Exhibit 10.34

 

EXECUTION VERSION

 

AMENDMENT NO. 1

TO

FIRST LIEN CREDIT AGREEMENT

 

This AMENDMENT NO. 1 TO FIRST LIEN CREDIT AGREEMENT, dated as of March 3, 2010
(this “Amendment”), is entered into among CANNERY CASINO RESORTS, LLC, a Nevada
limited liability company (“CCR” or “Borrower”), WASHINGTON TROTTING
ASSOCIATION, INC., a Delaware corporation (“WTA” and, collectively with CCR, the
“Borrowers”), each Lender (as defined below) party hereto, and BANK OF AMERICA,
N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and L/C
Issuer, and amends the FIRST LIEN CREDIT AGREEMENT, dated as of May 18, 2007
(the “Credit Agreement”), among the Borrowers, each lender from time to time
party thereto (collectively, the “Lenders” and individually, a “Lender”), and
BANK OF AMERICA, N.A., as Administrative Agent, Collateral Agent, Swing Line
Lender and L/C Issuer, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as
Syndication Agent and CIT LENDING SERVICES CORPORATION, COMMERZBANK AG, LOS
ANGELES BRANCH and NEVADA STATE BANK, as Co-Documentation Agents.  Capitalized
terms used and not otherwise defined herein shall have the meanings assigned to
them in the Credit Agreement.  Banc of America Securities LLC is the sole
arranger (in such capacity, the “Arranger”) and book running manager for this
Amendment.

 

WHEREAS, the Borrowers, the Administrative Agent and the undersigned Lenders,
constituting the Required Lenders, wish to amend the Credit Agreement to effect
the changes described below; and

 

WHEREAS, Section 10.01 of the Credit Agreement permits the Credit Agreement to
be amended from time to time.

 

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

 

Section 1.              Amendments to Credit Agreement.  As of the Amendment No.
1 Effective Date (as defined below), the Credit Agreement shall be amended as
follows:

 

(A)           SECTION 1.01 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY DELETING
THE DEFINITIONS OF “INCREASE EFFECTIVE DATE”, “INCREASE OPTION AMOUNT” AND
“REPRICING TRANSACTION”.

 

(B)           SECTION 1.01 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY ADDING
THE FOLLOWING NEW DEFINITIONS TO APPEAR IN PROPER ALPHABETICAL ORDER:

 

“Amendment No. 1 Effective Date” means March 3, 2010.

 

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“Cage Cash” means the amount of cash reasonably determined by the Borrowers as
necessary to operate their respective gaming businesses.

 

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with
respect to the L/C Issuer, such Defaulting Lender’s Applicable Percentage of the
outstanding L/C Obligations other than L/C Obligations as to which such
Defaulting Lender’s participation obligation has been reallocated to other
Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with
respect to the Swing Line Lender, such Defaulting Lender’s Applicable Percentage
of Swing Line Loans other than Swing Line Loans as to which such Defaulting
Lender’s participation obligation has been reallocated to other Lenders or Cash
Collateralized in accordance with the terms hereof.

 

“Permitted Auction Rate Securities” means Investments by the Borrowers in
auction rate securities existing on the Amendment No. 1 Effective Date in an
aggregate principal amount of approximately $13,000,000, which amount shall be
reduced dollar-for-dollar upon the maturity or monetization of such auction rate
securities.

 

“Permitted Meadows Transaction” means a transaction pursuant to which CCR
Pennsylvania Racing, Inc. sells, leases or assigns up to 5.0 acres of the
Meadows Property (the “Subject Parcel”) to a third-party, which third-party
shall not be an Affiliate of the Borrowers, which may create easements,
licenses, covenants and rights-of-way of the type described in clause (p) of the
definition of “Permitted Liens” for the development, construction and operation
of a hotel on the Subject Parcel, subject to the following conditions:

 

(a)           the hotel will be situated on the Subject Parcel, which will be
substantially contiguous to the north side of the Permanent Meadows Casino
location, it being understood that the Borrowers may alter the location of the
Subject Parcel in its reasonable discretion in accordance with the other
provisions of the Credit Agreement;

 

(b)           such sale, lease or assignment, as the case may be, of the Subject
Parcel shall be for consideration determined by the Borrowers in their sole
discretion and may be at no cost or a below-market price; provided that such
transaction is reasonably calculated to result in a hotel development that will
not materially (i) impair the value or marketability of the remainder of the
Meadows Property encumbered by the Meadows Property Mortgage, (ii) interfere
with the ordinary conduct of the business of the Permanent Meadows Casino or
(iii) impair the enforceability of the Administrative Agent’s mortgage lien on
the remainder of the Meadows Property encumbered by the Meadows Property
Mortgage;

 

(c)           the applicable Loan Party shall deliver the following items in
connection with the sale, lease or assignment of the Subject Parcel, each in
form and substance reasonably satisfactory to the Administrative Agent:
(i) copies of the applicable deed, lease or assignment, as the case may be,
together with copies of any other agreements or documents

 

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executed in connection with the consummation of such transaction as shall be
reasonably requested by the Administrative Agent, (ii) such subordination,
non-disturbance and attornment agreements, estoppel certificates, consents,
approvals, amendments, memoranda of lease or other instruments as shall be
reasonably requested by the Administrative Agent, (iii) such documentation as
the Borrowers may have and receive from time to time regarding the status of
construction of the hotel, and (iv) any other agreements or documents reasonably
requested by the Administrative Agent to ensure the continuing priority of the
Administrative Agent’s first-priority lien on and security interest in the
applicable Loan Party’s right, title and interest in the Real Property
encumbered by the Meadows Property Mortgage (including, without limitation, to
the extent the Administrative Agent reasonably deems necessary, amendments to
the Meadows Property Mortgage to encumber the applicable Loan Party’s right,
title and interest in, to and under any easement, license, covenant and
right-of-way granted or entered into in connection with the development,
construction and operation of a hotel on the Subject Parcel) and to confirm the
perfection, validity, effectiveness and priority thereof;

 

(d)           the applicable Loan Party shall deliver the following items with
respect to the Meadows Property, each in form and substance reasonably
satisfactory to the Administrative Agent: (i) an endorsement to the Mortgage
Policy for the Meadows Property relating to the enforceability of the
Administrative Agent’s first-priority mortgage lien on the remainder of the
Meadows Property encumbered by the Meadows Property Mortgage, together with such
affidavits, certificates and instruments of indemnification as shall be
reasonably requested by the Administrative Agent, and (ii) an updated ALTA
survey of the remainder of the Meadows Property and the Subject Parcel;

 

(e)           both before and after giving effect to such transactions, no
Default or Event of Default shall have occurred and be continuing; and

 

(f)            100% of the Net Cash Proceeds from any such transactions shall be
used to repay the Term Loan in accordance with the provisions of
Section 2.07(b)(I).

 

“Series C Preferred Units” means the Series C Non-Participating Units of CCR.

 

(C)           SECTION 1.01 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
RESTATING THE DEFINITION OF “AGGREGATE REVOLVING COMMITMENTS” AND IN ITS
ENTIRETY AS FOLLOWS:

 

“AGGREGATE REVOLVING COMMITMENTS” SHALL MEAN THE REVOLVING COMMITMENTS OF ALL
REVOLVING LENDERS.  AS OF THE AMENDMENT NO. 1 EFFECTIVE DATE, THE AGGREGATE
REVOLVING COMMITMENTS ARE $70,000,000.

 

(D)           SECTION 1.01 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
RESTATING THE DEFINITION OF “APPLICABLE RATE” IN ITS ENTIRETY AS FOLLOWS:

 

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“APPLICABLE RATE” SHALL MEAN (A) WITH RESPECT TO THE TERM LOANS (I) 4.25% PER
ANNUM, IN THE CASE OF EURODOLLAR RATE LOANS, AND (II) 3.25% PER ANNUM, IN THE
CASE OF BASE RATE LOANS AND (B) WITH RESPECT TO THE REVOLVING LOANS, (I) 4.25%
PER ANNUM, IN THE CASE OF EURODOLLAR RATE LOANS, AND (II) 3.25% IN THE CASE OF
BASE RATE LOANS.

