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Exhibit 10.1.2  

 
 

AMENDED AND RESTATED
  AGREEMENT OF JOINT VENTURE OF
  CIRCUS AND ELDORADO JOINT VENTURE    
  

        This Amended and Restated Agreement (this "Agreement") of Joint Venture of Circus and Eldorado Joint Venture (the "Joint Venture") as originally executed as of
March 1, 1994 (the "Original Agreement"), is amended and restated effective as of the 1st day of January, 2001, by and between ELDORADO LIMITED LIABILITY COMPANY ("E"), a Nevada limited liability
company owned and controlled by ELDORADO RESORTS LLC, a [Nevada] limited liability company ("ERLLC"), and GALLEON, INC., a Nevada corporation ("C"), owned and controlled by
MANDALAY RESORT GROUP, a Nevada corporation ("MRG"), pursuant to the provisions of the Nevada Uniform Partnership Act, on the following terms and conditions. This Agreement amends, restates and
supercedes the Original Agreement in its entirety. 

 
 

Section 1    
    
    THE JOINT VENTURE    
  

        1.1    Formation.    The Joint Venture was formed as a Nevada general partnership between E and C ("Partners")
effective as of March 1, 1994, pursuant to the provisions of the Nevada Uniform Partnership Act ("Act"). 

        1.2    Name.    The name of the Joint Venture is CIRCUS AND ELDORADO JOINT VENTURE
[CONSIDERING NAME CHANGE ISSUES] and all business of the Joint Venture shall be conducted in such name. The joint venture shall
hold all of its property in the name of the Joint Venture and not in the name of any Partner. 

        1.3    Purpose.    

        (a)  The
purpose of the Joint Venture is to own and operate the Silver Legacy Resort & Casino in Reno, Nevada (the "Casino"). 

        (b)  The
Joint Venture shall be a partnership only for the purpose specified in this Section 1.3. Except as otherwise provided in this Agreement, the Joint Venture shall not
engage in any other activity or business and no Partner shall have any authority to hold himself out as the agent of the other Partner in any other business or activity. 

        1.4    Place of Business.    The principal place of business of the Joint Venture shall be at 407 North Virginia
Street, Reno, Nevada or at such other place within Reno, Nevada, as may be determined by the Managing Partner. 

        1.5    Term.    The term of the Joint Venture commenced on March 1, 1994 and shall continue until the winding up and
liquidation of the Joint Venture following a "Liquidating Event," as provided in Section 13 hereof. 

        1.6    Percentage Interest.    The Percentage Interest of each Partner shall be fifty percent (50%) and shall not be
changed. 

        1.7    Statutory Compliance.    The Joint Venture shall exist under and be governed by, and this Agreement shall be
construed in accordance with, the applicable laws of the State of Nevada including the Nevada Gaming Control Act embodied in Chapter 463 of the Nevada Revised Statutes and the regulations promulgated
thereunder. The Partners shall make all filings and disclosures required by, and shall otherwise comply with, all such laws. The Partners shall execute and file in the appropriate records any assumed
or fictitious name certificates and other documents and instruments as may be 

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necessary or appropriate with respect to the formation of, and conduct of business by, the Joint Venture. 

        1.8    Title to Property.    All real and personal property owned by the Joint Venture shall be owned by and in the
name of the Joint Venture as an entity and no Partner shall have any ownership interest in such property in its individual name or right, and each Partner's interest in the Joint Venture shall be
personal property for all purposes. 

        1.9    Payments of Individual Obligations.    The Joint Venture's credit and assets shall be used solely for the
benefit of the Joint Venture, and no asset of the Joint Venture shall be transferred or encumbered for or in payment of any separate obligation of a Partner. 

        1.10    Independent Activities.    

        (a)  Each
Partner shall be required to devote only such time to the affairs of the Joint Venture as such Partner determines in its sole discretion may be necessary to manage
and operate the Joint Venture, and each Partner shall be free to serve any other Person or enterprise in any capacity that it may deem appropriate. Nothing in this Agreement shall prevent either
Partner from engaging in other business ventures of every nature, including, but not limited to, the ownership, management, improvement, development and operation of any other hotels and/or casinos
wherever located, and this Agreement shall grant neither the Joint Venture nor any Partner any right in any such independent venture or business or to the income and profits derived therefrom. Each
Partner specifically acknowledges that the other Partner or an Affiliate of the other Partner is the owner and operator of a competing hotel casino adjacent to the Casino and connected to the Casino,
and that this Agreement shall not be deemed or construed to prevent, hinder or inhibit in any way the present operation or future expansion of said properties. 

        (b)  As
used in this Agreement, the term "Affiliate," when used with respect to any entity, shall mean any other entity directly or indirectly controlling, controlled by or
under common control with such entity. 

        1.11    Expenses of Partners.    Except as specifically provided in this Agreement, no Partner shall be paid for
services rendered to the Joint Venture by such Partner. However, each party shall be entitled to reimbursement from the Joint Venture for the actual out-of-pocket expenses reasonably incurred by such
Partner in furtherance of the Joint Venture's business to the extent such expenses are contemplated by a budget approved by the Partners, upon the presentation of reasonable supporting documentation
of the amount and purpose of such expense. 

 
 

Section 2    
    
    CAPITAL CONTRIBUTIONS    
  

        2.1    Capital Contributions.    As of the date of this Agreement, each Partner has contributed or caused to be
contributed to the Joint Venture, as its Capital Contribution, cash and/or property in the amount of $51.9 million and its Partner's Capital Account has been credited accordingly. In addition, each
Partner's Capital Account has been adjusted through the date hereof, as provided in Section 2.3. As of January 1, 2001, the Capital Accounts of the Partners have the balances set forth on Schedule A
attached hereto. It is intended that, following the special distributions described in Section 4.3 and absent a default of a Partner's obligations hereunder, the Capital Account of E will exceed the
Capital Account of C by $10,000,000. 

        2.2    No Further Capital Contributions.    The Partners shall not be permitted or required to contribute additional
capital or lend any funds to the Joint Venture without the consent of both Partners, which consent may be given or withheld in each Partner's sole and absolute discretion. 

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        2.3    Capital Accounts.    An individual Capital Account shall be established and maintained for each Partner. The
Capital Account of each Partner shall be equal to the aggregate amount of cash contributed by such Partner to the Joint Venture, increased by (i) the fair market value of property contributed by such
Partner to the Joint Venture, net of liabilities secured by such property that the Joint Venture assumes or takes the property subject to, (ii) the amount of any Joint Venture liabilities assumed by
such Partner other than liabilities secured by property distributed to such Partner, (iii) such Partner's allocable share of Profits of the Joint Venture, (iv) any items in the nature of income and
gain which are excluded from the definitions of Profits and Losses and allocated to such Partner and (v) any other increases required by Treasury Regulation Section 1.704-1(b)(2)(iv), and reduced by
(i) such Partner's distributive share of Losses, (ii) the amount of any distributions of cash to such Partner, (iii) the amount of liabilities of such Partner assumed by the Joint Venture, (iv) the
fair market value of property (net of liabilities to which such distributed property is subject) distributed to such Partner, (v) any items in the nature of deductions or losses which are excluded
from the definitions of Profits and Losses and allocated to such Partner and (vi) any other decreases required by Treasury Regulation Section 1.704-1(b)(2)(iv). The provisions of this Agreement
relating to the maintenance of Capital Accounts have been included in this Agreement to comply with Section 704(b) of the Internal Revenue Code of 1986, as amended (the "Code") and the Treasury
Regulations promulgated thereunder and will be interpreted and applied in a manner consistent with those provisions. 

        2.4    Other Matters.    

        (a)  Except
as otherwise provided in this Agreement, no Partner shall demand or receive a return of his Capital Contributions or withdraw from the Joint Venture without the
consent of all Partners. Under circumstances requiring a return of any Capital Contributions, no Partner shall have the right to receive property other than cash, except as may be specifically
provided herein. 

        (b)  No
Partner shall receive any interest, salary, or draws with respect to its Capital Contributions or its Capital Account or for services rendered on behalf of the Joint
Venture or otherwise in its capacity as Partner, except as otherwise provided in this Agreement. 

