Document:

Exhibit 10.4

 

AMENDMENT
TO

EXECUTIVE  EMPLOYMENT AGREEMENT

 

CARDINAL FINANCIAL
CORPORATION (“Cardinal”) and Kendal E. Carson (“you” and all similar
references) hereby agree that the Executive Employment Agreement by and between
them effective March 6, 2006 with an Addendum is amended effective as of
the date below by making the changes below:

 

Sections 1.a and 1.b. are
replaced with the following:

 

a.                                       During your employment on and after April 1,
2009 (the “Amendment Date”), Cardinal agrees to employ you as an Executive
Officer in the position of Market President, Cardinal Bank, reporting to the
Chief Lending Officer, and you agree to accept such employment, devoting
substantially all of your business time, effort and attention to the business
of Cardinal Bank, and performing such duties as are normally associated with
your position.

 

b.                                      Your initial base salary as of the
Amendment Date will be $187,500 annually, less required and authorized
withholding and deductions, payable in installments in accordance with Cardinal
Bank’s normal payroll practices. You will be eligible for an annual merit
increase, performance bonus and stock option grants on the same basis as other
similarly situated Executive Officers of Cardinal Bank and subject to the terms
of any applicable compensation, bonus and stock plans, provided that you will
receive a minimum bonus of $7,500 for 2009.

 

Except as amended above,
the terms of the Executive Employment Agreement with an Addendum remain in
effect.

 

The parties have signed
this Amendment this 31st day of March, 2009.

 

	
   

  	
   

  	
  CARDINAL FINANCIAL
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Kendal E. Carson

  	
   

  	
  By

  	
  /s/ Bernard H.
  Clineburg

  
	
  Kendal E. Carson

  	
   

  	
   

  	
  Bernard H. Clineburg

  
	
   

  	
   

  	
   

  	
  Chairman and CEOExhibit 10.1

 

 

 

 

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of January 20, 2009

 

among

 

GOLDEN ROAD MOTOR INN, INC.,

a Nevada corporation,

as Borrower

 

MONARCH CASINO & RESORT,
INC.,

a Nevada corporation,

as Guarantor

 

the LENDERS herein named

 

WELLS FARGO BANK, National
Association,

as Swingline Lender, L/C Issuer and
Agent Bank

 

 

 

 

 

 

 

 

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 20th 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 

 

7

 

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.

 

10

 

“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 

 

11

 

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 

 

12

 

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.

 

13

 

“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 

 

14

 

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.

 

15

 

“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.

 

16

 

“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, 

 

17

 

“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 

 

18

 

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.

 

19

 

“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.

 

20

 

 

“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 

 

21

 

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.

 

22

 

“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.

 

23

 

“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).

 

24

 

“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 

 

25

 

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 

 

26

 

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 

 

27

 

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.

 

28

 

“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); 

 

29

 

(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.

 

30

 

“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.

 

31

 

“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.

 

32

 

“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.

 

33

 

“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.

 

34

 

“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 (2nd) 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.

 

35

 

“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:

 

36

 

 

(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.

 

37

 

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.

 

38

 

(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 

 

39

 

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 (6th) 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 

 

40

 

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 

 

41

 

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 

 

42

 

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.

 

43

 

(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 

 

44

 

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 

 

45

 

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 

 

46

 

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 

 

47

 

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 

 

48

 

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 

 

49

 

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, 

 

50

 

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 

 

51

 

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

 

52

 

 

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 

 

53

 

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 

 

54

 

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.

 

55

 

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

 

56

 

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

 

57

 

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

 

58

 

(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

 

59

 

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 

 

60

 

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

 

62

 

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.

 

63

 

Section 3.14.         Phase I Environmental Site
Assessments.

 

(a)        An
Environmental Risk Disclosure Questionnaire in the standard form currently used
by WFB with respect to real estate secured loans fully completed by Borrower
and delivered to Agent Bank.

 

(b)        Borrower hereby confirms the
representations contained in Sections 2.1 and 2.2 of the Environmental
Certificate are true and correct in all respects, except with respect to the
matters disclosed on the Schedule of Significant Litigation.

 

(c)        Agent Bank shall have received evidence
of flood insurance coverage for all portions of the Real Property that are
located in: (i) an area designated by the Federal Emergency Management
Agency as having special flood or mud hazards; and (ii) a community that
participates in the National Flood Insurance Program; all in compliance with
any applicable regulations of the Board of Governors of the Federal Reserve
System.

 

Section 3.15.         Skybridge Documentation.  A true and correct copy of the CC Skybridge
Agreement and CC Skybridge Peckham Lane Entitlements and of all amendments and
modifications to such Skybridge Documentation.

 

Section 3.16.         Gaming Permits.  Copy of the Gaming Permits issued by the
Nevada Gaming Authorities evidencing the right of the Borrower to conduct
gaming activities and games of chance at the Hotel/Casino Facility.

 

Section 3.17.         Financial Statements, Pricing
Certificate and Total Leverage Ratio Certification.

 

(a)        Audited financial statements of the
Borrower for the most recently ended Fiscal Year, to the extent the same have
been prepared and are available.

 

(b)        A certificate (the “Closing Pricing
Certificate”) in the form of the Closing Pricing Certificate affixed hereto as “Exhibit F”,
setting forth the Total Leverage Ratio of the Borrower determined as of the end
of the four (4) consecutive Fiscal Quarter period ending December 31,
2008, giving pro forma effect to the occurrence of the Restatement Effective
Date and advance of the Closing Disbursement hereunder based upon unaudited
Adjusted EBITDA.  The Applicable Margin
shall be subject to adjustment based on the Compliance Certificate to be
delivered for the fiscal period ended December 31, 2008 under Section 5.08(f).

 

64

 

Section 3.18.         Schedule of all Significant
Litigation.  A Schedule of
Significant Litigation (Schedule 3.18) involving any member of the MCRI
Consolidation, in each instance setting forth the names of the other parties
thereto, a brief description of such litigation, whether or not such litigation
is covered by insurance and, if so, whether the defense thereof and liability
therefor has been accepted by the applicable insurance company indicating
whether such acceptance of such defenses with or without a reservation of
rights, the commencement date of such litigation and the amount sought to be
recovered by the adverse parties thereto or the amount which is otherwise in
controversy.

 

Section 3.19.         No Injunction or Other Litigation.  No law or regulation shall prohibit, and no
order, judgment or decree of any Governmental Authority shall, and no
litigation shall be pending or threatened which in the reasonable judgment of
the Agent Bank would or would reasonably be expected to, enjoin, prohibit,
limit or restrain the execution and delivery of this Credit Agreement or the
making of any advance under the Credit Facility.

 

Section 3.20.         Additional Documents and Statements.  As of the Restatement Effective Date such
additional documents, affidavits, certificates and opinions as Requisite
Lenders may reasonably require to insure compliance with this Credit
Agreement.  The statements set forth in Section 3.22
shall be true and correct.

 

B.         Conditions Precedent to all Borrowings, Swingline
Advances and Letters of Credit.  The
obligation of each Lender and Agent Bank to advance any Borrowing requested to
be made on any Funding Date is (except Borrowings made upon the demand of Agent
Bank for the purpose of funding repayment of Swingline Outstandings and/or L/C
Reimbursement Obligations), and the obligation of Swingline Lender to fund
Swingline Advances and the obligation of L/C Issuer to issue Letters of Credit
are, in each case, subject to the occurrence of each of the following
conditions precedent as of such Funding Date, Swingline Issuance Date and/or
L/C Issuance Date, as the case may be:

 

Section 3.21.         Notices.

 

(a)        With respect to any Borrowing, the Agent
Bank shall have received in accordance with Section 2.03 on or before such
Funding Date an original and duly executed Notice of Borrowing or facsimile
copy thereof, to be promptly followed by an original.

 

(b)        With respect to any Swingline Advance,
the Swingline Lender shall have received in accordance with Section 2.08
on or before such Swingline Issuance Date an original and duly executed Notice
of Swingline Advance or facsimile copy thereof, to be promptly followed by an
original.

 

65

 

(c)        With respect to the issuance of any
Letter of Credit, the L/C Issuer shall have received in accordance with Section 2.09
on or before such L/C Issuance Date an original and duly executed L/C
Agreement.

 

Section 3.22.         Certain Statements.  On the Restatement Effective Date and as of
the Funding Date the following statements shall be true and correct:

 

(a)        The representations and warranties with
respect to the Borrower and MCRI contained in Article IV hereof (other
than representations and warranties which expressly speak only as of a
different date which shall be true and correct as of such date) are true and
correct on and as of the Funding Date and as of the Restatement Effective Date
in all material respects as though made on and as of that date, except to the
extent that such representations and warranties are not true and correct as a result
of a change which is permitted by this Credit Agreement or by any other Loan
Document, or which is otherwise consented to by Requisite Lenders;

 

(b)        The representations and certifications
contained in the Environmental Certificate are true and correct in all material
respects (other than representations and warranties which expressly speak only
as of a different date which shall be true and correct as of such date);

 

(c)        Since the date of the most recent
financial statements referred to in Section 3.17 and 5.08, no material adverse change shall
have occurred; and

 

(d)        No event has occurred or as a result of
any Borrowings contemplated hereby would occur and is continuing, or would
result from the making thereof, which constitutes a Default or Event of Default
hereunder.

 

Section 3.23.         Gaming Permits.  The
Borrower shall have all Gaming Permits material to or required for the conduct
of its gaming businesses and the conduct of games of chance at the Hotel/Casino
Facility and such Gaming Permits shall not then be suspended, enjoined or
prohibited (for any length of time) by the Nevada Gaming Authorities or any
other Governmental Authority.

 

C.        Additional Conditions Precedent to Commitment Increase.  In addition to the requirements set forth in
Articles III A and B, the obligation of Lenders (as such Lenders are defined as
of the applicable date of determination) and Agent Bank to make available the
Commitment Increase is subject to and contingent upon (i) satisfaction of
each of the conditions and requirements set forth in Section 2.01(e), and (ii) 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:

 

66

 

Section 3.24.         Guaranty Affirmation.  The Guarantor shall have consented to the
Commitment Increase and ratified and affirmed the Guaranty as applicable to the
Commitment Increase.

 

Section 3.25.         Amendments to Security Documents.  Borrower shall execute and deliver to Agent
Bank such amendments to the Security Documentation as may be required by Agent
Bank to add the Commitment Increase as an Obligation secured by the Security
Documentation.

 

Section 3.26.         Revolving Credit Note.  Borrower shall execute and deliver an
amendment and restatement of the Revolving Credit Note, in a form reasonably
acceptable to Agent Bank, in the amount of the then Aggregate Commitment as
increased by the Commitment Increase.

 

Section 3.27.         Opinion of Counsel - Commitment
Increase.  An opinion of counsel to
the Borrower and addressed to the Agent Bank on behalf of itself and each of
the Banks, together with their respective successors and assigns, opining as to
such matters as are reasonably required by Agent Bank and the Requisite
Lenders.

 

Section 3.28.         Endorsement of Title Insurance
Policy.  As of the Commitment
Increase Effective Date, Borrower, at Borrower’s expense, shall cause the Title
Insurance Policy to be endorsed with an 108.8 or other appropriate endorsement
for the purpose of increasing the policy insured amount by the amount of the
Commitment Increase.

 

Section 3.29.         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
Commitment Increase, including, but not limited to, title insurance premiums,
reasonable attorney’s fees of Henderson & Morgan, LLC and all other
like fees and expenses relating to the Commitment Increase Effective Date,
provided that the amount then invoiced shall not thereafter preclude Borrower’s
obligation to pay such costs and expenses relating to the Commitment Increase
following the Commitment Increase Effective Date or to reimburse Agent Bank for
the payment thereof.

 

Section 3.30.         Pro Forma Financial Compliance.  The Borrower shall deliver a duly executed
and completed Compliance Certificate, as of the end of the most recently ended
Fiscal Quarter, prepared on a pro forma basis based on the assumption that the
Commitment Increase had occurred one (1) year prior to the end of the most
recently ended Fiscal Quarter, evidencing pro forma compliance with each of the
Financial Covenants.

 

Section 3.31.         Additional Documents and Statements.  Such additional documents, affidavits,
certificates and opinions as Agent Bank may reasonably require to

 

67

 

insure compliance with this Credit
Agreement.  The statements set forth in Section 3.22
shall be true and correct.

 

ARTICLE
IV

 

REPRESENTATIONS
AND WARRANTIES

 

To induce Banks to enter
into this Credit Agreement, Borrower and MCRI make the following
representations and warranties:

 

Section 4.01.         Organization; Power and
Authorization.  Borrower and MCRI are
each a corporation duly organized and validly existing under the laws of the
State of Nevada.  Each of Borrower and
MCRI (i) has all requisite corporate power, authority and legal right to
execute and deliver each document, agreement or certificate to which it is a
party or by which it is bound in connection with the Credit Facility, to
consummate the transactions and perform its obligations hereunder and
thereunder, and to own its properties and assets and to carry on and conduct
its business as presently conducted or proposed to be conducted, and (ii) has
taken all necessary corporate action to authorize the execution, delivery and
performance of this Credit Agreement and the other Loan Documents to which it
is a party or by which it is bound and to consummate the transactions contemplated
hereunder and thereunder.

 

Section 4.02.         No Conflict With, Violation of or
Default Under Laws or Other Agreements. 
Neither the execution and delivery of this Credit Agreement, the
Revolving Credit Note, the Swingline Note or any other Loan Document, or any
other agreement, certificate or instrument to which either Borrower or MCRI is
a party or by which it is bound in connection with the Bank Facilities, nor the
consummation of the transactions contemplated hereunder or thereunder, nor the
compliance with or performance of the terms and conditions herein or therein,
is prevented by, limited by, conflicts in any material respect with, or will
result in a material breach or violation of, or a material default (with due
notice or lapse of time or both) under, or the creation or imposition of any
lien, charge, or encumbrance of any nature whatsoever upon any of their
respective property or assets by virtue of, the terms, conditions or provisions
of (a) any indenture, evidence of indebtedness, loan or financing  agreement, or other agreement or instrument
of whatever nature to which Borrower or MCRI is bound, or (b) any
provision of any existing law, rule, regulation, order, writ, injunction or
decree of any court or Governmental Authority to which Borrower or MCRI are
subject.

 

Section 4.03.         Litigation.  Except as disclosed on the Schedule of
Significant Litigation delivered in connection with Section 3.18, to the
best knowledge of Borrower and MCRI, after due inquiry and investigation, there
is no action, suit, proceeding, inquiry, hearing or investigation pending or
threatened, in any court of law or in equity, or before any Governmental
Authority, which reasonably would be

 

68

 

expected to (a) result in
any Material
Adverse Change in the Hotel/Casino Facility or in their respective
business, financial condition, properties or operations, (b) materially
adversely affect the Borrower’s or MCRI’s ability to perform their respective
obligations under the Credit Agreement and the other Loan Documents, or (c) materially
adversely affect the validity or enforceability of this Credit Agreement and
the other Loan Documents.  To the best
knowledge of Borrower and MCRI, after due inquiry and investigation, neither
Borrower nor MCRI is in violation of or default with respect to any order,
writ, injunction, decree or demand of any Governmental Authority.

 

Section 4.04.                                  Agreements
Legal, Binding, Valid and Enforceable.  This Credit Agreement, the Revolving Credit
Note, the Swingline Note, the Guaranty, the Security Documentation and all
other Loan Documents, when executed and delivered by Borrower and/or Guarantor,
as applicable, in connection with the Credit
Facility  will constitute legal, valid and
binding obligations of Borrower, enforceable against Borrower and/or Guarantor,
as applicable, in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium and other laws of
general application relating to or affecting the enforcement of creditors’
rights and the exercise of judicial discretion in accordance with general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).

 

Section 4.05.                                  Information
and Financial Data Accurate; Financial Statements; No Adverse Event.  All information and financial and other data
previously furnished in writing by Borrower and MCRI in connection with the
Bank Facilities was true, correct and complete in all material respects as of
the date furnished (unless subsequently corrected prior to the date hereof),
and there has been no Material
Adverse Change with respect thereto to the date of this Credit Agreement
since the dates thereof.  No information
has been omitted which would make the information previously furnished in such
financial statements to Banks misleading or incorrect in any material respect
to the date of this Credit Agreement. 
Any and all financial statements heretofore furnished to Banks by Borrower
and/or MCRI: (a) present fairly the financial position of Borrower and
MCRI as of their respective dates and the results of operations and changes in
financial position for the periods to which they apply, and (b) have been
prepared in conformity with GAAP applied on a consistent basis throughout the
periods involved.  Since the date of the
financial statements referred to in this Section 4.05, there has been no Material Adverse Change
in
the financial condition, assets, liabilities, business or operations of
Borrower or MCRI.

 

Section 4.06.                                  Governmental
Approvals.  All timely
consents, approvals, orders or authorizations of, or registrations,
declarations, notices or filings with any Governmental Authority which are
required in connection with the valid execution and delivery of this Credit
Agreement and the other Loan Documents by Borrower and the carry-out or
performance of any of the transactions required or contemplated hereunder, or
thereunder, by Borrower, have been obtained or accomplished and are in full
force 

 

69

 

and effect, or can be obtained or
accomplished by Borrower.  All timely
consents, approvals, orders or authorizations of, or registrations,
declarations, notices or filings with any Governmental Authority which are
required by Borrower in connection with the use and operation of the
Hotel/Casino Facility have been obtained or accomplished and are in full force
and effect.

 

Section 4.07.                                  Payment
of Taxes.  Borrower and MCRI
have duly filed or caused to be filed all federal, state and local tax reports
and returns which are required to be filed by them and have paid or made
provisions for the payment of, all material taxes, assessments, fees and other
governmental charges which have or may have become due pursuant to said returns
or otherwise pursuant to any assessment received by Borrower except such taxes,
assessments, fees or other governmental charges, if any, as are being contested
in good faith by Borrower by appropriate proceedings and for which Borrower or
MCRI have maintained adequate reserves for the payment thereof in accordance
with GAAP.

 

Section 4.08.                                  Title
to Properties.  Borrower shall have
good and marketable title to the Real Property as of the Restatement Effective
Date and at all times during the term of the Bank Facilities (except for the
Adjacent Driveway Property with respect to which Borrower shall have good and
marketable leasehold title and except for the Pedestrian Crossing Air Space
with respect to which Borrower shall have a valid license).  Each of Borrower and MCRI has good and
marketable title to:  (a) all of its
properties and assets reflected in the most recent financial statements
referred to in Section 4.05 hereof as owned by them (except those
properties and assets disposed of since the date of said financial statements
in the ordinary course of business or those properties and assets which are no
longer used or useful in the conduct of its businesses), including, but not
limited to, Borrower’s and MCRI’s interest in patents, trademarks, tradenames,
servicemarks, and licenses relating to or pertaining to the Real Property or
the Hotel/Casino Facility, and (b) all properties and assets acquired by
them subsequent to the date of the most recent financial statements referred to
in Section 4.05 hereof.  All such
properties and assets are not subject to any liens, encumbrances or
restrictions except Permitted Encumbrances. 
All roads, easements and rights of way necessary for the full
utilization of the Real Property have been completed and/or obtained.

 

Section 4.09.                                  No
Untrue Statements.  All statements, representations and warranties
made by Borrower and MCRI in this Credit Agreement, any other Loan Document and
any other agreement, document, certificate or instrument previously furnished
or to be furnished by Borrower and/or MCRI to Banks pursuant to the provisions
of this Credit Agreement, at the time they were made and on and as of the
Restatement Effective Date: (a) are and shall be true, correct and complete
in all material respects, (b) do not and shall not contain any untrue
statement of a material fact, and (c) do not and shall not omit to state a
material fact, the absence of which

 

70

 

makes the information contained herein
or therein materially misleading or incomplete. 
Borrower and MCRI understand that all such statements, representations
and warranties shall be deemed to have been relied upon by Banks as a material
inducement to establish the Bank Facilities.

 

Section 4.10.                               Brokerage
Commissions. No person is entitled to receive any brokerage commission,
finder’s fee or similar fee or payment in connection with the extensions of
credit contemplated by this Credit Agreement. 
No brokerage or other fee, commission or compensation is to be paid by
Banks with respect to the extensions of credit contemplated hereby and Borrower
agrees to indemnify Banks against any such claims for brokerage fees or
commissions and to pay all expenses including, without limitation, reasonable
attorney’s fees incurred by Banks in connection with the defense of any action
or proceeding brought to collect any such brokerage fees or commissions.

 

Section 4.11.                               No
Defaults.  Borrower is not in
violation of any applicable law and/or regulations, the violation of which
materially and adversely affects the business, financial condition or
operations of the Real Property or the Hotel/Casino Facility.  Borrower is not in violation or default (nor
is there any waiver in effect which, if not in effect, would result in a
violation or default) in any material and adverse respect under any indenture,
evidence of indebtedness, loan or financing agreement or other agreement or
instrument of whatever nature to which it is a party or by which it is bound
(except for any defaults previously brought to Banks’ attention in writing, for
which Borrower has received a waiver from Requisite Lenders), a default under
which would reasonably be expected to result in a Material Adverse
Change.

 

Section 4.12.                                  Employee
Retirement Income Security Act of 1974.  No Reportable Event has occurred and is
continuing with respect to any Pension Plan under ERISA, that gives rise to
liabilities that would constitute a Material Adverse Change.

 

Section 4.13.                                  Availability
of Utility Services. 
All utility services and facilities necessary for the Hotel/Casino
Facility and the Real Property including, without limitation, electrical,
water, gas and sewage services and facilities are available for the use and
operation of the Hotel/Casino Facility and the Real Property.

 

Section 4.14.                               Policies
of Insurance.  As of the
Restatement Effective Date, each of the copies of the declaration pages,
original binders and certificates of insurance evidencing the Policies of
Insurance relating to the Hotel/Casino Facility delivered to Agent Bank by
Borrower (i) is a true, correct and complete copy of the respective
original thereof as in effect on the date hereof, and no amendments or
modifications of any of said documents or instruments not included in such
copies have been made, and (ii) has not been terminated and is in full
force and effect.  Borrower is not in
default in the observance or performance of its obligations under said
documents

 

71

 

and instruments, and Borrower has done
all things required to be done as of the Restatement Effective Date to keep
unimpaired its rights thereunder.

 

Section 4.15.                              Spaceleases.  Schedules of all executed Spaceleases
pertaining to the Hotel/Casino Facility, or any portion thereof, in existence
as of the Restatement Effective Date, are set forth on Schedule 4.15
attached hereto.

 

Section 4.16.                              Equipment
Leases and Contracts. 
Schedules of all executed Equipment Leases and Contracts pertaining to
the Hotel/Casino Facility or any portion thereof, in existence as of the
Restatement Effective Date, are set forth on Schedule 4.16 attached
hereto.

 

Section 4.17.                                  Gaming
Permits and Approvals. 
All Gaming Permits required to be held by Borrower are current and in
good standing and Borrower presently holds all Gaming Permits necessary for the
continued operation of the Hotel/Casino Facility.

 

Section 4.18.                                  Environmental
Certificate.  The representations
and certifications contained in the Environmental Certificate are true and
correct in all material respects.

 

Section 4.19.                                  Investment
Company Act.  Borrower is neither
an “investment company” nor a company “controlled” by an “investment company,”
within the meaning of the Investment Company Act of 1940, as amended.

 

Section 4.20.                              Public
Utility Holding Company Act. 
Borrower is neither a “holding company,” nor a “subsidiary company” of a
“holding company,” nor an “affiliate” of a “holding company” nor of a “subsidiary
company” of a “holding company,” within the meaning of the Public Utility
Holding Company Act of 1935, as amended.

 

Section 4.21.                                  Labor
Relations.  There is no strike
or work stoppage in existence, or to the best knowledge of Borrower
threatened, involving Borrower or the Hotel/Casino Facility.

 

Section 4.22.                              Trademarks,
Patents, Licenses, Franchises, Formulas and Copyrights.  Borrower owns all the patents, trademarks,
permits, service marks, trade names, copyrights, licenses, franchises and
formulas set forth in Schedule 4.22, or has a valid license or sublicense
of rights with respect to the foregoing, and has obtained assignments of all
leases and other rights of whatever nature, necessary for the present conduct
of its business, without any known conflict with the rights of others which, or
the failure to obtain which, as the case may be, could reasonably be expected
to result in a Material
Adverse Change on the business, operations, property, assets or condition
(financial or otherwise) of Borrower.  Each
of the patents, trademarks,

 

72

 

servicemarks, tradenames and copyrights
owned by Borrower which is registered with any Governmental Authority is set
forth on Schedule 4.22, attached hereto.

 

Section 4.23.                              Contingent
Liabilities.  As of the
Restatement Effective Date, neither Borrower nor Guarantor has incurred any
material Contingent Liabilities (any Contingent Liability in excess of Two
Million Dollars ($2,000,000.00) being deemed material) other than in connection
with the Credit Facility and those described on Schedule 4.23.

 

Section 4.24.                                  CC
Skybridge Documentation. 
The copies of the CC Skybridge Agreement and CC Skybridge Peckham Lane
Entitlements which have been delivered to Agent Bank in accordance with Section 3.15
are true and correct copies of the originals thereof.  The CC Skybridge Agreement and CC Skybridge
Peckham Lane Entitlements are each in full force and effect and have not been
amended or otherwise modified except as set forth by documents delivered to Agent
Bank in accordance with Section 3.15 or except as permitted under Section 5.25.

 

Section 4.25.                              Subsidiaries.  As of the Restatement Effective Date: (a) MCRI
has no Subsidiaries other than Borrower, Golden Town, Inc., a Nevada
corporation (inactive) and High Desert Sunshine, Inc., a Nevada corporation,
and (b) Borrower does not have any Subsidiaries.

 

ARTICLE V

 

GENERAL COVENANTS OF BORROWER AND
MCRI

 

To induce the Banks to
enter into this Credit Agreement, Borrower and MCRI covenant to Banks as
follows:

 

A.                                 General
Covenants.

 

Section 5.01.                                  FF&E.  Borrower shall furnish, fixture and equip the
Hotel/Casino Facility with FF&E it reasonably deems appropriate for the
operation of the Hotel/Casino Facility. 
All FF&E that is purchased and installed in the Hotel/Casino
Facility shall be purchased free and clear of any liens, encumbrances or
claims, other than Permitted Encumbrances.

 

Section 5.02.                                  Permits;
Licenses and Legal Requirements. 
Borrower shall comply in all material respects with and keep in full
force and effect, as and when required, all Gaming Permits and all material
permits, licenses and approvals obtained from any Governmental Authorities
which are required for the operation and use of the Real Property as the
Hotel/Casino Facility.  Borrower shall
comply in all material respects with all applicable material existing and
future laws, rules, regulations, orders, 

 

73

 

ordinances and requirements of all
Governmental Authorities, and with all recorded restrictions affecting the Real
Property.

 

Section 5.03.                                  Protection
Against Lien Claims. 
Borrower shall promptly pay and discharge or cause to be paid and
discharged all claims and liens for labor done and materials and services
supplied and furnished in connection with the Hotel/Casino Facility in
accordance with this Section 5.03. 
If any mechanic’s lien or materialman’s lien shall be recorded, filed or
suffered to exist against the Real Property, Hotel/Casino Facility or any
interest therein by reason of work, labor, services or materials supplied,
furnished or claimed to have been supplied and furnished in connection with the
Hotel/Casino Facility, upon Borrower’s receipt of written notice from Agent
Bank demanding the release and discharge of such lien: (a) said lien or
claim shall be paid, released and discharged of record within sixty (60) days
following its receipt of such notice, or (b) Borrower shall cause said
mechanic’s lien or materialman’s lien to be released of record pursuant to the
provisions set forth in the Nevada Revised Statues 108.2413, et. seq., within
ninety (90) days following its receipt of such notice.

 

Section 5.04.                              Continuance
of Outstanding Balance of Existing Bank Loan.  On the Restatement Effective Date, each
Lender shall fund its Pro Rata Share of the outstanding principal and interest
owing under the Existing Bank Loan for payment to the Existing Lenders for the
purpose of continuing the unpaid principal under the Existing Bank Loan as
Funded Outstandings under the Credit Facility.

 

Section 5.05.                                  No
Change in Character of Business or Location of Chief Executive Office.  At all times throughout the term of the
Credit Facility (a) the chief executive office of Borrower and MCRI shall
be located at 3800 South Virginia Street, Reno, Nevada 89502; provided,
however, Borrower shall be entitled to move its chief executive office to
another location within the State of Nevada upon no less than thirty (30) days
prior written notice to Agent Bank, (b) the Hotel/Casino Facility shall be
operated by the Borrower, and (c) neither Borrower nor MCRI shall effect a
material change in the nature and character of the business at the Hotel/Casino
Facility as presently conducted and as presently contemplated and disclosed to
Banks.

 

Section 5.06.                                  Preservation
and Maintenance of Properties and Assets; Acquisition of Additional Property or
Leases.

 

(a)                               At all
times throughout the term of the Bank Facilities, (a) the Borrower shall
operate, maintain and preserve all rights, privileges, franchises, licenses,
Gaming Permits and other properties and assets necessary to conduct its
businesses and the Hotel/Casino Facility, in accordance with all applicable
governmental laws, ordinances, approvals, rules and regulations and
requirements, including, but not limited to, zoning, sanitary, pollution, building,
environmental and safety laws and ordinances, rules and regulations
promulgated thereunder, and (b) Borrower shall not consolidate

 

74

 

with, remove,
demolish, materially alter, discontinue the use of, sell, transfer, assign,
hypothecate or otherwise dispose of to any Person, any part of its properties
and assets necessary for the continuance of its business, as presently
conducted and as presently contemplated, other than in the normal course of business,
alterations or modifications as are reasonably expected to increase the value
of the Collateral, or as otherwise permitted pursuant to this Credit Agreement.

 

(b)                              Furthermore,
in the event Borrower, MCRI or any Affiliate and/or Related Entity thereof
(other than BLILP), shall acquire any other real property or rights to the use
of real property which is: (a) adjacent to any of the Real Property and
used as an integral part of the operation at the Real Property and/or the
Hotel/Casino Facility, or (b) if not so adjacent, necessary and required
for the use and operation of such Real Property or Hotel/Casino Facility,
Borrower shall concurrently with the acquisition of such real property or the
rights to the use of such real property, execute or cause the execution of such
documents as may be necessary to add such real property or rights to the use of
real property as Collateral under the Bank Facilities.  Provided, however, in the event the V/P
Property, or any portion thereof, is released as Collateral pursuant to Section 5.22,
the V/P Property so released, or applicable portion thereof, shall be required
to be added as Collateral only in the event that its use in connection with the
Hotel/Casino Facility is required by the Laws of any applicable Governmental
Authority.

 

(c)                               Other
than with respect to the Adjacent Driveway Lease, neither Borrower nor MCRI
shall enter into any other leases, licenses, rental or other arrangements for
the use or occupancy of all or any portion of the Village Shopping Center which
use or occupancy is or is planned or projected to be or become an integral part
of the operation at the Real Property and/or the Hotel/Casino Facility, without
the prior written consent of Agent Bank, which consent shall not be
unreasonably withheld or delayed, or if in the opinion of Agent Bank such
amendment, modification or termination is materially adverse to Borrower or the
Banks, without the prior written consent of Requisite Lenders.

 

Section 5.07.                                  Repair
of Properties and Assets. 
At all times throughout the term of the Bank Facilities, Borrower shall,
at its own cost and expense, (a) maintain, preserve and keep in a manner
consistent with hotel and gaming casino operating practices, as the case may
be, applicable to hotel/casino operations operating in the Reno, Nevada area,
its assets and properties, including, but not limited to, the Hotel/Casino
Facility and all FF&E owned or leased by Borrower in good and substantial
repair, working order and condition, ordinary wear and tear excepted, (b) from
time to time, make or cause to be made, all necessary and proper repairs,
replacements, renewals, improvements and betterments thereto, and (c) from
time to time, make such substitutions, additions, modifications and
improvements as may be necessary and as shall not impair the structural
integrity, operating efficiency and

 

75

 

economic value of said assets and
properties.  All alterations,
replacements, renewals, or additions made pursuant to this Section 5.07
shall become and constitute a part of said assets and property and subject, inter
alia, to the provisions of Section 5.01 and subject to the lien of the
Loan Documents.

 

Section 5.08.                                  Financial
Statements; Reports; Certificates and Books and Records.  Until Bank Facility Termination, Borrower and
MCRI shall, unless the Agent Bank (with the written approval of the Requisite
Lenders) otherwise consents, at Borrower’s sole expense, deliver to the Agent
Bank and each of the Lenders a full and complete copy of each of the following
and shall comply with each of the following financial requirements:

 

(a)                               As
soon as practicable, and in any event within forty-five (45) days after the end
of each Fiscal Quarter (including the fourth (4th) Fiscal Quarter in any Fiscal
Year), the balance sheet, income statement, statement of retained earnings and
statement of cash flows of the Borrower as at the end of such Fiscal Quarter
and for the portion of the Fiscal Year ended with such Fiscal Quarter, all in
reasonable detail.  Such financial
statements shall be certified by an Authorized Officer of Borrower as fairly
presenting the financial condition, results of operations and cash flows of
Borrower in accordance with GAAP (other than footnote disclosures) as at such
date and for such periods, subject only to normal year-end accruals and audit
adjustments;

 

(b)                              As
soon as practicable, and in any event within forty-five (45) days after the end
of each Fiscal Quarter (including the fourth (4th) Fiscal Quarter in any Fiscal
Year), the consolidated and consolidating balance sheet, income statement,
statement of retained earnings and statement of cash flows of the MCRI
Consolidation as at the end of such Fiscal Quarter and for the portion of the
Fiscal Year ended with such Fiscal Quarter, all in reasonable detail.  Such financial statements shall be certified
by an Authorized Officer of MCRI as fairly presenting the financial condition,
results of operations and cash flows of the MCRI Consolidation in accordance
with GAAP (other than footnote disclosures) as at such date and for such
periods, subject only to normal year-end accruals and audit adjustments;

 

(c)                               As
soon as practicable, and in any event within ninety (90) days after the end of
each Fiscal Year, (i) the balance sheet, income statement, statement of
retained earnings and statement of cash flows (reconciled with year end audited
statements) of the Borrower as at the end of such Fiscal year, all in
reasonable detail, and (ii) the consolidated and consolidating balance
sheet, income statement, statement of retained earnings and cash flows
(reconciled with year end audited statements) of the MCRI Consolidation as at
the end of such Fiscal year, all in reasonable detail.  Such financial statements shall be prepared
in accordance with GAAP and shall be accompanied by a report of any “Big 4”
accounting firm or other independent public accountants of recognized standing
selected by Borrower and

 

76

 

reasonably
satisfactory to the Agent Bank, which report shall be prepared in accordance
with generally accepted auditing standards as at such date, and shall not be
subject to any qualifications or exceptions as to the scope of the audit nor to
any other qualification or exception determined by the Requisite Lenders in
their good faith business judgment to be adverse to the interests of the
Banks.  Such accountants’ report shall be
accompanied by a certificate stating that, in making the examination pursuant
to generally accepted auditing standards necessary for the certification of
such financial statements and such report, such accountants have obtained no
knowledge of any Default or, if, in the opinion of such accountants, any such
Default shall exist, stating the nature and status of such Default, and stating
that such accountants have reviewed the Financial Covenants as at the end of
such Fiscal Year (which shall accompany such certificate) under Sections 6.01
through 6.03, have read such Sections (including the definitions of all defined
terms used therein) and that nothing has come to the attention of such
accountants in the course of such examination that would cause them to believe
that the same were not calculated by the Borrower and the MCRI Consolidation,
as applicable, in the manner prescribed by this Credit Agreement.  Such financial statements shall be certified
by an Authorized Officers of the Borrower and MCRI in the same manner as
required with respect to financial statements delivered pursuant to
Sections 5.08(a) and (b);

 

(d)                              As
soon as practicable, and in any event no later than forty-five (45) days
following the commencement of each Fiscal Year, projections by Fiscal Quarter
for that Fiscal Year, including projected balance sheet, statement of
operations and statement of cash flow of Borrower and projected consolidated
and consolidating balance sheets and statements of operations and cash flows,
of the Borrower,  all in
reasonable detail;

 

(e)                               As
soon as practicable, and in any event no later than forty-five (45) days after
the commencement of each Fiscal Year, a Capital Expenditure budget by Borrower
for the Hotel/Casino Facility for that Fiscal Year, all in reasonable detail;

 

(f)                                  Concurrently
with the financial statements and reports required pursuant to Sections
5.08(a), (b) and 5.08(c), a Compliance Certificate signed by an Authorized
Officer of Borrower, including, without limitation, through the 2010 Fiscal
Year the status of the Remodel Projects shown on Schedule of Remodel Project
and reconciliation of the line item project descriptions and cost estimates
which shall not exceed Fourteen Million Two Hundred Seventy-Five Thousand
Dollars ($14,275,000.00) in the aggregate at any time;

 

(g)                               Promptly
after the same are available, copies of each annual report, proxy or financial
statement or other report or communication that shall have been sent to the
stockholders of MCRI, and copies of all annual, regular, periodic and

 

77

 

special
reports (including, without limitation, each 10Q and 10K report) and
registration statements which MCRI shall have filed or be required to file with
the Securities and Exchange Commission under Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended, and not otherwise required to
be delivered to the Banks pursuant to other provisions of this Section 5.08.

 

(h)                               Promptly,
and in any event within ten (10) days of the filing thereof, a copy of any
substantive filing, report or other document filed by Borrower, MCRI or any
member of the MCRI Consolidation with the Nevada Gaming Authorities.  Promptly after the same are available, copies
of any written communication to Borrower or MCRI from the Nevada Gaming
Authorities advising them, or either of them, of a material violation of or
non-compliance with, any Gaming Law by Borrower, MCRI or any member of the MCRI
Consolidation.

 

(i)                                   Until
Bank Facility Termination, Borrower and MCRI, and each of them, shall keep and
maintain complete and accurate books and records in accordance with GAAP,
consistently applied.  Borrower and MCRI,
and each of them, shall permit Banks and any authorized representatives of
Banks to have reasonable access to and to inspect, examine and make copies of
the books and records, any and all accounts, data and other documents of
Borrower and MCRI at all reasonable times upon the giving of reasonable notice
of such intent.  In addition:  (i) in the event of the occurrence of
any Default or Event of Default, or (ii) in the event any Material Adverse Change
occurs, Borrower and MCRI shall promptly, and in any event within three (3) days
after actual knowledge thereof, notify Agent Bank in writing of such
occurrence.

 

(j)                                  Until
Bank Facility Termination, Borrower and MCRI, and each of them, shall furnish
to Agent Bank, with sufficient copies for distribution to each of the Banks,
any financial information or other information bearing on the financial status
of the Borrower, MCRI, any member of the MCRI Consolidation, or any of them,
which is reasonably requested by Agent Bank or Requisite Lenders.