 

(E)           SECTION 1.01 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
RESTATING THE DEFINITION OF “CASH COLLATERALIZE” IN ITS ENTIRETY AS FOLLOWS:

 

“CASH COLLATERALIZE” MEANS TO PLEDGE AND DEPOSIT WITH OR DELIVER TO THE
ADMINISTRATIVE AGENT, FOR THE BENEFIT OF THE L/C ISSUER OR SWING LINE LENDER (AS
APPLICABLE), AS COLLATERAL FOR L/C OBLIGATIONS, OBLIGATIONS IN RESPECT OF SWING
LINE LOANS (AS THE CONTEXT MAY REQUIRE), CASH OR DEPOSIT ACCOUNT BALANCES OR, IF
THE L/C ISSUER OR SWING LINE LENDER BENEFITING FROM SUCH COLLATERAL SHALL AGREE
IN ITS SOLE DISCRETION, OTHER CREDIT SUPPORT, IN EACH CASE PURSUANT TO
DOCUMENTATION IN FORM AND SUBSTANCE SATISFACTORY TO (A) THE ADMINISTRATIVE AGENT
AND (B) THE L/C ISSUER OR THE SWING LINE LENDER (AS APPLICABLE).  “CASH
COLLATERAL” SHALL HAVE A MEANING CORRELATIVE TO THE FOREGOING AND SHALL INCLUDE
THE PROCEEDS OF SUCH CASH COLLATERAL AND OTHER CREDIT SUPPORT.

 

(F)            SECTION 1.01 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
RESTATING THE DEFINITION OF “DEFAULTING LENDER” IN ITS ENTIRETY AS FOLLOWS:

 

“Defaulting Lender” means, subject to Section 2.16(b), any Lender that, as
determined by the Administrative Agent, (a) has failed to perform any of its
funding obligations hereunder including in respect of its Loans or
participations in respect of Letters of Credit or Swing Line Loans within three
Business Days of the date required to be funded by it hereunder, (b) has
notified the Borrowers or the Administrative Agent that it does not intend to
comply with its funding obligations or has made a public statement to that
effect with respect to its funding obligations hereunder or under other
agreements in which it commits to extend credit, (c) has failed, within three
Business Days after request by the Administrative Agent, to confirm in a manner
satisfactory to the Administrative Agent, that it will comply with its funding
obligations, or (d) has, or has a direct or indirect parent company (unless such
Lender demonstrates to the reasonable satisfaction of the Administrative Agent
and the Borrowers that its access to funds shall continue notwithstanding any of
the following actions by its parent) that has, after the Amendment No. 1
Effective Date (i) become the subject of a proceeding under any Debtor Relief
Law, (ii) had a receiver, conservator, trustee, administrator, assignee for the
benefit of creditors or similar Person charged with reorganization or
liquidation of its business or a custodian appointed for it, or (iii) taken any
action in furtherance of, or indicated its consent to, approval of or
acquiescence in any such proceeding or appointment; provided that a Lender shall
not be a Defaulting Lender solely by virtue of the ownership or acquisition of
any equity interest in that Lender or any direct or indirect parent company
thereof by a Governmental Authority; and provided further that a Lender
described in this clause (d) shall not continue to be a Defaulting Lender upon
its providing reasonable

 

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assurances satisfactory to the Administrative Agent and the Borrowers that it
will comply with its funding obligations hereunder, including without limitation
any confirmation that such persons may require from a bankruptcy court or
trustee.

 

(G)           SECTION 1.01 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY AMENDING
THE DEFINITION OF “PERMITTED HOLDERS” BY ADDING THE WORDS “CROWN LIMITED, CROWN
CCR GROUP INVESTMENTS ONE, LLC, CROWN CCR GROUP INVESTMENTS TWO, LLC” AFTER THE
WORD “OCM” IN SUCH DEFINITION.

 

(H)           SECTION 1.01 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY AMENDING
THE DEFINITION OF “PERMITTED LIENS” BY (I) DELETING THE WORD “AND” AT THE END OF
CLAUSE (N) OF SUCH DEFINITION, (II) REPLACING THE “.” AT THE END OF CLAUSE
(O) OF SUCH DEFINITION WITH “; AND” AND (III) INSERTING THE FOLLOWING TEXT AS
NEW CLAUSE (P):

 

“(p)         commercially reasonable reciprocal easements, licenses, covenants,
rights-of-way, restrictions and other similar encumbrances created or modified
in connection with the Permitted Meadows Transaction that shall not materially
interfere with the ordinary conduct of the business of the Permanent Meadows
Casino.”

 

(I)            SECTION 2.03(A)(III)(F) OF THE CREDIT AGREEMENT IS HEREBY
RESTATED ENTIRETY AS FOLLOWS:

 

(F)           ANY LENDER IS AT THAT TIME A DEFAULTING LENDER, UNLESS THE L/C
ISSUER HAS ENTERED INTO ARRANGEMENTS, WHICH MAY INCLUDE THE DELIVERY OF CASH
COLLATERAL, SATISFACTORY TO THE L/C ISSUER (IN ITS SOLE DISCRETION) WITH THE
BORROWERS OR SUCH LENDER TO ELIMINATE THE L/C ISSUER’S FRONTING EXPOSURE (AFTER
GIVING EFFECT TO SECTION 2.16(A)(IV)) WITH RESPECT TO THE DEFAULTING LENDER
ARISING FROM EITHER THE LETTER OF CREDIT THEN PROPOSED TO BE ISSUED OR THAT
LETTER OF CREDIT AND ALL OTHER L/C OBLIGATIONS AS TO WHICH THE L/C ISSUER HAS
ACTUAL OR POTENTIAL FRONTING EXPOSURE FROM SUCH DEFAULTING LENDER.

 

(J)            SECTION 2.03(G) OF THE CREDIT AGREEMENT IS HEREBY DELETED IN ITS
ENTIRETY AND REPLACED WITH “[RESERVED].”

 

(K)           SECTION 2.03(I) OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
INSERTING THE FOLLOWING TEXT IMMEDIATELY BEFORE THE PERIOD AT THE END OF THE
FIRST SENTENCE OF SUCH SECTION:

 

“PROVIDED, HOWEVER, ANY LETTER OF CREDIT FEES OTHERWISE PAYABLE FOR THE ACCOUNT
OF A DEFAULTING LENDER WITH RESPECT TO ANY LETTER OF CREDIT AS TO WHICH SUCH
DEFAULTING LENDER HAS NOT PROVIDED CASH COLLATERAL SATISFACTORY TO THE L/C
ISSUER PURSUANT TO THIS SECTION 2.03 SHALL BE PAYABLE, TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAW, TO THE OTHER LENDERS IN ACCORDANCE WITH THE UPWARD
ADJUSTMENTS IN THEIR RESPECTIVE APPLICABLE PERCENTAGES ALLOCABLE TO SUCH LETTER
OF CREDIT PURSUANT TO SECTION 2.16(A)(IV), WITH THE BALANCE OF SUCH FEE, IF ANY,
PAYABLE TO THE L/C ISSUER FOR ITS OWN ACCOUNT”

 

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(L)            SECTION 2.05(E) OF THE CREDIT AGREEMENT IS HEREBY RESTATED IN ITS
ENTIRETY AS FOLLOWS:

 

“(E)         UPON ANY VOLUNTARY PREPAYMENT OF THE TERM LOANS (IN WHOLE OR IN
PART, INCLUDING PURSUANT TO A REFINANCING THEREOF) AT ANY TIME PRIOR TO THE
18-MONTH ANNIVERSARY OF THE AMENDMENT NO. 1 EFFECTIVE DATE WITH THE PROCEEDS
RECEIVED FROM ISSUANCE OF ANY INDEBTEDNESS, BORROWERS SHALL PAY A PREMIUM EQUAL
TO 1.00% OF THE PRINCIPAL AMOUNT OF ANY PORTION OF SUCH TERM LOANS VOLUNTARILY
PREPAID.”

 

(M)          SECTION 2.07(A) OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
DELETING THE TEXT “, PLUS, (III) FOLLOWING EACH INCREASE EFFECTIVE DATE, IF ANY,
THE AGGREGATE PRINCIPAL AMOUNT OF INCREASED TERM LOANS ADVANCED ON SUCH INCREASE
EFFECTIVE DATE” FROM THE FIRST SENTENCE OF SUCH SECTION.

