Document:

Exhibit
10.1

 

CREDIT AGREEMENT

DATED AS OF APRIL 20, 2007

by and among

NORTH
METRO HARNESS INITIATIVE, LLC

as Borrower

and

THE
OTHER PERSONS PARTY HERETO THAT

ARE DESIGNATED AS LOAN PARTIES

and

BLACK
DIAMOND COMMERCIAL FINANCE, L.L.C.

as Agent, Lead Arranger and a Lender

and

THE
OTHER FINANCIAL INSTITUTIONS PARTY HERETO

as Lenders

 

TABLE OF
CONTENTS

	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1. DEFINITIONS

  	
  1

  
	
   

  	
   

  
	
  1.1

  	
  Definitions

  	
  1

  
	
  1.2

  	
  Rules of Construction

  	
  28

  
	
   

  	
   

  	
   

  
	
  SECTION 2. AMOUNTS AND TERMS OF LOANS; project
  funding

  	
  29

  
	
   

  	
   

  
	
  2.1

  	
  Term Loan; Project Funding

  	
  29

  
	
  2.2

  	
  Interest and Applicable Margins

  	
  38

  
	
  2.3

  	
  Fees

  	
  40

  
	
  2.4

  	
  Payments

  	
  41

  
	
  2.5

  	
  Prepayments

  	
  41

  
	
  2.6

  	
  Maturity

  	
  42

  
	
  2.7

  	
  Loan Accounts

  	
  42

  
	
  2.8

  	
  Yield Protection

  	
  43

  
	
  2.9

  	
  Taxes

  	
  44

  
	
   

  	
   

  	
   

  
	
  SECTION 3. CONDITIONS TO LOANS

  	
  46

  
	
   

  	
   

  
	
  3.1

  	
  Conditions to Initial Advance

  	
  46

  
	
  3.2

  	
  Conditions to Advances

  	
  48

  
	
  3.3

  	
  Conditions to Final Advance

  	
  50

  
	
   

  	
   

  	
   

  
	
  SECTION 4. REPRESENTATIONS AND WARRANTIES

  	
  51

  
	
   

  	
   

  
	
  4.1

  	
  Organization, Powers, Capitalization and Good
  Standing

  	
  51

  
	
  4.2

  	
  Disclosure

  	
  51

  
	
  4.3

  	
  No Material Adverse Effect

  	
  52

  
	
  4.4

  	
  No Conflict

  	
  52

  
	
  4.5

  	
  Financial Statements and Projections

  	
  52

  
	
  4.6

  	
  Solvency

  	
  52

  
	
  4.7

  	
  Use of Proceeds; Margin Regulations

  	
  52

  
	
  4.8

  	
  Brokers

  	
  53

  
	
  4.9

  	
  Compliance with Laws

  	
  53

  
	
  4.10

  	
  Intellectual Property

  	
  53

  
	
  4.11

  	
  Investigations, Audits, Etc

  	
  53

  
	
  4.12

  	
  Employee Matters

  	
  53

  
	
  4.13

  	
  Litigation; Adverse Facts

  	
  53

  
	
  4.14

  	
  Ownership of Property; Liens

  	
  54

  
	
  4.15

  	
  Environmental Matters

  	
  54

  
	
  4.16

  	
  ERISA

  	
  54

  
	
  4.17

  	
  Deposit and Disbursement Accounts

  	
  55

  

 

 i
 

 

	
  4.18

  	
  Agreements and Other Documents

  	
  55

  
	
  4.19

  	
  Insurance

  	
  55

  
	
  4.20

  	
  Taxes and Tax Returns

  	
  55

  
	
  4.21

  	
  Project Construction.

  	
  56

  
	
  4.22

  	
  Certificate of Occupancy; Licenses

  	
  57

  
	
   

  	
   

  	
   

  
	
  SECTION 5. AFFIRMATIVE COVENANTS

  	
  58

  
	
   

  	
   

  
	
  5.1

  	
  Compliance With Laws and Contractual Obligations

  	
  58

  
	
  5.2

  	
  Insurance

  	
  58

  
	
  5.3

  	
  Inspection; Consultants; Lender Meeting

  	
  59

  
	
  5.4

  	
  Organizational Existence

  	
  59

  
	
  5.5

  	
  Environmental Matters

  	
  59

  
	
  5.6

  	
  Landlords’ Agreements, Mortgagee Agreements, Bailee
  Letters and Real Estate Purchases

  	
  60

  
	
  5.7

  	
  Further Assurances

  	
  60

  
	
  5.8

  	
  Payment of Taxes

  	
  60

  
	
  5.9

  	
  Cash Management Systems

  	
  61

  
	
  5.10

  	
  Project Construction

  	
  61

  
	
  5.11

  	
  Shortfalls

  	
  64

  
	
  5.12

  	
  Maintenance of Assets.

  	
  64

  
	
   

  	
   

  	
   

  
	
  SECTION 6. NEGATIVE COVENANTS

  	
  65

  
	
   

  	
   

  
	
  6.1

  	
  Indebtedness

  	
  65

  
	
  6.2

  	
  Liens and Related Matters

  	
  65

  
	
  6.3

  	
  Investments

  	
  66

  
	
  6.4

  	
  Contingent Obligations

  	
  66

  
	
  6.5

  	
  Restricted Payments

  	
  67

  
	
  6.6

  	
  Restriction on Fundamental Changes

  	
  67

  
	
  6.7

  	
  Disposal of Assets or Subsidiary Stock

  	
  67

  
	
  6.8

  	
  Transactions with Affiliates

  	
  68

  
	
  6.9

  	
  Conduct of Business; Use of Property

  	
  68

  
	
  6.10

  	
  Fiscal Year

  	
  68

  
	
  6.11

  	
  Press Release; Public Offering Materials

  	
  68

  
	
  6.12

  	
  Subsidiaries

  	
  69

  
	
  6.13

  	
  Deposit Accounts

  	
  69

  
	
  6.14

  	
  ERISA

  	
  69

  
	
  6.15

  	
  Sale-Leasebacks

  	
  69

  
	
   

  	
   

  	
   

  
	
  SECTION 7. FINANCIAL COVENANTS/REPORTING

  	
  69

  
	
   

  	
   

  
	
  7.1

  	
  Financial Covenants

  	
  69

  
	
  7.2

  	
  Financial Statements and Other Reports

  	
  71

  
	
  7.3

  	
  Accounting Terms; Utilization of GAAP for Purposes
  of Calculations Under Agreement

  	
  74

  

 

 ii
 

 

	
  SECTION 8. DEFAULT, RIGHTS
  AND REMEDIES

  	
  74

  
	
   

  	
   

  
	
  8.1

  	
  Event of Default

  	
  74

  
	
  8.2

  	
  Suspension or Termination of Term Loan Commitment

  	
  76

  
	
  8.3

  	
  Acceleration and other Remedies

  	
  76

  
	
  8.4

  	
  Construction Related Remedies

  	
  77

  
	
  8.5

  	
  Performance by Agent

  	
  78

  
	
  8.6

  	
  Application of Proceeds

  	
  78

  
	
   

  	
   

  	
   

  
	
  SECTION 9. ASSIGNMENT AND PARTICIPATION

  	
  79

  
	
   

  	
   

  
	
  9.1

  	
  Assignment and Participations

  	
  79

  
	
  9.2

  	
  Agent

  	
  80

  
	
  9.3

  	
  Set Off and Sharing of Payments

  	
  85

  
	
  9.4

  	
  Disbursement of Funds

  	
  85

  
	
  9.5

  	
  Disbursements of Advances; Payment

  	
  86

  
	
   

  	
   

  	
   

  
	
  SECTION 10. MISCELLANEOUS

  	
  87

  
	
   

  	
   

  
	
  10.1

  	
  Indemnities

  	
  87

  
	
  10.2

  	
  Amendments and Waivers

  	
  87

  
	
  10.3

  	
  Notices

  	
  88

  
	
  10.4

  	
  Failure or Indulgence Not Waiver; Remedies
  Cumulative

  	
  89

  
	
  10.5

  	
  Marshaling; Payments Set Aside

  	
  89

  
	
  10.6

  	
  Severability

  	
  89

  
	
  10.7

  	
  Lenders’ Obligations Several; Independent Nature of
  Lenders’ Rights

  	
  89

  
	
  10.8

  	
  Headings

  	
  90

  
	
  10.9

  	
  Applicable Law

  	
  90

  
	
  10.10

  	
  Successors and Assigns

  	
  90

  
	
  10.11

  	
  No Fiduciary Relationship; Limited Liability;
  Retention of Construction Consultant

  	
  90

  
	
  10.12

  	
  Subrogation Rights of Agent and Lenders

  	
  91

  
	
  10.13

  	
  Construction

  	
  91

  
	
  10.14

  	
  Confidentiality

  	
  91

  
	
  10.15

  	
  CONSENT TO JURISDICTION

  	
  91

  
	
  10.16

  	
  WAIVER OF JURY TRIAL

  	
  92

  
	
  10.17

  	
  Survival of Warranties and Certain Agreements

  	
  92

  
	
  10.18

  	
  Entire Agreement

  	
  92

  
	
  10.19

  	
  Counterparts; Effectiveness

  	
  92

  
	
  10.20

  	
  Replacement of Lenders

  	
  92

  
	
  10.21

  	
  Delivery of Termination Statements and Mortgage
  Releases

  	
  94

  
	
  10.22

  	
  Subordination of Intercompany Debt

  	
  94

  

 

 iii
 

INDEX OF
APPENDICES

Annexes

	
  Annex A

  	
  -

  	
  Pro Rata Shares and Term Loan Commitment Amounts

  
	
  Annex B

  	
  -

  	
  Closing Checklist

  
	
  Annex C

  	
  -

  	
  Pro Forma

  
	
  Annex D

  	
  -

  	
  Lenders’ Bank Accounts

  
	
  Annex E

  	
  -

  	
  Compliance and Excess Cash Flow Certificate

  

 

Exhibits

	
  Exhibit 1.1(a)

  	
  -

  	
  Form of Architect Consent

  
	
  Exhibit 1.1(c)

  	
  -

  	
  Form of Borrower Final Completion Certificate

  
	
  Exhibit 1.1(e)

  	
  -

  	
  Form of Developer Consultant Consent

  
	
  Exhibit 1.1(f)

  	
  -

  	
  Form of Engineer Consent

  
	
  Exhibit 1.1(g)

  	
  -

  	
  Form of General Contractor Consent

  
	
  Exhibit 1.1(h)

  	
  -

  	
  Form of Major Trade Contractor Consent

  
	
  Exhibit 2.1(a)

  	
  -

  	
  Form of Term Notes

  
	
  Exhibit 2.1(b)

  	
  -

  	
  Form of Advance Request

  
	
  Exhibit 2.1(b)(ii)

  	
  -

  	
  Form of Borrower Advance Certification

  
	
  Exhibit 2.1(b)(iii)

  	
  -

  	
  Form of Trade Contractor Payment Receipt

  
	
  Exhibit 2.2(e)

  	
  -

  	
  Notice of Continuation/Conversion

  
	
  Exhibit 3.2(e)

  	
  -

  	
  Form of Interim Lien Waiver from Trade Contractors

  
	
  Exhibit 3.3(a)

  	
  -

  	
  Form of Final Lien Waiver from Trade Contractors

  
	
  Exhibit 9.1

  	
  -

  	
  Assignment Agreement

  

 

Schedules

	
  Schedule 1.1

  	
  -

  	
  Plans and Specifications

  
	
  Schedule 4.1(a)

  	
  -

  	
  Jurisdictions of Organization and Qualifications

  
	
  Schedule 4.1(b)

  	
  -

  	
  Capitalization

  
	
  Schedule 4.7

  	
  -

  	
  Use of Proceeds

  
	
  Schedule 4.8

  	
  -

  	
  Brokers

  
	
  Schedule 4.10

  	
  -

  	
  Intellectual Property

  
	
  Schedule 4.11

  	
  -

  	
  Investigations and Audits

  
	
  Schedule 4.12

  	
  -

  	
  Employee Matters

  
	
  Schedule 4.13

  	
  -

  	
  Litigation

  
	
  Schedule 4.14

  	
  -

  	
  Real Estate

  
	
  Schedule 4.15

  	
  -

  	
  Environmental Matters

  
	
  Schedule 4.16

  	
  -

  	
  ERISA

  
	
  Schedule 4.17

  	
  -

  	
  Deposit and Disbursement Accounts

  
	
  Schedule 4.18

  	
  -

  	
  Agreements and Other Documents

  
	
  Schedule 4.19

  	
  -

  	
  Insurance

  
	
  Schedule 4.21(k)

  	
  -

  	
  Other Land

  
	
  Schedule 6.1

  	
  -

  	
  Indebtedness

  
	
  Schedule 6.2

  	
  -

  	
  Liens

  
	
  Schedule 6.3

  	
  -

  	
  Investments

  
	
  Schedule 6.4

  	
  -

  	
  Contingent Obligations

  
	
  Schedule 6.7

  	
  -

  	
  Asset Dispositions

  
	
  Schedule 6.8

  	
  -

  	
  Affiliate Transactions

  

 

 iv

CREDIT AGREEMENT

This CREDIT AGREEMENT is
dated as of April 20, 2007 and entered into by and among NORTH METRO HARNESS
INITIATIVE, LLC, a Minnesota limited liability company (“Borrower”), the
other persons designated as “Loan Parties”,  the financial
institutions who are or hereafter become parties to this Agreement as Lenders,
and BLACK DIAMOND COMMERCIAL FINANCE, L.L.C., a Delaware limited liability
company (in its individual capacity, “BDCF”), as Agent and a Lender.

R
E  C  I  T  A  L  S:

WHEREAS, Borrower desires
that Lenders extend term credit facility  to Borrower to
fund the construction and completion of the Project (as hereinafter defined)
and related costs and expenses; and

WHEREAS, Borrower desires to
secure all of its Obligations (as hereinafter defined) under the Loan Documents
(as hereinafter defined) by granting to Agent, for the benefit of Agent and
Lenders, a security interest in and lien upon substantially all  of its personal and real property; and

WHEREAS, each of
MTR-Harness, Inc. (“MTR”) and Southwest Casino and Hotel Corp. (“SCC”)
(MTR and SCC are sometimes collectively referred to herein as the “Sponsors”
and individually as a “Sponsor”) collectively own all the Stock of
Borrower and are each willing to pledge to Agent, for the benefit of Agent and
Lenders, all of the Stock of Borrower held by such Sponsor to secure the
Obligations; and

WHEREAS, each of Borrower’s
Domestic Subsidiaries is willing to guaranty all of the Obligations of Borrower
and to grant to Agent, for the benefit of Agent and Lenders, a security
interest in and lien upon substantially all of its personal and real property
to secure the Obligations; and

NOW, THEREFORE, in
consideration of the premises and the agreements, provisions and covenants
herein contained, Borrower, Loan Parties, Lenders and Agent agree as follows:

SECTION 1.

DEFINITIONS

1.1           Definitions. 
Capitalized terms used in the Loan Documents shall have the following
respective meanings:

Account Debtor means any Person who may become obligated to
any Loan Party under, with respect to, or on account of, an Account, Chattel
Paper or General Intangibles (including a payment intangible).

Accounting Changes means: 
(a) changes in accounting principles required by GAAP and
implemented by Borrower; (b) changes in accounting principles recommended
by Borrower’s certified public accountants and implemented by Borrower; and
(c) changes in carrying value of Borrower’s or any of its Subsidiaries’
assets, liabilities or equity accounts resulting from (i) the application
of purchase accounting principles (A.P.B. 16 and/or 17, FASB 141 and EITF 88-16
and FASB 109) to the Related Transactions or (ii) as the result of
any other adjustments that, in each case, were applicable to, but not included
in, the Pro Forma.

Accounts means all “accounts,” as such term is
defined in the Code, now owned or hereafter acquired by any Loan Party.

Additional Land shall mean, with respect to the Project
Land, all additional lands, estates and development rights hereafter acquired
by Borrower for use in connection with Project Land owned by Borrower and the
development of the Property and all additional lands and estates therein which
may, from time to time, by supplemental mortgage or otherwise, be expressly
made subject to the lien of the applicable Mortgage.

Advance has the meaning ascribed to in Section
2.1(a).

Advance Deposit has the meaning ascribed to in Section
2.1(b)(i).

Advance Period has the meaning ascribed to it in Section
2.1(b)(v).

Advance Period Date has the meaning ascribed to in Section
2.1(b)(v).

Advance Request means, with respect to each Advance, a
request for such Advance made by Borrower pursuant to Section 2.1(b),
substantially in the form attached as Exhibit 2.1(b), together with all
documents, certificates and deliveries required by this Agreement to be
furnished to Agent and Construction Consultant in connection with, or as a
condition to, such Advance.

Affected Lender has the meaning ascribed to it in Section
10.20(a).

Affiliate means, with respect to any Person,
(a) each Person that, directly or indirectly, owns or controls, whether
beneficially, or as a trustee, guardian or other fiduciary, 10% or more of the
Stock having ordinary voting power in the election of directors of such Person,
(b) each Person that controls, is controlled by or is under common control
with such Person, and (c) each of such Person’s officers, directors, joint
venturers and partners.  For the purposes
of this definition, “control” of a Person shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of its management
or policies, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that with respect to the Loan
Parties, the term “Affiliate” shall specifically exclude Agent and each Lender,
each unrelated portfolio company of Sponsor.

Agent means BDCF in its capacity as Agent for
itself and Lenders or a successor agent.

Agreement means this Credit Agreement (including all
schedules, subschedules, annexes and exhibits hereto), as the same may be
amended, supplemented, restated or otherwise modified from time to time.

Anticipated Cost Report means, with respect to the Project, a report
prepared by Borrower, in form and substance reasonably approved by Agent, which
indicates the Project Costs anticipated to complete the construction of the
Project, after giving effect to Project Costs incurred during the previous
month and projected Project Costs.

Applicable Margins means collectively  the
Applicable Unused Line Fee Margin, the Applicable Term Loan Index Margin and
the Applicable Term Loan LIBOR Margin.

Applicable Term Loan Index
Margin means the per
annum interest rate from time to time in effect and payable in addition to the
Index Rate applicable to the Term Loan, as determined by reference to Section
2.2(a).

 2
 

Applicable Term Loan LIBOR
Margin means the per
annum interest rate from time to time in effect and payable in addition to the
LIBOR Rate applicable to the Term Loan, as determined by reference to Section
2.2(a).

Applicable Unused Line Fee
Margin means the per
annum fee from time to time in effect payable in respect of Borrower’s non-use
of committed funds pursuant to Section 2.3(b), which fee is determined
by reference to Section 2.2 (a).

Architect means, subject to any applicable
requirements of the Loan Documents, (i) KKE Architects, Inc. (ii) any other
architect engaged by (or on behalf of) Borrower with respect to the Project
after the date hereof and approved by Agent in its reasonably discretion and
(iii) any successor of any of the foregoing, in each case as approved by Agent
in its reasonable discretion.

Architect Agreement means, with respect to each Architect, any
agreement for architectural and related services entered into by (or on behalf
of) Borrower with such Architect, in each case as approved by Agent in its
reasonable discretion, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.

Architect Consent means an Architect Certification and Consent
Agreement executed and delivered by such Architect in favor of Agent and
substantially in the form attached as Exhibit 1.1(a), as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time in accordance with the terms hereof.

Asset Disposition means the disposition, whether by sale,
lease, transfer, loss, damage, destruction, casualty, condemnation or
otherwise, of any of the following: 
(a) any of the Stock or other equity or ownership interest of any
of Borrower’s Subsidiaries or (b) any or all of the assets of Borrower or
any of its Subsidiaries.

Assignment Agreement has the meaning ascribed to it in Section
9.1(a).

Availability means as of any date of
determination the Maximum Amount less the outstanding principal
balance of the Loans.

Bankruptcy Code means the provisions of Title 11 of the
United States Code, 11 U.S.C. §§ 101 et seq. or other applicable
bankruptcy, insolvency or similar laws.

BDCF has the meaning ascribed to it in the
Preamble.

BDCF Fee Letter has the meaning ascribed to it in Section
2.3(a).

Borrower has the meaning ascribed to it in the
preamble to this Agreement.

Borrower Advance
Certification means
the Borrower Advance Certification in the form of Exhibit 2.1(b)(ii) and
delivered pursuant to Section 2.1(b)(iv).

Borrower Final Completion
Certificate means a
certificate substantially in the form of Exhibit 1.1(c) hereto.

Borrower Pledge Agreement the Pledge Agreement of even date herewith
executed by Borrower in favor of Agent, on behalf of itself and Lenders,
pledging all its Stock of Hotel LLC.

 3
 

Business Day means any day that is not a Saturday, a
Sunday or a day on which banks are required or permitted to be closed in the
States of New York and in
reference to LIBOR Loan shall mean any such day that is also a LIBOR Business
Day.

Capital Expenditures means (i) all expenditures (by the
expenditure of cash or (without duplication) the incurrence of Indebtedness)
during any measuring period for any fixed asset or improvements or replacements,
substitutions, or additions thereto that have a useful life of more than one
year and are required to be capitalized under GAAP, less (ii) Net
Proceeds of Asset Dispositions which Borrower has reinvested under Section
2.5(c) that are reflected in the amount calculated in clause (i) above, less
(iii) expenditures made in connection with the replacement, substitution or
restoration of assets to the extent financed (x) from insurance proceeds paid
on account of the loss of or damage to the assets being replaced or restored or
(y) with awards of compensation arising from the taking by condemnation of the
assets being replaced.

Capital Lease means, with respect to any Person, any lease
of any property (whether real, personal or mixed) by such Person as lessee
that, in accordance with GAAP, would be required to be classified and accounted
for as a capital lease on a balance sheet of such Person.

Capital Lease Obligation means, with respect to any Capital Lease of
any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.

Cash Collateral Account means account number 2908110899 maintained
at Associated Bank Minnesota, National Association (“Associated Bank”),
which is used solely to provide cash collateral to support that certain letter
of credit issued by Associated Bank in the amount of Five Hundred Thousand
Dollars ($500,000) in favor of the Minnesota Racing Commission.

Cash Equivalents means:  (i) marketable securities (A) issued
or directly and unconditionally guaranteed as to interest and principal by the
United States government or (B) issued by any agency of the United States
government the obligations of which are backed by the full faith and credit of
the United States, in each case maturing within one (1) year after acquisition
thereof; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after
acquisition thereof and having, at the time of acquisition, a rating of at
least A-1 from S&P or at least P-1 from Moody’s;
(iii) commercial paper maturing no more than one year from the date of
acquisition and, at the time of acquisition, having a rating of at least A-1
from S&P or at least P-1 from Moody’s; (iv) certificates of
deposit or bankers’ acceptances issued or accepted by any Lender, Associated
Bank Minnesota, National Association or by any commercial bank organized under
the laws of the United States of America or any state thereof or the District
of Columbia that is at least (A) ”adequately capitalized” (as defined in
the regulations of its primary Federal banking regulator) and (B) has Tier
1 capital (as defined in such regulations) of not less than $250,000,000, in
each case maturing within one year after issuance or acceptance thereof; and
(v) shares of any money market mutual or similar funds that (A) has
substantially all of its assets invested continuously in the types of
investments referred to in clauses (i) through (iv) above, (B) has net
assets of not less than $500,000,000 and (C) has the highest rating
obtainable from either S&P or Moody’s.

Certificate of Exemption  has the meaning ascribed to it in Section
2.9(c).

Certificate of Occupancy means, with respect to the Project, a
permanent or temporary certificate of occupancy, in either case, issued by the
applicable Governmental Authority pursuant to applicable

 4
 

Legal Requirements which
permanent or temporary certificate of occupancy shall permit such portion of
the Project covered thereby to be lawfully occupied and used for its intended
purposes, shall be in full force and effect and, in the case of a temporary
certificate of occupancy, shall permit full use and lawful occupancy of the
portions of the Project covered thereby, and if such temporary certificate of
occupancy shall provide for an expiration date, any Punchlist Items which must
be completed in order for such temporary certificate of occupancy to be renewed
or extended shall be completed no later than fifteen (15) days prior to the
applicable expiration date thereof.

Change Orders means with respect to the Project, any
amendment, deviation, supplement, addition, deletion, revision or other
modification in any respect to the Plans and Specifications, the Project
Budget, the Construction Schedule, the Architect Agreement, any Trade Contract,
any other Construction Contract or Project Document or the Work provided for therein.

Change of Control means any event, transaction or occurrence
as a result of which (a) either Sponsor ceases to own and control all of
the economic and voting rights associated with ownership of twenty percent
(20%) of the outstanding Stock of all classes of Borrower on a fully diluted
basis, (b) the Sponsors collectively cease to own and control all of the
economic and voting rights associated with ownership of one hundred percent
(100%) of the outstanding Stock of all classes of Borrower on a fully diluted
basis or (c) Borrower ceases to own and control all of the economic and
voting rights associated with all of the outstanding Stock of any of its
Subsidiaries.

Charges means all federal, state, county, city,
municipal, local, foreign or other governmental premiums and other amounts
(including premiums and other amounts owed to the PBGC at the time due and
payable), levies, assessments, charges, liens, claims or encumbrances upon or
relating to (a) the Collateral, (b) the Obligations, (c) the employees,
payroll, income or gross receipts of any Loan Party, (d) any Loan Party’s
ownership or use of any properties or other assets, or (e) any other aspect of
any Loan Party’s business.

Chattel Paper means any “chattel paper,” as such term is
defined in the Code, including electronic chattel paper, now owned or hereafter
acquired by any Loan Party, wherever located.

Closing Checklist means the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information to be delivered in connection with this Agreement, the other Loan
Documents and the transactions contemplated thereunder, substantially in the
form attached hereto as Annex B.

Closing Date means April 20, 2007.

Code means the Uniform Commercial Code as the
same may, from time to time, be enacted and in effect in the State of New York;
provided, that to the extent that the Code is used to define any term
herein or in any Loan Document and such term is defined differently in
different Articles or Divisions of the Code, the definition of such term
contained in Article or Division 9 shall govern; provided further, that
in the event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of, or remedies with respect to, Agent’s or
any Lender’s Lien on any Collateral is governed by the Uniform Commercial Code
as enacted and in effect in a jurisdiction other than the State of New York,
the term “Code” shall mean the Uniform Commercial Code as enacted and in effect
in such other jurisdiction solely for purposes of the provisions thereof
relating to such attachment, perfection, priority or remedies and for purposes
of definitions related to such provisions.

 5
 

Collateral means the property covered by the Security
Agreement, the Mortgages, and the other
Collateral Documents and any other property, real or personal, tangible or
intangible, now existing or hereafter acquired, that may at any time be or
become subject to a security interest or Lien in favor of Agent, on behalf of
itself and Lenders, to secure the Obligations or any portion thereof.

Collateral Documents means the Security Agreement, the Pledge
Agreements, the Guaranties,  the Mortgages,
the Patent Security Agreements, the Trademark Security Agreements, the
Copyright Security Agreements. the Control Agreements, and all similar
agreements entered into guaranteeing payment of, or granting a Lien upon
property as security for payment of, the Obligations or any portion thereof.

Communication means any notice, information or other communication
required or permitted to be given or made under this Agreement, but excluding
any Loan Document requested by Agent to be delivered solely in a signed
writing, including without limitation, any Mortgage, Note, power of attorney,
or Patent, Trademark or Copyright Security Agreement.

Compliance and Excess Cash
Flow Certificate has
the meaning ascribed to it in Section 7.2(n).

Construction Consultant means Merritt & Harris, Inc., or such
other Person as may be designated by Agent in its sole discretion from time to
time as construction consultant to advise, consult and render reports to Agent
concerning the Project.

Construction Contract means, with respect to the Project,
collectively, any contract or agreement entered into by (or on behalf of) Borrower
or their respective Affiliates for the development, construction and equipping
of Project or any part thereof, including (without limitation) any contract or
agreement entered into by any General Contractor with respect to Project and
including, as the context shall require, any Architect Agreement, any Developer
Consultant Agreement, any General Contractor Agreement, any Engineer Agreement,
any agreement with other design professionals engaged or otherwise acting in
connection with Project or any part thereof and each Trade Contract relating to
Project or any part thereof.

Construction Permits means, with respect to the Project,
collectively, all authorizations, consents and approvals, licenses and permits
given or issued by Governmental Authorities which are required for the
construction of the Project and completion of the Project in accordance with
all Legal Requirements, the Plans and Specifications and the other Project
Documents, and for the performance and observance of all obligations and agreements
of Borrower contained herein.

Construction Schedule means, with respect to the Project, a
schedule for the construction and completion of the Project as a whole, in form
and substance acceptable to Agent in its reasonable discretion and including
(without limitation) (i) a construction progress schedule reflecting the
anticipated dates of completion and the timing of disbursements of incremental
amounts of specified subcategories of the Project Budget, (ii) a trade by trade
breakdown of the estimated periods of commencement and completion of the
specific Work to be completed in connection with the Project, and (iii) such
other information as the Construction Consultant shall reasonably require.

Construction Surety Bonds means, with respect to the Project,
performance and payment bonds with respect to the development and construction
work contemplated by the Plans and Specifications in amounts, on terms and from
an issuer satisfactory to Agent.

Contracts means, with respect to the Property, all
agreements, contracts, certificates, instruments, franchises, permits,
licenses, plans, specifications and other documents, now or hereafter entered
into, and all rights therein and thereto, respecting or pertaining to the use,
occupation, construction, management or

 6
 

operation of the Property
and any part thereof or any Improvements or any business or activity conducted
in, at or on the Property and any part thereof or any Improvements and all
right, title and interest of Borrower therein and thereunder.

Consolidated Net Income means net income of Borrower and its
Subsidiaries during the measuring period on a consolidated basis
excluding:  (i) the income (or deficit)
of any Person accrued prior to the date it became a Subsidiary of, or was
merged or consolidated into, Borrower or any of Borrower’s Subsidiaries, (ii)
the income (or deficit) of any Person (other than a Subsidiary) in which Borrower has an ownership interest,
except to the extent any such income has actually been received by Borrower or
any of its Subsidiaries in the form of cash dividends or distributions, (iii)
the undistributed earnings of any Subsidiary of Borrower to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary, (iv) any restoration to income of any
contingency reserve, except to the extent that provision for such reserve was
made out of income accrued during such period, (v) any net gain attributable to
the write-up of any asset, (vi) any loss attributable to the write-down of any
asset (other than Accounts and Inventory), (vii) any net gain from the
collection of the proceeds of life insurance policies, (viii) any net gain arising
from the acquisition of any securities, or the extinguishment of any
Indebtedness, of Borrower or any
of its Subsidiaries, (ix) any deferred credit representing the excess of equity
in any Subsidiary of Borrower at
the date of acquisition of such Subsidiary over the cost to Borrower of the investment in such
Subsidiary.

Contingent Obligation means, as applied to any Person, any direct
or indirect liability of that Person: 
(i) with respect to Guaranteed Indebtedness and with respect to any
Indebtedness, lease, dividend or other obligation of another Person if the
purpose or intent of the Person incurring such liability, or the effect
thereof, is to provide assurance to the obligee of such liability that such
liability will be paid or discharged, or that any agreements relating thereto
will be complied with, or that the holders of such liability will be protected
(in whole or in part) against loss with respect thereto; (ii) with respect
to any letter of credit issued for the account of that Person or as to which
that Person is otherwise liable for reimbursement of drawings; (iii) under
any foreign exchange contract, currency swap agreement, interest rate swap
agreement or other similar agreement or arrangement designed to alter the risks
of that Person arising from fluctuations in currency values or interest rates,
(iv) any agreement, contract or transaction involving commodity options or
future contracts, (v) to make take-or-pay or similar payments if required
regardless of nonperformance by any other party or parties to an agreement, or
(vi) pursuant to any agreement to purchase, repurchase or otherwise
acquire any obligation or any property constituting security therefor, to
provide funds for the payment or discharge of such obligation or to maintain the
solvency, financial condition or any balance sheet item or level of income of
another.  The amount of any Contingent
Obligation shall be equal to the amount of the obligation so guaranteed or
otherwise supported or, if not a fixed and determined amount, the maximum
amount so guaranteed.

Contractual Obligations means, as applied to any Person, any
indenture, mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject
including the Related Transactions Documents.

Control Agreement means a tri-party deposit account,
securities account or commodities account control agreements by and among the
applicable Loan Party, Agent and the depository, securities intermediary or
commodities intermediary, and each in form and substance reasonably
satisfactory to Agent, and in any event providing to Agent “control” of such
deposit account, securities or commodities account, as applicable, within the
meaning of Articles 8 and 9 of the Code.

 7
 

Copyright License means any and all rights now owned or
hereafter acquired by any Loan Party under any written agreement granting any
right to such Loan Party to use any Copyright or Copyright registration owned
by a third party.

Copyright Security
Agreements means the
Copyright Security Agreements made in favor of Agent, on behalf of itself and
Lenders, by each applicable Loan Party.

Copyrights means all of the following now owned or
hereafter adopted or acquired by any Loan Party: (a) all copyrights and
General Intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any similar office or agency of the United
States, any state or territory thereof, or any other country or any political
subdivision thereof; and (b) all reissues, extensions or renewals thereof.

Cost Saving shall mean, with respect to the Project:

(a)           the difference between the amount of a Line Item in the Project and the
amount expended for such Line Item in the event that the component of the
construction of the Project (other than interest on the Term Loan payable
hereunder) which is the subject of such Line Item shall have been completed
without the expenditure of the entire amount allocated in the Project Budget to
such Line Item, and all Trade Contractors and other Persons have been paid in
full for work performed and materials provided with respect to such component
which is the subject of such Line Item, in each case as confirmed by
Construction Consultant and reasonably approved by Agent; or

(b)           prior to the completion of the component of the construction of Project
which is the subject of a Line Item (other than the Line Item for interest
payable hereunder or any Line Item designated as “Contingency”), the amount of
any Cost Saving that will be realized pursuant to clause (a) above upon
completion of such component, in each case as confirmed by Construction
Consultant and approved by Agent in its sole discretion.

Default means any event that, with the passage of
time or notice or both, would, unless cured or waived, become an Event of
Default.

Default Rate has the meaning ascribed to it in Section
2.2(d).

Developer Consultant means, subject to any applicable
requirements of the Loan Documents, each of (i) LaSalle Development Group,
Ltd., engaged by (or on behalf of) Borrower with respect to the Project, (ii)
any other developer consultant engaged by (or on behalf of) Borrower with
respect to the Project after the date hereof and approved by Agent in its
reasonable discretion, and (iii) any successor of any of the foregoing, in each
case as approved by Agent in its reasonable discretion.

Developer Consultant
Agreement shall mean,
with respect to each Developer Consultant, any agreement for development and
related services entered into by (or on behalf of) Borrower with such Developer
Consultant, in each case as approved by Agent in its reasonable discretion, as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time in accordance with the terms hereof.

Developer Consultant Consent shall mean, with respect to each Developer
Consultant, a Developer Certification and Consent Agreement executed and
delivered by such Developer Consultant in favor of Agent and substantially in
the form attached as Exhibit 1.1(e), as the same may be amended,

 8
 

restated, replaced,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.

Disbursement Account has the meaning ascribed to it in Section
2.1(j).

Disbursement Schedule means a schedule of the monthly projected
Advances throughout the construction period, in form and substance acceptable
to Agent in its reasonable discretion.

Disclosure Schedules means the Schedules prepared by Borrower and
denominated as Schedules 1.1 through 6.9 in the index to this Agreement.

Documents means any “document,” as such term is
defined in the Code, including electronic documents, now owned or hereafter
acquired by any Loan Party, wherever located.

Dollars or $ means lawful currency of the
United States of America.

Domestic Loan Parties means any Loan Party organized under the
laws of a jurisdiction in the United States of America.

Domestic Subsidiaries means any Subsidiary other than a Foreign
Subsidiary.

EBITDA means Consolidated Net Income less:  (in each case to the extent included in the
calculation of Consolidated Net Income, but without duplication): (i) income
and franchise tax credits, (ii)  interest
income, (iii) gain from extraordinary items, (iv) any gain arising from the
sale, exchange or other disposition of assets outside of the ordinary course of
business, other than Accounts and Inventory (v) any other non-cash gains, (vi)
expenditures related to the Related Transactions and not reflected on the Pro
Forma or the footnotes thereto, and (vii) non-recurring gains; plus: (in
each case to the extent deducted in the calculation of Consolidated Net Income,
but without duplication): (i) any provision for income and franchise taxes,
(ii) Interest Expense, (iii) depreciation and amortization, (iv) amortized debt
discount (but in the case of amortization and expenses of Related Transactions,
only to the extent included in the Pro Forma), (v) any deduction as the result
of any grant to any members of the management of Borrower or any of its Subsidiaries of any Stock, (vi) loss from
extraordinary items (vii) any loss arising from the sale, exchange or other
disposition of assets outside of the ordinary course of business, other than
Accounts and Inventory, but including amortization of intangibles (including
but not limited to goodwill), (viii) any other non-cash losses (other than
non-cash losses relating to write-offs, write-downs or reserves with respect to
Accounts and Inventory) and (ix) expenses of the Related Transactions, provided
that such expenses were included in the Pro Forma, or disclosed in any notes
thereto.

Engineer means, subject to any applicable
requirements of the Loan Documents, each of (i) any engineer engaged by (or on
behalf of) Borrower with respect to the Project after the date hereof and
approved by Agent in its reasonable discretion, and (ii) any successor of any
of the foregoing, in each case as approved by Agent in its reasonable
discretion.

Engineer Agreement means, with respect to each Engineer, any
agreement for structural, mechanical, electrical or other engineering services
and related services entered into by (or on behalf of) Borrower with such
Engineer, in each case as approved by Agent in its reasonable discretion, as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time in accordance with the terms hereof.

 9
 

Engineer Consent means, with respect to the Engineer, an
Engineer Certification and Consent Agreement executed and delivered by such
Engineer in favor of Agent, for the benefit of itself and the Lenders, and
substantially in the form attached as Exhibit 1.1(f), as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time in accordance with the terms hereof.

Environmental Laws means all applicable federal, state, local
and foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, and any legally binding applicable
judicial or administrative interpretation thereof, including any applicable
judicial or administrative order, consent decree, order or judgment, imposing
liability or standards of conduct for or relating to the regulation and
protection of the environment (including ambient air, surface water,
groundwater, wetlands, land surface or subsurface strata) or human health or
safety with respect to exposure to Hazardous Materials.  Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. §§
9601 et seq.) (“CERCLA”); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. §§ 5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et seq.);
the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et seq.); the Toxic
Substance Control Act (15 U.S.C. §§ 2601 et seq.); the Clean Air Act (42
U.S.C. §§ 7401 et seq.); the Federal Water Pollution Control Act (33
U.S.C. §§ 1251 et seq.); the Occupational Safety and Health Act (29
U.S.C. §§ 651 et seq.); and the Safe Drinking Water Act (42 U.S.C.
§§ 300(f) et seq.), and any and all regulations promulgated
thereunder, and all analogous state, local and foreign counterparts or
equivalents and any transfer of ownership notification or approval statutes.

Environmental Liabilities means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute or common law, including any
arising under or related to any Environmental Laws, Environmental Permits, or
in connection with any Release or threatened Release or presence of a Hazardous
Material whether on, at, in, under, from or about or in the vicinity of any
real or personal property.

Environmental Permits means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.

Equipment means all “equipment,” as such term is
defined in the Code, now owned or hereafter acquired by any Loan Party,
wherever located.

ERISA means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and any regulations promulgated
thereunder.

ERISA Affiliate means, with respect to any Loan Party, any
trade or business (whether or not incorporated) that, together with such Loan
Party, are treated as a single employer within the meaning of Sections 414(b),
(c), (m) or (o) of the IRC.

ERISA Event means, with respect to any Loan Party or any
ERISA Affiliate, (a) any event described in Section 4043(c) of ERISA with
respect to a Title IV Plan; (b) the withdrawal of any Loan Party or ERISA
Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer, as defined in Section 4001(a)(2)
of ERISA; (c) the complete or

 10
 

partial withdrawal of any
Loan Party or any ERISA Affiliate from any Multiemployer Plan; (d) the
filing of a notice of intent to terminate a Title IV Plan or the treatment of a
plan amendment as a termination under Section 4041 of ERISA; (e) the
institution of proceedings to terminate a Title IV Plan or Multiemployer Plan
by the PBGC; (f) the failure by any Loan Party or ERISA Affiliate to make
when due required contributions to a Multiemployer Plan or Title IV Plan unless
such failure is cured within 30 days; (g) any other event or condition
that might reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer,
any Title IV Plan or Multiemployer Plan or for the imposition of liability
under Section 4069 or 4212(c) of ERISA; (h) the termination of a
Multiemployer Plan under Section 4041A of ERISA or the reorganization or
insolvency of a Multiemployer Plan under Section 4241 or 4245 of ERISA;
(i) the loss of a Qualified Plan’s qualification or tax exempt status; or
(j) the termination of a Plan described in Section 4064 of ERISA.