 

Section 5.09.                                  Insurance.  Borrower shall obtain, or cause to be
obtained, and shall maintain or cause to be maintained with respect to the
Hotel/Casino Facility, at all times throughout the term of the Credit Facility,
at its own cost and expense, and shall deposit with Agent Bank on or before the
Restatement Effective
Date:

 

(a)                               Property
Insurance.  Borrower shall
maintain an “All Risk” (Special Causes of Loss or Equivalent) perils policy
covering the building and improvements, and other permanent structures for one
hundred percent (100%) of the replacement cost. 
Borrower shall maintain no less than a Five Million Dollar
($5,000,000.00) sub-limit for the perils of flood and earthquake.  The policy will include Agreed Amount
(waiving co-insurance), replacement cost valuation and building

 

78

 

ordinance
endorsements.  The policy will include a
standard mortgagee clause (ISO form or equivalent) and provide that all losses
in excess of One Million Dollars ($1,000,000.00) be adjusted by Borrower with
the consent of Agent Bank.  The Borrower
waives any and all rights of subrogation against Banks.

 

(b)                              Personal
Property (including machinery, equipment, furniture, fixtures, stock).  Borrower shall maintain special causes of
loss (“All Risk”) property coverage which represents one hundred percent (100%)
of the values at replacement costs for all personal property owned, leased or
for which Borrower is legally liable. 
Such policy shall include a lenders loss payable endorsement in favor of
Agent Bank.  The policy providing real
and personal property coverage may include a deductible of no more than Two
Hundred Fifty Thousand Dollars ($250,000.00) for any single occurrence.

 

(c)                               Business
Income/Extra Expense. 
Borrower shall maintain a combined Business Income/Extra Expense
coverage with a limit no less than eighty percent (80%) of the net profit, plus
continuing expenses (including debt service) for the Hotel/Casino Facility,
which coverage may be included in the coverages required by Section 5.09(a) and
(b) above.  Such coverage shall also
include extensions for off premises power losses at One Million Dollars
($1,000,000.00) and an extended period of indemnity ninety (90) days
endorsement.  These coverages (to the
extent not covered by Section 5.09(a) and (b) above) may have a
deductible of no greater than forty-eight (48) hours, or One Hundred Thousand
Dollars ($100,000.00), if a separate deductible applies.  Agent Bank shall be endorsed as the loss
payee under the above coverages.  The
Borrower may elect to cover the property on a blanket or loss limit basis as
long as one hundred percent (100%) replacement cost values are utilized as
required above.  The property coverage
shall contain no exclusions or limitations for terrorism or terrorist acts.

 

(d)                              Boiler
and Machinery.  Borrower shall
maintain a Boiler and Machinery policy for the Hotel/Casino Facility written on
a Comprehensive Form with a combined direct and indirect limit of no less
than Twenty-Five Million Dollars ($25,000,000.00), which coverage may be
included in the coverages required by Section 5.09(a) and (b) above.  The policy shall include extensions for
Agreed Amount (waiving co-insurance) and Replacement Cost Valuation.  The policy (to the extent not covered by Section 5.09(a) and
(b) above) may contain deductibles of no greater than One Hundred Thousand
Dollars ($100,000.00) direct and forty-eight (48) hours indirect.

 

(e)                               Crime
Insurance.  Borrower shall obtain a comprehensive crime
policy, including the following coverages:

 

(i)                                   employee dishonesty - Five Hundred Thousand
Dollars ($500,000.00);

 

79

 

(ii)                                money and securities (inside) - Five Hundred
Thousand Dollars ($500,000.00);

 

(iii)                             money and securities (outside) - Five Hundred
Thousand Dollars ($500,000.00);

 

(iv)                            depositor’s forgery - Five Hundred Thousand
Dollars ($500,000.00);

 

(v)                               computer fraud - Five Hundred Thousand
Dollars ($500,000.00).

 

The policy must be
amended so that money is defined to include “tokens and chips”.  The policy may contain deductibles of no
greater than Two Hundred Fifty Thousand Dollars ($250,000.00) for employee
dishonesty, depositor’s forgery and computer fraud and One Hundred Thousand
Dollars ($100,000.00) for all other coverage agreements listed above.

 

(f)                                  Commercial
General Liability (2005 ISO Form or Equivalent).  Borrower shall maintain a Commercial General
Liability policy with a One Million Dollar ($1,000,000.00) combined single
limit for bodily injury and property damage, including Contractual Liability,
and all standard policy form extensions. 
The policy must provide a Two Million Dollar ($2,000,000.00) general
aggregate (per location, if multi-location risk) and be written on an “occurrence
form”.  The policy will include
extensions for Liquor Legal Liability and Employee Benefits Legal Liability
coverages.  If the general liability
policy contains a self-insured retention, it shall be no greater than Fifty
Thousand Dollars ($50,000.00) per occurrence with an aggregate of no greater
than One Million Dollars ($1,000,000.00) for all losses.

 

The policy shall be
endorsed to include Agent Bank as an additional insured on behalf of the Banks
for losses relating to the Hotel/Casino Facility.  Definition of additional insured shall
include all officers, directors, employees, agents and representatives of the
additional insured.  The coverage for
additional insured shall apply on a primary basis irrespective of any other insurance
whether collectible or not (ISO Form Endorsement No. CE20261185
Additional Insured - Designated Person, Organization or equivalent).

 

(g)                               Automobile.  Borrower shall maintain a comprehensive
Automobile Liability Insurance Policy written under coverage “symbol 1”,
providing a One Million Dollar ($1,000,000.00) combined single limit for bodily
injury and property damage covering all owned, non-owned and hired vehicles of
the Borrower.  If the policy contains a
self-insured retention it shall be no greater than Fifty Thousand Dollars
($50,000.00) per occurrence with an aggregate of no greater than One Million
Dollars

 

80

 

 ($1,000,000.00) for all losses.  The following additional coverages must be
purchased by Borrower:

 

(i)                                   Garagekeepers Legal Liability.  Five
Hundred Thousand Dollar ($500,000.00) limit for comprehensive and collision
coverages for physical damage to vehicles in the mortgagors care, custody and
control.  The policy can be subject to a
deductible of no greater than Five Thousand Dollars ($5,000.00) for each auto
and Twenty-Five Thousand Dollars ($25,000.00) for each loss.

 

(h)                               Workers
Compensation and Employers Liability Insurance.  Borrower shall maintain standard Workers
Compensation Policy covering the State of Nevada and Employers Liability
coverage subject to a limit of no less than Five Hundred Thousand Dollars
($500,000.00) each employee, Five Hundred Thousand Dollars ($500,000.00) each
accident, Five Hundred Thousand Dollars ($500,000.00) policy limit.  The policy shall include endorsements for
Voluntary Compensation and Stop Gap Liability. 
If the Borrower has elected to self-insure Workers Compensation coverage
in the State of Nevada, the Agent Bank must be furnished with a copy of the
certificate from the state permitting self-insurance and evidence of a Stop
Loss Excess Workers Compensation policy with a specific retention of no greater
than Five Hundred Thousand Dollars ($500,000.00) thereafter.

 

(i)                                   Umbrella
Liability.  An Umbrella
Liability policy must be purchased with a limit of not less than Seventy-Five
Million Dollars ($75,000,000.00) providing excess coverage over all limits and
coverages indicated in paragraphs a through g above.  The limits can be obtained by a combination
of Primary and Excess Umbrella policies, provided that all layers follow form
with the underlying policies indicated in f, g and h and are written on an “occurrence”
form.  This policy, or the underlying
policy or policies to which the Umbrella Liability policy pertains, shall be
endorsed to include the Agent Bank as an additional insured on behalf of the
Banks.

 

(j)                                  If
Borrower’s general liability and automobile policies include a self-insured
retention, it is agreed and fully understood that Borrower is solely
responsible for payment of all amounts due within said self-insured
retentions.  Any Indemnification/Hold
Harmless provision is extended to cover all liabilities associated with said
self-insured retentions.

 

(k)                              All
policies indicated above shall be written with insurance companies licensed and
admitted to do business in the State of Nevada and rated no lower than “A X”
in the most recent addition of A.M. Best and/or “AA” in the most recent
edition of Standard & Poor’s, or such other carrier reasonably
acceptable to Agent Bank.  All policies
discussed above shall be endorsed to provide that in the event of a 

 

81

 

cancellation,
non-renewal or material modification, Agent Bank shall receive thirty (30) days
prior written notice thereof.  The Borrower
shall furnish Agent Bank with Certificates of Insurance executed by an
authorized agent evidencing compliance with all insurance provisions discussed
above on an annual basis.  Certificates
of Insurance executed by an authorized agent of each carrier providing
insurance evidencing continuation of all coverages will be provided on the Restatement Effective Date and
annually on or before ten (10) days prior to the expiration of each
policy.  The
Borrower shall also furnish a copy of the declaration page of each policy
required by this section and the actual policy endorsements evidencing the
Agent Bank’s status as Mortgagee/Loss Payee (Property coverage) and Additional
Insured (General Liability coverage) as required.  All certificates and other notices
related to the insurance program shall be delivered to Agent Bank concurrently
with the delivery of such certificates or notices to such carrier or to
Borrower as applicable.

 

(l)                                   Any
other insurance reasonably requested by Agent Bank or Requisite Lenders in such
amount and covering such risks as may be reasonably requested.  Approval of
any insurance by the Agent Bank shall not be a representation of the solvency
of any insurer or the sufficiency of any coverage required under this Credit
Agreement.  All requirements set forth in this section are considered
minimums in terms of the purchase and maintenance of insurance under this
Credit Agreement.

 

Section 5.10.                                  Taxes.  Throughout the term of the Credit Facility,
Borrower shall prepare and timely file or cause to be prepared and timely filed
all federal, state and local tax returns required to be filed by it, and
Borrower shall pay and discharge prior to delinquency all taxes, assessments
and other governmental charges or levies imposed upon it, or in respect of any
of any of its properties and assets except such taxes, assessments and other
governmental charges or levies, if any, as are being contested in good faith by
Borrower in the manner which is set forth for such contests by Section 4.07
herein.

 

Section 5.11.                                  Permitted
Encumbrances Only.  At all times
throughout the term of the Credit Facility, Borrower shall not create, incur,
assume or suffer to exist any mortgage, deed of trust, pledge, Lien, security
interest, encumbrance, attachment, levy, distraint, or other judicial process
and burdens of every kind and nature except the Permitted Encumbrances on or
with respect to the Collateral, except (a) with respect to matters
described in Sections 5.03 and 5.10 such items as are being contested in
the manner described therein, and (b) with respect to any other items, if
any, as are being contested in good faith by appropriate proceedings and for
which Borrower has maintained adequate reserves for the payment thereof.

 

Section 5.12.                                  Advances.  At any time during the term of the Credit
Facility, if Borrower should fail (a) to perform or observe, or (b) to
cause to be performed or observed, any covenant or obligation of Borrower under
this Credit Agreement or any

 

82

 

of the other Loan Documents, then Agent
Bank, upon the giving of reasonable notice may (but shall be under no
obligation to) take such steps as are necessary to remedy any such
non-performance or non-observance and provide for payment thereof.  All amounts advanced by Agent Bank or Lenders
pursuant to this Section 5.12 shall become an additional obligation of
Borrower to Lenders secured by the Deed of Trust and other Loan Documents,
shall reduce the amount of Available Borrowings and shall become due and
payable by Borrower on the next interest payment date, together with interest
thereon at a rate per annum equal to the Default Rate (such interest to be
calculated from the date of such advancement to the date of payment thereof by
Borrower).

 

Section 5.13.                                  Further
Assurances.  Borrower and MCRI
will do, execute, acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered, such amendments or supplements hereto or to any of
the Loan Documents and such further documents, instruments and transfers as
Requisite Lender or Agent Bank may reasonably require for the curing of any
defect in the execution or acknowledgement hereof or in any of the Loan
Documents, or in the description of the Real Property or other Collateral or
for the proper evidencing of giving notice of each lien or security interest
securing repayment of the Bank Facilities. 
Further, upon the execution and delivery of the Deed of Trust and each
of the Loan Documents and thereafter, from time to time, Borrower shall cause the
Deed of Trust and each of the Loan Documents and each amendment and supplement
thereto to be filed, registered and recorded and to be refiled, re-registered
and re-recorded in such manner and in such places as may be reasonably required
by the Requisite Lenders or Agent Bank, in order to publish notice of and fully
protect the lien of the Deed of Trust and the Loan Documents and to protect or
continue to perfect the security interests created by the Deed of Trust and
Loan Documents in the Real Property and Collateral and to perform or cause to
be performed from time to time any other actions required by law and execute or
cause to be executed any and all instruments of further assurance that may be
necessary for such publication, perfection, continuation and protection.

 

Section 5.14.                                  Indemnification.  Borrower agrees to and does hereby jointly
and severally indemnify, protect, defend and save harmless Agent Bank and each
of the Banks and their respective trustees, officers, employees, agents,
attorneys and shareholders (individually an “Indemnified Party” and
collectively the “Indemnified Parties”) from and against any and all losses,
damages, expenses or liabilities of any kind or nature from any suits, claims,
or demands, including reasonable counsel fees incurred in investigating or
defending such claim, suffered by any of them and caused by, relating to,
arising out of, resulting from, or in any way connected with this Credit
Agreement, with any other Loan Document or with the transactions contemplated herein
and thereby; provided, however, Borrower shall not be obligated to indemnify,
protect, defend or save harmless an Indemnified Party if, and to the extent,
the loss, damage,

 

83

 

expense or liability was caused by (a) the
gross negligence or intentional misconduct of such Indemnified Party, (b) a
dispute amongst the Lenders not involving or arising from Borrower’s or
Guarantor’s Default, or (c) the breach of this Credit Agreement or any
other Loan Document by such Indemnified Party or the breach of any laws, rules or
regulation by such Indemnified Party (other than those breaches of Laws arising
from Borrower’s or Guarantor’s Default). 
In case any action shall be brought against any Indemnified Party based
upon any of the above and in respect to which indemnity may be sought against
Borrower, Agent Bank shall promptly notify Borrower in writing, and Borrower
shall assume the defense thereof, including the employment of counsel selected
by Borrower and reasonably satisfactory to Indemnified Party, the payment of
all costs and expenses and the right to negotiate and consent to settlement
upon the consent of the Indemnified Party. 
Upon reasonable determination made by Indemnified Party that such
counsel would have a conflict representing such Indemnified Party and Borrower,
the applicable Indemnified Party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof.  Borrower shall not be liable for any settlement
of any such action effected without its consent, but if settled with Borrower’s
consent, or if there be a final judgment for the claimant in any such action,
Borrower agrees to indemnify, defend and save harmless such Indemnified Parties
from and against any loss or liability by reason of such settlement or
judgment.  The provisions of this Section 5.14
shall survive the termination of this Credit Agreement and Bank Facility
Termination and the assignment or subparticipation of all or any portion of the
Syndication Interest held by any Lender pursuant to Section 10.10.

 

Section 5.15.                                  Inspection
of the Collateral and Appraisal. 
At all times during the term of the Credit Facility, Borrower shall
provide or cause to be provided to Banks and any authorized representatives of
Banks, accompanied by representatives of Borrower, the reasonable right of
entry and free access to the Real Property to inspect same on reasonable prior
notice to Borrower.  If at any time any
Qualified Appraisal of the Hotel/Casino Facility is required to be made by any
banking regulatory authority or determined to be necessary by Agent Bank or
Requisite Lenders after the occurrence of an Event of Default, Borrower agrees
to pay all fees, costs and expenses incurred by Agent Bank in connection with
the preparation of such Qualified Appraisal. 
Borrower shall not be obligated to pay for more than one of such
Qualified Appraisals during any Fiscal Year.

 

Section 5.16.                                  Compliance
With Other Loan Documents. 
Borrower shall comply with each and every term, condition and agreement
contained in the Loan Documents. 
Guarantor shall comply with each and every term, condition and agreement
contained in the Guaranty.

 

Section 5.17.                                  Suits
or Actions Affecting Borrower or MCRI.  Throughout the term of the Credit Facility,
Borrower and MCRI shall promptly advise Agent Bank in writing within ten (10) days
after Borrower or MCRI obtain knowledge of (a) any claims,

 

84

 

litigation, proceedings or
disputes (whether or not purportedly on behalf of Borrower) against, or to the
actual knowledge of Borrower or MCRI, threatened or affecting Borrower or MCRI
which, if adversely determined, would result in a Material Adverse Change
in the Hotel/Casino Facility or the business, operations or financial
conditions of Borrower or MCRI, (b) any material labor controversy
resulting in or threatening to result in a strike against the Hotel/Casino
Facility, or (c) any proposal by any Governmental Authority to acquire any
of the material assets or business of Borrower or MCRI.

 

Section 5.18.         Notice to State Gaming Control Board.  Borrower shall make all required reports and
disclosures to the Nevada State Gaming Control Board, including, but not
limited to, reporting the Credit Facility within the time period required by
Regulation 8.130(2) of the Regulations of Nevada Gaming Commission and
State Gaming Control Board.

 

Section 5.19.         Tradenames, Trademarks and
Servicemarks.  Borrower shall not
assign or in any other manner alienate its interests in any material
tradenames, trademarks or servicemarks relating or pertaining to the
Hotel/Casino Facility during the term of the Credit Facility.  Borrower shall not change its name without
first giving at least thirty (30) days prior written notice to Agent Bank.

 

Section 5.20.         Notice of Hazardous Materials.  Within ten (10) days after an executive
officer of Borrower shall have obtained actual knowledge thereof, Borrower
shall promptly advise Agent Bank and each of the Lenders in writing of and
deliver a copy of: (a) any and all enforcement, clean-up, removal or other
governmental or regulatory actions instituted or threatened by any Governmental
Agency pursuant to any applicable federal, state or local laws, ordinances or
regulations relating to any Hazardous Materials (as defined in the
Environmental Certificate) affecting the Hotel/Casino Facility, or any portion
thereof; (b) all written claims made or threatened by any third party
against Borrower, the Real Property, or the Hotel/Casino Facility, relating to
damage, contribution, cost recovery compensation, loss or injury resulting from
any Hazardous Materials (the matters set forth in clauses (a) and (b) above
are hereinafter referred to as “Hazardous Materials Claims”); and (c) the
discovery of any occurrence or condition on any real property adjoining or in
the vicinity of the Real Property or the Hotel/Casino Facility that could cause
Borrower or any part thereof to be held liable under the provisions of, or to
be otherwise subject to any restrictions on the ownership, occupancy,
transferability or use of the Real Property or the Hotel/Casino Facility under,
any Hazardous Materials Laws.

 

Section 5.21.         Compliance with Access Laws.

 

(a)        Borrower agrees that Borrower and the
Hotel/Casino Facility shall at all times take all reasonable steps to comply
with the requirements of the Americans with Disabilities Act of 1990; the Fair
Housing Amendments Act of 1988; and

 

85

 

other
federal, state or local laws or ordinances related to disabled access; or any
statute, rule, regulation, ordinance, order of Governmental Authorities, or
order or decree of any court adopted or enacted with respect thereto, as now
existing or hereafter amended or adopted (collectively, the “Access Laws”).  At any time, Agent Bank may require a
certificate of compliance with the Access Laws and indemnification agreement in
a form reasonably acceptable to Agent Bank. 
Agent Bank may also require a certificate of compliance with the Access
Laws from an architect, engineer, or other third party acceptable to Agent
Bank.

 

(b)        Notwithstanding any provisions set forth
herein or in any other document, Borrower shall not alter or permit any tenant
or other person to alter the Hotel/Casino Facility in any manner which would
increase Borrower’s responsibilities for compliance with the Access Laws
without the prior written approval of Agent Bank.  In connection with such approval, Agent Bank
may require a certificate of compliance with the Access Laws from an architect,
engineer or other person acceptable to Agent Bank.

 

(c)        Borrower agrees to give prompt written
notice to Agent Bank of the receipt by Borrower of any claims of violation of
any of the Access Laws and of the commencement of any proceedings or
investigations which relate to compliance with any of the Access Laws.

 

(d)        Borrower shall indemnify, defend and
hold harmless Indemnified Parties from and against any and all claims, demands,
damages, costs, expenses, losses, liabilities, penalties, fines and other
proceedings including, without limitation, reasonable attorneys’ fees and
expenses arising directly or indirectly from or out of or in any way connected
with any failure of the Hotel/Casino Facility to comply with any of the Access
Laws.  The obligations and liabilities of
Borrower under this section shall survive Bank Facility Termination, any
satisfaction, assignment, judicial or nonjudicial foreclosure proceeding, or
delivery of a deed in lieu of foreclosure.

 

Section 5.22.         Release of V/P Property as
Collateral.  Upon the prior written
consent of each of the Lenders, Agent Bank shall promptly release the V/P
Property (or that portion thereof which is not an integral part of the Hotel/Casino
Facility) as Collateral upon the occurrence of each of the following
conditions, so long as no Default or Event of Default has occurred and remains
continuing:

 

(a)        Borrower delivers a written request to
Agent Bank requesting the release of the V/P Property or applicable portion
thereof, including a description of the property to be released and a statement
and explanation of why the V/P Property or applicable portion thereof is not an
integral, necessary or required part of the business operation conducted at the
Hotel/Casino Facility.  In this regard,
provision must be 

 

86

 

made for the
retention as Collateral of the entrance to the Hotel/Casino Facility presently
located on the V/P Property and the bridge over Virginia Street;

 

(b)        Borrower shall provide such substitute
Collateral as may be deemed necessary by Lenders;

 

(c)        If previously released, as provided
above, and the V/P Property, or applicable portion thereof, has been retaken as
Collateral under Section 5.06 of this Credit Agreement, the V/P Property,
or applicable portion thereof, shall be re-released as Collateral on the same
basis as set forth above.

 

Section 5.23.         Compliance with Pedestrian Crossing
Air Space License.  Until Bank
Facilities Termination, Borrower shall fully perform and comply with or cause
to be performed and complied with all of the respective material covenants,
material terms and material conditions imposed or assumed by it as licensee
under the Pedestrian Crossing Air Space License.  Borrower shall not amend, modify or
terminate, or enter into any agreement to amend, modify or terminate the
Pedestrian Crossing Air Space License without the prior written consent of
Agent Bank, which consent shall not be unreasonably withheld or delayed, or if
in the opinion of Agent Bank such amendment, modification or termination is
materially adverse to Borrower or the Banks, without the prior written consent
of Requisite Lenders.

 

Section 5.24.         Compliance with Adjacent Driveway
Lease.  Until Bank Facilities
Termination, Borrower shall fully perform and comply with or cause to be
performed and complied with all of the respective material covenants, material
terms and material conditions imposed or assumed by it as lessee under the
Adjacent Driveway Lease.  Borrower shall
not enter into any material amendment or modification or terminate, or enter
into any agreement to enter into any material amendment or modification or
terminate the Adjacent Driveway Lease without the prior written consent of
Agent Bank, which consent shall not be unreasonably withheld or delayed, or if
in the opinion of Agent Bank such amendment, modification or termination is
materially adverse to Borrower or the Banks, without the prior written consent
of Requisite Lenders.  In this regard it
is understood that “material” amendment or modification shall include, without
limitation, any modification to the Term as set forth in Article 1, amount
of Rent, as set forth in Article 2, the provisions concerning “Use of
Property” as set forth in Section 4.2 and “Option to Purchase” in Article 7
of the Adjacent Driveway Lease.

 

Section 5.25.         Compliance with CC Skybridge
Documentation.  Until Bank Facilities
Termination, Borrower shall fully perform and comply with or cause to be performed
and complied with all of the respective material covenants, material terms and
material conditions imposed or assumed by it under the CC Skybridge
Documentation.  Borrower shall not enter
into any material amendment or modification or terminate, or enter into any
agreement to enter into any material amendment or

 

87

 

modification or terminate any of the CC
Skybridge Documentation without the prior written consent of Agent Bank, which
consent shall not be unreasonably withheld or delayed, or if in the opinion of
Agent Bank such amendment, modification or termination is materially adverse to
Borrower or the Banks, without the prior written consent of Requisite Lenders.

 

Section 5.26.         USA Patriot Act.  Each Lender that is subject to the Patriot
Act (as hereinafter defined) and the Agent Bank (for itself and not on behalf
of any Lender), notifies Borrower that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Patriot Act”), it is required to obtain, verify and record
information that identifies such Borrower, which information includes the name
and address of such Borrower and other information that will allow such Lender
or the Agent Bank, as applicable, to identify such Borrower in accordance with
the Patriot Act, and Borrower agrees to provide such information from time to
time to Agent Bank and any Lender.

 

ARTICLE
VI

 

FINANCIAL
COVENANTS

 

Until payment in full of
all sums owing hereunder and under the Revolving Credit Note and the occurrence
of Bank Facility Termination, Borrower and MCRI agree, as set forth below, to
comply or cause compliance with the following Financial Covenants.

 

Section 6.01.         Total Leverage Ratio.  Commencing as of the Fiscal Quarter ended December 31,
2008 and continuing as of each Fiscal Quarter end until Bank Facility
Termination, the Borrower shall maintain a Total Leverage Ratio no greater than
the ratios described hereinbelow to be calculated as of the end of each Fiscal
Quarter in accordance with the following schedule:

 

	
  Fiscal Quarter End

  	
   

  	
  Maximum Total

  Leverage Ratio

  
	
  As of the Fiscal Quarter ending December 31, 2008 through the
  Fiscal Quarter ending September 30, 2009

  	
   

  	
  2.875 to 1.00

  
	
   

  	
   

  	
   

  
	
  As of the Fiscal Quarter ending December 31, 2009 through the
  Fiscal Quarter ending March 31, 2010

  	
   

  	
  2.625 to 1.00

  

 

88

 

	
  Fiscal Quarter End

  	
   

  	
  Maximum Total

  Leverage Ratio

  
	
  As of the Fiscal Quarter ending June 30, 2010 through the Fiscal
  Quarter ending March 31, 2011

  	
   

  	
  2.375 to 1.00

  
	
   

  	
   

  	
   

  
	
  As of the Fiscal Quarter ending June 30, 2011 and as of each
  Fiscal Quarter end thereafter occurring until Bank Facility Termination

  	
   

  	
  2.00 to 1.00

  

 

Section 6.02.         Fixed Charge Coverage Ratio.  Commencing as of the Fiscal Quarter ended December 31,
2008 and continuing as of each Fiscal Quarter end through Bank Facility
Termination, the Borrower shall maintain a minimum Fixed Charge Coverage Ratio
no less than 1.25 to 1.00 to be calculated on a cumulative basis with respect
to each Fiscal Quarter and the most recently ended three (3) preceding
Fiscal Quarters on a rolling four (4) Fiscal Quarter basis.

 

Section 6.03.         Minimum Two Fiscal Quarter Adjusted
EBITDA.  Commencing with the Fiscal
Quarter ending on March 31, 2009 and continuing as of each Fiscal Quarter
end until the occurrence of Bank Facility Termination, the Borrower shall
realize Adjusted EBITDA no less than the amounts set forth below, in each case
to be calculated with reference to each such Fiscal Quarter and the immediately
preceding Fiscal Quarter on a rolling two (2) Fiscal Quarter basis:

 

	
  December 31, 2008 and

  March 31, 2009

  	
   

  	
  $

  	
  7,250,000.00

  
	
  March 31, 2009 and

  June 30, 2009

  	
   

  	
   

  	
  8,750,000.00

  
	
  June 30, 2009 and

  September 30, 2009

  	
   

  	
  1

  	
  1,250,000.00

  
	
  September 30, 2009 and

  December 31, 2009

  	
   

  	
   

  	
  9,750,000.00

  
	
  December 31, 2009 and

  March 31, 2010

  	
   

  	
   

  	
  7,250,000.00

  
	
  March 31, 2010 and

  June 30, 2010

  	
   

  	
   

  	
  8,750,000.00

  
	
  June 30, 2010 and

  September 30, 2010

  	
   

  	
  1

  	
  1,250,000.00

  

 

89

 

	
  September 30, 2010 and

  December 31, 2010

  	
   

  	
   

  	
  9,750,000.00

  
	
  December 31, 2010 and

  March 31, 2011

  	
   

  	
   

  	
  7,250,000.00

  
	
  March 31, 2011 and

  June 30, 2011

  	
   

  	
   

  	
  8,750,000.00

  
	
  June 30, 2011 and

  September 30, 2011

  	
   

  	
  1

  	
  1,250,000.00

  
	
  September 30, 2011 and

  December 31, 2011

  	
   

  	
   

  	
  9,750,000.00

  

 

Section 6.04.         Maintenance Capital Expenditure
Requirements.  During each Fiscal
Year commencing with the Fiscal Year ending December 31, 2009, Borrower
shall make or cause to be made, Maintenance Capital Expenditures to the
Hotel/Casino Facility in a minimum aggregate amount equal to or greater (“Minimum
Maintenance Cap Ex Requirement”) than two percent (2%) of consolidated annual
net revenues determined with reference to the consolidated annual net revenues
derived from the Hotel/Casino Facility during such Fiscal Year, but in no event
shall Maintenance Capital Expenditures made during any Fiscal Year be greater
than a maximum aggregate amount equal to six percent (6%) of consolidated
annual net revenues (“Maximum Maintenance Cap Ex Limit”) derived from the
Hotel/Casino Facility during such Fiscal Year. 
Notwithstanding anything herein contained to the contrary, during each
of the 2008, 2009 and 2010 Fiscal Years, Borrower may, at its discretion, receive
a credit toward the Minimum Maintenance Cap Ex Requirement for the amounts
expended by Borrower on the Remodel Projects during each respective Fiscal
Year; provided, however, the Maximum Maintenance Cap Ex Limit, as provided
above, shall be determined exclusive of the Remodel Projects shown on the
Schedule of Remodel Projects, Schedule 6.04 affixed hereto.

 

Section 6.05.         Investment Restrictions.  Other than Investments permitted herein or
approved in writing by Requisite Lenders, the Borrower shall not make any
Investments (whether by way of loan, stock purchase, capital contribution, or
otherwise) other than the following:

 

(a)        Cash, Cash Equivalents and direct
obligations of the United States Government;

 

(b)        Prime commercial paper (AA rated or
better);

 

90

 

(c)        Certificates of Deposit or Repurchase
Agreement issued by a commercial bank having capital surplus in excess of One
Hundred Million Dollars ($100,000,000.00);

 

(d)        Money market or other funds of
nationally recognized institutions investing solely in obligations described in
(a), (b) and (c) above;

 

(e)        Loans and advances to employees in the
ordinary course of business not exceeding One Million Dollars ($1,000,000.00)
in the aggregate at any one time;

 

(f)         Investments and Maintenance Capital
Expenditures in the Hotel/Casino Facility to the extent permitted in Section 6.04
hereinabove; and

 

(g)        Share Repurchases to the extent
permitted as Distributions under Section 6.06.

 

Section 6.06.         Limitation on Distributions.  The Borrower shall not pay and disburse any
Distributions other than as specifically permitted hereinbelow:

 

(a)        So long as no Default or Event of
Default has occurred and remains continuing or would result from the payment or
disbursement of such Distribution, the Borrower may make Distributions,
including Share Repurchases, up to the maximum cumulative aggregate amount of
Three Million Dollars ($3,000,000.00) during each Fiscal Year, so long as each
proposed Distribution will not result in a violation of the Adjusted Fixed
Charge Coverage Ratio to be calculated on a pro forma basis as if such
Distribution had been made during the most recently ended Fiscal Quarter.

 

(b)        Notwithstanding the limitation set forth
in (a) above, in the event that Borrower funds less than Three Million
Dollars ($3,000,000.00) in Distributions during any Fiscal Year (such unfunded
amounts being herein collectively referenced as the “Distribution Carryover”),
Borrower may thereafter fund in addition to the maximum cumulative aggregate
permitted in (a) above, an additional amount of up to the amount of the
Distribution Carryover outstanding as of the date of such additional
Distribution, so long as at least thirty (30) calendar days prior to the
funding of such Distribution an Authorized Officer certifies to Agent Bank in
writing that such Distribution will not result in a violation of the Fixed
Charge Coverage Ratio at the end of the Fiscal Quarter during which such
Distribution is made nor as of the end of each Fiscal Quarter remaining during
the Fiscal Year during which such Distribution is made.

 

(c)        Notwithstanding the limitations set
forth in (a) and (b) above, in the event Borrower achieves a Total
Leverage Ratio of 1.75 to 1.00 or less as of the

 

91

 

end of any
Fiscal Quarter determined with respect to such Fiscal Quarter and the most
recently ended three (3) preceding Fiscal Quarters, the limitations set
forth in (a) and (b) shall be suspended until the Borrower realizes a
Total Leverage Ratio in excess of 1.75 to 1.00 as of the end of any Fiscal
Quarter determined with respect to such Fiscal Quarter and the most recently
ended three (3) preceding Fiscal Quarters, at which time the limitations
set forth in (a) and (b) above shall be reinstated in all
respects.  During any period during which
the limitations set forth in (a) and (b) above are suspended,
Distributions, including Share Repurchases, may be made without limitation so
long as no Default or Event of Default has occurred and remains continuing and
so long as at least thirty (30) calendar days prior to the funding of each
proposed Distribution an Authorized Officer certifies to Agent Bank in writing
that each such Distribution will not result in a violation of the Fixed Charge
Coverage Ratio (x) at the end of the Fiscal Quarter during which such
Distribution is made, and (y) either (1) at the end of the next
ensuing Fiscal Quarter, or (2) as of the end of each Fiscal Quarter
remaining during the Fiscal Year during which such Distribution is made,
whichever period is longer from the date of such Distribution.

 

Section 6.07.         Limitation on Indebtedness.  The Borrower and MCRI, on a combined basis,
shall not owe or incur any Indebtedness, except as specifically permitted
hereinbelow:

 

(a)       Aggregate Outstandings under the Credit
Facility;

 

(b)      Secured Interest Rate Hedges up to the
aggregate amount of the Aggregate Commitment at any time outstanding;

 

(c)       Incurrence of secured purchase money
Indebtedness and Capital Lease Liabilities relating to FF&E to be used in
connection with the Hotel/Casino Facility not in excess of the aggregate amount
of Five Million Dollars ($5,000,000.00) at any time outstanding;

 

(d)      Unsecured Indebtedness, not in excess of
Seven Million Five Hundred Thousand Dollars ($7,500,000.00) at any time
outstanding, that is not subject to financial and other covenants and events of
default more onerous or restrictive on Borrower and Guarantor than the terms
and provisions of this Credit Agreement;

 

(e)       Indebtedness that is evidenced by a
Permitted Encumbrance;

 

(f)       Unsecured trade payables incurred in the
ordinary course of business less than one hundred twenty (120) days past due,
except such trade payables, if any, as are being contested in good faith by the
Borrower by appropriate

 

92

 

proceedings
and for which the Borrower has maintained adequate reserve for the payment
thereof;

 

(g)        Contingent Liabilities to the extent
permitted under Section 6.12; and

 

(h)       Other Indebtedness (other than the
Commitment Increases) that may be incurred by the Borrower and/or MCRI so long
as: (i) such Indebtedness is unsecured, (ii) no Default or Event of
Default has occurred and remains continuing or would result from the incurrence
of such Indebtedness, and (iii) one hundred percent (100%) of the net Cash
proceeds, after payment of the costs and expenses of incurring such
Indebtedness, is used to make a Mandatory Commitment Reduction to the Aggregate
Commitment hereunder.

 

Section 6.08.         Total Liens.  The Borrower shall not directly or
indirectly, create, incur, assume or permit to exist any Lien on or with
respect to any of the Collateral, whether now owned or hereafter acquired, or
any income or profits therefrom, or file or permit the filing of, or permit to
remain in effect, any financing statement or other similar notice of any Lien
with respect to any of the Collateral, except:

 

(a)        Permitted Encumbrances;

 

(b)        Liens granted or permitted pursuant to
the Security Documentation;

 

(c)       Liens on the FF&E and other goods
securing Indebtedness to finance the purchase price thereof; provided
that (i) such Liens shall extend only to the equipment and other goods so
financed and the proceeds thereof, and (ii) such Liens shall not secure
Indebtedness in excess of the amounts permitted under Section 6.07(a) hereinabove;
and

 

(d)        Liens described on Schedule 6.08
annexed hereto.

 

Section 6.09.         Sale of Assets, Consolidation,
Merger, or Liquidation.  Other than
as approved in writing by Requisite Lenders, neither Borrower nor MCRI shall
wind up, liquidate or dissolve their respective affairs or enter into any
transaction of merger or consolidation. 
Further, Borrower shall not convey, sell, lease or otherwise dispose of
(or make an agreement to do any of the foregoing at any time prior to Bank
Facility Termination) all or any material part of its respective property or
assets, except that the following shall be permitted:

 

93

 

(a)        The Borrower may make sales of inventory
and other assets in the ordinary course of business;

 

(b)        So long as no Default or Event of
Default shall have occurred and remains continuing the Borrower may, in the
ordinary course of business and subject to the provisions of subsection (c) hereinbelow,
sell FF&E and other items of Collateral that are, in Borrower’s prudent
business judgment, obsolete or no longer necessary for the Borrower’s business
objectives;

 

(c)        If the Borrower should sell, transfer,
convey or otherwise dispose (“Disposition”) of any FF&E and not within
ninety (90) days of such Disposition replace such FF&E with purchased items
of equivalent value and utility or replace said FF&E with leased FF&E
of equivalent value and utility, within the permissible leasing and purchase
agreement limitation set forth in Section 6.07(c) herein, to the
extent the Net Proceeds from Dispositions which are not used to replace
FF&E exceed the cumulative aggregate amount of Two Million Five Hundred
Thousand Dollars ($2,500,000.00) during the Revolving Credit Period (the “Excess
Capital Proceeds”), the Borrower shall be required to, prior to ninety (90)
days following each Disposition of FF&E resulting in Excess Capital
Proceeds, permanently reduce the Aggregate Commitment by a Mandatory Commitment
Reduction in the amount of the Excess Capital Proceeds, subject, however, to
the right of Agent Bank to verify to its reasonable satisfaction the amount of
said Excess Capital Proceeds.

 

Section 6.10.         No Transfer of Ownership.  MCRI shall not transfer or hypothecate its
ownership interests in Borrower except in connection with the Security
Documentation.  This provision shall not
be effective as to MCRI until it is approved by the Nevada Gaming Authorities.

 

Section 6.11.         Limitation on Subsidiaries.  Borrower shall not create any Subsidiaries
without the prior written consent of Requisite Lenders.  Nothing contained herein shall be deemed to
prohibit or restrict MCRI from creating or continuing any Subsidiaries.

 

Section 6.12.         Contingent Liability(ies).  Borrower and MCRI, on a consolidated basis,
shall not directly or indirectly incur any Contingent Liabilities on the
Indebtedness of any other Person, without the prior written consent of
Requisite Lenders.  In no event shall any
Contingent Liabilities be secured by a Lien on any property or assets of the
Borrower.

 

Section 6.13.         Transactions with Members of MCRI
Consolidation.  Other than with
respect to payments of the MCRI Corporate Overhead Allocation and Distributions
permitted under Section 6.06, no transactions shall be made by
Borrower

 

94

 

with any member of the MCRI
Consolidation other than arms length transactions for fair market value.

 

Section 6.14.         Limitation on Consolidated Tax
Liability.  Borrower shall not be
liable to the MCRI Consolidation, or any member thereof, for federal income
taxes in excess of the amount of federal income taxes it would pay if reporting
as a separate entity.

