Document:

Exhibit
10.18

 

DEED OF TRUST, ASSIGNMENT OF

RENTS AND LEASES, FIXTURE FILING AND SECURITY AGREEMENT 

(Nevada)

 

THIS DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES,
FIXTURE FILING AND SECURITY AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this “Deed of
Trust”) is dated as of January 23, 2004, by and from GNL, CORP., a Nevada corporation (“Grantor”), whose address is 2300 South
Casino Drive, Laughlin, Nevada 89028 to NEVADA
TITLE COMPANY, a Nevada corporation (“Trustee”), with an address at 2500 North Buffalo, Suite #150,
Las Vegas, Nevada 89128 for the benefit of WELLS
FARGO FOOTHILL, INC., a California corporation, in its capacity as
lender, arranger, administrative agent and documentation agent (the “Agent”) pursuant to the Loan Agreement (as
defined below), having an address at 2450 Colorado Avenue, Suite 3000 West,
Santa Monica, California 90404 (Agent, together with its successors and
assigns, is referred to herein as  “Beneficiary”).

 

RECITALS:

 

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

 

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

 

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

 

This Deed of Trust is to be governed by the provisions
of NRS 106.300 through NRS 106.400 inclusive (“NRS” means Nevada Revised Statutes).  The maximum amount to be secured by the Deed
of Trust is $35,000,000.  It is the
intention of the parties that the Obligations include the obligation of Grantor
to repay “future advances” of “principal” (as defined in NRS 106.345, as
amended or recodified

 

 

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from time to time) in an
amount up to $35,000,000.00, and that the lien of this Deed of Trust secures
the obligation of Grantor to repay all such “future advances” with the priority
set forth in NRS 106.370(1), as amended or recodified from time to time.

 

Without limiting the foregoing, any and all future
advances by Agent or Lender group to Borrowers made for the improvement,
protection or preservation, together with interest at the rate applicable to
overdue principal set forth in the Loan Agreement, shall be automatically
secured hereby unless such a document evidencing such advances specifically
recites that it is not intended to be secured hereby, and the payment of all
sums expended or advanced by Agent or Lender Group under or pursuant to the
terms hereof or the Loan Agreement or to protect the security hereof, together
with interest thereon as herein provided (without limiting the generality of
the protections afforded by NRS Chapter 106), and funds disbursed
that, in the reasonable exercise of Agent’s judgment, are needed for improving
property or to protect Lender’s security in the Property are to be deemed
obligatory advances hereunder and will be added to the total indebtedness
secured by this Deed of Trust and such indebtedness shall be increased
accordingly.

 

ARTICLE 1

DEFINITIONS

 

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

 

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

 

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

 

 

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conditions stated in the
Loan Agreement.  This Deed of Trust
secures all Advances and re-advances under the revolving credit feature of the
Loan Agreement.

 

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

 

(d)                                           “Trust
Property”:  All of Grantor’s
interest in (1) the fee estate in the real property described in Exhibit
A attached hereto, together with all existing and future appurtenances,
privileges, easements, franchises, herediments and tenements of the real
property (including all minerals, oil, gas and other hydrocarbons and
associated substances) which may be in, under or produced from any part of the
real property, all air, water or other interests or development rights and
credits and any greater estate therein as hereafter may be acquired by Grantor
(the “Land”),
(2) all improvements now leased, owned or hereafter acquired by Grantor, now or
at any time situated, placed or constructed upon the Land (the ”Improvements”;
the Land and Improvements are collectively referred to herein as the “Premises”),
(3) the Operating Assets and all materials, supplies, equipment, apparatus and
other items of personal property now owned or hereafter acquired by Grantor and
now or hereafter located on the Premises (excluding, however, the Excluded
Assets, as such term is defined in the Loan Agreement) (the “Operational
Property”), (4) all materials, supplies, equipment, apparatus and
other items of personal property now owned or hereafter acquired by Grantor and
now or hereafter attached to or installed in any of the Improvements or the
Land so as to constitute fixtures (excluding, however, the Excluded Assets) and
water, gas, electrical, telephone, storm and sanitary sewer facilities and all
other utilities whether or not situated in easements (the “Fixtures”), (5) all
reserves, escrows or impounds and deposit accounts maintained by Grantor with
respect to the Trust Property (excluding, however, the Excluded Assets) (the “Deposit
Accounts”), (6) all existing and future leases, subleases, licenses,
concessions, occupancy agreements or other agreements (written or oral, now or
at any time in effect), granted by Grantor or a direct or indirect lessee or
sublessee of Grantor, which grant to any Person a possessory interest in, or
the right to use or occupy, all or any part of the Trust Property, whether made
before or after the filing by or against Grantor of any petition for relief
under the Bankruptcy Code, together with any extension, renewal or replacement
of the same and together with all related security and other deposits (the “Leases”),
(7) all of the rents, additional rents, revenues, royalties, income,
proceeds, profits, early termination fees or payments, security and other types
of deposits, and other benefits paid or payable by parties to the Leases for
using, leasing, licensing, possessing, operating from, residing in, selling or
otherwise enjoying the Trust Property or any part thereof, whether paid or
accruing before or after the filing by or against Grantor of any petition for
relief under the Bankruptcy Code (the “Rents”), (8) all other agreements,
such as construction contracts, architects’ agreements, engineers’ contracts,
utility contracts, maintenance agreements, management agreements, service
contracts, listing agreements, guaranties, warranties,

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permits
(including the Permits), licenses, certificates and entitlements in any way
relating to the construction, use, occupancy, operation, maintenance, enjoyment
or ownership of the Trust Property (the “Property Agreements”), (9) all rights,
privileges, tenements, hereditaments, rights-of-way, easements, appendages and
appurtenances appertaining to the foregoing, (10) all property tax
refunds, utility refunds and rebates, earned or received at any time
(the ”Tax Refunds”), (11) all accessions, replacements and
substitutions for any of the foregoing and all proceeds thereof and all rents,
fees, charges, accounts, issues, profits, revenues and payments for or from (a)
the use or occupancy of the guest rooms, banquet facilities, ballrooms, spas,
salons, pools, restaurants, meeting rooms and other guest facilities at or in
the Hotel and (b) the operation of the Casino (excluding, however, the Excluded
Assets) (the “Proceeds”), (12) all insurance policies, unearned
premiums therefor and proceeds from such policies covering any of the above
property now or hereafter acquired by Grantor (the “Insurance”), (13) all of
Grantor’s right, title and interest in and to any awards, damages,
remunerations, reimbursements, settlements or compensation heretofore made or
hereafter to be made by any governmental authority pertaining to the Land,
Improvements or Fixtures (the ”Condemnation Awards”), (14) all of
Grantor’s rights to appear and defend any action or proceeding brought with
respect to the Trust Property and to commence any action or proceeding to
protect the interest of Beneficiary in the Trust Property, and (15) all
rights, powers, privileges, options and other benefits of Grantor under the
Leases, including, without limitation, the immediate and continuing right to
claim for, receive, collect and receive all Rents payable or receivable under
the Leases or pursuant thereto (and to apply the same to the payment of the
Indebtedness and the Obligations), and to do all other things which Grantor or
any lessor is or may become entitled to do under the Leases.  As used in this Deed of Trust, the term
“Trust Property” shall mean all or, where the context permits or requires, any
portion of the above or any interest therein. 
THE TERM “TRUST PROPERTY” IS INTENDED TO EXCLUDE ALL ITEMS OF PERSONAL
PROPERTY IN WHICH BENEFICIARY HAS OBTAINED AND/OR PERFECTED A SECURITY INTEREST
UNDER SEPARATE INSTRUMENTS.

 

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

 

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

 

(g)                                           “Casino”:  That portion of the Casino Hotel used for
gaming and related activities.

 

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

 

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

 

(j)                                               “Hotel”:  That portion of the Casino Hotel not
included within the Casino.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(ii)                                  slot
machines, video poker machines, electronic gaming devices, crap tables, blackjack
tables, roulette tables, baccarat tables, poker tables, other gaming tables,
big six wheels, racing and sports displays and video screens, prizes and prize
displays, and all other gaming furnishings and equipment;

 

(iii)                               cards,
dice, gaming chips and placques, tokens, chip racks, dealing shoes, dice cups,
dice sticks, layouts, paddles, roulette balls and other consumable supplies and
items;

 

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

 

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

 

(vi)                              sets,
scenery, costumes, props and other items used in the production of shows in any
showroom, convention space, ballroom, exhibition hall or sports or
entertainment arena now or hereafter located on the Land.