 

(N)           SECTION 2.07(B)(B) OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
REPLACING “25%” AND “0%” IN SUCH SECTION WITH “75%” AND “50%”, RESPECTIVELY.

 

(O)           SECTION 2.07(B)(C) OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
REPLACING THE TABLE IN SUCH SECTION WITH THE FOLLOWING:

 

Consolidated Total
Leverage Ratio

 

Percentage of
Excess Cash Flow

 

 

 

 

 

Greater than or equal to 5.0x

 

100

%

 

 

 

 

Less than 5.0x

 

50

%

 

(P)           SECTION 2.07(B)(D) OF THE CREDIT AGREEMENT IS HEREBY RESTATED IN
ITS ENTIRETY AS FOLLOWS:

 

(D)          WITHIN FIVE BUSINESS DAYS AFTER RECEIPT THEREOF, THE BORROWERS
SHALL MAKE A MANDATORY PREPAYMENT OF THE LOANS BY AN AMOUNT EQUAL TO 100% OF THE
NET CASH PROCEEDS RECEIVED FROM ISSUANCE OF (I) ANY INDEBTEDNESS (OTHER THAN
INDEBTEDNESS PERMITTED UNDER SECTION 7.03) OR (II) SUBORDINATED DEBT OR
UNSECURED INDEBTEDNESS INCURRED PURSUANT TO SECTION 7.03(G); PROVIDED THAT SUCH
AMOUNT SHALL EQUAL 50% OF SUCH NET CASH PROCEEDS SO LONG AS THE CONSOLIDATED
TOTAL LEVERAGE RATIO (DETERMINED BY REFERENCE TO THE MOST RECENT COMPLIANCE
CERTIFICATE DELIVERED IN ACCORDANCE WITH SECTION 6.02(B)) IS LESS THAN 4.5X;

 

(Q)           SECTION 2.07(B) OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
ADDING NEW PARAGRAPH (H) AS FOLLOWS:

 

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“(H)        WITHIN FIVE BUSINESS DAYS AFTER RECEIPT THEREOF, THE BORROWERS SHALL
MAKE A MANDATORY PREPAYMENT OF THE LOANS BY AN AMOUNT EQUAL TO 100% OF THE NET
CASH PROCEEDS RECEIVED FROM THE ISSUANCE OF PERMITTED CURE SECURITIES PURSUANT
TO SECTION 8.04, WHICH AMOUNT SHALL NOT BE LESS THAN THE CURE AMOUNT.”

 

(R)            SECTION 2.07(B) OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
ADDING NEW PARAGRAPH (I) AS FOLLOWS:

 

“(I)          WITHIN FIVE BUSINESS DAYS AFTER RECEIPT THEREOF, THE BORROWERS OR
THE APPLICABLE LOAN PARTY SHALL MAKE A MANDATORY PREPAYMENT OF THE TERM LOANS BY
AN AMOUNT EQUAL TO 100% OF THE NET CASH PROCEEDS RECEIVED FROM A PERMITTED
MEADOWS TRANSACTION.”

 

(S)           SECTION 2.07 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY ADDING
NEW CLAUSE (F) AS FOLLOWS:

 

“(F)          THE BORROWERS SHALL REPAY THE REVOLVING LOANS AND/OR CASH
COLLATERALIZE L/C OBLIGATIONS IN ACCORDANCE WITH SECTION 7.16.”

 

(T)            SECTION 2.09(A) OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
(I) REPLACING THE TEXT “THE APPLICABLE RATE” IN THE FIRST SENTENCE OF SUCH
SECTION WITH THE TEXT “0.50% PER ANNUM” AND (II) DELETING THE LAST SENTENCE OF
SUCH SECTION IN ITS ENTIRETY.

 

(U)           SECTION 2.13 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
RESTATING CLAUSE (II) OF SUCH SECTION IN ITS ENTIRETY AS FOLLOWS:

 

“(II) THE PROVISIONS OF THIS SECTION SHALL NOT BE CONSTRUED TO APPLY TO (X) ANY
PAYMENT MADE BY THE BORROWERS PURSUANT TO AND IN ACCORDANCE WITH THE EXPRESS
TERMS OF THIS AGREEMENT (INCLUDING THE APPLICATION OF FUNDS ARISING FROM THE
EXISTENCE OF A DEFAULTING LENDER), (Y) THE APPLICATION OF CASH COLLATERAL
PROVIDED FOR IN SECTION 2.14, OR (Z) ANY PAYMENT OBTAINED BY A LENDER AS
CONSIDERATION FOR THE ASSIGNMENT OF OR SALE OF A PARTICIPATION IN ANY OF ITS
COMMITTED LOANS OR SUBPARTICIPATIONS IN L/C OBLIGATIONS OR SWING LINE LOANS TO
ANY ASSIGNEE OR PARTICIPANT, OTHER THAN TO THE BORROWERS OR ANY SUBSIDIARY
THEREOF (AS TO WHICH THE PROVISIONS OF THIS SECTION SHALL APPLY).”

 

(V)           SECTION 2.14 OF THE CREDIT AGREEMENT IS HEREBY RESTATED IN ITS
ENTIRETY AS FOLLOWS:

 

“2.14      Cash Collateral.

 

(a)           Certain Credit Support Events.  Upon the request of the
Administrative Agent or the L/C Issuer (i) if the L/C Issuer has honored any
full or partial drawing request under any Letter of Credit and such drawing has
resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration
Date, any L/C Obligation for any reason remains

 

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outstanding, the Borrowers shall, in each case, immediately Cash Collateralize
the then Outstanding Amount of all L/C Obligations.  At any time that there
shall exist a Defaulting Lender, immediately upon the request of the
Administrative Agent, the L/C Issuer or the Swing Line Lender, the Borrowers
shall deliver to the Administrative Agent Cash Collateral in an amount
sufficient to cover all Fronting Exposure (after giving effect to
Section 2.16(a)(iv) and any Cash Collateral provided by the Defaulting Lender).

 

(b)           Grant of Security Interest.  All Cash Collateral (other than
credit support not constituting funds subject to deposit) shall be maintained in
blocked, non-interest bearing deposit accounts at a depository institution
selected by the Administrative Agent.  The Borrowers, and to the extent Cash
Collateral is provided by any Lender, such Lender, hereby grants to (and
subjects to the control of) the Administrative Agent, for the benefit of the
Administrative Agent, the L/C Issuer and the Lenders (including the Swing Line
Lender), and agrees to maintain, a first priority security interest in all such
cash, deposit accounts and all balances therein, and all other property so
provided as collateral pursuant hereto, and in all proceeds of the foregoing,
all as security for the obligations to which such Cash Collateral may be applied
pursuant to Section 2.14(c).  If at any time the Administrative Agent determines
that Cash Collateral is subject to any right or claim of any Person other than
the Administrative Agent as herein provided (other than the liens of the
depository institution), or that the total amount of such Cash Collateral is
less than the applicable Fronting Exposure and other obligations secured
thereby, the Borrowers or the relevant Defaulting Lender will, promptly upon
demand by the Administrative Agent, pay or provide to the Administrative Agent
additional Cash Collateral in an amount sufficient to eliminate such deficiency.

 

(c)           Application.  Notwithstanding anything to the contrary contained
in this Agreement, Cash Collateral provided under any of this Section 2.14 or
Sections 2.03, 2.04, 2.05, 2.16 or 8.02 in respect of Letters of Credit or Swing
Line Loans shall be held and applied to the satisfaction of the specific L/C
Obligations, Swing Line Loans, obligations to fund participations therein
(including, as to Cash Collateral provided by a Defaulting Lender, any interest
accrued on such obligation) and other obligations for which the Cash Collateral
was so provided, prior to any other application of such property as may be
provided for herein.

 

(d)           Release.  Cash Collateral (or the appropriate portion thereof)
provided to reduce Fronting Exposure or other obligations shall be released
promptly following (i) the elimination of the applicable Fronting Exposure or
other obligations giving rise thereto (including by the termination of
Defaulting Lender status of the applicable Lender (or, as appropriate, its
assignee following compliance with Section 10.06(b)(v))) or (ii) when the
Administrative Agent shall determine in good faith that there exists excess Cash
Collateral; provided, however, (x) that Cash Collateral furnished by or on
behalf of a Loan Party shall not be released during the continuance of a Default
or Event of Default (and following application as provided in this Section 2.14
may be otherwise applied in

 

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accordance with Section 8.03), and (y) the Person providing Cash Collateral and
the L/C Issuer or Swing Line Lender, as applicable, may agree that Cash
Collateral shall not be released but instead held to support future anticipated
Fronting Exposure or other obligations.”