 

Section 6.15.         ERISA.  Borrower shall not:

 

(a)        At any time, permit any Pension Plan
which is maintained by Borrower or to which Borrower is obligated to contribute
on behalf of its employees, in such case if to do so would constitute a Material Adverse Change, to:

 

(i)         engage in any
non-exempt “prohibited transaction”, as such term is defined in Section 4975
of the Code;

 

(ii)        incur any material “accumulated
funding deficiency”, as that term is defined in Section 302 of ERISA; or

 

(iii)       suffer a termination
event to occur which may reasonably be expected to result in liability of
Borrower to the Pension Plan or to the Pension Benefit Guaranty Corporation or
the imposition of a lien on the Collateral pursuant to Section 4068 of
ERISA.

 

(b)        Fail, upon Borrower becoming aware
thereof, promptly to notify the Agent Bank of the occurrence of any Reportable
Event with respect to any Pension Plan or of any non-exempt “prohibited
transaction” (as defined in Section 4975 of the Code) with respect to any
Pension Plan which is maintained by Borrower or to which Borrower is obligated
to contribute on behalf of its employees or any trust created thereunder which
Reportable Event or prohibited transaction would constitute a Material Adverse Change.

 

(c)        At any time, permit any Pension Plan
which is maintained by Borrower or to which Borrower is obligated to contribute
on behalf of its employees to fail to comply with ERISA or other applicable
laws in any respect that would result in a Material Adverse Change.

 

Section 6.16.         Margin Regulations.  No part of the proceeds of the Credit
Facility will be used by Borrower to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any Margin
Stock.  Neither the making of such loans,
nor the use of the proceeds of such loans will violate or be 

 

95

 

inconsistent with the provisions of
Regulations T, U or X of the Board of Governors of the Federal Reserve System.

 

Section 6.17.         Change in Accounting Principles.  Except as otherwise provided herein, if any
changes in accounting principles from those used in the preparation of the most
recent financial statements delivered to Agent Bank pursuant to the terms
hereof are hereinafter required or permitted by the rules, regulations,
pronouncements and opinions of the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions) and are adopted by the Borrower with the
agreement of its independent certified public accountants and such changes
result in a change in the method of calculation of any of the financial
covenants, standards or terms found herein, the parties hereto agree to enter
into negotiations in order to amend such provisions so as to equitably reflect
such changes with the desired result that the criteria for evaluating the
financial condition of Borrower shall be the same after such changes as if such
changes had not been made; provided, however, that no change in GAAP that would
affect the method of calculation of any of the financial covenants, standards
or terms shall be given effect in such calculations until such provisions are
amended, in a manner satisfactory to Agent Bank and Requisite Lenders, to so
reflect such change in accounting principles.

 

ARTICLE
VII

 

EVENTS
OF DEFAULT

 

Section 7.01.         Events of Default.  Any of the following events and the passage
of any applicable notice and cure periods shall constitute an Event of Default
hereunder:

 

(a)        Any representation or warranty made by
Borrower or MCRI pursuant to or in connection with this Credit Agreement, the
Notes, the Environmental Certificate, or any other Loan Document or in any
report, certificate, financial statement or other writing furnished by Borrower
or Guarantor in connection herewith, shall prove to be false, incorrect or
misleading in any materially adverse aspect as of the date when made;

 

(b)        Borrower shall have defaulted in the
payment of any interest on the Notes when due, and such default continues for a
period of more than five (5) days or Borrower shall have defaulted in the
payment of any principal when due;

 

(c)        Borrower shall have defaulted under the
terms of any other obligation owing Agent Bank, which default continues beyond
any applicable grace period therein contained;

 

96

 

(d)        Borrower shall have defaulted in the
payment of any fees required to be paid under the Fee Side Letter, late charge,
Commitment Fees, L/C Fees, expenses, indemnities or any other amount owing
under any Loan Document for a period of five (5) days after notice thereof
to Borrower from Agent Bank;

 

(e)        Borrower shall fail duly and punctually
to perform or comply with: (i) any term, covenant, condition or promise
contained in Sections 6.01, 6.02, 6.03, 6.04, 6.05, 6.06, 6.07, 6.08, 6.09
or 6.10, or (ii) any other term, covenant, condition or promise contained
in this Credit Agreement, the Notes, the Deed of Trust or any other Loan
Document and, in the case of any term, covenant, condition or promise covered
by this clause (ii), such failure shall continue thirty (30) days after written
notice thereof is delivered to Borrower by Agent Bank or any Lender of such
failure;

 

(f)         Any of the Security Documentation or
any provision thereof: (i) shall cease to be in full force and effect in
any material respect as a result of any action of the Borrower and such
cessation results in a Material
Adverse Change, or (ii) shall cease to give the Agent Bank in any
material respect the liens, rights, powers and privileges purported to be
created thereby as a result of any action of the Borrower, or (iii) the
Borrower shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to the
Security Documentation for a period of thirty (30) days after written notice
thereof is delivered to Borrower by Agent Bank of such failure (or such shorter
period following such notice as may be specifically required in any Loan
Document);

 

(g)        Borrower or MCRI shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to it or its debts under the Bankruptcy Code or any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official, for all or substantially all of its property, or shall
consent to any such relief or to the appointment or taking possession by any
such official in any involuntary case or other proceeding against it;

 

(h)        An involuntary case or other proceeding
shall be commenced against Borrower or MCRI seeking liquidation, reorganization
or other relief with respect to itself or its debts under the Bankruptcy Code
or any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official, for all or substantially all of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for
a period of ninety (90) days;

 

(i)         Borrower or MCRI makes an assignment
for the benefit of its creditors or admits in writing its inability to pay its
debts generally as they become due;

 

97

 

(j)       Borrower shall fail to make any payment
when due (whether by scheduled maturity, required prepayment, offer to
purchase, redemption, acceleration, demand or otherwise, in each case beyond
the grace period provided with respect to such Indebtedness) on any Indebtedness
(other than any Indebtedness under this Credit Agreement), if the aggregate
amount of such Indebtedness is One Million Dollars ($1,000,000.00), or more, or
any breach, default or event of default shall occur, or any other event shall
occur or condition shall exist, under any instrument, agreement or indenture
pertaining thereto if the effect thereof is to accelerate, the maturity of any
such Indebtedness; or any such Indebtedness shall be declared to be due and
payable or shall be required to be prepaid, purchased or redeemed (other than
by a regularly scheduled required prepayment) prior to the stated maturity
thereof, or the holder of any lien in any amount, shall commence foreclosure of
such lien upon property of Borrower having a value in excess of One Million
Dollars ($1,000,000.00) and such foreclosure shall continue against such
property to a date less than thirty (30) days prior to the date of the proposed
foreclosure sale;

 

(k)      The occurrence of any event of default,
beyond any applicable grace period, under the terms of any agreement with any
Lender in connection with a Secured Interest Rate Hedge relating to the Credit
Facility;

 

(l)        Borrower shall be voluntarily or
involuntarily divested of title or possession of any portion of the Real Property
or shall lease or in any other manner, voluntarily or involuntarily alienate
any of its interest in any portion of the Real Property or Hotel/Casino
Facility, other than the Permitted Encumbrances and as permitted in
Sections 5.01 and 5.22;

 

(m)       The occurrence of any Reportable Event
with respect to a Pension Plan which Agent Bank determines in good faith
constitutes proper grounds for the termination of any Pension Plan by the
Pension Benefit Guaranty Corporation or for the appointment by an appropriate
United States District Court of a trustee to administer any such plan that
would constitute a Material
Adverse Change, should occur and should continue for thirty (30) days
after written notice of such determination shall have been given to Borrower by
Agent Bank;

 

(n)        Commencement against Borrower, any time
after the execution of this Credit Agreement, of any litigation which is not
stayed, bonded, dismissed, terminated or disposed of to the satisfaction of
Agent Bank within ninety (90) days after its commencement, and which (i) has
a reasonable probability of success, and could, if successful, in the
reasonable opinion of Agent Bank, materially and adversely affect the priority
of the Liens granted Agent Bank by the Deed of Trust in the Real Property, or (ii) results
in the issuance of a preliminary or permanent injunction which is not dissolved
or stayed pending appeal within sixty (60) days of its issuance

 

98

 

and which
preliminary or permanent injunction materially adversely affects Borrower’s
right to use the Real Property as the Hotel/Casino Facility;

 

(o)        The loss or suspension, other than on
account of forces majeure, of Borrower’s unrestricted Gaming Permits or the
failure of Borrower to maintain gaming activities at the Hotel/Casino Facility
other than on account of forces majeure at least to the same general extent as
is presently conducted thereon;

 

(p)        Any money judgment, writ or warrant of
attachment or similar process in excess of Three Million Dollars
($3,000,000.00) in the aggregate not adequately covered by insurance as to
which a solvent and unaffiliated insurance company has acknowledged coverage,
shall be entered or filed against Borrower or any of its assets and shall
remain undischarged, unvacated, unbonded or unstayed for a period of sixty (60)
days (or in any event later than five (5) days prior to the date of any
proposed sale thereunder);

 

(q)      Any order, judgment or decree shall be
entered against Borrower decreeing its involuntary dissolution or split up and
such order shall remain undischarged and unstayed for a period in excess of
thirty (30) days, or Borrower shall otherwise dissolve or cease to exist;

 

(r)        The occurrence of any Change of Control;

 

(s)        MCRI sells, transfers, assigns,
hypothecates or otherwise alienates its interest in all or any portion of the
common voting stock of Borrower (subject to this provision being first approved
by all necessary Gaming Authorities); or

 

(t)       The occurrence of any default under the
Guaranty or the revocation, termination or repudiation of any of the Guarantor’s
promises, obligations or covenants under the Guaranty.

 

Section 7.02.         Default Remedies.

 

(a)        Upon the occurrence and during the
continuance of any Event of Default, Agent Bank may and, upon the consent of
Requisite Lenders shall: (i) declare all of the outstanding unpaid
Indebtedness hereunder and under the Notes and the other Loan Documents,
together with all accrued interest thereon, to be fully due and payable without
presentation, demand, protest or notice of any kind, and, in the event of such
declaration; (ii) shall terminate the obligation of Lenders to make any
advances for Borrowings; and (iii) shall terminate the obligation of the
Swingline Lender to make any advances under the Swingline Facility; provided,
that, the remedies set forth in clauses (i) through (iii) above will
be deemed to have been automatically exercised on the occurrence of any event
set out in Sections 7.01(g), (h) or (i).

 

99

 

(b)        Additionally, while any Event of Default
has occurred and remains continuing, the Banks and/or Agent Bank may (i) exercise
any and all remedies available to Banks or Agent Bank under the Loan Documents;
and/or (ii) exercise any other remedies available to Banks or Agent Bank
at law or in equity, including requesting the appointment of a receiver to
perform any acts required of Borrower under this Credit Agreement.

 

(c)        In the event Borrower has failed to
provide any insurance required under Section 5.09, Agent Bank may elect at
its discretion to purchase such insurance. 
All payments made by Agent Bank for the purpose of providing the
insurance coverages required under Section 5.09 shall be deemed amounts
advanced under Section 5.12 of this Credit Agreement.

 

(d)        The Banks and/or Agent Bank may exercise
any other remedies available to Banks or Agent Bank at law or in equity,
including requesting the appointment of a receiver to perform any acts required
of Borrower under this Credit Agreement, and Borrower hereby specifically
consents to any such request by Banks.

 

(e)       The Swingline Lender shall, upon receipt
of written notice of the occurrence of an Event of Default, terminate its
obligation to make any advances under the Swingline Facility and may declare
all outstanding unpaid Indebtedness hereunder and under the Swingline Note,
together with all accrued interest thereon immediately due and payable without
presentation, demand, protest or notice of any kind.  This remedy will be deemed to have been
automatically exercised on the occurrence of any event set out in
Sections 7.01(g), (h) or (i).

 

(f)         The L/C Issuer shall, upon receipt of
written notice of the occurrence of an Event of Default, terminate its
obligation to issue Letters of Credit and/or any Letter of Credit which may be
terminated in accordance with its terms. 
This remedy will be deemed to have been automatically exercised on the
occurrence of any event set out in Sections 7.01(g), (h) or (i).

 

(g)        Agent Bank and/or L/C Issuer may, or at
the direction of the Requisite Lenders will, direct the Borrower to pay (and
Borrower hereby agrees upon receipt of such notice to pay) to the L/C Issuer an
amount in Cash equal to the then outstanding L/C Exposure, such Cash to be held
by L/C Issuer in the Cash Collateral Account as security for the repayment of
all L/C Reimbursement Obligations thereafter occurring.

 

For the purpose of
carrying out this section and exercising these rights, powers and privileges,
Borrower hereby irrevocably constitutes and appoints Agent Bank as its true and
lawful attorney-in-fact to execute, acknowledge and deliver any instruments and
do and perform any acts such as are referred to in this paragraph in the name
and on

 

100

 

behalf
of Borrower.  Agent Bank on behalf of
Lenders may exercise one or more of Lenders’ remedies simultaneously and all
its remedies are nonexclusive and cumulative. 
Agent Bank and Lenders shall not be required to pursue or exhaust any
Collateral or remedy before pursuing any other Collateral or remedy.  Agent Bank and Lenders’ failure to exercise
any remedy for a particular default shall not be deemed a waiver of (i) such
remedy, nor their rights to exercise any other remedy for that default, nor (ii) their
right to exercise that remedy for any subsequent default.

 

Section 7.03.           Application
of Proceeds.  All payments and proceeds received and all
amounts held or realized from the sale or other disposition of the Collateral,
which are to be applied hereunder towards satisfaction of Borrower’s
obligations under the Credit Facility, shall be applied in the following order
of priority:

 

(a)          First,
to the payment of all reasonable fees, costs and expenses (including reasonable
attorney’s fees and expenses) incurred by Agent Bank and Banks, their agents or
representatives in connection with the realization upon any of the Collateral;

 

(b)          Next,
to the payment in full of any other amounts due under this Credit Agreement,
the Deed of Trust, or any other Loan Documents (other than the Notes or under
any Secured Interest Rate Hedge);

 

(c)          Next,
to the balance of interest remaining unpaid on the Notes;

 

(d)          Next,
to the balance of principal remaining unpaid on the Notes;

 

(e)          Next,
to the payment of any other amounts owing to Banks which is necessary to cause
Bank Facility Termination, including, without limitation, any amounts owing
with respect to the Secured Interest Rate Hedges; and

 

(f)           Next,
the balance, if any, of such payments or proceeds to whomever may be legally
entitled thereto.

 

Section 7.04.           Notices.  In order to entitle Agent Bank and/or Banks
to exercise any remedy available hereunder, it shall not be necessary for Agent
Bank and/or Banks to give any notice, other than such notice as may be required
expressly herein or by applicable law.

 

Section 7.05.           Agreement
to Pay Attorney’s Fees and Expenses.  Subject to the provisions of Section 10.14,
upon the occurrence of an Event of Default, as a result of which Agent Bank
shall require and employ attorneys or incur other

 

101

 

expenses for the collection of payments due or
to become due or the enforcement or performance or observance of any obligation
or agreement on the part of Borrower contained herein, Borrower shall, on
demand, pay to Agent Bank the reasonable fees of such attorneys and such other
reasonable expenses so incurred by Agent Bank.

 

Section 7.06.           No
Additional Waiver Implied by One Waiver.  In the event any agreement contained in this
Credit Agreement should be breached by either party and thereafter waived by
the other party, such waiver shall be limited to the particular breach so
waived and shall not be deemed to waive any other breach hereunder.

 

Section 7.07.           Licensing
of Agent Bank and Lenders.  In the event of the occurrence of an Event of
Default hereunder or under any of the Loan Documents and it shall become
necessary, or in the opinion of Requisite Lenders advisable, for an agent,
supervisor, receiver or other representative of Agent Bank and Banks to become
licensed under the provisions of the laws and/or regulations of any applicable
Gaming Authority as a condition to receiving the benefit of any Collateral
encumbered by the Deed of Trust or other Loan Documents for the benefit of Lenders
or otherwise to enforce their rights hereunder, Borrower hereby gives its
consent to the granting of such license or licenses and agrees to execute such
further documents as may be required in connection with the evidencing of such
consent.

 

Section 7.08.          Exercise
of Rights Subject to Applicable Law.  All rights, remedies and powers provided by
this Article VII may be exercised only to the extent that the exercise
thereof does not violate any applicable provision of the laws of any
Governmental Authority and all of the provisions of this Article VII are
intended to be subject to all applicable mandatory provisions of law that may
be controlling and to be limited to the extent necessary so that they will not
render this Credit Agreement invalid, unenforceable or not entitled to be
recorded or filed under the provisions of any applicable law.

 

Section 7.09.           Discontinuance
of Proceedings.  In case Agent Bank and/or Banks shall have
proceeded to enforce any right, power or remedy under this Credit Agreement,
the Notes, the Deed of Trust or any other Loan Document by foreclosure, entry
or otherwise, and such proceedings shall have been discontinued or abandoned
for any reason or shall have been determined adversely to Banks, then and in
every such case Borrower, Agent Bank and/or Banks shall be restored to their
former positions and rights hereunder with respect to the Collateral, and all
rights, remedies and powers of Agent Bank and Banks shall continue as if such
proceedings had not been taken, subject to any binding rule by the
applicable court or other tribunal in any such proceeding.

 

102

 

ARTICLE
VIII

 

DAMAGE, DESTRUCTION AND CONDEMNATION

 

Section 8.01.           No
Abatement of Payments.  If all or any part of the Hotel/Casino
Facility shall be materially damaged or destroyed, or if title to or the
temporary use of the whole or any part of the Hotel/Casino Facility shall be
taken or condemned by a competent authority for any public use or purpose,
there shall be no abatement or reduction in the amounts payable by Borrower
hereunder or under the Revolving Credit Note, and Borrower shall continue to be
obligated to make such payments.

 

Section 8.02.           Distribution
of Capital Proceeds Upon Occurrence of Fire, Casualty, Other Perils or
Condemnation.  All Capital Proceeds received from insurance
policies under Section 5.09, including flood and earthquake, covering any
of the Collateral or from condemnation, eminent domain or similar actions or by
settlement in lieu of eminent domain proceedings in regard to said Collateral,
shall be paid directly to Agent Bank.  In
the event the amount of Capital Proceeds paid to Agent Bank is equal to or less
than Two Million Dollars ($2,000,000.00), such Capital Proceeds shall be paid
to Borrower, unless a Default in the payment of any principal or interest owing
under the terms of the Bank Facilities or an Event of Default (other than
non-monetary Events of Default occurring as a direct consequence of each
casualty loss or condemnation) shall have occurred hereunder and is
continuing.  In the event the amount of
Capital Proceeds paid to Agent Bank is greater than Two Million Dollars
($2,000,000.00), then, unless a Default or Event of Default (other than non-monetary
Events of Default occurring as a direct consequence of each casualty loss or
condemnation) has occurred hereunder and is then continuing, the entire amount
so collected or so much thereof as may be required (any excess to be returned
to Borrower) to repair or replace the destroyed or condemned property, shall,
subject to the conditions set forth below, be released to Borrower for repair
or replacement of the property destroyed or condemned or to reimburse Borrower
for the costs of such repair or replacement incurred prior to the date of such
release.  If a Default or Event of
Default (other than non-monetary Events of Default occurring as a direct
consequence of such casualty loss or condemnation) has occurred hereunder and
is then continuing, such amount may, at the option of Requisite Lenders, be
applied as a Mandatory Commitment Reduction. 
In the event Banks are required to release all or a portion of the
collected funds to Borrower for such repair or replacement of the property
destroyed or condemned, such release of funds shall be made in accordance with
the following terms and conditions:

 

(a)          The
repairs, replacements and rebuilding shall be made in accordance with plans and
specifications approved by Requisite Lenders and in accordance with all
applicable Laws, ordinances, rules, regulations and requirements of
Governmental Authorities;

 

103

 

(b)          Borrower
shall provide Agent Bank with a detailed estimate of the costs of such repairs
or restorations;

 

(c)         Borrower
shall satisfy the Requisite Lenders that after the reconstruction is completed,
the value of the Hotel/Casino Facility as determined by the Requisite Lenders
in their reasonable discretion, will not be less than the value of the
Hotel/Casino Facility prior to such destruction or condemnation as determined
by the Requisite Lenders pursuant to this Credit Agreement;

 

(d)          In
the Requisite Lenders’ sole reasonable opinion, any undisbursed portion of the
Available Borrowings contemplated hereunder, after deposit of such proceeds, is
sufficient to pay all costs of reconstruction of the Hotel/Casino Facility or
other Collateral damaged, destroyed or condemned; or if the undisbursed portion
of such Credit Facility is not sufficient, Borrower shall deposit additional
funds with the Agent Bank, sufficient to pay such additional costs of
reconstructing the Hotel/Casino Facility;

 

(e)          Borrower
has delivered to the Agent Bank a construction contract for
the work of reconstruction in form and content, including insurance
requirements, acceptable to the Agent Bank with a contractor acceptable to the
Agent Bank;

 

(f)          The
Requisite Lenders in their reasonable discretion have determined that after the
work of reconstruction is completed, the Hotel/Casino Facility or Collateral
damaged, destroyed or condemned will produce income sufficient to pay all costs
of operations and maintenance of the Hotel/Casino Facility with a reasonable
reserve for repairs, and service all debts secured by the Hotel/Casino
Facility;

 

(g)         No
Default or Event of Default (other than non-monetary Events of Default
occurring as a direct consequence of such casualty loss or condemnation) has
occurred and is continuing hereunder;

 

(h)          Borrower
has deposited with the Agent Bank that amount reasonably determined by the
Requisite Lenders (taking into consideration the amount of Borrowings available
and the amount of proceeds, if any, of insurance policies covering property
damage and business interruption, loss or rental income in connection with the
Hotel/Casino Facility or Collateral damaged, destroyed or condemned accruing
and immediately forthcoming to the Agent Bank and reasonable projections of
income of Borrower to be realized during the period of reconstruction) to be
sufficient to service the Indebtedness secured hereby during the period of
reconstruction, as reasonably estimated by the Requisite Lenders;

 

104

 

(i)           Before
commencing any such work, Borrower shall, at its own cost and expense, furnish
Agent Bank with appropriate endorsements, if needed, to the “All Risk”
insurance policy which Borrower is then presently maintaining, and course of construction
insurance to cover all of the risks during the course of such work;

 

(j)           Such
work shall be commenced by Borrower within one hundred twenty (120) days after (i) settlement
shall have been made with the insurance companies or condemnation proceeds
shall have been received, and (ii) all the necessary governmental
approvals shall have been obtained, and such work shall be completed within a
reasonable time, free and clear of all liens and encumbrances so as not to
interfere with the lien of the Deed of Trust;

 

(k)          Disbursements
of such insurance or condemnation proceeds shall be made in the customary
manner used by Agent Bank for the disbursement of construction
loans.

 

ARTICLE
IX

 

AGENCY PROVISIONS

 

Section 9.01.           Appointment.

 

(a)          Each
Lender hereby (i) designates and appoints WFB as the Agent Bank of such
Lender under this Credit Agreement and the Loan Documents, (ii) authorizes
and directs Agent Bank to enter into the Loan Documents other than this Credit
Agreement for the benefit of Lenders, and (iii) authorizes Agent Bank to
take such action on its behalf under the provisions of this Credit Agreement
and the Loan Documents and to exercise such powers as are set forth herein or
therein, together with such other powers as are reasonably incidental thereto,
subject to the limitations referred to in Sections 9.10(a) and
9.10(b).  Agent Bank agrees to act as
such on the express conditions contained in this Article IX.

 

(b)          The
provisions of this Article IX are solely for the benefit of Agent Bank and
Lenders, and Borrower and Guarantor shall not have any rights to rely on or
enforce any of the provisions hereof (other than as set forth in the provisions
of Section 9.03, 9.09 and 10.10), provided, however, that the foregoing
shall in no way limit Borrower’s or Guarantor’s obligations under this Article IX
nor limit Lenders’ obligations to Borrower as provided in this Credit
Agreement.  In performing its functions
and duties under this Credit Agreement, Agent Bank shall act solely as Agent
Bank of Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for Borrower,
Guarantor or any other Person.

 

105

 

Section 9.02.        Nature
of Duties. 
Agent Bank shall not have any duties or responsibilities except those
expressly set forth in this Credit Agreement or in the Loan Documents.  The duties of Agent Bank shall be
administrative in nature.  Subject to the
provisions of Sections 9.05 and 9.07, Agent Bank shall administer the Credit
Facility in the same manner as it administers its own loans.  Promptly following the effectiveness of this
Credit Agreement, Agent Bank shall send to each Lender a duplicate executed
original, to the extent the same are available in sufficient numbers, of the
Credit Agreement and a copy of each other Loan Document in favor of Lenders and
a copy of the filed or recorded Security Documentation, with the originals of
the latter to be held and retained by Agent Bank for the benefit of all
Lenders.  Agent Bank shall not have by
reason of this Credit Agreement a fiduciary relationship in respect of any
Lender.  Nothing in this Credit Agreement
or any of the Loan Documents, expressed or implied, is intended or shall be
construed to impose upon Agent Bank any obligation in respect of this Credit
Agreement or any of the Loan Documents except as expressly set forth herein or
therein.  Each Lender shall make its own
independent investigation of the financial condition and affairs of the
Borrower, Guarantor and the Collateral in connection with the making and the
continuance of the Credit Facility hereunder and shall make its own appraisal
of the creditworthiness of the Borrower, Guarantor and the Collateral, and,
except as specifically provided herein, Agent Bank shall not have any duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect thereto, whether coming into
its possession before the Restatement Effective Date
or at any time or times thereafter.

 

Section 9.03.        Disbursement
of Borrowings.

 

(a)          Not
later than the next Banking Business Day following receipt of a Notice of
Borrowing, Agent Bank shall send a copy thereof by facsimile to each other
Lender and shall otherwise notify each Lender of the proposed Borrowing and the
Funding Date.  Each Lender shall make
available to Agent Bank (or the funding bank or entity designated by Agent
Bank), the amount of such Lender’s Pro Rata Share of such Borrowing in
immediately available funds not later than the times designated in Section 9.03(b).  Unless Agent Bank shall have been notified by
any Lender not later than the close of business (San Francisco time) on the
Banking Business Day immediately preceding the Funding Date in respect of any
Borrowing that such Lender does not intend to make available to Agent Bank such
Lender’s Pro Rata Share of such Borrowing, Agent Bank may assume that such
Lender shall make such amount available to Agent Bank.  If any Lender does not notify Agent Bank of
its intention not to make available its Pro Rata Share of such Borrowing as
described above, but does not for any reason make available to Agent Bank such
Lender’s Pro Rata Share of such Borrowing, such Lender shall pay to Agent Bank
forthwith on demand such amount, together with interest thereon at the Federal
Funds Rate.  In any case where a Lender
does not for any reason make available to Agent Bank such Lender’s Pro Rata
Share of

 

106

 

such Borrowing, Agent
Bank, in its sole discretion, may, but shall not be obligated to, fund to
Borrower such Lender’s Pro Rata Share of such Borrowing.  If Agent Bank funds to Borrower such Lender’s
Pro Rata Share of such Borrowing and if such Lender subsequently pays to Agent
Bank such corresponding amount, such amount so paid shall constitute such
Lender’s Pro Rata Share of such Borrowing. 
Nothing in this Section 9.03(a) shall alter the respective
rights and obligations of the parties hereunder in respect of a Deteriorating
Lender or a Non-Pro Rata Borrowing.

 

(b)          Requests
by Agent Bank for funding by Lenders of Borrowings will be made by facsimile or
through the Platform.  Each Lender shall
make the amount of its Pro Rata Share of such Borrowing available to Agent Bank
in Dollars and in immediately available funds, to such bank and account, in San
Francisco, California as Agent Bank may designate, not later than 11:00 a.m.
on the Funding Date designated in the Notice of Borrowing with respect to such
Borrowing.

 

(c)          Nothing
in this Section 9.03 shall be deemed to relieve any Lender of its
obligation hereunder to make its Pro Rata Share of Borrowings on any Funding
Date, nor shall any Lender be responsible for the failure of any other Lender
to perform its obligations to advance its Pro Rata Share of any Borrowing
hereunder, and the Pro Rata Share of the Aggregate Commitment of any Lender
shall not be increased or decreased as a result of the failure by any other
Lender to perform its obligation to advance its Pro Rata Share of any
Borrowing.

 

Section 9.04.           Distribution
and Apportionment of Payments.

 

(a)          Subject
to Section 9.04(b), payments actually received by Agent Bank for the
account of Lenders shall be paid to them promptly after receipt thereof by
Agent Bank, but in any event within one (1) Banking Business Day, provided
that Agent Bank shall pay to Lenders interest thereon, at the Federal Funds
Rate from the Banking Business Day following receipt of such funds by Agent
Bank until such funds are paid in immediately available funds to Lenders.  Subject to Section 9.04(b), all payments
of principal and interest in respect of Funded Outstandings, all payments of
the fees described in this Credit Agreement, and all payments in respect of any
other Obligations shall be allocated among such other Lenders as are entitled
thereto, in proportion to their respective Pro Rata Shares or otherwise as
provided herein.  Agent Bank shall
promptly distribute, but in any event within one (1) Banking Business Day,
to each Lender at its primary address set forth on the appropriate signature page hereof
or on the applicable Assignment and Assumption Agreement, or at such other
address as a Lender may request in writing, such funds as it may be entitled to
receive, provided that Agent Bank shall in any event not be bound to inquire
into or determine the validity, scope or priority of any interest or entitlement
of any Lender and may suspend all payments and seek appropriate relief
(including, without limitation, instructions from Requisite Lenders or all
Lenders, as applicable, or an action in the nature of 

 

107

 

interpleader) in the
event of any doubt or dispute as to any apportionment or distribution
contemplated hereby.  The order of
priority herein is set forth solely to determine the rights and priorities of
Lenders as among themselves and may at any time or from time to time be changed
by Lenders as they may elect, in writing in accordance with Section 10.01,
without necessity of notice to or consent of or approval by Borrower, Guarantor
or any other Person.  All payments or
other sums received by Agent Bank for the account of Lenders (including,
without limitation, principal and interest payments, the proceeds of any and
all insurance maintained with respect to any of the Collateral, and any and all
condemnation proceeds with respect to any of the Collateral) shall not
constitute property or assets of the Agent Bank and shall be held by Agent
Bank, solely in its capacity as administrative and collateral agent for itself
and the other Lenders, subject to the Loan Documents.

 

(b)          Notwithstanding
any provision hereof to the contrary, until such time as a Defaulting Lender
has funded its Pro Rata Share of Borrowing which was previously a Non Pro Rata
Borrowing, or all other Lenders have received payment in full (whether by
repayment or prepayment) of the principal due in respect of such Non Pro Rata
Borrowing, all principal sums owing to such Defaulting Lender hereunder shall
be subordinated in right of payment to the prior payment in full of all
principal, in respect of all Non Pro Rata Borrowing in which the Defaulting
Lender has not funded its Pro Rata Share. 
This provision governs only the relationship among Agent Bank, each
Defaulting Lender, and the other Lenders; nothing hereunder shall limit the
obligation of Borrower to repay all Borrowings in accordance with the terms of
this Credit Agreement.  The provisions of
this section shall apply and be effective regardless of whether an Event of
Default occurs and is then continuing, and notwithstanding (i) any other
provision of this Credit Agreement to the contrary, (ii) any instruction
of Borrower as to its desired application of payments or (iii) the
suspension of such Defaulting Lender’s right to vote on matters which are
subject to the consent or approval of Requisite Lenders or all Lenders.  No Commitment Fee or L/C Fees shall accrue in
favor of, or be payable to, such Defaulting Lender from the date of any failure
to fund Borrowings or reimburse Agent Bank for any Liabilities and Costs as
herein provided until such failure has been cured, and Agent Bank shall be
entitled to (A) withhold or setoff, and to apply to the payment of the
defaulted amount and any related interest, any amounts to be paid to such
Defaulting Lender under this Credit Agreement, and (B) bring an action or
suit against such Defaulting Lender in a court of competent jurisdiction to
recover the defaulted amount and any related interest.  In addition, the Defaulting Lender shall
indemnify, defend and hold Agent Bank and each of the other Lenders harmless
from and against any and all Liabilities and Costs, plus interest thereon at
the Default Rate, which they may sustain or incur by reason of or as a direct
consequence of the Defaulting Lender’s failure or refusal to abide by its
obligations under this Credit Agreement.

 

108

 

Section 9.05.           Rights,
Exculpation, Etc.  Neither Agent Bank, any Affiliate of Agent
Bank, nor any of their respective officers, directors, employees, agents,
attorneys or consultants, shall be liable to any Lender for any action taken or
omitted by them hereunder or under any of the Loan Documents, or in connection
herewith or therewith, except that Agent Bank shall be liable for its gross
negligence or willful misconduct.  In the
absence of gross negligence or willful misconduct, Agent Bank shall not be
liable for any apportionment or distribution of payments made by it in good
faith pursuant to Section 9.04, and if any such apportionment or
distribution is subsequently determined to have been made in error the sole
recourse of any Person to whom payment was due, but not made, shall be to
recover from the recipients of such payments any payment in excess of the
amount to which they are determined to have been entitled.  Agent Bank shall not be responsible to any
Lender for any recitals, statements, representations or warranties herein or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Credit Agreement, any of the Security
Documentation or any of the other Loan Documents, or any of the transactions
contemplated hereby and thereby; or for the financial condition of the Borrower
or any of its Affiliates.  Agent Bank
shall not be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Credit
Agreement or any of the Loan Documents or the financial condition of the
Borrower, Guarantor or any of their Affiliates, or the existence or possible
existence of any Default or Event of Default.

 

Section 9.06.           Reliance.  Agent Bank shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents,
telecopies or any telephone message believed by it in good faith to be genuine
and correct and to have been signed, sent or made by the proper Person, and
with respect to all matters pertaining to this Credit Agreement or any of the
Loan Documents and its duties hereunder or thereunder, upon advice of legal
counsel (including counsel for Borrower), independent public accountant and
other experts selected by it.

 

Section 9.07.           Indemnification.  To the extent that Agent Bank is not
reimbursed and indemnified by Borrower or Guarantor, Lenders will reimburse,
within ten (10) Banking Business Days after notice from Agent Bank, and indemnify
and defend Agent Bank for and against any and all Liabilities and Costs which
may be imposed on, incurred by, or asserted against it in any way relating to
or arising out of this Credit Agreement, the Security Documentation or any of
the other Loan Documents or any action taken or omitted by Agent Bank or under
this Credit Agreement, the Security Documentation or any of the other Loan
Documents, in proportion to each Lender’s Pro Rata Share; provided that no
Lender shall be liable for any portion of such Liabilities and Costs resulting
from Agent Bank’s gross negligence or willful misconduct.  The obligations of Lenders under this Section 9.07
shall survive the payment in full of all Obligations and the termination of
this Credit Agreement.  In the event that
after 

 

109

 

payment and distribution of any amount by Agent
Bank to Lenders, any Lender or third party, including Borrower, any creditor of
Borrower or Guarantor or a trustee in bankruptcy, recovers from Agent Bank any
amount found to have been wrongfully paid to Agent Bank or disbursed by Agent
Bank to Lenders, then Lenders, in proportion to their respective Pro Rata
Shares, shall reimburse Agent Bank for all such amounts.  Notwithstanding the foregoing, Agent Bank
shall not be obligated to advance Liabilities and Costs and may require the
deposit by each Lender of its Pro Rata Share of any material Liabilities and
Costs anticipated by Agent Bank before they are incurred or made payable.

 

Section 9.08.           Agent
Individually.  With respect to its Pro Rata Share of the
Aggregate Commitment hereunder and the Borrowings made by it, Agent Bank shall
have and may exercise the same rights and powers hereunder and is subject to
the same obligations and liabilities as and to the extent set forth herein for
any other Lender.  The terms “Lenders”, “Requisite
Lenders” or any similar terms may include Agent Bank in its individual capacity
as a Lender or one of the Requisite Lenders, but Requisite Lenders shall not
include Agent Bank solely in its capacity as Agent Bank and need not
necessarily include Agent Bank in its capacity as a Lender.  Agent Bank and any Lender and its Affiliates
may accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with Borrower or any of its Affiliates as if
it were not acting as Agent Bank or Lender pursuant hereto.

 

Section 9.09.           Successor
Agent Bank; Resignation of Agent Bank; Removal of Agent Bank.

 

(a)          Agent
Bank may resign from the performance of all its functions and duties hereunder
at any time by giving at least thirty (30) Banking Business Days’ prior written
notice to Lenders and Borrower, and shall automatically cease to be Agent Bank
hereunder in the event a petition in bankruptcy shall be filed by or against
Agent Bank or the Federal Deposit Insurance Corporation or any other
Governmental Authority shall assume control of Agent Bank or Agent Bank’s
interests under the Bank Facilities. 
Further, Lenders (other than Agent Bank) may unanimously remove Agent
Bank at any time upon the occurrence of gross negligence or wilful misconduct
by Agent Bank by giving at least thirty (30) Banking Business Days’ prior
written notice to Agent Bank, Borrower and all other Lenders.  Such resignation or removal shall take effect
upon the acceptance by a successor Agent Bank of appointment pursuant to clause
(b) or (c).

 

(b)          Upon
any such notice of resignation by or removal of Agent Bank, Requisite Lenders
shall appoint a successor Agent Bank which appointment shall be subject to
Borrower’s consent (other than upon the occurrence and during the continuance
of any Event of Default), which shall not be unreasonably withheld or
delayed.  Any successor Agent Bank must
be a bank (i) the senior debt obligations of 

 

110

 

which (or such bank’s
parent’s senior unsecured debt obligations) are rated not less than Baa-2 by
Moody’s Investors Services, Inc. or a comparable rating by a rating agency
acceptable to Requisite Lenders and (ii) which has total assets in excess
of Ten Billion Dollars ($10,000,000,000.00).

 

(c)          If
a successor Agent Bank shall not have been so appointed within said thirty (30)
Banking Business Day period, the retiring or removed Agent Bank, with the
consent of Borrower (other than upon the occurrence and during the continuance
of any Event of Default) (which may not be unreasonably withheld or delayed),
shall then appoint a successor Agent Bank who shall meet the requirements
described in subsection (b) above and who shall serve as Agent Bank until
such time, if any, as Requisite Lenders, with the consent of Borrower (other
than upon the occurrence and during the continuance of any Event of Default),
appoint a successor Agent Bank as provided above.

 

Section 9.10.           Consent
and Approvals.

 

(a)          Each
consent, approval, amendment, modification or waiver specifically enumerated in
this Credit Agreement as conditioned upon the prior consent or approval of
Requisite Lenders shall be evidenced by a written consent or approval delivered
to Agent Bank.

 

(b)          Each
consent, approval, amendment, modification or waiver specifically enumerated in
Sections 10.01(i) through (iii) shall require the consent of all
Lenders.

 

(c)         In
addition to the required consents or approvals referred to in subsection (a) above,
Agent Bank may at any time request instructions from Requisite Lenders with
respect to any actions or approvals which, by the terms of this Credit
Agreement or of any of the Loan Documents, Agent Bank is permitted or required
to take or to grant without instructions from any Lenders, and if such
instructions are promptly requested, Agent Bank shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from taking any
action or withholding any approval under any of the Loan Documents until it
shall have received such instructions from Requisite Lenders.  Without limiting the foregoing, no Lender
shall have any right of action whatsoever against Agent Bank as a result of
Agent Bank acting or refraining from acting under this Credit Agreement, the
Security Documentation or any of the other Loan Documents in accordance with
the instructions of Requisite Lenders or, where applicable, all Lenders.  Agent Bank shall promptly notify each Lender
at any time that the Requisite Lenders have instructed Agent Bank to act or
refrain from acting pursuant hereto.