        (c)  Except
as provided in Section 10, no Person shall be admitted to the Joint Venture as a Partner without the unanimous consent of the Partners. 

        (d)  The
Managing Partner, on behalf of the Joint Venture, may contract with an Affiliate of the Managing Partner for the provision of accounting, bookkeeping, computer
services and management information and similar central office services at a cost not to exceed the reasonable direct costs incurred by such Affiliate in providing such services. 

 
 

Section 3    
    
    ALLOCATIONS    
  

        Items of income, gain, loss, deduction and credit of the Joint Venture shall be allocated among the Partners in the manner specified in the Addendum hereto. 

 
 

Section 4    
    
    DISTRIBUTIONS    
  

        4.1    Net Cash From Operations.    The term "Net Cash From Operations" shall mean the gross cash proceeds received by
the Joint Venture (including proceeds from borrowings), less the following amounts: (i) cash operating expenses and payments of other expenses and obligations of the Joint Venture, including interest
and scheduled principal payments on Joint Venture indebtedness, including indebtedness owed to the Partners, if any; (ii) all capital expenditures made by the Joint Venture, and (iii) such reasonable
reserves as the Partners deem necessary in good faith and in the best interests of 

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the Joint Venture to meet anticipated future obligations and liabilities of the Joint Venture (less any release of reserves previously established, as similarly determined). . Subject to any
contractual restrictions to which the Joint Venture is subject, and prior to the occurrence of a Liquidating Event, the Net Cash From Operations shall be distributed as follows: 

        (a)  The
General Manager shall determine the estimated taxable income allocable to each Partner for the periods (each, an "Estimated Tax Period") beginning January 1 and
ending March 31, May 31, August 31 and December 31 of each year, and not later than the fifteenth (15th) day of the following April, June, September and January, respectively, shall
cause the Joint Venture to distribute to each Partner, in accordance with its Percentage Interest, an amount equal to' the corresponding Tax Distribution (as determined pursuant to Section 4.2
hereof). 

        (b)  As
soon as practicable following the completion of each annual financial statement audit of the Joint Venture, any remaining balance of the Net Cash From Operations
shall be distributed to the Partners in proportion to their Percentage Interests. 

        (c)  Nothing
in this Section 4.1 shall be construed to limit the ability of the Joint Venture to distribute Net Cash Flow From Operations in amounts or at times that differ
from those set forth, provided that both Partners agree in writing to such distribution in advance thereof. 

        4.2    Tax Distribution.    The "Tax Distribution" with respect to each Estimated Tax Period shall equal an amount,
when distributed to the Partners in accordance with their Percentage Interests, necessary to cause the cumulative distributions to each Partner with respect to the calendar year including such
Estimated Tax Period to be no less than the sum of (a) the product of (i) the net taxable income of the Joint Venture allocated to that Partner for that Estimated Tax Period (plus any net taxable
income of the Joint Venture allocable to that Partner with respect to any prior year pursuant to an audit adjustment that becomes final during that Estimated Tax Period), multiplied by (ii) the
Applicable Tax Rate for that period, plus (b) any Tax Shortfall from the immediately preceding calendar year (provided that there shall be no Tax Shortfall for any period prior to January 1, 2001).
The "Applicable Tax Rate" for an Estimated Tax Period shall equal the greater of the maximum marginal federal income tax rate applicable to individuals for such period (as of the date hereof, 39.1%)
or the maximum marginal federal income tax rate applicable to corporations for such period (as of the date hereof, 35%); provided, however, that if
either Partner informs the General Manager in writing that such Partner is subject to income tax (including franchise tax based on income) of any state, the Applicable Tax Rate for any Tax
Distributions subsequent to that notice (until such Partner informs that General Manager that it is no longer subject to such state tax) shall be increased by the higher of the maximum marginal
individual tax rate or corporate income tax rate of that state (after reduction for the federal tax benefit for the deduction of state taxes, using the maximum marginal federal individual or corporate
rate, respectively). A "Tax Shortfall" with respect to a calendar year shall equal the excess, if any, of the aggregate of the Tax Distributions with respect to that year over the distributions made
pursuant to Section 4.1 with respect to that year. 

        4.3    Special Cash Distributions.    It is anticipated that the Joint Venture will issue Mortgage Notes on or about
September       , 2001 in the aggregate principal amount of $                  million (the "Mortgage Financing"). The
Partners agree that, notwithstanding anything herein to the contrary, the following distributions shall be made by the Joint Venture as soon as practicable following the Mortgage Financing: 

        (a)  [$22,100,000]
shall be distributed to C; and 

        (b)  $10,000,000
shall be distributed to E. 

As
provided in Section 2.1, immediately following such distributions, the Capital Account of E shall exceed the Capital Account of C by $10,000,000. 

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Section 5    
    
    MANAGEMENT    
  

        5.1    Day-to-Day Management by Managing Partner.    C shall be and hereby is appointed the Managing Partner for the
Joint Venture and is hereby charged with, and C hereby agrees to assume the responsibility and authority for, the prudent day-to-day management of the business affairs of the Joint Venture, except as
otherwise designated to the General Manger in accordance herewith. 

        Subject
to the limitations and restrictions set forth in this Agreement and the Annual Business Plan, the Managing Partner may exercise the following specific rights and powers without
any further consent of the other Partners being required: 

        (a)  Oversee
and manage the day-to-day operations of the Casino and other Joint Venture business; 

        (b)  Direct
and oversee the legal, architectural, engineering, construction and other work necessary for the care and improvement of the Casino and other Joint Venture
business; 

        (c)  Prepare
budgets and appropriate development schedules for the improvement and operation of the Casino; 

        (d)  Implement
decisions made by both Partners; 

        (e)  Utilize
due diligence to operate, on behalf of and for the sole benefit of the Joint Venture, the Casino and such other business and activities which are customary and
usual in connection with such operation; 

        (f)    Care
for and distribute Joint Venture funds in accordance with the provisions of this Agreement; 

        (g)  Contract
on behalf of the Joint Venture for the services of independent contractors such as lawyers and accountants; 

        (h)  Establish,
maintain and supervise the deposit of monies or securities of the Joint Venture with federally insured banking institutions or other banking institutions as
may be selected by the Managing Partner. The Managing Partner is authorized to sign on behalf of the Joint Venture on all accounts with such banking institutions; 

        (i)    After
consultation with the Executive Committee, prepare and submit the Annual Business Plan for review and approval of the Executive Committee as provided herein; 

        (j)    Acquire
by purchase, lease, or otherwise such personal property which may be necessary, convenient, or incidental to the accomplishment of the purposes of the Joint
Venture consistent with the Annual Business Plan; 

        (k)  Execute
any and all agreements, contracts, documents, certifications, and instruments necessary or convenient in connection with the management, maintenance, and
operation of the Casino, or in connection with managing the affairs of the Joint Venture, including, without limitation, adequate insurance as provided in the Annual Business Plan. 

        5.2    Annual Business Plan.    No later than forty-five (45) days prior to the end of the then current fiscal year,
after consultation with the Executive Committee, the Managing Partner and the General Manager shall cause to be prepared a business plan (the "Annual Business Plan") for the next fiscal year. The
Annual Business Plan shall be subject to the review and approval of the Executive Committee. After approval of the Business Plan, there shall be no material changes in the Annual 

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Business Plan without the approval of the Executive Committee. The Annual Business Plan shall include, but not be limited to, the following: 

        (a)  A
narrative description of any activities proposed to be undertaken including the physical development of the Casino; 

        (b)  A
projected annual income statement (accrual basis) on a monthly basis for upcoming fiscal year and subsequent fiscal year; 

        (c)  A
projected balance sheet as of the end of the upcoming fiscal year and subsequent fiscal year; 

        (d)  A
capital budget and an operating budget for the Casino by department, including the establishment and amount of working capital, capital improvement, and contingency
reserves; 

        (e)  A
schedule of projected operating cash flow, including itemized operating revenues, Casino costs, expenses, a schedule of projected operating deficits and capital calls
for Additional Capital Contributions, if any, on a monthly basis; 

        (f)    A
marketing plan indicating the nature, type and timing of advertising, public relations, complimentaries, and promotions (e.g., print, television, food/beverage,
billboard, signage, and other media), contemplated distribution and amounts payable to contractors; 

        (g)  An
operating plan, including executive and other key employee and department staffing needs; 

        (h)  An
entertainment plan and budget; 

        (i)    Proposed
personal property acquisitions; and 

        (j)    Anticipated
insurance needs of the Joint Venture, including comprehensive, general liability, casualty, fire and extended coverage, workers' compensation, fidelity
insurance protecting against employee loss or theft and business interruption insurance in an amount agreed to by all Partners, together with assurance that each Partner is named as an additional
insured on the Joint Venture insurance policies. 