 

ARTICLE 2

GRANT

 

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

 

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

 

ARTICLE 3

WARRANTIES,
REPRESENTATIONS AND COVENANTS

 

Grantor warrants, represents and covenants to
Beneficiary as follows:

 

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

 

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encumber the Trust Property in the manner and form set
forth in this Deed of Trust.  This Deed
of Trust creates valid, enforceable first priority liens and security interests
against the Trust Property.

 

Section 3.2                                   First
Lien Status.  Grantor shall
preserve and protect the first lien and security interest status of this Deed
of Trust and the other Loan Documents. 
If Grantor has any knowledge of any lien or security interest, other
than the Permitted Liens, is asserted against the Trust Property, Grantor shall
promptly, and at its expense, (a) give Beneficiary a detailed written notice of
such lien or security interest (including origin, amount and other terms), and
(b) pay the underlying claim in full or take such other action so as to cause
it to be released or contest the same in compliance with the requirements of
the Loan Agreement (including the requirement of providing a bond or other
security satisfactory to Beneficiary).

 

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

 

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

 

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

 

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

 

Section 3.7                                   Condemnation Awards and Insurance Proceeds.

 

(a)                                            Condemnation
Awards.  Grantor, immediately upon
obtaining knowledge of the institution of any proceedings for the condemnation
of the

 

 

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Trust Property or any
portion thereof, will notify Beneficiary of the pendency of such
proceedings.  Except as set forth in the
Loan Agreement, Beneficiary may participate in any such proceedings and Grantor
from time to time will deliver to Beneficiary all instruments requested by it
to permit such participation.  Grantor
assigns all awards and compensation to which it is entitled for any
condemnation or other taking, or any purchase in lieu thereof, to Beneficiary
and authorizes Beneficiary to collect and receive such awards and compensation
and to give proper receipts and acquittances therefor, subject to the terms of
the Loan Agreement. Grantor hereby waives all rights to such awards and
compensation described in the foregoing sentence.  Grantor, upon request by Beneficiary, shall make, execute and
deliver any and all instruments requested for the purpose of confirming the
assignment of the aforesaid awards and compensation to Beneficiary free and
clear of any liens, charges or encumbrances of any kind or nature
whatsoever.  Grantor specifically,
unconditionally and irrevocably waives all rights of a property owner granted
under applicable law, including NRS 37.115, as amended or recodified from time
to time, which provide for an allocation of condemnation proceeds between a
property owner and a lienholder, and any other law or successor statute of
similar import.

 

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

 

(c)                                            Beneficiary
acknowledges that, notwithstanding the foregoing provisions of this Section
3.7, Grantor has granted certain rights in and to condemnation awards and
insurance proceeds pursuant to the Junior Deed of Trust and, 

subject to the terms of the
Intercreditor Agreement, the provisions of this Section 3.7 are entered
into subject to such rights.

 

Section 3.8                                   Costs
of Defending and Upholding the Lien. 
If any action or proceeding is commenced to which action or proceeding
Trustee or Beneficiary is made a party or in which it becomes necessary for
Trustee or Beneficiary to defend or uphold the lien of this Deed of Trust
including any extensions, renewals, amendments or

 

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modifications thereof,
Grantor shall, on demand, reimburse Trustee and Beneficiary for all expenses
(including, without limitation, reasonable attorneys’ fees and reasonable
appellate attorneys’ fees) incurred by Trustee or Beneficiary in any such
action or proceeding and all such expenses shall be secured by this Deed of
Trust.  In any action or proceeding to
foreclose this Deed of Trust or to recover or collect the Indebtedness, the
provisions of law relating to the recovering of costs, disbursements and
allowances shall prevail unaffected by this covenant.

 

Section 3.9                                   TRANSFER OF THE SECURED PROPERTY.  EXCEPT AS EXPRESSLY PERMITTED PURSUANT TO
THE TERMS OF THE LOAN AGREEMENT, GRANTOR SHALL NOT SELL, ASSIGN, TRANSFER,
PLEDGE, ENCUMBER, CREATE A SECURITY INTEREST IN, LEASE, OR OTHERWISE
HYPOTHECATE, ALL OR ANY PORTION OF THE TRUST PROPERTY WITHOUT THE PRIOR WRITTEN
CONSENT OF BENEFICIARY.  THE CONSENT BY
BENEFICIARY TO ANY SALE, ASSIGNMENT, TRANSFER, PLEDGE, ENCUMBRANCE, CREATION OF
A SECURITY INTEREST IN, LEASE, OR OTHER HYPOTHECATION OF, ANY PORTION OF THE
TRUST PROPERTY SHALL NOT BE DEEMED TO CONSTITUTE A NOVATION OR A CONSENT TO ANY
FURTHER SALE, ASSIGNMENT, TRANSFER, PLEDGE, ENCUMBRANCE, CREATION OF A SECURITY
INTEREST IN, LEASE, OR OTHER HYPOTHECATION, OR TO WAIVE THE RIGHT OF BENEFICIARY,
AT ITS OPTION, TO DECLARE THE INDEBTEDNESS SECURED HEREBY IMMEDIATELY DUE AND
PAYABLE, WITHOUT NOTICE TO GRANTOR OR ANY OTHER PERSON OR ENTITY, UPON ANY SUCH
SALE, ASSIGNMENT, TRANSFER, PLEDGE, ENCUMBRANCE, CREATION OF A SECURITY
INTEREST, LEASE, OR OTHER HYPOTHECATION TO WHICH BENEFICIARY SHALL NOT HAVE
CONSENTED.

 

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

 

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

 

(a)                                  each
Lease is by its terms subordinate to this Deed of  Trust and the tenant thereunder has agreed to attorn to
Beneficiary;

 

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

 

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

 

(d)                                 Grantor
shall not, except to the extent Grantor has received the prior written consent
of Beneficiary, (A) alter, modify or change the terms of any Lease in any
material respect; (B) consent to any assignment of or subletting under any
Lease not in accordance with its terms; and (C) cancel or terminate any
Lease or accept a surrender thereof, unless such tenant is in default thereunder
and a new Lease has been entered into on substantially the same terms or more
favorable terms as the canceled Lease.

 

Section 3.12                            Additional
Lease Covenants.

 

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

 

11

 

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

 

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

 

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

 

12

 

such notice has been received, the date it was
received and the nature of the default, (vi) whether there are any alleged
defaults of the lessee under the applicable Lease and, if there are,
setting forth the nature thereof in reasonable detail, and (vii) if the
lessee under the applicable Lease shall be in default, the default.

 

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

 

Section 3.15                            Maintenance
of Premises.  Grantor shall
maintain and keep the Premises in such good repair, working order and condition
and shall make or cause to be made all such needful and proper repairs,
renewals and replacements thereto consistent with the standards of other first
class casino and hotel complexes in Laughlin, Nevada.  Grantor shall occupy and continuously operate the Casino Hotel
and keep the Casino Hotel supplied with Tangible Personal Property, all in a
manner consistent with the standards of other first class casino and hotel
complexes in Laughlin, Nevada.

 

Section 3.16                            Alterations.  All alterations to the Premises (a) shall be
carried out in conformity with the Indebtedness Documents, Legal Requirements
and insurance requirements in a good and workmanlike manner and prosecuted with
reasonable dispatch subject to force majeure; (b) shall be undertaken only with
appropriate workers compensation insurance covering workers engaged in such
alterations and appropriate commercial general liability insurance covering all
hazards resulting from such alterations; and (c) affecting the structure of any
of the Improvements, the building systems or any material portion of the
Improvements, (i) shall be carried out under the supervision of a
reputable architect with no less than ten (10) years’ experience in the design
and construction of first class casino and hotel complexes in Laughlin, Nevada,
(ii) shall be notified to Beneficiary prior to the commencement thereof and,
upon Beneficiary’s request, Grantor shall deliver to Beneficiary copies of all
drawings, plans, specifications and cost estimates therefor prepared and
approved in writing by said architect and accompanied by a certificate of such
architect stating that such drawings, plans and specifications are in
compliance with all Legal Requirements and insurance requirements, and (iii)
shall not be commenced until Grantor has furnished to Beneficiary, at Grantor’s
sole cost and expense, a surety bond or bonds, covering performance, labor and
material payments with respect to the work, naming Beneficiary as obligee (or
as co-obligee with the beneficiary under the Superior Deed of Trust and
Grantor), issued by a responsible surety company, authorized to do business in
the State of Nevada, in a form generally and customarily used by such surety in
an amount equal to the estimated cost of construction of the work, guaranteeing
the performance and completion of such construction, substantially in
conformity with

 

13

 

the plans and specifications and within a reasonable
time subject to force majeure free and clear of all Liens, claims and
liabilities for the cost of such alterations (if such surety bond is
unobtainable, Grantor shall provide equivalent security in the form of cash,
letter of credit or other guarantee). 
No alterations of any kind shall be made which shall change the use of
the Casino Hotel from its use as a gaming and hotel facility.

