TABLE OF CONTENTS

 

RECITALS			1
ARTICLE I - DEFINITIONS			2
	Section 1.01.	Definitions	2
	Section 1.02.	Interpretation and Construction	36
	Section 1.03.	Use of Defined Terms	38
	Section 1.04.	Cross-References	38
	Section 1.05.	Exhibits and Schedules	38
ARTICLE II - AMOUNT, TERMS AND SECURITY OF THE BANK FACILITIES			38
	Section 2.01.	The Credit Facility	38
	Section 2.02.	Use of Proceeds of the Credit Facility	40
	Section 2.03.	Notice of Borrowings	41
	Section 2.04.	Conditions of Borrowings	42
	Section 2.05.	The Revolving Credit Note and Interest Rate Options	42
	Section 2.06.	Security for the Credit Facility	46
	Section 2.07.	Place and Manner of Payment	46
	Section 2.08.	The Swingline Facility	48
	Section 2.09.	Issuance of Letters of Credit	51
	Section 2.10.	Fees	56
	Section 2.11.	Late Charges and Default Rate	57
	Section 2.12.	Net Payments	57
	Section 2.13.	Increased Costs	59
	Section 2.14.	Mitigation; Exculpation.	60
	Section 2.15.	Guaranty Agreement	60
ARTICLE III - CONDITIONS PRECEDENT TO THE RESTATEMENT EFFECTIVE DATE			60
A.	Closing Conditions		60
	Section 3.01.	Credit Agreement	61
	Section 3.02.	The Notes and Guaranty	61
	Section 3.03.	Security Documentation	61
	Section 3.04.	Other Loan Documents	61
	Section 3.05.	Articles of Incorporation, Bylaws, Corporate
		Resolutions, Certificates of Good Standing and
		Closing Certificate	61
	Section 3.06.	Opinion of Counsel	62
	Section 3.07.	Title Policy Endorsements	62
	Section 3.08.	Survey	62
	Section 3.09.	Payment of Taxes	63
	Section 3.10.	Insurance	63

 

 

	Section 3.11.	Payment of Fees and Existing Bank Loan	63
	Section 3.12.	Reimbursement for Expenses and Fees	63
	Section 3.13.	Schedules of Spaceleases and Equipment Leases
		and Contracts	63
	Section 3.14.	Phase I Environmental Site Assessments	64
	Section 3.15.	Skybridge Documentation	64
	Section 3.16.	Gaming Permits	64
	Section 3.17.	Financial Statements, Pricing Certificate and
		Total Leverage Ratio Certification	64
	Section 3.18.	Schedule of all Significant Litigation	65
	Section 3.19.	No Injunction or Other Litigation	65
	Section 3.20.	Additional Documents and Statements	65
B.	Conditions Precedent to all Borrowings, Swingline Advances and Letters of Credit		65
	Section 3.21.	Notices	65
	Section 3.22.	Certain Statements	66
	Section 3.23.	Gaming Permits	66
C.	Additional Conditions Precedent to Commitment Increase		66
	Section 3.24.	Guaranty Affirmation	67
	Section 3.25.	Amendments to Security Documents	67
	Section 3.26.	Revolving Credit Note	67
	Section 3.27.	Opinion of Counsel - Commitment Increase	67
	Section 3.28.	Endorsement of Title Insurance Policy	67
	Section 3.29.	Reimbursement for Expenses and Fees	67
	Section 3.30.	Pro Forma Financial Compliance	67
	Section 3.31.	Additional Documents and Statements	67
ARTICLE IV - REPRESENTATIONS AND WARRANTIES			68
	Section 4.01.	Organization; Power and Authorization	68
	Section 4.02.	No Conflict With, Violation of or Default Under Laws
		or Other Agreements	68
	Section 4.03.	Litigation	68
	Section 4.04.	Agreements Legal, Binding, Valid and Enforceable	69
	Section 4.05.	Information and Financial Data Accurate; Financial Statements; No Adverse Event	69
	Section 4.06.	Governmental Approvals	69
	Section 4.07.	Payment of Taxes	70
	Section 4.08.	Title to Properties	70

 

II

 

	Section 4.09.	No Untrue Statements	70
	Section 4.10.	Brokerage Commissions	71
	Section 4.11.	No Defaults	71
	Section 4.12.	Employee Retirement Income Security Act of 1974	71
	Section 4.13.	Availability of Utility Services	71
	Section 4.14.	Policies of Insurance	71
	Section 4.15.	Spaceleases	72
	Section 4.16.	Equipment Leases and Contracts	72
	Section 4.17.	Gaming Permits and Approvals	72
	Section 4.18.	Environmental Certificate	72
	Section 4.19.	Investment Company Act	72
	Section 4.20.	Public Utility Holding Company Act	72
	Section 4.21.	Labor Relations.	72
	Section 4.22.	Trademarks, Patents, Licenses, Franchises, Formulas and Copyrights	72
	Section 4.23.	Contingent Liabilities	73
	Section 4.24.	CC Skybridge Documentation	73
	Section 4.25.	Subsidiaries	73
ARTICLE V - GENERAL COVENANTS OF BORROWER AND MCRI			73
A.	General Covenants		73
	Section 5.01.	FF&E	73
	Section 5.02.	Permits; Licenses and Legal Requirements	73
	Section 5.03.	Protection Against Lien Claims	74
	Section 5.04.	Continuance of Outstanding Balance of Existing Bank Loan	74
	Section 5.05.	No Change in Character of Business or Location of
		Chief Executive Office.	74
	Section 5.06.	Preservation and Maintenance of Properties and
		Assets; Acquisition of Additional Property or Leases	74
	Section 5.07.	Repair of Properties and Assets	75
	Section 5.08.	Financial Statements; Reports; Certificates and Books and Records	76
	Section 5.09.	Insurance	78
	Section 5.10.	Taxes	82
	Section 5.11.	Permitted Encumbrances Only	82
	Section 5.12.	Advances	82
	Section 5.13.	Further Assurances	83
	Section 5.14.	Indemnification	83
	Section 5.15.	Inspection of the Collateral and Appraisal	84
	Section 5.16.	Compliance With Other Loan Documents	84

 

III

 

	Section 5.17.	Suits or Actions Affecting Borrower or MCRI	84
	Section 5.18.	Notice to State Gaming Control Board	85
	Section 5.19.	Tradenames, Trademarks and Servicemarks	85
	Section 5.20.	Notice of Hazardous Materials	85
	Section 5.21.	Compliance with Access Laws	85
	Section 5.22.	Release of V/P Property as Collateral	86
	Section 5.23.	Compliance with Pedestrian Crossing Air Space
		License	87
	Section 5.24.	Compliance with Adjacent Driveway Lease	87
	Section 5.25.	Compliance with CC Skybridge Documentation	87
	Section 5.26.	USA Patriot Act	88
ARTICLE VI - FINANCIAL COVENANTS			88
	Section 6.01.	Total Leverage Ratio	88
	Section 6.02.	Fixed Charge Coverage Ratio	89
	Section 6.03.	Minimum Two Fiscal Quarter Adjusted EBITDA	89
	Section 6.04.	Maintenance Capital Expenditure Requirements	90
	Section 6.05.	Investment Restrictions	90
	Section 6.06.	Limitation on Distributions	91
	Section 6.07.	Limitation on Indebtedness	92
	Section 6.08.	Total Liens	93
	Section 6.09.	Sale of Assets, Consolidation, Merger or Liquidation.	93
	Section 6.10.	No Transfer of Ownership	94
	Section 6.11.	Limitation on Subsidiaries	94
	Section 6.12.	Contingent Liability(ies)	94
	Section 6.13.	Transactions with Members of MCRI Consolidation	94
	Section 6.14.	Limitation on Consolidated Tax Liability	95
	Section 6.15.	ERISA	95
	Section 6.16.	Margin Regulations	95
	Section 6.17.	Change in Accounting Principles	96
ARTICLE VII - EVENTS OF DEFAULT			96
	Section 7.01.	Events of Default	96
	Section 7.02.	Default Remedies	99
	Section 7.03.	Application of Proceeds	101
	Section 7.04.	Notices	101
	Section 7.05.	Agreement to Pay Attorney’s Fees and Expenses	101
	Section 7.06.	No Additional Waiver Implied by One Waiver	102
	Section 7.07.	Licensing of Agent Bank and Lenders	102
	Section 7.08.	Exercise of Rights Subject to Applicable Law	102
	Section 7.09.	Discontinuance of Proceedings	102
ARTICLE VIII - DAMAGE, DESTRUCTION AND CONDEMNATION			103

 

IV

 

	Section 8.01.	No Abatement of Payments	103
	Section 8.02.	Distribution of Capital Proceeds Upon Occurrence of
		Fire, Casualty, Other Perils or Condemnation	103
ARTICLE IX - AGENCY PROVISIONS			105
	Section 9.01.	Appointment	105
	Section 9.02.	Nature of Duties	106
	Section 9.03.	Disbursement of Borrowings	106
	Section 9.04.	Distribution and Apportionment of Payments	107
	Section 9.05.	Rights, Exculpation, Etc.	109
	Section 9.06.	Reliance	109
	Section 9.07.	Indemnification	109
	Section 9.08.	Agent Individually	110
	Section 9.09.	Successor Agent Bank; Resignation of Agent Bank; Removal of Agent Bank	110
	Section 9.10.	Consent and Approvals	111
	Section 9.11.	Agency Provisions Relating to Collateral	112
	Section 9.12.	Lender Actions Against Collateral	114
	Section 9.13.	Ratable Sharing	114
	Section 9.14.	Delivery of Documents	114
	Section 9.15.	Notice of Events of Default	115
ARTICLE X - GENERAL TERMS AND CONDITIONS			115
	Section 10.01.	Amendments and Waivers.	115
	Section 10.02.	Failure to Exercise Rights	117
	Section 10.03.	Notices and Delivery	117
	Section 10.04.	Modification in Writing	119
	Section 10.05.	Other Agreements	119
	Section 10.06.	Counterparts	119
	Section 10.07.	Rights, Powers and Remedies are Cumulative	119
	Section 10.08.	Continuing Representations	119
	Section 10.09.	Successors and Assigns	120
	Section 10.10.	Assignment of Loan Documents by Borrower,
		Guarantor or Syndication Interests by Lenders	120
	Section 10.11.	Action by Lenders	121
	Section 10.12.	Time of Essence	122
	Section 10.13.	Choice of Law and Forum	122
	Section 10.14.	Arbitration	122
	Section 10.15.	WAIVER OF JURY TRIAL	123
	Section 10.16.	Scope of Approval and Review	123
	Section 10.17.	Severability of Provisions	123
	Section 10.18.	Cumulative Nature of Covenants	123

 

V

 

	Section 10.19.		Costs to Prevailing Party			124
	Section 10.20.		Expenses			124
	Section 10.21.		Setoff			125
	Section 10.22.		Security and Loan Documentation			125
	Section 10.23.		Schedules Attached			125
		Schedule 2.01(a)		-	Schedule of Lenders’ Proportions in
					Credit Facility
		Schedule 2.01(c)		-	Aggregate Commitment Reduction
					Schedule
		Schedule 2.01(c)		-
		Alternate One			Aggregate Commitment Reduction
					Schedule - Alternate One
		Schedule 3.18		-	Schedule of Significant Litigation
		Schedule 4.15		-	Schedule of Spaceleases
		Schedule 4.16		-	Schedule of Equipment Leases and Contracts
		Schedule 4.22		-	Schedule of Trademarks, Patents,
					Licenses, Franchises, Formulas and
					Copyrights
		Schedule 4.23		-	Schedule of Contingent Liabilities
		Schedule 6.04		-	Schedule of Remodel Projects
		Schedule 6.08		-	Schedules of Liens
		Schedule A		-	Hotel/Casino Property - Description
		Schedule B		-	V/P Property - Description
	Section 10.23.		Exhibits Attached			126
		Exhibit A		-	Revolving Credit Note - Form
		Exhibit B		-	Swingline Note - Form
		Exhibit C		-	Notice of Borrowing - Form
		Exhibit D		-	Continuation/Conversion Notice - Form
		Exhibit E		-	Compliance Certificate - Form
		Exhibit F		-	Closing Pricing Certificate - Form
		Exhibit G		-	Authorized Officer Certificate - Form
		Exhibit H		-	Closing Certificate - Form
		Exhibit I		-	Guaranty - Form
		Exhibit J		-	Legal Opinion - Form
		Exhibit K		-	Notice of Swingline Advance - Form
		Exhibit L		-	Assumption and Consent Agreement -
					Form

 

VI

 

	Exhibit M	-	Assignment and Assumption Agreement -
			Form
	Exhibit N	-	Cash Collateral Pledge Agreement - Form

 

VII

 

AMENDED AND RESTATED

CREDIT AGREEMENT

 

THIS AMENDED AND RESTATED CREDIT AGREEMENT (“Credit Agreement”) is made and entered into as of the 20 th  day of January, 2009, by and among GOLDEN ROAD MOTOR INN, INC., a Nevada corporation (the “Borrower”), and MONARCH CASINO & RESORT, INC., a Nevada corporation (“Guarantor”) and each of the Lenders, as hereinafter defined, WELLS FARGO BANK, National Association, as the swingline lender (herein in such capacity, together with its successors and assigns, the “Swingline Lender”), and WELLS FARGO BANK, National Association, as the issuer of letters of credit following the Restatement Effective Date (in such capacity, together with its successors and assigns, the “L/C Issuer”) and WELLS FARGO BANK, National Association, as administrative and collateral agent for the Lenders, Swingline Lender and L/C Issuer (herein, in such capacity, called the “Agent Bank” and, together with the Lenders, Swingline Lender and L/C Issuer collectively referred to as the “Banks”).

 

R E C I T A L S:

 

WHEREAS:

 

A.        In this Credit Agreement all capitalized words and terms shall have the respective meanings and be construed herein as hereinafter provided in Section 1.01 of this Credit Agreement and shall be deemed to incorporate such words and terms as a part hereof in the same manner and with the same effect as if the same were fully set forth.

 

B.         Borrower owns and operates the Atlantis Hotel & Casino and is a wholly owned subsidiary of MCRI.  On or about February 20, 2004, Borrower and MCRI entered into a credit agreement (as amended, the “Existing Credit Agreement”) with certain banks, as lenders, described in the Existing Credit Agreement (each individually an “Existing Lender” and collectively the “Existing Lenders”) under the terms of which Existing Lenders established a reducing revolving line of credit in favor of Borrower and MCRI in the amount of Fifty Million Dollars ($50,000,000.00) (as amended, the “Existing Bank Loan”) as evidenced by a Revolving Credit Promissory Note of even date therewith (the “Existing Note”) executed by Borrower and payable to the order of WFB, as agent for the Existing Lenders.

 

C.        The Borrower desires to amend, restate and increase the aggregate amount of the Existing Bank Loan, Existing Credit Agreement and Existing Note to refinance certain other Indebtedness owing by Borrower and to provide for the working capital and general corporate needs of the Borrower.

 

 

D.        Banks are willing, subject to the terms, covenants and conditions hereinafter set forth, to amend, restate and increase the aggregate amount of the Existing Bank Loan and establish the Credit Facility in the initial principal amount of Sixty Million Dollars ($60,000,000.00), subject to increase up to Seventy-Five Million Dollars ($75,000,000.00) in accordance with the provisions set forth in Section 2.01(e), including the Swingline Facility to be funded by the Swingline Lender, as a subfacility in the maximum aggregate amount of Four Million Dollars ($4,000,000.00) at any time outstanding and a letter of credit subfacility for the issuance of Letters of Credit up to the maximum aggregate amount of Two Million Five Hundred Thousand Dollars ($2,500,000.00) at any time outstanding, all on the terms and subject to the conditions, covenants and understandings hereinafter set forth and contained in each of the Loan Documents.

 

NOW, THEREFORE, in consideration of the foregoing, and other valuable considerations as hereinafter described, the parties hereto do promise, covenant and agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01.    Definitions .  For the purposes of this Credit Agreement, each of the following terms shall have the meaning specified with respect thereto, unless a different meaning clearly appears from the context:

 

“Acquisition” means any transaction, or any series of related transactions, consummated after the Restatement Effective Date, by which the Borrower directly or indirectly acquires (i) any real property, (ii) any New Venture or any ongoing business, or (iii) all or substantially all of the assets of any firm, partnership, joint venture, limited liability company, corporation or division thereof, whether through purchase of assets, merger or otherwise.

 

“Adjacent Driveway Property” shall mean the leasehold interest of Borrower in that portion of the Hotel/Casino Property which is designated as Parcel 2 on Schedule A attached hereto and incorporated by reference herein, which leasehold interest is evidenced by the Adjacent Driveway Lease.

 

“Adjacent Driveway Lease” shall mean that certain Lease Agreement and Option to Purchase dated January 29, 2004, by and between BLILP, as lessor, and Borrower, as lessee, pursuant to which, among other things, Borrower is granted a leasehold interest in, and an option to purchase, the Adjacent Driveway Property.

 

2

 

“Adjacent Driveway Estoppel” shall mean the Estoppel Certificate executed as of the Closing Date, by Biggest Little City Investments L.P., a Delaware limited partnership, and recorded on February 20, 2004 in the Official Records of Washoe County, Nevada, as Document No. 2996371, pursuant to which: (a) it certified and represented to Agent Bank that the Adjacent Driveway Lease represents the entire agreement between the parties thereto with respect to the Adjacent Driveway Property and supercedes all other previous documents and agreements between them, that the Adjacent Driveway Lease had not been modified, supplemented or amended except as set forth therein and that there are no defaults existing or continuing under any of the provisions of the Adjacent Driveway Lease; and (b) other agreements are made regarding notice to Agent Bank in the event of a default under this Adjacent Driveway Lease, Agent Bank’s right to cure and the rights of the Banks and their successors to continue in possession of the Adjacent Driveway Property.

 

“Adjusted EBITDA” shall mean EBITDA less MCRI Corporate Overhead Allocation for the period under review to the extent not deducted from Net Income in the determination of EBITDA.

 

“Affiliate”, as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person.  For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

 

“Agent Bank” shall mean WFB in its capacity as administrative and collateral agent for Lenders, Swingline Lender and L/C Issuer.

 

“Aggregate Commitment” shall mean reference to the aggregate amount committed by Lenders for advance to or on behalf of the Borrower as Borrowings under the Credit Facility in the initial principal amount of Sixty Million Dollars ($60,000,000.00), subject to increase in the amount of up to an additional Fifteen Million Dollars ($15,000,000.00) as provided in Section 2.01(e), in each case as may be reduced from time to time by (i) Scheduled Reductions, (ii) Voluntary Permanent Reductions, and/or (iii) Mandatory Commitment Reductions.

