Document:

Exhibit 10.87

 

	
   

  	
   

  	
  200500000163

  
	
   

  	
   

  	
  Filed for Record in

  
	
   

  	
   

  	
  LEWIS COUNTY MO

  
	
   

  	
   

  	
  BRENDA GUNLOCK

  
	
   

  	
   

  	
  02-02-2005 At 11:05 am.

  
	
   

  	
   

  	
  DEED TRUST 141.00

  
	
  [Seal]

  	
   

  	
  OR Book 503 Page 2559 - 2598

  

 

 

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

 

	
  1.

  	
   

  	
  Title of Document:

  	
  Fee and Leasehold Deed of Trust
  with Assignment of Rents, Security Agreement and Fixture Filing

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Date of Document:

  	
  January 31, 2005

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Grantor:

  	
  HGI - Mark Twain

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Grantee:

  	
  Bank of America, N.A., as
  Administrative Agent

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Statutory Mailing Address(es):

  	
  Grantor:

  
	
   

  	
   

  	
   

  	
  c/o Herbst Gaming, Inc.

  
	
   

  	
   

  	
   

  	
  5195 Las Vegas Blvd.

  
	
   

  	
   

  	
   

  	
  Las Vegas, NV 89119

  
	
   

  	
   

  	
   

  	
  Attn: M. Higgins

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Grantee:

  
	
   

  	
   

  	
   

  	
  Bank of America, N.A.

  
	
   

  	
   

  	
   

  	
  Mail Code: TX1-492-14-11

  
	
   

  	
   

  	
   

  	
  Bank of America Plaza

  
	
   

  	
   

  	
   

  	
  901 Main Street, 14th
  Floor

  
	
   

  	
   

  	
   

  	
  Dallas, TX 75202-3714

  
	
   

  	
   

  	
   

  	
  Attn: Chris M. Levine,
  Assistant Vice President

  Agency Management Officer II

  GCIB Agency Management Central I

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Legal description:

  	
  See Exhibit A
  annexed to the document

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Reference(s) to Book(s) and
  Page(s):

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Prepared by and following
  recording return to:

  	
   

  
	
   

  	
   

  	
   

  	
  Sheppard, Mullin,
  Richter & Hampton LLP

  
	
   

  	
   

  	
   

  	
  333 South Hope Street, 48th
  Floor

  
	
   

  	
   

  	
   

  	
  Los Angeles, California 90071

  
	
   

  	
   

  	
   

  	
  Attn: William M. Scott
  IV, Esq.

  
						

 

 

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

 

	
  RECORDING
  REQUESTED BY

  AND WHEN RECORDED MAIL TO:

  	
   

  	
   

  
	
  Sheppard,
  Mullin, Richter & Hampton LLP

  333 South Hope Street, 48th Floor

  Los Angeles, CA 90071-1448

  Attn: William M. Scott IV, Esq.

  	
   

  	
   

  
	
   

  	
   

  	
  THIS
  SPACE ABOVE FOR RECORDER’S USE

  

 

FEE AND LEASEHOLD DEED OF TRUST

with Assignment of Rents, Security Agreement and

Fixture Filing

 

The parties to this Fee and Leasehold Deed of Trust
with Assignment of Rents, Security Agreement and Fixture Filing (“Deed of Trust”),
dated as of January 31, 2005, are HGI – MARK TWAIN, a Nevada corporation (“Trustor”),
as trustor, TODD W. GRIFFEE, ESQ., as trustee (“Trustee”), and BANK OF AMERICA,
N.A., as “Administrative Agent” for the “Lenders” including, without
limitation, “the Swing Line Lender” (as each of those three terms is defined in
the Credit Agreement), as beneficiary and secured party (“Beneficiary”).  Capitalized terms used and not otherwise
defined herein shall have the meanings given to them in that certain Credit
Agreement, dated as of October 8, 2004 (as amended, extended, renewed, modified
or supplemented from time to time, the “Credit Agreement”) by and among Herbst
Gaming, Inc., a Nevada corporation (“Borrower”), each lender whose name is
set forth on the signature pages therein and each lender that may
hereafter become a party to the Credit Agreement pursuant to Section 10.06
therein (each a “Lender” and collectively, the “Lenders”), Bank of America,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.  The Credit Agreement initially provided for
Revolving Loans in the aggregate principal amount of $175,000,000.  Concurrently herewith, the Credit Agreement
is being amended by a Term Joinder Agreement pursuant to which Term Loans in
the aggregate principal amount of $100,000,000 are being extended to the
Borrower in addition to such Revolving Loans, for an aggregate credit facility
of $275,000,000.

 

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

 

1.             Grant in Trust and Secured Obligations.

 

1.1           Grant in Trust.  For the purpose
of securing payment and performance of the Secured Obligations defined and
described in Section 1.2, Trustor hereby irrevocably and

 

2

 

unconditionally grants and sells, mortgages, warrants, conveys,
confirms, assigns and sets over unto Trustee, in trust for the benefit of
Beneficiary, with power of sale and right of entry and possession, all estate,
right, title and interest which Trustor now has or may later acquire in and to
the following property (all or any part of such property, or any interest in
all or any part of it, as the context may require, the “Property”):

 

(a)           All of Trustor’s right, title and interest under and
in connection with that certain Lease dated as of December 29, 1999, between
City of LaGrange, Missouri, a special charter city and municipal corporation,
as landlord, and Mark Twain Casino, L.L.C., a Missouri limited liability
company, as original tenant and predecessor in interest to Trustor (the “Operating
Lease”), a memorandum of which (the “Memorandum of Lease”) dated September 11,
2000, was recorded on September 29, 2000, in Book 436 at Page 106, in
the Official Records (the “Official Records”) of Lewis County (the “County”),
including, without limitation, (i) all options to extend or renew the
Operating Lease (and the leasehold estate for the term of each extension or
renewal), (ii) all options and rights of first refusal contained in the
Operating Lease to purchase the real property which is subject to the Operating
Lease, and (iii) all of Trustor’s other rights, titles and interests under
the Operating Lease; together with

 

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

 

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

 

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

 

(e)           Subject to Article 2, below, all existing
and future leases, subleases, subtenancies, licenses (except for gaming
licenses and liquor licenses that are

 

3

 

not
transferable), occupancy agreements, concessions and any other agreement
devising any portion of the Property or relating to the use and enjoyment of
all or any part of the Land and Improvements, and any and all guaranties and
other agreements relating to or made in connection with any of the foregoing,
whether written or oral and whether in existence at or upon the recordation of
this Deed of Trust or entered into after the recordation of this Deed of Trust
(some or all collectively, as the context may require, “Leases”), and all
rents, security deposits, royalties, issues, profits, receipts, earnings,
revenue, income, products and proceeds and other benefits of the Land and Improvements,
whether now due, past due or to become due, including, without limitation, all
prepaid rents, security deposits, fixed, additional and contingent rents,
deficiency rents and liquidated damages, license fees, occupancy charges, hotel
room charges, cabana charges, casino revenues, show ticket revenues, food and
beverage revenues, room service revenues, merchandise sales revenues, parking,
maintenance, common area, tax, insurance, utility and service charges and
contributions, proceeds of sale of electricity, gas, heating, air-conditioning,
cable and other utilities and services, green fees, cart rental fees,
instruction fees, membership charges, restaurant, snack bar and pro shop
revenues, liquidated damages, and all other rights to payments, together with
and any and all guaranties and other agreements relating to or made in
connection with any of such leases (some or all collectively, as the context
may require, “Rents”); together with

 

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

 

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

 

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(h)           All rights to the payment of money, accounts, accounts
receivable, reserves, deferred payments, refunds, cost savings, payments and
deposits, room revenues, food revenues, beverage revenues and casino revenues,
whether now or later to be received from third parties (including all earnest
money sales deposits) or deposited by Trustor with third parties (including all
utility deposits), contract rights, development and use rights, governmental
permits and licenses (except for gaming licenses and liquor licenses that are
not transferable), authorizations, certificates, variances, consents and
approvals, applications, architectural and engineering plans, specifications
and drawings, as-built drawings, guaranties, warranties, management agreements,
operating and/or licensing agreements, supply and service contracts for water,
sanitary and storm sewer, drainage, electricity, steam, gas, telephone, cable,
satellite, and other utilities, property and title insurance policies and
proceeds thereof (including without limitation the right to assert, prosecute
and settle claims under such policies), chattel paper, instruments, documents,
notes, certificates of deposit, securities, other investments, drafts and
letters of credit (other than letters of credit in favor of Beneficiary), which
arise from or relate to construction on the Land or to any business now or
later to be conducted on it, or to the Land and Improvements generally;
together with

 

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

 

(j)            All books and records pertaining to any and all of the
property described above, including computer readable memory and any computer
hardware or software necessary to access and process such memory (“Books and
Records”); together with

 

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

 

5

 

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

 

Trustor shall and will warrant and forever defend the
Property in the quiet and peaceable possession of the Trustee, its successors and
assigns against all and every Person or Persons lawfully claiming or to claim
the whole or any part thereof.  Trustor
agrees that any greater title to the Property hereafter acquired by Trustor
during the term hereof shall be subject hereto.

 

1.2           Secured Obligations.

 

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

 

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

 

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

 

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

 

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

 

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

 

1.2.3        All Persons who may have or acquire an interest in all
or any part of the Property will be considered to have notice of, and will be
bound by, the terms of the Secured Obligations and each other agreement or
instrument made or entered into in connection with each of the Secured
Obligations.  Such terms include any
provisions in the Credit Agreement or the other Loan Documents which permit
borrowing, repayment and reborrowing, or which provide that the interest rate
on one or more of the Secured Obligations may vary from time to time.

 

1.2.4        In addition to the indebtedness evidenced by the
Guaranty and all other Secured Obligations, this Deed of Trust, to the fullest
extent permitted by the Laws of the State of Missouri, shall secure also and
constitute a Lien on the Property for all future advances made by the
Beneficiary to Borrower and future obligations incurred by Borrower to
Beneficiary in connection with the Property to the same extent as if such
future advances were made or such future obligations incurred on the date of
the execution of this Deed of Trust.  The
total amount of the indebtedness that may be secured by this Deed of Trust
shall not exceed a maximum principal amount equal to $275,000,000.00 plus
future advances and/or future obligations made or incurred for the reasonable
protection of the security or to enable completion of a contemplated
improvement, all as contemplated by Subsection 3 of §443.055, Missouri
Revised Statutes, and this instrument is to be governed by said §443.055.

 

2.             Assignment of Rents and Leases.

 

2.1           Assignment.  Trustor
hereby irrevocably, absolutely, presently and unconditionally assigns,
transfers and sets over to Beneficiary all of the right, title and interest
which Trustor now has or may later acquire in and to the Rents and the Leases,
and confers upon Beneficiary the right to collect such Rents and enforce the
provisions of the Leases with or without taking possession of the Property.  This is an absolute assignment, not an
assignment for security only.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3.             Grant of Security Interest.

 

3.1           Security Agreement.  The parties
intend for this Deed of Trust to create a lien on and security interest in the
Property, and an absolute assignment of the Rents and the Leases, all in favor
of Beneficiary.  The parties acknowledge
that some of the Property and some of the Rents and Leases may be determined
under applicable law to be personal property or fixtures.  To the extent such Property, Rents or Leases
constitute personal property, Trustor, as debtor, hereby grants to Beneficiary,
as secured party, a security interest in all such Property, Rents and Leases,
to secure payment and performance of the Secured Obligations, and Trustor, as
debtor, also has granted a security interest in such Property, Rents and Leases
pursuant to that certain Amended and Restated Security Agreement dated October 8,
2004, executed by the Borrower and each of its Subsidiaries, as debtor, in
favor of Beneficiary, as secured party, as modified from time to time.  This Deed of Trust constitutes a security
agreement under the Missouri Uniform Commercial Code, as amended or recodified
from time to time, covering all such Property, Rents and Leases.  To the extent any revenues generated in
connection with the operation of the Property from time to time are not real
property encumbered by the lien created by Section 1.1, above, and
are not absolutely assigned by the assignment set forth in Section 2.1,
above, it is the intention of the parties that such revenues shall constitute “proceeds,
products, offspring, rents or profits” (as defined in and for the purposes of Section 552(b) of
the United States Bankruptcy Code, as such section may be modified or
supplemented) of the Land and Improvements, and/or “fees, charges, accounts, or
other payments for the use or occupancy of rooms and other public facilities in
hotels, motels or other lodging properties,” as applicable (as such terms are
defined in and for the purpose of Section 552(b) of the United States
Bankruptcy Code, as such Section may be modified or supplemented).

 

3.2           Financing Statements.  Trustor
consents to the filing by Beneficiary  of
one or more financing statements and such other documents as Beneficiary may
from time to time require to perfect or continue the perfection of Beneficiary’s
security interest in any Property, Rents or Leases.  As provided in Section 5.11,
Trustor shall pay all fees and costs that Beneficiary may incur in filing such
documents in public offices and in obtaining such record searches as
Beneficiary may reasonably require.  If
Trustor fails to execute any financing statements or other documents for the
perfection or continuation of any security interest, Trustor hereby appoints
Beneficiary as its true and lawful attorney-in-fact (which appointment is
irrevocable and coupled with an interest) to execute any such documents on its
behalf.  If any financing statement or
other document is filed in the records normally pertaining to personal property,
that filing shall never be construed as in any way derogating from or impairing
this Deed of Trust or the rights or obligations of the parties under it.

 

4.             Fixture Filing.  This Deed of
Trust constitutes a financing statement filed as a fixture filing under the
Missouri Uniform Commercial Code, as amended or recodified from time to time,
covering any Property which now is or later may become fixtures attached to the
Land or

 

9

 

Improvements.  In connection
therewith, the addresses of Trustor, as debtor, and Beneficiary, as secured
party, are as set forth in Section 8.11, below.  The foregoing address of Beneficiary, as
secured party, is also the address from which information concerning the
security interest may be obtained by any interested party.  The property subject to this fixture filing
is described in Section 1.1, above. 
Portions of the property subject to this fixture filing as identified in
this Section are or are to become fixtures related to the real estate
described in Exhibit A attached hereto.

 

5.             Rights and Duties of the Parties.

 

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

 

(a)           Trustor lawfully possesses and holds fee simple title
to all of the Land and Improvements thereon and has or will have good title to
all Property (other than personal property utilized by Trustor under such
equipment leases and similar financing arrangements as were disclosed to
Beneficiary in writing prior to the execution of this Deed of Trust or as are
hereafter entered into by Trustor in accordance with the Credit Agreement);

 

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

 

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

 

(d)           The Property includes all property and rights which
may be reasonably necessary to promote the present beneficial use and enjoyment
of the Land and Improvements;

 

(e)           Trustor owns any Property which is personal property
free and clear of any security agreements, reservations of title or conditional
sales contracts, and there is no financing statement affecting such personal
property on file in any public office (other than personal property utilized by
Trustor under such equipment leases and similar financing arrangements as were
disclosed to Beneficiary in writing prior to the execution of this Deed of
Trust or as are hereafter entered into by Trustor in accordance with the Credit
Agreement);

 

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

 

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

 

5.2           Taxes and Assessments.  Trustor shall
pay prior to delinquency all taxes, levies, charges and assessments, including
assessments on appurtenant water stock, imposed by

 

10

 

any public or quasi-public authority or utility company which are (or
if not paid, may become) a lien on or security interest in all or part of the
Property or any interest in it, or which may cause any decrease in the value of
the Property or any part of it.  If any
such taxes, levies, charges or assessments become delinquent, Beneficiary may
require Trustor to present evidence that they have been paid in full, on ten (10) days’
written notice by Beneficiary to Trustor. 
This Section 5.2 is subject to the right granted in Section 5.11
of the Credit Agreement to contest in good faith certain taxes, assessments,
charges and levies.

 

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

 

5.4           Liens, Charges and Encumbrances. 
Trustor shall immediately discharge any lien on or security interest in
the Property to which Beneficiary has not consented in writing.  Subject to any applicable rights to contest
set forth in the Credit Agreement, Trustor shall pay, prior to delinquency,
each obligation secured by or reducible to a lien, security interest, charge or
encumbrance which now does or later may encumber or appear to encumber all or
part of the Property or any interest in it, whether the lien, security
interest, charge or encumbrance is or would be senior or subordinate to this
Deed of Trust.

 

5.5           Damages and Insurance and Condemnation Proceeds.

 

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

 

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

 

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

 

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

 

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

 

5.5.2        Trustor shall immediately notify Beneficiary in
writing if:

 

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

 

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

 

11

 

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

 

5.5.4        All proceeds of these assigned claims, other property
and rights which Trustor may receive or be entitled to (collectively, “Proceeds”)
shall be paid to Beneficiary.  In each
instance, Beneficiary shall apply such Proceeds first toward reimbursement of
all of Beneficiary’s costs and expenses of recovering the Proceeds, including
attorneys’ fees.  If, in any instance,
each and all of the following conditions (the “Restoration Conditions”) are
satisfied in Beneficiary’s reasonable judgment, Beneficiary shall permit
Trustor to use the balance of such Proceeds (“Net Claims Proceeds”) to pay
costs of repairing or reconstructing the Property in the manner described
below:

 

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

 

(b)           Beneficiary must receive evidence reasonably
satisfactory to it that, after repair or reconstruction, the Property will be
at least as valuable as it was immediately before the damage or condemnation
occurred; and

 

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

 

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

 

If Beneficiary finds that such conditions have been
met, Beneficiary shall hold the Net Claims Proceeds and any funds which Trustor
is required to provide in an interest-bearing passbook savings account and
shall disburse them to Trustor on a monthly basis in accordance with
Beneficiary’s customary construction lending procedures.  However, if an Event of Default has occurred
and is continuing, Beneficiary may apply the Net Claims Proceeds to pay or
prepay (without premium) some or all of the Secured Obligations in such order
and proportions as Beneficiary in its absolute discretion may choose (subject
to the provisions for priority of application of payments set forth in the
Credit Agreement).  Any and all Proceeds
(including,

 

12

 

without limitation, any Net Claims Proceeds) held by
Beneficiary from time to time shall be collateral for the Secured Obligations,
and Trustor hereby grants to Beneficiary a security interest in and lien on
such Proceeds and all rights and remedies available under applicable laws with
respect to such Proceeds, including, without limitation, all rights and
remedies under the Missouri Uniform Commercial Code.  Trustor shall execute and deliver to
Beneficiary and the Lenders any and all documents reasonably requested by
Beneficiary in order to confirm, create and perfect such security interest in
and lien on such Proceeds.  In the event
that any Proceeds are applied to pay any Secured Obligations, then Beneficiary
shall have no obligation to disburse or release such applied Proceeds to
Trustor under this Section 5.5. 
If no Event of Default shall have occurred and be continuing, any funds
remaining upon completion of the repair or reconstruction shall be returned to
Trustor.

 

5.5.5        Trustor hereby specifically, unconditionally and
irrevocably waives all rights of a property owner granted under applicable law,
which provide for allocation of condemnation proceeds between a property owner
and a lienholder, and any other law or successor statute of similar
import.  Trustor hereby specifically,
unconditionally and irrevocably waives all right to recover against Beneficiary
or any Lender (or any officer, employee, agent or representative of Beneficiary
or any Lender) for any loss incurred by Trustor from any cause insured against
or required by any Loan Document to be insured against; provided, however, that
this waiver of subrogation shall not be effective with respect to any insurance
policy if the coverage thereunder would be materially reduced or impaired as a
result.

 

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

 

5.6           Maintenance and Preservation of Property.

 

5.6.1        Except as permitted in the Credit Agreement, Trustor
shall not remove or demolish the Property or any part of it, or alter, restore
or add to the Property, or initiate or allow any change in any zoning or other land
use classification which affects the Property or any part of it, except as
permitted or required by the Credit Agreement or with Beneficiary’s express
prior written consent in each instance; provided that, without Beneficiary’s
consent, Trustor shall be entitled to remove personal property in the ordinary
course of Trustor’s business so long as any such personal property is replaced
with property of comparable value.

 

5.6.2        If all or part of the Property becomes damaged or
destroyed, Trustor shall promptly and completely repair and/or restore the
Property in a good and workmanlike manner in accordance with sound building
practices, regardless of whether or not Beneficiary agrees to disburse
insurance proceeds or other sums to pay costs of the work of repair or
reconstruction under Section 5.5.

 

13

 

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

 

5.6.4        Trustor shall not commit or allow waste of the
Property.

 

5.6.5        Trustor shall perform all other acts which from the
character or use of the Property may be reasonably necessary to maintain and
preserve its value. Without limiting the generality of the forgoing, Trustor
shall protect and preserve all easements, rights-of-way and other appurtenances
to the Land and/or Improvements.  Trustor
shall not cause or allow any such easement, right-of-way and other appurtenance
to be cancelled, rejected or otherwise terminated, or modified (except for such
terminations that occur pursuant to the terms of such easement, right of way
and other appurtenance).

 

5.7           Insurance.

 

5.7.1        Trustor shall maintain the following insurance with
respect to the Property:

 

(a)           Trustor shall provide, maintain and keep in force at
all times during any period of construction with respect to the portion of the
Property affected by such construction a policy or policies of builder’s “all
risk” insurance in nonreporting form in an amount not less than the full
insurable completed value of such portion of the Property on a replacement cost
basis.  The policy or policies shall
insure against loss or damage by hazards customarily included within such “all
risk” policies and any other risks or hazards which Beneficiary may reasonably
specify (and shall include boiler and machinery insurance from and after the
date on which any such equipment is installed on the Property), and each shall
contain a Lender’s Loss Payable Endorsement (Form 438 BFU or equivalent)
in favor of Beneficiary; provided that Beneficiary shall not be entitled to
require Trustor to insure the Property against earthquake risks during any
period in which earthquake insurance is not available with respect to the
Property at commercially reasonable rates.

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

(h)           The following notice is provided pursuant to Section 427.120,
RS.Mo.  As used herein, the terms “you”
and “your” shall refer to Trustor, and
the terms “we and “us” shall refer to Beneficiary.  UNLESS YOU PROVIDE
EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR AGREEMENT WITH US, WE MAY PURCHASE
INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTERESTS IN YOUR COLLATERAL.  THIS INSURANCE MAY, BUT NEED NOT, PROTECT
YOUR INTERESTS.  THE COVERAGE THAT WE
PURCHASE MAY NOT PAY ANY CLAIM THAT YOU MAKE OR ANY CLAIM THAT IS MADE
AGAINST YOU IN CONNECTION WITH THE COLLATERAL. 
YOU MAY LATER CANCEL ANY INSURANCE PURCHASED BY US, BUT ONLY AFTER
PROVIDING EVIDENCE THAT YOU HAVE OBTAINED INSURANCE AS REQUIRED BY OUR
AGREEMENT.  IF WE

 

15

 

PURCHASE INSURANCE FOR THE COLLATERAL, YOU WILL BE
RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING THE INSURANCE PREMIUM,
INTEREST AND ANY OTHER CHARGES WE MAY IMPOSE 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 MAYBE ADDED TO YOUR TOTAL OUTSTANDING BALANCE OR
OBLIGATION.  THE COSTS OF THE INSURANCE MAY BE
MORE THAN THE COST OF THE INSURANCE YOU MAY BE ABLE TO OBTAIN ON YOUR OWN.

 

5.7.2        All such policies of insurance shall be issued by
companies approved by Beneficiary having a minimum A.M. Best’s rating of
A-:IX.  The limits, coverage, forms,
deductibles, inception and expiration dates and cancellation provisions of all
such policies shall be reasonably acceptable to Beneficiary.  Each property insurance policy maintained in
connection with any of the Property shall contain a Lender’s Loss Payable
Endorsement (Form 438 BFU or equivalent) in favor of Beneficiary, and
shall provide that all proceeds be payable to Beneficiary to the extent of its
interest.  Each liability insurance
policy maintained in connection with any of the Property shall name Beneficiary
and the Lenders as additional insureds. 
An approval by Beneficiary is not, and shall not be deemed to be, a
representation of the solvency of any insurer or the sufficiency of any amount
of insurance.  Each policy of insurance
required hereunder shall provide that it may not be modified or cancelled
without at least thirty (30) days’ prior written notice to Beneficiary (or ten (10) days’
prior written notice in the event of a premium nonpayment), and shall permit a
waiver of subrogation by Trustor in favor of Beneficiary and the Lenders.

 

5.7.3        Trustor shall supply Beneficiary with certificates of
each policy required hereunder and any other policy of insurance maintained in
connection with any of the Property, together with an original (which may be a
duplicate original) or underlyer of each such policy and all endorsements
thereto.  When any insurance policy
required hereunder expires, Trustor shall furnish Beneficiary with proof
acceptable to Beneficiary that the policy has been reinstated or a new policy
issued, continuing in force the insurance covered by the policy which
expired.  If Trustor fails to pay any
such premium, Beneficiary shall have the right, but not the obligation, to
obtain current coverage and advance funds to pay the premiums for it.  Trustor shall repay Beneficiary immediately
on demand for any advance for such premiums, which shall be considered to be an
additional loan to Trustor bearing interest at the Default Rate, and secured by
this Deed of Trust and any other collateral held by Beneficiary in connection
with the Secured Obligations.

 

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

 

5.9           Releases, Extensions, Modifications and Additional
Security.

 

5.9.1        From time to time, Beneficiary and/or any Lender may
perform any of the following acts without incurring any liability or giving
notice to any Person, and without affecting the personal liability of any
Person for the payment of the Secured Obligations (except as provided below),
and without affecting the security hereof for the full amount of the

 

16

 

Secured Obligations on all Property remaining subject hereto, and
without the necessity that any sum representing the value of any portion of the
Property affected by Beneficiary’s and/or such Lender’s action(s) be credited
on the Secured Obligations:

 

(a)           Release any Person liable for payment of any Secured
Obligation;

 

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

 

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

 

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

 

5.9.2        From time to time when requested to do so by
Beneficiary in writing, Trustee may perform any of the following acts without
incurring any liability or giving notice to any Person:

 

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

 

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

 

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

 

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

 

5.10         Reconveyance.  Upon (a) the
expiration or termination of the Commitment, (b) the full and final
payment in cash of the Loans and all interest and fees with respect thereto, (c) the
payment of all other amounts then demanded by Beneficiary or any Lender or
indemnitee and then owed under the Credit Agreement, and (d) the payment
of all other amounts then due under the Guaranty and the other Loan Documents
and the full payment and performance of all other Secured Obligations (other
than indemnity obligations, if any, that are not then due), Beneficiary shall
request Trustee in writing to reconvey the Property, and shall surrender this
Deed of Trust.  When Trustee receives
Beneficiary’s written request for reconveyance and all fees and other sums
owing to Trustee by Trustor under Section 5.11, Trustee shall
reconvey the Property, or so much of it as is then held under this Deed of
Trust, without warranty, to the Person or Persons legally entitled to it.  Such Person or Persons shall pay any costs of
recordation.  In the reconveyance, the
grantee may be described as “the person or persons legally entitled thereto,”
and the recitals of any matters or facts shall be conclusive proof of their
truthfulness.  Neither Beneficiary nor
Trustee shall have any duty to determine the rights of Persons claiming to be
rightful grantees of any reconveyance.

 

17

 

5.11         Compensation, Exculpation, Indemnification.

 

5.11.1      Trustor agrees to pay reasonable fees as may be
charged by Beneficiary and Trustee, subject to the maximum amounts legally
permitted, for any services that Beneficiary or Trustee may render in
connection with this Deed of Trust, including Beneficiary’s providing a
statement of the Secured Obligations or Trustee’s rendering of services in
connection with a reconveyance.  Trustor
shall also pay or reimburse all of Beneficiary’s and Trustee’s costs and
expenses which may be incurred in rendering any such services.  Trustor further agrees to pay or reimburse
Beneficiary for all costs, expenses and other advances which may be incurred or
made by Beneficiary or Trustee in any efforts to enforce any terms of this Deed
of Trust, including any rights or remedies afforded to Beneficiary or Trustee
or both of them under Section 6.3, whether any lawsuit is filed or
not, or in defending any action or proceeding arising under or relating to this
Deed of Trust, including reasonable attorneys’ fees and other legal costs,
costs of any Foreclosure Sale (as defined in Section 6.3.8) and any
cost of evidence of title.  If
Beneficiary chooses to dispose of the Property through more than one
Foreclosure Sale, Trustor shall pay all costs, expenses or other advances that
may be incurred or made by Trustee or Beneficiary in each of such Foreclosure
Sales.

 

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

 

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

 

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

 

(c)           Any loss sustained by Trustor or any third party
resulting from Beneficiary’s failure to lease or operate the Property, or from
any other act or omission of Beneficiary in managing the Property, after an
Event of Default, unless the loss is caused by the willful misconduct and bad
faith of Beneficiary.

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

5.11.4      Trustor shall pay all obligations to pay money arising
under this Section 5.11 within five (5) business days demand
by Beneficiary (or the applicable Indemnitee). 
Each such obligation shall bear interest from the date the obligation
arises at the Default Rate set forth in the Credit Agreement, and any such
obligation to a Lender shall be added to, and considered to be part of, the
principal of the Note in favor of such Lender (and, in the event that such
Lender holds more than one Note, the allocation of such obligation among such
Notes shall be made by such Lender in its absolute discretion).

 

5.12         Defense and Notice of Claims and Actions. 
At Trustor’s sole expense, Trustor shall protect, preserve and defend
the Property and title to and right of possession of the Property, and the
security of this Deed of Trust and the rights and powers of Beneficiary and
Trustee created under it, against all adverse claims.  Trustor shall give Beneficiary and Trustee
prompt notice in writing if any claim is asserted which does or could affect
any of such matters, or if any action or proceeding is commenced which alleges
or relates to any such claim.

 

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

 

5.14         Subrogation.  Subject to
Gaming Laws, Beneficiary shall be subrogated to the liens and security
interests of all encumbrances, whether released of record or not, which are
discharged in whole or in part by Beneficiary in accordance with this Deed of
Trust or with the proceeds of any loan secured by this Deed of Trust.

 

5.15         Site Visits, Observation and Testing. 
Beneficiary and its agents and representatives shall have the right at
any reasonable time to enter and visit the Property for the purpose of
performing appraisals.  In addition, each
Person indemnified by the Borrower under Section 10.04 of the
Credit Agreement (collectively, “Indemnified Parties”) and their agents and representatives
shall have the right at any reasonable time to enter and visit the Property for
the purposes of observing the Property, taking and removing soil or groundwater
samples, and conducting tests on any part of the Property; provided that, so
long as no Event of Default remains uncured, the Indemnified Parties shall not
be entitled to conduct any tests that would significantly interfere with the
operation of the Property.  The
Indemnified Parties have no duty, however, to visit or observe the Property or
to conduct tests, and no site visit, observation or

 

19

 

testing by any Indemnified Party shall impose any liability on any
Indemnified Party.  In no event shall any
site visit, observation or testing by any Indemnified Party be a representation
that Hazardous Materials are or are not present in, on, or under the Property,
or that there has been or shall be compliance with any Hazardous Materials Law,
or any other applicable Law.  Neither
Trustor nor any other party is entitled to rely on any site visit, observation
or testing by any Indemnified Party.  The
Indemnified Parties owe no duty of care to protect Trustor or any other party
against, or to inform Trustor or any other party of, any Hazardous Material or
any other adverse condition affecting the Property.  Any Indemnified Party shall give Trustor
reasonable notice before entering the Property. 
The Indemnified Party shall make reasonable efforts to avoid interfering
with Trustor’s use of the Property in exercising any rights provided in this
Section.

 

5.16         Notice of Change.  Trustor shall
give Beneficiary prior written notice of (a) any change in the location of
Trustor’s place of business or its chief executive office if it has more than
one place of business, (b) any change in the location of any of the
Property, including the Books and Records, and (c) any change to Trustor’s
name or business structure.  Unless
otherwise approved by Beneficiary in writing, all Property that consists of
personal property (other than the Books and Records) will be located on the
Land and all Books and Records for the portion of the Property owned by Trustor
will be located at such Trustor’s place of business or chief executive office
if such Trustor has more than one place of business.

 

5.17         Title Insurance.  At any time
and from time to time at the reasonable request of Beneficiary, Trustor, at its
sole cost and expense, shall deliver to Beneficiary such additional title
insurance indorsements and reinsurance issued by title insurance companies, in
form and substance and reasonably satisfactory to Beneficiary, with respect to
this Deed of Trust, including, without limitation, CLTA 122 endorsements
insuring that each advance is secured by this Deed of Trust (without any exception
not set forth in the policy of title insurance insuring this Deed of Trust
other than (i) liens for taxes and assessments not yet due and payable and
(ii) other encumbrances, approved by the Beneficiary, insured to be
subordinate to this Deed of Trust), and CLTA 101.4 endorsements insuring the
priority of the Deed of Trust over any mechanic’s lien; provided that Trustor
shall not be obligated under this Section 5.17 to increase the
stated amount of the policy of title insurance insuring this Deed of Trust.

 

6.             Accelerating Transfers, Defaults and Remedies.

 

6.1           Accelerating Transfers.

 

6.1.1        “Accelerating Transfer” means any sale, contract to
sell, conveyance, encumbrance, lease, alienation or further encumbrance of all
or any material portion of the Property (or any interest in it) which is not
expressly permitted under the Credit Agreement, or any other transfer of all or
any material portion of the Property (or any interest in it), whether
voluntary, involuntary, by operation of law or otherwise, unless Beneficiary
has given its prior written consent to such “Accelerating Transfer,” which
consent may be given or not given in the absolute discretion of
Beneficiary.  If Trustor is a corporation
or limited liability company, “Accelerating Transfer” also means any transfer
of any share or shares in Trustor.  If
Trustor is a partnership or limited liability company, “Accelerating Transfer”
also means withdrawal or removal of any general partner or manager, as the case
may be, dissolution of the

 

20

 

partnership or limited liability company under Nevada law, or any
transfer of any partnership interest or any ownership interest in the limited
liability company.

 

6.1.2        Trustor acknowledges that Beneficiary and the Lenders
are making one or more advances under the Credit Agreement in reliance on the
expertise, skill and experience of Trustor; thus, the Secured Obligations
include material elements similar in nature to a personal service contract.  In consideration of Beneficiary’s reliance,
Trustor agrees that Trustor shall not make any Accelerating Transfer, unless
the transfer is preceded by Beneficiary’s written consent to the particular
transaction and transferee.  Beneficiary
may withhold such consent in its absolute discretion.  If any Accelerating Transfer occurs,
Beneficiary may, in its absolute discretion (provided that it has received any
consents or approvals of any other Lenders required under the Credit Agreement),
declare all of the Secured Obligations to be immediately due and payable, and
Beneficiary and Trustee may invoke any rights and remedies provided by Section 6.3
of this Deed of Trust.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6.3.2        Receiver.  Beneficiary
may apply to any court of competent jurisdiction for, and obtain appointment
of, a receiver for the Property; and Beneficiary may request, in connection
with any foreclosure proceeding hereunder, that the Missouri Gaming Commission
petition a District Court of the State of Missouri for the appointment of a
supervisor to conduct the normal gaming activities on the Property following
such foreclosure proceeding.

 

21

 

6.3.3        Entry.  Beneficiary,
in person, by agent or by court-appointed receiver, may enter, take possession
of, manage and operate all or any part of the Property, and may also do any and
all other things in connection with those actions that Beneficiary may in its
absolute discretion consider necessary and appropriate to protect the security
of this Deed of Trust.  Such other things
may include, without limitation:  taking
and possessing all of Trustor’s or the then owner’s Books and Records; entering
into, enforcing, modifying, or cancelling Leases on such terms and conditions
as Beneficiary may consider proper; obtaining and evicting tenants; collecting
and receiving any payment of money owing to Trustor; completing construction;
and/or contracting for and making repairs and alterations.  If Beneficiary so requests, Trustor shall
assemble all of the Property that has been removed from the Land and make all
of it available to Beneficiary at the site of the Land.  Trustor hereby irrevocably constitutes and
appoints Beneficiary as Trustor’s attorney-in-fact (which appointment is
coupled with an interest) to perform such acts and execute such documents as
Beneficiary in its absolute discretion may consider to be appropriate in
connection with taking these measures, including endorsement of Trustor’s name
on any instruments.  Regardless of any
provision of this Deed of Trust or the Credit Agreement, Beneficiary shall not
be considered to have accepted any property other than cash or immediately
available funds in satisfaction of any obligation of Trustor to Beneficiary
unless Beneficiary has given express written notice of Beneficiary’s election
of that remedy.

 

6.3.4        Cure; Protection of Security. 
Either Beneficiary or Trustee may cure any breach or default of Trustor
and, if it chooses to do so in connection with any such cure, Beneficiary or
Trustee may (subject to applicable Gaming Laws) also enter the Property and/or
do any and all other things which either may in its absolute discretion
consider necessary and appropriate to protect the security of this Deed of
Trust.  Such other things may include,
without limitation:  appearing in and/or
defending any action or proceeding which purports to affect the security of, or
the rights or powers of Beneficiary or Trustee under, this Deed of Trust;
paying, purchasing, contesting or compromising any encumbrance, charge, lien,
security interest or claim of lien or security interest which (in Beneficiary’s
or Trustee’s sole judgment) is or may be senior in priority to this Deed of
Trust, such judgment of Beneficiary or Trustee to be conclusive as among the
parties to this Deed of Trust; obtaining insurance and/or paying any premiums
or charges for insurance required to be carried under this Deed of Trust and
the other Loan Documents; otherwise caring for and protecting any and all of
the Property; and/or employing counsel, accountants, contractors and other
appropriate Persons to assist Beneficiary or Trustee.  Beneficiary and Trustee may take any of the
actions permitted under this Section 6.3.4 either with or without
giving notice to any Person.

 

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

 

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

 

6.3.7        Power of Sale.  Under the
power of sale hereby granted, Beneficiary shall have the discretionary right to
cause some or all of the Property, including any Property which constitutes
personal property, to be sold or otherwise disposed of in any

 

22

 

combination and in any manner permitted by applicable law.  At Trustee’s option, Trustee may set the
place of any such sale at any reasonable place, as permitted by Section 443.327
and any other applicable law of the Revised Statutes of Missouri, first giving
notice of such sale in the manner prescribed by statute.  Trustee may in Trustee’s discretion set the
time of any such sale at any commercially reasonable time, as permitted by Section 443.327
of the Revised Statutes of Missouri.

 

(a)           Sales of Personal Property.

 

(i)            For purposes of this power of sale,
Beneficiary may elect to treat as personal property any Property which is
intangible or which can be severed from the Land or Improvements without
causing structural damage.  If it chooses
to do so, Beneficiary may dispose of any personal property separately from the
sale of real property, in any manner permitted by Article 9 of the
Missouri Uniform Commercial Code, as amended or recodified from time to time,
including any public or private sale, or in any manner permitted by any other
applicable law.  Any proceeds of any such
disposition shall not cure any Event of Default or reinstate any Secured
Obligation.

 

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

 

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

 

(i)            Beneficiary may choose to dispose of some
or all of the Property which consists solely of real property in any manner
then permitted by applicable law.  In its
discretion, Beneficiary may also or alternatively choose to dispose of some or
all of the Property, in any combination consisting of both real and personal
property, together in one sale to be held in accordance with the law and
procedures applicable to real property, as permitted by Article 9 of the
Missouri Uniform Commercial Code, as amended or recodified from time to
time.  Trustor agrees that such a sale of
personal property together with real property constitutes a commercially
reasonable sale of the personal property. 
For purposes of this power of sale, either a sale of real property
alone, or a sale of both real and personal property together in accordance with
Article 9 of the Missouri Uniform Commercial Code, as amended or
recodified from time to time, will sometimes be referred to as a “Trustee’s
Sale.”

 

23

 

(ii)           Before any Trustee’s Sale, Beneficiary or
Trustee shall give such notice of default and election to sell as may then be
required by law.  When all time periods
then legally mandated have expired, and after such notice of sale as may then
be legally required has been given, Trustee shall sell the property being sold
at a public auction to be held at the time and place specified in the notice of
sale, provided, however, that no sale or other disposition of slot machines or
other gaming devices shall occur without first receiving the approval of the
applicable Gaming Board.  Neither Trustee
nor Beneficiary shall have any obligation to make demand on Trustor before any
Trustee’s Sale.  From time to time in
accordance with then applicable law, Trustee may, and in any event at
Beneficiary’s request shall, postpone any Trustee’s Sale by public announcement
at the time and place noticed for that sale.

 

(iii)          At any Trustee’s Sale, Trustee shall sell
the property being sold at a public auction to the highest bidder at public
auction for cash in lawful money of the United States.  Trustee shall execute and deliver to the
purchaser(s) a deed or deeds conveying the property being sold without any
covenant or warranty whatsoever, express or implied.  The recitals in any such deed of any matters
or facts, including any facts bearing upon the regularity or validity of any
Trustee’s Sale, shall be conclusive proof of their truthfulness.  Any such deed shall be conclusive against all
Persons as to the facts recited in it.

 

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

 

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

 

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

 

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

 

6.3.9        Other Permitted Remedies. 
Beneficiary and the Lenders may refuse to make any advance to any
Borrower or issue any Letter of Credit for the account of any Borrower.  Beneficiary and the Lenders may exercise any
and all other rights and remedies available under the Loan Documents and
applicable law, including, without limitation, the right to file applications
to change, and to exercise all other rights and remedies available under

 

24

 

applicable law with respect to, all water permits and rights relating
to the Property; provided however that, notwithstanding the foregoing or any
other provision contained in this Deed of Trust, the remedies provided by this
Deed of Trust shall not include the right to take any action that violates
applicable Gaming Laws.

 

6.4           Credit Bids.  At any
Foreclosure Sale, any Person, including Trustor, Trustee or Beneficiary, may
bid for and acquire the Property or any part thereof to the extent permitted by
then applicable law.  Instead of paying
cash for such property, Beneficiary may settle for the purchase price by crediting
against the sales price of the Property or any part thereof any or all of the
outstanding Secured Obligations (including without limitation the portion of
the Secured Obligations attributable to the expenses of sale, costs of any
action and any other sums for which Trustor is obligated to pay or reimburse
Beneficiary, the Lenders or Trustee under Section 5.11) in such
order and proportions as Beneficiary in its absolute discretion may choose.

 

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

 

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

 

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

 

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

 

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

 

7.             Leasehold Mortgage Provisions. 
The provisions of this Article 7 shall apply in the event
that, and so long as, any portion of the Property consists of Trustor’s
interests as tenant under any lease or leases (collectively, including the
Operating Lease, the “Ground Leases”). 
Unless otherwise expressly provided, the lien of this Deed of Trust
shall encumber all of Trustor’s rights and interests under and in connection
with any Ground Lease, including without limitation renewal and extension
rights, options to expand, and purchase options (all of which rights shall be
collectively referred to herein as a “Ground Leasehold”).  Trustor hereby agrees, with respect to each
Ground Lease, as follows:

 

25

 

7.1           Trustor shall timely perform its obligations in
connection with each Ground Lease. 
Without limiting the generality of Section 6.3.4, above,
Trustor specifically acknowledges Beneficiary’s right, while any default by
Trustor under any Ground Lease remains uncured, to perform the defaulted
obligations and take all other actions which Beneficiary deems necessary to
protect its interests with respect thereto, and Trustor hereby irrevocably
appoints Beneficiary its true and lawful attorney-in-fact (which appointment is
coupled with an interest) in its name or otherwise to execute all documents,
and perform all other acts, which Beneficiary reasonably deems necessary to
preserve its or Trustor’s rights with respect to any Ground Lease.

 

7.2           Trustor shall not, without Beneficiary’s prior written
consent, modify, or cause or permit the termination of, any Ground Lease, or
waive or in any way release the landlord under any Ground Lease of or from any
obligation or condition.

 

7.3           Trustor shall notify Beneficiary promptly in writing
of (i) the occurrence of any default by the landlord under any Ground
Lease and (ii) the receipt by Trustor of any notice claiming the
occurrence of any default by Trustor under any Ground Lease or the occurrence
of any event which, with the passage of time or the giving of notice or both,
would constitute a default by Trustor under any Ground Lease (and Trustor shall
also promptly deliver a copy of any such notice to Beneficiary).

 

7.4           Unless Beneficiary otherwise consents in writing, so
long as any Secured Obligation remains outstanding, neither the fee title to,
nor any other estate or interest in, the real property subject to any Ground
Lease shall merge with any Ground Leasehold, notwithstanding the union of such
estates in the landlord or the tenant or in a third party.  Any acquisition of the landlord’s interest in
any Ground Lease by Trustor or any affiliate of Trustor shall be accomplished
in such a manner as to avoid a merger of the interests of landlord and tenant
unless Beneficiary consents to such merger in writing.

 

7.5           If Trustor acquires fee title to any portion of the
real property subject to any Ground Lease, this Deed of Trust shall
automatically be a lien on such fee title.

 

7.6           Trustor shall not subordinate any Ground Lease or
Ground Leasehold to any deed of trust or other encumbrance of, or lien on, any
interest in the real property subject to such Ground Leasehold without the
prior written consent of Beneficiary.  Any such subordination without such consent
shall, at Beneficiary’s option, be void.

 

7.7           All subleases entered into by Trustor with respect to
all or any portion of the Property (and all existing subleases modified by
Trustor) shall provide that such subleases are subordinate to the lien of this
Deed of Trust and any modifications of this Deed of Trust and the obligations
secured hereby and that, if Beneficiary forecloses under this Deed of Trust or
enters into a new lease with any landlord under any Ground Lease pursuant to
the provisions for a new lease, if any, contained in the applicable Ground
Lease or in any other document or agreement, the subtenant shall attorn to
Beneficiary or its assignee and the sublease shall remain in full force and
effect in accordance with its terms notwithstanding the termination of the
applicable Ground Lease.

