                 Entire Agreement.


 


This
Agreement, together with any other agreement executed in connection herewith,
is intended by the parties as a final expression of their agreement and is
intended as a complete and exclusive statement of the terms and conditions
thereof.


 


26.                                 Time.


 


Time is of the
essence of this Agreement.


 


27.                                 Counterparts.


 


This Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original but all of which shall together constitute one and the same agreement.


 


28.                                 Waiver of Jury Trial.


 


EACH
DEBTOR AND THE ADMINISTRATIVE AGENT HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
AGREEMENT AND THE RELATIONSHIP AMONG THEM THAT IS BEING ESTABLISHED.  EACH DEBTOR AND THE ADMINISTRATIVE AGENT
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT IT HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT, AND THAT IT WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS.  EACH SUCH PERSON
FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.


 


26






















 


29.                                 Responsibilities of the Administrative Agent.


 


The powers
conferred on the Administrative Agent hereunder are solely to protect its
interest in the Collateral granted for the benefit of the Secured Parties and
shall not impose any duty upon it to exercise any such powers.  Except for the exercise of reasonable care
in the custody of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Administrative Agent shall have
no duty as to any Collateral, it being understood that the Administrative Agent
shall have no responsibility for (a) taking any necessary steps (other than
steps taken in accordance with the standard of care set forth above to maintain
possession of the Collateral) to preserve rights against any parties with
respect to any Collateral; (b) taking any necessary steps to collect or realize
upon the Obligations or any guarantee therefor, or any part thereof, or any of
the Collateral; or (c) taking any action to protect against any diminution in
value of the Collateral, but, in each case, the Administrative Agent may do so
and all expenses reasonably incurred in connection therewith shall be part of
the Obligations.  The Administrative
Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which such Person accords its own
property of like kind.


 


30.                                 Additional Debtors.


 


Upon the
execution and delivery by any other Person of a supplement in the form of Exhibit
A hereto, such Person shall become a “Debtor” hereunder with the same force
and effect as if it were originally a party to this Agreement and named as a
“Debtor” hereunder.  The execution and
delivery of such supplement shall not require the consent of any other Debtor hereunder,
and the rights and obligations of each Debtor hereunder shall remain in full
force and effect notwithstanding the addition of any new Debtor as a party to
this Agreement.


 


31.                                 Joint and Several Obligations.


 


The provisions
of Section 2.9 of the Construction Loan Agreement are incorporated herein
by reference and each Debtor agrees that the provisions of the aforesaid
sections shall apply with respect to each Debtor hereunder.


 


[Signature page
follows]


 


27






















 


IN
WITNESS WHEREOF, each of the undersigned has caused
this Agreement to be duly executed and delivered as of the day and year first
written above.


 


 


	
   

  	
  DEBTORS:

  
	
   

  	
   

  
	
   

  	
  PHASE II MALL SUBSIDIARY, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Phase II
  Mall Holding, LLC, its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Lido Casino
  Resort Holding Company, LLC,

  its Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Lido
  Intermediate Holding Company,

  LLC, its managing member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  Venetian
  Casino Resort, LLC, its sole

  member

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  Las Vegas
  Sands, Inc., its

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  managing
  member

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Harry Miltenberger

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Harry Miltenberger

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  VP Finance, Secretary & Chief Accounting Officer

  



 


	
   

  	
  Notice
  Address:

  	
  3355 Las
  Vegas Blvd South

  
	
   

  	
   

  	
  Room 1A

  
	
   

  	
   

  	
  Las Vegas,
  Nevada 89109

  
	
   

  	
  Attention:

  	
  General
  Counsel

  
	
   

  	
  Facsimile
  Number:

  	
  (702) 414-4421
  and

  
	
   

  	
  Attention:

  	
  Harry
  Miltenberger

  
	
   

  	
  Facsimile
  Number:

  	
  (702)
  733-5758

  



 






















 


	
   

  	
   

  	
  PHASE II MALL HOLDING, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Lido Casino
  Resort Holding Company, LLC,

  its Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Lido
  Intermediate Holding Company,

  LLC, its managing member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  Venetian
  Casino Resort, LLC, its sole 

  member

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  Las Vegas
  Sands, Inc., its

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  managing
  member

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Harry Miltenberger

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Harry Miltenberger

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  VP Finance, Secretary & Chief Accounting Officer

  



 


 


	
   

  	
  Notice
  Address:

  	
  3355 Las
  Vegas Blvd South

  
	
   

  	
   

  	
  Room 1A

  
	
   

  	
   

  	
  Las Vegas,
  Nevada 89109

  
	
   

  	
  Attention:

  	
  General
  Counsel

  
	
   

  	
  Facsimile
  Number:

  	
  (702)
  414-4421 and

  
	
   

  	
  Attention:

  	
  Harry
  Miltenberger

  
	
   

  	
  Facsimile
  Number:

  	
  (702)
  733-5758

  



 






















 


	
   

  	
  ADMINISTRATIVE AGENT:

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NOVA SCOTIA 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan
  Pendergast

  
	
   

  	
   

  	
  Name:

