**Exhibit 10.86**

 
|   |   | FILE NUMBER 2005001646                |
|--------|--------|---------------------------------------|
|   |   | BK 02764 PG 0657                      |
|   |   | RECORDED 02/02/2005 04:10:46 PM       |
| [Seal] |   | RECORDING FEE 132.00                  |
|   |   | KAREN HIGGINBOTHAM, RECORDER OF DEEDS |
|   |   | BUCHANAN COUNTY, MISSOURI             |
|   |   | Karen Higginbotham                    |

 

**Space above Line Reserved For Recorder’s Use [Space from top of page tothis line must be 3 inches]**

 
| **1.**     |   | **Title of Document****:**                              | **Deed of Trust with Assignment  of Rents, Security Agreement and Fixture Filing**                                   |
|------------|--------|---------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------|
|       |   |                                                    |                                                                                                                 |
| **2.**     |   | **Date of Document:**                                   | **January 31, 2005**                                                                                            |
|       |   |                                                    |                                                                                                                 |
| **3.**     |   | **Grantor****:**                                        | **HGI – St. Jo**                                                                                                |
|       |   |                                                    |                                                                                                                 |
| **4.**     |   | **Grantee****:**                                        | **Bank of America, N.A., as  Administrative Agent**                                                                  |
|       |   |                                                    |                                                                                                                 |
| **5.**     |   | **Statutory Mailing Address(es)****:**                  | **Grantor:**                                                                                                         |
| ** ** |   | ** **                                              | **c/o Herbst Gaming, Inc.**                                                                                     |
| ** ** |   | ** **                                              | **5195 Las Vegas Blvd.**                                                                                             |
| ** ** |   | ** **                                              | **Las Vegas, NV 89119**                                                                                              |
| ** ** |   | ** **                                              | **Attn: M. Higgins**                                                                                                 |
| ** ** |   | ** **                                              | ** **                                                                                                           |
| ** ** |   | ** **                                              | **Grantee:**                                                                                                         |
| ** ** |   | ** **                                              | **Bank of America, N.A.**                                                                                            |
| ** ** |   | ** **                                              | **Mail Code: TX1-492-14-11**                                                                                         |
| ** ** |   | ** **                                              | **Bank of America Plaza**                                                                                            |
| ** ** |   | ** **                                              | **901 Main Street, 14th  Floor**                                                                                     |
| ** ** |   | ** **                                              | **Dallas, TX 75202-3714**                                                                                            |
| ** ** |   | ** **                                              | **Attn: Chris M. Levine,  Assistant Vice President  Agency Management Officer II  GCIB Agency Management Central I** |
|       |   |                                                    |                                                                                                                 |
| **6.**     |   | **Legal description****:**                              | **See Exhibit A  annexed to the document**                                                                      |
|       |   |                                                    |                                                                                                                 |
| **7.**     |   | **Reference(s) to Book(s) and  Page(s)****:**           |                                                                                                                 |
|       |   |                                                    |                                                                                                                 |
| **8.**     |   | **Prepared by and following  recording return to****:** | ** **                                                                                                           |
| ** ** |   | ** **                                              | **Sheppard, Mullin,  Richter & Hampton LLP**                                                                |
| ** ** |   | ** **                                              | **333 South Hope Street, 48th  Floor**                                                                               |
| ** ** |   | ** **                                              | **Los Angeles, California 90071**                                                                                    |
| ** ** |   |                                                    | **Attn: William M. Scott  IV, Esq.**                                                                            |
|            |        |                                                         |                                                                                                                      |  |  |  |

 

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THIS INSTRUMENT SECURES FUTURE ADVANCES AND/OR FUTURE OBLIGATIONSWITHIN THE MEANING OF MISSOURI REVISED STATUTES §443.055, AS AMENDED, THE TOTALPRINCIPAL AMOUNT OF WHICH SHALL NOT EXCEED $275,000,000.00 PLUS FUTURE ADVANCESAND/OR FUTURE OBLIGATIONS MADE OR INCURRED FOR THE REASONABLE PROTECTION OF THESECURITY OR TO ENABLE COMPLETION OF A CONTEMPLATED IMPROVEMENT, ALL ASCONTEMPLATED BY SUBSECTION 3 OF SAID §443.055, AND THIS INSTRUMENT IS TOBE COVERED BY SAID §443.055.

 

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO:

Sheppard, Mullin,Richter & Hampton LLP 333 South Hope Street, 48th FloorLos Angeles, CA 90071-1448

Attn: William M.Scott IV, Esq.

 

THISSPACE ABOVE FOR RECORDER’S USE

 

DEED OF TRUSTwith Assignment of Rents, Security Agreement andFixture Filing

 

The parties to this Deed of Trust with Assignment ofRents, Security Agreement and Fixture Filing (“Deed of Trust”), dated as of January 31,2005, are HGI – ST. JO, a Nevada corporation (“Trustor”), as trustor, TODD W.GRIFFEE, ESQ., as trustee (“Trustee”), and BANK OF AMERICA, N.A., as “AdministrativeAgent” for the “Lenders” including, without limitation, “the Swing Line Lender”(as each of those three terms is defined in the Credit Agreement), asbeneficiary and secured party (“Beneficiary”). Capitalized terms used and nototherwise defined herein shall have the meanings given to them in that certainAmended and Restated Credit Agreement, dated as of October 8, 2004 (asamended, extended, renewed, modified or supplemented from time to time, the “CreditAgreement”) by and among Herbst Gaming, Inc., a Nevada corporation (“Borrower”),each lender whose name is set forth on the signature pages therein andeach lender that may hereafter become a party to the Credit Agreement pursuantto Section 10.06 therein (each a “Lender” and collectively, the “Lenders”),Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/CIssuer. The Credit Agreement initially provided for Revolving Loans in theaggregate principal amount of $175,000,000. Concurrently herewith, the CreditAgreement is being amended by a Term Joinder Agreement pursuant to which TermLoans in the aggregate principal amount of $100,000,000 are being extended tothe Borrower in addition to such Revolving Loans, for an aggregate creditfacility of $275,000,000.

 

The lenders party to the Credit Agreement as of thedate of this Deed of Trust are listed on Exhibit B.

 

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1.             Grant in Trust and Secured Obligations.

 

1.1           Grant in Trust. For the purpose of securing payment and performanceof the Secured Obligations defined and described in Section 1.2,Trustor hereby irrevocably and unconditionally grants and sells, mortgages,warrants, conveys, confirms, assigns and sets over unto Trustee, in trust forthe benefit of Beneficiary, with power of sale and right of entry andpossession, all estate, right, title and interest which Trustor now has or maylater acquire in and to the following property (all or any part of suchproperty, or any interest in all or any part of it, as the context may require,the “Property”):

 

(a)           The real property located in the County of Buchanan(the “County”), State of Missouri, as described in Exhibit A,together with all existing and future easements and rights affording access toit (the “Land”); together with

 

(b)           The decommissioned vessel located in the man-made moaton the Land, and all other buildings, structures and improvements now locatedor later to be constructed on the Land, including, without limitation, allparking areas, roads, driveways, walks, fences, walls, docks, berms,landscaping, recreation facilities, drainage facilities, lighting facilitiesand other site improvements (the “Improvements”); together with

 

(c)           All existing and future appurtenances, privileges,easements, franchises, hereditaments and tenements of the Land, including allminerals, oil, gas, other hydrocarbons and associated substances, sulphur,nitrogen, carbon dioxide, helium and other commercially valuable substanceswhich may be in, under or produced from any part of the Land, all developmentrights and credits, air rights, water, water courses, water rights (whetherriparian, appropriative or otherwise, and whether or not appurtenant), water stockand water permits (together with the statutory right to file applications tochange, and any and all applications to change the same), including any waterpermits, easements, rights of way, rights of ingress and egress, drainagerights, gores or strips of land, any land lying in the streets, highways, ways,sidewalks, alleys, passages, roads or avenues, open or proposed, in front of oradjoining the Land and Improvements, any land in the bed of any body of wateradjacent to the Land, any land adjoining the Land created by artificial meansor by accretion, all air space and rights to use such air space, and alldevelopment and similar rights; together with

 

(d)           Subject to Article 2, below, all existingand future leases, subleases, subtenancies, licenses (except for gaminglicenses and liquor licenses that are not transferable), occupancy agreements,concessions and any other agreement devising any portion of the Property orrelating to the use and enjoyment of all or any part of the Land and Improvements,and any and all guaranties and other agreements relating to or made inconnection with any of the foregoing, whether written or oral and whether inexistence at or upon the recordation of this Deed of Trust or entered intoafter the recordation of this Deed of Trust (some or all collectively, as thecontext may require, “Leases”), and all rents, security deposits, royalties,issues, profits, receipts, earnings, revenue, income, products and proceeds andother benefits of the Land and Improvements, whether now due, past due or tobecome due, including, without

 

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limitation,all prepaid rents, security deposits, fixed, additional and contingent rents,deficiency rents and liquidated damages, license fees, occupancy charges, hotelroom charges, cabana charges, casino revenues, show ticket revenues, food andbeverage revenues, room service revenues, merchandise sales revenues, parking,maintenance, common area, tax, insurance, utility and service charges and contributions,proceeds of sale of electricity, gas, heating, air-conditioning, cable andother utilities and services, green fees, cart rental fees, instruction fees,membership charges, restaurant, snack bar and pro shop revenues, liquidateddamages, and all other rights to payments, together with and any and allguaranties and other agreements relating to or made in connection with any ofsuch leases (some or all collectively, as the context may require, “Rents”);together with

 

(e)           All goods, materials, supplies, chattels, furniture,fixtures, equipment, machinery and other property now or later to be attachedto, placed in or on, or used in connection with the use, enjoyment, occupancyor operation of all or any part of the Land and Improvements, whether stored onthe Land or elsewhere, including all pumping plants, engines, pipes, ditchesand flumes, and also all gas, electric, cooking, heating, cooling, airconditioning, lighting, refrigeration and plumbing fixtures and equipment, allwater, sanitary and storm sewer, drainage, electricity, steam, gas, telephone,cable and other utility equipment and facilities, all plumbing, lighting,heating, ventilating, air conditioning, refrigerating, incinerating,compacting, fire protection and sprinkler, surveillance and security, vacuumcleaning, public address and communications equipment and systems, all kitchenand laundry appliances, screens, awnings, floor coverings, partitions,elevators, escalators, motors, machinery, pipes, fittings and other items ofequipment and property of every kind and description, all of which shall beconsidered to the fullest extent of the law to be real property for purposes ofthis Deed of Trust (it being agreed that, if the lien of this Deed of Trustshall be subject to a conditional bill of sale, chattel mortgage, or othersecurity interest covering any such property, then all the right, title andinterest of Trustor in and to such property, together with the benefits of anydeposits or payments now or hereafter made thereon, are and shall be covered bythe lien of this Deed of Trust); together with

 

(f)            All building materials, equipment, work in process orother personal property of any kind, whether stored on the Land or elsewhere,which have been or later will be acquired for the purpose of being deliveredto, incorporated into or installed in or about the Land or Improvements;together with

 

(g)           All rights to the payment of money, accounts, accountsreceivable, reserves, deferred payments, refunds, cost savings, payments anddeposits, room revenues, food revenues, beverage revenues and casino revenues,whether now or later to be received from third parties (including all earnestmoney sales deposits) or deposited by Trustor with third parties (including allutility deposits), contract rights, development and use rights, governmentalpermits and licenses (except for gaming licenses and liquor licenses that arenot transferable), authorizations, certificates, variances, consents andapprovals, applications, architectural and engineering plans, specificationsand drawings, as-built drawings, guaranties, warranties, management agreements,operating and/or licensing agreements, supply and service contracts for water,sanitary and storm sewer,