 

26

 

7.8           Trustor shall exercise any option or right to renew or
extend the term of any Ground Lease at least six months prior to the date of
termination of any such option or right, shall give immediate written notice
thereof to Beneficiary, and shall execute, deliver and record any documents
requested by Beneficiary to evidence the lien of this Deed of Trust on such extended
or renewed lease term.  If Trustor fails
to exercise any such option or right as required herein, Beneficiary may
exercise the option or right as Trustor’s agent and attorney-in-fact pursuant
to this Deed of Trust, or in Beneficiary’s own name or in the name of and on
behalf of a nominee of Beneficiary, as Beneficiary chooses in its absolute
discretion.

 

7.9           As security for the Secured Obligations, Trustor
hereby assigns to Beneficiary a security interest in all prepaid rents and
security deposits and all other security which the landlords under the Ground
Leases hold for the performance of Trustor’s obligations thereunder.

 

7.10         Promptly upon demand by Beneficiary, Trustor shall use
reasonable efforts to obtain from the landlord under any Ground Lease and
furnish to Beneficiary an estoppel certificate of such landlord stating the
date through which rent has been paid, whether or not there are any defaults,
and the specific nature of any claimed defaults.

 

7.11         Trustor shall notify Beneficiary promptly in writing
of any request by either party to any Ground Lease for arbitration, appraisal
or other proceedings relating to any Ground Lease and of the institution of any
such proceeding, and shall promptly deliver to Beneficiary a copy of all
determinations in any such proceeding. 
Beneficiary shall have the right, following written notice to Trustor,
to participate in any such proceeding in association with Trustor or on its own
behalf as an interested party.  Trustor
shall notify Beneficiary promptly in writing of the institution of any legal
proceeding involving obligations under any Ground Lease, and Beneficiary may
intervene in any such legal proceeding and be made a party.  Trustor shall promptly provide Beneficiary
with a copy of any decision rendered in connection with any such proceeding.

 

7.12         To the extent permitted by law, the price payable by
Trustor or any other party in the exercise of the right of redemption, if any,
from any sale under, or decree of foreclosure of, this Deed of Trust shall include
all rents and other amounts paid and other sums advanced by Beneficiary on
behalf of Trustor as the tenant under the Ground Leases.

 

7.13         In addition to all other Events of Default described
in this Deed of Trust, the occurrence of any of the following shall be an Event
of Default hereunder:

 

(a)           A breach or default by Trustor under any Ground Lease,
subject to any applicable cure period; or

 

(b)           The occurrence of any event or circumstance which
gives the landlord under any Ground Lease a right to terminate such Ground
Lease.

 

7.14         As used in this Deed of Trust, the “Bankruptcy Code”
shall mean 11 U.S.C. § 101 et  seq., as modified and/or
recodified from time to time. 
Notwithstanding anything to the contrary contained herein with respect
to any Ground Lease:

 

27

 

(a)           The lien of this Deed of Trust attaches to all of
Trustor’s rights under Subsection 365(h) of the Bankruptcy Code,
including without limitation any and all elections to be made thereunder, any and
all rights under any Ground Lease which Trustor is entitled to retain pursuant
to 11 U.S.C. § 365(h)(1)(A)(ii) in the event of a rejection
under the Bankruptcy Code of such Ground Lease by the landlord thereunder (or
any trustee thereof), and any and all rights of offset under or as described in
11 U.S.C. § 365(h)(1)(B).

 

(b)           Trustor acknowledges and agrees that, as the
beneficiary under this Deed of Trust and by operation of 11 U.S.C. § 365(h)(1)(D),
Beneficiary has, and until this Deed of Trust has been fully reconveyed
continuously shall have, whether before or after any default under any of the
Secured Obligations or the taking of any action to enforce any of Beneficiary’s
rights and remedies under this Deed of Trust or any foreclosure sale hereunder,
the complete, unfettered and exclusive right, in its sole and absolute
discretion, to elect (the “365(h) Election”) whether (i) any Ground
Lease that has been rejected under the Bankruptcy Code by the landlord
thereunder (or any trustee therefor) shall be treated as terminated under
11 U.S.C. § 365(h)(1)(A)(i), or (ii) the rights under such
Ground Lease that are in or appurtenant to the real property, as described in
11 U.S.C. § 365(h)(1)(A)(ii), should be retained pursuant to that
subsection.  To the extent that,
notwithstanding the preceding sentence and 11 U.S.C. § 365(h)(1)(D),
Trustor now or at any time in the future has any right to make, or to
participate in or otherwise in any manner affect the making of, the 365(h) Election
with respect to any Ground Lease, Trustor hereby absolutely assigns and conveys
to Beneficiary any and all such rights, and all of Trustor’s right, title, and
interest therein, which may be used and exercised by Beneficiary completely,
exclusively, and without any restriction whatsoever, in Beneficiary’s sole and
absolute discretion, whether before or after any default upon any of the
Secured Obligations, the taking of any action to enforce any of Beneficiary’s
rights and remedies under this Deed of Trust, or any foreclosure sale
hereunder.  Trustor hereby
unconditionally and irrevocably appoints Beneficiary as its attorney-in-fact to
exercise Trustor’s right, if any, to make, or participate in or otherwise in
any matter affect the making of, the 365(h) Election with respect to any
Ground Lease.  Trustor shall not in any
manner impede or interfere with any action taken by Beneficiary and, at the
request of Beneficiary, Trustor shall take or join in the taking of any action
to make, or participate in or otherwise in any manner affect the making of, the
365(h) Election with respect to any Ground Lease, in such manner as
Beneficiary determines in its sole and absolute discretion.  Unless and until instructed to do so by
Beneficiary (as determined by Beneficiary in its sole and absolute discretion),
Trustor shall not take any action to make, or participate in or otherwise in
any manner affect the making of, the 365(h) Election with respect to any
Ground Lease, including in particular, but without limitation, any election to
treat any Ground Lease as terminated. 
Beneficiary shall have no obligation whatsoever to Trustor or any other
person or entity in connection with the making of the 365(h) Election with
respect to any Ground Lease or any instruction by Beneficiary to Trustor given,
withheld or delayed in respect thereof, nor shall Beneficiary have any
liability to Trustor or any other person or entity arising from any of the
same.

 

(c)           As security for the Secured Obligations, Trustor
hereby irrevocably assigns to Beneficiary all of Trustor’s rights to damages
arising from any

 

28

 

rejection
by any landlord (or any trustee thereof) of any Ground Lease under the
Bankruptcy Code.  Beneficiary and Trustor
shall proceed jointly or in the name of Trustor in respect of any claim or
proceeding relating to the rejection of any Ground Lease, including without
limitation the right to file and prosecute any proofs of claim, complaints,
motions and other documents in any case in respect of such landlord under the
Bankruptcy Code.  This assignment shall
continue in effect until all of the Secured Obligations have been satisfied in
full.  Any amounts received by
Beneficiary or Trustor as damages arising from the rejection of any Ground
Lease as aforesaid shall be applied first to all costs reasonably incurred by
Beneficiary (including attorneys’ fees) in connection with this subsection (c) and
then in accordance with other applicable provisions of this Deed of Trust.

 

(d)           If, pursuant to the Bankruptcy Code, Trustor seeks to
offset against the rent reserved in any Ground Lease the amount of any damages
caused by the nonperformance of the landlord’s obligations after the rejection
by the landlord (or any trustee thereof) of such Ground Lease, Trustor shall,
prior to effecting such offset, notify Beneficiary in writing of its intent to
do so, setting forth the amounts proposed to be offset and, in the event that
Beneficiary objects, Trustor shall not effect any offset of the amounts to
which Beneficiary objects.  If
Beneficiary fails to object within 10 days following receipt of such
notice, Trustor may offset the amounts set forth in Trustor’s notice.

 

(e)           If any legal proceeding is commenced with respect to
any Ground Lease in connection with any case under the Bankruptcy Code,
Beneficiary and Trustor shall cooperatively conduct any such proceeding with
counsel reasonably agreed upon between Trustor and Beneficiary.  Trustor shall, upon demand, pay to
Beneficiary all costs (including attorneys’ fees) reasonably incurred by
Beneficiary in connection with any such proceeding.

 

(f)            Trustor shall immediately notify Beneficiary orally
upon learning of any filing by or against any landlord of a petition under the
Bankruptcy Code.  Trustor shall
thereafter promptly give written notice of such filing to Beneficiary, setting
forth any information available to Trustor with respect to the date of such
filing, the court in which such petition was filed, and the relief sought
therein.  Trustor shall promptly deliver
to Beneficiary all notices, pleadings and other documents received by Trustor
in connection with any such proceeding.

 

7.15         No maintenance, repair or other obligation of Trustor
hereunder which relates to the “Property” shall apply to any Ground Leasehold
with respect to which the applicable Ground Lease imposes such obligation on
the landlord so long as (a) Trustor does not own the landlord’s interest; (b) such
landlord is performing such obligation in accordance with the terms of such
Ground Lease; and (c) the Ground Lease has not been rejected by the
landlord (or any trustee thereof) under the Bankruptcy Code.

 

7.16         The generality of the provisions of this Deed of Trust
shall not be limited by any provision of this Article 7 that sets
forth particular obligations of Trustor as the tenant under the Ground Leases.

 

29

 

7.17         Trustor hereby represents and warrants to Beneficiary
as follows:

 

(a)           The Operating Lease is in full force and effect;

 

(b)           Trustor owns the entire tenant’s interest under the
Operating Lease and has the right under the Operating Lease to execute this
Deed of Trust; and

 

(c)           No default under the Operating Lease remains uncured,
nor has any event occurred which, with the passage of time or service of notice
or both, would constitute such a default.

 

8.             Miscellaneous Provisions.

 

8.1           Additional Provisions.  The Loan
Documents fully state all of the terms and conditions of the parties’ agreement
regarding the matters mentioned in or incidental to this Deed of Trust.  The Loan Documents also grant further rights
to Beneficiary and contain further agreements and affirmative and negative
covenants by Trustor which apply to this Deed of Trust and to the Property.

 

8.2           No Waiver or Cure.

 

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

 

8.2.2        If any of the events described below occurs, that
event alone shall not:  cure or waive any
breach, Event of Default or notice of default under this Deed of Trust or
invalidate any act performed pursuant to any such default or notice; or nullify
the effect of any notice of default or sale (unless all Secured Obligations
then due have been paid and performed and all other defaults under the Loan
Documents have been cured); or impair the security of this Deed of Trust; or
prejudice Beneficiary, Trustee or any receiver in the exercise of any right or
remedy afforded any of them under this Deed of Trust; or be construed as an
affirmation by Beneficiary of any tenancy, lease or option, or a subordination
of the lien or security interest of this Deed of Trust.

 

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

 

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

 

(c)           Beneficiary receives and applies to any Secured
Obligation proceeds of any Property, including any proceeds of insurance
policies, condemnation awards, or other claims, property or rights assigned to
Beneficiary under Section 5.5.

 

30

 

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

 

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

 

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

 

8.3           Powers of Beneficiary and Trustee.

 

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

 

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

 

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

 

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

 

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

 

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

 

31

 

8.6           Successors in Interest.  The terms,
covenants and conditions of this Deed of Trust shall be binding upon and inure
to the benefit of the heirs, successors and assigns of the parties.  However, this Section 8.6 does
not waive the provisions of Section 6.1.

 

8.7           Interpretation.

 

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

 

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

 

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

 

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

 

8.9           Waiver of Marshalling.  To the extent
permitted by applicable law, Trustor waives all rights, legal and equitable, it
may now or hereafter have to require marshalling of assets or to require
foreclosure sales of assets in a particular order.  Each successor and assign of Trustor,
including any holder of a lien or security interest subordinate to this Deed of
Trust, by acceptance of its interest or lien or security interest, agrees that
it shall be bound by the above waiver, as if it had given the waiver itself.

 

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

 

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

 

32

 

	
  Notices to Trustor:

  	
   

  	
  c/o Herbst
  Gaming, Inc.

  
	
   

  	
   

  	
  5195 Las Vegas Blvd.

  
	
   

  	
   

  	
  Las Vegas, NV 89119

  
	
   

  	
   

  	
  Attn: M. Higgins

  
	
   

  	
   

  	
   

  
	
  Notices to Beneficiary:

  	
   

  	
  Bank of America, N.A.

  
	
   

  	
   

  	
  Mail Code: TX1-492-14-11

  
	
   

  	
   

  	
  Bank of America Plaza

  
	
   

  	
   

  	
  901 Main Street, 14th
  Floor

  
	
   

  	
   

  	
  Dallas, TX 75202-3714

  
	
   

  	
   

  	
  Attn:       Chris M. Levine, Assistant Vice
  President

  
	
   

  	
   

  	
  Agency Management Officer II

  
	
   

  	
   

  	
  GCIB Agency Management Central I

  
	
   

  	
   

  	
   

  
	
  Notices to Trustee:

  	
   

  	
  Todd W.
  Griffee, Esq.

  
	
   

  	
   

  	
  106 S. Seventh Street,
  Suite 301

  
	
   

  	
   

  	
  St. Joseph, MO 64501

  

 

8.12         Lease of Property.  Trustee
hereby lets the Property to Trustor until a sale is held under this Deed of
Trust, or until an Event of Default shall occur, upon the following terms and
conditions, to wit:  Trustor and all
persons claiming or possessing any of the Property by, through or under Trustor
shall pay rent therefor during said term at the rate of one cent per month,
payable monthly upon demand, and shall surrender immediate peaceable possession
of the Property (and any and every part thereof) sold under the provisions of
this Deed of Trust to the purchaser thereof under such sale, without notice or
demand therefor, and shall and will at once, without notice, surrender up
possession of the Property and every part thereof in the event Beneficiary
shall take charge and enter the Property as provided in this Deed of Trust.

 

8.13         This notice is provided pursuant to section 432.045,
R.S.Mo.  As used herein, “you” means Trustor, “us” means Beneficiary and the
Lenders, “borrower” means Trustor, “creditor”
means Beneficiary and the Lenders and “this
writing” means this Agreement and
the other Loan Documents.  ORAL AGREEMENTS OR
COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT
OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT
ENFORCEABLE.  TO PROTECT YOU (BORROWER)
AND US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE
REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE
COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER
AGREE IN WRITING TO MODIFY IT.

 

33

 

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

 

 

	
   

  	
  “Trustor”:

  
	
   

  	
   

  	
   

  
	
   

  	
  HGI – MARK TWAIN,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward Herbst

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

34

 

ACKNOWLEDGEMENT

 

	
  STATE
  OF Nevada

  	
  )

  	
   

  
	
   

  	
  ) ss.

  	
   

  
	
  COUNTY
  OF Clark

  	
  )

  	
   

  

 

On this 28 day of January in  the 
year  2005  before 
me, Jenifer Cannon, a Notary Public in and for said State, personally
appeared Edward Herbst, of HGI – MARK TWAIN, known to me to be the person(s)
who executed the within Deed of Trust with Assignment of Rents, Security
Agreement and Fixture Filing on
behalf of said corporation and acknowledged to me that he/she/they executed the
same for the purposes therein stated.

 

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

 

 

	
  [SEAL]

  	
   

  	
  /s/ Jenifer E. Cannon

  	
   

  
	
   

  	
   

  	
  Notary Public

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  My term expires 

  	
  1/17/07

  	
  .

  	
   

  	
   

  
						

 

35

 

EXHIBIT “A”

 

(Legal Description of
Land)

 

DESCRIPTION
OF THE FEE ESTATE

 

Tract
1:

 

All of Lots One (1), Two (2), Three (3), Four (4),
Five (5), Six (6), Seven (7), Eight (8), Nine (9) and Ten (10) in
Block Four (4) together with the vacated alley adjoining, which, upon
vacation, attached to said property by operation of law pursuant to Ordinance No. 397
dated December 20, 1999; AND All of Lot 6 in Block 3 of Waltman and Louthan’s
Addition to the Town, now City of La Grange, Lewis County, Missouri.

 

Tract
2:

 

All that part of Section Thirty-one (31),
Township Sixty-one (61) North, Range Five (5) West, unplatted and lying
one hundred (100) feet South of the North line of Knox Street extended East,
and North of the North line of Lot Fourteen (14) in Block Twenty-two (22) in
Marlow’s Addition to the Town, now City of La Grange, Lewis County, Missouri,
extended East, and bounded on the West by Missouri Route B, also referred to as
Main Street, and bounded on the East by the Mississippi River, EXCEPT for all
of Lot Fifteen (15) and fractional Lot Sixteen (16) in Block Twenty-two (22) in
Marlowe Addition to the Town, now City of La Grange, Lewis County, Missouri,
all subject to the right-of-way of the CB&Q Railroad, its successors and
assigns, all in Lewis County, Missouri.

 

Tract
3:

 

All of Fractional Lot One (1), Lots Two (2), Three
(3), Four (4), Five (5), Six (6), Seven (7), Eight (8), Nine (9), Ten (10),
Eleven (11), Twelve (12), Thirteen (13) and all of Lot Fourteen (14) in Block
Three (3) in Marlow’s Addition together with the vacated alley adjoining
Lots 3 through 14 in Block 3, and the east 1⁄2 of said alley adjoining Fractional
Lot 1 and Lot 2 in Block 3, and together with the east 1⁄2 of vacated Second
Street adjoining said Block 4, and together with the north 1⁄2 of vacated Pierce
Street adjoining Lots 8 and 9 of said Block 4, all of which, upon vacation,
attached to said property by operation of law pursuant to Ordinance No. 397
dated December 20, 1999 in the Town, now City of La Grange, Lewis County,
Missouri.

 

Tract
4:

 

All of Lots Four (4), Five (5), Six (6), Seven (7),
Ten (10), Eleven (11), Twelve (12). Thirteen (13) and Fourteen (14) in Block
Four (4) in Marlow’s Addition together with the vacated alley adjoining
Lots 4, 5, 10 and 11 of Block 4, and together with the west 1⁄2 of vacated Second
Street adjoining such lots in said Block 4, and together with the north 1⁄2 of
vacated Pierce Street adjoining all such lots in said Block 4, all of which,
upon vacation, attached to said property by operation of law pursuant to
Ordinance No. 397 dated December 20, 1999 in the Town, now City of La
Grange, Lewis County, Missouri.

 

1

 

Tract
5:

 

All of Lots Two (2), Three (3), Four (4), Five (5),
Six (6), Seven (7). Eight (8) and Nine (9) in Block Eight (8) in
Marlow’s Addition together with the vacated alley adjoining, which, upon
vacation, attached to said property by operation of law pursuant to Ordinance No. 397
dated December 20, 1999 in the Town, now City of La Grange, Lewis County,
Missouri.

 

Tract
6:

 

All of Lots One (1), Two (2), Three (3). Four (4),
Five (5), Six (6), Seven (7), Eight (8), Nine (9) and Ten (10) in
Block Five (5) in Marlow’s Addition together with the vacated alley
adjoining, and together with the north 1⁄2 of vacated Buchannan Street and the
west 1⁄2 of vacated Second Street, and the south 1⁄2 of vacated Pearce Street, all
of which, upon vacation, attached to said property by operation of law pursuant
to Ordinance No. 397 dated December 20, 1999 in the Town, now City of
La Grange, Lewis County, Missouri.

 

Tract
7:

 

All of Block Two (2) of Marlow’s Addition to the
Town, now City of La Grange, Lewis County, Missouri, lying East of State Route
B in the Town, now City of La Grange, Lewis County, Missouri.

 

Tract
8:

 

Lots Six (6), Seven (7), Eight (8), Nine (9) and
Ten (10) in Block Two (2) of Marlow’s Addition together with the east
1⁄2 of vacated Second Street and the south 1⁄2 of vacated Pierce Street, all of
which, upon vacation, attached to said property by operation of law pursuant to
Ordinance No. 397 dated December 20, 1999 in the Town, now City of La
Grange, Lewis County, Missouri.

 

Tract
9:

 

Lots One (1). Two (2), Three (3), Four (4) Five
(5), Six (6), Seven (7) and Eight (8) in Block Six (6) of Marlow’s
Addition, together with the vacated alley adjoining, and the south 1⁄2 of
Buchanan Street, all of which, upon vacation, attached to said property by
operation of law pursuant to Ordinance No. 397 dated December 20,
1999 in the City of La Grange, Lewis County, Missouri,

 

Tract
10:

 

All of Lots One (1), Two (2), Three (3) and
fractional Lots Four (4), Five (5) and Six (6) in Block One (1) in
Marlow’s Addition lo the Town, now City of La Grange, Lewis County, Missouri.

 

Tract
11:

 

All of Lots Four (4), Five (5) and Six (6) in
Block Twenty-four (24) in Marlow’s Addition to the Town, now City of La Grange,
Lewis County, Missouri,

 

2

 

Tract
12:

 

All of Lots Four (4), Five (5), Six (6) and Seven
(7) in Block Twenty-three (23) in Marlow’s Addition to the Town. now City
of La Grange, Lewis County, Missouri.

 

Tract
13:

 

Lots Nine (9), Ten (10), Eleven (11), Twelve (12),
Thirteen (13), Fourteen (14), Fifteen (15) and Sixteen (16) in Block Twenty-two
(22) of Marlow’s Addition to the City of La Grange, Lewis County, Missouri.

 

Tract
14:

 

All of Lots (2) and Three (3) in Block Nine (9) in
Marlow’s Addition to the Town, now City of La Grange, Lewis County, Missouri.

 

DESCRIPTION
OF THE LEASEHOLD ESTATE

 

Leasehold interest in the following described
property under the terms of a Lease dated December 29, 1999, and shown by
Memorandum of Lease recorded on September 29, 2000, in Book 436, at page 106,
in the office Recorder of Deeds for Lewis County, Missouri, by and between Mark
Twain Casino, L.L.C., a Limited Liability Company, and the City of La Grange,
Lewis County, Missouri:

 

Leasehold
Tract 1:

 

All of Lot Fifteen (15) and Fractional Lot Sixteen
(16) in Block Three (3) of Marlow’s Addition, together with the west 1⁄2 of
the vacated alley adjoining said lots, and together with the east 1/2 of Second
Street adjoining said lots, which, upon vacation, attached to said property by
operation of law pursuant to Ordinance No. 397 dated December 20,
1999 in the City of La Grange, Lewis County, Missouri.

 

Leasehold
Tract 2:

 

Lots One (1) and Eight (8) in Block Five (5) of
Waltman and Louthan’s Addition to the City of La Grange, Lewis County,
Missouri.

 

END OF EXHIBIT A

 

3

 

EXHIBIT “B”

 

(Lenders)

 

	
   

  	
   

  	
  Bank of America, N.A.