  	
  Alan
  Pendergast

  
	
   

  	
   

  	
  Title:

  	
  Managing
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notice Address:

   

  The Bank of
  Nova Scotia 

  580 California Street, Suite 2100 

  San Francisco, California 94104 

  Attention: Alan Pendergast 

  Telefax: (415) 397-0791  

  

  With copy to:  

  

  The Bank of Nova Scotia 

  Loan Administration 

  600 Peachtree Street, N.E. 

  Atlanta, Georgia 30308 

  Attention:    Hilma
  Gabbidon

  Vicki Gibson 

  Telefax:                  (404)
  888-8998

  
					



 






















 


EXHIBIT A 


to the Security Agreement  


 


SUPPLEMENT TO

SECURITY AGREEMENT  


 


This
SUPPLEMENT, dated as of
                        
      ,
           (this “Supplement”), is to the Security Agreement,
dated as of
                
    , 2004 (as amended, supplemented, amended and restated
or otherwise modified from time to time, the “Security
Agreement”), among the Debtors (such capitalized term, and other
terms used in this Supplement, to have the meanings set forth in the Security
Agreement) from time to time party thereto, in favor of The Bank of Nova Scotia
(“Scotia Capital”), as
administrative agent (together with its successor(s) thereto in such capacity,
the “Administrative Agent”) for
each of the Secured Parties.  


 


W  I  T  N  E  S
S  E  T  H :


 


WHEREAS,
pursuant to a Construction Loan Agreement, dated as of
                  ,
2004 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Construction Loan
Agreement”), among Phase II Mall Holding, LLC, a Nevada limited
liability company (“Phase II Mall Subsidiary
Holding”), Phase II Mall Subsidiary, LLC, a Delaware limited
liability company (“Phase II Mall Subsidiary”),
Scotiabank, as administrative agent, sole lead arranger and sole bookrunner,
Sumitomo Mitsui Banking Corporation, as syndication agent and the financial
institutions party thereto (the “Lenders”)
have entered into the Construction Loan Agreement (as amended, amended and
restated, supplemented, modified, extended, refinanced, refunded, renewed,
replaced or substituted from time to time, the “Construction Loan Agreement”) pursuant to which the Lenders
have agreed, subject to the terms thereof and hereof, to make Credit Extensions
to Phase II Mall Subsidiary Holding and Phase II Mall Subsidiary;  


 


WHEREAS,
pursuant to the provisions of Section 30 of the Security Agreement, each
of the undersigned is becoming a Debtor under the Security Agreement; and  


 


WHEREAS, each
of the undersigned desires to become a “Debtor” under the Security Agreement in
order to induce the Secured Parties to continue to extend Credit Extensions
under the Construction Loan Agreement;  


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, each of the undersigned agrees, for the benefit
of each Secured Party, as follows.  


 


Section 1.   Party
to Security Agreement, etc.  In
accordance with the terms of the Security Agreement, by its signature below
each of the undersigned hereby irrevocably agrees to become a Debtor under the
Security Agreement with the same force and effect as if it were an original
signatory thereto and each of the undersigned hereby (a) agrees to be bound by
and comply with all of the terms and provisions of the Security Agreement
applicable to it as a Debtor and (b) represents and warrants that the
representations and warranties made by it as a 


 






















 


Debtor
thereunder are true and correct as of the date hereof, unless stated to relate
solely to an earlier date, in which case such representations and warranties
shall be true and correct as of such earlier date and (c) assigns, grants and
pledges, in favor of the Administrative Agent a security interest in all of its
property and assets that would constitute Collateral to the extent set forth in
Section 2 of the Security Agreement with the priority set forth
therein.  In furtherance of the
foregoing, each reference to a “Debtor” and/or “Debtors” in the Security
Agreement shall be deemed to include each of the undersigned.  


 


Section 2.   Representations.  Each undersigned Debtor hereby represents
and warrants that this Supplement has been duly authorized, executed and
delivered by it and that this Supplement and the Security Agreement constitute
the legal, valid and binding obligation of each of the undersigned, enforceable
against it in accordance with its terms. 



 


Section 3.   Full
Force of Subsidiary Pledge and Security Agreement.  Except as expressly supplemented hereby, the
Security Agreement shall remain in full force and effect in accordance with its
terms.  


 


Section 4.   Severability.  Wherever possible each provision of this
Supplement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Supplement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Supplement or
the Security Agreement.  


 


Section 5.   Governing
Law, Entire Agreement, etc.  THIS
SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK).  


 


Section 6.   Counterparts.  This Supplement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.


 


*  *  *  *  *


 






















 


IN WITNESS
WHEREOF, each of the parties hereto has caused this Agreement to be duly
executed and delivered by its Authorized Representative as of the date first
above written.


 


	
   

  	
  [NAME OF ADDITIONAL DEBTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address for Debtor:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
  Telefax:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED AND AGREED FOR ITSELF

  AND ON BEHALF OF THE SECURED

  PARTIES:

  	
   

  
	
   

  	
   

  
	
  THE BANK OF NOVA SCOTIA

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title: