ASSETPURCHASE AGREEMENT

ARTICLE I. SALE OF ASSETS; CLOSING		1
1.01	Assets.	1
1.02	Assumption of Certain Liabilities.	4
1.03	Deposit; Purchase Price; Closing Payment; Promissory Note and Security Agreement.	4
1.04	Closing; Deliveries.	5
1.05	Further Assurances; Post Closing Cooperation.	7
1.06	Third Party Consents.	7
1.07	Governmental and Regulatory Authority Consents.	8
1.08	Transfer Taxes	8
1.09	Prorations	9
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF SELLER		9
2.01	Organization of Seller	9
2.02	Authority	10
2.03	No Conflicts	10
2.04	Governmental Approvals and Filings	10
2.05	Books and Records	10
2.06	Financial Statements.	11
2.07	Absence of Changes	12
2.08	No Undisclosed Liabilities	13
2.09	Legal Proceedings.	13
2.10	Compliance With Laws and Orders	13
2.11	Benefit Plans; ERISA.	14
2.12	Real Property	15
2.13	Tangible Personal Property	17
2.14	Intellectual Property.	18
2.15	Title to Assets	18
2.16	Taxes.	18
2.17	Contracts.	19
2.18	Licenses	21
2.19	Insurance	21
2.20	Affiliate Transactions	22
2.21	Employees; Labor Relations.	22
2.22	Environmental Matters	23
2.23	Suppliers	23
2.24	Inventory	23
2.25	Vehicles	24
2.26	Entire Business	24
2.27	Brokers	24
2.28	Authority	24
2.29	Disclosure	24

ARTICLE III. REPRESENTATIONS AND WARRANTIES OF PURCHASER		25
3.01	Organization	25
3.02	Authority	25
3.03	No Conflicts	25
3.04	Governmental Approvals and Filings	25
3.05	Legal Proceedings	25
3.06	Brokers	26
3.07	OFAC Compliance	26
3.08	Purchaser's Reliance Upon Representation or Warranty of Seller	26
3.09	Authority	26
3.10	Financial Ability	26
ARTICLE IV. COVENANTS OF SELLER		26
4.01	Regulatory and Other Approvals	26
4.02	Investigation by Purchaser	27
4.03	No Solicitations or Business Dispositions	27
4.04	Conduct of Business	28
4.05	Delivery of Financial Statements and Reports; Filings.	28
4.06	Employee Matters	29
4.07	Certain Restrictions	30
4.08	Delivery of Books and Records	30
4.09	Noncompetition and Confidentiality	30
4.10	Notice and Cure	31
4.11	Fulfillment of Conditions	32
4.12	Use of Name	32
4.13	Kennewick, Washington, Property	32
ARTICLE V. COVENANTS OF PURCHASER		32
5.01	Regulatory and Other Approval	32
5.02	Notice and Cure	33
5.03	Fulfillment of Conditions	33
5.04	Employee Information	33
5.05	OFAC Compliance	33
5.06	Disclosure of Financial Information	34
ARTICLE VI. CONDITIONS TO OBLIGATIONS OF PURCHASER		34
6.01	Representations and Warranties	34
6.02	Performance	34
6.03	Certificates	34
6.04	Orders and Laws	34
6.05	Regulatory Consents and Approvals	35
6.06	Audited Most Recent Financial Statements	35
6.07	Third Party Consents	35
6.08	Deliveries	35
6.09	Proceedings	35
6.10	Privity Letters	35
6.11	No Material Adverse Change	35
6.12	Release and Discharge of Monetary Liens	36

ARTICLE VII. CONDITIONS TO OBLIGATIONS OF SELLER		36
7.01	Representations and Warranties	36
7.02	Performance	36
7.03	Officers’ Certificates	36
7.04	Orders and Laws	36
7.05	Deliveries	37
7.06	Regulatory Consents and Approvals	37
7.07	Proceedings	37
ARTICLE VIII. EMPLOYEE MATTERS		37
8.01	Employees	37
8.02	Termination of Benefits by Seller	37
8.03	No Third Party Beneficiaries	38
8.04	WARN Act.	38
8.05	COBRA.	38
ARTICLE IX. SURVIVAL OF REPRESENTATIONS, WARRANTIES,  COVENANTS AND AGREEMENTS		39
9.01	Survival of Representations, Warranties, Covenants and Agreements	39
9.02	Limits on Purchaser's Claims Alleging Breach of Representations and Warranties	40
9.03	Limits on Seller's Claims Alleging Breach of Representations and Warranties	40
ARTICLE X. INDEMNIFICATION		41
10.01	Indemnification.	41
10.02	Method of Asserting Claims	42
ARTICLE XI. TERMINATION		44
11.01	Termination	44
11.02	Survival	45
11.03	Deposit	45
11.04	No Consequential or Incidental Damages	45
11.05	Purchaser’s Right to Specific Performance	45
ARTICLE XII. MISCELLANEOUS		45
12.01	Notices	45
12.02	Construction	46
12.03	Entire Agreement	46
12.04	Expenses	46
12.05	Public Announcements	46
12.06	Confidentiality	47
12.07	Waiver	47
12.08	Amendment	47
12.09	No Third Party Beneficiary	47
12.10	No Assignment; Binding Effect	47
12.11	Headings	48
12.12	Consent to Jurisdiction and Service of Process	48
12.13	Invalid Provisions	48
12.14	Exhibits and Schedules	48
12.15	Governing Law	48
12.16	Joint and Several Obligations	48
12.17	Counterparts	48

If to Purchaser, to:	Nevada Gold & Casinos, Inc.
	50 Brian Hollow Lane, Suite 500W Houston, Texas 77027 Attn: Robert B. Sturges, Chief Executive Officer Facsimile No.:   ###-###-####
with a copy to:	Wolff & Samson P.C.
	One Boland Drive West Orange, New Jersey 07052 Attn:  Laurence M. Smith, Esq. Facsimile No.:   ###-###-####
If to a Seller:	c/o Maygan Hurst
	1911 SW Campus Dr # 774 Federal Way, WA  98023-6473 Facsimile No.:   ###-###-####
with a copy to:	Eisenhower & Carlson, PLLC
	1201 Pacific Avenue, Suite 1201 Tacoma, WA   ###-###-#### Attn:  Carl R. Peterson Facsimile No.:   ###-###-####

	Seller:   CRAZY MOOSE CASINO, INC.
	By:	/s/ Robert Mitchell
		Name: Robert Mitchell
		Title: President

	CRAZY MOOSE II CASINO, INC.
	By:	/s/ Robert Mitchell
		Name: Robert Mitchell
		Title: President

	COYOTE BOB’S, INC.
	By:	Robert Mitchell
		Name: Robert Mitchell
		Title: President

	GULLWING III, LLC
	By:	Robert Mitchell
		Name: Robert Mitchell
		Title: Member/Manager

	Purchaser: NG WASHINGTON, LLC
	By:	/s/ Robert B. Sturges
		Name: Robert B. Sturges
		Title: Manager

 

 

 

LEGAL DESCIRPTION

Lot 2, Block 1, The Highlands West, according to the Plat thereof recorded in Volume 11 of Plats, Page 4, records of Benton County, Washington.

That portion of Blocks 18 and 19, TOGETHER WITH vacated alley and streets adjoining said blocks, O'KEEFE'S THIRD ADDITION TO PASCO according to the Plat thereof recorded in Volume B of Plats, Page 37, records of Franklin County, Washington, being more particularly described as follows: Beginning at the Southeast corner of Section 25, Township 9 North, Range 29 East, W.M.; thence West along the South line of said section, 406 feet; thence North parallel to the East line of said section, 207 feet to the True Point of Beginning; thence East, parallel to the South line of said section, 406 feet to the East line of said section; thence North along the East line 200 feet; thence West, parallel to the South line of said section, 406 feet; thence South, parallel to the East line of said section, 200 feet to the True Point of Beginning; EXCEPT the East 40 feet thereof conveyed to the City of Pasco, for South 20th Avenue, by Deed recorded under Recording No. 283730.

 

 

 

$4,000,000.00

Tacoma, Washington

 

This promissory note (this “Note”) is made as of ____________, 2009, by NG WASHINGTON, LLC (“Borrower”) in favor of CRAZY MOOSE CASINO, INC., CRAZY MOOSE CASINO II, INC., COYOTE BOB’S, INC. and GULLWING III, LLC (“Lender”).

 

For value received, Borrower promises to pay to Lender, or order, the principal sum of Four Million and No/100 U.S. Dollars ($4,000,000.00), together with interest thereon, all as hereinafter provided and upon the following terms and conditions:

 

Payment and Interest.  The terms of payment of this Note and the rate of interest shall be as follows:

 

(a) Quarterly Payments.  Beginning on [___________]1, 2009 and continuing on the same day of every third month thereafter for thirty-six (36) months, Borrower shall pay to Lender all interest accrued on this Note through the date of such payment.

 

(b) Final Payment.  All principal and interest amounts outstanding on this Note shall be paid in full on [________], 2012.

 

(c) Interest.  All principal amounts outstanding from time to time owing on this Note shall bear interest at the rate of seven percent (7%) per annum.

 

Security.  To secure, among other things, payment of the obligations owing under this Note, the parties hereto agree that the following shall be pledged and offered as security to Lender (“Collateral”):

 

(a) This Note and the sums evidenced hereby shall be secured by a Deed of Trust by and between Lender and Borrower of even date herewith ("Deed of Trust"), encumbering Borrower's interest in certain real property located at 510 South 20th Street, Pasco, Washington (parcel no.  ###-###-####) and 3014 W. Kennewick Avenue, Kennewick, Washington (parcel no. 103891040001002) (collectively, "Property").  The Deed of Trust shall be in first position on the Property, subject to no liens or encumbrances other than those liens described in the Deed of Trust.

 

(b) This Note and the sums evidenced hereby shall be secured by a Security Agreement by and between Lender and Borrower of even date herewith ("Security Agreement"), encumbering Borrower's interest in the personal property described in the Security Agreement ("Personal Property"), subject to no liens or encumbrances other than permitted liens described in the Security Agreement.

 

Guaranty.  The obligations owing hereunder and performance of all of the indebtedness, obligations and duties owing by Borrower to Lender shall be guarantied by Nevada Gold & Casinos, Inc. ("Guarantor") pursuant to a guaranty of even date herewith ("Guaranty").

 

 

Prepayment.  The indebtedness evidenced by this Note may be pre-paid, in whole or in part, at any time or from time to time, without premium or penalty or additional charges of any kind.

 

Events of Default:  Time is of the essence of this Note.  Any one or more of the following events shall be considered an event of default ("Event of Default") hereunder:

 

(a) Default on Extension of Credit.  Failure of Borrower to make any payment of principal, interest, late charges or other sums when due under this Note, which failure continues for more than ten (10) days after Borrower’s receipt of written notice from Lender of any such failure .

 

(b) Other Defaults.  Failure of (i) Borrower to comply with or to perform when due any other term, obligation, covenant or condition contained in this Note, in the Deed of Trust, or the Security Agreement or (ii) the Guarantor to comply with the Guaranty, in either case which failure continues for more than thirty (30) days after Borrower’s receipt of written notice from Lender of any such failure.  The Note the Deed of Trust, the Security Agreement and the Guaranty shall be referred to herein as the “Related Documents.”

 

(c) Insolvency.  (i)  The dissolution or termination of Borrower's existence as a going concern (other than as a result of a merger or consolidation of Borrower with and into an Affiliate of Borrower or a transfer of substantially all of the assets of Borrower to its Affiliate, as a result of which or in connection with which the Borrower’s existence as a going concern is terminated (an “Affiliate Transaction”); provided, however, in the event of an Affiliate Transaction, the Affiliate assumes all obligations under this Note and the Related Documents and provides notice of same to Lender) or (ii) the insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property, any assignment by Borrower for the benefit of its creditors, any type of creditor workout involving the Borrower and substantially all of its creditors, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.