ESOP means a Plan that is intended to satisfy the
requirements of Section 4975(e)(7) of the IRC.

Event of Default has the meaning ascribed to it in Section
8.1.

Excess Cash Flow has the meaning ascribed to it in Schedule
2 to Annex E.

Excluded Taxes has the meaning ascribed to it in Section
2.9(a).

Fair Labor Standards Act means the Fair Labor Standards Act, 29
U.S.C. §201 et seq.

Federal Funds Rate means, for any day, a floating rate equal to
the weighted average of the rates on overnight federal funds transactions among
members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).

Federal Reserve Board means the Board of Governors of the Federal
Reserve System.

Fees means any and all fees payable to Agent or
any Lender pursuant to this Agreement or any of the other Loan Documents.

FF&E means furniture, fixtures and equipment.

Field Review has the meaning ascribed to it in Section
5.3.

Financial Statements means the consolidated and consolidating
income statements, statements of cash flows and balance sheets of Borrower and
its Subsidiaries delivered in accordance with Sections 7.2(a) and (b).

Fiscal Month means any of the monthly accounting periods
of Borrower of each Fiscal Year.

Fiscal Quarter means any of the quarterly accounting
periods of Borrower, ending on March 31, June 30, September 30, and December 31
of each year.

Fiscal Year means any of the annual accounting periods
of Borrower ending on December 31 of each year.

 11
 

Fixtures means all “fixtures” as such term is defined
in the Code, now owned or hereafter acquired by any Loan Party.

Foreign Lender has the meaning ascribed to it in Section
2.9(c).

Foreign Subsidiary means any direct or indirect Subsidiary of
Borrower that is not a “United States person” within the meaning of
Section 7701(a)(30) of the IRC.

Funded Debt means, with respect to any Person, without
duplication, all Indebtedness for borrowed money evidenced by notes, bonds,
debentures, or similar evidences of Indebtedness, and specifically including
Capital Lease Obligations and current portions thereof, current maturities of
long-term debt, revolving credit and short-term debt extendible
beyond one year at the option of the debtor, and also including, in the case of
Borrower, the Obligations and, without duplication, Guaranteed Indebtedness
consisting of guaranties of Funded Debt of other Persons.  For the avoidance of doubt, any obligation to
pay Southwest Casino Unmatched Pre-Licensing Costs, or the Preferred Return
thereon, shall not constitute “Funded Debt” hereunder.

Funding Date has the meaning ascribed to it in Section
3.2.

GAAP means generally accepted accounting
principles in the United States of America, consistently applied.

General Contractor means, subject to any applicable
requirements of the Loan Documents, each of (i) Kraus-Anderson Construction
Company, (ii) any general contractor engaged by (or on behalf of) Borrower with
respect to the Project and approved by Agent in its reasonable discretion, and
(iii) any successor of any of the foregoing, in each case as approved by Agent
in its reasonably discretion.

General Contractor Agreement means, with respect to each General
Contractor, any guaranteed maximum price contract or other general contractor
or similar agreement entered into by (or on behalf of) Borrower with such
General Contractor, in each case as approved by Agent in its reasonable
discretion, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time in accordance with the terms hereof.

General Contract Consent means, with respect to the General
Contractor, a General Contractor Certification and Consent Agreement executed
and delivered by such General Contracts in favor of Agent and substantially in
the form attached hereto as Exhibit 1.1(g), as the same may amended,
restated, replaced, supplemented or otherwise modified from time to time in
accordance with the terms hereof.

General Intangibles means “general intangibles,” as such term is
defined in the Code, now owned or hereafter acquired by any Loan Party.

Goods means any “goods,” as such term is defined
in the Code, now owned or hereafter acquired by any Loan Party, wherever
located, including embedded software to the extent included in “goods” as
defined in the Code, manufactured homes, standing timber that is cut and
removed for sale and unborn young of animals.

Governmental Authority means any nation or government, any state or
other political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

 12
 

Guaranteed Indebtedness means, as to any Person, any obligation of
such Person guaranteeing, providing comfort for or otherwise supporting any
Indebtedness, lease, dividend, or other obligation (“primary obligation”)
of any other Person (the “primary obligor”) in any manner, including any
obligation or arrangement of such Person to (a) purchase or repurchase any
such primary obligation, (b) advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet condition of the
primary obligor, (c) purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation,
(d) protect the beneficiary of such arrangement from loss (other than
product warranties given in the ordinary course of business) or
(e) indemnify the owner of such primary obligation against loss in respect
thereof.  The amount of any Guaranteed
Indebtedness at any time shall be deemed to be an amount equal to the lesser at
such time of (x) the stated or determinable amount of the primary obligation
in respect of which such Guaranteed Indebtedness is incurred and (y) the
maximum amount for which such Person may be liable pursuant to the terms of the
instrument embodying such Guaranteed Indebtedness, or, if not stated or
determinable, the maximum reasonably anticipated liability (assuming full
performance) in respect thereof.

Guaranties means, collectively, the Subsidiary Guaranty
and any other guaranty executed by any Guarantor in favor of Agent and Lenders
in respect of the Obligations.

Guarantors means Hotel LLC and  each
other Domestic Subsidiary of Borrower and each other Person, if any, that
executes a guaranty or other similar agreement in favor of Agent, for itself
and the ratable benefit of Lenders, in connection with the transactions
contemplated by this Agreement and the other Loan Documents.

Hard Costs means, with respect to the Project,
collectively, the costs set forth in the Project Budget for the Project which
are for labor, materials, equipment, furniture and fixtures.

Hazardous Material means any substance, material or waste that
is regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is
(a) defined as a “solid waste,” “hazardous waste,” “hazardous material,” “hazardous
substance,” “dangerous goods,” “extremely hazardous waste,” “restricted
hazardous waste,” “pollutant,” “contaminant,” “hazardous constituent,” “special
waste,” “toxic substance” or other similar term or phrase under any
Environmental Laws, or (b) petroleum or any fraction or by-product
thereof, asbestos, polychlorinated biphenyls (PCB’s), or any radioactive
substance.

Hotel LLC means North Metro Hotel, LLC, a Minnesota
limited liability company.

Improvements means, for the Property, the buildings,
structures, fixtures, additions, enlargements, extensions, modifications,
repairs, replacements and improvements now or hereafter erected or located on
the Property.

Indebtedness means, with respect to any Person, without
duplication (a) all indebtedness of such Person for borrowed money or for
the deferred purchase price of property payment for which is deferred six (6)
months or more, but excluding obligations to trade creditors that are unsecured
and not overdue by more than six (6) months unless being contested in good
faith and accrued expenses, in each case, incurred in the ordinary course of
business, (b) all reimbursement and other obligations with respect to
letters of credit, bankers’ acceptances and surety bonds, whether or not
matured, (c) all obligations evidenced by notes, bonds, debentures or
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person

 13
 

(even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all Capital
Lease Obligations and the present value (discounted at the Index Rate as in
effect on the Closing Date) of future rental payments under all synthetic
leases, (f) all obligations of such Person under commodity purchase or
option agreements or other commodity price hedging arrangements, in each case
whether contingent or matured, (g) all net payment obligations of such
Person under any foreign exchange contract, currency swap agreement, interest
rate swap, cap or collar agreement or other similar agreement or arrangement
designed to alter the risks of that Person arising from fluctuations in
currency values or interest rates, in each case whether contingent or matured,
(h) all Indebtedness referred to above secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien upon or in property or other assets (including accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness, (i) ”earnouts” and
similar payment obligations excluding bonus, phantom stock or other similar
compensation payments owed to employees, or officers and incurred in the
ordinary course of business, and (j) the Obligations.  Notwithstanding anything to the contrary
provided herein, any obligation to pay Southwest Casino Unmatched Pre-Licensing
Costs, or the Preferred Return thereon, shall not constitute “Indebtedness”
hereunder.

Indemnitees has the meaning ascribed to it in Section
10.1.

Index Rate means, for any day, a floating rate equal to
the higher of (i) the rate last quoted by The Wall Street Journal
as the “base rate on corporate loans posted by at least 75% of the 30 largest
US banks” in the United States and (ii) the Federal Funds Rate plus 50 basis
points per annum.

Index Rate Loan means the Term Loan or portion thereof
bearing interest by reference to the Index Rate.

Initial Advance has the meaning ascribed to in Section
2.1(a).

Instruments means all “instruments,” as such term is
defined in the Code, now owned or hereafter acquired by any Loan Party,
wherever located, and, in any event, including all certificated securities, all
certificates of deposit, and all promissory notes and other evidences of
indebtedness, other than instruments that constitute, or are a part of a group
of writings that constitute, Chattel Paper.

Intellectual Property means any and all Licenses, Patents,
Copyrights, Trademarks, and the goodwill associated with such Trademarks.

Intercompany Debt has the meaning ascribed to it in Section
10.22.

Interest Expense means for any measuring period interest
expense (whether cash or non-cash) determined in accordance with GAAP and
deducted in the calculation of Consolidated Net Income, including capitalized
interest expense, less the sum of (i) amortization of capitalized fees
and expenses with respect to Related Transactions for such period, (ii)
amortization of any original issue discount attributable to Funded Debt or
warrants for such period, and (iii) interest paid in-kind during such period.

Interest Payment Date means (a) as to any Index Rate Loan,
the first Business Day of each month to occur while such loan is outstanding,
and (b) as to any LIBOR Loan, the last day of the applicable LIBOR Period;  provided that, in addition to the foregoing, each of
(x) the date upon which all of the Term Loan Commitments have been
terminated and the Term Loan has been paid in full and (y) the Maturity

 14
 

Date shall be deemed to be
an “Interest Payment Date” with respect to any interest that has then
accrued under this Agreement.

Inventory means any “inventory,” as such term is
defined in the Code, now owned or hereafter acquired by any Loan Party,
wherever located.

Investment means (i) any direct or indirect
purchase or other acquisition by Borrower or any of its Subsidiaries of any
Stock, or other ownership interest in, any other Person, and (ii) any
direct or indirect loan, advance or capital contribution by Borrower or any of
its Subsidiaries to any other Person excluding Accounts and deposits arising in
the ordinary course of business and any extension of trade credit in the
ordinary course of business.

Investment Property means all “investment property,” as such
term is defined in the Code, now owned or hereafter acquired by any Loan Party,
wherever located.

IRC means the Internal Revenue Code of 1986, as
amended, and all regulations promulgated thereunder.

IRS means the United States Internal Revenue
Service.

Legal Requirements means all federal, state, county, municipal
and other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions of Governmental Authorities affecting the
Property or any part thereof, or the construction, use, alteration or operation
thereof, or any part thereof, whether now or hereafter enacted and in force,
and all permits, licenses and authorizations and regulations relating thereto,
and all covenants, agreements, restrictions and encumbrances contained in any
instruments, either of record or known to Borrower, at any time in force
affecting the Property or any part thereof, including, without limitation, any
which may (a) require repairs, modifications or alterations in or to the
Property or any part thereof, or (b) in any way limit the use and
enjoyment thereof.

Lenders means BDCF, the other Lenders named on the
signature pages of this Agreement (and, if any such Person shall decide to
assign all or any portion of the Obligations, such term shall include any
assignee of such Person).

Leverage Ratio means for any measuring period the ratio of
(x) Funded Debt as of the last day of such measuring period to (y) EBITDA.

LIBOR Breakage Costs means an amount equal to the amount of any
losses, expenses, liabilities (including, without limitation, any loss
(including interest paid) and lost opportunity cost (consisting of the present
value of the difference between the LIBOR Rate in effect for the Interest Period
and any lower LIBOR Rate in effect at the time of prepayment for the remainder
of that Interest Period) in connection with the re-employment of such funds)
that any Lender sustains as a result of (i) any default by Borrower in making
any borrowing of, conversion into or continuation of any LIBOR Loan following
Borrower’s delivery to Agent of any LIBOR Loan request in respect thereof or
(ii) any payment of a LIBOR Loan on any day that is not the last day of
the LIBOR Period applicable thereto (regardless of the source of such
prepayment and whether voluntary, by acceleration or otherwise). For purposes
of calculating amounts payable to a Lender under Section 2.3(d), each
Lender shall be deemed to have actually funded its relevant LIBOR Loan through
the purchase of a deposit bearing interest at the LIBOR Rate in an amount equal
to the amount of that LIBOR Loan and having a maturity and repricing
characteristics comparable to the relevant LIBOR Period; provided, however,
that each Lender may fund each of its LIBOR Loan in

 15
 

any manner it sees fit, and
the foregoing assumption shall be utilized only for the calculation of amounts
payable under Section 2.3(d).

LIBOR Business Day means a Business Day on which banks in the
City of London are generally open for interbank or foreign exchange
transactions.

LIBOR Loan means a Loan or any portion thereof bearing
interest by reference to the LIBOR Rate.

LIBOR Period means, with respect to any LIBOR Loan, each
period commencing on a LIBOR Business Day selected by Borrower pursuant to this
Agreement and ending one, two or three months thereafter, as selected by
Borrower’s irrevocable notice to Agent as set forth in Section 2.2(e); provided,
that the foregoing provision relating to LIBOR Periods is subject to the
following:

(a)           if any LIBOR Period would otherwise end on a day that is not a LIBOR
Business Day, such LIBOR Period shall be extended to the next succeeding LIBOR
Business Day unless the result of such extension would be to carry such LIBOR
Period into another calendar month in which event such LIBOR Period shall end
on the immediately preceding LIBOR Business Day;

(b)           any LIBOR Period that would otherwise extend beyond the date set forth
in clause (a) of the definition of “Maturity Date” shall end two (2) LIBOR
Business Days prior to such date;

(c)           any LIBOR Period that begins on the last LIBOR Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such LIBOR Period) shall end on the last
LIBOR Business Day of a calendar month; and

(d)           Borrower shall select LIBOR Periods so that there shall be no more than
five (5) separate LIBOR Loans in existence at any one time.

LIBOR Rate means for each LIBOR Period, a rate of
interest determined by Agent equal to:

(a)           the offered rate for deposits in United States Dollars for the
applicable LIBOR Period that appears on Telerate Page 3750 as of
11:00 a.m. (London time), on the second full LIBOR Business Day next
preceding the first day of such LIBOR Period (unless such date is not a
Business Day, in which event the next succeeding Business Day will be used);
divided by

(b)           a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is two (2) LIBOR Business Days prior to
the beginning of such LIBOR Period (including basic, supplemental, marginal and
emergency reserves under any regulations of the Federal Reserve Board or other
Governmental Authority having jurisdiction with respect thereto, as now and
from time to time in effect) for Eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Federal Reserve Board that
are required to be maintained by a member bank of the Federal Reserve System.

If such interest rates shall
cease to be available from Telerate News Service, the LIBOR Rate shall be
determined from such financial reporting service or other information as shall
be available to Agent.

 16

License means any Copyright License, Patent License,
Trademark License or other license of rights or interests now held or hereafter
acquired by any Loan Party.

Lien means any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security
interest under the Code or comparable law of any jurisdiction).

Line Item means, with respect to the Project Budget, a
line item of cost or expense set forth in the Project Budget as the same may be
adjusted in compliance with the terms hereof.

Litigation has the meaning ascribed to it in Section
7.2(k).

Loan Account has the meaning ascribed to it in Section
2.7.

Loan Documents means this Agreement, the Term Notes, the
Collateral Documents, the BDCF Fee Letter, and all other agreements,
instruments, documents and certificates identified in the Closing Checklist
executed and delivered to, or in favor of, Agent or any Lenders and including
all other pledges, powers of attorney, consents, assignments, contracts,
notices, and all other written matter whether heretofore, now or hereafter
executed by or on behalf of any Loan Party, or any employee of any Loan Party,
and delivered to Agent or any Lender in connection with this Agreement or the
transactions contemplated thereby.  Any
reference in this Agreement or any other Loan Document to a Loan Document shall
include all appendices, exhibits or schedules thereto, and all amendments,
restatements, supplements or other modifications thereto, and shall refer to
this Agreement or such Loan Document as the same may be in effect at any and
all times such reference becomes operative.

Loan Parties means Borrower and each other Person
(i) which executes this Agreement as a “Loan Party,” (ii) which
executes a Guaranty, (iii) which grants a Lien on all or substantially all
of its assets to secure payment of the Obligations and (iv) all of the
Stock of which is pledged to Agent for the benefit of itself and Lenders.  Notwithstanding the foregoing, as of the date
hereof the following entities shall not be considered Loan Parties: (i)
MTR-Harness, Inc., a Minnesota corporation, (ii) MTR Gaming Group, Inc., a
Delaware corporation, (iii) Southwest Casino and Hotel Corp., a Minnesota
corporation and (iv) Southwest Casino Corporation, a Nevada corporation.

Major Trade Contract means (a) with respect to the Project, any
Trade Contract, having a contract or purchase price, as the case may be,
whether initially or thereafter by virtue of any Change Order or Change Orders,
equal to or in excess of Two Hundred Fifty Thousand Dollars ($250,000),
provided that, for purposes of this definition, multiple Trade Contracts with a
single contractor or supplier, or an Affiliate thereof, as the case may be,
shall be deemed to be one Trade Contract.

Major Trade Contractor
Consent means a Major
Trade Contractor Consent and Agreement executed and delivered by a Major Trade
Contractor in favor of Agent, substantially in the form attached hereto as Exhibit
1.1(h), as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time in accordance with the terms hereof.

Material Adverse Effect means
a material adverse effect on (a) the business, assets, operations,
prospects or financial or other condition of the Loan Parties considered as a
whole, (b) Borrower’s ability to pay any of the Term Loan or any of the
other Obligations in accordance with the terms of this

 17
 

Agreement, (c) the
Collateral or Agent’s Liens, on behalf of itself and Lenders, on the Collateral
or the priority of such Liens, or (d) Agent’s or any Lender’s rights and
remedies under this Agreement and the other Loan Documents.

Material Change Order has the meaning ascribed to it in Section
2.1(g).

Maturity Date means the earliest of (a) April 20,
2014 and (b) the date of indefeasible payment or prepayment in full by
Borrower of the Term Loan.

Maximum Amount means, as of any date of determination, an
amount equal to the Term Loan Commitments of all Lenders as of that date.

Maximum Lawful Rate has the meaning ascribed to it in Section
2.2(f).

Minnesota Licensing Statute means Minn. Stat. 240.06, as amended from
time to time, and any successor statute.

Moody’s means Moody’s Investors Services, Inc.

Mortgages means each of the mortgages, leasehold
mortgages, collateral assignments of leases or other real estate security
documents delivered by any Loan Party to Agent on behalf of itself and Lenders
with respect to the Real Estate.

Multiemployer Plan means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA, and to which any Loan Party or ERISA Affiliate is
making or is obligated to make contributions on behalf of participants who are
or were employed by any of them or withdrawal liability payments.

Net Proceeds means cash proceeds received by Borrower or
any of its Subsidiaries from any Asset Disposition (including insurance
proceeds, awards of condemnation, and payments under notes or other debt
securities received in connection with any Asset Disposition), net of
(a) the costs of such Asset Disposition (including taxes attributable to
such sale, lease or transfer) and any commissions and other customary
transaction fees, costs and expenses), other than any costs payable to any
Affiliate of a Loan Party (b) amounts applied to repayment of Indebtedness
(other than the Obligations) secured by a Lien permitted under this Agreement
on the asset or property disposed, and (c) any amounts required to be held in
escrow until such time as such amounts are released from escrow whereupon such
amounts shall be considered Net Proceeds.

Non-Consenting Lender has the meaning ascribed to it in Section
10.20(c).

Non-Funding Lender has the meaning ascribed to it in Section
9.5(d).

Non-Excluded Taxes has the meaning ascribed to it in Section
2.9(a).

North Metro LLC Agreement means that certain Member Control Agreement
of the Borrower, dated as of June 8, 2004, as in effect on the Closing Date.

Obligations means all loans, advances, debts,
liabilities and obligations, for the performance of covenants, tasks or duties
or for payment of monetary amounts (whether or not such performance is then
required or contingent, or such amounts are liquidated or determinable), owing
by any Loan Party to Agent or any Lender, and all covenants and duties
regarding such amounts, of any kind or nature, present

 18
 

or future, whether or not
evidenced by any note, agreement or other instrument, arising under this
Agreement or any of the other Loan Documents. 
This term includes all principal, interest (including all interest that
accrues after the commencement of any case or proceeding by or against any Loan
Party in bankruptcy, whether or not allowed in such case or proceeding), Fees,
charges, expenses, reasonable attorneys’ fees and any other sum chargeable to
any Loan Party under this Agreement or any of the other Loan Documents.

Operating Permits means any building, land use, environmental,
hotel operator, liquor license, gaming license or other permit, license,
franchise, approval, consent or authorization required for the ownership, use,
occupation and operation of the Property, the Collateral or any portion of the
foregoing for their intended purpose or as otherwise contemplated under any of
the Loan Documents.

Other Lender has the meaning ascribed to it in Section
9.5(d).

Other Taxes has the meaning ascribed to it in Section
2.9(a).

Outstanding Term Loan
Commitment means as
of any date of determination the aggregate Term Loan Commitment minus
the sum of (a) the Initial Advance and (b) Advances made prior to such date.

Patent License means rights under any written agreement now
owned or hereafter acquired by any Loan Party granting any right to such Loan
Party with respect to any invention on which a Patent owned by a third party is
in existence.

Patent Security Agreements means the Patent Security Agreements made in
favor of Agent, on behalf of itself and Lenders, by each applicable Loan Party.

Patents means all of the following in which any Loan
Party now holds or hereafter acquires any interest: (a) all letters patent
of the United States or any other country, all registrations and recordings
thereof, and all applications for letters patent of the United States or of any
other country, including registrations, recordings and applications in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any State or any other country, and (b) all reissues,
continuations, continuations-in-part or extensions thereof.

PBGC means the Pension Benefit Guaranty
Corporation.

Pension Plan means a Plan described in Section 3(2) of
ERISA.

Permanent Certificate of
Occupancy Date means,
with respect to the Project, the date (which date shall be reasonably
acceptable to Agent) by which Borrower in its best business judgment reasonably
anticipates that a permanent Certificate of Occupancy will be issued for the
Project.

Permitted Encumbrances means the following encumbrances:
(a) Liens for taxes, assessments or governmental charges or levies not yet
due and payable and Liens for taxes, assessments or governmental charges or
levies being contested in good faith and by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP, excluding
federal income tax Liens and Liens in favor of the PBGC under ERISA;
(b) Liens in respect of property or assets of the Borrower or any of its
Subsidiaries imposed by law which were incurred in the ordinary course of
business and which have not arisen to secure Indebtedness for borrowed money,
such as carriers’, materialmen’s, warehousemen’s and mechanics’ Liens,
statutory and common law landlord’s Liens, and other similar Liens arising in
the ordinary course of business, and which either (1) do not in the aggregate materially
detract from the value

 19
 

of such property or assets
or materially impair the use thereof in the operation of the business of the
Borrower or any of its Subsidiaries or (2) are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or asset subject to such Lien; (c) Liens
created by or pursuant to this Agreement, the Collateral Documents or the other
Loan Documents; (d) Liens in existence on the Closing Date which are listed,
and the property subject thereto described, on Schedule 6.2, without
giving effect to any extensions or renewals thereof; (e) Liens arising from
judgments, decrees, awards or attachments in circumstances not constituting an
Event of Default, provided that the amount of cash and property
(determined on a fair market value basis) deposited or delivered to secure the
respective judgment or decree or subject to attachment shall not exceed the
limit for a separate judgment in Section 8.1(h); (f) Liens (other than
any Lien imposed by ERISA) (1) incurred or deposits made in the ordinary course
of business in connection with general insurance maintained by the Borrower and
its Subsidiaries, (2) incurred or deposits made in the ordinary course of business
of the Borrower and its Subsidiaries in connection with workers’ compensation,
unemployment insurance and other types of social security, (3) to secure the
performance by the Borrower and its Subsidiaries of tenders, statutory
obligations (other than excise taxes), surety, stay, customs and appeal bonds,
statutory bonds, bids, leases, government contracts, trade contracts,
performance and return of money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money) to the extent incurred in the
ordinary course of business, (4) to secure the performance by the Borrower and
its Subsidiaries of leases of real property, to the extent incurred or made in
the ordinary course of business, and (5) other deposits made solely in the
ordinary course of the Loan Parties’ business; (g) licenses, sublicenses,
leases or subleases granted to third Persons in the ordinary course of business
not interfering in any material respect with the business of the Borrower or
any of its Subsidiaries; (h) easements, rights-of-way, restrictions, minor
defects or irregularities in title, encroachments and other similar charges or
encumbrances, in each case not securing Indebtedness and not interfering in any
material respect with the ordinary conduct of the business of the Borrower or
any of its Subsidiaries; (i) Liens arising from precautionary UCC financing
statements regarding operating leases; (j) Liens created pursuant to or in
connection with leases or Capital Leases permitted pursuant to this Agreement, provided
that (1) such Liens only serve to secure the payment of rent or Indebtedness
arising under such leases or Capital Leases and (2) the Liens encumbering the
assets leased or purported to be leased under such leases or Capital Leases do
not encumber any other assets of the Borrower or any of its Subsidiaries (other
than letters of credit, payment undertaking agreements, guaranteed investment
contracts, deposits of cash or Cash Equivalents and other credit support
arrangements, in each case having an aggregate value not exceeding the fair
market value of the assets leased or purported to be leased under such leases
or Capital Leases (each of such values determined at the time when the lease
agreement relating to the relevant lease or Capital Lease is signed and
delivered)); (k) (1) those liens, encumbrances, hypothecs and other matters
affecting title to any real property and found reasonably acceptable by the
Agent or insured against by title insurance, (2) as to any particular real
property at any time, such easements, encroachments, covenants, rights of way,
minor defects, irregularities or encumbrances on title which would not
reasonably be expected to materially impair such real property for the purpose
for which it is held by the mortgagor or grantor thereof, or the lien or
hypothec held by the Agent, (3) zoning and other municipal ordinances which are
not violated in any material respect by the existing improvements and the
present use made by the mortgagor or grantor thereof of the premises, (4)
general real estate taxes and assessments not yet delinquent, (5) any Lien that
would be disclosed on a true, correct and complete survey of the real property
that does not materially affect the use or enjoyment of the real property as it
is currently being used, and (6) such other similar items as the Agent may
consent to (such consent not to be unreasonably withheld); (l) Liens arising
pursuant to purchase money mortgages or security interests securing
Indebtedness representing the purchase price (or financing of the purchase
price within 90 days after the respective purchase) of fixed assets acquired
after the Closing Date, provided that (1) any such Liens attach only to
the assets so purchased, upgrades thereon and, if the asset so purchased is an
upgrade, the original asset itself (and such other assets financed by the same
financing source), (2) the

 20
 

Indebtedness (other than
Indebtedness incurred from the same financing source to purchase other assets
and excluding Indebtedness representing obligations to pay installation and
delivery charges for the property so purchased) secured by any such Lien does
not exceed 100% of the lesser of the fair market value or the purchase price of
the property being purchased at the time of the incurrence of such Indebtedness
and (3) the Indebtedness secured thereby is permitted to be incurred pursuant
to this Agreement; (m) Liens arising out of consignment, bailment or similar
arrangements entered into by the Borrower or any of its Subsidiaries in the
ordinary course of business; (n) rights of setoff upon deposits of cash in
favor of banks or other depository institutions as permitted by any Control
Agreement or, with respect to deposits of cash not subject to a Control
Agreement, customary rights of setoff in favor of such banks or depository
institutions; and (o) Liens securing Indebtedness or leases that
refinance, refund, extend, renew and/or replace Indebtedness or leases secured
by Liens described in clauses (a) through (n) above, as long as such Indebtedness
is permitted hereunder.

Person means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, public benefit
corporation, other entity or government (whether federal, state, county, city,
municipal, local, foreign, or otherwise, including any instrumentality,
division, agency, body or department thereof).

Plan means, at any time, an “employee benefit
plan,” as defined in Section 3(3) of ERISA, that any Loan Party or ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any Loan Party.

Plans and Specifications means the plans and specifications set forth
on Schedule 1.1 together with all Change Orders applicable thereto,
provided that such Change Orders have been approved to the extent required
hereunder.

Pledge Agreements means, collectively, the Borrower Pledge
Agreement, the Sponsor Pledge Agreements, and any other pledge agreement
entered into after the Closing Date by any Loan Party.

Preferred Return has the meaning ascribed thereto in the
North Metro LLC Agreement.

Pro Forma means the unaudited consolidated balance
sheets of Borrower and its Subsidiaries prepared in accordance with GAAP as of
the Closing Date after giving effect to the Related Transactions.  The Pro Forma is annexed hereto as Annex C.

Pro Rata Share means with respect to all matters relating
to any Lender (a) with respect to the Term Loan, the percentage obtained
by dividing (i) the  Term Loan
Commitment of that Lender by (ii) the aggregate Term Loan Commitment of
all Lenders and (b) with respect to all Term Loan on and after the
Maturity Date, the percentage obtained by dividing (i) the aggregate
outstanding principal balance of the Term Loan held by that Lender, by
(ii) the outstanding principal balance of the Term Loan held by all
Lenders, as any such percentages may be adjusted by assignments pursuant to Section
9.1.

Proceeding means a proceeding under the Bankruptcy Code
or any similar law in any jurisdiction, in which any Loan Party or any
Subsidiary thereof is a debtor.

Project means Borrower’s construction of a facility on 178 acres of land owned
by the Borrower in Columbus Township, Minnesota which will consist of (i) a
harness racing and pari-mutuel betting facility, including simulcast betting on
live racing events, with an 1800 seat viewing area and related paddock area,
(ii) food and beverage facilities, (iii) an adjacent card playing and gaming
facility,

 21
 

specifically authorized under Minnesota statutes, of approximately 50
tables and (iv) 1200 parking spaces located on the Property.

Project Budget means, with respect to the Project, the
detailed budget for total Project Costs, setting forth and identifying all Hard
Costs and Soft Costs, prepared by (or on behalf of) Borrower and approved by
Agent and Construction Consultant (such approval not to be unreasonably
withheld), in each case as the same may be adjusted due to changes or
reallocations made in accordance with this Agreement or otherwise amended,
supplemented or modified from time to time in accordance with the terms hereof,
and which, in any event shall (i) set forth estimates for budgeted construction
categories of all items of direct and indirect costs and expenses to be
incurred or payable with respect to the Project, (ii) include all direct and
indirect costs estimated to be incurred in connection with the ownership and
operation of the Project until the Project achieves stabilized use and
occupancy, (iii) specify whether each such item constitutes a Hard Cost or a
Soft Cost and (iv) specify each direct and indirect cost which is to be funded
from proceeds of the Term Loan and any capital contribution to Borrower from
either Sponsor.

Project Costs means, with respect to the Project,
collectively, all Hard Costs and Soft Costs incurred or to be incurred in
connection with the development, design, engineering, procurement, installation
and construction of the Project until Final Completion thereof as set forth in
the Project Budget for the Project approved by Agent and Construction
Consultant in accordance with the requirements hereof.

Project Documents means, with respect to the Project,
collectively, the Project Plan, the Plans and Specifications, the Project
Budget, the Construction Schedule, the Disbursement Schedule, all Advance
Requests, all Construction Contracts, the Construction Permits, all Change
Orders and all other agreements, certificates or other documents to which
Borrower or any Affiliate of foregoing is a party, or otherwise subject to, or
is a beneficiary, in each case relating to the Project or any part thereof, in
each case as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time in accordance with the terms hereof.

Project Land means those certain parcels of real property
more particularly described on Schedule 4.14 hereto.

Project Opening means, with respect to the Project, the date
on which (a) a Borrower Final Completion Certificate has been delivered to
Agent, in form and substance reasonably acceptable to Agent, certifying, among
other things, that Substantial Completion has occurred, (b) the Project has
opened to the public, (c) either (i) the first harness race has been held at
the Project or (ii) the gaming tables have been opened to the public at the
Project, (d) final receipts have been received from each Trade Contractor and
that all other sums due in connection with the construction of the Project have
been paid in full (other than amounts, in an aggregate amount not to exceed
$250,000, which the Borrower is disputing in good faith and in an appropriate
manner), (e) the Project has received a temporary or permanent Certificate
of Occupancy from the applicable Governmental Authority, and (f) a Survey of
the Project in the form of the Survey delivered to Agent on or before the
Closing Date (as revised thereafter to the extent required under the Loan
Documents) and otherwise reasonably acceptable to Agent showing the as-built
location of the completed Project has been delivered to the Agent.

Project Plan means, with respect to the Project, a
general description of the Project prepared by (or on behalf of) Borrower
setting forth the scope of intended work and other material characteristics of
the Project and approved by Agent in its reasonable discretion, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time in accordance with the terms hereof.

 22
 

Projections means Borrower’s and its Subsidiaries’
forecasted consolidated and consolidating: 
(a) balance sheets; (b) profit and loss statements;
(c) cash flow statements; and (d) capitalization statements, all
prepared on a Subsidiary by Subsidiary or division-by-division basis, if applicable,
together with appropriate supporting details and a statement of underlying
assumptions.

Property means, collectively, the Project Land, any
Additional Land related to the Project Land, the Improvements now or hereafter
located thereon, any and all rents, leases, easements, Equipment, Fixtures,
personal property, condemnation awards, insurance proceeds, contracts and
Intellectual Property relating thereto, all refunds, rebates or credits in
connection with reduction in Taxes charged against the Project Property, all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing
including, without limitation, insurance proceeds and condemnation awards, into
cash or liquidation claims, and any and all other rights of Borrower and/or its
Affiliates in and to any of the foregoing items.

Punchlist Items means, with respect to the Project, any
detail of construction or mechanical adjustment, the non-completion of which,
when all such items are taken together as a whole, will not interfere in any
material respect with the use or occupancy of any portion of Project for its
intended purposes; provided, however, that, in all events, Punchlist Items
shall include (i) all items set forth in the “punchlist” to be delivered by
Borrower prior to any final payment or release of any Retainage to any Trade
Contractor with respect thereto, and (ii) all items that are listed on the “punchlists”
prepared by Borrower based upon the inspection of the Project by Governmental
Authorities in connection with the issuance of Certificate of Occupancy.

Proposed Change has the meaning ascribed to it in Section
10.20(c).

Qualified Assignee means (a) any Lender, any Affiliate of any
Lender and, with respect to any Lender, any investment fund that invests in
commercial loans and that is managed or advised by such Lender, an Affiliate of
such Lender or the same investment advisor as such Lender or by an Affiliate of
such investment advisor, (b) any commercial bank, savings and loan association
or savings bank or any other entity which is an “accredited investor” (as
defined in Regulation D under the Securities Act of 1933) which extends credit
or buys loans as one of its businesses, including insurance companies, mutual
funds, lease financing companies and commercial finance companies, which has a
rating of BBB or higher from S&P and a rating of Baa2 or higher from Moody’s
at the date that it becomes a Lender and which, through its applicable lending
office, is capable of lending to Borrower without the imposition of any withholding
or similar taxes or other additional amounts under Section 2.9 and (c)
BDCF and its Related Funds; provided that no Person that (directly or
through an Affiliate) holds a Investment in the equity of any Loan Party in
excess of 25% of its Investment in the Term Loan shall be a Qualified Assignee;
and provided  further that no Person that has failed to obtain any
required approval of a Governmental Authority shall be a Qualified Assignee.

Qualified Counterparty means a Person which (i) is an Affiliate of a
Lender and (ii) has entered into an agreement, in form and substance to the
Agent, pursuant to which such Person has, among other things, appointed the
Agent as its agent and agreed to be bound by certain provisions of the Loan
Documents.

Qualified Plan means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.

Qualified Third Parties means those third parties which are
specifically identified in the Plans and Specifications and/or Project Budget.

 23
 

Real Estate has the meaning ascribed to it in Section
4.14.

Related Fund means (a) any fund, trust or similar entity
that invests in commercial loans in the ordinary course of business and is
advised or managed by (i) a Lender, (ii) an affiliate of a Lender, (iii) the
same investment advisor that manages a Lender or (iv) an affiliate of an
investment advisor that manages a Lender, or (b) any finance company, insurance
company or other financial institution which temporarily warehouses loans for
any Lender or any Person described in clause (a) of this definition.

Related Transactions means the initial borrowing under the Term
Loan on the Closing Date and the payment of all Fees, costs and expenses
associated with all of the foregoing and the execution and delivery of all of
the Related Transactions Documents.

Related Transactions
Documents means the
Loan Documents, the Project Documents and all other agreements or instruments
executed in connection with the Related Transactions.

Release means any release, threatened release,
spill, emission, leaking, pumping, pouring, emitting, emptying, escape,
injection, deposit, disposal, discharge, dispersal, dumping, leaching or
migration of Hazardous Material in the indoor or outdoor environment, including
the movement of Hazardous Material through or in the air, soil, surface water,
ground water or property.

Replacement Lender has the meaning ascribed to it in Section
10.20(a).

Requisite Lenders means Lenders having (a) more than 50%
of the Term Loan Commitment of all Lenders, or (b) if the Term Loan
Commitment have been terminated, more than 50% of the aggregate outstanding
amount of the Term Loan.

Reserve means, with respect to the Term Loan
Commitment, an amount to be determined by Agent in its reasonable discretion
with respect to (a) potential material environmental liabilities of the
Borrower or (b) disputed amounts potentially owing to one or more vendors.

Restricted Payment means, with respect to any Loan Party
(a) the declaration or payment of any dividend or the incurrence of any
liability to make any other payment or distribution of cash or other property
or assets in respect of Stock (other than non-cash dividends or other non-cash
distributions in the form of additional stock issued by such Loan Party to the
extent such issuance is not prohibited hereunder); (b) any payment on
account of the purchase, redemption, defeasance, sinking fund or other
retirement of such Loan Party’s Stock or any other payment or distribution made
in respect thereof, either directly or indirectly; (c) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire Stock of such Loan
Party now or hereafter outstanding (other than cashless exercises of warrants,
options or other similar rights not resulting in the incurrence of
Indebtedness); (d) any payment of a claim for the rescission of the
purchase or sale of, or for material damages arising from the purchase or sale
of, any shares of such Loan Party’s Stock or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such claim for
damages or rescission; and (e) any payment, loan, contribution, or other
transfer of funds or other property to any Stockholder of such Loan Party other
than payment of compensation in the ordinary course of business, and consistent
with similarly situated companies, to Stockholders who are employees of such
Loan Party.

Retainage mean, for each Trade Contract, the greater
of (i) ten percent (10%) of all Hard Costs funded to the Trade Contractor (or
any General Contractor to the extent any General Contractor is performing the
work) under such Trade Contract until such time as the Work provided thereunder
is fifty

 24
 

percent (50%) complete as
certified by the Borrower, at which time the Retainage shall be reduced to five
percent (5%) of such Hard Costs until the Work provided thereunder has been
completed, and (ii) the actual retainage required by applicable Legal
Requirements or permitted under such Trade Contract.

S&P means Standard & Poor’s Ratings
Services, a division of the McGraw-Hill Companies, Inc.

Scheduled Installments has the meaning ascribed to it in Section
2.1(a).

Security Agreement means the Security Agreement of even date
herewith entered into by and among Agent, on behalf of itself and Lenders, and
each Loan Party that is a signatory thereto.

Shortfall means, with respect to the Project, at any
given time, the amount by which the amounts yet to be advanced by Lenders
pursuant to this Agreement are less than the actual sum, as estimated by Agent
or Construction Consultant in its reasonable judgment, which will be required
to complete the construction of the Project in accordance with the Plans and
Specifications, the other Project Documents, this Agreement and the other Loan
Documents and all Legal Requirements, and to pay all unpaid Project Costs in
connection therewith.  Such estimate
shall be binding and conclusive provided it is made in good faith and absent manifest
error.

Soft Costs means, with respect to the Project,
collectively, the costs set forth in the Project Budget for the Project which
are not Hard Costs, including, without limitation, fees and expenses of any
Architect, Developer Consultant, Engineer or General Contractor engaged in connection
with the Project, fees and expenses of Borrower’s counsel and Agent’s counsel,
fees and expenses of the Construction Consultant, taxes, insurance premiums and
operating expense incurred during the construction of the Project, pre-opening
costs and expenses, operating supplies and equipment and such other costs as
are set forth in the Project Budget.

Software means all “software” as such term is defined
in the Code, now owned or hereafter acquired by any Loan Party, other than
software embedded in any category of Goods, including all computer programs and
all supporting information provided in connection with a transaction related to
any program.

Solvent means, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including
subordinated and contingent liabilities, of such Person; (b) the present
fair saleable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its debts
and liabilities, including subordinated and contingent liabilities as they
become absolute and matured; (c) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such Person’s
ability to pay as such debts and liabilities mature; and (d) such Person
is not engaged in a business or transaction, and is not about to engage in a
business or transaction, for which such Person’s property would constitute an
unreasonably small capital.  The amount
of contingent liabilities (such as Litigation, guaranties and pension plan
liabilities) at any time shall be computed as the amount that, in light of all
the facts and circumstances existing at the time, represents the amount that
would reasonably be expected to become an actual or matured liability.

