Document:

Exhibit 10.68

 

	
  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.

  
	
  APN:  

  
	
   

  
	
  Mail Property
  Tax Statements to:

  c/o Herbst Gaming, Inc.

  5195 Las Vegas Blvd.

  Las Vegas, NV  89119

  Attn:  M. Higgins

  
	
   

  
	
   

  
	
  THIS
  SPACE ABOVE FOR RECORDER’S USE

  

 

LEASEHOLD DEED OF TRUST

with Assignment of Rents, Security Agreement and

Fixture Filing

 

NOTICE:  THE OBLIGATIONS SECURED HEREBY PROVIDE FOR
THE PERIODIC INCREASES AND/OR DECREASES IN THE APPLICABLE INTEREST RATE.

 

NOTICE:  THE OBLIGATIONS SECURED HEREBY INCLUDE
REVOLVING CREDIT OBLIGATIONS WHICH PERMIT BORROWING, REPAYMENT AND REBORROWING.

 

NOTICE:  THIS DEED OF TRUST SECURES FUTURE ADVANCES.  THE MAXIMUM AMOUNT OF PRINCIPAL SECURED IS
$190 MILLION.

 

The parties to
this Leasehold Deed of Trust with Assignment of Rents, Security Agreement and
Fixture Filing (“Deed of Trust”), dated as of June 10, 2004, are E-T-T,
INC., a Nevada corporation (“Trustor”), as trustor, PRLAP, INC., as trustee
(“Trustee”), and BANK OF AMERICA, N.A., a national banking association, 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 June 10, 2004 (“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 10.6 therein
(each a “Lender” and collectively, the “Lenders”), Bank of America, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer, Banc of America
Securities LLC, as a Co-Lead Arranger and Sole Book Manager, U.S. Bank,
National Association, as a Co-Lead Arranger, Wells Fargo Bank, National
Association, as Syndication Agent and Lehman Brothers Holdings, Inc., as
Documentation Agent.

 

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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 unconditionally grants, bargains, conveys, sells, transfers and
assigns to 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 Sublease dated as of
July 1, 2002, between Terrible Herbst, Inc., as sublandlord and Trustor,
as subtenant (the “Operating Lease”), which is a sublease of a portion of the
premises under that certain Master Lease dated as of June, 2002, between
Centennial Acquisitions, LLC, a Nevada limited liability company, as master
landlord, and Terrible Herbst, Inc., as tenant (the “Master Lease”) (copies of
which Sublease and Master Lease are attached hereto as Exhibit B)
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
of Clark (the “County”), State of Nevada, 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

 

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(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 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”, which shall not include the
Operating Lease), 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; 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

 

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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.

 

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

 

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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 (the “Guaranty”), dated concurrently herewith, executed
by Trustor in favor of Beneficiary.  The
Guaranty has been entered into by Trustor to, among other things, guaranty the
payment and performance of all obligations of Borrower and any other “Obligor”
(as defined in the Guaranty) 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 amount of $150,000,000, but subject to
increase to $190,000,000 under certain circumstances (the “Commitment”),
including, but not limited to the payment of all amounts owing under the Swing
Line Loan Note, 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;

 

(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

 

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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.

 

1.3                                 Future Advances (NRS 106.300, et seq). 
It is the intention of Trustor, Beneficiary and the Lenders that this
Deed of Trust is an “instrument” (as defined in NRS 106.330, as amended or
recodified from time to time) which secures “future advances” (as defined in
NRS 106.320, as amended or recodified from time to time) and which is governed
pursuant to NRS 106.300 through 106.400, as amended or recodified from
time to time (“NRS” means Nevada Revised Statutes).  It is the intention of the parties that the
Secured Obligations include the obligation of Trustor to repay “future
advances” of “principal” (as defined in NRS 106.345, as amended or recodified
from time to time) in an amount up to the Commitment (as further described
above), and that the lien of this Deed of Trust secures the obligation of
Trustor to repay all such “future advances” with the priority set forth in
NRS 106.370(1), as amended or recodified from time to time.

 

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.

 

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

 

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(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.

 

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.

 

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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 Security Agreement dated concurrently
herewith, 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 Nevada 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 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 NRS 104.9502(2) of the Nevada 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
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

 

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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 the
leasehold estate under the Operating Lease;

 

(b)                                 Trustor has or will have good title to
all Property other than the Land and Improvements (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);

 

(c)                                  Subject to applicable gaming laws and
regulations of the State of Nevada, Trustor has the full and unlimited power,
right and authority to encumber the Property and assign the Rents and the
Leases;

 

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

 

(e)                                  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;

 

(f)                                    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);

 

(g)                                 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

 

(h)                                 None of 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 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

 

9

 

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.

 

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

 

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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, 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

 

11

 

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 Nevada 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, including NRS 37.115, as amended or recodified from time
to time, 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.

 

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,

 

12

 

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.

 

13

 

(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 Fifty Million
Dollars ($50,000,000).  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.

 

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

 

14

 

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
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

 

15

 

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.

 

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 legal
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.

 

16

 

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

 

(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

 

17

 

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 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.

 

18

 

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 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, any other Borrower, any other
Party, or any other “borrower” (as that term is defined in NRS 106.310, as
amended or recodified from time to time) who may send a notice pursuant to NRS
106.380(1), as amended or recodified from time to time, with respect to this
Deed of Trust, (i) delivers, sends by mail or otherwise gives, or purports
to deliver, send by mail or otherwise give, to Beneficiary or any Lender,
(A) any notice of an election to terminate the operation of this Deed of
Trust as security for any Secured Obligation, including, without limitation,
any obligation to repay any “future advance” (as defined in NRS 106.320, as
amended or recodified from

 

19

 

time to time) of “principal” (as defined in NRS
106.345, as amended or recodified from time to time), or (B) any other
notice pursuant to NRS 106.380(1), as amended or recodified from time to time,
(ii) records a statement pursuant to NRS 106.380(3), as amended or
recodified from time to time, or (iii) causes this Deed of Trust, any
Secured Obligation, Beneficiary or any Lender to be subject to NRS 106.380(2),
106.380(3) or 106.400, as amended or recodified from time to time; 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 Nevada Gaming Commission
petition a District Court of the State of Nevada for the appointment of a
supervisor to conduct the normal gaming activities on the Property following
such foreclosure proceeding.

 

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 in accordance with NRS 104.9620, as it may be amended or
recodified from time to time.

 

20

 

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 Nevada 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 combination and in any manner permitted by applicable law.

 

(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 Nevada 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

 

21

 

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 Nevada
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
Nevada Uniform Commercial Code, as amended or recodified from time to time,
will sometimes be referred to as a “Trustee’s Sale.”

 

(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.

 

22

 

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
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).

 

23

 

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.

 

6.7                                 Incorporation of Certain Nevada Covenants. 
Covenants Nos. 1, 2 (full replacement value), 3, 4 (at the applicable
Default Rate), 5, 6, 7 (reasonable), 8 and 9 of NRS 107.030, where not in
conflict with the provisions of the Loan Documents, are hereby adopted and made
a part of this Deed of Trust.  Upon any
Event of Default by Trustor hereunder, Beneficiary may (a) declare all sums
secured immediately due and payable without demand or notice or (b) have a
receiver appointed as a matter of right without regard to the sufficiency of
said property or any other security or guaranty and without any showing as
required by NRS §107.100.  All remedies
provided in this Deed of Trust are distinct and cumulative to any other right
or remedy under this Deed of Trust or afforded by law or equity and may be
exercised concurrently, independently or successively.  The sale of said property conducted pursuant
to Covenants Nos. 6, 7 and 8 of NRS §107.030 may be conducted either as to the
whole of said property or in separate parcels and in such order as Trustee may
determine.

 

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:

 

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.

 

24

 

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.

 

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.

 

25

 

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:

 

(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).

 

26

 

(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 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 

 

27

 

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.

 

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

 

28

 

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.                                       Suretyship Provisions. 
The following provisions shall apply to the extent that all or any
portion of the Secured Obligations now or hereafter constitute obligations of
person(s) (for the purposes of this Article 8, each a “Obligated Party”
and collectively, “Obligated Parties”) other than, or in addition to, Trustor:

 

8.1                                 Conditions to Exercise of Rights. 
Trustor hereby waives any right it may now or hereafter have to require
Beneficiary, as a condition to the exercise of any remedy or other right
against Trustor hereunder or under any other document executed by Trustor in
connection with any Secured Obligation, 
to proceed against any Obligated Party or other person, or against any
other collateral assigned to Beneficiary by Trustor or any Obligated Party or
other person,  to pursue any other right
or remedy in Beneficiary’s power,  to
give notice of the time, place or terms of any public or private sale of real
or personal property collateral assigned to Beneficiary by any Obligated Party
or other person (other than Trustor), or otherwise to comply with
Section 9504 of the Nevada Uniform Commercial Code (as modified or
recodified from time to time) with respect to any such personal property
collateral, or  to make or give (except
as otherwise expressly provided in the Loan Documents) any presentment, demand,
protest, notice of dishonor, notice of protest or other demand or notice of any
kind in connection with any Secured Obligation or any collateral (other than
the Property) for any Secured Obligation.

 

8.2                                 Defenses.  Trustor
hereby waives any defense it may now or hereafter have that relates to:  any disability or other defense of either of
any Obligated Party or other person;  the
cessation, from any cause other than full performance, of the obligations of
any Obligated Party or other person;  the
application of the proceeds of any Secured Obligation, by any Obligated Party
or other person, for purposes other than the purposes represented to Trustor by
any Obligated Party or otherwise intended or understood by Trustor or any
Obligated Party;  any act or omission by
Beneficiary which directly or indirectly results in or contributes to the
release of any Obligated Party or other person or any collateral for any
Secured Obligation;  the unenforceability
or invalidity of any collateral assignment (other than this Deed of Trust) or
guaranty with respect to any Secured Obligation, or the lack of perfection or
continuing perfection or lack of priority of any lien (other than the lien
hereof) which secures any Secured Obligation; 
any failure of Beneficiary to marshal assets in favor of Trustor or any
other person;  any modification of any
Secured Obligation, including any renewal, extension, acceleration or increase
in interest rate;  any election of
remedies by Beneficiary that impairs any subrogation or other right of Trustor
to proceed against any Obligated Party or other person, including any loss of
rights resulting from anti-deficiency laws relating to nonjudicial foreclosures
of real property or other laws limiting, qualifying or discharging obligations
or remedies; any law which provides that the obligation of a surety or
guarantor must neither be larger in amount nor in other respects more burdensome
than that of the principal or which reduces a surety’s or guarantor’s
obligation in proportion to the principal obligation;  any failure of Beneficiary to file or enforce
a claim in any bankruptcy or other proceeding with respect to any person;  the election by Beneficiary, in any
bankruptcy proceeding of any person, of the application or non-application of
Section 1111(b)(2) of the United States Bankruptcy Code; any extension of
credit or the grant of any lien under Section 364 of the United States
Bankruptcy Code;  any use of cash
collateral

 

29

 

under Section 363 of the United States Bankruptcy Code; or  any agreement or stipulation with respect to
the provision of adequate protection in any bankruptcy proceeding of any
person.

 

8.3                                 Without limiting the generality of the
foregoing:

 

8.3.1                        Trustor waives all rights and defenses
that Trustor may have (a) because any Secured Obligation is secured by any real
property other than the Property (“Other Real Property”) or (b) because any
Secured Obligation which is an obligation of a person or persons other than
Trustor is secured by the Property.  This
means, among other things:

 

8.3.2                        Beneficiary may foreclose hereunder or
exercise any other remedy or right against Trustor hereunder (or under any
other document executed by Trustor in connection with any Secured Obligation)
without first foreclosing on any Other Real Property or personal property
collateral pledged by an Obligated Party (or by any other person) with respect
to any Secured Obligation.

 

8.3.3                        If Beneficiary forecloses on the Property
or on any Other Real Property pledged by an Obligated Party (or by any other
person) with respect to any Secured Obligation:

 

(a)                                  The amount of such Secured Obligation may
be reduced only by the price for which that collateral is sold at the
foreclosure sale, even if the collateral is worth more than the sale price.

 

(b)                                 Beneficiary may foreclose hereunder or
exercise any other remedy or right against Trustor hereunder (or under any
other document executed by Trustor in connection with any Secured Obligation)
even if Beneficiary, by foreclosing on any such real property, has destroyed
any right Trustor may have to collect from Obligated Party (or from any other
person who pledged any such collateral and/or was liable for such Secured
Obligation).

 

This is an
unconditional and irrevocable waiver of any rights and defenses Trustor may
have because any obligation secured hereby is also secured by Other Real
Property and/or because any Secured Obligation which is an obligation of a
person or persons other than Trustor is secured by the Property.

 

Trustor waives all rights and defenses arising out of
an election of remedies by Beneficiary, even though that election of remedies,
such as a nonjudicial foreclosure with respect to security for a Secured
Obligation, has destroyed Trustor’s rights of subrogation and reimbursement
against the principal.

 

8.4                                 Subrogation. 
Until no part of any Commitment under the Credit Agreement remains
outstanding and all of the Secured Obligations have been indefeasibly paid and
performed in full, Trustor hereby waives 
any right of subrogation which Trustor may now or hereafter have against
any Obligated Party that relates to any Secured Obligation,  any right to enforce any remedy Trustor may
now or hereafter have (in its own right, or by reason of succession to rights
of Beneficiary) against any Obligated Party that relates to any Secured
Obligation (including without limitation any right of reimbursement, indemnity
or contribution),

 

30

 

and  any right to participate in
any collateral now or hereafter assigned to Beneficiary with respect to any
Secured Obligation.  Trustor further
agrees that, if and to the extent that any waiver set forth in this paragraph
is ever held to be unenforceable, all such rights of subrogation, enforcement
and participation shall be junior and subordinate to the right of Beneficiary
to obtain payment and performance of the Secured Obligations and to all rights
of Beneficiary in and to any property which now or hereafter serves as
collateral security for any Secured Obligation.

 

8.5                                 Obligated Party Information. 
Trustor warrants and agrees:  that
Trustor has not relied, and will not rely, on any representations or warranties
by Beneficiary to Trustor with respect to the creditworthiness of any Obligated
Party or the prospects of repayment of any Secured Obligation from sources
other than the Property;  that Trustor
has established and/or will establish adequate means of obtaining from any
Obligated Party on a continuing basis financial and other information
pertaining to the business operations, if any, and financial condition of each
Obligated Party;  that Trustor assumes full
responsibility for keeping informed with respect to each Obligated Party’s
business operations, if any, and financial condition;  that Beneficiary shall have no duty to
disclose or report to Trustor any information now or hereafter known to
Beneficiary with respect to any Obligated Party, including without limitation
information relating to any Obligated Party’s business operations or financial
condition; and that Trustor is familiar with the terms and conditions of the
Loan Documents and consents to all provisions thereof.

 

8.6                                 Other Rights of Sureties. 
Trustor hereby waives all other rights it may now or hereafter have,
whether or not similar to any of the foregoing, by reason of laws of the State
of Nevada pertaining to sureties.

 

8.7                                 Duration and Reinstatement of Lien. 
The lien of this Deed of Trust shall continue until the expiration of
all periods within which any amount at any time paid on account of the Secured
Obligations may be required to be restored or returned by Beneficiary upon the
bankruptcy, insolvency or reorganization of any Obligated Party, any guarantor
or any other person; and Beneficiary’s rights hereunder shall be reinstated and
revived, and the enforceability of this Deed of Trust shall continue, with
respect to any such amount which Beneficiary is required to restore or return
in connection with any such bankruptcy, insolvency or reorganization.