 

“Aggregate Commitment Reduction Schedule” shall mean the schedule setting forth the amount of the Scheduled Reductions as of each Reduction Date under the Credit Facility, which schedule shall be: (i) the Aggregate Commitment Reduction Schedule marked “Schedule 2.01(c)”, affixed hereto and by this reference incorporated herein and made a part hereof, or (ii) in the event of occurrence of a Commitment

 

3

 

Increase, the Aggregate Commitment Reduction Schedule - Alternate One marked “Schedule 2.01(c) - Alternate One”, affixed hereto and by this reference incorporated herein and made part hereof to be completed by Agent Bank and distributed to Borrower and each of the Lenders, evidencing the amount of each Scheduled Reduction following the applicable Commitment Increase Effective Date.  In each instance of a Commitment Increase, the amount of the level Scheduled Reductions shall be proportionately adjusted so that the unpaid balance of principal at the Maturity Date is no greater than 62.5% of the sum of the Commitment Increase, plus the amount of any prior Commitment Increase, plus Sixty Million Dollars ($60,000,000.00).

 

“Aggregate Outstandings” shall mean collective reference to the sum of the Funded Outstandings, Swingline Outstandings and L/C Exposure as of any given date of determination.

 

“Applicable Margin” means for any Base Rate Loan or LIBOR Loan, the applicable percentage amount to be added to the Base Rate or LIBO Rate, as the case may be, as follows: (i) commencing on the Restatement Effective Date and continuing until June 1, 2009, the Applicable Margins as calculated on the Closing Pricing Certificate to be delivered by Borrower to Agent Bank on the Restatement Effective Date pursuant to Section 3.17(b); provided that in no event shall the Base Rate Margin or the LIBO Rate Margin be less than 3.125% during the period commencing on the Restatement Effective Date and continuing until June 1, 2009; and (ii) commencing on June 1, 2009 and continuing on each Rate Adjustment Date until Bank Facility Termination, the margin rates as set forth in Table One below in each instance based on the Total Leverage Ratio calculated with regard to the Borrower as of each Fiscal Quarter end, commencing with the Fiscal Quarter ending March 31, 2009, together with the immediately preceding three (3) Fiscal Quarters on a four (4) Fiscal Quarter basis:

 

		TABLE ONE				TABLE TWO
Total Leverage Ratio		Base Rate Margin		LIBO Rate Margin		Commitment Percentage
Greater than or equal to 2.50 to 1.00		3.375%		3.375%		0.80%
Greater than or equal to 2.00 to 1.00 but less than 2.50 to 1.00		3.125%		3.125%		0.750%
Greater than or equal to 1.50 to 1.0 but less than 2.00 to 1.00		2.875%		2.875%		0.625%
Greater than or equal to 1.00 to 1.0 but less than 1.50 to 1.00		2.375%		2.375%		0.50%
Less than 1.00 to 1.00		2.00%		2.00%		0.40%

 

4

 

“Assets” shall mean the total assets of the Borrower determined in accordance with GAAP.

 

“Assignment and Assumption Agreement” shall mean the document evidencing an assignment of a Syndication Interest by any Lender to an Eligible Assignee in the form of the Assignment, Assumption and Consent Agreement marked “Exhibit M”, affixed hereto and by this reference incorporated herein and made a part hereof.

 

“Assignment of Rents” shall mean collective reference to the Existing Assignment of Rents as amended by the First Amendment to Assignment of Rents, as it may be further amended, modified, extended, renewed or restated from time to time.

 

“Assumption and Consent Agreement” shall mean the document evidencing an increase of the Aggregate Commitment and assumption of such increase by a Lender or Eligible Assignee pursuant to Section 2.01(e) in the form of the Assumption and Consent Agreement marked “Exhibit L”, affixed hereto and by this reference incorporated herein and made a part hereof.

 

“Authorized Officer(s)” shall mean those of the respective officers of Borrower whose signatures and incumbency shall have been certified to Agent Bank and the Banks as required in Section 3.05(iv) of the Credit Agreement with the authority and responsibility to deliver Notices of Borrowing, Continuation/Conversion Notices, Pricing Certificates, Compliance Certificates and all other requests, notices, reports, consents, certifications and authorizations on behalf of Borrower.

 

“Authorized Officer Certificate” shall have the meaning set forth in Section 3.05.

 

“Available Borrowings” shall mean, at any time, and from time to time, the aggregate amount available to Borrower for a Borrowing, a Swingline Advance or issuance of a Letter of Credit not exceeding the amount of the Maximum Availability, as of each date of determination.

 

“Bank Facilities” shall mean collective reference to the Credit Facility, Swingline Facility and L/C Facility.

 

“Bank Facility Termination” shall mean indefeasible payment in full of all sums owing under the Bank Facilities and each of the Loan Documents, the occurrence of the Stated Expiry Date or other termination of all outstanding Letters of Credit, and the irrevocable termination of: (i) the obligation of Lenders to advance Borrowings under the

 

5

 

Credit Facility, (ii) the obligation of Swingline Lender to advance Swingline Advances under the Swingline Facility, and (iii) the obligation of L/C Issuer to issue Letters of Credit under the L/C Facility.

 

“Banking Business Day” means (a) with respect to any Borrowing, payment or rate determination of LIBOR Loans, a day, other than a Saturday or Sunday, on which Agent Bank is open for business in San Francisco and on which dealings in Dollars are carried on in the London interbank market, and (b) for all other purposes any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the States of California and/or Nevada, or is a day on which banking institutions located in California and/or Nevada are required or authorized by law or other governmental action to close.

 

“Bankruptcy Code” shall mean the United States Bankruptcy Code, as amended, 11 U.S.C. Section 101, et seq .

 

“Banks” shall have the meaning set forth in the Preamble to this Credit Agreement.

 

“Base Rate” shall mean, on any day, the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate for such day plus one and one-half percent (1.50%) and (c) one (1) month LIBO Rate for such day (determined on a daily basis as set forth below) plus one and one-half percent (1.50%).  As used in this definition, “One Month LIBOR Rate” shall mean, with respect to any interest rate calculation for a Base Rate Loan or other Obligation bearing interest at the Base Rate, a rate per annum equal to the quotient (rounded upward if necessary to the nearest 1/16 of one percent) of (a) the rate per annum referred to as the BBA (British Bankers Association) LIBO RATE as reported on Reuters LIBOR Page 1, or if not reported by Reuters, as reported by any service selected by the Agent Bank, on the applicable day (provided that if such day is not a Banking Business Day for which a LIBO Rate is quoted, the next preceding Banking Business Day for which a LIBO Rate is quoted) at or about 11:00 a.m., London time (or as soon thereafter as practicable), for Dollar deposits being delivered in the London interbank eurodollar currency market for a term of one month commencing on such date of determination, divided by (b) one (1) minus the LIBOR Reserve Percentage in effect on such day.  If for any reason rates are not available as provided in clause (a) of the preceding sentence, the rate to be used in clause (a) shall be, at the Agent Bank’s discretion (in each case, rounded upward if necessary to the nearest 1/16 of one percent), (i) the rate per annum at which Dollar deposits are offered to the Agent Bank in the London interbank eurodollar currency market or (ii) the rate at which Dollar deposits are offered to the Agent Bank in, or by the Agent Bank to major banks in, any offshore interbank eurodollar market selected by the Agent Bank, in each case on the applicable day (provided that if such day is not a

 

6

 

Banking Business Day for which Dollar deposits are offered to the Agent Bank in the London interbank eurodollar currency market, the next preceding Banking Business Day for which Dollar deposits are offered to the Agent Bank in the London interbank eurodollar currency market) at or about 11:00 a.m., London time (or as soon thereafter as practicable) (for delivery on such date of determination) for a one (1) month term.

 

“Base Rate Loan” shall mean reference to that portion of the unpaid principal balance of the Credit Facility bearing interest with reference to the Base Rate plus the Applicable Margin.

 

“BLILP” shall mean Biggest Little Investments L.P., a Delaware limited partnership.

 

“Borrower” shall mean Golden Road Motor Inn, Inc., a Nevada corporation.

 

“Borrowing(s)” shall mean such amounts as Borrower may request from Agent Bank from time to time to be advanced under the Credit Facility by Notice of Borrowing in the manner provided in Section 2.03 or at the request of Agent Bank pursuant to Section 2.08 or Section 2.09.

 

“Breakage Charges” shall have the meaning set forth in Section 2.07(c) of the Credit Agreement.

 

“Capital Expenditures” shall mean, for any period, without duplication, the aggregate of all expenditures (whether paid in cash or accrued as liabilities during that period and including Capitalized Lease Liabilities) by Borrower during such period that, in conformity with GAAP, are required to be included in or reflected by the property, plant or equipment or similar fixed or capital asset accounts reflected in the balance sheet of Borrower (including equipment which is purchased simultaneously with the trade-in of existing equipment owned by Borrower to the extent of (a) the gross amount of such purchase price less (b) the cash proceeds of trade-in credit of the equipment being traded in at such time), but excluding capital expenditures made in connection with the replacement or restoration of assets, to the extent reimbursed or refinanced from insurance proceeds paid on account of the loss of or damage to the assets being replaced or restored, or from awards of compensation arising from the taking by condemnation of or the exercise of the power of eminent domain with respect to such assets being replaced or restored.

 

“Capital Proceeds” shall mean the Net Proceeds available to Borrower from (i) partial or total condemnation, eminent domain or destruction of any part of the Collateral or by settlement in lieu of condemnation or eminent domain proceedings, (ii) insurance

 

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proceeds (other than rent insurance and business interruption insurance) received in connection with damage to or destruction of the Collateral, (iii) the sale or other disposition of any portion of the Collateral in accordance with the provisions of this Credit Agreement (not including, however, any proceeds received by Borrower from a sale, condemnation, damage or destruction of FF&E or other personal property if such FF&E or other personal property is replaced by items of equivalent value or utility, in each case such exclusion to apply only during any period in which no Default in the payment of any principal or interest owing under the terms of the Bank Facilities or an Event of Default has occurred and is continuing), and (iv) any other extraordinary receipt of proceeds not in the ordinary course of business and treated, for accounting purposes, as capital in nature, other than capital contributions made by MCRI to the Borrower.

 

“Capitalized Lease Liabilities” means all monetary obligations of the Borrower under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases, and, for purposes of this Credit Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP, and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty.

 

“Cash” shall mean, when used in connection with any Person, all monetary and non-monetary items owned by that Person that are treated as cash in accordance with GAAP.

 

“Cash Collateral Account” shall mean the restricted depository savings account to be established by Borrower or Agent Bank on behalf of Borrower with Agent Bank at its offices located at 5340 Kietzke Lane, Suite 201, Reno, Nevada, or at such other office located in the United States as may be designated from time to time by Agent Bank, for the purpose of depositing Cash collateral for (i) the aggregate L/C Exposure upon the occurrence of any Event of Default, or (ii) all or a portion of a Deteriorating Lender’s obligation to fund under Section 2.09(c) or (d) with respect to its Pro Rata Share of L/C Exposure, or (iii) all or a portion of a Deteriorating Lender’s Pro Rata Share of risk participation in Swingline Advances under Section 2.08(d) or (e).

 

“Cash Collateral Pledge Agreement” shall mean the Pledge and Assignment of Savings Account Agreement to be executed by Borrower as of the Restatement Effective Date in favor of Agent Bank on behalf of the L/C Issuer and Swingline Lender as the same may be amended or modified from time to time under the terms of which all sums held from time to time in the Cash Collateral Account are pledged in favor of Agent Bank to secure repayment of (i) any funding required under any outstanding Letters of Credit following an Event of Default, or (ii) all or a portion of a Deteriorating Lender’s obligation to fund under Section 2.09(c) or (d) with respect to its

 

8

 

Pro Rata Share of L/C Exposure, or (iii) all or a portion of a Deteriorating Lender’s Pro Rata Share of risk participation in Swingline Advances under Section 2.08(d) or (e), a copy of the form of which Cash Collateral Pledge Agreement is marked “Exhibit N”, affixed hereto and by this reference incorporated herein and made a part hereof.

 

“Cash Equivalents” shall mean, when used in connection with any Person, that Person’s Investments in:

 

(a)        Government Securities due within one (1) year after the date of the making of the Investment;

 

(b)        readily marketable direct obligations of any State of the United States of America given on the date of such Investment a credit rating of at least Aa by Moody’s Investors Service, Inc. or AA by Standard & Poor’s Corporation, in each case due within one (1) year from the making of the Investment;

 

(c)        certificates of deposit issued by, bank deposits in, eurodollar deposits through, bankers’ acceptance of, and repurchase agreements covering Government Securities executed by, any bank incorporated under the laws of the United States of America or any State thereof and having on the date of such Investment combined capital, surplus and undivided profits of at least Two Hundred Fifty Million Dollars ($250,000,000.00), or total assets of at least Five Billion Dollars ($5,000,000,000.00), in each case due within one (1) year after the date of the making of the Investment;

 

(d)        certificates of deposit issued by, bank deposits in, eurodollar deposits through, bankers’ acceptances of, and repurchase agreements covering Government Securities executed by, any branch or office located in the United States of America of a bank incorporated under the laws of any jurisdiction outside the United States of America having on the date of such Investment combined capital, surplus and undivided profits of at least Five Hundred Million Dollars ($500,000,000.00), or total assets of at least Fifteen Billion Dollars ($15,000,000,000.00) in each case due within one year after the date of the making of the Investment; and

 

(e)        “money market preferred stock” issued by a corporation incorporated under the laws of the United States of America or any State thereof given on the date of such Investment a credit rating of at least Aa by Moody’s Investors Service, Inc. or AA by Standard & Poor’s Corporation, in each case having an investment period not to exceed fifty (50) days; provided that (i) the amount of all such Investments issued by the same

 

9

 

issuer does not exceed Five Million Dollars ($5,000,000.00) and (ii) the aggregate amount of all such Investments does not exceed Fifteen Million Dollars ($15,000,000.00).

 

“CC Skybridge” shall mean a collective reference to: (i) the elevated pedestrian walkway which extends, from Parcel 1 of the Hotel/Casino Property to the CC Skybridge Tower, over and across Peckham Lane and the north parking lot of the Convention Center Property to the Reno Sparks Convention Center; (ii) the CC Skybridge Tower; and (iii) all elevators, escalators, support columns, landscaping, paving and other facilities and fixtures which are related to the foregoing, all as particularly set forth by the CC Skybridge Agreement.

 

“CC Skybridge Agreement” shall mean that certain Atlantis Convention Center Skybridge Agreement and Easement, dated May 9, 2007, between RSCVA and Borrower, which was recorded in the Official Records of Washoe County, Nevada on May 10, 2007, as Document No. 3530942, pursuant to which, among other things:  (i) RSCVA granted the CC Skybridge Easements to Borrower; (ii) Borrower granted, to RSCVA, certain access easements over Parcels 3 through 5 of the Hotel/Casino Property; (iii) Borrower agreed to construct and operate the CC Skybridge within the applicable CC Skybridge Easements; and (iv) Borrower agreed that RSCVA would be entitled to reserve blocks of rooms at the Hotel/Casino Facility for certain types of events being conducted by RSCVA; all in accordance with the terms and conditions set forth therein.

 

“CC Skybridge Documentation” shall mean a collective reference to: (i) the CC Skybridge Agreement; and (ii) the CC Skybridge Peckham Lane Entitlements.

 

“CC Skybridge Easements” shall mean certain permanent and temporary easements over the Convention Center Property which are granted to Borrower by RSCVA, pursuant to the CC Skybridge Agreement, in order to facilitate Borrower’s construction and operation of the CC Skybridge, all as more particularly set forth therein.

 

“CC Skybridge Estoppel” shall mean an estoppel statement, in a form and substance acceptable to Agent Bank, to be executed by RSCVA: (i) consenting to encumbrance of Borrower’s interest in the CC Skybridge, and in the CC Skybridge Agreement, with the lien and security agreement of the Deed of Trust; (ii) acknowledging that the CC Skybridge Agreement is in full force and effect and that Borrower is not in default of any of its material obligations thereunder; and (iii) providing such other assurances as may be required by Agent Bank.

 

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“CC Skybridge Peckham Lane Entitlements” shall mean the documentation which sets forth the agreement, by all appropriate Governmental Authorities, authorizing and entitling Borrower to construct and maintain the CC Skybridge over Peckham Lane in accordance with the CC Skybridge Agreement.

 

“CC Skybridge Tower” shall mean the pedestrian dispersal site for the CC Skybridge, which is situate on the Convention Center Property, including the dispersal tower, lobby, escalators, elevators and stairs.

 

“Change in Control” shall mean the occurrence of any of the following:

 

(a)        any Person, other than members of the Farahi Family Group, owns or controls, more than fifty percent (50%) of the common voting stock of MCRI; or

 

(b)        MCRI fails to own, directly or indirectly, one hundred percent (100%) of the capital stock interests of Borrower.

 

“Closing Certificate” shall have the meaning ascribed to such term in Section 3.05(v).

 

“Closing Date” shall mean February 20, 2004, the date upon which the Existing Bank Loan closed.

 

“Closing Disbursements” shall have the meaning set forth in Section 2.02(a).

 

“Closing Instructions” shall mean the Closing Instructions to be given by Agent Bank to the Title Insurance Company on or before the Restatement Effective Date setting forth the requirement of Lenders for issuance of the Title Policy Endorsements and other conditions for the occurrence of the Restatement Effective Date.

 

“Closing Pricing Certificate” shall have the meaning set forth in Section 3.17(b).

 

“Collateral” shall mean collective reference to: (i) all of the Real Property, and all presently owned, or hereafter acquired, personal property of Borrower (including, without limitation, the FF&E), and the contract rights, leases, intangibles and other interests of Borrower, which are subject to the liens and security interests of the Security Documents; (ii) all rights of Borrower assigned as additional security pursuant to the terms of the Security Documents; and (iii) any and all other property and/or

 

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intangible rights, interest or benefits inuring to or in favor of Borrower, which are in any manner assigned, pledged, encumbered or otherwise hypothecated in favor of Agent Bank on behalf of Lenders to secure payment of the Bank Facilities.

 

“Commercial Letter(s) of Credit” shall mean a letter or letters of credit issued by L/C Issuer pursuant to Section 2.09 of the Credit Agreement for the purpose of assuring payment for goods, equipment or materials supplied to Borrower.

 

“Commitment Fee” shall have the meaning ascribed to such term in Section 2.10(b) of this Credit Agreement.

 

“Commitment Increase” shall have the meaning ascribed to such term in Section 2.01(e).

 

“Commitment Increase Effective Date” shall mean the date upon which each of the requirements and conditions precedent for the effectiveness and funding of a Commitment Increase as set forth in Section 2.01(e) and in Article III C shall have been fully satisfied.

 

“Commitment Percentage” shall mean the per annum percentage to be used in the calculation of the Commitment Fee based on the Total Leverage Ratio of the Borrower determined as set forth in Table Two of the definition of Applicable Margin.

 

“Communications” shall have the meaning ascribed to such term in Section 10.03.

 

“Compliance Certificate” shall mean a compliance certificate as described in Section 5.08(f) which is more particularly described on “Exhibit E”, affixed hereto and by this reference incorporated herein and made a part hereof.

