CREDIT AGREEMENT

 

TABLE OF CONTENTS

		Page
SECTION 1. DEFINITIONS		1
1.1	Definitions	1
1.2	Rules of Construction	28
SECTION 2. AMOUNTS AND TERMS OF LOANS; project funding		29
2.1	Term Loan; Project Funding	29
2.2	Interest and Applicable Margins	38
2.3	Fees	40
2.4	Payments	41
2.5	Prepayments	41
2.6	Maturity	42
2.7	Loan Accounts	42
2.8	Yield Protection	43
2.9	Taxes	44
SECTION 3. CONDITIONS TO LOANS		46
3.1	Conditions to Initial Advance	46
3.2	Conditions to Advances	48
3.3	Conditions to Final Advance	50
SECTION 4. REPRESENTATIONS AND WARRANTIES		51
4.1	Organization, Powers, Capitalization and Good Standing	51
4.2	Disclosure	51
4.3	No Material Adverse Effect	52
4.4	No Conflict	52
4.5	Financial Statements and Projections	52
4.6	Solvency	52
4.7	Use of Proceeds; Margin Regulations	52
4.8	Brokers	53
4.9	Compliance with Laws	53
4.10	Intellectual Property	53
4.11	Investigations, Audits, Etc	53
4.12	Employee Matters	53
4.13	Litigation; Adverse Facts	53
4.14	Ownership of Property; Liens	54
4.15	Environmental Matters	54
4.16	ERISA	54
4.17	Deposit and Disbursement Accounts	55

 

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4.18	Agreements and Other Documents	55
4.19	Insurance	55
4.20	Taxes and Tax Returns	55
4.21	Project Construction.	56
4.22	Certificate of Occupancy; Licenses	57
SECTION 5. AFFIRMATIVE COVENANTS		58
5.1	Compliance With Laws and Contractual Obligations	58
5.2	Insurance	58
5.3	Inspection; Consultants; Lender Meeting	59
5.4	Organizational Existence	59
5.5	Environmental Matters	59
5.6	Landlords’ Agreements, Mortgagee Agreements, Bailee Letters and Real Estate Purchases	60
5.7	Further Assurances	60
5.8	Payment of Taxes	60
5.9	Cash Management Systems	61
5.10	Project Construction	61
5.11	Shortfalls	64
5.12	Maintenance of Assets.	64
SECTION 6. NEGATIVE COVENANTS		65
6.1	Indebtedness	65
6.2	Liens and Related Matters	65
6.3	Investments	66
6.4	Contingent Obligations	66
6.5	Restricted Payments	67
6.6	Restriction on Fundamental Changes	67
6.7	Disposal of Assets or Subsidiary Stock	67
6.8	Transactions with Affiliates	68
6.9	Conduct of Business; Use of Property	68
6.10	Fiscal Year	68
6.11	Press Release; Public Offering Materials	68
6.12	Subsidiaries	69
6.13	Deposit Accounts	69
6.14	ERISA	69
6.15	Sale-Leasebacks	69
SECTION 7. FINANCIAL COVENANTS/REPORTING		69
7.1	Financial Covenants	69
7.2	Financial Statements and Other Reports	71
7.3	Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement	74

 

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SECTION 8. DEFAULT, RIGHTS AND REMEDIES		74
8.1	Event of Default	74
8.2	Suspension or Termination of Term Loan Commitment	76
8.3	Acceleration and other Remedies	76
8.4	Construction Related Remedies	77
8.5	Performance by Agent	78
8.6	Application of Proceeds	78
SECTION 9. ASSIGNMENT AND PARTICIPATION		79
9.1	Assignment and Participations	79
9.2	Agent	80
9.3	Set Off and Sharing of Payments	85
9.4	Disbursement of Funds	85
9.5	Disbursements of Advances; Payment	86
SECTION 10. MISCELLANEOUS		87
10.1	Indemnities	87
10.2	Amendments and Waivers	87
10.3	Notices	88
10.4	Failure or Indulgence Not Waiver; Remedies Cumulative	89
10.5	Marshaling; Payments Set Aside	89
10.6	Severability	89
10.7	Lenders’ Obligations Several; Independent Nature of Lenders’ Rights	89
10.8	Headings	90
10.9	Applicable Law	90
10.10	Successors and Assigns	90
10.11	No Fiduciary Relationship; Limited Liability; Retention of Construction Consultant	90
10.12	Subrogation Rights of Agent and Lenders	91
10.13	Construction	91
10.14	Confidentiality	91
10.15	CONSENT TO JURISDICTION	91
10.16	WAIVER OF JURY TRIAL	92
10.17	Survival of Warranties and Certain Agreements	92
10.18	Entire Agreement	92
10.19	Counterparts; Effectiveness	92
10.20	Replacement of Lenders	92
10.21	Delivery of Termination Statements and Mortgage Releases	94
10.22	Subordination of Intercompany Debt	94

 

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INDEX OF APPENDICES

Annexes

Annex A	-	Pro Rata Shares and Term Loan Commitment Amounts
Annex B	-	Closing Checklist
Annex C	-	Pro Forma
Annex D	-	Lenders’ Bank Accounts
Annex E	-	Compliance and Excess Cash Flow Certificate