 

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drainage,electricity, steam, gas, telephone, cable, satellite, and other utilities,property and title insurance policies and proceeds thereof (including withoutlimitation the right to assert, prosecute and settle claims under suchpolicies), chattel paper, instruments, documents, notes, certificates ofdeposit, securities, other investments, drafts and letters of credit (otherthan letters of credit in favor of Beneficiary), which arise from or relate toconstruction on the Land or to any business now or later to be conducted on it,or to the Land and Improvements generally; together with

 

(h)           All proceeds, including all rights and claims to,dividends of and demands for them, of the voluntary or involuntary conversionof any of the Land, Improvements or the other property described above intocash or liquidated claims, including proceeds of all present and future fire,hazard or casualty insurance policies (whether or not any such insurance policyis required by this Deed of Trust or any other Loan Document) and allcondemnation awards or payments now or later to be made by any public body ordecree by any court of competent jurisdiction for any taking or in connectionwith any condemnation or eminent domain proceeding, and all causes of action andtheir proceeds for any damage or injury to the Land, Improvements or the otherproperty described above or any part of them, or breach of warranty inconnection with the construction of the Improvements, including causes ofaction arising in tort, contract, fraud or concealment of a material fact;together with

 

(i)            All books and records pertaining to any and all of theproperty described above, including computer readable memory and any computerhardware or software necessary to access and process such memory (“Books andRecords”); together with

 

(j)            All proceeds of, additions and accretions to,substitutions and replacements for, changes in, and greater right, title andinterest in, to and under or derived from, any of the property described aboveand all extensions, improvements, betterments, renewals, substitutions andreplacements thereof and additions and appurtenances thereto, including allproceeds of any voluntary or involuntary disposition or claim, right and remedyrespecting any such property (arising out of any judgment, condemnation oraward, or otherwise arising) and all goods, documents, general intangibles,chattel paper and accounts, wherever located, acquired with cash proceeds ofany of the foregoing or its proceeds.

 

Notwithstanding the foregoing, the term “Property,” asused in this Deed of Trust, shall not include (i) any personal property orfixtures, the purchase of which was financed by a purchase money securityinterest, including any capital lease obligation, permitted under the CreditAgreement to the extent that the documents creating such purchase moneysecurity interest or capital lease prohibit the granting thereon, but only forso long as the related indebtedness remains outstanding, (ii) any capitalstock or other equity interests in any gaming licenses, and (iii) anygaming licenses and liquor licenses which are not transferable.

 

Trustor shall and will warrant and forever defend theProperty in the quiet and peaceable possession of the Trustee, its successorsand assigns against all and every Person or Persons

 

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lawfully claiming or toclaim the whole or any part thereof. Trustor agrees that any greater title tothe Property hereafter acquired by Trustor during the term hereof shall besubject hereto.

 

1.2           Secured Obligations.

 

1.2.1        Trustor makes the grant, bargain, conveyance, sale,transfer and assignment set forth in Section 1.1 and grants the securityinterest set forth in Article 3 for the purpose of securing the followingobligations (collectively, the “Secured Obligations”) in any order of prioritythat Beneficiary may choose:

 

(a)           Except as specified in Section 1.2.2 below, thepayment and performance of each obligation of Trustor pursuant to that certainGuaranty (as amended as of the date hereof, the “Guaranty”), dated June 10,2004, entered into by Trustor in favor of Beneficiary pursuant to thatInstrument of Joinder to Guaranty dated as of October 8, 2004. TheGuaranty has been entered into by Trustor to, among other things, guaranty thepayment and performance of all obligations of Borrower to Beneficiary under theCredit Agreement and all related Loan Documents, pursuant to which the Lendershave extended or have agreed to extend to the Borrower certain secured revolvingand term credit facilities, presently in the aggregate principal amount of$275,000,000 (the “Commitment”), including, but not limited to the payment ofall amounts owing under the Swing Line, the payment of all amounts owing withrespect to the Letters of Credit, including without limitation unreimburseddrawings and obligations to furnish cash collateral as provided in the CreditAgreement, and the payment of all amounts owing under any and all Secured SwapContracts entered into by the Borrower with any Lender or Affiliate thereof;

 

(b)           The payment and performance of all future advances andother obligations that Trustor or any other Person or entity may owe toBeneficiary and/or any Lender (whether as principal, surety or guarantor), whena writing evidences Trustor’s and Beneficiary’s agreement that such advances orobligations be secured by this Deed of Trust;

 

(c)           The payment and performance of all obligations ofTrustor under this Deed of Trust;

 

(d)           The payment and performance of all modifications,amendments, extensions and renewals, however evidenced, of any of the SecuredObligations described in clause (a), (b) or (c) above.

 

1.2.2        Notwithstanding any provision of this Deed of Trust orany other Loan Document, the obligations and liability of Trustor, any Borroweror any other Person arising under Sections 5.09 and/or 10.04 ofthe Credit Agreement (and/or under any separate agreement relating to HazardousMaterials which states that it is not secured by real property) are not andshall not be Secured Obligations under this Deed of Trust.

 

1.2.3        All Persons who may have or acquire an interest in allor any part of the Property will be considered to have notice of, and will bebound by, the terms of the Secured Obligations and each other agreement orinstrument made or entered into in connection

 

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with each of the Secured Obligations. Such terms include any provisionsin the Credit Agreement or the other Loan Documents which permit borrowing,repayment and reborrowing, or which provide that the interest rate on one ormore of the Secured Obligations may vary from time to time.

 

1.2.4        In addition to the indebtedness evidenced by theGuaranty and all other Secured Obligations, this Deed of Trust, to the fullestextent permitted by the Laws of the State of Missouri, shall secure also andconstitute a Lien on the Property for all future advances made by theBeneficiary to Borrower and future obligations incurred by Borrower toBeneficiary in connection with the Property to the same extent as if suchfuture advances were made or such future obligations incurred on the date ofthe execution of this Deed of Trust. The total amount of the indebtedness thatmay be secured by this Deed of Trust shall not exceed a maximum principalamount equal to $275,000,000.00 plus future advances and/or future obligationsmade or incurred for the reasonable protection of the security or to enablecompletion of a contemplated improvement, all as contemplated by Subsection 3of §443.055, Missouri Revised Statutes, and this instrument is to be governedby said §443.055.

 

2.             Assignment of Rents and Leases.

 

2.1           Assignment. Trustor hereby irrevocably, absolutely, presentlyand unconditionally assigns, transfers and sets over to Beneficiary all of theright, title and interest which Trustor now has or may later acquire in and tothe Rents and the Leases, and confers upon Beneficiary the right to collectsuch Rents and enforce the provisions of the Leases with or without taking possessionof the Property. This is an absolute assignment, not an assignment for securityonly.

 

2.2           Grant of License. Beneficiary hereby confers upon Trustor a license (“License”)to collect and retain the Rents as they become due and payable, so long as no Eventof Default, as defined in Section 6.2, shall exist and becontinuing. If an Event of Default has occurred and is continuing, Beneficiaryshall have the right, which it may choose to exercise in its absolutediscretion, to terminate this License without notice to or demand upon Trustor,and without regard to the adequacy of Beneficiary’s security under this Deed ofTrust.

 

2.3           Collection and Application of Rents. Subject to the License granted toTrustor under Section 2.2, Beneficiary has the right, power andauthority to collect any and all Rents and exercise Trustor’s right, title andinterest under the Leases. Trustor hereby appoints Beneficiary its attorney-in-factto perform any and all of the following acts, if and at the times whenBeneficiary in its absolute discretion may so choose:

 

(a)           Demand, receive and enforce payment of any and allRents and any other right, title and interest of Trustor under the Leases; or

 

(b)           Give receipts, releases and satisfactions for any andall Rents and any other obligations and duties under the Leases; or

 

(c)           Sue either in the name of Trustor or in the name ofBeneficiary for any and all Rents and to enforce any other obligations andduties under the Leases.

 

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Beneficiary’s right to the Rents and the Leases doesnot depend on whether or not Beneficiary takes possession of the Property aspermitted under Section 6.3.3. In Beneficiary’s absolutediscretion, Beneficiary may choose to collect Rents and exercise the right,title and interest of Trustor under the Leases either with or without takingpossession of the Property. Beneficiary shall apply all Rents collected by itin the manner provided under Section 6.6. If an Event of Defaultshall have occurred and Beneficiary is in possession of all or part of theProperty and is collecting and applying Rents and exercising any right, titleand interest of Trustor under the Leases as permitted under this Deed of Trust,then Beneficiary, Trustee and any receiver shall nevertheless be entitled toexercise and invoke every right and remedy afforded any of them under this Deedof Trust and at law and in equity, including the right to exercise the power ofsale granted under Section 1.1 and Section 6.3.7.

 

2.4           Beneficiary Not Responsible. Under no circumstances shallBeneficiary have any duty to produce Rents from the Property or maintain theLeases. Regardless of whether or not Beneficiary, in Person or by agent, takesactual possession of the Land and Improvements, Beneficiary is not and shallnot be deemed to be:

 

(a)           a “mortgagee in possession” for any purpose; or

 

(b)           responsible for performing any of the obligationsunder any Lease; or

 

(c)           responsible for any waste committed by lessees or anyother parties, any dangerous or defective condition of the Property, or anynegligence in the management, upkeep, repair or control of the Property; or

 

(d)           liable in any manner for the Property or the use,occupancy, enjoyment or operation of all or any part of it.

 

Notwithstanding the foregoing, this Section 2.4shall not be construed as a waiver of any liability of Beneficiary to Trustorthat would otherwise exist as a result of Beneficiary’s gross negligence orwillful misconduct.

 

2.5           Leasing. Without Beneficiary’s prior written consent, Trustorshall not accept any deposit or prepayment of Rents for any period exceedingone (1) month, and Trustor shall not lease the Property or any part of itexcept strictly in accordance with the Loan Documents. Trustor shall not applyany Rents in any manner prohibited by the Loan Documents.

 

3.             Grant of Security Interest.

 

3.1           Security Agreement. The parties intend for this Deed of Trust to createa lien on and security interest in the Property, and an absolute assignment ofthe Rents and the Leases, all in favor of Beneficiary. The parties acknowledgethat some of the Property and some of the Rents and Leases may be determinedunder applicable law to be personal property or fixtures. To the extent suchProperty, Rents or Leases constitute personal property, Trustor, as debtor,hereby grants to Beneficiary, as secured party, a security interest in all suchProperty, Rents and Leases, to secure payment and performance of the SecuredObligations, and Trustor,

 

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as debtor, also has granted a security interest in such Property, Rentsand Leases pursuant to that certain Amended and Restated Security Agreementdated October 8, 2004, executed by the Borrower and each of itsSubsidiaries, as debtor, in favor of Beneficiary, as secured party, as modifiedfrom time to time. This Deed of Trust constitutes a security agreement underthe Missouri Uniform Commercial Code, as amended or recodified from time totime, covering all such Property, Rents and Leases. To the extent any revenuesgenerated in connection with the operation of the Property from time to timeare not real property encumbered by the lien created by Section 1.1,above, and are not absolutely assigned by the assignment set forth in Section 2.1,above, it is the intention of the parties that such revenues shall constitute “proceeds,products, offspring, rents or profits” (as defined in and for the purposes of Section 552(b) ofthe United States Bankruptcy Code, as such section may be modified orsupplemented) of the Land and Improvements, and/or “fees, charges, accounts, orother payments for the use or occupancy of rooms and other public facilities inhotels, motels or other lodging properties,” as applicable (as such terms aredefined in and for the purpose of Section 552(b) of the United StatesBankruptcy Code, as such Section may be modified or supplemented).