 

“Contingent Liability(ies)” shall mean, as to any Person any obligation of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness, leases or dividends (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, (d) to make payment in respect of any net liability arising in connection with any Interest

 

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Rate Hedges, foreign currency exchange agreement, commodity hedging agreement or any similar agreement or arrangement in any such case if the purpose or intent of such agreement is to provide assurance that such primary obligation will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such primary obligation will be protected (in whole or in part) against loss in respect thereof or (e) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Liability shall not include endorsements of instruments for deposit or collection in the ordinary course of business or player points programs awarded in connection with gaming operations at the Hotel/Casino Facility in the ordinary course of business, in the event such player points programs are determined to constitute Contingent Liabilities.  The amount of any Contingent Liability shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Liability is made or, if not stated or determinable, the reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

 

“Continuation/Conversion Notice” shall mean a notice of continuation of or conversion to a LIBOR Loan and certificate duly executed by an Authorized Officer of Borrower, substantially in the form of that certain exhibit marked “Exhibit D”, affixed hereto and by this reference incorporated herein and made a part hereof.

 

“Convention Center Property” shall mean that certain real property owned by RSCVA, which is designated by Washoe County Assessor’s Parcel No. 025-011-19 and upon which Reno Sparks Convention Center is situate.

 

“Convert, Conversion and Converted” shall refer to a Borrowing at or continuation of a particular interest rate basis or conversion of one interest rate basis to another pursuant to Section 2.05(c).

 

“Credit Agreement” shall mean this Amended and Restated Credit Agreement together with all Schedules and Exhibits attached thereto, executed by and among Borrower, MCRI and Banks setting forth the terms and conditions of the Bank Facilities, which shall fully amend and restate the Existing Credit Agreement, as may be further amended, modified, extended, renewed or restated from time to time.

 

“Credit Facility” shall mean the agreement of Lenders to fund a reducing revolving line of credit, subject to the terms and conditions set forth in this Credit Agreement and the Revolving Credit Note, up to the Aggregate Commitment as reduced from time to time in accordance with the terms of this Credit Agreement and the Revolving Credit Note.

 

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“Deed of Trust” shall mean collective reference to the Existing Deed of Trust as amended by the First Amendment to Deed of Trust, as it may be further amended, modified, extended, renewed or restated from time to time.

 

“Default” shall mean the occurrence or non-occurrence, as the case may be, of any event that with the giving of notice or passage of time, or both, would become an Event of Default.

 

“Default Rate” shall have the meaning set forth in Section 2.11(b).

 

“Defaulting Lender” means any Lender which fails or refuses to perform its obligations under this Credit Agreement within the time period specified for performance of such obligation or, if no time frame is specified, if such failure or refusal continues for a period of five (5) Banking Business Days after notice from Agent Bank.

 

“Designated Deposit Account” shall mean a deposit account to be maintained by Borrower with Agent Bank, as from time to time designated in writing by an Authorized Officer of Borrower.

 

“Deteriorating Lender” shall mean (a) a Defaulting Lender or (b) an Unsuitable Lender or (c) a Lender as to which (i) the L/C Issuer or Swingline Lender (as applicable) has a good faith belief that such Lender has defaulted in fulfilling its obligations under one or more other syndicated credit facilities or (ii) an entity that controls such Lender has been deemed insolvent or becomes subject to a receivership, bankruptcy or other similar proceeding. For the purpose of this definition, “control” of a Lender shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise.

 

“Disposition” shall have the meaning ascribed to such term in Section 6.09(c).

 

“Dispute” shall have the meaning set forth in Section 10.14(a).

 

“Distribution Carryover” shall have the meaning ascribed to such term in Section 6.06(b).

 

“Distributions” shall mean and collectively refer to any and all cash dividends, loans, management fees, payments, advances or other distributions, fees or compensation of any kind or character whatsoever made by Borrower to or for the benefit of MCRI, any Subsidiary or Affiliate thereof or any member of the Farahi Family Group, but shall not include consideration paid for tangible and intangible assets in an arms length

 

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exchange for fair market value, trade payments made and other payments for liabilities incurred in the ordinary course of business or compensation to officers, directors and employees of Borrower in the ordinary course of business.

 

“Documents” shall have the meaning set forth in Section 10.14(a).

 

“Dollars” and “$” means the lawful money of the United States of America.

 

“EBITDA” shall mean with reference to any Person, for any fiscal period under review, the sum of (i) Net Income for that period, less (ii) interest income reflected in such Net Income, less (iii) any extraordinary one-time non-Cash gain reflected in such Net Income, plus (iv) any extraordinary losses on sales of assets and other extraordinary losses and one-time non-Cash charges, plus (v) Interest Expense (including expensed and capitalized) for that period, plus (vi) the aggregate amount of federal and state taxes on or measured by income for that period (whether or not payable during that period), plus (vii) depreciation, amortization and all other non-cash expenses for that period, including, without limitation, non-cash stock option expenses, in each case determined in accordance with GAAP and, in the case of items (iv), (v), (vi) and (vii), only to the extent deducted in the determination of Net Income for that period.

 

“Eligible Assignee” means (a) another Lender, (b) with respect to any Lender, any Affiliate of that Lender and (c) any commercial bank having a combined capital and surplus of One Hundred Fifty Million Dollars ($150,000,000.00) or more that is (i) organized under the Laws of the United States of America, any State thereof or the District of Columbia or (ii) organized under the Laws of any other country which is a member of the Organization for Economic Cooperation and Development, or a political subdivision of such a country, provided that (A) such bank is acting through a branch or agency located in the United States of America and (B) is otherwise exempt from withholding of tax on interest and delivers Form 1001 or Form 4224 at the time of any assignment, (d) a financial institution which is an accredited investor as defined by the Securities Act of 1934 and is otherwise exempt from withholding tax on interest at the time of any assignment, (e) any other financial institution that meets the requirements set forth in subclauses (c)(i) or (c)(ii) above that (i) has a net worth of One Hundred Fifty Million Dollars ($150,000,000.00) or more, (ii) is engaged in the business of lending money and extending credit under credit facilities substantially similar to those extended under this Credit Agreement, and (iii) is operationally and procedurally able to meet the obligations of a Lender hereunder to the same degree as a commercial bank, and (f) with respect to such commercial bank or financial institution as described in (a) through (e) above, no finding of unsuitability has been made or determined by any Gaming Authority or the gaming authorities of any other States of the United States of America.

 

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“Environmental Certificate” shall mean the Certificate and Indemnification Regarding Hazardous Substances to be executed by Borrower on or before the Restatement Effective Date as a further inducement to the Banks to establish the Credit Facility, as it may be amended, modified, extended, renewed or restated from time to time.

 

“Equipment Leases and Contracts” shall mean the executed leases and purchase contracts pertaining to the FF&E wherein Borrower is the lessee or vendee, as the case may be, as set forth on that certain schedule marked “Schedule 4.16”, affixed hereto and by this reference incorporated herein and made a part hereof.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“Event of Default” shall mean any event of default as defined in Section 7.01 hereof.

 

“Excess Capital Proceeds” shall have the meaning ascribed to such term in Section 6.09(c) of this Credit Agreement.

 

“Existing Assignment of Rents” shall mean the Assignment of Entitlements, Contracts, Rents and Revenues executed by Borrower as of February 20, 2004 and recorded February 20, 2004, in the Official Records of Washoe County, Nevada, as Document No. 2996369, whereby Borrower presently assigned to Agent Bank in consideration of the Existing Bank Loan, as it may be amended, modified, extended, renewed or restated from time to time, (reserving a revocable license to retain use and enjoy):  (a) all of its right, title and interest under all Spaceleases and Equipment Leases and Contracts relating to the Hotel/Casino Facility, (b) all of its right, title and interest in and to all permits, licenses and contracts relating to the Hotel/Casino Facility, except Gaming Permits and those permits, licenses and contracts which are unassignable, and (c) all rents, issues, profits, revenues and income from the Real Property and the Hotel/Casino Facility and any other business activity conducted on the Real Property, together with any and all future expansions thereof, related thereto or used in connection therewith.

 

“Existing Bank Loan” shall have the meaning ascribed to such term in Recital Paragraph B.

 

“Existing Bank Loan Security Documents” shall mean collective reference to all pledges, security agreements, mortgages, deeds of trust, financing statements and other documents and instruments securing repayment of the Existing Bank Loan.

 

“Existing Credit Agreement” shall have the meaning ascribed to such term in Recital Paragraph B.

 

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“Existing Deed of Trust” shall mean the Deed of Trust, Fixture Filing and Security Agreement with Assignment of Rents executed as of the Closing Date by Borrower in favor of Agent Bank and recorded on February 20, 2004, in the Official Records of Washoe County, Nevada as Document No. 2996368, encumbering the Real Property, the FF&E and other Collateral therein described, for the purpose, among other things, of securing the Existing Bank Loan, as it may be amended, modified, extended, renewed or restated from time to time.

 

“Existing Lender(s)” shall have the meaning ascribed to such term in Recital Paragraph B.

 

“Existing Note” shall have the meaning ascribed to such term in Recital Paragraph B.

 

“Existing Title Insurance Policy” shall mean the ALTA Loan Policy of Title Insurance issued by the Title Insurance Company, as Policy No. G47-2406164, dated as of February 20, 2004, together with the endorsements which were issued concurrently therewith, with such policy and endorsements providing coverage in the aggregate amount of Fifty Million Dollars ($50,000,000.00), insuring the Existing Deed of Trust as a first priority mortgage lien encumbering the Real Property subject only to the exceptions shown therein.

 

“Existing Trademark Security Agreement” shall mean the Trademark Security Agreement which was executed by Borrower under date of February 20, 2004 for the purpose, among other things, of granting a security interest in favor of Agent Bank in all trademarks, tradenames, copyrights, servicemarks, and interests therein (including, without limitation, licenses) used in connection with the Hotel/Casino Facility, as security for, among other things, Borrower’s payment and performance under the Existing Bank Loan.

 

“Farahi” shall mean collective reference to John Farahi, Bahram (Bob) Farahi and Behrouz (Ben) Farahi.

 

“Farahi Family Group” shall mean collective reference to Farahi, Jila Farahi Trust created by agreement dated May 20, 2002, and their respective children, grandchildren, executors, administrators, testamentary trustees, heirs, legatees and beneficiaries.

 

“Federal Funds Rate” means, as of any date of determination, the rate set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the Federal Reserve Board (including any such successor,

 

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“H.15(519)”) for such date opposite the caption “Federal Funds (Effective)”.  If for any relevant date such rate is not yet published in H.15(519), the rate for such date will be the rate set forth in the daily statistical release designated as the Composite 3:30 p.m., New York City Time, Quotations for U.S. Government Securities, or any successor publication, published by the Federal Reserve Bank of New York (including any successor, the “Composite 3:30 p.m., New York City Time, Quotation”) for such date under the caption “Federal Funds Effective Rate”.  If on any relevant date the appropriate rate for such date is not yet published in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such date will be the arithmetic mean of the rates for the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on that date by each of three leading brokers of Federal funds transactions in New York City selected by the Agent Bank.  For purposes of the Credit Agreement, any change in the Base Rate due to a change in the Federal Funds Rate shall be effective as of the opening of business on the effective date of such change.

 

“Fee Side Letter” shall mean the Side Letter of Understanding Regarding Fees to be executed by and between Borrower and Agent Bank on or before the Restatement Effective Date concerning payment of the Agent Fees more particularly therein described.

 

“FF&E” shall mean collective reference to any and all furnishings, fixtures and equipment, including, without limitation, all Gaming Devices and associated equipment, which have been installed or are to be installed and used in connection with the operation of the Hotel/Casino Facility and in connection with any other business operation conducted on the Real Property and those items of furniture, fixtures and equipment which have been purchased or leased or are hereafter purchased or leased by Borrower in connection with the Hotel/Casino Facility and in connection with any other business operation conducted on the Real Property.

 

“Financial Covenants” shall mean collective reference to the financial covenants set forth in Article VI of this Credit Agreement.

 

“Financing Statements” shall mean a collective reference to: (i) the UCC-1 Financing Statement filed in the Official Records of Washoe County, Nevada on February 20, 2004, as Document No. 2996370, for the purpose of perfecting the security interest in applicable collateral which was initially granted by the Existing Deed of Trust, together with the UCC Amendment Statement to be filed substantially concurrent with the Restatement Effective Date; and (ii) the UCC-1 Financing Statement filed in the Office of the Nevada Secretary of State on December 17, 2004 under File No. 2004005323-9, together with the UCC Amendment Statement to be filed substantially concurrent with the Restatement Effective Date; all of which perfect the security interest granted to Agent Bank under the Deed of Trust and other Security

 

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Documentation in accordance with requirements of the Nevada Uniform Commercial Code, as such financing statements may be amended, modified, extended, renewed or restated from time to time.

 

“FIRREA” shall mean the Financial Institutions Reform, Recovery and Enforcement Act of 1989.

 

“First Amendment to Assignment of Rents” shall mean that certain First Amendment to Assignment of Entitlements, Contracts, Rents and Revenues which is to be executed by Borrower and by Agent Bank, on or before the Restatement Effective Date, and is to be recorded in the Official Records of Washoe County, Nevada, concurrently, or substantially concurrent, with the Restatement Effective Date in order to amend the Existing Assignment of Entitlements, Contracts, Rents and Revenues for the purpose, among other things, of reflecting: (i) Borrower’s acquisition of the CC Skybridge Easements; and (ii) the restatement of the Existing Bank Loan and increase in the amount of the Credit Facility as set forth in the Credit Agreement.

 

“First Amendment to Deed of Trust” shall mean that certain First Amendment to Deed of Trust, Fixture Filing and Security Agreement with Assignment of Rents and Notice of Additional Commitment which is to be executed by Borrower and by Agent Bank, on or before the Restatement Effective Date, and is to be recorded in the Official Records of Washoe County, Nevada, concurrently, or substantially concurrent, with the Restatement Effective Date in order to amend the Existing Deed of Trust for the purpose, among other things, of causing it to additionally encumber the CC Skybridge Easements and confirming that it secures Borrower’s payment and performance under the Credit Facility.

 

“First Amendment to Trademark Security Agreement” shall mean the First Amendment to Trademark Security Agreement to be executed by Borrower as of the Restatement Effective Date in order to amend the Existing Trademark Security Agreement for the purpose, among other things, of confirming its security for payment and performance of the Bank Facilities and reflecting the increase in the amount of the Credit Facility as set forth in the Credit Agreement.

 

“Fiscal Quarter” shall mean the consecutive three (3) month periods during each Fiscal Year beginning on January 1, April 1, July 1 and October 1 and ending on March 31, June 30, September 30 and December 31, respectively.

 

“Fiscal Year” shall mean the fiscal year period beginning January 1 of each calendar year and ending on the following December 31.

 

“Fiscal Year End” shall mean December 31 of each calendar year.

 

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“Fixed Charge Coverage Ratio” as of the end of any Fiscal Quarter shall mean with reference to the Borrower:

 

For the Fiscal Quarter under review, together with the most recently ended three (3) preceding Fiscal Quarters, the sum of: (i) Adjusted EBITDA, less (ii) the aggregate amount of Distributions (exclusive of the Distributions made for the purpose of funding Share Repurchases during the Fiscal Quarters ended March 31, 2008 and June 30, 2008) actually paid, without duplication, less (iii) the aggregate amount of actually paid federal and state taxes on or measured by income, less (iv) the aggregate amount of the Maintenance Capital Expenditures, less (v) the aggregate amount expended on the Remodel Projects to be applied as a credit toward the Minimum Maintenance Cap Ex Requirement

 

Divided by ( ¸ )

 

The sum of: (i) the aggregate amount of Interest Expense (accrued and capitalized), plus (ii) the aggregate of the Scheduled Reduction Payments actually paid during the period under review, plus (iii) the aggregate of payments required to be made on all other interest bearing Indebtedness, plus (iv) the aggregate of payments required to be made on Capitalized Lease Liabilities, in each instance determined for the Fiscal Quarter under review together with the most recently ended three (3) preceding Fiscal Quarters.

 

“Funded Outstandings” shall mean the unpaid principal amount outstanding on the Credit Facility as of any given date of determination for Borrowings made thereunder, not including Swingline Outstandings or the amount of any L/C Exposure.

 

“Funding Date” shall mean each date upon which Lenders fund Borrowings requested by Borrower in accordance with the provisions of Section 2.03 or at the request of Agent Bank pursuant to Section 2.08 or 2.09.

 

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, or in such other statements by such other entity as may be in general use by significant segments of the accounting profession, which are applicable to the circumstances as of the date of determination.

 

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“Gaming Devices” shall mean slot machines and other devices which constitute gaming devices and related equipment as defined in Nevada Revised Statute Chapter 463 and Nevada Gaming Commission Regulations by the Nevada Gaming Authorities and Gaming Laws.

 

“Gaming Laws” shall mean all statutes, rules, regulations, ordinances, codes and administrative or judicial precedents pursuant to which any Gaming Authority possesses regulatory licensing or permit authority over gambling, gaming or casino activities conducted by Borrower at the Hotel/Casino Facility, including the Nevada Gaming Control Act and regulations promulgated thereunder.

 

“Gaming Permits” shall mean collective reference to every license, permit or other authorization required to own, operate and otherwise conduct gambling, gaming and casino activities at the Hotel/Casino Facility, including, without limitation, all licenses granted by the Nevada Gaming Authorities.

 

“Gaming Revenues” shall mean all income and revenues of Borrower derived from gaming and gambling activities which are subject to taxation by the Nevada Gaming Authorities.

 

“Government Securities” means readily marketable (a) direct full faith and credit obligations of the United States of America or obligations guaranteed by the full faith and credit of the United States of America and (b) obligations of an agency or instrumentality of, or corporation owned, controlled or sponsored by, the United States of America that are generally considered in the securities industry to be implicit obligations of the United States of America.

 

“Governmental Authority” or “Governmental Authorities” shall mean any federal, state, regional, county or municipal governmental agency, board, commission, officer or official in the United States of America whose consent or approval is required or whose regulations must be followed as a prerequisite to (i) the continued operation and occupancy of the Real Property and the Hotel/Casino Facility or (ii) the performance of any act or obligation or the observance of any agreement, provision or condition of whatever nature herein contained.

 

“Gross Revenues” shall mean all income and revenues of Borrower at the Hotel/Casino Facility from all sources.

 

“Guarantor” shall mean MCRI.

 

“Guaranty” shall mean the General Continuing Guaranty to be executed by MCRI in favor of the Agent Bank on behalf of Banks, under the terms of which MCRI

 

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irrevocably and unconditionally guaranties to Agent Bank on behalf of the Banks the full and prompt payment and performance of all Obligations, a copy of the form of which is marked “Exhibit I”, affixed hereto and by this reference incorporated herein and made a part hereof, as the same may be amended, modified, supplemented, replaced, renewed or restated from time to time.

 

“Hazardous Materials Laws” shall have the meaning ascribed to such term in the Environmental Certificate.

 

“Hedge Termination Value” shall mean, in respect of any one or more Interest Rate Hedges, after taking into account the effect of any legally enforceable netting agreement relating to such Interest Rate Hedges, (a) for any date on or after the date such Interest Rate Hedges have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Interest Rate Hedges, as determined by the Agent Bank based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Interest Rate Hedges which may include any Lender.