 

(d) Creditor or Forfeiture Proceedings.  Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method (each, a “Proceeding”), by any creditor of Borrower or any other creditor or any grantor against any collateral of the Lender securing this Note, including the Property and the Real Property, or by any Governmental or Regulatory Authority, which Proceeding is not dismissed or stayed within sixty (60) days after the commencement of such Proceeding.

 

Remedies.  If any Event of Default shall occur, the Lender may, in its sole discretion, take any one or more of the following actions (except that in the case of an Event of Default of the type described in clause (ii) of the “Insolvency” subsection (c) above, the acceleration set forth below shall be automatic and not optional):

(a) Declare all principal, interest, and other sums on this Note immediately due and payable without demand, protest, notice of protest, notice of default, presentment for the payment or further notice of any kind (which Borrower hereby waives);

 

(b) Repossess, sell or otherwise dispose of any or all of the Collateral; and/or

 

 

(c) Proceed to enforce such other and additional rights and remedies that the Lender may have hereunder, under the Security Agreement, Deed of Trust or Guaranty or as may be provided by law.

 

Default Interest.  Upon the occurrence of an Event of Default, the interest rate described above shall increase immediately by eight percent (8%) per annum.

 

Rights Not Exclusive.  The rights and remedies provided for in this Note are cumulative and are not exclusive, and the Lender may also exercise any other rights, powers, privileges or remedies provided by law or in equity.

 

Payments.  Any and all payments made hereunder shall be made (i) by check to Lender at c/o Maygan Hurst, 1911 SW Campus Dr # 774, Federal Way, WA  98023-6473, or to such other location as shall be requested by Lender or (ii) by wire of funds to [TBS]2.  Any and all payment made hereunder shall be deemed tendered and received only upon actual receipt, promptly on the date due for each such payment as herein required (time being of the essence), at the address or account of the Lender designated for such payment.  Borrower hereby expressly assumes all risks of loss or liability resulting from non-delivery or delay in delivery of any payment transmitted by mail or in any other manner.

 

Maximum Interest Rate.  Nothing herein contained, nor any transaction relating hereto, shall be construed or so operate as to require Borrower to pay, or be charged, interest at a greater rate than the maximum allowed by the applicable law relating to this Note.  Should any interest or other charges, charged, paid or payable by Borrower in connection with this Note, or any other document delivered in connection herewith, result in the charging, compensation, payment or earning of interest in excess of the maximum allowed by the applicable law, all such excess shall be, and the same is hereby waived by the Lender, and any and all such excess paid shall be automatically credited against and in reduction of the principal due under this Note.

 

Late Charges; Acceptance of Payments.  If any installment under this Note is unpaid more than ten (10) days after it is due there shall be added to each such delinquent installment a late charge equal to ten percent (10%) of the installment or, in the case of the payment of the principal balance of this Note upon maturity, five percent (5%) of the installment.  Acceptance by the Lender of any payment in an amount less than the amount then due shall be deemed an acceptance on account only, and the failure to pay the entire amount then due shall be and continue to be an Event of Default, and at any time thereafter and until the entire amount then due has been paid, Lender shall be entitled to exercise all rights conferred upon it by this Note and/or under any the other documents upon occurrence of an Event of Default.

 

Liability.  Borrower hereby waives demand, presentment for payment, protest and notice of protest, and of nonpayment.  Borrower agrees that any modification or extension of the terms of payment made by the Lender or subsequent holder of this Note with or without notice, or a release of any party liable for Borrower’s obligations, or a release of property, real or personal, or any part thereof granted as security herefor, shall not diminish or impair Borrower’s liability for the payment hereof.

 

 

 

Waiver.  No delay or failure of the Lender in exercising any right, remedy, power or privilege hereunder shall affect such right, remedy, power or privilege, nor shall any single or partial exercise thereof preclude the exercise of any other right, remedy, power or privilege.  No delay or failure of the Lender at any time to demand strict adherence to the terms of this Note or any other documents, instruments or agreements between Borrower and Lender shall be deemed to constitute a course of conduct inconsistent with Lender's right at any time, before or after any Event of Default, to demand strict adherence to the terms of this Note or the Related Documents.

 

Attorney's Fees, Costs and Expenses.  Upon the occurrence of an Event of Default and if this Note is referred to an attorney for collection or suit is brought hereon, the Borrower shall pay to Lender or any subsequent holder all expenses and costs of collection, including, but not limited to, reasonable attorney's costs and fees, including any costs and fees incurred in connection with any bankruptcy action or appeal.  Any judgment recovered by the Lender or subsequent holder shall bear interest at the default rate.

 

No Assignment.  The obligations of the Borrower are not assignable nor assumable by any person or firm, nor may any person or firm take or receive the property "subject to" this Note, without the prior written consent of Lender, except in the case of an Affiliate Transaction pursuant to which, (1) by operation of law or pursuant to an assumption agreement, the obligations of the Borrower under this Note are assumed by an Affiliate of Borrower, and (2) Lender has been given no less than ten (10) days notice and an opportunity to take such actions as Lender deems necessary to perfect and continue Lender's security interest in the Collateral.  This Note shall be non-assignable by Lender until the expiration of one (1) year following the date hereof.  As a condition to assigning this Note from and after the one-year anniversary of the date hereof, and in order to provide assurance that Lender will have the financial ability to satisfy any claims that Borrower may have against Lender, Lender shall post a bond in favor of Borrower (with a bonding company and having terms that are approved by Borrower in writing, such approval not to be unreasonably withheld) or maintain cash in a segregated account (and provide written evidence, reasonably satisfactory to Borrower, upon the establishment of such account and quarterly thereafter, including evidence of the balance in such account) in an amount equal to the greater of (i) $250,000 or (ii) the amount of any claims asserted by Borrower against Lender in good faith, prior to the assignment of this Note by Lender, pursuant to any other agreements among Borrower and Lender.

 

Venue and Applicable Law.  Borrower agrees that the venue of any action hereon shall be laid in Pierce County, Washington and that this Note shall be construed according to the laws of the State of Washington.

 

Defined Terms.  As used in this Note, in addition to the defined terms set forth herein, the following defined terms have the meanings indicated below:

 

“Affiliate” means any Person that directly, or indirectly through one of more intermediaries, controls or is controlled by or is under common control with the Person specified. For purposes of this definition, control of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person whether by contract or otherwise and, in any event and without limitation of the previous sentence, any Person owning ten percent (10%) or more of the voting securities of another Person shall be deemed to control that Person. With respect to a natural Person, an Affiliate includes such Person's spouse, siblings and children.

 

“Governmental or Regulatory Authority” means any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States, or any state, county, city or other political subdivision.

 

 

“Person” means any natural person, corporation, limited liability company, general partnership, limited partnership, proprietorship, other business organization, trust, union, association or Governmental or Regulatory Authority.

 

 

NOTICE CONCERNING ORAL AGREEMENTS   Oral agreements or oral commitments to lend money, extend credit or to forbear from enforcing repayment of a debt are not enforceable under Washington law.

 

 

Dated as of the date first above written.

 

 

NG WASHINGTON, LLC

 

 

By:
Its:

 

 

CRAZY MOOSE CASINO, INC.

 

 

CRAZY MOOSE CASINO II, INC.

 

 

COYOTE BOB’S, INC.

 

 

GULLWING III, LLC

 

 

By:
Its:

 

 

 

 

This Security Agreement (“Agreement”) is made as of ________ __, 2009, by CRAZY MOOSE CASINO, INC., a Washington corporation having an office at 510 South 20th Street, Pasco, Washington 99301 (“Crazy Moose”), CRAZY MOOSE CASINO II, INC., a Washington corporation having an office at 22003 66th Ave. W, Ste. A, Mountlake Terrace, Washington 98043 (“Crazy Moose II”), COYOTE BOB’S, INC., a Washington corporation having an office at 3014 W. Kennewick Ave., Kennewick, Washington 99336 (“Coyote Bob’s”), and GULLWING III, LLC, a Washington limited liability company having an office at 402 16th St. NE, Ste. A-106, Auburn, Washington 98002 (“Gullwing”) (Crazy Moose, Crazy Moose II, Coyote Bob’s and Gullwing shall be collectively referred to herein as “Lender”), and NG WASHINGTON, LLC, a Washington limited liability company having an office at 50 Briar Hollow Lane, Suite 500 West Houston, Texas 77027 (“Borrower”).

 

 

 

A. Pursuant to an Asset Purchase Agreement dated as of March 12, 2009 (“Purchase Agreement”), Borrower has agreed to purchase the Assets (as defined below) from Lender.  In connection therewith, among other documents, Borrower has executed in favor of Lender a promissory note of even date herewith in the aggregate original principal amount of $4,000,000 (“Note”).  Capitalized terms used and not defined herein shall have the meanings ascribed to such terms as set forth in the Purchase Agreement.

 

 

B. It is a condition to Closing of the Purchase Agreement that Borrower execute and deliver to Lender (i) a deed of trust encumbering Borrower's interest in certain real property transferred pursuant to the Purchase Agreement (“Deed of Trust”) and (ii) this Agreement, encumbering all of its personal property assets, including those transferred by Lender to Borrower under the Purchase Agreement, as collateral security for the payment and performance of the Indebtedness (as defined below).

 

Now, therefore, the parties hereto hereby agree as follows:

 

 

1. Grant of Security Interest.  For valuable consideration, Borrower grants to Lender a security interest in the Collateral to secure the Indebtedness and agrees that Lender shall have the rights stated in this Agreement with respect to the Collateral, in addition to all other rights which Lender may have by applicable law.

 

2. Definitions.  The following words shall have the following meanings when used in this Agreement:

 

·	Account.  “Account” or “Accounts” means all of Borrower's accounts, including those as defined in RCW 62A.9A-102.

 

·	Agreement.  "Agreement" means this Security Agreement, as this Security Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Security Agreement.

 

 

·	Borrower.  "Borrower" means NG WASHINGTON, LLC and its successors and assigns.

 

·	Collateral.  "Collateral" means the following described property of Borrower, whether now owned or hereafter acquired, whether now existing or hereafter arising and wherever located (collectively, “Assets”):

 

All Accounts, Inventory, Equipment, vehicles, chattel paper (whether tangible or electronic) and General Intangibles, commercial tort claims, documents, fixtures, instruments, letter of credit rights, money and supporting obligations, and Income and Proceeds therefrom; provided, however, in no event shall the Collateral consist of assets acquired by Borrower after the date of this Agreement for use in connection with a new location that does not comprise part of the Business as of the Closing Date.

 

In addition, the word "Collateral" includes all the following, whether now owned or hereafter acquired, whether now existing or hereafter existing and wherever located:

 

(a) All attachments, accessions, accessories, tools, parts, supplies, increases, and additions to and replacements of and substitutions for any Assets.

 

(b) All products and produce of any Assets.

 

(c) All accounts, general intangibles, instruments, rents, monies, payments, and all other rights, arising out of a sale, lease, or other disposition of any Assets.

 

(d) All proceeds (including insurance proceeds) from the sale or other disposition of any Assets.

 

(e) All records and data relating to any Assets, whether in the form of a writing, photograph, microfilm, microfiche, or electronic media, together with all of Borrower's right, title, and interest in and to all computer software required to utilize, create, maintain, and process any such records or data on electronic media.

 

·	Deed of Trust.  “Deed of Trust” shall be as defined in Recital B above.

 

·

Equipment.  “Equipment” means all Borrower’s equipment, machinery, furniture, and furnishings, including that acquired by Borrower at Closing under the Purchase Agreement, together with all accessions, parts, attachments, accessories, or appurtenances thereto, or appertaining, attached, kept, used or intended for use in connection therewith, and all substitutions, improvements and replacements thereof and additions thereto.