 

3.2           Financing Statements. Trustor consents to the filing by Beneficiary of oneor more financing statements and such other documents as Beneficiary may fromtime to time require to perfect or continue the perfection of Beneficiary’ssecurity interest in any Property, Rents or Leases. As provided in Section 5.11,Trustor shall pay all fees and costs that Beneficiary may incur in filing suchdocuments in public offices and in obtaining such record searches asBeneficiary may reasonably require. If Trustor fails to execute any financingstatements or other documents for the perfection or continuation of anysecurity interest, Trustor hereby appoints Beneficiary as its true and lawfulattorney-in-fact (which appointment is irrevocable and coupled with aninterest) to execute any such documents on its behalf. If any financingstatement or other document is filed in the records normally pertaining to personalproperty, that filing shall never be construed as in any way derogating from orimpairing this Deed of Trust or the rights or obligations of the parties underit.

 

4.             Fixture Filing. This Deed of Trust constitutes a financing statementfiled as a fixture filing under the Missouri Uniform Commercial Code, asamended or recodified from time to time, covering any Property which now is orlater may become fixtures attached to the Land or Improvements. In connectiontherewith, the addresses of Trustor, as debtor, and Beneficiary, as securedparty, are as set forth in Section 8.11, below. The foregoingaddress of Beneficiary, as secured party, is also the address from whichinformation concerning the security interest may be obtained by any interestedparty. The property subject to this fixture filing is described in Section 1.1,above. Portions of the property subject to this fixture filing as identified inthis Section are or are to become fixtures related to the real estatedescribed in Exhibit A attached hereto.

 

5.             Rights and Duties of the Parties.

 

5.1           Representations and Warranties. Trustor represents and warrants that,except as previously disclosed to Beneficiary in a writing making reference tothis Section 5.1:

 

(a)           Trustor lawfully possesses and holds fee simple titleto all of the Land and Improvements thereon and has or will have good title toall Property (other than

 

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personalproperty utilized by Trustor under such equipment leases and similar financingarrangements as were disclosed to Beneficiary in writing prior to the executionof this Deed of Trust or as are hereafter entered into by Trustor in accordancewith the Credit Agreement);

 

(b)           Trustor has the full and unlimited power, right and authorityto encumber the Property and assign the Rents and the Leases;

 

(c)           This Deed of Trust creates a first and prior lien onand security interest in the Property;

 

(d)           The Property includes all property and rights whichmay be reasonably necessary to promote the present beneficial use and enjoymentof the Land and Improvements;

 

(e)           Trustor owns any Property which is personal propertyfree and clear of any security agreements, reservations of title or conditionalsales contracts, and there is no financing statement affecting such personalproperty on file in any public office (other than personal property utilized byTrustor under such equipment leases and similar financing arrangements as weredisclosed to Beneficiary in writing prior to the execution of this Deed ofTrust or as are hereafter entered into by Trustor in accordance with the CreditAgreement);

 

(f)            Trustor’s place of business, or its chief executiveoffice if it has more than one place of business, is located at the addressspecified below; and

 

(g)           The Property is located in an area having oridentified as having special flood hazards or any similar designation under theNational Flood Insurance Act of 1968, as amended or recodified from time totime, or the Flood Disaster Protection Act of 1973, as amended or recodifiedfrom time to time.

 

5.2           Taxes and Assessments. Trustor shall pay prior to delinquency all taxes,levies, charges and assessments, including assessments on appurtenant waterstock, imposed by any public or quasi-public authority or utility company whichare (or if not paid, may become) a lien on or security interest in all or partof the Property or any interest in it, or which may cause any decrease in thevalue of the Property or any part of it. If any such taxes, levies, charges orassessments become delinquent, Beneficiary may require Trustor to presentevidence that they have been paid in full, on ten (10) days’ writtennotice by Beneficiary to Trustor. This Section 5.2 is subject tothe right granted in Section 5.11 of the Credit Agreement tocontest in good faith certain taxes, assessments, charges and levies.

 

5.3           Performance of Secured Obligations. Trustor shall promptly pay and performeach Secured Obligation in accordance with its terms.

 

5.4           Liens, Charges and Encumbrances. Trustor shall immediately discharge anylien on or security interest in the Property to which Beneficiary has notconsented in writing. Subject to any applicable rights to contest set forth inthe Credit Agreement, Trustor shall pay, prior to delinquency, each obligationsecured by or reducible to a lien, security interest, charge or

 

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encumbrance which now does or later may encumber or appear to encumberall or part of the Property or any interest in it, whether the lien, securityinterest, charge or encumbrance is or would be senior or subordinate to thisDeed of Trust.

 

5.5           Damages and Insurance and Condemnation Proceeds.

 

5.5.1        Trustor hereby absolutely and irrevocably assigns toBeneficiary, and authorizes the payor to pay to Beneficiary, the followingclaims, causes of action, awards, payments and rights to payment:

 

(a)           All awards of damages and all other compensationpayable directly or indirectly because of a condemnation, proposed condemnationor taking for public or private use which affects all or part of the Propertyor any interest in it; and

 

(b)           All other awards, claims and causes of action, arisingout of any warranty affecting all or any part of the Property, or for damage orinjury to or decrease in value of all or part of the Property or any interestin it; and

 

(c)           All proceeds of any insurance policies payable becauseof loss sustained to all or part of the Property; and

 

(d)           All interest which may accrue on any of the foregoing.

 

5.5.2        Trustor shall immediately notify Beneficiary inwriting if:

 

(a)           Any damage occurs or any injury or loss is sustainedin the amount of $250,000 or more to all or part of the Property, or any actionor proceeding relating to any such damage, injury or loss is commenced; or

 

(b)           Any offer is made, or any action or proceeding iscommenced, which relates to any actual or proposed condemnation or taking ofall or part of the Property.

 

5.5.3        If Beneficiary chooses to do so, Beneficiary may inits own name appear in or prosecute any action or proceeding to enforce anycause of action based on warranty, or for damage, injury or loss to all or partof the Property and, while any Event of Default remains uncured, Beneficiarymay make any compromise or settlement of the action or proceeding. Beneficiary,if it so chooses, may participate in any action or proceeding relating tocondemnation or taking of all or part of the Property, and may join Trustor inadjusting any loss covered by insurance. Trustor hereby irrevocably appointsBeneficiary its true and lawful attorney-in-fact for all such purposes. Thepower of attorney granted hereunder is coupled with an interest and isirrevocable. Trustor shall not settle, adjust or compromise any such action orproceeding without the prior written approval of Beneficiary, which shall notbe unreasonably withheld or delayed.

 

5.5.4        All proceeds of these assigned claims, other propertyand rights which Trustor may receive or be entitled to (collectively, “Proceeds”)shall be paid to Beneficiary. In each instance, Beneficiary shall apply suchProceeds first toward reimbursement

 

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of all of Beneficiary’s costs and expenses of recovering the Proceeds,including attorneys’ fees. If, in any instance, each and all of the followingconditions (the “Restoration Conditions”) are satisfied in Beneficiary’sreasonable judgment, Beneficiary shall permit Trustor to use the balance ofsuch Proceeds (“Net Claims Proceeds”) to pay costs of repairing orreconstructing the Property in the manner described below:

 

(a)           The plans and specifications, cost breakdown,construction contract, construction schedule, contractor and payment andperformance bond for the work of repair or reconstruction must all bereasonably acceptable to Beneficiary; and

 

(b)           Beneficiary must receive evidence reasonablysatisfactory to it that, after repair or reconstruction, the Property will beat least as valuable as it was immediately before the damage or condemnationoccurred; and

 

(c)           The Net Claims Proceeds must be sufficient inBeneficiary’s reasonable determination to pay for the total cost of repair orreconstruction, including all associated development costs and interestprojected to be payable on the Secured Obligations until the repair orreconstruction is complete; or Trustor must provide its own funds in an amountequal to the difference between the Net Claims Proceeds and a reasonableestimate, made by Trustor and found acceptable by Beneficiary, of the total costof repair or reconstruction; and

 

(d)           No Event of Default shall have occurred and becontinuing.

 

If Beneficiary finds that such conditions have beenmet, Beneficiary shall hold the Net Claims Proceeds and any funds which Trustoris required to provide in an interest-bearing passbook savings account andshall disburse them to Trustor on a monthly basis in accordance withBeneficiary’s customary construction lending procedures. However, if an Eventof Default has occurred and is continuing, Beneficiary may apply the Net ClaimsProceeds to pay or prepay (without premium) some or all of the SecuredObligations in such order and proportions as Beneficiary in its absolutediscretion may choose (subject to the provisions for priority of application ofpayments set forth in the Credit Agreement). Any and all Proceeds (including,without limitation, any Net Claims Proceeds) held by Beneficiary from time totime shall be collateral for the Secured Obligations, and Trustor hereby grantsto Beneficiary a security interest in and lien on such Proceeds and all rightsand remedies available under applicable laws with respect to such Proceeds,including, without limitation, all rights and remedies under the MissouriUniform Commercial Code. Trustor shall execute and deliver to Beneficiary andthe Lenders any and all documents reasonably requested by Beneficiary in orderto confirm, create and perfect such security interest in and lien on suchProceeds. In the event that any Proceeds are applied to pay any SecuredObligations, then Beneficiary shall have no obligation to disburse or releasesuch applied Proceeds to Trustor under this Section 5.5. If noEvent of Default shall have occurred and be continuing, any funds remainingupon completion of the repair or reconstruction shall be returned to Trustor.

 

5.5.5        Trustor hereby specifically, unconditionally andirrevocably waives all rights of a property owner granted under applicable law,which provide for allocation of condemnation proceeds between a property ownerand a lienholder, and any other law or

 

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successor statute of similar import. Trustor hereby specifically,unconditionally and irrevocably waives all right to recover against Beneficiaryor any Lender (or any officer, employee, agent or representative of Beneficiaryor any Lender) for any loss incurred by Trustor from any cause insured againstor required by any Loan Document to be insured against; provided, however, thatthis waiver of subrogation shall not be effective with respect to any insurancepolicy if the coverage thereunder would be materially reduced or impaired as aresult.

 

5.5.6        Notwithstanding anything to the contrary set forth inthis Section 5.5, so long as no Event of Default remains uncured,the proceeds of any casualty or condemnation for which the gross value of theapplicable damage and/or taking is less than $250,000 shall be paid to Trustorrather than to Beneficiary (and shall be delivered to Trustor if received byBeneficiary), and Trustor shall not be required to obtain Beneficiary’s consentto settle, adjust or compromise any action or proceeding relating to any suchcasualty or condemnation (nor shall Beneficiary be entitled to participate insuch action or proceeding).

 

5.6           Maintenance and Preservation of Property.

 

5.6.1        Except as permitted in the Credit Agreement, Trustorshall not remove or demolish the Property or any part of it, or alter, restoreor add to the Property, or initiate or allow any change in any zoning or otherland use classification which affects the Property or any part of it, except aspermitted or required by the Credit Agreement or with Beneficiary’s expressprior written consent in each instance; provided that, without Beneficiary’sconsent, Trustor shall be entitled to remove personal property in the ordinarycourse of Trustor’s business so long as any such personal property is replacedwith property of comparable value.