 

8.8                                 Subordination. 
Except as expressly provided in the Credit Agreement, until all of the
Secured Obligations have been fully paid and performed,  Trustor hereby agrees that all existing and
future indebtedness and other obligations of each Obligated Party to Trustor
(collectively, the “Subordinated Debt”) shall be and are hereby subordinated to
all Secured Obligations which constitute obligations of the applicable
Obligated Party, and the payment thereof is hereby deferred in right of payment
to the prior payment and performance of all such Secured Obligations;  Trustor shall not collect or receive any cash
or non-cash payments on any Subordinated Debt or transfer all or any portion of
the Subordinated Debt; and  in the event
that, notwithstanding the foregoing, any payment by, or distribution of assets
of, any Obligated Party with respect to any Subordinated Debt is received by
Trustor, such payment or distribution shall be held in trust and immediately
paid over to Beneficiary, is hereby assigned to Beneficiary as security for the
Secured Obligations, and shall be held by Beneficiary in an interest bearing
account until all Secured Obligations have been fully paid and performed.

 

31

 

8.9                                 Lawfulness and Reasonableness. 
Trustor warrants that all of the waivers in this Deed of Trust are made
with full knowledge of their significance, and of the fact that events giving
rise to any defense or other benefit waived by Trustor may destroy or impair
rights which Trustor would otherwise have against Beneficiary, Obligated
Parties and other persons, or against collateral.  Trustor agrees that all such waivers are
reasonable under the circumstances and further agrees that, if any such waiver
is determined (by a court of competent jurisdiction) to be contrary to any law
or public policy, such waiver shall be effective to the fullest extent
permitted by law.

 

9.                                       Miscellaneous Provisions.

 

9.1                                 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.

 

9.2                                 No Waiver or Cure.

 

9.2.1                        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.

 

9.2.2                        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.

 

32

 

(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.

 

9.3                                 Powers of Beneficiary and Trustee.

 

9.3.1                        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.

 

9.3.2                        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

 

9.3.3                        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.

 

9.3.4                        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.

 

9.4                                 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.

 

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

 

33

 

9.6                                 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.

 

9.7                                 Interpretation.

 

9.7.1                        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.”

 

9.7.2                        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.

 

9.7.3                        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.

 

9.8                                 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.

 

9.9                                 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,
including any rights provided by NRS 100.040 and 100.050, as such Sections may
be amended or recodified from time to time. 
Each successor and assign of 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.

 

9.10                           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.

 

9.11                           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
Nevada 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 Nevada Uniform
Commercial Code, as amended or recodified from time to time.

 

34

 

	
  Notices to Trustor:

  	
  Herbst Gaming,
  Inc.

  
	
   

  	
  5195 Las Vegas Blvd.

  
	
   

  	
  Las Vegas, NV 
  89119

  
	
   

  	
  Attn:  M.
  Higgins

  
	
   

  	
   

  
	
  Notices to Beneficiary:

  	
  Bank of America, N.A.

  
	
   

  	
  Gaming and Leisure Industries Group

  
	
   

  	
  Portfolio Management – CA 9-706-17-54

  
	
   

  	
  555 So. Flower Street, 17th Floor

  
	
   

  	
  Los Angeles, California  90071

  
	
   

  	
  Attention: 
  Janice Hammond

  
	
   

  	
   

  
	
  Notices to Trustee:

  	
  PRLAP, Inc.

  
	
   

  	
  P.O. Box 2240

  
	
   

  	
  Brea, California 
  92622

  

 

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

 

“Trustor”:

 

E-T-T, INC., 

a Nevada corporation

 

 

	
  By:

  	
  /s/ Edward Herbst

  	
   

  
	
   

  	
  Edward Herbst

  	
   

  

 

35

 

ACKNOWLEDGEMENT

 

	
  STATE OF Nevada

  	
  )

  	
   

  
	
   

  	
  ) ss

  	
   

  
	
  COUNTY OF Clark

  	
  )

  	
   

  

 

This instrument
was acknowledged before me on 6/10, 2004 by 
Edward Herbst as President of E-T-T, Inc., a Nevada corporation.

 

	
   

  	
  /s/ Janice R. Donelson

  	
   

  
	
   

  	
  (Signature of Notarial Officer)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  JANICE R. DONELSON

  	
   

  	
   

  	
   

  
	
  (SEAL)

  	
  Notary Public State of Nevada

  	
   

  	
  (Title and Rank)

  	
   

  
	
   

  	
  No. 99-39315-1

  	
   

  	
   

  	
   

  
	
   

  	
  My appt. exp. Nov. 20, 2007

  	
   

  	
  My commission expires:

  	
  11/20/07

  	
   

  
						

 

36

 

EXHIBIT “A”

 

(Legal Description of
Land) 

 

THAT PORTION OF
GOVERNMENT LOT 4 SITUATE  IN THE SOUTHWEST QUARTER (SW 1⁄4) OF
THE SOUTHWEST QUARTER (SW  1/4)
OF SECTION 19, TOWNSHIP 21 SOUTH, RANGE 61 EAST, M.D.M., CLARK COUNTY,
NEVADA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

 

COMMENCING AT THE SOUTHEAST CORNER OF THE
SOUTHWEST QUARTER (SW 1⁄4) OF THE SOUTHWEST QUARTER (SW 1⁄4) OF SAID SECTION 19,
SAID CORNER ALSO BEING THE CENTERLINE INTERSECTION OF TROPICANA AVENUE
(PRESENTLY 100 FEET IN WIDTH) AND CAMERON STREET (PRESENTLY 60 FEET IN
WIDTH);  THENCE ALONG THE EAST LINE
THEREOF AND THE CENTERLINE OF SAID CAMERON STREET NORTH 00 34’29” WEST, 216.25
FEET; THENCE DEPARTING SAID EAST LINE AND CENTERLINE SOUTH 89 25’3 1” WEST,
30.00 FEET TO THE POINT OF BEGINNING; 
THENCE SOUTH 89 53’19” WEST, 241.80 FEET;  THENCE SOUTH 00 34’28” EAST, 166.00 FEET TO A
POINT ON THE NORTH RIGHT-OF-WAY LINE OF SAID TROPICANA AVENUE;  THENCE ALONG SAID NORTH RIGHT-OF-WAY LINE,
NORTH 89 53’20” EAST, 216.59 FEET TO THE BEGINNING OF A CURVE CONCAVE
NORTHWESTERLY, HAVING A RADIUS OF 25.00 FEET; THENCE NORTHERLY ALONG SAID CURVE
THROUGH A CENTRAL ANGEL OF 90 27’49”, AN ARC DISTANCE OF 39.47 FEET TO A POINT
ON THE WEST RIGHT OF WAY LINE OF SAID CAMERON STREET;  THENCE ALONG SAID WEST RIGHT-OF-WAY LINE
NORTH 00 34’29” WEST, 141.00 FEET TO THE POINT OF BEGINNING.

 

1

 

EXHIBIT “B”

 

(Master Lease and
Sublease)

 

SEE ATTACHED

 

2

 

LEASE AGREEMENT

 

THIS LEASE, made this 1st day
of July, 2002, by and between Terrible Herbst, Inc. (hereinafter “Lessor”), and
E-T-T, Inc. (Hereinafter “Lessee”).

 

WHEREAS, Lessor leases the
Property described below pursuant to that certain Lease dated June 30,
2002 between Lessor and Centennial Acquisitions, LLC (hereinafter “Property
Owner”), a copy of which is attached hereto as Exhibit “A” and incorporated
herein by reference.

 

WITNESSETH: that the Lessor in
consideration of the rent herein specified to be paid by the Lessee, and the
covenants and conditions herein mentioned, does hereby lease, let and demise,
unto Lessee, and the Lessee does hereby rent from the Lessor that certain real
property necessary for parking, along with improvements thereto, to wit,
approximately4,000 square feet of building space to be used as and for a
casino, bar and related uses (Hereinafter the “Property”) situated in the
County of Clark, State of Nevada, whose street address is 670 US Highway 95,
Searchlight, Nevada 89046 and which is set forth in the floorplan and site
plan, both of which are attached hereto as Exhibit “A”.

 

TO HAVE AND TO HOLD the same
unto the said Lessee, its successors and assigns for the period and upon the
terms and conditions hereinafter set forth.

 

THIS INDENTURE OF LEASE is made
by the Lessor and accepted by the Lessee upon each of the following terms and
conditions, namely:

 

1.                                       TERM:  This Lease shall be a twenty (20) year lease
commencing on the first day of operations at the casino by the Lessee.

 

1

 

2.                                       RENTAL:  The Lessee agrees to pay to the Lessor as
rental for the Property the sum of Fifteen Thousand Dollars ($15,000.00) per
month on the first of each month for the duration of said lease.

 

3.                                       RIGHTS
& TITLE:  Lessee agrees that
buildings and improvements hereafter located or erected on premises at any time
during the term of his Lease, or extension thereof, shall be and remain
property of Lessor and Lessee shall have no title, rights or interest in said
buildings and improvements other than such interest granted hereby.

 

4.                                       QUIET
POSSESSION:  Lessor hereby covenants,
warrants, and agrees that at all times during the term hereof, provided Lessee
is not in default hereunder, Lessee shall have the full, peaceful and quiet
possession of the Property, and, further that Lessor has full right and power
to make and enter into this lease.

 

5.                                       TAXES
AND UTILITY CHARGES:  Lessee agrees
to pay all real taxes, and assessments which may be levied against the
improvements thereon and any personal property and trade fixtures located
therein and will pay charges for light, power and other public utilities used
by it in connection with the use of the Property.

 

6.                                       ALTERATIONS:  The Lessee agrees that before commencing any
construction work on said premises or making any alterations on improvements
placed upon the Property that he will notify Lessor in order that a notice of
non-responsibility may be posted on the Property and recorded in accordance
with the provisions of the Mechanic’s Lien Law of the State of Nevada.

 

7.                                       REQUIREMENTS
FOR ALTERATIONS:  Lessee covenants
and agrees that such alterations and/or changes shall be at his sole cost and
expense and that prior written 

 

2

 

consent of the Lessor shall be obtained
therefore; and provided that such changes and alterations shall conform with
building codes and zoning regulations now or hereinafter legally effective, and
promulgated by the State, County or Municipal authorities.

 

8.                                       REPAIRS:  Lessee agrees, at his cost and expense, to
maintain and keep in good order, condition and repair the service station and all
ancillary buildings or improvements to be constructed thereon by Lessee and all
fixtures and equipment, including visible plumbing and electrical
fixtures.  The Lessee agrees to keep the
Property clean and to have no nuisance, unsightly rubbish, or to commit or
cause to be committed by its employees, and/or sub-tenants, any violation of
the laws, rules or regulations of the State, County or Municipal Board of
Health or appropriate sanitary agency.

 

9.                                       TITLE
TO FIXTURES:  All fixtures and other
property and materials  installed in the
building on the Property by the Lessee shall be and remain the property of the
Lessee, and at the expiration of the Lease, the Lessee may, within thirty (30)
days, remove from said premises all of such fixtures, property, and materials,
provided that all expenses connected with the removal thereof shall be at the
expense of the Lessee.  The Lessee
further agrees to repair at his sole expense all damage that may result from
the removal of such building, fixtures and other property and to restore the
Property to the condition in  which they
were prior to the start of construction and that no building or improvements
placed upon said premises by Lessee shall be removed during the term of this
Lease or extension thereof without the consent of Lessor first had and
obtained.

 

10.                                 LIABILITY
AND FIRE INSURANCE:  The Lessor shall
require the Lessee to carry, maintain and have in full force and effect fire,
workmen’s compensation, public

 

3

 

liability, and product liability insurance
with a recognized insurance company authorized to transact business in the
State of Nevada for the benefit of the Lessor and Lessee, and for the
protection of all persons who may suffer injury while in, on or about the
Property.  Said  policy shall carry an amount of coverage for
injury to one person in any one accident in the sum of One Hundred Thousand
Dollars ($100,000.00) and for more injury to more than one person in any one
accident in the sum of Three Hundred Thousand Dollars ($300,000.00).  Lessor shall be furnished with copies of said
policies and all endorsements thereto.

 

The Lessee shall carry
insurance against loss by destruction of the Property caused by fire, explosion
or other action of the elements, except loss caused by earthquake, equal to
ninety per cent (90%) of the value of the improvements.

 

11.                                 COMPLIANCE
WITH THE LAW:  The Lessee shall
conduct his business in such manner as will comply with all requirements of all
State, Federal, County and  Municipal
authorities, appertaining to the business conducted upon the Property, and
Lessee shall not permit the Property to be used for any unlawful purposes.

 

12.                                 DEFAULT:  In the event Lessee shall be in default in
the payment of any rent herein reserved, or in the performance of any of the
covenants or conditions of this Lease to 
be kept and performed by the Lessee, and such default continue for
thirty (30) days from and after service upon the Lessee of written notice of
such default, signed by the Lessor or their duly authorized agents, then and in
any such event, the Lessor may, at their option declare this Lease terminated
and repossess themselves of the Property and take such action  or pursue such remedy as may be permitted
under the law of the State of Nevada. 
However,  if Lessee commences the
necessary work to cure said default before the expiration of the

 

4

 

thirty (30) days, but the work takes in
excess of thirty days, then Lessor shall not be allowed  to declare this Lease terminated.

 

13.                                 LIENS:  The Lessee agrees that he will, at all times,
save the Lessor and keep it blameless and the Property free and harmless of and
from any liability on account of or in respect to any mechanic’s liens or liens
in the nature thereof, for work and labor done, or materials furnished at the
instance and request of the Lessee, in, on or about the Property; provided,
however, that the Lessee shall have the right to contest the claim of such
lien, in which event the Lessee shall, at his expense, furnish to the Lessor a
sufficient surety bond executed by a reputable and responsible surety company,
in at least double the amount of  such
claim of such lien, conditioned upon the diligent prosecution of such defense,
and to  hold the Lessor from and clear of
all loss, costs, damages, and expenses of every kind and nature, arising either
directly or indirectly out of said contest, and to pay any judgment that may be
obtained forthwith upon the same being entered.

 

14.                                 ATTORNEY
FEE:  In the event of litigation
arising from default in performance of any of the provisions of this Lease by
either the Lessor or Lessee, the prevailing party in such litigation shall be
entitled to receive from the other party reasonable attorney fees and costs of
action incurred in connection with said litigation.  In the event that either Lessor or Lessee
shall by reason of acts of omission or commission in violation of the terms of
the Lease, be made a party to any litigation commenced by a person other than
the parties hereto, then such party performing the said act or suffering the
said omission shall  pay all costs,
expenses and reasonable attorney fees incurred by the other party which arise
from or are in connection with such litigation.

 

5

 

15.                                 INDEMNIFICATION:  Lessee shall indemnify and hold harmless
Lessor  and its agents, servants,
employees and representatives from and against all claims, damages, losses and
expenses, including attorneys’ fees arising out of or resulting from Lessee’s
occupancy, provided however, that Lessor, its agents, employees,
representatives, successors, or assigns are not negligent with regards to
same.  This Paragraph shall have full
force and effect upon execution of this Lease Agreement.