 

·	Event of Default.  "Event of Default" means any of the Events of Default set forth below in the section titled "Events of Default."

 

·

General Intangibles.  “General Intangibles” means all of Borrower’s general intangibles, including, but not limited to, any contract rights, permits and licenses to the extent transferable by applicable law, concessions, trademarks, patents, copyrights or franchises or general rights to receive payment from any source whatsoever, now owned or hereafter acquired, including those acquired by Borrower under the Purchase Agreement.

 

 

·	Guaranty.  “Guaranty” means that guaranty by Nevada Gold & Casinos, Inc. of even date herewith in favor of the Lender.

 

·

Income and Proceeds.  “Income and Proceeds” mean all present and future income, proceeds, earnings, increases, and substitutions from or for the Collateral of every kind and nature, including without limitation all payments, interest, profits, distributions, benefits, rights, options, warrants, dividends, stock dividends, stock splits, stock rights, regulatory dividends, distributions, subscriptions, monies, claims for money due and to become due, proceeds of any insurance on the Collateral, whether voluntary or involuntary, by agreement or by operation of law, and all other property Borrower is entitled to receive on account of such Collateral, including accounts, contract rights, documents, instruments, chattel paper, and general intangibles.

 

·	Indebtedness.  “Indebtedness” means the indebtedness evidenced by the Note or any other Related Documents, including all principal, interest, costs, fees and expenses for which Borrower is responsible.

 

·	Inventory.  "Inventory" means all of Borrower's inventory, including that as defined in RCW 62A.9A.102.

 

·	Lender.  "Lender" means collectively, CRAZY MOOSE, CRAZY MOOSE II, COYOTE BOB’S and GULLWING and their successors and assigns.

 

·	Note.  “Note” means the Note of even date herewith, in the principal amount of $4,000,000.00 from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of and substitutions therefor.

 

·

Permitted Lien.  “Permitted Lien” means (i) the term “Permitted Lien” as defined in the Purchase Agreement, (ii) a lien in favor of the principal lender to Borrower or its Affiliates, so long as such lien is subordinate to the lien granted to Lender hereunder and approved in writing by Lender, such approval not to be unreasonably withheld and (iii) purchase money security interests granted from time to time by Borrower in an amount not to exceed $100,000 (or such greater amount as Lender may approve in writing, such approval not to be unreasonably withheld) in any calendar year, provided that such security interests attach only to the personal property (which shall be described with specificity in the applicable UCC-1 statements) being financed by the secured party and Lender receives any notices required under the applicable provisions of the Washington Uniform Commercial Code--RCW 62A.1 101 et seq. and a detailed description of the personal property subject to the purchase money security interest (complete with serial numbers if available).

 

·	Purchase Agreement.  Purchase Agreement shall be as defined in Recital A above.

 

·	Related Documents.  "Related Documents" means the Note and the Deed of Trust.

 

3. Borrower's Waivers and Responsibilities.  Except as otherwise required under this Agreement or by applicable law, (a) Borrower agrees that Lender need not tell Borrower about any action or inaction Lender takes in connection with this Agreement; (b) Borrower assumes the responsibility for being and keeping informed about the Collateral; (c) Borrower waives any defenses that may arise because of any action or inaction of Lender, including without limitation any failure of Lender to realize upon the Collateral or any delay by Lender in realizing upon the Collateral; and (d) Borrower agrees to remain liable under the Indebtedness no matter what action Lender takes or fails to take under this Agreement.

 

 

4. Obligations of Borrower.  Borrower covenants to Lender as follows:

 

4.1 Organization.  Borrower shall at all times remain a Washington State limited liability company validly existing under the laws of the State of Washington, except in connection with an Affiliate Transaction (as defined in the Note).

 

4.2 Perfection of Security Interest.  Borrower agrees to execute such financing statements and to take whatever other actions are reasonably requested by Lender to perfect and continue Lender's security interest in the Collateral.  Upon request of Lender, Borrower will note Lender's interest upon any chattel paper constituting part of the Collateral.  Lender may at any time, and without further authorization from Borrower, file a carbon, photographic or other reproduction of any financing statement or of this Agreement for use as a financing statement.  Borrower will reimburse Lender for all expenses for the perfection and the continuation of the perfection of Lender's security interest in the Collateral.  Borrower promptly will notify Lender of any change in Borrower's name including any change to the assumed business names of Borrower.

 

4.3 Removal of Collateral.  Borrower shall keep the Collateral (or to the extent the Collateral consists of intangible property such as accounts, the records concerning the Collateral) at Borrower's addresses within the State of Washington, or at such other locations where Borrower conducts business as specified by written notice to Lender.  To the extent that the Collateral consists of vehicles, or other titled property, Borrower shall not take or permit any action which would require application for certificates of title for the vehicles outside the State of Washington, without the prior written consent of Lender.

 

4.4 Transactions Involving Collateral.  Borrower shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral except for (i) the sale of Inventory in the ordinary course of its business, (ii) the sale of Equipment which is fully-depreciated or obsolete or (iii) as otherwise permitted hereunder or under any other Related Document.  A sale in the ordinary course of Borrower's business does not include a transfer in partial or total satisfaction of a debt (other than in partial or total satisfaction of the Note) or any bulk sale.  Borrower shall not, without the prior written consent of Lender, pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any lien, security interest, encumbrance, or charge, other than the security interest provided for in this Agreement and other than Permitted Liens.  Unless waived by Lender, all proceeds from any disposition of the Collateral in violation hereof (for whatever reason) shall be held in trust for Lender and shall not be commingled with any other funds; provided, however, this requirement shall not constitute consent by Lender to any sale or other disposition in violation of this Section 4.4.  Upon receipt, Borrower shall immediately deliver any such proceeds to Lender.

 

4.5 Title.  Borrower covenants to Lender that all times it shall hold good and marketable title to the Collateral, free and clear of all liens and encumbrances except for the liens permitted by this Agreement and any Permitted Lien.  Borrower shall defend Lender's rights in the Collateral against the claims and demands of all other persons.

 

4.6 Taxes, Assessments and Liens.  Borrower shall pay when due all taxes, assessments and liens upon the Collateral, its use or operation, upon this Agreement, upon the Note, or upon any of the other Related Documents; provided, however, in no event shall Borrower be obligated to pay any taxes or other assessment relating to the income of Lender, including without limitation, interest under the Note.  Borrower may withhold any such payment or may elect to contest any lien if Borrower is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's interest in the Collateral is not jeopardized.  If the Collateral is subjected to a lien which is not discharged within thirty (30) days, Borrower shall deposit with Lender cash, a sufficient corporate surety bond or other security satisfactory to Lender in an amount adequate to provide for the discharge of the lien plus any interest, costs, attorneys' fees or other charges that could accrue as a result of foreclosure or sale of the Collateral.  In any contest Borrower shall defend itself and Lender and shall satisfy any final adverse judgment before enforcement against the Collateral.  Borrower shall name Lender as an additional obligee under any surety bond furnished in the contested proceedings.

 

 

4.7 Compliance With Governmental Requirements.  Borrower shall comply promptly in all material respects with all laws, ordinances and regulations of all Governmental or Regulatory Authority applicable to the production, disposition, or use of the Collateral.  Borrower may contest in good faith any such law, ordinance or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Lender's interest in the Collateral is not jeopardized.

 

4.8 Hazardous Substances.  Borrower represents and warrants that the Collateral shall not, so long as this Agreement remains a lien on the Collateral, be used for the generation, manufacture, storage, transportation, treatment, disposal, release or threatened release of any hazardous waste or substance, as those terms are defined in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub.L.No.99-499 ("SARA"), the Hazardous Material Transportation Act, 49 U.S.C. Section 1801, et seq, the Resource Conservation and Recovery Act, 49 U.S.C. Section 6901, et seq., or other applicable state or Federal laws, rules or regulations adopted pursuant to any of the foregoing.  The terms "hazardous waste" and "hazardous substance" shall also include, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos.  Borrower hereby releases and waives any future claims against a Lender for indemnity or contribution in the event Borrower becomes liable for cleanup or other costs under any such laws.  Notwithstanding the foregoing, office equipment, cleaning solutions and other materials that are or contain hazardous substances may be used, handled or stored on the premises in which Borrower conducts business, provided such are in de minimis amounts only and are incidental to, and reasonably necessary for, the operation and maintenance of the premises and are used in compliance with all environmental statutes.

 

4.9 Maintenance of Casualty Insurance.  Borrower shall procure and maintain all risks insurance, including without limitation, fire, theft and liability coverage, together with such other insurance, similar in form, amounts, coverages and basis as are currently in effect with respect to the Collateral, issued by a company or companies reasonably acceptable to Lender.  Borrower, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least ten (10) days’ prior written notice to Lender and not including any disclaimer of the insurer's liability for failure to give such a notice.  In connection with all policies covering Collateral, Borrower will provide Lender with such loss payable or other endorsements as Lender may reasonably require.  If Borrower at any time fails to obtain or maintain any insurance as required under this Agreement, Lender may (but shall not be obligated to) obtain such insurance as Lender deems appropriate in accordance with this Section 4.9, including if it so chooses "single interest insurance," which will cover only Lender's interest in the Collateral.

 

4.10 Application of Insurance Proceeds.  Borrower shall promptly notify Lender of any loss or damage to the Collateral in excess of $10,000.  Lender may make proof of loss if Borrower fails to do so within forty-five (45) days of the casualty.  All proceeds of any insurance on the Collateral, including accrued proceeds thereon, shall be utilized by Borrower for repair or replacement of the damaged or destroyed Collateral.  Any proceeds which have not been disbursed within six (6) months after their receipt and which Borrower has not committed to the repair or restoration of the Collateral shall be used to prepay the Indebtedness.

 

 

4.11 Maintenance and Inspection of Collateral.  Borrower shall maintain all tangible Collateral in good condition and repair, normal wear and tear excepted.  Borrower will not commit damage to or destruction of the Collateral or any part of the Collateral.

 

5. Expenditures By Lender.  If not discharged or paid when due, Lender may (but shall not be obligated to) discharge or pay any amounts required to be discharged or paid by Borrower under this Agreement, including without limitation all taxes, liens, security interests, encumbrances, and other claims, at any time levied or placed on the Collateral.  Lender also may (but shall not be obligated to) pay all costs of insuring, maintaining and preserving the Collateral consistent with the terms of this Agreement.  All such expenditures incurred or paid by Lender for such purposes will then bear interest at the interest rate then in effect under the Note, from the date incurred or paid by Lender to the date of repayment by Borrower.  All such expenses shall become a part of the Indebtedness and, at Lender's option, will (a) be payable on demand, (b) be added to the balance of the Indebtedness and be apportioned among and be payable with any installment payments to become due during either (i) the term of any applicable insurance policy or (ii) the remaining term of the Indebtedness or (c) be treated as a balloon payment which will be due and payable at the Indebtedness's maturity.  This Agreement also will secure payment of these amounts.  Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon the occurrence of an Event of Default.

 

6. Limitations on Obligations of Lender.  Following an Event of Default and the expiration of any applicable cure period, Lender shall use ordinary reasonable care in the physical preservation and custody of the Collateral in Lender's possession, but shall have no other obligation to protect the Collateral or its value.  In particular, but without limitation, Lender shall have no responsibility for (a) any depreciation in value of the Collateral or for the collection or protection of any income and proceeds from the Collateral, (b) preservation of rights against parties to the Collateral or against third persons, (c) ascertaining any maturities, calls, conversions, exchanges, offers, tenders, or similar matters relating to any of the Collateral, or (d) informing Borrower about any of the above, whether or not Lender has or is deemed to have knowledge of such matters.  Except as provided above, Lender shall have no liability for depreciation or deterioration of the Collateral.