Southwest Casino Unmatched
Pre-Licensing Costs
shall have the meaning ascribed thereto in the North Metro LLC Agreement.

Sponsor has the meaning ascribed to it in Recitals.

 25
 

Sponsor Pledge Agreement means, collectively, each Pledge Agreement
of even date herewith executed by each Sponsor in favor of Agent, on behalf of
itself and Lenders, pledging all its Stock of the Borrower.

Statement has the meaning ascribed to it in Section
7.2(c).

Stock means all shares, options, warrants, general
or limited partnership interests, membership interests or other equivalents
(regardless of how designated) of or in a corporation, partnership, limited
liability company or equivalent entity, whether voting or nonvoting, including
common stock, preferred stock or any other “equity security” (as such term is
defined in Rule 3a11-1 of the General Rules and Regulations promulgated
by the Securities and Exchange Commission under the Securities Exchange Act of
1934).

Stored Materials has the meaning ascribed to in Section
2.1(c).

Stockholder means, with respect to any Person, each
holder of Stock of such Person.

Subsidiary means, with respect to any Person,
(a) any corporation of which an aggregate of more than 50% of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors of such corporation (irrespective of whether, at the time, Stock
of any other class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time, directly
or indirectly, owned legally or beneficially by such Person or one or more
Subsidiaries of such Person, or with respect to which any such Person has the
right to vote or designate the vote of more than 50% of such Stock whether by
proxy, agreement, operation of law or otherwise, and (b) any partnership
or limited liability company in which such Person and/or one or more
Subsidiaries of such Person shall have an interest (whether in the form of
voting or participation in profits or capital contribution) of more than 50% or
of which any such Person is a general partner or may exercise the powers of a
general partner.  Unless the context otherwise
requires, each reference to a Subsidiary shall be a reference to a Subsidiary
of the Borrower.

Subsidiary Guaranty means the Guaranty of even date herewith
executed by Hotel LLC in favor of Agent, on behalf of itself and Lenders.

Substantial Completion means, with respect to the Project, the
completion of the construction of the Project (except for any Punchlist Items)
in accordance with the Plans and Specifications, the other Project Documents,
this Agreement and all Legal Requirements, and that (a) all Operating Permits
required for the normal use and occupancy of the Project, as set forth in the
Plans and Specifications and otherwise necessary for the Project to function
for its intended purpose have been issued by the appropriate Governmental
Authority and are in full force and effect (other than permits, licenses or
other authorizations concerning commencement of card room operations),
including, without limitation, delivery to Agent of valid temporary
Certificates of Occupancy for Project, together with a written determination of
Borrower setting forth the Permanent Certificate of Occupancy Date, (b) all
required utilities are supplied to the Project and are fully operating, as
certified by the applicable Architect and approved by the Construction
Consultant, and (c) the Project shall contain all furniture, Fixtures and
Equipment required for the use and operation of Project and which may be
required by any Governmental Authority.

Survey means each survey of any portion of the
Property delivered to Agent on the Closing Date (as revised thereafter to the
extent required pursuant to the terms of the Loan Documents).

 26
 

Tax Returns means all reports, returns, information
returns, claims for refund, elections, estimated Tax filings or payments,
requests for extension, documents, statements, declarations and certifications
and other information required to be filed with respect to Taxes, including
attachments thereto and amendments thereof.

Taxes has the meaning ascribed to it in Section
2.9(a).

Termination Date means the date on which (a) the Term
Loan has been indefeasibly repaid in full, (b) all other Obligations under
this Agreement and the other Loan Documents have been completely discharged
(other than contingent indemnification obligations as to which no unsatisfied
claim has been asserted), (d) all Term Loan Commitment have been
terminated and (e) Agent and Lenders have been released by Loan Parties of
all claims against Agent and Lenders.

Term Loan has the meaning ascribed to it in Section
2.1 (a).

Term Note has the meaning ascribed to it in Section
2.1(a).

Term Loan Commitment means (a) as to any Lender, the
commitment of such Lender to make its Pro Rata Share of the Term Loan (as set
forth on Annex A) in the maximum aggregate amount set forth in Section
2.1(a) or in the most recent Assignment Agreement, if any, executed by such
Lender and (b) as to all Lenders, the aggregate commitment of all Lenders
to make the Term Loan.  The Term Loan
Commitment with respect to each Term Loan shall reduce automatically by the
amount prepaid or repaid in respect of such Term Loan (but solely by the amount
of such prepayment or repayment allocable to a Lender, for purposes of clause
(a) of this definition).  The aggregate
Term Loan Commitment shall be FORTY ONE MILLION SEVEN HUNDRED THOUSAND DOLLARS
AND ZERO CENTS ($41,700,000.00) on the Closing Date, as such amount may be
adjusted, if at all, from time to time in accordance with this Agreement.

Title Company means, collectively, each Title Company
providing insurance or reinsurance under a direct access agreement with respect
to the Title Insurance Policy delivered to Agent on the date hereof, in each
case as reasonably approved by Agent.

Title Insurance Policy means, with respect to the Property, a
policy of title insurance issued by a Title Company, which policy of title
insurance must be a 1992 ALTA Loan Policy, insuring the applicable mortgages or
deeds of trust securing the Term Loan to be a valid first lien upon the fee
title to the Property subject only to the Permitted Encumbrances.  The Title Insurance Policy must specifically
insure Agent for claims and questions related to claims for mechanics’ or
materialmen’s liens, have all standard exceptions deleted, and contain the
following endorsements: (a) ALTA Zoning 3.0 endorsement which must specifically
state that the intended use of the Property is a “permitted use” under the
governing zoning ordinance; (b) location endorsement; (c) usury endorsement;
(d) tax parcel endorsement; (e) contiguity endorsement, if applicable; (f)
environmental lien endorsement; (g) deletion of creditor’s rights endorsement;
(h) plans and specifications endorsement; (i) variable rate endorsement; (j)
access endorsement; (k) last dollar endorsement; (l) first loss endorsement;
(m) future advance endorsement; (n) date down endorsement 10 and interim
mechanics lien endorsement 10A; (o) such other endorsements as Agent may
reasonably require.  Additionally, the
Title Insurance Policy must insure that the Title Company is prepared to issue
a final title policy inclusive of its ALTA Zoning 3.1 Endorsement and its
unconditional ALTA 9 Comprehensive Endorsement upon completion of the Project
in accordance with the Plans and Specifications; (p) utility facility
endorsement; (q) deletion of arbitration endorsement; (r) CLTA Form 100/ALTA
Form 9 comprehensive endorsement; (s) usury endorsement; (t) doing business
endorsement; (u) CLTA 103.11/ALTA 17 access endorsement; (v) CLTA 116.1 survey

 27
 

endorsement; (w) CLTA
129.1/ALTA 18.1 tax parcel endorsement; (x) tie-in endorsement; and (y) any other
endorsements reasonably required by Agent.

Title IV Plan means a “pension plan” as defined in Section
3(2) of ERISA (other than a Multiemployer Plan), that is covered by Title IV of
ERISA or Section 412 of the IRC, and that any Loan Party or ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.

Trade Contract means, with respect to the Project, any
agreement, contract or purchase order (excluding any Architect Agreement,
Developer Consultant Agreement, any Engineer Agreement, any General Contractor
Agreement, any Construction Management Agreement and any other agreements
pertaining solely to professional services from other design professionals)
directly related to Project and entered into by (or on behalf of) Borrower or
any Affiliate of the foregoing with any Trade Contractor, including (without
limitation) any such agreement, contract or purchase order entered into by any General
Contractor, pursuant to which such Trade Contractor agrees to provide labor,
materials, equipment and/or services in connection with Project.

Trade Contractor means, with respect to the Project, any
Person that is a contractor, sub-contractor, supplier or provider of labor,
materials, equipment and/or services, as the case may be, under a Trade
Contract in connection with Project, including (without limitation) any General
Contractor.

Trademark Security
Agreements means the
Trademark Security Agreements made in favor of Agent, on behalf of itself and
Lenders, by each applicable Loan Party.

Trademark License means rights under any written agreement now
owned or hereafter acquired by any Loan Party granting any right to such Loan
Party to use any Trademark owned by a third party.

Trademarks means all of the following now owned or
hereafter adopted or acquired by any Loan Party: (a) all trademarks, trade
names, corporate names, business names, trade styles, service marks, logos,
internet domain names, other source or business identifiers, prints and labels
on which any of the foregoing have appeared or appear, designs and general
intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any state or territory thereof, or any other country or any
political subdivision thereof; (b) all reissues, extensions or renewals
thereof; and (c) all goodwill associated with or symbolized by any of the
foregoing.

Unrestricted Cash means unrestricted cash deposited in a
deposit account which is subject to a Control Agreement and which is not
subject to any Lien other than the Liens securing the Obligations.

Work means, with respect to any Construction
Contract, the construction, labor and materials to be provided by the Trade
Contractor thereunder.

1.2           Rules
of Construction.  Rules of construction with respect to
accounting terms used in this Agreement or the other Loan Documents shall be as
set forth or referred to in this Section 1.2.  All other undefined terms contained in any of
the Loan Documents shall, unless the context indicates otherwise, have the
meanings provided for by the Code to the extent the same are used or defined
therein; in the event that any term is defined differently in different
Articles or Divisions of the Code, the definition contained in Article or
Division 9 shall control.  Unless otherwise
specified, references in this Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as

 28
 

contained in this Agreement.  The
words “herein,” “hereof” and “hereunder” and other words of similar import
refer to this Agreement as a whole, including all Annexes, Exhibits and
Schedules, as the same may from time to time be amended, restated, modified or
supplemented, and not to any particular section, subsection or clause contained
in this Agreement or any such Annex, Exhibit or Schedule.

Wherever from the context it
appears appropriate, each term stated in either the singular or plural shall
include the singular and the plural, and pronouns stated in the masculine,
feminine or neuter gender shall include the masculine, feminine and neuter
genders.  The words “including”, “includes”
and “include” shall be deemed to be followed by the words “without limitation”;
the word “or” is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations.  Whenever any
provision in any Loan Document refers to the knowledge (or an analogous phrase)
of any Loan Party, such words are intended to signify that such Loan Party has
actual knowledge or awareness of a particular fact or circumstance or that such
Loan Party, if it had exercised reasonable diligence, would have known or been
aware of such fact or circumstance. 
Unless otherwise specifically indicated, definitions of agreements and
instruments in Section 1.1 shall mean and refer to such agreements and
instruments as amended, modified, supplemented, restated, substituted or
replaced from time to time in accordance with their respective terms and the
terms of this Agreement and the other Loan Documents.

SECTION 2.

AMOUNTS AND TERMS OF LOANS; project funding

2.1           Term
Loan; Project Funding.  Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrower
and the other Loan Parties contained herein:

(a)           Term Loan.  Each Term Lender agrees,
severally and not jointly, to lend to Borrower in one draw (the “Initial
Advance”), on the Closing Date, its Pro Rata Share of $5,000,000
(collectively with all Advances (as defined below), the “Term Loan”).  Subsequent to the Closing Date, each Term
Lender agrees, severally and not jointly, subject to the terms and conditions
hereof, to make its Pro Rata Share of advances (each an “Advance”)
requested by Borrower hereunder; provided, however that the amount of any
Advance to be made any time shall not exceed the Outstanding Term Loan
Commitment at such time less any Reserve.   The Advances shall be made in one or more
Advances each an amount not less than $100,000 (or if less, the entire
Outstanding Term Loan Commitment) in accordance with Section 2.1(b);
provided, that no more than two Advances (excluding the advance of the Initial
Term Loan) shall be made during any thirty (30) day consecutive period; and,
provided, further, that no Advances shall be made after September 30,
2008.  Each such Advance shall be made by
Borrower by delivering an Advance Request to Agent in accordance with Section
2.1(b), which written notice must be given on the date which is five (5)
Business Days (but in any event no later than five (5) Business Days prior to
the last day of any calendar month) on or prior to the date that the Advance is
proposed to be made and shall be accompanied by evidence satisfactory to the
Agent that the conditions set forth in Section 3.2 and Section 3.3,
as applicable, have been satisfied. 
Promptly after receipt of any such written notice from Borrower, Agent
shall give each Term Lender written notice thereof.  The obligations of each Term Lender hereunder
shall be several and not joint.  Notwithstanding
anything herein or otherwise to the contrary, no Term Lender shall have any
obligation to fund any Advance if as of the date thereof any Default or Event
of Default has occurred and is continuing pursuant to Section 8.1 hereof
or would result after giving effect to such Advance.

 29
 

Borrower may not at any time
reduce the Term Loan Commitment without the Agent’s prior written consent.

Borrower shall repay the
Term Loan through periodic payments on the last day of each Fiscal Quarter
(beginning with the last day of the first full Fiscal Quarter to occur after
the Project Opening) in an amount equal to $104,250 in addition to a final
installment in amount equal to the entire remaining unpaid principal of the
Term Loan which shall be due and payable on April 20, 2014 (all such
installments, the “Scheduled Installments”). Amounts borrowed hereunder
and repaid may not be reborrowed.

At the request of the
applicable Lender, the Term Loans shall be evidenced by promissory notes
substantially in the form of Exhibit 2.1(a) (as amended, modified,
extended, substituted or replaced from time to time, each a “Term Note”
and, collectively, the “Term Notes”), and Borrower shall execute and
deliver a Term Note to each such Term Lender. 
Each Term Note shall represent the obligation of Borrower to pay the
amount of the applicable Term Lender’s Term Loan Commitment, together with
interest thereon.

(b)           General Requirement Applicable to Advances.

(i)            Advances for Hard Costs.  No
Advance will be made for any Hard Costs unless the Work and materials are set
forth in the Project Budget as Line Items (or portions thereof).  Subject to Section 2.1(b)(vii),
Advances may be made for advance deposits for material to be included in the
Project (“Advance Deposits”). 
Advances for Hard Costs with respect to a trade or any portion of
construction covered by any of the Line Items (or portions thereof) in the
Project Budget shall not exceed:

(A)          the total Hard Costs as set forth as a Line Item (or portion thereof)
in the Project Budget to perform and complete the trade or portion of
construction covered by such Line Item, multiplied by the stage of completion
of such trade or portion of construction (expressed as a percentage) as
determined by the Architect and agreed to by the Construction Consultant; less

(B)           any Retainage with respect to such Line Item, if withheld pursuant to
the terms hereof, and the amounts previously advanced for such Hard Costs as
set forth in such Line Item.

(ii)           Advances for Soft Costs.  No
Advance will be made for any Soft Costs unless (A) such Soft Costs are set
forth in the Project Budget as a portion of the Project Costs as reasonably
determined by the Architect and agreed to by the Construction Consultant and
(B) Agent has received evidence reasonably satisfactory to Agent that such Soft
Costs are then due and payable.

(iii)          Form of Advance Request.  Each
Advance Request delivered by Borrower shall constitute Borrower’s
representation and warranty to Agent and Lenders that:

(A)          any completed construction for which the Advance is being requested is
substantially in accordance with the Plans and Specifications;

(B)           all costs for the payment of which the Agent and Lenders previously
advanced funds have in fact been paid to the contract party with whom Borrower
is in privity or are being held in escrow by the Title Company;

 30
 

(C)           all the representations and warranties of each Loan Party contained in
the Loan Documents were true, correct and complete as of the date of execution
of the Agreement, and in all material respects as of the date of any previous
Advance and continue to be true and correct in all material respects as of the
date of such Advance Request (except to the extent that such representation or
warranty expressly relates to an earlier date in which case it shall be true as
of such earlier date); and

(D)          no Default or Event of Default shall have occurred and be continuing
hereunder.

(iv)          Advance Request Required Documentation.  Each
request for an Advance shall be in accordance with the Disbursement Schedule, in
all material respects, and shall be accompanied by the following:

(A)          an executed Advance Request and Borrower Advance Certification;

(B)           with respect to any Advance Request that includes Hard Costs, a
completed and itemized Application and Certificate for Payment (AIA Document
No. G702) or similar form approved by Agent, together with invoices relating to
all items of Project Costs for the Project in excess of $10,000 covered thereby
and accompanied by a cost breakdown showing the cost of Work for the Project
on, and the cost of materials incorporated into, the Improvements to the
Advance Period Date; the cost breakdown shall also show the percentage of
completion of each Line Item on the Project Budget, and the accuracy of the
cost breakdown shall be certified by the Borrower; all such applications for
payment shall also show all Trade Contractors and subcontractors being paid by
such Advance, including the Major Trade Contractors, by name and trade, the
total amount of each such Construction Contract or subcontract, the amount
theretofore paid to each Trade Contractor and subcontractor thereunder as of
the date of such application, and the amount to be paid from the proceeds of
the Advance to each Trade Contractor and subcontractor;

(C)           a list of all Change Orders and pending Change Orders for the Project
through the Advance Period Date with respect to such Advance Request;

(D)          a list of all Trade Contracts for the Project through the Advance
Period Date with respect to such Advance Request;

(E)           except with respect to the Initial Advance, and except for payment
receipts to the extent relating to amounts being contested by Borrower in
accordance with Section 2.1(b)(viii), payment receipts substantially in
the form attached as Exhibit 2.1(b)(iii) from any General Contractor and
all Trade Contractors evidencing that they have been paid in full for all work
performed and/or materials supplied to the date of the Advance Period Date
immediately preceding the current Advance Period Date with respect to such Advance
Request, except for Retainage provided for in this Agreement;

(F)           with respect to any Advance Request that includes Soft Costs, (i)
evidence reasonably satisfactory to Agent that such Soft Costs have been
properly incurred and are due and payable and are within budgeted amounts, and
(ii) invoices,

 31
 

statements or such other
information and documentation as Agent or Construction Consultant shall
reasonably request or require with respect to such Soft Costs covered by such
Advance Request to evidence the validity of such Soft Costs;

(G)           evidence reasonably satisfactory to Agent that the full amount of the
last preceding Advance have been paid out by Borrower and/or General Contractor
to the Persons with respect to whom such Advance was disbursed and otherwise in
accordance with this Agreement (except to the extent that funds are being held
in escrow by the Title Company);

(H)          Agent and the Construction Consultant shall have received copies of the
General Contractor’s application for payment (including all attachments with
respect thereto) at least ten (10) days prior to the requested Funding Date;
and

(I)            such other information and documents as may
be reasonably requested or required by Agent or Construction Consultant with
respect to the Project Costs covered by such Advance Request.

(v)           Advance Period and Advance Period Date.  Each
Advance Request shall pertain to Work performed no later than the last day of
the then immediately preceding calendar month. 
For purposes of illustration, an Advance Request submitted in June of
2007 shall not pertain to Work performed in June of 2007.  Rather, such Advance Request would pertain to
Work performed in May of 2007 (or, in the case of a payee who (A) has been
delinquent in submitting a proper invoice or other request for payment or (B)
who is involved in a payment dispute with the Borrower which is not resolved
until a subsequent month, Work performed in an earlier month).  For purposes of this Agreement, the period of
Work which may be covered by the Advance Request shall be referred to as the “Advance
Period” and the last date of the calendar month ending immediately prior to
the date on which the applicable Advance Request is submitted shall be referred
to as the “Advance Period Date” with respect to such Advance Request.  In the illustration above, the Advance Period
would end on May 31, 2007 and, accordingly, May 31, 2007 would be the Advance
Period Date with respect to such Advance Request.

(vi)          Payments for Current Work. 
Notwithstanding any provision in Section 2.1(b)(v) to the
contrary, Borrower may include in an Advance Request a request with respect to
Work performed after the Advance Period Date (and, accordingly, not reflected
in the Project Budget submitted in connection with the applicable Advance
Request) provided that (A) the aggregate amount included in any such Advance
Request for Work performed after the Advance Period Date shall not exceed
Twenty Five Thousand Dollars ($25,000) and (B) such Work must be reflected in
the Project Budget submitted in connection with the next Advance Request.

(vii)         Advance Deposits. 
Borrower may include in any Advance Request a request to make Advance
Deposits; provided, however that such Advance Deposits must be
consistent with the Project Budget as reasonably determined by the Agent and
Construction Consultant.  Borrower may
request that Advances for Advance Deposits be disbursed directly to the General
Contractor and be used by the General Contractor to make Advance Deposits for
material to be included in the Project; provided, however, that such
Advance Deposits must be consistent with the Project Budget and the terms and
conditions of the underlying Trade Contracts, as reasonably determined by the
Agent and Construction Consultant.  The
Agent may require that Advances for Advance Deposits made to the General
Contract be conditioned upon the General Contractor providing evidence
reasonably satisfactory to the Agent (such as copies of wire confirmations or
cancelled checks) that any prior Advances made to the General Contractor for
Advance Deposits were in fact made by the General Contractor to the

 32
 

applicable Trade Contractors. 
Notwithstanding anything to the contrary provided herein, the Agent may
require at any that all Advances made for Advance Deposits be disbursed by the
Lenders directly to the Title Company or material vendors rather than disbursed
directly to the Borrower or General Contractor.

(viii)        Disputed Amounts.  To
the extent that Borrower in good faith and by appropriate proceedings disputes
the amount (a “Disputed Amount”) payable to a contractor, material
supplier, service provider or other vendor (either because Borrower believes
that the amount claimed is erroneous or because Borrower believes that the Work
performed was defective), Borrower (A) shall promptly notify the Agent of the
identity of the applicable vendor and the applicable Disputed Amount (it being
understood that the Agent may take a Reserve with respect thereto), (B) is not
required to pay such contractor, material supplier, service provider or other
vendor until such dispute is resolved, (C) except as provided in Section 3.3,
Borrower is not required to seek an Advance relating to a Disputed Amount
and/or to deliver into escrow any payment to the extent relating to such
Disputed Amount and (D) shall not, during the pendency of such dispute, be
required to obtain lien releases or payment receipts relating to such Disputed
Amount.  Nothing in this Section
2.1(b)(viii), however, is intended to (A) relieve Borrower of its
obligation under Section 5.10 to keep the Project free and clear of
Liens (other than Permitted Encumbrances) or (B) to limit the Agent’s ability
to make a direct advance pursuant to the terms and conditions of Section
2.1(i).  Borrower shall reflect
Disputed Amounts in the Project Budget in the manner reasonably determined by
the Agent and Construction Consultant. 
Notwithstanding anything to the contrary provided in this Agreement, no
Advance Request shall be made for an amount which is then a Disputed Amount; provided,
however, that on September 30, 2008, and subject to satisfaction of each
of the other terms hereof (including, without limitation, Section 3
hereof), the Borrower may make an Advance Request for the then unused portion
of the Term Loan Commitment in an amount not to exceed the aggregate amount of
all then current Disputed Amounts as long as such amounts are to be funded into
an escrow pursuant to arrangements reasonably satisfactory to the Agent.

(c)           Advances for Stored Materials.

(i)            Except to the extent set forth in this Section
2.1(c), Agent and Lenders shall in no event or under any circumstances have
any obligation to make any Advance for or with respect to materials which are
stored other than on the Property unless Agent reasonably agrees to the
contrary.

(ii)           Agent and Lenders shall not be required to
disburse any funds for any materials, machinery or other property not yet
incorporated into the Improvements excluding, however, (a) materials in
fabrication and (b) on site materials (other than FF&E) awaiting installation
(the “Stored Materials”) unless Agent and Construction Consultant
receive reasonably satisfactory evidence that:

(A)
the Stored Materials are components in substantially final form ready for
incorporation into the Project;

(B)
the Stored Materials are stored at the Property, in a bonded warehouse in
Minnesota, or at such other site as Agent shall reasonably approve, and are
protected against theft and damage;

(C)
the Stored Materials under materials only contracts will be paid for in full
with the funds to be disbursed and Stored Materials under labor and materials
contracts shall be subject to the Retainage requirements set forth herein, and
all rights or claims of the supplier will be released upon full payment;

 33
 

(D)
Agent shall have received, or will receive upon payment of such Advance,
warehouseman’s receipts or other evidence reasonably satisfactory to Agent of
the Agent’s first priority Lien, for the benefit of itself and the Lenders, in
such materials;

(E)
Borrower shall provide proof reasonably satisfactory to Agent that such
materials are insured against loss by casualty or theft for their full
replacement cost;

(F)
the cost of Stored Materials not stored at the Property, in the aggregate at
any time with respect to the Projects, is not more than $2,000,000 (reduced by
the then cost of Stored Materials, as defined above, stored at the Property but
not otherwise incorporated into the Improvements); and

(G)
the cost of Stored Materials stored at the Property but not otherwise
incorporated into the Improvements, in the aggregate at any time with respect
to the Project, is not more than $1,000,000 (reduced by the then cost of Stored
Materials not stored at the Property).

(iii)          In the event that the Borrower shall at any
time store materials at any one location other than the Property, the cost of
which exceeds the maximum amount permitted under this Section 2.1(c),
Borrower shall pay the excess cost of such materials with its own funds and
shall not be entitled to any Advance in respect of such excess until such time
as such excess is located at the Property and the other conditions set forth in
this Section 2.1(c) have been satisfied (or waived by Agent in its sole
discretion).

(d)           Quality of Work.  No
Advance or any portion thereof shall be made with respect to defective Work or
materials or to any Person that has performed Work or supplied materials that
are defective and that has not been cured, as specified in and confirmed by the
report of the Construction Consultant in its reasonable discretion after
consultation with the Architect and the Developer Consultant; provided,
however, that Lenders may disburse all or any part of any Advance before any
such cure if Agent believes it advisable to do so, and all such amounts or
portions thereof shall be deemed to have been made pursuant to this Agreement.

(e)           Budget Reallocations.

(i)            General Contingency Line Items. 
Borrower may upon notice to Agent, without Agent’s consent, revise the
Project Budget from time to time to move (A) amounts available under any Line
Item for Hard Costs that are designated as “General Contingency” to other Line
Items for Hard Costs in the Project Budget, and/or (B) amounts available under
any Line Item for Soft Costs that are designated as “General Contingency” to
other Line Items for Soft Costs in the Project Budget; provided,
however, that adequate funds remain for each particular Line Item as certified
by the Architect to the best of Architect’s knowledge and belief.

(ii)           Allocation to Cost Savings Contingency.  If
there is a Cost Saving in a particular Line Item of the Project Budget and such
Cost Saving is substantiated by evidence reasonably satisfactory to Agent and
Construction Consultant, then Borrower shall have the right to reallocate such
Cost Saving to the “Cost Savings Contingency”. 
Without the prior approval of Agent, which approval shall not be
unreasonably withheld, Borrower shall in no event or under any circumstances
have the right to reallocate any portion of the Line Items for interest, fees
or other expenses hereunder to the Cost Saving Contingency.

 34
 

(iii)          Allocation from Cost Savings Contingency. 
Borrower may upon notice to Agent, without Agent’s consent, revise the
Project Budget from time to time to move amounts available under any Line Item
designated as “Cost Savings Contingency” to other Line Items; provided,
however, that adequate funds remain for each particular Line Item as certified
by the Architect to the best of Architect’s knowledge and belief.

(iv)          New Line Items. 
Without the prior written consent of Agent in each instance, (i)
Borrower shall not be permitted to create any new Line Item in the Project
Budget, and (ii) the Line Item designated “General Contingency” or “Cost
Savings Contingency” may not be reallocated to any such new Line Item.

(v)           Project Budget as of Advance Period Date.  A
copy of an updated Project Budget shall be prepared as of each Advance Period
Date and promptly delivered to the Agent.

(f)            Loan Balancing and Shortfalls.

(i)            Agent and Lenders will not be required to make
Advances pursuant to the provisions of this Agreement or any of the other Loan
Documents for more than the amount of any Line Item in the Project Budget,
unless Cost Savings from other Line Items have previously been reallocated in
accordance with the terms hereof or all or a portion of the Line Item
designated as “General Contingency” or “Cost Savings Contingency” has been
reallocated to such Line Item in accordance with the terms hereof or any of the
actions other set forth in this Section 2.1(f).

(ii)           In the event that Agent shall determine that
there exists any Shortfall with respect to any Advance as of the Advance Period
Date, Agent shall deliver notice of such determination to Borrower and
thereafter until Borrower has advanced funds equal to such Shortfall, Agent and
Lenders will not be obligated to make any Advances under this Agreement or any
of the other Loan Documents and, within ten (10) days of receipt of such notice
of determination, Borrower shall take any of the following action:

(A)
 establish to Agent’s reasonable
satisfaction that contrary to Agent’s prior determination, no Shortfall then
exists;

(B)  move any Line Item designated as “General
Contingency” or “Cost Saving Contingency” pursuant to the terms hereof such
that the aggregate sum of the Shortfall is reduced to zero; or

(C)  make one or more payments on account of Hard
Costs and/or Soft Costs, until the Shortfall has been reduced to zero.

(g)           Change Orders.

(i)            To the extent not previously provided to
Agent and Construction Consultant, Borrower shall provide to Agent and
Construction Consultant, concurrently with each Advance Request, copies of all
orders (including Change Orders), documents or revisions to Plans and
Specifications reflecting Change Orders for the Project as of the Advance
Period Date, regardless of whether the prior approval by Agent and/or
Construction Consultant of any such order, document or revision is required
pursuant to the terms hereof.

 35
 

(ii)           Borrower shall not request, initiate, agree
to, accept, cause or suffer directly or indirectly any Material Change Order
without Agent’s prior written consent, not to be unreasonably withheld.  Any Change Order other than a Material Change
Order shall not require Agent’s consent. 
Notwithstanding the foregoing, Borrower may request that the Agent
consent to, or ratify, a Change Order which is not a Material Change
Order.  No Change Order, whether or not
approved by Agent, obligates Agent and Lenders to make any Advance to the
extent the same would not otherwise be obligated pursuant to this Agreement to
make such Advance.  Borrower shall submit
to Agent and Construction Consultant copies of each proposed Material Change
Order prior to entering into it, together with documentation reasonably
satisfactory to Agent and Construction Consultant, setting forth all additions
and subtractions theretofore made to or from the scope of the Project.  Borrower may also submit to Agent and
Construction Consultant from time to time, for approval or ratification, as the
case may be, copies of Change Orders which do not constitute Material Change
Orders, together with the documentation described above with respect to the
submission of Material Change Orders. 
Agent shall promptly review all Material Change Orders so submitted, and
grant or deny its consent within ten (10) Business Days of Borrower’s request
therefor; provided that the request is accompanied by a notice, which provides
in upper case bold-faced type:  “THIS IS
A REQUEST FOR AN APPROVAL OR RATIFICATION, AS THE CASE MAY BE, WITH RESPECT TO
A CHANGE ORDER.  IF AGENT FAILS TO
RESPOND WITHIN 10 BUSINESS DAYS OF THE EFFECTIVENESS OF THIS NOTICE, THE
REQUESTED ACTION WITH RESPECT TO THE CHANGE ORDER WILL BE DEEMED APPROVED OR
RATIFIED, AS APPLICABLE”, and if Agent does not respond during such ten (10)
Business Day period, it shall be deemed to have approved or ratified such
Change Orders.  If any Material Change
Order shall require the consent or approval of any third party, Borrower shall
provide Agent with written evidence of such consent or approval.  Borrower shall submit to Agent and
Construction Consultant copies of all Change Orders entered into with respect
to the Project within fifteen (15) days after the same are entered into,
irrespective of whether the same require the prior approval of Agent and
Construction Consultant pursuant to this Agreement.  As used herein, a “Material Change Order” is
(i) any Change Order affecting the Project Budget in an amount greater than
$100,000, or (ii) any Change Order, that together with all other Change Orders
previously requested with respect to the Project but not approved or ratified
by Agent, would affect the Project Budget in an amount greater than $250,000.

(h)           Retainage. With respect to each Advance, whether before or after Substantial
Completion or the Project Opening, the portion of any Retainage that relates to
Work or materials supplied by any Trade Contractor in connection with the
Project will, upon request, be disbursed to Borrower as an Advance subject to
satisfaction of the following conditions:

(A)
no Default or Event of Default has occurred and is continuing and all other
conditions to an Advance under this Agreement are then satisfied;

(B)
the Borrower certifies to Agent that such Trade Contractor has completed one
hundred percent (100%) of its obligations under the applicable Trade Contract,
including any Punchlist Items, and has supplied one hundred percent (100%) of
all materials for the Project in compliance with such Trade Contract and in
conformity with the Plans and Specifications;

(C)
such Trade Contractor will be paid in full for its work upon the release of
such portion of the Retainage;

(D) such Trade Contractor executes and delivers such final receipts for
such Trade Contract that may be reasonably requested or required by Agent; and

 36

(E) the Architect shall have
approved the Work completed by such Trade Contractor, as certified in writing
by such Architect to Agent. 

(i)            Direct Advances.

(i)             subject to Borrower’s contest rights as set
forth below and upon thirty (30) days’ prior written notice to Borrower,
Lenders may make, in their reasonable discretion, Advances directly to any of
the Trade Contractors for Project Costs which shall theretofore have been
approved by Agent and for which Borrower shall have failed to make payment and the
execution of this Agreement by Borrower shall, and hereby does, constitute an
irrevocable authorization to so advance the proceeds of such Advances directly
to the Trade Contractors.  No further
authorization from Borrower shall be necessary and all such Advances shall
satisfy the obligations of Lender hereunder with respect to such Advance and
shall be secured by the Mortgages and the other Collateral as fully as if made
directly to Borrower.

(ii)           subject to Borrower’s contest rights as set forth below and upon thirty
(30) days’ prior written notice to Borrower, Agent and Lenders may make, in
their reasonable discretion, Advances (A) to any Person to which Agent in good
faith determines payment is due and (B) in payment of interest and principal
hereunder, and such portion of the Project shall be deemed disbursed as of the
date on which such disbursement is made. 
The execution of this Agreement by Borrower shall, and hereby does,
constitute an irrevocable authorization to so advance the proceeds any Advance.  No further authorization from Borrower shall
be necessary and all such Advances shall satisfy the obligations of Agent and
Lenders hereunder with respect to such Advance and shall be secured by the
Mortgages and the other Collateral as fully as if made directly to Borrower.

(iii)          Borrower shall have the right to contest the validity or application of
any of the costs described in Sections 2.1(i)(i) and 2.1(i)(ii)
by appropriate legal proceedings, so long as the following shall remain
satisfied:

(A)          such legal proceedings shall be prosecuted with diligence by Borrower
and shall operate to prevent any taking or closing or shutting down of the
Project, the Property or any portion thereof, by any Governmental Authority or
any other Person and has the effect of staying any type of sale or forfeiture
of the Project, the Property or any part thereof for failure to comply; 

(B)           Borrower will have deposited with Agent cash collateral, a bond or such
other security satisfactory to Agent, in each case, on such terms as may be
satisfactory to Agent, in its sole discretion, in an amount as may be deemed
necessary by Agent, sufficient to pay any fines, penalties, charges and
interest thereon which may be awarded or assessed and which may become a Lien
upon the Project, the Property or any part thereof which may in any way take
priority over the Lien of the Mortgages, and subject to increase at the request
of Agent when it determines a greater amount may be required to make such
payments; 

(C)           such proceeding shall not subject Agent or Borrower to any risk of any
criminal liability; 

(D)          Borrower shall keep Agent fully informed as to the status and progress
of any such proceeding; and 

 37
 

(E)           Borrower will, upon a final determination of such contest, take all
steps necessary to comply with any requirements arising therefrom.  

If
Borrower shall fail at any time to comply with the above conditions to contest,
the Property or any part thereof is, in the reasonable judgment of Agent, in
any imminent danger of being forfeited or lost or the value of the Collateral
being adversely impacted, Agent may require Borrower to, and Borrower will,
thereupon make the payment which is the subject of the contest.

(j)            Funding Authorization.  The
proceeds of the Initial Advance and subsequent Advances made pursuant to this
Agreement subsequent to the Closing Date are to be funded by Agent by wire
transfer to the account designated by Borrower below (the “Disbursement
Account”):

North Metro Harness Initiative, L.L.C.

Bank:      Associated Bank 

200 North Adams

PO Box 19006, 

Green Bay, WI 54307-9006

FBO:       North Metro Harness Initiative, LLC

2001 Killebrew Drive, #350,
Minneapolis, MN  55425 

ABA No.:  091001270 

Account
No.:  2283033690

Borrower shall provide Agent
with written notice of any change in the foregoing instructions at least three
(3) Business Days before the desired effective date of such change.

2.2           Interest
and Applicable Margins.

(a)           Borrower shall pay interest to Agent, for the ratable benefit of
Lenders with respect to the Term Loan made by each Lender, in arrears on each
applicable Interest Payment Date, with respect to such portion of the Term Loan
designated as an Index Rate Loan, the Index Rate plus the Applicable Term Loan
Index Margin per annum or, with respect to such portion of the Term Loan
designated as a LIBOR Loan, the applicable LIBOR Rate plus the Applicable Term
Loan LIBOR Margin per annum.

As of the Closing Date, the
Applicable Margins are as follows:

	
  Applicable Term Loan Index
  Margin

  	
   

  	
  4.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Applicable Term
  Loan LIBOR Margin

  	
   

  	
  6.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Applicable Unused Line
  Fee Margin

  	
   

  	
  4.50

  	
  %

  

 

On and after the Project
Opening, the Applicable Margins will be as follows:

	
  Applicable Term Loan Index
  Margin

  	
   

  	
  2.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Applicable Term
  Loan LIBOR Margin

  	
   

  	
  4.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Applicable Unused Line
  Fee Margin

  	
   

  	
  4.50

  	
  %

  

 

 38
 

(b)           If any payment on any Loan becomes due and payable on a day other than
a Business Day, the maturity thereof will be extended to the next succeeding
Business Day (except as set forth in the definition of LIBOR Period) and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.

(c)           All computations of Fees calculated on a per annum basis and interest
shall be made by Agent on the basis of a 360-day year, in each case for the
actual number of days occurring in the period for which such Fees and interest
are payable.  The Index Rate is a
floating rate determined for each day. 
Each determination by Agent of an interest rate and Fees hereunder shall
be presumptive evidence of the correctness of such rates and Fees, absent
manifest error.

(d)           So long as an Event of Default has occurred and is continuing under Section
8.1(a), (f) or (g) and without notice of any kind, or so long
as any other Event of Default has occurred and is continuing and at the
election of Agent (or upon the written request of Requisite Lenders) confirmed
by written notice from Agent to Borrower, the interest rates applicable to the
Term Loan shall be increased by two percentage points (2%) per annum above the
rates of interest or the rate of such Fee otherwise applicable hereunder (“Default
Rate”), and the outstanding principal balance of the Term Loan shall bear
interest at the Default Rate applicable to such Obligations.  Interest at the Default Rate shall accrue
from the initial date of such Event of Default until that Event of Default is
cured or waived and shall be payable upon demand, but in any event, shall be
payable on the next regularly scheduled payment date set forth herein for such
Obligation.

(e)           Borrower shall have the option to (i) convert at any time all or
any part of the outstanding Term Loan from Index Rate Loan to LIBOR Loan, (ii) convert
any LIBOR Loan to an Index Rate Loan, subject to payment of the LIBOR Breakage
Costs in accordance with Section 2.3(d) if such conversion is made prior
to the expiration of the LIBOR Period applicable thereto, or
(iii) continue all or any portion of the Term Loan as a LIBOR Loan upon
the expiration of the applicable LIBOR Period and the succeeding LIBOR Period
of that continued portion of the Term Loan shall commence on the first day
after the last day of the LIBOR Period of the portion of the Term Loan to be
continued.  Any portion of the Term Loan
having the same proposed LIBOR Period to be made or continued as, or converted
into, a LIBOR Loan must be in a minimum amount of $2,000,000  and integral multiples of $500,000 in
excess of such amount.  Any such election
must be made by noon (New York time) on the 3rd Business Day prior to
(1) the date of any proposed Advance which is to bear interest at the
LIBOR Rate, (2) the end of each LIBOR Period with respect to any LIBOR
Loan to be continued as such, or (3) the date on which Borrower wishes to
convert any Index Rate Loan to a LIBOR Loan for a LIBOR Period designated by
Borrower in such election.  If no
election is received with respect to a LIBOR Loan by noon (New York time) on
the 3rd Business Day prior to the end of the LIBOR Period with respect thereto,
that LIBOR Loan shall be converted to an Index Rate Loan at the end of its
LIBOR Period.  Borrower must make such
election by notice to Agent in writing, by fax, e-mail or overnight
courier (or by telephone, to be promptly confirmed in writing).  In the case of any conversion or
continuation, such election must be made pursuant to a written notice (a “Notice
of Conversion/Continuation”) in the form of Exhibit 2.2(e).  No Loan shall be made, converted into or
continued as, a LIBOR Loan, if an Event of Default has occurred and is
continuing and Agent or Requisite Lenders have determined not to make or
continue any Loan as a LIBOR Loan as a result thereof.