        5.3    Restrictions on the Partners.    The following shall require the unanimous approval of all Partners: 

        (a)  The
admission of an additional Partner; 

        (b)  The
purchase of additional real property; 

        (c)  Any
other transaction which is unrelated to the purposes of the Joint Venture; 

        (d)  Except
as otherwise provided herein, incurring any indebtedness that encumbers the real property of the Casino; 

        (e)  Sales
or other dispositions of all or substantially all of the assets of the Joint Venture; 

        (f)    Capital
improvements in the aggregate in excess of $250,000, not included in the approved Annual Business Plan; 

        (g)  Refinancing
existing funded indebtedness, or the incurrence of any unsecured indebtedness in excess of $250,000 other than in the ordinary course of business of the
Joint Venture; 

        (h)  Any
obligation, contract, agreement, or commitment of any type whatsoever with a Partner or an Affiliate of a Partner, other than those specifically described in this
Agreement; 

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        (i)    Except
as provided in Section 10, the sale, assignment, pledge, mortgage, encumbrance or disposal of all or any portion of such Partner's interest in the Joint Venture.
Except as specifically provided herein, nothing herein shall prohibit or limit a Partner's right to assign or pledge its proceeds from the Joint Venture; 

        (j)    The
assignment, pledge or transfer of any debt in excess of $250,000 due the Joint Venture or the release of any such debt, except on payment in full, other than in the
ordinary course of the business of the Joint Venture; 

        (k)  The
compromise of any claim due to the Joint Venture in excess of $250,000 or submission to arbitration of any dispute or controversy involving the Joint Venture, other
than in the ordinary course of the business of the Joint Venture; 

        (l)    Transfer
or conveyance of the Casino, or the grant of easements or other property rights relating to the Casino; 

        (m)  Cancellation
of any insurance as set forth in the approved Annual Business Plan. 

        5.4    Replacement of Managing Partner.    (a) Except as provided herein, the Managing Partner may only be changed by
the unanimous agreement of all Partners. If the actual net operating income of the business of the Joint Venture for any four (4) consecutive quarters are less than eighty percent (80%) of the
projected amount as set forth in the Annual Business Plan [CONSIDER WHETHER TO MAKE THIS ANNUAL. IF NOT, IS IT 4 QUARTERS COMBINED HAVE TO BE LESS THAN 80% OR EACH
OF 4 CONSECUTIVE QUARTERS HAS TO BE LESS THAN 80%? WE DISCUSSED THIS, BUT IT SEEMS LIKE THE RESULTS CAN BE COMPUTED ON A QUARTERLY BASIS IF THE CHANGE TO SECTION 5.2(e) IS
MADE], after appropriate adjustments for factors affecting similar business in the vicinity of the Casino, then the other Partner may require the Managing Partner
to resign. 

        (b)  In
the event that there is any dispute with respect to whether the Managing Partner has performed in accordance with the standards set forth in this Section 5.4, such
dispute shall be submitted to the CPA firm of Arthur Andersen for resolution. Arthur Andersen shall consider the positions of both Partners and shall render a decision with respect to the performance
of the Managing Partner, which
decision shall be final and binding on the Partners. In the event that Arthur Andersen is unable or unwilling to undertake this dispute resolution, then the dispute will be resolved by another
qualified CPA firm as appointed by Arthur Andersen. 

        (c)  The
Managing Partner reserves the right to resign as the Managing Partner. In the event that the Managing Partner resigns, the other Partner will have the right and
option to become the Managing Partner of the Joint Venture and assume all the obligations of the Managing Partner as required by this Agreement. In the event that the other Partner does not exercise
its option to become the Managing Partner, then the Partners shall attempt to appoint a third party ("Manager") to manage the day-to-day business affairs of the Joint Venture. In the event that the
Partners are unable to agree on the Manager, then the Joint Venture shall be dissolved and liquidated in accordance with the provisions of Section 13, with the last active Managing Partner being
responsible for the dissolution and liquidation as provided in Section 13. 

        5.5    Implementation of Annual Business Plan.    The Managing Partner shall use due diligence to implement the Annual
Business Plan. The Joint Venture will be conducted consistent with prudent business practices, with the objective of maximizing the profits of the Joint Venture, and each Partner will use due
diligence to achieve that objective. The Managing Partner shall promptly notify the other Partner of any transaction, notice, event or proposal relating to the management and operation of the Casino
which could significantly affect, either adversely or favorably, the Casino or the Joint Venture or otherwise cause a significant deviation from the Annual Business Plan. 

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        5.6    Executive Committee.    There shall be established an Executive Committee. The Executive Committee shall
consult with, review, monitor and oversee the performance of the Managing Partner and the General Manager. The Managing Partner and the General Manager shall consult with the Executive Committee on a
periodic basis as provided herein and seek the input and counsel of the Executive Committee prior to the preparation of the Annual Business Plan. 

        5.7    Membership; Voting Executive Committee.    

        (a)    Membership.    The Executive Committee shall consist of five
(5) members, with three (3) members appointed by the Managing Partner and two (2) members appointed by the other Partner. In the event that neither of the Partners is the Managing Partner, then the
Executive Committee shall consist of five (5) members, with two (2) members appointed by each party, and the Manager appointed pursuant to Section 5.4 shall be the fifth member of the Executive
Committee. Each Partner may, at any time, appoint alternate members to the Executive Committee and such alternates will have all the powers of a regular committee member in the absence or inability of
a regular committee member to serve. The current members of the Executive Committee are Stephen J. Greathouse, Thomas D. Robinson, Yvette E. Landau, Robert M. Jones and Gene Carano. Each Partner shall
notify the other Partner in writing of its appointments to the Executive Committee within ten (10) business days of such appointment. 

        (b)    Voting.    Each member of the Executive Committee shall have one vote on any decision
of the Executive Committee. A member of the Executive Committee may give his written proxy to another member of the Executive Committee to vote on his behalf in his absence. All actions of the
Executive Committee must be approved by a majority of all of the members of the Executive Committee, who may be present or voting by proxy. 

        5.8    Meetings of the Executive Committee; Time and Place.    Regular meetings of the Executive Committee shall be
held quarterly at such time and at such place as the Executive Committee shall determine. At such regular meetings, the Managing Partner's representatives and the General Manager shall report on the
financial performance and condition of the Joint Venture on a year-do-date basis (including cash flows, reserves, outstanding loans, and compliance efforts), give progress reports on capital projects,
compliance with the Annual Business Plan, material contracts entered into, material litigation, marketing efforts and such other matters relevant to the operation of the Joint Venture. The Executive
Committee may make use of telephones and other electronic devices to hold meetings, provided that each member of the Executive Committee must simultaneously participate with all of the other members
of the Executive Committee with respect to all discussions and votes of the Executive Committee. The Executive Committee may act without a meeting if the action taken is reduced to writing (either
prior to or thereafter) and approved by members of the Executive Committee in accordance with the voting provisions of this Agreement. Written minutes shall be taken at each meeting of the Executive
Committee. Any Partner may call for a special meeting of the Executive Committee by giving three (3) days prior written notice to all members of the Executive Committee. 