 

16.                                 ASSIGNMENT:  The Lessee shall not have the right to assign
this Lease or hypothecate the same without first receiving the written consent
of the Lessor, which  consent shall not
unreasonably be withheld.  Lessee shall
have the right to sublet any portion  of
the Property, providing that the tenancy of such sub-tenant shall be subject to
all the  terms, covenants and conditions
of this Lease.

 

17.                                 WAIVER:  The waiver of either party of any of the
covenants herein contained shall not be deemed a waiver of such party’s right
to enforce the same or any other covenant contained herein.

 

18.                                 HOLDING
OVER:  If the Lessee shall hold over
the Property beyond the term herein specified, or any renewal thereof, with the
consent, express or implied of the Lessor such holding over shall be construed
to be a month-to-month tenancy, unless otherwise mutually agreed upon.

 

19.                                 PHRASE
INTERPRETATION:  The term “Lessor”
shall include the singular,  if
necessary.  The term “Lessee” or the
phrase “the term hereof” shall include any renewal or renewal thereof where
permitted by the context hereof.

 

6

 

20.                                 PRINCIPAL
PLACE OF BUSINESS FOR NOTICES:  Any
and all notices shall be forwarded to the following addresses:

 

Lessor:

 

Terrible
Herbst, Inc.

Jerry Herbst

5195 Las Vegas
Blvd. South

Las Vegas,
Nevada 89119

 

Lessee:

 

E-T-T, Inc.

5195 Las Vegas
Blvd. South

Las Vegas,
Nevada 89119

Attn:  Timothy Herbst, Vice President

 

21.                                 NO
OTHER AGREEMENTS:  Both parties
hereby certify and declare that neither party has made any representations nor
agreements to or with any other party in 
addition to, or in conflict with the terms, covenants and conditions
hereof, and this Lease contains all of the terms, covenants and conditions and
representations between the parties upon the subject matter hereof.

 

22.                                 TERMINATION
OF LEASE IF LEGAL PROCEEDINGS FILED: 
If, at any time during the term hereof, proceedings in bankruptcy shall
be instituted by or against the Lessee and result in an adjudication of
bankruptcy, or if the Lessee shall file or any creditor shall file, or any
person shall file any Petition in Bankruptcy under Chapters 10 or 11 of the
Bankruptcy Act of the United States of America as such act is now in force or
as same may be amended, and shall be judicially approved, or if a Receiver of
the business or assets of the Lessee shall be appointed and if such appointment
be not vacated within sixty (60) days after

 

7

 

notice thereof to Lessee, or if a general
assignment is made by the Lessee for the benefit of creditors, or any sheriff,
Marshall, constable, or other duly constituted public official take possession
thereof by authority of any attachment or execution proceedings, and offer
same  for sale publicly, the Lessor may,
at its option, in either or any of such events, without notice  to Lessee or any other person or persons,
immediately recapture and take possession of the Property and terminate this
Lease with or without the process of law, such process being expressly waived
by Lessee.

 

23.                                 CARE
OF PREMISES:  Lessee agrees that it
will water, cultivate, trim and keep in a neat condition any shrubs, plants or
lawn planted on the Property and will keep the 
parking areas and black top in a neat and clean condition and will use
for parking.

 

24.                                 OPTION
TO RENEW:  Lessee understands and
acknowledges that Lessor holds interest in the Property through that certain
lease, which is attached hereto as Exhibit 
“B” and that Lessee’s option to renew this Agreement is subject to and
conditioned upon Lessor renewing Exhibit “B”. 
So long as Lessor renews, then the Lessee upon giving written notice to
Lessor, at least sixty (60) days prior to the date of the expiration of the term  aforesaid, provided he has faithfully
complied with the terms hereof, shall have the option of renewing this Lease
for up to five (5) additional ten (10) year terms, subject to the same  terms, covenants and conditions and
agreements as contained herein other than this 
paragraph.  The monthly rental for
each renewal term shall be determined at the time of each renewal.

 

25.                                 TIME
IS OF ESSENCE:  Time is of the
essence in this Lease and of each  and
every one of the provisions herein contained.

 

8

 

26.                                 BINDING
EFFECT:  The covenants and agreements
contained in this Lease shall be binding upon the parties hereto and upon their
respective heirs, executors, administrators, successors and assigns.

 

IN WITNESS WHEREOF, the parties
have caused this Lease to be executed by their duly authorized officers as of
the day and year first herein written.

 

LESSOR:

TERRIBLE HERBST, INC.

 

 

	
  /s/ Jerry E. Herbst

  	
   

  
	
  JERRY E. HERBST

  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  LESSEE,

  E-T-T, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Timothy P. Herbst

  	
   

  
	
  TIMOTHY P. HERBST

  	
   

  
	
  Vice President

  	
   

  
	
   

  	
   

  
	
  RECORDER’S NOTE:

  	
   

  
	
   THIS IS A COPY

  	
   

  

 

9

 

EXHIBIT A

 

LEGAL
DESCRIPTION

 

THAT PORTION OF GOVERNMENT LOT 4 SITUATE IN THE SOUTHWEST QUARTER
(SW 1⁄4) OF THE SOUTHWEST QUARTER (SW 1/4) OF SECTION 19, TOWNSHIP 21
SOUTH, RANGE 61 EAST, M.D.M., CLARK COUNTY, NEVADA, MORE PARTICULARLY
DESCRIBED AS FOLLOWS:

 

COMMENCING AT THE SOUTHEAST CORNER OF THE
SOUTHWEST QUARTER (SW 1⁄4) OF THE SOUTHWEST QUARTER (SW 1⁄4) OF SAID
SECTION 19, SAID CORNER ALSO BEING THE CENTERLINE INTERSECTION OF
TROPICANA AVENUE (PRESENTLY 100 FEET IN WIDTH) AND CAMERON STREET (PRESENTLY 60
FEET IN WIDTH); THENCE ALONG THE EAST LINE THEREOF AND THE CENTERLINE OF SAID
CAMERON STREET NORTH 00 34’29” WEST, 216.25 FEET; THENCE DEPARTING SAID EAST
LINE AND CENTERLINE SOUTH 89 25’31” WEST, 30.00 FEET TO THE POINT OF BEGINNING;
THENCE SOUTH 89 53’19” WEST, 241.80 FEET; THENCE SOUTH 00 34’28” EAST, 166.00
FEET TO A POINT ON THE NORTH RIGHT-OF-WAY LINE OF SAID TROPICANA AVENUE; THENCE
ALONG SAID NORTH RIGHT-OF-WAY LINE, NORTH 89 53’20” EAST, 216.59 FEET TO THE
BEGINNING OF A CURVE CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 25.00 FEET;
THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGEL OF 90 27’49”, AN ARC
DISTANCE OF 39.47 FEET TO A POINT ON THE WEST RIGHT OF WAY LINE OF SAID CAMERON
STREET;  THENCE ALONG SAID WEST
RIGHT-OF-WAY LINE NORTH 00 34’29” WEST, 141.00 FEET TO THE POINT OF BEGINNING.

 

 

LEASE

 

Searchlight Truck Stop.

 

THIS LEASE
(the “Lease” is entered into as of the
       day of June, 2002, between Centennial
Acquisitions, LLC, a Nevada limited liability company (“Landlord”), and
Terrible Herbst, Inc., a Nevada corporation (“Tenant”).

 

WITNESSETH:

 

FOR AND IN
CONSIDERATION of the mutual covenants contained in this Lease, Landlord and
Tenant hereby agree as follows:

 

1.                                       Definitions.  The following words and phrases shall have
the meanings set forth below:

 

1.1                                 “Commencement
Date” means the later of the date as of which this Lease is entered into
and the date Landlord acquires the Premises.

 

1.2                                 “Expiration
Date” means twenty (20) years after the Commencement Date.

 

1.3                                 “Term”
means the period commencing on 12:01 a.m. of the Commencement Date and expiring
on midnight of the Expiration Date, together with the period of any extension
or renewal of this Lease to which Landlord and Tenant agree in writing.

 

1.4                                 “Basic
Monthly Rent” means $48,333.33 per calendar month, as the same may be
increased from time to time pursuant to the provisions of Paragraph 4.2.

 

1.5                                 “Additional
Rent” means all amounts payable as rent by Tenant to the
Landlord pursuant to this Lease (other than Basic Monthly Rent),
regardless of the manner of computation or timing of the payment.

 

1.6                                 “Permitted
Use” means use of the Premises for an automotive fuel and service station,
convenience store, fast food restaurant and casino (provided that Landlord
makes no representation or warranty that such uses are permitted under
applicable law).

 

1.7                                 “Premises”
means the approximately 7.43 acres of land (the “Land”), together with the
Building (the “Building”) and all other improvements located on the Land,
situated at City of Searchlight, County of Clark, State of Nevada, more
particularly described on the attached Exhibit A.  (The Building and all other improvements
located on the Land are hereinafter collectively referred to as the
“Improvements.”)  The Building consists
of approximately            square
feet and includes, without limitation, all heating, air conditioning,
mechanical, electrical, elevator and plumbing systems, the roof and all walls,
foundations, fixtures and equipment above the suspended ceiling or beneath the
level of the foundation which serve the Premises, constituting a part thereof.  The Land includes all easements and
rights-of-way appurtenant thereto. 
Landlord’s reservation includes the right to install, inspect,
maintain,  use, repair and replace those
areas and items and to enter the Premises in order to do so.

 

1

 

1.8                                 “Tenant”
means each person executing this document as a Tenant under this Lease.  If there is more than one person set forth on
the signature line as Tenant, their liability under this Lease shall be
joint and several.  If there is more than
one Tenant, any notice required or permitted by the terms of this Lease
may be given by or to any one Tenant, and shall have the same force and
effect as if given by or to all persons comprising Tenant.

 

2.                                       Agreement
of Lease; Improvement.  Landlord
hereby leases to Tenant and Tenant hereby leases from Landlord the Premises for
the Term, in accordance with the provisions set forth in this Lease, and
subject to all matters now or hereafter of record or enforceable at law or in
equity.  The Tenant acknowledges that the
Premises are ready for occupancy as-is. 
Landlord shall not be obligated to make any improvements or repairs
thereto.  Tenant has had an opportunity
to, and to have its architects, engineers and other consultants, inspect the
Premises and Tenant has found the Premises fit for Tenant’s use.  Tenant accepts the Premises with all systems
(roof, walls, foundation, heating, ventilating, air conditioning, telephone,
sewer, electrical, mechanical, elevator, utility and plumbing) in good working
order and repair.

 

3.                                       Term;
Commencement Date; Option to Extend Term. 
Tenant’s obligation to pay rent under this Lease shall commence on the
Commencement Date and shall be for the Term. 
Upon Landlord’s request, Landlord and Tenant shall execute a written
acknowledgment of the Commencement Date, which acknowledgment shall be deemed
to be a part of this Lease.

 

Tenant (but
not a successor, assignee or subtenant of Tenant) shall have the option to
extend the Term for four (4) periods of five (5) additional years (the “Option
Term”) by delivering written notice of exercise of such option not later than
180 days prior to the expiration of the original Term; provided, Tenant shall
not be in default when the Option is exercised or as of the date the Option
Term commences or the right to extend the term shall be null and void.  In the event Tenant timely exercises the
option granted by this Paragraph 3 and extends the Term, this Lease shall
continue on the same terms and conditions as set forth in this Lease except
that the Base Rent for each Lease Year during the Option Term shall escalate
annually as provided in Paragraph 4.2 below.

 

4.                                       Rent;
Consumer Escalation; Net Lease.

 

4.1                                 Basic
Monthly Rent.  Tenant covenants to
pay to Landlord without abatement, deduction, offset, prior notice or demand
the Basic Monthly Rent in lawful money of the United States in equal
consecutive monthly installments at such place as Landlord may designate, in
advance on or before the first day of each calendar month during the Term,
commencing on the Commencement Date.  If the Commencement Date occurs
on a day other than the first day of a calendar month, on the Commencement Date
the Basic Monthly Rent shall be paid for the initial fractional calendar month
prorated on a per-diem basis and for the first full calendar month occurring
after the Commencement Date.

 

4.2                                 Basic
Monthly Rent Escalation.  The Basic
Monthly Rent shall be increased on each anniversary of the Commencement Date to
the product obtained by multiplying the Basic Monthly Rent then in effect by
1.02.  Landlord shall invoice Tenant
retroactively for the increased portion of the Basic Monthly Rent due for the
period between each such anniversary and the date of such invoice.  The delay or failure of Landlord to compute
or to bill Tenant for the adjustments to be

 

2

 

made pursuant to this Paragraph 4.2 shall not
impair the continuing obligation of Tenant to pay the increased portion of the
Basic Monthly Rent resulting from such adjustments.  In no event shall the Basic Monthly Rent be
decreased as a result of this Paragraph 4.2.

 

4.3                                 Net
Rent.  It is the intent of Landlord
and Tenant that the Basic Monthly Rent and all other rent and sums payable by
Tenant to Landlord under this Lease be absolutely net to Landlord and that
Tenant shall, except as expressly hereinafter provided, pay (either directly or
by payment to Landlord of Tenant’s share of any expenses or costs pursuant to
any provision of this Lease) for all insurance, taxes, utilities, repairs,
operating expenses, maintenance and all other services and costs relating to
the Premises and to Tenant’s use thereof.

 

4.4                                 Place
of Payment.  All payments made by
Tenant under this Lease shall be made at Landlord’s place of business
designated on the signature page of this Lease, or at such other places as
Landlord may designate from time to time by written notice to Tenant.

 

4.5                                 Late
Charges.  Any payment of Basic
Monthly Rent or Additional Rent not made when due, shall at Landlord’s
sole option, bear late charges thereon calculated at the rate of one
and one-half percent (11⁄2%) per month, but in no event greater than the
highest rate permitted by applicable law.

 

4.6                                 Retention
of payments by Landlord.  Any payment
of Basic Monthly Rent or Additional Rent then accrued shall be fully earned by
Landlord when due under terms of this Lease.

 

4.7                                 Prepaid
Rent.  Concurrent with the execution
of this Agreement, Tenant shall pay Landlord the sum of $145,000
representing the first three months rent due hereunder.  On the first day of the fourth month of
the term of this Lease, Tenant shall commence making monthly rental payments in
the amount set forth in Paragraph 1.4 above.