 

111

 

(d)          Each
Lender agrees that any action taken by Agent Bank at the direction or with the
consent of Requisite Lenders in accordance with the provisions of this Credit
Agreement or any Loan Document, and the exercise by Agent Bank at the direction
or with the consent of Requisite Lenders of the powers set forth herein or
therein, together with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all Lenders, except for actions
specifically requiring the approval of all Lenders.  Funding requests hereunder shall be made in
the manner set forth in Article II herein. 
All other communications from Agent Bank to Lenders requesting Lenders’
determination, consent, approval or disapproval (i) shall be given in the
form of a written notice to each Lender, (ii) shall be accompanied by a
description of the matter or thing as to which such determination, approval,
consent or disapproval is requested, or shall advise each Lender where such
matter or thing may be inspected, or shall otherwise describe the matter or
issue to be resolved, (iii) shall include, if reasonably requested by a
Lender and to the extent not previously provided to such Lender, written
materials and a summary of all oral information provided to Agent Bank by
Borrower in respect of the matter or issue to be resolved, and (iv) shall
include Agent Bank’s recommended course of action or determination in respect
thereof.  Each Lender shall reply
promptly, but in any event within ten (10) Banking Business Days (the “Lender
Reply Period”).  Unless a Lender shall
give written notice to Agent Bank that it objects to the recommendation or
determination of Agent Bank (together with a written explanation of the reasons
behind such objection) within the Lender Reply Period, such Lender shall be
deemed to have approved of or consented to such recommendation or
determination.  With respect to decisions
requiring the approval of Requisite Lenders or all Lenders, Agent Bank shall
submit its recommendation or determination for approval of or consent to such
recommendation or determination to all Lenders and upon receiving the required
approval or consent shall follow the course of action or determination
recommended to Lenders by Agent Bank or such other course of action recommended
by Requisite Lenders, and each non-responding Lender shall be deemed to have
concurred with such recommended course of action.

 

Section 9.11.           Agency
Provisions Relating to Collateral.

 

(a)          Agent
Bank is hereby authorized on behalf of all Lenders, without the necessity of
any notice to or further consent from any Lender, from time to time prior to an
Event of Default, to take any action with respect to any Collateral or Loan
Document which may be necessary to perfect and maintain Liens of the Security
Documentation upon the Collateral granted pursuant to the Loan Documents.  Agent Bank may make, and shall be reimbursed
by Lenders (in accordance with their Pro Rata Shares), to the extent not
reimbursed by Borrower or Guarantor, for, Protective Advance(s) during any
one (1) calendar year with respect to the Collateral up to the sum of (i) amounts
expended to pay real estate taxes, assessments and governmental charges or
levies imposed upon such Collateral, (ii) amounts expended to pay 

 

112

 

insurance premiums for
policies of insurance related to such Collateral, and (iii) One Hundred
Thousand Dollars ($100,000.00). 
Protective Advances in excess of said sum during any calendar year for
any Collateral shall require the consent of Requisite Lenders.  In addition, Agent Bank is hereby authorized
on behalf of all Lenders, without the necessity of any notice to or further
consent from any Lender, to: (i) waive the imposition of the late fees
provided for in Section 2.11 up to a maximum of two (2) times per
calendar year, including any extensions, and (ii) release the V/P Property
as Collateral subject to the satisfaction of each of the conditions set forth
in Section 5.22.

 

(b)          Lenders
hereby irrevocably authorize Agent Bank, at its option and in its discretion,
to release any Security Documentation granted to or held by Agent Bank upon any
Collateral (i) upon Bank Facility Termination and repayment and
satisfaction of all Borrowings, and all other Obligations and the termination
of this Credit Agreement, or (ii) if approved, authorized or ratified in
writing by Agent Bank at the direction of all Lenders.  Agent Bank shall not be required to execute
any document to evidence the release of the Security Documentation granted to
Agent Bank for the benefit of Lenders herein or pursuant hereto upon any
Collateral if, in Agent Bank’s opinion, such document would expose Agent Bank
to liability or create any obligation or entail any consequence other than the
release of such Security Documentation without recourse or warranty, and such
release shall not in any manner discharge, affect or impair the Obligations or
any Security Documentation upon (or obligations of Borrower in respect of) any
property which shall continue to constitute part of the Collateral.

 

(c)          Except
as provided in this Credit Agreement, Agent Bank shall have no obligation
whatsoever to any Lender or to any other Person to assure that the Collateral
exists or is owned by Borrower or is cared for, protected or insured or has been
encumbered or that the Security Documentation granted to Agent Bank herein or
in any of the other Loan Documents or pursuant hereto or thereto have been
properly or sufficiently or lawfully created, perfected, protected or enforced
or are entitled to any particular priority.

 

(d)          Should
Agent Bank (i) employ counsel for advice or other representation (whether
or not any suit has been or shall be filed) with respect to any Collateral or
any part thereof, or any of the Loan Documents, or the attempt to enforce any
security interest or Security Documentation on any of the Collateral, or (ii) commence
any proceeding or in any way seek to enforce its rights or remedies under the
Loan Documents, irrespective of whether as a result thereof Agent Bank shall
acquire title to any Collateral, either through foreclosure, deed in lieu of
foreclosure or otherwise, each Lender, upon demand therefor from time to time,
shall contribute its share (based on its Pro Rata Share) of the reasonable
costs and/or expenses of any such advice or other representation, enforcement
or acquisition, including, but not limited to, fees of receivers or trustees,
court costs, title company charges, filing and recording fees, appraisers’ fees
and fees and expenses of attorneys to the extent not

 

113

 

otherwise reimbursed
by Borrower; provided that Agent Bank shall not be entitled to reimbursement of
its attorneys’ fees and expenses incurred in connection with the resolution of
disputes between Agent Bank and other Lenders unless Agent Bank shall be the
prevailing party in any such dispute. 
Any loss of principal and interest resulting from any Event of Default
shall be shared by Lenders in accordance with their respective Pro Rata
Shares.  It is understood and agreed that
in the event Agent Bank determines it is necessary to engage counsel for
Lenders from and after the occurrence of an Event of Default, said counsel
shall be selected by Agent Bank.

 

Section 9.12.           Lender
Actions Against Collateral.  Each Lender agrees that it will not take any
action, nor institute any actions or proceedings, against Borrower, Guarantor
or any other obligor hereunder, under the Security Documentation or under any
other Loan Documents with respect to exercising claims against or rights in any
Collateral without the consent of Requisite Lenders.

 

Section 9.13.           Ratable
Sharing. 
Subject to Section 9.03 and 9.04, Lenders agree among themselves
that (i) with respect to all amounts received by them which are applicable
to the payment of the Obligations, equitable adjustment will be made so that,
in effect, all such amounts will be shared among them ratably in accordance
with their Pro Rata Shares, whether received by voluntary payment, by
counterclaim or cross action or by the enforcement of any or all of the
Obligations, or the Collateral, (ii) if any of them shall by voluntary
payment or by the exercise of any right of counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of the Obligations held by it
which is greater than its Pro Rata Share of the payments on account of the
Obligations, the one receiving such excess payment shall purchase, without
recourse or warranty, an undivided interest and participation (which it shall
be deemed to have done simultaneously upon the receipt of such payment) in such
Obligations owed to the others so that all such recoveries with respect to such
Obligations shall be applied ratably in accordance with their Pro Rata Shares;
provided, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to that
party to the extent necessary to adjust for such recovery, but without interest
except to the extent the purchasing party is required to pay interest in
connection with such recovery.  Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 9.13 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 Borrower in the amount of such
participation.  No Lender shall exercise
any setoff, banker’s lien or other similar right in respect to any Obligations
without the prior written approval by Agent Bank.

 

Section 9.14.           Delivery
of Documents.  Agent Bank shall as soon as reasonably
practicable distribute to each Lender at its primary address set forth on the
appropriate counterpart signature page hereof, or at such other address as
a Lender

 

114

 

may request in writing, (i) copies of all documents to
which such Lender is a party or of which is executed or held by Agent Bank on
behalf of such Lender, (ii) all documents of which Agent Bank receives
copies from Borrower pursuant to Article VI and Section 10.03, (iii) all
other documents or information which Agent Bank is required to send to Lenders
pursuant to the terms of this Credit Agreement, (iv) other information or
documents received by Agent Bank at the request of any Lender, and (v) all
notices received by Agent Bank pursuant to Section 5.20.  In addition, within fifteen (15) Banking
Business Days after receipt of a request in writing from a Lender for written
information or documents provided by or prepared by Borrower, Agent Bank shall
deliver such written information or documents to such requesting Lender if
Agent Bank has possession of such written information or documents in its
capacity as Agent Bank or as a Lender.

 

Section 9.15.             Notice of
Events of Default.  Agent Bank
shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default (other than nonpayment of principal of or interest
on the Credit Facility) unless Agent Bank has received notice in writing from a
Lender or Borrower referring to this Credit Agreement or the other Loan
Documents, describing such event or condition and expressly stating that such
notice is a notice of a Default or Event of Default.  Should Agent Bank receive such notice of the
occurrence of a Default or Event of Default, or should Agent Bank send Borrower
or Guarantor a notice of Default or Event of Default, Agent Bank shall promptly
give notice thereof to each Lender.

 

ARTICLE X

 

GENERAL TERMS AND CONDITIONS

 

The following terms and conditions shall be applicable throughout the
term of this Credit Agreement:

 

Section 10.01.          Amendments
and Waivers.  (a) No
amendment or modification of any provision of this Credit Agreement shall be
effective without the written agreement of Requisite Lenders (after notice to
all Lenders), Borrower and Guarantor (except for rights and priorities of
Lenders as amongst themselves as provided in Section 9.04(a) which do
not require the consent of Borrower or Guarantor), and (b) no termination
or waiver of any provision of this Credit Agreement, or consent to any
departure by Borrower and/or Guarantor therefrom (except as expressly provided
in Section 9.11(a) with respect to waivers of late fees), shall in
any event be effective without the written concurrence of Requisite Lenders
(after notice to all Lenders), which Requisite Lenders shall have the right to
grant or withhold at their sole discretion, except that the following
amendments, modifications or waivers shall require the consent of all Lenders:

 

115

 

(a)          modify any
requirement hereunder that any particular action be taken by all the Lenders or
by the Requisite Lenders, modify this Section 10.01 or change the
definition of “Requisite Lenders”, or remove Agent Bank under Section 9.09(a),
shall be effective unless consented to by all of the Lenders, without regard to
the vote of Agent Bank as a Lender;

 

(b)          increase
the Aggregate Commitment (other than with respect to the Commitment Increase)
or increase the Syndication Interest of any Lender, release any Collateral
except as specifically provided in the Credit Agreement, extend the Maturity
Date or change any provision expressly requiring the consent of all Lenders
shall be made without the consent of each Lender; or

 

(c)          reduce any
fees described in Section 2.10 or extend the due date for, or reduce or
postpone the amount of, any Scheduled Reductions on the Credit Facility, or
reduce the rate of interest or postpone the payment of interest on the Credit
Facility, shall be made without the consent of all of the Lenders.

 

In connection with any proposed amendment, modification, supplement,
extension, termination, consent or waiver requiring the consent of all Lenders
as set forth in (i) through (iii) above, if the consent of the
Requisite Lenders is obtained, but the consent of other Lenders whose consent
is required is not obtained (any such Lender whose consent is not obtained as
described in this Section 10.01 being referred to as a “Non-Consenting
Lender”), then, so long as the Lender that is acting as the Agent Bank is not a
Non-Consenting Lender, at the Borrowers’ request, the Lender that is acting as
the Agent Bank or an Eligible Assignee that is acceptable to the Agent Bank (in
either case the “Purchasing Lender”) shall have the right with the Agent Bank’s
consent and in the Agent Bank’s sole discretion (but shall have no obligation)
to purchase from such Non-Consenting Lender, and such Non-Consenting Lender
agrees that it shall, upon the Agent Bank’s request, sell and assign to the
Purchasing Lender all of its rights and obligations under this Credit Agreement
and the other Loan Documents (including all of its rights and obligations in
the Bank Facilities) for an amount equal to the Non-Consenting Lender’s
Syndication Interest in the Funded Outstandings and all accrued interest, fees
and other Obligations with respect thereto through the date of sale (or such
other amounts as may be agreed upon by the Non-Consenting Lender and the
Purchasing Lender).  In such event, such
Non-Consenting Lender and such Purchasing Lender agree to execute an Assignment
and Assumption Agreement to reflect such purchase and sale, but regardless of
whether such Assignment and Assumption Agreement is executed by such
Non-Consenting Lender, such Non-Consenting Lender’s rights hereunder, except
rights under Section 5.14 (i.e. Indemnification by the Borrowers) and
10.14 (i.e. Arbitration) with respect to actions prior to such date, shall
cease from and after the date of presentation of the Assignment and Assumption
Agreement duly executed by such Purchasing Lender and tender by the Purchasing
Lender of the amount of the purchase price.

 

116

 

No amendment, modification, termination or waiver
of any provision of Article X or any other provision referring to Agent
Bank shall be effective without the written concurrence of Agent Bank, but only
if such amendment, modification, termination or waiver alters the obligations
or rights of Agent Bank.  Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given.  No
notice to or demand on Borrower or Guarantor in any case shall entitle Borrower
to any other further notice or demand in similar or other circumstances.  Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 10.01 shall be
binding on each assignee, transferee or recipient of Agent Bank’s or any Lender’s
Syndication Interest under this Credit Agreement or the Credit Facility at the
time outstanding.  No modification of Section 2.08
or the Swingline Note shall be made without the consent of the Swingline
Lender.  No modification of Section 2.09
shall be made without the consent of the L/C Issuer.

 

Section 10.02.          Failure to
Exercise Rights.  Nothing
herein contained shall impose upon Banks, Borrower or Guarantor any obligation
to enforce any terms, covenants or conditions contained herein.  Failure of Banks, Borrower or Guarantor, in
any one or more instances, to insist upon strict performance by Borrower,
Guarantor or Banks of any terms, covenants or conditions of this Credit
Agreement or the other Loan Documents, shall not be considered or taken as a
waiver or relinquishment by Banks, Borrower or Guarantor of their right to insist
upon and to enforce in the future, by injunction or other appropriate legal or
equitable remedy, strict compliance by Borrower, Guarantor or Banks with all
the terms, covenants and conditions of this Credit Agreement and the other Loan
Documents.  The consent of Banks,
Guarantor or Borrower to any act or omission by Borrower, Guarantor or Banks
shall not be construed to be a consent to any other or subsequent act or
omission or to waive the requirement for Banks’, Guarantor’s or Borrower’s
consent to be obtained in any future or other instance.

 

Section 10.03.          Notices
and Delivery.

 

(a)          The
Borrower agrees that the Agent Bank may make any material delivered by the
Borrower to the Agent Bank, as well as any amendments, waivers, consents, and
other written information, documents, instruments and other materials relating
to the Borrower, any of its Subsidiaries or Affiliates, or any other materials
or matters relating to this Credit Agreement, the Notes or any of the
transactions contemplated hereby (collectively, the “Communications”) available
to the Lenders by posting such notices on an electronic delivery system (which
may be provided by the Agent Bank, an Affiliate of the Agent Bank, or any
Person that is not an Affiliate of the Agent Bank), such as IntraLinks, DebtX
or a substantially similar electronic system (the “Platform”).  The Borrower acknowledges that (i) the
distribution of material through an electronic medium is not necessarily secure
and that there are 

 

117

 

confidentiality and other risks associated with such
distribution, (ii) the Platform is provided “as is” and “as available” and
(iii) neither the Agent Bank nor any of its Affiliates warrants the
accuracy, completeness, timeliness, sufficiency, or sequencing of the
Communications posted on the Platform. 
The Agent Bank and its Affiliates expressly disclaim with respect to the
Platform any liability for errors in transmission, incorrect or incomplete downloading,
delays in posting or delivery, or problems accessing the Communications posted
on the Platform and any liability for any losses, costs, expenses or
liabilities that may be suffered or incurred in connection with the
Platform.  No warranty of any kind,
express, implied or statutory, including, without limitation, any warranty of
merchantability, fitness for a particular purpose, non-infringement of third
party rights or freedom from viruses or other code defects, is made by the
Agent Bank or any of its Affiliates in connection with the Platform.

 

(b)          Each Lender agrees that notice to it (as provided in the next sentence)
(a “Notice”) specifying that any Communication has been posted to the Platform
shall for purposes of this Credit Agreement constitute effective delivery to
such Lender of such information, documents or other materials comprising such
Communication.  Each Lender agrees (i) to
notify, on or before the date such Lender becomes a party to this Credit
Agreement, the Agent Bank in writing of such Lender’s e-mail address to which a
Notice may be sent (and from time to time thereafter to ensure that the Agent
Bank has on record an effective e-mail address for such Lender) and (ii) that
any Notice may be sent to such e-mail address.

 

(c)          Notwithstanding
the foregoing, any Communications may be personally served, faxed or sent by
courier service or United States mail and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of a facsimile (or
on the next Banking Business Day if such facsimile is received on a non-Banking
Business Day or after 5:00 p.m. on a Banking Business Day) or four (4) Banking
Business Days after deposit in the United States mail (registered or certified,
with postage prepaid and properly addressed). 
Notices to Agent Bank pursuant to Articles II shall not be effective
until received by Agent Bank.

 

(d)          For the
purposes hereof, the addresses of the parties hereto (until notice of a change
thereof is delivered as provided in this Section 10.03) shall be as set
forth below each party’s name on the signature pages hereof, or, as to
each party, at such other address as may be designated by such party in an
Assignment and Assumption Agreement or in a written notice to all of the other
parties.  All non-electronic deliveries
to be made to Agent Bank for distribution to the Lenders shall be made to Agent
Bank at the addresses specified for notice on the signature page hereto
and in addition, a sufficient number of copies of each such delivery shall be
delivered to Agent Bank for delivery to each Lender at the address specified
for deliveries on the signature page hereto or such other address as may
be designated by Agent Bank in a written notice.

 

118

 

Section 10.04.          Modification
in Writing.  This Credit
Agreement and the other Loan Documents constitute the entire agreement between
the parties and supersede all prior agreements whether written or oral with
respect to the subject matter hereof, including, but not limited to, any term
sheets furnished by any of the Banks to Borrower or Guarantor.  Neither this Credit Agreement, nor any other
Loan Documents, nor any provision herein, or therein, may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against whom enforcement of the change, waiver, discharge or
termination is sought.

 

Section 10.05.          Other
Agreements.  If the terms
of any documents, certificates or agreements delivered in connection with this
Credit Agreement are inconsistent with the terms of the Loan Documents,
Borrower or Guarantor, as applicable, shall use their best efforts to amend
such document, certificate or agreement to the satisfaction of Agent Bank to
remove such inconsistency.

 

Section 10.06.          Counterparts.  This Credit Agreement may be executed by the
parties hereto in any number of separate counterparts with the same effect as
if the signatures hereto and hereby were upon the same instrument.  All such counterparts shall together
constitute but one and the same document.

 

Section 10.07.          Rights,
Powers and Remedies are Cumulative.  None of the rights, powers and remedies
conferred upon or reserved to Agent Bank, Banks, Borrower or Guarantor in this
Credit Agreement are intended to be exclusive of any other available right,
power or remedy, but each and every such right, power and remedy shall be
cumulative and not alternative, and shall be in addition to every right, power
and remedy herein specifically given or now or hereafter existing at law, in
equity or by statute.  Any forbearance,
delay or omission by Agent Bank, Banks, Borrower or Guarantor in the exercise
of any right, power or remedy shall not impair any such right, power or remedy
or be considered or taken as a waiver or relinquishment of the right to insist
upon and to enforce in the future, by injunction or other appropriate legal or
equitable remedy, any of said rights, powers and remedies given to Agent Bank,
Banks, Borrower or Guarantor herein.  The
exercise of any right or partial exercise thereof by Agent Bank, Banks,
Borrower or Guarantor shall not preclude the further exercise thereof and the
same shall continue in full force and effect until specifically waived by an
instrument in writing executed by Agent Bank or Banks, as the case may be.

 

Section 10.08.          Continuing
Representations.  All
agreements, representations and warranties made herein shall survive the
execution and delivery of this Credit Agreement, the making of the Credit
Facility hereunder and the execution and delivery of each other Loan Document
until and final payment of all sums owing under the Credit Facility and the
Credit Facility has been irrevocably terminated.

 

119

 

Section 10.09.          Successors
and Assigns.  All of the
terms, covenants, warranties and conditions contained in this Credit Agreement
shall be binding upon and inure to the sole and exclusive benefit of the
parties hereto and their respective successors and assigns.

 

Section 10.10.          Assignment
of Loan Documents by Borrower, Guarantor or Syndication Interests by Lenders.

 

(a)          This
Credit Agreement and the other Loan Documents to which Borrower or Guarantor is
a party will be binding upon and inure to the benefit of Borrower, Guarantor,
the Agent Bank, each of the Banks, and their respective successors and assigns,
except that, Borrower and Guarantor may not assign their rights
hereunder or thereunder or any interest herein or therein without the prior
written consent of all the Lenders.  Any
attempted assignment or delegation in contravention of the foregoing shall be
null and void.  Any Lender may at any
time pledge its Syndication Interest in the Credit Facility, the Credit
Agreement and the Loan Documents to a Federal Reserve Bank, but no such pledge
shall release that Lender from its obligations hereunder or grant to such
Federal Reserve Bank the rights of a Lender hereunder absent foreclosure of
such pledge.

 

(b)          Each
Lender may assign all or any part of its Syndication Interest in the Credit
Facility to one or more financial institutions that are Eligible Assignees with
the prior consent of the Agent Bank and, so long as no Event of Default has
occurred and remains continuing, Borrower (which consents shall not be
unreasonably withheld or delayed); provided, however, that the minimum
amount of each such assignment shall be Five Million Dollars ($5,000,000.00),
or such lesser amount as constitutes the remaining amount of a Lender’s
Syndication Interest in the Credit Facility (except that there shall be no
minimum assignment among the Lenders or to their Affiliates), and each assignee
Lender (or assignor if so agreed between the assignee Lender and such assignor)
shall pay to the Agent Bank an assignment fee of Three Thousand Five Hundred
Dollars ($3,500.00) with respect to each such assignment.  Each such assignment shall be evidenced by an
assignment substantially in the form of the Assignment and Assumption Agreement
or other form reasonably acceptable to Agent Bank and Borrower.  Concurrently with each such assignment, each assignee
Lender shall certify that as of the date of such assignment no amounts are
payable to such assignee Lender under Sections 2.12 or 2.13 of the Credit
Agreement other than to the extent amounts thereunder are payable to all of the
Lenders.  Upon any such assignment, the
assignee financial institution shall become a Lender for all purposes under the
Credit Agreement and each of the Loan Documents and the assigning Lender shall
be released from its further obligations hereunder to the extent of such assignment.  Agent Bank agrees to give prompt notice to
Borrower of each assignment made under this Section 10.10(b) and to
deliver to Borrower each 

 

120

 

revision to the Schedule of Lenders’ Proportions in
Credit Facility made as a consequence of each such assignment.

 

(c)          Each
Lender may sell participations for all or any part of its Syndication Interest
in the Credit Facility; provided, however, that (i) such Lender
shall promptly give written notice of such participation to Agent Bank, (ii) such
Lender shall remain responsible for its total obligations under the Credit
Agreement and each of the Loan Documents, (iii) the Borrower and the Agent
Bank shall continue to deal solely with such Lender in connection with such
Lender’s rights and obligations under the Credit Agreement and each of the Loan
Documents, (iv) such Lender shall not sell any participation to any
competitor of Borrower or any Person engaged in the business of owning or
operating a casino, and (v) such Lender shall not sell any participation
under which the participant would have rights to approve any amendment or
waiver relating to the Credit Agreement or any Loan Document except to the
extent any such amendment or waiver would (w) extend the final Maturity
Date or the date for the payment or any installments of fees, principal or
interest due in respect of the Credit Facility, (x) reduce the amount of
any Scheduled Reduction in respect to the Credit Facility, (y) reduce the
interest rates or fees applicable to the Credit Facility or (z) release
any material portion of the Collateral. 
Notwithstanding the foregoing, the rights of the Lenders to make
assignments and to grant participations shall be subject to the approval by the
Gaming Authorities of the assignee or participant, to the extent required by
applicable Gaming Laws, and to applicable securities laws.

 

(d)          In the
event any Lender is found unsuitable as a Lender under the Credit Facility by
the Nevada Gaming Authorities or the Governmental Authorities of any other
State of the United States (“Unsuitable Lender”): (i) Agent Bank may, in
its sole and absolute discretion, use its reasonable efforts to find a
replacement Lender, (ii) Borrower shall have the right, in Borrower’s
discretion, to make a Voluntary Permanent Reduction in the amount necessary to
reduce the Aggregate Commitment by the amount of the Syndication Interest held
by the Unsuitable Lender until a replacement Lender, if any, commits to acquire
the Syndication Interest of the Unsuitable Lender, at which time the Aggregate
Commitment shall be increased by the amount of the Voluntary Permanent
Reduction, and (iii) upon full payment of all outstanding amounts of
principal and interest owing it, such Unsuitable Lender shall execute such
documents as may be required by Agent Bank, Borrower or the Nevada Gaming
Authorities to evidence the assignment or termination, as the case may be, of
its Syndication Interest in the Credit Facility.

 

Section 10.11.          Action by
Lenders.  Whenever Banks shall
have the right to make an election, or to exercise any right, or their consent
shall be required for any action under this Credit Agreement or the Loan
Documents, then such election, exercise or consent shall be given or made for
all Banks by Agent Bank in accordance with the provisions of Section 10.01.  Notices, reports and other documents required
to 

 

121

 

be given by Borrower and/or Guarantor to Banks hereunder may
be given to Agent Bank on behalf of Banks, with sufficient copies for
distribution to each of the Banks, and the delivery to Agent Bank shall
constitute delivery to Banks.  In the
event any payment or payments are received by a Lender other than Agent Bank,
Borrower consents to such payments being shared and distributed as provided
herein.

 

Section 10.12.          Time of
Essence.  Time shall be of
the essence of this Credit Agreement.

 

Section 10.13.          Choice of
Law and Forum.  This Credit
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Nevada without regard to principles of conflicts of
law.  Borrower and Guarantor further
agree that the full and exclusive forum for the determination of any action
relating to this Credit Agreement, the Loan Documents, or any other document or
instrument delivered in favor of Banks pursuant to the terms hereof shall be
either an appropriate Court of the State of Nevada or the United States
District Court or United States Bankruptcy Court for the District of Nevada.

 

Section 10.14.          Arbitration.

 

(a)          Upon the
request of any party, whether made before or after the institution of any legal
proceeding, any action, dispute, claim or controversy of any kind (e.g.,
whether in contract or in tort, statutory or common law, legal or equitable) (“Dispute”)
now existing or hereafter arising between the parties in any way arising out
of, pertaining to or in connection with the Credit Agreement, Loan Documents or
any related agreements, documents, or instruments (collectively the “Documents”),
may, by summary proceedings (e.g., a plea in abatement or motion to stay
further proceedings), bring an action in court to compel arbitration of any
Dispute.

 

(b)         All
Disputes between the parties shall be resolved by binding arbitration governed
by the Commercial Arbitration Rules of the American Arbitration
Association.  Judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction.

 

(c)          No
provision of, nor the exercise of any rights under this arbitration clause
shall limit the rights of any party, and the parties shall have the right
during any Dispute, to seek, use and employ ancillary or preliminary remedies,
judicial or otherwise, for the purposes of realizing upon, preserving,
protecting or foreclosing upon any property, real or personal, which is
involved in a Dispute, or which is subject to, or described in, the Documents,
including, without limitation, rights and remedies relating to: (i) foreclosing
against any real or personal property collateral or other security by the
exercise of a power of sale under the Security Documentation or other security
agreement or instrument, or applicable law, (ii) exercising self-help
remedies 

 

122

 

(including setoff rights) or (iii) obtaining
provisional or ancillary remedies such as injunctive relief, sequestration,
attachment, garnishment or the appointment of a receiver from a court having
jurisdiction before, during or after the pendency of any arbitration.  The institution and maintenance of an action
for judicial relief or pursuit of provisional or ancillary remedies or exercise
of self-help remedies shall not constitute a waiver of the right of any party,
including the plaintiff, to submit the Dispute to arbitration nor render
inapplicable the compulsory arbitration provision hereof.

 

Section 10.15.          WAIVER OF
JURY TRIAL.  TO THE
MAXIMUM EXTENT PERMITTED BY LAW, BORROWER, GUARANTOR AND EACH OF THE BANKS EACH
MUTUALLY HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY ACTION, CAUSE
OF ACTION, CLAIM, DEMAND, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS
CREDIT AGREEMENT, THE REVOLVING CREDIT NOTE OR ANY OF THE LOAN DOCUMENTS, OR IN
ANY WAY CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE DEALINGS OF BORROWER,
GUARANTOR AND BANKS WITH RESPECT TO THIS CREDIT AGREEMENT, THE REVOLVING CREDIT
NOTE OR ANY OF THE LOAN DOCUMENTS, OR THE TRANSACTIONS RELATED HERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE. 
TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWER, GUARANTOR AND EACH OF
THE BANKS EACH MUTUALLY AGREE THAT ANY SUCH ACTION, CAUSE OF ACTION, CLAIM,
DEMAND, OR PROCEEDINGS SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND
THAT THE DEFENDING PARTY MAY FILE AN ORIGINAL COUNTERPART OF THIS SECTION WITH
ANY COURT OR OTHER TRIBUNAL AS WRITTEN EVIDENCE OF THE CONSENT OF THE
COMPLAINING PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

 

Section 10.16.          Scope of
Approval and Review.  Any inspection
of the Hotel/Casino Facility or other documents shall be deemed to be made
solely for Banks’ internal purposes and shall not be relied upon by the
Borrower, Guarantor or any third party. 
In no event shall Lenders be deemed or construed to be joint venturers
or partners of Borrower or Guarantor.

 

Section 10.17.          Severability
of Provisions.  In the event
any one or more of the provisions contained in this Credit Agreement shall be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby.

 

Section 10.18.          Cumulative
Nature of Covenants.  All
covenants contained herein are cumulative and not exclusive of each other
covenant.  Any action allowed by any
covenant shall be allowed only if such action is not prohibited by any other
covenant.

 

123

 

Section 10.19.          Costs to
Prevailing Party.  If any
action or arbitration proceeding is brought by any party against any other
party under this Credit Agreement or any of the Loan Documents, the prevailing
party shall be entitled to recover such costs and attorney’s fees as the court
in such action or proceeding may adjudge reasonable.

 

Section 10.20.          Expenses.

 

(a)          Generally.  Borrower agrees upon demand to pay, or
reimburse Agent Bank for, all of Agent Bank’s documented reasonable
out-of-pocket costs and expenses of every type and nature incurred by Agent
Bank at any time (whether prior to, on or after the date of this Credit
Agreement) in connection with (i) any requests for consent, waiver or
other modification of any Loan Document made by Borrower, other than to correct
errors attributable to the Banks; (ii) the negotiation, preparation and execution
of this Credit Agreement (including, without limitation, the satisfaction or
attempted satisfaction of any of the conditions set forth in Article III),
the Security Documentation and the other Loan Documents and the advance of
Borrowings; (iii) the subordination or release of any Collateral,
including title charges, recording fees and reasonable attorneys’ fees and
costs incurred in connection therewith; (iv) any appraisals performed
after the occurrence of an Event of Default; (v) the creation, perfection
or protection of the Security Documentation on the Collateral (including,
without limitation, any fees and expenses for title and lien searches, filing
and recording fees and taxes, duplication costs and corporate search fees); (vi) all
reasonable costs and expenses incurred by Agent Bank in connection with the
sale of Syndication Interests in the Credit Facility, including Platform fees,
in connection with the Restatement Effective Date and each Commitment Increase;
and (vii) the protection, collection or enforcement of any of the
Obligations or the Collateral, including Protective Advances.

 

(b)          After
Event of Default.  Borrower
further agrees to pay, or reimburse Agent Bank and Lenders, for all reasonable
out-of-pocket costs and expenses, including without limitation reasonable
attorneys’ fees and disbursements incurred by Agent Bank or Lenders after the
occurrence of an Event of Default (i) in enforcing any Obligation or in
foreclosing against the Collateral or exercising or enforcing any other right
or remedy available by reason of such Event of Default; (ii) in connection
with any refinancing or restructuring of the credit arrangements provided under
this Credit Agreement or in any insolvency or bankruptcy proceeding; (iii) in
commencing, defending or intervening in any litigation or in filing a petition,
complaint, answer, motion or other pleadings in any legal proceeding relating
to Borrower and related to or arising out of the transactions contemplated
hereby; (iv) in taking any other action in or with respect to any suit or
proceeding (whether in bankruptcy or otherwise); (v) in protecting,
preserving, collecting, leasing, selling, taking possession of, or 

 

124

 

liquidating any of the Collateral; or (vi) in
attempting to enforce or enforcing any lien in any of the Collateral or any
other rights under the Security Documentation.

 

Section 10.21.          Setoff.  In addition to any rights and remedies of the
Agent Bank provided by law, if any Event of Default exists, Agent Bank is
authorized at any time and from time to time, without prior notice to any
Borrower, any such notice being waived by the Borrower to the fullest extent
permitted by law, to set-off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by Agent Bank to or for
the credit or the account of Borrower against any and all obligations of
Borrower under the Credit Facility, now or hereafter existing, irrespective of
whether or not the Agent Bank shall have made demand under this Credit
Agreement or any Loan Document and although such amounts owed may be contingent
or unmatured.  Agent Bank agrees promptly
to notify the Borrower (and Agent Bank shall promptly notify each other Lender)
after any such setoff and application made by Agent Bank; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application.  The rights of
Agent Bank under this Section 10.21 are in addition to the other rights and
remedies which Agent Bank may have.

 

Section 10.22.          Security
and Loan Documentation.  The Security Documentation and other Loan
Documents (other than this Credit Agreement) may be held in the name of WFB as
the Agent Bank of all Banks hereunder pursuant to the terms of this Credit
Agreement.

 

Section 10.23.          Schedules
Attached.  Schedules
are attached hereto and incorporated herein and made a part hereof as follows:

 

	
  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

  	
  -

  	
  Schedules of Spaceleases

  
	
   

  	
   

  	
   

  
	
  Schedule 4.16

  	
  -

  	
  Schedule of Equipment Leases
  and Contracts

  
	
   

  	
   

  	
   

  
	
  Schedule
  4.22

  	
  -

  	
  Schedule of Trademarks,
  Patents, Licenses, Franchises, Formulas and Copyrights

  

 

125

 

	
  Schedule
  4.23

  	
  -

  	
  Schedule of Contingent
  Liabilities

  
	
   

  	
   

  	
   

  
	
  Schedule
  6.04

  	
  -

  	
  Schedule of Remodel Projects

  
	
   

  	
   

  	
   

  
	
  Schedule 6.08

  	
  -

  	
  Schedule of Liens

  
	
   

  	
   

  	
   

  
	
  Schedule
  A

  	
  -

  	
  Hotel/Casino Property -
  Description

  
	
   

  	
   

  	
   

  
	
  Schedule
  B

  	
  -

  	
  V/P Property - Description

  

 

Section 10.24.          Exhibits Attached. 
Exhibits are attached hereto and incorporated herein and made a part
hereof as follows:

 

	
  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

  
	
   

  	
   

  	
   

  
	
  Exhibit I

  	
  -

  	
  Guaranty - Form

  
	
   

  	
   

  	
   

  
	
  Exhibit J

  	
  -

  	
  Legal Opinion - Form

  
	
   

  	
   

  	
   

  
	
  Exhibit K

  	
  -

  	
  Notice of Swingline Advance - Form

  
	
   

  	
   

  	
   

  
	
  Exhibit L

  	
  -

  	
  Assumption and Consent Agreement - Form

  
	
   

  	
   

  	
   

  
	
  Exhibit M

  	
  -

  	
  Assignment and Assumption Agreement - Form

  
	
   

  	
   

  	
   

  
	
  Exhibit N

  	
  -

  	
  Cash Collateral Pledge Agreement - Form

  

 

126

 

IN
WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be
executed as of the day and year first above written.

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  GOLDEN
  ROAD MOTOR INN, INC.,

  a Nevada corporation 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ John Farahi

  	
   

  
	
   

  	
   

  	
  John
  Farahi,

  	
   

  
	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  3800
  South Virginia Street 

  Reno, NV 89502 

  
	
   

  	
   

  
	
   

  	
  Telephone:
  (775) 335-4602

  Facsimile: (775) 332-9171

  
	
   

  	
   

  
	
   

  	
  MCRI:

  
	
   

  	
   

  
	
   

  	
  MONARCH
  CASINO & RESORT, INC.,

  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ John Farahi

  	
   

  
	
   

  	
   

  	
  John
  Farahi,

  	
   

  
	
   

  	
   

  	
  Chief
  Executive Officer 

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  3800
  South Virginia Street 

  Reno, NV 89502

  
	
   

  	
   

  
	
   

  	
  Telephone:
  (775) 335-4602 

  Facsimile: (775) 332-9171

  

 

S-1

 

	
   

  	
  BANKS:

  
	
   

  	
   

  
	
   

  	
  WELLS
  FARGO BANK,

  National Association,

  Agent Bank, Lender and Swingline Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Stephen G. Buntin

  	
   

  
	
   

  	
   

  	
  Stephen
  G. Buntin,

  	
   

  
	
   

  	
   

  	
  Senior
  Vice President 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  5340
  Kietzke Lane, Suite 201 

  Reno, NV 89511 

  
	
   

  	
   

  
	
   

  	
  Telephone:
  (775) 689-6007

  
	
   

  	
  Facsimile:
  (775) 689-6029

  

 

S-2

 

	
   

  	
  BANK
  OF AMERICA , N.A.

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Donald Schulke

  	
   

  
	
   

  	
   

  	
  Donald
  Schulke,

  	
   

  
	
   

  	
   

  	
  Senior
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  401
  South Virginia Street, 2nd Floor

  
	
   

  	
  Reno,
  NV  89501

  
	
   

  	
   

  
	
   

  	
  Telephone:
  (775) 688-8667

  
	
   

  	
  Facsimile:
  (312) 453-5958

  

 

S-3

 

	
   

  	
  MUTUAL
  OF OMAHA BANK,

  a Federally Chartered Thrift

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Ashan S. Perera

  	
   

  
	
   

  	
   

  	
  Ashan
  S. Perera,

  	
   

  
	
   

  	
   

  	
  Vice
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  8337
  W. Sunset Road, Suite 300

  
	
   

  	
  Las
  Vegas, NV  89113

  
	
   

  	
   

  
	
   

  	
  Telephone:
  (702) 492-5801

  
	
   

  	
  Facsimile:
  (602) 636-8619

  

 

S-4

 

AMENDED
AND RESTATED

REVOLVING
CREDIT NOTE

 

	
  $60,000,000.00

  	
   

  	
  January 20, 2009

  

 

FOR
VALUE RECEIVED, the undersigned, GOLDEN ROAD MOTOR INN, INC., a Nevada
corporation (the “Borrower”) promises to pay to the order of WELLS FARGO BANK,
National Association, as Agent Bank on behalf of itself and the other Lenders
as defined and described in the Credit Agreement described hereinbelow (each,
together with their respective successors and assigns, individually being
referred as a “Lender” and collectively as the “Lenders”) such sums as Lenders
may hereafter loan or advance or re-loan to the Borrower from time to time
pursuant to the Credit Facility as described in the Credit Agreement,
hereinafter defined, up to the maximum principal amount of Sixty Million
Dollars ($60,000,000.00), the unpaid balance of which shall not exceed in the
aggregate the Aggregate Commitment at any time, together with interest on the
principal balance outstanding from time to time at the rate or rates set forth
in the Credit Agreement.

