STORAGE IN A BONDED WAREHOUSE IN
LAS VEGAS, NEVADA;
(D)
THE STORED MATERIALS WILL BE PAID FOR IN
FULL WITH THE FUNDS TO BE DISBURSED AND ALL LIEN RIGHTS OR CLAIMS OF THE
SUPPLIER WILL BE RELEASED UPON FULL PAYMENT;
(E)
LENDER HAS OR WILL HAVE UPON PAYMENT WITH
DISBURSED FUNDS A PERFECTED, FIRST PRIORITY SECURITY INTEREST IN THE STORED
MATERIALS;
(F)
THE STORED MATERIALS ARE INSURED FOR AN
AMOUNT EQUAL TO THEIR REPLACEMENT COSTS IN ACCORDANCE WITH SECTION 6.1 HEREOF;
(G)
THE AGGREGATE COST OF STORED MATERIALS TO BE
STORED AT THE HOTEL/CASINO PROPERTY AND/OR THE ADJACENT PROPERTY AT ANY ONE TIME
SHALL NOT EXCEED $5,000,000.00; AND
(H)
THE AGGREGATE COST OF STORED MATERIALS TO BE
STORED OFF-SITE FROM THE HOTEL/CASINO PROPERTY AND THE ADJACENT PROPERTY AT ANY
ONE TIME SHALL NOT EXCEED $1,000,000.00.
Section 3.12
Loan Balancing and Shortfalls.
(A)
NOTWITHSTANDING ANYTHING CONTAINED HEREIN
TO THE CONTRARY, IF AT ANY TIME OR FROM TIME TO TIME DURING THE TERM OF THIS
AGREEMENT, LENDER SHALL REASONABLY DETERMINE THAT THERE EXISTS ANY SHORTFALL,
LENDER SHALL DELIVER NOTICE OF SUCH DETERMINATION TO BORROWERS AND THEREAFTER
UNTIL SUCH SHORTFALL NO LONGER EXISTS, LENDER WILL NOT BE OBLIGATED TO MAKE ANY
CONSTRUCTION LOAN ADVANCES AND, WITHIN TEN (10) DAYS OF RECEIPT OF SUCH NOTICE
OF DETERMINATION, BORROWERS SHALL TAKE ANY ONE OF, OR A COMBINATION OF, THE
FOLLOWING ACTIONS: (I) DEPOSIT WITH LENDER AN AMOUNT EQUAL TO THE SHORTFALL
(SUCH DEPOSITED FUNDS, THE "SHORTFALL FUNDS"), (II) DELIVER A REQUIRED EQUITY
LETTER OF CREDIT IN THE AMOUNT OF THE SHORTFALL, OR (III) MAKE ONE OR MORE
PAYMENTS ON ACCOUNT OF HARD COSTS AND/OR SOFT COSTS UNTIL THE SHORTFALL HAS BEEN
REDUCED TO ZERO AND DELIVER TO LENDER REASONABLY SATISFACTORY EVIDENCE THEREOF.
(B)
ANY PAYMENT OF SHORTFALL FUNDS MADE TO
LENDER PURSUANT TO SECTION 3.12(A)(I) HEREOF SHALL BE DEPOSITED INTO AN ACCOUNT
WITH LENDER (THE "SHORTFALL ACCOUNT").
PROVIDED NO EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING, ANY FUNDS HELD IN THE SHORTFALL ACCOUNT WILL BE
ADVANCED BY LENDER TO BORROWERS AS THOUGH SUCH FUNDS WERE PROCEEDS OF THE
CONSTRUCTION LOAN AND SUBJECT TO ALL OF THE CONDITIONS WITH RESPECT THERETO SET
FORTH IN SECTIONS 3.2, 3.3 AND/OR 3.4 HEREOF, AS APPLICABLE, PRIOR TO ANY
FURTHER CONSTRUCTION LOAN ADVANCES.
UNTIL SO ADVANCED TO BORROWERS PURSUANT TO
THE PROVISIONS OF SECTIONS 3.2, 3.3 AND/OR 3.4 HEREOF, AS APPLICABLE, ALL SUCH
SHORTFALL FUNDS ON DEPOSIT IN THE SHORTFALL ACCOUNT SHALL BE HELD AS CASH
COLLATERAL AND ADDITIONAL SECURITY FOR THE DEBT AND THE OTHER OBLIGATIONS AND
SHALL
123
CONSTITUTE A RESERVE FUND IN WHICH LENDER SHALL HAVE A LIEN AND SECURITY
INTEREST PURSUANT TO THE PROVISIONS OF SECTION 7.8 HEREOF.
(C)
UPON THE TAKING OF ANY OF THE ACTIONS
CONTEMPLATED UNDER SECTION 3.12(A) HEREOF TO CURE ANY SHORTFALL, SUCH SHORTFALL
SHALL BE DEEMED TO NO LONGER EXIST FOR THE PURPOSES OF THIS AGREEMENT.
Section 3.13
Quality of Work.
No Construction Loan
Advance or any portion thereof shall be made with respect to materially
defective work or