 

5.6.2        If all or part of the Property becomes damaged ordestroyed, Trustor shall promptly and completely repair and/or restore theProperty in a good and workmanlike manner in accordance with sound buildingpractices, regardless of whether or not Beneficiary agrees to disburseinsurance proceeds or other sums to pay costs of the work of repair or reconstructionunder Section 5.5.

 

5.6.3        Trustor shall not commit or allow any act upon or useof the Property which would violate: (i) any applicable law or order ofany Governmental Agency, whether now existing or later to be enacted andwhether foreseen or unforeseen (except to the extent that noncompliance wouldnot cause a Material Adverse Effect or a License Revocation); or (ii) anypublic or private covenant, condition, restriction or equitable servitudeaffecting the Property. Trustor shall not bring or keep any article on theProperty or cause or allow any condition to exist on it, that could invalidateor would be prohibited by any insurance coverage required to be maintained byTrustor on the Property or any part of it under this Deed of Trust.

 

5.6.4        Trustor shall not commit or allow waste of theProperty.

 

5.6.5        Trustor shall perform all other acts which from thecharacter or use of the Property may be reasonably necessary to maintain andpreserve its value. Without limiting the generality of the forgoing, Trustorshall protect and preserve all easements, rights-of-way and other appurtenancesto the Land and/or Improvements. Trustor shall not cause or allow any sucheasement, right-of-way and other appurtenance to be cancelled, rejected orotherwise terminated,

 

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or modified (except for such terminations that occur pursuant to theterms of such easement, right of way and other appurtenance).

 

5.7           Insurance.

 

5.7.1        Trustor shall maintain the following insurance withrespect to the Property:

 

(a)           Trustor shall provide, maintain and keep in force atall times during any period of construction with respect to the portion of theProperty affected by such construction a policy or policies of builder’s “allrisk” insurance in nonreporting form in an amount not less than the fullinsurable completed value of such portion of the Property on a replacement costbasis. The policy or policies shall insure against loss or damage by hazardscustomarily included within such “all risk” policies and any other risks orhazards which Beneficiary may reasonably specify (and shall include boiler andmachinery insurance from and after the date on which any such equipment isinstalled on the Property), and each shall contain a Lender’s Loss PayableEndorsement (Form 438 BFU or equivalent) in favor of Beneficiary; providedthat Beneficiary shall not be entitled to require Trustor to insure theProperty against earthquake risks during any period in which earthquakeinsurance is not available with respect to the Property at commerciallyreasonable rates.

 

(b)           Trustor shall provide, maintain and keep in force atall times for all portions of the Property not covered by a policy or policiesdescribed in Section 5.7.1(a), above, a policy or policies of fire andhazards “all risk” insurance providing extended coverage, in an amount not lessthan the full insurable value of such portions of the Property on a replacementcost basis. The policy or policies shall insure against loss or damage byhazards customarily included within “all risk” and “extended coverage” policiesand any other risks or hazards which Beneficiary may reasonably specify (andshall include boiler and machinery insurance), and each shall contain a Lender’sLoss Payable Endorsement (Form 438 BFU or equivalent) in favor ofBeneficiary.

 

(c)           Trustor shall provide, maintain and keep in force atall times for all portions of the Property any policy or policies of businessinterruption insurance that Beneficiary reasonably requires (includinginsurance against income loss during a period of at least six (6) months),and each such policy shall contain a Lender’s Loss Payable Endorsement (Form 438BFU or equivalent) in favor of Beneficiary.

 

(d)           Trustor shall provide, maintain and keep in force atall times a policy or policies of comprehensive liability insurance namingBeneficiary and the Lenders as additional insureds, on an “occurrence” basis,against claims for “personal injury” liability, including bodily injury, deathor property damage liability, with a limit of not less than Thirty-Five MillionDollars ($35,000,000) for the first sixty (60) days following the TermEffective Date and not less than Fifty Million Dollars ($50,000,000)thereafter. Such insurance shall be primary and noncontributory with any otherinsurance carried by Beneficiary and/or any Lender(s).

 

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(e)           Trustor shall provide, maintain and keep in force atall times such policies of worker’s compensation insurance as may be requiredby applicable laws (including employer’s liability insurance, if required byBeneficiary), covering all employees of Trustor.

 

(f)            Trustor shall provide, maintain and keep in force atall times any and all additional insurance that Beneficiary (as instructed bythe Requisite Lenders) may from time to time require, so long as such insuranceis available in the commercial market at reasonable rates.

 

(g)           If the Property is required to be insured pursuant tothe Flood Disaster Protection Act of 1973 or the National Flood Insurance Actof 1968, and the regulations promulgated thereunder, because it is located inan area which has been identified by the Secretary of Housing and UrbanDevelopment as a Flood Hazard Area, then Trustor shall provide, maintain andkeep in force at all times a flood insurance policy covering the Property inlimits that would exceed the damage caused by what is expected to be the mostsevere flood (or any greater limits to the extent required by applicable law fromtime to time), containing a Lender’s Loss Payable Endorsement (Form 438BFU or equivalent) in favor of Beneficiary.

 

(h)           The following notice is provided pursuant to Section 427.120,RS.Mo. As used herein, the terms “you” and “your” shall refer to **Trustor**, and the terms “we and “us” shall refer to **Beneficiary**. **UNLESS YOU PROVIDEEVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR AGREEMENT WITH US, WE MAY PURCHASEINSURANCE AT YOUR EXPENSE TO PROTECT OUR INTERESTS IN YOUR COLLATERAL. THISINSURANCE MAY, BUT NEED NOT, PROTECT YOUR INTERESTS. THE COVERAGE THAT WEPURCHASE MAY NOT PAY ANY CLAIM THAT YOU MAKE OR ANY CLAIM THAT IS MADEAGAINST YOU IN CONNECTION WITH THE COLLATERAL. YOU MAY LATER CANCEL ANYINSURANCE PURCHASED BY US, BUT ONLY AFTER PROVIDING EVIDENCE THAT YOU HAVEOBTAINED INSURANCE AS REQUIRED BY OUR AGREEMENT. IF WE PURCHASE INSURANCE FORTHE COLLATERAL, YOU WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE,INCLUDING THE INSURANCE PREMIUM, INTEREST AND ANY OTHER CHARGES WE MAY IMPOSEIN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OFTHE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCEMAYBE ADDED TO YOUR TOTAL OUTSTANDING BALANCE OR OBLIGATION. THE COSTS OF THEINSURANCE MAY BE MORE THAN THE COST OF THE INSURANCE YOU MAY BE ABLETO OBTAIN ON YOUR OWN.**

 

5.7.2        All such policies of insurance shall be issued bycompanies approved by Beneficiary having a minimum A.M. Best’s rating ofA-:IX. The limits, coverage, forms, deductibles, inception and expiration datesand cancellation provisions of all such policies shall be reasonably acceptableto Beneficiary. Each property insurance policy maintained in connection withany of the Property shall contain a Lender’s Loss Payable Endorsement (Form

 

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438 BFU or equivalent) in favor of Beneficiary, and shall provide thatall proceeds be payable to Beneficiary to the extent of its interest. Eachliability insurance policy maintained in connection with any of the Propertyshall name Beneficiary and the Lenders as additional insureds. An approval byBeneficiary is not, and shall not be deemed to be, a representation of thesolvency of any insurer or the sufficiency of any amount of insurance. Eachpolicy of insurance required hereunder shall provide that it may not bemodified or cancelled without at least thirty (30) days’ prior written noticeto Beneficiary (or ten (10) days’ prior written notice in the event of apremium nonpayment), and shall permit a waiver of subrogation by Trustor infavor of Beneficiary and the Lenders.

 

5.7.3        Trustor shall supply Beneficiary with certificates ofeach policy required hereunder and any other policy of insurance maintained inconnection with any of the Property, together with an original (which may be aduplicate original) or underlyer of each such policy and all endorsementsthereto. When any insurance policy required hereunder expires, Trustor shallfurnish Beneficiary with proof acceptable to Beneficiary that the policy hasbeen reinstated or a new policy issued, continuing in force the insurancecovered by the policy which expired. If Trustor fails to pay any such premium,Beneficiary shall have the right, but not the obligation, to obtain currentcoverage and advance funds to pay the premiums for it. Trustor shall repayBeneficiary immediately on demand for any advance for such premiums, whichshall be considered to be an additional loan to Trustor bearing interest at theDefault Rate, and secured by this Deed of Trust and any other collateral heldby Beneficiary in connection with the Secured Obligations.

 

5.8           Trustee’s Acceptance of Trust. Trustee accepts this trust when thisDeed of Trust is recorded.

 

5.9           Releases, Extensions, Modifications and AdditionalSecurity.

 

5.9.1        From time to time, Beneficiary and/or any Lender mayperform any of the following acts without incurring any liability or givingnotice to any Person, and without affecting the personal liability of anyPerson for the payment of the Secured Obligations (except as provided below),and without affecting the security hereof for the full amount of the SecuredObligations on all Property remaining subject hereto, and without the necessitythat any sum representing the value of any portion of the Property affected byBeneficiary’s and/or such Lender’s action(s) be credited on the SecuredObligations:

 

(a)           Release any Person liable for payment of any SecuredObligation;

 

(b)           Extend the time for payment, or otherwise alter theterms of payment, of any Secured Obligation;

 

(c)           Accept additional real or personal property of anykind as security for any Secured Obligation, whether evidenced by deeds oftrust, mortgages, security agreements or any other instruments of security; or

 

(d)           Alter, substitute or release any property securing theSecured Obligations.

 

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5.9.2        From time to time when requested to do so byBeneficiary in writing, Trustee may perform any of the following acts withoutincurring any liability or giving notice to any Person:

 

(a)           Consent to the making of any plat or map of theProperty or any part of it;

 

(b)           Join in granting any easement or creating anyrestriction affecting the Property;

 

(c)           Join in any subordination or other agreement affectingthis Deed of Trust or the lien or security interest of it; or

 

(d)           Reconvey the Property or any part of it without anywarranty.

 

5.10         Reconveyance. Upon (a) the expiration or termination of theCommitment, (b) the full and final payment in cash of the Loans and allinterest and fees with respect thereto, (c) the payment of all otheramounts then demanded by Beneficiary or any Lender or indemnitee and then owedunder the Credit Agreement, and (d) the payment of all other amounts thendue under the Guaranty and the other Loan Documents and the full payment andperformance of all other Secured Obligations (other than indemnity obligations,if any, that are not then due), Beneficiary shall request Trustee in writing toreconvey the Property, and shall surrender this Deed of Trust. When Trusteereceives Beneficiary’s written request for reconveyance and all fees and othersums owing to Trustee by Trustor under Section 5.11, Trustee shallreconvey the Property, or so much of it as is then held under this Deed of Trust,without warranty, to the Person or Persons legally entitled to it. Such Personor Persons shall pay any costs of recordation. In the reconveyance, the granteemay be described as “the person or persons legally entitled thereto,” and therecitals of any matters or facts shall be conclusive proof of theirtruthfulness. Neither Beneficiary nor Trustee shall have any duty to determinethe rights of Persons claiming to be rightful grantees of any reconveyance.