 

Exhibits

Exhibit 1.1(a)	-	Form of Architect Consent
Exhibit 1.1(c)	-	Form of Borrower Final Completion Certificate
Exhibit 1.1(e)	-	Form of Developer Consultant Consent
Exhibit 1.1(f)	-	Form of Engineer Consent
Exhibit 1.1(g)	-	Form of General Contractor Consent
Exhibit 1.1(h)	-	Form of Major Trade Contractor Consent
Exhibit 2.1(a)	-	Form of Term Notes
Exhibit 2.1(b)	-	Form of Advance Request
Exhibit 2.1(b)(ii)	-	Form of Borrower Advance Certification
Exhibit 2.1(b)(iii)	-	Form of Trade Contractor Payment Receipt
Exhibit 2.2(e)	-	Notice of Continuation/Conversion
Exhibit 3.2(e)	-	Form of Interim Lien Waiver from Trade Contractors
Exhibit 3.3(a)	-	Form of Final Lien Waiver from Trade Contractors
Exhibit 9.1	-	Assignment Agreement

 

Schedules

Schedule 1.1	-	Plans and Specifications
Schedule 4.1(a)	-	Jurisdictions of Organization and Qualifications
Schedule 4.1(b)	-	Capitalization
Schedule 4.7	-	Use of Proceeds
Schedule 4.8	-	Brokers
Schedule 4.10	-	Intellectual Property
Schedule 4.11	-	Investigations and Audits
Schedule 4.12	-	Employee Matters
Schedule 4.13	-	Litigation
Schedule 4.14	-	Real Estate
Schedule 4.15	-	Environmental Matters
Schedule 4.16	-	ERISA
Schedule 4.17	-	Deposit and Disbursement Accounts
Schedule 4.18	-	Agreements and Other Documents
Schedule 4.19	-	Insurance
Schedule 4.21(k)	-	Other Land
Schedule 6.1	-	Indebtedness
Schedule 6.2	-	Liens
Schedule 6.3	-	Investments
Schedule 6.4	-	Contingent Obligations
Schedule 6.7	-	Asset Dispositions
Schedule 6.8	-	Affiliate Transactions

 

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CREDIT AGREEMENT

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

R E C I T A L S :

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

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

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

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

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

SECTION 1.
DEFINITIONS

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

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

BDCF has the meaning ascribed to it in the Preamble.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Closing Date means April 20, 2007.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cost Saving shall mean, with respect to the Project:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Domestic Subsidiaries means any Subsidiary other than a Foreign Subsidiary.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

FF&E means furniture, fixtures and equipment.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Indemnitees has the meaning ascribed to it in Section 10.1 .

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

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

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

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

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

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

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

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

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

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

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

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

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

IRS means the United States Internal Revenue Service.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

PBGC means the Pension Benefit Guaranty Corporation.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Sponsor has the meaning ascribed to it in Recitals.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 2.
AMOUNTS AND TERMS OF LOANS; project funding

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

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

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

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

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

(b)            General Requirement Applicable to Advances .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(c)            Advances for Stored Materials .

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

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

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

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

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

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

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

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

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

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

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

(e)            Budget Reallocations .

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

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

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

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

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

(f)             Loan Balancing and Shortfalls .

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

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

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

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

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

(g)            Change Orders .

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

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

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

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

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

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

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

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

(i)             Direct Advances .

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

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

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

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

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

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

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

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

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

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

North Metro Harness Initiative, L.L.C.

Bank:       Associated Bank

200 North Adams

PO Box 19006,

Green Bay, WI 54307-9006

FBO:        North Metro Harness Initiative, LLC

2001 Killebrew Drive, #350, Minneapolis, MN  55425

ABA No.:  091001270

Account No.:  2283033690

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

2.2            Interest and Applicable Margins .

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

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

Applicable Term Loan Index Margin		4.00	%
Applicable Term Loan LIBOR Margin		6.00	%
Applicable Unused Line Fee Margin		4.50	%

 

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

Applicable Term Loan Index Margin		2.50	%
Applicable Term Loan LIBOR Margin		4.50	%
Applicable Unused Line Fee Margin		4.50	%

 

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

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

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

(e)            Borrower shall have the option to (i) convert at any time all or any part of the outstanding Term Loan from Index Rate Loan to LIBOR Loan, (ii) convert any LIBOR Loan to an Index Rate Loan, subject to payment of the LIBOR Breakage Costs in accordance with Section 2.3(d) if such conversion is made prior to the expiration of the LIBOR Period applicable thereto, or (iii) continue all or any portion of the Term Loan as a LIBOR Loan upon the expiration of the applicable LIBOR Period and the succeeding LIBOR Period of that continued portion of the Term Loan shall commence on the first day after the last day of the LIBOR Period of the portion of the Term Loan to be continued.  Any portion of the Term Loan having the same proposed LIBOR Period to be made or continued as, or converted into, a LIBOR Loan must be in a minimum amount of $2,000,000 and integral multiples