 

7. Default and Remedies.

 

7.1 Events of Default.  An Event of Default (as defined under the Note) shall constitute an “Event of Default” under this Agreement.

 

7.2 Rights and Remedies on Default.  Following the occurrence and during the continuance of an Event of Default, Lender may exercise any one or more of the rights and remedies set forth below, except that in the case of an Event of Default of the type described in subsection (c) of the Note entitled "Insolvency", such acceleration shall be automatic and not optional.

 

 

 

 

7.2.3 Sell the Collateral.  Sell the Collateral, at Lender's discretion, as a unit or in parcels, at one or more public or private sales.  Unless the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, Lender shall give or mail to Borrower, or any of them, notice at least ten (10) days in advance of the time and place of any public sale, or of the date after which any private sale may be made.  Borrower agrees that any requirement of reasonable notice is satisfied if Lender mails notice by ordinary mail addressed to Borrower, or any of them, at the last address Borrower has given Lender in writing.  If a public sale is held, there shall be sufficient compliance with all requirements of notice to the public by a single publication in any newspaper of general circulation in the county where the Lender is located, setting forth the time and place of sale and a brief description of the property to be sold.  Lender may be a purchaser at any public sale.

 

7.2.4 Foreclosure.  Maintain a judicial suit for foreclosure and sale of the Collateral.

 

7.2.5 Transfer Title.  Effect transfer of title upon sale of all or part of the Collateral.  For this purpose, following an Event of Default and the expiration of any applicable cure period, Borrower irrevocably appoints Lender as its attorney-in-fact to execute endorsements, assignments and instruments in the name of Borrower and each of them (if more than one) as shall be necessary or reasonable.

 

7.2.6 Appoint Receiver.  To the extent permitted by applicable law, Lender shall have the following rights and remedies regarding the appointment of a receiver: (a) Lender may have a receiver appointed as a matter of right, (b) the receiver may be an employee of Lender and may serve without bond, and (c) all fees of the receiver and his or her attorney shall become part of the Indebtedness secured by this Agreement and shall be payable on demand, with interest at the default rate set forth in the Note from the date of expenditure until repaid.

 

7.2.7 Collect Revenues, Apply Accounts.  Lender, either itself of through a receiver, may collect the payments, rents, income and revenues from the Collateral.  Lender may at any time in its discretion transfer any Collateral into its own name or that of its nominee and receive the payments, rents, income, and revenues therefrom and hold the same as security for the Indebtedness or apply it to payment of the Indebtedness in such order of preference as Lender may determine or as otherwise required by applicable law.  Insofar as the Collateral consists of accounts, general intangibles, insurance policies, instruments, chattel paper, choses in action, or similar property, Lender may demand, collect, receipt for, settle, compromise, adjust, sue for, foreclose, or realize on the Collateral as Lender may determine.

 

 

7.2.8 Obtain Deficiency.  If Lender chooses to sell any or all of the Collateral, Lender may obtain a judgment against Borrower for any deficiency remaining on the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this Agreement.  Borrower shall be liable for a deficiency even if the transaction described in this subsection is a sale of accounts or chattel paper.

 

7.2.9 Other Rights and Remedies.  Have and exercise any or all of the rights and remedies of a secured creditor under the provisions of the Uniform Commercial Code, at law, in equity, or otherwise.

 

7.2.10 Application of Proceeds.  Apply any cash which is received from the collection or sale of the Collateral, to reimbursement of any reasonable expenses, including commissions incurred in connection with a sale, attorney fees as provided below, and court costs, whether or not there is a lawsuit and including any fees on appeal, incurred by Lender in connection with the collection and sale of such Collateral and to the payment of the Indebtedness of Borrower to Lender, with any excess funds to be paid to Borrower.  Borrower agrees, to the extent permitted by law, to pay any deficiency after application of the proceeds of the Collateral to the Indebtedness.

 

7.2.11 Cumulative Remedies.  All of Lender's rights and remedies, whether evidenced by this Agreement or by any other writing, shall be cumulative and (except as otherwise provided in the Guaranty) may be exercised singularly or concurrently.  Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower under this Agreement, after Borrower's failure to perform, shall not affect Lender's right to declare a default and to exercise its remedies.

 

8. Miscellaneous Provisions.  The following miscellaneous provisions are a part of this Agreement:

 

8.1 Amendments.  This Agreement constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement.  No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment.

 

8.2 Applicable Law.  This Agreement has been delivered to Lender and accepted by Lender in the State of Washington.  If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Pierce County, the State of Washington.  This Agreement shall be governed by and construed in accordance with the laws of the State of Washington.

 

8.3 Attorney's Fees; Expenses.  Borrower agree to pay upon demand all of Lender's costs and expenses, including reasonable attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Agreement.  Costs and expenses include Lender's reasonable attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (and including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services.  Borrower also shall pay all court costs and such additional fees as may be directed by the court.

 

 

8.4 Caption Headings.  Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement.

 

8.5 Notices.  All notices required to be given under this Agreement shall be given in writing, may be sent by telefacsimile, and shall be effective when actually delivered or when deposited with a nationally recognized overnight courier or deposited in the United States mail, first class, postage prepaid, addressed to the party to whom the notice is to be given at the following address:

 

	To Borrower at:	NG WASHINGTON, LLC
		50 Briar Hollow Lane, Ste. 500 West Houston, Texas  77027 Attn: Robert B. Sturges, Chief Executive Officer Facsimile No.: (713) 621-2245
	with copy to:	Wolff & Samson P.C.
		One Boland Drive West Orange, New Jersey 07052 Attn: Laurence M. Smith, Esq. Facsimile No.: (973) 530-2221
	To Lender at:	CRAZY MOOSE CASINO, INC.
		CRAZY MOOSE CASINO II, INC. COYOTE BOB’S, INC. GULLWING III, LLC c/o Maygan Hurst 1911 SW Campus Dr # 774 Federal Way, WA  98023-6473 Facsimile No.: (253) 952-5711
	with copies to:	Maygan Hurst
		1911 SW Campus Dr. #774 Federal Way, Washington 98023-6473 Facsimile No.: (253) 952-5711
	and to:	Eisenhower & Carlson, PLLC
		1200 Wells Fargo Plaza 1201 Pacific Avenue Tacoma, Washington  98402 Attn: Carl R. Peterson Facsimile No.: (253) 272-5732

 

Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address.  For notice purposes, Borrower agrees to provide notice to Lender of Borrower's current address(es).

 

8.6 Power of Attorney.  Borrower hereby appoints Lender as its true and lawful attorney-in-fact, irrevocably, with full power of substitution to do the following after the occurrence and during the continuance of an Event of Default: (a) to demand, collect, receive, receipt for, sue and recover all sums of money or other property which may now or hereafter become due, owing or payable from the Collateral; (b) to execute, sign and endorse any and all claims, instruments, receipts, checks, drafts or warrants issued in payment for the Collateral; (c) to settle or compromise any and all claims arising under the Collateral, and, in the place and stead of Borrower, to execute and deliver its releases and settlement for the claim; and (d) to file any claim or claims or to take any action or institute or take part in any proceedings, either in its own name or in the name of Borrower, or otherwise, which in the discretion of Lender may seem to be necessary or advisable.  This power is given as security for the Indebtedness, and following an Event of Default and expiration of any applicable cure period, the authority hereby conferred is and shall be irrevocable and shall remain in full force and effect until renounced by Lender.

 

 

8.7 Severability.  If a court of competent jurisdiction finds any provision of this Agreement to be invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances.  If feasible, any such offending provision shall be deemed to be modified to be within the limits of enforceability or validity; however, if the offending provision cannot be so modified it shall be stricken and all other provisions of this Agreement in all other respects shall remain valid and enforceable.

 

8.8 Successor Interests.  Subject to the limitations set forth above on transfer of the Collateral, this Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns.

 

8.9 Waiver.  Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender.  No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right.  A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver by Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement.  No prior waiver by Lender, nor any course of dealing between Lender and Borrower, shall constitute a waiver of any of Lender's rights or of any of Borrower's obligations as to any future transactions.  Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.

 

8.10 Meanings.  Except as otherwise defined in this Agreement, all terms in this Agreement shall have the meanings provided by the Washington Uniform Commercial Code--RCW 62A.1 101 et seq.

 

8.11 Preference Payments.  Any monies Lender pays because of an asserted preference claim in Borrower's bankruptcy will become a part of the Indebtedness and, at Lender's option, shall be payable by Borrower as provided above in the "EXPENDITURES BY LENDER" Section.

 

NOTICE CONCERNING ORAL AGREEMENTS Oral agreements or oral commitments to lend money, extend credit or to forbear from enforcing repayment of a debt are not enforceable under Washington law.

 

 

RETURN ADDRESS:

 

 

Reference Number(s) of Documents Assigned or Released:

Additional reference numbers on page _____ of document(s).

Grantor (Last name first, then first name and initials):

NG WASHINGTON, LLC, a Washington limited liability company

Grantees (Last name first, then first name and initials):

CRAZY MOOSE CASINO, INC., a Washington corporation;

CRAZY MOOSE CASINO II, INC., a Washington corporation;

COYOTE BOB’S, INC., a Washington corporation; and

GULLWING III, LLC, a Washington limited liability company.

CHICAGO TITLE INSURANCE COMPANY, Trustee.

Legal Description:

Lot 2, Block 1 The Highlands West;. Blocks 18 and 19 O'Keefe's Third Addn

Assessor's Property Tax Parcel/Account Number(s):  103891040001002; 119481053

 

 

The Auditor/Recorder will rely on the information provided on the form.  The staff will not read the document to verify the accuracy or completeness of the indexing information provided herein.

 

THIS DEED OF TRUST IS DATED ____________ ___, 2009, among CRAZY MOOSE CASINO, INC., a Washington corporation having an office at 510 South 20th Street, Pasco, Washington 99301 (“Crazy Moose”), CRAZY MOOSE CASINO II, INC., a Washington corporation having an office at 22003 66th Ave. W, Ste. A, Mountlake Terrace, Washington 98043 (“Crazy Moose II”), COYOTE BOB’S, INC., a Washington corporation having an office at 3014 W. Kennewick Ave., Kennewick, Washington 99336 (“Coyote Bob’s”), and GULLWING III, LLC, a Washington limited liability company having an office at 402 16th St. NE, Ste. A-106,  Auburn, Washington 98002 (“Gullwing”) (Crazy Moose, Crazy Moose II, Coyote Bob’s and Gullwing shall be collectively referred to herein sometimes as “Lender” and sometimes as “Beneficiary”), and NG WASHINGTON, LLC, a Washington limited liability company having an office at 50 Briar Hollow Lane, Suite 500 West Houston, Texas 77027 ("Grantor") and CHICAGO TITLE INSURANCE COMPANY, as trustee, whose mailing address is 4717 S. 19th Street, Suite 201, Tacoma, WA  98405 (referred to below as “Trustee”).

 

1. CONVEYANCE AND GRANT.  For valuable consideration, Grantor conveys to Trustee in trust with power of sale, right of entry and possession and for the benefit of Lender as beneficiary, all of Grantor’s right, title, and interest in and to the following real property located at 510 South 20th Street, Pasco, Washington (parcel no. 119481053) and 3014 W. Kennewick Avenue, Kennewick, Washington (parcel no. 103891040001002) (collectively, “Real Property”):

 

 

The Real Property tax identification number is ###-###-####; 103891040001002.

 

Grantor hereby assigns as security to Lender, all of Grantor’s right, title, and interest in and to all leases, Rents, and profits of the Real Property.  This assignment is recorded in accordance with RCW 65.08.070; the lien created by this assignment is intended to be specific, perfected and choate upon the recording of this Deed of Trust.  Lender grants to Grantor a license to collect the Rents and profits, which license may be revoked at Lender’s option and shall be automatically revoked upon acceleration of all or part of the Indebtedness.