 

ARTICLE 4

DEFAULT

 

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

 

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

 

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

 

(c)                                            if
Grantor shall give Beneficiary Notice of Election to Terminate under NRS
106.380;

 

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

 

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

 

ARTICLE 5

REMEDIES AND FORECLOSURE

 

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

 

(a)                                  To
the extent permitted under the Loan Agreement and in accordance with the
provisions thereof, declare the Indebtedness to be immediately due

14

 

and payable, without
further notice, presentment, protest, notice of intent to accelerate, notice of
acceleration, demand or action of any nature whatsoever (each of which hereby
is expressly waived by Grantor), whereupon the same shall become immediately
due and payable.

 

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

 

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

 

(d)                                 Hold,
lease, develop, manage, operate or otherwise use the Trust Property upon such
terms and conditions as Beneficiary may deem reasonable under the circumstances
(making such repairs, alterations, additions and improvements and taking other
actions, from time to time, as Beneficiary deems necessary or desirable), and
apply all Rents and other amounts collected by Trustee in connection therewith
in accordance with the provisions of Section 5.7 hereof.

 

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

 

15

 

 

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

 

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

 

(h)                                 Make
application to a court of competent jurisdiction for, and obtain from such
court as a matter of strict right and without notice to Grantor or

 

16

 

regard to the adequacy of
the Trust Property for the repayment of the Indebtedness, the appointment of a
receiver of the Trust Property, and Grantor irrevocably consents to such
appointment.  Any such receiver shall
have all the usual powers and duties of receivers in similar cases, including the
full power to rent, maintain and otherwise operate the Trust Property upon such
terms as may be approved by the court, and shall apply such Rents in accordance
with the provisions of Section 5.7 hereof.  Beneficiary may request, in connection with any foreclosure
proceeding hereunder, that the Nevada Gaming Commission petition a court of
competent jurisdiction for the appointment of a supervisor to conduct the
normal gaming activities on the Premises following such foreclosure proceeding.

 

(i)                                     Exercise
all other rights, remedies and recourses granted under the Loan Documents or
otherwise available at law or in equity.

 

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

 

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

 

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

 

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

 

17

 

of any present or future
statute of limitations or law or judicial decision exempting the Trust Property
from attachment, levy or sale on execution or providing for any stay of
execution, exemption from civil process, redemption or extension of time for
payment, (b) all notices of any Event of Default or of any election by
Trustee or Beneficiary to exercise or the actual exercise of any right, remedy
or recourse provided for under the Loan Documents, and (c) any right to a
marshalling of assets, a sale in inverse order of alienation or to require sale
of assets in a particular order, including rights provided by NRS 100.040 and
100.050, as such sections may be amended or recodified from time to time.  Each successor and assign of Grantor,
including any holder of a lien or security interest subordinate to this Deed of
Trust, by acceptance of its interest or lien or security interest, agrees that
it shall be bound by the above waiver, as if it had given the waiver itself.

 

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

 

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

 

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

 

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

 

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

 

 

18

 

 

Section 5.8                                   Occupancy
After Foreclosure.  Except as
otherwise required by applicable law, any sale of the Trust Property or any
part thereof in accordance with Section 5.1(e) or Section 5.1(f)
hereof will divest all right, title and interest of Grantor in and to the
property sold.  Subject to applicable
law, any purchaser at a foreclosure sale will receive immediate possession of
the property purchased.  If Grantor
retains possession of such property or any part thereof subsequent to such
sale, Grantor will be considered a tenant at sufferance of the purchaser, and
will, if Grantor remains in possession after demand to remove, be subject to
eviction and removal, forcible or otherwise, with or without process of law.

 

Section 5.9                                   Additional Advances and Disbursements; Costs
of Enforcement.

 

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

 

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

 

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

 

Section 5.11                            WAIVER OF GRANTOR’S RIGHTS.  BY EXECUTION
OF THIS DEED OF TRUST, GRANTOR EXPRESSLY: 
(A) ACKNOWLEDGES THE RIGHT OF BENEFICIARY TO ACCELERATE THE
INDEBTEDNESS EVIDENCED BY THE LOAN AGREEMENT OR OTHER LOAN DOCUMENTS UPON THE
OCCURRENCE OF AN EVENT OF

 

19

 

 DEFAULT; 
(B) TO THE EXTENT ALLOWED BY APPLICABLE LAW, WAIVES ANY AND ALL RIGHTS
WHICH GRANTOR MAY HAVE UNDER THE CONSTITUTION OF THE UNITED STATES, THE VARIOUS
PROVISIONS OF THE CONSTITUTIONS FOR THE SEVERAL STATES, OR BY REASON OF ANY
OTHER APPLICABLE LAW, TO NOTICE AND TO JUDICIAL HEARING PRIOR TO THE EXERCISE
BY BENEFICIARY OF ANY RIGHT OR REMEDY HEREIN PROVIDED TO BENEFICIARY;  (C) ACKNOWLEDGES THAT GRANTOR HAS READ
THIS DEED OF TRUST AND ITS PROVISIONS HAVE BEEN EXPLAINED FULLY TO GRANTOR AND
GRANTOR HAS CONSULTED WITH LEGAL COUNSEL OF GRANTOR’S CHOICE PRIOR TO EXECUTING
THIS DEED OF TRUST;  AND
(D) ACKNOWLEDGES THAT ALL WAIVERS OF THE AFORESAID RIGHTS OF GRANTOR HAVE
BEEN MADE KNOWINGLY, INTENTIONALLY AND WILLINGLY BY GRANTOR AS PART OF A
BARGAINED FOR LOAN TRANSACTION.

 

ARTICLE
6

ASSIGNMENT OF RENTS AND LEASES

 

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

 

Section 6.2                                   Perfection
Upon Recordation.    Grantor acknowledges that
Beneficiary and Trustee have taken all actions necessary to obtain, and that
upon recordation of this Deed of Trust Beneficiary and Trustee shall have, to
the extent permitted under applicable law, a valid and fully perfected, first
priority, present assignment of the Rents arising out of the Leases and all
security for such Leases, subject only to the assignment of such Rents pursuant
to the Junior Deed of Trust and/or any

 

20

 

separate assignment of
Rents executed in conjunction therewith. 
Grantor acknowledges and agrees that upon recordation of this Deed of
Trust Trustee’s and Beneficiary’s interest in the Rents shall be deemed to be
fully perfected, “choate” and enforced as to Grantor and all third parties,
including, without limitation, any subsequently appointed trustee in any case
under Title 11 of the United States Code (the ”Bankruptcy Code”), without
the necessity of commencing a foreclosure action with respect to this Deed of
Trust, making formal demand for the Rents, obtaining the appointment of a
receiver or taking any other affirmative action.

 

Section 6.3                                   Bankruptcy
Provisions.   Without limitation of the absolute nature
of the assignment of the Rents hereunder, Grantor, Trustee and Beneficiary
agree that (a) this Deed of Trust shall constitute a “security agreement” for
purposes of Section 552(b) of the Bankruptcy Code, (b) the security interest
created by this Deed of Trust extends to property of Grantor acquired before
the commencement of a case in bankruptcy and to all amounts paid as Rents and
(c) such security interest shall extend to all Rents acquired by the estate
after the commencement of any case in bankruptcy.