  
	
   

  	
   

  	
  U.S. Bank National Association

  
	
   

  	
   

  	
  Wells Fargo Bank, N.A

  
	
   

  	
   

  	
  Lehman Commercial Paper Inc.

  
	
   

  	
   

  	
  The CIT Group/Equipment Financing, Inc.

  
	
   

  	
   

  	
  Comerica West Incorporated

  
	
   

  	
   

  	
  Nevada State Bank

  
	
   

  	
   

  	
  American Express Certificate Company

  
	
   

  	
   

  	
  IDS Life Insurance Company

  
	
   

  	
   

  	
  Centurion CDO 8, Limited

  
	
   

  	
   

  	
  Black Diamond CLO 2005-1 Ltd.

  
	
   

  	
   

  	
  Carlyle High Yield Partners II, Ltd.

  
	
   

  	
   

  	
  Carlyle High Yield Partners III, Ltd.

  
	
   

  	
   

  	
  Carlyle High Yield Partners VI, Ltd.

  
	
   

  	
   

  	
  Carlyle Loan Investment Ltd

  
	
   

  	
   

  	
  Senior Debt Portfolio

  
	
   

  	
   

  	
  Eaton Vance Institutional Senior Loan Fund

  
	
   

  	
   

  	
  Eaton Vance CDO III, Ltd.

  
	
   

  	
   

  	
  Costantinus Eaton Vance CDO V, Ltd.

  
	
   

  	
   

  	
  Eaton Vance CDO VI, Ltd.

  
	
   

  	
   

  	
  Grayson & Co

  
	
   

  	
   

  	
  The Norinchukin Bank, New York Branch

  

 

1

 

	
   

  	
   

  	
  Tolli &
  Co.

  
	
   

  	
   

  	
  Fidelity
  Central Investment Portfolios LLC: Fidelity Floating Rate Central Investment
  Portfolio

  
	
   

  	
   

  	
  Fidelity
  Advisor Series II: Fidelity Advisor Floating Rate High Income Fund (161)

  
	
   

  	
   

  	
  Franklin
  Floating Rate Trust

  
	
   

  	
   

  	
  Franklin
  Floating Rate Master Series

  
	
   

  	
   

  	
  Franklin CLO
  IV, Limited

  
	
   

  	
   

  	
  ELF Funding
  Trust I

  
	
   

  	
   

  	
  Highland
  Offshore Partners, L.P.

  
	
   

  	
   

  	
  Pioneer
  Floating Rate Trust

  
	
   

  	
   

  	
  Loan Star
  State Trust

  
	
   

  	
   

  	
  ING Prime
  Rate Trust

  
	
   

  	
   

  	
  ING Senior
  Income Fund

  
	
   

  	
   

  	
  Floating
  Rate Income Strategies Fund II, Inc. (FRB)

  
	
   

  	
   

  	
  Southport
  CLO, Limited

  
	
   

  	
   

  	
  Loan Funding
  XI LLC

  
	
   

  	
   

  	
  Harbour Town
  Funding LLC

  
	
   

  	
   

  	
  Race Point
  CLO, Limited

  
	
   

  	
   

  	
  Race Point
  II CLO, Limited

  
	
   

  	
   

  	
  ULT CBNA
  Loan Funding LLC

  
	
   

  	
   

  	
  Van Kampen
  Senior Income Trust

  
	
   

  	
   

  	
  Van Kampen
  Senior Loan Fund

  
	
   

  	
   

  	
  Bank of
  Scotland

  

 

2Exhibit
10.88

 

	
   

  	
  FILED NO. 050242

  	
  REC 24200

  
	
   

  	
  STATE OF IOWA

  	
  AUD

  
	
   

  	
  CLARKE COUNTY

  	
  TRNS 

  
	
   

  	
  2005 FEB 2 PM 2 18

  	
  E-COM

  
	
   

  	
  BOOK 154 PAGE 524-571

  	
  REL 

  
	
   

  	
  PENNIE GONSETH

  	
  COPY  Rý

  
	
   

  	
  RECORDER

  	
  INDEX   ý

  
	
   

  	
   

  	
  SCAN 

  
	
   

  	
   

  	
  RETURN

  

 

PREPARER INFORMATION William
M. Scott IV, Esq 333 South Hope Street, 48th Floor, Los Angeles,
CA  90071, (213) 620-1780

 

 

	
  INDIVIDUAL’S NAME

  	
  STREET ADDRESS

  	
  CITY

  	
   

  	
  PHONE

  

 

Space above Line Reserved For Recorder’s Use

 

	
  1.

  	
   

  	
  Title of
  Document:

  	
   

  	
  Mortgage,
  Assignment of Rents and Fixture Filing

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Date of
  Document:

  	
   

  	
  January 31,
  2005

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Mortgagor:

  	
   

  	
  HGI -
  Lakeside, a Nevada corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Mortgagee:

  	
   

  	
  Bank of
  America, N.A., as Administrative Agent

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Statutory
  Mailing Address(es):

  	
  Mortgagor:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  c/o
  Herbst Gaming, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  5195 Las
  Vegas Blvd.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Las
  Vegas, NV 89119

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Attn:
  Mary Beth Higgins

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Mortgagee:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Bank of
  America, N.A.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Mail
  Code: TX1-492-14-11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Bank of
  America Plaza

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  901 Main
  Street, 14th Floor

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Dallas,
  TX 75202-3714

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Attn:
  Chris M. Levine, Assistant Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Agency
  Management Officer II

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  GCIB
  Agency Management Central I

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Legal
  description:

  	
   

  	
  See Exhibit
  A annexed to the document

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Reference(s)
  to Book(s) and Page(s):

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Prepared
  by and following recording return to:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Sheppard,
  Mullin, Richter & Hampton LLP

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  333 South
  Hope Street, 48th Floor

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Los
  Angeles, California 90071

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Attn:
  William M. Scott IV, Esq.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (213)620-1780

  
										

 

 

MORTGAGE, ASSIGNMENT OF RENTS AND FIXTURE FILING

 

The
parties to this Mortgage, Assignment of Rents and Fixture Filing (“Mortgage”),
dated as of January 31, 2005, are HGI - Lakeside, a Nevada corporation (“Mortgagor”),
as mortgagor, and BANK OF AMERICA, N.A., as “Administrative Agent” for the “Lenders”
including, without limitation, “the Swing Line Lender” (as each of those three
terms is defined in the Credit Agreement), as mortgagee and secured party (“Mortgagee”).  Capitalized terms used and not otherwise
defined herein shall have the meanings given to them in that certain Credit
Agreement, dated as of October 8, 2004 (as amended, extended, renewed,
modified or supplemented from time to time, the “Credit Agreement”) by and
among Herbst Gaming, Inc., a Nevada corporation (“Borrower”), each lender whose
name is set forth on the signature pages therein and each lender that may
hereafter become a party to the Credit Agreement pursuant to Section 10.06
therein (each a “Lender” and collectively, the “Lenders”), Bank of America,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.  The Credit Agreement initially provided for
Revolving Loans in the aggregate principal amount of $175,000,000.  Concurrently herewith, the Credit Agreement
is being amended by a Term Joinder Agreement pursuant to which Term Loans in
the aggregate principal amount of $100,000,000 are being extended to the
Borrower in addition to such Revolving Loans, for an aggregate credit facility
of $275,000,000.  The outside maturity
date for the Revolving Loans and the Term Loans is January 31, 2011.

 

The
lenders party to the Credit Agreement as of the date of this Mortgage are
listed on Exhibit B.

 

NOTICE:
This Mortgage secures credit in the amount of up to $300,000,000 (including
loans and letters of credit of up to $275,000,000 plus the amount of any credit
exposure owed to the Lenders in respect of the Secured Swap Contracts referred
to below).  Loans and advances up to this
amount, together with interest, are senior to indebtedness to other creditors
under subsequently recorded or filed mortgages and liens.

 

1.                                       Grant of Mortgage.

 

1.1                                 Grant of Mortgage.  For
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and in order to secure the payment and performance of each and
all of the Secured Obligations defined and described in Section 1.2,
Mortgagor has mortgaged, granted and conveyed and by these presents does hereby
sell, mortgage, grant and convey to Mortgagee, its successors and assigns, all
of Mortgagor’s right,

 

2

 

title and interest, whether
now existing or hereafter acquired, in and to all of the following (all or any
part of such property, or any interest in all or any part of it, as the context
may require, the “Property”), TO HAVE AND TO HOLD said Property unto and to the
proper use and benefit of Mortgagee, its successors and assigns, forever:

 

(a)                                  All of Mortgagor’s right, title and interest
under and in connection with that certain Lease dated as of August 19,
1997, between City of Osceola, Iowa, a municipal corporation, as landlord,
Osceola Water Works Board of Trustees, as landlord, and Southern Iowa Gaming
Co., an Iowa corporation, as original tenant and predecessor in interest to
Trustor (as amended, the “Operating Lease”), a memorandum of which (the “Memorandum
of Lease”) dated November 16, 1998, was recorded on November 19,
1998, in Book 83, Page 853, in the Official Records (the “Official Records”) of
Clarke County (the “County”), including, without limitation, (i) all
options to extend or renew the Operating Lease (and the leasehold estate for
the term of each extension or renewal), (ii) all options and rights of
first refusal contained in the Operating Lease to purchase the real property
which is subject to the Operating Lease, and (iii) all of Mortgagor’s
other rights, titles and interests under the Operating Lease; together with

 

(b)                                 The real property located in the County,
State of Iowa, as described in Exhibit A, together with all
existing and future easements and rights affording access to it (the “Land”);
together with

 

(c)                                  All buildings, structures and improvements
now located or later to be constructed on the Land, including, without
limitation, all parking areas, roads, driveways, walks, fences, walls, docks,
berms, landscaping, recreation facilities, drainage facilities, lighting
facilities and other site improvements (the “Improvements”); together with

 

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

 

(e)                                  Subject to Article 2, below, all
existing and future leases, subleases, subtenancies, licenses (except for
gaming licenses and liquor licenses that are not transferable), occupancy
agreements, concessions and any other agreement devising any portion of the
Property or relating to the use and enjoyment of all or any part of the

 

3

 

Land
and Improvements, and any and all guaranties and other agreements relating to
or made in connection with any of the foregoing, whether written or oral and
whether in existence at or upon the recordation of this Mortgage or entered
into after the recordation of this Mortgage (some or all collectively, as the
context may require, “Leases”), and all rents, security deposits, royalties,
issues, profits, receipts, earnings, revenue, income, products and proceeds and
other benefits of the Land and Improvements, whether now due, past due or to
become due, including, without limitation, all prepaid rents, security
deposits, fixed, additional and contingent rents, deficiency rents and
liquidated damages, license fees, occupancy charges, hotel room charges, cabana
charges, casino revenues, show ticket revenues, food and beverage revenues,
room service revenues, merchandise sales revenues, parking, maintenance, common
area, tax, insurance, utility and service charges and contributions, proceeds
of sale of electricity, gas, heating, air-conditioning, cable and other
utilities and services, green fees, cart rental fees, instruction fees,
membership charges, restaurant, snack bar and pro shop revenues, liquidated
damages, and all other rights to payments, together with and any and all
guaranties and other agreements relating to or made in connection with any of
such leases (some or all collectively, as the context may require, “Rents”);
together with

 

(f)                                    All goods, materials, supplies, chattels,
furniture, fixtures, equipment, machinery and other property now or later to be
attached to, placed in or on, or used in connection with the use, enjoyment,
occupancy or operation of all or any part of the Land and Improvements, whether
stored on the Land or elsewhere, including all pumping plants, engines, pipes,
ditches and flumes, and also all gas, electric, cooking, heating, cooling, air
conditioning, lighting, refrigeration and plumbing fixtures and equipment, all
water, sanitary and storm sewer, drainage, electricity, steam, gas, telephone,
cable and other utility equipment and facilities, all plumbing, lighting,
heating, ventilating, air conditioning, refrigerating, incinerating,
compacting, fire protection and sprinkler, surveillance and security, vacuum
cleaning, public address and communications equipment and systems, all kitchen
and laundry appliances, screens, awnings, floor coverings, partitions,
elevators, escalators, motors, machinery, pipes, fittings and other items of
equipment and property of every kind and description, all of which shall be
considered to the fullest extent of the law to be real property for purposes of
this Mortgage (it being agreed that, if the lien of this Mortgage shall be
subject to a conditional bill of sale, chattel mortgage, or other security
interest covering any such property, then all the right, title and interest of
Mortgagor in and to such property, together with the benefits of any deposits
or payments now or hereafter made thereon, are and shall be covered by the lien
of this Mortgage); together with

 

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

 

(h)                                 All rights to the payment of money, accounts,
accounts receivable, reserves, deferred payments, refunds, cost savings,
payments and deposits, room revenues, food revenues, beverage revenues and
casino revenues, whether now or later to be received from third parties
(including all earnest money sales deposits) or deposited by

 

4

 

Mortgagor
with third parties (including all utility deposits), contract rights,
development and use rights, governmental permits and licenses (except for
gaming licenses and liquor licenses that are not transferable), authorizations,
certificates, variances, consents and approvals, applications, architectural
and engineering plans, specifications and drawings, as-built drawings, guaranties,
warranties, management agreements, operating and/or licensing agreements,
supply and service contracts for water, sanitary and storm sewer, drainage,
electricity, steam, gas, telephone, cable, satellite, and other utilities,
property and title insurance policies and proceeds thereof (including without
limitation the right to assert, prosecute and settle claims under such
policies), chattel paper, instruments, documents, notes, certificates of
deposit, securities, other investments, drafts and letters of credit (other
than letters of credit in favor of Mortgagee), which arise from or relate to
construction on the Land or to any business now or later to be conducted on it,
or to the Land and Improvements generally; together with

 

(i)                                     All proceeds, including all rights and claims
to, dividends of and demands for them, of the voluntary or involuntary
conversion of any of the Land, Improvements or the other property described
above into cash or liquidated claims, including proceeds of all present and
future fire, hazard or casualty insurance policies (whether or not any such
insurance policy is required by this Mortgage or any other Loan Document) and
all condemnation awards or payments now or later to be made by any public body
or decree by any court of competent jurisdiction for any taking or in
connection with any condemnation or eminent domain proceeding, and all causes
of action and their proceeds for any damage or injury to the Land, Improvements
or the other property described above or any part of them, or breach of
warranty in connection with the construction of the Improvements, including
causes of action arising in tort, contract, fraud or concealment of a material
fact; together with

 

(j)                                     All books and records pertaining to any and
all of the property described above, including computer readable memory and any
computer hardware or software necessary to access and process such memory (“Books
and Records”); together with

 

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

 

Notwithstanding
the foregoing, the term “Property,” as used in this Mortgage, shall not include
(i) any personal property or fixtures, the purchase of which was financed by a
purchase money security interest, including any capital lease obligation,
permitted under the Credit Agreement to the extent that the documents creating
such purchase money security interest or capital lease prohibit the granting
thereon, but only for so long as the related indebtedness

 

5

 

remains outstanding, (ii)
any capital stock or other equity interests in any gaming licenses, and (iii)
any gaming licenses and liquor licenses which are not transferable.

 

Mortgagor
shall and will warrant and forever defend the Property in the quiet and
peaceable possession of the Mortgagee, its successors and assigns against all
and every Person or Persons lawfully claiming or to claim the whole or any part
thereof.  Mortgagor agrees that any
greater title to the Property hereafter acquired by Mortgagor during the term
hereof shall be subject hereto.

 

1.2                                 Secured Obligations.

 

1.2.1                        Mortgagor makes the grant, bargain,
conveyance, sale, transfer and assignment set forth in Section 1.1
and grants the security interest set forth in Article 3 for the
purpose of securing the following obligations (collectively, the “Secured
Obligations”) in any order of priority that Mortgagee may choose:

 

(a)                                  Except as specified in Section 1.2.2
below, the payment and performance of each obligation of Mortgagor pursuant to
that certain Guaranty (as amended as of the date hereof, the “Guaranty”), dated
June 10, 2004, entered into by Mortgagor in favor of Mortgagee pursuant to
that Instrument of Joinder to Guaranty dated as of October 8, 2004.  The Guaranty has been entered into by
Mortgagor to, among other things, guaranty the payment and performance of all
obligations of Borrower to Mortgagee under the Credit Agreement and all related
Loan Documents, pursuant to which the Lenders have extended or have agreed to
extend to the Borrower certain secured revolving and term credit facilities,
presently in the aggregate principal amount of $275,000,000 (the “Commitment”),
including, but not limited to the payment of all amounts owing under the Swing
Line, the payment of all amounts owing with respect to the Letters of Credit,
including without limitation unreimbursed drawings and obligations to furnish
cash collateral as provided in the Credit Agreement, and the payment of all
amounts owing under any and all Secured Swap Contracts entered into by the
Borrower with any Lender or Affiliate thereof;

 

(b)                                 The payment and performance of all future
advances and other obligations that Mortgagor or any other Person or entity may
owe to Mortgagee and/or any Lender (whether as principal, surety or guarantor),
when a writing evidences Mortgagor’s and Mortgagee’s agreement that such
advances or obligations be secured by this Mortgage;

 

(c)                                  The payment and performance of all
obligations of Mortgagor under this Mortgage;

 

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

 

1.2.2                        Notwithstanding any provision of this
Mortgage or any other Loan Document, the obligations and liability of
Mortgagor, any Borrower or any other Person arising under Sections 5.09
and/or 10.04 of the Credit Agreement (and/or under any separate
agreement

 

6

 

relating to Hazardous
Materials which states that it is not secured by real property) are not and
shall not be Secured Obligations under this Mortgage.

 

1.2.3                        All Persons who may have or acquire an
interest in all or any part of the Property will be considered to have notice
of, and will be bound by, the terms of the Secured Obligations and each other
agreement or instrument made or entered into in connection with each of the
Secured Obligations.  Such terms include
any provisions in the Credit Agreement or the other Loan Documents which permit
borrowing, repayment and reborrowing, or which provide that the interest rate
on one or more of the Secured Obligations may vary from time to time.

 

1.2.4                        In addition to the indebtedness evidenced by
the Guaranty and all other Secured Obligations, this Mortgage, to the fullest
extent permitted by the Laws of the State of Iowa, shall secure also and
constitute a Lien on the Property for all future advances made by the Mortgagee
to Borrower and future obligations incurred by Borrower to Mortgagee in
connection with the Property to the same extent as if such future advances were
made or such future obligations incurred on the date of the execution of this Mortgage.  The total amount of the indebtedness that may
be secured by this Mortgage shall not exceed a maximum principal amount equal
to $300,000,000.00 plus future advances and/or future obligations made or
incurred for the reasonable protection of the security or to enable completion
of a contemplated improvement.

 

2.                                       Assignment of Rents and Leases.

 

2.1                                 Assignment.  Mortgagor hereby irrevocably,
absolutely, presently and unconditionally assigns, transfers and sets over to
Mortgagee all of the right, title and interest which Mortgagor now has or may
later acquire in and to the Rents and the Leases, and confers upon Mortgagee
the right to collect such Rents and enforce the provisions of the Leases with
or without taking possession of the Property. 
This is an absolute assignment, not an assignment for security only.

 

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

 

2.3                                 Collection and Application of Rents. 
Subject to the License granted to Mortgagor under Section 2.2,
Mortgagee has the right, power and authority to collect any and all Rents and
exercise Mortgagor’s right, title and interest under the Leases.  Mortgagor hereby appoints Mortgagee its
attorney-in-fact to perform any and all of the following acts, if and at the
times when Mortgagee in its absolute discretion may so choose:

 

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

 

7

 

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

 

(c)                                  Sue either in the name of Mortgagor or in the
name of Mortgagee for any and all Rents and to enforce any other obligations
and duties under the Leases.

 

Mortgagee’s right to the
Rents and the Leases does not depend on whether or not Mortgagee takes
possession of the Property as permitted under Section 6.3.3.  In Mortgagee’s absolute discretion, Mortgagee
may choose to collect Rents and exercise the right, title and interest of
Mortgagor under the Leases either with or without taking possession of the
Property.  Mortgagee shall apply all
Rents collected by it in the manner provided under Section 6.6.  If an Event of Default shall have occurred
and Mortgagee is in possession of all or part of the Property and is collecting
and applying Rents and exercising any right, title and interest of Mortgagor
under the Leases as permitted under this Mortgage, then Mortgagee and any
receiver shall nevertheless be entitled to exercise and invoke every right and
remedy afforded any of them under this Mortgage and at law and in equity.

 

2.4                                 Mortgagee Not Responsible. 
Under no circumstances shall Mortgagee have any duty to produce Rents
from the Property or maintain the Leases. 
Regardless of whether or not Mortgagee, in Person or by agent, takes
actual possession of the Land and Improvements, Mortgagee is not and shall not
be deemed to be:

 

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

 

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

 

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

 

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

 

Notwithstanding the
foregoing, this Section 2.4 shall not be construed as a waiver of
any liability of Mortgagee to Mortgagor that would otherwise exist as a result
of Mortgagee’s gross negligence or willful misconduct.

 

2.5                                 Leasing.  Without Mortgagee’s prior
written consent, Mortgagor shall not accept any deposit or prepayment of Rents
for any period exceeding one (1) month, and Mortgagor shall not lease the
Property or any part of it except strictly in accordance with the Loan
Documents.  Mortgagor shall not apply any
Rents in any manner prohibited by the Loan Documents.

 

3.                                       Grant of Security Interest.

 

3.1                                 Security Agreement.  The
parties intend for this Mortgage to create a lien on and security interest in
the Property, and an absolute assignment of the Rents and the Leases,

 

8

 

all in favor of
Mortgagee.  The parties acknowledge that
some of the Property and some of the Rents and Leases may be determined under
applicable law to be personal property or fixtures.  To the extent such Property, Rents or Leases
constitute personal property, Mortgagor, as debtor, hereby grants to Mortgagee,
as secured party, a security interest in all such Property, Rents and Leases,
to secure payment and performance of the Secured Obligations, and Mortgagor, as
debtor, also has granted a security interest in such Property, Rents and Leases
pursuant to that certain Amended and Restated Security Agreement dated October 8,
2004, executed by the Borrower and each of its Subsidiaries, as debtor, in
favor of Mortgagee, as secured party, as modified from time to time.  This Mortgage constitutes a security
agreement under the Iowa Uniform Commercial Code, as amended or recodified from
time to time, covering all such Property, Rents and Leases.  To the extent any revenues generated in
connection with the operation of the Property from time to time are not real
property encumbered by the lien created by Section 1.1, above, and
are not absolutely assigned by the assignment set forth in Section 2.1,
above, it is the intention of the parties that such revenues shall constitute “proceeds,
products, offspring, rents or profits” (as defined in and for the purposes of Section 552(b)
of the United States Bankruptcy Code, as such section may be modified or
supplemented) of the Land and Improvements, and/or “fees, charges, accounts, or
other payments for the use or occupancy of rooms and other public facilities in
hotels, motels or other lodging properties,” as applicable (as such terms are
defined in and for the purpose of Section 552(b) of the United States
Bankruptcy Code, as such Section may be modified or supplemented).