 

A.        Incorporation
of Credit Agreement.

 

1.        Reference is made to the Amended and
Restated Credit Agreement dated concurrently herewith (the “Credit Agreement”),
executed by and among the Borrower, Guarantor and the Banks therein named, and
Wells Fargo Bank, National Association, as administrative and collateral agent
for itself and for the Banks (the “Agent Bank”).  Terms defined in the Credit Agreement and not
otherwise defined herein are used herein with the meanings defined for those
terms in the Credit Agreement.  This
Amended and Restated Revolving Credit Note, together with each of the
Replacement Notes issued pursuant to Section 2.05(i) of the Credit
Agreement, constitute the Revolving Credit Note (“Revolving Credit Note”)
referred to in the Credit Agreement, and any holder hereof is entitled to all
of the rights, remedies, benefits and privileges provided for in the Credit
Agreement as originally executed or as it may from time to time be
supplemented, modified or amended.  The
Credit Agreement, among other things, contains provisions for acceleration of
the maturity hereof upon the happening of certain stated events upon the terms
and conditions therein specified.

 

2.         The
outstanding principal indebtedness evidenced by this Revolving Credit Note
shall be payable as provided in the Credit Agreement and in any event on January 20,
2012, the Maturity Date.  This Revolving
Credit Note is a full amendment and restatement of that certain Revolving
Credit Note dated February 20, 2004 (the “Existing Note”) executed by
Borrower, payable to the order of Agent Bank, in 

 

Page
1 of 3

 

EXHIBIT A

 

 

the
principal amount of Fifty Million Dollars ($50,000,000.00).  All amounts outstanding under the Existing
Note on the Restatement Effective Date hereof shall be deemed outstandings
hereunder.

 

3.         Interest
shall be payable on the outstanding daily unpaid principal amount of each
Borrowing hereunder from the date thereof until payment in full and shall
accrue and be payable at the rates and on the dates set forth in the Credit
Agreement both before and after Default and before and after maturity and
judgment, with interest on overdue interest to bear interest at the Default
Rate, to the fullest extent permitted by applicable law.

 

4.         The
amount of each payment hereunder shall be made to the Agent Bank at the Agent
Bank’s office as specified in the Credit Agreement for the account of the
Lenders at the time or times set forth therein, in lawful money of the United
States of America and in immediately available funds.

 

5.         Borrowings
hereunder shall be made in accordance with the terms, provisions and procedures
set forth in the Credit Agreement.

 

B.         Default.  The “Late Charges and Default Rate”
provisions contained in Section 2.11 and the “Events of Default”
provisions contained in Article VII of the Credit Agreement are hereby
incorporated by this reference as though fully set forth herein.  Upon the occurrence of a Default or Event of
Default, Borrower’s right to convert or exercise its Interest Rate Option for a
LIBOR Loan, or the continuation thereof, shall immediately, without notice or
demand, terminate.

 

C.        Waiver.  Borrower
waives diligence, demand, presentment for payment, protest and notice of
protest.

 

D.        Collection
Costs.  In the event of the
occurrence of an Event of Default, the Borrower agrees to pay all reasonable
costs of collection, including a reasonable attorney’s fee, 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 default. 
In the event legal action is commenced for the collection of any sums
owing hereunder the undersigned 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.

 

E.         Interest
Rate Limitation.  Notwithstanding any
provision herein or in any document or instrument now or hereafter securing
this Revolving Credit Note, the total liability for payments in the nature of
interest shall not exceed the limits now imposed by the applicable laws of the
State of Nevada or the United States of America.

 

Page
2 of 3

 

F.         Security.  This Revolving Credit Note is secured by the
Security Documentation described in the Credit Agreement.

 

G.        Governing
Law.  This Revolving Credit Note has
been delivered in Reno, Nevada, and shall be governed by and construed in
accordance with the laws of the State of Nevada.

 

H.        Partial
Invalidity.  If any provision of this
Revolving Credit Note shall be prohibited by or invalid under any applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision of any
other provision of this Revolving Credit Note.

 

I.          No
Conflict with Credit Agreement.  This
Revolving Credit Note is issued under, and subject to, the terms, covenants and
conditions of the Credit Agreement, which Credit Agreement is by this reference
incorporated herein and made a part hereof. 
No reference herein to the Credit Agreement and no provision of this
Revolving Credit Note or the Credit Agreement shall alter or impair the
obligations of Borrower, which are absolute and unconditional, to pay the
principal of and interest on this Revolving Credit Note at the place, at the
respective times, and in the currency prescribed in the Credit Agreement.  If any provision of this Revolving Credit
Note conflicts or is inconsistent with any provision of the Credit Agreement,
the provisions of the Credit Agreement shall govern.

 

IN
WITNESS WHEREOF, this Revolving Credit Note has been executed as of the date
first hereinabove written.

 

	
   

  	
  GOLDEN
  ROAD MOTOR INN, INC.

  
	
   

  	
  a
  Nevada corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  John
  Farahi,

  	
   

  
	
   

  	
   

  	
  Chief
  Executive Officer

  

 

Page
3 of 3

 

SWINGLINE
NOTE

 

	
  $4,000,000.00

  	
   

  	
  January 20, 2009

  

 

FOR
VALUE RECEIVED, the undersigned, GOLDEN ROAD MOTOR INN, INC., a Nevada
corporation (the “Borrower”) promises to pay to the order of WELLS FARGO BANK,
National Association (the “Swingline Lender”) at its principal office at 5340
Kietzke Lane, Suite 201, Reno, Nevada 89502, Attention: Stephen G. Buntin,
Gaming Division, or at such other location as may be directed from time to time
by Swingline Lender by written notice to Borrower, the principal sum of Four
Million Dollars ($4,000,000.00) or, if less, the aggregate unpaid principal
amount of all Swingline Advances (as defined in the Credit Agreement,
hereinafter defined) made by the Swingline Lender to or for the benefit of
Borrower pursuant to the Credit Agreement, in the manner and at the times set
forth in Section 2.08 of the Credit Agreement and, in any event, on or
before thirty-five (35) days prior to January 20, 2012.  Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed thereto in the Credit
Agreement.

 

Borrower
also promises to pay interest on the unpaid principal amount hereof from time
to time outstanding from the date of each Swingline Advance until repaid at the
Base Rate plus the Applicable Margin, and on the dates specified in the Credit
Agreement and in any event on or before thirty-five (35) days prior to the
Maturity Date, as defined in the Credit Agreement.

 

Payments
of both principal and interest are to be made in lawful money of the United
States of America in same day or immediately available funds.

 

This
Swingline Note is the Swingline Note described in, and is subject to the terms
and provisions of that certain Amended and Restated Credit Agreement of even
date herewith executed by and among Borrower, Guarantor, Lenders, Swingline
Lender, L/C Issuer and Agent Bank, as described and defined therein (as
amended, modified, supplemented or restated from time to time, the “Credit
Agreement”) and payment of this Swingline Note is secured by the Security Documentation.  Reference is hereby made to the Credit
Agreement for a statement of the rights and obligations of the Borrower, a
description of the properties mortgaged and assigned, the nature and extent of
the collateral security and the rights of the parties to the Security
Documentation in respect of such collateral security, and for a statement of
the terms and conditions under which the due date of this Swingline Note may be
accelerated.  Upon the occurrence of any
Event of 

 

Page
1 of 2

 

EXHIBIT B

 

Default
as specified in the Credit Agreement, the principal balance hereof and the
interest accrued hereon may be declared to be forthwith due and payable.

 

In
addition to and not in limitation of the foregoing and the provisions of the
Credit Agreement, the Borrower further agrees, subject only to any limitation
imposed by applicable law, to pay all expenses, including reasonable attorneys’
fees and legal expenses, incurred by the Swingline Lender in endeavoring to
collect any amounts payable hereunder which are not paid when due, whether by
acceleration or otherwise.

 

All
parties hereto, whether as makers, endorsers, or otherwise, severally waive
presentment for payment, demand, protest and notice of dishonor.

 

This
Swingline Note is issued under, and subject to, the terms, covenants and
conditions of the Credit Agreement, which Credit Agreement is by this reference
incorporated herein and made a part hereof.

 

THIS
SWINGLINE NOTE HAS BEEN DELIVERED IN RENO, NEVADA AND SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEVADA.

 

 

	
   

  	
  GOLDEN
  ROAD MOTOR INN, INC.

  
	
   

  	
  a
  Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   John
  Farahi,

  	
   

  
	
   

  	
   

  	
   Chief
  Executive Officer

  	
   

  

 

Page
2 of 2

 

FORM OF

NOTICE
OF BORROWING

 

TO:                                                                        WELLS
FARGO BANK, National Association, in its capacity as Agent Bank under that
certain Amended and Restated Credit Agreement dated as of January 20, 2009
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), by and among Golden Road Motor Inn, Inc., a Nevada
corporation (the “Borrower”), the Guarantor therein named, the Lenders therein
named (each, together with their respective successors and assigns,
individually being referred to as a “Lender” and collectively as the “Lenders”),
Wells Fargo Bank, National Association, as the swingline lender (herein in such
capacity, together with its successors and assigns, the “Swingline Lender”),
Wells Fargo Bank, National Association, as the issuer of letters of credit
thereunder (herein in such capacity, together with their 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”).  Capitalized terms used herein without
definition shall have the meanings attributed to them in Section 1.01 of
the Credit Agreement.

 

Pursuant to Section 2.03(a) of
the Credit Agreement, this Notice of Borrowing represents Borrower’s request
for a Borrowing to be advanced on                           ,
200       (the “Funding Date”) from the
Lenders (each to advance in proportion to their respective Syndication
Interests) in the aggregate principal amount of                                                                                   
($                         
) in [Base Rate] [LIBO Rate for which the initial LIBO Loan
Interest Period is requested to be a                             
(      ) month period].  Proceeds of such Borrowing are to be
disbursed on the Funding Date in immediately available funds to the Designated
Deposit Account at Agent Bank’s Main Branch at                                     ,
              ,
Nevada, Account No.                                   .

 

Borrower hereby certifies
that (i) the representations and warranties contained in Article IV
of the Credit Agreement, in each of the Loan Documents and in the Environmental
Certificate (other than representations and warranties which expressly speak
only as of a different date, which shall be true and correct in all material
respects as of such date), shall be true and correct in all material respects
on and as of the Funding Date as though made on and as of the Funding Date,
except to the extent that such representations and warranties are not true and
correct as a result of a

 

EXHIBIT C

 

 

change which is permitted
by the Credit Agreement or by any other Loan Document or which has been
otherwise consented to by Agent Bank; (ii) no Default or Event of Default
has occurred and is continuing under the Credit Agreement or any other Loan
Document or will result from the making of the requested Borrowing; (iii) Borrower
has and shall have satisfied all conditions precedent under Article III B
of the Credit Agreement required to be performed by it on or before the Funding
Date (unless otherwise waived pursuant to the terms of the Credit Agreement); (iv) since
the date of the most recent audited financial statements referred to in
Sections 3.17 and 5.08 of the Credit Agreement, no Material Adverse Change
shall have occurred; and (v) the aggregate of all outstanding Borrowings
does not (and after giving effect to the requested Borrowing, will not) exceed
the Maximum Availability then in effect.

 

Borrower further
certifies that as of the Funding Date, without regard to the requested
Borrowing:

 

	
  A.

  	
   

  	
  The Aggregate
  Commitment is

  	
   

  	
  $__________

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  The Funded Outstandings
  are

  	
   

  	
  $__________

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  The Swingline
  Outstandings are

  	
   

  	
  $__________

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  The total L/C Exposure
  is

  	
   

  	
  $__________

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Aggregate Outstandings

  	
   

  	
  $__________

  
	
   

  	
   

  	
  (B + C + D)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  The Maximum Availability

  	
   

  	
   

  
	
   

  	
   

  	
  (A minus E) is

  	
   

  	
  $__________

  
	
   

  	
   

  	
   

  	
   

  	
   

  

2

 

The
Borrower has caused this Notice of Borrowing to be executed and delivered, and
the certification and warranties contained herein to be made, by its Authorized
Officer this          day of                           ,
200    .

 

 

	
   

  	
  GOLDEN ROAD MOTOR INN, INC., 

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:_______________________

  
	
   

  	
   

  
	
   

  	
  Title: Authorized Officer

  
	
   

  	
   

  
	
   

  	
  Print 

  
	
   

  	
  Name:_______________________

  
	
   

  	
   

  

3

 

CONTINUATION/CONVERSION NOTICE

[Form]

 

 

TO:                                                                        WELLS
FARGO BANK, National Association, in its capacity as Agent Bank under that
certain Amended and Restated Credit Agreement, dated as of January 20,
2009 (as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), by and among Golden Road Motor Inn, Inc., a Nevada
corporation (the “Borrower”), the Guarantor therein named, the Lenders therein
named (each, together with their respective successors and assigns,
individually being referred to as a “Lender” and collectively as the “Lenders”),
Wells Fargo Bank, National Association, as the swingline lender (herein in such
capacity, together with its successors and assigns, the “Swingline Lender”),
Wells Fargo Bank, National Association, as the issuer of letters of credit
thereunder (herein in such capacity, together with their 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”).  Capitalized terms used herein without
definition shall have the meanings attributed to them in Section 1.01 of
the Credit Agreement.

 

This
Continuation/Conversion Notice is delivered to you pursuant to Section 2.05(c) of
the Credit Agreement regarding the [conversion to] [continuation of] a LIBOR
Loan as specified below:

 

The Borrower hereby
requests that:

 

1.         ($____________) of the presently
outstanding principal amount of the Credit Facility;

 

2.         and presently being maintained as [Base
Rate Loan] [LIBOR Loan having an Interest Period ending on ___________________,
200___];

 

3.         be [Converted into] [continued as];

 

4.         [LIBOR Loan having an Interest Period
of __________ months] [Base Rate Loan] as of ___________, 200__.

 

EXHIBIT
D

 

 

 

The undersigned
Authorized Officer certifies, to the best of his or her knowledge, that no
Default or Event of Default has occurred and is continuing.

 

The undersigned Authorized Officer of Borrower has
caused this Continuation/Conversion Notice to be executed and delivered this
___ day of ______________, 200__.

 

 

	
   

  	
  GOLDEN ROAD MOTOR INN,
  INC.,   

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:______________________

  
	
   

  	
   

  
	
   

  	
  Title:________________________

  
	
   

  	
  Authorized Officer

  
	
   

  	
   

  
	
   

  	
  Print

  
	
   

  	
  Name:_______________________

  
	
   

  	
   

  

2

 

 

COMPLIANCE CERTIFICATE

 

 

	
  TO:

  	
  WELLS FARGO BANK, National Association,

  
	
   

  	
  as Agent Bank

  

 

Reference is made
to that certain Amended and Restated Credit Agreement dated as of January 20,
2009 (as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), by and among Golden Road Motor Inn, Inc., a Nevada
corporation (the “Borrower”), Monarch Casino & Resort, Inc., a
Nevada corporation (the “Guarantor”), the Lenders therein named (each, together
with their respective successors and assigns, individually being referred to as
a “Lender” and collectively as the “Lenders”), Wells Fargo Bank, National
Association, as the swingline lender (herein in such capacity, together with
its successors and assigns, the “Swingline Lender”), Wells Fargo Bank, National
Association, as the issuer of letters of credit thereunder (herein in such
capacity, together with their 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”).  Terms defined in the Credit Agreement and not
otherwise defined in this Compliance Certificate (“Certificate”) shall have the
meanings defined and described in the Credit Agreement.  This Certificate is delivered in accordance
with Section 5.08(g) of the Credit Agreement.

 

The period under
review is the Fiscal Quarter ended     [INSERT DATE]    ,
together with, where indicated, the three (3) immediately preceding Fiscal
Quarters on a rolling four (4) Fiscal Quarter basis.

 

I.

 

COMPLIANCE WITH AFFIRMATIVE COVENANTS

 

	
  A.

  	
  FF&E (Section 5.01):
  Please state whether or not all FF&E has been purchased and installed in
  the Hotel/Casino Facility free and clear of all liens, encumbrances or
  claims, other than Permitted Encumbrances.

  	
   

  	
  yes/no

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
  Liens Filed (Section 5.03):
  Report any liens filed against the Real Property and the amount claimed in
  such liens. Describe actions being taken with respect thereto.

  	
   

  	
  $

  	
   

  	
   

  
						

 

EXHIBIT E

 

	
  C.

  	
  Additional Real Property
  (Section 5.06): 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Other than the Real Property presently encumbered by the Deed of
  Trust, attach a legal description of any other real property or rights to the
  use of real property which is used in any material manner in connection with
  the Hotel/Casino Facility and describe such use.  Attach evidence that such real property or
  rights to the use of such real property has been added as Collateral under
  the Credit Agreement.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  Other than with respect to the Adjacent Driveway Lease, have Borrower
  or MCRI entered into any additional leases, licenses, rental or other
  arrangements for the use or occupancy of all or any portion of the Village
  Shopping Center?

  	
   

  	
  yes/no

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If so, are such arrangements planned or projected to be or become an
  integral part of the operation at the Real Property and/or the Hotel/Casino
  Facility?

  	
   

  	
  yes/no

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If so, have such arrangements been consented to by Agent Bank or
  Requisite Lenders?

  	
   

  	
  yes/no

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
  Permitted Encumbrances
  (Section 5.11): Describe any Lien attachment, levy, distraint or other
  judicial process or burden affecting the Collateral other than the Permitted
  Encumbrances.  Describe any matters
  being contested in the manner described in Sections 5.03 and 5.10 of the
  Credit Agreement.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
  Suits or Actions
  (Section 5.17):  Describe on a
  separate sheet any matters requiring advice to Agent Bank under
  Section 5.17.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
  Tradenames, Trademarks and Servicemarks
  (Section 5.19): Describe on a separate sheet any matters requiring
  advice to Agent Bank under Section 5.19.

  	
   

  	
   

  	
   

  

 

2

 

	
  G.

  	
  Notice of Hazardous Materials
  (Section 5.20): State whether or not to your knowledge there are any
  matters of which Banks should be advised under Section 5.20.  If so, attach a detailed summary of such
  matter(s).

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.

  	
  Compliance with Pedestrian Crossing Air Space
  License (Section 5.23): Describe all defaults, if any,
  which occurred during the period under review under the Pedestrian Crossing
  Air Space License.  Describe any
  modifications or amendments to the Pedestrian Crossing Air Space
  License.  State whether or not such
  modifications or amendments have been consented to by Agent Bank or Requisite
  Lenders as required under Section 5.23 of the Credit Agreement.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I.

  	
  Compliance with Adjacent Driveway Lease
  (Section 5.24): Describe all defaults, if any, which occurred during the
  period under review under the Adjacent Driveway Lease.  Describe any modifications or amendments to
  the Adjacent Driveway Lease.  State
  whether or not such modifications or amendments have been consented to by
  Agent Bank or Requisite Lenders as required under Section 5.24 of the
  Credit Agreement.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  J.

  	
  Compliance with CC Skybridge Documentation (Section 5.25):
  Describe all defaults, if any, which occurred during the period under review
  under the CC Skybridge Documentation. 
  Describe any modifications or amendments to the CC Skybridge
  Documentation.  State whether or not
  such modifications or amendments have been consented to by Agent Bank or Requisite
  Lenders as required under Section 5.25 of the Credit Agreement.

  	
   

  	
   

  	
   

  

 

3

 

II.

 

FINANCIAL COVENANTS

 

	
  A.

  	
  Total Leverage Ratio
  (Section 6.01):  To be calculated
  with reference to the Borrower commencing with the Fiscal Quarter ending
  December 31, 2008 and continuing as of each Fiscal Quarter end until
  Bank Facility Termination:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TOTAL FUNDED DEBT:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  The aggregate amount of the Funded Outstandings on the Credit
  Facility as of the last day of the Fiscal Quarter under review.

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  Plus the aggregate amount of the Swingline Outstandings on the
  Swingline Facility as of the last day of the Fiscal Quarter under review.

  	
  +

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  c.

  	
  Plus the aggregate amount of the L/C Exposure on the L/C Facility as
  of the last day of the Fiscal Quarter under review.

  	
  +

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  d.

  	
  Plus the total, as of the last day of the Fiscal Quarter under
  review, of both the long-term and current portions (without duplication) of
  all other interest bearing interest bearing Indebtedness (including
  Contingent Liabilities).

  	
  +

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  e.

  	
  Plus the total, as of the last day of the Fiscal Quarter under
  review, of all Capitalized Lease Liabilities.

  	
  +

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  f.

  	
  TOTAL FUNDED DEBT

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (a + b + c + d + e)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Divided ( ̧) by:

  	
   ̧

  	
   

  	
   

  

 

4

 

	
   

  	
  Adjusted EBITDA

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  To be calculated on a cumulative basis with respect to the Fiscal
  Quarter under review and the most recently ended three (3) preceding
  Fiscal Quarters on a four (4) Fiscal Quarter basis:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  g.

  	
  Net Income

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  h.

  	
  Less interest income reflected in such Net Income

  	
  -

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  i.

  	
  Less any extraordinary one-time non-Cash gain reflected in such Net
  Income

  	
  -

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  j.

  	
  Plus any extraordinary losses on sales of assets and other
  extraordinary losses and one-time non-Cash charges

  	
  +

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  k.

  	
  Plus Interest Expense (expensed and capitalized) to the extent
  deducted in the determination of Net Income

  	
  +

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  l.

  	
  Plus the aggregate amount of federal and state taxes on or measured
  by income for the period under review (whether or not payable during such
  period) to the extent deducted in the determination of Net Income

  	
  +

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  m.

  	
  Plus depreciation, amortization and all other non-cash expenses,
  including, without limitation, non-cash stock option expenses, for the period
  under review to the extent deducted in the determination of Net Income

  	
  +

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  n.

  	
  Total EBITDA

  (g - h - i + j + k + l + m)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  o.

  	
  Less the aggregate of MCRI Corporate Overhead Allocation to the extent
  not deducted in the determination of Net Income in (g) above

  	
  -

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  p.

  	
  ADJUSTED
  EBITDA

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (n - o)

  	
   

  	
   

  	
   

  	
   

  

 

5

 

	
   

  	
  q.

  	
  Total Leverage Ratio

  (f  ̧ p)

  	
   

  	
  :1.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Maximum Permitted: 

  	
   

  	
   

  	
   

  

 

	
  Fiscal Quarter End

  	
   

  	
  Maximum Total

  Leverage Ratio

  	
   

  
	
  As of the Fiscal
  Quarter ending December 31, 2008 through the Fiscal Quarter ending
  September 30, 2009

  	
   

  	
  2.875 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  As of the Fiscal
  Quarter ending December 31, 2009 through the Fiscal Quarter ending March 31,
  2010

  	
   

  	
  2.625 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  As of the Fiscal
  Quarter ending June 30, 2010 through the Fiscal Quarter ending
  March 31, 2011

  	
   

  	
  2.375 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  As of the Fiscal
  Quarter ending June 30, 2011 and as of each Fiscal Quarter end
  thereafter occurring until Bank Facility Termination

  	
   

  	
  2.00 to 1.00

  	
   

  

 

	
  B.

  	
  Adjusted Fixed Charge Coverage Ratio
  (Section 6.02): To be calculated on a cumulative basis with respect to
  the Fiscal Quarter under review and the most recently ended three
  (3) preceding Fiscal Quarters on a four (4) Fiscal Quarter basis,
  unless otherwise provided, commencing with the Fiscal Quarter ended
  December 31, 2008:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Numerator

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Total Adjusted EBITDA (Enter II A (p) above)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  Less the aggregate amount of Distributions actually paid, without
  duplication (exclusive of the Distributions made for the purpose of funding
  Share Repurchases during the Fiscal Quarters ended March 31, 2008 and
  June 30, 2008)

  	
  -

  	
  $

  	
   

  	
   

  

 

6

 

	
   

  	
  c.

  	
  Less the aggregate amount of actually paid federal and state taxes on
  or measured by income 

  	
  -

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  d.

  	
  Less the aggregate amount of the Maintenance Capital Expenditures 

  	
  -

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  e.

  	
  Less the aggregate amount expended on the Remodel Projects to be
  applied as a credit toward the Minimum Maintenance Cap Ex Requirement

  	
  -

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  f.

  	
  Total Numerator

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (a - b - c - d - e)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Divided ( ̧) by the sum of:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Denominator

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  g.

  	
  The aggregate amount of Interest Expense (accrued and capitalized)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  h.

  	
  Plus the aggregate of the Scheduled Reduction Payments actually
  paid during the period under review

  	
  +

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  i.

  	
  Plus the aggregate of payments required to be made on all other
  interest bearing Indebtedness 

  	
  +

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  j.

  	
  Plus the aggregate of payments required to be made on Capitalized
  Lease Liabilities 

  	
  +

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  k.

  	
  Total Denominator

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (g + h + i +j)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Adjusted Fixed Charge Coverage Ratio (f  ̧
  k)

  	
   

  	
   

  	
  :1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Minimum required: no less than 1.25 to 1.00.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
  Minimum Two Fiscal Quarter Adjusted EBITDA
  (Section 6.03):  Commencing as of
  the Fiscal Quarter ending March 31, 2009 and continuing as of each
  Fiscal Quarter end until Bank Facilities Termination, set forth the Adjusted
  EBITDA of the Borrower calculated for each two consecutive Fiscal Quarter
  periods on a rolling two (2) Fiscal Quarter basis.

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Total Two Fiscal Quarter Adjusted EBITDA

  	
   

  	
  $

  	
   

  	
   

  

 

7

 

	
   

  	
  a.

  	
  Net Income

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  Less interest income reflected in such Net Income

  	
  -

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  c.

  	
  Less any extraordinary one-time non-Cash gain reflected in such Net
  Income

  	
  -

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  d.

  	
  Plus any extraordinary losses on sales of assets and other
  extraordinary losses and one-time non-Cash charges

  	
  +

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  e.

  	
  Plus Interest Expense (expensed and capitalized) to the extent
  deducted in the determination of Net Income

  	
  +

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  f.

  	
  Plus the aggregate amount of federal and state taxes on or measured
  by income for the period under review (whether or not payable during such
  period) to the extent deducted in the determination of Net Income

  	
  +

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  g.

  	
  Plus depreciation, amortization and all other non-cash expenses,
  including, without limitation, non-cash stock option expenses, for the period
  under review to the extent deducted in the determination of Net Income

  	
  +

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  h.

  	
  Less the aggregate of MCRI Corporate Overhead Allocation to the
  extent not deducted in the determination of Net Income in (a) above

  	
  -

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  i.

  	
  Total Two Fiscal Quarter Adjusted EBITDA

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (a - b - c + d + e + f + g - h)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Minimum Required:

  	
   

  	
   

  	
   

  	
   

  

 

	
  Fiscal Quarter End

  	
   

  	
  Minimum Two
  Fiscal Quarter Adjusted EBITDA

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2008 and March 31, 2009

  	
   

  	
  $7,250,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2009 and June 30, 2009

  	
   

  	
  8,750,000.00

  	
   

  

 

8

 

	
  June 30,
  2009 and September 30, 2009

  	
   

  	
  11,250,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2009 and December 31, 2009

  	
   

  	
  9,750,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2009 and March 31, 2010

  	
   

  	
  7,250,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2010 and June 30, 2010

  	
   

  	
  8,750,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2010 and September 30, 2010

  	
   

  	
  11,250,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2010 and December 31, 2010

  	
   

  	
  9,750,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2010 and March 31, 2011

  	
   

  	
  7,250,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2011 and June 30, 2011

  	
   

  	
  8,750,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2011 and September 30, 2011

  	
   

  	
  11,250,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2011 and December 31, 2011

  	
   

  	
  9,750,000.00

  	
   

  

 

	
  D.

  	
  Maintenance Capital Expenditure Requirement
  (Section 6.04):  To be calculated
  with respect to the Borrower for each Fiscal Year commencing with the Fiscal
  Year ending December 31, 2009:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Set forth amount of Maintenance Capital Expenditures made during the
  Fiscal Year under review.

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  Set forth the amount expended on the Remodel Projects during the
  Fiscal Year under review which Borrower intends to apply as a credit toward
  the Minimum Maintenance Cap Ex Requirement.

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  c.

  	
  Set forth 2% of consolidated annual net revenues derived from the
  Hotel/Casino Facility for the Fiscal Year ending December 31, 2009 and
  for each subsequent Fiscal Year.

  	
   

  	
  $

  	
   

  	
   

  

 

9

 

	
   

  	
  d.

  	
  Set forth 6% of consolidated annual net revenues derived from the Hotel/Casino
  Facility for the Fiscal Year ending December 31, 2009 and for each
  subsequent Fiscal Year.

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Requirements:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  The sum of (a) plus (b) must exceed (c).

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Line (a) must but be less than (d)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
  Investment Restrictions
  (Section 6.05):

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Set forth the amount and a brief description of each Investment not
  permitted under Section 6.05.

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
  Restriction on Distributions
  (Section 6.06):  Set forth (on a
  separate sheet if necessary) the date and amount of each Distribution
  (including all Share Repurchases) made during the fiscal period under review.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Requirements:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Attach on a separate sheet a pro forma calculation of the Adjusted
  Fixed Charge Coverage Ratio of the Borrower as of the most recently ended
  Fiscal Quarter prior to the Fiscal Quarter under review, based on the
  assumption that the Distributions set forth above had occurred during such
  prior Fiscal Quarter.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Set forth the Pro Forma Adjusted Fixed Charge Coverage Ratio (must
  not be less than the Minimum Coverage Ratios during the applicable periods as
  set forth in II B above).

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Permitted up to the maximum cumulative aggregate of $3,000,000.00
  during each Fiscal Year.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  Set forth the aggregate amount of unused Distribution Carryover from
  prior Fiscal Years.

  	
   

  	
  $

  	
   

  	
   

  

 

10

 

	
   

  	
  c.

  	
  In addition to the amounts permitted for Distribution in
  (a) above, may also distribute all or a portion of the Distribution
  Carryover if:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  An Authorized Officer certified to Agent Bank at least 30 days prior
  to each such Distribution that such Distribution Carryover would not result
  in a violation of the Fixed Charge Coverage Ratio at the end of the Fiscal
  Quarter during which such Distribution was made nor as of the end of each
  Fiscal Quarter remaining during the Fiscal Year during which such
  Distribution was made.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Date Certification was submitted to Agent Bank.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  Attach on a separate sheet a pro forma calculation of the Adjusted
  Fixed Charge Coverage Ratio of the Borrower as of the most recently ended
  Fiscal Quarter prior to the Fiscal Quarter under review, based on the
  assumption that the Distributions set forth in (a) and (c) above
  had occurred during such prior Fiscal Quarter.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Set forth the Pro Forma Adjusted Fixed Charge Coverage Ratio (must
  not be less than the Minimum Coverage Ratios during the applicable periods as
  set forth in II B above).

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  d.

  	
  Was the Total Leverage Ratio set forth in Section II
  A(q) of the Compliance Certificate submitted for the most recently ended
  Fiscal Quarter 1.75 to 1.00 or less?

  	
   

  	
   

  	
  yes/no

  	
   

  

 

11

 

	
   

  	
  e.

  	
  If yes, Distribution limitations in (a) and (c) above were
  suspended during the Fiscal Quarter under review if:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  An Authorized Officer certified to Agent Bank at least 30 days prior
  to each such Distribution that each such Distribution would not result in a
  violation of the Fixed Charge Coverage Ratio at the end of the Fiscal Quarter
  during which such Distribution was made nor either (x) at the end of the
  next ensuing Fiscal Quarter, or (y) as of the end of each Fiscal Quarter
  remaining during the Fiscal Year during which such Distribution was made,
  whichever period is longer from the date of such Distribution.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Date Certification was submitted to Agent Bank.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  Attach on a separate sheet a pro forma calculation of the Adjusted
  Fixed Charge Coverage Ratio of the Borrower as of the most recently ended
  Fiscal Quarter prior to the Fiscal Quarter under review, based on the
  assumption that the Distributions set forth in (a) above had occurred
  during such prior Fiscal Quarter.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Set forth the Pro Forma Adjusted Fixed Charge Coverage Ratio (must
  not be less than the Minimum Coverage Ratios during the applicable periods as
  set forth in II B above).

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  G.

  	
  Indebtedness (Section 6.07):  With respect to the Borrower and MCRI on a
  combined basis:

  	
   

  	
  $

  	
   

  	
   

  

 

12

 

	
   

  	
  a.

  	
  Set forth the aggregate amount of secured purchase money Indebtedness
  and Capital Lease Liabilities.

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Maximum Permitted

  	
   

  	
  $

  	
   5,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  Set forth the aggregate amount of unsecured Indebtedness.

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Maximum Permitted

  	
   

  	
  $

  	
   7,500,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Is any of the unsecured Indebtedness subject to financial and other
  covenants and events of default more onerous or restrictive on Borrower than
  the terms and provisions of the Credit Agreement?  If yes, please explain on a separate sheet.

  	
   

  	
   

  	
  yes/no

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  c.

  	
  Set forth the amount and a brief description of any Indebtedness of
  Borrower and MCRI not permitted under Section 6.07.

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.

  	
  Total Liens
  (Section 6.08):  On a separate
  sheet describe in detail any and all Liens not permitted under
  Section 6.08.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I.

  	
  Sale of Assets, Consolidation, Merger or Liquidation
  (Section 6.09):

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  On a separate sheet describe any and all mergers, consolidations,
  liquidations and/or dissolutions not permitted under Section 6.09.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  With respect to the determination of Excess Capital Proceeds, please
  set forth the amount of Net Proceeds received by the Borrower, during the
  period commencing on the Restatement Effective Date and continuing through
  the end of the Fiscal Quarter under review, from the Disposition of FF&E
  and other items of Collateral which have not been replaced with purchased or
  leased FF&E of equivalent value and utility.

  	
   

  	
   

  	
   

  	
   

  

 

13

 

	
   

  	
   

  	
  Requirement.  For all amounts
  in excess of $2,500,000.00, must make a Mandatory Commitment Reduction on or
  before 90 days following each such Disposition resulting in Excess Capital
  Proceeds.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  J.

  	
  Restriction on Transfer of Ownership
  (Section 6.10): On a separate sheet describe in detail any transfers or
  hypothecations of MCRI’s ownership interest in Borrower not permitted under
  Section 6.10

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  K.

  	
  Limitation on Subsidiaries
  (Section 6.11):  On a separate
  sheet, describe any Subsidiaries created by Borrower.  State whether or not the creation of such
  Subsidiaries has been consented to by the Requisite Lenders as required under
  Section 6.11.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  L.

  	
  Contingent Liabilities
  (Section 6.12):

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Set forth the amount of all Contingent Liabilities incurred by the
  Borrower and/or by MCRI.

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Maximum Permitted: Cumulative aggregate of $5,000,000.00 at any time
  for Borrower and MCRI on a combined basis, without the prior written consent
  of Requisite Lenders

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  M.

  	
  Transactions with Members of the MCRI Consolidation
  (Section 6.13): Describe on a separate sheet any transactions or
  payments made by Borrower to any member of the MCRI Consolidation which are
  not allowed under Section 6.13.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  N.

  	
  Limitation on Consolidated Tax Liability
  (Section 6.14): Describe  on a
  separate sheet any federal income taxes paid by Borrower which are not
  allowed under Section 6.14.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  O.

  	
  ERISA (Section 6.15):
  Describe on a separate sheet any matters requiring advice to Agent Bank under
  Section 6.15.

  	
   

  	
   

  	
   

  	
   

  

 

14

 

	
  P.

  	
  Margin Regulations (Section 6.16):
  Set forth the amount(s) of and describe on a separate sheet of paper any
  proceeds of any portion of the Credit Facility, used by Borrower to purchase
  or carry any Margin Stock or to extend credit to others for the purpose of
  purchasing or carrying any Margin Stock.

  	
   

  	
   

  	
   

  	
   

  

 

III.

 

REMODEL PROJECTS STATUS

 

To be reconciled
with the Schedule of Remodel Projects (Schedule 6.04) as of the end of the
Fiscal Quarter under review until all of the Remodel Projects have been
completed and all costs fully paid:

 

	
  1.

  	
  Please attach a revised
  Schedule of Remodel Projects showing with respect to each project description
  line item:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  the percentage of
  completion;

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  costs paid to date; and

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  c.

  	
  remaining costs to
  complete.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Is the aggregate of the
  costs paid and the remaining costs to complete in excess of $14,275,000?

  	
   

  	
   

  	
  yes/no

  	
   

  

 

IV.

 

APPLICABLE MARGIN DETERMINATION

 

Commencing with the
Fiscal Quarter ending March 31, 2009 and continuing as of the end of each
Fiscal Quarter until Bank Facility Termination, the Applicable Margins, based
on the Total Leverage Ratio (See II A(q) above) are:

 

	
   

  	
  Base Rate Margin

  	
   

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LIBO Rate Margin

  	
   

  	
   

  	
   

  	
  %

  

 

The change in the
Applicable Margins, if any, shall be effective on  [insert date which is the first (1st) day of
the third (3rd) month immediately following the Fiscal Quarter end set forth
above]  .

 

15

 

V.

 

COMMITMENT FEE CALCULATION

 

	
  (Section 2.10(b)):
  To be calculated with respect to the Fiscal Quarter under review:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Daily average of
  Aggregate Commitment

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  Less daily average of
  Funded Outstandings

  	
  -

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  c.

  	
  Less the daily average
  of L/C Exposure

  	
  -

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  d.

  	
  Amount of Nonusage

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (a minus b minus c)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  e.

  	
  Total Leverage Ratio
  (See II A(q) above)

  	
   

  	
   

  	
  :1

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  f.

  	
  Applicable Commitment
  Percentage: 

  	
   

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [See Table Two in
  definition of Applicable Margin]

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  g.

  	
  Gross Commitment Fee

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (d times f)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  h.

  	
  Number of days in
  Fiscal Quarter under review

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  i.

  	
  Commitment Fee for
  Fiscal Quarter under review

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (g  ̧
  360 x h)

  	
   

  	
  $

  	
   

  	
   

  

 

VI.

 

PERFORMANCE OF OBLIGATIONS

 

A review of the
activities of the Borrower during the fiscal period covered by the attached
financial statements has been made under my supervision with a view to
determining whether during such fiscal period any Default or Event of Default
has occurred and is continuing.  Except
as described in an attached document or in an earlier Certificate, to the best
of my knowledge, as of the date of this Certificate, there is no Default or
Event of Default that has occurred and remains continuing.

 

16

 

VII.