 

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

 

ARTICLE 7

SECURITY AGREEMENT

 

Section 7.1                                   Security
Interest.  This Deed of Trust
constitutes a “security agreement” on personal property within the meaning of
the UCC and other applicable law and with respect to the Operational Property,
Fixtures, Leases, Rents, Deposit Accounts, Property Agreements, Tax Refunds,
Proceeds, Insurance and Condemnation Awards. 
To this end, Grantor grants to Beneficiary a first and prior
security interest in the Fixtures, Leases, Rents, Deposit Accounts, Property
Agreements, Tax Refunds, Proceeds, Insurance and Condemnation Awards and all
other Trust Property which is personal property to secure the payment of the
Indebtedness and performance of the Obligations (including without limitation
all “gaming devices” or “associated equipment” as such terms or words of similar
import referring thereto are defined in the applicable Gaming Laws (as defined
in the Loan Agreement), Liquor Laws (as defined in the Loan Agreement) and
other similar applicable regulations), and agrees that Beneficiary shall have
all the rights and remedies of a secured party under the UCC with respect to
such property.  Any notice of sale,
disposition or other intended action by Beneficiary with respect to the
Operational Property, Fixtures, Leases, Rents, Deposit Accounts, Property
Agreements, Tax Refunds, Proceeds, Insurance and Condemnation Awards sent to
Grantor at least five (5) days prior to any action under the UCC shall

 

21

 

constitute reasonable
notice to Grantor.  THE TERM “TRUST
PROPERTY” IS INTENDED TO EXCLUDE ALL ITEMS OF PERSONAL PROPERTY IN WHICH
BENEFICIARY HAS OBTAINED AND/OR PERFECTED A SECURITY INTEREST UNDER SEPARATE
INSTRUMENTS.

 

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

 

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

 

Section 7.4                                   Applicable Gaming Laws and Liquor Laws.  The parties acknowledge and agree that all
rights, remedies, and powers provided in this Deed of Trust relative to the
Trust Property may be exercised only to the extent that the exercise thereof
does not violate any applicable mandatory provision of the applicable Gaming
Laws and Liquor Laws and all provisions of this Deed of Trust relative to the
Trust Property are intended to be subject to all applicable mandatory
provisions of the applicable Gaming Laws and Liquor Laws and to be limited
solely to the extent necessary to not render the provisions of this Deed of
Trust invalid or unenforceable, in whole or in part.  Beneficiary will timely apply for and
receive all required approvals of the applicable Gaming Authorities (as defined
in the Loan Agreement) and Liquor Authorities (as defined in the Loan
Agreement) for the sale or other disposition of gaming equipment regulated by
applicable Gaming Laws and Liquor Laws, including any such sale or disposition
of gaming equipment consisting of slot machines, gaming tables, cards, dice,
gaming chips, player tracking systems, and all other “gaming devices” and
“associated equipment” (as such terms or words of like import referring thereto
are defined in the applicable Gaming Laws or Liquor Laws) and for the sale of
liquor and other alcoholic beverages.

 

ARTICLE 8

CONCERNING THE TRUSTEE

 

Section 8.1                                   Certain
Rights.  With the approval of
Beneficiary, Trustee shall have 

 

 

22

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 9

MISCELLANEOUS

 

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

 

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

 

Section 9.3                                   Attorney-in-Fact.  Grantor hereby irrevocably appoints
Beneficiary and its successors and assigns, as its attorney-in-fact, which
agency is coupled with an interest and with full power of substitution, (a) to
execute and/or record any notices of completion, cessation of labor or any
other notices that Beneficiary deems appropriate to protect Beneficiary’s
interest, if Grantor shall fail to do so within ten (10) days after
written request by Beneficiary, (b) upon the issuance of a deed pursuant to the
foreclosure of this Deed of Trust or the delivery of a deed in lieu of
foreclosure, to execute all instruments of assignment, conveyance or further
assurance with respect to the Operational Assets, Fixtures, Leases, Rents,
Deposit Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance and
Condemnation Awards in favor of the grantee of any such deed and as may be
necessary or desirable for such purpose, (c) to prepare, execute and file or
record financing statements, continuation statements, applications for
registration and like papers necessary to create, perfect or preserve
Beneficiary’s security interests and rights in or to any of the Trust Property,
and (d) while any Event of Default exists, to perform any obligation of Grantor
hereunder, however:  (1) Beneficiary
shall not under any circumstances be obligated to perform any obligation of
Grantor; (2) any sums advanced by Beneficiary in such performance shall be
added to and included in the Indebtedness and shall bear interest at the rate
or rates at which interest is then computed on the Indebtedness; (3)
Beneficiary as such attorney-in-fact shall only be accountable for such funds
as are actually received by Beneficiary; and (4) Beneficiary shall not be liable
to Grantor or any other person or entity for any failure to take any action
which it is empowered to take under this Section 9.3.  Notwithstanding the foregoing, Beneficiary
shall be liable for its gross negligence, willful misconduct, and bad faith in connection
with exercising its rights hereunder. 
Regardless of any provision of this Deed of Trust or the Loan Documents,
Beneficiary shall not be considered to have accepted any property other than
cash or immediately available funds in satisfaction of any obligation of
Grantor to Beneficiary unless Beneficiary has given express written notice of

 

23

 

Beneficiary’s election of
that remedy in accordance with NRS 104.9505, as it may be amended or recodified
from time to time.

 

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

 

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

 

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

 

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

 

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

 

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

 

24

 

 

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

 

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

 

Section 9.12                            Beneficiary as Agent; Successor Agents.

 

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

 

Section 9.13                            No Amendments. 
This Deed of Trust shall not be in any way amended or modified unless
such amendment or modification is in writing and signed by Beneficiary.

 

ARTICLE
10

LOCAL LAW PROVISIONS

 

Section 10.1                            Power of Sale.  Should default be made by Grantor in payment
or performance of any Indebtedness or other Obligation or agreement secured
hereby and/or in performance of any agreement herein, or should Grantor otherwise
be in default hereunder, Beneficiary may, subject to NRS 107.080, declare
all sums secured hereby immediately due by delivery to Trustee of a written
notice of breach and election to sell (which notice Trustee shall cause to be
recorded and mailed as required by law) and shall surrender to Trustee this
Deed of Trust.

 

After three (3) months
shall have elapsed following recordation of any such notice of breach, Trustee
shall sell the property subject hereto at such time and at such place in the
State of Nevada as Trustee, in its sole discretion, shall deem best to
accomplish the objects of these trusts, having first given notice of such sale
as then required by law.  In the conduct
of any such sale Trustee may act itself or through any

 

25

 

auctioneer, agent
or attorney.  The place of sale may be
either in the county in which the property to be sold, or any part thereof, is
situated, or at an office of the Trustee located in the State of Nevada.

 

Upon the request of
Beneficiary or if required by law Trustee shall postpone sale of all or any
portion of said property or interest therein by public announcement at the time
fixed by said notice of sale, and shall thereafter postpone said sale from time
to time by public announcement at the time previously appointed.

 

At the time of sale so
fixed, Trustee shall sell the property so advertised or any part thereof or
interest therein either as a whole or in separate parcels, as Beneficiary may
determine in its sole and absolute discretion, to the highest bidder for cash
in lawful money of the United States, payable at the time of sale, and shall
deliver to such purchaser a deed or deeds or other appropriate instruments
conveying the property so sold, but without covenant or warranty, express or
implied.  Beneficiary and Trustee may
bid and purchase at such sale.  To the
extent of the Indebtedness secured hereby, Beneficiary need not bid for cash at
any sale of all or any portion of the Property pursuant hereto, but the amount
of any successful bid by Beneficiary shall be applied in reduction of said
Indebtedness.  Trustor hereby agrees, if
it is then still in possession, to surrender, immediately and without demand,
possession of said property to any purchaser.

 

Trustee shall apply the
proceeds of any such sale to payment of expenses of sale and all charges and
expenses of Trustee and of these trusts, including cost of evidence of title
and Trustee’s fee in connection with sale; all sums expended under the terms hereof,
not then repaid, with accrued interest at the default rate determined by the
Loan Agreement; all other sums then secured hereby, and the remainder, if any,
to the person or persons legally entitled thereto.

 

Beneficiary, from time to
time before Trustee’s sale, may rescind any notice of breach and election to
sell by executing, delivering and causing Trustee to record a written notice of
such rescission.  The exercise by
Beneficiary of such right of rescission shall not constitute a waiver of any
breach or default then existing or subsequently occurring, or impair the right
of Beneficiary to execute and deliver to Trustee, as above provided, other
notices of breach and election to sell, nor otherwise affect any term, covenant
or condition hereof or under any obligation secured hereby, or any of the
rights, obligations or remedies of the parties thereunder.

 

Section 10.2                            Credit Bids.  At any foreclosure sale, any person,
including Grantor, Trustee or Beneficiary, may bid for and acquire the Trust
Property or any part thereof to the extent permitted by then applicable
law.  Instead of paying cash for such
property, Beneficiary may settle for the purchase price by crediting the sales
price of the property against the obligations in the order provided by
NRS 40.462.