 

3.2                                 Financing Statements. 
Mortgagor consents to the filing by Mortgagee of one or more financing
statements and such other documents as Mortgagee may from time to time require
to perfect or continue the perfection of Mortgagee’s security interest in any
Property, Rents or Leases.  As provided
in Section 5.10, Mortgagor shall pay all fees and costs that
Mortgagee may incur in filing such documents in public offices and in obtaining
such record searches as Mortgagee may reasonably require.  If Mortgagor fails to execute any financing
statements or other documents for the perfection or continuation of any
security interest, Mortgagor hereby appoints Mortgagee as its true and lawful
attorney-in-fact (which appointment is irrevocable and coupled with an
interest) to execute any such documents on its behalf.  If any financing statement or other document
is filed in the records normally pertaining to personal property, that filing
shall never be construed as in any way derogating from or impairing this
Mortgage or the rights or obligations of the parties under it.

 

4.                                       Fixture Filing.  This
Mortgage constitutes a financing statement filed as a fixture filing under the
Iowa Uniform Commercial Code, as amended or recodified from time to time,
covering any Property which now is or later may become fixtures attached to the
Land or Improvements.  In connection
therewith, the addresses of Mortgagor, as debtor, and Mortgagee, as secured
party, are as set forth in Section 8.11, below.  The foregoing address of Mortgagee, as
secured party, is also the address from which information concerning the
security interest may be obtained by any interested party.  The property subject to this fixture filing
is described in Section 1.1, above. 
Portions of the property subject to this fixture filing as identified in
this Section are or are to become fixtures related to the real estate
described in Exhibit A attached hereto.

 

9

 

5.                                       Rights and Duties of the Parties.

 

5.1                                 Representations and Warranties. 
Mortgagor represents and warrants that, except as previously disclosed
to Mortgagee in a writing making reference to this Section 5.1:

 

(a)                                  Mortgagor lawfully possesses and holds fee
simple title to all of the Land and Improvements thereon and has or will have
good title to all Property (other than personal property utilized by Mortgagor
under such equipment leases and similar financing arrangements as were
disclosed to Mortgagee in writing prior to the execution of this Mortgage or as
are hereafter entered into by Mortgagor in accordance with the Credit
Agreement);

 

(b)                                 Mortgagor has the full and unlimited power,
right and authority to encumber the Property and assign the Rents and the
Leases;

 

(c)                                  This Mortgage creates a first and prior lien
on and security interest in the Property;

 

(d)                                 The Property includes all property and rights
which may be reasonably necessary to promote the present beneficial use and
enjoyment of the Land and Improvements;

 

(e)                                  Mortgagor owns any Property which is personal
property free and clear of any security agreements, reservations of title or
conditional sales contracts, and there is no financing statement affecting such
personal property on file in any public office (other than personal property
utilized by Mortgagor under such equipment leases and similar financing arrangements
as were disclosed to Mortgagee in writing prior to the execution of this
Mortgage or as are hereafter entered into by Mortgagor in accordance with the
Credit Agreement);

 

(f)                                    Mortgagor’s place of business, or its chief
executive office if it has more than one place of business, is located at the
address specified below; and

 

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

 

(h)                                 None of the Property constitutes and none of
the loans secured by the Mortgage will be used to purchase any: (i) real property
that is a single-family or a two-family dwelling occupied or to be occupied by
the Mortgagor; (ii) agricultural products or property used for an agricultural
purpose as defined in Section 535.13 of the Iowa Code, now enacted or
hereafter modified, amended or replaced; (iii) agricultural land as defined in Section 9H.1(2)
of the Iowa Code, now enacted or hereafter modified, amended or replaced; or
(iv) property used for an agricultural purpose as defined in Section 570A.1(2)
of the Iowa Code, now enacted or hereafter modified, amended or replaced.

 

10

 

5.2                                 Taxes and Assessments. 
Mortgagor shall pay prior to delinquency all taxes, levies, charges and
assessments, including assessments on appurtenant water stock, imposed by any
public or quasi-public authority or utility company which are (or if not paid,
may become) a lien on or security interest in all or part of the Property or
any interest in it, or which may cause any decrease in the value of the
Property or any part of it.  If any such
taxes, levies, charges or assessments become delinquent, Mortgagee may require
Mortgagor to present evidence that they have been paid in full, on ten (10)
days’ written notice by Mortgagee to Mortgagor. 
This Section 5.2 is subject to the right granted in Section 5.11
of the Credit Agreement to contest in good faith certain taxes, assessments,
charges and levies.

 

5.3                                 Performance of Secured Obligations. 
Mortgagor shall promptly pay and perform each Secured Obligation in accordance
with its terms.

 

5.4                                 Liens, Charges and Encumbrances. 
Mortgagor shall immediately discharge any lien on or security interest
in the Property to which Mortgagee has not consented in writing.  Subject to any applicable rights to contest
set forth in the Credit Agreement, Mortgagor shall pay, prior to delinquency,
each obligation secured by or reducible to a lien, security interest, charge or
encumbrance which now does or later may encumber or appear to encumber all or
part of the Property or any interest in it, whether the lien, security
interest, charge or encumbrance is or would be senior or subordinate to this
Mortgage.

 

5.5                                 Damages and Insurance and Condemnation
Proceeds.

 

5.5.1                        Mortgagor hereby absolutely and irrevocably
assigns to Mortgagee, and authorizes the payor to pay to Mortgagee, the
following claims, causes of action, awards, payments and rights to payment:

 

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

 

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

 

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

 

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

 

5.5.2                        Mortgagor shall immediately notify Mortgagee
in writing if:

 

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

 

11

 

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

 

5.5.3                        If Mortgagee chooses to do so, Mortgagee may
in its own name appear in or prosecute any action or proceeding to enforce any
cause of action based on warranty, or for damage, injury or loss to all or part
of the Property and, while any Event of Default remains uncured, Mortgagee may
make any compromise or settlement of the action or proceeding.  Mortgagee, if it so chooses, may participate
in any action or proceeding relating to condemnation or taking of all or part
of the Property, and may join Mortgagor in adjusting any loss covered by
insurance.  Mortgagor hereby irrevocably
appoints Mortgagee its true and lawful attorney-in-fact for all such
purposes.  The power of attorney granted
hereunder is coupled with an interest and is irrevocable.  Mortgagor shall not settle, adjust or
compromise any such action or proceeding without the prior written approval of
Mortgagee, which shall not be unreasonably withheld or delayed.

 

5.5.4                        All proceeds of these assigned claims, other
property and rights which Mortgagor may receive or be entitled to
(collectively, “Proceeds”) shall be paid to Mortgagee.  In each instance, Mortgagee shall apply such
Proceeds first toward reimbursement of all of Mortgagee’s costs and expenses of
recovering the Proceeds, including attorneys’ fees.  If, in any instance, each and all of the
following conditions (the “Restoration Conditions”) are satisfied in Mortgagee’s
reasonable judgment, Mortgagee shall permit Mortgagor to use the balance of
such Proceeds (“Net Claims Proceeds”) to pay costs of repairing or reconstructing
the Property in the manner described below:

 

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

 

(b)                                 Mortgagee must receive evidence reasonably
satisfactory to it that, after repair or reconstruction, the Property will be
at least as valuable as it was immediately before the damage or condemnation
occurred; and

 

(c)                                  The Net Claims Proceeds must be sufficient in
Mortgagee’s reasonable determination to pay for the total cost of repair or
reconstruction, including all associated development costs and interest
projected to be payable on the Secured Obligations until the repair or
reconstruction is complete; or Mortgagor must provide its own funds in an
amount equal to the difference between the Net Claims Proceeds and a reasonable
estimate, made by Mortgagor and found acceptable by Mortgagee, of the total
cost of repair or reconstruction; and

 

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

 

If Mortgagee finds that such
conditions have been met, Mortgagee shall hold the Net Claims Proceeds and any
funds which Mortgagor is required to provide in an interest-bearing passbook
savings account and shall disburse them to Mortgagor on a monthly basis in
accordance with Mortgagee’s customary construction lending procedures.  However, if an Event of Default has

 

12

 

occurred and is continuing,
Mortgagee may apply the Net Claims Proceeds to pay or prepay (without premium)
some or all of the Secured Obligations in such order and proportions as
Mortgagee in its absolute discretion may choose (subject to the provisions for
priority of application of payments set forth in the Credit Agreement).  Any and all Proceeds (including, without
limitation, any Net Claims Proceeds) held by Mortgagee from time to time shall
be collateral for the Secured Obligations, and Mortgagor hereby grants to
Mortgagee a security interest in and lien on such Proceeds and all rights and
remedies available under applicable laws with respect to such Proceeds,
including, without limitation, all rights and remedies under the Iowa Uniform
Commercial Code.  Mortgagor shall execute
and deliver to Mortgagee and the Lenders any and all documents reasonably
requested by Mortgagee in order to confirm, create and perfect such security
interest in and lien on such Proceeds.  In
the event that any Proceeds are applied to pay any Secured Obligations, then
Mortgagee shall have no obligation to disburse or release such applied Proceeds
to Mortgagor under this Section 5.5.  If no Event of Default shall have occurred
and be continuing, any funds remaining upon completion of the repair or
reconstruction shall be returned to Mortgagor.

 

5.5.5                        Mortgagor hereby specifically,
unconditionally and irrevocably waives all rights of a property owner granted
under applicable law, which provide for allocation of condemnation proceeds between
a property owner and a lienholder, and any other law or successor statute of
similar import.  Mortgagor hereby
specifically, unconditionally and irrevocably waives all right to recover
against Mortgagee or any Lender (or any officer, employee, agent or
representative of Mortgagee or any Lender) for any loss incurred by Mortgagor
from any cause insured against or required by any Loan Document to be insured
against; provided, however, that this waiver of subrogation shall not be
effective with respect to any insurance policy if the coverage thereunder would
be materially reduced or impaired as a result.

 

5.5.6                        Notwithstanding anything to the contrary set
forth in this Section 5.5, so long as no Event of Default remains
uncured, the proceeds of any casualty or condemnation for which the gross value
of the applicable damage and/or taking is less than $250,000 shall be paid to
Mortgagor rather than to Mortgagee (and shall be delivered to Mortgagor if
received by Mortgagee), and Mortgagor shall not be required to obtain Mortgagee’s
consent to settle, adjust or compromise any action or proceeding relating to
any such casualty or condemnation (nor shall Mortgagee be entitled to
participate in such action or proceeding).

 

13

 

5.6                                 Maintenance and Preservation of Property.

 

5.6.1                        Except as permitted in the Credit Agreement,
Mortgagor shall not remove or demolish the Property or any part of it, or
alter, restore or add to the Property, or initiate or allow any change in any
zoning or other land use classification which affects the Property or any part
of it, except as permitted or required by the Credit Agreement or with
Mortgagee’s express prior written consent in each instance; provided that,
without Mortgagee’s consent, Mortgagor shall be entitled to remove personal
property in the ordinary course of Mortgagor’s business so long as any such
personal property is replaced with property of comparable value.

 

5.6.2                        If all or part of the Property becomes
damaged or destroyed, Mortgagor shall promptly and completely repair and/or
restore the Property in a good and workmanlike manner in accordance with sound
building practices, regardless of whether or not Mortgagee agrees to disburse
insurance proceeds or other sums to pay costs of the work of repair or
reconstruction under Section 5.5.

 

5.6.3                        Mortgagor shall not commit or allow any act
upon or use of the Property which would violate:  (i) any applicable law or order of any
Governmental Agency, whether now existing or later to be enacted and whether
foreseen or unforeseen (except to the extent that noncompliance would not cause
a Material Adverse Effect or a License Revocation); or (ii) any public or
private covenant, condition, restriction or equitable servitude affecting the
Property.  Mortgagor shall not bring or
keep any article on the Property or cause or allow any condition to exist
on it, that could invalidate or would be prohibited by any insurance coverage
required to be maintained by Mortgagor on the Property or any part of it under
this Mortgage.

 

5.6.4                        Mortgagor shall not commit or allow waste of
the Property.

 

5.6.5                        Mortgagor shall perform all other acts which
from the character or use of the Property may be reasonably necessary to
maintain and preserve its value. Without limiting the generality of the
forgoing, Mortgagor shall protect and preserve all easements, rights-of-way and
other appurtenances to the Land and/or Improvements.  Mortgagor shall not cause or allow any such easement,
right-of-way and other appurtenance to be cancelled, rejected or otherwise
terminated, or modified (except for such terminations that occur pursuant to
the terms of such easement, right of way and other appurtenance).

 

5.7                                 Insurance.

 

5.7.1                        Mortgagor shall maintain the following insurance
with respect to the Property:

 

(a)                                  Mortgagor shall provide, maintain and keep in
force at all times during any period of construction with respect to the
portion of the Property affected by such construction a policy or policies of
builder’s “all risk” insurance in nonreporting form in an amount not less than
the full insurable completed value of such portion of the Property on a
replacement cost basis.  The policy or
policies shall insure against loss or damage by hazards customarily included
within such “all risk” policies and any other risks or hazards which Mortgagee
may reasonably specify (and shall include boiler and

 

14

 

machinery
insurance from and after the date on which any such equipment is installed on
the Property), and each shall contain a Lender’s Loss Payable Endorsement (Form
438 BFU or equivalent) in favor of Mortgagee; provided that Mortgagee shall not
be entitled to require Mortgagor to insure the Property against earthquake
risks during any period in which earthquake insurance is not available with
respect to the Property at commercially reasonable rates.

 

(b)                                 Mortgagor shall provide, maintain and keep in
force at all times for all portions of the Property not covered by a policy or
policies described in Section 5.7.1(a), above, a policy or policies
of fire and hazards “all risk” insurance providing extended coverage, in an
amount not less than the full insurable value of such portions of the Property
on a replacement cost basis.  The policy
or policies shall insure against loss or damage by hazards customarily included
within “all risk” and “extended coverage” policies and any other risks or
hazards which Mortgagee may reasonably specify (and shall include boiler and
machinery insurance), and each shall contain a Lender’s Loss Payable
Endorsement (Form 438 BFU or equivalent) in favor of Mortgagee.

 

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

 

(d)                                 Mortgagor shall provide, maintain and keep in
force at all times a policy or policies of comprehensive liability insurance
naming Mortgagee and the Lenders as additional insureds, on an “occurrence”
basis, against claims for “personal injury” liability, including bodily injury,
death or property damage liability, with a limit of not less than Fifty Million
Dollars ($50,000,000).  Such insurance
shall be primary and noncontributory with any other insurance carried by
Mortgagee and/or any Lender(s).

 

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

 

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

 

(g)                                 If the Property is required to be insured
pursuant to the Flood Disaster Protection Act of 1973 or the National Flood
Insurance Act of 1968, and the regulations promulgated thereunder, because it
is located in an area which has been identified by the Secretary of Housing and
Urban Development as a Flood Hazard Area, then Mortgagor shall provide,
maintain and keep in force at all times a flood insurance policy covering the
Property in limits that would exceed the damage caused by what is expected to
be the most severe flood (or any greater limits to the extent required by

 

15

 

applicable
law from time to time), containing a Lender’s Loss Payable Endorsement (Form
438 BFU or equivalent) in favor of Mortgagee.

 

5.7.2                        All such policies of insurance shall be
issued by companies approved by Mortgagee having a minimum A.M. Best’s rating
of A-:IX.  The limits, coverage, forms,
deductibles, inception and expiration dates and cancellation provisions of all
such policies shall be reasonably acceptable to Mortgagee.  Each property insurance policy maintained in
connection with any of the Property shall contain a Lender’s Loss Payable
Endorsement (Form 438 BFU or equivalent) in favor of Mortgagee, and shall
provide that all proceeds be payable to Mortgagee to the extent of its
interest.  Each liability insurance
policy maintained in connection with any of the Property shall name Mortgagee
and the Lenders as additional insureds. 
An approval by Mortgagee is not, and shall not be deemed to be, a
representation of the solvency of any insurer or the sufficiency of any amount
of insurance.  Each policy of insurance
required hereunder shall provide that it may not be modified or cancelled
without at least thirty (30) days’ prior written notice to Mortgagee (or ten
(10) days’ prior written notice in the event of a premium nonpayment), and
shall permit a waiver of subrogation by Mortgagor in favor of Mortgagee and the
Lenders.

 

5.7.3                        Mortgagor shall supply Mortgagee with
certificates of each policy required hereunder and any other policy of
insurance maintained in connection with any of the Property, together with an
original (which may be a duplicate original) or underlyer of each such policy
and all endorsements thereto.  When any
insurance policy required hereunder expires, Mortgagor shall furnish Mortgagee
with proof acceptable to Mortgagee that the policy has been reinstated or a new
policy issued, continuing in force the insurance covered by the policy which
expired.  If Mortgagor fails to pay any
such premium, Mortgagee shall have the right, but not the obligation, to obtain
current coverage and advance funds to pay the premiums for it.  Mortgagor shall repay Mortgagee immediately
on demand for any advance for such premiums, which shall be considered to be an
additional loan to Mortgagor bearing interest at the Default Rate, and secured
by this Mortgage and any other collateral held by Mortgagee in connection with
the Secured Obligations.

 

5.8                                 Releases, Extensions, Modifications and
Additional Security.

 

5.8.1                        From time to time, Mortgagee and/or any
Lender may perform any of the following acts without incurring any liability or
giving notice to any Person, and without affecting the personal liability of
any Person for the payment of the Secured Obligations (except as provided
below), and without affecting the security hereof for the full amount of the
Secured Obligations on all Property remaining subject hereto, and without the
necessity that any sum representing the value of any portion of the Property
affected by Mortgagee’s and/or such Lender’s action(s) be credited on the
Secured Obligations:

 

(a)                                  Release any Person liable for payment of any
Secured Obligation;

 

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

 

16

 

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

 

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

 

(e)                                  [Intentionally Omitted].

 

5.9                                 Reconveyance.  Upon
(a) the expiration or termination of the Commitment, (b) the full and
final payment in cash of the Loans and all interest and fees with respect
thereto, (c) the payment of all other amounts then demanded by Mortgagee
or any Lender or indemnitee and then owed under the Credit Agreement, and (d) the
payment of all other amounts then due under the Guaranty and the other Loan
Documents and the full payment and performance of all other Secured Obligations
(other than indemnity obligations, if any, that are not then due), Mortgagee
shall reconvey the Property, and shall surrender this Mortgage.  When Mortgagee receives all fees and other
sums owing to Mortgagee under Section 5.10, Mortgagee shall
reconvey the Property, or so much of it as is then held under this Mortgage,
without warranty, to the Person or Persons legally entitled to it.  Such Person or Persons shall pay any costs of
recordation.  In the reconveyance, the
grantee may be described as “the person or persons legally entitled thereto,”
and the recitals of any matters or facts shall be conclusive proof of their
truthfulness.  Mortgagee shall not have
any duty to determine the rights of Persons claiming to be rightful grantees of
any reconveyance.

 

5.10                           Compensation, Exculpation, Indemnification.

 

5.10.1                  Mortgagor agrees to pay reasonable fees as
may be charged by Mortgagee, subject to the maximum amounts legally permitted,
for any services that Mortgagee may render in connection with this Mortgage,
including Mortgagee’s providing a statement of the Secured Obligations or
rendering of services in connection with a reconveyance.  Mortgagor shall also pay or reimburse all of
Mortgagee’s costs and expenses which may be incurred in rendering any such
services.  Mortgagor further agrees to
pay or reimburse Mortgagee for all costs, expenses and other advances which may
be incurred or made by Mortgagee in any efforts to enforce any terms of this
Mortgage, including any rights or remedies afforded to Mortgagee under Section 6.3,
whether any lawsuit is filed or not, or in defending any action or proceeding
arising under or relating to this Mortgage, including reasonable attorneys’
fees and other legal costs, costs of any Foreclosure Sale (as defined in Section 6.3.8)
and any cost of evidence of title.  If
Mortgagee chooses to dispose of the Property through more than one Foreclosure
Sale, Mortgagor shall pay all costs, expenses or other advances that may be
incurred or made by Mortgagee in each of such Foreclosure Sales.

 

5.10.2                  Mortgagee shall not be directly or indirectly
liable to Mortgagor or any other Person as a consequence of any of the
following:

 

(a)                                  Mortgagee’s exercise of, or failure to
exercise, any rights, remedies or powers granted to Mortgagee in this Mortgage;

 

17

 

(b)                                 Mortgagee’s failure or refusal to perform or
discharge any obligation or liability of Mortgagor under any agreement related
to the Property or under this Mortgage; or

 

(c)                                  Any loss sustained by Mortgagor or any third
party resulting from Mortgagee’s failure to lease or operate the Property, or from
any other act or omission of Mortgagee in managing the Property, after an Event
of Default, unless the loss is caused by the willful misconduct and bad faith
of Mortgagee.

 

Mortgagor hereby expressly
waives and releases all liability of the types described above, and agrees that
no such liability shall be asserted against or imposed upon Mortgagee.

 

5.10.3                  Mortgagor agrees to indemnify Mortgagee and
the Lenders (collectively, the “Indemnitees”) against and hold them harmless
from all losses, damages, liabilities, claims, causes of action, judgments,
court costs, reasonable attorneys’ fees and other reasonable legal expenses,
cost of evidence of title, cost of evidence of value, and other costs and
expenses which any of them may suffer or incur (except to the extent that any
of the foregoing are the result of the gross negligence or willful misconduct
of any such Indemnitee):

 

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

 

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

 

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

 

Each obligation or liability
of Mortgagor to any Indemnitee under this Section 5.11.3 shall
survive the release and cancellation of any or all of the Secured Obligations
and the full or partial release and/or reconveyance of this Mortgage.

 

5.10.4                  Mortgagor shall pay all obligations to pay
money arising under this Section 5.10 within five (5) business days
demand by Mortgagee (or the applicable Indemnitee).  Each such obligation shall bear interest from
the date the obligation arises at the Default Rate set forth in the Credit
Agreement, and any such obligation to a Lender shall be added to, and
considered to be part of, the principal of the Note in favor of such Lender
(and, in the event that such Lender holds more than one Note, the allocation of
such obligation among such Notes shall be made by such Lender in its absolute
discretion).

 

5.11                           Defense and Notice of Claims and Actions.  At
Mortgagor’s sole expense, Mortgagor shall protect, preserve and defend the
Property and title to and right of possession of the Property, and the security
of this Mortgage and the rights and powers of Mortgagee created under it,
against all adverse claims.  Mortgagor
shall give Mortgagee prompt notice in writing if any claim is asserted which
does or could affect any of such matters, or if any action or proceeding is
commenced which alleges or relates to any such claim.