 

NO MATERIAL ADVERSE CHANGE

 

To the best of my
knowledge, except as described in an attached document or in an earlier
Certificate, no Material Adverse Change has occurred since the date of the most
recent Certificate delivered to the Banks.

 

DATED this _____ day of ___________________, 200___.

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  GOLDEN ROAD MOTOR INN, INC.,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name

  	
   

  
	
   

  	
   

  
	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  
	
   

  	
   

  
	
   

  	
  Print

  
	
   

  	
  Name

  	
   

  
					

 

17

 

CLOSING
PRICING CERTIFICATE

 

TO:                        WELLS
FARGO BANK, National Association,

as Agent Bank

 

Reference is made to that
certain Amended and Restated Credit Agreement, dated as of January 20,
2009 (as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), by and among Golden Road Motor Inn, Inc., a Nevada
corporation (the “Borrower”), Monarch Casino & Resort, Inc., a
Nevada corporation (the “Guarantor”), the Lenders therein named (each, together
with their respective successors and assigns, individually being referred to as
a “Lender” and collectively as the “Lenders”), Wells Fargo Bank, National
Association, as the swingline lender (herein in such capacity, together with
its successors and assigns, the “Swingline Lender”), Wells Fargo Bank, National
Association, as the issuer of letters of credit thereunder (herein in such
capacity, together with their 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”).  Terms defined in the Credit Agreement and not
otherwise defined in this Closing Pricing Certificate (“Certificate”) shall
have the meanings defined and described in the Credit Agreement.  This Certificate is delivered in accordance
with Section 3.17(b) of the Credit Agreement for the purpose of
determining the Applicable Margins.

 

The period under
review is the Fiscal Quarter ended December 31, 2008, together with the
three (3) immediately preceding Fiscal Quarters on a rolling four (4) Fiscal
Quarter basis.

 

The Applicable
Margins, based on the calculations for the Borrower as set forth below, for the
period commencing on the Restatement Effective Date and continuing until June 1,
2009 are:

 

	
  Base Rate Margin 

  	
   

  	
  %

  
	
   

  	
   

  	
   

  
	
  LIBO Rate Margin 

  	
   

  	
  %

  

 

Total
Leverage Ratio:  To
be calculated with reference to the Borrower commencing with the Fiscal Quarter
ending December 31, 2008:

 

EXHIBIT F

 

 

	
  TOTAL FUNDED DEBT:

  	
   

  	
   

  	
   

  
	
  a.

  	
  The aggregate
  amount of the Funded Outstandings on the Credit Facility as of the last day
  of the Fiscal Quarter under review.

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  b.

  	
  Plus the aggregate
  amount of the Swingline Outstandings on the Swingline Facility as of the last
  day of the Fiscal Quarter under review.

  	
   

  	
  + $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  c.

  	
  Plus the
  aggregate amount of the L/C Exposure on the L/C Facility as of the last day
  of the Fiscal Quarter under review.

  	
   

  	
  + $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  d.

  	
  Plus the total,
  as of the last day of the Fiscal Quarter under review, of both the long-term
  and current portions (without duplication) of all other interest bearing
  interest bearing Indebtedness (including Contingent Liabilities).

  	
   

  	
  + $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  e.

  	
  Plus the total,
  as of the last day of the Fiscal Quarter under review, of all Capitalized
  Lease Liabilities.

  	
   

  	
  + $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  f.

  	
  TOTAL
  FUNDED DEBT  

  (a + b + c + d + e)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Divided ( ̧)
  by:

  	
   

  	
   ̧

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Adjusted
  EBITDA  

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  To be calculated
  on a cumulative basis with respect to the Fiscal Quarter ended December 31,
  2008 and the most recently ended three (3) preceding Fiscal Quarters on a
  four (4) Fiscal Quarter basis:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  g.

  	
  Net Income

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  h.

  	
  Less interest income reflected in such Net Income

  	
   

  	
  - $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  i.

  	
  Less any
  extraordinary one-time non-Cash gain reflected in such Net Income

  	
   

  	
  - $

  	
   

  
						

 

2

 

	
  j.

  	
  Plus any
  extraordinary losses on sales of assets and other extraordinary losses and
  one-time non-Cash charges

  	
   

  	
  + $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  k.

  	
  Plus Interest
  Expense (expensed and capitalized) to the extent deducted in the
  determination of Net Income

  	
   

  	
  + $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  l.

  	
  Plus the
  aggregate amount of federal and state taxes on or measured by income for the
  period under review (whether or not payable during such period) to the extent
  deducted in the determination of Net Income

  	
   

  	
  + $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  m.

  	
  Plus
  depreciation, amortization and all other non-cash expenses, including,
  without limitation, non-cash stock option expenses, for the period under
  review to the extent deducted in the determination of Net Income

  	
   

  	
  + $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  n.

  	
  Total EBITDA

  (g - h - i + j + k + l + m)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o.

  	
  Less the
  aggregate of MCRI Corporate Overhead Allocation to the extent not deducted in
  the determination of Net Income in (g) above

  	
   

  	
  - $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  p.

  	
  ADJUSTED
  EBITDA

  (n - o)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  q.

  	
  Total
  Leverage Ratio 

  (f  ̧ p)

  	
   

  	
   

  	
  :1.0

  

 

3

 

DATED this ____
day of ________________, 200__.

 

	
   

  	
  GOLDEN ROAD MOTOR INN, INC., 

  a Nevada corporation 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  
						

 

4

 

AUTHORIZED
OFFICERS CERTIFICATE

OF

GOLDEN
ROAD MOTOR INN, INC.

 

The undersigned
hereby certifies that the following persons currently have been authorized to
act on behalf of GOLDEN ROAD MOTOR INN, INC., a Nevada corporation (the “Borrower”),
holding the positions indicated next to their names, that the signatures
appearing opposite their names below are true and genuine signatures of such
persons, and that each of such persons shall be deemed an “Authorized Officer”
of Borrower as defined in and for the purposes used in connection with the
Amended and Restated Credit Agreement (as may be amended or modified from time
to time, the “Credit Agreement”), dated as of the date hereof, executed by and
among the Borrower, Monarch Casino & Resort, Inc., a Nevada corporation
(“Guarantor”), the Lenders therein named (each, together with their respective
successors and assigns, individually being referred to as a “Lender” and
collectively as the “Lenders”), Wells Fargo Bank, National Association, as the
swingline lender (herein in such capacity, together with its successors and
assigns, the “Swingline Lender”), Wells Fargo Bank, National Association, as
the issuer of letters of credit thereunder (herein in such capacity, together
with their 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”), and such Authorized Officers are
authorized to deliver on behalf of the Borrower the Notices of Borrowings,
Continuation/Conversion Notices, Compliance Certificates and all other notices,
requests, reports, consents, certifications and authorizations on behalf of the
Borrower under the Credit Agreement, and have been duly authorized by the
Borrower as “Authorized Officers” of Borrower for all purposes under the Credit
Agreement and each related Loan Document.

 

All capitalized
terms used but not otherwise defined in this Certificate shall have the same
meanings as set forth in the Credit Agreement.

 

EXHIBIT
G

 

 

	
  NAME

  	
  POSITION
  IN

  BORROWER

  	
  SIGNATURE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   Bob Farahi

  	
  President, Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   Ronald Rowan

  	
  Chief Financial

  Officer/Treasurer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   John Farahi

  	
  Chief Executive

  Officer

  	
   

  	
   

  

 

IN WITNESS
WHEREOF, the undersigned secretary of the Borrower has executed the foregoing
Certificate on behalf of Borrower as of the ___ day of January, 2009.

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  GOLDEN ROAD MOTOR INN,
  INC.,

  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Bob Farahi,

  
	
   

  	
   

  	
  Secretary

  

 

2

 

 

CLOSING
CERTIFICATE

 

TO:                                                                      WELLS FARGO BANK,
National Association, in its capacity as Agent Bank under that certain Amended
and Restated Credit Agreement, dated as of January 20, 2009 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
by and among Golden Road Motor Inn, Inc., a Nevada corporation (the “Borrower”),
Monarch Casino & Resort, Inc., a Nevada corporation (the “Guarantor”),
the Lenders therein named (each, together with their respective successors and
assigns, individually being referred to as a “Lender” and collectively as the “Lenders”),
Wells Fargo Bank, National Association, as the swingline lender (herein in such
capacity, together with its successors and assigns, the “Swingline Lender”),
Wells Fargo Bank, National Association, as the issuer of letters of credit
thereunder (herein in such capacity, together with their 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”).  Capitalized terms used herein without
definition shall have the meanings attributed to them in Section 1.01 of
the Credit Agreement.

 

THE UNDERSIGNED, as an
Authorized Officers of Borrower and Guarantor, do hereby make the following
certifications effective as of the date of this Closing Certificate pursuant to
Article III of the Credit Agreement:

 

(a)                             the representations and warranties
contained in Article IV of the Credit Agreement and contained in each of
the other Loan Documents are true and correct on and as of the Restatement
Effective Date in all material respects as though such representations and
warranties had been made on and as of the Restatement Effective Date;

 

(b)                              Since the date of the most recent
financial statements referred to in Sections 3.17 and 5.08 the Credit
Agreement, no Material Adverse Change has occurred and no event or circumstance
which could reasonably be expected to result in a Material Adverse Change has
occurred;

 

(c)                               no event (i) has occurred and is
continuing or (ii) would occur as a result of any Borrowing contemplated
under the Credit Agreement, or (iii) would result from the making thereof,
which (in the case of (i), (ii) or (iii) above) constitutes a Default
or Event of Default under the terms of the Credit Agreement;

 

EXHIBIT H

 

 

(d)        Borrower and Guarantor have, as of the
Restatement Effective Date, performed and complied with all agreements and
conditions that are contained in the Credit Agreement and that the Credit
Agreement requires Borrower and Guarantor to perform and comply with prior to
or as of the Restatement Effective Date;

 

(e)        The Credit Agreement, the Revolving
Credit Note, Guaranty and the other Loan Documents have been duly authorized by
all necessary action of each of Borrower’s and Guarantor’s respective Board of
Directors and have been executed and delivered on behalf of Borrower or
Guarantor, where applicable, by a duly authorized representative thereof; and

 

(f)         Concurrently herewith, each of Borrower
and Guarantor have delivered to Agent Bank a true and correct copy of the
articles of incorporation and bylaws, together with all amendments thereto
adopted through the date hereof.

 

IN
WITNESS WHEREOF, I have hereunto set my hand as of the 20th day of January,
2009.

 

	
   

  	
   

  	
   

  
	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
  GOLDEN ROAD MOTOR INN,
  INC.,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  John Farahi,

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  MONARCH
  CASINO & RESORT, INC.,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  John Farahi,

  
	
   

  	
   

  	
  Chief Executive Officer

  

 

2

 

GENERAL
CONTINUING GUARANTY

 

THIS GENERAL CONTINUING
GUARANTY (“Guaranty”), dated as of January 20, 2009, is executed and
delivered by MONARCH CASINO & RESORT, INC., a Nevada corporation
(referred to as a “Guarantor”), in favor of the Beneficiaries, referred to
below, and in light of the following:

 

R_E_C_I_T_A_L_S:

 

WHEREAS:

 

A.        Reference is made to
that certain Amended and Restated Credit Agreement, dated as of January 20,
2009 (as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), by and among Golden Road Motor Inn, Inc., a Nevada
corporation (the “Borrower”), Guarantor, the Lenders therein named (each,
together with their respective successors and assigns, individually being
referred to as a “Lender” and collectively as the “Lenders”), Wells Fargo Bank,
National Association, as the swingline lender (herein in such capacity,
together with its successors and assigns, the “Swingline Lender”), Wells Fargo
Bank, National Association, as the issuer of letters of credit thereunder
(herein in such capacity, together with their 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”).

 

B.         For the purpose of this
Guaranty, all capitalized terms not otherwise specifically defined herein shall
have the same meaning given them in Section 1.01 of the Credit Agreement
as though fully restated verbatim.

 

C.        In order to induce
Beneficiaries to make Borrowings, loans, advances and extend financial
accommodations to Borrower pursuant to the Credit Agreement, and in consideration
thereof, and in consideration of any Borrowings, Swingline Advances, loans,
advances, or other financial accommodations heretofore or hereafter extended by
Beneficiaries to Borrower, whether pursuant to the Credit Agreement or
otherwise, Guarantor has agreed to guaranty the Guarantied Obligations.

 

NOW, THEREFORE, in
consideration of the foregoing, Guarantor hereby agrees, in favor of
Beneficiaries, as follows:

 

EXHIBIT
I

 

1.            Definitions
and Construction.

 

a.   Definitions.  The following terms, as used in this
Guaranty, shall have the following meanings:

 

“Agent Bank” shall
mean Wells Fargo Bank, National Association, as the administrative and
collateral agent for each of the Lenders under the Credit Agreement.

 

“Beneficiaries”
shall mean a collective reference to Agent Bank and Banks.

 

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

 

“Credit Agreement”
shall have the meaning set forth by Recital A of this Guaranty.

 

“Guarantied
Obligations” shall mean:  (a) the
due and punctual payment of the principal of, and interest (including post
petition interest and including any and all interest which, but for the
application of the provisions of the Bankruptcy Code, would have accrued on
such amounts) on, and premium, if any, on the Revolving Credit Note and/or the
Swingline Note; and (b) the due and punctual payment of all present or
future Indebtedness owing by Borrower.

 

“Guarantor” shall
have the meaning set forth in the preamble to this Guaranty.

 

“Guaranty” shall
have the meaning set forth in the preamble to this document.

 

“Indebtedness”
shall mean any and all obligations, indebtedness, or liabilities of any kind or
character owed to Beneficiaries, or any of them, and arising directly or
indirectly out of or in connection with the Credit Agreement, the Revolving
Credit Note, the Swingline Note, L/C Exposure, the Environmental Certificate,
or any of the other Loan Documents, including all Interest Rate Hedges and all
such obligations, indebtedness, or liabilities, whether for principal, interest
(including post petition interest and including any and all interest which, but
for the application of the provisions of the Bankruptcy Code, would have
accrued on such amounts), premium, reimbursement obligations, fees, costs,
expenses (including attorneys’ fees), or indemnity obligations, whether
heretofore, now, or hereafter made, incurred, or created, whether voluntarily
or involuntarily made, incurred, or created, whether secured or unsecured (and
if secured, regardless of the nature or extent of the security), whether
absolute or contingent,

 

2

 

liquidated or
unliquidated, or determined or indeterminate, whether Borrower is liable
individually or jointly with others, and whether recovery is or hereafter
becomes barred by any statute of limitations or otherwise becomes unenforceable
for any reason whatsoever, including any act or failure to act by
Beneficiaries.

 

“Lenders” shall
have the meaning set forth by Recital A of this Guaranty.

 

b.   Construction.  Unless the context of this Guaranty clearly
requires otherwise, references to the plural include the singular, references
to the singular include the plural, the part includes the whole, the term “including”
is not limiting, and the term “or” has the inclusive meaning represented by the
phrase “and/or.”  The words “hereof,” “herein,”
“hereby,” “hereunder,” and other similar terms refer to this Guaranty as a
whole and not to any particular provision of this Guaranty.  Any reference in this Guaranty to any of the
following documents includes any and all alterations, amendments, extensions,
modifications, renewals, or supplements thereto or thereof, as applicable:  the Loan Documents; the Credit Agreement;
this Guaranty; the Environmental Certificate; and the Revolving Credit Note.

 

2.         Guarantied
Obligations.  Guarantor hereby
irrevocably and unconditionally guaranty to Beneficiaries, as and for its own
debt, until final and indefeasible payment thereof has been made, (a) the
due and punctual payment of the Guarantied Obligations, in each case when the
same shall become due and payable, whether at maturity, pursuant to a mandatory
payment requirement, by acceleration, or otherwise; it being the intent of
Guarantor that the guaranty set forth herein shall be a guaranty of payment and
not a guaranty of collection; and (b) the punctual and faithful
performance, keeping, observance, and fulfillment by Borrower of all of the
agreements, conditions, covenants, and obligations of Borrower contained in the
Credit Agreement, the Revolving Credit Note, the Environmental Certificate and
under each of the other Loan Documents.

 

3.         Continuing
Guaranty.  This Guaranty includes
Guarantied Obligations arising under successive transactions continuing,
compromising, extending, increasing, modifying, releasing, or renewing the
Guarantied Obligations, changing the interest rate, payment terms, or other
terms and conditions thereof, or creating new or additional Guarantied
Obligations after prior Guarantied Obligations have been satisfied in whole or
in part.  To the maximum extent permitted
by law, Guarantor hereby waives any right to revoke this Guaranty as to future
Indebtedness.  If such a revocation is
effective notwithstanding the foregoing waiver, Guarantor acknowledges and
agrees that (a) no such revocation shall be effective until written notice
thereof has been received and acknowledged by Beneficiaries, (b) no such
revocation shall apply to any Guarantied Obligations in existence on such date
(including any subsequent continuation, extension, or renewal thereof, or
change in the interest rate, payment

 

3

 

terms, or other
terms and conditions thereof to the extent permitted by law), (c) no such
revocation shall apply to any Guarantied Obligations made or created after such
date to the extent made or created pursuant to a legally binding commitment of
Beneficiaries in existence on the date of such revocation, (d) no payment
by Guarantor, Borrower, or from any other source, prior to the date of such
revocation shall reduce the maximum obligation of Guarantor hereunder, and (e) any
payment by Borrower or from any source other than Guarantor subsequent to the
date of such revocation shall first be applied to that portion of the
Guarantied Obligations as to which the revocation is effective and which is
not, therefore, guarantied hereunder.

 

4.         Performance
under this Guaranty.  In the event
that Borrower fails to make any payment of any Guarantied Obligations on or
before the due date thereof, or if Borrower shall fail to perform, keep,
observe, or fulfill any other obligations referred to in clause (b) of Section 2
hereof in the manner provided in the Credit Agreement, the Revolving Credit
Note, the Swingline Note or the other Loan Documents, as applicable, Guarantor
immediately shall cause such payment to be made or each of such obligations to
be performed, kept, observed, or fulfilled.

 

5.         Primary
Obligations.  This Guaranty is a
primary and original obligation of Guarantor, is not merely the creation of a
surety relationship, and is an absolute, unconditional, and continuing guaranty
of payment and performance which shall remain in full force and effect without
respect to future changes in conditions, including any change of law or any
invalidity or irregularity with respect to the issuance of the Notes.  Guarantor agrees that it is directly, jointly
and severally with any other guarantor of the Guarantied Obligations, liable to
Beneficiaries, that the obligations of Guarantor hereunder are independent of
the obligations of Borrower or any other guarantor, and that a separate action
may be brought against Guarantor, whether such action is brought against
Borrower or any other guarantor whether Borrower or any such other guarantor is
joined in such action.  Guarantor agrees
that its liability hereunder shall be immediate and shall not be contingent
upon the exercise or enforcement by Beneficiaries of whatever remedies they may
have against Borrower or any other guarantor, or the enforcement of any lien or
realization upon any security Beneficiaries may at any time possess.  Guarantor agrees that any release which may
be given by Beneficiaries to Borrower or any other guarantor shall not release
Guarantor.  Guarantor consents and agrees
that Beneficiaries shall be under no obligation to marshal any property or
assets of Borrower or any other guarantor in favor of Guarantor, or against or
in payment of any or all of the Guarantied Obligations.

 

6.         Waivers.

 

a.   Guarantor hereby waives:  (i) notice of acceptance hereof; (ii) notice
of any Borrowings, Swingline Advances, advances, loans or other financial
accommodations made or extended under the Credit Agreement, or the creation or

 

4

 

existence of any
Guarantied Obligations; (iii) notice of the amount of the Guarantied
Obligations, subject, however, to Guarantor’s right to make inquiry of Agent
Bank to ascertain the amount of the Guarantied Obligations at any reasonable
time; (iv) notice of any adverse change in the financial condition of
Borrower or of any other fact that might increase Guarantor’s risk hereunder; (v) notice
of presentment for payment, demand, protest, and notice thereof as to the
Revolving Credit Note, the Swingline Note or any other instrument; (vi) notice
of any Default or Event of Default under the Credit Agreement; and (vii) all
other notices (except if such notice is specifically required to be given to
Guarantor under this Guaranty or any other Loan Document to which Guarantor is
party) and demands to which Guarantor might otherwise be entitled.

 

b.   To the fullest extent permitted by applicable
law, Guarantor waives the right by statute or otherwise to require
Beneficiaries to institute suit against Borrower or to exhaust any rights and
remedies which Beneficiaries have or may have against Borrower.  In this regard, Guarantor agrees that it is
bound to the payment of each and all Guarantied Obligations, whether now
existing or hereafter accruing, as fully as if such Guarantied Obligations were
directly owing to Beneficiaries by Guarantor. 
Guarantor further waives any defense arising by reason of any disability
or other defense (other than the defense that the Guarantied Obligations shall
have been fully and finally performed and indefeasibly paid) of Borrower or by
reason of the cessation from any cause whatsoever of the liability of Borrower
in respect thereof.

 

c.   To the maximum extent permitted by law,
Guarantor hereby waives:  (i) any
rights to assert against Beneficiaries any defense (legal or equitable),
set-off, counterclaim, or claim which Guarantor may now or at any time
hereafter have against Borrower or any other party liable to Beneficiaries; (ii) any
defense, set-off, counterclaim, or claim, of any kind or nature, arising
directly or indirectly from the present or future lack of perfection,
sufficiency, validity, or enforceability of the Guarantied Obligations or any
security therefor; (iii) any defense arising by reason of any claim or
defense based upon an election of remedies by Beneficiaries; (iv) the
benefit of any statute of limitations affecting Guarantor’s liability hereunder
or the enforcement thereof, and any act which shall defer or delay the
operation of any statute of limitations applicable to the Guarantied
Obligations shall similarly operate to defer or delay the operation of such
statute of limitations applicable to Guarantor’s liability hereunder; and (v) any
defense or benefit that may be derived from or afforded by law which limits the
liability of or exonerates guaranties or sureties including, without
limitation, the benefits of Nevada Revised Statutes §§40.430 - 40.459,
40.475 and 40.485 as permitted by Nevada Revised Statutes §40.495.

 

d.   Guarantor agrees that if all or a portion of the
Indebtedness or this Guaranty is at any time secured by a deed of trust or
mortgage covering interests in real property, Beneficiaries, in their sole
discretion, without notice or demand and without affecting the liability of
Guarantor under this Guaranty, may foreclose (pursuant

 

5

 

to the terms of the
Credit Agreement or otherwise) the deed of trust or mortgage and the interests
in real property secured thereby by non-judicial sale.  Guarantor understands that the exercise of
Beneficiaries of certain rights and remedies contained in the Credit Agreement
and any such deed of trust or mortgage may affect or eliminate Guarantor’s
right of subrogation against Borrower and that Guarantor may therefore incur a
partially or totally non-reimbursable liability hereunder.  Nevertheless, Guarantor hereby authorize and
empower Beneficiaries to exercise, in their sole discretion, any rights and
remedies, or any combination thereof, which may then be available, since it is
the intent and purpose of Guarantor that the obligations hereunder shall be
absolute, independent and unconditional under any and all circumstances.  Notwithstanding any foreclosure of the lien
of any deed of trust or security agreement with respect to any or all of any
real or personal property secured thereby, whether by the exercise of the power
of sale contained therein, by an action for judicial foreclosure or by an
acceptance of a deed in lieu of foreclosure, Guarantor shall remain bound under
this Guaranty including its obligation to pay any deficiency following a
non-judicial foreclosure.

 

e.         Guarantor
also hereby waives any claim, right or remedy which Guarantor may now have or
hereafter acquire against the Borrower that arises hereunder and/or from the
performance by Guarantor hereunder including, without limitation, any claim,
remedy or right of subrogation, reimbursement, exoneration, contribution,
indemnification, or participation in any claim, right or remedy of
Beneficiaries against the Borrower or any security which Beneficiaries now have
or hereafter acquire, whether or not such claim, right or remedy arises in
equity, under contract, by statute, under common law or otherwise.

 

7.            Releases.
Guarantor consents and agrees that, without notice to or by Guarantor and
without affecting or impairing the obligations of Guarantor hereunder,
Beneficiaries may, by action or inaction, compromise or settle, extend the
period of duration or the time for the payment, or discharge the performance
of, or may refuse to, or otherwise not enforce, or may, by action or inaction,
release all or any one or more parties to, any one or more of the Credit
Agreement, the Notes, or any of the other Loan Documents or may grant other
indulgences to Borrower in respect thereof, or may amend or modify in any
manner and at any time (or from time to time) any one or more of the Credit
Agreement, the Notes, or any of the other Loan Documents, or may, by action or
inaction, release or substitute any other guarantor, if any, of the Guarantied
Obligations, or may enforce, exchange, release, or waive, by action or
inaction, any security for the Guarantied Obligations (including the
Collateral) or any other guaranty of the Guarantied Obligations, or any portion
thereof.

 

8.            No Election.  Beneficiaries shall have the right to seek
recourse against Guarantor to the fullest extent provided for herein and no
election by Beneficiaries to proceed in one form of action or proceeding, or
against any party, or on

 

6

 

any obligation,
shall constitute a waiver of Beneficiaries’ right to proceed in any other form
of action or proceeding or against other parties unless Beneficiaries have
expressly waived such right in writing. 
Specifically, but without limiting the generality of the foregoing, no
action or proceeding by Beneficiaries under any document or instrument
evidencing the Guarantied Obligations shall serve to diminish the liability of
Guarantor under this Guaranty except to the extent that Beneficiaries finally
and unconditionally shall have realized indefeasible payment by such action or
proceeding.

 

9.         Indefeasible
Payment.  The Guarantied Obligations
shall not be considered indefeasibly paid for purposes of this Guaranty unless
and until all payments to Beneficiaries are no longer subject to any right on
the part of any person whomsoever, including Borrower, Borrower as a debtor in
possession, or any trustee (whether appointed under the Bankruptcy Code or
otherwise) of Borrower’s assets to invalidate or set aside such payments or to
seek to recoup the amount of such payments or any portion thereof, or to
declare same to be fraudulent or preferential. 
In the event that, for any reason, all or any portion of such payments
to Beneficiaries is set aside or restored, whether voluntarily or
involuntarily, after the making thereof, the obligation or part thereof
intended to be satisfied thereby shall be revived and continued in full force
and effect as if said payment or payments had not been made and Guarantor shall
be liable for the full amount Beneficiaries are required to repay plus any and
all costs and expenses (including attorneys’ fees) paid by Beneficiaries in
connection therewith.

 

10.       Financial Condition of Borrower and
Guarantor.

 

a.         Guarantor
represents and warrants to Beneficiaries that it is currently informed of the
financial condition of Borrower and of all other circumstances which a diligent
inquiry would reveal and which bear upon the risk of nonpayment of the
Guarantied Obligations.  Guarantor
further represents and warrant to Beneficiaries that it has read and
understands the terms and conditions of the Credit Agreement, the Notes and the
other Loan Documents.  Guarantor hereby
covenants that it will continue to keep itself informed of Borrower’s financial
condition, the financial condition of other guarantors, if any, and of all
other circumstances which bear upon the risk of nonpayment or nonperformance of
the Guarantied Obligations.

 

b.         Guarantor
shall deliver to Agent Bank within the time periods therein described, the
financial information and other reporting requirements set forth in Section 5.08
of the Credit Agreement which are applicable to them.

 

11.       Subordination.  Any indebtedness of Borrower now or hereafter
held by Guarantor is hereby subordinated to the indebtedness of Borrower to
Beneficiaries; and from and after the occurrence of a Default or an Event of
Default under the Credit Agreement and for so long as such a Default or Event
of Default shall

 

7

 

continue such
indebtedness of Borrower to Guarantor shall be collected, enforced and received
by Guarantor as trustee for Borrower and paid over to Beneficiaries on account
of the indebtedness of Borrower to Beneficiaries but without reducing or
affecting in any manner the liability of Guarantor under the other provisions
of this Guaranty.

 

12.       Payments;
Application.  All payments to be made
hereunder by Guarantor shall be made in lawful money of the United States of
America at the time of payment, shall be made in immediately available funds,
and shall be made without deduction (whether for taxes or otherwise) or
offset.  All payments made by Guarantor
hereunder shall be applied as follows: 
first, to all reasonable costs and expenses (including attorneys’ fees)
incurred by Beneficiaries in enforcing this Guaranty or in collecting the
Guarantied Obligations; second, to all accrued and unpaid interest, premium, if
any, and fees owing to Beneficiaries constituting Guarantied Obligations; and
third, to the balance of the Guarantied Obligations.

 

13.       Costs
and Expenses.  Guarantor agrees to
pay Beneficiaries’ reasonable out-of-pocket costs and expenses, including, but
not limited to, legal fees and disbursements, incurred in any effort (which
shall include those incurred in investigations of and advising on matters
relating to the Beneficiaries’ rights and remedies) to collect or enforce any
of sums owing under this Guaranty whether or not any lawsuit is filed.  Until paid to the Beneficiaries’ such sums
will bear interest at the Default Rate set forth in the Credit Agreement.

 

14.       Costs
to Prevailing Party.  If any action
or proceeding is brought by any party against any other party under this
Guaranty, the prevailing party shall be entitled to recover such costs and
attorney’s fees as the court in such action or proceeding may adjudge
reasonable.

 

15.       Notices.  Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, sent by telefacsimile,
telexed, or sent by courier service or United States mail and shall be deemed
to have been given when delivered in person or by courier service, upon receipt
of a telefacsimile or telex or five (5) Banking Business Days after
deposit in the United States mail (registered or certified, with postage
prepaid and properly addressed).  For the
purposes hereof, the addresses of the parties hereto (until notice of a change
thereof is delivered as provided in this Section 15) shall be as set forth
below, or, as to each party, at such other address as may be designated by such
party in a written notice to all of the other parties:

 

8

 

	
  If to Guarantor:

  	
   

  	
  Monarch
  Casino & Resort, Inc.

  
	
   

  	
   

  	
  3800 South Virginia
  Street

  
	
   

  	
   

  	
  Reno, NV  89502

  
	
   

  	
   

  	
  Attn: John Farahi,
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Ron Rowan, Chief
  Financial Officer

  
	
   

  	
   

  	
  Executive Offices

  
	
   

  	
   

  	
  Monarch
  Casino & Resort, Inc.

  
	
   

  	
   

  	
  3800 South Virginia
  Street

  
	
   

  	
   

  	
  Reno, NV  89502

  
	
   

  	
   

  	
   

  
	
  If to Beneficiaries

  	
   

  	
   

  
	
  c/o Agent Bank:

  	
   

  	
  Wells Fargo Bank,
  National Association

  
	
   

  	
   

  	
  Gaming Division

  
	
   

  	
   

  	
  5340 Kietzke Lane,
  Suite 201

  
	
   

  	
   

  	
  Reno, NV  89511

  
	
   

  	
   

  	
  Attn: Stephen G.
  Buntin, Sr.V.P.

  

 

16.       Cumulative
Remedies.  No remedy under this
Guaranty, under the Credit Agreement, the Revolving Credit Note, or any Loan
Document is intended to be exclusive of any other remedy, but each and every
remedy shall be cumulative and in addition to any and every other remedy given
under this Guaranty, under the Credit Agreement, the Revolving Credit Note, or
any other Loan Document, and those provided by law.  No delay or omission by Beneficiaries to
exercise any right under this Guaranty shall impair any such right nor be construed
to be a waiver thereof.  No failure on
the part of Beneficiaries to exercise, and no delay in exercising, any right
under this Guaranty shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under this Guaranty preclude any other or further
exercise thereof or the exercise of any other right.

 

17.       Severability
of Provisions.  Any provision of this
Guaranty which is prohibited or unenforceable under applicable law, shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof.

 

18.       Entire
Agreement; Amendments.  This
Guaranty, together with the Credit Agreement, constitutes the entire agreement
between Guarantor and Beneficiaries pertaining to the subject matter contained
herein.  This Guaranty may not be
altered, amended, or modified, nor may any provisions hereof be waived or
noncompliance therewith consented to, except by means of a writing executed by
Guarantor and Beneficiaries.  Any such
alteration, amendment, modification, waiver, or consent shall be effective only
to the extent specified therein and for the specific purpose for which
given.  No course of dealing and no delay
or waiver of any right or

 

9

 

default under this
Guaranty shall be deemed a waiver of any other, similar or dissimilar, right or
default or otherwise prejudice the rights and remedies hereunder.

 

19.       Successors
and Assigns.  This Guaranty shall be
binding upon Guarantor and its respective successors and assigns and shall
inure to the benefit of the successors and assigns of Beneficiaries; provided,
however, Guarantor shall not assign this Guaranty or delegate any of its
duties hereunder without Beneficiaries’ prior written consent and any
unconsented to assignment shall be absolutely void.  In the event of any assignment or other
transfer of rights by Beneficiaries, the rights and benefits herein conferred
upon Beneficiaries shall automatically extend to and be vested in such assignee
or other transferee.

 

20.       Choice
of Law and Venue; Service of Process. 
THE VALIDITY OF THIS GUARANTY, ITS CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT, AND THE RIGHTS OF GUARANTOR AND BENEFICIARIES, SHALL BE DETERMINED
UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEVADA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.  ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
GUARANTOR WITH RESPECT TO THIS GUARANTY MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEVADA, AND BY
EXECUTION AND DELIVERY OF THIS GUARANTY, GUARANTOR ACCEPTS, FOR ITSELF AND IN
CONNECTION WITH ITS ASSETS, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY
FINAL JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY FROM WHICH NO
APPEAL HAS BEEN TAKEN OR IS AVAILABLE.

 

21.       Arbitration.

 

a.   Upon the request of any party, whether made
before or after the institution of any legal proceeding, any action, dispute,
claim or controversy of any kind (e.g., whether in contract or in tort,
statutory or common law, legal or equitable) (“Dispute”) now existing or
hereafter arising between the parties in any way arising out of, pertaining to
or in connection with the Credit Agreement, Loan Documents or any related
agreements, documents, or instruments (collectively the “Documents”), may, by
summary proceedings (e.g., a plea in abatement or motion to stay further
proceedings), bring an action in court to compel arbitration of any Dispute.

 

b.   All Disputes between the parties shall be
resolved by binding arbitration governed by the Commercial Arbitration Rules of
the American Arbitration Association. 
Judgment upon the award rendered by the arbitrators may be entered in
any court having jurisdiction.

 

10

 

c.   No provision of, nor the exercise of any
rights under this arbitration clause shall limit the rights of any party, and
the parties shall have the right during any Dispute, to seek, use and employ
ancillary or preliminary remedies, judicial or otherwise, for the purposes of
realizing upon, preserving, protecting or foreclosing upon any property, real
or personal, which is involved in a Dispute, or which is subject to, or
described in, the Documents, including, without limitation, rights and remedies
relating to: (i) foreclosing against any real or personal property
collateral or other security by the exercise of a power of sale under the
Security Documentation or other security agreement or instrument, or applicable
law, (ii) exercising self-help remedies (including setoff rights) or (iii) obtaining
provisional or ancillary remedies such as injunctive relief, sequestration,
attachment, garnishment or the appointment of a receiver from a court having
jurisdiction before, during or after the pendency of any arbitration.  The institution and maintenance of an action
for judicial relief or pursuit of provisional or ancillary remedies or exercise
of self-help remedies shall not constitute a waiver of the right of any party,
including the plaintiff, to submit the Dispute to arbitration nor render
inapplicable the compulsory arbitration provision hereof.

 

22.       Waiver
of Jury Trial.  TO THE MAXIMUM EXTENT
PERMITTED BY LAW, GUARANTOR AND EACH OF THE BENEFICIARIES EACH MUTUALLY HEREBY
EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY ACTION, CAUSE OF ACTION,
CLAIM, DEMAND, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS GUARANTY, OR
IN ANY WAY CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE DEALINGS OF
GUARANTOR AND BENEFICIARIES WITH RESPECT TO THIS GUARANTY, OR THE TRANSACTIONS
RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE.  TO THE MAXIMUM EXTENT PERMITTED BY LAW,
GUARANTOR AND EACH OF THE BENEFICIARIES EACH MUTUALLY HEREBY AGREE THAT ANY
SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDINGS SHALL BE DECIDED BY
A COURT TRIAL WITHOUT A JURY AND THAT THE DEFENDING PARTY MAY FILE AN
ORIGINAL COUNTERPART OF THIS SECTION WITH ANY COURT OR OTHER TRIBUNAL
AS WRITTEN EVIDENCE OF THE CONSENT OF THE COMPLAINING PARTY TO THE WAIVER OF
ITS RIGHT TO TRIAL BY JURY.

 

11

 

IN WITNESS WHEREOF, the undersigned have executed and
delivered this Guaranty as of the day and year first written above.

 

 

	
   

  	
  MONARCH
  CASINO & RESORT, INC.,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   John Farahi,

  
	
   

  	
   

  	
   Chief Executive Officer

  

 

12

 

 

FORM OF
LEGAL OPINION

 

MONARCH
CASINO & RESORT, INC.

3800
South Virginia Street

Reno,
NV  89502

 

January___, 2009

 

Wells Fargo Bank,

National
Association,

Agent Bank

5340 Kietzke Lane,
Suite 201

Reno, Nevada 89511

 

Attn:  Stephen G. Buntin, Sr.V.P.

 

and each of the
Banks

described on
Schedule 1

hereto, and their

successors and
assigns

 

Re:                        Amended and Restated Credit Agreement
dated as of January 20, 2009 (the “Credit Agreement”), by and among Golden
Road Motor Inn, Inc., a Nevada corporation (the “Borrower”), Monarch
Casino & Resort, Inc., a Nevada corporation (the “Guarantor”),
the Lenders therein named (each, together with their respective successors and
assigns, individually being referred to as a “Lender” and collectively as the “Lenders”),
Wells Fargo Bank, National Association, as the swingline lender (herein in such
capacity, together with its successors and assigns, the “Swingline Lender”),
Wells Fargo Bank, National Association, as the issuer of letters of credit
thereunder (herein in such capacity, together with their 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”).  All capitalized terms which are used herein,
and which are not otherwise defined herein, shall have the meaning which is set
forth by Section 1.01 of the Credit Agreement.

 

EXHIBIT J

 

 

January___, 2009

Page 2

 

Ladies and
Gentlemen:

 

The undersigned is
General Counsel of Borrower and the Guarantor and has acted in such capacity in
connection with the preparation, execution and delivery of the Credit Agreement
and each of the Loan Documents.  This
opinion is delivered to you at the request of Borrower and the Guarantor
pursuant to Section 3.06 of the Credit Agreement for the reliance of each
of the Banks and their respective successors and assigns.

 

In rendering the
opinions set forth herein I have: (i) examined, and am familiar with,
originals of each of the executed Loan Documents; and (ii) made such
inquiries, and reviewed such other documents, corporate documentation and
records, as I deemed appropriate under the circumstances.  In making such examination and review, I have
assumed the genuineness of all signatures (other than the signatures of
officers signing on behalf of the Borrower and the Guarantor), the authenticity
of all documents submitted to me as originals, the conformity to original
documents of all documents submitted to me as certified or photostatic copies
and the authenticity of the originals of such copies.  I have also assumed the valid authorization,
execution and delivery of each Loan Document by each party thereto (other than
the Borrower and the Guarantor), and I have assumed, where applicable, that
each such other party has been duly organized, is validly existing and in good
standing under its jurisdiction of organization and possesses the corporate or
other organization power to perform its obligations thereunder.