 

26

 

 

Section 10.3                            Nevada Law.  Where not inconsistent with the above, the
following covenants, Nos. 1; 2 (full replacement value); 3; 4 (the rate or
rates at which interest is computed upon default of the Indebtedness); 5; 6; 7
(attorneys’ fees as provided herein); 8 and 9 of NRS 107.030 are
hereby adopted and made a part of this Deed of Trust.

 

ARTICLE 11

INTERCREDITOR AGREEMENT

 

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

 

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

 

 

27

 

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

 

	
  GRANTOR:

  	
  GNL, CORP., a Nevada corporation  

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  Joanne Beckett

  	
   

  
	
   

  	
  Name:

  	
  Joanne Beckett

  	
   

  
	
   

  	
  Its:

  	
  Vice President and General Counsel

  	
   

  

 

 

	
  STATE OF NEVADA

  	
  )

  
	
   

  	
  )ss.

  
	
  COUNTY OF CLARK

  	
  )

  

 

 

This instrument was
acknowledged before me on January 13, 2004, by Joanne Beckett as Vice President and General Counsel of GNL,
CORP., a Nevada Corp.

 

 

	
   

  	
  /s/ Regina Giannola
  Comple

  	
   

  
	
   

  	
  Signature of Notarial
  Officer

  

 

 

Exhibit A

 

Legal Description

 

 

PARCEL ONE (1):

 

THAT PORTION OF
GOVERNMENT LOT FOUR (4) OF SECTION 13, TOWNSHIP 32 SOUTH, RANGE 66 EAST,
M.D.M., CLARK COUNTY, NEVADA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

 

COMMENCING AT THE SOUTH
QUARTER CORNER OF SAID SECTION 13, AND PROCEEDING ALONG THE SOUTH LINE THEREOF,
NORTH 89°08’55” EAST, 178.71
FEET TO A POINT ON THE EAST RIGHT OF WAY LINE OF CASINO DRIVE, THE TRUE POINT
OF BEGINNING;

THENCE ALONG SAID RIGHT
OF WAY LINE NORTH 1°02’43” EAST, 419.60
FEET TO THE SOUTHWEST CORNER OF THAT PARCEL OF LAND CONVEYED TO MARIE E.
FOLKNER AND LUCILLE M. EDDY, ET AL, IN BOOK 228, DOCUMENT NO. 185148;

THENCE NORTH 89°26’17”
EAST, 713.7 FEET, MORE OR LESS, TO A POINT ON THE EAST LINE OF GOVERNMENT
LOT 4;

THENCE MEANDERING ALONG
THE EAST LINE OF GOVERNMENT LOT 4, THE ORDINARY HIGH WATER LINE OF THE COLORADO
RIVER, THE FOLLOWING COURSES:

SOUTH 15°14’21”
WEST, 60.74 FEET;

SOUTH 21°29’38”
WEST, 110.75 FEET;

SOUTH 10°15’26”
WEST, 95.14 FEET;

SOUTH 1°02’01”
EAST, 69.14 FEET;

SOUTH 15°59’18”
WEST, 23.69 FEET;

SOUTH 43°03’00”
WEST, 49.31 FEET;

SOUTH 50°22’36”
WEST, 54.71 FEET TO A POINT ON THE SOUTH LINE OF GOVERNMENT LOT 4;

THENCE ALONG SAID LINE
SOUTH 89°08’55” WEST, 566.9
FEET, MORE OR LESS, TO THE POINT OF BEGINNING.

 

 

PARCEL TWO (2):

 

THAT PORTION OF THE SOUTH
HALF (S 1/2) OF SECTION 13, TOWNSHIP 32 SOUTH, RANGE 66 EAST, M.D.M., CLARK
COUNTY, NEVADA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

 

COMMENCING AT THE
SOUTHWEST CORNER OF SAID SECTION 13, AND PROCEEDING ALONG THE SOUTH LINE
THEREOF, NORTH 89°26’11” EAST,
1280.48 FEET TO THE TRUE POINT OF BEGINNING;

THENCE CONTINUING ALONG
SAID SECTION LINE, NORTH 89°26’11”
EAST, 469.00 FEET TO THE SOUTH QUARTER CORNER OF SAID SECTION 13;

THENCE NORTH 89°08’55”
EAST 118.57 FEET TO A POINT ON THE WEST RIGHT OF WAY LINE OF CASINO DRIVE;

THENCE ALONG SAID RIGHT
OF WAY LINE NORTH 1°02’43” EAST 319.94
FEET;

THENCE ALONG THE SOUTH
LINE OF THE NORTH 1000 FEET OF THE SOUTH HALF (S 1/2) OF SECTION 13, SOUTH 89°29’43”
WEST, 587.81 FEET;

THENCE SOUTH 1°00’48”
WEST 321.14 FEET TO THE POINT OF BEGINNING.

 

2

 

PARCEL THREE (3):

 

PARCELS OF LAND SITUATE
WITHIN GOVERNMENT LOT FIVE (5) OF SECTION 24, TOWNSHIP 32 SOUTH, RANGE 66 EAST,
M.D.M., CLARK COUNTY, NEVADA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

 

LOTS TWO (2) AND THREE
(3) AS SHOWN BY MAP THEREOF ON FILE IN FILE 44 OF PARCEL MAPS, PAGE 40, IN THE
OFFICE OF THE COUNTY RECORDER OF CLARK COUNTY, NEVADA.

 

EXCEPT THAT PART OF LOT 2
CONVEYED TO CALIFORNIA HOTEL & CASINO, A NEVADA CORPORATION, BY DEED
RECORDED MARCH 31, 1989 IN BOOK 890331 AS DOCUMENT NO. 01130, AND RE-RECORDED
OCTOBER 16, 1989 IN BOOK 891016 AS DOCUMENT NO. 00330, MORE PARTICULARLY
DESCRIBED AS:

 

BEGINNING AT THE
NORTHWEST CORNER OF SAID SECTION 24;

THENCE ALONG THE NORTH
LINE OF SAID SECTION NORTH 89°26’11”
EAST, 1749.00 FEET TO THE NORTH ONE QUARTER (N 1/4) CORNER OF SAID SECTION 24;

THENCE CONTINUING ALONG
SAID SECTION LINE NORTH 89°08’55”
EAST, 27.26 FEET;

THENCE DEPARTING SAID
NORTH LINE SOUTH 00°33’49” EAST 222.00
FEET TO THE TRUE POINT OF BEGINNING;

THENCE NORTH 89°08’55”
EAST, 104.50 FEET TO A POINT ON THE WEST RIGHT OF WAY LINE OF CASINO DRIVE;

THENCE SOUTH 00°33’49”
EAST, 163.66 FEET;

THENCE SOUTH 89°26’11”
WEST, 104.50 FEET TO A POINT ON THE EAST LINE OF SUNDANCE SHORES UNIT NO. 1;

THENCE ALONG SAID LINE
NORTH 00°33’49” WEST, 163.14
FEET TO THE TRUE POINT OF BEGINNING.

 

3

 

PARCEL FOUR (4):

 

THAT PORTION OF
GOVERNMENT LOTS FIVE (5) AND SIX (6) OF SECTION 24, TOWNSHIP 32 SOUTH, RANGE 66
EAST, M.D.B.&M., CLARK COUNTY, NEVADA, DESCRIBED AS FOLLOWS:

 

THAT PORTION OF PARCEL
FOUR (4) AS SHOWN BY MAP THEREOF IN FILE 44 OF PARCEL MAPS, PAGE 40, IN THE
OFFICE OF THE COUNTY RECORDER, CLARK COUNTY, NEVADA DESCRIBED AS FOLLOWS:

 

BEGINNING AT THE
NORTHWEST CORNER OF SAID SECTION 24; THENCE ALONG THE NORTH LINE OF SAID SECTION
NORTH 89°26’11” EAST,
1749.00 FEET TO THE NORTH QUARTER (N 1/4) CORNER OF SAID SECTION 24; THENCE
DEPARTING SAID NORTH LINE SOUTH 45°13’27” EAST, 272.80
FEET TO THE TRUE POINT OF BEGINNING, SAID POINT ALSO BEING ON THE EAST
RIGHT-OF-WAY LINE OF CASINO DRIVE; THENCE DEPARTING SAID EAST RIGHT-OF-WAY LINE
NORTH 89°08’55” EAST, 487.10 FEET TO A POINT ON THE
ORDINARY HIGHWATER LINE OF THE COLORADO RIVER; THENCE ALONG SAID WATER LINE
SOUTH 18°17’41” WEST, 28.58 FEET; THENCE DEPARTING SAID
WATER LINE SOUTH 89°08’55” WEST, 477.86
FEET TO A POINT ON SAID EAST RIGHT-OF-WAY LINE OF CASINO DRIVE; THENCE ALONG
SAID EAST LINE NORTH 00°33’49” WEST, 27.00
FEET TO THE TRUE POINT OF BEGINNING.