 

18

 

5.12                           Subrogation.  Subject to Gaming Laws, Mortgagee
shall be subrogated to the liens and security interests of all encumbrances,
whether released of record or not, which are discharged in whole or in part by
Mortgagee in accordance with this Mortgage or with the proceeds of any loan
secured by this Mortgage.

 

5.13                           Site Visits, Observation and Testing. 
Mortgagee and its agents and representatives shall have the right at any
reasonable time to enter and visit the Property for the purpose of performing
appraisals.  In addition, each Person
indemnified by the Borrower under Section 10.04 of the Credit
Agreement (collectively, “Indemnified Parties”) and their agents and
representatives shall have the right at any reasonable time to enter and visit
the Property for the purposes of observing the Property, taking and removing
soil or groundwater samples, and conducting tests on any part of the Property;
provided that, so long as no Event of Default remains uncured, the Indemnified
Parties shall not be entitled to conduct any tests that would significantly interfere
with the operation of the Property.  The
Indemnified Parties have no duty, however, to visit or observe the Property or
to conduct tests, and no site visit, observation or testing by any Indemnified
Party shall impose any liability on any Indemnified Party.  In no event shall any site visit, observation
or testing by any Indemnified Party be a representation that Hazardous
Materials are or are not present in, on, or under the Property, or that there
has been or shall be compliance with any Hazardous Materials Law, or any other
applicable Law.  Neither Mortgagor nor
any other party is entitled to rely on any site visit, observation or testing
by any Indemnified Party.  The Indemnified
Parties owe no duty of care to protect Mortgagor or any other party against, or
to inform Mortgagor or any other party of, any Hazardous Material or any other
adverse condition affecting the Property. 
Any Indemnified Party shall give Mortgagor reasonable notice before
entering the Property.  The Indemnified
Party shall make reasonable efforts to avoid interfering with Mortgagor’s use
of the Property in exercising any rights provided in this Section.

 

5.14                           Notice of Change. 
Mortgagor shall give Mortgagee prior written notice of (a) any
change in the location of Mortgagor’s place of business or its chief executive
office if it has more than one place of business, (b) any change in the
location of any of the Property, including the Books and Records, and (c) any
change to Mortgagor’s name or business structure.  Unless otherwise approved by Mortgagee in
writing, all Property that consists of personal property (other than the Books
and Records) will be located on the Land and all Books and Records for the
portion of the Property owned by Mortgagor will be located at such Mortgagor’s
place of business or chief executive office if such Mortgagor has more than one
place of business.

 

5.15                           Title Insurance.  At
any time and from time to time at the reasonable request of Mortgagee,
Mortgagor, at its sole cost and expense, shall deliver to Mortgagee such
additional title insurance indorsements and reinsurance issued by title
insurance companies, in form and substance and reasonably satisfactory to
Mortgagee, with respect to this Mortgage, including, without limitation, CLTA
122 endorsements insuring that each advance is secured by this Mortgage
(without any exception not set forth in the policy of title insurance insuring
this Mortgage other than (i) liens for taxes and assessments not yet due
and payable and (ii) other encumbrances, approved by the Mortgagee,
insured to be subordinate to this Mortgage), and CLTA 101.4 endorsements
insuring the priority of the Mortgage over any mechanic’s lien;

 

19

 

provided that Mortgagor
shall not be obligated under this Section 5.15 to increase the
stated amount of the policy of title insurance insuring this Mortgage.

 

6.                                       Accelerating Transfers, Defaults and Remedies.

 

6.1                                 Accelerating Transfers.

 

6.1.1                        “Accelerating Transfer” means any sale,
contract to sell, conveyance, encumbrance, lease, alienation or further
encumbrance of all or any material portion of the Property (or any interest in
it) which is not expressly permitted under the Credit Agreement, or any other
transfer of all or any material portion of the Property (or any interest in
it), whether voluntary, involuntary, by operation of law or otherwise, unless
Mortgagee has given its prior written consent to such “Accelerating Transfer,”
which consent may be given or not given in the absolute discretion of
Mortgagee.  If Mortgagor is a corporation
or limited liability company, “Accelerating Transfer” also means any transfer
of any share or shares in Mortgagor.  If
Mortgagor is a partnership or limited liability company, “Accelerating Transfer”
also means withdrawal or removal of any general partner or manager, as the case
may be, dissolution of the partnership or limited liability company under
Nevada law, or any transfer of any partnership interest or any ownership
interest in the limited liability company.

 

6.1.2                        Mortgagor acknowledges that Mortgagee and the
Lenders are making one or more advances under the Credit Agreement in reliance
on the expertise, skill and experience of Mortgagor; thus, the Secured
Obligations include material elements similar in nature to a personal service
contract.  In consideration of Mortgagee’s
reliance, Mortgagor agrees that Mortgagor shall not make any Accelerating
Transfer, unless the transfer is preceded by Mortgagee’s written consent to the
particular transaction and transferee. 
Mortgagee may withhold such consent in its absolute discretion.  If any Accelerating Transfer occurs,
Mortgagee may, in its absolute discretion (provided that it has received any
consents or approvals of any other Lenders required under the Credit
Agreement), declare all of the Secured Obligations to be immediately due and
payable, and Mortgagee may invoke any rights and remedies provided by Section 6.3
of this Mortgage.

 

6.2                                 Events of Default. 
Mortgagor will be in default under this Mortgage upon the occurrence of
any one or more of the following events (“Events of Default”):

 

(a)                                  Mortgagor fails to perform any obligation to
pay money which arises under this Mortgage within two (2) Business Days
after written demand therefor; or

 

(b)                                 Mortgagor fails to perform any other
obligation arising under this Mortgage within ten (10) Business Days after
the giving of written notice by Mortgagee of such failure; or

 

(c)                                  Any Event of Default (as defined in the
Credit Agreement or in any other Loan Document) occurs; or any other default
occurs under any of the Secured Obligations.

 

20

 

6.3                                 Remedies.  At any time after and during
the continuance of an Event of Default (following the expiration of any
applicable cure period) and provided that Mortgagee has received any consents
or approvals of any other Lenders required under the Credit Agreement,
Mortgagee will be entitled to invoke any or all of the following rights and
remedies (subject to any restrictions on those rights and remedies imposed by
applicable Gaming Laws), all of which will be cumulative, and the exercise of
any one or more of which shall not constitute an election of remedies:

 

6.3.1                        Acceleration. 
Mortgagee may declare any or all of the Secured Obligations to be due
and payable immediately.

 

6.3.2                        Receiver.  Mortgagee may apply to any
court of competent jurisdiction for, and obtain appointment of, a receiver for
the Property; and Mortgagee may request, in connection with any foreclosure
proceeding hereunder, that the Iowa Gaming and Racing Commission petition a
District Court of the State of Iowa for the appointment of a supervisor to
conduct the normal gaming activities on the Property following such foreclosure
proceeding.

 

6.3.3                        Entry.  To the extent permitted by
applicable law, Mortgagee, in person, by agent or by court-appointed receiver,
may enter, take possession of, manage and operate all or any part of the
Property, and may also do any and all other things in connection with those
actions that Mortgagee may in its absolute discretion consider necessary and
appropriate to protect the security of this Mortgage.  Such other things may include, without
limitation:  taking and possessing all of
Mortgagor’s or the then owner’s Books and Records; entering into, enforcing,
modifying, or canceling Leases on such terms and conditions as Mortgagee may
consider proper; obtaining and evicting tenants; collecting and receiving any
payment of money owing to Mortgagor; completing construction; and/or contracting
for and making repairs and alterations. 
If Mortgagee so requests, Mortgagor shall assemble all of the Property
that has been removed from the Land and make all of it available to Mortgagee
at the site of the Land.  To the extent
permitted by applicable law, Mortgagor hereby irrevocably constitutes and
appoints Mortgagee as Mortgagor’s attorney-in-fact (which appointment is
coupled with an interest) to perform such acts and execute such documents as
Mortgagee in its absolute discretion may consider to be appropriate in
connection with taking these measures, including endorsement of Mortgagor’s
name on any instruments.  Regardless of
any provision of this Mortgage or the Credit Agreement, Mortgagee shall not be
considered to have accepted any property other than cash or immediately
available funds in satisfaction of any obligation of Mortgagor to Mortgagee
unless Mortgagee has given express written notice of Mortgagee’s election of
that remedy.

 

6.3.4                        Cure; Protection of Security. 
Mortgagee may cure any breach or default of Mortgagor and, if it chooses
to do so in connection with any such cure, Mortgagee may (subject to applicable
Gaming Laws) also enter the Property and/or do any and all other things which
either may in its absolute discretion consider necessary and appropriate to
protect the security of this Mortgage. 
Such other things may include, without limitation:  appearing in and/or defending any action or
proceeding which purports to affect the security of, or the rights or powers of
Mortgagee under, this Mortgage; paying, purchasing, contesting or compromising
any encumbrance, charge, lien, security interest or claim of lien or security
interest which (in

 

21

 

Mortgagee’s sole judgment)
is or may be senior in priority to this Mortgage, such judgment of Mortgagee to
be conclusive as among the parties to this Mortgage; obtaining insurance and/or
paying any premiums or charges for insurance required to be carried under this
Mortgage and the other Loan Documents; otherwise caring for and protecting any
and all of the Property; and/or employing counsel, accountants, contractors and
other appropriate Persons to assist Mortgagee. 
Mortgagee may take any of the actions permitted under this Section 6.3.4
either with or without giving notice to any Person.

 

6.3.5                        Uniform Commercial Code Remedies. 
Subject to applicable Gaming Laws, Mortgagee may exercise any or all of
the remedies granted to a secured party under the Iowa Uniform Commercial Code,
as amended or recodified from time to time.

 

6.3.6                        Judicial or Nonjudicial Foreclosure Action. 
Mortgagee may bring an action in any court of competent jurisdiction to
foreclose this Mortgage or to obtain specific enforcement of any of the
covenants or other terms of this Mortgage. 
Mortgagee may also exercise any rights of nonjudicial foreclosure it may
have under applicable law.

 

6.3.7                        Sales of Personal Property.

 

(a)                                  Mortgagee may elect to treat as personal
property any Property which is intangible or which can be severed from the Land
or Improvements without causing structural damage.  If it chooses to do so, Mortgagee may dispose
of any personal property separately from the sale or other disposition of real
property, in any manner permitted by Article 9 of the Iowa Uniform
Commercial Code, as amended or recodified from time to time, including any
public or private sale, or in any manner permitted by any other applicable
law.  Any proceeds of any such
disposition shall not cure any Event of Default or reinstate any Secured
Obligation.

 

(b)                                 In connection with any sale or other
disposition of such Property, Mortgagor agrees that the following procedures
constitute a commercially reasonable sale: 
Mortgagee shall mail written notice of the sale to Mortgagor not later
than ten (10) days prior to such sale. 
Once per week during the three weeks immediately preceding such sale,
Mortgagee will publish notice of the sale in a local daily newspaper of general
circulation.  Upon receipt of any written
request, Mortgagee will make the Property available to any bona fide
prospective purchaser for inspection during reasonable business hours.  Notwithstanding any provision to the
contrary, Mortgagee shall be under no obligation to consummate a sale if, in
its judgment, none of the offers received by it equals the fair value of the
Property offered for sale.  The foregoing
procedures do not constitute the only procedures that may be commercially
reasonable.

 

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

 

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

 

(b)                                 Elect to dispose of the lots, parcels and/or
items through a single consolidated sale or disposition to be held or made in
connection with judicial

 

22

 

proceedings,
or by virtue of a judgment and decree of foreclosure and sale; or by virtue of
a nonjudicial foreclosure or through two or more such sales or dispositions; or
in any other manner Mortgagee may deem to be in its best interests (any such
sale or disposition being referred to herein as a “Foreclosure Sale”).

 

If Mortgagee chooses to have
more than one Foreclosure Sale, Mortgagee at its option may cause the
Foreclosure Sales to be held simultaneously or successively, on the same day,
or on such different days and at such different times and in such order as
Mortgagee may deem to be in its best interests. 
No Foreclosure Sale shall terminate or affect the liens or security
interests of this Mortgage on any part of the Property which has not been sold
until all of the Secured Obligations have been paid in full and the Commitment
has been fully and finally terminated.

 

6.3.9                        Other Permitted Remedies. 
Mortgagee and the Lenders may refuse to make any advance to any Borrower
or issue any Letter of Credit for the account of any Borrower.  Mortgagee and the Lenders may exercise any
and all other rights and remedies available under the Loan Documents and
applicable law, including, without limitation, the right to file applications
to change, and to exercise all other rights and remedies available under
applicable law with respect to, all water permits and rights relating to the
Property; provided however that, notwithstanding the foregoing or any other
provision contained in this Mortgage, the remedies provided by this Mortgage
shall not include the right to take any action that violates applicable Gaming
Laws.

 

6.4                                 Credit Bids.  At any Foreclosure Sale, any
Person, including Mortgagor or Mortgagee, may bid for and acquire the Property
or any part thereof to the extent permitted by then applicable law.  Instead of paying cash for such property,
Mortgagee may settle for the purchase price by crediting against the sales
price of the Property or any part thereof any or all of the outstanding Secured
Obligations (including without limitation the portion of the Secured
Obligations attributable to the expenses of sale, costs of any action and any
other sums for which Mortgagor is obligated to pay or reimburse Mortgagee and
the Lenders under Section 5.10) in such order and proportions as
Mortgagee in its absolute discretion may choose.

 

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

 

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

 

(a)                                  First, to pay the portion of the Secured
Obligations attributable to the costs and expenses of operation and collection
that may be incurred by Mortgagee or any receiver;

 

23

 

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

 

(c)                                  Third, to remit the remainder, if any, to the
Person or Persons entitled to it. 
Mortgagee shall have no liability for any funds which it does not
actually receive.

 

6.7                                 Redemption.  It is agreed that if this
Mortgage covers less than ten (10) acres of land, and in the event of the
foreclosure of this Mortgage and sale of the property by sheriff’s sale in such
foreclosure proceedings, the time of one year for redemption from said sale
provided by the statutes of the State of Iowa shall be reduced to six (6)
months provided the Mortgagee, in such action files an election to waive any
deficiency judgment against Mortgagor which may arise out of the foreclosure
proceedings; all to be consistent with the provisions of Chapter 628 of the
Iowa Code, now enacted or hereafter modified, amended or replaced. If the
redemption period is so reduced, for the first three (3) months after sale such
right of redemption shall be exclusive to the Mortgagor, and the time periods
in Sections 628.5, 628.15 and 628.16 of the Iowa Code shall be reduced to four
(4) months.

 

It
is further agreed that the period of redemption after a foreclosure of this
Mortgage shall be reduced to sixty (60) days if all of the three following
contingencies develop: (1) The real estate is less than ten (10) acres in size;
(2) the court finds affirmatively that the said real estate has been abandoned
by the owners and those persons personally liable under this Mortgage at the
time of such foreclosure; and (3) Mortgagee in such action files an election to
waive any deficiency judgment against Mortgagor or their successors in interest
in such action.  If the redemption period
is so reduced, Mortgagor or its successors in interest or the owner shall have
the exclusive right to redeem for the first thirty (30) days after such sale,
and the time provided for redemption by creditors as provided in Sections
628.5, 628.15 and 628.16 of the Iowa Code shall be reduced to forty (40)
days.  Entry of appearance by pleading or
docket entry by or on behalf of Mortgagor shall be a presumption that the property
is not abandoned.  Any such redemption
period shall be consistent with all of the provisions of Chapter 628 of the
Iowa Code.  This paragraph shall not be
construed to limit or otherwise affect any other redemption provisions
contained in Chapter 628 of the Iowa Code.

 

It
is further agreed, pursuant to Section 654.20 of the Iowa Code, now
enacted or hereafter modified, amended or replaced, that foreclosure without
redemption may be conducted between the Mortgagor and Mortgagee.

 

7.                                       Leasehold Mortgage Provisions.  The
provisions of this Article 7 shall apply in the event that, and so
long as, any portion of the Property consists of Mortgagor’s interests as
tenant under any lease or leases (collectively, including the Operating Lease,
the “Ground Leases”).  Unless otherwise
expressly provided, the lien of this Mortgage shall encumber all of Mortgagor’s
rights and interests under and in connection with any Ground Lease, including
without limitation renewal and extension rights, options to expand, and
purchase options (all of which rights shall be collectively referred to herein
as a “Ground Leasehold”).  Mortgagor
hereby agrees, with respect to each Ground Lease, as follows:

 

24

 

7.1                                 Mortgagor shall timely perform its
obligations in connection with each Ground Lease.  Without limiting the generality of Section 6.3.4,
above, Mortgagor specifically acknowledges Mortgagee’s right, while any default
by Mortgagor under any Ground Lease remains uncured, to perform the defaulted
obligations and take all other actions which Mortgagee deems necessary to
protect its interests with respect thereto, and Mortgagor hereby irrevocably
appoints Mortgagee its true and lawful attorney-in-fact (which appointment is
coupled with an interest) in its name or otherwise to execute all documents,
and perform all other acts, which Mortgagee reasonably deems necessary to
preserve its or Mortgagor’s rights with respect to any Ground Lease.

 

7.2                                 Mortgagor shall not, without Mortgagee’s
prior written consent, modify, or cause or permit the termination of, any
Ground Lease, or waive or in any way release the landlord under any Ground
Lease of or from any obligation or condition.

 

7.3                                 Mortgagor shall notify Mortgagee promptly in
writing of (i) the occurrence of any default by the landlord under any
Ground Lease and (ii) the receipt by Mortgagor of any notice claiming the
occurrence of any default by Mortgagor under any Ground Lease or the occurrence
of any event which, with the passage of time or the giving of notice or both,
would constitute a default by Mortgagor under any Ground Lease (and Mortgagor
shall also promptly deliver a copy of any such notice to Mortgagee).

 

7.4                                 Unless Mortgagee otherwise consents in
writing, so long as any Secured Obligation remains outstanding, neither the fee
title to, nor any other estate or interest in, the real property subject to any
Ground Lease shall merge with any Ground Leasehold, notwithstanding the union
of such estates in the landlord or the tenant or in a third party.  Any acquisition of the landlord’s interest in
any Ground Lease by Mortgagor or any affiliate of Mortgagor shall be
accomplished in such a manner as to avoid a merger of the interests of landlord
and tenant unless Mortgagee consents to such merger in writing.

 

7.5                                 If Mortgagor acquires fee title to any
portion of the real property subject to any Ground Lease, this Mortgage shall
automatically be a lien on such fee title.

 

7.6                                 Mortgagor shall not subordinate any Ground
Lease or Ground Leasehold to any mortgage or other encumbrance of, or lien on,
any interest in the real property subject to such Ground Leasehold without the
prior written consent of Mortgagee.  Any
such subordination without such consent shall, at Mortgagee’s option, be void.

 

7.7                                 All subleases entered into by Mortgagor with
respect to all or any portion of the Property (and all existing subleases
modified by Mortgagor) shall provide that such subleases are subordinate to the
lien of this Mortgage and any modifications of this Mortgage and the
obligations secured hereby and that, if Mortgagee forecloses under this
Mortgage or enters into a new lease with any landlord under any Ground Lease
pursuant to the provisions for a new lease, if any, contained in the applicable
Ground Lease or in any other document or agreement, the subtenant shall attorn
to Mortgagee or its assignee and the sublease shall remain in full force and
effect in accordance with its terms notwithstanding the termination of the
applicable Ground Lease.

 

25

 

7.8                                 Mortgagor shall exercise any option or right
to renew or extend the term of any Ground Lease at least six months prior to
the date of termination of any such option or right, shall give immediate
written notice thereof to Mortgagee, and shall execute, deliver and record any
documents requested by Mortgagee to evidence the lien of this Mortgage on such
extended or renewed lease term.  If
Mortgagor fails to exercise any such option or right as required herein, Mortgagee
may exercise the option or right as Mortgagor’s agent and attorney-in-fact
pursuant to this Mortgage, or in Mortgagee’s own name or in the name of and on
behalf of a nominee of Mortgagee, as Mortgagee chooses in its absolute
discretion.

 

7.9                                 As security for the Secured Obligations,
Mortgagor hereby assigns to Mortgagee a security interest in all prepaid rents
and security deposits and all other security which the landlords under the
Ground Leases hold for the performance of Mortgagor’s obligations thereunder.

 

7.10                           Promptly upon demand by Mortgagee, Mortgagor
shall use reasonable efforts to obtain from the landlord under any Ground Lease
and furnish to Mortgagee an estoppel certificate of such landlord stating the
date through which rent has been paid, whether or not there are any defaults, and
the specific nature of any claimed defaults.

 

7.11                           Mortgagor shall notify Mortgagee promptly in
writing of any request by either party to any Ground Lease for arbitration,
appraisal or other proceedings relating to any Ground Lease and of the
institution of any such proceeding, and shall promptly deliver to Mortgagee a
copy of all determinations in any such proceeding.  Mortgagee shall have the right, following
written notice to Mortgagor, to participate in any such proceeding in
association with Mortgagor or on its own behalf as an interested party.  Mortgagor shall notify Mortgagee promptly in
writing of the institution of any legal proceeding involving obligations under
any Ground Lease, and Mortgagee may intervene in any such legal proceeding and
be made a party.  Mortgagor shall
promptly provide Mortgagee with a copy of any decision rendered in connection
with any such proceeding.

 

7.12                           To the extent permitted by law, the price
payable by Mortgagor or any other party in the exercise of the right of redemption,
if any, from any sale under, or decree of foreclosure of, this Mortgage shall
include all rents and other amounts paid and other sums advanced by Mortgagee
on behalf of Mortgagor as the tenant under the Ground Leases.

 

7.13                           In addition to all other Events of Default
described in this Mortgage, the occurrence of any of the following shall be an
Event of Default hereunder:

 

(a)                                  A breach or default by Mortgagor under any
Ground Lease, subject to any applicable cure period; or

 

(b)                                 The occurrence of any event or circumstance
which gives the landlord under any Ground Lease a right to terminate such
Ground Lease.

 

7.14                           As used in this Mortgage, the “Bankruptcy
Code” shall mean 11 U.S.C. § 101 et  seq., as modified
and/or recodified from time to time. 
Notwithstanding anything to the contrary contained herein with respect
to any Ground Lease:

 

26

 

(a)                                  The lien of this Mortgage attaches to all of
Mortgagor’s rights under Subsection 365(h) of the Bankruptcy Code,
including without limitation any and all elections to be made thereunder, any
and all rights under any Ground Lease which Mortgagor is entitled to retain
pursuant to 11 U.S.C. § 365(h)(1)(A)(ii) in the event of a rejection
under the Bankruptcy Code of such Ground Lease by the landlord thereunder, and
any and all rights of offset under or as described in 11 U.S.C. § 365(h)(1)(B).