 

“Hotel/Casino Facility” shall mean collective reference to the Real Property, the improvements located thereon and the hotel and casino business and related activities conducted on the Real Property.

 

“Hotel/Casino Property” shall mean that certain real property more particularly described on that certain schedule marked “Schedule A”, affixed hereto and by this reference incorporated herein and made a part hereof, and the CC Skybridge Peckham Lane Entitlements.

 

“Indebtedness” of any Person includes all obligations, contingent or otherwise, which in accordance with GAAP should be classified upon such Person’s balance sheet as liabilities, but in any event including liabilities for borrowed money or other liabilities secured by any lien existing on property owned or acquired by such Person, or a Subsidiary thereof (whether or not the liability secured thereby shall have been assumed), obligations which have been or under GAAP should be capitalized for financial reporting purposes, the face amount of all Letters of Credit issued for the account of such Person, the Hedge Termination Value (if negative) with respect to all Interest Rate Hedges of such Person and all guaranties, endorsements, and other contingent obligations with respect to Indebtedness of others, including, but not limited to, any obligations to acquire any of such Indebtedness, to purchase, sell, or furnish property or services primarily for the purpose of enabling such other Person to make payment of any of such Indebtedness, or otherwise to assure the owner of any of such Indebtedness against loss with respect thereto.

 

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“Intangibles” shall mean the aggregate goodwill, trademarks, patents, organizational expense and other similar intangible items of the Borrower determined in accordance with GAAP.

 

“Interest Expense” shall mean with respect to any Person, as of the last day of any fiscal period under review, the sum of (i) all interest, fees, charges and related expenses paid or payable (without duplication but including capitalized interest) for that fiscal period by such Person to a lender in connection with borrowed money (including any obligations for fees, charges and related expenses payable to the issuer of any letter of credit) or the deferred purchase price of assets that are considered “interest expense” under GAAP, plus (ii) the portion of the up front costs and expenses for Interest Rate Hedges (to the extent not included in (i)) fairly allocated to such interest rate hedges as expenses for such period, plus (iii) the portions of Capital Lease Liabilities paid or payable with respect to such period that should be treated as interest in accordance with GAAP.

 

“Interest Period(s)” shall have the meaning set forth in Section 2.05(d) of the Credit Agreement.

 

“Interest Rate Hedges” shall mean, with respect to any Person, all liabilities of such Person under interest rate swap agreements, interest rate cap agreements, basis swap, forward rate agreement and interest collar or floor agreements and all other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency exchange rates.

 

“Interest Rate Option” shall have the meaning ascribed to such term in Section 2.05(b) of the Credit Agreement.

 

“Investment” shall mean, when used in connection with any Person: (i) any investment by or of that Person, whether by means of purchase or other acquisition of stock or other securities of any other Person or by means of a loan, advance creating a debt, capital contribution, guaranty or other debt or equity participation or interest in any other Person, including any partnership and joint venture interests of such Person, (ii) any Acquisition, and (iii) any other item that is or would be classified as an investment on a balance sheet of such Person prepared in accordance with GAAP, as in effect as of the Restatement Effective Date.  The amount of any Investment shall be the amount actually invested without adjustment for subsequent increases or decreases in the value of such Investment.

 

“Laws” means, collectively, all international, foreign, federal, state and local statutes, rules, regulations, ordinances, codes and administrative or judicial precedents.

 

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“L/C Agreement(s)” shall mean collective reference to the Application and Agreement for Standby Letter of Credit and Application for Commercial Letter of Credit and addendum(s) thereto executed by an Authorized Officer of Borrower in favor of L/C Issuer in L/C Issuer’s standard form, setting forth the terms and conditions upon which L/C Issuer shall issue a Letter(s) of Credit, as the same may be amended or modified from time to time.

 

“L/C Exposure” shall mean the aggregate amount which L/C Issuer may be required to fund or is contingently liable for disbursement under all issued and outstanding Letter(s) of Credit, which amount shall be determined by subtracting from the aggregate of the Stated Amount of each such Letter(s) of Credit (to the extent such Letter of Credit is not secured by Cash deposited into the Cash Collateral Account and subject to the Cash Collateral Pledge Agreement), the principal amount of all L/C Reimbursement Obligations which have accrued and have been fully satisfied as of each date of determination.

 

“L/C Facility” shall mean the agreement of L/C Issuer to issue Letters of Credit subject to the terms and conditions and up to the maximum amounts and duration as set forth in Section 2.09 of the Credit Agreement.

 

“L/C Fee” shall have the meaning set forth in Section 2.10(c) of the Credit Agreement.

 

“L/C Issuer” shall mean WFB in its capacity as the issuer of Letters of Credit under the L/C Facility.

 

“L/C Reimbursement Obligation(s)” shall mean the obligation of Borrower to reimburse L/C Issuer for amounts funded or disbursed under a Letter(s) of Credit, together with accrued interest thereon.

 

“Lender” shall mean individual reference and “Lenders” shall mean collective reference to WFB and any other bank, finance company, insurance company or other financial institution which is or becomes a party to this Credit Agreement by execution of a counterpart signature page hereto or an Assignment and Assumption Agreement, as assignee.  At all times that there are no Lenders other than WFB, the terms “Lender” and “Lenders” means WFB in its individual capacity.  With respect to matters requiring the consent to or approval of all Lenders at any given time, all then existing Defaulting Lenders will be disregarded and excluded, and, for voting purposes only, “all Lenders” shall be deemed to mean “all Lenders other than Defaulting Lenders”.

 

“Lender Reply Period” shall have the meaning set forth in Section 9.10(d).

 

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“Letter(s) of Credit” shall mean collective reference to the Standby Letter(s) of Credit and/or Commercial Letter(s) of Credit, as the case may be, issued by L/C Issuer on behalf of Borrower, as the same may be extended, renewed or reissued from time to time.

 

“Liabilities” shall mean the total liabilities of the Borrower in accordance with GAAP.

 

“Liabilities and Costs” means all claims, judgments, liabilities, obligations, responsibilities, losses, damages (including lost profits), punitive or treble damages, costs, disbursements and expenses (including, without limitation, reasonable attorneys’, experts’ and consulting fees and costs of investigation and feasibility studies), fines, penalties and monetary sanctions, interest, direct or indirect, absolute or contingent, past, present or future.

 

“LIBO Rate” means, relative to any LIBOR Loan Interest Period for any LIBOR Loan included in any Borrowing, the per annum rate (reserve adjusted as hereinbelow provided) of interest quoted by Agent Bank, at which Dollar deposits in immediately available funds are offered to Agent Bank by leading banks in the London interbank market at approximately 11:00 a.m. London, England time two (2) Banking Business Days prior to the beginning of such Interest Period, for delivery on the first day of such Interest Period for a period approximately equal to such Interest Period and in an amount equal or comparable to the LIBOR Loan to which such Interest Period relates.  The foregoing rate of interest shall be reserve adjusted by dividing the applicable LIBO Rate by one (1.00) minus the LIBOR Reserve Percentage, with such quotient to be rounded upward to the nearest whole multiple of one-hundredth of one percent (0.01%).  All references in this Credit Agreement or other Loan Documents to a LIBO Rate include the aforesaid reserve adjustment.

 

“LIBOR Loan” shall mean each portion of the total unpaid principal under the Credit Facility which bears interest at a rate determined by reference to the LIBO Rate plus the Applicable Margin.

 

“LIBOR Reserve Percentage” means, relative to any Interest Period for LIBOR Loans made by any Lender, the reserve percentage (expressed as a decimal) equal to the actual aggregate reserve requirements (including all basic, emergency, supplemental, marginal and other reserves and taking into account any transactional adjustments or other scheduled changes in reserve requirements) announced within Agent Bank as the reserve percentage applicable to Agent Bank as specified under regulations issued from time to time by the Federal Reserve Board.  The LIBOR Reserve Percentage shall be based on Regulation D of the Federal Reserve Board or

 

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other regulations from time to time in effect concerning reserves for “Eurocurrency Liabilities” from related institutions as though Agent Bank were in a net borrowing position.

 

“Lien” means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any security interest) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing.

 

“Loan Documents” shall mean collective reference to the Credit Agreement, the Revolving Credit Note, the Swingline Note, Notices of Borrowing, Continuation/Conversion Notices, Notices of Swingline Advance, L/C Agreements, the Security Documentation, Cash Collateral Pledge Agreement, the Environmental Certificate and all other documents and instruments which may hereafter be executed and delivered by or on behalf of Borrower or any other Person in connection with the Credit Facility for the benefit of Banks or Agent Bank on behalf of the Lenders, the Swingline Lender and/or the L/C Issuer, as the same may be amended, modified, supplemented, replaced, renewed or restated from time to time.

 

“Maintenance Capital Expenditures” shall mean collective reference to Capital Expenditures made to or for the benefit of or for use in connection with the Hotel/Casino Facility which are for the purpose of maintaining, repairing and/or replacing existing assets of the Borrower; provided, however, that Maintenance Capital Expenditures shall not include Fourteen Million Two Hundred Seventy-Five Thousand Dollars ($14,275,000.00) in remodel expenses during the 2008 and 2009 Fiscal Years, up to and including the Two Million Five Hundred Thousand Dollars ($2,500,000.00) for demolition of the motor lodge, which may take place in either the 2009 or in the 2010 Fiscal Year as shown on the Schedule of Remodel Projects, Schedule 6.04 affixed hereto.

 

“Mandatory Commitment Reduction(s)” shall mean a permanent reduction of the Aggregate Commitment which shall be made from time to time as may be required under Sections 5.12, 6.07(h), 6.09(c) and/or 8.02.

 

“Margin Stock” shall have the meaning provided in Regulation U of the Board of Governors of the Federal Reserve System.

 

“Material Adverse Change” shall mean: (i) any set of circumstances of events which, other than with respect to the Representations and Warranties set forth in Article IV of the Credit Agreement which shall be construed to be applicable to circumstances and events existing both as of the Restatement Effective Date (or such

 

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earlier date as may be referenced in each particular provision) and subsequent to the Restatement Effective Date, are not in existence as of the Restatement Effective Date, which are material and adverse to (a) the Collateral or (b) the condition (financial or otherwise) or business operations of the Borrower taken as a whole, or (c) the ability of any of the Lenders to enforce any of their material rights or remedies under any of the Loan Documents, or (ii) any events or changes, which, other than with respect to the Representations and Warranties set forth in Article IV of the Credit Agreement which shall be construed to be applicable to events and changes existing both as of the Restatement Effective Date (or such earlier date as may be referenced in each particular provision) and subsequent to the Restatement Effective Date, are not in existence as of the Restatement Effective Date and which have or result in a material adverse effect upon (a) the priority of the security interests granted to Agent Bank, (b) the validity of any of the Loan Documents, which is not promptly cured or corrected to the reasonable satisfaction of Agent Bank, as provided in Section 5.13 or (c) the use, occupancy or operation of the Hotel/Casino Facility taken as a whole, except during periods of repair or replacement as provided under Section 8.02.

 

“Maturity Date” shall mean January 20, 2012.

 

“Maximum Availability” shall mean the Aggregate Commitment less the Aggregate Outstandings.

 

“MCRI” shall mean Monarch Casino & Resort, Inc., a Nevada corporation, without regard to any of its Subsidiaries unless otherwise specifically indicated.

 

“MCRI Consolidation” shall mean MCRI and its Subsidiaries on a consolidated basis.

 

“MCRI Corporate Overhead Allocation” shall mean for any fiscal period, all costs and expenses of MCRI or any Affiliate of MCRI which are paid by Borrower or which are paid by Distributions made by Borrower to MCRI or such Affiliate of MCRI.

 

“Net Income” shall mean with respect to any Person for any fiscal period, the net income of such Person during such fiscal period determined in accordance with GAAP.

 

“Net Proceeds” shall mean the aggregate Capital Proceeds received by the Borrower in Cash or Cash Equivalent in respect of any partial or total condemnation or destruction of any part of the Collateral or any sale, transfer, conveyance or disposition of FF&E, net of: (i) the direct costs relating to such sale, transfer, conveyance or

 

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disposition of FF&E, (ii) amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset or assets that were the subject of such sale, transfer, conveyance or disposition of FF&E, and (iii) any reserve for adjustment in respect of the sale price of such FF&E or liabilities associated with such sale, transfer, conveyance or disposition of FF&E and retained by the Borrower.

 

“Nevada Gaming Authorities” shall mean, without limitation, the Nevada Gaming Commission and the State Gaming Control Board and any other applicable governmental or administrative state or local agency involved in the regulation of gaming and gaming activities conducted by the Borrower in the State of Nevada.

 

“Non-Consenting Lender” shall have the meaning ascribed to such term in Section 10.01.

 

“Non Pro Rata Borrowing” means a Borrowing with respect to which fewer than all Lenders have funded their respective Pro Rata Shares of such Borrowing and the failure of the non-funding Lender or Lenders to fund its or their respective Pro Rata Shares of such Borrowing constitutes a breach of this Credit Agreement.

 

“Notes” shall mean collective reference to the Revolving Credit Note and the Swingline Note.

 

“Notice of Borrowing” shall have the meaning set forth in Section 2.03.

 

“Notice of Swingline Advance” shall have the meaning set forth in Section 2.08(b).

 

“Obligations” means, from time to time, all Indebtedness of Borrower owing to Agent Bank, any Lender or any Person entitled to indemnification pursuant to Section 5.14, or any of their respective successors, transferees or assigns, of every type and description, whether or not evidenced by any note, guaranty or other instrument, arising under or in connection with this Credit Agreement or any other Loan Document, whether or not for the payment of money, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired.  The term includes, without limitation, all interest, charges, expenses, fees, reasonable attorneys’ fees and disbursements, reasonable fees and disbursements of expert witnesses and other consultants, and any other sum now or hereinafter chargeable to Borrower under or in connection with Credit Agreement or any other Loan Document.  Notwithstanding the foregoing definition of “Obligations”, Borrower’s obligations under any environmental indemnity agreement constituting a Loan Document, or any environmental representation, warranty, covenant, indemnity or similar provision in this Credit Agreement or any other Loan Document, shall be secured by the Collateral only to the extent, if any, specifically provided in the Security Documentation.

 

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“Participant Cash Collateralization” shall mean to pledge and deposit with or deliver to the Agent Bank Cash or deposit account balances, for the benefit of the L/C Issuer and/or the Swingline Lender, as applicable, as collateral subject to a first priority, perfected security interest securing the obligations of a Deteriorating Lender, in an amount equal to all or a portion of such Deteriorating Lender’s Pro Rata Share of risk participation in Swingline Advances or all or a portion of a Deteriorating Lender’s Pro Rata Share of L/C Exposure, in each case pursuant to documentation in form and substance satisfactory to the Agent Bank and the L/C Issuer or Swingline Lender, as applicable (which documents are hereby consented to by the Lenders.)

 

“Pedestrian Crossing” shall mean the elevated pedestrian crossing which is constructed between the Hotel/Casino Property and the V/P Property which includes, among other things, a restaurant, bar, gaming space and other public areas.

 

“Pedestrian Crossing Air Space” shall mean that portion of the airspace between the Hotel/Casino Property and the V/P Property within which the Pedestrian Crossing is constructed.

 

“Pedestrian Crossing Air Space License” shall mean that certain Application and Permit for Occupancy of Nevada Department of Transportation Right of Way, which was issued to Borrower by the State of Nevada Department of Transportation, under Permit Number 2-28-97, for the purpose of authorizing Borrower’s construction and use of the Pedestrian Crossing within the Pedestrian Crossing Air Space.

 

“Pension Plan” means any “employee pension benefit plan” that is subject to Title IV of ERISA and which is maintained for employees of Borrower or any of its ERISA Affiliates.

 

“Permitted Encumbrances” shall mean, at any particular time, (i) liens for taxes, assessments or governmental charges not then due and payable or not then delinquent, (ii) statutory liens for labor and/or materials and liens for taxes, assessments or governmental charges the validity of which, in either instance, are being contested in good faith by Borrower by appropriate proceedings, and as provided in Sections 5.03 and 5.10 hereof, respectively, provided that, Borrower shall have maintained adequate reserves in accordance with GAAP for payment of same, (iii) liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, trade contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);

 

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(iv) leases or subleases granted to others (including, without limitation, any Subsidiary) not interfering in any material respect with the ordinary conduct of the business of the Hotel/Casino Facility; (v) liens created or contemplated by the Security Documents, (vi) the liens, encumbrances and restrictions on the Real Property, FF&E and existing improvements which are shown as exceptions on Schedule B of the Title Policy to be issued by Title Insurance Company as of the Restatement Effective Date, (vii) liens consented to in writing by Agent Bank upon the approval of Requisite Lenders, (viii) liens of legally valid capital leases and purchase money security interests for FF&E to the extent permitted by Section 6.08(c), and (ix) each and every easement, license, restriction or right-of-way that (A) is hereafter granted to any Governmental Authority or public utility providing services to the Real Property or (B) does not interfere in any material respect with the business operation of the Hotel/Casino Facility; and (x) judgment liens, writs, warrants, levies, distraints, attachments and other similar process which do not constitute an Event of Default.

 

“Person” means an individual, firm, corporation, limited liability company, trust, association, partnership, joint venture, tribunal or other entity.

 

“Platform” shall have the meaning ascribed to such term in Section 10.03(a).

 

“Policies of Insurance” shall mean the insurance to be obtained and maintained by Borrower throughout the term of this Credit Agreement as provided by Section 5.09 herein.

 

“Prime Rate” means at any time, and from time to time, the rate of interest most recently announced within WFB at its principal office in San Francisco, California, as its “Prime Rate”, with the understanding that WFB’s “Prime Rate” is one of its base rates and serves as the basis upon which effective rates of interest are calculated for those loans and extensions of credit making reference thereto, and is evidenced by the recording thereof after its announcement in such internal publication or publications as WFB may designate.  Each change in the Prime Rate shall be effective on the day the change is announced within WFB.

 

“Principal Prepayments” shall have the meaning set forth in Section 2.07(a) of this Credit Agreement.

 

“Pro Rata” or “Pro Rata Share” shall mean, with respect to any Lender, a percentage equal to such Lender’s Syndication Interest in the Credit Facility as set forth on the Schedule of Lenders’ Proportions in Credit Facility.

 

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“Protective Advance” means all sums expended as reasonably determined by Agent Bank to be necessary to: (a) protect the priority, validity and enforceability of the Security Documentation on, and security interests in, any Collateral and the instruments evidencing or securing the Obligations, or (b) prevent the value of any Collateral from being materially diminished (assuming the lack of such a payment within the necessary time frame could potentially cause such Collateral to lose value), or (c) protect any of the Collateral from being materially damaged, impaired, mismanaged or taken, including, without limitation, any amounts expended in accordance with Section 10.20 or post-foreclosure ownership, maintenance, operation or marketing of any Collateral.

 

“Purchasing Lender” shall have the meaning ascribed to such term in Section 10.01.