 

EXCEPTING FROM HEREIN
ABOVE DESCRIBED PARCELS 1 TO 4 ANY PORTIONS CONVEYED TO COUNTY OF CLARK, A
POLITICAL SUBDIVISION OF NEVADA, BY QUITCLAIM DEED RECORDED AUGUST 28, 1989 IN
BOOK 890828, PAGE 00519 IN THE OFFICE OF THE COUNTY RECORDER OF CLARK COUNTY,
NEVADA.

 

4

 

ASSESSOR’S
PARCEL NOS:

264-13-801-005

264-13-401-002

 

SEND PROPERTY TAX STATEMENTS TO:

GNLV, CORP.

2300 South Casino Drive

Laughlin, Nevada 89028

 

WHEN
RECORDED MAIL TO:

Paul, Hastings, Janofsky & Walker LLP

515 South Flower Street, 25th Floor

Los Angeles, California 90071

Attention:  John Francis Hilson, Esq.

 

 

DEED
OF TRUST, ASSIGNMENT

OF RENTS AND LEASES, FIXTURE FILING AND SECURITY AGREEMENT

 

by
and from

 

GNL,
CORP., “Grantor”

 

to

 

NEVADA
TITLE COMPANY, “Trustee”

 

for
the benefit of

 

WELLS
FARGO FOOTHILL, INC.,

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

 

Dated
as of January 23, 2004

 

 

 

	
  Municipality:

  	
   

  	
  Laughlin

  
	
  County:

  	
   

  	
  Clark

  
	
  State:

  	
   

  	
  Nevada

  

 

 

This Deed of Trust is to
be filed and indexed in the real estate records and is also to be indexed in
the index of Financing Statements of Clark County, Nevada under the names of
GNL, CORP., a Nevada corporation, as Debtor, and Wells Fargo Foothill, Inc., in
its capacity as arranger, administrative agent and documentation agent, as
secured party.  Borrower’s
organizational number is Nevada file number C4123-1988.  Information concerning the security interest
may be obtained from Beneficiary at the following address:  2450 Colorado Avenue, Suite 3000 West, Santa
Monica, California 90404.

 

This Deed of Trust is to
be governed by the provisions of NRS 106.300 through NRS 106.400
inclusive.  The maximum amount to be
secured by the instrument is $35,000,000. 
Without limiting the foregoing, any and all future advances by Agent or
Lender Group to Borrowers made for the improvement, protection or preservation,
together with interest at the rate applicable to overdue principal set forth in
the Loan Agreement, shall be automatically secured hereby unless such a
document evidencing such advances specifically recites that it is not intended
to be secured hereby, and the payment of all sums expended or advanced by Agent
or Lender Group under or pursuant to the terms hereof or the Loan Agreement or
to protect the security hereof, together with interest thereon as herein
provided (without limiting the generality of the protections afforded by
NRS Chapter 106), and funds disbursed that, in the reasonable
exercise of Beneficiary’s judgment, are needed for improving the Trust Property
or to protect Lender’s security in the Trust Property are to be deemed
obligatory advances hereunder and will be added to the total indebtedness
secured by this Deed of Trust and such indebtedness shall be increased
accordingly.Exhibit 10.19

 

Recording #311481

Book #386

Assigned to Valley Bank #6260

Book #667

 

L E A S E

 

THIS LEASE, made and entered into this 4th
day of September, 1962, by and between the Trustees of FRATERNAL ORDER OF
EAGLES, LAS VEGAS AERIE 1213, hereinafter called “Landlord,” and GOLDEN NUGGET,
INC., a Nevada corporation, hereinafter called “Tenant.”

 

W I T N E S S E T H:

 

That Landlord, for and in consideration of
the rents, covenants and agreements hereinafter mentioned to be paid, kept and
performed by the Tenant, and subject to the reservations and conditions herein
stated, does by these presents lease and let unto Tenant, and Tenant does
hereby lease and take from the Landlord, for the term hereinafter specified and
upon the terms, covenants and conditions, reservations and payments of rental
herein mentioned and contained, certain premises hereinafter more fully
described.

 

1.               PREMISES LEASED.

 

The premises leased hereunder are all of that
certain real property situated in Clark County, Nevada, more particularly
described as follows:

 

Lot 8, in
Block 14 of Clark’s Las Vegas Townsite, City of Las Vegas, County of Clark,
State of Nevada, including any portion of the alley or street that has been or
may be vacated during the term of this lease.

 

2.               TERM.

 

The term of this lease is from August 1, 1962
until midnight August 31, 1975. Extended to 31 August 95 by attached letter.

 

3.                                        OPTIONS.

 

In the event Tenant shall well and faithfully complete all the
covenants and conditions herein contained, the Tenant may, at its option,
extend the term of said lease for an

 

1

 

 

 

additional period of ten (10) years upon the
same terms and conditions as herein provided; provided, however, that in the
event the Tenant shall desire to exercise the option, it shall notify Landlord
not less than ninety (90) days before the expiration of the term of this lease
by notifying Landlord in writing of its intention to exercise said option.  In addition to the option herein provided to
extend, Tenant may at its option, provided it shall well and faithfully
complete the covenants and conditions herein contained, extend the term of this
lease for additional periods of five (5) years after the expiration of the term
herein upon giving the same notice upon the same terms and conditions as are
therein provided, for additional periods of five (5) years up to and including
August 31, 2025.

 

4.               LEGAL PROHIBITION OF GAMBLING.

 

That from and after September 1, 1975, in
case the Legislature of the State of Nevada, City of Las Vegas, Nevada or other
legal authority shall pass an Act, Ordinance, Law, Rule or Regulation
prohibiting gambling in said premises in the manner in which same is now
conducted, then in such event, Tenant shall have the right to terminate this
lease by giving to Landlord thirty (30) days’ written notice of its intention
so to terminate, and in the event of such termination, shall forfeit any
advance rentals paid.  This paragraph
shall be of no force and effect until September 1, 1975.

 

5.               BASIC RENTAL.

 

Tenant shall pay as basic rental the sum of
Three Hundred Forty-Five Thousand Four Hundred Dollars ($345,000.00), 

2

 

payable in monthly installments of Two
Thousand Two Hundred Dollars ($2,200.00) per month, commencing August 1, 1962
and ending on August 31, 1975.  Ten (10)
days’ grace shall be allowed for the payment of each installment of rent so as
to allow for Sundays, holidays and oversights.

 

5a.  ADVANCE
RENT.

 

Landlord acknowledges receipt of the sum of
Five Thousand Dollars ($5,000.00) as and for advance rent.  Said Five Thousand Dollars ($5,000.00) shall
apply on the last rent due Landlord under this lease.  If Tenant exercises its option or options to extend the term of
this lease, then the said advance rent shall apply on the last rent due for the
last option period exercised.

 

6.               ADDITIONAL RENTAL.

 

In addition to the rent above specified,
Tenant covenants and agrees to pay Landlord monthly in advance on the first day
of each and every month, beginning with the rent commencing on the 1st day of
August, 1963, additional rent which shall be determined as follows:  Using as a base the Consumer Price Index for
July, 1962 (the all-items index for the United States City Average Index) as
calculated by the United States Department of Labor’s Bureau of Labor
Statistics (the all-items index for the United States City Average Index) for
the July period of the preceding rent year, the percent change in the price
index to the preceding rent year from July, 1962, shall be computed by
obtaining the ratio between the July, 1962, price index and the aforesaid price
index for July of the preceding rent year (making appropriate adjustments, if
needed, for any subsequent

 

3

 

changes in index measurement or base period
reference) and the percent change in the price index shall be applied to the
monthly basic rental for the current annual rental.  The resultant dollar amount shall constitute the additional
monthly rental for each month of the current annual rental, it being understood
and agreed that at no time shall the monthly rental be less than $2,200.00,
although as a result of the Consumer Price Index as is herein set forth, the
rentals may fluctuate either upward or downward.

 

For the purpose of illustrating the manner in
which the additional rent is to be computed, the following example is submitted
and it is agreed that the method used in the example with be used by the
parties hereto.

 

	
  Examine the following facts:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consumer Price Index for July, 1962,

  	
   

  	
   

  	
   

  	
   

  
	
  (the all-items index for the U.S.