        5.9    Duties of the Executive Committee.    Subject to the unanimous approval requirements of Section 5.3, the duties
of the Executive Committee shall include, but not be limited to, the following: 

        (a)  Reviewing,
adjusting, approving, developing, and supervising the Annual Business Plan; 

        (b)  Reviewing
and approving the terms of any loans made to the Joint Venture; 

        (c)  Determining,
except as otherwise provided in this Agreement, the capital requirements of the Joint Venture; 

        (d)  Appointment
of a firm of independent certified public accountants to perform an annual audit and issue an opinion letter with respect to the financial statements of the
Joint Venture; 

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        (e)  Appointment
of those individuals, other than the Managing Partner and General Manager, who will have the authority to open and draw checks on bank accounts in the name
of the Joint Venture, or endorse checks for deposit to such accounts; 

        (f)    Approving
all material purchases, sales, leases or other dispositions of Joint Venture property, other than in the ordinary course of business; and 

        (g)  Approving
of the appointment of the General Manager, who should be the Chief Executive Officer of the Joint Venture, and the Controller, who shall be the Chief Financial
Officer and Accounting Officer of the Joint Venture, and determine the compensation of the General Manager and the Controller. 

        5.10    General Manager.    

        (a)  The
Partner other than the Managing Partner shall appoint the General Manager and other principal senior management of the Joint Venture and the Casino, who shall serve
at the direction and pleasure of the Managing Partner. The General Manager and other principal senior officers shall perform those functions of the Managing Partner set forth in Sections 5.1(a), (c),
(e), (g), (h), (i), (j), (k), 5.2 and 5.5, and such other duties and responsibilities as the Managing Partner may assign to the General Manager. 

        (b)  The
General Manager shall consult with the Managing Partner on a weekly basis and review results of operations and proposals for future operations. 

        (c)  The
Managing Partner shall have the right, upon thirty (30) days' prior written notice to the General Manager, to terminate his/her employment for cause. For purposes of
this Agreement, cause ("Cause") shall mean (a) committing fraud, misappropriation or embezzlement in the performance of duties as an employee of the Joint Venture, (b) conviction of a felony involving
a crime of moral turpitude, (c) willful disregard of any written directive of the Executive Committee that is not inconsistent with this Agreement or applicable law, (d) an act of the General Manager
constituting willful material breach by the General Manager of any material provision of this Agreement or (e) the General Manager willfully engaging in any business activity that materially conflicts
with General Manager's duties owed to the Joint Venture. In the event that the General Partner is terminated for Cause, the Partner other than the Managing Partner shall appoint the new General
Manager. 

        (e)  In
the event that the Managing Partner and the Executive Committee do not approve the Annual Business Plan as proposed by the General Manager, then the General Manger
may resign. In the event that the General Manger resigns, the Partner other than the Managing Partner shall appoint the new General Manager. In the event that the General Manager does not resign, the
General Manager shall
implement the Annual Business Plan as revised and approved by the Managing Partner and the Executive Committee. 

 
 

Section 6    
    
    INDEMNIFICATION OF PARTNERS    
  

        6.1    General.    The Joint Venture shall indemnify, save harmless, and pay all judgments and claims of third parties
against each Partner or any officer, shareholder, member, partner, or director of such Partner and members of the Executive Committee relating to any liability or damage, including attorneys' fees to
be paid as incurred, arising by reason of any act performed or omitted to be performed by such Partner, officer, shareholder, member, partner, director or member of the Executive Committee in
connection with the business of the Joint Venture, except for any conduct of a Partner that constitutes fraud, bad faith or breach of fiduciary duty. 

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        6.2    Joint Venture Expenses.    

        (a)  The
Joint Venture shall indemnify, hold harmless, and pay all expenses, costs, or liabilities of any Partner who for the benefit of the Joint Venture makes any deposit,
acquires any option, or makes any other similar payment or assumes any obligation in connection with any property proposed to be acquired by the Joint Venture in accordance with this Agreement and who
suffers any financial loss as the result of such action. 

        (b)  Notwithstanding
anything to the contrary in any of Sections 6.1 and 6.2, in the event that any provision in any of such Sections is determined to be invalid in whole or
in part, such Section shall be enforced to the maximum extent permitted by law. 

 
 

Section 7    
    
    REPRESENTATIONS AND WARRANTIES    
  

        7.1    Representations and Warranties.    Each Partner hereby represents and warrants that: 

        (a)  If
such Partner is a corporation, limited liability company, or a partnership, it is duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation or formation and has the corporate, company, statutory, or partnership power and authority to own its property and carry own its business as owned and carried on at
the date hereof and as contemplated hereby. 

        (b)  Such
Partner has the individual, corporate, company, statutory, or partnership power and authority to execute and deliver this Agreement and to perform its obligations
hereunder and, if such partner is a corporation, limited liability company, or partnership, the execution, delivery, and performance of this Agreement has been duly authorized by all necessary
corporate, company, statutory, or partnership action. 

        (c)  This
Agreement constitutes the legal, valid, and binding obligation of such Partner, and is enforceable in accordance with its terms and does not violate the terms and
conditions of any law, regulation, order or award of any court of governmental agency or otherwise violate or result in a breach or default of the terms and conditions of any mortgage, agreement or
other written document by which a Partner may be bound. 

 
 

Section 8    
    
    ACCOUNTING, BOOKS AND RECORDS    
  

        8.1    Accounting, Books and Records.    The Joint Venture shall maintain at its principal place of business separate
books of account for the Joint Venture which shall show a true and accurate record of all costs and expenses incurred, all charges made, all credits made and received, and all income derived in
connection with the operation of the Joint Venture business in accordance with generally accepted accounting principles and casino industry guidelines consistently applied and, to the extent
inconsistent therewith, in accordance with this Agreement. The Joint Venture shall use the accrual method of accounting in preparation of its annual reports and for tax purposes and shall keep its
books accordingly. The Joint Venture's books and records shall be independently audited annually at the Joint Venture's expense. Each Partner shall, at its sole expense, have the right, without notice
to any other Partner, to examine, copy, and audit the Joint Venture's books and records during normal business hours. 

        8.2    Reports.    

        (a)    In General.    The Managing Partner shall cause the General
Manager and the Controller to be responsible for the preparation of financial reports of the Joint Venture and 

10

 

the coordination of financial matters of the Joint Venture with the Joint Venture's accountants. 

        (b)    Reports.    Within ninety (90) days after the end of each fiscal year and within
forty-five (45) days after the end of any fiscal quarter, and within twenty (20) days after the end of any calendar month, the Managing Partner shall cause each Partner to be furnished with a copy of
the balance sheet of the Joint Venture as of the last day of the applicable period, a statement of income or loss for the Joint Venture for such period, and a statement of the Joint Venture's cash
flow for such period. The Managing Partner shall determine the fiscal year of the Joint Venture for financial reporting requirements and for Federal Income Tax purposes. Annual statements shall also
include a statement of the Partners' Capital Accounts and changes therein for such fiscal year. Annual statements shall be examined by the Joint Venture's independent accountants. 

        8.3    Tax Returns; Information.    The Managing Partner shall cause the Joint Venture's accountants to prepare all
income and other tax returns of the Joint Venture and shall cause the same to be filed in a timely manner. The Managing Partner shall furnish to each Partner a copy of each such return, together with
any schedules or other information which each Partner may require in connection with such Partner's own tax affairs. 

        8.4    Tax Matters Partner.    The Managing Partner is specially authorized to act as the "Tax Matters Partner" under
the Code and any state or local law. If an agreement, settlement or compromise regarding any tax matter could materially and adversely affect a Partner, the Tax Matters Partner shall not enter into
such agreement or settle or compromise such tax matter without the prior written consent of the affected Partner, which consent shall not be unreasonably withheld. 

 
 

Section 9    
    
    AMENDMENTS    
  

        9.1    Amendments.    This Agreement may only be amended by the consent and approval of both Partners. Any such
amendment shall be in writing and executed by both Partners. 