 

I am not
expressing any opinion as to the effect of the compliance or noncompliance of
any of the Banks with any state or federal laws or regulations which are
applicable because of the legal or regulatory status, or the nature of the
business of any of the Banks.

 

I am a member of
the bar of the State of Nevada and express no opinion as to the laws of any
other jurisdiction other than the federal laws of the United States of America.

 

Based on the
foregoing and subject to the qualifications set forth herein, I am of the
opinion that:

 

1.         Each of the Borrower and Guarantor is a
corporation organized, validly existing and in good standing under the laws of
the State of Nevada.  Each of the
Borrower and the Guarantor (i) has all requisite power, authority and
legal right to execute and deliver each document, agreement or certificate to
which it is a party or by which it is bound in connection with the Credit
Facility, to consummate the transactions and perform its respective obligations
thereunder, and to own its properties and assets and to carry on and conduct
its business as presently conducted or proposed to be conducted, and (ii) has
taken all necessary action to authorize the execution, delivery and performance
of the Credit Agreement and the other Loan Documents to which it is a party or
by which it is bound and to consummate the transactions contemplated
thereunder.

 

 

January___, 2009

Page 3

 

2.         Neither the execution and delivery of
the Credit Agreement, the Revolving Credit Note, the Swingline Note, or any
other Loan Document, or any other agreement, certificate or instrument to which
Borrower and/or Guarantor is a party or by which it is bound in connection with
the Credit Facility, nor the consummation of the transactions contemplated
thereunder, or the compliance with or performance of the terms and conditions
therein, is prevented by, limited by, conflicts: (i) in any respect with,
or will result in a breach or violation of, or a default (with due notice or
lapse of time or both) under, or the creation or imposition of any lien,
charge, or encumbrance of any nature whatsoever upon any of their respective
property or assets by virtue of, the terms, conditions or provisions of (a) the
Articles of Incorporation, Bylaws or other documents of organization or charter
of the Borrower or MCRI, or (b) any provision of any existing law, rule,
regulation, order, writ, injunction or decree of any court of Governmental
Authority to which it is subject, or (ii) in any material respect with, or
will result in a material breach or violation of, or a material default (with
due notice or lapse of time or both) under, or the creation or imposition of
any lien, charge, or encumbrance of any nature whatsoever upon any of its
property or assets by virtue of, the terms, conditions or provisions of any
indenture, evidence of indebtedness, loan or financing agreement, or other
agreement or instrument of whatever nature to which it is a party or by which
it is bound.

 

3.         The Credit Agreement, the Notes and all
other Loan Documents have been duly executed and delivered by Borrower and
constitute legal, valid and binding obligations of Borrower, enforceable
against Borrower in accordance with their respective terms.  The Credit Agreement and the Guaranty have
been duly executed and delivered by the Guarantor and constitute the legal,
valid and binding obligations of Guarantor, enforceable against Guarantor in
accordance with their respective terms.

 

4.         The First Amendment to Deed of Trust is
in proper form for recording; has been fully executed and delivered and will,
when recorded in the office of the County Recorder of Washoe County, Nevada,
validly modify the Existing Deed of Trust so that it constitutes a valid and
legally binding encumbrance lien on the Collateral therein described, as
security for the Bank Facilities.  No
other filing or other registration of any document or instrument is necessary
or advisable to protect the priority of the lien so created and it is not
necessary to re-file or re-record the Existing Deed of Trust in order to
maintain such priority.

 

5.         The UCC Continuation Statements when
filed in the Official Records of Washoe County and in the Office of the Nevada
Secretary of State, together with the Financing Statements filed in the
Official Records of Washoe County, Nevada, on February 20, 2004, as
Instrument No. 2996370 and in the Office of the Nevada Secretary of State
on February 20, 2004 under File No. 2004005323-9 will continue to
perfect the security interest granted by the Existing Deed of Trust as amended
by the First Amendment 

 

 

January___, 2009

Page 4

 

to Deed of Trust
in the Collateral therein described in accordance with the Uniform Commercial
Code as in force and effect in the State of Nevada, and no refiling or
re-recording of such Financing Statements is required in order to maintain the
security interest of Agent Bank in said Collateral, except additional
continuation statements which will be required to be filed within six (6) months
prior to the expiration of five (5) years from the date of the filing of
the UCC Continuation Statements.

 

6.         Except in complying with Nevada Gaming
Commission (“NGC”) Regulations 8 and 8A, respectively, it is not necessary
under any Gaming Law by reason of the execution, delivery or performance of the
Loan Documents, that Agent Bank or any of the Lenders be licensed, qualified or
authorized to carry on business in any such jurisdiction.  All necessary authorizations, consents and
approvals of all applicable Gaming Authorities have been procured by Borrower
for the execution and delivery by them of the Loan Documents, and for the
advance of Borrowings under the Credit Agreement, and for the performance by
Borrower of its obligations, under the Loan Documents to which it is a party.

 

7.         Each of Borrower and Guarantor has
obtained all authorizations, consents, approvals, orders, licenses and permits
from, and has accomplished all filings, registrations and qualifications with,
or obtained exemptions from any of the foregoing from, all Governmental
Authorities that are necessary for the transaction of its business as
contemplated under the Credit Agreement.

 

8.         The transactions contemplated by the
Credit Agreement will not violate the usury laws of the State of Nevada.

 

9.         Neither MCRI nor any of its
Subsidiaries is an “investment company” or a company “controlled” by an “investment
company”, within the meaning of the Investment Company Act of 1940, as amended.

 

10.       Neither MCRI nor any of its Subsidiaries
is a “holding company”, or a “subsidiary company” of a “holding company”, or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding
company”, within the meaning of the Public Utility Holding Company Act of 1935,
as amended.

 

The opinions set
forth in Paragraphs (3) through (5) above are subject to the
additional qualifications that:  (a) the
enforcement of the Loan Documents and the Guaranty may be subject to
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereinafter in effect relating to creditors’ rights generally; (b) certain
of the provisions contained in the Loan Documents and the Guaranty may be
unenforceable in whole or in part, to the extent that any such provision may
contravene the public policy of the State of Nevada; and (c) certain
waivers contained in the Loan Documents and the Guaranty may be 

 

 

January___, 2009

Page 5

 

unenforceable in
whole or in part under the applicable laws of the State of Nevada, but the
inclusion of such provisions, as described in (b) and (c) above, does
not affect the validity of such Loan Documents and the Guaranty and such Loan
Documents and the Guaranty contain adequate provisions for enforcing payment of
all monetary obligations thereunder and for the practical realization of the
rights and benefits afforded thereby, provided such enforcement is conducted in
accordance with the procedures established by the laws of the State of Nevada.

 

This opinion is
rendered to the Banks, and their respective successors and assigns, in
connection with the transactions referred to herein and may not be relied on in
any other context; nor may it be relied on by any other Person.  This opinion may not be quoted nor may copies
hereof be furnished to any other Person without the prior written consent of
the undersigned, except that the Banks, and their respective successors and
assigns, and any of them, may furnish a copy hereof:  (i) to their respective independent
auditors and attorneys; (ii) to any Governmental Authority or authority
having regulatory jurisdiction over any of the Banks, or their respective
successors and assigns; (iii) pursuant to order or legal process of any
court or Governmental Authority; (iv) in connection with any legal action
to which any of the Banks, or their respective successors and assigns, are a party
arising out of the transactions referred to above; or (v) to a financial
institution in connection with a proposed assignment of any interest in the
Bank Facilities or a proposed transfer of a participation interest in the Bank
Facilities.

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Debra B. Robinson,

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  General Counsel

  

 

 

 

FORM OF

NOTICE
OF SWINGLINE ADVANCE

 

TO:                        WELLS
FARGO BANK, National Association, in its capacity as Swingline Lender under
that certain Amended and Restated Credit Agreement, dated as of January 20,
2009 (as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), by and among Golden Road Motor Inn, Inc., a Nevada
corporation (the “Borrower”), Monarch Casino & Resort, Inc., a
Nevada corporation (the “Guarantor”), the Lenders therein named (each, together
with their respective successors and assigns, individually being referred to as
a “Lender” and collectively as the “Lenders”), Wells Fargo Bank, National
Association, as the swingline lender (herein in such capacity, together with
its successors and assigns, the “Swingline Lender”), Wells Fargo Bank, National
Association, as the issuer of letters of credit thereunder (herein in such
capacity, together with their 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”).  Capitalized terms used herein without definition
shall have the meanings attributed to them in Section 1.01 of the Credit
Agreement.

 

Pursuant to Section 2.08(b) of
the Credit Agreement, this Notice of Swingline Advance represents Borrower’s
request for a Swingline Advance to be advanced on                           ,
200       (the “Swingline Funding Date”)
from the Swingline Lender.  Proceeds of
such Swingline Advance are to be disbursed on the Swingline Funding Date in
immediately available funds to the Designated Deposit Account at Agent Bank’s
Branch at                                               ,
                      ,
Nevada, Account No.                                   .

 

Borrower hereby
certifies that (i) the representations and warranties contained in Article IV
of the Credit Agreement, in each of the Loan Documents and in the Environmental
Certificate (other than representations and warranties which expressly speak
only as of a different date, which shall be true and correct in all material
respects as of such date), shall be true and correct in all material respects
on and as of the Swingline Funding Date, except to the extent that such
representations and warranties are not true and correct as a result of a change
which is permitted by the Credit Agreement or by any other Loan Document or
which has been otherwise consented to by Agent Bank; (ii) no Default or
Event of Default has occurred and is continuing under the Credit Agreement or
any other Loan Document or will result from the making of the requested
Swingline Advance; (iii) Borrower has and shall have satisfied all
conditions precedent under Section 2.08 and Article III B of the
Credit Agreement required to be performed by it on or 

 

EXHIBIT
K

 

before the
Swingline Funding Date (unless otherwise waived pursuant to the terms of the
Credit Agreement); (iv) since the date of the most recent audited
financial statements referred to in Sections 3.17 and 5.08 of the Credit
Agreement, no Material Adverse Change shall have occurred; and (v) the
Swingline Outstandings, after giving effect to the requested Swingline Advance,
will not exceed Four Million Dollars ($4,000,000.00) and the amount requested
does not exceed the Available Borrowings.

 

Borrower further
certifies that as of the Swingline Funding Date, without regard to the requested
Swingline Advance:

 

	
   

  	
   

  	
   

  
	
  A.

  	
  The Aggregate
  Commitment is

  	
  $

  	
   

  
	
   

  	
   

  	
   

  
	
  B.

  	
  The Funded Outstandings
  are

  	
  $

  	
   

  
	
   

  	
   

  	
   

  
	
  C.

  	
  The Swingline
  Outstandings are

  	
  $

  	
   

  
	
   

  	
   

  	
   

  
	
  D.

  	
  The Total L/C Exposure
  is

  	
  $

  	
   

  
	
   

  	
   

  	
   

  
	
  E.

  	
  Aggregate Outstandings

  	
  $

  	
   

  
	
   

  	
  (B + C + D)

  	
   

  
	
   

  	
   

  	
   

  
	
  F.

  	
  The Maximum Availability
  (A minus E) is

  	
  $

  	
   

  

 

The Borrower has
caused this Notice of Swingline Advance to be executed and delivered, and the
certification and warranties contained herein to be made, by its Authorized
Officer this          day of                           ,
200    .

 

	
   

  	
  GOLDEN ROAD MOTOR INN,
  INC., 

  
	
   

  	
  a Nevada corporation 

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   Authorized Officer 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Print 

  
	
   

  	
  Name:

  	
   

  	
   

  
					

 

 

2

 

ASSUMPTION AND CONSENT AGREEMENT - FORM

 

THIS ASSUMPTION
AND CONSENT AGREEMENT (“Assumption Agreement”) is made as of the       
day of                       ,
        , by and among [Insert names of Lenders funding increase]              
(collectively referred to as the “Assuming Lenders” and each individually as an
“Assuming Lender”), GOLDEN ROAD MOTOR INN, INC., a Nevada corporation (the “Borrower”)
and WELLS FARGO BANK, National Association, in its capacity as Agent Bank as
described hereinbelow.

 

R_E_C_I_T_A_L_S:

 

A.        Reference is made to that certain Amended and Restated Credit
Agreement, dated as of January 20, 2009 (as may be amended, supplemented
or otherwise modified from time to time, the “Credit Agreement”), by and among
Borrower, the Guarantor and the Banks therein named and Wells Fargo Bank,
National Association, as administrative and collateral agent for the Banks
(herein, in such capacity, called the “Agent Bank”).

 

B.         In this Assumption Agreement, all capitalized words and
terms not otherwise defined herein shall have the respective meanings to be
construed herein as provided in Section 1.01 of the Credit Agreement and
any reference to a provision of the Credit Agreement shall be deemed to
incorporate such provision as a part hereof in the same manner and with the
same effect as if the same were fully set forth herein.

 

C.        Pursuant to Section 2.01(e) of the Credit
Agreement, Borrower desires to further increase the Aggregate Commitment from
Sixty Million Dollars ($60,000,000.00) to                                               
Million Dollars ($      ,000,000.00), an
increase of                 
Million Dollars ($      ,000,000.00) (the “Commitment
Increase”).

 

D.        Each Assuming Lender is willing to commit to advance the
portion of the Commitment Increase set forth below, so that as of the Effective
Date, as hereinafter defined, Assuming Lenders shall hold the respective Pro
Rata Shares of the Aggregate Commitment as increased by the Commitment Increase
and the respective Syndication Interests in the Revolving Credit Facility set
forth below (each individually an “Assumed Interest” and collectively the “Assumed
Interests”):

 

EXHIBIT L

	
   

  	
   

  	
   

  	
   

  
	
  NAME OF

  ASSUMING

  LENDER

  	
  PORTION OF

  COMMITMENT

  INCREASE

  	
  PRO RATA SHARE

  OF TOTAL

  COMMITMENT

  AFTER

  COMMITMENT

  INCREASE

  	
  PROPORTIONATE

  SYNDICATION

  INTERESTS AFTER

  COMMITMENT

  INCREASE

  
	
   

  	
  $

  	
  ____________

  	
  $

  	
  _______________

  	
   

  	
  _________________%

  
	
   

  	
   

  	
  ____________

  	
   

  	
  _______________

  	
   

  	
  _________________%

  
	
   

  	
   

  	
  ____________

  	
   

  	
  _______________

  	
   

  	
  _________________%

  
	
   

  	
   

  	
  ____________

  	
   

  	
  _______________

  	
   

  	
  _________________%

  
	
   

  	
   

  	
  ____________

  	
   

  	
  _______________

  	
   

  	
  _________________%

  
	
   

  	
   

  	
  ____________

  	
   

  	
  _______________

  	
   

  	
  _________________%

  
	
   

  	
   

  	
  ____________

  	
   

  	
  _______________

  	
   

  	
  _________________%

  

 

E.         This Assumption Agreement is made, executed and delivered
pursuant to Section 2.01(e) of the Credit Agreement and shall also
constitute the assumption by and delegation to Assuming Lenders of the
Syndication Interests particularly described hereinbelow.

 

NOW, THEREFORE, in
consideration of the foregoing and other good and valuable considerations, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto do
agree as follows:

 

1.         From and after the Effective Date, each Assuming Lender
shall and does hereby assume and agree to perform all of the promises and
covenants of a Lender as to its respective Assumed Interest arising or
performable from and after the Effective Date and does further agree to assume
and be bound by each and every term, condition, provision and covenant
contained in the Credit Agreement and each of the Loan Documents, effective as
of the Effective Date, to the same extent and manner as if such Assuming Lender
had originally been named in the Credit Agreement as a Lender holding the
Assumed Interest therein and Assuming Lender shall be deemed to be a Lender
party to the Credit Agreement for all purposes thereof.

 

2.         The “Effective Date” as used herein shall mean                           ,
provided that each of the following conditions precedent have been satisfied on
or before the Effective Date: (a) Assuming Lenders, Borrower and Agent
Bank have executed sufficient duplicate originals of this Assumption Agreement
for each of the Assuming Lenders, Borrower and Agent Bank and each of such
originals have been delivered to Agent Bank, (b) Borrower has executed and
delivered to Agent Bank, on 

 

2

 

behalf of the Lenders, a
restatement of the Revolving Credit Note payable to the order of Agent Bank on behalf
of the Lenders, in the principal amount of                       Million Dollars ($                      ),
(c) the Borrower has executed and delivered to Agent Bank such amendments,
supplements, restatements and modifications to the Security Documentation as
Agent Bank reasonably requests and in a form and content acceptable to Agent
Bank, for the purpose of securing repayment of the Commitment Increase and the
restated Revolving Credit Note, (d) Title Company has committed to issue,
at Borrower’s expense, its modified 108.8 (or other appropriate endorsement)
endorsement to the Title Insurance Policies increasing coverage thereunder by
an additional                     
Million Dollars ($                      ),
(e) each Lender realizing a decrease in its respective Syndication
Interest has received from Agent Bank such amount as is necessary to adjust
such Lender’s Pro Rata Share of the Funded Outstandings as of the Effective
Date equal to such Lender’s Syndication Interest as set forth on the Schedule
of Lenders’ Proportions in Revolving Credit Facility as of                                   
attached hereto, (f) each Assuming Lender realizing an increase in its
respective Syndication Interest has delivered to Agent Bank an amount
representing its Pro Rata Share of the Funded Outstandings as of the Effective
Date, less Assuming Lenders’ Pro Rata Share of the Funded Outstandings
immediately prior to the Effective Date, for distribution to the Lenders in
such amounts as are necessary to adjust each such Lenders’ Pro Rata Share of
the Funded Outstandings as of the Effective Date to a percentage equal to the
Syndication Interests set forth on the Schedule of Lenders’ Proportions in
Revolving Credit Facility as of                         
attached hereto, and (g) Agent Bank has received from Borrower for the
account of the applicable Lenders, any Breakage Charges due under Section 2.07(c) of
the Credit Agreement.  Interest accrued
but remaining unpaid on the portion of the outstanding principal balance under
the Revolving Credit Facility shall be prorated to the Effective Date and
disbursed by Agent Bank to Lenders upon receipt of the next payment of accrued
interest under the Revolving Credit Note.

 

3.         On the Effective Date, the respective aggregate Syndication
Interests of the Lenders in the Revolving Credit Facility shall be as set forth
on the Schedule of Lenders’ Proportions in Revolving Credit Facility as of                           ,
a copy of which is marked “Schedule 2.01(a)” affixed hereto and by this
reference incorporated herein and made a part hereof, which shall restate the
Schedule of Lenders’ Proportions in Revolving Credit Facility attached as
Schedule 2.01(a) to the Credit Agreement, and all previous amendments and
restatements thereof, for the purpose of showing the Commitment Increase, the
adjustment of the respective Syndication Interests held by each of the Lenders
and evidencing each Assuming Lender’s applicable Syndication Interest in the
Revolving Credit Facility on and after the Effective Date.

 

4.         Agent Bank, on behalf of itself and each of the Lenders,
makes no representation or warranty and assumes no responsibility with respect
to any

 

3

 

statements, warranties or
representations made by Borrower in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement, the Loan Documents or any other instrument or
document furnished pursuant thereto. 
Agent Bank, on behalf of itself and each of the Lenders, makes no
representation or warranty in connection with, and assumes no responsibility
with respect to, the solvency, financial condition or statements of the
Borrower or the performance or observance by the Borrower of any of its obligations
under the Credit Agreement, the Loan Documents or any other instrument or
document furnished in connection therewith.

 

5.                                    Each
Assuming Lender represents and warrants on behalf of itself that:

 

a.         (i) it is duly organized and existing and it has full
power and authority to take, and has taken, all action necessary to execute and
deliver this Assumption Agreement and any other documents required to be
executed or delivered by it in connection with this Assumption Agreement, and
to fulfill its obligations hereunder; (ii) no notices to, or consents,
authorizations or approvals of, any person are required (other than any already
given or obtained) for its due execution, delivery and performance of this
Assumption Agreement; and apart from any agreements or undertakings or filings
required by the Credit Agreement, no further action by, or notice to, or filing
with, any person is required of it for such execution, delivery or performance;
(iii) this Assumption Agreement has been fully executed and delivered by
it and constitutes its legal, valid and binding obligations, enforceable
against it in accordance with the terms hereof, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, reorganization and other laws of general
application relating to or affecting creditors’ rights and to general equitable
principles; and (iv) it is eligible under the Credit Agreement to be a
Lender in accordance with the terms hereof.

 

b.         (i) under applicable law and
treaties no tax will be required to be withheld by Borrower or any Bank with
respect to any payments to be made to such Assuming Lender under the Credit
Agreement, (ii) it agrees to furnish (if it is organized under the laws of
any jurisdiction other than the United States or any State thereof) to the
Agent Bank and the Borrower prior to the time that the Agent Bank or Borrower
are required to make any payment of principal, interest or fees hereunder,
duplicate executed original of either U.S. Internal Revenue Service Form W-8BEN
or U.S. Internal Revenue Service Form W-8ECI (wherein the Assuming Lender
claims entitlement to the benefits of a tax treaty that provides for a complete
exemption from U.S. federal income withholding tax on all payments hereunder)
and agrees to provide new Forms W-8BEN or W-8ECI upon the expiration of any
previously delivered form or comparable statements in accordance with
applicable U.S. law and regulations and amendments thereto, duly executed and
completed by the Assuming Lender, and (iii) it agrees to 

 

4

 

comply with all
applicable U.S. laws and regulations with regard to such withholding tax
exemption.

 

6.                                    Borrower
represents and warrants as of the Effective Date that:

 

a.         the representations and warranties
contained in Article IV of the Credit Agreement and contained in each of
the other Loan Documents (other than representations and warranties which
expressly speak only as of a different date, which shall be true and correct in
all material respects as of such date) are true and correct on and as of the
Effective Date in all material respects as though such representations and
warranties had been made on and as of the Effective Date, except to the extent
that such representations and warranties are not true and correct as a result of
a change which is permitted by the Credit Agreement or by any other Loan
Document or which has been otherwise consented to by Agent Bank;

 

b.         Since the date of the most recent
financial statements referred to in Section 5.08 of the Credit Agreement,
no Material Adverse Change has occurred and no event or circumstance which
could reasonably be expected to result in a Material Adverse Change has
occurred; and

 

c.         no event has occurred and is continuing
which constitutes a Default or Event of Default under the terms of the Credit
Agreement.

 

7.                                  Each
Assuming Lender (a) acknowledges that it has received a copy of the Credit
Agreement and the Loan Documents, together with copies of the most recent
financial statements referred to in Section 5.08 of the Credit Agreement,
and such other documents and information as it has deemed appropriate to make
its own credit and legal analysis and decision to enter into this Assumption
Agreement; (b) agrees that it will, independently and without reliance
upon the Agent Bank or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit and legal decisions in taking or not taking action under the Credit
Agreement; and (c) appoints and authorizes the Agent Bank to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Agent Bank by the terms thereof, together
with such powers as are reasonably incidental thereto.

 

8.                                    Each
Assuming Lender [Insert for each new Lender] hereby
advises Borrower and Agent Bank of the following administrative details:

 

5

 

	
  a.

  	
  Credit/Business Matters:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Telephone:

  	
   

  	
   

  
	
   

  	
  Facsimile:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  b.

  	
  Operations/Administration:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Telephone:

  	
   

  	
   

  
	
   

  	
  Facsimile:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  c.

  	
  Payment Instructions:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ABA No.

  	
   

  	
   

  
	
   

  	
  Cr:

  	
   

  	
   

  
	
   

  	
  Attn:

  	
   

  	
   

  
	
   

  	
  Ref:

  	
   

  	
   

  
									

 

9.         This Assumption Agreement may be signed in any number of
counterparts, and signatures to all counterparts thereto, when assembled
together, shall constitute signatures to this entire agreement with the same
effect as if all signatures were on the same document.

 

10.       This Assumption Agreement shall be governed by and construed
in accordance with the internal laws of the State of Nevada without regard to
principles of conflicts of law.  Borrower
further agree that the full and exclusive forum for the determination of any
action relating to this Assumption Agreement, the Loan Documents, or any other
document or instrument delivered in favor of Banks pursuant to the terms hereof
shall be either an appropriate Court of the State of Nevada or the United
States District Court or United States Bankruptcy Court for the District of
Nevada.

 

11.       Any amendment or waiver of any provision of this Assumption
Agreement shall be in writing and signed by the parties hereto.  No failure or delay by either party hereto in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof and any waiver of any breach of the provisions of this Assumption

 

6

 

Agreement shall be without
prejudice to any rights with respect to any other or further breach thereof.

 

IN WITNESS
WHEREOF, the parties hereto have executed the foregoing Assumption Agreement as
of the day and year first above written.

 

	
   

  	
  GOLDEN ROAD MOTOR INN, INC., 

  
	
   

  	
  a Nevada corporation 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Officer 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print 

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AGENT BANK:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK,

  National Association  

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  
								

 

7

 

	
   

  	
  ASSUMING
  LENDERS:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  
						

 

8

 

ASSIGNMENT,
ASSUMPTION AND CONSENT AGREEMENT

(Form)

 

 

THIS ASSIGNMENT, ASSUMPTION AND CONSENT AGREEMENT (“Assignment”)
is made as of the ___ day of _____________, 200__, by and between
________________________________ (hereinafter referred to as “Assignor”), party
of the first part, and ____________________________ (hereinafter referred to as
“Assignee”), party of the second part.

 

R_E_C_I_T_A_L_S:

 

A.                                 Reference
is made to that certain Amended and Restated Credit Agreement, dated as of January 20,
2009 (as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), by and among Golden Road Motor Inn, Inc., a Nevada
corporation (the “Borrower”), Monarch Casino & Resort, Inc., a
Nevada corporation (the “Guarantor”), the Lenders therein named (herein
together with their respective successors and assigns collectively the “Lenders”),
Wells Fargo Bank, National Association, as the swingline lender (herein in such
capacity, together with its successors and assigns, the “Swingline Lender”),
Wells Fargo Bank, National Association, as the issuer of letters of credit
thereunder (herein in such capacity, together with their 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”).

 

B.                                  In
this Assignment, all capitalized words and terms not otherwise defined herein
shall have the respective meanings to be construed herein as provided in Section 1.01
of the Credit Agreement and any reference to a provision of the Credit
Agreement shall be deemed to incorporate such provision as a part hereof in the
same manner and with the same effect as if the same were fully set forth
herein.

 

C.                                 As
of the date of this Assignment and as of the Effective Date, as hereinafter
defined, but before giving effect to the assignment contemplated hereby,
Assignor is and shall be the owner and holder of a ___________ percent (____%)
Syndication Interest in the Credit Facility.

 

D.                                 As
of the Effective Date, as hereinafter defined, Assignor desires to assign to
Assignee and Assignee desires to assume a ____________ percent (____%)
Syndication Interest in the Credit Facility.

 

E.                                   This
Assignment is made, executed and delivered pursuant to Section 10.10 of
the Credit Agreement and shall also constitute notice to Borrower and

 

EXHIBIT M

 

 

Agent Bank of the assignment
and delegation to Assignee of the Syndication Interest particularly described
hereinbelow.

 

NOW, THEREFORE, in consideration of the foregoing and
other good and valuable considerations, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto do agree as follows:

 

1.                                    As
of the Effective Date, as hereinafter defined, Assignor does hereby transfer,
convey, set over and assign unto Assignee, without recourse, warranty or
representation other than as set forth in Paragraph 5 hereinbelow (the “Assigned
Interest”), $________________ of the outstanding unpaid balance of the Credit
Facility, representing an undivided _______________ percent (_____%)
Syndication Interest.

 

2.                                    From
and after the Effective Date, Assignee shall and does hereby assume and agree
to perform all of the promises and covenants of Assignor as to the Assigned
Interest particularly described in Paragraph 1 hereinabove arising or
performable from and after the Effective Date and further agrees to indemnify
and hold Assignor harmless from any and all liabilities, damages, costs or
expenses which Assignor may incur by reason of the failure of Assignee to fund
or perform any obligation of Assignor as to the Assigned Interest assigned
hereunder arising or performable from and after the Effective Date at the time
and in the manner set forth in the Loan Documents, and does further agree to
assume and be bound by each and every term, condition, provision and covenant
contained in the Credit Agreement and each of the Loan Documents, effective as
of the Effective Date, to the same extent and manner as if Assignee had
originally been named in the Credit Agreement as a Lender holding the Assigned
Interest therein and Assignee shall be deemed to be a Lender party to the
Credit Agreement for all purposes thereof.

 

3.                                    The
“Effective Date” as used herein shall mean ___________, 200__, provided that
each of the following conditions precedent have been satisfied on or before the
Effective Date: (a) Assignor and Assignee have executed this Assignment, (b) Borrower
and Agent Bank have joined in the execution of this Assignment for the purpose
of evidencing their respective acknowledgment and consent to the assignment by
Assignor of the Assigned Interest in favor of Assignee, (c) Assignee has
delivered to Assignor _______________________ Dollars ($________________) in
immediately available funds, and (d) Assignee has delivered to Agent Bank
in immediately available funds the Three Thousand Five Hundred Dollar
($3,500.00) assignment fee in accordance with Section 10.10b of the Credit
Agreement.  Interest accrued but
remaining unpaid on the portion of the outstanding principal balance under the
Credit Facility which is allocable to the Assigned Interest assigned hereby and
is owing to Assignor as of the Effective Date shall be prorated to the
Effective Date and disbursed by Agent Bank to Assignor and Assignee, as
applicable, from the next payment of accrued interest under the Revolving
Credit Note.

 

2

 

4.                                    On
the Effective Date, the respective aggregate Syndication Interests of the
Lenders in the Credit Facility shall be as set forth on 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, which shall restate the Schedule of Lenders’ Proportions in Credit
Facility attached as Schedule 2.01(a) to the Credit Agreement, and all
previous amendments and reinstatements thereof, for the purpose of showing the
Assigned Interest as a decrease in Assignor’s applicable Syndication Interest
and evidencing Assignee’s applicable Syndication Interest in the Credit
Facility.

 

5.                                    Assignor
represents and warrants that:

 

a.             (i) it
is the owner of the Assigned Interest being assigned and transferred hereunder
free and clear of any liens or other charges of any kind created by or through
Assignor, (ii) it is duly organized and existing and has the full power
and authority to take, and has taken, all action necessary to execute and
deliver this Assignment and any other documents required or permitted to be
executed or delivered by it in connection with this Assignment and to fulfill
its obligations hereunder, (iii) no notices to, or consents, authorizations
or approvals of, any Person are required (other than any already given or
hereby obtained) for its due execution, delivery and performance of this
Assignment, and apart from any agreements or undertaking or filings required by
the Credit Agreement, no further action by, or notice to, or filing with, any
Person is required of it for such execution, delivery or performance; and (iv) this
Assignment has been duly executed and delivered by it and constitutes its
legal, valid and binding obligations, enforceable against it in accordance with
the terms hereof, subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization and other laws of general application relating to or
affecting creditors’ rights and to general equitable principles.

 

b.            Assignor
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, the Loan Documents
or any other instrument or document furnished pursuant thereto.  Assignor makes no representation or warranty
in connection with, and assumes no responsibility with respect to, the solvency,
financial condition or statements of the Borrower or the performance or
observance by the Borrower of any of its respective obligations under the
Credit Agreement, the Loan Documents or any other instrument or document
furnished in connection therewith.

 

6.                                    Assignee
represents and warrants that:

 

3

 

a.             (i) it
is duly organized and existing and it has full power and authority to take, and
has taken, all action necessary to execute and deliver this Assignment and any
other documents required or permitted to be executed or delivered by it in
connection with this Assignment, and to fulfill its obligations hereunder; (ii) no
notices to, or consents, authorizations or approvals of, any person are
required (other than any already given or obtained) for its due execution,
delivery and performance of this Assignment; and apart from any agreements or
undertakings or filings required by the Credit Agreement, no further action by,
or notice to, or filing with, any person is required of it for such execution,
delivery or performance; (iii) this Assignment has been fully executed and
delivered by it and constitutes its legal, valid and binding obligations,
enforceable against it in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors’ rights and to
general equitable principles; and (iv) it is eligible under the Credit
Agreement to be an assignee in accordance with the terms hereof.

b.            (i) under
applicable law and treaties no tax will be required to be withheld by Borrower
or any Bank with respect to any payments to be made to the Assignee under the
Credit Agreement, (ii) it agrees to furnish (if it is organized under the
laws of any jurisdiction other than the United States or any State thereof) to
the Agent Bank and the Borrower prior to the time that the Agent Bank or
Borrower are required to make any payment of principal, interest or fees
hereunder, duplicate executed original of either U.S. Internal Revenue Service Form 4224
or U.S. Internal Revenue Service From 1001 (wherein the Assignee claims
entitlement to the benefits of a tax treaty that provides for a complete
exemption from U.S. federal income withholding tax on all payments hereunder)
and agrees to provide new Forms 4224 or 1001 upon the expiration of any
previously delivered form or comparable statements in accordance with
applicable U.S. law and regulations and amendments thereto, duly executed and
completed by the Assignee, and (iii) it agrees to comply with all
applicable U.S. laws and regulations with regard to such withholding tax
exemption.

 

c.             As of
the Effective Date, no amounts are payable by Borrower to Assignee under Sections 2.12
or 2.13 of the Credit Agreement, other than to the extent amounts thereunder
are payable to all of the Lenders.

 

7.                                    The
Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Loan Documents, together with copies of the most recent
financial statements referred to in Section 5.08 of the Credit Agreement,
and such other documents and information as it has deemed appropriate to make
its own credit and legal analysis and decision to enter into this Assignment; (b) agrees
that it will, independently and without reliance upon the Assignor, the Agent
Bank or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit and legal
decisions in taking or not taking

 

4

 

action under the Credit
Agreement; and (c) appoints and authorizes the Agent Bank to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Agent Bank by the terms thereof, together
with such powers as are reasonably incidental thereto.

 

8.                                    Assignee
hereby advises Borrower and Agent Bank of the following administrative details
with respect to the Assigned Interest:

 

	
   

  	
  a.

  	
  Address
  for notices:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  Telephone:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  c.

  	
  Facsimile:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  d.

  	
  Payment
  (wire) instructions:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

9.                                    Borrower
and Agent Bank join in the execution of this Assignment for the purpose of
evidencing and acknowledging their respective consents to the transfer by
Assignor to Assignee of the Assigned Interest and agree to recognize Assignee
as a Lender under the Credit Agreement and each of the Loan Documents to the
same extent as if Assignee were originally named as a Lender therein as to the
Assigned Interest.  Borrower and Agent
Bank further agree that as of the Effective Date and consummation of each of
the items specified in Paragraph 3 hereinabove, Assignor shall be and is
hereby fully released and discharged from all liabilities, responsibilities and
obligations with respect to the Assigned Interest hereby assigned arising or
performable on and after the Effective Date.

 

10.                            Any
interest, commissions, fees and other payments accrued to but excluding the
Effective Date with respect to the Assigned Interest hereby assigned shall be
for the account of Assignor.  Any
interest, fees and other payments accrued on and

 

5

 

after the Effective Date
with respect to the Assigned Interest hereby assigned shall be for the account
of the Assignee.  Each of the Assignor
and the Assignee agree that it will hold in trust for the other party any
interest and other amounts which it may receive to which the other party is
entitled pursuant to the preceding sentence and pay to the other party any such
amounts which it may receive promptly upon receipt.

 

11.                            This
Assignment may be signed in any number of counterparts, and signatures to all
counterparts thereto, when assembled together, shall constitute signatures to
this entire agreement with the same effect as if all signatures were on the
same document.

 

12.                            This
Assignment shall, in all respects, be governed by the laws of the State of
Nevada and if any action is taken to enforce the terms hereof, such action
shall be commenced and maintained within the State of Nevada.

 

13.                            Any
amendment or waiver of any provision of this Assignment shall be in writing and
signed by the parties hereto.  No failure
or delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment shall be without prejudice to any rights with
respect to any other or further breach thereof.

 

IN WITNESS WHEREOF, the parties hereto have executed
the foregoing Assignment as of the day and year first above written.

 

	
  ASSIGNOR:

  	
   

  	
  ASSIGNEE:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  	
  Title

  	
   

  	
   

  
										

 

6

 

Borrower and Agent
Bank hereby join in the execution of this Assignment for the purpose of
evidencing and acknowledging their respective consent as set forth in
Paragraph 9 above.

 

DATED as of the
____ day of _______________, 200__.

 

	
  BORROWER:

  	
   

  	
  AGENT
  BANK:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  GOLDEN ROAD
  MOTOR INN, INC.,

  a Nevada corporation

  	
   

  	
  WELLS FARGO
  BANK,

  National Association

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  	
  Title

  	
   

  	
   

  
										

 

7

 

 

 

 

PLEDGE AND ASSIGNMENT OF

SAVINGS ACCOUNT AGREEMENT

 

 

 

THIS PLEDGE AND ASSIGNMENT OF SAVINGS ACCOUNT AGREEMENT (“Pledge
Agreement”) is made and entered into as of this 20th day
of January, 2009, by and between, GOLDEN ROAD MOTOR INN, INC., a Nevada corporation,
Debtor and Assignor, hereinafter referred to as “Borrower”, party of the first
part, and WELLS FARGO BANK, National Association, hereinafter referred to as “Agent
Bank” party of the second part.

 

R_E_C_I_T_A_L_S:

 

WHEREAS:

 

A.        In
this Pledge Agreement all capitalized words and terms not otherwise
specifically herein defined shall have the respective meanings and be construed
herein as provided in or incorporated into Section 1.01 entitled “Definitions”
of the Amended and Restated Credit Agreement (as may be further amended,
supplemented, restated or otherwise modified from time to time, the “Credit
Agreement”), executed concurrently herewith by and among Borrower, Monarch
Casino & Resort, Inc., a Nevada corporation (the “Guarantor”),
Swingline Lender, L/C Issuer and the Banks therein described, and any reference
to a provision of the Credit Agreement shall be deemed to incorporate that
provision as a part hereof in the same manner and with the same effect as if
the same were fully set forth herein.

 

B.         Pursuant
to the Credit Agreement: (i) Swingline Lender has agreed, subject to the
terms and conditions specified therein, to make Swingline Advances to Borrower
up to the maximum aggregate amount of Four Million Dollars ($4,000,000.00) at
any time outstanding, and (ii) L/C Issuer has agreed, subject to the terms
and conditions specified therein, to issue Letters of Credit on behalf of
Borrower up to the maximum aggregate Stated Amount of Two Million Five Hundred
Thousand Dollars ($2,500,000.00) at any time outstanding.  As security for the prompt payment of: (i) 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), (ii) all or
a portion of a Deteriorating Lender’s Obligation to fund under Section 2.09(c) or
(d) of the Credit Agreement with respect to its Pro Rata Share of L/C
Exposure, and (iii) each and every L/C Reimbursement Obligation arising
after the occurrence of an Event of Default, Agent Bank shall establish a
restricted depository savings account for the account of Borrower (the “Cash
Collateral Account”).  It is a condition
of the Credit Agreement, the making of each Swingline Advance and the issuance
of Letters of Credit that all Borrowings, Cash, securities and other property
of Borrower which may hereafter be deposited into the

 

EXHIBIT N

 

 

Cash Collateral Account be presently and irrevocably pledged and
assigned to Agent Bank to be held by Agent Bank on behalf of the Swingline
Lender and the L/C Issuer in the manner and for the purposes set forth in the
Credit Agreement and L/C Agreements.