 39
 

(f)            Notwithstanding anything to the contrary set
forth in this Section 2.2, if a court of competent jurisdiction
determines in a final order that the rate of interest payable hereunder exceeds
the highest rate of interest permissible under law (the “Maximum Lawful Rate”),
then so long as the Maximum Lawful Rate would be so exceeded, the rate of
interest payable hereunder shall be equal to the Maximum Lawful Rate; provided,
however, that if at any time thereafter the rate of interest payable hereunder
is less than the Maximum Lawful Rate, Borrower shall continue to pay interest
hereunder at the Maximum Lawful Rate until such time as the total interest
received by Agent, on behalf of Lenders, is equal to the total interest that
would have been received had the interest rate payable hereunder been (but for
the operation of this paragraph) the interest rate payable since the Closing
Date as otherwise provided in this Agreement. 
Thereafter, interest hereunder shall be paid at the rate(s) of interest
and in the manner provided in Sections 2.2(a) through (e), unless
and until the rate of interest again exceeds the Maximum Lawful Rate, and at
that time this paragraph shall again apply. 
In no event shall the total interest received by any Lender pursuant to
the terms hereof exceed the amount that such Lender could lawfully have
received had the interest due hereunder been calculated for the full term
hereof at the Maximum Lawful Rate.  If
the Maximum Lawful Rate is calculated pursuant to this paragraph, such interest
shall be calculated at a daily rate equal to the Maximum Lawful Rate divided by
the number of days in the year in which such calculation is made.  If, notwithstanding the provisions of this Section
2.2(f), a court of competent jurisdiction shall determine by a final,
non-appealable order that a Lender has received interest hereunder in excess of
the Maximum Lawful Rate, Agent shall, to the extent permitted by applicable
law, promptly apply such excess as specified in Section 2.5(e) and
thereafter shall refund any excess to Borrower or as such court of competent
jurisdiction may otherwise order.

2.3           Fees.

(a)           Fee Letter.  Borrower shall pay to BDCF,
individually, the Fees specified in that certain fee letter dated as of January
19, 2007  among Borrower and BDCF
(the “BDCF Fee Letter”), at the times specified for payment therein.

(b)           Unused Line Fee.  As
additional compensation for the Lenders, Borrower shall pay to Agent, for the
ratable benefit of such Lenders, in arrears, on the first Business Day of each
calendar month prior to September 30, 2008 and on September 30, 2008, a fee for
Borrower’s non-use of available funds in an amount equal to the
Applicable Unused Line Fee Margin per annum multiplied by the Outstanding Term
Loan Commitment as of the last Business Day of the immediately preceding
calendar month.

(c)           [Intentionally Omitted].

(d)           LIBOR Breakage Costs.  Upon
(i) any default by Borrower in making any borrowing of, conversion into or
continuation of, any LIBOR Loan following Borrower’s delivery to Agent of any
LIBOR Loan request in respect thereof or (ii) any payment of a LIBOR Loan
on any day that is not the last day of the LIBOR Period applicable thereto
(regardless of the source of such prepayment and whether voluntary, by
acceleration or otherwise), Borrower shall pay Agent, for the benefit of all
Lenders that funded or were prepared to fund any such LIBOR Loan, LIBOR
Breakage Costs, if applicable.

(e)           Expenses and Attorneys’ Fees. 
Borrower agrees to pay all reasonable, out-of-pocket fees, charges,
costs and expenses (including reasonable attorneys’ fees and expenses) incurred
by Agent in connection with any matters contemplated by or arising out of the
Loan Documents, in connection with the examination, review, due diligence
investigation, documentation, negotiation and closing of the transactions
contemplated herein and in connection with the continued administration of the

 40
 

Loan Documents including any amendments, modifications, consents and
waivers.  Borrower agrees to promptly pay
all reasonable, out-of-pocket fees, charges, costs and expenses (including
reasonable fees, charges, costs and expenses of attorneys, auditors,
appraisers, consultants and advisors) incurred by Agent in connection with any
amendment, waiver, consent with respect to the Loan Documents, Event of
Default, work-out or action to enforce any Loan Document or to collect any
payments due from Borrower or any other Loan Party.  In addition, in connection with any work-out
or action to enforce any Loan Document or to collect any payments due from
Borrower or any other Loan Party, Borrower agrees to promptly pay all
reasonable, out-of-pocket fees, charges, costs and expenses, including, without
limitation, reasonable attorneys’ fees, incurred by Lenders.  All fees, charges, costs and expenses for
which Borrower is responsible under this Section 2.3(e) shall be deemed
part of the Obligations when incurred, payable in accordance with the final
sentence of Section 2.4 and secured by the Collateral.

2.4           Payments.  All
payments by Borrower of the Obligations shall be without deduction, defense,
setoff or counterclaim and shall be made in same day funds and delivered to
Agent, for the benefit of Agent and Lenders, as applicable, by wire transfer to
the account identified below or such other place as Agent may from time to time
designate in writing.

Bank: The Bank of New York

ABA#: 021-000-018

Acct. Name: Black Diamond
Capital Clearing Account

Acct.#: 0000404599

Ref: North Metro

Attn: Bob Hingston

Borrower shall receive
credit on the day of receipt for funds received by Agent by 2:00 p.m. (New
York time).  In the absence of timely
receipt, such funds shall be deemed to have been paid on the next Business
Day.  Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, the
payment may be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the amount of interest and Fees
due hereunder.

2.5           Prepayments.

(a)           Voluntary Prepayments of Term Loan.  At
any time, Borrower may prepay the Term Loan, in whole or in part, subject to
the payment of  the Fees specified
in Section 2.3(a)  and  LIBOR Breakage Costs, if applicable.  Prepayments of Term Loan shall be applied in
accordance with Section 2.5(e).

(b)           Prepayments from Excess Cash Flow. 
Within ten (10) days after the date on which audited Financial
Statements for each Fiscal Year are required to be delivered pursuant to Section 7.2(c),
commencing with the Fiscal Year ended December 31, 2008, Borrower shall prepay
the Term Loan in an amount equal to fifty percent (50%) of the Excess Cash Flow
for such Fiscal Year.  The calculation
shall be based on the audited Financial Statements for Borrower and its
Subsidiaries.  Any prepayments from
Excess Cash Flow paid pursuant to this Section 2.5(b) shall be applied
in accordance with Section 2.5(e).

(c)           Prepayments from Asset Dispositions. 
Immediately upon receipt of any Net Proceeds in excess of $100,000 in
the aggregate during any Fiscal Year,
Borrower shall prepay the Term Loan in an amount equal to such Net
Proceeds, except that Borrower or its Subsidiaries may reinvest all Net
Proceeds of any such Asset Disposition (to the extent not in excess of $500,000
in any consecutive twelve month period), within ninety (90) days, in fixed
assets.  If Borrower does not intend to
so reinvest

 41
 

such Net Proceeds or if the period set
forth in the immediately preceding sentence expires without Borrower having
reinvested the Net Proceeds of any such Asset Disposition, Borrower shall
prepay the Term Loan in an amount equal to such remaining Net Proceeds in
accordance with Section 2.5(e).

(d)           Prepayments from Issuance of Securities. 
Immediately upon the receipt by Borrower or any of its Subsidiaries of
the proceeds of the issuance of Stock, Borrower shall prepay the Term Loan in
an amount equal to such proceeds, net of underwriting discounts and commissions
and other reasonable out-of-pocket costs associated therewith.  The payments shall be applied in accordance
with Section 2.5(e).  Notwithstanding
the foregoing, the following proceeds of stock issuance shall be excluded from
any mandatory prepayment: 
(i) proceeds of issuances of Stock by Borrower on or prior to the
Closing Date, (ii) proceeds of issuances of Stock by either Sponsor which are
contributed to Borrower prior to the Project Opening to make payments to keep
the Project on schedule in accordance with the Construction Schedule, (iii)
proceeds of issuances of Stock by either Sponsor which are contributed to
Borrower to make Capital Expenditures permitted under this Agreement and
(iv) proceeds of issuances of Stock by any Subsidiary of Borrower to
Borrower which constitutes an Investment permitted hereunder.

(e)           Application of Proceeds.  With
respect to any prepayments made by Borrower pursuant to Sections 2.5(b),
2.5(c) and Section 2.5(d) and any payments of Term Loan pursuant
to Section 2.5(a), such prepayments shall be applied, first, to the Term
Loan in the inverse order of maturity of the Scheduled Installments until such
Term Loan shall have been prepaid in full and (ii) thereafter to all other
Obligations then due and owing. Any such prepayment shall be applied first to
Index Rate Loan of the type required to be prepaid before application to LIBOR
Loan of the type required to be prepaid, in each case in a manner which
minimizes any resulting LIBOR Breakage Costs.

2.6           Maturity.  All
of the Obligations shall become due and payable as set forth herein, but in any
event all of the remaining Obligations shall become due and payable upon the
Maturity Date or pursuant to Section 8.3.  Until the Termination Date, Agent shall be
entitled to retain the Liens on the Collateral granted under the Collateral
Documents and the ability to exercise all rights and remedies available to them
under the Loan Documents and applicable laws.

2.7           Loan
Accounts.  Agent shall maintain a loan account (the “Loan
Account”) on its books to record: 
the name and federal employer identification number of each Lender, all
Advances and the Term Loan(s), all payments made by Borrower, and all other debits
and credits as provided in this Agreement with respect to the Term Loan or any
other Obligations.  All entries in the
Loan Account shall be made in accordance with Agent’s customary accounting
practices as in effect from time to time. 
The balance in the Loan Account, as recorded on Agent’s most recent
printout or other written statement, shall, absent manifest error, be
presumptive evidence of the amounts due and owing to Agent and Lenders by
Borrower; provided that any failure to so record or any error in so
recording shall not limit or otherwise affect (other than to the extent of such
error) Borrower’s duty to pay the Obligations. 
Agent shall render to Borrower a quarterly accounting of transactions
with respect to the Term Loan setting forth the balance of the Loan Account for
the immediately preceding quarter. 
Unless Borrower notifies Agent in writing of any objection to any such
accounting (specifically describing the basis for such objection), within forty-five
(45) days after the date thereof, each and every such accounting shall, absent
manifest error, be deemed presumptive evidence of all matters reflected
therein.  Only those items expressly
objected to in such notice shall be deemed to be disputed by Borrower.  Notwithstanding any provision herein
contained to the contrary, any Lender may elect (which election may be revoked)
to dispense with the issuance of Term Notes to that Lender and may rely on the
Loan Account as evidence of the amount of Obligations from time to time owing
to it.

 42
 

2.8           Yield
Protection.

(a)           Capital Adequacy and Other Adjustments.  In
the event that any Lender shall have determined that the adoption after the
date hereof of any law, treaty, governmental (or quasi-governmental) rule,
regulation, guideline or order regarding capital adequacy, reserve requirements
or similar requirements or compliance by any Lender or any corporation
controlling such Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not having
the force of law and whether or not failure to comply therewith would be
unlawful) from any central bank or governmental agency or body having
jurisdiction does or shall have the effect of increasing the amount of capital,
reserves or other funds required to be maintained by such Lender or any
corporation controlling such Lender and thereby reducing the rate of return on
such Lender’s or such corporation’s capital as a consequence of its obligations
hereunder, then Borrower shall from time to time within fifteen (15) days after
notice and demand from such Lender (together with the certificate referred to
in the next sentence and with a copy to Agent) pay to Agent, for the account of
such Lender, additional amounts sufficient to compensate such Lender for such
reduction; provided that if the respective Lender has unreasonably delayed or
withheld such notice and demand, the respective Lender shall not be entitled to
receive additional payments pursuant to this Section 2.8(a) for
periods occurring prior to the 180th day before the receipt of such notice and
demand (provided that this limitation shall not apply to reductions
arising out of the retroactive application of any law, treaty, rule,
regulation, guideline or order which arises during such 180 day period); and
provided further, that such Lender shall not be entitled to any such additional
amounts, unless such Lender is imposing similar types of assessments on other
similarly situated borrowers.  A
certificate as to the amount of such cost and showing the basis of the
computation of such cost submitted by such Lender to Borrower and Agent shall,
save for manifest error, be presumptive evidence of the matters set forth
therein.  Each Lender agrees that, as
promptly as practicable after it becomes aware of any circumstances referred to
above which would result in any such cost or reduction, the affected Lender
shall, to the extent not inconsistent with such Lender’s internal policies of
general application, use reasonable commercial efforts to minimize the redirect
rate of return, costs and expenses incurred by it and payable to it by Borrower
pursuant to this Section 2.8(a).

(b)           Increased LIBOR Funding Costs; Illegality. 
Notwithstanding anything to the contrary contained herein, if the
introduction of or any change in any law, rule, regulation, treaty or directive
(or any change in the interpretation thereof) after the date hereof shall make
it unlawful, or any central bank or other Governmental Authority shall assert
that it is unlawful, for any Lender to agree to make or to continue to fund or
maintain any LIBOR Loan, then, unless that Lender is able to make or to
continue to fund or to maintain such LIBOR Loan at another branch or office of
that Lender without, in that Lender’s opinion, adversely affecting it or its
Term Loan or the income obtained therefrom, on notice thereof and demand
therefor by such Lender to Borrower through Agent, (i) the obligation of
such Lender to make or to continue to fund or maintain LIBOR Loan shall
terminate and (ii) Borrower shall, at the end of each respective LIBOR
Period, repay each outstanding LIBOR Loan of such Lender or convert such LIBOR
Loan into Index Rate Loan; provided that if the continued existence of any such
LIBOR Loan through the end of its respective LIBOR Period is illegal, then
Borrower shall forthwith prepay in full each such outstanding LIBOR Loan owing
by Borrower to such Lender, together with interest accrued thereon, unless
Borrower, on behalf of Lender, within five (5) Business Days after the
delivery of such notice and demand, converts all LIBOR Loan into Index Rate
Loan. If, after the date hereof, the introduction of, change in or
interpretation of any law, rule, regulation, treaty or directive would impose
or increase reserve requirements (other than as taken into account in the
definition of LIBOR) or otherwise increase the cost to any such Lender of
making or maintaining a LIBOR Loan, then Borrower shall from time to time
within fifteen (15) days after notice and demand from Agent to Borrower (together
with the certificate referred to in the next sentence) pay to Agent, for the
account of all such affected Lenders, additional amounts sufficient to
compensate such Lenders for such increased cost;

 43
 

provided that Borrower shall not be liable to pay for any such amounts
incurred or accrued more than one hundred eighty (180) days prior to the date
on which notice of the event giving rise to the obligation to make such payment
is given to Borrower (provided that this limitation shall not apply to
increased costs arising out of the retroactive application of any law, treaty,
rule, regulation or directive (or any change in interpretation thereof) which
arises during such 180 day period), and provided further, that such Lender
shall not be entitled to any such additional amounts unless such Lender is
imposing similar types of assessments on other similarly situated
borrowers.  A certificate as to the
amount of such cost and showing the basis of the computation of such cost
submitted by Agent on behalf of all such affected Lenders to Borrower shall,
save for manifest error, be presumptive evidence of the matters set forth
therein.  Each Lender agrees that, as
promptly as is practicable after it becomes aware of any circumstances referred
to above which would result in any such increased cost, the affected Lender
shall, to the extent not inconsistent with such Lender’s internal policies of
general application, use reasonable commercial efforts to minimize costs and
expenses incurred by it and payable to it by Borrower pursuant to this Section
2.8(b).

2.9           Taxes.

(a)           No Deductions; Other Taxes.  Any
and all payments or reimbursements made hereunder or under any other Loan
Documents shall be made free and clear of and without deduction for any and all
Charges, present or future, taxes, levies, imposts, deductions or withholdings,
and all liabilities with respect thereto (including any interest, additions to
tax or penalties applicable thereto) of any nature whatsoever imposed by any
Governmental Authority (“Taxes”), excluding (i) such Taxes to the
extent imposed on or measured by Agent’s or a Lender’s gross or net income or
gross receipts (and franchise taxes, branch profits taxes, taxes on doing
business or other taxes imposed in lieu thereof) as a result of a connection
between such Agent or Lender and the jurisdiction of the Governmental Authority
imposing such Tax or any political subdivision or taxing authority thereof or
therein (ii) Taxes imposed on or measured by Agent’s or a Lender’s overall net
income (however denominated), and franchise taxes imposed on it (in lieu of net
income taxes), by the jurisdiction (or any political subdivision thereof) under
the laws of the laws of which such recipient is organized or Borrower is
currently organized or in which the recipient’s principal office is located or,
in the case of any Lender, in which its applicable lending office is located,
(iii) any branch profits taxes imposed by the United States of America or any
similar tax imposed by any other jurisdiction in which the Borrower is located
and (iv) any United States federal withholding tax that is imposed on
amounts payable to a Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement or is attributable to such Foreign Lender’s failure
(other than as a result of a change in law, rule, regulation or treaty or in
the administration, interpretation or application thereof by any Governmental
Authority) to comply with Section 2.9(c), except in each case (other
than in the latter case where a Foreign Lender fails to provide a Certificate
of Exemption described in Section 2.9(c) that it is legally entitled to
do) to the extent that such Foreign Lender’s assignor (if any) was entitled, at
the time of assignment, to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to this Section 2.9(a)
(collectively, “Excluded Taxes,” and all such non-Excluded Taxes being
referred to herein as “Non-Excluded Taxes”).  If Borrower shall be required by law to
deduct any Non-Excluded Taxes or Other Taxes from or in respect of any sum
payable hereunder or under any other Loan Document to any Lender or Agent, then
the sum payable hereunder shall be increased as may be necessary so that, after
making all required deductions (including deductions applicable to additional
sums payable pursuant to this Section 2.9), such Lender or Agent
receives an amount equal to the sum it would have received had no such
deductions been made.  If any amounts are
payable in respect of Non-Excluded Taxes or Other Taxes pursuant to the
preceding sentence, Borrower agrees to reimburse each Lender or Agent, upon the
written request of such Lender or Agent and reasonable documentation of such
amounts, for any net additional taxes imposed on or measured by the net income
of such Lender or Agent as such Lender or Agent shall determine are payable in
respect of

 44
 

such amounts so paid to or on behalf of such Lender or Agent pursuant
to the preceding sentence and in respect of any amounts paid to or on behalf of
such Lender or Agent pursuant to this sentence. 
All required deductions shall be withheld and timely paid over to the
relevant Governmental Authority in accordance with applicable law.  In addition, Borrower agrees to timely pay to
the relevant Governmental Authority in accordance with applicable law any
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made hereunder or
under any other Loan Document or from the execution, delivery, enforcement or
registration of, or otherwise with respect to, this Agreement or any other Loan
Document (“Other Taxes”).

(b)           Changes in Tax Laws.  In
the event that, after the date hereof (or in the case of a Qualified Assignee
or participant, the date of the relevant assignment or sale of a
participation), (1) any changes in any existing law, regulation, treaty or
directive or in the administration, interpretation or application thereof,
(2) any new law, regulation, treaty or directive enacted or any administration,
interpretation or application thereof, or (3) compliance with any request,
guideline or directive (whether or not having the force of law) from any
Governmental Authority:

(i)            does or shall subject Agent or any Lender to
any tax of any kind whatsoever with respect to this Agreement, or any other
Loan Documents or the Term Loan made hereunder, or change the basis of taxation
of payments to Agent or such Lender in respect thereof (except for the
imposition of, or any change in the rate of, any Excluded Tax); or

(ii)           does or shall impose on Agent or any Lender any other condition, cost
or expense in connection with the transactions contemplated hereby or
participations herein; and the result of any of the foregoing is to increase
the cost to Agent or any such Lender of making or continuing the Term Loan, as
the case may be, or to reduce any amount receivable hereunder or under any
other Loan Document, then, in any such case, Borrower shall promptly pay to
Agent or such Lender, upon its demand with reasonable documentation thereof,
any additional amounts necessary to compensate Agent or such Lender, on an
after-tax basis, for such additional cost or reduced amount receivable, as
reasonably determined by Agent or such Lender; provided that Agent or such
Lender shall not be entitled to any such amounts to the extent that the event
giving rise to such additional cost or reduced amount receivable occurred more
than six (6) months prior to the date such notice and demand is given to the
Borrower; provided, however, that if the event giving rise to such additional
cost or reduced amount receivable has a retroactive effect, then such 6-month
period shall be extended to include the period of such retroactive effect.  If Agent or such Lender becomes aware that it
is entitled to claim any additional amounts pursuant to this Section 2.9(b),
it shall promptly notify Borrower of the event by reason of which Agent or such
Lender has become so entitled.  A
certificate as to any additional amounts payable pursuant to the foregoing
sentence submitted by Agent or such Lender to Borrower (with a copy to Agent if
applicable) shall be presumptive evidence of the amount due.  Borrower shall pay Agent or such Lender, as
the case may be, the amount shown as due on any such certificate within ten
(10) days after the receipt thereof.

(c)           Foreign Lenders. 
Prior to becoming a Lender under this Agreement and within fifteen (15)
days after a reasonable written request of Borrower or Agent from time to time
thereafter, each such Person or Lender that is not in each case a “United
States person” (as such term is defined in IRC Section 7701(a)(30)) for U.S.
federal income tax purposes (a “Foreign Lender”) shall provide to
Borrower and Agent, if it is legally entitled to, a properly completed and
executed IRS Form W-8BEN or Form W-8ECI or other applicable form,
certificate or document prescribed by the IRS, certifying as to such Foreign
Lender’s entitlement to an exemption from, or reduction in, United States
withholding tax

 45
 

with respect to payments to be made to such Foreign Lender under this
Agreement and under the Term Notes (a “Certificate of Exemption”).

(d)           Indemnification. 
Subject to such Lender’s or Agent’s compliance with the provisions of
this Section 2.9, Borrower will indemnify each Lender and Agent for the
full amount of Non-Excluded Taxes and Other Taxes (including any Non-Excluded
Taxes and Other Taxes imposed by any U.S. jurisdiction on amounts payable under
this Section 2.9) paid by such Lender or Agent, as the case may be, and
any liability (including penalties, interest and expenses including reasonable
attorney’s fees and expenses) arising therefrom or with respect thereto,
whether or not such Non-Excluded Taxes or Other Taxes were correctly or legally
asserted by the relevant Governmental Authority.  A certificate as to the amount of such
payments or liabilities submitted by Lender or Agent to Borrower (with a copy
to Agent if applicable) shall be presumptive evidence of the amount due.  Borrower shall pay Agent or such Lender, as
the case may be, the amount shown as due on any such certificate within ten
(10) day s after the receipt thereof.

(e)           Evidence of Payments.  As
soon as practicable after any payment of Non-Excluded Taxes or Other Taxes by
the Borrower to a Governmental Authority, the Borrower shall deliver to the
Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Agent.

SECTION 3.

CONDITIONS TO LOANS

The obligations of Lenders
to make the Term Loan is subject to satisfaction of all of the applicable
conditions set forth below.

3.1           Conditions
to Initial Advance.  The obligations of Lenders to make the
Initial Advance on the Closing Date is subject to:

(a)           Borrower having received, since its
formation, an aggregate cash equity capital contribution from Sponsors in an
amount not less than $20,800,000;

(b)           the Related Transactions shall have been consummated
in accordance with the respective terms of the Related Transactions Documents,
except as may have been consented to in writing by Agent;

(c)           the Agent shall have received evidence
satisfactory to Agent that the development and construction work at the Project
is supported by a Construction Surety Bond having terms and in an amount
satisfactory to Agent issued by an issuer satisfactory to Agent which
Construction Surety Bond(s) shall be collaterally assigned to Agent (and with
endorsements satisfactory to the Agent);

(d)           Agent and the Construction Consultant shall
be satisfied that the Project Land does not contain any historical geological
sites the preservation or destruction of which could delay, impair or otherwise
adversely effect the Project Opening or the operation or financial performance
of the Project;

(e)           any third-party and regulatory approvals and
consents necessary to consummate the proposed transactions and operate the
Project as contemplated and permit the Agent and Lenders to be creditors to the
Borrower (and permit assignments so that entities managed by entities under
common

 46
 

control with the Agent or any Lender may be creditors to the Borrower)
shall have been obtained and shall be final and non-appealable (other than (i)
approvals and consents to permit racing dates which have not yet been awarded
or determined and (ii) the Minnesota Racing Commission’s approval of the “Card
Room Plan of Operations” (it being agreed that the Borrower shall use good
faith efforts to cause all such approvals and consents to be obtained as soon
as practicable));

(f)            Agent and the Construction Consultant shall
have received and approved the Plans and Specifications and Project Budget;

(g)           Agent shall have received and approved the
Borrower’s business plan;

(h)           Agent and its environmental consultant shall
have approved the scope and content of any environmental audit reports required
by Agent to be provided by Borrower with respect to real property owned or
leased by Borrower or any of its subsidiaries and shall be satisfied that there
are no existing or potential environmental liabilities which could have an
adverse impact on the financial condition of Borrower. Any environmental audit
report required by Agent must be prepared by a nationally recognized environmental
engineering firm acceptable to Agent, delivered at least 10 days prior to
closing and addressed to Agent;

(i)            Agent shall have received a copy of the
Project Plan, the Plans and Specifications, the Project Budget, the
Construction Schedule and the Disbursement Schedule, in each case for the
Project and in form and substance reasonably acceptable to Agent and
Construction Consultant.  Agent shall
have received a true, correct and complete copy of all other Project Documents
then in place for the Project, each in form and substance reasonably
satisfactory to Agent;

(j)            Agent shall have received a copy of any
Architect Agreement for the Project, in each case in form and substance
reasonably acceptable to Agent and Construction Consultant, and each Architect
under such Architect Agreements shall have delivered to Agent a duly executed
and completed Architect Consent with respect to its Architect Agreement, in the
form required hereunder and otherwise reasonably acceptable to Agent and
Construction Consultant;

(k)           Agent shall have received a copy of any
Developer Consultant Agreement for the Project, in each case in form and
substance reasonably acceptable to Agent and Construction Consultant, and each
Developer Consultant under such Develop Agreements shall have delivered to
Agent a duly executed and completed Developer Consultant Consent with respect
to its Developer Consultant Agreement, in the form required hereunder and
otherwise reasonably acceptable to Agent and Construction Consultant;

(l)            Agent shall have received a copy of any
General Contractor Agreement, in each case in form and substance reasonably
acceptable to Agent and Construction Consultant, and any General Contractor
under such General Contractor Agreement shall have delivered to Agent a duly
executed and completed General Contractor Consent with respect to its General
Contractor Agreement, in the form required hereunder and otherwise reasonably
acceptable to Agent and Construction Consultant;

(m)          a copy of all Governmental Approvals necessary
for the construction of the Project as contemplated by the Plans and
Specifications, including, without limitation, a final building permit for the
Project with no conditions to Borrower’s right to commence construction (other
than the payment of certain amounts which are to be paid on the Closing Date as
set forth in that certain Letter of Direction, dated as of the Closing Date, by
the Borrower to the Agent), and all relevant Construction

 47
 

Permits,
licenses and approvals, have been obtained and shall have been delivered to
Agent and approved by Agent and Construction Consultant;

(n)           Agent shall have received evidence reasonably
satisfactory to Agent that no Shortfalls exist;

(o)           Agent shall have received (i) the Title
Insurance Policy, together with evidence of coinsurance and reinsurance direct
access arrangements as Agent shall reasonably require and (ii) copies of all
other policies of all insurance required to be maintained pursuant to this
Agreement or any other Loan Document or other evidence of such insurance
acceptable to Agent in its reasonable discretion;

(p)           Agent shall have received evidence reasonably
acceptable to Agent (including, without limitation, letters from applicable
Governmental Authorities, opinions from zoning counsel and certifications from
the Architect) that the Project and the Property does and will comply with all
applicable zoning, subdivision, land use, parking, environmental and building
statutes, codes, ordinances, regulations, variances and special regulations;

(q)           Each of MTR Gaming Group, Inc. (“MTR
Gaming”), Southwest Casino Corporation (“Southwest Casino”) and each
Sponsor shall have executed an agreement, in form and substance reasonably
acceptable to Agent, providing that MTR Gaming, Southwest Casino and each Sponsor,
respectively, shall (i) to the extent not prohibited by existing agreements to
which it is a party, invest additional amounts in the Borrower to the extent
necessary to cause the Project to be completed and Project Opening to occur,
(ii) covenanted not to enter into any agreement, or otherwise permit to exist,
any restriction on making any investment or providing support to Borrower other
than those in existence on the date hereof and (iii) agreed to pay to Agent the
amount of any dividend, distribution or payment made to such entity or its
affiliates in violation of this Agreement.

(r)            each representation and warranty by any Loan
Party contained herein or in any other Loan Document is true and correct in all
material respects (without duplication of any materiality qualifier contained
therein) as of the Closing Date;

(s)           no Default or Event of Default has occurred and is continuing or would
result after giving effect to the Initial Advance; and

(t)            Borrower shall
deliver all documents listed on,
take all actions set forth on and satisfy all other conditions precedent listed
in the Closing Checklist attached hereto as Annex B, all in form and
substance, or in a manner, reasonably satisfactory to Agent.

3.2           Conditions
to Advances.  Lenders shall not be obligated to make any
Advance subsequent to the Initial Advance, (A) if as of the date thereof (the “Funding
Date”) (i) any representation and warranty by any Loan Party contained
herein or in any other Loan Document is untrue or incorrect in any material respect
(without duplication of any materiality qualifier contained therein) as of such
date (except to the extent that such representation or warranty expressly
relates to an earlier date) and Agent or Requisite Lenders have determined not
to make such Advance as a result thereof or (ii) any Default or Event of
Default has occurred and is continuing or would result after giving effect to
any Advance and Agent or Requisite Lenders have determined not to make such
Advance; and (B) unless each of the following conditions are satisfied:

 48
 

(i)            Agent
shall have received a complete executed Advance Request and Borrower Advance
Certification in accordance with the requirements of Section 2.1(b),
together with all required attachments and deliveries relating thereto, each of
which shall be in form and substance acceptable to Agent and Construction
Consultant;

(ii)           evidence satisfactory to the Agent and the Construction Consultant, in
their reasonable discretion, that the proceeds of such funding will be paid to
(i) Qualified Third Parties for work which has been completed (or requires
advance payment or deposit) and which conforms to the Plans and Specifications
and Project Budget, (ii) Agent and Lenders for interest and Fees owing in
connection with this Agreement or (iii) bonding companies for necessary
Construction Surety Bonds, guarantees, and similar construction related
agreements permitted under Section 6.4(e);

(iii)          subject to Section 2.1(b)(viii), delivery of interim lien
waivers in the form attached hereto as Exhibits 3.2, as applicable for
the period ending one month prior to the Advance Period Date;

(iv)          evidence satisfactory to the Agent and the Construction Consultant that
as of the Advance Period Date, construction of the Project is on plan, schedule
and budget, consistent with the Plans and Specifications, Project Budget and
Construction Schedule in all material respects;

(v)           certification to the Agent that the Borrower does not have cash or cash
equivalents in an aggregate amount in excess of $200,000;

(vi)          to the extent on or prior to the Advance Period Date that Borrower has
entered into any new (or amended any existing) Project Documents, Architect
Agreements, Developer Consultant Agreements, General Contractor Agreements,
Engineer Agreements or Major Trade Contracts with respect to the Project, Agent
shall have received copies of such documents, agreements and/or amendments, in
each case in form and substance reasonably acceptable to Agent and Construction
Consultant if and only if Agent has approval rights with respect thereto under
the terms of this Agreement, and any new Architect, General Contractor,
Engineer or Major Trade Contractor shall have delivered to Agent a duly
executed and completed Architect Consent, General Contractor Consent, Engineer Consent
and/or Major Trade Contractor Consent, as applicable.  Borrower shall have also updated the list of
Trade Contracts on or prior to the Advance Period Date;

(vii)         Agent shall have received from Borrower an updated certified list of
all Construction Contracts for the Project that have been entered into on or
prior to the Advance Period Date;

(viii)        Agent shall have received an updated Project Budget for the Project as
of the Advance Period Date, in form and substance reasonably approved by Agent,
which indicates the Project Costs anticipated to complete the construction of
the Project, after giving effect to Project Costs incurred through the Advance
Period Date;

(ix)           Agent shall have received all documents, reports, certificates,
affidavits and other information, in form and substance satisfactory to Agent
or Construction Consultant, as each reasonably may require to evidence
compliance by Borrower with all of the provisions of this Agreement;

(x)            Agent shall have received a reconciliation by
Borrower of the progress and cost of the construction of the Project as of the
Advance Period Date with the Construction Schedule and the Project Budget
together with a projection of such progress and cost through to completion of
the construction of the Project;

 49
 

(xi)           Agent shall have received from the Title Company a date down
endorsement to be included in the Title Insurance Policy insuring that there
are no mechanic liens filed against the Project as of the date of such Advance
(and an increase to the coverage of the Title Insurance Policy by an amount
equal to the Advance then being made if the Title Insurance Policy does not by
its terms provide for such an increase);

(xii)          Borrower shall have paid, or caused to be paid, all fees and expenses
required by the Loan Documents, to the extent due and payable; and

(xiii)         Agent shall have received evidence reasonably satisfactory to Agent
that no Shortfall shall exist with respect to the Project as of the Advance
Period Date.

The request and acceptance
by Borrower of the proceeds of any Advance or the conversion or continuation of
any portion of the Term Loan into, or as, a LIBOR Loan shall be deemed to
constitute, as of the date thereof, (i) a representation and warranty by
Borrower that the conditions in this Section 3.2  have been satisfied and (ii) a
reaffirmation by Borrower of the granting and continuance of Agent’s Liens, on
behalf of itself and Lenders, pursuant to the Collateral Documents.

3.3           Conditions
to Final Advance.  Lenders shall not be obligated to make any
Advance which is the final disbursement under this Agreement, unless, in
addition to the conditions set forth in Section 3.2 above, each of the
following conditions are satisfied:

(a)           subject to Section 2.1(b)(viii), Agent shall have received final
lien waivers from all Trade Contractors with respect to all Project Costs in
the form attached hereto as Exhibit 3.3(a), or such other statutorily
prescribed form as applies in any jurisdiction and which is approved by the
Title Company and satisfactory to Agent;

(b)           subject to Section 2.1(b)(viii), Agent shall have received from
any General Contractor and all Trade Contractors either (i) final unconditional
release/payment receipts evidencing that the same have been paid in full for
all work performed and/or materials supplied, or (ii) final conditional
release/payment receipts which shall be conditioned solely upon receipt of a
portion of such final Advance;

(c)           Agent shall have received a copy of the permanent (or temporary)
Certificate of Occupancy and all other material Operating Permits for the
Project;

(d)           Agent shall have received a final as built Survey of the Project by a
surveyor reasonably satisfactory to Agent and the Title Company in the form of
the Surveys of the Property delivered to Agent as of the Closing Date (as
revised thereafter to the extent required under the Loan Documents) and
otherwise reasonably satisfactory to Agent;

(e)           Endorsements to the Title Insurance Policy referencing the final as
built survey and indicating no Liens other than Permitted Encumbrances and
including an update to the Form 9 Comprehensive Endorsement, in each case in
form and substance reasonably acceptable to Agent; and

(f)            Lenders shall have received payment for any
and all fees payable with respect to the Advance pursuant to the Loan
Documents, including (without limitation) all fees and expenses of Construction
Consultant to the extent then due and payable.

 50
 

SECTION 4.

REPRESENTATIONS AND WARRANTIES

To induce Agent and Lenders
to enter into the Loan Documents, to make Term Loan, Borrower and the other
Loan Parties executing this Agreement, jointly and severally, represent,
warrant and covenant to Agent and each Lender that the following statements are
and, after giving effect to the Related Transactions will (with respect to Sections
4.1 through 4.9 and Sections 4.21 through 4.24) remain
true, correct and complete until the Termination Date with respect to all Loan
Parties.

4.1           Organization,
Powers, Capitalization and Good Standing.

(a)           Organization and Powers.  Each
of the Loan Parties and each of their Subsidiaries is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization and qualified to do business in all states where such
qualification is required except where failure to be so qualified or be in good
standing would not reasonably be expected to have a Material Adverse
Effect.  The jurisdiction of organization
and all jurisdictions in which each Loan Party is qualified to do business as
of the Closing Date are set forth on Schedule 4.1(a).  Each of the Loan Parties and each of their
Subsidiaries has all requisite organizational power and authority to own and
operate its properties, to carry on its business as now conducted and proposed
to be conducted, to enter into each Loan Document and Related Transactions
Document to which it is a party and to incur the Obligations, grant liens and
security interests in the Collateral and carry out the Related Transactions.

(b)           Capitalization.  As
of the Closing Date:  (i) the authorized
Stock of each of the Loan Parties and each of their Subsidiaries is as set
forth on Schedule 4.1(b); (ii) all issued and outstanding Stock of
each of the Loan Parties and each of their Subsidiaries is duly authorized and
validly issued, fully paid, nonassessable (as applicable), free and clear of
all Liens other than those in favor of Agent for the benefit of Agent and
Lenders, and such Stock was issued in compliance with all applicable state,
federal and foreign laws concerning the issuance of securities; (iii) the
identity of the holders of the Stock of each of the Loan Parties and the
percentage of their fully-diluted ownership of the Stock of each of the
Loan Parties is set forth on Schedule 4.1(b); and (iv) no Stock of
any Loan Party or any of their Subsidiaries, other than those described above,
is issued and outstanding.  Except as
provided in Schedule 4.1(b), as of the Closing Date, there are no
preemptive or other outstanding rights, options, warrants, conversion rights or
similar agreements or understandings for the purchase or acquisition from any
Loan Party or any of their Subsidiaries of any Stock of any such entity.

(c)           Binding Obligation.  This
Agreement is, and the other Loan Documents and Related Transactions Documents
when executed and delivered will be, the legally valid and binding obligations
of the Loan Parties, each enforceable against each Loan Party, as applicable,
in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting,
creditors’ rights generally and the effects of general principles of equity.

4.2           Disclosure.  No
representation or warranty of any Loan Party contained in this Agreement, the
Financial Statements referred to in Section 4.5, the other Related
Transactions (other than Projections, as to which the only representation and
warranty made is as set forth in Section 4.5 hereof), the other Loan Documents
or any other document, certificate or written statement furnished to Agent or any
Lender by or on behalf of any such Person for use in connection with the Loan
Documents or the Related Transactions Documents contains any untrue statement
of a material fact or omitted, omits or will omit to state a material fact
necessary in order to make the statements contained herein or therein not
misleading in any material respect in light of the circumstances in which the
same were made.

 51
 

4.3           No
Material Adverse Effect.  Since January 19, 2007 there have been no
events or changes in facts or circumstances affecting any Loan Party or any of
its Subsidiaries which individually or in the aggregate have had or would
reasonably be expected to have a Material Adverse Effect.

4.4           No
Conflict.  The consummation of the Related Transactions
does not and will not violate or conflict with any laws, rules, regulations or
orders of any Governmental Authority or violate, conflict with, result in a
breach of, or constitute a default (with due notice or lapse of time or both)
under any Contractual Obligation or organizational documents of any Loan Party
or any of its Subsidiaries, except if such violations, conflicts, breaches or
defaults have not had and would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.

4.5           Financial
Statements and Projections.  All Financial Statements concerning Borrower
and its Subsidiaries which have been or will hereafter be furnished to Agent
pursuant to this Agreement, have been or will be prepared in accordance with
GAAP consistently applied (except as disclosed therein) and do or will present
fairly in all material respects the financial condition of the entities covered
thereby as at the dates thereof and the results of their operations for the
periods then ended, subject to, in the case of unaudited Financial Statements,
the absence of footnotes and normal year-end adjustments.

The Projections delivered on
or prior to the Closing Date were prepared on the basis of the assumptions
stated therein and such assumptions were believed by the Loan Parties to be
reasonable at the time prepared.  It is
understood by all parties hereto that uncertainty is inherent in any forecasts
or projections and that no assurance can be given that the results set forth in
the Projections will actually be obtained.

4.6           Solvency.  The
Borrower and the Loan Parties taken as a whole are Solvent.

4.7           Use of
Proceeds; Margin Regulations.

(a)           No part of the proceeds of any Loan will be used for “buying” or “carrying”
“margin stock” within the respective meanings of such terms under
Regulation U of the Board of Governors of the Federal Reserve System as
now and from time to time hereafter in effect or for any other purpose that
violates the provisions of the regulations of the Board of Governors of the
Federal Reserve System.  If requested by
Agent, each Loan Party will furnish to Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form G-3 or FR
Form 0-1, as applicable, referred to in Regulation U.

(b)           Borrower shall utilize the proceeds of the Initial Advance to pay (i)
on the Closing Date, fees, costs and expenses relating to the Related
Transactions, (ii) on the Closing Date, fees, costs and expenses then due and
owing to Qualified Third Parties, and (iii) after the Closing Date, to the
extent there are any remaining funds from the Initial Term Loan after the
payments described in the preceding clauses (i) and (ii), for uses which are
otherwise permitted for subsequent Advances. 
Borrower shall utilize the proceeds of the Advances made after the
Closing Date to pay for (i) Project Costs which were specified in the Advance
Request for such Advance and (ii) interest and Fees owing in respect of this
Agreement.   Schedule 4.7 contains
a description of Borrower’s sources and uses of funds as of the Closing Date,
including that portion of the Term Loan to be made or incurred on that date,
and a funds flow memorandum detailing how funds from each source are to be
transferred for particular uses.