 

2. DEFINITIONS.  The following words shall have the following meanings when used in this Deed of Trust.  Terms not otherwise defined in this Deed of Trust shall have the meanings attributed to such terms in the Uniform Commercial Code.  All references to dollar amounts shall mean amounts in lawful money of the United States of America.

 

Deed of Trust.  The words “Deed of Trust” mean this Deed of Trust among Grantor, Lender, and Trustee, and includes without limitation all assignment and security interest provisions relating to the Personal Property and Rents.

 

Grantor.  The word “Grantor” means NG WASHINGTON, LLC.

 

Improvements.  The word “Improvements” means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property.

 

Indebtedness.  The word “Indebtedness” means the indebtedness of Grantor to Beneficiary under the Note and any amounts expended or advanced by Lender in accordance with the terms of this Deed of Trust to discharge obligations of Grantor or expenses incurred by Trustee or Lender in accordance with the terms of this Deed of Trust to enforce obligations of Grantor under this Deed of Trust, together with interest on such amounts as provided in this Deed of Trust.  The word “Indebtedness” also includes all renewals, modifications, extensions, future advances or increases in the amount of the Note.

 

 

Lender.  The word “Lender” means collectively, CRAZY MOOSE, CRAZY MOOSE II, COYOTE BOB’S and GULLWING and their successors and assigns.

 

Note.  The word “Note” means the Promissory Note dated of even date herewith, in the original principal amount of $4,000,000.00 from Grantor to Lender, together with all renewals, extensions, modifications, refinancings, and substitutions for the Note.

 

Personal Property.  The words “Personal Property” mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, but only to the extent that same are now or hereafter attached or affixed to the Real Property and constitute “fixtures” under applicable law; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all issues and profits thereon and proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property.

 

Property.  The word “Property” means collectively the Real Property and the Personal Property.

 

Real Property.  The word “Real Property” mean the property, interests and rights described above in the “Conveyance and Grant” section hereof (Section 1).

 

Related Documents.  The words “Related Documents” mean the Note and the Security Agreement dated as of the date hereof by Grantor in favor of Lender in connection with the Indebtedness.

 

Rents.  The word “Rents” means all present and future rents, revenues, income, issues, royalties, profits, and other benefits derived from the Property.

 

Trustee.  The word “Trustee” means Chicago Title Insurance Company and any substitute or successor trustees.

 

THIS DEED OF TRUST, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS AND (2) PERFORMANCE OF ANY AND ALL OBLIGATIONS OF GRANTOR UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS DEED OF TRUST.  THIS DEED OF TRUST IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS:

 

3. PAYMENT AND PERFORMANCE.  Except as otherwise provided in this Deed of Trust, Grantor shall pay to Lender all amounts secured by this Deed of Trust as they become due, and shall perform all of Grantor’s obligations under this Deed of Trust and the Related Documents in accordance with the terms thereof.

 

4. POSSESSION AND MAINTENANCE OF THE PROPERTY.  Grantor agrees that Grantor’s possession and use of the Property shall be governed by the following provisions:

 

(1) Possession and Use.  Until the occurrence of an Event of Default, Grantor may (a) remain in possession and control of the Property, (b) use, operate or manage the Property, and (c) collect any Rents from the Property (this privilege is a license from Lender to Grantor automatically revoked upon the occurrence of an Event of Default).

 

 

(2) No Agricultural Use.  The Real Property is not used principally for agriculture or farming purposes.

 

(3) Commercial Use.  Grantor represents and warrants to Lender that this Deed of Trust and the Indebtedness incurred in connection herewith at all times will be used for business and commercial purposes.

 

(4) Duty to Maintain.  Grantor shall maintain the Property in a commercially reasonable manner.

 

(5) Hazardous Substances.  The terms “hazardous waste,” “hazardous substance,” “disposal,” “release,” and “threatened release,” as used in this Deed of Trust, shall have the same meanings as set forth in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended 42 U.S.C. Section 9601, et seq. (“CERCLA”), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 (‘SARA”), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or Federal laws, rules, or regulations adopted pursuant to any of the foregoing.  The terms “hazardous waste” and “hazardous substance” shall also include, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos.  Grantor covenants with Lender that (i) neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall use, generate, manufacture, store, treat, dispose of, or release any hazardous waste or substance on, under, about or from the Property in violation of applicable law, and (ii) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances, including without limitation those laws, regulations, and ordinances described above.  Provided that Lender has a reasonable basis to believe that Grantor is in violation of the foregoing covenant, Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Lender’s expense, as Lender may reasonably deem appropriate to determine compliance of the Property with this section of the Deed of Trust.  Lender shall provide Grantor with reasonable prior written notice of any such test or inspection, and shall perform same on such date(s) and at such times as shall be mutually convenient to the parties.  In performing any such test or inspection, Lender shall use commercially reasonable efforts to minimize interference with Grantor and Grantor’s operations at the Property.  Any inspections or tests made by Lender shall be for Lender’s purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other person.  Grantor hereby agrees to indemnify and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Deed of Trust.  The provisions of this section of the Deed of Trust, including the obligation to indemnify, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Deed of Trust and shall not be affected by Lender’s acquisition of any interest in the Property, whether by foreclosure or otherwise.  Notwithstanding the foregoing, the indemnity set forth in this section shall not relate or apply to, and Grantor shall have no liability to Lender with respect to, (i) any matter, or event which occurs after the date that Grantor no longer has title to and possession of the Property, or (ii) any claims, losses, liabilities, damages, penalties or expenses which result from or arise out of any act or omission of Lender or any of Lender’s employees, agents or representatives.

 

 

(6) Nuisance, Waste.  Grantor shall not cause, conduct or permit any legal nuisance, nor commit, permit, or suffer any material waste, on or to the Property or any portion of the Property.  Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the right to remove, any timber, minerals (including oil and gas), soil, gravel or rock products without the prior written consent of Lender, which consent shall not be unreasonably withheld or delayed (it being understood and agreed, however, that the foregoing shall not apply to, and Lender’s consent shall not be required for, normal and customary removal of timber, minerals (including oil and gas), soil, gravel, rock and other materials in connection with any construction and/or development on, at or with respect to the Property).

 

(7) Removal of Improvements.  Grantor shall not demolish or remove any Improvements from the Real Property without the prior written consent of Lender, which consent shall not be unreasonably withheld or delayed.

 

(8) [Intentionally omitted]

 

(9) Compliance with Governmental Requirements.  Grantor shall promptly comply, and shall promptly cause compliance by all agents, tenants or  other persons or entities of every nature whatsoever who rent, lease or otherwise use or occupy the Property in any manner, with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act.  Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender’s reasonable opinion, Lender’s lien on the Property is not jeopardized by such contest.

 

(10) Duty to Protect.  Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property.

 

5. PARTIAL RELEASE.  Grantor shall have the right, at Grantor’s election at any time, to sell and/or convey to a third party purchaser either one of the properties comprising the Property (each, an “Individual Property”).  Concurrently with the closing of the sale of such Individual Property by Grantor to the third party purchaser, Trustee and Lender shall release the lien of this Deed of Trust on such Individual Property provided that (i) no Event of Default shall have occurred and be continuing at the time of such closing and (ii) Grantor shall have paid to Lender, concurrently with such closing, the Release Amount (as identified below) applicable to such Individual Property.  In connection therewith, Trustee and Lender shall execute and deliver, concurrently with such closing, any and all documents, in recordable form, that are reasonably requested by Grantor or such third party purchaser in order to evidence, effectuate and/or confirm such release, including without limitation a partial reconveyance of this Deed of Trust releasing such Individual Property from the lien of this Deed of Trust.  For purposes of this Section 5, the “Release Amount” for each Individual Property is as follows:

 

Individual Property                             Release Amount

 

510 South 20th Street, Pasco, Washington    $2,000,000.00

 

3014 W. Kennewick Avenue, Kennewick, Washington  $2,000,000.00.

 

6. TAXES AND LIENS.  The following provisions relating to the taxes and liens on the Property are a part of this Deed of Trust.

 

(1) Payment.  Grantor shall pay when due (and in all events prior to delinquency) all taxes, special taxes, assessments, charges (including water and sewer), fines, liens and impositions levied against or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property.  Grantor shall maintain the Property free of all liens, except for the Permitted Exceptions (as hereinafter defined) and the lien of taxes and assessments not due.  Grantor may contest in good faith any such taxes, special taxes, assessments, charges (including water and sewer), fines, liens and impositions and withhold payment thereof during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as Lender’s lien on the Property is not jeopardized by such contest.

 

 

(2) Evidence of Payment.  Grantor shall upon demand furnish to Lender reasonable evidence of payment of the taxes or assessments and shall, upon written request from Lender, authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property.

 

(3) Notice of Construction.  Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic’s lien, materialmen’s lien, or other lien could be asserted on account of the work, services, or materials.  Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements.

 

7. PROPERTY DAMAGE INSURANCE.  The following provisions relating to insuring the Property are a part of this Deed of Trust.

 

(1) Maintenance of Insurance.  Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender.  Grantor shall also procure and maintain comprehensive general liability insurance in commercially reasonable coverage amounts with the Trustee and Lender being named as additional insureds in such liability insurance policies.  Policies shall be written in commercially reasonable form, amounts and coverages and issued by a company or companies reasonably acceptable to Lender.  Grantor, upon written request of Lender from time to time, will deliver to Lender certificates of insurance evidencing the coverages required by this Deed of Trust, including stipulations that coverages will not be cancelled or diminished without at least ten (10) days’ prior written notice to Lender.  Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person.

 

(2) Application of Proceeds.  Grantor shall promptly notify Lender of any loss or damage to the Property if the estimated cost of repair or replacement exceeds $100,000.00.  Lender may make proof of loss only if Grantor fails to do so within fifteen (15) business days after receipt by Grantor of written notice from Lender to do so.  Upon the election of Lender, Lender may receive and retain the proceeds of any insurance.  So long as no Event of Default has occurred and is then continuing, Lender shall promptly deliver all such proceeds of insurance to Grantor to be used by Grantor for the restoration or repair of the Property.  If an Event of Default has occurred and is then continuing, Lender shall have the right either to apply the proceeds of such insurance to the reduction of the Indebtedness or to deliver all such proceeds of insurance to Grantor to be used by Grantor for the restoration or repair of the Property.  If Lender elects or is obligated to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a commercially reasonable manner.  If Lender holds any proceeds of insurance after payment in full of the Indebtedness, such proceeds shall be immediately paid without interest by Lender to Grantor.

 

 

(3) Unexpired Insurance at Sale.  Any unexpired insurance shall inure to the benefit of, and pass to, the purchaser of the Property covered by this Deed of Trust at any trustee’s sale or other sale held under the provisions of this Deed of Trust, or at any foreclosure sale of such Property.

 

8. EXPENDITURES BY LENDER.  If Grantor fails to comply with any provision of this Deed of Trust and such failure continues uncured for fifteen (15) days after written notice thereof from Lender, or if any action or proceeding is commenced that would materially affect Lender’s interests in the Property and such action or proceeding is not dismissed within thirty (30) days after same is commenced, Lender on Grantor’s behalf may, but shall not be required to, take any action that Lender reasonably deems necessary in order to protect or preserve Lender’s interest in the Property.  Any amount that Lender reasonably expends in so doing will bear interest at the highest rate provided for in the Note from the date incurred or paid by Lender to the date of repayment by Grantor.  All such expenses, at Lender’s option, will (a) be payable on demand, (b) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during the remaining term of the Note, or (c) be treated as a balloon payment which will be due and payable at the Note’s maturity.  This Deed of Trust also will secure payment of these amounts.  The rights provided for in this section shall be in addition to any other rights or remedies to which Lender may be entitled on account of the occurrence of an Event of Default, if any.  Any such action by Lender shall not be construed as curing any existing Event of Default so as to bar Lender from any remedy that it otherwise would have had.