 

“Qualified Appraisal” shall mean reference to an appraisal or appraisals of the Hotel/Casino Facility and Collateral, or any portion thereof, acceptable to Agent Bank, prepared at Borrower’s expense in compliance with FIRREA by an appraiser acceptable to Agent Bank, with sufficient copies delivered to Agent Bank for distribution to each of the Lenders.

 

“Rate Adjustment Date” shall mean June 1, 2009 and thereafter the first (1st) day of the third (3rd) month immediately following each Fiscal Quarter end.

 

“Real Property” shall mean collective reference to the Hotel/Casino Property, the Pedestrian Crossing Airspace, the V/P Property and the CC Skybridge Easements; provided, however, that in the event the V/P Property, or any portion thereof, is released as Collateral pursuant to the provisions of Section 5.22 of this Credit Agreement, the term  “Real Property” shall thereafter mean only the Hotel/Casino Property, the Pedestrian Crossing Airspace, CC Skybridge Easements and that portion of the V/P Property not released.

 

“Reduction Date(s)” shall mean, subject to the effect of Section 2.01(e), reference to each date or the dates, as the context may require, upon which the Aggregate Commitment is reduced by a Scheduled Reduction as set forth on the Aggregate Commitment Reduction Schedule.

 

“Related Entities” shall mean collective reference to all stockholders, Affiliates and Subsidiaries of the Borrower.

 

“Remodel Projects” shall mean the Remodel Projects shown on the Schedule of Remodel Projects.

 

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“Replacement Note(s)” shall have the meaning set forth in Section 2.05(i) of the Credit Agreement.

 

“Reportable Event” shall mean any of the events described in Section 4043(b) of ERISA, other than an event for which the thirty (30) day notice requirement is waived by regulations.

 

“Requisite Lenders” means, as of any date of determination prior to the occurrence of an Event of Default, Lenders holding Syndication Interests equal to or in excess of fifty percent (50.0%) of the Credit Facility; and at all times during which an Event of Default has occurred and remains continuing, Lenders holding a percentage in excess of fifty percent (50.0%) of the Funded Outstandings; provided that , (i) in determining such percentage at any given time, all then existing Defaulting Lenders will be disregarded and excluded and the Pro Rata Shares of Lenders shall be redetermined, for voting purposes only, to exclude the Pro Rata Shares of such Defaulting Lenders, and (ii) notwithstanding the foregoing, at all times when two or more Lenders are party to this Credit Agreement, the term Requisite Lenders shall in no event mean less than two (2) Lenders.

 

“Restatement Effective Date” shall mean the date upon which: (i) each condition precedent required under Article IIIA of this Credit Agreement has been satisfied by Borrower or waived by Agent Bank and (ii) the Security Documentation Amendments have been filed and/or recorded in accordance with and in the manner required by the Closing Instructions, or such other date as to which Agent Bank and Borrower agree in writing.

 

“Revolving Credit Note” shall mean the Amended and Restated Revolving Credit Note, a copy of which is marked “Exhibit A”, affixed hereto and by this reference incorporated herein and made a part hereof, to be executed by Borrower on the Restatement Effective Date, payable to the order of Agent Bank on behalf of the Lenders, evidencing the Credit Facility, as may be amended, modified, extended, renewed, restated or replaced in whole or in part from time to time, including, without limitation, each Replacement Note or Replacement Notes issued to one or more of the Lenders on or after the Restatement Effective Date pursuant to Section 2.05(i) evidencing the respective Syndication Interest of such Lender or Lenders.

 

“Revolving Credit Period” shall mean the period commencing on the Restatement Effective Date and terminating on the Maturity Date.

 

“RSCVA” shall mean the Reno Sparks Convention and Visitors Authority, a political subdivision of the County of Washoe, State of Nevada.

 

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“Schedule of Lenders’ Proportions in Credit Facility” shall mean the Schedule of Lenders’ Proportions in Credit Facility, a copy of which is marked “Schedule 2.01(a)”, affixed hereto and by this reference incorporated herein and made a part hereof, setting forth the respective Syndication Interest and maximum amount to be funded under the Credit Facility by each Lender, as the same may be amended, modified or restated from time to time in connection with an Assignment and Assumption Agreement.

 

“Schedule of Remodel Projects” shall mean the Schedule of Remodel Projects, a copy of which is set forth as Schedule 6.04, affixed hereto and by this reference incorporated herein and made a part hereof, setting forth a line item breakdown and cost estimate for each of the remodel projects components.

 

“Schedule of Significant Litigation” shall mean the Schedule of Significant Litigation, a copy of which is set forth as Schedule 3.18, affixed hereto and by this reference incorporated herein and made a part hereof, setting forth the information described in Section 3.18 with respect to each Significant Litigation.

 

“Scheduled Reduction Payment” shall mean for any Fiscal Quarter, the amount, if any, by which the highest amount of Aggregate Outstandings during such Fiscal Quarter exceeds the amount of the Aggregate Commitment as reduced by any Scheduled Reduction required to be made to such Aggregate Commitment at the end of such Fiscal Quarter.

 

“Scheduled Reductions” shall mean, subject to the effect of Section 2.01(e), the amount by which the Aggregate Commitment is reduced on each Reduction Date as set forth on the Aggregate Commitment Reduction Schedule.

 

“Secured Interest Rate Hedge(s)” shall mean any Interest Rate Hedge entered into between Borrower and any Lender, or Affiliate of any Lender, which is secured by the Security Documentation.

 

“Security Documentation” shall mean collective reference to the Deed of Trust, Assignment of Rents and all other documents, instruments or agreements which are executed or delivered by or on behalf of Borrower and accepted by Agent Bank, on behalf of the Lenders, as security for payment of the Bank Facilities.

 

“Security Documentation Amendments” shall mean collective reference to the First Amendment to Deed of Trust, the First Amendment to Assignment of Entitlements, Contracts, Rents and Revenues and the First Amendment to Trademark Security Agreement.

 

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“Share Repurchases” shall mean the purchase of shares of any class of stock, option, right or other equity interest, whether voting or non-voting of MCRI by MCRI.

 

“Significant Litigation” shall mean each action, suit, proceeding, litigation and controversy involving Borrower involving claims in excess of Two Million Dollars ($2,000,000.00) or which if determined adverse to the interests of Borrower could result in a Material Adverse Change.

 

“Spaceleases” shall mean the executed leases and concession agreements pertaining to the Hotel/Casino Facility, or any portion thereof, wherein Borrower is the lessor, as set forth on that certain schedule marked “Schedule 4.15”, affixed hereto and by this reference incorporated herein and made a part hereof.

 

“Standby Letter(s) of Credit” shall mean a letter or letters of credit issued by L/C Issuer pursuant to Section 2.09 of the Credit Agreement for the purpose of securing payment or performance of a financial obligation of Borrower, other than in connection with the payment for goods, equipment or materials.

 

“Stated Amount” shall mean the maximum amount which L/C Issuer may be required to disburse to the beneficiary(ies) of a Letter(s) of Credit under the terms thereof.

 

“Stated Expiry Date(s)” shall mean the date set forth on the face of a Letter(s) of Credit as the date when all obligations of L/C Issuer to advance funds thereunder will terminate, as the same may be extended from time to time.

 

“Subsidiary” shall mean, on the date in question, any Person of which an aggregate of 50% or more of the stock of any class or classes (or equivalent interests) is owned of record or beneficially, directly or indirectly, by another Person and/or any of its Subsidiaries, if the holders of the stock of such class or classes (or equivalent interests) (a) are ordinarily, in the absence of contingencies, entitled to vote for the election of a majority of the directors (or individuals performing similar functions) of such Person, even though the right so to vote has been suspended by the happening of such a contingency, or (b) are entitled, as such holders, to vote for the election of a majority of the directors (or individuals performing similar functions) of such Person, whether or not the right so to vote exists by reason of the happening of a contingency.

 

“Swingline Advance” shall mean each advance made by Swingline Lender to Borrower under the Swingline Facility.

 

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“Swingline Facility” shall mean the agreement of Swingline Lender to make Swingline Advances to Borrower subject to the terms and conditions and up to the maximum amounts and for the duration as set forth in Section 2.08 of this Credit Agreement.

 

“Swingline Lender” shall have the meaning set forth in the Preamble of this Credit Agreement.

 

“Swingline Note” shall mean the Swingline Note, a copy of which is marked “Exhibit B”, affixed hereto and by this reference incorporated herein and made a part hereof, to be executed by Borrower on the Restatement Effective Date, payable to the order of Swingline Lender evidencing the Swingline Facility.

 

“Swingline Outstandings” shall mean the aggregate amount of all outstanding and unpaid Swingline Advances as of each date of determination.

 

“Swingline Settlement Date” shall mean the second (2 nd ) Thursday following each Swingline Advance, or if such date is not a Banking Business Day, the next occurring Banking Business Day.

 

“Syndication Interest” shall mean the proportionate interest of each Lender in the Aggregate Commitment as set forth on the Schedule of Lenders’ Proportions in Credit Facility, as the same may be amended or restated from time to time.

 

“Tangible Net Worth” shall mean Assets, excluding Intangibles, less Liabilities.

 

“Title Endorsements” shall mean collective reference to the following endorsements, which shall be issued to the Existing Title Insurance Policy by the Title Insurance Company, as of the Restatement Effective Date, in accordance with the Closing Instructions: (i) Modification and Additional Advance Endorsement (Commonwealth Special 254) increasing coverage under the Existing Title Insurance Policy to Sixty Million Dollars ($60,000,000.00) and providing assurances that, among other things, the Existing Deed of Trust has been validly amended by the First Amendment to Deed of Trust; and (ii) such other endorsements as may be requested by Agent Bank; all of which shall be in a form and substance acceptable to Agent Bank.

 

“Title Insurance Company” shall mean Lawyers Title Insurance Company, and its issuing agent, Western Title Company, Inc., with offices located at 241 Ridge Street, Reno, Nevada, together with such reinsurers with direct access as are requested by Agent Bank or other title insurance company or companies as may be acceptable to Agent Bank.

 

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“Total Funded Debt” shall mean with reference to the Borrower for any period the Aggregate Outstandings as of the last day of the period under review, plus the total as of the last day of such period of both the long-term and current portions (without duplication) of all other interest bearing Indebtedness, Contingent Liabilities and Capitalized Lease Liabilities.

 

“Total Leverage Ratio” as of the end of any Fiscal Quarter shall mean the ratio resulting by dividing (a) Total Funded Debt as of the end of the Fiscal Quarter under review by (b) the sum of Adjusted EBITDA for the Fiscal Quarter under review plus Adjusted EBITDA for each of the most recently ended three (3) preceding Fiscal Quarters.

 

“Trademark Security Agreement” shall mean collective reference to the Existing Trademark Security Agreement as amended by the First Amendment to Trademark Security Agreement, as it may be further amended, modified, extended, renewed or restated from time to time.

 

“UCC Amendment Statements” shall mean UCC Financing Statement Amendment forms to be filed in the office of the Nevada Secretary of State and in the office of the Washoe County Recorder for the purpose of causing Exhibit B to each of the Financing Statements to additionally include the air space and real property within, and upon, which the CC Skybridge is situate.

 

“Unsuitable Lender” shall have the meaning set forth in Section 10.10(d).

 

“Village Shopping Center” shall mean the shopping center known as “The Village” and formerly known as the Sierra Marketplace Shopping Center, located at the southeast corner of Virginia Street and Moana Lane, Reno, Nevada, that is owned by BLILP, a portion of which is the subject of the Adjacent Driveway Lease.

 

“Voluntary Permanent Reduction” shall have the meaning set forth in Section 2.01(c).

 

“V/P Property” shall mean the real property more particularly described on that certain schedule marked “Schedule B”, affixed hereto and by this reference incorporated herein and made a part hereof.

 

“WFB” shall mean Wells Fargo Bank, National Association.

 

Section 1.02.          Interpretation and Construction .  In this Credit Agreement, unless the context otherwise requires:

 

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(a)        Articles and Sections mentioned by number only are the respective Articles and Sections of this Credit Agreement as so numbered;

 

(b)        Words importing a particular gender mean and include every other gender, and words importing the singular number mean and include the plural number and vice versa ;

 

(c)        All times specified herein, unless otherwise specifically referred, shall be the time in San Francisco, California;

 

(d)        Any headings preceding the texts of the several Articles and Sections of this Credit Agreement, and any table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this Credit Agreement, nor shall they affect its meaning, construction or effect;

 

(e)        If any clause, definition, provision or Section of this Credit Agreement shall be determined to be apparently contrary to or conflicting with any other clause, definition, provision or Section of this Credit Agreement then the clause, definition, provision or Section containing the more specific provisions shall control and govern with respect to such apparent conflict.  The parties hereto do agree that each has contributed to the drafting of this Credit Agreement and all Loan Documents and that the provisions herein contained shall not be construed against either Borrower or Lenders as having been the person or persons responsible for the preparation thereof;

 

(f)         The terms “herein”, “hereunder”, “hereby”, “hereto”, “hereof” and any similar terms as used in the Credit Agreement refer to this Credit Agreement; the term “heretofore” means before the date of execution of this Credit Agreement; and the term “hereafter” means after the date of the execution of this Credit Agreement;

 

(g)        All accounting terms used herein which are not otherwise specifically defined shall be used in accordance with GAAP;

 

(h)        If any clause, provision or Section of this Credit Agreement shall be ruled invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any of the remaining provisions hereof; and

 

(i)         Each reference to this Credit Agreement or any other Loan Document or any of them, as used in this Credit Agreement or in any other Loan Document, shall be deemed a reference to this Credit Agreement or such Loan Document, as applicable, as the same may be amended, modified, supplemented, replaced, renewed or restated from time to time.

 

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Section 1.03.          Use of Defined Terms .  Unless otherwise defined or the context otherwise requires, terms for which meanings are provided in this Credit Agreement shall have such meanings when used in the Notes and in each Loan Document and other communication delivered from time to time in connection with this Credit Agreement or any other Loan Document.

 

Section 1.04.          Cross-References .  Unless otherwise specified, references in this Credit Agreement and in each other Loan Document to any Article or Section are references to such Article or Section of this Credit Agreement or such other Loan Document, as the case may be, and, unless otherwise specified, references in any Article, Section or definition to any clause are references to such clause of such Article, Section or definition.

 

Section 1.05.          Exhibits and Schedules .  All Exhibits and Schedules to this Credit Agreement, either as originally existing or as the same may from time to time be supplemented, modified or amended, are incorporated herein by this reference.

 

ARTICLE II

 

AMOUNT, TERMS AND SECURITY OF THE BANK FACILITIES

 

Section 2.01.          The Credit Facility .

 

(a)        Subject to the conditions and upon the terms hereinafter set forth and in accordance with the terms and provisions of the Revolving Credit Note, on and after the Restatement Effective Date Lenders severally agree in the proportions set forth on the Schedule of Lenders’ Proportions in Credit Facility to lend and advance Borrowings to Borrower, up to the Aggregate Commitment in the initial amount of Sixty Million Dollars ($60,000,000.00), subject to increase by up to an additional Fifteen Million Dollars ($15,000,000.00) as provided in Section 2.01(e) hereinbelow, in such amounts as Borrower may request by Notice of Borrowing duly executed by an Authorized Officer and delivered to Agent Bank from time to time as provided in Section 2.03.

 

(b)        Subject to the uses and purposes set forth in Section 2.02, on and after the Restatement Effective Date Borrower may borrow, repay and reborrow the Borrowings up to the Available Borrowings from time to time.  Provided, however, amounts of Funded Outstandings bearing interest with reference to a LIBO Rate shall be subject to Breakage Charges incident to prepayment.  The Credit Facility shall be for a term commencing on the Restatement Effective Date and terminating on the Maturity Date.  In no event shall any Lender be liable to fund any amounts under the Credit Facility in excess of its respective Syndication Interest in any Borrowing.

 

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(c)        Notwithstanding the Scheduled Reductions to the Aggregate Commitment as set forth on the Aggregate Commitment Reduction Schedule, Borrower may voluntarily further reduce the Aggregate Commitment from time to time (a “Voluntary Permanent Reduction”) on the following conditions:

 

(i)         that each such Voluntary Permanent Reduction be in the minimum amount of Five Hundred Thousand Dollars ($500,000.00) and in increments of Fifty Thousand Dollars ($50,000.00) and made in writing by an Authorized Officer of Borrower, effective on the third (3rd) Banking Business Day following receipt by Agent Bank; and

 

(ii)        that each such Voluntary Permanent Reduction shall be irrevocable and a permanent reduction to the Aggregate Commitment.

 

(d)        In the event any Scheduled Reduction, Voluntary Permanent Reduction or Mandatory Commitment Reduction reduces the Aggregate Commitment to less than the sum of the Funded Outstandings, the Borrower shall immediately, cause the Funded Outstandings to be reduced by such amount as may be necessary to cause the Funded Outstandings to be equal to or less than the Aggregate Commitment.  No Voluntary Permanent Reduction or Mandatory Commitment Reductions shall relieve or otherwise defer the making of each Scheduled Reduction on each Reduction Date.

 

(e)        Commitment Increase .  Borrower may, by written notice to the Agent Bank and the Lenders, increase the Aggregate Commitment by up to an additional Fifteen Million Dollars ($15,000,000.00) (the actual amount of such increase to the Aggregate Commitment being herein referred to as the “Commitment Increase”); provided that (i) no Default or Event of Default has occurred and remain continuing, (ii) no more than two (2) Commitment Increases may be made during the term of the Credit Facility and in no case shall the total of such Commitment Increases exceed Fifteen Million Dollars ($15,000,000.00) in the aggregate, (iii) the obligation to fund the Commitment Increase is assumed by a Lender or Lenders then party to this Credit Agreement or (after having first offered the Commitment Increase to the Lenders then party to the Credit Agreement) by a Person or Persons that are Eligible Assignees, in each case acceptable to Borrower and, in the latter case, reasonably acceptable to the Agent Bank, and in each instance evidenced in writing by execution of an Assumption and Consent Agreement in the form of Exhibit L attached hereto, executed by each such assuming Lender or Eligible Assignee, Agent Bank and Borrower, provided that no Lender shall have any obligation to increase its Syndication Interest in effect as of the Restatement Effective Date, (iv) each such assuming Lender or Eligible Assignee concurrently purchases a Pro Rata Share of the Funded Outstandings from the Lenders party to the Credit Agreement (and each Lender hereby agrees to sell the appropriate

 

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proportion of its Pro Rata Share at par value to such assuming Lender or Eligible Assignee) that is equivalent to the increased new Pro Rata Share of each such assuming Lender or Eligible Assignee after giving effect to the Commitment Increase and such Lender’s Syndication Interest in the Aggregate Commitment, (v) Borrower pays Agent Bank any amount owing under Section 2.07(c) and any fees owing to the Agent Bank or to the assuming Lenders or Eligible Assignees committing to fund the Commitment Increase based upon negotiations made in connection with the funding of the Commitment Increase, (vi) the Commitment Increase shall not increase the Pro Rata Share of the Aggregate Commitment and the Pro Rata Share of the amount of the Funded Outstandings held by any other Lender absent the express written consent of that Lender, (vii) the Commitment Increase shall not be available for advance by Lenders until each condition precedent set forth in Sections 3.24 through 3.31 of Article III C shall have occurred and been fully satisfied, and (viii) no more than Five Million Dollars ($5,000,000.00) of the Commitment Increase shall be available to Borrower for funding prior to the sixth (6 th ) month anniversary of the Restatement Effective Date.  Giving effect to the Commitment Increase and purchase of Pro Rata Shares of the Funded Outstandings, adjustments shall be made to the Pro Rata Shares of the Lenders in the Aggregate Commitment and the Pro Rata Shares of Funded Outstandings such that the Pro Rata Shares of each Lender in the Aggregate Commitment shall be identical to its Pro Rata Share of the Funded Outstandings.  The Agent Bank shall promptly thereafter prepare and circulate to Borrower and the Banks a revised Schedule of Lenders’ Proportions in Credit Facility reflecting such increased Aggregate Commitment and the revised Pro Rata Shares of the Lenders in the Credit Facility, and such revised Schedule of Lenders’ Proportions in Credit Facility shall supersede and replace the then existing Schedule of Lenders’ Proportions in Credit Facility.