 

NOW, THEREFORE, in consideration of the Swingline Advances to be made by
Swingline Lender and of the Letters of Credit to be issued by L/C Issuer for
the benefit of Borrower, the receipt and sufficiency of which consideration is
hereby acknowledged, the Borrower hereby pledges and assigns to Agent Bank, on
behalf of the Swingline Lender and L/C Issuer, all of its right, title and
interest in and to the Cash Collateral Account and any Borrowings, Cash,
securities and other property of Borrower hereafter held or deposited therein,
as follows:

 

1.         Borrower shall and does
hereby agree that Agent Bank shall have the right, on and after the occurrence
of an Event of Default or in the event any Lender becomes a Deteriorating
Lender, to establish and maintain the Cash Collateral Account for the purpose
set forth herein and in the Credit Agreement. 
The Borrower by these presents does hereby presently and irrevocably
grant, bargain, sell, assign, transfer and set over unto Agent Bank, on behalf
of the Swingline Lender and L/C Issuer, its successors and assigns, all of
Borrower’s right, title and interest in and to the Cash Collateral Account and
any Borrowings, Cash, securities and other property of Borrower hereafter held
or deposited therein.

 

2.         In addition to all
rights of setoff for repayment of the Pro Rata Share of a Deteriorating Lender’s
risk participation in Swingline Advances or L/C Exposure or of any L/C
Reimbursement Obligation against any Borrowings held in the Cash Collateral
Account, monies, securities or other property given to Agent Bank by law, Agent
Bank shall have a right of setoff for the repayment of the Pro Rata Share of a
Deteriorating Lender’s risk participation in Swingline Advances or L/C Exposure
or any L/C Reimbursement Obligation against any Borrowings, monies, securities
and other property of Borrower now or hereafter held or deposited in the Cash
Collateral Account or on deposit with Agent Bank whether held in a general or
special account or deposit, or for safekeeping or otherwise; and every such
right of setoff for the repayment of the Pro Rata Share of a Deteriorating
Lender’s risk participation in Swingline Advances or L/C Exposure or any L/C
Reimbursement Obligation may be exercised without demand upon or notice to
Borrower.  No right of setoff shall be
deemed to have been waived by any act or conduct on the part of Agent Bank or
by any neglect to exercise such right of setoff, or by any delay in doing so;
and every right of setoff shall continue in full force and effect until
specifically waived or released by an instrument in writing executed by Agent
Bank.

 

3.         No delay or failure by
Swingline Lender, L/C Issuer, Agent Bank or any of the Banks to exercise any right
or remedy against the Borrower under the Loan Documents shall be construed as a
waiver of such right or remedy.  All
remedies of

 

2

 

 

Swingline Lender, L/C Issuer, Agent Bank and Banks against the Borrower
under the Loan Documents are cumulative.

 

4.         This Pledge Agreement
may not be amended, changed or terminated except by an agreement in writing
signed by the party or parties against whom enforcement of the change is
sought.  This Pledge Agreement shall be
governed by and construed in accordance with the laws of the State of Nevada
and if any action is taken to enforce the terms of this Pledge Agreement such
action shall be commenced and maintained within the State of Nevada.

 

5.         If and to the extent that
the amounts held from time to time in the Cash Collateral Account (including
any interest) exceed the sum of Swingline Outstandings plus the Stated Amount
of all undrawn Letters of Credit and all unpaid L/C Reimbursement Obligations,
Agent Bank shall, on or before ten (10) days following receipt of written
request by Borrower, apply such excess in the order of priority set forth in Section 7.03
of the Credit Agreement.

 

IN WITNESS WHEREOF, the parties hereto have executed the foregoing
instrument on the day and year first above written.

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  GOLDEN ROAD MOTOR INN,
  INC.,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   John Farahi,

  
	
   

  	
   

  	
   Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
  AGENT BANK:

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK,

  
	
   

  	
  National Association,

  
	
   

  	
  Agent Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   Stephen G. Buntin,

  
	
   

  	
   

  	
   Senior Vice
  President

  

 

3

 

SCHEDULE OF LENDERS’ PROPORTIONS IN

CREDIT FACILITY

AS OF RESTATEMENT EFFECTIVE DATE

 

 

	
   

  NAME OF
  LENDER

  	
   

  MAXIMUM
  AMOUNT OF

  PRINCIPAL

  	
   

  PROPORTIONATE

  SYNDICATION INTEREST

  IN CREDIT FACILITY

  
	
   

   Wells Fargo Bank,
  National Association

  	
   

  $ 30,000,000.00

  	
   

  50.0%

  
	
   

   Bank of America,
  N.A.

  	
   

  15,000,000.00

  	
   

  25.0%

  
	
   

   Mutual of Omaha
  Bank

  	
   

  15,000,000.00

  	
   

  25.0%

  
	
   

   Total

  	
   

  $60,000,000.00

  	
   

  100.0%

  

 

SCHEDULE 2.01(a)

 

AGGREGATE COMMITMENT REDUCTION SCHEDULE

(At Closing)

 

 

	
   

  REDUCTION DATE

  	
   

  SCHEDULED
  REDUCTION

  
	
   

   Closing Date

  	
   

  -0-

  
	
   

   December 31,
  2009

  	
   

  $2,500,000.00

  
	
   

   March 31, 2010

  	
   

  $2,500,000.00

  
	
   

   June 30, 2010

  	
   

  $2,500,000.00

  
	
   

   September 30,
  2010

  	
   

  $2,500,000.00

  
	
   

   December 31,
  2010

  	
   

  $2,500,000.00

  
	
   

   March 31, 2011

  	
   

  $2,500,000.00

  
	
   

   June 30, 2011

  	
   

  $2,500,000.00

  
	
   

   September 30,
  2011

  	
   

  $2,500,000.00

  
	
   

   December 31,
  2011

  	
   

  $2,500,000.00

  
	
   

   January 20,
  2012

   (Maturity Date)

  	
   

    Remaining unpaid principal
  balance

  

 

SCHEDULE 2.01(c)

 

 

AGGREGATE COMMITMENT REDUCTION SCHEDULE

(ALTERNATE ONE IN
EVENT OF A COMMITMENT INCREASE)

 

To
be completed by Agent Bank as of each Commitment Increase Effective Date in
accordance with the calculations set forth below:

 

	
   

  REDUCTION DATE

  	
   

  SCHEDULED
  REDUCTION *

  
	
   

   Commitment Increase Effective Date

  	
  -0-

  
	
   

   [insert a list of
  the last days of each subsequent Fiscal  Quarter]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

   January 20, 2012

   (Maturity Date)

  	
   

    Remaining unpaid principal
  balance

  

 

*       The amount of each Scheduled
Reduction occurring subsequent to each applicable Commitment Increase Effective
Date 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
Increases plus $60,000,000.00.

 

SCHEDULE 2.01(c) - ALTERNATE ONE

 

SCHEDULE OF SIGNIFICANT LITIGATION

 

 

Litigation
was filed against Monarch on January 27, 2006, by Kerzner International
Limited (“Kerzner “) owner of the Atlantis, Paradise Island, Bahamas in the
United States District Court, District of Nevada.  The case number assigned to the matter is
3:06-cv-00232-ECR (RAM).  The complaint
seeks declaratory judgment prohibiting Monarch from using the name “Atlantis”
in connection with offering casino services other than at Monarch’s Atlantis
Casino Resort Spa located in Reno, Nevada, and particularly prohibiting Monarch
from using the “Atlantis” name in connection with offering casino services in
Las Vegas, Nevada; injunctive relief enforcing the same; unspecified
compensatory and punitive damages; and other relief. Monarch believes Kerzner’s
claims to be entirely without merit and is defending vigorously against the
suit. Further, Monarch has filed a counterclaim against Kerzner seeking to
enforce the license agreement granting Monarch the exclusive right to use the
Atlantis name in association with lodging throughout the state of Nevada; to
cancel Kerzner’s registration of the Atlantis mark for casino services on the
basis that the mark was fraudulently obtained by Kerzner; and to obtain
declaratory relief on these issues. 
Litigation is in the discovery phase.

 

Schedule 3.18

 

 

SCHEDULE OF SPACELEASES

 

 

None

 

Schedule 4.15

 

 

SCHEDULE OF EQUIPMENT LEASES AND CONTRACTS

 

 

None

 

Schedule 4.16

 

 

SCHEDULE
4.22

SCHEDULE
OF TRADEMARKS, PATENTS, LICENSES,

FRANCHISES, FORMULAS AND
COPYRIGHTS

 

 

	
  Mark

  	
   

  	
  Registrant

  	
   

  	
  Registration

  	
   

  	
  Expiration

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Atlantis Casino Resort

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  7/15/97

  	
   

  	
   

  
	
  (Class 100 and
  Class 107)

  	
   

  	
  Renewed

  	
   

  	
  7/15/07

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  7/15/12

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Atlantis Casino Resort

  	
   

  	
  Fictitious Firm Name

  	
   

  	
  12/31/03

  	
   

  	
  12/31/08

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Updated below

  
	
  *Atlantis Casino Resort Spa

  	
   

  	
  Fictitious Firm Name

  	
   

  	
   

  	
   

  	
   

  
	
  #106201

  	
   

  	
  Certificate (renewal)

  	
   

  	
  Renewed

  	
   

  	
  06/03/10

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Bistro Napa

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  7/17/08

  	
   

  	
  01/16/13

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *City of Gold

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  5/11/06

  	
   

  	
  05/11/11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Club Paradise

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  1/5/94

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  01/05/09

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  01/05/19

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Club Paradise Charter 55

  	
   

  	
  Clarion Hotel Casino

  	
   

  	
  3/31/94

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  04/14/09

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  04/14/14

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Copper Cash

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  12/28/04

  	
   

  	
  12/28/09

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Corporate Connection

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  2/18/03

  	
   

  	
  2/18/08

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  2/18/13

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Cruise of Champions

  	
   

  	
  Atlantis Casino Resort

  	
   

  	
  5/7/96

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  5/07/06

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  5/11/11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Disco Night Fever

  	
   

  	
  Atlantis Casino Resort

  	
   

  	
  12/17/97

  	
   

  	
   

  
	
   

  	
   

  	
  Renewed

  	
   

  	
  12/17/07

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  12/17/12

  

 

- 1 -

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Discover Reno’s Paradise

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  10/6/99

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  10/6/09

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Easy Cash

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  11/17/03

  	
   

  	
  11/17/08

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  11/17/13

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Easy Comp

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  11/15/01

  	
   

  	
  11/15/06

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  11/15/11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *EKENO

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  11/17/03

  	
   

  	
  11/17/08

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  11/17/13

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Every Local’s Paradise

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  11/15/01

  	
   

  	
  11/15/06

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  11/15/11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Every Players Paradise

  	
   

  	
  Clarion Hotel Casino

  	
   

  	
  1/5/94

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  01/05/09

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  01/05/19

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *E Z Cash

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  11/17/03

  	
   

  	
  11/17/08

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  11/17/13

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *E Z Comp

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  11/15/01

  	
   

  	
  11/15/06

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  11/15/11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *EZ Jackpots

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  9/13/04

  	
   

  	
  09/13/09

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Free $lot Play

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  5/11/04

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  5/11/14

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Gourmet Grind

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  3/31/08

  	
   

  	
  3/31/13

  
	
   

  	
   

  	
  (Classes 100 and 107)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Hot August Paradise

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  11/15/01

  	
   

  	
  11/15/06

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  11/15/11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *InstantFortune Jackpot

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  4/12/05

  	
   

  	
  4/12/10

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *It’s the Place to Be

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  10/3/01

  	
   

  	
  10/3/06

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  10/3/11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Jackpot Mania

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  9/13/04

  	
   

  	
  9/13/09

  

 

- 2 -

 

	
  *Lite Delights

  	
   

  	
  Atlantis Casino Resort

  	
   

  	
  9/6/96

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  10/09/06

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  10/09/11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Localmania

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  5/13/91

  	
   

  	
  5/13/01

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  8/01/06

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  8/01/11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Manhattan Delicatessen

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  & Restaurant

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  5/17/06

  	
   

  	
  5/17/11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Mania Madness

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  5/11/06

  	
   

  	
  5/11/11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Martini & Magic

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  3/23/05

  	
   

  	
  3/23/10

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Meet in Paradise

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  10/6/99

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  10/6/09

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Mega Reel Jackpots

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  9/13/04

  	
   

  	
  9/13/09

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Mega Video Jackpots

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  9/13/04

  	
   

  	
  9/13/09

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *MegaMoney Jackpot

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  3/23/05

  	
   

  	
  3/23/10

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Megamonety Jackpot

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  3/23/05

  	
   

  	
  3/23/10

  
	
  (Error on spelling of MegaMoney - do not renew)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *MonteVigna Italian

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ristorante

  	
   

  	
  Atlantis Casino Resort

  	
   

  	
  5/18/99

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  5/18/09

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Mystery Bonus Keno

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  2/18/03

  	
   

  	
  2/18/08

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  2/18/13

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Napa Table

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  6/18/08

  	
   

  	
  6/18/13

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Paradise Payoff

  	
   

  	
  Atlantis Casino Resort

  	
   

  	
  12/4/97

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  12/4/07

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  12/4/12

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Paradise Plus Rewards

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  2/22/06

  	
   

  	
  2/26/11

  
	
  *Penny Mania

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  9/13/04

  	
   

  	
  9/13/09

  

 

- 3 -

 

	
  *Penny Paradise

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  5/11/04

  	
   

  	
  5/11/09

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  5/11/14

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Play a Year on Us

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  11/15/01

  	
   

  	
  11/15/06

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  11/15/11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Poker Mania

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  9/13/04

  	
   

  	
  9/13/09

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Rapid Fortune Jackpot

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  1/09/06

  	
   

  	
  1/06/11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Reno/Tahoe Winter Wine

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Expo

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  2/22/06

  	
   

  	
  2/26/11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Royal Flush Derby

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  5/11/06

  	
   

  	
  5/11/11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Slot Paradise

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  10/6/99

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed 9/13/04

  	
   

  	
  10/6/09

  
	
  *Super Funday

  	
   

  	
  Gold Road Motor Inn

  	
   

  	
  12/28/04

  	
   

  	
  12/28/09

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Toucan Charlies Buffet

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  & Grille Restaurant

  	
   

  	
  Clarion Hotel Casino

  	
   

  	
  3/15/94

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed 5/4/04

  	
   

  	
  5/4/09

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed 12/18/08

  	
   

  	
  5/4/14

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Where Reno Wins

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  2/22/06

  	
   

  	
  2/26/11

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Xtra Play Credit

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  5/11/04

  	
   

  	
  5/11/09

  
	
   

  	
   

  	
   

  	
   

  	
  Renewed

  	
   

  	
  5/11/14

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *4 Card Fortune

  	
   

  	
  Golden Road Motor Inn

  	
   

  	
  2/19/08

  	
   

  	
  2/19/13

  

 

- 4 -

 

FEDERAL MARKS

 

Assignment:

U.S.. Federal
Trademark No. 1,857,994 - “ATLANTIS” for lodging in U.S.

Federal Trademark
Agreement for assignment of exclusive rights to Atlantis mark in Nevada from
Atlantis Lodge, Inc.

 

 

 

* Original
Certificate in box

Updated:  January 5, 2009

 

- 5
-

 

SCHEDULE OF CONTINGENT LIABILITIES

 

 

None.

 

Schedule 4.23

 

 

Schedule 6.04

 

	
   

  	
  Remodel Projects

  	
   

  

 

	
  I. FIRST
  FLOOR

  	
  Cost
  Estimate

  
	
   

  	
  a. Casino carpet

  	
  $1,500,000

  
	
   

  	
  b. Tile walkway (yellow brick
  road)

  	
  $300,000

  
	
   

  	
  c. Awning at front desk

  	
  $50,000

  
	
   

  	
  d. Huts & casino
  remodel

  	
  $800,000

  
	
   

  	
  e. Caberet stage

  	
  $250,000

  
	
   

  	
  f. high limit remodel

  	
  $150,000

  
	
   

  	
  g. replace chair rail and
  “wind coating” below rail

  	
  $750,000

  
	
   

  	
  h. ceiling tiles/light
  fixtures/keno seating

  	
  $350,000

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  II. SECOND
  FLOOR

  	
   

  
	
   

  	
  a. Steak House remodel

  	
  $750,000

  
	
   

  	
  b. ballroom/meeting space
  remodel

  	
  $600,000

  
	
   

  	
  c. carpet in fun center

  	
  $50,000

  
	
   

  	
  d. trade wins remodel =
  convert to office space

  	
  $150,000

  
	
   

  	
  e. Not used

  	
   

  
	
   

  	
  f.

  	
   

  
	
   

  	
  g. upgrade walkway railing to
  stone

  	
  $125,000

  
	
   

  	
  h. wall chair rail and carpet
  on wall below chair rail and snack bar

  	
  $250,000

  
	
   

  	
  i. remove glass on walls

  	
   

  
	
   

  	
  j. remodel bathrooms

  	
  $350,000

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  III. HOTEL

  	
   

  
	
   

  	
  a. remodel spa flloor cooridor
  and rooms

  	
  $250,000

  
	
   

  	
  b. all hotel corridors
  (carpet, wallpaper, sconces, ceilings, molding...)

  	
  $850,000

  
	
   

  	
  c. Tower 3 rooms (gut, re-skin
  and new furniture)

  	
  $1,750,000

  
	
   

  	
  d. every hotel room door
  (outside and inside doors)...front, bathroom, closet and adjoining...to match
  corridor remodel and remove popcorn ceilings and replace molding

  	
  $2,500,000

  

 

	
  IV.
  OTHER

  	
   

  
	
   

  	
  a. demolish the motor lodge

  	
  $2,500,000

  
			

 

	
   

  	
  TOTAL

  	
  $14,275,000

  

 

 

 

SCHEDULE OF LIENS

 

 

None.

 

Schedule 6.08

 

 

 

 

All
that real property situate in the City of Reno, County of Washoe, State of
Nevada, described as follows:

 

PARCEL 1:

 

That
certain parcel of land situate within the Northeast 1/4 of Section 25,
Township 19 North, Range 19 East, M.D.B.&M., City of Reno, County of
Washoe, State of Nevada and a portion of land shown on that certain “Reversion
to Acreage” Parcel Map No. 2105, recorded March 5, 1987, as File No. 1144922,
filed in the office of the Washoe County Recorder, State of Nevada, said Parcel
No. 2105, being a reversion of acreage of Parcels A, B and C of Parcel Map
No. 1085 filed April 18, 1980, as File No. 668558 in the office
of the Washoe County Recorder, State of Nevada, more particularly described as
follows:

 

BEGINNING
at a point on the westerly line of Coliseum Way, said point being the Southwest
corner of Parcel B of the above-mentioned Parcel Map No. 1085, from which
point the Northeast corner of said Section 25 bears North 55°01’17” East
761.93 feet, said point being the true point of beginning; thence along said
westerly line of Coliseum Way North 7°29’17” West 89.52 feet; thence South
69°53’10” West 1,082.38 feet to a point on the easterly line of S. Virginia
Street; thence along said easterly line South 20°06’52” East 379.15 feet to the
beginning of a tangent 25.00 foot radius curve to the left concave to the East,
Northeast and North from which point the radius point bears North 69°53’08”
East; thence southerly, southeasterly and easterly along said curve an arc
distance of 37.15 feet through a central angle of 85°08’58” to a point on the
North line of Peckham Lane; thence along said North line North 74°44’13” East
101.26 feet; thence North 77°47’44” East 99.26 feet to the beginning of a
tangent 600.50 foot radius curve to the right concave to the South from which
point the radius point bears South 12°12’16” East; thence easterly along said
curve an arc distance of 117.60 feet through a central angle of 11°13’14”;
thence North 76°58’43” East 27.42 feet to the beginning of a non-tangent 597.04
foot radius curve to the right concave to the South from which point the radius
point bears South 0°02’01” East; thence from a tangent which bears North 89°57’59”
East easterly along said curve an arc distance of 270.26 feet through a central
angle of 25°56’08”; thence South 64°05’50” East 364.55 feet; thence North 25°54’07”
East 23.81 feet to the beginning of a tangent 200.00 foot radius curve to the
left concave to the Northwest and West from which point the radius point bears
North 64°05’53” West; thence northeasterly and northerly along said curve an
arc distance of 116.55 feet through a central angle of 33°23’24”; thence North
7°29’17” West 677.86 feet to the true point of beginning.

 

SCHEDULE "A"

HOTEL/CASINO PROPERTY

Page 1 of 9

 

The
basis of bearings for this description is the Nevada State Plane Coordinate
System, West Zone (NAD 83/94).

 

Being
further described as Parcel A as shown on Record of Survey Map No. 4880,
according to the map thereof, filed in the office of the County Recorder of
Washoe County, State of Nevada on April 6, 2007, as File No. 3518334,
Official Records.

 

NOTE:  The above metes and bounds description
appeared previously in that certain instrument recorded in the office of the
County Recorder of Washoe County, Nevada on April 3, 2007, as Document No. 3516901
of Official Records.

 

PARCEL 2:

 

That
certain parcel of land situated within the Southeast 1⁄4 of Section 24 and
in the Northeast 1⁄4 of Section 25, Township 19 North, Range 19 East,
M.D.B.&M., City or Reno, County of Washoe, State of Nevada, more
particularly described as follows:

 

BEGINNING
at a point on the East line of Virginia Street as it presently exists from
which point the Southwest corner of Parcel C of Reversion-Parcel Map No. 2105
recorded as File No. 1144922 on March 05, 1987 in the office of the
County Recorder of Washoe County, Nevada, bears South 0°58’33” East 14.73
feet;  said point also bears South 65°44’38”
West 1,802.49 feet the Northeast corner of said Section 25, said point
being the true point of beginning; 
thence North 69°10’56” East 173.39 feet; 
thence North 20°47’32” West 215.45 feet; 
thence South 69°10’54” West 173.49 feet; 
thence South 20°49’06” East 215.44 feet to the true point of beginning.

 

The
basis of bearing used herein is the centerline tangent of Coliseum Way taken as
North 8°11’31” West.  Record per Parcel
Map No. 1085 id North 8°10’00” West.

 

NOTE
(NRS 111.312):  The above metes and
bounds description was prepared by Gilbert W. Patterson, PLS# 5666, at Castle
Land Surveying, 240 Linden Street, Reno, NV 
89502.

 

SCHEDULE "A"

HOTEL/CASINO PROPERTY

Page 2 of 9

 

PARCEL 3:

 

CONVENTION CENTER LAND EASEMENT AREAS

 

All
those certain land easements situate in the NE 1⁄4 of Section 25,
T19N, R19E, M.D.M., City of Reno, County of Washoe, State of Nevada, being
portions of Parcel 1A of Record of Survey No. 4385, recorded May 13,
2004 as File No. 3037530 in the Official Records of Washoe County, Nevada
being more particularly described as follows:

 

LAND EASEMENT AREA 1

 

COMMENCING
on the northerly boundary of said Parcel 1A also being the southerly
right-of-way of East Peckham Lane at the southeasterly end of a line labeled “N64°05’19”W, 61.68’ “ being the POINT OF
COMMENCEMENT for the following descriptions;

 

THENCE
departing said boundary and right-of-way South 44°25’38” West, 19.24
feet to the POINT OF BEGINNING of EASEMENT
AREA 1;

 

THENCE along the
following fourteen (14) courses:

 

1)   
South 19°24’41” West, 37.53 feet;

2)   
North 70°35’19” West, 62.00 feet;

3)   
North 19°24’41” East, 14.84 feet;

4)   
North 70°35’19” West, 5.00 feet;

5)   
South 19°24’41” West, 3.80 feet;

6)   
North 70°35’19” West, 27.00 feet;

7)   
North 19°24’41” East, 7.00 feet;

8)   
North 11°58’48” East, 11.60 feet;

9)   
North 19°24’41” East, 10.00 feet;

10) 
South 70°35’19” East, 30.00 feet;

11) 
South 19°24’41” West, 3.02 feet;

12) 
South 70°35’19” East, 19.00 feet;

13) 
North 19°24’41” East, 1.02 feet;

14) 
South 70°35’19” East, 46.50 feet to the POINT OF
BEGINNING.

 

LAND EASEMENT AREA 2

 

SCHEDULE "A"

HOTEL/CASINO PROPERTY

Page 3 of 9

 

THENCE departing said boundary and
right-of-way South 76°19’26” West, 91.47 feet to the POINT OF BEGINNING
of EASEMENT AREA 2;

 

THENCE along the
following four (4) courses:

 

1)    South 19°24’41” West, 18.00
feet;

2)    North 70°35’19” West, 24.00
feet;

3)    North 19°24’41” East, 18.00
feet;

4)    South 70°35’19” East, 24.00
feet to the POINT OF BEGINNING.

 

LAND EASEMENT AREA 3

 

THENCE  departing said boundary and right-of-way South 51°27’37” West, 102.62
feet to the POINT OF BEGINNING of EASEMENT
AREA 3;

 

THENCE along the
following four (4) courses:

 

1)    South 19°47’10” East, 20.00
feet;

2)    South 70°12’50” West, 20.00
feet;

3)    North 19°47’10” West, 20.00
feet;

4)    North 70°12’50” East, 20.00
feet to the POINT OF BEGINNING;

 

LAND EASEMENT AREA 4

 

THENCE  departing said boundary and right-of-way South 25°16’00” West, 137.29
feet to the POINT OF BEGINNING of EASEMENT
AREA 4;

 

THENCE along the
following four (4) courses:

 

1)    South 19°47’10” East, 20.00
feet;

2)    South 70°12’50” West, 20.00
feet;

3)    North 19°47’10” West, 20.00
feet;

4)    North 70°12’50” East, 20.00
feet to the POINT OF BEGINNING;

 

SCHEDULE "A"

HOTEL/CASINO PROPERTY

Page 4 of 9

 

LAND EASEMENT AREA 5

 

THENCE  departing said
boundary and right-of-way South 11°19’40” West, 188.04 feet to the POINT OF BEGINNING of EASEMENT AREA 5;

 

THENCE along the
following four (4) courses:

 

1)    South 19°47’10” East, 20.00
feet;

2)    South 70°12’50” West, 20.00
feet;

3)    North 19°47’10” West, 20.00
feet;

4)    North 70°12’50” East, 20.00
feet to the POINT OF BEGINNING;

 

LAND EASEMENT AREA 6

 

THENCE  departing said boundary and right-of-way South 03°34’21” West, 245.08
feet to the POINT OF BEGINNING of EASEMENT
AREA 6;

 

THENCE along the
following four (4) courses:

 

1)    South 19°47’10” East, 20.00
feet;

2)    South 70°12’50” West, 20.00
feet;

3)    North 19°47’10” West, 20.00
feet;

4)    North 70°12’50” East, 20.00
feet to the POINT OF BEGINNING;

 

LAND EASEMENT AREA 7

 

THENCE  departing said boundary and right-of-way South 01°12’05” East, 304.89
feet to the POINT OF BEGINNING of EASEMENT
AREA 7;

 

THENCE along the
following four (4) courses:

 

1)    South 19°47’10” East, 20.00
feet;

2)    South 70°12’50” West, 20.00
feet;

3)    North 19°47’10” West, 20.00
feet;

4)    North 70°12’50” East, 20.00
feet to the POINT OF BEGINNING;

 

SCHEDULE "A"

HOTEL/CASINO PROPERTY

Page 5 of 9

 

LAND EASEMENT AREA 8

 

THENCE  departing said
boundary and right-of-way South 04°19’59” East, 351.55 feet to the POINT OF BEGINNING of EASEMENT AREA 8;

 

THENCE along the
following four (4) courses:

 

1)    South 19°47’10” East, 7.00 feet;

2)    South 70°12’50” West, 27.00 feet;

3)    North 19°47’10” West, 7.00 feet;

4)    North 70°12’50” East, 27.00 feet to the POINT OF BEGINNING;

 

The
intent of these descriptions is to envelope the footings of the Skybridge-Tower
structure and the support columns for the Skybridge-Walkway, as such terms are
defined by that certain Atlantis Convention Center Skybridge Agreement and
Easement which was recorded in the Official Records of Washoe County, Nevada on
May 10, 2007 as Document No. 3530942.

 

The
basis of bearings for these descriptions is identical to the aforementioned
Record of Survey No. 4385.

 

Legal
description prepared by:

Ronald
C. Hoops, PLS 10839

Odyssey
Engineering, Inc.

895
Roberta Lane, Ste 104

Sparks,
NV 89431

 

PARCEL 4:

 

CONVENTION CENTER AIRSPACE EASEMENT AREA

 

All that certain airspace easement situate in the NE 1⁄4
of Section 25, T19N, R19E, M.D.M., City of Reno, County of Washoe, State
of Nevada, being a portion of Parcel 1A of Record of Survey No. 4385,
recorded May 13, 2004 as File No. 3037530 in the Official Records of
Washoe County, Nevada being the basis of bearings for the description as
follows:

 

COMMENCING
on the northerly boundary of said Parcel 1A also being the southerly right-of-way
of East Peckham Lane at the northwesterly end of a line labeled

 

SCHEDULE "A"

HOTEL/CASINO PROPERTY

Page 6 of 9

 

“
N64°05’19”W, 61.68’ “ ;

 

THENCE
along a non-tangent curve to the left having a radial bearing of South
21°41’28” West, a radius of 465.00 feet, a central angle of 01°38’45” and an
arc length of 13.36 feet along said boundary to the POINT OF
BEGINNING;

 

THENCE departing
said common boundary and along the following six (6) courses:

 

1)     South 19°24’41” West, 47.45 feet;

2)     South 70°35’19” East, 4.50 feet;

3)     South 19°24’41” West, 14.30 feet;

4)     North 70°35’19” West, 4.50 feet;

5)     South 19°24’41” West, 1.46 feet;

6)     South 19°47’10”
East, 363.35 feet to the northerly wall of the existing Reno Sparks Convention
Center;

 

THENCE South 70°12’50” West, 28.00 feet
along said wall;

 

THENCE departing said wall and along
the following two (2) courses:

 

1)     North 19°47’10” West, 373.32 feet;

2)          North 19°24’41” East, 72.66 feet to
the aforementioned northerly boundary of Parcel 1A and southerly right-of-way;

 

THENCE along a non-tangent curve to the
right, having a radial bearing of South 16°35’39” West, a radius of 465.00
feet, a central angle of 03°27’04” and an arc length of 28.01 feet along said
common boundary to the POINT OF BEGINNING.

 

The airspace easement is bounded
vertically between the elevations of 4467.5 feet, bottom of bridge, to 4491.0
feet, top of parapet. Basis of Elevation are the control points as shown on
Sheet C1.1 of the improvements plans for the Convention Center Skybridge as
prepared by Waldemar Eklof Architect dated October 16, 2007.

 

The
intent of this description is to create a three-dimensional corridor of that
portion of the existing Skybridge-Walkway which is situate above the RSCC Land,
as such terms are defined by that certain Atlantis Convention Center Skybridge
Agreement and Easement which was

 

SCHEDULE "A"

HOTEL/CASINO PROPERTY

Page 7 of 9

 

recorded in the Official
Records of Washoe County, Nevada on May 10, 2007, as Document
No. 3530942.

 

Legal description prepared
by:

Ronald C. Hoops, PLS 10839

Odyssey Engineering, Inc.

895 Roberta Lane, Ste 104

Sparks, NV 89431

 

PARCEL
5:

 

CONVENTION CENTER ENTRY EASEMENT AREA

 

All
that certain Skybridge Easement situate in the NE 1⁄4 of Section 25,
T19N, R19E, M.D.M., City of Reno, County of Washoe, State of Nevada, being a
portion of Parcel 1A of Record of Survey Map No. 4385 as recorded in
Washoe County Official Records on May 13th, 2004 as
Filing No. 3037530 and being more particularly described as follows:

 

BEGINNING
at an angle point on the southerly
right-of-way line of East Peckham Lane, said point being on the South end of a
course labeled S 30o24’11” W, 1.27’ as shown in “Detail A” of said Record of
Survey Map No. 4385; thence along the following nine (9) courses;

 

1.   Along a curve to the right having a tangent
bearing of S 16°47’49” E, a radius of 24.00 feet,
a central angle of 43o25’56”, and an arc length of 18.19 feet along a existing
back of sidewalk;

 

2.  S 26°38’07” W, 49.21 feet along said existing back of sidewalk;

 

3. 
N 64°56’08” W, 27.04 feet;

 

4.
   S 19°47’10” E, 329.08 feet to the North building line of the existing
Reno-Sparks Convention Center;

 

5.  S 70°12’50” W, 89.00 feet along said North building
line;

 

6.  N 19°47’10” W, 368.05 feet;

 

SCHEDULE "A"

HOTEL/CASINO PROPERTY

Page 8 of 9

 

7. 
 N 17°05’37” E, 94.36 feet to the
aforementioned southerly right-of-way line of East Peckham Lane;

 

8.   Along
a curve to the right, having a tangent bearing of S 76°24’0” E, a radius of 465.00 feet, a central angle of 08°05’28” and an arc length of 65.67 feet along said
right-of —way;

 

9.  S 64o05’19” E, 61.68 feet
along said right-of-way to the POINT OF
BEGINNING.

 

Legal description prepared
by:

Ronald C. Hoops, PLS 10839

Odyssey Engineering, Inc.

895 Roberta Lane, Ste 104

Sparks
NV 89431

 

SCHEDULE “A”

HOTEL/CASINO PROPERTY

Page 9 of 9

 

All
that real property situate in the City of Reno, County of Washoe, State of
Nevada, described as follows:

 

PARCEL
1:

 

BEGINNING
at the intersection of the Western line of South Virginia Street (U.S. 395),
(86 feet wide) with the Southern line of the parcel of land described in Parcel
1 in the Deed to William H. Moffat, recorded in Book 74, File No. 44494,
Deed Records, from said point of beginning the Southeast corner of Section 25,
Township 19 North, Range 19 East, M.D.B.&M., bears South 20°42’22” East 4413.18 feet; thence along a fence line along the Southern
boundary of said Moffat parcel the five following courses and distances:  South 70°36’51” West 358.52 feet; North 19°50’56” West 63.62 feet; South 70°36’51” West 27.66 feet; North 22°02’59” West 27.33 feet; and South 67°27’53” West 635.24 feet to a fence line
along the Western line of the Cochran Ditch; thence along said fence line along
said Western line of said Cochran Ditch the ten following courses and
distances:  North 38°59’53” West 45.40 feet; North 3°43’20” West 65.74 feet; North 38°06’35” East 102.87 feet; North 0°22’42” West 86.15 feet; North 0°06’57” West 24.68 feet; North 7°46’41” West 49.06 feet; North 21°40’34” West 131.88 feet; North 10°43’03” West 84.24 feet; North 1°13’59” East 94.68 feet; and North 8°27’39” East 119.99 feet to a fence along the
Northern boundary of said Moffat parcel; thence North 68°59’51” East along said fence line along said Northern boundary of said
Moffat parcel 754.93 feet to said Western line of South Virginia Street; thence
South 20°52’13” East along the last mentioned line
794.38 feet to the point of beginning, situate in the Northeast 1⁄4 of said Section 25.
Reference is made to License Survey No. 298942.

 

EXCEPTING
THEREFROM that parcel described in Deed recorded November 3, 1970, under
File No. 189261, Official Records of Washoe County.

 

ALSO
EXCEPTING THEREFROM all that portion of the herein described property lying
within West Peckham Lane as it presently exists, and or conveyed to the City of
Reno by Deed recorded November 3, 1970, under File No. 189266.

 

AND
ALSO EXCEPTING THEREFROM that portion described as Parcel 2 in Deed to Eagle
Thrifty Drugs and Markets, Inc., a Nevada corporation, recorded January 7,
1972, under File No. 231197.

 

ALSO
EXCEPTING THEREFROM that portion conveyed by an instrument recorded February 15,
2006 as File No. 3349617, Official Records.

 

SCHEDULE “B”

V/P PROPERTY

Page 1 of 3

 

PARCEL 2:

 

COMMENCING at the East
quarter corner of said Section 25; thence South 89°26’06” West along the East-West centerline of said Section 25, a
distance of 1002.7 feet to the Western line of South Virginia Street (U. S.
Highway 395); thence along said Western line of said South Virginia Street the
two following courses and distances: 
North 20°34’25’ West 353.34 feet and North 20°52’13” West a distance of 1243.52 feet to the most Easterly Northeast
corner of Parcel 3 conveyed to Louis Capurro, et al, by Deed recorded March 25,
1946, in Book 179 of Deeds, Page 586, Washoe County, Nevada, Records;
thence along the Northerly boundary of said parcel South 70°36’37” West 370.46 feet, shown as South 68°19’ West 364.7 feet in said Deed, the true
point of beginning; thence along the Northerly boundary of said parcel the
following courses and distances:  North
19°51’17” West 63.54 feet, shown as North 20°56’ West 64.00 feet in said Deed; South 70°40’05” West 27.67 feet, shown as South 66°36’ West 28.7 feet in said Deed; North 22°02’34” West 27.34 feet, shown as North 19°25’ West 28.00 feet in said Deed; and South 67°28’58” West a distance of 238.80 feet, shown
as South 65°50’ West in said Deed; thence leaving the
Northerly boundary line of said parcel North 89°39’39” East 210.34 feet; thence on a curve
to the left the tangent of which bears the last described course, having a
radius of 170.00 feet through a central angle of 19°03’02” for an arc distance of 56.52; thence
North 70°36’37” East a distance of 13.55 feet to the
true point of beginning.

 

PARCEL
3:

 

COMMENCING
at the Northwest corner of Section 25, Township 19 North, Range 19 East,
M.D.B.&M.; thence South 73°50’45” East 1807.93 feet; thence East 900
feet to a point on the North-South quarter line of said Section 25; thence
along said line South 0°23’30” East 245 feet to the true point of
beginning, said point being on the same line as described in the Deed to
William H. Schnoor and wife, recorded in Book 171, Page 172, Deed Records;
thence South 89°36’30” East 82.08 feet to a point on the
West bank of the Cochran Ditch marked by an iron pin; thence Southerly and
along said West bank to a point and iron rod on said bank, at a point 9.0 feet
South of the South line of the Northwest 1⁄4 of the Northeast 1⁄4 of said Section 25;
thence parallel to said line West 62.3 feet to a rod on said North-South
quarter line of said Section 25; thence along said quarter line North 0°23’30” West 581.00 feet to the true point of beginning, situate in the
Northwest 1⁄4 of the Northeast 1⁄4 and the Southwest 1⁄4 of Northeast 1⁄4 of Section 25,
Township 19 North, Range 19 East, M.D.B.&M.

 

SCHEDULE “B”

V/P PROPERTY

Page 2 of 3

 

EXCEPTING
THEREFROM that portion conveyed to the City of Reno, by Deed recorded November 3,
1970, under File No. 189266.

 

NOTE
(NRS 111.312):  The above metes and
bounds description appeared previously in that certain instrument, recorded in
the office of the County Recorder of 
Washoe County, Nevada on December 31, 1997, as Document No. 2167154,
of  Official Records.

 

SCHEDULE “B”

V/P PROPERTY

Page 3 of 3

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