 

9. WARRANTY; DEFENSE OF TITLE.  The following provisions relating to ownership of the Property are a part of this Deed of Trust.

 

(1) Warranty of Title.  Grantor represents and warrants to Beneficiary that:  (i) Grantor is the sole holder of fee title to the Property and has good and marketable title to the Property; (ii) Grantor has not placed or recorded any liens, encumbrances, exceptions or other charges of any kind whatsoever on the Property other than those listed on the attached Exhibit "B" and any other liens, encumbrances, exceptions or charges expressly permitted by the terms of this Deed of Trust or expressly agreed to in writing by Lender (collectively, the "Permitted Exceptions"); and (iii) Grantor has the right to grant, transfer, convey and assign the Property as herein provided and will forever warrant and defend the Property unto Lender against all claims and demands of any other person whomsoever, subject only to nondelinquent installments of taxes and assessments and the Permitted Exceptions.

 

10. [Intentionally omitted]

 

11. CONDEMNATION.  The following provisions relating to condemnation proceedings are a part of this Deed of Trust.

 

(1) Application of Net Proceeds.  If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may receive and retain the proceeds of any award.  So long as no Event of Default has occurred and is then continuing, Lender shall promptly deliver all such proceeds of the award to Grantor to be used by Grantor for the restoration or repair of the Property.  If an Event of Default has occurred and is then continuing, Lender shall have the right either to apply the proceeds of such award to the reduction of the Indebtedness or to deliver all such proceeds of the award to Grantor to be used by Grantor for the restoration or repair of the Property.  If Lender elects or is obligated to apply the proceeds to restoration and repair, Grantor shall repair or restore the Improvements in a commercially reasonable manner.  If Lender holds any proceeds of an award after payment in full of the Indebtedness, such proceeds shall be immediately paid without interest by Lender to Grantor.

 

 

(2) Proceedings.  If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be reasonably necessary to defend the action and obtain the award.  Grantor shall be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, all at Lender’s expense, and Grantor will deliver or cause to be delivered to Lender such instruments as may be reasonably requested in writing by it from time to time to permit such participation.

 

12. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES.  The following provisions relating to governmental taxes, fees and charges are a part of this Deed of Trust.

 

(1) Current Taxes, Fees and Charges.  Upon written request by Lender, Grantor shall execute such documents in addition to this Deed of Trust and take whatever other action is reasonably requested by Lender to perfect and continue Lender’s lien on the Real Property.  Grantor shall reimburse Lender for all taxes identified in section 12.2 below which are actually paid by Lender, together with all expenses actually incurred by Lender in recording, perfecting or continuing this Deed of Trust, including without limitation all taxes, fees, documentary stamps and other charges for recording or registering this Deed of Trust.

 

(2) Taxes.  The following shall constitute taxes to which this Section 12 applies: (a) a specific tax upon this type of Deed of Trust or upon all or any part of the Indebtedness secured by this Deed of Trust; (b) a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the Indebtedness secured by this type of Deed of Trust; (c) a tax on this type of Deed of Trust chargeable against the Lender or the holder of the Note; and (d) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor.  In no event shall Grantor be liable for any income taxes or franchise taxes payable by Lender or the Trustee.

 

(3) Subsequent Taxes.  If any tax to which this section applies is enacted subsequent to the date of this Deed of Trust, Grantor shall either (a) pays such tax before it becomes delinquent, or (b) contest such tax as provided above in Section 6 (Taxes and Liens).

 

13. SECURITY AGREEMENT; FINANCING STATEMENTS.  The following provisions relating to this Deed of Trust as a security agreement are a part of this Deed of Trust.

 

(1) Security Agreement.  This instrument shall constitute a security agreement to the extent any of the Property constitutes Personal Property, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time.

 

(2) Security Interest.  Upon written request by Lender, Grantor shall take whatever action as is reasonably requested by Lender to perfect and continue Lender’s security interest in the Rents and Personal Property.  In addition to recording this Deed of Trust in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Deed of Trust as a financing statement.  Grantor shall reimburse Lender for all filing expenses incurred in perfecting or continuing this security interest.  Upon the occurrence of an Event of Default, Grantor shall assemble the Personal Property at the Real Property and make it available to Lender within three (3) days after receipt of written demand from Lender.

 

 

(3) Addresses.  The mailing addresses of Grantor (debtor) and Lender (secured party), from which information concerning the security interest granted by this Deed of Trust may be obtained (each as required by the Uniform Commercial Code), are as stated on the first page of this Deed of Trust.

 

14. FURTHER ASSURANCES.  The following provisions relating to further assurances are a part of this Deed of Trust.  At any time, and from time to time, upon written request of Lender, Grantor will make, execute and deliver, or will cause to be made, executed or delivered, to Lender or to Lender’s designee, and when requested by Lender in writing, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may reasonably deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the reasonable opinion of Lender, be necessary in order to effectuate, complete, perfect, continue, or preserve (a) the obligations of Grantor under the Note, this Deed of Trust, and the Related Documents, and (b) the liens and security interests created by this Deed of Trust as first and prior liens on the Property.

 

15. FULL PERFORMANCE.  If Grantor pays all the Indebtedness and otherwise performs all the obligations imposed upon Grantor under this Deed of Trust, Lender shall promptly execute and deliver to Trustee a request for, and Trustee shall promptly prepare, execute and record, a full reconveyance of the Property, and Lender shall promptly execute and deliver to Grantor suitable statements of termination of any financing statement on file evidencing Lender’s security interest in the Rents and Personal Property.  Any reconveyance fee shall be paid by Grantor, if permitted by applicable law.  The grantee in any reconveyance shall be Grantor or, at Grantor’s request, may be described as the “person or persons legally entitled thereto”, and the recitals in the reconveyance of any matters or facts shall be conclusive proof of the truthfulness of any such matters or facts.

 

16. DEFAULT.  An Event of Default (as defined in the Note) shall consitute an “Event of Default” under this Deed of Trust.

 

17. RIGHTS AND REMEDIES ON DEFAULT.  Following the occurrence and during the continuance of any Event of Default, Trustee or Lender, at its option, may exercise any one or more of the following rights and remedies, in addition to any other rights or remedies provided by law:

 

(1) Accelerate Indebtedness.  Lender shall have the right at its option to declare the entire Indebtedness immediately due and payable.

 

(2) Foreclosure.  With respect to all or any part of the Real Property, the Trustee shall have the right to exercise its power of sale and to foreclose by notice and sale, and Lender shall have the right to foreclose by judicial foreclosure, in either case in accordance with and to the full extent provided by applicable law.

 

(3) UCC Remedies.  With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code.

 

 

(4) Collect Rents.  Lender shall have the right, without notice to Grantor, to take possession of and manage the Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above the actual, out-of-pocket costs incurred by Lender in connection therewith, against the Indebtedness.  In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to Lender.  If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor’s attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds.  Payments by tenants or other users to Lender in response to Lender’s demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed.  Lender may exercise its rights under this subsection either in person, by agent, or through a receiver.

 

(5) Appoint Receiver.  To the extent permitted by applicable law, Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding or pending foreclosure or sale, and to collect the Rents from the Property and apply the proceeds, over and above the actual, out-of-pocket costs of the receivership, against the Indebtedness.  The receiver may serve without bond if permitted by law.  Lender’s right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount.  Employment by Lender shall not disqualify a person from serving as a receiver.

 

(6) Tenancy at Sufferance.  If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property as a result of the occurrence of an Event of Default, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall at Lender’s option either (a) pay a reasonable rental for the use of the Property, or (b) vacate the Property immediately upon the written demand of Lender.

 

(7) Other Remedies.  Trustee or Lender shall have any other right or remedy provided in this Deed of Trust or the Note or the Related Documents or by law.

 

(8) Notice of Sale.  Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made.  Reasonable notice shall mean written notice given at least ten (10) days before the time of the sale or disposition.  Any sale of Personal Property may be made in conjunction with any sale of the Real Property.

 

(9) Sale of the Property.  To the extent permitted by applicable law, Grantor hereby waives any and all rights to have the Property marshaled.  In exercising its rights and remedies, the Trustee or Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales.  Lender shall be entitled to bid at any public sale on all or any portion of the Property.

 

(10) Waiver, Election of Remedies.  A waiver by any party of a breach of a provision of this Deed of Trust shall not constitute a waiver of or prejudice the party’s rights otherwise to demand strict compliance with that provision or any other provision.  Election by Lender to pursue any remedy provided in this Deed of Trust, the Note, in any Related Document, or provided by law shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Deed of Trust after failure of Grantor to perform shall not affect Lender’s right to declare an Event of Default (if an Event of Default exists) and to exercise any of its remedies.

 

 

(11) Attorneys’ Fees, Expenses.  If Lender institutes any suit or action to enforce any of the terms of this Deed of Trust, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys’ fees and costs at trial on any appeal.  Whether or not any court action is involved, all reasonable expenses incurred by Lender which in Lender’s reasonable opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of expenditure until repaid.  Expenses covered by this section include, without limitation, however subject to any limits under applicable law, Lender’s reasonable attorneys’ fees whether or not there is a lawsuit, including reasonable attorneys’ fees for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals and any anticipated post-judgment collection services, the actual, out-of-pocket cost of searching records, obtaining title reports (including foreclosure reports), surveyors’ reports, appraisal fees, title insurance, and fees for the Trustee, to the extent permitted by applicable law.  Grantor also will pay any court costs, in addition to all other sums provided by law.

 

(12) Rights of Trustee.  Trustee shall have all of the rights and duties of Lender as set forth in this section.

 

18. POWERS AND OBLIGATIONS OF TRUSTEE.  The following provisions relating to the powers and obligations of Trustee (pursuant to Lender’s instructions) are part of this Deed of Trust.

 

(1) Powers of Trustee.  In addition to all powers of Trustee arising as a matter of law, Trustee shall have the power to take the following actions with respect to the Property upon the joint written request of Lender and Grantor: (a) join in preparing and filing a map or plat of the Real Property, including the dedication of streets or other rights to the public; (b) join in granting any easement or creating any restriction on the Real Property; and (c) join in any subordination or other agreement affecting this Deed of Trust or the interest of Lender under this Deed of Trust.

 

(2) Obligations to Notify.  Trustee shall not be obligated to notify any other party of a pending sale under any other trust deed or lien, or of any action or proceeding in which Grantor, Lender, or Trustee shall be a party, unless required by applicable law, or unless the action or proceeding is brought by Trustee.

 

(3) Trustee.  Trustee shall meet all qualifications required for a trustee under applicable law.  In addition to the rights and remedies set forth above with respect to all or any part of the Property, the Trustee shall have the right to foreclose by notice and sale, and Lender shall have the right to foreclose by judicial foreclosure, in either case in accordance with and to the full extent provided by applicable law.

 

(4) Successor Trustee.  Lender, at Lender’s option, may from time to time appoint a successor trustee to any Trustee appointed hereunder by an instrument executed and acknowledged by Lender and recorded in the office of the recorder for the County in which the Real Property is located.  The successor trustee, without conveyance of the Property, shall succeed to all the title, power, and duties conferred upon the Trustee in this Deed of Trust and by applicable law.  This procedure for substitution of trustee shall govern to the exclusion of all other provisions for substitution.

 

19. NOTICES TO GRANTOR AND OTHER PARTIES.  Subject to applicable law, and except for notice required or allowed by law to be given in another manner, any notice under this Deed of Trust shall be in writing, and shall be effective when actually delivered, or when deposited with a nationally recognized overnight courier, or, if mailed, shall be deemed effective when deposited in the United States mail first class, certified or registered mail, postage prepaid, directed to the addresses shown near the beginning of this Deed of Trust.  Any party may change its address for notices under this Deed of Trust by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party’s address.  All copies of notices of foreclosure from the holder of any lien which has priority over this Deed of Trust shall be sent to Lender’s address, as shown near the beginning of this Deed of Trust.  For notice purposes, Grantor, Lender and Trustee agree to keep each other informed at all times of their respective current addresses.