 

Section 2.02.          Use of Proceeds of the Credit Facility .  Available Borrowings shall be used for the purposes of:

 

(a)        On the Restatement Effective Date (collectively the “Closing Disbursements”):

 

(i)         reimbursing the Existing Lenders for their respective pro rata shares of all loans, advances, accrued interest, fees and other obligations outstanding under the Existing Bank Loan as of the Restatement Effective Date; and

 

(ii)        paying in full the fees due Agent Bank as set forth in the Fee Side Letter, the costs, fees and expenses of Title Company incurred in connection with the issuance of the Title Policy Endorsements, the reasonable costs, fees and expenses of Henderson & Morgan, LLC, attorneys for Agent Bank, and

 

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insurance consultants retained by them incurred to the Restatement Effective Date.

 

(b)        During the Revolving Credit Period:

 

(i)         funding working capital needs and general corporate purposes of the Borrower relating to the Hotel/Casino Facility;

 

(ii)        funding ongoing Capital Expenditure requirements of the Borrower relating to the Hotel/Casino Facility; and

 

(iii)       funding repayment of Swingline Advances as provided in Section 2.08.

 

Section 2.03.          Notice of Borrowings .

 

(a)        An Authorized Officer of Borrower may give Agent Bank, no later than 11:00 a.m. on any Banking Business Day at Agent Bank’s office specified in Section 2.07, three (3) full Banking Business Days prior written notice in the form of the Notice of Borrowing (“Notice of Borrowing”), a copy of which is marked “Exhibit C”, affixed hereto and by this reference incorporated herein and made a part hereof, for each proposed Borrowing to be made with reference to a LIBO Rate and at least one (1) full Banking Business Days prior notice for all other Borrowings, specifying the date and amount of each proposed Borrowing.  Agent Bank shall give prompt notice of each Notice of Borrowing to Lenders of the amount to be funded and specifying the Funding Date.  Not later than 11:00 a.m. on the Funding Date specified, each Lender shall disburse to Agent Bank its Pro Rata Share of the amount to be advanced by each such Lender in lawful money of the United States of America and in immediately available funds.  Agent Bank shall make the proceeds of such fundings that it receives from the Lenders on or before 11:00 a.m. available to Borrower by depositing, prior to 1:00 p.m. on the day so received (but not prior to the Funding Date), the amounts received from the Lenders in the Designated Deposit Account maintained with Agent Bank.  No Borrowing may exceed the Available Borrowings.  Each Borrowing of a Base Rate Loan shall be in a minimum amount of Fifty Thousand Dollars ($50,000.00) and in increments of Ten Thousand Dollars ($10,000.00).  Borrower shall be entitled to no more than three (3) Borrowings during each calendar month, exclusive of Borrowings made for the sole purpose of funding repayment of a Swingline Advance or L/C Reimbursement.

 

(b)        The failure of any Lender to fund its Pro Rata Share of any Borrowing on any Funding Date shall neither relieve any other Lender of any obligation hereunder to fund its Pro Rata Share of such Borrowing on such Funding Date nor relieve such Lender which has failed to fund its Pro Rata Share of its obligations to Borrower hereunder.  No Lender shall be responsible for the failure of any other Lender

 

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to fund its Pro Rata Share of such Borrowing on any Funding Date nor shall any Lender be responsible for the failure of any other Lender to perform its respective obligations hereunder.

 

(c)        The provisions set forth in Section 10.10(d) shall be applicable to a Deteriorating Lender to the same extent as if such Deteriorating Lender was found to be an Unsuitable Lender.

 

Section 2.04.          Conditions of Borrowings . During the Revolving Credit Period, Borrowings, other than Borrowings made at the request of Agent Bank for the purpose of funding repayment of Swingline Outstandings and/or L/C Reimbursement Obligations as hereinafter provided, will only be made so long as Borrower is in full compliance with each of the requirements and conditions precedent set forth in Article III B of this Credit Agreement.  Provided, however, upon the consent of Requisite Lenders, Lenders shall advance Borrowings notwithstanding the existence of less than full compliance with the requirements of Article III B and Borrowings so made shall be deemed to have been made pursuant to this Credit Agreement.

 

Section 2.05.          The Revolving Credit Note and Interest Rate Options .

 

(a)        The Credit Facility shall be further evidenced by the Revolving Credit Note payable to the order of Agent Bank on behalf of the Lenders.  Agent Bank shall record manually or electronically the date and amount of each Borrowing advanced by the Lenders together with the applicable Interest Period in the case of portions of the unpaid principal under the Credit Facility bearing interest with reference to a LIBO Rate, and the amount of each repayment of principal made thereunder by Borrower and the entry of such records shall be conclusive absent manifest or demonstrable error; provided, however, the failure to make such a record or notation with respect to any Borrowing or repayment thereof, or an error in making such a record or notation, shall not limit or otherwise affect the obligations of Borrower hereunder or under the Revolving Credit Note.

 

(b)        Interest shall accrue on the entire outstanding principal balance of the Credit Facility at a rate per annum equal to the Base Rate plus the Applicable Margin, unless Borrower requests a LIBOR Loan pursuant to Section 2.03 or elect pursuant to Section 2.05(c) hereinbelow to have interest accrue on a portion or portions of the outstanding principal balance of the Credit Facility at a LIBO Rate (“Interest Rate Option”), in which case interest on such portion or portions shall accrue at a rate per annum equal to such LIBO Rate plus the Applicable Margin in effect as of the second Banking Business Day prior to the first day of the applicable Interest Period, as long as: (i) each such LIBOR Loan is in a minimum amount of One Hundred Thousand Dollars ($100,000.00) plus minimum increments of Ten Thousand Dollars ($10,000.00), or such lesser amount as equals the Aggregate Commitment, (ii) no more

 

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than eight (8) LIBOR Loans may be outstanding at any one time, and (iii) no Default or Event of Default shall have occurred and be continuing.  Interest accrued on each Base Rate Loan shall be due and payable on the first day of the month following the Restatement Effective Date, on the first day of each successive month thereafter, and on the Maturity Date.  For each LIBOR Loan, accrued interest shall be due and payable at the end of each Interest Period applicable thereto, but in any event no less frequently than at the end of each three (3) month period during the term of such LIBOR Loan.  Except as qualified above, the outstanding principal balance hereunder may be a Base Rate Loan or one or more LIBOR Loans, or any combination thereof, as Borrower shall specify.

 

(c)        So long as no Default or Event of Default shall have occurred and remains continuing, Borrower may Convert from one Interest Rate Option to another Interest Rate Option or continue an Interest Rate Option for another Interest Period by giving irrevocable notice to Agent Bank of such Conversion by 11:00 a.m., on a day which is at least three (3) Banking Business Days prior to the proposed date of such Conversion to or Continuation of each LIBOR Loan or one (1) Banking Business Day prior to the proposed date of such Conversion to each Base Rate Loan.  Each Conversion to a LIBOR Loan shall be in a minimum amount of One Hundred Thousand Dollars ($100,000.00) plus minimum increments of Ten Thousand Dollars ($10,000.00), or such lesser amount as equals the Aggregate Commitment.  Each such notice shall be made by an Authorized Officer by telephone and thereafter immediately confirmed in writing by delivery to Agent Bank of a Continuation/Conversion Notice specifying the date of such Conversion or Continuation, the amounts to be so Converted or Continued and the Interest Period if the Conversion or Continuation is being made with reference to a LIBOR Loan.  Upon receipt of such Continuation/Conversion Notice, Agent Bank shall promptly set the applicable interest rate (which in the case of a LIBOR Loan shall be the LIBO Rate plus the Applicable Margin as of the second Banking Business Day prior to the first day of the applicable Interest Period) and the applicable Interest Period if the Conversion or Continuation is being made with reference to a LIBOR Loan and shall confirm the same in writing to Borrower and Lenders.  Each Conversion or Continuation shall be on a Banking Business Day.  No LIBOR Loan shall be converted to a Base Rate Loan or renewed on any day other than the last day of the current Interest Period relating to such amounts outstanding unless Borrower pays any applicable Breakage Charges.  All Borrowings advanced at the request of Agent Bank under Section 2.08 of the Credit Agreement shall bear interest with reference to the Base Rate plus the Applicable Margin, subject to Borrower’s right to Convert such Borrowing to a LIBOR Loan or LIBOR Loans as provided herein.  If Borrower fails to give a Continuation/Conversion Notice for the continuation of a LIBOR Loan as a LIBOR Loan for a new Interest Period in accordance with this Section 2.05(c), such LIBOR Loan shall automatically become a Base Rate Loan at the end of its then current Interest Period.

 

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(d)        Each interest period (each individually an “Interest Period” and collectively the “Interest Periods”) for a LIBOR Loan shall commence on the date such LIBOR Loan is made or the date of Conversion or Continuation of any amount or amounts of the outstanding Borrowings hereunder to a LIBOR Loan, as the case may be, and shall end on the date which is one (1) or three (3) months thereafter, as elected by Borrower.  However, no Interest Period may extend beyond the Maturity Date.  Each Interest Period for a LIBOR Loan shall commence and end on a Banking Business Day.  If any Interest Period commences on a date for which there is no corresponding date in the month in which it is scheduled to end, such Interest Period shall end on the last Banking Business Day of such month.  If any Interest Period would otherwise expire on a day which is not a Banking Business Day, the Interest Period shall be extended to expire on the next succeeding Banking Business Day, unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Banking Business Day.

 

(e)        The applicable LIBO Rate and Base Rate shall be determined by the Agent Bank, and notice thereof shall be given promptly to Borrower and Lenders.  Each determination of the applicable Base Rate and LIBO Rate shall be conclusive and binding upon the Borrower, in the absence of manifest or demonstrable error.  The Agent Bank shall, upon written request of Borrower or any Lender, deliver to Borrower or such Lender, as the case may be, a statement showing the computations used by the Agent Bank in determining any rate hereunder.

 

(f)         Computation of interest on all Base Rate Loans shall be calculated on the basis of a year of three hundred sixty-five (365), or when appropriate three hundred sixty-six (366), days and the actual number of days elapsed.  Computation of interest on all LIBOR Loans shall be calculated on the basis of a year of three hundred sixty (360) days and the actual number of days elapsed.  The applicable Base Rate shall be effective the same day as a change in the Base Rate is announced by WFB as being effective.

 

(g)        If with respect to any Interest Period, (a) the Agent Bank reasonably determines (which determination shall be binding and conclusive on Borrower) that by reason of circumstances affecting the inter-bank eurodollar market adequate and reasonable means do not exist for ascertaining the applicable LIBO Rate, or (b) Requisite Lenders advise Agent Bank that the LIBO Rate as determined by Agent Bank will not adequately and fairly reflect the cost to such Lenders of maintaining or funding, for such Interest Period, a LIBOR Loan, then so long as such circumstances shall continue:  (i) Agent Bank shall promptly notify Borrower thereof, (ii) the Lenders shall not be under any obligation to make a LIBOR Loan or Convert a Base Rate Loan into a LIBOR Loan for which such circumstances exist, and (iii) on the last day of the

 

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then current Interest Period, the LIBOR Loan for which such circumstances exist shall, unless then repaid in full, automatically Convert to a Base Rate Loan.

 

(h)        Notwithstanding any other provisions of the Credit Agreement, if, after the Restatement Effective Date, any law, rule, regulation, treaty, interpretation or directive (whether having the force of law or not) or any change therein shall make it unlawful for any Lender to make or maintain LIBOR Loans, then (i) the commitment and agreement to maintain LIBOR Loans as to such Lender shall immediately be suspended, and (ii) unless required to be terminated earlier (which termination shall be without Breakage Charges), LIBOR Loans as to such Lender, if any, shall be Converted on the last day of the then current Interest Period applicable thereto to Base Rate Loans.  If it shall become lawful for such Lender to again maintain LIBOR Loans, then Borrower may once again as to such Lender request Conversions to the LIBO Rate.  During any period of such suspension, such Lender shall make Base Rate Loans.

 

(i)         The Borrower agrees that upon written notice by: (y) Agent Bank or (z) any Lender to the Borrower (with a copy of such notice concurrently delivered to Agent Bank) to the effect that a promissory note or other evidence of indebtedness is required for such Lender in order for such Lender to evidence (whether for the purposes of pledge, enforcement or otherwise) the Borrowings owing to, or to be made by, such Lender:

 

(i)         The Borrower shall promptly execute and deliver to each Lender a promissory note payable to the order of each such Lender (each individually a “Replacement Note” and collectively the “Replacement Notes”) in the form of the Revolving Credit Note in the amount of such requiring Lender’s respective Syndication Interest in the Credit Facility subject to Scheduled Reductions to be allocated amongst Lenders in accordance with their respective Syndication Interests;

 

(ii)        The Replacement Notes shall, in the aggregate, fully replace the Revolving Credit Note as to the Syndication Interests evidenced by such Replacement Notes and each reference to the Revolving Credit Note in this Credit Agreement and each of the Loan Documents shall be deemed to be a collective reference to the Revolving Credit Note and each of the Replacement Notes;

 

(iii)       Borrowings, Interest Rate Options, Continuation/Conversion Notices and all other provisions for the disbursement of funds, setting of interest rates and collection of repayments of interest and principal shall continue to be made by

 

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Agent Bank as the administrative and collateral agent for the Lenders in the same manner and to the same extent as provided in the Revolving Credit Note and this Credit Agreement as fully applicable to each of the Replacement Notes;

 

(iv)       the Agent Bank, upon the consent of Requisite Lenders, shall cause the Title Insurance Company to issue, at the expense of Borrower, such endorsements to the Title Policy as may be reasonably necessary to assure the aggregate obligation evidenced by the Replacement Notes is secured by the Deed of Trust with the same coverage and priority as the obligation evidenced by the Revolving Credit Note; and

 

(v)        Concurrently with the delivery of each Replacement Note, Borrowers shall execute a restated Revolving Credit Note in the principal amount of the Aggregate Commitment less the aggregate amount of the Syndication Interests evidenced by the Replacement Notes and Agent Bank shall return the original Revolving Credit Note to Borrowers marked as superseded and replaced by such restated Revolving Credit Notes and the Replacement Notes.

 

Section 2.06.          Security for the Credit Facility .  As security for the due and punctual payment and performance of the terms and provisions of this Credit Agreement, the Notes and all of the other Loan Documents, the Security Documentation shall be executed and delivered, as of the Restatement Effective Date, by the respective parties to each of the Security Documentation.

 

Section 2.07.          Place and Manner of Payment .

 

(a)        All amounts payable by Borrower to the Lenders or Agent Bank on behalf of Lenders pursuant to the Credit Facility shall be made on a Banking Business Day in lawful money of the United States of America and in immediately available funds.  Other than in connection with: (i) the Scheduled Reductions of principal, or (ii) principal payments which may be required to decrease the Funded Outstandings to an amount equal to or less than the Aggregate Commitment, Borrower shall not make repayments (“Principal Prepayments”) of the outstanding balance of principal owing under the Revolving Credit Note more frequently than three such Principal Prepayments during each calendar month.  Each such Principal Prepayment shall be in a minimum amount of Fifty Thousand Dollars ($50,000.00) and in increments of Ten Thousand Dollars ($10,000.00).  Borrower shall give written notice to Agent Bank of each Principal Payment by 11:00 a.m. on a day which is at least three (3) Banking Business Days prior to each Principal Prepayment of all or any portion of a LIBOR Loan

 

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or one (1) Banking Business Day prior to each Principal Prepayment of all or any portion of a Base Rate Loan.

 

(b)        All such amounts payable by Borrower shall be debited by Agent Bank from Borrower’s Designated Deposit Account on the earlier of: (i) the date specified by Borrower by written notice to Agent Bank, or (ii) on the date upon which such payment is due.  If such written notice is received by Agent Bank prior to 11:00 a.m., Agent Bank shall credit Borrower with such payment on the day so received and shall promptly disburse to the appropriate Lenders on the same day the Pro Rata Share of payments relating to the Credit Facility, in immediately available funds.  If such written notice is received by Agent Bank after 11:00 a.m., Agent Bank shall credit Borrower with such payment as of the next Banking Business Day and disburse to the appropriate Lenders on the next Banking Business Day such Pro Rata Share of such payment relating to the Credit Facility in immediately available funds.  Any payment on the Credit Facility made by Borrower to Agent Bank pursuant to the terms of this Credit Agreement or the Revolving Credit Note for the account of Lenders shall constitute payment to the appropriate Lenders.  If the Revolving Credit Note or any payment required to be made thereon or hereunder, is or becomes due and payable on a day other than a Banking Business Day, the due date thereof shall be extended to the next succeeding Banking Business Day and interest thereon shall be payable at the then applicable rate during such extension.

 

(c)        The outstanding principal owing under the Credit Facility and the Revolving Credit Note may, subject to Section 2.07(a), be prepaid at any time in whole or in part without penalty, provided, however, that any portion or portions of the unpaid principal balance which is accruing interest at a LIBO Rate may only be prepaid or repaid on the last day of the applicable Interest Period unless Borrower gives three (3) days prior written notice to Agent Bank and additionally pays concurrently with such prepayment or repayment such additional amount or amounts as will compensate Lenders for any losses, costs or expenses which they may incur as a result of such payment, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by the liquidation or reemployment of deposits or other funds acquired by such Lender to fund or maintain such LIBOR Loan (“Breakage Charges”).  A certificate of a Lender as to amounts payable hereunder shall be conclusive and binding on Borrower for all purposes, absent manifest or demonstrable error.  Any calculation hereunder shall be made on the assumption that each Lender has funded or will fund each LIBOR Loan in the London interbank market; provided that no Lender shall have any obligation to actually fund any LIBOR Loan in such manner.

 

(d)        Unless the Agent Bank receives notice from an Authorized Officer prior to the date on which any payment is due to the Lenders that the Borrower will not make such payment in full as and when required, the Agent Bank may assume that the Borrower has made such payment in full to the Agent Bank on such date in

 

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immediately available funds and the Agent Bank may (but shall not be so required), in reliance upon such assumption, distribute to each Lender on such due date an amount equal to the amount then due such Lender.  If and to the extent the Borrower has not made such payment in full to the Agent Bank, each Lender shall repay to the Agent Bank on demand such amount distributed to such Lender, together with interest thereon at the Federal Funds Rate for each day from the date such amount is distributed to such Lender until the date repaid.