  	
   

  	
   

  	
   

  	
   

  
	
  City Average Index)

  	
   

  	
  =

  	
   

  	
  100

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consumer Pride Index for July, 1963,

  	
   

  	
   

  	
   

  	
   

  
	
  (the all-items index for the U.S.

  	
   

  	
   

  	
   

  	
   

  
	
  City Average Index)

  	
   

  	
  =

  	
   

  	
  102

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consumer Price Index for July, 1964,

  	
   

  	
   

  	
   

  	
   

  
	
  (the all-items index for the U.S.

  	
   

  	
   

  	
   

  	
   

  
	
  City Average Index)

  	
   

  	
  =

  	
   

  	
  101

  

 

Additional rent from August 1, 1963, through
July 31, 1964, would be $44.00 per month, which is 2% of $2,200.00.

 

Additional rent from August 1, 1964, through
July 31, 1965, would be $22.00 per month, which is 1% of $2,200.00.

 

Throughout the term of this lease, Landlord
shall give written notice to Tenant of such additional rental as shall be
determined to be due for the current annual rental on or before the 10th day of
the third month of the current annual rental, or within sixty (60) days of
public release of said 

4

 

Consumer Price Index by the United States
Department of Labor for the last month of July of the preceding annual rental,
whichever is later, and said notice shall set forth the Consumer Price Index
(the all-items index for the United States City Average) as published by the
Department for July preceding the termination of the current annual rental
period and shall show computation of additional rental. Should Landlord give
such notice within the time specified but after the due date for payment of
additional rent for any month of the current rent year.  Tenant shall on the due date for the next
monthly rental payment pay the additional monthly rental for the passed months
of the current annual rental, as well as the basic and additional rental for
the current month.

 

Failure by Landlord to give the aforesaid
written notice within the time specified within any rent year shall not work a
forfeiture and loss of additional monthly rental within the annual rental year
for the months which shall have passed before the aforesaid written notice is
given or for the remaining months of the current annual rental.

 

Errors in reporting said price indices or in
computation of additional rental shall be subject to correction within the
current annual rental to which the same apply, without prejudice to Landlord’s
right to collect or Tenant’s duty to pay the same as corrected and with
adjustments for the entire 12 months of the current annual rental period, and
unless notice thereof be given before the end of the current annual rental,
neither party is required to make any such 

 

 

5

 

corrections or adjustments for said year
thereafter.

 

In the event the Department of Labor ceases
to publish the same or substantially the same aforesaid price index during the
basic or option terms of this lease, then and in such event only, the
adjustment of rentals therein provided shall be made on the basis of such other
comparable index of consumer retail prices as shall be then published by the
United States Government or, if there be none, by the comparable index published
by Standard & Poor’s.

 

In the event none of the foregoing indices
are published, and unless the parties shall themselves be in agreement as to
the amount of said adjustment and additional rental for the current annual
rental, it is agreed that said matter be submitted to three arbitrators.  The Landlord shall choose one of such
arbitrators, the Tenant another, and the two so chosen shall together choose a
third.  The decision of the majority of
the arbitrators shall be binding upon the parties hereto.

 

7.               TAXES AND ASSESSMENTS.

 

In addition to the cash rental, Tenant agrees
to pay upon presentation of written statements therefor all City, County and
State property taxes and assessments assessed against the above-described
property, it being understood and agreed that during the fractional years this
lease is in effect, the taxes for such years shall be prorated for the months
of occupancy by Tenant.  The provisions
of this paragraph as to proration of rent shall not be applicable to the first
year of this lease, and all such taxes and assessments shall be paid by Tenant.

 

 

6

 

8.               DAMAGE BY FIRE OR THE ELEMENTS.

 

In the event all or a portion of said leased
premises are destroyed by fire or the elements, Tenant shall repair said
damages as expeditiously as possible, but in any event, Tenant shall commence
said repairs prior to ninety (90) days from the date of such damage.

 

8a.  PROPORTIONATE
PAYMENT OF RENT.

 

In the event only a portion of said premises
be rendered untenable by virtue of fire or other damage by the elements, the
Tenant shall pay rent in proportion to the amount of space remaining tenable;
provided, however, full monthly installments of rent shall resume no later than
ninety (90) days after the date that the premises were first damaged or
destroyed by fire or the elements.

 

9.               REPAIRS.

 

During the term of this lease Tenant shall
keep said premises in thorough repair and shall surrender them at the
expiration of this lease in as good a condition as they were when leased,
reasonable wear and tear excepted, and it is further agreed at the termination
of this lease that Tenant will replace any of the concrete walls removed by
Tenant on said premises.  Tenant shall
not make or suffer any waste on the leased premises.

 

10.         ALTERATIONS.

 

Tenant shall have the right to make
alterations in and about the premises.

 

11.         LIENS.

 

Tenant agrees to at all times save and keep
the Landlord and the demised premises free and harmless of and from 

7

 

all liability on account of or in respect to
any mechanics’ lien or liens in the nature thereof for work and labor done or
materials furnished at the instance and request of the Tenant in, on, and about
the demised premises; provided, however, that the Tenant shall have the right
to contest the claim of such lien, in which event the Tenant shall, at its
expense, furnish to the Landlord a sufficient surety bond executed by a
reputable and responsible surety company in the amount of such claim of such
lien conditioned upon the diligent prosecution of such defense and to hold the
Landlord free and clear of all loss, costs, damages and expenses of every kind
and nature arising either directly or indirectly out of the said contest, and
pay any judgment that may be obtained forthwith upon the same being entered.

 

Tenant shall give Landlord written notice of any proposed major
improvements to enable Landlord to have reasonable time to post Notice of
Non-Responsibility, and Landlord may enter the premises for such purposes.

 

12.         HOLD HARMLESS.

 

Tenant covenants and agrees to save and hold
the Landlord harmless from any and all claims of any kind whatsoever arising
out of this lease or property or the use of the leased premises during the term
hereof, and specifically covenants and agrees to defend at Tenant’s sole cost
and expense any suits brought against the Landlord involving the use of the
leased premises, except only any claims or suits involving the Landlord’s fee
title to the leased premises.

 

13.         BANKRUPTCY, INSOLVENCY, ETC.

 

In the event Tenant shall at any time during
the term 

 

8

 

hereof become insolvent or be adjudicated a
bankrupt, or assign over all of its estate or effects for the payment of its
debts, or file a voluntary petition under Chapter X or XI of the National
Bankruptcy Act, or under any similar or substituted provision of said Act which
may be hereafter adopted, or in the event any execution or attachment shall issue
against Tenant or any of the effects of Tenant and remain in force for a period
of more than thirty (30) days, a receiver or trustee be appointed over the
business, property or assets of Tenant, whereupon a public officer or agent
shall be placed in charge of the demised premises, or any part or portion
thereof, and shall so remain in charge for a period of thirty (30) days, or
this lease shall, by operation of law, devolve upon or pass to any person or
persons other than the personal representative or distributee of a deceased
individual Tenant, then in any or either of such events, Landlord may at its
option terminate this lease and the same shall become null and void and
thereafter of no effect whatsoever.

 

14.                                  REMEDY
UPON DEFAULT.

 

It is further understood and agreed by and
between the parties hereto that in case the Tenant shall fail to pay said rent
or any installment thereof at the times and in the amount and manner as
hereinbefore mentioned when the same becomes due, or should it fail to keep or
perform any of the covenants, agreements or conditions herein contained after
Landlord shall have given Tenant thirty (30) days’ written notice of the
failure to perform under any covenant, agreement or condition hereunder, on
Tenant’s part to be kept 

 

9

 

or performed, then and in
either of said events, the said Landlord, or its assigns, may at its option
declare this lease forfeited and of no force and effect and may thereupon enter
the said leased premises, using all necessary force so to do, and take
possession thereof by action of forcible entry, or unlawful detainer, or use
any and all of said remedies, or may enforce a cancellation of this lease.

 

15.         SURRENDER OF POSSESSION.

 

At the end or earlier termination of the
lease term, or on the breach of any covenant or condition herein contained,
Tenant shall surrender immediately possession of the leased premises and all
buildings and improvements then on the same to Landlord.  If possession be not immediately surrendered,
Landlord, with or without process of law, may forthwith re-enter said premises
and repossess the same or any part thereof in the name of the whole or expel
and remove therefrom, using such force as may be necessary, all persons and
property except as provided for in this lease, without being deemed guilty of
any unlawful act and without prejudice to any other legal remedy available to
Landlord.