 

 

20. MISCELLANEOUS PROVISIONS.  The following miscellaneous provisions are a part of this Deed of Trust:

 

(1) Amendments.  This Deed of Trust, together with any Related Documents, constitutes the entire and final understanding and agreement of the parties as to the matters set forth in this Deed of Trust.  No alteration of or amendment to this Deed of Trust shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment.

 

(2) Applicable Law.  This Deed of Trust has been delivered to Lender and accepted by Lender in the State of Washington.  This Deed of Trust shall be governed by and construed in accordance with the laws of the State of Washington.

 

(3) Caption Headings.  Caption headings in this Deed of Trust are for convenience purposes only and are not to be used to interpret or define the provisions of this Deed of Trust.

 

(4) Merger.  There shall be no merger of the interest or estate created by this Deed of Trust with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender.

 

(5) [Intentionally omitted]

 

(6) Severability.  If a court of competent jurisdiction finds any provision of this Deed of Trust to be invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances.  If feasible, any such offending provision shall be deemed to be modified to be within the limits of enforceability or validity; however, if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Deed of Trust in all other respects shall remain valid and enforceable.

 

(7) Successors and Assigns.  This Deed of Trust shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.  If ownership of the Property becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor’s successors with reference to this Deed of Trust and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Deed of Trust or liability under the Indebtedness, unless otherwise agreed to in writing by Lender.

 

(8) Time is of the Essence.  Time is of the essence in the performance of this Deed of Trust.

 

(9) Waivers and Consents.  Lender shall not be deemed to have waived any rights under this Deed of Trust (or under the Related Documents) unless such waiver is in writing and signed by Lender.  No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right.  A waiver by any party of a provision of this Deed of Trust shall not constitute a waiver of or prejudice the party’s right otherwise to demand strict compliance with that provision or any other provision.  No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender’s rights or any of Grantor’s obligations as to any future transactions.  Whenever consent by Lender is required in this Deed of Trust, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required.

 

(10) Waiver of Homestead Exemption.  Grantor hereby releases and waives all rights and benefits of the homestead exemption laws of the State of Washington as to all Indebtedness secured by this Deed of Trust.

 

 

 

 

 

 

 

 

By:
Its:

 

 

STATE OF [___________]	)
	) ss.
County of [________]	)

 

 I certify that I know or have satisfactory evidence that _________________ is the person who appeared before me, and said person acknowledged that _______ signed this instrument, on oath stated that ________ was authorized to execute the instrument and acknowledged it as the ________ of NG WASHINGTON, LLC to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

 DATED this ____ day of _____________, 2009.

____________________________

Signature of Notary Public

____________________________

Name of Notary Public

NOTARY PUBLIC

____________________________

My Appointment Expires:

 

 

 

 

 

Lot 2, Block 1, The Highlands West, according to the Plat thereof recorded in Volume 11 of Plats, Page 4, records of Benton County, Washington.

 

 

That portion of Blocks 18 and 19, TOGETHER WITH vacated alley and streets adjoining said blocks, O'KEEFE'S THIRD ADDITION TO PASCO according to the Plat thereof recorded in Volume B of Plats, Page 37, records of Franklin County, Washington, being more particularly described as follows:

 

Beginning at the Southeast corner of Section 25, Township 9 North, Range 29 East, W.M.; thence West along the South line of said section, 406 feet;

 

thence North parallel to the East line of said section, 207 feet to the True Point of Beginning; thence East, parallel to the South line of said section, 406 feet to the East line of said section; thence North along the East line 200 feet;

 

thence West, parallel to the South line of said section, 406 feet;

 

thence South, parallel to the East line of said section, 200 feet to the True Point of Beginning;

 

EXCEPT the East 40 feet thereof conveyed to the City of Pasco, for South 20th Avenue, by Deed recorded under Recording No. 283730.

 

 

 

 

 

 

 

To: __________________________________________________, Trustee

 

 

The undersigned is the legal owner and holder of all indebtedness secured by this Deed of Trust.  You are hereby requested, upon payment of all sums owing to you, to reconvey without warranty, to the persons entitled thereto, the right, title and interest now held by you under the Deed of Trust.

 

 

 

Date:

Beneficiary:

 

By:
Its:

 

 

 

 

This Commercial Guaranty ("Guaranty") is made as of __________, 2009, by NEVADA GOLD & CASINOS, INC., a Nevada corporation ("Guarantor") and in favor of CRAZY MOOSE CASINO, INC., a Washington corporation having an office at 510 South 20th Street, Pasco, Washington 99301 (“Crazy Moose”), CRAZY MOOSE CASINO II, INC., a Washington corporation having an office at 22003 66th Ave. W, Ste. A, Mountlake Terrace, Washington 98043 (“Crazy Moose II”), COYOTE BOB’S, INC., a Washington corporation having an office at 3014 W. Kennewick Ave., Kennewick, Washington 99336 (“Coyote Bob’s”), and GULLWING III, LLC, a Washington limited liability company having an office at 402 16th St. NE, Ste. A-106,  Auburn, Washington 98002 (“Gullwing”) (Crazy Moose, Crazy Moose II, Coyote Bob’s and Gullwing shall be collectively referred to herein as “Lender”).

 

 

A. Pursuant to an Asset Purchase Agreement dated as of March [11], 2009 (the “Purchase Agreement”), NG Washington, LLC, a Washington limited liability company (“Borrower”) has agreed to purchase the Assets (as defined in the Purchase Agreement) from Lender.  In connection therewith, among other documents, Borrower has executed in favor of Lender a promissory note of even date herewith in the aggregate original principal amount of $4,000,000 (the “Note”).  Capitalized terms used and not defined herein shall have the meanings ascribed to such terms as set forth in the Purchase Agreement.

 

B. It is a condition to Closing of the Purchase Agreement that Guarantor execute and deliver this guaranty (“Guaranty”) of collection of all obligations owing under the Note.

 

 

1. Guaranty of Collection.  Notwithstanding anything to the contrary contained herein, Lender shall have no right to assert any claim or demand under this Guaranty unless and until Lender has exhausted all of its rights and remedies against Borrower and the Collateral under the Note, the Security Agreement and the Deed of Trust, this being a guaranty of collection and not a guaranty of payment and Guarantor’s obligations hereunder being limited to any deficiency after all of Lender’s rights and remedies against Borrower and the Collateral have been exhausted.

 

2. Continuing Guaranty.  For good and valuable consideration, Guarantor absolutely and unconditionally guarantees and promises to pay to Lender or its order, on demand, in legal tender of the United States of America, the Indebtedness (as hereinafter defined) of Borrower to Lender on the terms and conditions set forth in this Guaranty.  Except as otherwise provided in Section 1 of this Guaranty, the liability of Guarantor hereunder is unlimited and the obligations of Guarantor are continuing.

 

 

3. Definitions.  The following words shall have the following meanings when used in this Guaranty:

 

§ Borrower.  "Borrower" means NG Washington, LLC.

 

§ Guarantor.  "Guarantor" means Nevada Gold & Casinos, Inc.

 

§ Guaranty.  "Guaranty" means this Guaranty by Guarantor for the benefit of Lender.

 

§ Indebtedness.  "Indebtedness" means all obligations of Borrower under the Note and the other Related Documents, including all principal, interest, late charges and other sums.

 

§ Lender.  "Lender" means Crazy Moose, Crazy Moose II, Coyote Bob’s, and Gullwing, and their respective successors and assigns.

 

§ Related Documents. "Related Documents" means the Note, the Security Agreement and the Deed of Trust.

 

4. Nature of Guaranty.  Guarantor's liability under this Guaranty shall be open and continuous for so long as this Guaranty remains in force.  Guarantor intends to guaranty at all times the performance and prompt payment when due, whether at maturity or earlier by reason of acceleration or otherwise, of all Indebtedness.  Accordingly, no payments made upon the Indebtedness will discharge or diminish the continuing liability of Guarantor in connection with any remaining portions of the Indebtedness or any of the Indebtedness which subsequently arises or is thereafter incurred or contracted.

 

5. Duration of Guaranty.  This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any notice to Guarantor or to Borrower, and will continue in full force until all Indebtedness incurred or contracted shall have been fully and finally paid and satisfied and all other obligations of Guarantor under this Guaranty shall have been performed in full.  Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty.

 

6. Guarantor's Authorization to Lender.  Guarantor authorizes Lender, without notice or demand and without lessening Guarantor's liability under this Guaranty, from time to time: (a) to alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness; extensions may be repeated and may be for longer than the original credit terms; (b) to take and hold security for the payment of this Guaranty or the Indebtedness, and exchange and enforce any such security; (c) to release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (d) to determine how, when and what application of payments and credits shall be made on the Indebtedness; (e) to apply such security and direct the order or manner of sale thereof in accordance with applicable law, including without limitation, any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust, as Lender in its discretion may determine; and (f) to sell, transfer, assign, or grant participations in all or any part of the Indebtedness, subject to any limitations contained in the Note.

 

7. Guarantor's Representations and Warranties.  Guarantor represents and warrants to Lender that (a) no representation or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (b) Lender has made no representation to Guarantor as to the creditworthiness of Borrower; (c) if Guarantor is no longer required to make its financial statements publicly available, upon Lender's request (which shall not be made more than once each calendar quarter), Guarantor will provide to Lender copies of Guarantor’s financial statements; and (d) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition.  Guarantor agrees to keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for information, Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower.

 

 

8. Guarantor's Waivers

 

8.1 General Waivers.  Except as prohibited by applicable law, Guarantor waives any right to require Lender (a) to extend other credit to Borrower or (b) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations.

 

8.2 Waiver of Claim Against Borrower.  If now or hereafter (a) Borrower shall be or become insolvent, and (b) the Indebtedness shall not at all times until paid be fully secured by collateral pledged by Borrower, Guarantor hereby forever waives and relinquishes in favor of Lender and Borrower, and their respective successors, any claim or right to payment Guarantor may now have or hereafter have or acquire against Borrower, by subrogation or otherwise, so that at no time shall Guarantor be or become a "creditor" of Borrower within the meaning of 11 U.S.C. section 547(b), or any successor provision of the Federal bankruptcy laws.

 

8.3 Waiver of Rights and Defenses.  Subject to Section 1 of this Guaranty, Guarantor waives any and all rights or defenses arising by reason of any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness.  If payment is made by Borrower, whether voluntarily or otherwise, or by any third party, on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of enforcement of this Guaranty.

 

9. Guarantor's Understanding With Respect to Waivers.  Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law.  If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public policy.

 

10. Subordination of Borrower's Debts to Guarantor.  Guarantor agrees that the Indebtedness of Borrower to Lender, whether now existing or hereafter created, shall be prior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent.  Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower.  In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness of Borrower to Lender.  Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness.

 

 

11. Miscellaneous Provisions.  The following miscellaneous provisions are part of this Guaranty:

 

11.1 Amendments.  This Guaranty constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty.  No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment.

 

11.2 Applicable Law.  This Guaranty has been delivered to Lender and accepted by Lender in the State of Washington.  If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Pierce County, State of Washington.  This Guaranty shall be governed by and construed in accordance with the laws of the State of Washington.

 

11.3 Attorneys' Fees; Expenses.  If Lender institutes suit to enforce its rights hereunder against Guarantor in accordance with the provisions of this Guaranty or if Lender attempts to enforce its rights hereunder following the voluntary or involuntary bankruptcy of Guarantor, Guarantor agrees to pay upon demand all of Lender's costs and expenses, including reasonable attorneys' fees and Lender's legal expenses, including attorneys' fees and legal expenses for bankruptcy proceedings (and including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services.  Guarantor also shall pay all court costs and such additional fees as may be directed by the court.