 

(e)        If, other than as expressly provided elsewhere herein, any Lender shall obtain any payment with respect to the Credit Facility (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its Syndication Interest, such Lender shall immediately (a) notify the Agent Bank of such fact, and (b) purchase from the other Lenders such participations in the Credit Facility as shall be necessary to cause such purchasing Lender to share the excess payment with each of them in proportion to their respective Syndication Interests; provided , however, that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender, such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender’s ratable share (according to the proportion of (i) the amount of such paying Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.  The Borrower agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by law, exercise all its rights of payment with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.  The Agent Bank will keep records (which shall be conclusive and binding in the absence of manifest or demonstrable error) of each participation purchased under this section and will in each case notify the Lenders following any such purchases or repayments.

 

Section 2.08.          The Swingline Facility .

 

(a)        Subject to the conditions and upon the terms hereinafter set forth and in accordance with the terms and provisions of the Swingline Note, on and after the Restatement Effective Date Swingline Lender agrees to lend and advance Swingline Advances to Borrower in the amounts and at the times provided below.  Notwithstanding anything herein contained to the contrary, however, Borrower shall not be entitled to any Swingline Advances on and after thirty-five (35) calendar days prior to the Maturity Date.

 

(b)        With respect to each proposed Swingline Advance, an Authorized Officer shall no later than 1:00 p.m. on the date for such proposed Swingline Advance give Swingline Lender written notice in the form of the Notice of Swingline

 

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Advance (“Notice of Swingline Advance”), a copy of which is marked “Exhibit K”, affixed hereto and by this reference incorporated herein and made a part hereof, specifying the requested amount to be funded.  Swingline Lender shall deposit such amounts as Borrower may request into the Designated Deposit Account in lawful money of the United States of America in immediately available funds, provided, that: (i) after giving effect to such Swingline Advance, the Swingline Outstandings do not exceed Four Million Dollars ($4,000,000.00), (ii) the amount requested does not exceed the Available Borrowings, and (iii) no Default or Event of Default has occurred and remains continuing.  Furthermore, before making any Swingline Advances (if at such time any Lender is a Deteriorating Lender), the Swingline Lender may condition the funding of such Swingline Advance on receipt by Agent Bank on behalf of the Swingline Lender of Participant Cash Collateralization or similar security satisfactory to the Swingline Lender (in its sole discretion) from such Deteriorating Lender in respect of such Deteriorating Lender’s risk participation in such Swingline Advances as set forth below or from Borrower in Cash to be deposited in the Cash Collateral Account in the amount of such Deteriorating Lender’s risk participation in such Swingline Advance as set forth below.  Such Deteriorating Lender hereby grants to the Agent Bank, for the benefit of the Swingline Lender, a security interest in all such Participant Cash Collateralization and all proceeds of the foregoing. Participant Cash Collateralization shall be maintained in blocked, deposit accounts at Agent Bank and may be invested in Cash Equivalents reasonably acceptable to the Agent Bank. If at any time the Agent Bank determines that any funds held as Participant Cash Collateralization are subject to any right or claim of any Person other than the Agent Bank or that the total amount of such funds is less than the aggregate risk participation of such Deteriorating Lender in the relevant Swingline Advance, the Borrower will, promptly upon demand by the Agent Bank, pay to the Agent Bank, as additional funds to be deposited into the Cash Collateral Account, an amount equal to the excess of (x) such aggregate risk participation over (y) the total amount of funds, if any, then held as Participant Cash Collateralization that the Agent Bank determines to be free and clear of any such right and claim. At such times as there are Swingline Advances outstanding for which funds are on deposit as Participant Cash Collateralization, such funds shall be applied as and when determined by the Agent Bank, to reimburse and otherwise pay the applicable obligations owing to the Swingline Lender.  Within the foregoing limitations, Borrower may borrow, repay and reborrow under the Swingline Facility.

 

(c)        Each Swingline Advance shall be in a minimum amount of Fifty Thousand Dollars ($50,000.00) and in increments of Ten Thousand Dollars ($10,000.00).  Borrowers shall be entitled to no more than five (5) Swingline Advances during each calendar month.  Promptly after receipt of each request for a Swingline Advance, Swingline Lender shall obtain telephonic verification from Agent Bank that, giving effect to such request, the amount of such request does not exceed the Available Borrowings (such verification to be promptly confirmed in writing).  Unless Borrower is

 

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notified to the contrary by the Swingline Lender, each repayment of a Swingline Advance shall be in a minimum amount of Fifty Thousand Dollars ($50,000.00) and in increments of Ten Thousand Dollars ($10,000.00), together with the accrued interest thereon.

 

(d)        Each Swingline Advance shall bear interest at the Base Rate plus the Applicable Margin and shall be payable at the times and in the manner set forth below and, in any event, on or before thirty-five (35) days prior to the Maturity Date.  Unless otherwise paid, interest accrued on the unpaid balance of Swingline Outstandings shall be paid monthly on the first day of each and every month.  Each Swingline Advance shall be fully repaid no later than the first occurring Swingline Settlement Date occurring after such Swingline Advance is made.  Unless Borrower has requested a LIBOR Loan for the purpose of repaying the Swingline Outstandings or made other arrangements acceptable to the Swingline Lender to pay the Swingline Outstanding in full or to continue such Swingline Outstanding, on the Banking Business Day immediately preceding the applicable Swingline Settlement Date, Borrower shall request a Borrowing under the Credit Facility as a Base Rate Loan in an amount sufficient to pay the applicable Swingline Advance in full.  Upon receipt of the amount of the Borrowing from the Lenders, the Agent Bank shall provide such amount to the Swingline Lender for repayment of the applicable Swingline Advance and the balance of the Borrowing, if any, shall be deposited in immediately available funds to the Designated Deposit Account.  In the event Borrower fails to request a Borrowing within the period specified above, Agent Bank shall, without notice to the Borrower and without regard to any other conditions precedent for the making of Borrowings under the Credit Facility, including, without limitation the remedies set forth in Section 7.02, promptly (but subject to the notice periods for Borrowings set forth in Section 2.03) request a Borrowing to be made and each of the Lenders agree to fund such Borrowing under the Credit Facility in the amount necessary to pay the applicable Swingline Advance in full, together with all interest accrued thereon, to the extent of Available Borrowings, and the Borrower shall be deemed to have requested such Borrowing and consented to its being made as provided for herein.

 

(e)        In the event Agent Bank fails or is restrained, prohibited or restricted from causing a Borrowing to be made as provided in (d) above or Lenders are restrained, prohibited or restricted from funding a Borrowing as provided in (d) above, the Swingline Lender may by written notice given to Agent Bank not later than 11:00 a.m. on any Banking Business Day require the Lenders to acquire participations on the next Banking Business Day in the Swingline Outstandings.  Such notice shall specify the aggregate amount of the Swingline Outstandings in which the Lenders will participate.  Promptly upon receipt of such notice, Agent Bank will give notice thereof to each Lender, specifying in such notice such Lender’s applicable Pro Rata Share of such Swingline Outstandings.  Each Lender hereby absolutely and unconditionally agrees,

 

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upon receipt of notice as provided above, to pay to Agent Bank, for the account of the Swingline Lender, such Lender’s Pro Rata Share of such Swingline Outstandings.  Each Lender acknowledges and agrees that its obligation to acquire a participation in the Swingline Outstandings pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or an Event of Default, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever (provided that such payment shall not cause the unpaid balance of principal owing to such Lender under the Bank Facilities to exceed such Lender’s Syndication Interest in the Credit Facility).  Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.03(a) with respect to Borrowings made by such Lender, and Agent Bank shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders.  Agent Bank shall notify Borrowers of any participations in any Swingline Outstandings acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Outstandings shall be made to Agent Bank and not to the Swingline Lender.  Any amounts received by the Swingline Lender from Borrowers (or other party on behalf of Borrowers) in respect of Swingline Outstandings after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to Agent Bank; any such amounts received by Agent Bank shall be promptly remitted by Agent Bank to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear.  The purchase of participations in Swingline Outstandings pursuant to this paragraph shall not relieve Borrowers of any default in the payment thereof.

 

(f)         Each Lender’s obligation to advance Borrowings in the proportionate amount of its Syndication Interest in the Credit Facility of any unreimbursed Swingline Outstandings pursuant hereto is irrevocable and several, and not joint or joint and several.  The failure of any Lender to perform its obligation to advance a Borrowing in a proportionate amount of such Lender’s Syndication Interest of any unreimbursed Swingline Outstandings shall neither relieve any other Lender of its obligation hereunder to advance such Borrowing in the amount of such other Lender’s proportionate Syndication Interest of such amount, nor relieve the Lender which has failed to fund of its obligations to Borrower hereunder.  The Borrower agrees to accept the Borrowings for payment of Swingline Outstandings as provided hereinabove, whether or not such Borrowings could have been made pursuant to the terms of Article III B, or any other section of this Credit Agreement.

 

Section 2.09.          Issuance of Letters of Credit .

 

(a)        Any Authorized Officer of Borrower may from time to time request that a Standby Letter of Credit or Commercial Letter of Credit be issued by delivering to L/C Issuer (with a copy to the Agent Bank) on a Banking Business Day, at

 

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least five (5) Banking Business Days prior to the date of such proposed issuance, an L/C Agreement in L/C Issuer’s then standard form (consistent with the terms of the Credit Agreement), completed to the satisfaction of L/C Issuer and such other certificates as the L/C Issuer may reasonably request; provided, however, that no Letter of Credit shall be issued (i) if any Default or Event of Default has occurred and remains continuing, or (ii) if after giving effect to the issuance thereof, the aggregate Stated Amount of outstanding Letters of Credit would exceed Two Million Five Hundred Thousand Dollars ($2,500,000.00), or (iii) the Stated Amount of the requested Letter of Credit exceeds the Maximum Availability.  Provided, however, L/C Issuer shall be under no obligation to issue any Letter of Credit if any Lender is at such time a Deteriorating Lender, unless the Agent Bank has received Participant Cash Collateralization or similar security satisfactory to the L/C Issuer (in its sole discretion) from such Deteriorating Lender in respect of such Deteriorating Lender’s obligation to fund under Section 2.09(c) or (d) or has received from Borrower Cash to be deposited in the Cash Collateral Account in the amount of such Deteriorating Lender’s obligation to fund under Section 2.09(c) or (d).  Such Deteriorating Lender hereby grants to the Agent Bank, for the benefit of the L/C Issuer, a security interest in all such Participant Cash Collateralization and all proceeds of the foregoing. Participant Cash Collateralization shall be maintained in blocked, deposit accounts at Agent Bank and may be invested in Cash Equivalents reasonably acceptable to the Agent Bank. If at any time the Agent Bank determines that any funds held as Participant Cash Collateralization are subject to any right or claim of any Person other than the Agent Bank or that the total amount of such funds is less than the aggregate L/C Exposure in respect of such Deteriorating Lender, the Borrower will, promptly upon demand by the Agent Bank, pay to the Agent Bank, as additional funds to be deposited into the Cash Collateral Account, an amount equal to the excess of (x) such aggregate L/C Exposure over (y) the total amount of funds, if any, then held as Participant Cash Collateralization that the Agent Bank determines to be free and clear of any such right and claim. Upon the drawing of any Letter of Credit for which funds are on deposit as Participant Cash Collateralization or in the Cash Collateral Account, such funds shall be applied to reimburse the L/C Issuer.

 

(b)        Each Letter of Credit shall be issued by the L/C Issuer on the Banking Business Day specified in the Borrower’s application therefor.  Each request for a Letter of Credit and each Letter of Credit shall be subject to the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce Publication New 1994 Revision No. 500, or any successor publication then in effect.  Each Standby Letter of Credit will be issued for a term not greater than one (1) year and shall not include any provision for automatic renewal.  Each Commercial Letter of Credit will be issued for a term not greater than one hundred eighty (180) calendar days.  In no event shall any Letter of Credit have a Stated Expiry Date later than thirty (30) days prior to the Maturity Date.  Promptly after receipt of each request for the issuance of a Letter of Credit and immediately prior to the issuance thereof, L/C Issuer shall obtain telephonic

 

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verification from Agent Bank that the amount of such request does not exceed the then Available Borrowings.  The L/C Issuer shall promptly notify the Agent Bank of the aggregate L/C Exposure of outstanding Letters of Credit each time there is a change therein.

 

(c)        Upon presentation of a draft drawn under any Letter of Credit, L/C Issuer shall promptly notify the Agent Bank and Borrower of the amount under such draft and the date upon which such draft is to be funded.  On or before two (2) Banking Business Days following such notice (unless Borrower has made other arrangements acceptable to the L/C Issuer to pay the amount of such draft in full), Borrower shall advance to L/C Issuer the amount of such draft from Borrower’s available funds or shall request a Borrowing under the Credit Facility in an amount sufficient to pay the amount of such draft in full.  The Agent Bank, upon receipt of such funds from the Lenders, shall automatically provide such amount to the L/C Issuer for payment of the amount of such draft and the balance of the Borrowing shall be deposited in immediately available funds to the Designated Deposit Account.  In the event Borrower fails to advance to L/C Issuer the amount of such draft from Borrower’s available funds or to request a Borrowing within two (2) Banking Business Days from receipt of the notice as specified above, on the third (3rd) Banking Business Day following Agent Bank’s receipt of such notice, Agent Bank shall, without notice to or consent of the Borrower and without regard to any other conditions precedent for the making of Borrowings under the Credit Facility, request a Borrowing to be made and Lenders agree to fund such Borrowing under the Credit Facility in the amount necessary to pay the amount of such draft in full.  Upon the occurrence of any Event of Default, L/C Issuer shall, without notice or further authorization or consent of Borrower whatsoever, be authorized to immediately cause the Cash Collateral Account to be established and funded by Lenders with a Borrowing advanced to Agent Bank equal to the aggregate amount of the L/C Exposure then outstanding.  All amounts held by L/C Issuer in the Cash Collateral Account shall be held as security for the repayment of any L/C Reimbursement Obligation thereafter arising pursuant to the terms of the L/C Agreement(s) and the Cash Collateral Pledge Agreement.  Borrowings advanced by Lenders to pay drafts drawn upon or to secure repayment of the L/C Exposure under Letters of Credit pursuant to this subsection shall: (i) constitute Borrowings under the Credit Facility, (ii) initially be Base Rate Loans and (iii) be subject to all of the provisions of this Credit Agreement concerning Borrowings under the Credit Facility, except that such Borrowings shall be made upon demand of the Agent Bank as set forth above rather than upon Notice of Borrowing by Borrower and shall be made, notwithstanding anything in this Credit Agreement to the contrary, without regard to any other conditions precedent to the making of Borrowings under the Credit Agreement and notwithstanding any Default or Event of Default thereunder.  All amounts paid by L/C Issuer on a draft drawn under any Letter of Credit which has not been funded or concurrently reimbursed by Borrower or through a Borrowing as provided hereinabove, shall bear interest at the

 

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Base Rate plus the Applicable Margin per annum until repaid or reimbursed to L/C Issuer.

 

(d)        In the event Agent Bank fails or is restrained, prohibited or restricted from causing a Borrowing to be made as provided in (b) above or Lenders are restrained, prohibited or restricted from funding a Borrowing as provided in (b) above, the L/C Issuer may by written notice given to Agent Bank not later than 11:00 a.m. on any Banking Business Day require the Lenders to acquire participations on the next Banking Business Day in the subject L/C Reimbursement Obligation.  Such notice shall specify the aggregate amount of the L/C Reimbursement Obligation in which Lenders will participate.  Promptly upon receipt of such notice, Agent Bank will give notice thereof to each Lender, specifying in such notice such Lender’s applicable Pro Rata Share percentage of such L/C Reimbursement Obligation.  Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to Agent Bank, for the account of the L/C Issuer, such Lender’s Pro Rata Share of such L/C Reimbursement Obligation.  Each Lender acknowledges and agrees that its obligation to acquire participations in the L/C Reimbursement Obligation pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or an Event of Default, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever (provided that such payment shall not cause the unpaid balance of principal owing to such Lender under the Bank Facilities to exceed such Lender’s Syndication Interest in the Credit Facility).  Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.03(a) with respect to Borrowings made by such Lender, and Agent Bank shall promptly pay to the L/C Issuer the amounts so received by it from the Lenders.  Agent Bank shall notify Borrower of any participations in any L/C Reimbursement Obligation acquired pursuant to this paragraph, and thereafter payments in respect of such L/C Reimbursement Obligation shall be made to Agent Bank and not to the L/C Issuer.  Any amounts received by the L/C Issuer from Borrower (or other party on behalf of Borrower) in respect of any L/C Reimbursement Obligation after receipt by the L/C Issuer of the proceeds of a sale of participations therein shall be promptly remitted to Agent Bank; any such amounts received by Agent Bank shall be promptly remitted by Agent Bank to the Lenders that shall have made their payments pursuant to this paragraph and to the L/C Issuer, as their interests may appear.  The purchase of participations in any L/C Reimbursement Obligation pursuant to this paragraph shall not relieve Borrower of any default in the payment thereof.

 

(e)        Each Lender’s obligation to advance Borrowings in the proportionate amount of its Syndication Interest in the Credit Facility of any unreimbursed amounts outstanding under any Letter of Credit pursuant hereto is several, and not joint or joint and several.  The failure of any Lender to perform its

 

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obligation to advance a Borrowing in a proportionate amount of such Lender’s Syndication Interest of any unreimbursed amounts outstanding under a Letter of Credit will not relieve any other Lender of its obligation hereunder to advance such Borrowing in the amount of such other Lender’s proportionate Syndication Interest of such amount, nor relieve the Lender which has failed to fund of its obligation to fund hereunder.  The Borrower agrees to accept the Borrowings for payment of Letters of Credit as provided hereinabove, whether or not such Borrowings could have been made pursuant to the terms of Article III B or C, or any other section of the Credit Agreement.

 

(f)         Letters of Credit shall be used and issued for the benefit of Borrower for the general corporate purposes of Borrower relating to the Hotel/Casino Facility.

 

(g)        The obligations of Borrower under this Credit Agreement and any L/C Agreement to reimburse L/C Issuer for a drawing under a Letter of Credit, and to repay any drawing under a Letter of Credit funded by any Borrowing under the Credit Facility, shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Credit Agreement and each such other L/C Agreement under all circumstances, including the following:  (i) any lack of validity or enforceability of this Credit Agreement or any L/C Agreement; (ii) the existence of any claim, setoff, defense or other right that Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or any person for whom any such beneficiary or any such transferee may be acting), L/C Issuer or any other person, whether in connection with this Agreement, the transactions contemplated hereby or by the L/C Agreement or any unrelated transaction; (iii) any draft, demand, certificate or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit; or any defense based upon the failure of any drawing under a Letter of Credit to conform to the terms of the Letter of Credit or any non-application or misapplication by the beneficiary of the proceeds of such drawing; or (iv) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, Borrower; provided, however, that neither Borrower nor any Lender shall be obligated to reimburse L/C Issuer for any wrongful payment finally determined by a court of competent jurisdiction to have been made by L/C Issuer as a result of acts or omissions constituting willful misconduct or gross negligence on the part of L/C Issuer.  To the extent that any provision of any L/C Agreement is inconsistent with the provisions of this Section 2.09, the provisions of this Section 2.09 shall control.