 

5.                                       Property
Taxes.  Tenant shall pay all real
property taxes applicable to the Premises during the Term.  All such payments shall be made at least ten
(10) days prior to the delinquency date of such payment.  Upon payment thereof, Tenant shall promptly furnish
Landlord with satisfactory evidence that such taxes have been paid.  Notwithstanding the foregoing provisions of
this Paragraph 5, if the holder of any mortgage then affecting Landlord’s
interest in the Premises requires that Landlord make monthly or other periodic
payments to an escrow or reserve for use in paying real property taxes
as they fall due, Tenant shall, upon being so advised by Landlord and at
the time of its making the monthly payments of Basic Monthly Rent required
under Paragraph 4, remit to Landlord the monthly or other periodic
payments required to be paid by Landlord to such holder, and Landlord shall in
turn remit such amount to such holder. 
As used herein, the term “real property taxes” shall include any form of
general or special assessment, license fee, commercial rental or gross receipts
tax, levy, penalty, duty, charge or tax (other than inheritance or estates
taxes) imposed by an authority having the direct or indirect power to tax,
including any city, county, state or federal government, or any school,
agricultural, lighting, drainage, sewer or other improvement district against
any legal or equitable interest of Landlord in the Premises or in the real
property of which the Premises are a part, against Landlord’s right to rent or
other income therefrom, against the use, occupancy or possession of the Premises
by Landlord or Tenant or against Landlord’s business of leasing the Premises or
any tax imposed in substitution, partially or totally, of any tax previously
included within the definition of real property taxes, or any  additional tax the  nature of 
which was  previously included
within the definition

 

3

 

of real property taxes.  All expenses, including attorney’s fees and
disbursements, experts’ and other witnesses’ fees, incurred in contesting the
validity or amount of any taxes or in obtaining a refund of taxes will be
considered as part of the taxes for the tax year in which such expenses are
incurred.  If the Premises are not
separately assessed, Tenant’s liability shall be an equitable proportion of the
real property taxes for all of the land and improvements included within the
tax parcel assessed, such proportion to be determined by Landlord from the
respective valuations assigned in the assessor’s work sheets or such other
information as may be reasonably available. 
Landlord’s reasonable determination thereof, in good faith, shall be
conclusive.  Tenant shall pay prior to
delinquency all taxes assessed against and levied upon trade fixtures,
furnishings, equipment and all other personal property of Tenant contained in
the Premises or elsewhere.  When
possible, Tenant shall cause said trade fixtures, furnishings, equipment and
all other personal property to be assessed and billed separately from the real
property of Landlord.

 

6.               Use
and Operation.

 

6.1                                 Use;
Suitability.  Tenant shall not use or
occupy or permit the Premises to be used or occupied for any purpose other than
for the Permitted Use, and shall not do or permit anything to be done by its
employees, agents, licensees or invitees (collectively, “Occupants”) which may
(a) increase the existing rate or violate the provisions of any insurance
carried with respect to the Premises; (b) create a public or private nuisance,
commit waste or interfere with, annoy or disturb any other tenant or occupant
of the Building or Landlord in its operation of the Building; (c) overload the
floors or otherwise damage the structure of the Building; (c) constitute an
improper, immoral or objectionable purpose; (e) subject Landlord to any
liability to any third party; or (f) lower the first-class character of the
Building.  Tenant shall, at its sole
cost, (t) operate its business on the Premises; (u) use the Premises in a
careful, safe and proper manner; (v) comply with all present and future
governmental or quasi-governmental laws, ordinances, regulations and
requirements and any covenants, conditions and restrictions existing with
respect to the Premises and the use thereof; (w) comply with the requirements
of any board of fire underwriters or other similar body relating to the
Premises; (x) keep the Premises free of objectionable noises and odors; (y) not
store, use or dispose of any hazardous, toxic or radioactive materials on the
Premises except those necessary to the operation of its business and in full
compliance with all applicable present and future governmental or
quasi-governmental laws, ordinances, regulations and requirements regarding the
same; and (z) not place any signs on the Premises, except as provided in
Paragraph 18 of this Lease, unless Landlord consents thereto in advance in
writing.  The judgment of any court of
competent jurisdiction or the admission of Tenant in any action against Tenant,
whether or not Landlord is a party thereto, that Tenant has violated any
governmental or quasi-governmental law, ordinance, regulation or requirement or
any covenant, condition or restriction existing with respect to the Premises or
with respect to any hazardous, toxic or radioactive substance on the Premises
shall be conclusive of that fact as between Landlord and Tenant.  (The foregoing sentence shall not create or
confer upon Tenant or any other person any rights with respect to
Landlord.)  Except as expressly set forth
in this Lease, no representation or warranty has been made to or relied upon by
Tenant concerning the Premises, including, without limitation, the fitness or
suitability of the Premises for the conduct of Tenant’s business, nor has
Landlord agreed to undertake any modification, alteration or improvement of the
Premises.

 

6.2                                 Covenant
of Continuous Operation.  Tenant
shall carry on its business diligently and continuously at the Premises
throughout the Term and shall keep the Premises open for

 

4

 

Business on all business days in accordance with the
schedule of minimum hours specified from time to time by Landlord.

 

7.                                       Utilities
and Services.  Tenant shall pay all
costs, expenses, charges and amounts, or whatever kind or character, for all
water, gars, heat light, power, air conditioning, telephone, sewer service,
protective service, trash disposal and other utilities and services supplied to
the Premises, together with any taxes thereon. 
If any such services are not billed to Tenant, but rather are billed to and paid
by Landlord, Tenant shall pay to Landlord the cost of such services.  If any utility service to the Premises
is interrupted for any reason whatsoever, Landlord shall not be liable
therefore to Tenant, such interruption shall not be deemed to be an eviction or
interference with Tenant’s use and occupancy of the Premises, the rents
required to be paid hereunder shall not be abated as a result thereof, and
Tenant hereby expressly waives any claims Tenant might otherwise have against
Landlord as a result of any such interruption.

 

8.                                       Maintenance
and Repairs; Alterations; Access.

 

8.1                                 Maintenance
and Repairs.  Tenant, at its sole
cost and expense, shall maintain the Premises and every part thereof in good
order, condition and repair, and in a clean and sanitary condition, including
both structural and nonstructural portions, including, without limitation, all
plumbing, sewage, heating, air conditioning, ventilating, electrical, and
lighting facilities equipment, fixtures, floor, walls and ceilings and their
coverings (interior and exterior), foundations, roofs (interior and exterior),
columns, beams, floors, windows, window sashes and frames, doors and door
frames, locks, glass and plate glass, furnishings, trade fixtures, leasehold
improvements, equipments, landscaping, driveways, parking lots, fences, signs
and other personal property from time to time situated in, on or upon the
Premises.  Tenant expressly and
irrevocably waives the benefit or applicability of any statute in effect on or
after the date of this Lease which affords Tenant the right to make repairs at
Landlord’s expense or to terminate this Lease because of Landlord’s failure to
keep the Premises in good order, condition and repair.

 

8.2                                 Alterations.  Tenant shall not make any change, addition or
improvement to the Premises, unless such change, addition or improvement:
(a) equals or exceeds the then-current standard for the building and utilizes
only new and first-grade materials; (b) is in conformity with all applicable
governmental and quasi-governmental laws, ordinances, regulations and
requirements, and is made after obtaining any required permits and
licenses; (c) is made with the prior written consent of Landlord; (d) is made
pursuant to plans and specifications approved in writing in advance by
Landlord, which approval shall not be unreasonably withheld; (e) is made
after Tenant has provided to Landlord such indemnification or bonds, including,
without limitation, a performance and completion bond, in such form and amount
as may be satisfactory to Landlord, to protect against claims and liens for
labor performed and materials furnished, and to insure the completion of any
change, addition or improvement; (f) is carried out by persons approved in
writing by Landlord, who, if required by Landlord, deliver to Landlord before
commencement of their work proof of such insurance coverage as Landlord
may require, with Landlord named as an additional insured; and (g) immediately
becomes the property of Landlord.  Any
such change, addition or improvement. 
Tenant shall indemnify, defend and hold harmless Landlord from and
against all liens, claims, damages, losses, liabilities and expenses, including
attorneys’ fees, which may arise out of or be connected in any way with any
such change, addition or

 

5

 

improvement. 
Within ten (10) days following the imposition of any such lien Tenant
shall cause such lien to be released of record by payment of money or posting
of a proper bond.  Any increase in
property taxes on or insurance cost for the Premises attributable to such
change, addition or improvement shall be borne by Tenant and shall be paid by
Tenant to Landlord within thirty (30) days after receipt by Tenant of
Landlord’s invoice(s) therefore.

 

8.3                                 Access
to Premises.  Landlord may enter the
Premises at reasonable times for the purpose of inspecting, altering and
repairing the Premises and ascertaining compliance with the provisions of this
Lease by Tenant.  Landlord shall have
free access to the Premises in the event of an emergency.  Landlord may also show the Premises to
prospective purchasers, tenants or mortgages at reasonable times.  Tenant hereby waives any claim for damages or
for injury to inconvenience to or interference with Tenant’s business, any loss
of occupancy or quiet enjoyment of the Premises, and any other loss occasioned
thereby.  Landlord shall at all times
have a key with which to unlock all of the doors in the Premises (excluding
Tenant’s vaults, safes and similar areas designated in writing by Tenant in
advance).  During the six (6) months
prior to the expiration of the Term or other termination of this Lease,
Landlord may place upon the Premises “To Let,” “For Sale” or other similar
signs.

 

9.               Assignment.

 

9.1                                 Prohibition.  Tenant shall not, either voluntarily or by
operation of law, assign, transfer, mortgage, encumber, pledge or hypothecate
this Lease or Tenant’s interest in this Lease, in whole or in part, permit the
use of the Premises by any persons other than Tenant or its Occupants, or
sublease the Premises or any part of the Premises, without the prior written
consent of Landlord, which may be withheld in Landlord’s sole discretion for
any reason or for no reason.  Any
transfer of this Lease from Tenant by merger, consolidation, liquidation or
transfer of assets shall constitute an assignment for the purposes of this
Lease.  If Tenant is a corporation, an
unincorporated association or a partnership, the assignment, transfer,
encumbrance or hypothecation of any stock or interest in such corporation,
association or partnership in the aggregate in excess of forty-nine percent
(49%) shall be deemed an assignment within the meaning of this Paragraph 9.1
unless such transfer is to the immediate family of such majority equity
holder.  Consent to any assignment or
subleasing shall not operate as a waiver of the necessity for consent to any
subsequent assignment or subleasing and the terms of such consent shall be
binding upon any person holding by, under or through Tenant.  At Landlord’s option, any assignment or
sublease without Landlord’s prior written consent shall be void.  Notwithstanding the foregoing, Landlord
expressly consents to subleases to McDonalds and EFT [hand written
notation  changing EFT to ETT, initialed
by Phyllis Schwartz], Inc.  Tenant hereby
pledges its interest in said leases to Landlord to secure Tenant’s obligations
to Landlord hereunder.

 

9.2                                 Termination.  If Tenant requests Landlord’s consent to an
assignment of this Lease or to a subleasing of the whole or any part of the
Premises (other than the approved subleases referred to in Paragraph 9.1
above), Tenant shall submit to Landlord the terms of such assignment or
subleasing, the name and address of the proposed assignee or subtenant, such
information relating to the nature of its business and finances as Landlord may
be reasonably require, and the proposed effective date (the “Effective Date”)
of the proposed assignment or subleasing, which Effective Date shall be neither
less than thirty (30) nor more than ninety (90) days following the date of Tenant’s
submission of such information.  Upon
receipt of such request and all such information from Tenant, Landlord shall
have the right, exercisable by notice within fifteen (15) days after such
receipt, to terminate this Lease if the request is to assign this Lease or to
sublease all of the Premises or, if the request is to

 

6

 

sublease a portion of the Premises only, to
terminate this Lease with respect to such portion, in each case as of the
Effective Date, unless within five (5) business days after notice from Landlord
to Tenant of such termination, Tenant withdraws such request.  Such right to terminate shall be for any
reason whatsoever in the sole discretion of Landlord, including but not limited
to the right to retain all profits of such assignment or sublease.  If Landlord shall exercise such termination
right, Tenant shall surrender possession of the entire Premises or the portion
which is the subject of the right, as the case may be, on the Effective Date in
accordance with the provisions of Paragraph 17. 
If this Lease is terminated as to a portion of the Premises only, the
rent payable by Tenant under this Lease shall be abated proportionately
commencing as of the Effective Date, based upon the percentage of the Premises
as to which this Lease has been terminated.

 

9.3                                 Landlord’s
Rights.  If this Lease is assigned or
if all or any portion of the Premises is subleased or occupied by any person
other than Tenant without obtaining Landlord’s consent, Landlord may collect
rent and other charges from such assignee or other party, and apply the amount
collected to the rent and other charges reserved under this Lease, but such
collection shall not constitute consent or waiver of the necessity of consent
to such assignment or subleasing, nor shall such collection constitute the
recognition of such assignee or subtenant as Tenant under this Lease or a
release of Tenant from the further performance of all of the covenants and
obligations of Tenant contained in this Lease. 
No consent by Landlord to any assignment or subleasing by Tenant shall
relieve Tenant of any obligation to be paid or performed by tenant under this
Lease, whether occurring before or after such consent, assignment or
subleasing, but rather Tenant and it assignee or subtenant, as the case may be,
shall b jointly and severally primarily liable for such payment and
performance.  Tenant shall reimburse
Landlord for its attorneys’ and other 
fees and costs incurred in connection with both determining whether to
give its consent and giving its consent. 
O assignment or subleasing under this Lease shall be effective unless
and until Tenant provides to Landlord an executed counterpart of the assignment
or sublease agreement, which shall specifically state that (a) such agreement
is subject to all of the provisions of this Lease; (b) in the case of an
assignment, the assignee assumes and agrees to perform all of Tenant’s
obligations under the Lease; (c) the assignee or subtenant, as the case may be,
does not have the right to a further assignment of such agreement, or to allow
the Premises to be used by others, without the prior written consent of
Landlord in each instance; (d) a consent by Landlord thereto shall not be
deemed or construed to modify, amend or affect the provisions of this Lease or
Tenant’s obligations under this Lease, which shall continue to apply to the
Premises and the occupants of the Premises as if the assignment or sublease had
not been made; (e) if Tenant defaults in the payment of any amounts due under
this Lease, Landlord is authorized to collect any rents or other amounts due
from any assignee, subtenant or other occupant of the Premises and to apply the
net amounts collected to the sums reserved in this Lease; and (f) the receipt by
Landlord of any amounts from an assignee, subtenant or other occupant of any
part of the Premises shall not be deemed or construed as releasing Tenant from
Tenant’s obligations under this Lease or the acceptance of that party as a
direct tenant.

 

10.         Indemnity;
Waiver and Release.

 

10.1                           Indemnity.  Tenant shall indemnify, defend and hold
harmless Landlord from, against and with respect to all demands, claims, causes
of action, judgments, losses, damages (including consequential damages),
liabilities, obligations, fines, penalties, costs and expenses, including but
not limited to attorneys’ fees, arising from the occupancy or use by Tenant or
its invitees on the Premises, the conduct of Tenant’s business on the Premises,
and act or omission done, permitted

 

7

 

or suffered by Tenant or any of its invitees,
any default or nonperformance by Tenant under this Lease, any injury or damage
to the person, property or business of Tenant or its invitees, any litigation
commenced by or against Tenant to which Landlord is made a party without fault
on the part of Landlord, or any change or liability brought by any local, state
or federal governmental agency regarding Tenant’s retail fuel operations,
including, without limitation, claims brought by the Environmental Protection
Agency due to a violation of any law.  If
any action or proceeding is brought against Landlord, its employees or its
agents by reason of any such claim, Tenant, upon notice from Landlord, shall
defend the claim at Tenant’s expense with counsel reasonably satisfactory to
Landlord.