 

5.11         Compensation, Exculpation, Indemnification.

 

5.11.1      Trustor agrees to pay reasonable fees as may becharged by Beneficiary and Trustee, subject to the maximum amounts legallypermitted, for any services that Beneficiary or Trustee may render inconnection with this Deed of Trust, including Beneficiary’s providing astatement of the Secured Obligations or Trustee’s rendering of services inconnection with a reconveyance. Trustor shall also pay or reimburse all ofBeneficiary’s and Trustee’s costs and expenses which may be incurred inrendering any such services. Trustor further agrees to pay or reimburseBeneficiary for all costs, expenses and other advances which may be incurred ormade by Beneficiary or Trustee in any efforts to enforce any terms of this Deedof Trust, including any rights or remedies afforded to Beneficiary or Trusteeor both of them under Section 6.3, whether any lawsuit is filed ornot, or in defending any action or proceeding arising under or relating to thisDeed of Trust, including reasonable attorneys’ fees and other legal costs,costs of any Foreclosure Sale (as defined in Section 6.3.8) and anycost of evidence of title. If Beneficiary chooses to dispose of the Propertythrough more than one

 

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Foreclosure Sale, Trustor shall pay all costs, expenses or otheradvances that may be incurred or made by Trustee or Beneficiary in each of suchForeclosure Sales.

 

5.11.2      Beneficiary shall not be directly or indirectly liableto Trustor or any other Person as a consequence of any of the following:

 

(a)           Beneficiary’s exercise of, or failure to exercise, anyrights, remedies or powers granted to Beneficiary in this Deed of Trust;

 

(b)           Beneficiary’s failure or refusal to perform ordischarge any obligation or liability of Trustor under any agreement related tothe Property or under this Deed of Trust; or

 

(c)           Any loss sustained by Trustor or any third partyresulting from Beneficiary’s failure to lease or operate the Property, or fromany other act or omission of Beneficiary in managing the Property, after anEvent of Default, unless the loss is caused by the willful misconduct and badfaith of Beneficiary.

 

Trustor hereby expressly waives and releases allliability of the types described above, and agrees that no such liability shallbe asserted against or imposed upon Beneficiary.

 

5.11.3      Trustor agrees to indemnify Trustee, Beneficiary andthe Lenders (collectively, the “Indemnitees”) against and hold them harmlessfrom all losses, damages, liabilities, claims, causes of action, judgments,court costs, reasonable attorneys’ fees and other reasonable legal expenses,cost of evidence of title, cost of evidence of value, and other costs andexpenses which any of them may suffer or incur (except to the extent that anyof the foregoing are the result of the gross negligence or willful misconductof any such Indemnitee):

 

(a)           In performing any act required or permitted by thisDeed of Trust or any of the other Loan Documents or by law;

 

(b)           Because of any failure of Trustor to perform any ofTrustor’s obligations; or

 

(c)           Because of any alleged obligation of or undertaking byBeneficiary to perform or discharge any of the representations, warranties,conditions, covenants or other obligations in any document relating to theProperty other than the Loan Documents.

 

Each obligation or liability of Trustor to anyIndemnitee under this Section 5.11.3 shall survive the release andcancellation of any or all of the Secured Obligations and the full or partialrelease and/or reconveyance of this Deed of Trust.

 

5.11.4      Trustor shall pay all obligations to pay money arisingunder this Section 5.11 within five (5) business days demandby Beneficiary (or the applicable Indemnitee). Each such obligation shall bearinterest from the date the obligation arises at the Default Rate set forth inthe Credit Agreement, and any such obligation to a Lender shall be added to,and considered to be part of, the principal of the Note in favor of such Lender(and, in the event that

 

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such Lender holds more than one Note, the allocation of such obligationamong such Notes shall be made by such Lender in its absolute discretion).

 

5.12         Defense and Notice of Claims and Actions. At Trustor’s sole expense, Trustorshall protect, preserve and defend the Property and title to and right ofpossession of the Property, and the security of this Deed of Trust and therights and powers of Beneficiary and Trustee created under it, against alladverse claims. Trustor shall give Beneficiary and Trustee prompt notice inwriting if any claim is asserted which does or could affect any of suchmatters, or if any action or proceeding is commenced which alleges or relatesto any such claim.

 

5.13         Substitution of Trustee. From time to time, Beneficiary may substitute asuccessor to any Trustee named in or acting under this Deed of Trust in anymanner now or later to be provided at law, or by a written instrument executedand acknowledged by Beneficiary and recorded in the office(s) of therecorder(s) of the County. Any such instrument shall be conclusive proof of theproper substitution of the successor Trustee, who shall automatically uponrecordation of the instrument succeed to all estate, title, rights, powers andduties of the predecessor Trustee, without conveyance from it.

 

5.14         Subrogation. Subject to Gaming Laws, Beneficiary shall besubrogated to the liens and security interests of all encumbrances, whetherreleased of record or not, which are discharged in whole or in part byBeneficiary in accordance with this Deed of Trust or with the proceeds of anyloan secured by this Deed of Trust.

 

5.15         Site Visits, Observation and Testing. Beneficiary and its agents andrepresentatives shall have the right at any reasonable time to enter and visitthe Property for the purpose of performing appraisals. In addition, each Personindemnified by the Borrower under Section 10.04 of the CreditAgreement (collectively, “Indemnified Parties”) and their agents andrepresentatives shall have the right at any reasonable time to enter and visitthe Property for the purposes of observing the Property, taking and removingsoil or groundwater samples, and conducting tests on any part of the Property;provided that, so long as no Event of Default remains uncured, the IndemnifiedParties shall not be entitled to conduct any tests that would significantlyinterfere with the operation of the Property. The Indemnified Parties have noduty, however, to visit or observe the Property or to conduct tests, and nosite visit, observation or testing by any Indemnified Party shall impose anyliability on any Indemnified Party. In no event shall any site visit,observation or testing by any Indemnified Party be a representation thatHazardous Materials are or are not present in, on, or under the Property, orthat there has been or shall be compliance with any Hazardous Materials Law, orany other applicable Law. Neither Trustor nor any other party is entitled torely on any site visit, observation or testing by any Indemnified Party. The IndemnifiedParties owe no duty of care to protect Trustor or any other party against, orto inform Trustor or any other party of, any Hazardous Material or any otheradverse condition affecting the Property. Any Indemnified Party shall giveTrustor reasonable notice before entering the Property. The Indemnified Partyshall make reasonable efforts to avoid interfering with Trustor’s use of theProperty in exercising any rights provided in this Section.

 

5.16         Notice of Change. Trustor shall give Beneficiary prior written noticeof (a) any change in the location of Trustor’s place of business or its chiefexecutive office if it has

 

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more than one place of business, (b) any change in the location ofany of the Property, including the Books and Records, and (c) any changeto Trustor’s name or business structure. Unless otherwise approved byBeneficiary in writing, all Property that consists of personal property (otherthan the Books and Records) will be located on the Land and all Books andRecords for the portion of the Property owned by Trustor will be located atsuch Trustor’s place of business or chief executive office if such Trustor hasmore than one place of business.

 

5.17         Title Insurance. At any time and from time to time at the reasonablerequest of Beneficiary, Trustor, at its sole cost and expense, shall deliver toBeneficiary such additional title insurance indorsements and reinsurance issuedby title insurance companies, in form and substance and reasonably satisfactoryto Beneficiary, with respect to this Deed of Trust, including, withoutlimitation, CLTA 122 endorsements insuring that each advance is secured by thisDeed of Trust (without any exception not set forth in the policy of titleinsurance insuring this Deed of Trust other than (i) liens for taxes andassessments not yet due and payable and (ii) other encumbrances, approvedby the Beneficiary, insured to be subordinate to this Deed of Trust), and CLTA101.4 endorsements insuring the priority of the Deed of Trust over any mechanic’slien; provided that Trustor shall not be obligated under this Section 5.17to increase the stated amount of the policy of title insurance insuring thisDeed of Trust.

 

6.             Accelerating Transfers, Defaults and Remedies.

 

6.1           Accelerating Transfers.

 

6.1.1        “Accelerating Transfer” means any sale, contract tosell, conveyance, encumbrance, lease, alienation or further encumbrance of allor any material portion of the Property (or any interest in it) which is notexpressly permitted under the Credit Agreement, or any other transfer of all orany material portion of the Property (or any interest in it), whethervoluntary, involuntary, by operation of law or otherwise, unless Beneficiaryhas given its prior written consent to such “Accelerating Transfer,” whichconsent may be given or not given in the absolute discretion of Beneficiary. IfTrustor is a corporation or limited liability company, “Accelerating Transfer”also means any transfer of any share or shares in Trustor. If Trustor is apartnership or limited liability company, “Accelerating Transfer” also meanswithdrawal or removal of any general partner or manager, as the case may be,dissolution of the partnership or limited liability company under Nevada law,or any transfer of any partnership interest or any ownership interest in thelimited liability company.

 

6.1.2        Trustor acknowledges that Beneficiary and the Lendersare making one or more advances under the Credit Agreement in reliance on theexpertise, skill and experience of Trustor; thus, the Secured Obligationsinclude material elements similar in nature to a personal service contract. Inconsideration of Beneficiary’s reliance, Trustor agrees that Trustor shall notmake any Accelerating Transfer, unless the transfer is preceded by Beneficiary’swritten consent to the particular transaction and transferee. Beneficiary maywithhold such consent in its absolute discretion. If any Accelerating Transferoccurs, Beneficiary may, in its absolute discretion (provided that it hasreceived any consents or approvals of any other Lenders required under theCredit Agreement), declare all of the Secured Obligations to be immediately dueand payable, and Beneficiary and Trustee may invoke any rights and remediesprovided by Section 6.3 of this Deed of Trust.

 

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6.2           Events of Default. Trustor will be in default under this Deed of Trustupon the occurrence of any one or more of the following events (“Events ofDefault”):

 

(a)           Trustor fails to perform any obligation to pay moneywhich arises under this Deed of Trust within two (2) Business Days afterwritten demand therefor; or

 

(b)           Trustor fails to perform any other obligation arisingunder this Deed of Trust within ten (10) Business Days after the giving ofwritten notice by Beneficiary of such failure; or

 

(c)           Trustor shall give to Beneficiary any notice under theprovisions of Section 443.055 of the Revised Statutes of Missouriconcerning future advances; or

 

(d)           Any Event of Default (as defined in the CreditAgreement or in any other Loan Document) occurs; or any other default occursunder any of the Secured Obligations.

 

6.3           Remedies. At any time after and during the continuance of anEvent of Default (following the expiration of any applicable cure period) andprovided that Beneficiary has received any consents or approvals of any otherLenders required under the Credit Agreement, Beneficiary and Trustee will beentitled to invoke any or all of the following rights and remedies (subject toany restrictions on those rights and remedies imposed by applicable GamingLaws), all of which will be cumulative, and the exercise of any one or more ofwhich shall not constitute an election of remedies:

 

6.3.1        Acceleration. Beneficiary may declare any or all of the SecuredObligations to be due and payable immediately.

 

6.3.2        Receiver. Beneficiary may apply to any court of competentjurisdiction for, and obtain appointment of, a receiver for the Property; andBeneficiary may request, in connection with any foreclosure proceedinghereunder, that the Missouri Gaming Commission petition a District Court of theState of Missouri for the appointment of a supervisor to conduct the normalgaming activities on the Property following such foreclosure proceeding.