(c)           None
of Borrower or any of its Subsidiaries is subject to regulation as an “investment
company” as defined in, or subject to regulation under, the Investment Company
Act of 1940.

 52

4.8           Brokers. 
Except as set forth on Schedule 4.8, no broker or finder acting
on behalf of any Loan Party or Affiliate thereof brought about the obtaining,
making or closing of the Term Loan or the Related Transactions, and no Loan
Party or Affiliate thereof has any obligation to any Person in respect of any
finder’s or brokerage fees in connection therewith.

4.9           Compliance
with Laws.  Each Loan Party represents and warrants that
it (i) is in compliance and each of its Subsidiaries is in compliance with
the requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority (including, without limitation, Executive Order No.
13224 on Terrorist Financing, effective September 24, 2001, and the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, Public Law 107-56) and the obligations,
covenants and conditions contained in all Contractual Obligations other than
those laws, rules, regulations, orders and provisions of such Contractual
Obligations the noncompliance with which would not be reasonably expected to
have, either individually or in the aggregate, a Material Adverse Effect, and
(ii) maintains and each of its Subsidiaries maintains all licenses, qualifications
and permits referred to above other than any failure to maintain which would
not reasonably be expected to have a Material Adverse Effect.

4.10         Intellectual
Property.  As of the Closing Date, each of the Loan
Parties and its Subsidiaries owns, is licensed to use or otherwise has the
right to use, all material Intellectual Property used in or necessary for the
conduct of its business as currently conducted that is material to the
financial condition, business or operations of such Loan Party and its Subsidiaries
and all such Intellectual Property that is federally registered as of the
Closing Date is identified on Schedule 4.10 and duly and properly
registered, filed or issued in the applicable office and jurisdictions for such
registrations, filings or issuances.  As
of the Closing Date, except as disclosed in Schedule 4.10, to their
knowledge, the use of such Intellectual Property by the Loan Parties and their
Subsidiaries and the conduct of their businesses does not and has not been
alleged by any Person to infringe on the rights of any Person.

4.11         Investigations,
Audits, Etc.  As of the Closing Date, except as set forth
on Schedule 4.11, no Loan Party or any of their Subsidiaries is the
subject of an audit by the IRS or, to each Loan Party’s knowledge, any review
by the IRS or any governmental investigation concerning the violation or
possible violation of any law.

4.12         Employee
Matters.  As of the Closing Date, except as set forth
on Schedule 4.12, (a) no Loan Party or Subsidiary of a Loan Party
nor any of their respective employees is subject to any collective bargaining
agreement, (b) no petition for certification or union election is pending
with respect to the employees of any Loan Party or any of their Subsidiaries
and no union or collective bargaining unit has sought such certification or
recognition with respect to the employees of any Loan Party or any of their
Subsidiaries, (c) there are no strikes, slowdowns, work stoppages or
controversies pending or, to the best knowledge of any Loan Party after due
inquiry, threatened between any Loan Party or any of their Subsidiaries and its
respective employees, other than employee grievances arising in the ordinary
course of business which would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect and (d) hours
worked by and payment made to employees of each Loan Party and each of their
Subsidiaries comply in all material respects with the Fair Labor Standards Act
and each other federal, state, provincial, local or foreign law applicable to
such matters.  Except as set forth on Schedule
4.12, neither Borrower nor any of its Subsidiaries is party to an
employment contract.

4.13         Litigation;
Adverse Facts.  Except as set forth on Schedule 4.13,
there are no judgments outstanding against any Loan Party or any of its
Subsidiaries or affecting any property of any Loan Party or any of its
Subsidiaries as of the Closing Date, nor is there any Litigation pending, or to
the best

 53
 

knowledge of any Loan Party threatened, against any Loan Party or any
of its Subsidiaries, in each case which would reasonably be expected to result
in any Material Adverse Effect.

4.14         Ownership
of Property; Liens.  As of the Closing Date, the real estate
(together with any future acquired real estate, “Real Estate”) listed in
Schedule 4.14 constitutes all of the real property owned, leased,
subleased, or used by any Loan Party or any of its Subsidiaries.  As of the Closing Date, each of the Loan
Parties and each of its Subsidiaries owns good and marketable fee simple title
to all of its owned Real Estate, and valid and marketable leasehold interests
in all of its leased Real Estate, all as described on Schedule 4.14, and
copies of all such leases or a summary of terms thereof reasonably satisfactory
to Agent have been delivered to Agent.  Schedule
4.14 further describes any Real Estate with respect to which any Loan Party
or any of its Subsidiaries is a lessor, sublessor or assignor as of the Closing
Date.  As of the Closing Date, each of
the Loan Parties and each of its Subsidiaries also has good and marketable
title to, or valid leasehold interests in, all of its personal property and
assets subject to applicable Permitted Encumbrances.  As of the Closing Date, none of the
properties and assets of any Loan Party or any of its Subsidiaries are subject
to any Liens other than Permitted Encumbrances, and there are no facts,
circumstances or conditions known to Borrower that are reasonably likely to
result in any Liens (including Liens arising under Environmental Laws) other
than Permitted Encumbrances against the properties or assets of any Loan Party
or any of its Subsidiaries.  As of the
Closing Date, Schedule 4.14 also describes any purchase options, rights
of first refusal or other similar contractual rights pertaining to any Real
Estate.

4.15         Environmental
Matters.  Except as set forth in Schedule 4.15,
as of the Closing Date: (i) the Loan Parties and their Subsidiaries are
and have been in compliance with all Environmental Laws, except for such noncompliance
that would not reasonably be expected to result in Environmental Liabilities of
the Loan Parties or their Subsidiaries in excess of $50,000 in the aggregate;
(ii) the Loan Parties and their Subsidiaries have obtained, and are in
compliance with, all Environmental Permits required by Environmental Laws for
the operations of their respective businesses as presently conducted or as
proposed to be conducted, except where the failure to so obtain or comply with
such Environmental Permits would not reasonably be expected to result in
Environmental Liabilities of the Loan Parties or their Subsidiaries in excess
of $50,000 in the aggregate, and all such Environmental Permits are valid,
uncontested and in good standing; (iii) no Loan Party and no Subsidiary of
a Loan Party is involved in operations or knows of any facts, circumstances or
conditions, including any Releases of Hazardous Materials, that are likely to
result in any Environmental Liabilities of such Loan Party or Subsidiary which
would reasonably be expected to be in excess of $50,000 in the aggregate, and
no Loan Party or Subsidiary of a Loan Party has permitted any current or former
tenant or occupant of the Real Estate to engage in any such operations;
(iv) there is no Litigation arising under or related to any Environmental
Laws, Environmental Permits or Hazardous Material that seeks damages,
penalties, fines, costs or expenses in excess of  $50,000
in the aggregate or injunctive relief against, or that alleges criminal
misconduct by any Loan Party or any Subsidiary of a Loan Party; and (v) no
notice has been received by any Loan Party or any Subsidiary of a Loan Party
identifying any of them as a “potentially responsible party” or requesting
information under CERCLA or analogous state statutes, and to the knowledge of
the Loan Parties, there are no facts, circumstances or conditions that would be
reasonably likely to result in any of the Loan Parties or their Subsidiaries
being identified as a “potentially responsible party” under CERCLA or analogous
state statutes.

4.16         ERISA.

(a)           Except with respect to Multiemployer Plans, each Qualified Plan
received a favorable determination or opinion letter from the IRS or is within
the applicable remedial amendment period. 
Except as would not reasonably be expected to have a Material Adverse
Effect, each Plan is in

 54
 

compliance with the applicable provisions of ERISA and the IRC.  Except as would not reasonably be expected to
have a Material Adverse Effect, neither any Loan Party nor ERISA Affiliate has
failed to make any contribution or pay any amount due as required by either
Section 412 of the IRC or Section 302 of ERISA or the terms of any such
Title IV Plan.  No Loan Party has
engaged in a “prohibited transaction,” as defined in Section 406 of ERISA and
Section 4975 of the IRC, in connection with any Plan, that would subject any
Loan Party to a material tax on prohibited transactions imposed by Section
502(i) of ERISA or Section 4975 of the IRC in an amount that would reasonably
be expected to have a Material Adverse Effect.

(b)           As of the Closing Date, except as set forth in Schedule 4.16:  (i) no ERISA Event or event described in
Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or is
reasonably expected to occur; (ii) except as would not reasonably be expected
to have a Material Adverse Effect, no Loan Party or ERISA Affiliate has
incurred or reasonably expects to incur any liability as a result of a complete
or partial withdrawal from a Multiemployer Plan; and (iii) except as would not
reasonably be expected to have a Material Adverse Effect, within the last
five years no Title IV Plan of any Loan Party or ERISA Affiliate has been
terminated, whether or not in a “standard termination” as that term is used in
Section 404(b)(1) of ERISA.

4.17         Deposit
and Disbursement Accounts.  Schedule 4.17 lists all banks and
other financial institutions at which any Loan Party maintains deposit or other
accounts as of the Closing Date, including any Disbursement Accounts, and such Schedule
correctly identifies the name, address and telephone number of each depository,
the name in which the account is held, a description of the purpose of the
account, and the complete account number therefor. 

4.18         Agreements
and Other Documents.  As of the Closing Date, each Loan Party has
provided to Agent or its counsel, on behalf of Lenders, accurate and complete
copies (or summaries) of all of the following agreements or documents to which
it is subject and each of which is listed in Schedule 4.18:  supply agreements and purchase agreements not
terminable by such Loan Party within sixty (60) days following written notice
issued by such Loan Party and involving transactions in excess of $500,000 per
annum (other than purchase orders entered into in the ordinary course of
business); leases of Equipment having a remaining term of one year or longer
and requiring aggregate rental and other payments in excess of $10,000  per annum (other than purchase orders entered into in the
ordinary course of business); licenses and permits held by the Loan Parties,
the absence of which would reasonably be expected to have a Material Adverse
Effect; instruments and documents evidencing any Indebtedness or Guaranteed
Indebtedness of such Loan Party and any Lien granted by such Loan Party with
respect thereto;  instruments and
agreements evidencing the issuance of any equity securities, warrants, rights
or options to purchase equity securities of such Loan Party; and the Project
Documents.

4.19         Insurance.  Each
Loan Party currently maintains in good repair, working order and condition
(normal wear and tear excepted) all material properties as set forth in Section
5.2 and maintains all insurance described in such Section.  Schedule 4.19 lists all insurance
policies of any nature maintained, as of the Closing Date, for current
occurrences by each Loan Party, as well as a summary of the key business terms
of each such policy such as deductibles, coverage limits and term of policy.

4.20         Taxes
and Tax Returns.

(a)           As of the Closing Date, (i) all Tax Returns required to be filed by the
Loan Parties have been timely and properly filed and (ii) all taxes that are
due (other than taxes being contested in good faith by appropriate proceedings
and for which adequate reserves have been provided for in accordance with GAAP)
have been paid, in each case except where the failure to file Tax Returns or
pay

 55
 

Taxes would not reasonably be expected to have a Material Adverse
Effect.  No Governmental Authority has
asserted any claim for taxes, or to any Loan Party’s knowledge, has threatened
to assert any claim for taxes that would, if not paid by a Loan Party, have a
Material Adverse Effect.  All taxes
required by law to be withheld or collected and remitted (including, without
limitation, income tax, unemployment insurance and workmen’s compensation
premiums) with respect to the Loan Parties have been withheld or collected and
paid to the appropriate Governmental Authorities (or are properly being held
for such payment), except for amounts the nonpayment of which would not be
reasonably likely to have a Material Adverse Effect.

(b)           None of the Loan Parties has been notified that either the IRS, or any
other Governmental Authority, has raised or intends to raise, any adjustments
with respect to Taxes of the Loan Parties, which adjustments would be
reasonably likely to have a Material Adverse Effect.

4.21         Project
Construction.

(a)           Borrower has all necessary power and
authority to enter into and perform its obligations under the Project Documents
to which Borrower is a party or is otherwise bound, and all other agreements
and instruments to be executed by Borrower in connection with the construction
of the Improvements and the development of the Project;

(b)           the Project Documents to which Borrower is a
party have been duly executed and delivered by Borrower and constitute the
legal, valid and binding obligation of Borrower, enforceable against Borrower
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally;

(c)           the construction of the Project and the
execution, delivery and performance by Borrower of its obligations under, and
the consummation of the transactions contemplated by, each of the Project
Documents to which Borrower is a party, and all other agreements and
instruments to be executed by Borrower in connection therewith do not and will
not (a) violate any Legal Requirement applicable to Borrower, (b) result in a
breach of any of the terms, conditions or provisions of, or constitute a
default under the organizational documents of Borrower, or any mortgage,
indenture, agreement, permit, franchise, license, note or instrument to which
Borrower is a party or by which it or any of its properties is bound, or (c)
result in the creation or imposition of any mortgage, lien, charge or
encumbrance of any nature whatsoever upon any of the assets of Borrower (except
as contemplated by this Agreement and by the other Loan Documents);

(d)           there are no actions, suits or proceedings at
law or in equity or before or instituted by any Governmental Authority pending
or, to Borrower’s knowledge, threatened against or affecting Borrower, any of
its Affiliates or the Property, or any part thereof which affect or might
affect the validity or enforceability of any of the Project Documents or which
may have a material adverse effect on the Borrower’s ability to complete the
Project;

(e)           all Construction Permits that are required in
connection with the valid execution, delivery and performance by Borrower of
the Project Documents and all other agreements and instruments to be executed
by Borrower in connection therewith have been obtained (or will be obtained
when required) and are (or will be) in full force and effect and Borrower
agrees that all Construction Permits and Operating Permits required for the
construction and operation of the Project and otherwise in connection with the
carrying out or performance of any of the transactions required or contemplated

 56
 

thereby (other than routine construction and occupancy permits which
are not appropriate or necessary for the stages of construction in question)
will be obtained when required;

(f)            the Plans and Specifications have been
approved, to the extent required by applicable Legal Requirements at such time,
by all Governmental Authorities;

(g)           the anticipated use of the Project complies
with all restrictive covenants affecting the Property and all Legal
Requirements, including, without limitation, all applicable zoning ordinances
and regulations and environmental laws;

(h)           all utility services and facilities necessary
for the construction of the Project and, upon completion of construction, the
operation, use and occupancy of the Project for their intended purposes are
available (or will be available when needed) at the boundaries of the Project
Land, including, without limitation, water supply, storm and sanitary sewer
facilities, gas and electric and telephone facilities and means of access between
the Project Land and public ways;

(i)            except for the existing Trade Contracts
disclosed to Agent in writing, Borrower has not made, assumed or been assigned
any contract or arrangement of any kind, the performance of which by the other
party thereto would give rise to a Lien against all or any portion of the
Property;

(j)            the current zoning law and declarations
covering the Property, together with the Construction Permits and Operating
Permits obtained by Borrower) permit ‘by-right’ the construction of the Project
to be completed in accordance with the Plans and Specifications and, upon
completion of construction in accordance with the Plans and Specifications, the
current zoning law and declarations covering the Property, together with the
Construction Permits and Operating Permits obtained or to be obtained by
Borrower, permit the Project to be operated and used as contemplated by this
Agreement and the other Loan Documents.  

(k)           the Property currently and, upon completion
of construction in accordance with the Plans and Specifications, the use
thereof will be in all respects in compliance with all Construction Permits
then required and Operating Permits then required, as applicable, and all other
Legal Requirements, and such, except as described in Schedule 4.21(k),
compliance is not dependent on any land, improvements or facilities not a part
of the Property.  

(l)            there are no pending, or to Borrower’s
knowledge, threatened actions, suits or proceedings to revoke, attach,
invalidate, rescind or modify the zoning applicable to the Property or any part
thereof, or any of the Construction Permits, as currently existing;

(m)          the Trade Contracts and the other Project Documents heretofore executed
by, or assigned to and assumed by, Borrower are in full force and effect, not
having been amended, modified, terminated, assigned or otherwise changed, or
the provisions thereof waived, except as permitted hereunder or as has
otherwise been disclosed to Agent; and

(n)           the Project Budget contains all Hard Costs and Soft Costs and any other
costs and expenses reasonably anticipated to be incurred in connection the
construction and development of the Project.

4.22         Certificate
of Occupancy; Licenses.  On and after the date on which the Project
Opening occurs (a) all certifications, permits, licenses and approvals,
including without limitation, certificates of completion and occupancy permits,
any applicable liquor licenses and gaming licenses, to the extent

 57
 

applicable where the Property is located and required for the legal
use, occupancy and operation of the Property for its intended purposes
(collectively, the “Property Licenses”), will have been obtained and
will be in full force and effect, (b) Borrower shall keep and maintain all
Property Licenses necessary for the operation of the Property and (c) the uses
being made of the Property is in conformity with the Certificate of Occupancy. 

SECTION 5.

AFFIRMATIVE COVENANTS

Each Loan Party executing
this Agreement jointly and severally agrees as to all Loan Parties that from
and after the date hereof and until the Termination Date:

5.1           Compliance
With Laws and Contractual Obligations.

(a)           Each Loan Party will (i) comply with and shall cause each of its
Subsidiaries to comply with (1) the requirements of all applicable material
laws, rules, regulations and orders of any Governmental Authority (including,
without limitation, laws, rules, regulations and orders relating to taxes,
employer and employee contributions, securities, employee retirement and
welfare benefits, environmental protection matters and employee health and
safety) as now in effect and which may be imposed in the future in all
jurisdictions in which any Loan Party or any of its Subsidiaries is now doing
business or may hereafter be doing business and (2) the obligations,
covenants and conditions contained in all Contractual Obligations of such Loan
Party or any of its Subsidiaries other than the noncompliance with which would
not be reasonably expected to have, either individually or in the aggregate, a
Material Adverse Effect, and (ii) maintain or obtain and shall cause each
of its Subsidiaries to maintain or obtain all licenses, qualifications and
permits now held or hereafter required to be held by such Loan Party or any of
its Subsidiaries, for which the loss, suspension, revocation or failure to
obtain or renew, would reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect. 
All asbestos containing material on the Property shall be demolished,
removed and disposed of in accordance with all applicable federal, state and
local laws, rules, regulations and orders. 
This Section 5.1 shall not preclude any Loan Party or its
Subsidiaries from contesting any taxes or other payments, if they are being
diligently contested in good faith in a manner which stays enforcement thereof
and if appropriate expense provisions have been recorded in conformity with
GAAP, and no Lien (other than a Permitted Encumbrance) in respect thereof has
been created.

(b)           Each Loan Party will comply with all applicable provisions of the
Minnesota Licensing Statute and Borrower shall provide notice to the Minnesota
Racing Commission of any new Lender hereunder, in the form of an affidavit
described in subdivision 1, clause (d) of the Minnesota Licensing Statue as in
effect on the date hereof, within five days of the occurrence of any assignment
or other transfer of all or any part of the Loan to such Lender. 

5.2           Insurance.  Each
Loan Party will maintain or cause to be maintained, with insurers reasonably
acceptable to Agent, liability and property damage insurance with respect to
its business and properties and the business and properties of its Subsidiaries
against loss or damage of the kinds customarily carried or maintained by
corporations of established reputation engaged in substantially similar
businesses and in amounts reasonably acceptable to Agent and will deliver
evidence thereof to Agent. The Loan Parties shall maintain business
interruption insurance providing coverage for a period of at least six (6)
months and in an amount not less than $5,000,000 (or such greater amount as may
be reasonably required, from time to time, by Agent).  Each Loan Party shall, pursuant to
endorsements and/or assignments in form and

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substance reasonably satisfactory to Agent, (i) cause Agent to be named
as lender’s loss payee in the case of casualty insurance, and assignee in the
case of all business interruption insurance, in each case for the benefit of
Agent and Lenders and (ii) cause Agent and each Lender to be named as
additional insureds in the case of all liability insurance, and in each case
such insurance shall be primary and non-contributory for the duration of this
Agreement.  So long as no Event of
Default has occurred and is continuing, proceeds of business interruption
insurance will be released to the Loan Parties. 
In the event any Loan Party fails to provide Agent with evidence of the
insurance coverage required by this Agreement, Agent may purchase insurance at
such Loan Party’s expense to protect Agent’s interests in the Collateral.  This insurance may, but need not, protect
such Loan Party’s interests.  The
coverage purchased by Agent may not pay any claim made by such Loan Party or
any claim that is made against such Loan Party in connection with the
Collateral.  If Agent purchases insurance
for the Collateral, such Loan Party will be responsible for the costs of that
insurance (which may exceed the cost of insurance that such Loan Party could
obtain on its own), including interest and other Charges imposed by Agent in
connection with the placement of the insurance, until the effective date of the
cancellation or expiration of the insurance. 
The costs of the insurance may be added to the Obligations.

5.3           Inspection;
Consultants; Lender Meeting. Each
Loan Party shall permit any authorized representatives of Agent to visit, audit
and inspect any of the properties of such Loan Party and its Subsidiaries,
including its and their financial and accounting records, and to make copies
and take extracts therefrom, and to discuss its and their affairs, finances and
business with its and their officers and certified public accountants, at such
reasonable times during normal business hours and as often as may be reasonably
requested (collectively a “Field Review”).  At the reasonable request of Agent, Borrower
shall (or permit Agent to) engage, at Borrower’s expense, examiners,
appraisers, industry consultants, construction consultants, environmental
engineering firms and other professionals that Agent deems appropriate to
assist in the ongoing maintenance of the Project and Property.  Representatives of each Lender will be
permitted to accompany representatives of Agent during each Field Review at
Borrower’s expense; provided  however, that with respect to any Lender
which is not an Affiliate or a Related Fund of the Agent, this will be at such
Lender’s expense.  In addition to the
foregoing, each Loan Party will participate and will cause key management
personnel of each Loan Party and its Subsidiaries to participate in a meeting
with Agent and Lenders at least once during each year, which meeting shall be
held at such time and such place as may be reasonably requested by Agent.

5.4           Organizational
Existence.  Except as otherwise permitted by Section
6.6, each Loan Party will and will cause its material Subsidiaries to at
all times preserve and keep in full force and effect its organizational
existence and all rights and franchises material to its business.

5.5           Environmental
Matters.  Each Loan Party shall and shall cause each
Person within its control to: (a) conduct its operations and keep and
maintain its Real Estate in compliance with all Environmental Laws and
Environmental Permits other than noncompliance that would not reasonably be
expected to have a Material Adverse Effect; (b) notify Agent promptly
after such Loan Party or any Person within its control becomes aware of any
violation of Environmental Laws or Environmental Permits or any Release on, at,
in, under, above, to, from or about any Real Estate that is reasonably likely
to result in Environmental Liabilities to a Loan Party or its Subsidiaries in
excess of $50,000; and (c) promptly forward to Agent a copy of any order,
notice of actual or alleged violation or liability, request for information or
any communication or report received by such Loan Party or any Person within
its control in connection with any such violation or Release or any other
matter relating to any Environmental Laws or Environmental Permits that would
reasonably be expected to result in Environmental Liabilities in excess of
$50,000.  

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5.6           Landlords’
Agreements, Mortgagee Agreements, Bailee Letters and Real Estate Purchases.  Each
Loan Party shall use reasonable efforts to obtain a landlord’s agreement,
mortgagee agreement or bailee letter, as applicable, from the lessor of each
leased property, mortgagee of owned property or bailee with respect to any
warehouse, processor or converter facility or other location where Collateral
with a book value greater than $100,000 is stored or located, which agreement
or letter shall contain a waiver or subordination of all Liens or claims that
the landlord, mortgagee or bailee may assert against the Collateral at that
location, and shall otherwise be reasonably satisfactory in form and substance to
Agent. With respect to such leased locations or warehouse, processor or
converter facility, or where Collateral is stored or located as to which no
such agreement has been obtained, the Eligible Inventory at that location shall
be subject to such Reserves as may be established by Agent in its reasonable
credit judgment.  Each Loan Party shall
and shall cause its Subsidiaries to timely and fully pay and perform their
obligations under all leases and other agreements with respect to each leased
location or public warehouse where any Collateral is or may be located (other
than Collateral in an aggregate amount for all such locations not to exceed
$100,000 in the aggregate). 

5.7           Further
Assurances.

(a)           Each Loan Party shall, from time to time, execute such guaranties,
financing statements, documents, security agreements and reports as Agent or
Requisite Lenders at any time may reasonably request to evidence, perfect or
otherwise implement the guaranties and security for repayment of the
Obligations contemplated by the Loan Documents, including, without limitation,
the execution and delivery of all such writings necessary to transfer any
liquor licenses with respect to the Property into the name of Agent or its
designee after the occurrence of an Event of Default; and

(b)           In the event any Loan Party acquires a fee ownership interest in real
property after the Closing Date, such Loan Party shall deliver to Agent a fully
executed mortgage or deed of trust over such real property in form and
substance satisfactory to Agent, together with such title insurance policies,
surveys, appraisals, evidence of insurance, legal opinions, environmental
assessments and other documents and certificates as shall be reasonably
required by Agent. 

(c)           Each Loan Party shall (i) cause each Person, upon its becoming a
Domestic Subsidiary of such Loan Party (provided that this shall not be
construed to constitute consent by any of the Lenders to any transaction not
expressly permitted by the terms of this Agreement), promptly to guaranty the
Obligations and to grant to Agent, for the benefit of Agent and Lenders, a
security interest in the real, personal and mixed property of such Domestic
Subsidiary to secure the Obligations and (ii) pledge, or cause to be
pledged, to Agent, for the benefit of Agent and Lenders, all of the Stock of
such Domestic Subsidiary to secure the Obligations.  Each Loan Party shall pledge, or cause to be
pledged, to Agent, for the benefit of Agent and Lenders, 66% of the outstanding
voting Stock and 100% of the outstanding nonvoting Stock of any person upon its
becoming a first tier Foreign Subsidiary of any Loan Party.  The documentation for such guaranty, security
and pledge shall be substantially similar to the Loan Documents executed
concurrently herewith with such modifications as are reasonably requested by
Agent.

5.8           Payment
of Taxes.  Each Loan Party shall timely pay and
discharge (or cause to be paid and discharged) all material taxes, assessments
and governmental and other charges or levies imposed upon it or upon its income
or profits, or upon property belonging to it; provided that such Loan Party
shall not be required to pay any such tax, assessment, charge or levy that is
being contested in good faith by appropriate proceedings and for which the
affected Loan Party shall have set aside on its books adequate reserves with
respect thereto in conformance with GAAP.

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5.9           Cash
Management Systems.  Borrower shall, and shall cause each other
Loan Party to, enter into Control Agreements with respect to each deposit
account maintained by Borrower or any Subsidiary of Borrower (other than any
payroll account so long as such payroll account is a zero balance account and
the Cash Collateral Account) as of or after the Closing Date.  Each such Control Agreement shall be in form
and substance satisfactory to Agent.  If
any Control Agreement is terminated for any reason by the applicable bank with
respect to one or more deposit accounts, Borrower shall immediately close such
deposit accounts and transfer the funds held therein to a bank which then
enters into a Control Agreement in form and substance satisfactory to Agent.

5.10         Project
Construction.

(a)           General.  Borrower shall cause the
Project to be constructed in accordance with the Plans and Specifications and
Construction Schedule in all material respects. 
Borrower shall cause the Project Costs of the construction of the
Project to be in accordance with the Project Budget (subject to Borrower’s
rights and obligations with respect to Shortfalls, and Borrower’s rights to
change the Project Budget to the extent permitted under this Agreement).  Borrower shall cause construction of the
Project in accordance with the Plans and Specifications (as they may be revised
as permitted hereunder), free and clear of Liens or claims for materials
supplied or for labor or services performed in connection with the construction
of the Project or otherwise (other than Permitted Encumbrances).

(b)           Construction Schedule.  Each
month during the period from the commencement of the Project until Substantial
Completion of the Project, Borrower shall deliver to Agent and Construction
Consultant a copy of an updated Construction Schedule reflecting, among other
things, the anticipated dates of completion of and the timing of disbursements
of incremental amount of various subcategories of the Project Budget, all in
such form and containing such details as Agent may require in its reasonable
discretion.

(c)           Budget Adjustments.  No
adjustments in the Project Budget shall be deemed to be approved without the
prior written consent of Agent, not to be unreasonably withheld, except to the
extent expressly permitted hereunder.

(d)           Inspection of Project and Books and Records.

(i)            Borrower agrees to permit Agent and
Construction Consultant, or designated representatives of any of them, to enter
upon the Property, at any reasonable times during business hours on reasonable
notice and without material interference with the construction of the Project,
with free access to inspect or examine or, to the extent not located on the
Property, to otherwise make available to Agent and Construction Consultant the
following:

(A) all materials and shop drawings pertaining to the construction of
the Project;

(B) any contracts, bills of sale, statements, receipts or vouchers pertaining
to the construction of the Project;

(C) all work done, labor performed or materials furnished in and about
the Project, including, without limitation, in connection with the construction
of the Project;

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(D) all books, contracts and records of Borrower or its Affiliates
pertaining to the construction of the Project; and

(E) any other documents which are related to the construction of the
Project.

(ii)           Borrower promptly will provide Agent or Construction Consultant with
copies of any of the items set forth in clause (d) above as Agent or
Construction Consultant, as the case may be, may from time to time reasonably
request.  Borrower will make its
representatives available to discuss Borrower’s affairs, finances and accounts
relating to the construction of the Project, and Borrower will reasonably
cooperate, and take all reasonable steps to cause any Architect, any Engineer,
any General Contractor, if any, and any Major Trade Contractors, in each case
for the Project, to cooperate with Agent and Construction Consultant, or any of
their designated representatives, to enable such Person to perform its
functions under this Agreement.

(e)           Correction of Work. 
Borrower will, promptly after notice from Agent, correct any material
defect in the Project or any material departure from the Plans and
Specifications thereof.  Borrower agrees
that the making of any Advance shall not constitute a waiver of Agent’s right
to require compliance with this Section 5.10 with respect to any such
defects or departures from the Plans and Specifications.  Borrower agrees that Agent’s failure to
deliver such a notice shall not constitute a waiver by Agent of any of the
obligations of Borrower hereunder.  Agent
agrees to act in good faith and in a commercially reasonable manner in
requiring the correction of Work pursuant to this Section 5.10(e).

(f)            Required Notices.

(i)            Borrower shall give notice to Agent promptly
upon the occurrence of:

(A) any cessation of construction of the Project (after it has
commenced) for a period in excess of five (5) consecutive calendar days;

(B) Borrower obtaining knowledge of any actual or threatened
litigation, investigation or legal proceeding (including without limitation, a
motion where injunctive or similar relief is sought) affecting the Project;

(C) any actual or threatened litigation or action of a Governmental
Authority of which Borrower has knowledge concerning the actual or alleged
presence, release, threat of release, placement on or in, or the generation,
transportation, storage, treatment or disposal at, the Property and/or the
Project of any Hazardous Material;

(D) any notice given pursuant to any Project Document alleging that
there has occurred a default or other failure by Borrower in the fulfillment of
Borrower’s obligations thereunder; and

(E) any condition which results in any delay in the Project which could
result in Substantial Completion occurring after the date therefor set forth in
the Construction Schedule, or in any further delay beyond any delays of which
Agent has been previously notified.

(ii)           Each notice pursuant to this Section
5.10(f) shall be accompanied by a statement of Borrower setting forth
details of the occurrence referred to therein and stating what action

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Borrower proposes to take with respect thereto, in each case in such
detail as Agent may reasonably require.

(g)           No Encroachments. 
Borrower shall cause the Project to be constructed entirely within the
perimeter of the Property and so as not to encroach upon or overhang any
easement or right-of-way or any land of others, and when erected shall be
wholly within any applicable building restriction lines, however established.

(h)           Compliance with Construction Documents. 
Borrower shall abide by, perform and comply with all of Borrower’s
obligations under each of the Project Documents for the Project and Borrower,
at its sole cost and expense, shall use all commercially reasonable efforts to
secure or enforce the performance of each and every material obligation,
covenant, condition and agreement to be performed by the other parties under
any such documents.

(i)            Changes in Agreements. 
Except to the extent otherwise permitted herein, Borrower will not
surrender, terminate, cancel, modify, amend, enter into any such agreement or
any agreement in substitution for, or consent to the assignment of any
Architect Agreement, any Developer Consultant Agreement, any Engineer
Agreement, any Construction Management Agreements or any General Contractor
Agreement (other than a change to existing agreements thereto which would not
constitute a Material Change Order), without Agent’s prior written consent,
which consent shall not be unreasonably withheld.  Agent shall promptly review all documents so
submitted, and grant or deny its consent within ten (10) Business Days of
Borrower’s request therefor; provided that the request is accompanied by a
notice, which provides in upper case bold-faced type:  “THIS IS A REQUEST FOR AN APPROVAL WITH
RESPECT TO A MATERIAL AGREEMENT.  IF
AGENT FAILS TO RESPOND WITHIN 10 BUSINESS DAYS OF THE EFFECTIVENESS OF THIS
NOTICE, THE REQUESTED ACTION WITH RESPECT TO THE MATERIAL AGREEMENT WILL BE
DEEMED APPROVED”, and if Agent does not respond during such ten (10) Business
Day period, it shall be deemed to have approved such request, action or
agreement.  If and to the extent any
amendment, supplement, replacement or other modification is made to any of the
foregoing, upon reasonable request by Agent, Borrower shall promptly cause the
Architect, the Engineer or the General Contractor, as applicable, to deliver a
certificate or other written statement which confirms, on and as of the date
thereof, that the Architect Consent, the Engineer Consent, or the General
Contractor Consent, as applicable, previously delivered in connection with the
Advance remains valid, true, correct and complete as of the date of the
original delivery of such certificate. 
Borrower promptly will give notice to Agent of the surrender,
termination, cancellation, modification, amendment, substitution or assignment
of the Project Documents, whether or not Agent consented thereto pursuant to
the immediately preceding sentence.

(j)            Major Trade Contracts. 
Borrower will not, without Agent’s prior written consent, which consent
shall not be unreasonably withheld, enter into any Major Trade Contract except
the Major Trade Contracts existing on the date hereof or surrender, terminate,
cancel, materially modify or amend any Major Trade Contract.  Agent shall promptly review all Major Trade
Contracts so submitted, and grant or deny its consent within ten (10) Business
Days of Borrower’s request therefor; provided that the request is accompanied
by a notice, which provides in upper case bold-faced type:  “THIS IS A REQUEST FOR AN APPROVAL WITH
RESPECT TO A MAJOR TRADE CONTRACT.  IF
AGENT FAILS TO RESPOND WITHIN 10 BUSINESS DAYS OF THE EFFECTIVENESS OF THIS
NOTICE, THE REQUESTED ACTION WITH RESPECT TO THE MAJOR TRADE CONTRACT WILL BE
DEEMED APPROVED”, and if Agent does not respond during such ten (10) Business
Day period, it shall be deemed to have approved such Major Trade
Contracts.  Borrower certifies that, on
or prior to the date hereof, Agent has been provided with a true, correct and
complete copy of each Major Trade Contract. 
In connection with the foregoing consent, Borrower may from time

 63
 

to time deliver to Agent and Construction Consultant a list of the
names of prospective Major Trade Contractors with whom Borrower may contract
for the construction of the Project. 
Borrower will deliver to Agent an executed copy of any Trade Contract
which Borrower enters into and will promptly give notice to Agent of the
surrender, termination, cancellation, modification, amendment, substitution or
assignment of any Trade Contract, whether or not Agent’s consent to such action
is required pursuant to this Section 5.10(j).  Borrower shall deliver to Agent a copy of
each subcontract entered into by any General Contractor within (10) days after
such subcontract is entered into (to the extent that Borrower is aware of such
subcontract and a copy thereof is made available to Borrower).

(k)           Final Survey. 
Borrower will deliver to Agent within sixty (60) days after Substantial
Completion has occurred, an updated “as-built” survey for the Project, dated no
earlier than the date on which Substantial Completion occurs with a
certification that there are no encroachments with respect to the Project on
land other than the Property.

(l)            Construction Permit. Promptly after obtaining any material
Construction Permit for the construction of the Project or any part thereof,
Borrower shall deliver a copy thereof to Agent.

(m)          Certificate of Occupancy.  Upon
Substantial Completion, Borrower shall obtain an unconditional permanent (or
temporary) Certificate of Occupancy with respect to the Project and shall keep
such certificate of occupancy in effect at all times thereafter.  To the extent Borrower obtains a temporary
Certificate of Occupancy, Borrower shall diligently pursue and use all
commercially reasonable efforts to obtain a permanent Certificate of Occupancy.

(n)           Agent Review. 
Observation, inspection and approvals by Agent of the Plans and
Specifications for the Project, any other Project Documents related to the
Project, the construction of the Project and the workmanship and materials used
therein shall impose no responsibility or liability of any nature whatsoever on
Agent or Construction Consultant and no Person shall, under any circumstances,
be entitled to rely upon such inspections and approvals by Agent or
Construction Consultant for any reason. 
Approvals granted by Agent for any matters covered under this Agreement
shall be narrowly construed to cover only the parties and facts identified in
any such approval.  Construction
Consultant has been or will be retained by Agent solely as a consultant and has
no authority to bind or otherwise act for or on behalf of Agent.

(o)           Trade Contractors. 
Except as provided by law, no Trade Contractors or any other Person
dealing with Borrower, including, without limitation, the Architect, the
Engineer, if any, shall be, nor shall any of them be deemed to be, third party
beneficiaries of this Agreement, but each shall be deemed to have agreed (i)
that the Trade Contractor(s) or other Person in question shall look to Borrower
as their sole source of recovery if not paid and (ii) except as otherwise
agreed to in writing between Agent and the Trade Contractor(s) or other Person
in question, that they may not claim against Agent under any
circumstances.  

5.11         Shortfalls.  If Borrower becomes aware of the existence of
a Shortfall at any time, it shall promptly notify the Agent thereof.

5.12         Maintenance
of Assets.  Each Loan Party shall
keep and maintain all of its material assets in good working order and
condition, ordinary wear and tear excepted.

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SECTION 6.

NEGATIVE COVENANTS

Each Loan Party executing
this Agreement jointly and severally agrees as to all Loan Parties that from
and after the date hereof until the Termination Date:

6.1           Indebtedness.  The
Loan Parties shall not and shall not cause or permit their Subsidiaries
directly or indirectly to create, incur, assume, or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness (other than
pursuant to a Contingent Obligation permitted under Section 6.4) except:

(a)           Indebtedness described on Schedule 6.1;

(b)           the Obligations; 

(c)           Indebtedness not to exceed $2,500,000 (less
the aggregate amount of all Indebtedness permitted pursuant to Section
6.1(d) hereof that refinanced Indebtedness previously permitted pursuant to
this Section 6.1(c)) in an aggregate principal amount at any time
outstanding secured by purchase money Liens or incurred with respect to Capital
Leases and purchase money Indebtedness for the purchase of fixed assets; 

(d)           refinancings of Indebtedness permitted under
clauses (a) and (e) that do not accelerate the scheduled dates for payment
thereof, increase the principal amounts thereof, materially increase any
interest rate or fees applicable thereto, add additional obligors therefor, or
enhance the collateral therefor or the priority thereof; and

(e)           Contingent Obligations permitted by Section
6.4.

6.2           Liens
and Related Matters.

(a)           No Liens.  The Loan Parties shall not and
shall not cause or permit their Subsidiaries to directly or indirectly create,
incur, assume or permit to exist any Lien on or with respect to any property or
asset of such Loan Party or any such Subsidiary, whether now owned or hereafter
acquired, or any income or profits therefrom, except Permitted Encumbrances
(including, without limitation, those Liens constituting Permitted Encumbrances
existing on the date hereof and renewals and extensions thereof, as set forth
on Schedule 6.2).

(b)           No Negative Pledges.  The
Loan Parties shall not and shall not cause or permit their Subsidiaries to
directly or indirectly enter into or assume any agreement (other than the Loan
Documents) prohibiting the creation or assumption of any Lien upon its
properties or assets, whether now owned or hereafter acquired and other than
agreements containing (i) provisions restricting subletting or assignment under
any lease governing a leasehold interest or lease of personal property; (ii)
restrictions with respect to a Subsidiary imposed pursuant to any agreement
which has been entered into for the sale of disposition of all or substantially
all of the equity interests or assets of such Subsidiary, so long as such sale
or disposition of all or substantially all of the equity interests or assets of
such Subsidiary is permitted under this Agreement; and (iii) restrictions on
assignments or sublicensing of licensed Intellectual Property.