 

10.2                           Waiver
and Release.  Tenant waives and
releases all claims against Landlord, its employees and agents with respect to
all matters for which Landlord has disclaimed liability pursuant to the
provisions of this Lease.  In addition,
Landlord, its employees and agents shall not be liable for any loss, injury,
death or damage (including any consequential damage) to persons, property or Tenant’s
business resulting from any theft, act of God, public enemy, injunction, riot,
strike, insurrection, war, court order, requisition, order of governmental body
or authority, fire, explosion, falling object, steam, water, rain, snow,
breakage, leakage, obstruction or other defects of pipes, sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, construction,
repair or alteration of the Premises or other cause beyond Landlord’s
control.  Tenant acknowledges that it
constructed all improvements comprising the Premises and that it is now leasing
the property pursuant to a sale/leaseback transaction with Landlord.  Consequently, Tenant waives all claims
against Landlord relating to the current or future condition of the improvements
or the Premises and acknowledges that any it is responsible for any deficiency
of the improvements or the Premises. 
Tenant shall timely pursue all meritorious claims against contractors,
subcontractors, materialmen and/or architects contributing to any substandard
condition relating to the improvements or the Premises and shall advise
Landlord of any such claim.

 

11.                                 Insurance.  Tenant shall, at Tenant’s dole cost, procure
and continue in force the following insurance coverage: (a) bodily injury and
property damage liability insurance with a combined single limit for bodily
injury and property damage of not less tan $2,000,000 per occurrence; (b) fire
and extended coverage insurance, including vandalism, malicious mischief,
special extended peril (all-risk), boiler, and sprinkler leakage coverage, in
an amount equal to the full replacement value (without deduction for
depreciation) of the Premises and of all furnishings, trade fixtures, leasehold
improvements, equipment, merchandise and other personal property from time to
time situated in, on or upon the Premises; and (c) worker’s compensation
insurance satisfying Tenant’s obligations under the worker’s compensation laws
of the State of Nevada.  Such minimum
limits shall in no event limit the liability of Tenant under this Lease.  Such liability insurance shall name Landlord
and any other person specified from time to time by Landlord as an additional
insured, such property insurance shall name Landlord as a loss payee as its
interests may appear, and both such liability and property insurance shall be
with companies acceptable to Landlord having a rating of not less than A:XI in
the most recent issue of Best’s Key Rating Guide, Property-Casualty.  All liability policies maintained by Tenant
shall contain a provision that Landlord and any other additional insured,
although named as an insured, shall nevertheless be entitled to recover under
such policies for any loss sustained by it, its agents and its employees as a
result of the acts or omissions of Tenant. 
Tenant shall furnish Landlord certificates of coverage.  No such policy shall be cancelable or subject
to reduction of coverage or other modification except after thirty (30) days’
prior written notice to Landlord by the insurer.  All such policies shall be written as primary
policies, not contributing with and not in excess

 

8

 

of any coverage Landlord may carry, and shall
only be subject to such deductibles as may be approved in writing in advance by
Landlord.  Tenant shall, at least ten
(10) days prior to the expiration of such policies, furnish Landlord with
renewals or binders therefore.  Landlord
and Tenant hereby mutually waive their respective rights of subrogation against
each other for any loss insured by insurance policies existing for the benefit
of the respective parties.  Landlord and
Tenant shall cause their respective insurance carriers to issue appropriate
waivers of subrogation rights endorsements to all policies of insurance carried
in connection with the Premises or the contents of the Premises.  Tenant shall cause all other occupants of the
Premises claiming by, through or under Tenant to execute and deliver to
Landlord a waiver of claims similar to the waiver of subrogation rights endorsements.  Any mortgage lender interested in any part of
the Premises may, at Landlord’s option, be afforded coverage under any policy
required to be secured by Tenant under this Lease, by use of a mortgagee’s
endorsement to the policy concerned.

 

12.                                 Damage
or Destruction.

 

12.1                           General
Provisions.  If the Premises are
partially damaged or destroyed by any casualty insured against under any
insurance policy maintained by Tenant or Landlord, they shall, upon receipt of
any insurance proceeds, use such proceeds to effect repair of the Premises to
substantially the condition in which the Premises were immediately prior to
such destruction.  Landlord’s obligation
under the preceding sentence shall not exceed the lesser of the cost of the
standard improvements installed by Landlord in the Premises, or the proceeds
received by Landlord from any insurance policy maintained by Tenant.  If (a) by reason of such occurrence the
Premises are rendered wholly untenantable; (b) the Premises are damaged as a
result of a risk not covered by insurance; (c) the Premises are damaged in
whole or in part during the last twelve (12) months of the Term; (d) the
Premises or the Building (whether or not the Premises are damaged) is damaged
to the extent of ten percent (10%) or more of the then-replacement value of
either or to the extent that it would take, in Landlord’s opinion, in excess of
ninety (90) days to complete the requisite repairs; or (e) insurance proceeds
adequate to repair the Premises are not available to Landlord for any reason,
Landlord may either elect to repair the damage or cancel this Lease by notice
of cancellation within sixty (60) days after such event and thereupon this
Lease shall expire as of the date such notice is given, and Tenant shall vacate
and surrender the Premises to Landlord. 
There shall be no abatement of any payment due from Tenant to Landlord
under this Lease.  Tenant expressly
waives any claim Tenant might  have
against Landlord for any loss suffered by reason of any such damage,
destruction, repair or restoration, and Tenant shall have no right to terminate
this Lease as the result of any statutory provision in effect on or after the
date of this Lease pertaining to the damage and destruction of the Premises or
the Building.

 

12.2                           Damage
to Tenant’s Trade Fixtures and other Personal Property.  The proceeds of all insurance carried by
Tenant on Tenant’s furnishings, trade fixtures, leasehold improvements,
equipment, merchandise and other personal property shall be held in trust by
Tenant for the purpose of the repair and replacement of the same, and shall not
be subject to any claim by Landlord for repair or replacement of any part of
the Premises.  Landlord shall not be
required to repair any damage or to make any restoration or replacement of any
furnishings, trade fixtures, leasehold improvements, equipment, merchandise and
other personal property installed in the Premises by Tenant or at the direct or
indirect expense of Tenant.  Unless this
Lease is terminated by Landlord pursuant to this Paragraph, Tenant shall be
require to restore or replace such furnishings, trade fixtures, leasehold

 

9

 

improvements, equipment, merchandise and
other personal property in the event of damage or destruction in at least a
condition equal to that existing prior to such event.

 

13.                                 Condemnation.  As used in this Paragraph 13, “Condemnation
Proceedings” means any actions or proceedings in which any interest in the
Premises is taken for any public or quasi-public purpose by any lawful
authority through exercise of the poser of eminent domain or by purchase or
otherwise in lieu of such exercise.  If
the whole of the Premises is taken through Condemnation Proceedings, this Lease
shall automatically terminate as of the date of such taking.  The phrase “as of the date of the taking”
means the date of taking actual physical possession by the condemning authority
or such earlier date as the condemning authority gives notice that it is deemed
to have taken possession.  Landlord may
terminate this Lease if more than twenty-five percent (25%) of the Premises is
taken or any portion of the Premises is taken that, in Landlord’s judgment,
substantially interferes with Landlord’s ability to operate or use the Premises
for the purposes for which it was intended. 
Any such termination must be accomplished through written notice to
Tenant given no later than sixty (60) days after, and shall be effective as of,
the date of such taking.  In all other
cases, or if Landlord does not exercise its right to terminate, this Lease
shall remain in effect.  If a portion of
the Premises is taken and this Lease is not terminated, the Basic Monthly Rent
shall be reduced in the proportion that the floor area of buildings taken bears
to the total floor area of the Premises immediately prior to the taking.  Whether or not this Lease is terminated as a
consequence of Condemnation Proceedings, all damages or compensation awarded
for a partial or total taking, including any award for severance damage and any
sums compensating for diminution in the value of or deprivation of the
leasehold estate under this Lease, shall be the sloe and exclusive property of
Landlord.  Tenant shall be entitled to
any award for the loss of or damage to Tenant’s trade fixtures or loss of
business, provided that a separate award is actually made therefore to Tenant
and that the same will not reduce Landlord’s award.  Tenant shall have no claim against Landlord
for the occurrence of any Condemnation Proceedings, or for the termination of
this Lease or a reduction in the Premises as a result of any Condemnation
Proceedings.

 

14.                                 Landlord’s
Financing.  This lease shall be
subordinate to any existing or future first mortgage, first deed of trust and
all renewals, modifications, amendments, consolidations, replacements and
extensions of any such instruments.  No
documentation other than this Lease shall be required to evidence such
subordination.  If any holder of a
mortgage or deed of trust and shall give written notice of such election to
Tenant, this Lease shall be deemed prior to such mortgage or deed of
trust.  Tenant shall execute such
documents as may be required by Landlord to confirm such subordination or
priority within ten (10) days after request therefore.  Tenant shall from time to time if so
requested by Landlord and if doing so will not materially and adversely affect
Tenant’s economic interests under this Lease, join with Landlord in amending
this Lease so as to meet the needs or requirements of any lender that is
considering making or that has made a loan secured by the Premises or any
portion thereof.  Any sale, assignment or
transfer of Landlord’s interest under this Lease or in the Premises, including
any such disposition resulting from Landlord’s default under a debt obligation,
shall be subject to this Lease and Tenant shall attorn to Landlord’s successors
and assigns and shall recognize such successors or assigns as Landlord under
this Lease, regardless of any rule of law to the contrary or absence of privity
of contract.

 

10

 

15.                                 Default.

 

15.1                           Default
by Tenant.  The occurrence of any of
the following events shall constitute a default by Tenant under this Lease:

 

15.1.1                  Tenant
fails to pay timely any installment of Basic Monthly Rent or any other payment
due under this Lease.

 

15.1.2                  Tenant
fails to observe or perform timely any other term, covenant or condition to be
observed or performed by Tenant under this Lease.

 

15.1.3                  Tenant
fails to provide fuel services for a period of five (5) consecutive days,
unless Tenant is prevented from doing so by Force Majeure.  For purposes of this provision, Force Majeure
shall mean any act or event that occurs as a consequence of fire, theft, water,
wind, flood, hurricane, and that could not have been avoided by reasonable
diligence, prevention or control.

 

15.1.4                  Tenant
becomes insolvent or ceases to transact business as a going concern.

 

15.1.5                  Tenant
sells or otherwise transfers its business and the purchaser does not expressly
assume all of Tenant’s obligations hereunder.

 

15.1.6                  Tenant
or any guarantor of this Lease dies (if an individual), files a petition in
bankruptcy, becomes insolvent, has taken against such party in any court,
pursuant to state or federal statute, a petition in bankruptcy or insolvency or
for reorganization or appointment of a receiver or trustee, petitions for or
enters into an arrangement for the benefit of creditors or suffers this Lease
to become subject to a writ of execution.

 

15.1.7                  Tenant
vacates or abandons the Premises.

 

15.1.7.1         Any
guarantor, surety or endorser of this Lease for Tenant attempts to rescind or
to terminate its guaranty, or defaults in or breaches any obligation or
liability to Landlord.

 

15.2                           Remedies.  In the event Tenant fails to timely and fully
carry out any of the provisions or obligations under this Lease or is in
default under any of the provisions of Paragraph 15.1 above, Landlord shall
have the right to, at any time and at Landlord’s option, without waiving or
limiting any other right or remedy available to it, (a) perform in Tenant’s
stead any obligation that Tenant has failed to perform, and Landlord shall be
reimbursed promptly for any cost incurred by Landlord in connection therewith
with interest thereon from the date of such expenditure until paid in full at
the greater of the prime rate then charged by Bank of America (or any other
bank or savings and loan association designated by Landlord), plus four percent
(4%), or eighteen percent (18%) per annum (the “Interest Rate”); (b) terminate
Tenant’s rights under this Lease by written notice; (c) reenter and take
possession of the Premises by any lawful means (with or without terminating
this Lease); or (d) pursue any other remedy allowed by law.  Tenant shall pay to Landlord the cost of
recovering possession of the Premises, all costs of reletting, including
reasonable renovation, remodeling and alteration of the Premises, the amount of
any commissions paid by Landlord in

 

11

 

connection with such reletting, and all other
costs and damages arising out of Tenant’s default, including attorneys’ fees
and costs.  Notwithstanding any
termination or reentry, the liability of Tenant for the rents and other sums
reserved in this Lease shall not be extinguished for the balance of the Term,
and Tenant agrees to compensate Landlord upon demand for any deficiency arising
from reletting the Premises at a lesser rent than applies under this Lease.

 

15.3                           Past
Due Amounts; Tenant’s Obligations Independent.  If Tenant fails to pay when due any amounts
required to be paid by Tenant under this Lease, such unpaid amounts shall bear
interest at the Interest Rate from the due date of such amounts to the date of
payment in full, with interest.  In
addition, Landlord may also charge a sum of five percent (5%) of such unpaid
amounts as a late charge.  The actual
cost in each instance is extremely difficult, if not impossible, to
determine.  The  payment (and acceptance) of this late payment
charge shall not constitute a waiver by Landlord of any default by Tenant under
this Lease.  All amounts due under this
Lease are and shall be deemed to be rent or additional, rent, and shall be paid
by the terms of this Lease).  The obligations
of Tenant to pay Basic Monthly Rent and all other amounts due and to perform
all of its obligations under this Lease are severable from and independent of
any obligations of Landlord under this Lease.

 

15.4                           Default
by Landlord.  Landlord shall not be
in default under this Lease unless Landlord or the holder of any mortgage or deed
of trust covering the Premises whose name and address have been furnished to
Tenant in writing fails to perform an obligation required of Landlord under
this Lease within thirty (30) days after written notice by Tenant to Landlord
and to such holder, specifying the respects in which Landlord has failed to
perform such obligation.  If the nature
of Landlord’s obligation is such that more than thirty (30) days are reasonably
required for performance or cure, Landlord shall not be in default if Landlord
or such commencement diligently prosecutes the same to completion.  In no event shall Tenant have the right to
terminate this Lease or to withhold the payment of rent or other charges
provided for in this Lease as a result of Landlord’s default.

 

16.                                 Expiration
or Termination.

 

16.1                           Surrender
of Premises.  Upon the expiration of
the Term or other termination of this Lease, Tenant shall, at its own cost, (a)
promptly and peaceably surrender the Premises to Landlord “broom clean,” in
good order and condition, ordinary wear and tear excepted; (b) repair any
damage to the Premises caused by or in connection with the removal of any
property from the Premises by or at the direction of Tenant; (c) repair, patch
and pain in a good and workmanlike manner satisfactory to Landlord all holes
and other marks in the floors, walls and ceilings of the Premises to Landlord’s
reasonable satisfaction; and (d) deliver all keys to the Premises to
Landlord.  Before surrendering the
Premises, Tenant shall, at its sole cost, remove its movable personal property
only, and all other property shall, unless otherwise directed by Landlord,
remain in the Premises and become the property of Landlord without payment
therefore; however, Tenant shall not remove any personal property, trade fixtures
or other property fro the Premises without Landlord’s prior written consent if
such personal property, trade fixtures or other property is used in the
operation of the Premises, the removal of such property, trade fixtures or
other property will impair the structure of the Building, or Tenant is in
default under this Lease.  If Tenant is
in default under this Lease, Landlord shall have a lien on such personal
property, trade fixtures and other property. 
Landlord may require Tenant to remove any personal property, trade
fixtures, other property,

 

12

 

alterations, additions and improvements made
to the Premises by Tenant or by Landlord for Tenant, and to restore the
Premises to their condition on the date of this Lease.  All personal property, trade fixtures and
other property of Tenant not removed from the Premises upon the abandonment of
the Premises or upon the expiration of the Term or other termination of this Lease
for any cause shall conclusively be deemed to have been abandoned and may be
appropriated, sold, stored, destroyed or otherwise disposed of by Landlord
without notice to Tenant or any other person and without any obligation to
account therefore.  Tenant shall pay to
Landlord all expenses incurred in connection with the disposition of such
property in excess of any amount received by Landlord from any such
disposition.  No surrender of the
Premises shall be effected by Landlord’s acceptance of the keys or of this rent
or by any other means whatsoever without Landlord’s written acknowledgement of
such acceptance as a surrender.  Tenant
shall not be released from Tenant’s obligations under this Lease in connection
with surrender of the Premises until Landlord has inspected the Premises and
delivered to Tenant a written release.