 

6.3.3        Entry. Beneficiary, in person, by agent or bycourt-appointed receiver, may enter, take possession of, manage and operate allor any part of the Property, and may also do any and all other things inconnection with those actions that Beneficiary may in its absolute discretionconsider necessary and appropriate to protect the security of this Deed ofTrust. Such other things may include, without limitation: taking and possessingall of Trustor’s or the then owner’s Books and Records; entering into,enforcing, modifying, or cancelling Leases on such terms and conditions asBeneficiary may consider proper; obtaining and evicting tenants; collecting andreceiving any payment of money owing to Trustor; completing construction;and/or contracting for and making repairs and alterations. If Beneficiary sorequests, Trustor shall assemble all of the Property that has been removed fromthe Land and make all of it available to Beneficiary at the site of the Land. Trustorhereby irrevocably constitutes and appoints Beneficiary as Trustor’s attorney-in-fact(which appointment is coupled with an interest) to perform such acts andexecute such documents as Beneficiary in its absolute discretion may considerto be appropriate in connection with taking these measures, includingendorsement of

 

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Trustor’s name on any instruments. Regardless of any provision of thisDeed of Trust or the Credit Agreement, Beneficiary shall not be considered tohave accepted any property other than cash or immediately available funds insatisfaction of any obligation of Trustor to Beneficiary unless Beneficiary hasgiven express written notice of Beneficiary’s election of that remedy.

 

6.3.4        Cure; Protection of Security. Either Beneficiary or Trustee may cureany breach or default of Trustor and, if it chooses to do so in connection withany such cure, Beneficiary or Trustee may (subject to applicable Gaming Laws)also enter the Property and/or do any and all other things which either may inits absolute discretion consider necessary and appropriate to protect thesecurity of this Deed of Trust. Such other things may include, withoutlimitation: appearing in and/or defending any action or proceeding whichpurports to affect the security of, or the rights or powers of Beneficiary orTrustee under, this Deed of Trust; paying, purchasing, contesting orcompromising any encumbrance, charge, lien, security interest or claim of lienor security interest which (in Beneficiary’s or Trustee’s sole judgment) is ormay be senior in priority to this Deed of Trust, such judgment of Beneficiaryor Trustee to be conclusive as among the parties to this Deed of Trust;obtaining insurance and/or paying any premiums or charges for insurancerequired to be carried under this Deed of Trust and the other Loan Documents;otherwise caring for and protecting any and all of the Property; and/oremploying counsel, accountants, contractors and other appropriate Persons toassist Beneficiary or Trustee. Beneficiary and Trustee may take any of theactions permitted under this Section 6.3.4 either with or withoutgiving notice to any Person.

 

6.3.5        Uniform Commercial Code Remedies. Subject to applicable Gaming Laws,Beneficiary may exercise any or all of the remedies granted to a secured partyunder the Missouri Uniform Commercial Code, as amended or recodified from timeto time.

 

6.3.6        Judicial Action. Beneficiary may bring an action in any court ofcompetent jurisdiction to foreclose this Deed of Trust or to obtain specificenforcement of any of the covenants or other terms of this Deed of Trust.

 

6.3.7        Power of Sale. Under the power of sale hereby granted, Beneficiaryshall have the discretionary right to cause some or all of the Property,including any Property which constitutes personal property, to be sold orotherwise disposed of in any combination and in any manner permitted byapplicable law. At Trustee’s option, Trustee may set the place of any such saleat any reasonable place, as permitted by Section 443.327 and any otherapplicable law of the Revised Statutes of Missouri, first giving notice of suchsale in the manner prescribed by statute. Trustee may in Trustee’s discretionset the time of any such sale at any commercially reasonable time, as permittedby Section 443.327 of the Revised Statutes of Missouri.

 

(a)           Sales of Personal Property.

 

(i)            For purposes of this power of sale,Beneficiary may elect to treat as personal property any Property which isintangible or which can be severed from the Land or Improvements withoutcausing structural damage. If it chooses to do so, Beneficiary may dispose ofany personal property separately from the sale of real property, in any mannerpermitted by Article 9 of the

 

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Missouri Uniform Commercial Code, as amended orrecodified from time to time, including any public or private sale, or in anymanner permitted by any other applicable law. Any proceeds of any suchdisposition shall not cure any Event of Default or reinstate any SecuredObligation.

 

(ii)           In connection with any sale or otherdisposition of such Property, Trustor agrees that the following proceduresconstitute a commercially reasonable sale: Beneficiary shall mail writtennotice of the sale to Trustor not later than ten (10) days prior to suchsale. Once per week during the three weeks immediately preceding such sale,Beneficiary will publish notice of the sale in a local daily newspaper ofgeneral circulation. Upon receipt of any written request, Beneficiary will makethe Property available to any bona fide prospective purchaser for inspectionduring reasonable business hours. Notwithstanding any provision to thecontrary, Beneficiary shall be under no obligation to consummate a sale if, inits judgment, none of the offers received by it equals the fair value of theProperty offered for sale. The foregoing procedures do not constitute the onlyprocedures that may be commercially reasonable.

 

(b)           Trustee’s Sales of Real Property or Mixed Collateral.

 

(i)            Beneficiary may choose to dispose of someor all of the Property which consists solely of real property in any mannerthen permitted by applicable law. In its discretion, Beneficiary may also oralternatively choose to dispose of some or all of the Property, in anycombination consisting of both real and personal property, together in one saleto be held in accordance with the law and procedures applicable to realproperty, as permitted by Article 9 of the Missouri Uniform CommercialCode, as amended or recodified from time to time. Trustor agrees that such asale of personal property together with real property constitutes acommercially reasonable sale of the personal property. For purposes of thispower of sale, either a sale of real property alone, or a sale of both real andpersonal property together in accordance with Article 9 of the MissouriUniform Commercial Code, as amended or recodified from time to time, willsometimes be referred to as a “Trustee’s Sale.”

 

(ii)           Before any Trustee’s Sale, Beneficiary orTrustee shall give such notice of default and election to sell as may then berequired by law. When all time periods then legally mandated have expired, andafter such notice of sale as may then be legally required has been given,Trustee shall sell the property being sold at a public auction to be held atthe time and place specified in the notice of sale, provided, however, that nosale or other disposition of slot machines or other gaming devices shall occurwithout first receiving the approval of the applicable Gaming Board. NeitherTrustee nor Beneficiary shall have any obligation to make demand on Trustorbefore any Trustee’s Sale. From time to time in accordance with then applicablelaw, Trustee may, and in any event at Beneficiary’s request shall, postpone anyTrustee’s Sale by public announcement at the time and place noticed for thatsale.

 

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(iii)          At any Trustee’s Sale, Trustee shall sellthe property being sold at a public auction to the highest bidder at publicauction for cash in lawful money of the United States. Trustee shall executeand deliver to the purchaser(s) a deed or deeds conveying the property beingsold without any covenant or warranty whatsoever, express or implied. Therecitals in any such deed of any matters or facts, including any facts bearingupon the regularity or validity of any Trustee’s Sale, shall be conclusiveproof of their truthfulness. Any such deed shall be conclusive against allPersons as to the facts recited in it.

 

6.3.8        Single or Multiple Foreclosure Sales. If the Property consists of more thanone lot, parcel or item of property, Beneficiary may:

 

(a)           Designate the order in which the lots, parcels and/oritems shall be sold or disposed of or offered for sale or disposition; and

 

(b)           Elect to dispose of the lots, parcels and/or itemsthrough a single consolidated sale or disposition to be held or made under thepower of sale granted in Sections 1.1 and 6.3.7, or in connectionwith judicial proceedings, or by virtue of a judgment and decree of foreclosureand sale; or through two or more such sales or dispositions; or in any othermanner Beneficiary may deem to be in its best interests (any such sale ordisposition being referred to herein as a “Foreclosure Sale”).

 

If Beneficiary chooses to have more than oneForeclosure Sale, Beneficiary at its option may cause the Foreclosure Sales tobe held simultaneously or successively, on the same day, or on such differentdays and at such different times and in such order as Beneficiary may deem tobe in its best interests. No Foreclosure Sale shall terminate or affect theliens or security interests of this Deed of Trust on any part of the Propertywhich has not been sold until all of the Secured Obligations have been paid infull and the Commitment has been fully and finally terminated.

 

6.3.9        Other Permitted Remedies. Beneficiary and the Lenders may refuseto make any advance to any Borrower or issue any Letter of Credit for theaccount of any Borrower. Beneficiary and the Lenders may exercise any and allother rights and remedies available under the Loan Documents and applicablelaw, including, without limitation, the right to file applications to change,and to exercise all other rights and remedies available under applicable lawwith respect to, all water permits and rights relating to the Property;provided however that, notwithstanding the foregoing or any other provisioncontained in this Deed of Trust, the remedies provided by this Deed of Trustshall not include the right to take any action that violates applicable GamingLaws.

 

6.4           Credit Bids. At any Foreclosure Sale, any Person, includingTrustor, Trustee or Beneficiary, may bid for and acquire the Property or anypart thereof to the extent permitted by then applicable law. Instead of payingcash for such property, Beneficiary may settle for the purchase price bycrediting against the sales price of the Property or any part thereof any orall of the outstanding Secured Obligations (including without limitation theportion of the Secured Obligations attributable to the expenses of sale, costsof any action and any other sums for which Trustor is obligated to pay orreimburse Beneficiary, the Lenders or

 

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Trustee under Section 5.11) in such order and proportionsas Beneficiary in its absolute discretion may choose.

 

6.5           Application of Foreclosure Sale Proceeds. Beneficiary and Trustee shall apply theproceeds of any Foreclosure Sale in the manner required by applicable law;provided that all proceeds that are to be applied against the SecuredObligations shall, except as otherwise required by applicable law, be appliedagainst the Secured Obligations in any order and proportions as Beneficiary inits absolute discretion may choose (subject to any applicable provisions forpriority of application of proceeds set forth in either Credit Agreement).

 

6.6           Application of Rents and Other Sums. Beneficiary shall apply any and allRents collected by it, and any and all sums other than proceeds of aForeclosure Sale which Beneficiary may receive or collect under Section 6.3,in the following manner:

 

(a)           First, to pay the portion of the Secured Obligationsattributable to the costs and expenses of operation and collection that may beincurred by Trustee, Beneficiary or any receiver;

 

(b)           Second, to pay all other Secured Obligations in anyorder and proportions as Beneficiary in its absolute discretion may choose(subject to any applicable provisions for priority of application of paymentsset forth in the Credit Agreement); and

 

(c)           Third, to remit the remainder, if any, to the Personor Persons entitled to it. Beneficiary shall have no liability for any fundswhich it does not actually receive.

 

7.             [Intentionally omitted.]

 

8.             Miscellaneous Provisions.

 

8.1           Additional Provisions. The Loan Documents fully state all of the terms andconditions of the parties’ agreement regarding the matters mentioned in orincidental to this Deed of Trust. The Loan Documents also grant further rightsto Beneficiary and contain further agreements and affirmative and negativecovenants by Trustor which apply to this Deed of Trust and to the Property.

 

8.2           No Waiver or Cure.

 

8.2.1        Each waiver by Beneficiary or Trustee must be inwriting, and no waiver shall be construed as a continuing waiver. No waivershall be implied from any delay or failure by Beneficiary or Trustee to takeaction on account of any default of Trustor. Consent by Beneficiary or Trusteeto any act or omission by Trustor shall not be construed as a consent to anyother or subsequent act or omission or to waive the requirement for Beneficiary’sor Trustee’s consent to be obtained in any future or other instance.

 

8.2.2        If any of the events described below occurs, thatevent alone shall not: cure or waive any breach, Event of Default or notice ofdefault under this Deed of Trust or

 

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invalidate any act performed pursuant to any such default or notice; ornullify the effect of any notice of default or sale (unless all SecuredObligations then due have been paid and performed and all other defaults underthe Loan Documents have been cured); or impair the security of this Deed ofTrust; or prejudice Beneficiary, Trustee or any receiver in the exercise of anyright or remedy afforded any of them under this Deed of Trust; or be construedas an affirmation by Beneficiary of any tenancy, lease or option, or asubordination of the lien or security interest of this Deed of Trust.