 
 

Section 10    
    
    TRANSFERS OF INTERESTS    
  

        10.1    Restrictions on Transfers.    Except as expressly permitted by this Agreement, no Partner shall transfer all
or any portion of its interest in the Joint Venture or any rights therein without the unanimous consent of the Partners. Any transfer or attempted transfer by any Partner in violation of the preceding
sentence shall be null and void and of no force or effect whatever. The Partners acknowledge and agree that they are relying on the experience, expertise, reputation and financial condition of the
other Partner in entering into this Agreement and that the nature of the relationship between the parties is personal. Each Partner hereby acknowledges the reasonableness of the restrictions on
Transfers imposed by this Agreement in view of the Joint Venture purposes and the relationship of the Partners. Accordingly, the restrictions on Transfers contained herein shall be specifically
enforceable. Each Partner hereby further agrees to hold the Joint Venture and each Partner (and each Partner's successors and assigns) wholly and completely harmless from any cost, liability, or
damage (including, without limitation, liabilities for income taxes and costs of enforcing this indemnity) incurred by any of such indemnified Partners as a result of a transfer or an attempted
transfer in violation of this Agreement. 

11

 

        10.2    Permitted Transfers.    

        (a)    General.    A Partner shall be entitled to transfer or convey
all or any portion of its interest in this Joint Venture to any of the following persons or entities ("Permitted Transferee"): 

          (i)  An
Affiliate of such Partner, subject to the provisions of Paragraph 10.3; 

        (ii)  Members
of the Partner's family, which includes the Partner's spouse, natural or adoptive lineal descendants, and trusts for their benefit; 

        (iii)  Any
other Partner; 

        (iv)  A
personal representative of such Partner, which includes any person or entity who succeeds to the Partner's estate as a result of the Partner's death, legal
incompetence or bankruptcy; and 

        (v)  Any
person or entity approved by the unanimous consent of the Partners. 

        (b)    Admission of Permitted Transferee as a Partner.    A Permitted
Transferee of an interest in the Joint Venture shall be admitted as a Partner in the Joint Venture only upon the unanimous consent of the Partners. The rights of a Permitted Transferee who is not
admitted as a Partner shall be limited to the right to receive allocations and distributions from the Joint Venture with respect to the interest transferred, as provided by this Agreement. A Permitted
Transferee that is not admitted as a Partner shall not be a partner with respect to such interest and, without limiting the foregoing, shall not have the right to inspect the Joint Venture's books,
act for or bind the Joint Venture, or otherwise interfere in its operations. 

        (c)    Effect of Permitted Transfer on Joint Venture.    The Partners
intend that the Permitted Transfer of an interest in the Joint Venture shall not cause the dissolution of the Joint Venture under the Act; however, if determined by a court of competent jurisdiction
that a dissolution has occurred, the Partners shall continue to hold the Joint Venture's assets and operate its business in Joint Venture form under this Agreement as if no such dissolution has
occurred. 

        (d)    Notice and Costs of Transfer.    In the event of any Permitted
Transfer, the Partner making the transfer shall notify the other Partner of the transfer and shall furnish the Joint Venture with the Transferee's tax identification number and sufficient information
to determine the Transferee's interest and tax basis in the Joint Venture and any other information reasonably necessary to permit the Joint Venture to file all required federal and state tax returns.
The Partner making a transfer permitted hereunder of all or a portion of his Joint Venture interest shall pay all costs and expenses incurred by the Joint Venture in connection with such transfer. 

        10.3    Limitation on Ownership of Partners.    

        (a)  Unless
otherwise agreed by C, Donald L. Carano or a member of his immediate family acceptable to C, which acceptance will not be unreasonably withheld, or an Affiliate
controlled by Donald L. Carano or a member of his immediate family acceptable to C, which acceptance will not be unreasonably withheld, shall be the manager of and shall control E. Nothing herein
shall prohibit, restrict or otherwise limit an Affiliate's right and ability to become a publicly traded entity so long as the above restriction on control of E is met. The foregoing provisions of
this Section 10.3(a) shall not apply following a sale or other disposition of all or substantially all the assets of ERLLC, or all or substantially all interest in ERLLC constituting control of ERLLC,
to persons other than Donald L. Carano, member's of his immediate family or an Affiliate controlled by Donald L. Carano or a member of his immediate family. 

12

 

        (b)  Unless
otherwise agreed by E, which shall not be unreasonably withheld, C shall be controlled by MRG. 

        (c)  In
the event that the provisions of this Section 10.3 are breached, the Non-Defaulting Partner shall have the right (but shall not be required) to exercise the Buy-Sell
provisions of Sections 12.2 and 12.3. [DO YOU WANT TO TRIGGER THE BUY-SELL OR DO YOU WANT THIS TO BE A SITUATION WHERE THE NON-DEFAULTING PARTY CAN BECOME BOTH
GENERAL PARTNER AND APPOINT THE GENERAL MANAGER. PERHAPS BOTH? ALSO, IF THEY SELL THE SPECIAL PURPOSE PARTNER, SHOULD THERE BE A RIGHT OF FIRST REFUSAL?] 

 
 

Section 11    
    
    WITHDRAWALS; ACTION FOR PARTITION; BREACHES    
  

        11.1    Waiver of Partition and Covenant Not to Withdraw.    Each Partner hereby covenants and agrees that the
Partners have entered into this Agreement based on their mutual expectation that both Partners will continue as Partners and carry out the duties and obligations undertaken by them hereunder and that,
except as otherwise expressly required or permitted hereby, each Partner hereby covenants and agrees not to (a) take any action to require partition or to compel any sale with respect to its Joint
Venture interest, (b) take any action to file a certificate of dissolution or its equivalent with respect to
itself, (c) take any action that would cause a Bankruptcy of such Partner, (d) withdraw or attempt to withdraw from the Joint Venture, (e) exercise any power under the Act to dissolve the Joint
Venture, (f) transfer all or any portion of its interest in the Joint Venture (other than as permitted hereunder), (g) petition for judicial dissolution of the Joint Venture, or (h) demand a return of
such Partner's contributions or profits (or a bond or other security for the return of such contributions or profits) without the unanimous consent of the Partners. 

        11.2    Consequences of Violation of Covenants.    If a Partner (a "Breaching Partner") attempts to (i) cause a
partition or (ii) withdraw from the Joint Venture or dissolve the Joint Venture or otherwise take any action in breach of Section 11.1 hereof [SHOULD WE ADD HERE AN
ATTEMPTED TRANSFER OF THE INTEREST IN VIOLATION OF SECTION 10.1 OR A TRANSFER THAT VIOLATES SECTION 10.3?], the Joint Venture shall continue and such Breaching
Partner shall be subject to this Section 11.2 [SHOULD THIS ALSO TRIGGER THE BUY-SELL?]. In such event, the following shall
occur: 

        (a)  The
Breaching Partner shall immediately cease to have the authority to act as a Partner and shall have no further power to act for or bind the Joint Venture (including
as Managing Partner); 

        (b)  The
other Partner shall have the right (but shall not be obligated unless it was so obligated prior to such breach) to manage all of the affairs of the Joint Venture'; 

        (c)  The
Breaching Partner shall be liable in damages, without requirement of a prior accounting, to the Joint Venture for all costs and liabilities that the Joint Venture or
any Partner may incur as a result of such breach; 

        (d)  Distributions
to the Breaching Partner shall be reduced to seventy-five percent (75%) of the Distributions otherwise payable to the Breaching Partner. The Joint Venture
may apply any distributions otherwise payable to the Breaching Partner to satisfy any claims it may have against the Breaching Partner and the balance shall be distributed to the other Partners. 

        (e)  The
Breaching Partner shall continue to be liable to the Joint Venture for any obligations of the Joint Venture pursuant to this Agreement, and to be jointly and
severally liable with the 

13

 

other Partners for any debts and liabilities (whether actual or contingent, known or unknown) of the Joint Venture existing at the time the Breaching Partner withdraws or dissolves. 

 
 

Section 12    
    
    BUY-SELL    
  

        12.1    Conditions Precedent to Buy-Sell.    The Buy-Sell provisions of this Agreement may not be instituted by any
Partner until each of the following events or conditions have taken place: 

        (a)  Except
as otherwise provided in this Agreement, ten (10) years from the date of commencement of operation of the Casino; and 

        (b)  Such
Partner is not in default of any of the provisions of this Agreement. 