(c)           No Restrictions on Subsidiary Distributions
to Borrower.  Except as provided herein, the Loan Parties
shall not and shall not cause or permit their Subsidiaries to directly or
indirectly

 65
 

create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of any such
Subsidiary to: (1) pay dividends or make any other distribution on any of
such Subsidiary’s Stock owned by Borrower or any other Subsidiary; (2) pay
any Indebtedness owed to Borrower or any other Subsidiary; (3) make loans
or advances to Borrower or any other Subsidiary; or (4) transfer any of
its property or assets to Borrower or any other Subsidiary.

6.3           Investments.  The
Loan Parties shall not and shall not cause or permit their Subsidiaries to
directly or indirectly make or own any Investment in any Person except:

(a)           Borrower and its Subsidiaries may make and
own Investments in Cash Equivalents subject to Control Agreements in favor of
Agent; provided that such Cash Equivalents are not subject to setoff rights;

(b)           Borrower and its Subsidiaries may make loans
and advances to employees for moving, entertainment, travel and other similar
expenses in the ordinary course of business not to exceed $100,000 in the
aggregate at any time outstanding; 

(c)           non-cash consideration received in accordance
with Section 6.7;

(d)           Investments existing on the Closing Date, as set forth on Schedule
6.3 and any renewals, amendments and replacements thereof that do not
increase the amount thereof; and 

(e)           Borrower and its Subsidiaries may make advances in the form of a
prepayment of expenses, so long as such expenses were incurred in the ordinary
course of business, and which are consistent with similarly situated companies,
and are being paid in accordance with customary trade terms of Borrower or such
Subsidiary.

6.4           Contingent
Obligations.  The Loan Parties shall not and shall not
cause or permit their Subsidiaries to directly or indirectly create or become
or be liable with respect to any Contingent Obligation except:

(a)           those resulting from endorsement of negotiable instruments for
collection in the ordinary course of business;

(b)           those existing on the Closing Date and described in Schedule 6.4;

(c)           those arising under indemnity agreements to title insurers to cause
such title insurers to issue to Agent mortgagee title insurance policies;

(d)           those arising with respect to customary indemnification obligations
incurred in connection with Asset Dispositions permitted hereunder;

(e)           those incurred in the ordinary course of business with respect to
surety and appeal bonds, performance and return-of-money bonds and other
similar obligations not exceeding at any time outstanding $50,000 in aggregate
liability and any surety bonds or similar instruments required from time to
time by the Minnesota Racing Commission;

(f)            those incurred with respect to Indebtedness
permitted by Section 6.1 provided that (i) any such Contingent
Obligation is subordinated to the Obligations to the same extent as the
Indebtedness to which it relates is subordinated to the Obligations and (ii) no
Loan Party may incur

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Contingent Obligations in respect of Indebtedness incurred by any
Person that is not a Loan Party under this clause (h); and 

(g)           any other Contingent Obligation not expressly permitted by clauses (a)
through (h) above, so long as any such other Contingent Obligations, in the
aggregate at any time outstanding, do not exceed $50,000 and no Loan Party may
incur Contingent Obligations in respect of Indebtedness incurred by any Person
that is not a Loan Party under this clause (i).

6.5           Restricted
Payments.  The Loan Parties shall not and shall not
cause or permit their Subsidiaries to directly or indirectly declare, order,
pay, make or set apart any sum for any Restricted Payment, except that:

(a)            So long as Borrower is a limited liability company for tax purposes,
it may make cash distributions to its Stockholders that are used by such
Persons to pay income taxes (or estimates thereof) then due and owing with
respect to the net income of Borrower taking into account losses from prior
periods; provided that (i) no Default or Event of Default exists at the time of
any such Restricted Payment or would occur as a result thereof and (ii) the
amounts do not exceed the amount of taxes that would have been payable by the
Borrower in the applicable period if Borrower was subject to the applicable
entity level taxation; 

(b)           Borrower may make cash distributions to its Stockholders in excess of the
amount permitted, if any, pursuant to Section 6.5(a); provided that (i)
no Default or Event of Default exists at the time of any such Restricted
Payment or would occur as a result thereof and (ii) at the time of any such
Restricted Payment (A) the ratio of Borrower’s (x) Funded Debt as of the date
of such cash distribution after giving effect to any Advances made on such day
to (y) EBITDA for the twelve Fiscal Month period ending on the last day of the
immediately preceding Fiscal Month is less than 2.5 to 1.0 (the “Leverage
Test”) and (B) based upon Projections (or any other documentation requested
by Agent) reasonably satisfactory to Agent, Borrower has demonstrated that the
Leverage Test will remain below 2.5 to 1.0 until the Termination Date.

(c)           Direct or indirect wholly-owned Subsidiaries of Borrower may make
Restricted Payments to the entity which is the direct owner of the equity of
such wholly-owned Subsidiary.

6.6           Restriction
on Fundamental Changes.  The Loan Parties shall not and shall not cause
or permit their Subsidiaries to directly or indirectly:  (a) amend, modify or waive any term or
provision of its organizational documents in a manner adverse to the Lenders,
including its articles of incorporation, certificates of designations
pertaining to preferred stock, by-laws, partnership agreement or
operating agreement in any manner adverse to the Agent or Lenders unless
required by law; (b) enter into any transaction of merger or consolidation
except, upon not less than five (5) Business Days prior written notice to
Agent, any wholly-owned Subsidiary of Borrower may be merged with or into
Borrower (provided that Borrower is the surviving entity) or  any other wholly-owned Subsidiary of Borrower (provided
that, in the case of any such merger of any Domestic Subsidiary with or into a
Foreign Subsidiary, the Domestic Subsidiary is the surviving entity);
(c) liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution); or (d) acquire by purchase or otherwise all or any substantial
part of the Stock, business or assets of any other Person.

6.7           Disposal
of Assets or Subsidiary Stock.  The Loan Parties shall not and shall not
cause or permit their Subsidiaries to directly or indirectly convey, sell,
lease, sublease, transfer or otherwise dispose of, or grant any Person an
option to acquire, in one transaction or a series of related transactions, any
of its property, business or assets, whether now owned or hereafter acquired,
except for (a) dispositions of

 67
 

obsolete equipment not used or useful in the business; (b) any
disposition of assets as a consequence of any loss, damage, destruction or
other casualty or any condemnation or taking of such assets by eminent domain
proceedings; (c) sales or dispositions of Cash Equivalents for not less
than fair market value thereof and in return for cash or Cash Equivalents;
(e) sales or other dispositions of assets by any Loan Party to any Loan
Party; (f) dispositions described on Schedule 6.7 as long as the Net
Proceeds of such Asset Disposition are applied as required by Section 2.5(c)
and (g) Asset Dispositions by Borrower and its Subsidiaries (excluding
sales of Accounts and Stock of any of Borrower’s Subsidiaries) if all of the
following conditions are met: 
(i) the aggregate fair market value of assets sold or otherwise
disposed of in any Fiscal Year does not exceed $100,000; (ii) the
consideration received is at least equal to the fair market value of such
assets (as determined by the board of directors of the applicable Loan Party in
good faith); (iii) at least 90% of the consideration received is cash;
(iv) the Net Proceeds of such Asset Disposition are applied as required by
Section 2.5(c); and (v)  no Event of Default has occurred and is
continuing or would result from such Asset Disposition.

6.8           Transactions
with Affiliates.

(a)           The Loan Parties shall not and shall not cause or permit their
Subsidiaries to directly or indirectly enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property or
the rendering of any management, consulting, investment banking, advisory or
other similar services) with any Affiliate or with any director, officer or
employee of any Loan Party, except (a) as set forth on Schedule 6.8,
(b) transactions in the ordinary course of and pursuant to the reasonable
requirements of the business of any such Loan Party or any of its Subsidiaries
and upon fair and reasonable terms which (except in the case of transactions
among Domestic Loan Parties) are no less favorable to any such Loan Party or
any of its Subsidiaries than would be obtained in a comparable arm’s length
transaction with a Person that is not an Affiliate, and which are disclosed to
Agent in advance if they involve payments, receipts or transfers in excess of
$100,000 in value in a single transaction or series of related transactions,
(c) payment of reasonable compensation to officers and employees for
services actually rendered to any such Loan Party or any of its Subsidiaries;
(d) payment of director’s fees for individuals who are not officers or
employees of one or more of the Sponsors or Affiliates thereof (other than the
Borrower) not to exceed Twenty Five Thousand Dollars ($25,000) in the aggregate
for any Fiscal Year of Borrower; (e) loans to employees permitted in Section
6.3, (f) reimbursement of employee travel and lodging costs incurred in the
ordinary course of business, (g) the guaranty of the Obligations by Loan
Parties and (h) employment agreements, equity incentive agreements and other
employee and management arrangements in the ordinary course of business which
are fully disclosed to, and reasonably approved by, the Agent; provided that no
Event of Default has occurred and is continuing at the time of any such
Restricted Payment or would result after giving effect thereto; provided
further that it is expressly agreed that any such management fees not permitted
to be so paid shall be accrued and paid when such Event of Default has been
cured or waived.

6.9           Conduct
of Business; Use of Property.  The Loan Parties shall not and shall not
cause or permit their Subsidiaries to directly or indirectly engage in any
business or use the Property for any other purpose other than harness racing,
pari-mutuel betting (live or simulcast), simulcast betting on live racing events
and card gaming activities and other legal gaming activities (and operation of
a restaurant, parking and other similar ancillary purposes).

6.10         Fiscal
Year.  The Loan Parties shall not and shall not
cause or permit their Subsidiaries to change their Fiscal Year, except with
prior notice to and approval of Agent.

6.11         Press
Release; Public Offering Materials.  No Loan Party shall cause or permit the
issuance of any press releases or other similar public disclosure, using the
name of BDCF or its affiliates or referring

 68
 

to this Agreement, without giving BDCF a reasonable opportunity to
review and comment thereon prior to issuance.

6.12         Subsidiaries.  The
Loan Parties shall not and shall not cause or permit their Subsidiaries to
directly or indirectly establish, create or acquire any new Subsidiary.

6.13         Deposit
Accounts.  The Loan Parties shall not and shall not
cause or permit their Subsidiaries to establish any new deposit accounts (other
than payroll, employee benefits and other similar trust accounts) without prior
written notice to Agent and unless Agent and the bank at which the account is
to be opened enter into a Control Agreement in form and substance reasonably
acceptable to Agent.  No Loan Party shall
deposit any new funds on or after the Closing Date in the Cash Collateral
Account.

6.14         ERISA.  The
Loan Parties shall not and shall not cause or permit any ERISA Affiliate to,
cause or permit to occur an ERISA Event to the extent such ERISA Event would
reasonably be expected to have a Material Adverse Effect. 

6.15         Sale-Leasebacks.  The
Loan Parties shall not and shall not cause or permit their Subsidiaries to
engage in any sale-leaseback, synthetic lease or similar transaction.

6.16         Availability.  The Borrower shall at no time permit the sum
of Availability and Unrestricted Cash to be less than $1,250,000.

SECTION 7.

FINANCIAL COVENANTS/REPORTING

Borrower covenants and
agrees that from and after the date hereof until the Termination Date, Borrower
shall perform and comply with, and shall cause each of the other Loan Parties
to perform and comply with, all covenants in this Section 7 applicable
to such Person. 

7.1           Financial
Covenants.

(a)           Capital Expenditure Limits. 
After the Project Opening, Borrower and its Subsidiaries on a
consolidated basis shall not make Capital Expenditures during any four (4)
consecutive Fiscal Quarters of more than $2,500,000 in the aggregate; provided,
however, that if such Capital Expenditures relate to improvements or FF&E
related to commencement of forms of gaming which Borrower may legally engage in
after the date hereof, then Borrower may make additional Capital Expenditures
relating thereto with the consent of Agent in its sole discretion.

(b)           Minimum EBITDA. 
Borrower and its Subsidiaries on a consolidated basis shall have, at the
end of each Fiscal Quarter set forth below, EBITDA for the 12-Fiscal Month
period then ended of not less than the following:

	
  Period

  	
   

  	
  EBITDA

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  (1,075,000

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2008

  	
   

  	
  $

  	
  8,255,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2008

  	
   

  	
  $

  	
  8,835,000

  	
   

  

 

 69
 

 

	
  March 31, 2009

  	
   

  	
  $

  	
  8,929,067

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  8,893,600

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2009

  	
   

  	
  $

  	
  8,990,400

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2009

  	
   

  	
  $

  	
  8,787,200

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  8,889,067

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2010

  	
   

  	
  $

  	
  8,940,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2010

  	
   

  	
  $

  	
  9,016,400

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2010

  	
   

  	
  $

  	
  9,092,800

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2011

  	
   

  	
  $

  	
  9,209,867

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2011

  	
   

  	
  $

  	
  9,268,400

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2011

  	
   

  	
  $

  	
  9,356,200

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2011

  	
   

  	
  $

  	
  9,444,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2012

  	
   

  	
  $

  	
  9,564,267

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2012

  	
   

  	
  $

  	
  9,624,400

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2012

  	
   

  	
  $

  	
  9,714,600

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2012 and
  the end of each Fiscal Quarter thereafter

  	
   

  	
  $

  	
  9,804,800

  	
   

  

 

(c)           Maximum Leverage Ratio. 
Borrower and its Subsidiaries on a consolidated basis shall have, at the
end of each Fiscal Quarter set forth below, a Leverage Ratio as of the last day
of such Fiscal Quarter and for the 12-Fiscal Month period then ended, of
not more than the following:

5.0
to 1.0 for the Fiscal Quarter ending September 30, 2008;

4.6
to 1.0 for the Fiscal Quarter ending December 31, 2008;

4.6
to 1.0 for the Fiscal Quarter ending March 31, 2009;

4.6
to 1.0 for the Fiscal Quarter ending June 30, 2009;

4.5
to 1.0 for the Fiscal Quarters ending September 30, 2009;

4.6
to 1.0 for the Fiscal Quarters ending December 31, 2009;

4.6
to 1.0 for the Fiscal Quarters ending March 31, 2010;

4.3
to 1.0 for the Fiscal Quarters ending June 30, 2010;

4.3
to 1.0 for the Fiscal Quarters ending September 30, 2010;

4.2
to 1.0 for the Fiscal Quarters ending December 31, 2010;

4.2
to 1.0 for the Fiscal Quarters ending March 31, 2011;

4.0
to 1.0 for the Fiscal Quarters ending June 30, 2011;

3.9
to 1.0 for the Fiscal Quarters ending September 30, 2011;

 70
 

3.9
to 1.0 for the Fiscal Quarters ending December 31, 2011;

3.8
to 1.0 for the Fiscal Quarters ending March 31, 2012;

3.6
to 1.0 for the Fiscal Quarters ending June 30, 2012;

3.6
to 1.0 for the Fiscal Quarters ending September 30, 2012;

3.5 to 1.0 for each Fiscal Quarter ending thereafter.

(d)           Annualization of EBITDA. For purposes of calculating compliance with
the financial covenants set forth in this Section 7.1 for Fiscal
Quarters ending after June 30, 2008 but on or prior to March 31, 2009, EBITDA
will be measured for measurement periods commencing on July 1, 2008 and ending
on the last day of each such Fiscal Quarter and will be multiplied by 4, 2 and
1.333 for the Fiscal Quarters ending September 30, 2008, December 31, 2008 and
March 31, 2009, respectively.

7.2           Financial
Statements and Other Reports.  Borrower will maintain, and cause each of its
Subsidiaries to maintain, a system of accounting established and administered
in accordance with sound business practices to permit preparation of Financial
Statements in conformity with GAAP (it being understood that monthly Financial
Statements are not required to have footnote disclosures).  Borrower will deliver each of the Financial
Statements and other reports described below to Agent (and each Lender in the
case of the Financial Statements and other reports described in Sections
(7.2)(a), (b), (e), (g), (h), (i) and (m)).

(a)           Monthly Financials.  As
soon as available and in any event within thirty (30) days after the end of
each Fiscal Month other than the last month of any Fiscal Quarter, Borrower
will deliver (1) the consolidated balance sheets of Borrower  and its Subsidiaries, as at the end of
such month, and the related consolidated statements of income, stockholders’
equity and cash flow for such Fiscal Month and for the period from the beginning
of the then current Fiscal Year of Borrower to the end of such Fiscal Month,
(2) a report setting forth in comparative form the corresponding figures
for the corresponding periods of the previous Fiscal Year and the corresponding
figures from the most recent Projections for the current Fiscal Year delivered
pursuant to Section 7.2(h) and (3) a schedule of the outstanding
Indebtedness for borrowed money of Borrower  and
its Subsidiaries describing in reasonable detail each such debt issue or loan
outstanding and the principal amount and amount of accrued and unpaid interest
with respect to each such debt issue or loan.  
Borrower shall deliver the items required under this Section 7.2(a)
with respect to the last month of any Fiscal Quarter (including the last Fiscal
Month of any Fiscal Year) concurrently with its delivery of the quarterly
financial statements required pursuant to Section 7.2(b).

(b)           Quarterly Financials.  As
soon as available and in any event within forty-five (45) days after the end of
each Fiscal Quarter (including the last Fiscal Quarter of Borrower’s Fiscal
Year), Borrower will deliver (1) the consolidated balance sheets of
Borrower  and its Subsidiaries, as
at the end of such quarter, and the related consolidated statements of income,
stockholders’ equity and cash flow for such Fiscal Quarter and for the period
from the beginning of the then current Fiscal Year of Borrower to the end of
such Fiscal Quarter, (2) a report setting forth in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal Year
and the corresponding figures from the most recent Projections for the current
Fiscal Year delivered pursuant to Section 7.2(h) and (3) a schedule
of the outstanding Indebtedness for borrowed money of Borrower  and its Subsidiaries describing in
reasonable detail each such debt issue or loan outstanding and the principal
amount and amount of accrued and unpaid interest with respect to each such debt
issue or loan.

(c)           Year-End Financials.  As
soon as available and in any event within ninety (90) days after the end of
each Fiscal Year of Borrower, Borrower will deliver (1) the consolidated
balance

 71
 

sheets of Borrower and its Subsidiaries, as at the end of such year,
and the related consolidated statements of income, stockholders’ equity and
cash flow for such Fiscal Year, (2) a schedule of the outstanding
Indebtedness for borrowed money of Borrower and its Subsidiaries describing in
reasonable detail each such debt issue or loan outstanding and the principal
amount and amount of accrued and unpaid interest with respect to each such debt
issue or loan and (3) a report with respect to the consolidated Financial
Statements from a firm of Certified Public Accountants (and for each Fiscal
Year ending after December 31, 2006, from a “Big Four” accounting firm)
selected by Borrower and reasonably acceptable to Agent, which report shall be
prepared in accordance with Statement of Auditing Standards No. 58 (the “Statement”)
“Reports on Audited Financial Statements” and such report shall be “Unqualified”
(as such term is defined in such Statement).

(d)           Accountants’ Reports. 
Promptly upon receipt thereof, Borrower will deliver copies of all
significant reports submitted by Borrower’s firm of certified public
accountants in connection with each annual, interim or special audit or review
of any type of the Financial Statements or related internal control systems of
Borrower  or its Subsidiaries  made by such accountants, including any
comment letter submitted by such accountants to management in connection with
their services.

(e)           Regulatory Filings. 
Promptly upon receipt thereof, Borrower will deliver copies of all
reports, notices or any other documentation received from any regulatory body,
including, without limitation any gaming regulatory body.  Promptly upon delivery thereof, Borrower will
deliver copies of all filings, reports, notices or any other documentation
provided to any regulatory body, including, without limitation, any gaming
regulatory body.

(f)            Management Report. 
Together with each delivery of Financial Statements of Borrower pursuant
to Sections 7.2(a) and (b), Borrower will deliver a management report
(1) describing the operations and financial condition of Borrower and its
Subsidiaries for the Fiscal Month then ended and the portion of the current
Fiscal Year then elapsed (or for the Fiscal Year then ended in the case of
year-end financials) and (2) discussing the reasons for any significant
variations.  The information above shall
be presented in reasonable detail and shall be certified by the chief financial
officer of Borrower to the effect that such information fairly presents in all
material respects the results of operations and financial condition of Borrower
and its Subsidiaries as at the dates and for the periods indicated.

(g)           Appraisals.  From time to time, if Agent or
any Lender determines that obtaining appraisals is necessary in order for Agent
or such Lender to comply with applicable laws or regulations, Agent will, at
Borrower’s expense, obtain appraisal reports in form and substance and from
appraisers reasonably satisfactory to Agent stating the then current fair
market values of all or any portion of the Real Estate owned by Loan
Parties.  In addition to the foregoing,
at Borrower’s expense, at any time while and so long as an Event of Default
shall have occurred and be continuing, and in the absence of a Default or Event
of Default not more than once during each calendar year, Agent may obtain
appraisal reports in form and substance and from appraisers satisfactory to
Agent stating the then current market values of all or any portion of the Real
Estate and personal property owned by any of the Loan Parties.

(h)           Projections.  As soon as available and in
any event no later than the last day of each of Borrower’s Fiscal Years,
Borrower will deliver Projections of Borrower and its Subsidiaries for the
forthcoming Fiscal Year month by month.

(i)            SEC Filings and Press Releases. 
Promptly upon their becoming available, Borrower will deliver copies of
(1) all Financial Statements, reports, notices and proxy statements,
material reports and material notices sent or made available by Borrower or any
of its Subsidiaries to its Stockholders, (2) all regular and periodic
reports and all registration statements and prospectuses, if any,

 72
 

filed by Borrower or any of
its Subsidiaries with any securities exchange or with the Securities and
Exchange Commission, any Governmental Authority or any private regulatory
authority, and (3) all press releases and other statements made available
by Borrower or any of its Subsidiaries
to the public concerning developments in the business of any such Person.

(j)            Events of Default, Etc. 
Promptly upon any officer of any Loan Party obtaining knowledge of any
of the following events or conditions, Borrower shall deliver copies of all
notices given or received by Borrower or any of its Subsidiaries with respect
to any such event or condition and a certificate of Borrower’s chief executive
officer specifying the nature and period of existence of such event or
condition and what action Borrower or any of its Subsidiaries has taken, is
taking and proposes to take with respect thereto:  (1) any condition or event that
constitutes, or which could reasonably be expected to result in the occurrence
of, an Event of Default or Default; (2) any notice that any Person has
given to Borrower or any of its Subsidiaries or any other action taken with
respect to a claimed default or event or condition of the type referred to in Section
8.1(b); or (3) any event or condition that could reasonably be
expected to result in any Material Adverse Effect.

(k)           Litigation.  Promptly upon any officer of
any Loan Party obtaining knowledge of (1) the institution of any action,
charge, claim, demand, suit, proceeding, petition, governmental investigation,
tax audit or arbitration now pending or, to the best knowledge of such Loan
Party after due inquiry, threatened against or affecting any Loan Party or any
of its Subsidiaries or any property of any Loan Party or any of its
Subsidiaries (“Litigation”) not previously disclosed by Borrower to
Agent or (2) any material development in any action, suit, proceeding,
governmental investigation or arbitration at any time pending against or
affecting any Loan Party or any property of any Loan Party which, in each case,
would reasonably be expected to have a Material Adverse Effect, Borrower will
promptly give notice thereof to Agent and provide such other information as may
be reasonably available to them to enable Agent and its counsel to evaluate
such matter.

(l)            Notice of Corporate and other Changes. 
Borrower shall provide prompt written notice of (1) all
jurisdictions in which a Loan Party becomes qualified after the Closing Date to
transact business, (2) any change after the Closing Date in the authorized
and issued Stock of any Loan Party or any amendment to their articles or
certificate of incorporation, by-laws, partnership agreement or other
organizational documents, (3) any Subsidiary created or acquired by any
Loan Party or any of its Subsidiaries after the Closing Date, such notice, in
each case, to identify the applicable jurisdictions, capital structures or
Subsidiaries, as applicable, (4) any other event that occurs after the
Closing Date which would cause any of the representations and warranties in Section 4
of this Agreement or in any other Loan Document to be untrue or misleading in
any material respect and (5) Asset Disposition that may result in a
mandatory prepayment pursuant to Section 2.5(c).  The foregoing notice requirement shall not be
construed to constitute consent by any of the Lenders to any transaction
referred to above which is not expressly permitted by the terms of this
Agreement.

(m)          Other Information.  With
reasonable promptness, Borrower will deliver such other information and data
with respect to any Loan Party or any Subsidiary of any Loan Party as from time
to time may be reasonably requested by Agent or any Lender.

(n)           Compliance and Excess Cash Flow Certificate. 
Together with each delivery of Financial Statements pursuant to Section
7.2(a) for the last month of each Fiscal Quarter and Section 7.2(c),
Borrower will deliver a fully and properly completed Compliance and Excess Cash
Flow Certificate (in substantially the same form as Annex F (the “Compliance
and Excess Cash Flow Certificate”) signed by Borrower’s chief executive
officer or chief financial officer; provided that the Excess Cash Flow portion
of such certificate is only required to be delivered annually; provided that 

 73
 

Schedule 2 of the Compliance and Excess Cash Flow Certificate shall be
delivered only in connection with the Financial Statements of Borrower and its
Subsidiaries delivered pursuant to Section 7.2(c).

(o)           Taxes.  Borrower shall provide prompt
written notice of (i) the execution or filing with the IRS or any other
Governmental Authority of any agreement or other document extending, or having
the effect of extending, the period for assessment or collection of any taxes
or other Charges by any Loan Party or any of its Subsidiaries and (ii) any agreement
by any Loan Party or any of its Subsidiaries or request directed to any Loan
Party or any of its Subsidiaries to make any adjustment under IRC Section
481(a), by reason of a change in accounting method or otherwise, which could
reasonably be expected to have a Material Adverse Effect.

7.3           Accounting
Terms; Utilization of GAAP for Purposes of Calculations Under Agreement.  For
purposes of this Agreement, all accounting terms not otherwise defined herein
shall have the meanings assigned to such terms in conformity with GAAP.  Financial statements and other information
furnished to Agent pursuant to Section 7.2 or any other section (unless
specifically indicated otherwise) shall be prepared in accordance with GAAP as
in effect at the time of such preparation and shall present fairly in all
material respects the financial condition and results of operation of the Loan
Parties; provided that no Accounting Change shall affect financial
covenants, standards or terms in this Agreement; provided further that
Borrower shall prepare footnotes to the Financial Statements required to be
delivered hereunder that show the differences between the Financial Statements
delivered (which reflect such Accounting Changes) and the basis for calculating
financial covenant compliance (without reflecting such Accounting Changes). All
such adjustments described in clause (c) of the definition of the term
Accounting Changes resulting from expenditures made subsequent to the Closing
Date (including capitalization of costs and expenses or payment of pre-Closing
Date liabilities) shall be treated as expenses in the period the expenditures
are made.  Notwithstanding the foregoing,
in the event that any Accounting Change shall occur and such change results in
a change in the method of calculation of the financial covenants, standards or
terms in this Agreement, then Borrower and Agent agree to negotiate in good
faith in order to amend such provisions of this Agreement so as to equitably
reflect such Accounting Changes with the desired result that the criteria for
evaluating the financial condition of the Loan Parties shall be the same after
such Accounting Changes as if such Accounting Changes had not been made.  Until such time as such an amendment shall
have been executed and delivered by Borrower, Agent and the Requisite Lenders,
all financial covenants, standards and terms in this Agreement shall continue
to be calculated or construed as if such Accounting Changes had not occurred.

SECTION 8.

DEFAULT, RIGHTS AND REMEDIES

8.1           Event
of Default.  “Event of Default” shall mean the
occurrence or existence of any one or more of the following:

(a)           Payment.  (1) Failure to pay any
installment or other payment of principal of the Term Loan or interest or Fees
on the Term Loan or any other amount due under this Agreement or any of the
other Loan Documents when due; or

(b)           Default in Other Agreements. 
(1) Any Loan Party or any of its Subsidiaries fails to pay when due
or within any applicable grace period any principal or interest on Indebtedness
(other than the Term Loan) or any Contingent Obligations or (2) breach or
default of any Loan Party or any of its Subsidiaries, or the occurrence of any
condition or event, with respect to any Indebtedness (other than the Term Loan)
or any Contingent Obligations, if the effect of such breach, default or
occurrence is to cause or to permit the holder or holders then to cause,
Indebtedness and/or Contingent Obligations having

 74
 

an individual principal amount in excess of $10,000 or having an
aggregate principal amount in excess of $50,000 to become or be declared due
prior to their stated maturity; or

(c)           Breach of Certain Provisions. 
Failure of any Loan Party to perform or comply with any term or
condition contained in (1) the BDCF Fee Letter,
(2) Section 7.2 which failure continues for more than five
(5) Business Days after the date specified for performance or compliance with
such term or condition, (3) that portion of Section 5.2 relating
to the Loan Parties’ obligation to maintain insurance, or (4) Section 5.1(b), Section
5.3, Section 5.4, Section 6 or Section 7.1; or

(d)           Breach of Warranty.  Any
representation, warranty, certification or other statement made by any Loan
Party in any Loan Document or in any statement or certificate at any time given
by such Person in writing pursuant or in connection with any Loan Document is
false in any material respect (without duplication of materiality qualifiers
contained therein) on the date made; or

(e)           Other Defaults Under Loan Documents. Any Loan Party defaults in the performance
of or compliance with any term contained in this Agreement or the other Loan
Documents (other than occurrences described in other provisions of this Section
8.1 for which a different grace or cure period is specified, or for which
no cure period is specified and which constitute immediate Events of Default)
and such default is not remedied or waived within ten (10) days after the
earlier of (1) receipt by Borrower of notice from Agent or Requisite
Lenders of such default or (2) actual knowledge of Borrower or any other
Loan Party of such default; or

(f)            Involuntary Bankruptcy; Appointment of
Receiver, Etc.  (1) A court enters a decree or order for
relief with respect to any Loan Party in an involuntary case under the
Bankruptcy Code, which decree or order is not stayed or other similar relief is
not granted under any applicable federal or state law; or (2) the
continuance of any of the following events for sixty (60) days unless
dismissed, bonded or discharged: 
(a) an involuntary case is commenced against  any Loan Party, under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect; or
(b) a decree or order of a court for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over  any Loan Party, or
over all or a substantial part of its property, is entered; or (c) a
receiver, trustee or other custodian is appointed without the consent of a Loan
Party, for all or a substantial part of the property of  the Loan Party; or

(g)           Voluntary Bankruptcy; Appointment of
Receiver, Etc.  (1) Any Loan Party commences a voluntary
case under the Bankruptcy Code, or consents to the entry of an order for relief
in an involuntary case or to the conversion of an involuntary case to a
voluntary case under any such law or consents to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property; or (2) any Loan Party makes any assignment for the
benefit of creditors; or (3) the Board of Directors of any Loan Party
adopts any resolution or otherwise authorizes action to approve any of the
actions referred to in this Section 8.1(g); or

(h)           Judgment
and Attachments.  Any money judgment,
writ or warrant of attachment, or similar process (other than those described
elsewhere in this Section 8.1) involving (1) an amount in any
individual case in excess of $100,000 or (2) an amount in the aggregate at
any time in excess of $100,000 (in either case to the extent not adequately
covered by insurance in Agent’s sole discretion as to which the insurance
company has acknowledged coverage) is entered or filed against one or more of
the Loan Parties or any of their respective assets and remains undischarged,
unvacated, unbonded or unstayed for a period of thirty (30) days or in any
event later than five (5) Business Days prior to the date of any proposed sale
thereunder; or

 75

(i)            Dissolution.  Any order, judgment or decree
is entered against any Loan Party decreeing the dissolution or split up of such
Loan Party and such order remains undischarged or unstayed for a period in
excess of fifteen (15) days; or

(j)            Solvency.  Borrower or Loan Parties taken
as a whole cease to be Solvent; any Loan Party fails to pay its debts as they
become due or admits in writing its present or prospective inability to pay its
debts as they become due; or

(k)           Invalidity of Loan Documents.  Any
of the Loan Documents for any reason, other than a partial or full release in
accordance with the terms thereof, ceases to be in full force and effect or is
declared to be null and void, or any Loan Party denies that it has any further
liability under any Loan Documents to which it is party, or gives notice to
such effect; or

(l)            Change of Control.  A
Change of Control occurs;

(m)          Substantial Completion.  (1)
Substantial Completion of the Project has not occurred on or prior to June 30,
2008 or (2) at any time it is not possible in accordance with then applicable
Legal Requirements, for Borrower to open a card room of at least fifty tables
on or prior to July 1, 2008; or

(n)           Operations.  (1) Borrower fails to keep a
card room of at least fifty tables operating at all times after July 1, 2008  (subject to temporary closures pursuant to
normal operating procedures), (2) any gaming, racing or related license,
authorization or agreement of Borrower necessary for the operation of the
Project are terminated or suspended or (3) subsequent to the Project Opening,
Borrower ceases to operate and conduct its business (as contemplated on the
Closing Date) at the Property or terminates such business for any reason
whatsoever.

8.2           Suspension
or Termination of Term Loan Commitment.  Upon the occurrence of any Default or Event of Default, Agent may, and
at the request of Requisite Lenders Agent shall, without notice or demand,
immediately suspend or terminate all or any portion of Lenders’ obligations to
make additional Advances under the Term Loan Commitment; provided that,
in the case of a Default, if the subject condition or event is waived by
Requisite Lenders or cured within any applicable grace or cure period, the Term
Loan Commitment shall be reinstated.

8.3           Acceleration
and other Remedies.  Upon the occurrence of any Event of Default
described in Sections 8.1(f) or 8.1(g), the Term Loan Commitment
shall be immediately terminated and all of the Obligations, shall automatically
become immediately due and payable, without presentment, demand, protest,
notice of intent to accelerate, notice of acceleration or other requirements of
any kind, all of which are hereby expressly waived by Borrower, and the Term
Loan Commitment shall thereupon terminate. 
Upon the occurrence and during the continuance of any other Event of
Default, Agent may, and at the request of the Requisite Lenders, Agent shall,
by written notice to Borrower (a) reduce the aggregate amount of the Term
Loan Commitment from time to time, (b) declare all or any portion of the Term
Loan and all or any portion of the other Obligations to be, and the same shall
forthwith become, immediately due and payable together with accrued interest
thereon, and (c) exercise any other remedies which may be available under the
Loan Documents or applicable law. 
Borrower shall from time to time execute and deliver to Agent such
further documents and instruments as Agent may reasonably request with respect
to such cash collateral.  Borrower and
its Affiliates shall cooperate with Agent to (i) facilitate the orderly
transfer (to the fullest extent permitted by applicable Legal Requirements) to
Agent or its designee of all liquor license, casino operator and other licenses
and permits with respect to the Property, and (ii) enable the continued provision
of alcoholic beverages, the operation of liquor services and the

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operation of casino and gambling services at the Property without
interruption, in each case, until such time as Agent or its designee shall have
obtained such licenses and permits.  If
any other party is the holder of the foregoing licenses and permits with
respect to all or any portion of the Property, either as of the date hereof or
subsequent to the date hereof, Borrower and its Affiliates shall cause such
party to deliver to Agent in writing an agreement to abide by the foregoing.

8.4           Construction
Related Remedies

(i)            Right to Stop Disbursing Funds.  In
addition to any other rights and remedies which Agent and Lenders may have
pursuant to this Agreement and the other Loan Documents or pursuant to law or
equity, and without limitation thereof, (i) so long as an Event of Default
shall exist, Agent and Lenders may decline to make all or any portion of such
further Advances as Agent and Lenders may elect and/or (ii) so long as an Event
of Default shall exist, any or all obligations of Agent and Lenders under this
Agreement, at the option of Agent and Lenders, shall cease and terminate;
provided, however, Agent and Lenders may make all or any portion of any Advance
so long as any such Event of Default shall exist without thereby becoming
obligated to make all or a portion of any other or further Advance or waiving
Agent and Lenders’ right to exercise any of Agent and Lenders’ rights and
remedies pursuant to any one or more of the Loan Documents or as may be
available at law or equity.

(ii)           Right to Complete.  In
addition to any other rights and remedies which Agent may have under this
Agreement and the other Loan Documents or pursuant to law or equity, and
without limitation thereof (but subject to applicable law and regulation),
after the occurrence of any Event of Default and upon acceleration of the Term
Loan, Agent may enter upon the Property and into possession of the Property and
any other Property (and exclude Borrower and any other persons therefrom) and
cause completion of the construction of the Project substantially in accordance
with the Plans and Specifications, with such changes therein as Agent may from
time to time deem appropriate, all at the sole risk, cost and expense of
Borrower.  Agent shall have the right, at
any and all times, in its sole discretion to discontinue any work commenced by
Agent with respect to the construction of the Project or to change any course
of action undertaken by it and shall not be bound by any limitations or
requirements of time whether set forth herein or otherwise.  Upon acceleration of the Term Loan, Agent
shall have the right and power (but shall not be obligated) to assume all or
any portion of the obligations of Borrower under any or all Project Documents
as Agent may elect and to take over and use all or any part or parts of the
labor, materials, supplies and equipment contracted for by or on behalf of
Borrower, whether or not previously incorporated into the Property.  In connection with any portion of the
construction of the Project undertaken by Agent pursuant to the provisions of
this Section 8.4, Agent may do any or all of the following as Agent, in
its sole discretion, may elect:

(A)          engage builders, general contractors, general
and trade contractors, suppliers, architects, engineers, inspectors and others
for the purpose of furnishing labor, materials, equipment and fixtures in
connection with the construction of the Project;

(B)           amend, modify or terminate any then existing
contracts between Borrower and any of the persons described in the preceding
clause (A);

(C)           pay, settle or compromise all bills or claims
which may become Liens against the Property, or which have been or may be
incurred in any manner in connection with the construction of the Project or
for the discharge of liens, encumbrances or defects in the title of the
Property; and

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(D)          take such other action (including the
employment of watchmen and the taking of other measures to protect the
Property) or refrain from acting under this Agreement as Agent may in its sole
and absolute discretion from time to time determine without any limitation
whatsoever.

(iii)          Sums Advanced. 
Borrower shall be liable to Agent and Lenders for all sums paid or
incurred for the construction of the Project whether the same shall be paid or
incurred pursuant to the provisions of this Section 8.4 or otherwise,
and all other payments made or liabilities incurred by Agent and Lenders under
this Agreement of any kind whatsoever (except to the extent it is determined by
a court of competent jurisdiction, beyond right of appeal, that such
liabilities arose solely and directly out of the gross negligence or willful
misconduct of Lenders), all of which shall be paid by Borrower to Agent upon
demand with interest at the Default Rate to the date of payment to Lender, and
all of the foregoing sums, including such interest at the Default Rate, shall
be deemed and shall constitute Advances under this Agreement and be evidenced
and secured by the Loan Documents.

8.5           Performance
by Agent.  In addition to Agent’s rights under Section
8.4, if any Loan Party shall fail to perform any covenant, duty or
agreement contained in any of the Loan Documents which failure constitutes an
Event of Default, Agent may perform or attempt to perform such covenant, duty
or agreement on behalf of such Loan Party after the expiration of any cure or
grace periods set forth herein.  In such
event, such Loan Party shall, at the request of Agent, promptly pay any amount
reasonably expended by Agent in such performance or attempted performance to
Agent, together with interest thereon at the highest rate of interest in effect
upon the occurrence of an Event of Default as specified in Section 2.2(d)
from the date of such expenditure until paid. 
Notwithstanding the foregoing, it is expressly agreed that Agent shall
not have any liability or responsibility for the performance of any obligation
of any Loan Party under this Agreement or any other Loan Document.

8.6           Application
of Proceeds.  Notwithstanding anything to the contrary
contained in this Agreement, upon the occurrence and during the continuance of
an Event of Default, Borrower irrevocably waives the right to direct the
application of any and all payments at any time or times thereafter received by
Agent from or on behalf of Borrower, and Agent shall have the continuing and
exclusive right to apply and to reapply any and all payments received at any
time or times after the occurrence and during the continuance of an Event of
Default.  Notwithstanding anything to the
contrary contained in this Agreement (including, without limitation, Section
2.1 and Section 2.5 hereof), all payments (including the proceeds of
any Asset Disposition or other sale of, or other realization upon, all or any
part of the Collateral) received after acceleration of the Obligations shall be
applied as follows: first, to all costs and expenses incurred by or
owing to Agent and any Lender with respect to this Agreement, the other Loan
Documents or the Collateral; second, to accrued and unpaid interest and
Fees with respect to the Obligations (including any interest which but for the
provisions of the Bankruptcy Code, would have accrued on such amounts); third,
to the principal amount of the Obligations outstanding (other than Obligations
owed to any Lender under an Interest Rate Agreement) (and with respect to
amounts applied to Term Loan, pro rata among all remaining Scheduled
Installments thereof); and fourth to any other obligations of Borrower
owing to Agent or any Lender under the Loan Documents or any Interest Rate
Agreement.  Any balance remaining shall
be delivered to Borrower or to whomever may be lawfully entitled to receive
such balance or as a court of competent jurisdiction may direct.

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SECTION 9.