 

(a)           Beneficiary, its agent or a receiver takes possessionof all or any part of the Property in the manner provided in Section 6.3.3.

 

(b)           Beneficiary collects and applies Rents as permittedunder Sections 2.3 and 6.6 or exercises Trustor’s right, titleand interest under the Leases, either with or without taking possession of allor any part of the Property.

 

(c)           Beneficiary receives and applies to any SecuredObligation proceeds of any Property, including any proceeds of insurancepolicies, condemnation awards, or other claims, property or rights assigned toBeneficiary under Section 5.5.

 

(d)           Beneficiary makes a site visit, observes the Propertyand/or conducts tests as permitted under Section 5.15.

 

(e)           Beneficiary receives any sums under this Deed of Trustor any proceeds of any collateral held for any of the Secured Obligations, andapplies them to one or more Secured Obligations.

 

(f)            Beneficiary, Trustee or any receiver invokes any rightor remedy provided under this Deed of Trust.

 

8.3           Powers of Beneficiary and Trustee.

 

8.3.1        Trustee shall have no obligation to perform any actwhich it is empowered to perform under this Deed of Trust unless it isrequested to do so in writing and is reasonably indemnified against loss, cost,liability and expense.

 

8.3.2        If either Beneficiary or any Lender or Trusteeperforms any act which it is empowered or authorized to perform under this Deedof Trust, including any act permitted by Section 5.9 or Section 6.3.4,that act alone shall not release or change the personal liability of any Personfor the payment and performance of the Secured Obligations then outstanding, orthe lien or security interest of this Deed of Trust on all or the remainder ofthe Property for full payment and performance of all outstanding SecuredObligations. The liability of the original Trustor shall not be released orchanged if Beneficiary or any Lender grants any successor in interest to anyBorrower or Trustor any extension of time for payment, or modification of theterms of payment, of any Secured Obligation. Neither Beneficiary nor any Lendershall be required to comply with any demand by any original Trustor or Borrowerthat Beneficiary or such Lender refuse to grant such an extension ormodification to, or commence proceedings against, any such successor in interest

 

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8.3.3        Beneficiary may take any of the actions permittedunder Sections 6.3.2 and/or 6.3.3 regardless of the adequacy ofthe security for the Secured Obligations, or whether any or all of the SecuredObligations have been declared to be immediately due and payable, or whethernotice of default and election to sell has been given under this Deed of Trust.

 

8.3.4        From time to time, Beneficiary or Trustee may apply toany court of competent jurisdiction for aid and direction in executing thetrust and enforcing the rights and remedies created under this Deed of Trust. Beneficiaryor Trustee may from time to time obtain orders or decrees directing, confirmingor approving acts in executing this trust and enforcing these rights andremedies.

 

8.4           Merger. No merger shall occur as a result of Beneficiary’sacquiring any other estate in or any other lien on or security interest in theProperty unless Beneficiary consents to a merger in writing.

 

8.5           Applicable Law. This Deed of Trust shall be governed by andconstrued in accordance with the laws of the State of Missouri.

 

8.6           Successors in Interest. The terms, covenants and conditions of this Deed ofTrust shall be binding upon and inure to the benefit of the heirs, successorsand assigns of the parties. However, this Section 8.6 does notwaive the provisions of Section 6.1.

 

8.7           Interpretation.

 

8.7.1        Whenever the context requires, all words used in thesingular will be construed to have been used in the plural, and vice versa, andeach gender will include any other gender. The captions of the sections of thisDeed of Trust are for convenience only and do not define or limit any terms orprovisions. The word “include(s)” means “include(s), without limitation,” andthe word “including” means “including, but not limited to.”

 

8.7.2        The word “obligations” is used in its broadest andmost comprehensive sense, and includes all primary, secondary, direct,indirect, fixed and contingent obligations. It further includes all principal,interest, prepayment charges, late charges, loan fees and any other fees andcharges accruing or assessed at any time, as well as all obligations to performacts or satisfy conditions.

 

8.7.3        No listing of specific instances, items or matters inany way limits the scope or generality of any language of this Deed of Trust. AllExhibits and/or Schedules attached to this Deed of Trust are herebyincorporated in this Deed of Trust.

 

8.8           In-House Counsel Fees. Whenever Trustor is obligated to pay or reimburseBeneficiary or any Lender or Trustee for any attorneys’ fees, those fees shallinclude the allocated costs for services of in-house counsel.

 

8.9           Waiver of Marshalling. To the extent permitted by applicable law, Trustorwaives all rights, legal and equitable, it may now or hereafter have to requiremarshalling of assets or to require foreclosure sales of assets in a particularorder. Each successor and assign of Trustor, including any holder of a lien orsecurity interest subordinate to this Deed of Trust, by

 

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acceptance of its interest or lien or security interest, agrees that itshall be bound by the above waiver, as if it had given the waiver itself.

 

8.10         Severability. Any provision in this Deed of Trust that is held tobe inoperative, unenforceable or invalid as to any party or in any jurisdictionshall, as to that party or jurisdiction, be inoperative, unenforceable orinvalid without affecting the remaining provisions or the operation, enforceabilityor validity of that provision as to any other party or in any otherjurisdiction, and to this end the provisions of this Deed of Trust are declaredto be severable.

 

8.11         Notices. Trustor hereby requests that a copy of notice ofdefault and notice of sale be mailed to it at the address set forth below. Thataddress is also the mailing address of Trustor as debtor under the MissouriUniform Commercial Code, as amended or recodified from time to time. Beneficiary’saddress given below is the address for Beneficiary as secured party under theMissouri Uniform Commercial Code, as amended or recodified from time to time.

 
| Notices to Trustor:     |   | c/o Herbst  Gaming, Inc.                                                        |
|-------------------------|--------|--------------------------------------------------------------------------------------|
|                    |   | 5195 Las Vegas Blvd.                                                                 |
|                    |   | Las Vegas, NV 89119                                                                  |
|                    |   | Attn: M. Higgins                                                                     |
|                    |   |                                                                                 |
| Notices to Beneficiary: |   | Bank of America, N.A.                                                                |
|                    |   | Mail Code: TX1-492-14-11                                                             |
|                    |   | Bank of America Plaza                                                                |
|                    |   | 901 Main Street, 14th  Floor                                                         |
|                    |   | Dallas, TX 75202-3714                                                                |
|                    |   | Attn:       Chris M. Levine, Assistant Vice  President |
|                    |   | Agency Management  Officer II                                                        |
|                    |   | GCIB Agency Management  Central I                                                    |
|                    |   |                                                                                 |
| Notices to Trustee:     |   | Todd W.  Griffee, Esq.                                                          |
|                    |   | 106 S. Seventh Street,  Suite 301                                               |
|                    |   | St. Joseph, MO 64501                                                                 |

 

8.12         Lease of Property. Trustee hereby lets the Property to Trustor until asale is held under this Deed of Trust, or until an Event of Default shalloccur, upon the following terms and conditions, to wit: Trustor and all personsclaiming or possessing any of the Property by, through or under Trustor shallpay rent therefor during said term at the rate of one cent per month, payablemonthly upon demand, and shall surrender immediate peaceable possession of theProperty (and any and every part thereof) sold under the provisions of thisDeed of Trust to the purchaser thereof under such sale, without notice ordemand therefor, and shall and will at once, without notice, surrender uppossession of the Property and every part thereof in the event Beneficiaryshall take charge and enter the Property as provided in this Deed of Trust.

 

8.13         This notice is provided pursuant to section 432.045,R.S.Mo. As used herein, “you” means **Trustor**, “us”means **Beneficiary and the Lenders**, “borrower”means

 

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**Trustor**, “creditor” means **Beneficiaryand the Lenders** and “this writing” means this **Agreement**and the **other Loan Documents**. **ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TOFORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND ORRENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWER) AND US(CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACHCOVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE ANDEXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATERAGREE IN WRITING TO MODIFY IT.**

 

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IN WITNESS WHEREOF, this Deed of Trust has beenexecuted as of the date first written above.

 
|   | “Trustor”: |
|--------|----------------------|
|   |                 |   |
|   | HGI – ST. JO,   |
|   | a Nevada corporation |
|   |                 |   |
|   |                 |   |
|   | By:                  | /s/ Edward Herbst |   |
|   | Name:                |   |   |
|   | Title:               |   |   |
|        |                      |  |  |  |

 

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ACKNOWLEDGEMENT

 
| **STATE  OF Nevada** | **)**     |   |
|----------------------|-----------|--------|
| ** **           | **) ss.** |   |
| **COUNTY  OF Clark** | **)**     |   |

 

On this 28 day of January in the year 2005 before me, JeniferCannon , a Notary Public in and for said State, personally appeared EdwardHerbst, of HGI – ST. JO, known to me to be the person(s) who executed thewithin Deed of Trust with Assignment of Rents, Security Agreement and Fixture****Filing on behalf of said corporation and acknowledged to methat he/she/they executed the same for the purposes therein stated.

 

IN TESTIMONY WHEREOF, I have hereunder set my hand andaffixed my official seal in the County and State aforesaid, the day and yearfirst above written.

 

 
| [SEAL]          |          | /s/ Jenifer E. Cannon           |   |
|-----------------|---------------|---------------------------------|--------|
|            |          | Notary Public Jenifer E. Cannon |
|            |          |                            |
|            |          |                            |
| My term expires |  1/17/07 | .                               |   |   |
|                 |               |                                 |        |  |  |

 

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EXHIBIT “A”

 

(Legal Description ofLand)

 

**TRACTA:**

 

ALL THAT PART OF THE SOUTHWEST QUARTER (SW 1/4)OF SECTION SIX (6) TOWNSHIP FIFTY-SEVEN (57) NORTH. RANGE THIRTY-FIVE(35) WEST, ST. JOSEPH, BUCHANAN COUNTY, MISSOURI, LYING NORTH OF THE NORTH LINEOF THE RIGHT-OF-WAY LINE OF SUPPLEMENTARY STATE HIGHWAY “00” WEST OF THE NORTHAPPROACH TO SAID SUPPLEMENTARY STATE HIGHWAY ROUTE 00 EAST OF THE TRACT OFGROUND CONVEYED TO THE UNITED STATES OF AMERICA BY WARRANTY DEED RECORDED INBOOK 941 AT PAGE 227, IN THE OFFICE OF THE RECORDER OF DEEDS OF BUCHANANCOUNTY, MISSOURI, EXCEPT A TRACT OF LAND JUST NORTH OF THE OLD RIGHT-OF-WAY OFSTATE ROUTE “00” CONVEYED TO THE MISSOURI DEPARTMENT OF CONSERVATION; SAIDREMAINING SURVEYED TRACT MORE PARTICULARLY DESCRIBED AS FOLLOWS:

 

BEGINNING AT THE CENTER OF SECTION 6, TOWNSHIP 57NORTH, RANGE 35 WEST;

 

THENCE ALONG THE EAST-WEST CENTERLINE OF SAID SECTION 6,SOUTH 86°27’13” WEST, 349.98 FEET TO A POINT ON THE WESTERLY RIGHT-OF-WAY LINEOF WATERWORKS ROAD AND THE TRUE POINT OF BEGINNING;

 

THENCE ALONG THE WESTERLY RIGHT-OF-WAY LINE OFWATERWORKS ROAD THE FOLLOWING BEARINGS AND DISTANCES: SOUTH 09°00’11” EAST,11.27 FEET;

 

THENCE ALONG A CURVE TO THE RIGHT HAVING A RADIUS OF 356.20FEET AN ARC LENGTH OF 348.94 FEET AND A CHORD BEARING OF SOUTH 18°28’16” WEST;

 

THENCE SOUTH 46°57’21” WEST, 486.06 FEET;

 

THENCE ALONG A CURVE TO THE LEFT HAVING A RADIUS OF450.28 FEET, AND AN ARC LENGTH OF 354.73 FEET AND A CHORD BEARING OF SOUTH22°43’48” WEST TO A POINT OF THE NORTHEAST CORNER OF A TRACT OF LAND CONVEYEDTO THE MISSOURI DEPARTMENT OF CONSERVATION;

 

THENCE ALONG THE NORTH LINE OF SAID TRACT SOUTH 51°45’06”WEST, 375.30 FEET TO A POINT ON THE EAST LINE OF A TRACT OF GROUND CONVEYED TOTHE UNITED STATES OF AMERICA BY SAID WARRANTY DEED;

 

THENCE ALONG THE EAST LINE OF SAID TRACT ALONG A CURVETO THE RIGHT HAVING A RADIUS OF 9200.00 FEET, AN ARC LENGTH OF 1215.97 FEET ANDA CHORD BEARING OF NORTH 21°41’28” WEST, TO A POINT ON THE EAST-WEST CENTERLINE OF SAID SECTION 6;

 

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THENCE ALONG SAID SECTION LINE NORTH 86°27’13”EAST, 1339.60 FEET TO THE TRUE POINT OF BEGINNING.