 

16.2                           Holding
Over.  Tenant shall indemnify, defend
and hold harmless Landlord from and against all claims, liabilities and
expenses, including attorneys’ fees, resulting from delay by Tenant in
surrendering the Premises in accordance with the provisions of this Lease.  If Tenant remains in possession of the
Premises or any part of the Premises after the expiration of the Term or other
termination of this Lease with the express written consent of landlord, such
occupancy shall be a tenancy from month to month at a rental (and not as a
penalty) in the amount of one hundred fifty percent (150%) of the last monthly
rental, plus all other charges payable under this Lease, and upon all of the
terms of this Lease applicable to a month to month tenancy.  The provisions of this Paragraph 16 shall
survive the expiration of the Term or other termination of this Lease.

 

17.                                 Estoppel
Certificate.  Tenant shall, within
five (5) days after Landlord’s request therefore, execute and deliver to
Landlord an estoppel certificate in favor of Landlord and such other persons as
Landlord shall request setting forth the following: (a) a ratification of this
Lease; (b) the Commencement Date and Expiration Date; (c) that this Lease is in
full force and effect and has not been assigned, modified, supplemented or
amended (except by such writing as shall be stated); (d) that all conditions
under this Lease to be performed by Landlord have been satisfied, or, in the
alternative, those claimed by Tenant to be unsatisfied; (e) that there are no
defenses or offsets against the enforcement of this Lease by Landlord, or, in
the alternative, those claimed by Tenant; (f) the amount of advance rent, if
any (or none if such is the case), paid by Tenant; (g) the date to which rent
has been paid; and (h) such other information as Landlord may request.  Landlord’s mortgage lenders and purchasers
shall be entitled to rely upon any estoppel certificate executed by Tenant.  If Tenant fails to execute such estoppel
certificate within such five (5) day period, Landlord may execute the same on
behalf of Tenant as Tenant’s duly authorized attorney-in-fact.  For such purpose, Tenant hereby makes,
constitutes and appoints Landlord as Tenant’s true and lawful attorney to act
for Tenant and in Tenant’s name, place and stead and for Tenant’s use and
benefit.  Such power of attorney shall be
irrevocable and shall be deemed to be coupled with an interest.

 

18.                                 Signage.  Tenant may purchase and erect such signage on
the Building and on the lot as may be necessary to advertise its business, in
conformity with all applicable governmental and quasi-governmental laws,
ordinances, regulations and requirements, and after obtaining any required
permits, licenses, variances and approvals. 
All signs or letterings on doors shall be printed, painted and affixed
at the sole cost of Tenant by a person approved by Landlord, and shall comply
with the requirements of the governmental authorities having jurisdiction over
the Premises.  At its sole

 

13

 

expense, Tenant shall maintain all permitted
signs and shall, upon the expiration of the Term or other termination of this
Lease, remove all such permitted signs and repair any damage caused by such
removal.

 

19.                                 Additional
Authorizations and Consents.  Tenant
and Landlord shall execute and file or join in the execution and filing of any
applications or other documents which may be necessary in order to obtain the
authorization, approval or consent of any governmental body, local, state or
federal or any other third party, which may be required, or which Tenant may
reasonably request, in connection with the consummation of the transactions
contemplated hereby.  Each party shall
use its best efforts to obtain all such authorizations, approvals and consents.

 

20.                                 Purchase
Option.  At any time during the term
of this lease following the end of the 5th Lease Year and continuing
for a period of two months following the end of the term of this Lease (as the
same may be extended from time to time), Tenant shall have an option to
purchase the Premises for a sum equal to $6,090,000, increased by one percent
(1%) per year compounded from the end of the 5th Lease Year until
the date of exercise of the option.

 

21.                                 General
Provisions.

 

21.1                           No
Partnership.  Landlord does not by
this Lease, in any way or for any purpose, become a partner or joint venturer
of Tenant in the conduct of Tenant’s business or otherwise.

 

21.2                           Force
Majeure.  If either Landlord or
Tenant is delayed or hindered in or prevented from the performance of any act
required under this Lease by reason of acts of God, strikes, lockouts, other
labor troubles, inability to procure labor or materials, fire, accident,
failure of power, restrictive governmental laws, ordinances, regulations or
requirements of general applicability, riots, civil commotion, insurrection,
war or other reason not the fault of the party delayed and beyond the control
of such party (financial inability excepted), performance of the action in
question shall be excused for the period of delay and the period for the
performance of such act shall be extended for a period equivalent to the period
of such delay.  The provisions of this
Paragraph shall not, however, operate to excuse Tenant from the prompt payment
of rent or any other amounts required to be paid under this Lease.

 

21.3                           Notices.  Any notice, demand, request or other
instrument which may be or is required to be given under this Lease shall be
delivered in person or sent by United States certified or registered mail,
postage prepaid, shall be addressed as set forth below or as otherwise
designated in writing by Landlord or Tenant to the other, and shall be
effective upon delivery to the then effective notice address for the party
concerned.

 

Landlord:

 

Centennial Acquisitions, LLC

c/o Phyllis Schwartz

2877 Paradise Road, TH3402

Las Vegas, NV  89109

 

with a copy to:

 

14

 

John R. Erickson, Esq.

Woods Erickson Whitaker &
Miles, LLP

1349 Galleria Drive, Suite 300

Henderson, NV  89014

 

Tenant:

 

Terrible Herbst, Inc.

Attn: Sean Higgins

5195 South Las Vegas Blvd.

Las Vegas, NV  89119

 

21.4                           Severablilty.  If any provision of this Lease or the
application of any provision of this Lease to any person or circumstance shall
to any extent be invalid, the remainder of this Lease or the application of
such provision to persons or circumstances other than those as to which it is
held invalid shall not be affected thereby. 
Each provision of this Lease shall be valid and enforceable to the
fullest extent permitted by law.

 

21.5                           Notification
of Changes.  Tenant shall promptly
notify Landlord in writing of the existence or happening of any fact, event or
occurrence that may tend to alter, in any material respect, the accuracy or
completeness of any representation or warranty contained in this Lease, or
affect the ability of Tenant to perform its obligations hereunder.

 

21.6                           Brokerage
Commissions.  Except as agreed upon
in writing by Landlord, Tenant represents and warrants that there are no claims
for brokerage commission or finder’s fees in connection herewith and agrees to
indemnify, defend and hold harmless Landlord from and against all claims,
liabilities and expenses, including attorneys’ fees, arising from any such
brokerage commissions or finder’s fees.

 

21.7                           Use
of Pronouns.  The use of the neuter
singular pronoun to refer to Landlord or Tenant shall be deemed a proper
reference even though Landlord or Tenant may be an individual, partnership,
association, corporation or a group of two or more individuals, partnerships,
associations or corporation.  The
necessity grammatical changes required to make the provisions of this Lease
apply in the plural sense where there is more that one Landlord or Tenant and
to corporations, associations, partnerships, individuals, males or females,
shall in all instances be assumed as though in each case fully expressed.

 

21.8                           Successors.  Except as otherwise provided in this Lease,
all provisions contained in this Lease shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, devisees,
successors, assigns and legal representatives. 
In the event of any sale or assignment (except for purposes of security
or collateral) by Landlord of the Premises or this Lease, Landlord shall, from
and after the Commencement Date (irrespective of when such sale or assignment
occurs), be relieved entirely of all its obligations under this Lease and such
obligations shall, as of the time of such sale or assignment or on the
Commencement Date, whichever is later, automatically pass to the Landlord’s
successor in interest.

 

15

 

21.9                           Recourse
by Tenant.  Anything in this Lease to
the contrary notwithstanding, Tenant shall look solely to the equity of
Landlord in the Premises, subject to prior rights of the holder of any mortgage
or deed of trust, for the collection of any judgment (or other judicial
process) requiring the payment of money by Landlord in the event of any default
or breach by Landlord with respect to any of the terms, covenants and
conditions of this Lease to be observed or performed by Landlord, and no other
assets of Landlord shall be subject to levy, execution or other procedures for
the satisfaction of Tenant’s remedies.

 

21.10                     Quiet
Enjoyment.  Upon Tenant paying the
rents reserved under this Lease and observing and performing all of the terms,
covenants and conditions on Tenant’s part to be observed and performed under
this Lease, Tenant shall have quiet enjoyment of the Premises for the Term
without interference from Landlord, subject to all of the provisions of this
Lease.

 

21.11                     Waiver.  No failure by any party to insist upon the
strict performance of any covenant, duty or condition of this Lease or to
exercise any right or remedy consequent upon a breach of this Lease shall
constitute a waiver of any such breach or of such or any other covenant, duty
or condition.  Any part may, by notice
delivered in the manner provided in this Lease, but shall be under no
obligation to, waive any of its rights or any conditions to its obligations
under this Lease, or any covenant or duty of any other party hereto.  No waiver shall affect or alter the remainder
of this Lese but each other covenant, duty and condition of this Lease shall
continue in full force and effect with respect to any other then existing or
subsequently occurring breach.

 

21.12                     Rights
and Remedies.  The rights and
remedies of the parties hereto shall not be mutually exclusive and the exercise
of one or more of the provisions of this Lease shall not preclude the exercise
of any other provisions.  The parties
confirm that damages at law may be an inadequate remedy for a breach or
threatened breach by any party of any of the provisions of this Lease.  The parties’ respective rights and
obligations under this Lease shall be enforceable by specific performance,
injunction or any other equitable remedy.

 

21.13                     Authorization.  Each individual executing this Lease does
thereby represent and warrant to each other so signing (and each other entity
for which another person may be signing) that he has been duly authorized to
deliver this Lease in the capacity and for the entity set forth where he signs.

 

21.14                     Litigation
Expenses.  If any action, suit or
proceeding is brought by a party hereto to recover any rent or other amount due
under this Lease because of any default under this Lease, to enforce or
interpret any of the provisions of this Lease, or for recovery of possession of
the Premises, the prevailing party in such action or proceeding shall be
entitled to recover from the other all of its reasonable costs and expenses
incurred therein (including those incurred in connection with any appeal),
including attorney’s fees, the amounts of which shall be fixed by the court and
made a part of any judgment rendered. 
Tenant shall be responsible for all expenses incurred by Landlord,
including, without limitation, attorneys’ fees, that Landlord incurs in any
case or proceeding involving Tenant under or related to  any bankruptcy or insolvency law.

 

21.15                     Miscellaneous.  The captions to the Paragraphs of this Lease
are for convenience of reference only and shall not be deemed relevant in
resolving questions of construction or interpretation under this Lease.  Exhibits referred to in this Lease and any

 

16

 

addendums, riders and schedules attached to
this Lease shall be deemed to be incorporated I this Lease as though a part of
this Lease.  Tenant shall not record this
Lease or a memorandum or notice of this Lease without the prior written consent
of Landlord.  This Lease and the
exhibits, riders and addenda, if any, attached hereto, constitute the entire
agreement between the parties.  Any
guaranty attached hereto is an integral part of this Lease and constitutes
consideration given to Landlord to enter into this Lease.  No amendment to this Lease shall be binding
upon Landlord or Tenant unless reduced to writing and signed.  Unless otherwise expressly set forth in this
Lease, all references to Paragraphs are to Paragraphs in this Lease.  Each provision to be performed by Tenant
shall be constructed to be both a covenant and a condition.  This Lease shall be governed by and construed
and interpreted in accordance with the laws of the State of Nevada.  Venue on any action arising out of this Lease
shall be proper only in the Eighth Judicial District Court in and for Clark
County, State of Nevada.  Landlord and
Tenant waive trial by jury in any action, proceeding or counterclaim brought by
either of them against the other on all matters arising out of this Lease or
the use and occupancy of the Premises. 
Time is of the essence of this Lease and each and every provision
hereof.  The submission of this Lease to
Tenant is not an offer to lese the Premises or an agreement by Landlord to
reserve the Premises for Tenant. 
Landlord shall not be bound to Tenant until Tenant has duly executed and
delivered duplicate original copies of this Lease to Landlord, and Landlord has
duly executed and delivered one of those duplicate original copies to Tenant.

 

IN WITNESS
WHEREOF, Landlord and Tenant have executed this Lease as of the date first set
forth above.

 

	
  “Landlord”

  	
  CENTENNIAL ACQUISITIONS, LLC, a Nevada

  limited liability company,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Phyllis Schwartz

  
	
   

  	
   

  	
    Phyllis Schwartz, Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Tenant”

  	
  TERRIBLE HERBST, INC., a Nevada
  corporation,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Jerry Herbst

  
	
   

  	
   

  	
    Jerry Herbst, President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RECORDER’S
  NOTE:

  THIS IS A COPY

  
				

 

17

 

GUARANTY

 

FOR GOOD AND VALUABLE
CONSIDERATION the receipt and sufficiency of which are hereby acknowledged, and
for the purpose of inducing Centennial Acquisitions, LLC, a Nevada limited
liability company (“Landlord”), to enter into the foregoing Lease with Terrible
Herbst, Inc., a Nevada corporation (“Tenant”), the undersigned unconditionally
guarantee to Landlord the full, prompt, and complete payment and performance by
Tenant of all of the terms, obligations, 
covenants, and conditions of said Lease to be paid, kept, or performed
by Tenant, including the payment of all rent and other charges thereunder.  The undersigned shall pay all of Landlord’s
expenses, including attorneys’ fees, incurred in enforcing the obligations of
Tenant under said Lease or in enforcing this Guaranty.

 

The undersigned hereby waive
all requirements of notice of acceptance of this Guaranty and all requirements
of notice of default or non-performance by Tenant.  The obligations of the undersigned under this
Guaranty shall remain fully binding although Landlord may have waived one or
more defaults by Tenant, extended the time of performance by Tenant, modified
or amended said Lease, released, returned, or misapplied other collateral given
as additional security (including other guaranties), or released Tenant from
the performance of its obligations under said Lease.  In the event any right of action accrues to
Landlord under said Lease, Landlord may, at its option, proceed directly
against the undersigned without first having commenced any action, first having
pursued any remedy, or first having obtained any judgment, against Tenant.

 

If this Guaranty is signed by
more than one person, their obligations shall be joint and several, and the
release of one guarantor.  This Guaranty
shall be binding upon the undersigned and their respective heirs, personal
representatives, successors, and assigns.

 

EXECUTED by the
undersigned guarantor(s) on or as of the
                       
day of                        ,
2002.