 

(W)          ARTICLE II OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY ADDING A
NEW SECTION 2.16 AS FOLLOWS:

 

“2.16      Defaulting Lenders.  (a)  Adjustments.  Notwithstanding anything to
the contrary contained in this Agreement, if any Lender becomes a Defaulting
Lender, then, until such time as that Lender is no longer a Defaulting Lender,
to the extent permitted by applicable Law:(i)   Waivers and Amendments.  That
Defaulting Lender’s right to approve or disapprove any amendment, waiver or
consent with respect to this Agreement shall be restricted as set forth in
Section 10.01.

 

(ii)           Reallocation of Payments. Any payment of principal, interest,
fees or other amounts received by the Administrative Agent for the account of
that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article VIII or otherwise, and including any amounts made available to the
Administrative Agent by that Defaulting Lender pursuant to Section 10.08), shall
be applied at such time or times as may be determined by the Administrative
Agent as follows: first, to the payment of any amounts owing by that Defaulting
Lender to the Administrative Agent hereunder; second, to the payment on a pro
rata basis of any amounts owing by that Defaulting Lender to the L/C Issuer or
Swing Line Lender hereunder; third, if so determined by the Administrative Agent
or requested by an L/C Issuer or Swing Line Lender, to be held as Cash
Collateral for future funding obligations of that Defaulting Lender of any
participation in any Swing Line Loan or Letter of Credit; fourth, as the
Borrowers may request (so long as no Default or Event of Default exists), to the
funding of any Loan in respect of which that Defaulting Lender has failed to
fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent; fifth, if so determined by the Borrowers, with the consent
of the Administrative Agent, not to be unreasonably withheld, to be held in
escrow in a non-interest bearing deposit account and released in order to
satisfy obligations of that Defaulting Lender to fund Loans under this Agreement
(but only to the extent such Defaulting Lender is so obligated); sixth, to the
payment of any amounts owing to the Lenders, the L/C Issuer or Swing Line Lender
as a result of any judgment of a court of competent jurisdiction obtained by any
Lender, the L/C Issuer or Swing Line Lender against that Defaulting Lender as a
result of that Defaulting Lender’s breach of its obligations under this
Agreement; seventh, so long as no Default or Event of Default exists, to the
payment of any amounts owing to the Borrowers as a result of any judgment of a
court of competent jurisdiction obtained by the Borrowers against that
Defaulting Lender as a result of that Defaulting Lender’s breach of its
obligations under this Agreement; and eighth, to that Defaulting Lender or as
otherwise directed by a court of competent jurisdiction; provided that if
(x) such payment is a payment of the principal

 

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amount of any Loans or L/C Borrowings in respect of which that Defaulting Lender
has not fully funded its appropriate share and (y) such Loans or L/C Borrowings
were made at a time when the conditions set forth in Section 4.02 were satisfied
or waived, such payment shall be applied solely to pay the Loans of, and L/C
Borrowings owed to, all non-Defaulting Lenders on a pro rata basis prior to
being applied to the payment of any Loans, or L/C Borrowings owed to, that
Defaulting Lender.  Any payments, prepayments or other amounts paid or payable
to a Defaulting Lender that are applied (or placed in escrow) to pay amounts
owed by a Defaulting Lender or to post Cash Collateral pursuant to this
Section 2.16(a)(ii) shall be deemed paid to and redirected by that Defaulting
Lender, and each Lender irrevocably consents hereto.

 

(iii)          Certain Fees.  That Defaulting Lender (x) shall not be entitled
to receive any commitment fee pursuant to Section 2.09(a) for any period during
which that Lender is a Defaulting Lender (and the Borrowers shall not be
required to pay any such fee that otherwise would have been required to have
been paid to that Defaulting Lender) and (y) shall be limited in its right to
receive Letter of Credit Fees as provided in Section 2.03(i).

 

(iv)          Reallocation of Applicable Percentages to Reduce Fronting
Exposure.  During any period in which there is a Defaulting Lender, for purposes
of computing the amount of the obligation of each non-Defaulting Lender to
acquire, refinance or fund participations in Letters of Credit or Swing Line
Loans pursuant to Sections 2.03 and 2.04, the “Applicable Percentage” of each
non-Defaulting Lender shall be computed without giving effect to the Commitment
of that Defaulting Lender; provided, that, (i) each such reallocation shall be
given effect only if, at the date the applicable Lender becomes a Defaulting
Lender, no Default or Event of Default exists; and (ii) the aggregate obligation
of each non-Defaulting Lender to acquire, refinance or fund participations in
Letters of Credit and Swing Line Loans shall not exceed the positive difference,
if any, of (1) the Commitment of that non-Defaulting Lender minus (2) the
aggregate Outstanding Amount of the Committed Loans of that Lender.

 

(b)           Defaulting Lender Cure.  If the Borrowers, the Administrative
Agent, Swing Line Lender and the L/C Issuer agree in writing in their sole
discretion that a Defaulting Lender should no longer be deemed to be a
Defaulting Lender, the Administrative Agent will so notify the parties hereto,
whereupon as of the effective date specified in such notice and subject to any
conditions set forth therein (which may include arrangements with respect to any
Cash Collateral), that Lender will, to the extent applicable, purchase that
portion of outstanding Loans of the other Lenders or take such other actions as
the Administrative Agent may determine to be necessary to cause the Committed
Loans and funded and unfunded participations in Letters of Credit and Swing Line
Loans to be held on a pro rata basis by the Lenders in accordance with their
Applicable Percentages (without giving effect to Section 2.16(a)(iv)), whereupon
that Lender will cease to be a Defaulting Lender; provided that no adjustments
will be made retroactively with respect to fees accrued or payments made by or
on behalf of the Borrowers while that Lender was a Defaulting Lender; and
provided,

 

10

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further, that except to the extent otherwise expressly agreed by the affected
parties, no change hereunder from Defaulting Lender to Lender will constitute a
waiver or release of any claim of any party hereunder arising from that Lender’s
having been a Defaulting Lender.

 

(c)           Section 2.16 shall not limit any claim of any party hereto arising
from the Lender’s status as a Defaulting Lender.

 

(X)            SECTION 7.02(I) OF THE CREDIT AGREEMENT IS HEREBY RESTATED IN ITS
ENTIRETY AS FOLLOWS:

 

“(I)          INVESTMENTS IN UNRESTRICTED SUBSIDIARIES IN AN AGGREGATE AMOUNT OF
UP TO $45,000,000 IF (A) PRO FORMA FOR SUCH INVESTMENT, THE SUM OF AVAILABILITY
UNDER THE REVOLVING LOANS AND UNRESTRICTED BALANCE SHEET CASH (EXCLUDING CAGE
CASH) (THE “LIQUIDITY AMOUNT”) IS AT LEAST $35,000,000 AND (B) CCR’S
CONSOLIDATED TOTAL LEVERAGE RATIO (DETERMINED BY REFERENCE TO THE MOST RECENT
COMPLIANCE CERTIFICATE DELIVERED IN ACCORDANCE WITH SECTION 6.02(B)) IS LESS
THAN 4.5X.”

 

(Y)           SECTION 7.05 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
(I) DELETING THE WORD “AND” IMMEDIATELY AFTER THE “;” AT THE END OF CLAUSE
(I) OF SUCH SECTION, (II) INSERTING THE WORD “AND” IMMEDIATELY AFTER THE “;” AT
THE END OF CLAUSE (J) OF SUCH SECTION AND (III) ADDING THE FOLLOWING AS NEW
CLAUSE (K):

 

“(K)          THE PERMITTED MEADOWS TRANSACTION;”

 

(Z)            SECTION 7.06(F) OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
INSERTING THE TEXT “SO LONG AS THE CONSOLIDATED TOTAL LEVERAGE RATIO IS LESS
THAN OR EQUAL TO 4.5X,” IMMEDIATELY BEFORE THE TEXT “RESTRICTED PAYMENTS”.