 

(b)                                 Mortgagor acknowledges and agrees that, as
the mortgagee under this Mortgage and by operation of 11 U.S.C. § 365(h)(1)(D),
Mortgagee has, and until this Mortgage has been fully reconveyed continuously
shall have, whether before or after any default under any of the Secured
Obligations or the taking of any action to enforce any of Mortgagee’s rights
and remedies under this Mortgage or any foreclosure sale hereunder, the
complete, unfettered and exclusive right, in its sole and absolute discretion,
to elect (the “365(h) Election”) whether (i) any Ground Lease that has been
rejected under the Bankruptcy Code by the landlord thereunder shall be treated
as terminated under 11 U.S.C. § 365(h)(1)(A)(i), or (ii) the
rights under such Ground Lease that are in or appurtenant to the real property,
as described in 11 U.S.C. § 365(h)(1)(A)(ii), should be retained
pursuant to that subsection.  To the
extent that, notwithstanding the preceding sentence and 11 U.S.C. § 365(h)(1)(D),
Mortgagor now or at any time in the future has any right to make, or to
participate in or otherwise in any manner affect the making of, the 365(h)
Election with respect to any Ground Lease, Mortgagor hereby absolutely assigns
and conveys to Mortgagee any and all such rights, and all of Mortgagor’s right,
title, and interest therein, which may be used and exercised by Mortgagee
completely, exclusively, and without any restriction whatsoever, in Mortgagee’s
sole and absolute discretion, whether before or after any default upon any of
the Secured Obligations, the taking of any action to enforce any of Mortgagee’s
rights and remedies under this Mortgage, or any foreclosure sale
hereunder.  Mortgagor hereby
unconditionally and irrevocably appoints Mortgagee as its attorney-in-fact to
exercise Mortgagor’s right, if any, to make, or participate in or otherwise in
any matter affect the making of, the 365(h) Election with respect to any Ground
Lease.  Mortgagor shall not in any manner
impede or interfere with any action taken by Mortgagee and, at the request of
Mortgagee, Mortgagor shall take or join in the taking of any action to make, or
participate in or otherwise in any manner affect the making of, the 365(h)
Election with respect to any Ground Lease, in such manner as Mortgagee
determines in its sole and absolute discretion. 
Unless and until instructed to do so by Mortgagee (as determined by
Mortgagee in its sole and absolute discretion), Mortgagor shall not take any
action to make, or participate in or otherwise in any manner affect the making
of, the 365(h) Election with respect to any Ground Lease, including in
particular, but without limitation, any election to treat any Ground Lease as
terminated.  Mortgagee shall have no
obligation whatsoever to Mortgagor or any other person or entity in connection
with the making of the 365(h) Election with respect to any Ground Lease or any
instruction by Mortgagee to Mortgagor given, withheld or delayed in respect
thereof, nor shall Mortgagee have any liability to Mortgagor or any other
person or entity arising from any of the same.

 

(c)                                  As security for the Secured Obligations,
Mortgagor hereby irrevocably assigns to Mortgagee all of Mortgagor’s rights to
damages arising from any

 

27

 

rejection
by any landlord of any Ground Lease under the Bankruptcy Code.  Mortgagee and Mortgagor shall proceed jointly
or in the name of Mortgagor in respect of any claim or proceeding relating to
the rejection of any Ground Lease, including without limitation the right to
file and prosecute any proofs of claim, complaints, motions and other documents
in any case in respect of such landlord under the Bankruptcy Code.  This assignment shall continue in effect
until all of the Secured Obligations have been satisfied in full.  Any amounts received by Mortgagee or
Mortgagor as damages arising from the rejection of any Ground Lease as
aforesaid shall be applied first to all costs reasonably incurred by Mortgagee
(including attorneys’ fees) in connection with this subsection (c) and
then in accordance with other applicable provisions of this Mortgage.

 

(d)                                 If, pursuant to the Bankruptcy Code,
Mortgagor seeks to offset against the rent reserved in any Ground Lease the
amount of any damages caused by the nonperformance of the landlord’s
obligations after the rejection by the landlord of such Ground Lease, Mortgagor
shall, prior to effecting such offset, notify Mortgagee in writing of its
intent to do so, setting forth the amounts proposed to be offset and, in the
event that Mortgagee objects, Mortgagor shall not effect any offset of the
amounts to which Mortgagee objects.  If
Mortgagee fails to object within 10 days following receipt of such notice,
Mortgagor may offset the amounts set forth in Mortgagor’s notice.

 

(e)                                  If any legal proceeding is commenced with
respect to any Ground Lease in connection with any case under the Bankruptcy
Code, Mortgagee and Mortgagor shall cooperatively conduct any such proceeding
with counsel reasonably agreed upon between Mortgagor and Mortgagee.  Mortgagor shall, upon demand, pay to
Mortgagee all costs (including attorneys’ fees) reasonably incurred by
Mortgagee in connection with any such proceeding.

 

(f)                                    Mortgagor shall immediately notify Mortgagee
orally upon learning of any filing by or against any landlord of a petition
under the Bankruptcy Code.  Mortgagor
shall thereafter promptly give written notice of such filing to Mortgagee, setting
forth any information available to Mortgagor with respect to the date of such
filing, the court in which such petition was filed, and the relief sought
therein.  Mortgagor shall promptly
deliver to Mortgagee all notices, pleadings and other documents received by
Mortgagor in connection with any such proceeding.

 

7.15                           No maintenance, repair or other obligation of
Mortgagor hereunder which relates to the “Property” shall apply to any Ground
Leasehold with respect to which the applicable Ground Lease imposes such
obligation on the landlord so long as (a) Mortgagor does not own the
landlord’s interest; (b) such landlord is performing such obligation in
accordance with the terms of such Ground Lease; and (c) the Ground Lease
has not been rejected by the landlord under the Bankruptcy Code.

 

7.16                           The generality of the provisions of this
Mortgage shall not be limited by any provision of this Article 7
that sets forth particular obligations of Mortgagor as the tenant under the
Ground Leases.

 

7.17                           Mortgagor hereby represents and warrants to
Mortgagee as follows:

 

28

 

(a)                                  The Operating Lease is in full force and
effect;

 

(b)                                 Mortgagor owns the entire tenant’s interest
under the Operating Lease and has the right under the Operating Lease to
execute this Mortgage; and

 

(c)                                  No default under the Operating Lease remains
uncured, nor has any event occurred which, with the passage of time or service
of notice or both, would constitute such a default.

 

8.                                       Miscellaneous Provisions.

 

8.1                                 Additional Provisions.  The
Loan Documents fully state all of the terms and conditions of the parties’
agreement regarding the matters mentioned in or incidental to this
Mortgage.  The Loan Documents also grant
further rights to Mortgagee and contain further agreements and affirmative and
negative covenants by Mortgagor which apply to this Mortgage and to the
Property.

 

8.2                                 No Waiver or Cure.

 

8.2.1                        Each waiver by Mortgagee must be in writing,
and no waiver shall be construed as a continuing waiver.  No waiver shall be implied from any delay or
failure by Mortgagee to take action on account of any default of
Mortgagor.  Consent by Mortgagee to any
act or omission by Mortgagor shall not be construed as a consent to any other
or subsequent act or omission or to waive the requirement for Mortgagee’s
consent to be obtained in any future or other instance.

 

8.2.2                        If any of the events described below occurs,
that event alone shall not:  cure or
waive any breach, Event of Default or notice of default under this Mortgage or
invalidate any act performed pursuant to any such default or notice; or nullify
the effect of any notice of default or sale (unless all Secured Obligations
then due have been paid and performed and all other defaults under the Loan
Documents have been cured); or impair the security of this Mortgage; or
prejudice Mortgagee or any receiver in the exercise of any right or remedy
afforded any of them under this Mortgage; or be construed as an affirmation by
Mortgagee of any tenancy, lease or option, or a subordination of the lien or
security interest of this Mortgage.

 

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

 

(b)                                 Mortgagee collects and applies Rents as permitted
under Sections 2.3 and 6.6 or exercises Mortgagor’s right, title
and interest under the Leases, either with or without taking possession of all
or any part of the Property.

 

(c)                                  Mortgagee receives and applies to any Secured
Obligation proceeds of any Property, including any proceeds of insurance
policies, condemnation awards, or other claims, property or rights assigned to
Mortgagee under Section 5.5.

 

(d)                                 Mortgagee makes a site visit, observes the
Property and/or conducts tests as permitted under Section 5.13.

 

29

 

(e)                                  Mortgagee receives any sums under this
Mortgage or any proceeds of any collateral held for any of the Secured
Obligations, and applies them to one or more Secured Obligations.

 

(f)                                    Mortgagee or any receiver invokes any right
or remedy provided under this Mortgage.

 

8.3                                 Powers of Mortgagee.

 

8.3.1                        If either Mortgagee or any Lender performs
any act which it is empowered or authorized to perform under this Mortgage,
including any act permitted by Section 5.8 or Section 6.3.4,
that act alone shall not release or change the personal liability of any Person
for the payment and performance of the Secured Obligations then outstanding, or
the lien or security interest of this Mortgage on all or the remainder of the
Property for full payment and performance of all outstanding Secured
Obligations.  The liability of the
original Mortgagor shall not be released or changed if Mortgagee or any Lender
grants any successor in interest to any Borrower or Mortgagor any extension of
time for payment, or modification of the terms of payment, of any Secured
Obligation.  Neither Mortgagee nor any
Lender shall be required to comply with any demand by any original Mortgagor or
Borrower that Mortgagee or such Lender refuse to grant such an extension or
modification to, or commence proceedings against, any such successor in
interest

 

8.3.2                        Mortgagee may take any of the actions
permitted under Sections 6.3.2 and/or 6.3.3 regardless of the
adequacy of the security for the Secured Obligations, or whether any or all of
the Secured Obligations have been declared to be immediately due and payable,
or whether notice of default and election to sell has been given under this
Mortgage.

 

8.3.3                        From time to time, Mortgagee may apply to any
court of competent jurisdiction for aid and direction in enforcing the rights
and remedies created under this Mortgage. 
Mortgagee may from time to time obtain orders or decrees directing,
confirming or approving acts in enforcing these rights and remedies.

 

8.4                                 Merger.  No merger shall occur as a
result of Mortgagee’s acquiring any other estate in or any other lien on or
security interest in the Property unless Mortgagee consents to a merger in
writing.

 

8.5                                 Applicable Law.  This
Mortgage shall be governed by and construed in accordance with the laws of the
State of Iowa (excluding conflict of laws rules).

 

8.6                                 Successors in Interest.  The
terms, covenants and conditions of this Mortgage shall be binding upon and
inure to the benefit of the heirs, successors and assigns of the parties.  However, this Section 8.6 does
not waive the provisions of Section 6.1.

 

8.7                                 Interpretation.

 

8.7.1                        Whenever the context requires, all words used
in the singular will be construed to have been used in the plural, and vice
versa, and each gender will include any other gender.  The captions of the sections of this Mortgage
are for convenience only and do not

 

30

 

define or limit any terms or
provisions.  The word “include(s)” means “include(s),
without limitation,” and the word “including” means “including, but not limited
to.”

 

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

 

8.7.3                        No listing of specific instances, items or
matters in any way limits the scope or generality of any language of this
Mortgage.  All Exhibits and/or Schedules
attached to this Mortgage are hereby incorporated in this Mortgage.

 

8.8                                 In-House Counsel Fees.  Whenever
Mortgagor is obligated to pay or reimburse Mortgagee or any Lender for any
attorneys’ fees, those fees shall include the allocated costs for services of
in-house counsel.

 

8.9                                 Waiver of Marshalling.  To
the extent permitted by applicable law, Mortgagor waives all rights, legal and
equitable, it may now or hereafter have to require marshalling of assets or to
require foreclosure sales of assets in a particular order.  Each successor and assign of Mortgagor,
including any holder of a lien or security interest subordinate to this
Mortgage, by acceptance of its interest or lien or security interest, agrees
that it shall be bound by the above waiver, as if it had given the waiver
itself.

 

8.10                           Severability.  Any
provision in this Mortgage that is held to be inoperative, unenforceable or
invalid as to any party or in any jurisdiction shall, as to that party or
jurisdiction, be inoperative, unenforceable or invalid without affecting the
remaining provisions or the operation, enforceability or validity of that provision
as to any other party or in any other jurisdiction, and to this end the
provisions of this Mortgage are declared to be severable.

 

8.11                           Notices.  Mortgagor hereby requests that
a copy of notice of default and notice of sale be mailed to it at the address
set forth below.  That address is also
the mailing address of Mortgagor as debtor under the Iowa Uniform Commercial
Code, as amended or recodified from time to time.  Mortgagee’s address given below is the
address for Mortgagee as secured party under the Iowa Uniform Commercial Code,
as amended or recodified from time to time.

 

Notices to Mortgagor:                                                                         c/o Herbst Gaming, Inc.

5195 Las Vegas Blvd.

Las Vegas, NV  89119

Attn:  M. Higgins

 

31

 

Notices to Mortgagee:                                                                        Bank of America, N.A.

Mail Code: TX1-492-14-11

Bank of America Plaza

901 Main Street, 14th Floor

Dallas, TX  75202-3714

Attn:                    Chris M. Levine, Assistant Vice President
                                                Agency Management Officer II
                                                GCIB Agency Management Central I

 

8.12                           Lease of Property. 
Mortgagee hereby lets the Property to Mortgagor until a sale is held
under this Mortgage, or until an Event of Default shall occur, upon the
following terms and conditions, to wit: 
Mortgagor and all persons claiming or possessing any of the Property by,
through or under Mortgagor shall pay rent therefor during said term at the rate
of one cent per month, payable monthly upon demand, and shall surrender
immediate peaceable possession of the Property (and any and every part thereof)
sold under the provisions of this Mortgage to the purchaser thereof under such
sale, without notice or demand therefor, and shall and will at once, without
notice, surrender up possession of the Property and every part thereof in the
event Mortgagee shall take charge and enter the Property as provided in this
Mortgage.

 

8.13                           Surrender of Guaranty.  In
the event of foreclosure of this Mortgage, the Mortgagor hereby agrees that a
court may, and request the court to, enter a special order directing the clerk
of court to enter and record the judgment contained in the foreclosure decree
on the Guaranty secured by the Mortgage without requiring that the Guaranty be
first filed with the clerk of court for cancellation.  The Mortgagor further agrees, because the
Guaranty secured by this Mortgage may also be secured by other collateral and
will be necessary for any realization upon such collateral, that
notwithstanding Iowa Rule of Civil Procedure 1.961, as presently enacted or as
hereinafter amended or replaced, the clerk of court may, in the event of
foreclosure of this Mortgage, enter and record the judgment contained in the
foreclosure decree on the Guaranty secured by the Mortgage without the
requirement that the Guaranty be first filed with the clerk of court for
cancellation.

 

8.14                           Non-Statutory Liens.  The
Mortgagor hereby represents, warrants and agrees that the liens and security
interest granted hereby are not the type of lien referred to in Chapter 575 of
the Iowa Code, as now enacted or hereafter modified, amended, or replaced.  The Mortgagor, for itself and all persons
claiming by, through or under the Mortgagor, agrees that it claims no lien or
right to a lien of the type contemplated by Chapter 575 or any other chapter of
the Iowa Code and further waives all notices and rights pursuant to said law
with respect to the liens and security interests hereby granted, and represents
and warrants that it is the sole party entitled to do so and agrees to
indemnify and hold harmless the Mortgagee and Lenders from any loss, damage and
cost, including attorney’s fees, threatened or suffered by the Mortgagee and
Lenders arising either directly or indirectly as a result of any claim of the
applicability of said law to the liens and security interest hereby granted.

 

8.15                           Acknowledgement of Receipt of Documents. 
Mortgagor hereby acknowledges receipt of a copy of this Mortgage
together with a copy of each other Loan Document.

 

32

 

IMPORTANT:  READ BEFORE SIGNING.  THE TERMS OF THIS MORTGAGE SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE.  NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED
IN THIS MORTGAGE MAY BE LEGALLY ENFORCED. 
YOU MAY CHANGE THE TERMS OF THIS MORTGAGE ONLY BY ANOTHER WRITTEN
AGREEMENT.  THIS NOTICE SHALL ALSO BE
EFFECTIVE WITH RESPECT TO ALL OTHER LOAN DOCUMENTS NOW IN EFFECT BETWEEN YOU
AND MORTGAGEE AND/OR LENDERS.  THE
MODIFICATION OF ANY OTHER LOAN DOCUMENT NOW IN EFFECT BETWEEN YOU AND MORTGAGEE
AND/OR LENDERS, WHICH OCCURS AFTER RECEIPT BY YOU OF THIS NOTICE, MAY BE MADE
ONLY BY ANOTHER WRITTEN INSTRUMENT.  ORAL
OR IMPLIED MODIFICATIONS TO SUCH LOAN DOCUMENTS ARE NOT ENFORCEABLE AND SHOULD
NOT BE RELIED UPON.

 

33

 

IN
WITNESS WHEREOF, this Mortgage has been executed as of the date first written
above.

 

	
   

  	
  “Mortgagor”:

  
	
   

  	
   

  
	
   

  	
  HGI-LAKESIDE,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward Herbst

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

34

 

	
   

  	
   

  	
   

  	
  ACKNOWLEDGEMENT

  
	
   

  	
   

  	
   

  	
   

  
	
  STATE OF Nevada

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
  ss.

  	
   

  
	
  COUNTY OF Clark

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

On
this  28 day of January in the year
2005 before me, Jenifer Cannon, a Notary Public in and for said State,
personally appeared Edward Herbst, of HGI-LAKESIDE, a Nevada corporation, to me
personally known, who being by me duly sworn did say that that person is
President of said corporation and that said instrument is signed on behalf of
said corporation by it voluntarily executed.

 

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

 

 

	
  [SEAL]

  	
  /s/ Jenifer E. Cannon

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
   

  
	
  My term expires

  	
  1/17/07

  	
  .

  	
   

  
					

 

35

 

EXHIBIT “A”

 

(Legal Description of Land)

 

The following property
situate in Clarke County, Iowa:

 

SITE 1 -
PARCEL 1:

 

Parcel “E”, located in the
Southeast Quarter of the Northwest Quarter (SE1/4 NW1/4) and the Southwest
Quarter of the Northeast Quarter (SW1/4 NE1/4) of Section Thirteen (13),
Township Seventy-two (72) North, Range Twenty-six (26) West of the 5th P.M.,
Clarke County, Iowa, more particularly described as follows:

 

Commencing at the Center of Section Thirteen
(13), Township Seventy-two (72) North, Range Twenty-six (26) West of the 5th
P.M., Clarke County, Iowa; thence South 88°22’30” West, 165.05 feet along the
South line of the Southeast Quarter of the Northwest Quarter (SE1/4 NW 1/4) of
said Section Thirteen (13) to the point of beginning;

 

thence South 88°22’30” West,
527.69 feet along an existing fenceline which is the South line of the
Southeast Quarter of the Northwest Quarter (SE1/4 NW1/4) of said Section Thirteen
(13);

 

thence North 01°47’28” East,
1,342.24 feet along existing fenceline which is the East line of the West 627
feet of the Southeast Quarter of the Northwest Quarter (SE 1/4 NW 1/4) of said Section Thirteen
(13) to a point on the North line of the Southeast Quarter of the Northwest
Quarter (SE 1/4 NW 1/4) of said Section Thirteen (13);

 

thence North 88°37’ 02”
East, 692.57 feet along the North line of the Southeast Quarter of the
Northwest Quarter (SE1/4 NW1/4) of said Section Thirteen (13) to the
Northeast corner of the Southeast Quarter of the Northwest Quarter (SE 1/4
NW1/4) of said Section Thirteen (13);

 

thence North 88°32’52” East,
516.95 feet along the North line of the Southwest Quarter of the Northeast
Quarter (SW 1/4 NE 1/4) of said Section Thirteen (13);

 

thence South 02°37’07” West,
294.06 feet;

 

thence South 31 °49’00”
West, 334.39 feet;

 

thence South 16°22’36” West,
399.13 feet;

 

thence South 12°03’46” West,
152.67 feet;

 

thence South 15°51’41” West,
40.38 feet;

 

thence North 73°49’14” West,
194.16 feet;

 

thence South 36°31’06” West,
325.92 feet to the point of beginning.

 

1

 

SITE 1 -
PARCEL 2:

 

A parcel of land located in
a portion of the Southeast Quarter of the Northwest Quarter (SE1/4 NW1/4) and a
portion of the Northeast Quarter of the Southwest Quarter (NE1/4 SW1/4) of Section Thirteen
(13), Township Seventy-two (72) North, Range Twenty-six (26), West of the 5th
P.M., in Clarke County, Iowa, more particularly described as:

 

Commencing at a 1-1/2” iron
pin on the center of said Section Thirteen (13);

 

thence South 88°16’59” West
along the South line of the Southeast Quarter of the Northwest Quarter (SE1/4
NW1/4) of said Section Thirteen (13) a distance of 165.05 feet to a 1/2”
iron pin on the point of beginning;

 

thence South 43°00’06” West
a distance of 231.67 feet;

 

thence North 73°07’44” West
a distance of 403.50 feet to a 5/8” iron pin;

 

thence North 37°01’04” West
a distance of 340.53 feet to a 5/8” iron pin;

 

thence North 39°58’09” East
a distance of 370.60 feet to a 5/8” iron pin on the East line of the West 627
feet of the Southeast Quarter of the Northwest Quarter (SE1/4 NW1/4} of said Section Thirteen
(13);

 

thence South 01°48’15” West
along the East line of the West 627 feet of the Southeast Quarter of the
Northwest Quarter (SE 1/4 NW 1/4) of said section Thirteen (13) a distance
of 518.42 feet to a 5/8” iron pin on the Southeast corner of the West 627 feet
of the Southeast Quarter of the Northwest Quarter (SE1/4 NW1/4);

 

thence North 88°25’03” East
along the South line of the Southeast Quarter of the Northwest Quarter (SE 1/4
NW1/4) of said Section Thirteen (13) a distance of 527.61 feet to the
point of beginning.

 

SITE 1 -
PARCEL 3:

 

A parcel of land located in
the South One-half of the Northeast Quarter (S 1/2 NE 1/4) of Section Thirteen
(13), Township Seventy-two (72) North, Range Twenty-six (26) West of the 5th
P.M., Clarke County, Iowa, more fully described as follows:

 

Commencing at the Northeast
corner of the Southeast Quarter of the Northeast Quarter (SE1/4 NE1/4) of Section Thirteen
(13), Township Seventy-two (72) North, Range Twenty-six (26) West of the 5th
P.M.;

 

thence South 85°54’ West
1,369.5 feet;

 

thence South 04°06’ East
40.0 feet to a point on the South right-of-way line of Clarke County Route
H-33, the same being the point of beginning;

 

thence continuing South
04°06’ East 355.0 feet;

 

2

 

thence North 85°54’ East
40.4 feet to a point on an existing fenceline;

 

thence South 01°00’ East
365.5 feet on said fenceline to a point on the Westerly right-of-way line of
1-35;

 

thence North 31°20’ East
25.5 feet along said right-of-way line;

 

thence North 34° 12’ East
400 5 feet along said right-of-way line;

 

thence North 31 °20’ East
431.0 feet along said right-of-way line to a point on the South right-of-way
line of Route H-33;

 

thence North 88° 18’ West
296.5 feet along said right-of-way line;

 

thence South 85°54’ West
267.5 feet along said right-of-way line to the point of beginning.