        12.2    Exercise of Right to Buy or Sell.    At any time after the occurrence of the conditions precedent set forth in
Paragraph 12.1, either Partner may make an offer to purchase ("Offer") the interest of the other Partner. The Offer shall be in writing and shall set forth a statement of the aggregate dollar amount
(the "Specified Valuation Amount") which the offering Partner is willing to pay for all of the assets of the Joint Venture, free and clear of all monetary liabilities and obligations (other than non-
delinquent property taxes and assessments secured by liens on the Property) relating thereto. The Offer shall constitute an irrevocable offer by the Partner giving the Offer either to (i) purchase
all, but not less than all, of the interest of the Joint Venture of the other Partner free of liens and encumbrances for an amount equal to the amount the other Partner would be entitled to receive if
the Joint Venture sold all of its assets and business for the Specified Valuation Amount on the date of such notice and immediately thereafter the Joint Venture paid all monetary liabilities and
monetary obligations of the Joint Venture, and deducted customary closing costs that would be associated with a third-party sale, and distributed the net proceeds to each Partner in liquidation of the
Joint Venture pursuant to Section 13.2(c) hereof (the "Sales Price"), or (ii) sell all, but not less than all, of its interest in the Joint Venture free of liens and encumbrances to the other Partner
for an amount equal to the amount the offering Partner would be entitled to receive if the Joint Venture sold all of its assets and business for the Specified Valuation Amount on the date of such
notice and immediately thereafter the Joint Venture paid all monetary liabilities and monetary obligations of the Joint Venture, and deducted customary closing costs that would be associated with a
third party sale, and distributed the net proceeds to each Partner in liquidation of the Joint Venture pursuant to Section 13.2(c) hereof (the "Purchase Price"). The Partner receiving the Offer shall
have a period of two (2) months to accept the Offer to sell at the Sales Price or, in the alternative, to require that the Offering Partner sell its interest to the other Partner at the Purchase
Price. The Partner receiving the Offer shall give written notice (Notice of Election) of its acceptance of the Offer to sell or purchase to the Offering Partner within two (2) months of the receipt of
the Offer. Failure to give the Notice of Election shall constitute an acceptance of the Offer to sell to the Offering Partner on the terms set forth in the Offer. The closing of the transaction for
the sale or purchase of the Joint Venture interest shall occur not later than six (6) months after the Notice of Election or at such other time as may be required by the Nevada
Gaming Authorities. Subject to any agreements to which the Joint Venture is a party, the Partner purchasing the Joint Venture interest pursuant to this Section 12.2 (the "Purchasing Partner") shall be
entitled to encumber the Joint Venture Property in order to finance the purchase, provided that the other Partner (the "Selling Partner") shall have no liability, contingent or otherwise, under such
financing. The Purchasing Partner may elect to pay the purchase price in cash or on terms which require at least a twenty-five percent (25%) down payment with the balance to be paid quarterly on a
five (5) year amortization, plus interest at the prime rate of Bank of America from time to time. In the event that the Purchasing Partner elects to finance the purchase with installment payments to
the Selling Partner, the obligation to the Selling Partner may [WHY "MAY"? WHO DECIDES THIS?] be secured by a Deed of Trust on
the Joint Venture property, which Deed of Trust will only be 

14

 

subordinate to the Joint Venture debt in the amount encumbering the Joint Venture Property that existed on the date of the Offer to Purchase. If such Deed of Trust is not allowed by the First Deed of
Trust holder, then the Selling Partner may require a pledge of the Joint Venture interest of the Purchasing Partner as security for the financing of the purchase or such other security of the
Purchasing Partner as may be reasonably required by the Selling Partner; provided, however, that such pledge shall not be required if it is prohibited
by the terms of material financing agreements to which the Purchasing Partner is a party. The Purchasing Partner may assign all or part of its right to purchase the Joint Venture interest of the
Selling Partner to an Affiliate of the Purchasing Partner, provided that no such assignment shall relieve the Purchasing Partner of its obligations under this Section 12 in the event of a default by
such Affiliate. In the event of such an assignment, references in this Section 12 to the Purchasing Partner shall include, where the context permits, such Affiliate. 

        12.3    Closing.    

        (a)  At
the closing of a transaction pursuant to this Section 12, the Partners shall execute such documents and instruments of conveyance as may be necessary or appropriate
to confirm the transaction contemplated hereby, including, without limitation, the transfer of the Joint Venture interest of the Selling Partner and the assumption by the Purchasing Partner of the
Selling Partner's obligations with respect to the Joint Venture interest transferred [IS THIS THE INTENT? DOES THE BUYER ASSUME ALL OF THE SELLER'S OBLIGATIONS?
WHAT ABOUT OBLIGATIONS RESULTING FROM A BREACH OF THIS AGREEMENT?]. The reasonable costs of such transfer and closing, including, without limitation, attorneys'
fees and filing fees, shall be divided equally between the Purchasing and Selling Partners. 

        (b)  The
closing of the purchase and sale of the Partner's interest shall be subject to the approval of the Nevada Gaming Board and Commission. The Purchasing Partner shall
file all necessary applications for approval of the transaction with the Nevada Gaming Board and Commission within sixty (60) days after the Notice of Election. The Purchasing Partner shall pay all
costs and fees in connection with the approval of the Nevada Gaming Board and Commission. 

        (c)  At
the close of the transaction contemplated under the provisions of Section 12.2, the Selling Partner shall assign to the Purchasing Partner all of the interest of the
Selling Partner in the Joint Venture, free and clear of all liens, claims, encumbrances, and, at the request of the Purchasing
Partner, shall convey and transfer to the Purchasing Partner, subject only to all matters of record at the time of the conveyance which have been approved by the Purchasing Partner, an undivided
percentage interest in the assets of the Joint Venture equal to the Selling Partner's interest therein, and shall execute and deliver to the Purchasing Partner an amended Certificate of Fictitious
Name (or cancellation thereof), together with all other documents as may be reasonably be required to give effect to the transfer of the Selling Partner's interest in the Joint Venture.  [In connection
with such transfer, the Partners shall take all necessary action to discharge or release any Affiliate from any guarantee or
any debt of the Joint Venture—TBD]. 

        (d)  The
Purchasing Partner shall use the assets of the Joint Venture to discharge to the extent possible all loans and other indebtedness, liabilities or other obligations
of the Joint Venture (but shall not be required to prepay any obligations under any permanent loans secured by the Property) for which the Selling Partner has any personal or corporate liability or
otherwise obtain the release of the Selling Partner from any such liability [THERE IS NOT EVEN A "REASONABLE EFFORTS" OR SIMILAR STANDARD HERE. SHOULD THERE
BE?]. To the extent allowed under agreements by which the Joint Venture is bound, the Purchasing Partner shall also cause the Joint Venture to repay to the Selling
Partner any loans that were made by the Selling Partner to the Joint Venture or to the Purchasing Partner, together with unpaid accrued interest thereon. 

15

 

        (e)  The
Purchasing Partner shall indemnify and hold harmless the Selling Partner from all indebtedness, liabilities and other obligations of the Joint Venture, whether the
same arose prior to or after the purchase, except that such indemnification shall not apply to liabilities, if any, of the Joint Venture which were created by the Selling Partner while acting in fraud
of either the Joint Venture or the rights of the Purchasing Partner or in violation of the terms of this Agreement [NEED TO RESOLVE CONFLICT WITH
(a)]. 

 
 

Section 13    
    
    DISSOLUTION AND WINDING UP    
  

        13.1    Liquidating Events.    The Joint Venture shall dissolve and commence winding up and liquidating upon the first
to occur of any of the following ("Liquidating Events"): 

        (a)  January
1, 2053; 

        (b)  The
sale of all or substantially all of the property of the Joint Venture; 

        (c)  The
unanimous vote of the Partners to dissolve, wind up, and liquidate the Joint Venture; 

        (d)  The
happening of any other event that makes it unlawful or impossible to carry on the business of the Joint Venture; 

        (e)  The
occurrence of an Event of Bankruptcy (as defined in Section 14.1) of a Partner; or 

        (f)    The
Partners are unable to agree upon a replacement Managing Partner as provided in Section 5.4. 