 

(AA)         SECTION 7.06(G) OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
DELETING SUCH SECTION IN ITS ENTIRETY AND REPLACING IT WITH THE FOLLOWING:

 

“(G)         SO LONG AS (X) NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED
AND BE CONTINUING AT THE TIME THEREOF OR THAT WOULD RESULT THEREFROM AND (Y) THE
CONSOLIDATED TOTAL LEVERAGE RATIO IS LESS THAN 4.5X ON A PRO FORMA BASIS AFTER
GIVING EFFECT TO THE APPLICATION OF THE PROCEEDS AS SET FORTH BELOW, CCR MAY
DECLARE AND MAKE DIVIDEND PAYMENTS TO ANY DIRECT OWNER OF CCR’S EQUITY INTEREST
IN AN AGGREGATE AMOUNT NOT TO EXCEED 50% OF THE NET CASH PROCEEDS RECEIVED BY
CCR FROM THE CONCURRENT SALE OF ITS EQUITY INTEREST TO NON-AFFILIATED
THIRD-PARTIES; PROVIDED THAT AN EQUIVALENT PERCENTAGE OF SUCH NET CASH PROCEEDS
SHALL HAVE BEEN FIRST USED BY THE BORROWERS TO MANDATORILY PREPAY THE LOANS.”

 

(BB)         SECTION 7.06 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
(I) DELETING THE WORD “AND” IMMEDIATELY AFTER THE “;” AT THE END OF CLAUSE
(F) OF SUCH SECTION, (II) REPLACING THE

 

11

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“.” AT THE END OF CLAUSE (G) OF SUCH SECTION WITH “;” AND (III) ADDING THE
FOLLOWING AS NEW CLAUSES (H), (I) AND (J):

 

“(H)         CCR MAY DECLARE AND MAKE DIVIDEND PAYMENTS TO ANY DIRECT OWNERS OF
CCR’S EQUITY INTERESTS FROM THE NET CASH PROCEEDS RECEIVED BY CCR FROM THE
SUBSTANTIALLY CONCURRENT SALE OF ITS EQUITY INTERESTS TO NON-AFFILIATED
THIRD-PARTIES FROM THE EFFECTIVE DATE TO THE AMENDMENT NO. 1 EFFECTIVE DATE;

 

(I)            CCR MAY MAKE A ONE TIME PAYMENT TO MAGNA ENTERTAINMENT
CORPORATION (“MAGNA”) IN AN AMOUNT NOT TO EXCEED $5,000,000 IN EXCHANGE FOR
COMPLETE RESOLUTION OF MAGNA’S CLAIMS UNDER THE HOLDBACK AGREEMENT AND A FULL
RELEASE OF ALL CLAIMS BY MAGNA TO ADDITIONAL AND/OR FUTURE PAYMENT UNDER THE
HOLDBACK AGREEMENT; AND

 

(J)            CCR MAY DECLARE AND MAKE DIVIDEND PAYMENTS OR OTHER DISTRIBUTIONS
ON ACCOUNT OF THE SERIES C PREFERRED UNITS PAYABLE IN ADDITIONAL SERIES C
PREFERRED UNITS.”

 

(CC)         SECTION 7.06 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY DELETING
LAST PARAGRAPH OF SUCH SECTION IN ITS ENTIRETY.

 

(DD)         SECTION 7.11(B) OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
REPLACING THE LAST NINE ROWS IN THE TABLE SET FORTH IN SUCH SECTION WITH THE
FOLLOWING:

 

Date

 

Ratio

 

December 31, 2009

 

6.00 to 1.00

 

March 31, 2010

 

7.75 to 1.00

 

June 30, 2010

 

8.30 to 1.00

 

September 30, 2010

 

8.30 to 1.00

 

December 31, 2010

 

8.30 to 1.00

 

March 31, 2011

 

7.90 to 1.00

 

June 30, 2011

 

7.50 to 1.00

 

September 30, 2011

 

7.00 to 1.00

 

December 31, 2011

 

6.50 to 1.00

 

March 31, 2012

 

6.50 to 1.00

 

June 30, 2012

 

6.25 to 1.00

 

September 30, 2012

 

6.00 to 1.00

 

December 31, 2012 and thereafter

 

5.75 to 1.00

 

 

12

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(EE)         SECTION 7.11 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY ADDING A
NEW PARAGRAPH (C) AS FOLLOWS:

 

“(C)         MINIMUM EBITDA.  PERMIT THE CONSOLIDATED EBITDA FOR THE
TWELVE-MONTH PERIOD ENDING AS OF THE ENDING DATE OF ANY FISCAL QUARTER SET FORTH
BELOW TO BE LESS THAN THE AMOUNT SET FORTH BELOW OPPOSITE THE ENDING DATE OF
SUCH TWELVE-MONTH PERIOD:

 

Twelve-Month Period Ending

 

Consolidated EBITDA

 

December 31, 2009

 

$

80.0

 

March 31, 2010

 

$

62.0

 

June 30, 2010

 

$

60.0

 

September 30, 2010

 

$

58.0

 

December 31, 2010

 

$

58.0

 

March 31, 2011

 

$

60.0

 

June 30, 2011

 

$

63.0

 

September 30, 2011

 

$

66.0

 

December 31, 2011 and thereafter

 

$

70.0

 

 

(FF)           SECTION 7.12 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
DELETING SUCH SECTION IN ITS ENTIRETY AND REPLACING IT WITH THE FOLLOWING:

 

“7.12      CAPITAL EXPENDITURES.  MAKE OR BECOME LEGALLY OBLIGATED TO MAKE ANY
EXPENDITURE IN RESPECT OF THE PURCHASE OR OTHER ACQUISITION OF ANY FIXED OR
CAPITAL ASSET EXCEPT FOR (A) MAINTENANCE CAPITAL EXPENDITURES IN ANY FISCAL YEAR
IN AN AMOUNT NOT TO EXCEED 5% OF THE BORROWERS’ CONSOLIDATED NET REVENUE FOR THE
MOST RECENT FISCAL YEAR FOR WHICH A COMPLIANCE CERTIFICATE HAS BEEN DELIVERED
PURSUANT TO SECTION 6.02(B), (B) CAPITAL EXPENDITURES OF UP TO $20,000,000 IN
CONNECTION WITH THE ACQUISITION OF TABLE GAMING LICENSES IN PENNSYLVANIA,
(C) CAPITAL EXPENDITURES OF UP TO $5,000,000 FOR THE PURCHASE OF TABLE GAMES AND
RELATED EQUIPMENT FOR THE PERMANENT MEADOWS CASINO AND (D) OTHER EXPANSION
CAPITAL EXPENDITURES IN AN AGGREGATE AMOUNT NOT TO EXCEED $15,000,000 FROM THE
AMENDMENT NO. 1 EFFECTIVE DATE THROUGH THE MATURITY DATE.”

 

(GG)         ARTICLE VII OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY ADDING A
NEW SECTION 7.16 AS FOLLOWS:

 

13

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“7.16      CASH MANAGEMENT.  HOLD CASH (EXCLUDING CAGE CASH) OR INVESTMENTS OF
THE TYPE DESCRIBED IN SECTION 7.02(A) (OTHER THAN PERMITTED AUCTION RATE
SECURITIES) IN AN AMOUNT IN EXCESS OF $15,000,000 FOR ANY PERIOD OF FIVE
(5) CONSECUTIVE BUSINESS DAYS (OR SUCH LONGER PERIOD AS THE ADMINISTRATIVE AGENT
MAY AGREE) DURING ANY TIME THAT REVOLVING LOANS OR SWING LINE LOANS ARE
OUTSTANDING.  ANY AMOUNT OF CASH AND/OR SUCH INVESTMENTS IN EXCESS OF
$15,000,000 HELD BY THE BORROWERS OR ANY RESTRICTED SUBSIDIARY FOR GREATER THAN
FIVE (5) CONSECUTIVE BUSINESS DAYS (OR SUCH LONGER PERIOD AS THE ADMINISTRATIVE
AGENT MAY AGREE) SHALL BE APPLIED TO REPAY REVOLVING LOANS AND/OR CASH
COLLATERALIZE LETTERS OF CREDIT IN ACCORDANCE WITH SECTION 2.07(F).”