 

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Section 2.10.         Fees .

 

(a)        On the Restatement Effective Date and on each other applicable date, Borrower shall pay the fees as required in the Fee Side Letter, each of such fees to be retained by Agent Bank or distributed to Lenders as agreed between Agent Bank and each Lender.

 

(b)        Borrower shall pay a quarterly nonusage fee (the “Commitment Fee”) to the Agent Bank for the account of each Lender that is not a Defaulting Lender based on the Total Leverage Ratio, calculated as of each Fiscal Quarter end following the Restatement Effective Date with reference to the Borrower, to determine the applicable Commitment Percentage determined as set forth in Table Two of the definition of Applicable Margin.  As of the Restatement Effective Date, the Commitment Percentage shall be set in accordance with the Closing Pricing Certificate to be delivered by Borrower to Agent Bank on the Restatement Effective Date pursuant to Section 3.17(b); provided that in no event shall the Commitment Percentage be less than 0.75% during the period commencing on the Restatement Effective Date and continuing until June 1, 2009.

 

The Commitment Fee shall commence to accrue on the Restatement Effective Date and shall be calculated as the product of (i) the applicable Commitment Percentage multiplied by (ii) the daily average of the Aggregate Commitment less the daily average of the Funded Outstandings and less the daily average of L/C Exposure computed on the basis of a three hundred sixty (360) day year based on the number of actual days elapsed.  Each Commitment Fee shall be payable in arrears on a quarterly basis on the last Banking Business Day of each applicable Fiscal Quarter, and upon Bank Facility Termination.  Each Commitment Fee shall be promptly distributed by Agent Bank to each Lender that is not a Defaulting Lender in proportion to their respective Syndication Interests in the Credit Facility, as in effect from time to time during each applicable Fiscal Quarter.

 

(c)        Borrower shall pay to the Agent Bank a letter of credit fee (“L/C Fee”) equal to the Stated Amount of each such Letter of Credit multiplied by the LIBO Rate Margin, as set forth in Table One of the definition of Applicable Margin in effect as of the first day of the applicable Fiscal Quarter calculated on a per annum basis, due and payable quarterly in arrears on the last Banking Business Day of each Fiscal Quarter and on the Stated Expiry Date of each such Letter of Credit.  Each L/C Fee shall be promptly distributed by Agent Bank to each Lender that is not a Defaulting Lender in proportion to their respective Pro Rata Shares, as in effect from time to time during each applicable Fiscal Quarter.

 

(d)        Additionally, the Borrower shall pay directly to the L/C Issuer for its own account a fronting fee in an amount equal to 0.250% multiplied by the Stated

 

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Amount of each Letter of Credit (regardless of the term of such Letter of Credit) which shall be payable upon the issuance of and any renewal or extension of any Letter of Credit (whether by amendment, automatic or otherwise). In addition, the Borrower shall pay directly to the L/C Issuer for its own account the customary issuance, presentation, amendment, transfer, negotiation and other processing fees, and other standard costs and charges, of the L/C Issuer relating to Letters of Credit as from time to time in effect. Such fees and charges are due and payable on demand and are nonrefundable.

 

Section 2.11.         Late Charges and Default Rate .

 

(a)        If any payment due under the Revolving Credit Note is not paid by the end of any applicable grace period as provided in Article VII hereof, within one (1) Banking Business Day after receipt by Borrower of written notice of such nonpayment from Agent Bank, Borrower promises to pay a late charge in the amount of three percent (3%) of the amount of such delinquent payment and Agent Bank need not accept any late payment made unless it is accompanied by such three percent (3%) late payment charge.  Any late charge shall be paid to Lenders in proportion to their respective Syndication Interests.

 

(b)        In the event of the existence of an Event of Default, commencing on the first (1st) Banking Business Day following the receipt by Borrower of written notice of the occurrence of such Event of Default from Agent Bank: (i) the total of the unpaid balance of the principal and the then accrued and unpaid interest owing under each of the Notes shall commence accruing interest at a rate equal to two percent (2.0%) per annum over the interest rate otherwise applicable to each such Note (the “Default Rate”), and (ii) the L/C Fee shall be increased by two percent (2.0%) per annum, in each case to continue until all Events of Default which may exist have been cured, at which time the interest rate shall revert to the rate of interest otherwise accruing pursuant to the terms of each such Note and the L/C Fee shall revert to the per annum rate set forth in Section 2.10(c).

 

(c)        In the event of the occurrence of an Event of Default, Borrower agrees to pay all reasonable costs of collection, including the reasonable attorneys’ fees incurred by Agent Bank, in addition to and at the time of the payment of such sum of money and/or the performance of such acts as may be required to cure such Event of Default.  In the event legal action is commenced for the collection of any sums owing hereunder or under the terms of the Revolving Credit Note or the Swingline Note, the Borrower agrees that any judgment issued as a consequence of such action against Borrower shall bear interest at a rate equal to the Default Rate until fully paid.

 

Section 2.12.         Net Payments .  All payments under this Credit Agreement and the Revolving Credit Note, the Swingline Note and/or a L/C Reimbursement Obligation shall be made without set-off, counterclaim, recoupment or defense of any

 

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kind and in such amounts as may be necessary in order that all such payments, after deduction or withholding for or on account of any future taxes, levies, imposts, duties or other charges of whatsoever nature imposed by the United States or any Governmental Authority, other than franchise taxes or any tax on or measured by the gross receipts or overall net income of any Lender pursuant to the income tax laws of the United States or any State, or the jurisdiction where each Lender’s principal office is located (collectively “Taxes”), shall not be less than the amounts otherwise specified to be paid under this Credit Agreement and the Notes.  A certificate as to any additional amounts payable to the Lenders under this Section 2.12 submitted to the Borrower by the Lenders shall show in reasonable detail an accounting of the amount payable and the calculations used to determine in good faith such amount and shall be conclusive absent manifest or demonstrable error.  Any amounts payable by the Borrower under this Section 2.12 with respect to past payments shall be due within ten (10) days following receipt by the Borrower of such certificate from the Lenders; any such amounts payable with respect to future payments shall be due within ten (10) days after demand with such future payments.  With respect to each deduction or withholding for or on account of any Taxes, the Borrower shall promptly furnish to the Lenders such certificates, receipts and other documents as may be required (in the reasonable judgment of the Lenders) to establish any tax credit to which the Lenders may be entitled.  If a Lender or any of its successors or assigns is a foreign person (i.e., a person other than a United States person for United States federal income tax purposes), Lender shall:

 

(a)        Not later than the first date of any payment by the Borrower hereunder (or, in the case of a successor or assignee of a Lender, the date such successor or assignee becomes a successor or assignee) deliver to Borrower and Agent Bank one accurate and complete signed original of Internal Revenue Service Form W-8BEN or W-8ECI (as applicable to it) or any successor form (“Form W-8BEN”), or one accurate and complete signed original certificate required by Treasury Regulation Section 1.1441-1(a) or Section 1.1441-6(c) or any successor form (“Form 1.1441”), as appropriate, in each case indicating that such Lender (or such successor or assign, as applicable) is on the date of delivery thereof entitled to receive payments of principal, interest and fees under this Credit Agreement free from withholding of United States federal income tax;

 

(b)        If at any time such Lender makes any changes necessitating a new Form W-8BEN or Form 1.1441, with reasonable promptness deliver to Borrower and Agent Bank in replacement for, or in addition to, the forms previously delivered by it hereunder, one accurate and complete signed original of form W-8BEN or Form 1.1441, as appropriate, in each case indicating that it is on the date of delivery thereof entitled to receive payments of principal, interest and fees under this Credit Agreement free from withholding of United States federal income tax; and

 

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(c)        Promptly upon Agent Bank’s or Borrower’s reasonable request to that effect, deliver to Borrower and Agent Bank such other forms or similar documentation as may be required from time to time by applicable law, treaty, rule or regulation in order to establish its tax status for withholding purposes.

 

Section 2.13.         Increased Costs .  If after the date hereof the adoption of, or any change in, any applicable law, rule or regulation (including without limitation Regulation D of the Board of Governors of the Federal Reserve System and any successor thereto), or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender with any future request or future directive (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency:

 

(a)        Shall subject any Lender to any tax, duty or other charge payable to the United States or any Governmental Authority with respect to the Credit Facility, the Revolving Credit Note, the Swingline Note or such Lender’s obligation to make any funding of the Credit Facility, or shall change the basis of taxation of payments to such Lender of the principal of, or interest on, the Credit Facility or any other amounts due under the Revolving Credit Note and/or the Swingline Note in respect of the Credit Facility or such Lender’s obligation to fund the Credit Facility (except for changes in the rate of tax on the overall net income of such Lender imposed by the United States or any Governmental Authority pursuant to the income tax laws of the United States or any State, or the jurisdiction where each Lender’s principal office is located); or

 

(b)        With respect to the Credit Facility or the obligation of the Requisite Lenders to advance Borrowings under the Credit Facility, shall impose, modify or deem applicable any reserve imposed by the Board of Governors of the Federal Reserve System, special deposit, capitalization, capital adequacy or similar requirement against assets of, deposits with or for the account of, or credit extended by, Requisite Lenders; or

 

(c)        Shall impose on any Lender any other condition affecting the Credit Facility, the Revolving Credit Note or such Lender’s obligation to advance Borrowings under the Credit Facility;

 

and the result of any of the foregoing, as set forth in subsections (a), (b) or (c) is to increase the cost to (or in the case of Regulation D or reserve requirements referred to above or a successor thereto, to impose a cost on) such Lender of making or maintaining the Credit Facility, or to reduce the amount of any sum or rate of return received or receivable by such Lender under the Revolving Credit Note, then within ten (10) days after demand by such Lender (which demand shall be accompanied by a certificate setting forth

 

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the basis of such demand), the Borrower shall pay directly to such Lender such additional amount or amounts as will compensate such Lender for such increased cost (or in the case of Regulation D or reserve requirements referred to above or a successor thereto, such costs which may be imposed upon such Lender) or such reduction of any sum or rate of return received or receivable under the Revolving Credit Note.  A certificate as to any additional amounts payable to any Lender under this Section 2.13 submitted to the Borrower by such Lender shall show in reasonable detail an accounting of the amount payable and the calculations used to determine in good faith such amount and shall be conclusive absent manifest or demonstrable error.  Each Lender agrees to use its reasonable efforts not materially disadvantageous to it (in its reasonable determination) to minimize such increased or imposed costs or such reduction.

 

Section 2.14.         Mitigation; Exculpation .

 

(a)        Each Lender agrees that it will promptly notify the Borrower in writing upon its becoming aware that any payments are to become due to it under this Credit Agreement pursuant to Section 2.12 or 2.13.  Each Lender further agrees that it will use reasonable efforts not materially disadvantageous to it (in its reasonable determination) in order to avoid or minimize, as the case may be, the payment by the Borrower of any additional amounts pursuant to Section 2.12 or 2.13.  Each Lender represents, to the best of its knowledge, that as of the Restatement Effective Date no such amounts are payable to it.

 

(b)        Borrower shall not be liable to any Lender for any payments under Section 2.12 or 2.13 arising to the extent of such Lender’s gross negligence or willful misconduct or breach of any laws (other than as a result of Borrower’s breach), or for amounts which were incurred more than ninety (90) days prior to the date Borrower are notified of the incurrence of such amount.

 

Section 2.15.         Guaranty Agreement .  As additional security for the due and punctual payment and performance of the Credit Facility and each of the terms, covenants, representations, warranties and provisions herein contained and contained in each of the Loan Documents, on or before the Restatement Effective Date MCRI shall execute the Guaranty in the form of Exhibit I affixed hereto.

 

ARTICLE III

 

CONDITIONS PRECEDENT TO THE RESTATEMENT EFFECTIVE DATE

 

A.        Closing Conditions .  The obligation of each of the Banks to fund the Closing Disbursements under the Credit Facility is subject to the following conditions precedent, each of which shall be satisfied on or before January 23, 2009 (unless all of the Banks, in their sole and absolute discretion, shall agree otherwise).  The occurrence

 

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of the Restatement Effective Date is subject to and contingent upon Agent Bank having received, in each case in form and substance reasonably satisfactory to Agent Bank, or in the case of an occurrence, action or event, the occurrence of, each of the following:

 

Section 3.01.         Credit Agreement .  Executed counterparts of this Credit Agreement in sufficient duplicate originals for Borrower and each of the Banks.

 

Section 3.02.         The Notes and Guaranty .

 

(a)                             The Revolving Credit Note (including each Replacement Note as may be requested under Section 2.05(i)) duly executed by the Borrower, payable to the order of Agent Bank, on behalf of the Lenders.

 

(b)                            The Swingline Note duly executed by the Borrower, payable to the order of Swingline Lender.

 

(c)                                The Guaranty duly executed by MCRI in favor of Agent Bank, on behalf of the Lenders.

 

Section 3.03.         Security Documentation .  The Security Documentation duly executed by Borrower or other applicable party thereto, consisting of the following:

 

(a)                                First Amendment to Deed of Trust;

 

(b)                               the UCC Amendment Statements for each of the Financing Statements;

 

(c)                                First Amendment to Assignment of Entitlements, Contracts, Rents and Revenues; and

 

(d)                               First Amendment to Trademark Security Agreement.

 

Section 3.04.         Other Loan Documents .  The following Loan Documents duly executed by Borrower and each other applicable party thereto consisting of the following:

 

(a)                                Environmental Certificate.

 

(b)                               Cash Collateral Pledge Agreement.

 

(c)                                CC Skybridge Estoppel.

 

Section 3.05.         Articles of Incorporation, Bylaws, Corporate Resolutions, Certificates of Good Standing and Closing Certificate .  On or before the Restatement

 

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Effective Date, Agent Bank shall have received from each of the Borrower and MCRI: (i) a Certificate of Good Standing issued by the Secretary of State of the State of Nevada and dated within thirty (30) Banking Business Days of the Restatement Effective Date, (ii) a copy of the articles of incorporation and by-laws of Borrower and MCRI certified to be true and correct by an Authorized Officer, (iii) an original Certificate of Corporate Resolution and Certificate of Incumbency executed by the respective Secretaries of Borrower and MCRI and attested to by its respective President, Vice President, or Treasurer authorizing Borrower and MCRI  to enter into all documents and agreements to be executed by them pursuant to this Credit Agreement and further authorizing and empowering the officer or officers who will execute such documents and agreements with the authority and power to execute such documents and agreements on behalf of Borrower and MCRI, (iv) designation by corporate certificate (“Authorized Officer Certificate”), substantially in the form of the Authorized Officer Certificate marked “Exhibit G”, affixed hereto and by this reference incorporated herein and made a part hereof, of the officers of Borrower who are authorized to give Notices of Borrowing, Continuation/Conversion Notices, Closing Pricing Certificate, Compliance Certificates and all other notices, requests, reports, consents, certifications and authorizations on behalf of the Borrower, each individually an “Authorized Officer” and collectively the “Authorized Officers”, and (v) an original closing certificate (“Closing Certificate”), substantially in the form of the Closing Certificate marked “Exhibit H”, affixed hereto and by this reference incorporated herein and made a part hereof, duly executed by an Authorized Officer of Borrower.

 

Section 3.06.         Opinion of Counsel .  Opinion of counsel to the Borrower and Guarantor, dated as of the Restatement Effective Date and addressed to the Agent Bank on behalf of itself and each of the Banks, together with their respective successors and assigns, substantially in the form of the legal opinion marked “Exhibit J”, affixed hereto and by this reference incorporated herein and made a part hereof.

 

Section 3.07.         Title Policy Endorsements .  As of the Restatement Effective Date, the Title Endorsements (or proforma commitment for the issuance thereof) consistent with the requirements of the Closing Instructions.

 

Section 3.08.         Survey .  If required by Title Insurance Company as a condition for the issuance of the Title Policy Endorsement in compliance with the Closing Instructions, a current boundary and location survey for the Real Property delivered to Agent Bank no less than ten (10) Banking Business Days prior to the Restatement Effective Date, which must (a) be certified to Agent Bank and the Title Insurance Company, (b) show the Real Property to be free of encroachments, overlaps, and other survey defects, (c) show the courses and distances of the lot lines for the Real Property, (d) show that all existing improvements are located within said lot and building lines, and (e) show the location  of all above and below ground easements, improvements, appurtenances, utilities, rights-of-way, water rights and ingress and

 

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egress, by reference to book and page numbers and/or filed map reference.  On or before the Restatement Effective Date, all other survey requirements of Title Insurance Company for the issuance of the Title Policy Endorsements.

 

Section 3.09.         Payment of Taxes .  Evidence satisfactory to Agent Bank that all past and current real and personal property taxes and assessments which are presently due and payable applicable to the Real Property have been paid in full.

 

Section 3.10.         Insurance .  Copies of declaration pages of each insurance policy, certified to be true and correct in all respects by an Authorized Officer of Borrower, together with original binders evidencing Borrower as the named insured, and original certificates of insurance, loss payee and mortgagee endorsements naming Agent Bank as mortgagee, loss payee and additional insured as required by the insurance provisions set forth in Section 5.09 of this Credit Agreement.

 

Section 3.11.         Payment of Fees and Existing Bank Loan .  Payment by Borrower to Agent Bank of the fees to the extent then due and payable on the Restatement Effective Date as provided in Section 2.10(a) hereinabove.  The Existing Lenders shall be fully reimbursed for their respective pro rata shares of all loans, advances, accrued interest, fees and other obligations outstanding under the Existing Bank Loan as of the Restatement Effective Date.

 

Section 3.12.         Reimbursement for Expenses and Fees .  Reimbursement by Borrower for all reasonable fees and out-of-pocket expenses incurred by Agent Bank in connection with the Credit Facility, including, but not limited to, escrow charges, title insurance premiums, environmental examinations, recording fees, appraisal fees, reasonable attorney’s fees of Henderson & Morgan, LLC and insurance consultant fees, and all other like fees and expenses remaining unpaid as of the Restatement Effective Date to the extent then due and payable on the Restatement Effective Date, provided that the amount then invoiced shall not thereafter preclude Borrower’s obligation to pay such costs and expenses relating to the closing of the Credit Facility following the Restatement Effective Date or to reimburse Agent Bank for the payment thereof.

 

Section 3.13.         Schedules of Spaceleases and Equipment Leases and Contracts .  The Schedules of Spaceleases (Schedule 4.15) and Equipment Leases and Contracts (Schedule 4.16) in each instance setting forth the name of the other party thereto, a brief description of each spacelease, equipment lease and contract and the commencement and ending date thereof.

 

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Section 3.14.         Phase I Environmental Site Assessments .