 

 

	
  /s/ Jerry Herbst

  	
   

  	
   

  
	
  Jerry Herbst

  	
   

  

 

18

 

EXHIBIT A

 

To

 

BUILDING LEASE

 

DESCRIPTION OF PREMISES

 

The Premises
referred to in the foregoing instrument are more particularly described as
follows:

 

A parcel of land situated in the southeast
Quarter (SE1/4) of Section 34 and the Southwest Quarter (SW1/4) of
Section 35, Township 28 South, Range 63 East, M.D.M., Searchlight of the
Piute Lode Claim, U.S.M.S. 2366 lying Easterly of U.S. Highway No. 95, and begin
more specifically described as follows:

 

COMMENCING at the Southwest corner (SW-Cor.)
of said Section 25 as shown by a map recoded December 12, 1976 as
File 30, Page 61, Record of Survey Maps, Clark County, Nevada:

 

THENCE North 0°23’28” West along the Westerly
line of said Section 35, a distance of 1316 16 feet to the
Northeasterly line of the aforesaid Piute Load Claim, said point being the TRUE
POINT OF BEGINNING;

 

THENCE South 64°21’32” East along said
Northeasterly line, 801.18 feet;

 

THENCE South 25°26’26” West, 467.58 feet;

 

THENCE North 64° 28’26” West, 499.42 feet to
the Easterly line of U.S. Highway No. 95, (150.00 feet wide) being
concaved to the East, and having a radius of 2925.00 feet;

 

THENCE from radial line which bears south
71°18’52” West, along said Easterly line (curving right), through a central
angle of 10°20’20”, an arc length of 527.81 feet;

 

THENCE North 08°20’48” West, 72.20 feet to
the aforementioned Northeasterly line of the Piute Lode Claim;

 

THENCE departing Easterly line of U.S.
Highway No. 95, South 64°21’32” East, 69.80 feet to the TRUE POINT OF
BEGINNING.

 

INCLUDING that portion of the Piute Lode
Claim which extends into the Right of Way of U.S. Highway No. 95, (150.00 feet
wide), being more specifically described as follows:

 

COMMENCING at the Point of
Intersection of the Easterly line of U.S. Highway NO. 95 with the
Northeasterly line of the Piute Load Claim, U.S. M.S. No. 2366;

 

THENCE along said Easterly line of U.S.
Highway No. 95 as follows: South 08°20’48” East, 72.20 feet to a curve,
concave to the East having a radius of 2925.00 feet;

 

19

 

THENCE Southerly (curving right) along said
curve, through a central angle of 4°03’40”, an arc length of 207.32 feet
to the TRUE POINT OF BEGINNING;

 

THENCE South 77°35’32” West, along a radial
line 43.00 feet to a curve, concave to the East, having a radius of
2958.00 feet;

 

THENCE Southerly (curving left) along said
curve, through a central angle of 01°54’30” an arc length of 98.85 feet.

 

TEHNCE North 75°41’02” East along a radial
line 43.00 feet to a curve, concave to the East, having a radius of
2925.00 feet;

 

THENCE Northerly (curving right) along said
curve, through a central angle of 1°54’30”, an arch length of 97.42 feet
to the TRUE POINT OF BEGINNING.

 

RESERVING to the grantor herein the right to
all oil, petroleum, gas, asphaltum and other minerals, gaseous, liquid and
solid, in and under the property without any right of surface entry for
exploration, development or extraction.

 

EXCEPTING THEREFROM that portion of said land
as conveyed to the State of Nevada by deed recorded June 24, 1988 in
Book  88064 as Document No. 00262,
Official Records, Clark County, Nevada.

 

20

 

AMENDMENT TO LEASE

Searchlight Truck Stop.

 

THIS AMENDMENT
TO LEASE (this “Amendment”) is entered into as of the 30th day of
July 2002, between Centennial Acquisitions, LLC, a Nevada limited
liability company (“Landlord”), and Terrible Herbst, Inc., a Nevada
corporation (“Tenant”).

 

RECITALS:

 

A.                                   On
June 30, Landlord and Tenant entered into a certain Lease (the “Lease”)
of the Property described in Exhibit “A” hereto (the “Property”).

 

B.                                     In
consideration of Tenant’s agreeing to provide interim financing for Landlord’s
acquisition of the Property, Landlord agrees to modify the Lease as set forth
herein.

 

WITNESSETH:

 

FOR GOOD AND
VALUABLE CONSIDERATION, Landlord and Tenant hereby agree as follows:

 

Amendments to
Lease.  The Lease is
hereby amended as follows:

 

(a)                                  The
first paragraph of Section 3 of the Lease is hereby amended to read as
follows: “Tenant’s obligation to pay rent under this Lease shall commence
September 1, 2002.  Land and Tenant
acknowledge that the Commencement Date of the Lease shall be September 1,
2002 except that Tenant shall be entitled to occupy the Premises rent-free from
August 1, 2002 until the Commencement Date and Tenant’s obligation to pay
obligations described in Section 4.3 shall commence as of August 1,
2002.”

 

(b)                                 The
prepaid rent provided for in Section 4.7 of the Lease shall be paid on the
later of September 1, 2002 or the date Landlord pays off the promissory
note due to Tenant by Landlord secured by a first position trust deed on
the Property.

 

IN WITNESS
WHEREOF, Landlord and Tenant have executed this Amendment to Lease as of the
date first set forth above.

 

	
   

  	
  “Landlord”

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CENTENNIAL ACQUISITIONS, LLC, a

  Nevada limited liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Phyllis R. Schwartz

  	
   

  
	
   

  	
   

  	
  Phyllis R. Schwartz, Manager

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RECORDER’S NOTE:

  THIS IS A COPY

  	
   

  

 

 

	
   

  	
  “Tenant”

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TERRIBLE HERBST,
  INC.,

  	
   

  
	
   

  	
  a Nevada
  corporation,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jerry Herbst

  	
   

  
	
   

  	
   

  	
  Jerry Herbst, President

  	
   

  

 

The undersigned Jerry Herbst
hereby consents to the foregoing amendment and acknowledges that his guaranty
of the Lease is not affected by this Amendment to the Lease.

 

 

THENCE Southerly (curving right) along said
curve, through a central angle of 4°03’40”, an arc length of 207.32 feet
to the TRUE POINT OF BEGINNING;

 

THENCE South 77°35’32” West, along a radial
line 43.00 feet to a curve, concave to the East, having a radius of
2958.00 feet;

 

THENCE Southerly (curving left) along said
curve, through a central angle of 01°54’30” an arc length of 98.85
feet.

 

TEHNCE North 75°41’02” East along a radial
line 43.00 feet to a curve, concave to the East, having a radius of 2925.00
feet;

 

THENCE Northerly (curving right) along said
curve, through a central angle of 1°54’30”, an arch length of 97.42 feet to the
TRUE POINT OF BEGINNING.

 

RESERVING to the grantor herein the right to
all oil, petroleum, gas, asphaltum and other minerals, gaseous, liquid and
solid, in and under the property without any right of surface entry for
exploration, development or extraction.

 

EXCEPTING THEREFROM that portion of said land
as conveyed to the State of Nevada by deed recorded June 24, 1988 in
Book 88064 as Document No. 00262, Official Records, Clark County,
Nevada.Exhibit 10.69

 

	
  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.

  
	
  APN:

  
	
   

  
	
  Mail Property Tax
  Statements to:

  
	
  c/o Herbst Gaming, Inc.

  
	
  5195 Las Vegas Blvd.

  
	
  Las Vegas, NV  89119

  
	
  Attn:  M. Higgins

  
	
   

  
	
   

  
	
  THIS SPACE ABOVE FOR
  RECORDER’S USE

  

 

 

LEASEHOLD DEED OF TRUST

with Assignment of Rents, Security Agreement and

Fixture Filing

 

NOTICE:  THE OBLIGATIONS SECURED HEREBY PROVIDE FOR
THE PERIODIC INCREASES AND/OR DECREASES IN THE APPLICABLE INTEREST RATE.

 

NOTICE:  THE OBLIGATIONS SECURED HEREBY INCLUDE
REVOLVING CREDIT OBLIGATIONS WHICH PERMIT BORROWING, REPAYMENT AND REBORROWING.

 

NOTICE:  THIS DEED OF TRUST SECURES FUTURE ADVANCES.  THE MAXIMUM AMOUNT OF PRINCIPAL SECURED IS
$190 MILLION.

 

The parties to this
Leasehold Deed of Trust with Assignment of Rents, Security Agreement and
Fixture Filing (“Deed of Trust”), dated as of June 10, 2004, are MARKET GAMING,
INC., a Nevada corporation (“Trustor”), as trustor, PRLAP, INC., as trustee
(“Trustee”), and BANK OF AMERICA, N.A., a national banking association, 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 June 10, 2004 (“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 10.6 therein (each a
“Lender” and collectively, the “Lenders”), Bank of America, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer, Banc of America
Securities LLC, as a Co-Lead Arranger and Sole Book Manager, U.S. Bank,
National Association, as a Co-Lead Arranger, Wells Fargo Bank, National
Association, as Syndication Agent and Lehman Brothers Holdings, Inc., as
Documentation Agent.

 

1

 

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
unconditionally grants, bargains, conveys, sells, transfers and assigns to
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 February 9, 1994 between The
1993 Samuel Josephson Revocable Trust and Phoenix Associates, as tenant (the
“Operating Lease”), a memorandum of which was recorded February 14, 1994,
in Book 940214, Instrument No. 00989 in the Official Records of Clark
County, Nevada (“Official Records”) and which was assigned to Trustor by an
assignment of lease recorded August 24, 2001, in Book 20010824 as
Instrument No. 01133 in the Official Records, 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 of Clark (the
“County”), State of Nevada, 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

 

2

 

(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 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”, which shall not include the
Operating Lease), 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; 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

 

3

 

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.

 

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

 

4

 

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 (the “Guaranty”), dated concurrently herewith, executed by Trustor in
favor of Beneficiary.  The Guaranty has
been entered into by Trustor to, among other things, guaranty the payment and
performance of all obligations of Borrower and any other “Obligor” (as defined
in the Guaranty) 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 amount of $150,000,000, but subject to increase to $190,000,000
under certain circumstances (the “Commitment”), including, but not limited to
the payment of all amounts owing under the Swing Line Loan Note, 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;

 

(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

 

5

 

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.

 

1.3                                 Future Advances (NRS 106.300, et seq). 
It is the intention of Trustor, Beneficiary and the Lenders that this
Deed of Trust is an “instrument” (as defined in NRS 106.330, as amended or
recodified from time to time) which secures “future advances” (as defined in
NRS 106.320, as amended or recodified from time to time) and which is governed
pursuant to NRS 106.300 through 106.400, as amended or recodified from
time to time (“NRS” means Nevada Revised Statutes).  It is the intention of the parties that the
Secured Obligations include the obligation of Trustor to repay “future
advances” of “principal” (as defined in NRS 106.345, as amended or recodified
from time to time) in an amount up to the Commitment (as further described
above), and that the lien of this Deed of Trust secures the obligation of
Trustor to repay all such “future advances” with the priority set forth in
NRS 106.370(1), as amended or recodified from time to time.

 

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.

 

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

 

6

 

(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.

 

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.

 

7

 

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 Security Agreement dated concurrently herewith,
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 Nevada 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 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 NRS 104.9502(2) of the Nevada 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
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

 

8

 

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 the leasehold
estate under the Operating Lease;

 

(b)                                 Trustor has or will have good title to all Property
other than the Land and Improvements (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);

 

(c)                                  Subject to applicable gaming laws and regulations of
the State of Nevada, Trustor has the full and unlimited power, right and
authority to encumber the Property and assign the Rents and the Leases;

 

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

 

(e)                                  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;

 

(f)                                    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);

 

(g)                                 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

 

(h)                                 None of 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 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

 

9

 

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.

 

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

 

10

 

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, 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

 

11

 

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 Nevada 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,
including NRS 37.115, as amended or recodified from time to time, 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.

 

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,

 

12

 

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.

 

13

 

(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 Fifty Million
Dollars ($50,000,000).  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.

 

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

 

14

 

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 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

 

15

 

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.

 

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 legal 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.

 

16

 

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

 

(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

 

17

 

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 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.

 

18

 

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 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, any other Borrower, any other Party, or any
other “borrower” (as that term is defined in NRS 106.310, as amended or
recodified from time to time) who may send a notice pursuant to NRS 106.380(1),
as amended or recodified from time to time, with respect to this Deed of Trust,
(i) delivers, sends by mail or otherwise gives, or purports to deliver,
send by mail or otherwise give, to Beneficiary or any Lender, (A) any
notice of an election to terminate the operation of this Deed of Trust as
security for any Secured Obligation, including, without limitation, any
obligation to repay any “future advance” (as defined in NRS 106.320, as amended
or recodified from

 

19

 

time to time) of “principal” (as defined in NRS
106.345, as amended or recodified from time to time), or (B) any other
notice pursuant to NRS 106.380(1), as amended or recodified from time to time,
(ii) records a statement pursuant to NRS 106.380(3), as amended or
recodified from time to time, or (iii) causes this Deed of Trust, any
Secured Obligation, Beneficiary or any Lender to be subject to NRS 106.380(2),
106.380(3) or 106.400, as amended or recodified from time to time; 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 Nevada Gaming Commission
petition a District Court of the State of Nevada for the appointment of a
supervisor to conduct the normal gaming activities on the Property following
such foreclosure proceeding.

 

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 in accordance with NRS 104.9620, as it may be amended or
recodified from time to time.

 

20

 

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 Nevada 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 combination and
in any manner permitted by applicable law.

 

(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 Nevada 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

 

21

 

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 Nevada
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 Nevada
Uniform Commercial Code, as amended or recodified from time to time, will
sometimes be referred to as a “Trustee’s Sale.”

 

(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.

 

22

 

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
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).

 

23

 

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.

 

6.7                                 Incorporation of Certain Nevada Covenants. 
Covenants Nos. 1, 2 (full replacement value), 3, 4 (at the applicable
Default Rate), 5, 6, 7 (reasonable), 8 and 9 of NRS 107.030, where not in
conflict with the provisions of the Loan Documents, are hereby adopted and made
a part of this Deed of Trust.  Upon any
Event of Default by Trustor hereunder, Beneficiary may (a) declare all sums
secured immediately due and payable without demand or notice or (b) have a
receiver appointed as a matter of right without regard to the sufficiency of
said property or any other security or guaranty and without any showing as
required by NRS §107.100.  All remedies
provided in this Deed of Trust are distinct and cumulative to any other right
or remedy under this Deed of Trust or afforded by law or equity and may be
exercised concurrently, independently or successively.  The sale of said property conducted pursuant
to Covenants Nos. 6, 7 and 8 of NRS §107.030 may be conducted either as to the
whole of said property or in separate parcels and in such order as Trustee may
determine.

 

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:

 

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.

 

24

 

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.

 

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.

 

25

 

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:

 

(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).

 

26

 

(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 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

 

27

 

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.

 

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

 

28

 

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.                                       Suretyship Provisions. 
The following provisions shall apply to the extent that all or any
portion of the Secured Obligations now or hereafter constitute obligations of
person(s) (for the purposes of this Article 8, each a “Obligated Party” and
collectively, “Obligated Parties”) other than, or in addition to, Trustor:

 

8.1                                 Conditions to Exercise of Rights. 
Trustor hereby waives any right it may now or hereafter have to require
Beneficiary, as a condition to the exercise of any remedy or other right
against Trustor hereunder or under any other document executed by Trustor in
connection with any Secured Obligation, 
to proceed against any Obligated Party or other person, or against any
other collateral assigned to Beneficiary by Trustor or any Obligated Party or
other person,  to pursue any other right
or remedy in Beneficiary’s power,  to
give notice of the time, place or terms of any public or private sale of real
or personal property collateral assigned to Beneficiary by any Obligated Party
or other person (other than Trustor), or otherwise to comply with Section 9504
of the Nevada Uniform Commercial Code (as modified or recodified from time to
time) with respect to any such personal property collateral, or  to make or give (except as otherwise
expressly provided in the Loan Documents) any presentment, demand, protest,
notice of dishonor, notice of protest or other demand or notice of any kind in
connection with any Secured Obligation or any collateral (other than the
Property) for any Secured Obligation.