 

(HH)         SECTION 8.03 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
(I) INSERTING THE TEXT “, SUBJECT TO THE PROVISIONS OF SECTIONS 2.14 AND 2.16,”
IMMEDIATELY AFTER THE WORD “SHALL” AND IMMEDIATELY BEFORE THE WORD “BE” IN THE
FIRST SENTENCE OF SUCH SECTION AND (II) INSERTING THE TEXT “TO THE EXTENT NOT
OTHERWISE CASH COLLATERALIZED BY THE BORROWERS PURSUANT TO SECTIONS 2.03 AND
2.14” IMMEDIATELY BEFORE THE SEMICOLON AT THE END OF CLAUSE FIFTH OF SUCH
SECTION.

 

(II)           SECTION 8.04 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
DELETING SUCH SECTION IN ITS ENTIRETY AND REPLACING IT WITH THE FOLLOWING:

 

8.04        EQUITY CURE.  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN
SECTION 8.01 OR ANY OTHER PROVISION OF THIS AGREEMENT, IN THE EVENT THAT CCR
FAILS TO COMPLY (OR BELIEVES IT MAY FAIL TO COMPLY) WITH ANY FINANCIAL COVENANT
CONTAINED IN SECTION 7.11, CCR SHALL HAVE THE RIGHT ON ONE OR MORE OCCASIONS
FROM THE AMENDMENT NO. 1 EFFECTIVE DATE UNTIL THE TERM LOAN MATURITY DATE,
INCLUDING DURING THE APPLICABLE MEASUREMENT PERIOD THROUGH AND INCLUDING THE
10TH BUSINESS DAY AFTER THE DELIVERY OF A NOTICE OF ISSUANCE OF PERMITTED CURE
SECURITIES, TO ISSUE PERMITTED CURE SECURITIES FOR CASH IN AN AGGREGATE
PRINCIPAL AMOUNT NOT TO EXCEED $35,000,000 (COLLECTIVELY, THE “CURE RIGHT”), THE
NET CASH PROCEEDS OF WHICH SHALL BE APPLIED IN ACCORDANCE WITH
SECTION 2.07(B)(H), AND UPON THE LATER OF (A) THE APPLICATION BY CCR OF SUCH NET
CASH PROCEEDS AND (B) THE END OF THE RELEVANT MEASUREMENT PERIOD, SUCH FINANCIAL
COVENANT SHALL BE CALCULATED OR RECALCULATED, AS THE CASE MAY BE, GIVING EFFECT
TO THE FOLLOWING:

 

(i)          Consolidated EBITDA shall be increased, as provided in the
definition thereof, solely for the purpose of measuring compliance with the
financial covenants in Section 7.11 and will not be applied for any other
purpose under this Agreement, including but not limited to other provisions
hereof that are based upon the Consolidated Total Leverage Ratio in effect from
time to time, by an amount not to exceed the amount necessary to cure the
non-compliance or potential non-compliance (the “Cure Amount”), as applicable;

 

(ii)         if, after giving effect to the foregoing increase in Consolidated
EBITDA, CCR shall be in compliance with the requirements of such financial
covenant, CCR shall be deemed to have satisfied the requirements of such
financial

 

14

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covenant as of the end of the relevant Measurement Period and there shall be (or
shall be deemed to be) no applicable breach or default of such financial
covenant for all purposes of this Agreement and the other Loan Documents;

 

(iii)        Indebtedness shall not be deemed to have been repaid for purposes
of calculating the financial covenants for the applicable Measurement Period
with respect to which such Cure Right was exercised; and

 

(iv)        to the extent a fiscal quarter ended for which such financial
covenant is calculated giving effect to a Cure Amount is included in the
calculation of a financial covenant in a subsequent fiscal period, the Cure
Amount shall continue to be included in the amount of Consolidated EBITDA for
such fiscal quarter;

 

provided that CCR may not exercise such Cure Right in respect of more than six
fiscal quarters from and after the Amendment No. 1 Effective Date.  If CCR shall
have delivered a Notice of Issuance of Permitted Cure Securities in accordance
with Section 6.01(f), then (subject to the preceding sentence) the Lenders shall
not have the right to declare a Default or Event of Default or otherwise declare
the Loans due and payable and terminate the Commitments pursuant to Section 8.01
solely as a result of a Default under Section 7.11 until 10 Business Days
following the date of delivery of such Notice of Issuance of Permitted Cure
Securities, and then only if CCR has not applied the net cash proceeds of the
Cure Amount by such date.

 

(JJ)           SECTION 10.06(B) OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
DELETING THE WORD “AND” AT THE END OF CLAUSE (III) OF SUCH SECTION; REPLACING
THE “.” AT THE END OF CLAUSE (IV) OF SUCH SECTION WITH “; AND”; AND INSERTING
THE FOLLOWING TEXT AS A NEW CLAUSE (V):

 

(V)           CERTAIN ADDITIONAL PAYMENTS.  IN CONNECTION WITH ANY ASSIGNMENT OF
RIGHTS AND OBLIGATIONS OF ANY DEFAULTING LENDER HEREUNDER, NO SUCH ASSIGNMENT
SHALL BE EFFECTIVE UNLESS AND UNTIL, IN ADDITION TO THE OTHER CONDITIONS THERETO
SET FORTH HEREIN, THE PARTIES TO THE ASSIGNMENT SHALL MAKE SUCH ADDITIONAL
PAYMENTS TO THE ADMINISTRATIVE AGENT IN AN AGGREGATE AMOUNT SUFFICIENT, UPON
DISTRIBUTION THEREOF AS APPROPRIATE (WHICH MAY BE OUTRIGHT PAYMENT, PURCHASES BY
THE ASSIGNEE OF PARTICIPATIONS OR SUBPARTICIPATIONS, OR OTHER COMPENSATING
ACTIONS, INCLUDING FUNDING, WITH THE CONSENT OF THE BORROWERS AND THE
ADMINISTRATIVE AGENT, THE APPLICABLE PRO RATA SHARE OF LOANS PREVIOUSLY
REQUESTED BUT NOT FUNDED BY THE DEFAULTING LENDER, TO EACH OF WHICH THE
APPLICABLE ASSIGNEE AND ASSIGNOR HEREBY IRREVOCABLY CONSENT), TO (X) PAY AND
SATISFY IN FULL ALL PAYMENT LIABILITIES THEN OWED BY SUCH DEFAULTING LENDER TO
THE ADMINISTRATIVE AGENT OR ANY LENDER HEREUNDER (AND INTEREST ACCRUED THEREON)
AND (Y) ACQUIRE (AND FUND AS APPROPRIATE) ITS FULL PRO RATA SHARE OF ALL LOANS
AND PARTICIPATIONS IN LETTERS OF CREDIT AND SWING LINE LOANS IN ACCORDANCE WITH
ITS APPLICABLE PERCENTAGE. NOTWITHSTANDING THE FOREGOING, IN THE EVENT THAT ANY
ASSIGNMENT OF RIGHTS AND OBLIGATIONS OF ANY DEFAULTING LENDER HEREUNDER SHALL
BECOME EFFECTIVE UNDER APPLICABLE LAW WITHOUT COMPLIANCE WITH THE PROVISIONS OF
THIS PARAGRAPH, THEN THE ASSIGNEE OF SUCH INTEREST SHALL

 

15

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BE DEEMED TO BE A DEFAULTING LENDER FOR ALL PURPOSES OF THIS AGREEMENT UNTIL
SUCH COMPLIANCE OCCURS.

 

(KK)         SECTION 10.06(C) OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
INSERTING THE FOLLOWING NEW SENTENCE IMMEDIATELY BETWEEN THE SECOND AND THIRD
SENTENCES OF SUCH SECTION:

 

“IN ADDITION, THE ADMINISTRATIVE AGENT SHALL MAINTAIN ON THE REGISTER
INFORMATION REGARDING THE DESIGNATION, AND REVOCATION OF DESIGNATION, OF ANY
LENDER AS A DEFAULTING LENDER.”

 

(LL)           SECTION 10.06(D) OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY
INSERTING THE TEXT “, A DEFAULTING LENDER” IMMEDIATELY AFTER THE WORD “PERSON”
AND IMMEDIATELY BEFORE THE WORD “OR” IN THE FIRST SENTENCE OF SUCH SECTION.