 

SITE 1 –
PARCEL 4:

 

All that part of the S1/2
NE1/4 lying West of the West right-of-way line of Interstate Highway #35 as
shown on Official Plans for Project I-IG-35-02(3) 33(U-IG-853(4)) and SE1/4
NW1/4 except the West 627 feet thereof; all in Section 13, Township 72
North, Range 26 West of the 5th P.M.

 

EXCEPT a parcel of land
located in the SW 1/4 NE 1/4 of Section 13, Township 72 North, Range 26
West of the 5th P.M., more fully described as follows:

 

Commencing at the NE corner
of the SE 1/4 NE 1/4 of Section 13, Township 72 North, Range 26 West of
the 5th P.M.,

 

thence South 85°54’ West,
1815.6 feet along the centerline of county road H-33 to the point of beginning;

 

thence continuing South
85°54’ West, 285.0 feet along said centerline;

 

thence South 04°06’ East,
305.7 feet;

 

thence N85°54’E 285.0 feet;

 

thence North 04°06’ West,
305.7 feet to the point of beginning.

 

And also EXCEPT a tract of
land in the N1/2 of Section 13, Township 72 North, Range 26 West of the
5th P.M., located in Clarke County, Iowa, more particularly described as:

 

Beginning at the center of
said Section 13, said point being the true point of beginning;

 

thence South 85°56’30” West
along the South line of the N1/2 of said Section 13, a distance of 165.00’
to an iron pin,

 

thence North 34°05’30” East
a distance of 326.03 to an iron pin,

 

3

 

thence South 76°12’00” East
a distance of 250.00 to an iron pin,

 

thence South 04°03’30” East
a distance of 179.74’ to an iron pin, said pin being on the South line of the N
l/2 of said Section 13;

 

thence South 85°56’30” West
along the South line of the N1/2 of said Section 13 a distance of 274.26’
to the true point of beginning,

 

And also except

 

Parcel “E”, located in the Southeast Quarter of the
Northwest Quarter (SE1/4 NW1/4) and the Southwest Quarter of the Northeast
Quarter (SW1/4 NE1/4) of Section 13, Township 72 North, Range 26 West of
the 5th P.M., Clarke County, Iowa, more particularly described as follows:

 

Commencing at the Center of Section 13,
Township 72 North, Range 26 West of the 5th P.M., Clarke County, Iowa; thence
South 88°22’30” West, 527.69 feet along an existing fenceline which is the
South line of the SE 1/4 NW 1/4 of said Section 13;

 

thence North 1°47’28’ East,
1342.24 feet along existing fenceline which is the East line of the West 627
feet of the SE 1/4 NW 1/4 of said Section 13 to a point on the North line
of the SE 1/4 NW1/4 of said Section 13 to a point on the North line of the
SE1/4 NW1/4 of said Section 13;

 

thence North 88°37’02” East,
692.57 feet along the North line of the SE1/4 NW1/4 of said Section 13;

 

thence North 88°32’52” East,
518.95 feet along the North line of the SW 1/4 NE 1/4 of said Section 13;

 

thence South 2°37’07” West,
294.06 feet;

 

thence South 31 °49’00”
West, 334.39 feet;

 

thence South 16°22’36” West,
399.13 feet;

 

thence South 12°03’46” West,
152.67 feet;

 

thence South 15°51’41” West,
40.38 feet;

 

thence North 73°49’14” West,
194 16 feet;

 

thence South 36°31’06” West,
325.92 feet to the Point of Beginning.

 

SITE 2:

 

Parcel “D”, located in the West One-half of the
Southeast Quarter (W112 SE1/4) and the Northeast Quarter of the Southwest
Quarter (NE1/4 SW1/4) of Section Thirteen (13), Township Seventy-two (72)
North, Range Twenty-six (26) West of the 5th P.M., Clarke County, Iowa, more
particularly described as follows:

 

4

 

Beginning at the Southeast
Corner of the Northeast Quarter of the Southwest Quarter (NE1/4 SW1/4) of Section Thirteen
(13), Township Seventy-two (72) North, Range Twenty-six (26) West of the 5th
PM., Clarke County, Iowa;

 

thence South 86°08’20” West
along the South line of the Northeast Quarter of the Southwest Quarter of said Section Thirteen
(13), 739.70 feet;

 

thence North 0°00’19” West,
560.68 feet;

 

thence North 86°03’05” East,
739.73 feet;

 

thence South 57°17’05” East,
692.80 feet;

 

thence South 57°24’56” East,
197.54 feet to a point on the West right-of-way line of Interstate Highway 35;

 

thence Southeasterly 29.08
feet along a 3065.00 foot radius curve concave Southeasterly with a chord of
South 2°01’58” East, 29.08 feet;

 

thence South 2°53’35” East
along the West R.O.W. fenceline of Interstate Highway 35, 367.89 feet;

 

thence North 70° 13’ 09”
West, 498.40 feet to a point in an existing fenceline;

 

thence North 28°05’15” West
along said fenceline, 181.13 feet to a point on the North line of the Southwest
Quarter of the Southeast Quarter (SW1/4 SE1/4) of said Section Thirteen
(13);

 

thence South 86°32’19” West
along the North line of the Southwest Quarter of the Southeast Quarter (SW 1/4
SE1/4) of said Section Thirteen (13) which is an existing fenceline,
214.97 feet to the Point of Beginning

 

SITE 3:

 

That land lying in the
Southeast Quarter of the Southeast Quarter (SE1/4 SE1/4) and the Southwest
Quarter of the Southeast Quarter (SW1/4 SE1/4) of Section Twelve (12); and
the Northeast Quarter of the Northeast Quarter (NE 1/4 NE 1/4) and the
Northwest Quarter of the Northeast Quarter (NW 1/4 NE 1/4) of Section Thirteen
(13), all in Township Seventy-two (72) North, Range Twenty-six (26) West of the
5th P.M., Clarke County, Iowa, being described as follows:

 

Commencing as a point of
reference at the East Quarter Corner (El/4 Corner) of said Section Twelve
(12);

 

thence South 00°16’47” West
(all bearings based on grid North Iowa State Plane Coordinate System South
Zone), a distance of 2,452.53 feet, on the East line of the Southeast Quarter
(SE 1/4) of said Section Twelve (12) to the point of beginning;

 

5

 

thence continuing South
09°64’7” West, a distance of 206.26 feet, to the Northeast Corner of said Section Thirteen
(13);

 

thence South 00°18’55” West,
a distance of 99.67 feet, on the East line of the Northeast Quarter (NE 1/4) of
said Section Thirteen (13) to the Westerly right-of-way of Interstate
Highway 35 (formerly Interstate Road No. 
02) as recorded in Book 65 on Page 505, in the Office of the Clarke
County Recorder;

 

thence South 31°39’27” West,
a distance of 1,409.41 feet, on said Westerly right-of-way to a point being
160.00 feet normally distant Northwesterly on the East lane of said Interstate Road
centerline and 80.00 feet normally distant Northerly of Clay Street extended
(formerly secondary road centerline);

 

thence South 80°18’38” West,
a distance of 381.62 feet on the North right-of-way line of said Clay Street;

 

thence South 86°19’38” West
a distance of 213.22 feet to the West line of the Northeast Quarter of the
Northeast Quarter (NE1/4 NE1/4) of said Section Thirteen (13);

 

thence South 00°31’51” West,
a distance of 40.11 feet on said West line to the Southeast Corner of the
Northwest Quarter of the Northeast Quarter (NW1/4 NE1/4) of said Section Thirteen
(13);

 

thence South 86°19’38” West,
a distance of 922.59 feet on the South line of said Northwest Quarter of the
Northeast Quarter (NW 1/4 NE 1/4);

 

thence North 00°07’56” East,
a distance of 514.99 feet;

 

thence North 50°15’30” East,
a distance of 699.72 feet, to a point of curvature;

 

thence Northeasterly a
distance of 884.49 feet, on a curved line concave Northwest having a central
angle 50°07’35”, a radius of 1,011.00 feet, and a chord bearing North 25°11’43”
East, a distance of 856.55 feet;

 

thence North 00°07’56” East,
a distance of 191.46 feet;

 

thence South 89°52’04” East,
a distance of 18.40 feet;

 

thence South 00°16’47” West,
a distance of 191.30 feet;

 

thence South 89°45’02” East,
a distance of 82.09 feet, to a point on a non-tangent curve;

 

thence Southwesterly a
distance of 844.40 feet on a curved line non-tangent to the preceding course,
concave Northwest having a central angle of 43°32’48”, a radius of 1,111.00
feet and a chord bearing South 21 °54’20” West, a distance of 824.22 feet;

 

thence South 90°00’00” East,
a distance of 440.85 feet, on a line non-tangent to the preceding curved line;

 

thence North 47°29’35” East,
a distance of 413.06 feet;

 

6

 

thence North 61°57’38” East,
a distance of 917.23 feet to the point of beginning.

 

EXCEPT

 

That land lying in the
Southeast Quarter of the Southeast Quarter (SE1/4 SE1/4) of Section Twelve
(12), the Northeast Quarter of the Northeast Quarter (NE1/4 NE1/4) of Section Thirteen
(13), and the Northwest Quarter of the Northeast Quarter (NW1/4 NE1/4) of Section Thirteen
(13), all in Township Seventy-two (72) North, Range Twenty-six (26) West of the
Fifth Principal Meridian, Clarke County, Iowa, being described as follows:

 

Commencing as a point of
reference at the East Quarter Corner (E1/4 Corner) of said Section Twelve
(12);

 

thence South 00°16’47” West
(all bearings based on grid North Iowa State Plane Coordinate System South
Zone), a distance of 2,452.53 feet, on the east line of the Southeast Quarter
(SE 1/4) of said Section Twelve (12) to the point of beginning;

 

thence continuing South
00°16’47” West, a distance of 206.26 feet, to the Northeast Corner (NE Corner)
of said Section Thirteen (13),

 

thence South 00°18’55” West,
a distance of 99.67 feet on the east line of the Northeast Quarter (NE 1/4) of
said Section Thirteen (13) to the westerly right-of-way of Interstate
Highway 35 (formerly Interstate Road Number 02) as recorded in Book 65 on page
505, Office of the Clarke County Recorder;

 

thence South 31 °39’27”
West, a distance of 1,409.41 feet on said westerly right-of-way to a point
being 160.00 feet normally distant northwesterly of the east lane of said
Interstate Road centerline and 80.00 feet normally distant northerly of Clay
Street extended (formerly secondary road centerline);

 

thence South 80°18’38” West,
a distance of 316.84 feet on the north right-of-way line of said Clay Street;

 

thence North 89°25’15” West,
a distance of 276.40 feet to the west line of the Northeast Quarter of the
Northeast Quarter (NE 1/4 NE 1/4) of said Section Thirteen (13);

 

thence North 89°25’15” West,
a distance of 39.59 feet;

 

thence southwesterly a
distance of 198.39 feet on a curve concave to the Southeast having a central
angle of 17°13’21”, a radius of 660.00 feet, and a chord bearing South 81°58’05”
West, a distance of 197.64 feet;

 

thence South 73°21’24” West,
a distance of 203.72 feet; thence North 16°38’36” West, a distance of 80.00
feet; thence North 73°21’24” East, a distance of 20.72 feet;

 

thence Northeasterly a
distance of 153.31 feet on a curve concave southeasterly, having a central
angle of 11°52’12”, a radius of 740.00 feet and a chord bearing North 79°17’30”
East, a distance of 153.03 feet;

 

7

 

thence North 44°39’29” East,
a distance of 237.03 feet;

 

thence North 00°34’45” East,
a distance of 294.68 feet;

 

thence North 26°49’55” East,
a distance of 341.53 feet;

 

thence North 47°29’35” East,
a distance of 413.06 feet;

 

thence North 61°57’38” East,
a distance of 917.23 feet to the point of beginning.

 

SITE 4: -
PARCEL 1: Intentionally Omitted

 

SITE 4 -
PARCEL 2:

 

Parcel C”, located in the
Southwest Fractional Quarter of the Northwest Quarter (SW Fractional 1/4 NW
1/4) of Section Eighteen (18), Township Seventy-two (72) North, Range
Twenty- five (25) West Of the 5th P.M., Clarke County, Iowa, more particularly
described as follows:

 

Commencing at the West
Quarter Corner of Section Eighteen (18), Township Seventy-two (72) North,
Range Twenty-five (25) West of the 5th P.M., Clarke County, Iowa;

 

thence North 0°00’00” East,
510.65 feet along the West line of the Southwest Fractional Quarter of the
Northwest Quarter (SW Fractional 1/4 NW 1/4) of said Section Eighteen (18)
to the Point of Beginning;

 

thence North 0°00’00” East,
765.65 feet along an existing fenceline which is the West line of the Southwest
Fractional Quarter of the Northwest Quarter (SW Fractional 1/4 NW 1/4) of said Section Eighteen
(18) to a point on the South line of a parcel purchased by the Iowa Department
of Transportation for Highway right-of-way;

 

thence North 86°38’02” East,
519.84 feet along said right-of-way line to a point on the centerline of Clarke
County Road H-33;

 

thence Southeasterly 446.62
feet along said centerline, which is a 675.00 foot radius curve concave
Southwesterly with a chord of South 54°17’27” East, 438.52 feet;

 

thence South 35°20’08” East,
481.63 feet along said centerline;

 

thence South 82°43’20” West,
1162.94 feet along the projection of an existing fenceline to the Point of
Beginning.

 

SITE 5:

 

All that part of said NE 1/4
NE 1/4 that lies Northerly and Easterly of a line beginning at a point 60 feet
radially distant Northerly from centerline on the East line of said NE 1/4 NE
1/4 at Station 174+25;

 

thence to a point 140 feet
normally distant Northerly from Secondary Road centerline and 100 feet normally
distant Southeasterly from the centerline of Interstate Route No. 35;

 

8

 

thence Northeasterly along a
line 100 feet normally distant Southeasterly from and parallel to the East Lane
of Interstate Route No.  35 to a point on
the East line of said NE1/4 NE1/4, all in Section 13, Township 72 North,
Range 26 West of the 5th P.M., Clarke County, Iowa.

 

AND

 

A part of the NW1/4 NW1/4 of
Section 18 and SW1/4 SW1/4 of Section 7, all in Township 72 North,
Range 25 West of the 5th PM., Clarke County, Iowa, described as follows:

 

Beginning at a point of that
is 595.0 feet South of the Northwest Corner of said Section 18, thence
South 726.0 feet to the Southwest Corner of said NW 1/4 NW 1/4 of Section 18;
thence East 586.0 feet along the South line of said NW1/4 NW1/4;

 

thence North 1651.4 feet to
the right of way line of Interstate Highway 1-35;

 

thence South 32°20’ West
1096.5 feet along said right of way line to the point of beginning, subject to
road easement along the South side thereof.

 

EXCEPT

 

That land lying in the
Southwest Quarter of the Southwest Quarter (SW1/4 SW1/4) of Section Seven
(7), Township Seventy-two (72) North, Range Twenty-six (26) West, the Northeast
Quarter of the Northeast Quarter (NE1/4 NE1/4) of Section Thirteen (13),
Township Seventy-two (72) North, Range Twenty-six (26) West of the 5th P M.,
Clarke County, Iowa, being described as follows:

 

Commencing as a point of
reference at the Northwest Corner of said Section Eighteen (18);

 

thence South 00°18’55” West
(all bearings based on grid North Iowa State Plane Coordinate System South
Zone), a distance of 599.54 feet, on the West line of the Northwest Quarter
(NW1/4) of said Section Eighteen (18) to the easterly right-of-way of
Interstate Highway 35 (formerly Interstate Road Number 02) as recorded in Book
65 on page 505, Office of the Clarke County Recorder, said point being the
point of beginning;

 

thence North 32°57’52” East,
along said easterly right-of-way of Interstate 35, a distance of 713.36 feet to
the south line of the Southwest Quarter of said Section Seven (7);

 

thence North 32°57’52” East
on the easterly right-of-way of said Interstate Highway 35 a distance of 255.21
feet;

 

thence South 17°10’50” West,
a distance of 224.33 feet to the South line of the Southwest Quarter of said Section Seven
(7);

 

thence South 17°10’50” West
a distance of 191.05 feet;

 

thence South 00°34’45” West
a distance of 941.62 feet;

 

9

 

thence South 43°33’01 East,
a distance of 228.29 feet to a point being 40.00 feet normally distant
northerly of Clay Street extended (formerly secondary road centerline);

 

thence North 89°49’25” East,
a distance of 30.63 feet on the north right-of-way line of Clay Street to the
westerly line of Parcel “B” in the Northwest Quarter of said Section Eighteen
(18), (as recorded in Book 43 on page 365, Office of the Clarke County
Recorder);

 

thence South 00°5’55” West,
a distance of 40.01 feet to the south line of the Northwest Quarter of said Section Eighteen
(18);

 

thence South 89°49’25” West,
a distance of 137.86 feet to Sta. 178+69 of Clay Street; thence North 00°10’35”
West, a distance of 60.00 feet to the north right of-way line of Clay Street;

 

thence South 89°49’23” West
a distance of 447.74 feet on the north right-of-way line of Clay Street to a
point on the west line of the Northwest Quarter of said Section Eighteen
(18), said point being 60.00 feet normally distant northerly of Clay Street
extended (formerly secondary road centerline);

 

thence North 79°17’03” West,
a distance of 374.80 feet to the easterly right-of-way of said Interstate
Highway 35, said point being 100.00 feet normally distant form centerline of
the northbound lane of said Interstate Highway 35, thence North 31°39’27” East,
a distance of 708.72 feet along said easterly right-of-way to the point of
beginning.

 

10

 

Clay Street
Development Tract

 

A parcel of land located in
the Southwest Quarter of the Northeast Quarter (SW/14 NE1/4) of Section 13,
Township 72 North, Range 26 West of the 5th P.M., more fully described as follows:

 

Commencing at the Northeast
(NE) corner of the Southeast Quarter of the Northeast Quarter (SW/14 NE1/4) of Section 13,
Township 72 North, Range 26 West of the 5th P.M.;

 

Thence South 85°54’ West
1,815.6 feet along the centerline of Country Road H-33 to the point of
beginning;

 

Thence continuing South
85°54’ West 285 feet along said centerline

 

Thence South 4°6’ East 305.7
feet;

 

Thence North 85°54’ East 285
feet;

 

Thence North 4°6’ West 305.7
feet to the point of beginning.

 

 

LEASEHOLD
PARCEL:

 

DESCRIPTION
OF THE LEASEHOLD ESTATE

 

Leasehold interest in the
following described property under the terms of that certain Agreement and
Lease dated August 19, 1997, and by and between the City of Osceola, Iowa,
a Municipal corporation, the Osceola Water Works Board of Trustees and Southern
Iowa Gaming Co., an Iowa corporation, as amended from time to time:

 

That portion of land owned
by the City of Osceola for West Lake lying in parts of Sections 13, 14, 23 and
24, in Township 72 North, Range 26 West of the 5th P.M., in Clarke County,
Iowa, and described as:

 

That land lying above the
high water level (Elevation 1072.0) on the Easterly and Southerly side of West
lake beginning at the Southerly line of the boat ramp parking lot at the East
end of the West Lake dam, thence running South, Southeasterly and Westerly
along West Lake to the West line of the Southeast Quarter (SE 1/4) of said Section 14;
plus

 

An option in the following
described property under the terms of the foregoing Agreement and Leases:

 

That portion of land owned
by the City of Osceola for West Lake lying in parts of Sections 14, Township 72
North, Range 26 West of the 5th P.M., in Clarke County, Iowa, described as:

 

That land lying above the
high water level (Elevation 1072.0 feet) on the Northerly side of West Lake
beginning 50 feet South of the intake structure on the West end of dam at West
lake, thence running Southerly and Westerly along West Lake to the West line of
the SE1/4 of said Section 14.

 

11

 

EXHIBIT “B”

 

(Schedule of Lenders)

 

	
  Bank of America, N.A.

  
	
  U.S. Bank National
  Association

  
	
  Wells Fargo Bank, N.A

  
	
  Lehman Commercial Paper
  Inc.

  
	
  The CIT Group/Equipment
  Financing, Inc.

  
	
  Comerica West Incorporated

  
	
  Nevada State Bank

  
	
  American Express
  Certificate Company

  
	
  IDS Life Insurance Company

  
	
  Centurion CDO 8, Limited

  
	
  Black Diamond CLO 2005-1
  Ltd.

  
	
  Carlyle High Yield
  Partners II, Ltd.

  
	
  Carlyle High Yield
  Partners III, Ltd.

  
	
  Carlyle High Yield
  Partners VI, Ltd.

  
	
  Carlyle Loan Investment
  Ltd

  
	
  Senior Debt Portfolio

  
	
  Eaton Vance Institutional
  Senior Loan Fund

  
	
  Eaton Vance CDO III, Ltd.

  
	
  Costantinus Eaton Vance
  CDO V, Ltd.

  
	
  Eaton Vance CDO VI, Ltd.

  
	
  Grayson & Co

  
	
  The Norinchukin Bank, New
  York Branch

  

 

1

 

	
  Tolli & Co.

  
	
  Fidelity Central
  Investment Portfolios LLC: Fidelity Floating Rate Central Investment
  Portfolio

  
	
  Fidelity Advisor Series
  II: Fidelity Advisor Floating Rate High Income Fund (161)

  
	
  Franklin Floating Rate
  Trust

  
	
  Franklin Floating Rate
  Master Series

  
	
  Franklin CLO IV, Limited

  
	
  ELF Funding Trust I

  
	
  Highland Offshore
  Partners, L.P.

  
	
  Pioneer Floating Rate
  Trust

  
	
  Loan Star State Trust

  
	
  ING Prime Rate Trust

  
	
  ING Senior Income Fund

  
	
  Floating Rate Income
  Strategies Fund II, Inc. (FRB)

  
	
  Southport CLO, Limited

  
	
  Loan Funding XI LLC

  
	
  Harbour Town Funding LLC

  
	
  Race Point CLO, Limited

  
	
  Race Point II CLO, Limited

  
	
  ULT CBNA Loan Funding LLC

  
	
  Van Kampen Senior Income
  Trust

  
	
  Van Kampen Senior Loan
  Fund

  
	
  Bank of Scotland

  

 

2

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