ASSIGNMENT AND PARTICIPATION

9.1           Assignment
and Participations.

(a)           Subject to the terms of this Section 9.1 and all applicable
required governmental or regulatory approval, any Lender may make an assignment
to a Qualified Assignee of, or sale of participations in, at any time or times,
the Loan Documents, Term Loan, or any portion thereof or interest therein,
including any Lender’s rights, title, interests, remedies, powers or duties
thereunder.  Any assignment by a Lender
shall:  (i) require the consent of
Agent (which consent shall not be unreasonably withheld or delayed with respect
to a Qualified Assignee and which consent is not required by an assignment
between Lenders or from a Lender to an Affiliate of a Lender) and the execution
of an assignment agreement (an “Assignment Agreement” substantially in
the form attached hereto as Exhibit 9.1 and otherwise in form and
substance reasonably satisfactory to, and acknowledged by, Agent); (ii) be
conditioned on such assignee Lender representing to the assigning Lender and
Agent and the Borrower that it is purchasing the applicable Term Loan to be
assigned to it for its own account, for investment purposes and not with a view
to the distribution thereof; (iii) except with respect to any assignment by a
Lender to an Affiliate of such Lender, after giving effect to any such partial
assignment, the assignee Lender shall have Term Loan Commitment in an amount at
least equal to $2,500,000 and the assigning Lender shall have retained Term
Loan Commitment in an amount at least equal to $2,500,000 and (iv) unless
waived by Agent, require a payment to Agent of an assignment fee of $3,500
(other than direct or indirect assignments from a Lender to an Affiliate of a
Lender).  Notwithstanding the above,
Agent may in its sole and absolute discretion (subject to applicable law and
regulation) permit any assignment by a Lender to a Person or Persons that are
not Qualified Assignees.  In the case of
an assignment by a Lender that has become effective under this Section 9.1,
(i) the assignee shall have, to the extent of such assignment, the same
rights, benefits and obligations as all other Lenders hereunder and
(ii) the assigning Lender shall be relieved of its obligations hereunder
with respect to its Term Loan Commitment or assigned portion thereof and the
Term Loan, and other interests assigned by it from and after the effective date
of such assignment.  Borrower hereby
acknowledges and agrees that any assignment shall give rise to a direct
obligation of Borrower to the assignee and that the assignee shall be
considered to be a “Lender.”  In all
instances, each Lender’s liability to make Term Loan hereunder shall be several
and not joint and shall be limited to such Lender’s Pro Rata Share of the
applicable Term Loan Commitment.  In the
event Agent or any Lender assigns or otherwise transfers all or any part of the
Obligations, Agent or any such Lender shall so notify Borrower and Borrower
shall (i) notify the Minnesota Racing Commission thereof in accordance with Section
5.1(b) and (ii) upon the request of Agent or such Lender, execute new Term
Notes in exchange for the Term Notes, if any, being assigned.  Notwithstanding the foregoing provisions of
this Section 9.1(a), (a) any Lender may at any time pledge the
Obligations held by it and such Lender’s rights under this Agreement and the
other Loan Documents to a Federal Reserve Bank, (b) any Lender that is an
investment fund may assign the Obligations held by it and such Lender’s rights
under this Agreement and the other Loan Documents to another investment fund
managed by the same investment advisor or pledge such Obligations and rights to
a trustee for the benefit of its investors and (c) any Lender may assign the
Obligations to an Affiliate of such Lender or to a Person that is a Lender prior
to the date of such assignment. 
Notwithstanding any other provision of this Agreement to the contrary,
neither the Lenders nor any of their successors or assigns shall assign or
transfer any interest herein without obtaining a representation from such successor
or assign that any such assignment or transfer would not result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the
IRC with respect to the Plans or in a manner violative of applicable law or
regulation.

(b)           Any participation by a Lender of all or any part of its Term Loan
Commitment shall be made with the understanding that all amounts payable by
Borrower hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii)

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any release of all or
substantially all of the Collateral (other than in accordance with the terms of
this Agreement, the Collateral Documents or the other Loan Documents).  Solely for purposes of Sections 2.8, 2.9,
9.3 and 10.1, Borrower acknowledges and agrees that a
participation shall give rise to a direct obligation of Borrower to the
participant and the participant shall be considered to be a “Lender.”  Except as set forth in the preceding sentence
no Borrower or any other Loan Party shall have any obligation or duty to any
participant.  Neither Agent nor any Lender
(other than the Lender selling a participation) shall have any duty to any
participant and may continue to deal solely with the Lender selling a
participation as if no such sale had occurred. 
Each Lender having sold a participation in any of its obligations,
acting solely for this purpose as agent for the Borrower, shall maintain a
register for the recordation of the names and addresses of such participants
(and each change thereto, whether by assignment or otherwise) and the rights,
interests or obligations of such participants and in any right to receive any
payments hereunder.

(c)           Except as expressly provided in this Section 9.1, no Lender
shall, as between Borrower and that Lender, or Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Term Loan, the Term Notes or other Obligations owed to such
Lender.

(d)           Agent shall maintain, on behalf of Borrower, in its offices a “register”
for recording the name, address, commitment and Term Loan owing to each
Lender.  The entries in such register
shall be conclusive evidence of the amounts due and owing to each Lender in the
absence of manifest error.  Borrower,
Agent and each Lender may treat each Person whose name is recorded in such
register pursuant to the terms hereof as a Lender for all purposes of this
Agreement.  The register described herein
shall be available for inspection by Borrower and any Lender, at any reasonable
time upon reasonable prior notice.

(e)           A Lender may furnish any information concerning Loan Parties in the
possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants); provided that such Lender
shall obtain from assignees or participants confidentiality covenants
substantially equivalent to those contained in Section 10.14.

(f)            No Lender, without the prior written consent
of Borrower and Agent, shall assign or sell participations in any portion of
its Term Loan or Term Loan Commitment to a potential Lender or participant, if,
as of the date of the proposed assignment or sale, the assignee Lender or
participant would be subject to capital adequacy or similar requirements under Section 2.8(a),
increased costs or an inability to fund LIBOR Loan under Section 2.8(b),
or withholding taxes in accordance with Section 2.9.

9.2           Agent.

(a)           Appointment.  Each Lender hereby designates
and appoints BDCF as its Agent under this Agreement and the other Loan
Documents, and each Lender hereby irrevocably authorizes Agent to execute and
deliver the Collateral Documents and to take such action or to refrain from
taking such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers as are set forth herein or
therein, together with such other powers as are reasonably incidental
thereto.  Agent is authorized and
empowered to amend, modify, or waive any provisions of this Agreement or the
other Loan Documents on behalf of Lenders subject to the requirement that
certain of Lenders’ consent be obtained in certain instances as provided in
this Section 9.2 and Section 10.2.  The provisions of this Section 9.2 are
solely for the benefit of Agent and Lenders and neither Borrower nor any other
Loan Party shall have any rights as a third party beneficiary of any of the
provisions hereof.  In performing its
functions and duties under this Agreement, Agent shall act solely as agent of
Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of

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agency or trust
with or for Borrower or any other Loan Party. 
Agent may perform any of its duties hereunder, or under the Loan
Documents, by or through its agents or employees.

(b)           Nature of Duties.  The
duties of Agent shall be mechanical and administrative in nature.  Agent shall not have by reason of this
Agreement a fiduciary relationship in respect of any Lender.   Nothing in this Agreement or any of the Loan
Documents, express or implied, is intended to or shall be construed to impose
upon Agent any obligations in respect of this Agreement or any of the Loan
Documents except as expressly set forth herein or therein.  Each Lender shall make its own independent
investigation of the financial condition and affairs of each Loan Party in
connection with the extension of credit hereunder and shall make its own
appraisal of the creditworthiness of each Loan Party, and Agent shall have no
duty or responsibility, either initially or on a continuing basis, to provide
any Lender with any credit or other information with respect thereto (other
than as expressly required herein).  If
Agent seeks the consent or approval of any Lenders to the taking or refraining
from taking any action hereunder, then Agent shall send notice thereof to each
Lender.  Agent shall promptly notify each
Lender any time that the Requisite Lenders have instructed Agent to act or
refrain from acting pursuant hereto.

(c)           Rights, Exculpation, Etc. 
Neither Agent nor any of its officers, directors, employees or agents
shall be liable to any Lender for any action taken or omitted by them hereunder
or under any of the Loan Documents, or in connection herewith or therewith,
except that Agent shall be liable to the extent of its own gross negligence or
willful misconduct as determined by a final non-appealable order by a court of
competent jurisdiction.  Agent shall not
be liable for any apportionment or distribution of payments made by it in good
faith and if any such apportionment or distribution is subsequently determined
to have been made in error the sole recourse of any Lender to whom payment was
due but not made, shall be to recover from other Lenders any payment in excess
of the amount to which they are determined to be entitled (and such other
Lenders hereby agree to return to such Lender any such erroneous payments
received by them).  In no event shall
Agent be liable for punitive, special, consequential, incidental, exemplary or other
similar damages. In performing its functions and duties hereunder, Agent shall
exercise the same care which it would in dealing with loans for its own
account, but neither Agent nor any of its agents or representatives shall be
responsible to any Lender for any recitals, statements, representations or
warranties herein or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, or sufficiency of this Agreement or any of the
Loan Documents or the transactions contemplated thereby, or for the financial
condition of any Loan Party.  Agent shall
not be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any of the Loan Documents or the financial condition of any Loan Party, or the
existence or possible existence of any Default or Event of Default.  Agent may at any time request instructions
from Requisite Lenders or all affected Lenders with respect to any actions or
approvals which by the terms of this Agreement or of any of the Loan Documents
Agent is permitted or required to take or to grant.  If such instructions are promptly requested,
Agent shall be absolutely entitled to refrain from taking any action or to
withhold any approval and shall not be under any liability whatsoever to any
Person for refraining from any action or withholding any approval under any of
the Loan Documents until it shall have received such instructions from the
Requisite Lenders or such other portion of the Lenders as shall be prescribed
by this Agreement.  Without limiting the
foregoing, no Lender shall have any right of action whatsoever against Agent as
a result of Agent acting or refraining from acting under this Agreement or any
of the other Loan Documents in accordance with the instructions of Requisite
Lenders or all affected Lenders, as applicable; and, notwithstanding the
instructions of Requisite Lenders or all affected Lenders, as applicable, Agent
shall have no obligation to take any action if it believes, in good faith, that
such action is deemed to be illegal by Agent or exposes Agent to any liability
for which it has not received satisfactory indemnification in accordance with Section
9.2(e).

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(d)           Reliance.  Agent shall be entitled to
rely, and shall be fully protected in relying, upon any written notices,
statements, certificates, orders or other documents or any telephone message or
other communication (including any writing, telex, fax or telegram) believed by
it in good faith to be genuine and correct and to have been signed, sent or
made by the proper Person, and with respect to all matters pertaining to this
Agreement or any of the Loan Documents and its duties hereunder or
thereunder.  Agent shall be entitled to
rely upon the advice of legal counsel, independent accountants, and other
experts selected by Agent in its sole discretion.

(e)           Indemnification. 
Lenders will reimburse and indemnify Agent for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including, without limitation, attorneys’ fees and
expenses), advances or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by, or asserted against Agent in its capacity as such
in any way relating to or arising out of this Agreement or any of the Loan
Documents or any action taken or omitted by Agent in its capacity as such under
this Agreement or any of the Loan Documents, in proportion to each Lender’s Pro
Rata Share, but only to the extent that any of the foregoing is not reimbursed
by Borrower; provided, however, that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, advances or disbursements to the
extent resulting from Agent’s gross negligence or willful misconduct as
determined by a final non-appealable order by a court of competent
jurisdiction.  If any indemnity furnished
to Agent for any purpose shall, in the opinion of Agent, be insufficient or
become impaired, Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against even if so directed by the
Requisite Lenders or such other portion of the Lenders as shall be prescribed
by this Agreement until such additional indemnity is furnished.  The obligations of Lenders under this Section
9.2(e) shall survive the payment in full of the Obligations and the
termination of this Agreement.

(f)            BDCF (or any successor Agent) Individually.  With
respect to its Term Loan Commitment hereunder, BDCF (or any successor Agent)
shall have and may exercise the same rights and powers hereunder and is subject
to the same obligations and liabilities as and to the extent set forth herein
for any other Lender.  The terms “Lenders,”
“Requisite Lenders,” or any similar terms shall, unless the context clearly
otherwise indicates, include BDCF (or any successor Agent) in its individual
capacity as a Lender or one of the Requisite Lenders.  BDCF (or any successor Agent), either directly
or through strategic affiliations, may lend money to, acquire equity or other
ownership interests in, provide advisory services to and generally engage in
any kind of banking, trust or other business with any Loan Party as if it were
not acting as Agent pursuant hereto and without any duty to account therefor to
Lenders.  BDCF (or any successor Agent),
either directly or through strategic affiliations, may accept fees and other
consideration from any Loan Party for services in connection with this Agreement
or otherwise without having to account for the same to Lenders.   Each Lender acknowledges that BDCF may
purchase certain equity interest in Borrower and acknowledges the potential
conflict of interest of BDCF, as Agent and as a Lender and as a holder of an
equity interest in Borrower and consents thereto.

(g)           Successor Agent.

(i)            Resignation.  Agent may resign from the
performance of all its agency functions and duties hereunder at any time by
giving at least thirty (30) Business Days’ prior written notice to Borrower and
Lenders.  Such resignation shall take
effect upon the acceptance by a successor Agent of appointment pursuant to
clause (ii) below or as otherwise provided in clause (ii) below.

(ii)           Appointment of Successor.  Upon
any such notice of resignation pursuant to clause (i) above, Requisite
Lenders shall appoint a successor Agent which, unless an Event of Default has
occurred and is continuing, shall be subject to Borrower’s approval (which
shall not be

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unreasonably withheld or
delayed).  If a successor Agent shall not
have been so appointed within the thirty (30) Business Day period referred to
in clause (i) above, the retiring Agent, upon notice to Borrower, shall then
appoint a successor Agent which, unless an Event of Default has occurred and is
continuing shall be reasonably acceptable to Borrower (such consent not to be
unreasonably withheld) who shall serve as Agent until such time, if any, as
Requisite Lenders appoint a successor Agent as provided above.

(iii)          Successor Agent.  Upon
the acceptance of any appointment as Agent under the Loan Documents by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and obligations
under the Loan Documents.  After any
retiring Agent’s resignation as Agent, the provisions of this Section 9.2
shall continue to inure to its benefit as to any actions taken or omitted to be
taken by it in its capacity as Agent.

(h)           Collateral Matters.

(i)            Release of Collateral. 
Lenders hereby irrevocably authorize Agent, at its option and in its
discretion, to release any Lien granted to or held by Agent upon any Collateral
(x) on the Termination Date, (y) constituting property being sold or
disposed of if Borrower certifies to Agent that the sale or disposition is made
in compliance with the provisions of this Agreement (Agent may rely in good
faith conclusively on any such certificate, without further inquiry, and Agent
agrees to release such Lien upon receipt of a written request therefor from
Borrower) or (z) in accordance with the provisions of the next sentence.  In addition, with the consent of Requisite
Lenders, during any Fiscal Year Agent may release any Lien granted to or held
by Agent upon any Collateral having a book value not greater than ten percent
(10%) of the total book value of all Collateral as of the first day of such
Fiscal Year.

(ii)           Confirmation of Authority; Execution of
Releases.  Without in any manner limiting Agent’s authority
to act without any specific or further authorization or consent by Lenders (as
set forth in Section 9.2(h)(i)), each Lender agrees to confirm in
writing, upon request by Agent or Borrower, the authority to release any
Collateral conferred upon Agent under clauses (x) and (y) of Section
9.2(h)(i).  Upon receipt by Agent of
any required confirmation from the Requisite Lenders of its authority to
release any particular item or types of Collateral, and upon at least ten (10)
Business Days’ prior written request by Borrower, Agent shall (and is hereby
irrevocably authorized by Lenders to) execute such documents as may be
necessary to evidence the release of the Liens granted to Agent upon such
Collateral; provided, however, that (x) Agent shall not be
required to execute any such document on terms which, in Agent’s opinion, would
expose Agent to liability or create any obligation or entail any consequence
other than the release of such Liens without recourse or warranty, and
(y) such release shall not in any manner discharge, affect or impair the
Obligations or any Liens upon (or obligations of any Loan Party, in respect
of), all interests retained by any Loan Party, including the proceeds of any
sale, all of which shall continue to constitute part of the Collateral.

(iii)          Absence of Duty. 
Agent shall have no obligation whatsoever to any Lender or any other
Person to assure that the property covered by the Collateral Documents exists
or is owned by Borrower or any other Loan Party or is cared for, protected or insured
or has been encumbered or that the Liens granted to Agent have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
Agent in this Section 9.2(h) or in any of the Loan Documents, it being
understood and agreed that in respect of the property covered by the Collateral
Documents or any act, omission or event related thereto, Agent may act in any
manner it may deem

 83
 

appropriate, in its
discretion, given Agent’s own interest in property covered by the Collateral
Documents as one of the Lenders and that Agent shall have no duty or liability
whatsoever to any of the other Lenders, provided that Agent shall
exercise the same care which it would in dealing with loans for its own
account.

(i)            Agency for Perfection. 
Agent and each Lender hereby appoint each other Lender as agent for the
purpose of perfecting Agent’s security interest in assets which, in accordance
with the Code in any applicable jurisdiction, can be perfected by possession or
control.  Should any Lender (other than
Agent) obtain possession or control of any such assets, such Lender shall
notify Agent thereof, and, promptly upon Agent’s request therefor, shall
deliver such assets to Agent or in accordance with Agent’s instructions or
transfer control to Agent in accordance with Agent’s instructions.  Each Lender agrees that it will not have any
right individually to enforce or seek to enforce any Collateral Document or to
realize upon any collateral security for the Term Loan unless instructed to do
so by Agent in writing, it being understood and agreed that such rights and
remedies may be exercised only by Agent.

(j)            Notice of Default. 
Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default except with respect to defaults in the payment
of principal, interest and Fees required to be paid to Agent for the account of
Lenders, unless Agent shall have received written notice from a Lender or
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”.  Agent will use reasonable efforts to notify
each Lender of its receipt of any such notice, unless such notice is with
respect to defaults in the payment of principal, interest and fees, in which
case Agent will notify each Lender of its receipt of such notice.  Agent shall take such action with respect to
such Default or Event of Default as may be requested by Requisite Lenders in
accordance with Section 8.  Unless
and until Agent has received any such request, Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable or in
the best interests of Lenders.

(k)           Lender Actions
Against Collateral.  Each Lender agrees
that it will not take any enforcement action, nor institute any actions or
proceedings, with respect to the Term Loan, against Borrower or any Loan Party
hereunder or under the other Loan Documents or against any Collateral
(including the exercise of any right of set-off) without the consent of the
Agent or Requisite Lenders.  All such
enforcement actions and proceedings shall be (i) taken in concert and (ii) at
the direction of or with the consent of Agent or Requisite Lenders.  With respect to any action by Agent to
enforce the rights and remedies of Agent and the Lenders under this Agreement
and the other Loan Documents, each Lender hereby consents to the jurisdiction
of the court in which such action is maintained, and agrees to deliver its Term
Notes to Agent to the extent necessary to enforce the rights and remedies of
Agent for the benefit of the Lenders under the Mortgages in accordance with the
provisions hereof.

(l)            Agent Reports.  Each Lender may from time to time receive one
or more reports or other information (each, a “Report”) prepared by or
on behalf of Agent (or one or more of Agent’s Affiliates).  With respect to each Report, each Lender
hereby agrees that:

(i)            Agent (and Agent’s Affiliates) shall have no
duties or obligations in connection with or as a result of a Lender receiving a
copy of a Report, which will be provided solely as a courtesy, without
consideration.  Each Lender will perform
its own diligence and will make its own independent investigation of the
operations, financial conditions and affairs of the Loan Parties and will not
rely on any Report or make any claim that it has done so.  In addition, each Lender releases, and agrees
that it will not assert, any claim against Agent (or one or more of Agent’s
Affiliates) that in any way relates to any Report or arises out of a Lender
having access to any Report or any discussion of its

 84
 

contents, and each Lender
agrees to indemnify and hold harmless Agent (and Agent’s Affiliates) and their
respective officers, directors, employees, agents and attorneys from all
claims, liabilities and expenses relating to a breach by a Lender or any of its
personnel of this Section or otherwise arising out of a Lender’s access to any
Report or any discussion of its contents;

(ii)           Each Report may not be complete and certain information and findings
obtained by Agent (or one or more of Agent’s Affiliates) regarding the
operations and condition of the Loan Parties may not be reflected in each
Report.  Agent (and Agent’s Affiliates)
makes no representations or warranties of any kind with respect to (i) any
existing or proposed financing; (ii) the accuracy or completeness of the
information contained in any Report or in any other related documentation;
(iii) the scope or adequacy of Agent’s (and Agent’s Affiliates’) due diligence,
or the presence or absence of any errors or omissions contained in any Report
or in any other related documentation; and (iv) any work performed by Agent (or
one or more of Agent’s Affiliates) in connection with or using any Report or
any related documentation; and

(iii)          Each Lender agrees to safeguard each Report and any related
documentation with the same care which it uses with respect to information of
its own which it does not desire to disseminate or publish, and agrees not to
reproduce or distribute or provide copies of or disclose any Report or any
other related documentation or any related discussions to anyone.

9.3           Set Off and Sharing of Payments. 
Subject to Section 9.2(k), in addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, during the continuance of any Event of Default, each Lender is hereby
authorized by Borrower at any time or from time to time, with reasonably prompt
subsequent notice to Borrower (any prior or contemporaneous notice being hereby
expressly waived) to set off and to appropriate and to apply any and all
(A) balances held by such Lender at any of its offices for the account of
Borrower or any of its Subsidiaries (regardless of whether such balances are
then due to Borrower or its Subsidiaries), and (B) other property at any
time held or owing by such Lender to or for the credit or for the account of
Borrower or any of its Subsidiaries, against and on account of any of the
Obligations; except that no Lender shall exercise any such right without the
prior written consent of Agent. 
Notwithstanding anything herein to the contrary, the failure to give
notice of any set off and application made by such Lender to Borrower shall not
affect the validity of such set off and application.  Any Lender exercising a right to set off
shall purchase for cash (and the other Lenders shall sell) interests in each of
such other Lender’s Pro Rata Share of the Obligations as would be necessary to
cause all Lenders to share the amount so set off with each other Lender
entitled to share in the amount so set off in accordance with their respective
Pro Rata Shares.  Borrower agrees, to the
fullest extent permitted by law, that any Lender may exercise its right to set
off with respect to amounts in excess of its Pro Rata Share of the Obligations
and upon doing so shall deliver such amount so set off to the Agent for the
benefit of all Lenders entitled to share in the amount so set off in accordance
with their Pro Rata Shares.

9.4           Disbursement of Funds. 
Agent may, on behalf of Lenders, disburse funds to Borrower for any Term
Loan requested.  Each Lender shall
reimburse Agent on demand for all funds disbursed on its behalf by Agent, or if
Agent so requests, each Lender will remit to Agent its Pro Rata Share of any
Loan before Agent disburses same to Borrower. 
If Agent elects to require that each Lender make funds available to
Agent prior to a disbursement by Agent to Borrower, Agent shall advise each
Lender by telephone or fax of the amount of such Lender’s Pro Rata Share of the
Advance requested by Borrower no later than noon (New York time) on the Funding
Date applicable thereto, and each such Lender shall pay Agent such Lender’s Pro
Rata Share of such requested Loan, in same day funds, by wire transfer to Agent’s
account on such Funding Date.  If any
Lender fails to pay the amount of its Pro Rata Share within one (1) Business
Day after Agent’s demand, Agent shall promptly notify Borrower, and Borrower
shall

 85
 

immediately repay such amount to Agent.  Any repayment required pursuant to this Section
9.4 shall be without premium or penalty. 
Nothing in this Section 9.4 or elsewhere in this Agreement or the
other Loan Documents, including the provisions of Section 9.5, shall be
deemed to require Agent to advance funds on behalf of any Lender or to relieve
any Lender from its obligation to fulfill its commitments hereunder or to
prejudice any rights that Agent or Borrower may have against any Lender as a
result of any default by such Lender hereunder.

9.5           Disbursements of Advances; Payment.

(a)           Advances; Payments.  Each
Lender shall make the amount of such Lender’s Pro Rata Share of such Advance
available to Agent in same day funds by wire transfer to Agent’s account as set
forth in Section 2.1(e) not later than 2:00 p.m. (New York time)  on the requested Funding Date in the case
of an Index Rate Loan and not later than 10:00 a.m. (New York time)  on the requested Funding Date in the case
of a LIBOR Loan.  After receipt of such
wire transfers (or, in the Agent’s sole discretion, before receipt of such wire
transfers), subject to the terms hereof, Agent shall make the requested Advance
to Borrower as designated by Borrower in the Advance Request.  All payments by each Lender shall be made
without setoff, counterclaim or deduction of any kind.

(b)           Availability of Lender’s Pro Rata Share. 
Agent may assume that each Lender will make its Pro Rata Share of each
Advance available to Agent on each Funding Date.  If such Pro Rata Share is not, in fact, paid
to Agent by such Lender when due, Agent will be entitled to recover such amount
on demand from such Lender without setoff, counterclaim or deduction of any
kind.  If any Lender fails to pay the
amount of its Pro Rata Share forthwith upon Agent’s demand, Agent shall
promptly notify Borrower and Borrower shall immediately repay such amount to
Agent.  Nothing in this Section 9.5(b)
or elsewhere in this Agreement or the other Loan Documents shall be deemed to
require Agent to advance funds on behalf of any Lender or to relieve any Lender
from its obligation to fulfill its Term Loan Commitment hereunder or to
prejudice any rights that Borrower may have against any Lender as a result of
any default by such Lender hereunder.  To
the extent that Agent advances funds to Borrower on behalf of any Lender and is
not reimbursed therefor on the same Business Day as such Advance is made, Agent
shall be entitled to retain for its account all interest accrued on such
Advance until reimbursed by the applicable Lender.

(c)           Return of Payments.

(i)            If Agent pays an amount to a Lender under
this Agreement in the belief or expectation that a related payment has been or
will be received by Agent from Borrower and such related payment is not
received by Agent, then Agent will be entitled to recover such amount from such
Lender on demand without setoff, counterclaim or deduction of any kind.

(ii)           If Agent determines at any time that any amount received by Agent under
this Agreement must be returned to any Loan Party or paid to any other Person
pursuant to any insolvency law or otherwise, then, notwithstanding any other
term or condition of this Agreement or any other Loan Document, Agent will not
be required to distribute any portion thereof to any Lender.  In addition, each Lender will repay to Agent
on demand any portion of such amount that Agent has distributed to such Lender,
together with interest at such rate, if any, as Agent is required to pay to
Borrower or such other Person, without setoff, counterclaim or deduction of any
kind.

(d)           Non-Funding Lenders.  The
failure of any Lender (a “Non-Funding Lender”) to make any Advance or
any payment required by it hereunder shall not relieve any other Lender (each
such other Lender, an “Other Lender”) of its obligations to make any
Advance, but neither any Other Lender

 86
 

nor Agent shall be
responsible for the failure of any Non-Funding Lender to make any Advance or
make any other payment required hereunder. 
Notwithstanding anything set forth herein to the contrary, a Non-Funding
Lender shall not have any voting or consent rights under or with respect to any
Loan Document or constitute a “Lender” (or be included in the calculation of “Requisite
Lenders” hereunder) for any voting or consent rights under or with respect to
any Loan Document.

SECTION 10.

MISCELLANEOUS

10.1         Indemnities.

Borrower
agrees to indemnify, pay, and hold Agent, each Lender, and their respective
Affiliates, officers, directors, employees, agents, and attorneys (the “Indemnitees”)
harmless from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs and expenses from
any suits, claims or demands (including all reasonable fees and expenses of
counsel to such Indemnitees) of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Indemnitee as a result of such
Indemnitees being a party to this Agreement or the transactions consummated
pursuant to this Agreement or otherwise relating to any of the Loan Documents
or Related Transactions; provided, that Borrower shall have no obligation to an
Indemnitee hereunder with respect to liabilities to the extent resulting from
the gross negligence or willful misconduct of that Indemnitee as determined by
a court of competent jurisdiction.  If
and to the extent that the foregoing undertaking may be unenforceable for any
reason, Borrower agrees to make the maximum contribution to the payment and
satisfaction thereof which is permissible under applicable law.

10.2         Amendments and Waivers.

(a)           Except for actions expressly permitted to be taken by Agent, no
amendment, modification, termination or waiver of any provision of this
Agreement or any other Loan Document, or any consent to any departure by any
Loan Party therefrom, shall in any event be effective unless the same shall be
in writing and signed by Borrower, and by Requisite Lenders or all affected
Lenders, as applicable.  Except as set
forth in clauses (b) and (c) below, all such amendments, modifications,
terminations or waivers requiring the consent of any Lenders shall require the
written consent of Requisite Lenders.

(b)           No amendment, modification, termination or waiver of or consent with
respect to any provision of this Agreement that waives compliance with the
conditions precedent set forth in Section 3.2 or Section 3.3 to
the making of any Loan shall be effective unless the same shall be in writing
and signed by Agent, Requisite Lenders and Borrower.  Notwithstanding anything contained in this
Agreement to the contrary, no waiver or consent with respect to any Default or
any Event of Default shall be effective for purposes of the conditions
precedent to the making of an Advance set forth in Section 3.2 or Section
3.3 unless the same shall be in writing and signed by Agent, Requisite
Lenders and Borrower.

(c)           No amendment, modification, termination or waiver shall, unless in
writing and signed by Agent and each Lender directly affected thereby:  (i) increase the principal amount, or
postpone or extend the scheduled date of expiration, of any Lender’s Term Loan
Commitment (which action shall be deemed only to affect those Lenders whose
Term Loan Commitment are increased or the scheduled date of expiration of whose
Term Loan Commitment are postponed or extended and may be approved by Requisite
Lenders, including those Lenders whose Term Loan Commitment are increased or
the scheduled date of expiration of whose Term Loan Commitment are postponed or
extended); (ii) reduce the principal of, rate of interest on (other than
any determination or waiver to charge or not charge interest

 87
 

at the Default Rate) or
Fees payable with respect to any Loan of any affected Lender; (iii) extend
any scheduled payment date or final maturity date of the principal amount of
any Loan of any affected Lender; (iv) waive, forgive, defer, extend or
postpone any payment of interest or Fees as to any affected Lender (which
action shall be deemed only to affect those Lenders to whom such payments are
made); (v) release any Guaranty or, except as otherwise permitted in Section
6.7 or Section 9.2(h), release Collateral (which action shall be
deemed to directly affect all Lenders); (vi) change the percentage of the
Term Loan Commitment or of the aggregate unpaid principal amount of the Term
Loan that shall be required for Lenders or any of them to take any action
hereunder (which action shall be deemed to directly affect all Lenders); and
(vii) amend or waive this Section 10.2 or the definition of the
terms “Requisite Lenders” insofar as such definitions affect the substance of
this Section 10.2 or the term “Pro Rata Share” (which action shall be
deemed to directly affect all Lenders). 
Furthermore, no amendment, modification, termination or waiver affecting
the rights or duties of Agent under this Agreement or any other Loan Document
shall be effective unless in writing and signed by Agent, as the case may be,
in addition to Lenders required hereinabove to take such action.  Each amendment, modification, termination or
waiver shall be effective only in the specific instance and for the specific
purpose for which it was given.  No
amendment, modification, termination or waiver shall be required for Agent to
take additional Collateral pursuant to any Loan Document.  No amendment, modification, termination or
waiver of any provision of any Note shall be effective without the written
concurrence of the holder of that Note. 
No notice to or demand on any Loan Party in any case shall entitle such
Loan Party or any other Loan Party to any other or further notice or demand in
similar or other circumstances.  Any
amendment, modification, termination, waiver or consent effected in accordance
with this Section 10.2 shall be binding upon each holder of the Term
Notes at the time outstanding and each future holder of the Term Notes.

10.3         Notices.  Any notice or other
communication required shall be in writing addressed to the respective party as
set forth below and may be personally served, sent by e-mail, telecopied,
sent by overnight courier service or U.S. mail and shall be deemed to have been
given:  (a) if delivered in person,
when delivered; (b) if delivered by fax, on the date of transmission if
transmitted on a Business Day before 4:00 p.m. New York time;  (c) if sent by e-mail, by the sender’s receipt
of an e-mail acknowledgment confirming delivery thereof, (d) if
delivered by overnight courier, one (1) Business Day after delivery to the
courier properly addressed; or (e) if delivered by U.S. mail, four (4)
Business Days after deposit with postage prepaid and properly addressed.

Notices
shall be addressed as follows:

	
  

  	
  If to Borrower:

  	
  North Metro Harness Initiative, LLC

  
	
   

  	
   

  	
  2001 Killebrew
  Drive

  
	
   

  	
   

  	
  Bloomington, MN
  55425

  
	
   

  	
   

  	
  ATTN: Thomas E.
  Fox

  
	
   

  	
   

  	
  Fax: (952)
  853-9991

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
  Ruben & Aronson, LLP

  
	
   

  	
   

  	
  4800 Montgomery
  Lane, Suite 150

  
	
   

  	
   

  	
  Bethesda, MD
  20814

  
	
   

  	
   

  	
  ATTN: Lawrence
  A. London, Esq.

  
	
   

  	
   

  	
  Fax: (301)
  951-9636

  
	
   

  	
   

  	
   

  
	
   

  	
  If to Agent:

  	
  Black Diamond Commercial Finance, L.L.C.

  
	
   

  	
   

  	
  One Sound Shore Drive, Suite 203

  
	
   

  	
   

  	
  Greenwich, Connecticut 06830

  

 

 88
 

 

	
  

  	
   

  	
  ATTN: North Metro Harness Initiative, Account

  
	
   

  	
   

  	
  Officer

  
	
   

  	
   

  	
  Fax: (203) 674-7808

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
  The Bank of New York

  
	
   

  	
   

  	
  600 East Las
  Colinas Blvd., Suite 1300

  
	
   

  	
   

  	
  Irving, Texas
  75039

  
	
   

  	
   

  	
  ATTN: Bob
  Hingston

  
	
   

  	
   

  	
  Fax: (972)
  401-8555

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
  Latham & Watkins LLP

  
	
   

  	
   

  	
  233 South Wacker
  Drive

  
	
   

  	
   

  	
  Suite 5800,
  Sears Tower

  
	
   

  	
   

  	
  Chicago,
  Illinois 60606

  
	
   

  	
  ATTN:

  	
  Jeff Moran

  
	
   

  	
   

  	
  Fax: (312) 993-9767

  
	
   

  	
   

  	
   

  
	
   

  	
  If to a Lender:

  	
  To the address set forth on the signature page hereto
  or in the applicable Assignment Agreement

  

 

10.4         Failure or Indulgence Not Waiver; Remedies
Cumulative.  No failure or delay on the part of Agent or
any Lender to exercise, nor any partial exercise of, any power, right or
privilege hereunder or under any other Loan Documents shall impair such power,
right, or privilege or be construed to be a waiver of any Default or Event of
Default.  All rights and remedies
existing hereunder or under any other Loan Document are cumulative to and not
exclusive of any rights or remedies otherwise available.

10.5         Marshaling; Payments Set Aside. 
Neither Agent nor any Lender shall be under any obligation to marshal
any assets in payment of any or all of the Obligations.  To the extent that Borrower makes payment(s)
or Agent enforces its Liens or Agent or any Lender exercises its right of
set-off, and such payment(s) or the proceeds of such enforcement or set-off is
subsequently invalidated, declared to be fraudulent or preferential, set aside,
or required to be repaid by anyone (whether as a result of any demand,
litigation, settlement or otherwise), then to the extent of such recovery, the
Obligations or part thereof originally intended to be satisfied, and all Liens,
rights and remedies therefore, shall be revived and continued in full force and
effect as if such payment had not been made or such enforcement or set-off
had not occurred.

10.6         Severability.  The invalidity, illegality, or
unenforceability in any jurisdiction of any provision under the Loan Documents
shall not affect or impair the remaining provisions in the Loan Documents.

10.7         Lenders’ Obligations Several; Independent
Nature of Lenders’ Rights.  The obligation of each Lender hereunder is
several and not joint and no Lender shall be responsible for the obligation or
commitment of any other Lender hereunder. 
In the event that any Lender at any time should fail to make a Loan as
herein provided, the Lenders, or any of them, at their sole option, may make
the Advance that was to have been made by the Lender so failing to make such
Loan.  Nothing contained in any Loan
Document and no action taken by Agent or any Lender pursuant hereto or thereto
shall be deemed to constitute Lenders to be a partnership, an association, a joint
venture or any other kind of entity.  The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt.

 89
 

10.8         Headings.  Section and subsection
headings are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purposes or be given
substantive effect.

10.9         Applicable Law.  THIS AGREEMENT AND EACH OF THE
OTHER LOAN DOCUMENTS WHICH DOES NOT EXPRESSLY SET FORTH APPLICABLE LAW SHALL BE
GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPALS.

10.10       Successors and Assigns.  This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns except that Borrower may
not assign its rights or obligations hereunder without the written consent of
all Lenders and any such purported assignment without such written consent
shall be void.

10.11       No Fiduciary Relationship; Limited Liability;
Retention of Construction Consultant.

(a)           No provision in the Loan Documents and no course of dealing between the
parties shall be deemed to create any fiduciary duty owing to any Loan Party by
Agent or any Lender.  Borrower and each
other Loan Party agree that neither Agent nor any Lender shall have liability
to Borrower or any other Loan Party (whether sounding in tort, contract or
otherwise) for losses suffered by Borrower or any other Loan Party in
connection with, arising out of, or in any way related to the transactions
contemplated and the relationship established by the Loan Documents, or any
act, omission or event occurring in connection therewith, unless and to the
extent that it is determined that such losses resulted from the gross
negligence or willful misconduct of the party from which recovery is sought as
determined by a final non-appealable order by a court of competent
jurisdiction.  Neither Agent nor any
Lender shall have any liability with respect to, and Borrower and each other
Loan Party hereby waive, release and agree not to sue for, any special,
indirect or consequential damages suffered by Borrower and any other Loan Party
in connection with, arising out of, or in any way related to the Loan Documents
or the transactions contemplated thereby.

(b)           Agent has retained Construction Consultant, at the sole cost of the
Borrower, to perform certain services and advise Agent generally with respect
to the Project. The fees of Construction Consultant shall be paid by Borrower
within thirty (30) days after billing therefor and expenses incurred by Agent
on account thereof shall be reimbursed to Agent within ten (10) days after
request therefor, but neither Agent, Lenders nor Construction Consultant shall
have any liability to Borrower on account of: (i) the services performed by
Construction Consultant; (ii) any neglect or failure on the part of
Construction Consultant to properly perform its services; or (iii) any approval
given or withheld by Construction Consultant. 
Neither Agent, Lenders nor Construction Consultant assumes any
obligation of Borrower or any other Person concerning the quality of
construction of the Project or the absence therefrom of defects.  Borrower acknowledges that (i) Construction
Consultant has been retained by Agent to act as a consultant and only as a
consultant to Agent in connection with the construction of the Project and has
no duty to Borrower, (ii) Construction Consultant shall in no event or under
any circumstance have any power or authority to make any decision or to give any
approval or consent or to do any other act or thing which is binding upon Agent
or any Lender, and any such purported decision, approval, consent, act or thing
by Construction Consultant on behalf of Agent shall be void and of no force or
effect, (iii) Agent reserves the right to make any and all decisions required
to be made by Agent under this Agreement and to give or refrain from giving any
and all consents or approvals required to be given by Agent under this
Agreement and to accept or not accept any matter or thing required to be
accepted by Agent under this Agreement, and without being bound or limited in
any manner or under any circumstances whatsoever by any opinion expressed or
not expressed, or advice given or not given, or information, certificate or
report provided or

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not provided, by
Construction Consultant to Agent or any other person or party with respect
thereto, (iv) Agent reserves the right in its sole and absolute discretion to
disregard or disagree, in whole or in part, with any opinion expressed, advice
given or information, certificate or report furnished or provided by the
Construction Consultant to Agent or any other person or party, and (v) Agent
reserves the right in its sole and absolute discretion to replace Construction
Consultant with another construction consultant at any time and without
approval by or prior (but with subsequent) notice to Borrower.

10.12       Subrogation Rights of Agent and Lenders.  To
the extent that proceeds of the Term Loan are used to pay indebtedness secured
by any outstanding Lien, security interest, charge or prior encumbrance against
the Project, Agent and Lenders shall be subrogated to any and all rights,
security interests and Liens owned by any owner or holder of such outstanding
Liens, security interests, charges or encumbrances, irrespective of whether
said Liens, security interests, charges or encumbrances are released.

10.13       Construction.  Agent, each Lender, Borrower
and each other Loan Party acknowledge that each of them has had the benefit of
legal counsel of its own choice and has been afforded an opportunity to review
the Loan Documents with its legal counsel and that the Loan Documents shall be
construed as if jointly drafted by Agent, each Lender, Borrower and each other
Loan Party.