        The
Partners hereby agree that, notwithstanding any provision of the Act, the Joint Venture shall not dissolve prior to the occurrence of a Liquidating Event. If it is determined by a
court of competent jurisdiction that the Joint Venture has dissolved prior to the occurrence of a Liquidating Event, the Partners hereby agree to continue the business of the Joint Venture without a
winding up or liquidation. 

        13.2    Winding Up.    Upon the occurrence of a Liquidating Event, the Joint Venture shall continue solely for the
purpose of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Partners and no Partner shall take any action that is inconsistent with,
or not necessary to or appropriate for, winding up the Joint Venture's business and affairs. To the extent not inconsistent with the foregoing, all covenants and obligations in this Agreement shall
continue in full force and effect until such time as the Property has been distributed pursuant to this Section and the Joint Venture has terminated. The Managing Partner shall be responsible for
overseeing the winding up and liquidation of the Joint Venture, shall take full account of the Joint Venture's liabilities and assets, shall cause the assets to be liquidated as promptly as is
consistent with obtaining the fair market value thereof, and shall cause the proceeds therefrom, to the extent sufficient therefor, to be applied and distributed in the following order: 

        (a)  First,
to the payment and discharge of all of the Joint Venture's debts and liabilities to creditors other than Partners; 

        (b)  Second,
to the payment and discharge of all of the Joint Venture's debts and liabilities to Partners; and 

        (c)  The
balance, if any, to the Partners in the amount of their respective Capital Accounts, after giving effect to all contributions, distributions, and allocations for all
periods or portions thereof. 

        The
Managing Partner shall not receive any additional compensation for any services performed pursuant to this Section, but shall be entitled to reimbursement for all reasonable
out-of-pocket costs 

16

 

and expenses incurred in connection therewith. Each Partner understands and agrees that by accepting the provisions of this Section setting forth the priority of the distribution of the assets of the
Joint Venture to be made upon its liquidation, such Partner expressly waives any right which it, as a creditor of the Joint Venture, might otherwise have to receive distributions of assets  pari passu
with the other creditors of the Joint Venture in connection with a distribution of assets of the Joint Venture, and hereby subordinates to
said creditors any such right. 

        Any
gains or losses on the disposition of properties of the Joint Venture in the process of liquidation shall be credited or charged to the Partners in accordance with the Addendum
hereto. Any property distributed in kind in the liquidation shall be valued by agreement of the Partners and treated as though the property were sold and the cash proceeds distributed. The difference
between the agreed value of the property distributed in kind and its book value shall be treated as a gain or loss on sale of the property and shall be credited or charged to the Partners in
accordance with the Addendum hereto. 

        The
Partners agree that in the event of a sale of all or substantially all of the Joint Venture interests by the Partners in a single transaction or series of related transactions, the
consideration to be received or retained by the Partners shall be allocated between the Partners in the same manner as if the proceeds of such sale were being distributed to the Partners as provided
in Section 14.2(c) above, with no premium to either Partner for control, majority ownership or otherwise. 

        13.3    Compliance with Certain Requirements of Regulations.    In the event the Joint Venture is "liquidated" within
the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to this Section to the Partners who have positive Capital Accounts in compliance with Regulations Section
1.704-1(b)(2)(ii)(b)(2). 

        13.4    Reserve for Contingent and Unforeseen Liabilities.    In the discretion of the Managing Partner, a pro rata
portion of the distributions that would otherwise be made to the Partners pursuant to this Section 13 may be: 

        (a)  distributed
to a trust that qualifies as a "liquidating trust" for federal income tax purposes established for the benefit of the Partners for the purposes of
liquidating Joint Venture assets, collecting amounts owed to the Joint Venture, and paying any contingent or unforeseen liabilities or obligations of the Joint Venture or of the Partners arising out
of or in connection with the Joint
Venture. The assets of any such trust shall be distributed to the Partners from time to time, in the reasonable discretion of the Managing Partner, in the same proportions as the amount distributed to
such trust by the Joint Venture would otherwise have been distributed to the Partners pursuant to this Section; or 

        (b)  withheld
to provide a reasonable reserve for Joint Venture liabilities (contingent or otherwise) and to reflect the unrealized portion of any installment obligations
owed to the Joint Venture, provided that such withheld amounts shall be distributed to the Partners as soon as practicable. 

        13.5    Rights of Partners.    Except as otherwise provided in this Agreement, (a) each partner shall look solely to
the assets of the Joint Venture for the return of its Capital Contributions and shall have no right or power to demand or receive property other than cash from the Joint Venture and (b) no Partner
shall have priority over any other Partner as to the return of its Capital Contributions, distributions, or allocations. If for any reason the assets of the Joint Venture are not sufficient to satisfy
the positive Capital Accounts of the Partners, then distributions shall be made to the Partners pro rata based on their positive Capital Account
balances. 

17

  

        13.6    Notice of Dissolution.    In the event a Liquidating Event occurs, the Managing Partner shall, within
thirty
(30) days thereafter, (s) provide written notice thereof to each of the Partners and to all other parties with whom the Joint Venture regularly conducts business (as determined in the discretion of
the Managing Partner), and (b) publish notice of such dissolution in a newspaper of general circulation in each place in which the Joint Venture regularly conducts business. 

 
 

Section 14    
    
    BANKRUPTCY OR DISSOLUTION OF A PARTNER    
  

        14.1    Event of Bankruptcy.    Considering the personal nature of the relationship between the Partners of this Joint
Venture, upon occurrence of an Event of Bankruptcy with respect to a Partner, the remaining Partner shall have the right and option to dissolve and liquidate the Joint Venture in accordance with
Section 13 of this Agreement. 

        For
the purposes of this Agreement, any of the following shall constitute an "Event of Bankruptcy" with respect to the Partner involved: 

          (i)  the
filing of an involuntary petition under the United States Bankruptcy Act or any other United States or state bankruptcy statute, as now in effect or as hereafter
amended, against a Partner, which involuntary petition is not dismissed within 120 days after the filing thereof; 

        (ii)  the
commencement by a Partner of any proceeding of any type under the United States Bankruptcy Act or any other United States or state bankruptcy statute; or 

        (iii)  if
a Partner makes an assignment for the benefit of creditors, or allows the appointment of a receiver, trustee, conservator or liquidator of all or any portion of the
Partner or its assets. 

        14.2    Status of Bankruptcy Assignee.    After the date of an Event of Bankruptcy, the successor to the bankrupt
Partner shall be considered an assignee of the bankrupt Partner's interest in the Joint Venture but shall not be entitled to interfere or participate in management or administration of the Joint
Venture business or affairs, to receive or require information or an accounting with respect to the Joint Venture transactions or to inspect the books of the Joint Venture;  provided, however, that the
successor to the bankrupt Partner's interest in the Joint Venture may inspect the books of the Joint Venture at reasonable
times with reasonable notice for the sole purpose of assuring that the successor receives the appropriate distribution of profits and losses. 

 
 

Section 15    
    
    MISCELLANEOUS    
  

        15.1    Notices.    Unless otherwise provided, all notices, demands or other communications hereunder shall be in
writing and shall be deemed to have been given or submitted upon personal 

18

 

delivery or upon deposit in the United States mail by certified or registered mail, postage prepaid, with return receipt requested and addressed as follows [ADD
NOTICE BY FAX?]: 

	(a)	 	If to C, at	 	Galleon, Inc.

3950 Las Vegas Blvd. South

Las Vegas, Nevada 89119

Attention: General Counsel
	

(b)	
 	

If to E, at	
 	

Eldorado Limited Liability Company

c/o Eldorado Hotel Casino

345 N. Virginia Street

P.O. Box 3399

Reno, Nevada 89505
	

 	
 	

 	
 	

with a copy to:
	

 	
 	

 	
 	

McDonald, Carano, Wilson, McCune, Bergin,

                Frankovich & Hicks

P.O. Box 2670

Reno, Nevada 89505

Notices
shall be deemed received upon personal delivery or three (3) days following deposit in the mail, if sent through the mail. Each Partner may designate, from time to time, another address in
place of the address hereinabove set forth by notifying the other Partners of the new address in writing. 