 

8.2                                 Defenses.  Trustor
hereby waives any defense it may now or hereafter have that relates to:  any disability or other defense of either of
any Obligated Party or other person;  the
cessation, from any cause other than full performance, of the obligations of
any Obligated Party or other person;  the
application of the proceeds of any Secured Obligation, by any Obligated Party
or other person, for purposes other than the purposes represented to Trustor by
any Obligated Party or otherwise intended or understood by Trustor or any
Obligated Party;  any act or omission by
Beneficiary which directly or indirectly results in or contributes to the
release of any Obligated Party or other person or any collateral for any
Secured Obligation;  the unenforceability
or invalidity of any collateral assignment (other than this Deed of Trust) or
guaranty with respect to any Secured Obligation, or the lack of perfection or continuing
perfection or lack of priority of any lien (other than the lien hereof) which
secures any Secured Obligation;  any
failure of Beneficiary to marshal assets in favor of Trustor or any other
person;  any modification of any Secured
Obligation, including any renewal, extension, acceleration or increase in
interest rate;  any election of remedies
by Beneficiary that impairs any subrogation or other right of Trustor to
proceed against any Obligated Party or other person, including any loss of
rights resulting from anti-deficiency laws relating to nonjudicial foreclosures
of real property or other laws limiting, qualifying or discharging obligations
or remedies; any law which provides that the obligation of a surety or
guarantor must neither be larger in amount nor in other respects more burdensome
than that of the principal or which reduces a surety’s or guarantor’s
obligation in proportion to the principal obligation;  any failure of Beneficiary to file or enforce
a claim in any bankruptcy or other proceeding with respect to any person;  the election by Beneficiary, in any
bankruptcy proceeding of any person, of the application or non-application of
Section 1111(b)(2) of the United States Bankruptcy Code;  any extension of credit or the grant of any
lien under Section 364 of the United States Bankruptcy Code;  any use of cash collateral

 

29

 

under Section 363 of the United States Bankruptcy
Code; or  any agreement or stipulation
with respect to the provision of adequate protection in any bankruptcy
proceeding of any person.

 

8.3                                 Without limiting the generality of the foregoing:

 

8.3.1                        Trustor waives all rights and defenses that Trustor
may have (a) because any Secured Obligation is secured by any real property
other than the Property (“Other Real Property”) or (b) because any Secured
Obligation which is an obligation of a person or persons other than Trustor is
secured by the Property.  This means,
among other things:

 

8.3.2                        Beneficiary may foreclose hereunder or exercise any
other remedy or right against Trustor hereunder (or under any other document
executed by Trustor in connection with any Secured Obligation) without first
foreclosing on any Other Real Property or personal property collateral pledged
by an Obligated Party (or by any other person) with respect to any Secured
Obligation.

 

8.3.3                        If Beneficiary forecloses on the Property or on any
Other Real Property pledged by an Obligated Party (or by any other person) with
respect to any Secured Obligation:

 

(a)                                  The amount of such Secured Obligation may be reduced
only by the price for which that collateral is sold at the foreclosure sale,
even if the collateral is worth more than the sale price.

 

(b)                                 Beneficiary may foreclose hereunder or exercise any
other remedy or right against Trustor hereunder (or under any other document
executed by Trustor in connection with any Secured Obligation) even if
Beneficiary, by foreclosing on any such real property, has destroyed any right
Trustor may have to collect from Obligated Party (or from any other person who
pledged any such collateral and/or was liable for such Secured Obligation).

 

This is an unconditional
and irrevocable waiver of any rights and defenses Trustor may have because any
obligation secured hereby is also secured by Other Real Property and/or because
any Secured Obligation which is an obligation of a person or persons other than
Trustor is secured by the Property.

 

Trustor
waives all rights and defenses arising out of an election of remedies by
Beneficiary, even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for a Secured Obligation, has destroyed
Trustor’s rights of subrogation and reimbursement against the principal.

 

8.4                                 Subrogation.  Until no part
of any Commitment under the Credit Agreement remains outstanding and all of the
Secured Obligations have been indefeasibly paid and performed in full, Trustor
hereby waives  any right of subrogation
which Trustor may now or hereafter have against any Obligated Party that
relates to any Secured Obligation,  any
right to enforce any remedy Trustor may now or hereafter have (in its own
right, or by reason of succession to rights of Beneficiary) against any
Obligated Party that relates to any Secured Obligation (including without
limitation any right of reimbursement, indemnity or contribution),

 

30

 

and  any right to participate in any collateral
now or hereafter assigned to Beneficiary with respect to any Secured
Obligation.  Trustor further agrees that,
if and to the extent that any waiver set forth in this paragraph is ever held
to be unenforceable, all such rights of subrogation, enforcement and
participation shall be junior and subordinate to the right of Beneficiary to
obtain payment and performance of the Secured Obligations and to all rights of
Beneficiary in and to any property which now or hereafter serves as collateral
security for any Secured Obligation.

 

8.5                                 Obligated Party Information. 
Trustor warrants and agrees:  that
Trustor has not relied, and will not rely, on any representations or warranties
by Beneficiary to Trustor with respect to the creditworthiness of any Obligated
Party or the prospects of repayment of any Secured Obligation from sources
other than the Property;  that Trustor
has established and/or will establish adequate means of obtaining from any
Obligated Party on a continuing basis financial and other information
pertaining to the business operations, if any, and financial condition of each
Obligated Party;  that Trustor assumes full
responsibility for keeping informed with respect to each Obligated Party’s
business operations, if any, and financial condition;  that Beneficiary shall have no duty to
disclose or report to Trustor any information now or hereafter known to
Beneficiary with respect to any Obligated Party, including without limitation
information relating to any Obligated Party’s business operations or financial
condition; and that Trustor is familiar with the terms and conditions of the
Loan Documents and consents to all provisions thereof.

 

8.6                                 Other Rights of Sureties. 
Trustor hereby waives all other rights it may now or hereafter have,
whether or not similar to any of the foregoing, by reason of laws of the State
of Nevada pertaining to sureties.

 

8.7                                 Duration and Reinstatement of Lien. 
The lien of this Deed of Trust shall continue until the expiration of
all periods within which any amount at any time paid on account of the Secured
Obligations may be required to be restored or returned by Beneficiary upon the
bankruptcy, insolvency or reorganization of any Obligated Party, any guarantor
or any other person; and Beneficiary’s rights hereunder shall be reinstated and
revived, and the enforceability of this Deed of Trust shall continue, with
respect to any such amount which Beneficiary is required to restore or return
in connection with any such bankruptcy, insolvency or reorganization.

 

8.8                                 Subordination.  Except as
expressly provided in the Credit Agreement, until all of the Secured
Obligations have been fully paid and performed, 
Trustor hereby agrees that all existing and future indebtedness and
other obligations of each Obligated Party to Trustor (collectively, the
“Subordinated Debt”) shall be and are hereby subordinated to all Secured
Obligations which constitute obligations of the applicable Obligated Party, and
the payment thereof is hereby deferred in right of payment to the prior payment
and performance of all such Secured Obligations;  Trustor shall not collect or receive any cash
or non-cash payments on any Subordinated Debt or transfer all or any portion of
the Subordinated Debt; and  in the event
that, notwithstanding the foregoing, any payment by, or distribution of assets
of, any Obligated Party with respect to any Subordinated Debt is received by
Trustor, such payment or distribution shall be held in trust and immediately
paid over to Beneficiary, is hereby assigned to Beneficiary as security for the
Secured Obligations, and shall be held by Beneficiary in an interest bearing
account until all Secured Obligations have been fully paid and performed.

 

31

 

8.9                                 Lawfulness and Reasonableness. 
Trustor warrants that all of the waivers in this Deed of Trust are made
with full knowledge of their significance, and of the fact that events giving
rise to any defense or other benefit waived by Trustor may destroy or impair
rights which Trustor would otherwise have against Beneficiary, Obligated
Parties and other persons, or against collateral.  Trustor agrees that all such waivers are
reasonable under the circumstances and further agrees that, if any such waiver
is determined (by a court of competent jurisdiction) to be contrary to any law
or public policy, such waiver shall be effective to the fullest extent
permitted by law.

 

9.                                       Miscellaneous Provisions.

 

9.1                                 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.

 

9.2                                 No Waiver or Cure.

 

9.2.1                        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.

 

9.2.2                        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.

 

32

 

(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.

 

9.3                                 Powers of Beneficiary and Trustee.

 

9.3.1                        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.

 

9.3.2                        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

 

9.3.3                        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.

 

9.3.4                        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.

 

9.4                                 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.

 

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

 

33

 

9.6                                 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.

 

9.7                                 Interpretation.

 

9.7.1                        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.”

 

9.7.2                        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.

 

9.7.3                        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.

 

9.8                                 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.

 

9.9                                 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, including any rights
provided by NRS 100.040 and 100.050, as such Sections may be amended or
recodified from time to time.  Each
successor and assign of 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.

 

9.10                           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.

 

9.11                           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
Nevada 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 Nevada Uniform
Commercial Code, as amended or recodified from time to time.

 

34

 

	
  Notices to Trustor:

  	
   

  	
  Herbst Gaming, Inc.

  
	
   

  	
   

  	
  5195 Las Vegas Blvd.

  
	
   

  	
   

  	
  Las Vegas, NV  89119

  
	
   

  	
   

  	
  Attn:  M. Higgins

  
	
   

  	
   

  	
   

  
	
  Notices to Beneficiary:

  	
   

  	
  Bank of America, N.A.

  
	
   

  	
   

  	
  Gaming and Leisure Industries Group

  
	
   

  	
   

  	
  Portfolio Management – CA 9-706-17-54

  
	
   

  	
   

  	
  555 So. Flower Street, 17th Floor

  
	
   

  	
   

  	
  Los Angeles, California  90071

  
	
   

  	
   

  	
  Attention:  Janice Hammond

  
	
   

  	
   

  	
   

  
	
  Notices to Trustee:

  	
   

  	
  PRLAP, Inc.

  
	
   

  	
   

  	
  P.O. Box 2240

  
	
   

  	
   

  	
  Brea, California  92622

  

 

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

 

“Trustor”:

 

MARKET GAMING, INC., 

a Nevada corporation

 

 

	
  By:

  	
  /s/
  Edward Herbst

  	
   

  
	
   

  	
  Edward
  Herbst

  	
   

  

 

35

 

ACKNOWLEDGEMENT

 

	
  STATE OF Nevada

  	
   

  	
  )

  
	
   

  	
   

  	
  ) ss

  
	
  COUNTY OF Clark

  	
   

  	
  )

  

 

 

This instrument was
acknowledged before me on 6/10, 2004 by Edward Herbst as President of Market
Gaming, Inc., a Nevada corporation.

 

 

	
   

  	
  /s/ Janice R. Donelson

  	
   

  
	
   

  	
  (Signature of Notarial Officer)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  JANICE R. DONELSON

  	
   

  	
   

  	
   

  
	
  (SEAL)

  	
  Notary Public State of Nevada

  	
   

  	
  (Title and Rank)

  	
   

  
	
   

  	
  No. 99-39315-1

  	
   

  	
   

  	
   

  
	
   

  	
  My appt. exp. Nov. 20, 2007

  	
   

  	
  My commission expires:

  	
  11/20/07

  	
   

  
						

 

36

 

EXHIBIT “A”

 

(Legal Description of Land)

 

PARCEL I:

 

That portion of section
17, Township 22 South, Range 63 East, M.D.M., described as follows:

 

COMMENCING at the West
Quarter (W 1⁄4) corner of said Section 17; Thence North 00o06’00” East along the
West line of the Northwest Quarter (NW 1⁄4) of said Section 17 a distance of
344.47 feet to a point on the Northeasterly right of way line of U.S. Highway
No. 93-95-466 (400.00 feet wide); Thence South 42°23’2” East along said right
of way line a distance 1972.66 feet; Thence North 47°36’40” East a distance
176.29 feet to the TRUE POINT OF BEGINNING; Thence continuing North 47°36’40”
East a distance of 203.71 feet; Thence South 42°23’20” East a distance 148.71
feet; Thence South 47°36’40” West a distance of 203.71 feet; Thence North
42°23’20” West a distance of 148.71 feet to the TRUE POINT OF BEGINNING.

 

PARCEL II:

 

A non-exclusive easement
for ingress, egress, and parking over the unimproved portions of the following
described Parcel A, as provided for in that certain instrument entitled
“Declaration” and Recorded November 15, 1960 in Book 269 as Document No.
217787, Official Records; and as amended by that certain instrument entitled
“Amended to Declaration” Recorded August 2, 1978 in Book 924 as Document No.
883234, Official Records.

 

Parcel A:

That portion of the North Half (N 1⁄2) of the Southwest Quarter (SW 1⁄4) of
Section 17, Township 22 South, Range 63 East, M.D.M. & M., more
particularly described as Parcel 2-2-A, as shown by map thereof on file in File
75 of Parcel Maps, Page 51, in the Office of the County Recorder of Clark
County, Nevada.

 

PARCEL III:

 

A non-exclusive easement
for ingress, egress, access and parking over the unimproved portions of the
hereafter described Parcels B and C, as provided for in that certain Reciprocal
Easement Agreement recorded November 12, 1993 in Book 931112 as Document No.
01423, Official Records.

 

Parcel B:

That portion of
the North Half (N 1⁄2) of the Southwest Quarter (SW 1⁄4) of Section 17, Township 22
South, Range 63 East, M.D.B. & M., particularly described as Parcel 2-2-B,
as shown by map thereof in file 75 of Parcel Maps, Page 51, in the Office of
the County Recorder of Clark County, Nevada.

 

1

 

Parcel C:

A tract of land
being a portion of Lot 2-2-A of Parcel Map recorded in Parcel Map File 75, Page
51, of the Records of Clark County, Nevada, more particularly described as
follows:

 

BEGINNING at the
most Westerly corner of Lot 2-2-B of said Parcel Map, also being a corner on
the Southwesterly boundary line common to both said Lot 2-2-A and Lot 2-2-B on
the following three (3) courses:

 

1)                                      North 47°36’40” East 105.00 feet; Thence

2)                                      South 42°23’20” East, 96.50 feet; Thence

3)                                      South 47°36’40” West 105.00 feet;

 

Thence continuing
along the Southwesterly boundary line of said lot 2-2-A, South 42°23’20” East,
65.77 feet; Thence departing said Southwesterly boundary line of Lot 2-2-A,
North 47°36’40” East 110.62 feet; Thence North 42°23’20” West 167.19 feet;
Thence South 47°36’40” West 10.62 feet to a point on the Southwesterly boundary
line of said Lot 2-2-A; Thence along said Southwesterly boundary line, South
42°23’20” East 4.92 feet to the POINT OF BEGINNING.

 

2

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