10.14       Confidentiality.  Until the Termination Date,
Agent and each Lender agree to exercise their best efforts to keep confidential
any non-public information delivered pursuant to the Loan Documents and
identified as such by Borrower and not to disclose such information to Persons
other than to potential assignees or participants or to any Affiliate of, or
Persons employed by or engaged, by Agent, a Lender or any of their respective
Affiliates or a Lender’s assignees or participants including attorneys,
auditors, professional consultants, rating agencies, insurance industry
associations and portfolio management services. 
The confidentiality provisions contained in this Section 10.14
shall not apply to disclosures (i) required to be made by Agent or any
Lender to any regulatory or governmental agency or pursuant to law, rule,
regulations or legal process, (ii) consisting of general portfolio
information that does not specifically identify Borrower or (iii) to a Person
that is a trustee, investment advisor, collateral manager, servicer, noteholder
or secured party in a Securitization (as hereinafter defined) in connection
with the administration, servicing and reporting on the assets serving as
collateral for such Securitization.  For the purposes of this Section, “Securitization”
shall mean a public or private offering by a Lender or any of its Affiliates or
their respective successors and assigns, of securities which represent an
interest in, or which are collateralized, in whole or in party, by the Term
Loan.    Each Loan Party consents to the publication
by Agent or any Lender of a tombstone or similar advertising material relating
to the financing transactions contemplated by this Agreement.  Agent or such Lender shall provide a draft of
any such tombstone or similar advertising material to each Loan Party for
review and comment prior to the publication thereof.  Agent may provide to industry trade
organizations information with respect to, or relating to, this Agreement that
is necessary and customary for inclusion in league table measurements.  The obligations of Agent and Lenders under
this Section 10.14 shall supersede and replace the obligations of Agent
and Lenders under any confidentiality agreement in respect of this financing
executed and delivered by Agent or any Lender prior to the date hereof.  Agent and each Lender acknowledge that from
time to time they may be in possession of material non-public information about
Borrower, the Sponsors, and their publicly traded parent corporations.  Agent and each Lender are aware that United
States securities laws impose restrictions on trading in securities while in
possession of material non-public information or “tipping” others with respect
to such trading.

10.15       CONSENT
TO JURISDICTION.  BORROWER AND LOAN PARTIES HEREBY CONSENT TO
THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN NEW YORK COUNTY,
STATE OF NEW YORK AND IRREVOCABLY AGREE THAT, SUBJECT TO AGENT’S

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ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS   SHALL BE LITIGATED IN SUCH COURTS.  BORROWER AND LOAN PARTIES EXPRESSLY SUBMIT
AND CONSENT TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE
OF FORUM NON CONVENIENS.  BORROWER AND
LOAN PARTIES HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES
THAT ALL SUCH SERVICE OF PROCESS  MAY BE MADE
UPON BORROWER AND LOAN PARTIES BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, ADDRESSED TO BORROWER, AT THE ADDRESS SET FORTH IN THIS AGREEMENT
AND SERVICE  SO MADE SHALL BE COMPLETE TEN
(10) DAYS AFTER THE SAME HAS BEEN POSTED. 
NOTWITHSTANDING THE FOREGOING, EACH LOAN PARTY HEREBY APPOINTS CT
CORPORATION SYSTEM, LOCATED 111 EIGHTH AVENUE, 13TH FLOOR, NEW YORK, NY 10011,
U.S.A. AS ITS AGENT FOR SERVICE OF PROCESS IN ANY PROCEEDING IN ANY COURTS
LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS.

10.16       WAIVER OF JURY TRIAL. 
BORROWER, LOAN PARTIES, AGENT  AND
EACH LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS.  BORROWER, LOAN PARTIES,
AGENT AND EACH LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN
ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THAT EACH WILL
CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.  BORROWER, LOAN PARTIES, AGENT AND EACH LENDER
WARRANT AND REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY
WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS.

10.17       Survival of Warranties and Certain Agreements.  All
agreements, representations and warranties made herein shall survive the
execution and delivery of this Agreement, the making of the Term Loan, and the
execution and delivery of the Term Notes. 
Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Borrower set forth in Sections 2.8, 2.9
and 10.1 shall survive the repayment of the Obligations and the
termination of this Agreement.

10.18       Entire Agreement.  This Agreement, the Term Notes
and the other Loan Documents embody the entire agreement among the parties
hereto and supersede all prior commitments, agreements, representations, and
understandings, whether oral or written, relating to the subject matter hereof
(other than the BDCF Fee Letter), and may not be contradicted or varied by
evidence of prior, contemporaneous, or subsequent oral agreements or
discussions of the parties hereto.  All
Exhibits, Schedules and Annexes referred to herein are incorporated in this
Agreement by reference and constitute a part of this Agreement.

10.19       Counterparts; Effectiveness.  This
Agreement and any amendments, waivers, consents or supplements may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which counterparts together shall constitute but one in
the same instrument.  This Agreement
shall become effective upon the execution of a counterpart hereof by each of
the parties hereto.

10.20       Replacement of Lenders.

(a)           Within fifteen (15) days after receipt by Borrower of written notice
and demand from any Lender for payment pursuant to Section 2.8 or 2.9
or, as provided in Section 10.20(c), in the

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case of certain refusals
by any Lender to consent to certain proposed amendments, modifications,
terminations or waivers with respect to this Agreement that have been approved
by Requisite Lenders or all affected Lenders, as applicable (any such Lender
demanding such payment or refusing to so consent being referred to herein as an
“Affected Lender”), Borrower may, at its option, notify Agent and such
Affected Lender of its intention to do one of the following:

(i)            Borrower may obtain, at Borrower’s expense, a
replacement Lender (“Replacement Lender”) for such Affected Lender,
which Replacement Lender shall be reasonably satisfactory to Agent.  In the event Borrower obtains a Replacement
Lender that will purchase all outstanding Obligations owed to such Affected
Lender and assume its Term Loan Commitment hereunder within ninety (90) days
following notice of Borrower’s intention to do so, the Affected Lender shall
sell and assign all of its rights and delegate all of its obligations under
this Agreement to such Replacement Lender in accordance with the provisions of Section
9.1, provided that Borrower has reimbursed such Affected Lender for
any administrative fee payable pursuant to Section 9.1 and, in any case
where such replacement occurs as the result of a demand for payment pursuant to
Section 2.8 or 2.9, paid all amounts required to be paid to such
Affected Lender pursuant to Section 2.8 or 2.9 through the date
of such sale and assignment; or

(ii)           Borrower may, with Agent’s consent, prepay in full all outstanding
Obligations owed to such Affected Lender and terminate such Affected Lender’s
Pro Rata Share of the Term Loan Commitment, in which case the Term Loan
Commitment will be reduced by the amount of such Pro Rata Share.  Borrower shall, within ninety (90) days
following notice of its intention to do so, prepay in full all outstanding
Obligations owed to such Affected Lender (including, in any case where such
prepayment occurs as the result of a demand for payment for increased costs,
such Affected Lender’s increased costs for which it is entitled to
reimbursement under this Agreement through the date of such prepayment), and
terminate such Affected Lender’s obligations under the Term Loan Commitment.

(b)           In the case of a Non-Funding Lender pursuant to Section 9.5(d),
at Borrower’s request, Agent or a Person acceptable to Agent shall have the
right with Agent’s consent and in Agent’s sole discretion (but shall have no
obligation) to purchase from any Non-Funding Lender, and each Non-Funding
Lender agrees that it shall, at Agent’s request, sell and assign to Agent or
such Person, all of the Term Loan and Term Loan Commitment of that Non-Funding
Lender for an amount equal to the principal balance of all Term Loan held by
such Non-Funding Lender and all accrued interest and Fees with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant to
an executed Assignment Agreement.

(c)           If, in connection with any proposed amendment, modification, waiver or
termination pursuant to Section 10.2 (a “Proposed Change”):

(i)            requiring the consent of all affected
Lenders, the consent of Requisite Lenders is obtained, but the consent of other
Lenders whose consent is required is not obtained (any such Lender whose
consent is not obtained as described in this clause (i) and in clauses (ii),
(iii) and (iv) below being referred to as a “Non-Consenting Lender”), or

(ii)           requiring the consent of Requisite Lenders, the consent of Lenders
holding 51% or more of the aggregate Term Loan Commitment is obtained, but the
consent of Requisite Lenders is not obtained,

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then,
so long as Agent is not a Non-Consenting Lender, at Borrower’s request Agent,
or a Person reasonably acceptable to Agent, shall have the right with Agent’s
consent and in Agent’s sole discretion (but shall have no obligation) to
purchase from such Non-Consenting Lenders, and such Non-Consenting Lenders
agree that they shall, upon Agent’s request, sell and assign to Agent or such
Person, all of the Term Loan and Term Loan Commitment of such Non-Consenting
Lenders for an amount equal to the principal balance of the Term Loan held by
the Non-Consenting Lenders and all accrued interest and Fees and other
Obligations owing with respect thereto through the date of sale, such purchase
and sale to be consummated pursuant to an executed Assignment Agreement.

(d)           If the Minnesota Racing Commission request that any Lender be removed
as a Lender hereunder or the Agent reasonably determines that any Lender by
being a party hereto may adversely impact the licensing of the Borrower by, or
relationship of the Borrower with, any applicable Governmental Authority, then,
Agent, or a Person reasonably acceptable to Agent, shall have the right with
Agent’s consent and in Agent’s sole discretion shall have the right (but shall
have no obligation) to purchase from such Lender, and such Lender agrees that
it shall, upon Agent’s request, sell and assign to Agent or such Person, all of
the Term Loan and Term Loan Commitment of such Lender for an amount equal to
the principal balance of the Term Loan held by such Lender and all accrued
interest and Fees and other Obligations owing with respect thereto through the
date of sale, such purchase and sale to be consummated pursuant to an executed
Assignment Agreement.  In addition, if a
final non-appealable order of the Minnesota Racing Commission requires that a
particular Lender be removed as a Lender hereunder and Agent doesn’t, within
forty-five (45) days of receipt of a written request from Borrower to replace
such Lender, take the actions described above to replace such Lender, Borrower
shall have the right to require that such Lender sell and assign to a Person
reasonably acceptable to Agent all of the Term Loan and Term Loan Commitment of
such Lender for an amount equal to the principal balance of the Term Loan held
by such Lender and all accrued interest and Fees and other Obligations owing
with respect thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment Agreement.  In the event BDCF or one or more of its
Affiliates or Related Funds (determined as if BDCF were a Lender) is replaced
pursuant to this Section 10.20, Borrower shall be obligated to pay all
amounts which would have been required to be paid if the portion of the Term
Loan and Term Loan Commitments being assigned had been paid in full or
otherwise terminated.

10.21       Delivery of Termination Statements and
Mortgage Releases.  On the Termination Date, and so long as no
suits, actions proceedings, or claims are pending or threatened against any
Indemnitee asserting any damages, losses or liabilities that are indemnified
liabilities hereunder, Agent shall deliver to Borrower termination statements,
mortgage releases and other documents necessary or appropriate to evidence the
termination of the Liens securing payment of the Obligations.

10.22       Subordination of Intercompany Debt.

(a)           Each Loan Party hereby agrees that any intercompany Indebtedness or
other intercompany payables or receivables, or intercompany advances directly
or indirectly made by or owed to such Loan Party by any other Loan Party
(collectively, “Intercompany Debt”), of whatever nature at any time
outstanding shall be subordinate and subject in right of payment to the prior
payment in full in cash of the Obligations. 
Each Loan Party hereby agrees that it will not, while any Event of
Default is continuing, accept any payment, including by offset, on any
Intercompany Debt until the Termination Date, in each case, except with the
prior written consent of Agent.

(b)           In the event that any payment on any Intercompany Debt shall be
received by a Loan Party other than as permitted by this Section 10.22
before the Termination Date, such Loan Party shall receive such payments and
hold the same in trust for, segregate the same from its own assets and

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shall immediately pay over to, the Agent for the benefit of the Agent
and Lenders all such sums to the extent necessary so that Agent and the Lenders
shall have been paid in full, in cash, all Obligations owed or which may become
owing.

(c)           Upon any payment or distribution of any assets of any Loan Party of any
kind or character, whether in cash, property or securities by set-off,
recoupment or otherwise, to creditors in any liquidation or other winding-up of
such Loan Party or in the event of any Proceeding, Agent and Lenders shall
first be entitled to receive payment in full in cash, in accordance with the
terms of the Obligations and of this Agreement, of all amounts payable under or
in respect of such Obligations, before any payment or distribution is made on,
or in respect of, any Intercompany Debt, in any such Proceeding, any
distribution or payment, to which Agent or any Lender would be entitled except
for the provisions hereof shall be paid by such Loan Party, or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution directly to Agent (for the benefit of Agent and the
Lenders) to the extent necessary to pay all such Obligations in full in cash,
after giving effect to any concurrent payment or distribution to Agent and
Lenders (or to Agent for the benefit of Agent and Lenders).

*              *              *

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Witness the due execution
hereof by the respective duly authorized officers of the undersigned as of the
date first written above.

	
  

  	
  NORTH METRO HARNESS INITIATIVE,

  LLC, as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NORTH METRO HOTEL, LLC, as Loan Party

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BLACK DIAMOND COMMERCIAL

  FINANCE, L.L.C., as Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

	
  

  	
  [LENDER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attn:

  	
   

  	
   

  
	
   

  	
  Fax: (

  	
        

  	
  )

  	
        

  	
  -

  	
         

  	
   

  
	
   

  	
   

  
	
   

  	
  ABA No.:

  	
   

  	
   

  
	
   

  	
  account No.:

  	
   

  
	
   

  	
  Bank:

  	
   

  
	
   

  	
  Bank Address:

  	
   

  
														

 

 2Exhibit
10.2

PLEDGE AGREEMENT

This PLEDGE AGREEMENT,
dated as of April 20, 2007 (together with all amendments, if any, from time to
time hereto, this “Agreement”) between SOUTHWEST CASINO AND HOTEL CORP.,
a Nevada corporation (the “Pledgor”), and BLACK DIAMOND COMMERCIAL
FINANCE, L.L.C., a Delaware limited liability company, individually and in its
capacity as Agent for itself and Lenders (“Agent”).

W I T N E S S E T
H:

WHEREAS, pursuant to that
certain Credit Agreement dated as of the date hereof by and among North Metro
Harness Initiative, LLC, a Minnesota limited liability company (“Borrower”),
the other Loan Parties, Agent and the Lenders from time to time party thereto
(including all annexes, exhibits and schedules thereto, and as from time to
time amended, restated, supplemented or otherwise modified (the “Credit
Agreement”), the Lenders have agreed to make Advances to Borrower;

WHEREAS, Pledgor is the
record and beneficial owner of the shares of Stock listed on Schedule I
hereto;

WHEREAS, Pledgor benefits
from the credit facilities made available to Borrower under the Credit
Agreement;

WHEREAS, in order to
induce Agent and Lenders to make Advances as provided for in the Credit
Agreement, Pledgor has agreed to pledge the Pledged Collateral to Agent in accordance
herewith;

NOW, THEREFORE, in
consideration of the premises and the covenants hereinafter contained and to
induce Lenders to make Advances under the Credit Agreement, it is agreed as
follows:

1.             Definitions.  Unless otherwise defined herein, terms defined
in the Credit Agreement are used herein as therein defined, and the following
shall have (unless otherwise provided elsewhere in this Agreement) the
following respective meanings (such meanings being equally applicable to both
the singular and plural form of the terms defined):

“Bankruptcy Code”
means title 11, United States Code, as amended from time to time, and any
successor statute thereto.

“Pledged Collateral”
has the meaning assigned to such term in Section 2 hereof.

“Pledged Entity”
means an issuer of Pledged Shares.

“Pledged Shares”
means those shares listed on Schedule I hereto.

“Secured Obligations”
has the meaning assigned to such term in Section 3 hereof.

2.             Pledge.  Pledgor hereby pledges to Agent, and grants
to Agent for itself and the benefit of Lenders, a first priority security
interest in all of the following (collectively, the “Pledged Collateral”):

(a)           the Pledged Shares and the certificates
representing the Pledged Shares, and all dividends, distributions, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Shares; and

(b)           such portion, as determined by Agent as
provided in Section 6(d) below, of any additional shares of Stock of
Borrower from time to time acquired by Pledgor in any manner (which shares
shall be deemed to be part of the Pledged Shares), and the certificates
representing such additional shares, and all dividends, distributions, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such Stock.

3.             Security for
Obligations.  This Agreement secures,
and the Pledged Collateral is security for, the prompt payment in full when
due, whether at stated maturity, by acceleration or otherwise, and performance
of all Obligations of any kind under or in connection with the Credit Agreement
and the other Loan Documents and all obligations of Pledgor now or hereafter
existing under this Agreement including, without limitation, all reasonable
fees, costs and documented out-of-pocket expenses whether in connection with
collection actions hereunder or otherwise (collectively, the “Secured
Obligations”).

4.             Delivery of
Pledged Collateral.  All certificates
evidencing the Pledged Collateral shall be delivered to and held by or on
behalf of Agent, for itself and the benefit of Lenders, pursuant hereto.  All Pledged Shares shall be accompanied by
duly executed instruments of transfer or assignment in blank, all in form and
substance reasonably satisfactory to Agent and Pledgor.

5.             Representations
and Warranties.  Pledgor represents
and warrants to Agent that:

(a)           Pledgor is the sole holder of record and the
sole beneficial owner of such Pledged Collateral pledged by Pledgor free and
clear of any Lien thereon or affecting the title thereto, except for any Lien
created by this Agreement;

(b)           All of the Pledged Shares have been duly
authorized, validly issued and are fully paid and non-assessable;

(c)           Pledgor has the right and requisite
authority to pledge, assign, transfer, deliver, deposit and set over the
Pledged Collateral pledged by Pledgor to Agent as provided herein;

(d)           None of the Pledged Shares has been issued
or transferred in violation of the securities registration, securities
disclosure or similar laws of any jurisdiction to which such issuance or
transfer may be subject;

 2
 

(e)           All of the Pledged Shares are presently
owned by Pledgor, and are presently represented by the certificates listed on Schedule
I hereto.  As of the date hereof,
there are no existing options, warrants, calls or commitments of any character
whatsoever relating to the Pledged Shares;

(f)            No material consent, approval,
authorization or other order or other action by, and no notice to or filing
with, any Governmental Authority or any other Person is required (i) for the
pledge by Pledgor of the Pledged Collateral pursuant to this Agreement or for
the execution, delivery or performance of this Agreement by Pledgor, or (ii)
for the exercise by Agent of the voting or other rights provided for in this
Agreement or the remedies in respect of the Pledged Collateral pursuant to this
Agreement, except as may be required in connection with such disposition by
laws affecting the offering and sale of securities generally;

(g)           The pledge, assignment and delivery of the
Pledged Collateral (together with duly executed instruments of transfer or
assignment in blank and appropriate endorsements) pursuant to this Agreement
will create a valid first priority Lien on and a first priority perfected
security interest in favor of the Agent for the benefit of Agent and Lenders in
the Pledged Collateral and the proceeds thereof, securing the payment of the
Secured Obligations, subject to no other Lien;

(h)           This Agreement has been duly authorized,
executed and delivered by Pledgor and constitutes a legal, valid and binding
obligation of Pledgor enforceable against Pledgor in accordance with its terms,
except to the extent that enforcement may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting the
enforcement of creditor’s rights generally; and

(i)            The Pledged Shares constitute 50% of the
issued and outstanding shares of Stock of Borrower.

The representations and
warranties set forth in this Section 5 shall survive the execution and
delivery of this Agreement.

6.             Covenants.  Pledgor covenants and agrees that until the
Termination Date:

(a)           Without the prior written consent of Agent,
Pledgor will not sell, assign, transfer, pledge, or otherwise encumber any of
its rights in or to the Pledged Collateral, or any unpaid dividends or other
distributions or payments with respect to the Pledged Collateral or grant a
Lien in the Pledged Collateral, unless otherwise expressly permitted by the
Credit Agreement;

(b)           Pledgor will, at its expense, promptly
execute, acknowledge and deliver all such instruments and take all such actions
as Agent from time to time may reasonably request in order to ensure to Agent
and Lenders the benefits of the Liens in and to the Pledged Collateral intended
to be created by this Agreement, including the filing of any necessary Code
financing statements, which may be filed by Agent with or (to the extent permitted
by law) without the signature of Pledgor, and will cooperate with Agent, at
Pledgor’s expense, in obtaining all necessary approvals and making all
necessary filings under federal, state, local or foreign law in connection with
such Liens or any sale or transfer of the Pledged Collateral;

 3
 

(c)           Pledgor has and will make commercially
reasonable efforts to defend the title to the Pledged Collateral and the Liens
of Agent in the Pledged Collateral against the claim of any Person and will
maintain and preserve such Liens; and

(d)           Pledgor will, upon obtaining ownership of
any additional Stock of Borrower, which Stock is not already Pledged
Collateral, promptly (and in any event within five (5) Business Days) deliver
to Agent a Pledge Amendment, duly executed by Pledgor, in substantially the
form of Schedule II hereto (a “Pledge Amendment”) in respect of
any such additional Stock of Borrower, pursuant to which Pledgor shall pledge
to Agent all of such additional Stock of Borrower.  Pledgor hereby authorizes Agent to attach
each Pledge Amendment to this Agreement and agrees that all Pledged Shares
listed on any Pledge Amendment delivered to Agent shall for all purposes
hereunder be considered Pledged Collateral.

7.             Pledgor’s Rights.  As long as no Event of Default shall have
occurred and be continuing and until written notice shall be given to Pledgor
in accordance with Section 8(a) hereof:

(a)           Pledgor shall have the right, from time to
time, to vote and give consents with respect to the Pledged Collateral, or any
part thereof for all purposes not inconsistent with the provisions of this
Agreement, the Credit Agreement or any other Loan Document; provided, however,
that no vote shall be cast, and no consent shall be given or action taken,
which would have the effect of impairing the position or interest of Agent in
respect of the Pledged Collateral or which would authorize, effect or consent
to (unless and to the extent expressly permitted by the Credit Agreement):

(i)            the dissolution or liquidation, in whole or
in part, of Borrower;

(ii)           the consolidation or merger of Borrower with
any other Person;

(iii)          the sale, disposition or encumbrance of all
or substantially all of the assets of Borrower, except for Liens in favor of
Agent;

(iv)          any change in the authorized number of
shares, the stated capital or the authorized share capital of Borrower or the
issuance of any additional shares of its Stock; or

(v)           the alteration of the voting rights with
respect to the Stock of Borrower; and

(b)           (i)            Pledgor
shall be entitled, from time to time, to collect and receive for its own use
all cash dividends paid in respect of the Pledged Shares to the extent not in
violation of the Credit Agreement other than any and all: (A) dividends
paid or payable other than in cash in respect of any Pledged Collateral, and
instruments and other property received, receivable or otherwise distributed in
respect of, or in exchange for, any Pledged Collateral;  (B) dividends and other distributions paid or
payable in cash in respect of any Pledged Shares in connection with a partial
or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in capital of Borrower; and (C) cash paid,
payable or otherwise distributed, or in redemption of, or in exchange for, any
Pledged Collateral; provided, however, that until actually

 4
 

paid all rights to such distributions shall remain subject to the Lien
created by this Agreement; and

(ii)           all dividends (other
than such cash dividends as are permitted to be paid to Pledgor in accordance
with clause  (i) above) and all other distributions in respect of
any of the Pledged Shares, whenever paid or made, shall be delivered to Agent
to hold as Pledged Collateral and shall, if received by Pledgor, be received in
trust for the benefit of Agent, be segregated from the other property or funds
of Pledgor, and be forthwith delivered to Agent as Pledged Collateral in the
same form as so received (with any necessary endorsement).

8.             Defaults and
Remedies; Proxy.

(a)           If any Event of Default shall have occurred
and be continuing, and concurrently with written notice to Pledgor, Agent
(personally or through an agent) is hereby authorized and empowered to transfer
and register in its name or in the name of its nominee the whole or any part of
the Pledged Collateral, to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations, to exercise the voting and all other rights as a holder
with respect thereto, to collect and receive all cash dividends and other
distributions made thereon, to sell in one or more sales after ten (10)
business days’ notice of the time and place of any public sale or of the time
at which a private sale is to take place (which notice Pledgor agrees is
commercially reasonable) the whole or any part of the Pledged Collateral and to
otherwise act with respect to the Pledged Collateral as though Agent was the
outright owner thereof.  Any sale shall
be made at a public or private sale at Agent’s place of business, or at any
place to be named in the notice of sale, either for cash or upon credit or for
future delivery at such price as Agent may deem fair, and Agent may be the
purchaser of the whole or any part of the Pledged Collateral so sold and hold
the same thereafter in its own right free from any claim of Pledgor or any
right of redemption.  Each sale shall be
made to the highest bidder, but Agent reserves the right to reject any and all
bids at such sale which, in its discretion, it shall deem inadequate.  Demands of performance and, except as
otherwise herein specifically provided for, notices of sale, advertisements and
the presence of property at sale are hereby waived and any sale hereunder may be
conducted by an auctioneer or any officer or agent of Agent.  PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND
APPOINTS AGENT AS THE PROXY AND ATTORNEY-IN-FACT OF PLEDGOR WITH
RESPECT TO THE PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE THE PLEDGED
SHARES, WITH FULL POWER OF SUBSTITUTION TO DO SO.  THE APPOINTMENT OF AGENT AS PROXY AND
ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE
TERMINATION DATE.  IN ADDITION TO THE
RIGHT TO VOTE THE PLEDGED SHARES, THE APPOINTMENT OF AGENT AS PROXY AND
ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS,
PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF THE PLEDGED SHARES WOULD BE
ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS,
CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH
PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION
(INCLUDING ANY TRANSFER OF ANY PLEDGED SHARES ON THE RECORD BOOKS OF THE ISSUER
THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED SHARES OR ANY OFFICER
OR AGENT THEREOF), SO LONG AS AN

 5
 

EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, AND AGENT SHALL NOT
EXERCISE ANY PROXY OR RIGHTS AS ATTORNEY IN FACT UNLESS SUCH AN EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING. 
NOTWITHSTANDING THE FOREGOING, AGENT SHALL NOT HAVE ANY DUTY TO EXERCISE
ANY SUCH RIGHT OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE
TO DO SO OR FOR ANY DELAY IN DOING SO.

(b)           If, at the original time or times appointed
for the sale of the whole or any part of the Pledged Collateral, the highest
bid, if there be but one sale, shall be inadequate to discharge in full all of
the Secured Obligations, or if the Pledged Collateral be offered for sale in
lots, if at any of such sales, the highest bid for the lot offered for sale
would indicate to Agent, in its discretion, that the proceeds of the sales of
the whole of the Pledged Collateral would be unlikely to be sufficient to
discharge all of the Secured Obligations, Agent may, on one or more occasions
and in its discretion, postpone any of said sales by public announcement at the
time of sale or the time of previous postponement of sale, and no other notice
of such postponement or postponements of sale need be given, any other notice
being hereby waived; provided, however, that any sale or sales
made after such postponement shall be after ten (10) business days’ notice to
Pledgor.

(c)           If, at any time when Agent shall determine
to exercise its right to sell the whole or any part of the Pledged Collateral
hereunder, such Pledged Collateral or the part thereof to be sold shall not,
for any reason whatsoever, be effectively registered under the Securities Act
of 1933, as amended (or any similar statute then in effect) (the “Act”) Agent
may, in its discretion (subject only to applicable requirements of law), sell
such Pledged Collateral or part thereof by private sale in such manner and
under such circumstances as Agent may deem necessary or advisable, but subject
to the other requirements of this Section 8, and shall not be required
to effect such registration or to cause the same to be effected.  Without limiting the generality of the
foregoing, in any such event, Agent in its discretion (x) may, in accordance
with applicable securities laws, proceed to make such private sale notwithstanding
that a registration statement for the purpose of registering such Pledged
Collateral or part thereof could be or shall have been filed under said Act (or
similar statute), (y) may approach and negotiate with a single possible
purchaser to effect such sale, and (z) may restrict such sale to a purchaser
who is an accredited investor under the Act and who will represent and agree
that such purchaser is purchasing for its own account, for investment and not
with a view to the distribution or sale of such Pledged Collateral or any part
thereof.  In addition to a private sale
as provided above in this Section 8, if any of the Pledged Collateral
shall not be freely distributable to the public without registration under the
Act (or similar statute) at the time of any proposed sale pursuant to this Section
8, then Agent shall not be required to effect such registration or cause
the same to be effected but, in its discretion (subject only to applicable
requirements of law), may require that any sale hereunder (including a sale at
auction) be conducted subject to restrictions:

(i)            as to the financial sophistication and
ability of any Person permitted to bid or purchase at any such sale;

(ii)           as to the content of legends to be placed
upon any certificates representing the Pledged Collateral sold in such sale,
including restrictions on future transfer thereof;

 6
 

(iii)          as to the representations required to be made
by each Person bidding or purchasing at such sale relating to that Person’s
access to financial information about Pledgor and such Person’s intentions as
to the holding of the Pledged Collateral so sold for investment for its own
account and not with a view to the distribution thereof; and

(iv)          as to such other matters as Agent may, in its
discretion, deem necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in compliance with
the Bankruptcy Code and other laws affecting the enforcement of creditors’
rights and the Act and all applicable state securities laws.

(d)           Pledgor recognizes that Agent may be unable
to effect a public sale of any or all of the Pledged Collateral and may be
compelled to resort to one or more private sales thereof in accordance with clause
(c) above.  Pledgor also acknowledges
that any such private sale may result in prices and other terms less favorable
to the seller than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall not be deemed to have
been made in a commercially unreasonable manner solely by virtue of such sale
being private.  Agent shall be under no
obligation to delay a sale of any of the Pledged Collateral for the period of
time necessary to permit Borrower to register such securities for public sale
under the Act, or under applicable state securities laws, even if Pledgor and
Borrower would agree to do so.

(e)           Pledgor agrees to the maximum extent
permitted by applicable law that following the occurrence and during the
continuance of an Event of Default it will not at any time plead, claim or take
the benefit of any appraisal, valuation, stay, extension, moratorium or
redemption law now or hereafter in force in order to prevent or delay the
enforcement of this Agreement, or the absolute sale of the whole or any part of
the Pledged Collateral or the possession thereof by any purchaser at any sale
hereunder, and Pledgor waives the benefit of all such laws to the extent it
lawfully may do so.  Pledgor agrees that
it will not interfere with any right, power and remedy of Agent provided for in
this Agreement or now or hereafter existing at law or in equity or by statute
or otherwise, or the exercise or beginning of the exercise by Agent of any one
or more of such rights, powers or remedies. 
No failure or delay on the part of Agent to exercise any such right,
power or remedy and no notice or demand which may be given to or made upon
Pledgor by Agent with respect to any such remedies shall operate as a waiver
thereof, or limit or impair Agent’s right to take any action or to exercise any
power or remedy hereunder, without notice or demand, or prejudice its rights as
against Pledgor in any respect.

(f)            Pledgor further agrees that a breach of any
of the covenants contained in this Section 8 will cause irreparable
injury to Agent, that Agent shall have no adequate remedy at law in respect of
such breach and, as a consequence, agrees that each and every covenant
contained in this Section 8 shall be specifically enforceable against
Pledgor, and Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that the Secured Obligations are not then due and payable in accordance
with the agreements and instruments governing and evidencing such obligations.

9.             Waiver.  No delay on Agent’s part in exercising any
power of sale, Lien, option or other right hereunder, and no notice or demand
which may be given to or made upon Pledgor by Agent with respect to any power
of sale, Lien, option or other right hereunder, shall

 7
 

constitute a waiver thereof, or limit or impair Agent’s
right to take any action or to exercise any power of sale, Lien, option, or any
other right hereunder, without notice or demand, or prejudice Agent’s rights as
against Pledgor in any respect.

10.           Assignment.  Agent may assign, endorse or transfer any
instrument evidencing all or any part of the Secured Obligations as provided
in, and in accordance with, the Credit Agreement, and the holder of such
instrument shall be entitled to the benefits of this Agreement.

11.           Termination.  Immediately following the Termination Date,
Agent shall deliver to Pledgor the Pledged Collateral pledged by Pledgor at the
time subject to this Agreement and all instruments of assignment executed in
connection therewith, free and clear of the Liens hereof and, except as
otherwise provided herein, all of Pledgor’s obligations hereunder shall at such
time terminate and none of Agent and the Lenders shall have any continuing
right or interest in such Pledged Collateral or the proceeds thereof.

12.           Lien Absolute.  All rights of Agent hereunder, and all
obligations of Pledgor hereunder, shall be absolute and unconditional
irrespective of:

(a)           any lack of validity or enforceability of
the Credit Agreement, any other Loan Document or any other agreement or
instrument governing or evidencing any Secured Obligations;

(b)           any change in the time, manner or place of
payment of, or in any other term of, all or any part of the Secured
Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, any other Loan Document or any other
agreement or instrument governing or evidencing any Secured Obligations;

(c)           any exchange, release or non-perfection
of any other Pledged Collateral, or any release or amendment or waiver of or
consent to departure from any guaranty, for all or any of the Secured
Obligations;

(d)           the insolvency of any Loan Party; or

(e)           any other circumstance which might otherwise
constitute a defense available to, or a discharge of, Pledgor other than
payment and performance in full of the secured obligations.

13.           Release.  Pledgor consents and agrees that Agent may at
any time, or from time to time, in its discretion with notice in accordance
with the Credit Agreement:

(a)           renew, extend or change the time of payment,
and/or the manner, place or terms of payment of all or any part of the Secured
Obligations; and

(b)           exchange, release and/or surrender all or
any of the Pledged Collateral (including the Pledged Collateral), or any part
thereof, by whomsoever deposited, which is now or may hereafter be held by
Agent in connection with all or any of the Secured Obligations; all in such
manner and upon such terms as Agent may reasonably deem proper, and without
notice to or further assent from Pledgor, it being hereby agreed that Pledgor
shall be and remain bound upon

 8
 

this Agreement, irrespective of the value or condition of any of the
Pledged Collateral, and notwithstanding any such change, exchange, settlement,
compromise, surrender, release, renewal or extension, and notwithstanding also
that the Secured Obligations may, at any time, exceed the aggregate principal
amount thereof set forth in the Credit Agreement, or any other agreement
governing any Secured Obligations. 
Pledgor hereby waives notice of acceptance of this Agreement, and also
presentment, demand, protest and notice of dishonor of any and all of the
Secured Obligations, and promptness in commencing suit against any party hereto
or liable hereon, and in giving any notice to or of making any claim or demand
hereunder upon Pledgor.  No act or
omission of any kind on Agent’s part shall in any event affect or impair this
Agreement.

14.           Reinstatement.  This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
Pledgor or Borrower for liquidation or reorganization, should Pledgor or
Borrower become insolvent or make an assignment for the benefit of creditors or
should a receiver or trustee be appointed for all or any significant part of
Pledgor’s or Borrower’s assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment and performance of the
Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded
or reduced in amount, or must otherwise be restored or returned by any obligee
of the Secured Obligations, whether as a “voidable preference”, “fraudulent
conveyance”, or otherwise, all as though such payment or performance had not
been made.  In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.

15.           Miscellaneous.

(a)           Agent may execute any of its duties
hereunder by or through agents or employees and shall be entitled to advice of
counsel concerning all matters pertaining to its duties hereunder.

(b)           Pledgor agrees to promptly reimburse Agent
for actual out-of-pocket expenses, including, without limitation,
reasonable counsel fees, incurred by Agent in connection with the
administration and enforcement of this Agreement.

(c)           Neither Agent, nor any of its respective
officers, directors, employees, agents or counsel shall be liable for any
action lawfully taken or omitted to be taken by it or them hereunder or in
connection herewith, except for its or their own gross negligence or willful
misconduct as determined by a court of competent jurisdiction.

(d)           THIS AGREEMENT SHALL BE BINDING UPON PLEDGOR
AND ITS SUCCESSORS AND ASSIGNS (INCLUDING A DEBTOR-IN-POSSESSION ON BEHALF OF
PLEDGOR), AND SHALL INURE TO THE BENEFIT OF, AND BE ENFORCEABLE BY, AGENT AND
ITS SUCCESSORS AND ASSIGNS, AND SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN THAT STATE, AND NONE OF THE TERMS OR PROVISIONS OF THIS
AGREEMENT

 9
 

MAY BE WAIVED, ALTERED, MODIFIED OR AMENDED EXCEPT IN WRITING DULY
SIGNED FOR AND ON BEHALF OF AGENT AND PLEDGOR.

16.           Severability.  If for any reason any provision or provisions
hereof are determined to be invalid and contrary to any existing or future law,
such invalidity shall not impair the operation of or effect those portions of this
Agreement which are valid.

17.           Notices.  Except as otherwise provided herein, whenever
it is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other party, or whenever any of the parties desires to
give or serve upon any other a communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and either shall be delivered in person or
sent by registered or certified mail, return receipt requested, with proper
postage prepaid, or by facsimile transmission and confirmed by delivery of a
copy by personal delivery or United States Mail as otherwise provided herein:

	
  (a)

  	
  If to Agent, at:

  	
  Black Diamond Commercial Finance, L.L.C.

  
	
   

  	
   

  	
  One Sound Shore Drive

  
	
   

  	
   

  	
  Greenwich, CT 06830

  
	
   

  	
   

  	
  ATTN: North Metro Harness Initiative, Account
  Officer

  
	
   

  	
   

  	
  Fax: (203) 674-7808

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
  Latham & Watkins LLP

  
	
   

  	
   

  	
  Sears Tower, Suite 5800

  
	
   

  	
   

  	
  233 South Wacker Drive

  
	
   

  	
   

  	
  Chicago, Illinois 60606

  
	
   

  	
   

  	
  Attention: Jeffrey G. Moran, Esq.

  
	
   

  	
   

  	
  Fax: (312) 993-9767

  
	
   

  	
   

  	
   

  
	
   

  	
  If to Pledgor, at:

  	
  Southwest Casino and Hotel Corp.

  
	
   

  	
   

  	
  2001 Killebrew Drive

  
	
   

  	
   

  	
  Bloomington, MN 55425

  
	
   

  	
   

  	
  Attn: Thomas E. Fox

  
	
   

  	
   

  	
  Fax: (952) 853-9991

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
  Ruben & Aronson, LLP

  
	
   

  	
   

  	
  4800 Montgomery Lane, Suite 150

  
	
   

  	
   

  	
  Bethesda, MD 20814

  
	
   

  	
   

  	
  Attention: Lawrence A. London, Esq.

  
	
   

  	
   

  	
  Fax: (301) 951-9636

  

 

or at such other address
as may be substituted by notice given as herein provided. The giving of any
notice required hereunder may be waived in writing by the party entitled to
receive such notice.  Every notice,
demand, request, consent, approval, declaration or other communication

 10
 

hereunder shall be given
in the manner and deemed received as provided for in the Credit Agreement.

18.           Section Titles.  The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.

19.           Counterparts.  This Agreement may be executed in any number
of counterparts, which shall, collectively and separately, constitute one
agreement.

20.           Benefit of Lenders.  All security interests granted or
contemplated hereby shall be for the benefit of Agent and Lenders, and all
proceeds or payments realized from the Pledged Collateral in accordance
herewith shall be applied to the Obligations in accordance with the terms of
the Credit Agreement.

[signature page
follows]

 11

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed as
of the date first written above.

	
  

  	
  SOUTHWEST CASINO AND HOTEL CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BLACK DIAMOND COMMERCIAL FINANCE,

  L.L.C., as Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
						

 

SCHEDULE I

PLEDGED SHARES

	
  Pledged
  Entity

  	
   

  	
  Certificate

  Number

  
	
  North Metro Harness Initiative, LLC

  	
   

  	
  Certificate No. 1

  

 

SCHEDULE II

PLEDGE AMENDMENT

This Pledge Amendment,
dated                   
is delivered pursuant to Section 6(d) of the Pledge Agreement referred
to below.  All defined terms herein shall
have the meanings ascribed thereto or incorporated by reference in the Pledge
Agreement.  The undersigned hereby
certifies that the representations and warranties in Section 5 of the
Pledge Agreement are and continue to be true and correct in all material
respects, both as to the shares pledged prior to this Pledge Amendment and as
to shares pledged pursuant to this Pledge Amendment.  The undersigned further agrees that this
Pledge Amendment may be attached to that certain Pledge Agreement, dated            
    , 2007, between undersigned, as Pledgor, and Black
Diamond Commercial Finance, L.L.C., as Agent (the “Pledge Agreement”), and that
the Pledged Shares listed on this Pledge Amendment shall be and become a part
of the Pledged Collateral referred to in said Pledge Agreement and shall secure
all Secured Obligations referred to in said Pledge Agreement.

	
  

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

	
  Name and

  Address of Pledgor

  	
   

  	
  Pledged Entity

  	
   

  	
  Class

  of Stock

  	
   

  	
  Certificate

  Number(s)

  	
   

  	
  Number

  of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 2

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