 

(MM)       SECTION 10.08 OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY INSERTING
THE FOLLOWING TEXT IMMEDIATELY BEFORE THE PERIOD AT THE END OF THE FIRST
SENTENCE OF SUCH SECTION:

 

“PROVIDED, THAT IN THE EVENT THAT ANY DEFAULTING LENDER SHALL EXERCISE ANY SUCH
RIGHT OF SETOFF, (X) ALL AMOUNTS SO SET OFF SHALL BE PAID OVER IMMEDIATELY TO
THE ADMINISTRATIVE AGENT FOR FURTHER APPLICATION IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 2.16 AND, PENDING SUCH PAYMENT, SHALL BE SEGREGATED BY
SUCH DEFAULTING LENDER FROM ITS OTHER FUNDS AND DEEMED HELD IN TRUST FOR THE
BENEFIT OF THE ADMINISTRATIVE AGENT AND THE LENDERS, AND (Y) THE DEFAULTING
LENDER SHALL PROVIDE PROMPTLY TO THE ADMINISTRATIVE AGENT A STATEMENT DESCRIBING
IN REASONABLE DETAIL THE OBLIGATIONS OWING TO SUCH DEFAULTING LENDER AS TO WHICH
IT EXERCISED SUCH RIGHT OF SETOFF”

 

Section 2.              Amendments to Schedules and Exhibits.

 

(A)           SCHEDULE 2.01 TO THE CREDIT AGREEMENT IS HEREBY AMENDED BY
REPLACING THE COLUMNS ENTITLED “REVOLVING CREDIT COMMITMENT” AND “REVOLVING
CREDIT APPLICABLE PERCENTAGE” WITH THE RESPECTIVE COLUMNS ON SCHEDULE 2.01
HERETO.

 

Section 3.              Representations and Warranties.  On and as of the
Amendment No. 1 Effective Date, after giving effect to this Amendment, each
Borrower hereby represents and warrants to the Administrative Agent and each
Lender as follows:

 

(a)           this Amendment has been duly authorized, executed and delivered by
each Borrower and constitutes the legal, valid and binding obligations of each
Borrower enforceable against each Borrower in accordance with its terms and the
Credit Agreement as amended by this Amendment and constitutes the legal, valid
and binding obligation of each Borrower enforceable against each Borrower in
accordance with its terms;

 

(b)           each of the representations and warranties contained in Article V
(Representations and Warranties) of the Credit Agreement and each other Loan
Document is

 

16

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true and correct in all material respects on and as of the Amendment No. 1
Effective Date, as if made on and as of such date and except to the extent that
such representations and warranties specifically relate to a specific date, in
which case such representations and warranties shall be true and correct in all
material respects as of such specific date; provided, however, that references
therein to the “Credit Agreement” shall be deemed to refer to the Credit
Agreement as amended hereby and after giving effect to the consents and waivers
set forth herein;

 

(c)           no Default or Event of Default has occurred and is continuing; and

 

(d)           After giving effect to this Amendment, neither the modification of
the Credit Agreement effected pursuant to this Amendment nor the execution,
delivery, performance or effectiveness of this Amendment:

 

(I)            IMPAIRS THE VALIDITY, EFFECTIVENESS OR PRIORITY OF THE LIENS
GRANTED PURSUANT TO ANY LOAN DOCUMENT, AND SUCH LIENS CONTINUE UNIMPAIRED WITH
THE SAME PRIORITY TO SECURE REPAYMENT OF ALL OBLIGATIONS, WHETHER HERETOFORE OR
HEREAFTER INCURRED; OR

 

(II)           REQUIRES THAT ANY NEW FILINGS BE MADE OR OTHER ACTION TAKEN TO
PERFECT OR TO MAINTAIN THE PERFECTION OF SUCH LIENS OTHER THAN THE ACTIONS
REQUIRED BY SECTION 7 OF THIS AMENDMENT.

 

Section 4.              Affirmation of Obligations.  The undersigned hereby (i)
expressly acknowledges the terms of this Amendment, (ii) ratifies and confirms
its obligations under the Loan Documents (including guarantees and security
agreements) executed by the undersigned and (iii) acknowledges, renews and
extends its continued liability under all such Loan Documents and agrees such
Loan Documents remain in full force and effect.

 

Section 5.              Conditions to Effectiveness.  This Amendment shall
become effective as of the date when each of the following conditions is
satisfied (the “Amendment No. 1 Effective Date”):

 

(A)           THE ADMINISTRATIVE AGENT (OR ITS COUNSEL) SHALL HAVE RECEIVED FROM
THE REQUIRED LENDERS, THE L/C ISSUER, THE SWING LINE LENDER, THE BORROWERS AND
EACH OF THE OTHER PARTIES HERETO, A COUNTERPARTS OF THIS AMENDMENT SIGNED ON
BEHALF OF SUCH PARTY;

 

(B)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED PAYMENT OF A CONSENT
FEE ON BEHALF OF EACH LENDER CONSENTING TO THIS AMENDMENT IN AN AMOUNT EQUAL TO
0.50% OF THE AGGREGATE AMOUNT OF TERM LOANS AND/OR REVOLVING COMMITMENTS HELD BY
SUCH LENDER AFTER GIVING EFFECT TO THIS AMENDMENT;

 

17

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(C)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED REIMBURSEMENT OR
PAYMENT OF ALL FEES AND EXPENSES (INCLUDING THE REASONABLE FEES, CHARGES AND
DISBURSEMENTS OF CAHILL GORDON & REINDEL LLP) INCURRED IN CONNECTION WITH THIS
AMENDMENT;

 

(D)           ALL CORPORATE OR OTHER PROCEEDINGS TAKEN OR TO BE TAKEN IN
CONNECTION WITH THIS AMENDMENT AND ALL DOCUMENTS INCIDENTAL THERETO, WHETHER OR
NOT REFERRED TO HEREIN, SHALL BE REASONABLY SATISFACTORY IN FORM AND SUBSTANCE
TO THE ADMINISTRATIVE AGENT AND THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED
CERTIFIED TRUE AND COMPLETE COPIES OF THE CHARTER AND BY-LAWS AND ALL AMENDMENTS
THERETO (OR EQUIVALENT DOCUMENTS) OF EACH BORROWER AND OF ALL CORPORATE OR OTHER
AUTHORITY FOR EACH BORROWER (INCLUDING BOARD OF DIRECTORS (OR THE FUNCTIONAL
EQUIVALENT THEREOF) RESOLUTIONS WITH RESPECT TO THE EXECUTION, DELIVERY AND
PERFORMANCE OF THIS AMENDMENT AND EACH OTHER DOCUMENT TO BE DELIVERED BY EACH
BORROWER FROM TIME TO TIME IN CONNECTION HEREWITH AND THE EXTENSIONS OF CREDIT
HEREUNDER), CERTIFIED AS OF THE AMENDMENT NO. 1 EFFECTIVE DATE AS COMPLETE AND
CORRECT COPIES THEREOF BY THE SECRETARY OR ASSISTANT SECRETARY OF EACH BORROWER;

 

(E)           THE REPRESENTATIONS AND WARRANTIES IN SECTION 3 OF THIS AMENDMENT
SHALL BE TRUE AND CORRECT AND THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED AN
OFFICER’S CERTIFICATE OF THE BORROWERS, DATED THE AMENDMENT NO. 1 EFFECTIVE
DATE, CERTIFYING TO THE EFFECT SET FORTH IN SECTIONS 3(B) AND 3(C) OF THIS
AMENDMENT;

 

(F)            THE BORROWERS AND THE ADMINISTRATIVE AGENT SHALL BE SATISFIED
THAT ALL APPROVALS REQUIRED FOR THIS AMENDMENT FROM ANY APPLICABLE GAMING BOARD
SHALL HAVE BEEN RECEIVED;

 

(G)           THE BORROWERS SHALL HAVE (I) RECEIVED A CASH EQUITY CONTRIBUTION
OF NOT LESS THAN $75,000,000 (THE “EQUITY CONTRIBUTION”) ON TERMS ACCEPTABLE TO
THE ARRANGER AND THE ADMINISTRATIVE AGENT AND APPLIED THE PROCEEDS OF SUCH
EQUITY CONTRIBUTION TO REPAY $65,000,000 AGGREGATE PRINCIPAL AMOUNT OF THE TERM
LOANS AND $10,000,000 AGGREGATE PRINCIPAL AMOUNT OF REVOLVING LOANS AND
(II) APPLIED THE REMAINING BALANCE (APPROXIMATELY $16,000,000) IN THE
CONSTRUCTION RESERVE ACCOUNT TO REPAY THE TERM LOANS;