 

**EXCEPT ALL THAT PART IN THE MISSOURI RIVER.**

 

**EXCEPT THAT PART CONVEYED TO CITY OF ST.JOSEPH APRIL 18, 2002 IN BOOK 2431 AT PAGE 111.**

 

**TRACTB:**

 

A TRACT OF LAND IN THE NORTHWEST QUARTER OF SECTION SIX(6), TOWNSHIP FIFTY SEVEN (57) NORTH, RANGE THIRTY-FIVE (35) WEST, BUCHANANCOUNTY, MISSOURI, DESCRIBED AS FOLLOWS:

 

BEGINNING AT THE NORTHWEST CORNER OF THE NORTHWESTQUARTER OF SAID SECTION SIX (6);

 

THENCE NORTH 89°46’59” EAST, ALONG THE NORTH LINE OFSAID SECTION SIX (6), 1302.18 FEET TO THE NORTHEAST CORNER OF THE WESTHALF OF THE NORTHWEST QUARTER (W1/2 NW 1/4) OF SAID SECTION SIX (6);

 

THENCE SOUTH 00°22’41” WEST, ALONG THE EAST LINE OFTHE WEST HALF OF THE NORTHWEST QUARTER (W1/2 NW 1/4) OF SAID SECTION SIX(6), 1666.24 FEET TO THE TRUE POINT OF BEGINNING;

 

THENCE CONTINUING SOUTH 00°22’41” WEST, ALONG SAIDWEST LINE, 727.3 FEET TO THE NORTHEAST CORNER OF A TRACT OF LAND DESCRIBED INDEED RECORDED IN BOOK 1313 AT PAGE 343 IN THE OFFICE OF THE RECORDER OF DEEDSIN BUCHANAN COUNTY, MISSOURI;

 

THENCE SOUTH 86°27’13” WEST, 165.0 FEET TO THENORTHWEST CORNER OF SAID TRACT;

 

THENCE SOUTH 00°22’41” WEST, 170.00 FEET TO THE SOUTHWEST CORNER OF SAID TRACT;

 

THENCE NORTH 86°27’13” EAST, 165.00 FEET TO THESOUTHEAST CORNER OF SAID TRACT AND THE EAST LINE OF THE WEST HALF OF THENORTHWEST QUARTER (W1/2 NW 1/4);

 

THENCE SOUTH 00°22’41” WEST ALONG SAID EAST LINE170.00 FEET TO THE SOUTH LINE OF SAID NORTHWEST QUARTER (NW 1/4);

 

THENCE SOUTH 86°27’13” WEST, ALONG SAID SOUTH LINE,426.93 FEET TO A POINT ON THE EAST LINE OF A TRACT CONVEYED TO THE UNITEDSTATES OF AMERICA BY DEED RECORDED IN BOOK 933 AT PAGE 23 IN THE OFFICE OF THERECORDER OF DEEDS OF BUCHANAN COUNTY, MISSOURI;

 

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THENCE ALONG A CURVE TO THE RIGHT, HAVING A RADIUS OF9215.0 FEET AND AN ARC DISTANCE OF 110.45 FEET, CHORD BEARING NORTH 18°08’25”WEST;

 

THENCE NORTH 00°22’41” EAST, 986.86 FEET;

 

THENCE NORTH 89°46’59” EAST, 461.44 FEET TO THE TRUEPOINT OF BEGINNING.

 

ALSO, ALL THAT PART OF THE EAST HALF OF THENORTHWEST QUARTER (E1/2 NW 1/4) OF SECTION SIX (6), TOWNSHIP FIFTY-SEVEN(57) NORTH, RANGE THIRTY-FIVE (35) WEST OF THE FIFTH PRINCIPAL MERIDIAN,BUCHANAN COUNTY, MISSOURI, LYING WEST OF THE COUNTY ROAD KNOWN AS WATER WORKSROAD AND SOUTH OF A LINE 1064.53 FEET PERPENDICULARLY DISTANCE NORTH OF THESOUTH LINE OF SAID EAST HALF OF THE NORTHWEST QUARTER (E1/4 NW 1/4) OF SECTION SIX(6).

 

**EXCEPT THERE FROM ONE (1) ACRE DESCRIBED ASFOLLOWS:**

 

BEGINNING ON THE SOUTH LINE OF SAID EAST HALF OF THENORTHWEST QUARTER (E1/2 NW 1/4) OF SECTION SIX (6) AT A POINT THAT ISDISTANT SOUTH 86°30’ WEST, 331.95 FEET FROM THE SOUTHEAST CORNER THEREOF;

 

THENCE CONTINUING SOUTH 86°30’ WEST ALONG SAID SOUTHLINE, 276.92 FEET TO A POINT;

 

THENCE NORTH 0°19’ WEST, 185.85 FEET TO A POINT;

 

THENCE NORTH 86°30’ EAST, 251.09 FEET TO A POINT;

 

THENCE SOUTHEASTERLY TO THE POINT OF BEGINNING;

 

**AND EXCEPT THERE FROM, 64 SQUARE FEET AT THENORTHWEST CORNER DESCRIBED AS FOLLOWS:**

 

BEGINNING ON THE WEST LINE OF SAID EAST HALF OF THENORTHWEST QUARTER (E1/2 NW 1/4) OF SECTION SIX (6) AT A POINT THAT IS1056.0 FEET NORTH OF THE SOUTHWEST CORNER THEREOF;

 

THENCE CONTINUING NORTH 10.52 FEET TO A POINT;

 

THENCE NORTH 86°30” EAST, 6.01 FEET TO A POINT;

 

THENCE SOUTH PARALLEL WITH THE WEST LINE OF SAID SOUTHHALF QUARTER SECTION, 10.83 FEET TO A POINT;

 

THENCE SOUTH 89°27’ WEST, 6.0 FEET TO THE POINT OFBEGINNING.

 

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**TRACTC”**

 

THE FOLLOWING DESCRIBED TRACT OF LAND LOCATED INBUCHANAN COUNTY, MISSOURI,

 

BEGINNING 331.95 FEET WEST OF THE SOUTHEAST CORNER OFTHE NORTHWEST QUARTER OF SECTION SIX (6) TOWNSHIP FIFTY-SEVEN (57),RANGE THIRTY-FIVE (35);

 

THENCE WEST ALONG THE QUARTER SECTION LINE 276.92FEET;

 

THENCE NORTH PARALLEL TO THE WEST LINE OF SAIDNORTHWEST QUARTER 185.85 FEET;

 

THENCE EAST PARALLEL TO THE SOUTH LINE OF SAID QUARTERSECTION 251.09 FEET TO THE WESTERLY LINE OF THE WATER WORKS ROAD;

 

THENCE SOUTH ALONG THE WEST RIGHT OF WAY LINE OF THEWATER WORKS ROAD TO THE POINT OF BEGINNING, ALL IN BUCHANAN COUNTY, MISSOURI.

 

END OF EXHIBIT A

 

4

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EXHIBIT “B”

 

(Lenders)

 
|   |   | Bank of  America, N.A.                        |
|--------|--------|-----------------------------------------------|
|   |   | U.S. Bank  National Association               |
|   |   | Wells Fargo  Bank, N.A                        |
|   |   | Lehman  Commercial Paper Inc.                 |
|   |   | The CIT  Group/Equipment Financing, Inc. |
|   |   | Comerica  West Incorporated                   |
|   |   | Nevada State  Bank                            |
|   |   | American  Express Certificate Company         |
|   |   | IDS Life  Insurance Company                   |
|   |   | Centurion  CDO 8, Limited                     |
|   |   | Black  Diamond CLO 2005-1 Ltd.                |
|   |   | Carlyle High  Yield Partners II, Ltd.         |
|   |   | Carlyle High  Yield Partners III, Ltd.        |
|   |   | Carlyle High  Yield Partners VI, Ltd.         |
|   |   | Carlyle Loan  Investment Ltd                  |
|   |   | Senior Debt  Portfolio                        |
|   |   | Eaton Vance  Institutional Senior Loan Fund   |
|   |   | Eaton Vance  CDO III, Ltd.                    |
|   |   | Costantinus  Eaton Vance CDO V, Ltd.          |
|   |   | Eaton Vance  CDO VI, Ltd.                     |
|   |   | Grayson &  Co                        |
|   |   | The  Norinchukin Bank, New York Branch        |

 

1

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|   |   | Tolli &  Co.                                                                             |
|--------|--------|---------------------------------------------------------------------------------------------------|
|   |   | Fidelity  Central Investment Portfolios LLC: Fidelity Floating Rate Central Investment  Portfolio |
|   |   | Fidelity  Advisor Series II: Fidelity Advisor Floating Rate High Income Fund (161)           |
|   |   | Franklin  Floating Rate Trust                                                                     |
|   |   | Franklin  Floating Rate Master Series                                                             |
|   |   | Franklin CLO  IV, Limited                                                                         |
|   |   | ELF Funding  Trust I                                                                              |
|   |   | Highland  Offshore Partners, L.P.                                                                 |
|   |   | Pioneer  Floating Rate Trust                                                                      |
|   |   | Loan Star  State Trust                                                                            |
|   |   | ING Prime  Rate Trust                                                                             |
|   |   | ING Senior  Income Fund                                                                           |
|   |   | Floating  Rate Income Strategies Fund II, Inc. (FRB)                                         |
|   |   | Southport  CLO, Limited                                                                           |
|   |   | Loan Funding  XI LLC                                                                              |
|   |   | Harbour Town  Funding LLC                                                                         |
|   |   | Race Point  CLO, Limited                                                                          |
|   |   | Race Point  II CLO, Limited                                                                       |
|   |   | ULT CBNA  Loan Funding LLC                                                                        |
|   |   | Van Kampen  Senior Income Trust                                                                   |
|   |   | Van Kampen  Senior Loan Fund                                                                      |
|   |   | Bank of  Scotland                                                                                 |

 

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