 

11.4 Notices.  All notices required to be given by either party to the other under this Guaranty shall be in writing and shall be effective when actually delivered or when deposited with a nationally recognized overnight courier or deposited in the United States mail, first class postage prepaid, addressed to the party to whom the notice is to be given at the following address or to such other addresses as either party may designate to the other in writing:

 

Borrower		Guarantor
NG Washington, LLC. 50 Briar Hollow Lane, Suite 500 West Houston, Texas 77027 Attn: Robert B. Sturges, Chief Executive Officer Facsimile No.:   ###-###-####		Nevada Gold & Casinos, Inc. 50 Briar Hollow Lane, Suite 500 West Houston, TX 77027 Attn:  Robert B. Sturges, CEO
Lender
c/o Maygan Hurst 1911 SW Campus Dr # 774 Federal Way, WA  98023-6473 Facsimile No.:   ###-###-####

 

For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address.

 

 

11.5 Interpretation.  The words "Guarantor," "Borrower," and "Lender" include the heirs, successors, assigns, and transferees of each of them.  Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty.  If a court of competent jurisdiction finds any provision of this Guaranty to be invalid or unenforceable to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances, and all provisions of this Guaranty in all other respects shall remain valid and enforceable.  If any one or more of Borrower or Guarantor are corporations or partnerships, it is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers, directors, partners, or agents acting or purporting to act on their behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty.

 

11.6 Waiver.  Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender.  No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right.  A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty.  No prior waiver by Lender, nor any course of dealing between Lender and Guarantor, shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions.  Whenever the consent of Lender is required under this Guaranty, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.

GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS.  IN ADDITION, GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY."  NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE.

 

NOTICE CONCERNING ORAL AGREEMENTS   Oral agreements or oral commitments to lend money, extend credit or to forbear from enforcing repayment of a debt are not enforceable under Washington law.

 

 

By:
Its:

 

 

THIS BILL OF SALE AND ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”), dated as of __________ __, 2009, is made and entered into by and among CRAZY MOOSE CASINO, INC., a Washington corporation having an office at 510 South 20th Street, Pasco, Washington 99301 (“Crazy Moose”), CRAZY MOOSE CASINO II, INC., a Washington corporation having an office at 22003 66th Ave. W., St. A, Mountlake Terrace, Washington 98043 (“Crazy Moose II”), COYOTE BOB’S, INC., a Washington corporation having an office at 3014 W. Kennewick Ave.,, Kennewick, Washington 99336 (“Coyote Bob’s”), GULLWING III, LLC, a Washington limited liability company having an office at 402 16th St. NE, Ste. A-106, Auburn, Washington 98002 (“Gullwing”; and together with Crazy Moose, Crazy Moose II and Coyote Bob’s, referred to individually and collectively as the “Seller”) and NG WASHINGTON, LLC, a Washington limited liability company having an office at 50 Briar Hollow Lane, Suite 500 West Houston, Texas 77027 ("Purchaser"; and together with the Seller, referred to collectively as the “Parties”).

 

 

WHEREAS, the Seller and the Purchaser are parties to that certain Asset Purchase Agreement, dated as of March ___, 2009 (the “Asset Purchase Agreement”), by and among the Seller and the Purchaser; and

 

WHEREAS, pursuant to the Asset Purchase Agreement, the Seller has agreed to sell, transfer, convey, assign and deliver to the Purchaser all of the Seller’s right, title and interest in, to and under the Assets (as defined in the Asset Purchase Agreement) and the Purchaser has agreed to assume and become responsible for the Assumed Liabilities (as defined in the Asset Purchase Agreement), on the terms and conditions set forth therein;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:

 

 

 

 

 IN WITNESS WHEREOF, the Parties have each caused this Agreement to be duly executed as of the day and year first above written.

 

	CRAZY MOOSE CASINO, INC.
	By:
		Name
		Title

	CRAZY MOOSE CASINO II, INC.
	By:
		Name
		Title

	COYOTE BOB’S, INC.
	By:
		Name
		Title

	GULLWING III, LLC
	By:
		Name
		Title

	NG WASHINGTON, LLC
	By:
		Name
		Title

 

 

THIS ASSIGNMENT AND ASSUMPTION OF LEASE, dated as of ______ ___, 2009 (this “Assignment and Assumption of Lease”), is entered into by and among [SELLER ENTITY THAT IS THE LESSEE UNDER THE LEASE], a ___________ having an office at [______________], [___________], Washington __________ (the “Assignor”), and NG WASHINGTON, LLC, a Washington limited liability company having an office at 50 Briar Hollow Lane, Suite 500 West Houston, Texas 77027 (the “Assignee”).

WHEREAS, pursuant to an Asset Purchase Agreement, dated as of March ___, 2009, by and among CRAZY MOOSE CASINO, INC., a Washington corporation (“Crazy Moose”), CRAZY MOOSE CASINO II, INC., a Washington corporation (“Crazy Moose II”), COYOTE BOB’S, INC., a Washington corporation (“Coyote Bob’s”), and GULLWING III, LLC, a Washington limited liability company (“Gullwing”; and together with Crazy Moose, Crazy Moose II and Coyote Bob’s, referred to individually and collectively as the “Seller”), and the Assignee, the Seller has agreed to sell to the Assignee all of the Seller’s right, title and interest in, to and under the Assets (as defined in the Asset Purchase Agreement) and the Assignee has agreed to assume and become responsible for the Assumed Liabilities (as defined in the Asset Purchase Agreement); and

 

WHEREAS, in connection with such sale and purchase, the Assignor desires to assign and transfer to the Assignee all of the Assignor’s right, title and interest in, to and under that certain [Lease Agreement], dated [_____________], between [LANDLORD ENTITY] (the “Landlord”) and Assignor, as amended (the “Lease”); and

 

WHEREAS, in connection therewith, Assignee desires to assume the duties and obligations of Assignor with respect to the Lease arising from and after the date hereof.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1. Definitions.  Capitalized terms used in this Assignment and Assumption of Lease and not otherwise defined shall have the meanings given to such terms in the Asset Purchase Agreement.

 

2. Assignment.  Subject to the terms and conditions set forth in the Asset Purchase Agreement and in this Assignment and Assumption of Lease, the Assignor hereby assigns, transfers and conveys to the Assignee all of the Assignor’s right, title and interest in, to and under the Lease.

 

3. Assumption.  The Assignee hereby accepts the foregoing assignment of the Lease and hereby assumes and agrees to be bound by and to pay, perform and discharge all obligations, covenants, liabilities and responsibilities of the Assignor under or pursuant to the Lease arising or accruing from and after 12:01 a.m., local time, on the date hereof.

 

4. Asset Purchase Agreement.  This Assignment and Assumption of Lease is intended to effectuate the provisions of the Asset Purchase Agreement, and is subject in all respects to the terms, conditions and provisions set forth in the Asset Purchase Agreement.

 

 

5. Successors and Assigns; Governing Law.  This Assignment and Assumption of Lease shall be (a) binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns, and (b) construed in accordance with the laws of the State of Washington without giving effect to its conflict of laws principles.

 

6. Counterparts.  This Assignment and Assumption of Lease may be executed in any number of counterparts, each of which when executed and delivered shall be an original and all of which shall constitute one and the same instrument.

 

[Signatures on next page]

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Assignment and Assumption of Lease as of the date set forth on the first page hereof.

 

The undersigned Landlord hereby acknowledges and consents to the assignment to and assumption by the Assignee of the Lease, as provided above, and in connection therewith hereby certifies to the Assignee as follows:

 

 

By:
	Name: Title:

 

 

AFTER RECORDING MAIL TO:

 

Carl R. Peterson

Eisenhower & Carlson, PLLC

1201 Pacific Avenue, Suite 1200

Tacoma, Washington 98402

 

Document Title:	Special Warranty Deed
Grantor(s):	Gullwing III, LLC, a Washington limited liability company
Grantee(s):	NG Washington, LLC, a Washington limited liability company

Abbr. Legal Descr.:	Lot 2, Block 1 The Highlands West
Parcel No.:	1-0389-104-0001-002

 

 

 

The Grantor, GULLWING III, LLC, a Washington limited liability company, for and in consideration of One Dollar ($1.00) and other valuable consideration, in hand paid, grants, bargains and sells to Grantee, NG WASHINGTON, LLC, a Washington limited liability company, the following described real estate, situated in Benton County, Washington:

Lot 2, Block 1, The Highlands West, according to the Plat thereof recorded in Volume 11 of Plats, Page 4, records of Benton County, Washington, subject to those exceptions described on Exhibit A, attached hereto.

 

The Grantor, for itself and for its successors in interest, does by these presents expressly limit the covenants of the deed to those herein expressed and exclude all covenants arising or to arise by statutory or other implication, and do hereby covenant that against all persons whomsoever lawfully claiming or to claim by, through or under the Grantor and not otherwise, they will forever warrant and defend the real estate described herein.

 

Dated: ______________ ________, 2009.

 

 

 

STATE OF WASHINGTON )	)
	) ss.
County of ________	)

 

I certify that I know or have satisfactory evidence that _________________ is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument and acknowledge it as the   of Gullwing III, LLC, a Washington limited liability company, to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

 

DATED this ______ day of ______________, 2009.

 

Name:

 

Notary Public in and for the State of

 

Washington, residing at:

 

My Appointment Expires:

 

 

 

 

 

 

AFTER RECORDING MAIL TO:

 

Carl R. Peterson

Eisenhower & Carlson, PLLC

1201 Pacific Avenue, Suite 1200

Tacoma, Washington 98402

 

Document Title:	Special Warranty Deed
Grantor(s):	Gullwing III, LLC, a Washington limited liability company
Grantee(s):	NG Washington, LLC, a Washington limited liability company

Abbr. Legal Descr.:	Blocks 18 and 19 O'Keefe's Third Addn
Parcel No.:	119-481-053

 

 

 

 

The Grantor, GULLWING III, LLC, a Washington limited liability company, for and in consideration of One Dollar ($1.00) and other valuable consideration, in hand paid, grants, bargains and sells to Grantee, NG WASHINGTON, LLC, a Washington limited liability company, the following described real estate, situated in Franklin County, Washington:

 

That portion of Blocks 18 and 19, TOGETHER WITH vacated alley and streets adjoining said blocks, O'KEEFE'S THIRD ADDITION TO PASCO according to the Plat thereof recorded in Volume B of Plats, Page 37, records of Franklin County, Washington, being more particularly described as follows:

Beginning at the Southeast corner of Section 25, Township 9 North, Range 29 East, W.M.;

thence West along the South line of said section, 406 feet; thence North parallel to the East line of said section, 207 feet to the True Point of Beginning;

thence East, parallel to the South line of said section, 406 feet to the East line of said section;

thence North along the East line 200 feet; thence West, parallel to the South line of said section, 406 feet;

thence South, parallel to the East line of said section, 200 feet to the True Point of Beginning;

EXCEPT the East 40 feet thereof conveyed to the City of Pasco, for South 20th Avenue, by Deed recorded under Recording No. 283730.

Subject to those exceptions described on Exhibit A, attached hereto.

 

 

The Grantor, for itself and for its successors in interest, does by these presents expressly limit the covenants of the deed to those herein expressed and exclude all covenants arising or to arise by statutory or other implication, and do hereby covenant that against all persons whomsoever lawfully claiming or to claim by, through or under the Grantor and not otherwise, they will forever warrant and defend the real estate described herein.

 

Dated: ______________ ________, 2009.

 

	Grantor   GULLWING III, LLC
	By:
	Its:

 

 

I certify that I know or have satisfactory evidence that _________________ is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument and acknowledge it as the   of Gullwing III, LLC, a Washington limited liability company, to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.