 

(H)           THE BORROWERS SHALL HAVE DELIVERED TO THE ADMINISTRATIVE AGENT
COPIES OF ALL DOCUMENTATION AS THE ADMINISTRATIVE AGENT MAY REASONABLY REQUIRE
EVIDENCING OR RELATING TO THE EQUITY CONTRIBUTION;

 

(I)            THE BORROWERS SHALL HAVE OBTAINED AN AMENDMENT TO THE CREDIT
AGREEMENT GOVERNING THE FF&E FINANCING, WHICH AMENDMENT SHALL BE IN FULL FORCE
AND EFFECT ON THE AMENDMENT NO. 1 EFFECTIVE DATE ON TERMS REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE AGENT AND THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED WRITTEN DOCUMENTATION THEREOF;

 

(J)            A COPY OF, OR A CERTIFICATE AS TO COVERAGE UNDER, THE INSURANCE
POLICIES REQUIRED BY SECTION 6.07 AND THE APPLICABLE PROVISIONS OF THE
COLLATERAL DOCUMENTS, EACH OF WHICH SHALL BE ENDORSED OR OTHERWISE AMENDED TO
INCLUDE A “STANDARD” OR “NEW YORK”

 

18

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LENDER’S LOSS PAYABLE OR MORTGAGEE ENDORSEMENT (AS APPLICABLE) AND SHALL NAME
THE ADMINISTRATIVE AGENT, ON BEHALF OF THE SECURED PARTIES, AS ADDITIONAL
INSURED, IN FORM AND SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT; AND

 

(K)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED THE LEGAL OPINION OF
(I) MUNGER, TOLLES AND OLSON LLP AND (II) CERTAIN LOCAL COUNSEL TO THE
BORROWERS, EACH DATED THE AMENDMENT NO. 1 EFFECTIVE DATE, ADDRESSED TO THE
ADMINISTRATIVE AGENT AND EACH LENDER AND WITH RESPECT TO SUCH MATTERS AS THE
ADMINISTRATIVE AGENT SHALL REASONABLY REQUEST.

 

Upon satisfaction of the conditions precedent set forth above, the
Administrative Agent shall promptly notify the Borrowers and the Lenders of its
determination that this Amendment has become effective, which determination
shall, absent manifest error, be conclusive and binding on the Borrowers and the
Lenders for all purposes.

 

Section 6.              Real Estate Matters.  With respect to each Mortgaged
Property, Borrowers shall cause to be delivered, or shall cause the applicable
Loan Party to cause to be delivered, to the Administrative Agent, on behalf of
the Secured Parties, the following:

 

(a)           with respect to each Mortgage, an amendment (the “Mortgage
Amendment”) duly executed and acknowledged by the applicable Loan Party, and in
form for recording in the recording office where such Mortgage was recorded,
together with such certificates, affidavits, questionnaires or returns as shall
be required in connection with the recording or filing thereof under applicable
law, in each case in form and substance reasonably satisfactory to the
Administrative Agent; provided, however, that Borrowers or the applicable Loan
Party shall not be required to deliver a Mortgage Amendment for any Mortgaged
Property for which Borrower provides a local counsel opinion opining that such
Mortgaged Amendment is not necessary in connection with this Amendment;

 

(b)           with respect to the Mortgage Amendment, an endorsement to the
existing title insurance policy assuring the Administrative Agent that the
Mortgage, as amended by the Mortgage Amendment, is a valid and enforceable first
priority lien on such Mortgaged Property in favor of the Administrative Agent
(as appropriate) for the benefit of the Secured Parties free and clear of all
Liens except those Liens created or permitted by the Mortgage or by the
Administrative Agent, and such endorsement to title insurance policy shall
otherwise be in form and substance reasonably satisfactory to the Administrative
Agent;

 

(C)           TO THE EXTENT AVAILABLE ON COMMERCIALLY REASONABLE TERMS, A
COMPLETED “LIFE-OF-LOAN” FEDERAL EMERGENCY MANAGEMENT AGENCY STANDARD FLOOD
HAZARD DETERMINATION WITH RESPECT TO THE MORTGAGED PROPERTY (TOGETHER WITH A
NOTICE ABOUT SPECIAL FLOOD HAZARD AREA STATUS AND FLOOD DISASTER ASSISTANCE DULY
EXECUTED BY THE BORROWERS AND THE APPLICABLE LOAN PARTY RELATING THERETO),
UNLESS THE ADMINISTRATIVE AGENT, IN ITS REASONABLE JUDGMENT, WAIVES SUCH
REQUIREMENT; AND

 

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(d)           to the extent reasonably requested by the Administrative Agent,
with respect to each Mortgage Amendment, opinions of local counsel to the Loan
Parties, which opinions (x) shall be addressed to Administrative Agent and each
of the Lenders, (y) shall cover the enforceability of the respective Mortgage as
amended by the Mortgage Amendment, and (z) shall be in form and substance
reasonably satisfactory to the Administrative Agent.

 

The Borrowers shall deliver or cause to be delivered each of the documents and
instruments required pursuant to this Section 6 within ninety (90) days after
the Amendment No. 1 Effective Date, unless extended by the Administrative Agent
in its sole discretion.

 

Section 7.              Counterparts.  This Amendment may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.

 

Section 8.              Applicable Law.  THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

Section 9.              Headings.  Section headings herein and in the Loan
Documents are included for convenience of reference only and shall not affect
the interpretation of this Amendment or any Loan Document.

 

Section 10.            Effect of Amendment.  On and after the Amendment No. 1
Effective Date, each reference in the Credit Agreement to “this Agreement,”
“hereunder,” “hereof” or words of like import referring to the Credit Agreement,
and each reference in each of the Loan Documents to “the Credit Agreement,”
“thereunder,” “thereof” or words of like import referring to the Credit
Agreement, shall mean and be a reference to the Credit Agreement as amended by
this Amendment.  The Credit Agreement and each of the other Loan Documents, as
supplemented by this Amendment, are and shall continue to be in full force and
effect and are hereby in all respects ratified and confirmed.  Except as
expressly set forth herein, this Amendment shall not by implication or otherwise
limit, impair, constitute a waiver of or otherwise affect the rights and
remedies of the Lenders or the Administrative Agent under the Credit Agreement
or any other Loan Document, and shall not alter, modify, amend or in any way
affect any of the terms, conditions, obligations, covenants or agreements
contained in the Credit Agreement or any other provision of the Credit Agreement
or any other Loan Document, all of which are ratified and affirmed in all
respects and shall continue in full force and effect.  By executing and
delivering a copy hereof, each applicable Loan Party hereby agrees and confirms
that all Loans and Obligations shall be guaranteed and secured pursuant to the
Loan Documents as provided therein.

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.

 

 

CANNERY CASINO RESORTS, LLC,

 

a Nevada limited liability company,

 

as Borrower

 

 

 

 

 

By:

/s/ William C. Wortman

 

 

Name:

William C. Wortman

 

 

Title:

Manager

 

 

 

 

 

WASHINGTON TROTTING ASSOCIATION, INC.,

 

a Delaware corporation,

 

as Borrower

 

 

 

 

 

By:

/s/ William C. Wortman

 

 

Name:

William C. Wortman

 

 

Title:

Chief Executive Officer

 

[Amendment No. 1 to First Lien Credit Agreement]

 

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BANC OF AMERICA SECURITIES LLC,

 

as Sole Arranger and Bookrunning Manager

 

 

 

 

 

By:

/s/ Richard Arendale

 

 

Name:

Richard Arendale

 

 

Title:

Managing Director

 

[Amendment No. 1 to First Lien Credit Agreement]

 

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BANK OF AMERICA, N.A.,

 

as Administrative Agent, Swing Line Lender, L/C Issuer and Lender

 

 

 

 

 

By:

/s/ Justin Lien

 

 

Name:

Justin Lien

 

 

Title:

Senior Vice President

 

[Amendment No. 1 to First Lien Credit Agreement]

 

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