 

In such event, Landlord may relet the same as
agent for Tenant, and Tenant shall remain liable for all damages which Landlord
may sustain.

 

16.         WAIVER.

 

The waiver of either party of any of the
covenants herein contained shall not be deemed a waiver of such party’s right
to enforce the same as to other covenants. 
The rights and remedies given to the parties hereunder shall be in
addition to and not in lieu of any right or remedy provided by law.

 

 

10

17.         ATTORNEY’S FEES.

 

In the event any suit is brought by either
party against the other to enforce any of the terms or provisions of this
lease, or to collect any sum alleged to be due hereunder, or in the event that
Landlord shall institute a suit for an unlawful detainer of said premises, then
it is agreed that the successful party in such suit shall be entitled to
attorney’s fees in a reasonable amount to be fixed by the court and included in
any judgment in such action, as well as reasonable attorney’s fees in the event
of an appeal.

 

18.         CORPORATE RESOLUTION.

 

Tenant agrees to furnish Landlord with a
certified copy of a resolution of its Board of Directors authorizing the
President or Vice President and Secretary of Tenant corporation to execute this
lease, or ratifying its execution.

 

19.         DEFECTIVE CONDITION.

 

The Landlord shall not be liable to the
Tenant or to any of its employees, directors or stockholders, or to any other
person whomsoever, in any manner or to any extent whatsoever for injury that
may result to person or property by reason of any defect in the construction or
condition of the premises hereby demised, or from any other cause whatsoever.

 

20.         TIME.

 

Time is of the essence of each and all the
terms and conditions herein contained.

 

21.         CAPTIONS.

 

The captions are inserted only as a matter of
convenience and for reference and in no way define, limit or describe the

 

11

 scope of this lease nor the intent of any
provision thereof.

 

22.         INSURANCE.

 

Tenant covenants and agrees to maintain or
cause to be maintained at all times during the terms of this lease public
liability insurance in responsible insurance companies doing business in
Nevada, under which Landlord shall be one of the insureds, properly protecting
and indemnifying Landlord in an amount not less than $300,000.00 for injury to
any one person (including death), not less than $500,000.00 for personal
injuries in any one accident.  Tenant
shall furnish the Landlord with a certificate or certificates of such insurance
so maintained or cause to be maintained by Tenant.

 

Tenant further covenants and agrees to
maintain or cause to be maintained at all times during the term of this lease,
fire or extended coverage insurance to the extent of at least 80 per cent of
the cost of replacement of the improvements on the leased premises or 80 per cent
of the appraised value of the improvements on said leased premises whichever is
the greater.

 

23.         USE.

 

That Tenant will not use said premises or any
part thereof for any unlawful purpose whatever and will not conduct thereon, or
permit to be conducted thereon, any unlawful occupation or business, and will,
at all times in the use of said premises, comply with all City, County, State
and Federal laws, ordinances, rules and regulations.

 

24.         INSPECTION.

 

That Landlord, or its Trustees, or agent or
agents, may at any time during ordinary business hours, enter upon 

 

 

12

 

the premises leased, or any part thereof, for
the purpose of inspection.

 

25.         UTILITIES.

 

That Tenant shall promptly pay, when due, all
sewer, light, water, power, heat and other utilities used by it upon the
premises hereby leased.

 

26.         ASSIGNMENT.

 

That Tenant may assign or sublease this lease
or possession of the premises hereby leased, subject to all the terms and
conditions of this lease, but in the event of such assignment or sublease,
Tenant shall not be relieved of its obligations hereunder.

 

27.         BINDING EFFECT.

 

That this lease shall be binding upon the
lawful assigned representatives and successors in interest of the respective
parties hereto.

 

28.         PAYMENT OF RENT, NOTIFICATION OF SALE OR
HYPOTHECATION.

 

The Tenant shall pay the rent above specified
to Landlord by mailing a check therefor to the Landlord’s order at the Bank of
Las Vegas [Valley Bank], or such other place as Landlord may from time to time
direct.  The Landlord shall immediately
notify Tenant of any sale or transfer of title or legal or equitable ownership
of the premises or any hypothecation of the premises or rentals that may be due
or that may hereafter become due to Tenant.

 

29.         NOTICES.

 

Any notices to be given to the parties may be
delivered in person or may be sent by registered or certified mail, 

13

 

addressed to the parties as follows:

 

	
  If to Landlord:

  	
   

  	
  Fraternal Order of Eagles

  
	
   

  	
   

  	
  Washington and Bruce Streets

  
	
   

  	
   

  	
  Las Vegas, Nevada

  
	
   

  	
   

  	
   

  
	
  If to Tenant:

  	
   

  	
  Golden Nugget, Inc.

  
	
   

  	
   

  	
  P. O. Box 671

  
	
   

  	
   

  	
  Las Vegas, Nevada

  

 

or to such other place as the parties may from time to time direct in
writing.

 

30.         TERMINATION OF OLD LEASE.

 

The parties hereto presently have a lease on the
above-described premises, and as soon as this lease becomes effective, it shall
replace the existing lease upon the said premises.

 

IN WITNESS WHEREOF, the parties hereto have
by their proper officers, duly authorized, caused these presents to be executed
the day and year first above written.

 

	
  GOLDEN NUGGET, INC.

  	
   

  	
  FRATERNAL ORDER OF EAGLES

  LAS VEGAS AERIE 1213

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  /s/ G. C. Blaine

  	
   

  	
  By

  	
  /s/ Chester Cobain

  	
   

  
	
   

  	
  President

  	
   

  	
   

  	
   

  	
  Trustee

  	
   

  
	
   

  	
  (Corporate Seal)

  	
   

  	
  By

  	
  /s/ C. W. Alpin

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Trustee

  	
   

  
	
  By

  	
  /s/ A. W. Ham

  	
   

  	
  By

  	
  /s/ Samuel Griffin

  	
   

  	
   

  
	
   

  	
  Secretary

  	
   

  	
   

  	
   

  	
  Trustee

  	
   

  
	
   

  	
  “Tenant”

  	
   

  	
  By

  	
  /s/ Jerry Berry

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
  /s/ W. Kelsey

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Trustee

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Trustee

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  “Landlord”

  

 

14

 

	
  STATE OF NEVADA

  	
  )

  
	
   

  	
  )  SS:

  
	
  COUNTY OF CLARK

  	
  )

  

 

On this 4th Day of September, 1962, before
me, the undersigned Notary Public in and for said County and State, personally
appeared
                               ,
Chester Cobain, C. W. Alpin, Samuel Griffin, Jerry L. Berry, W. A.  Kelsey,
                                 ,
                                ,
and
                                 ,
known to me to be the Board of Trustees of the FRATERNAL ORDER OF EAGLES, LAS
VEGAS AERIE 1213, that executed the foregoing instrument, and upon oath did
depose that they are the Trustees of said FRATERNAL ORDER OF EAGLES as above
designated; that they are acquainted with the seal of said corporation and that
the seal affixed to said instrument is the corporate seal of said corporation
as indicated after said signatures; and that the said corporation executed the
said instrument freely and voluntarily and for the uses and purposes therein
mentioned.

 

WITNESS My hand and official seal.

 

	
   

  	
  /s/ Frances Eleanor Ellis

  
	
   

  	
  Notary Public in and for said

  County and State

  
	
   

  	
   

  
	
   

  	
  My Commission Expires:

  
	
   

  	
  June 23, 1963

  

 

	
  STATE OF NEVADA

  	
  )

  
	
   

  	
  )  SS:

  
	
  COUNTY OF CLARK

  	
  )

  

 

On this 12th day of September, 1962, before
me, the undersigned Notary Public in and for said County and State, personally
appeared G. C. Blaine and A. W. Ham, known to me to be the President and
Secretary, respectively of GOLDEN NUGGET, INC., the corporation that executed
the foregoing instrument, and upon oath did depose that they are the

 

15

 

officers of said corporation as above designated; that they are acquainted
with the seal of said corporation and that the seal affixed to said instrument
is the corporate seal of said corporation; that the signatures to said
instrument were made by the officers of said corporation as indicated after
said signatures; and that the said corporation executed the said instrument
freely and voluntarily and for the uses and purposes therein mentioned.

 

	
   

  	
  /s/ Charles J. Hirsch

  
	
   

  	
  Notary Public in and for said

  
	
   

  	
  County and State

  
	
   

  	
   

  
	
  (Notarial Seal)

  	
   

  
	
   

  	
   

  
	
   

  	
  My Commission Expires:

  

 

16

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