        15.2    Binding Effect.    Except as otherwise provided in this Agreement, every covenant, term, and provision of this
Agreement shall be binding upon and inure to the benefit of the Partners and their respective heirs, legatees, legal representatives, successors, transferees, and assigns. 

        15.3    Time.    Time is of the essence with respect to this Agreement. 

        15.4    Headings.    Section and other headings contained in this Agreement are for reference purposes only and are
not intended to describe, interpret, define, or limit the scope, extent, or intent of this Agreement or any provision hereof. 

        15.5    Severability.    Every provision of this Agreement is intended to be severable. If any term or provision
hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement. 

        15.6    Further Action.    Each Partner agrees to perform all further acts and execute, acknowledge, and deliver any
documents which may be reasonably necessary, appropriate, or desirable to carry out the provisions of this Agreement. 

        15.7    Attorneys' Fees.    In case of any action or proceeding to compel compliance with, or for a breach of, the
provisions of this Agreement, the prevailing party shall be entitled to recover all costs of such action or proceeding, including, but not limited to, reasonable attorneys' fees and court costs as
determined by the court. 

        15.8    Governing Law.    The laws of the State of Nevada shall govern the validity of this Agreement, the
construction of its terms, and the interpretation of the rights and duties of the Partners. 

        15.9    Loans.    Any Partner may, only with the approval of the Partners or as provided by this Agreement, lend or
advance money to the Joint Venture. If any Partner shall make any loan or loans to the Joint Venture or advance money on its behalf, the amount of any such loan or advance shall not be treated as a
contribution to the capital of the Joint Venture, but shall be a debt due from the Joint Venture. The amount of any such loan or advance by a lending Partner shall be repaid in accordance 

19

 

with its terms or, after a Liquidating Event, as provided in Section 13.2. Except as otherwise provided herein, none of the Partners shall be obligated to make any loan or advance to the Joint
Venture. 

        15.10    Use of Walkways to Adjacent Property.    Part of the Casino includes the utilization of space within walkways
over Fourth and Fifth Streets to the adjacent respective properties of MRG and ERLLC. Portions of the areas within the walkway structure are for the exclusive use of the adjacent properties of ERLLC
and MRG, and other portions are for the exclusive use of the Casino. The air space and the structural facility connecting the Casino to the adjacent property of MRG shall belong to MRG. The air space
and the structural facility connecting the Casino to the adjacent property of ERLLC shall belong to ERLLC. MRG and ERLLC agree that the portion of the walkway structure connecting to their respective
adjacent facilities intended to be utilized by the Casino as shown on the approved plans shall be leased to the Joint Venture on commercially reasonable terms. The Joint Venture shall be responsible
for all improvements, equipment, furniture and fixtures placed in such walkways which are utilized as part of the operation of the Casino as shown on the approved plans. All improvements, equipment,
furniture and fixtures placed on the walkway structures in areas which are for the exclusive use of ERLLC or MRG shall be paid by the respective entity utilizing such space. 

        15.11    Access to Adjacent Properties.    Each of the Partners recognizes and acknowledges that the Casino has
reasonably equivalent entrances and access to each Partner's Affiliate's properties located generally north and south of the Casino and under no circumstances, including, without limitation, a buy-out
or dissolution, shall the Joint Venture or any successor in interest in any way hinder reasonable access to such entrances between the Casino and such Affiliate's property or otherwise interfere with
or claim control or ownership of the equipment or facilities servicing such Affiliate's adjacent property. 

20

 

        IN WITNESS WHEREOF, the parties have entered into this Agreement on the      of September, 2001, effective as of January 1,
2001. 

	ELDORADO LIMITED LIABILITY COMPANY

a Nevada limited liability company	 	GALLEON, INC.

a Nevada corporation
	

By:	
 	

ELDORADO RESORTS LLC	
 	

By:	
 	

/s/ Glenn Schaeffer
	 	 	Its:	 	President	 	 	 	

	

 	
 	

Its Managing Member	
 	

 	
 	

 
	

 	
 	

[By:	
 	

RECREATIONAL ENTERPRISES,

                INC., General Partner]	
 	

 	
 	

 
	

 	
 	

By:	
 	

/s/ Donald Carano	
 	

 	
 	

 
	 	 	 	 	
	 	 	 	 
	 	 	Its	 	President	 	 	 	 
	

 	
 	

and	
 	

 	
 	

 	
 	

 
	

 	
 	

[By:	
 	

HOTEL CASINO MANAGEMENT, INC.

    General Partner]	
 	

 	
 	

 
	

 	
 	

By:	
 	

/s/ Raymond J. Poncia	
 	

 	
 	

 
	 	 	 	 	
	 	 	 	 
	 	 	Its	 	President	 	 	 	 

21

 
 
 

Addendum    
    
    ALLOCATIONS    
  

        Terms not otherwise defined herein or in the Amended and Restated Agreement have the meanings set forth in Section A1.2(i). 

        A1.1    Allocations of Net Profits and Net Losses.    For each taxable year or portion thereof, Net Profits and Net
Losses shall be allocated among the Partners in accordance with their Percentage Interests. 

        A1.2    Special Allocations.    The following special allocations shall be made in the following order: 

        (a)    Minimum Gain Chargeback.    Except as otherwise provided in
Section 1.704-2(f) of the Income Tax Regulations promulgated under the Code, as amended from time to time ("Regulations"), notwithstanding any other provision of this Agreement, if there is a net
decrease in Minimum Gain during any fiscal year, each Partner shall be specially allocated items of Joint Venture income and gain for such fiscal year (and, if necessary, subsequent fiscal years) in
an amount equal to such Partner's share of the net decrease in Minimum Gain, determined in accordance with Regulations Section 1.704-2(f) and (g). Allocations pursuant to the previous sentence shall
be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto. The items to be so allocated shall be determined in accordance with Sections 1.704-2(f)(6)
and 1.704-2(j)(2) of the Regulations. This Section A1.2(a) is intended to comply with the minimum gain chargeback requirement in Section 1.704-1(f) of the Regulations and shall be interpreted
consistently therewith. 

        (b)    Partner Nonrecourse Debt.    Any item of Joint Venture loss,
deduction or Section 705(a)(2)(B) expenditure that is attributable to Partner Nonrecourse Debt shall be allocated to the Partner or Partners that bear the economic risk of loss with respect to such
Partner Nonrecourse Debt in accordance with Regulations Section 1.704-2(i). Notwithstanding any other provisions of this Agreement
except Section A1.2(a) hereof, if there is a net decrease during any fiscal year in the minimum gain attributable to a Partner Nonrecourse Debt (within the meaning of Regulations Section
1.704-2(i)(3)), then any Partner with a share of the minimum gain attributable to such Partner Nonrecourse Debt at the beginning of such fiscal year shall be allocated items of Joint Venture income
and gain for such fiscal year (and, if necessary, for subsequent fiscal years) equal to such Partner's share of the net decrease in Partner Nonrecourse Debt Minimum Gain as provided in Regulations
Section 1.704-2(i)(4). 

        (c)    [Intentionally left blank]    

        (d)    Allocations Relating to Taxable Issuance of Joint Venture
Interests.    Any income, gain, loss or deduction realized by the Joint Venture as a direct or indirect result of the issuance of an interest in the Joint Venture to
a Partner (the "Issuance Items") shall be allocated among the Partners so that, to the extent possible, the net amount of such Issuance Items, together with all other allocations under this Agreement
to each Partner, shall be equal to the net amount that would have been allocated to each such Partner if the Issuance Items had not been realized. 

        (e)    Limitations on Allocation of Losses.    Notwithstanding the
provisions of this section, in no event shall any allocation of Net Losses (or any other loss, deduction or Section 705(a)(2)(B) expenditure) to any Partner cause such Partner to have or increase a
deficit balance in its Capital Account. If Net Loss (or items thereof) are reallocated under this Section A1.2(e), subsequent allocations of Profits and Losses shall be made so that, to the extent
possible, the net amount allocated under this Section A1.2(e) equals the amount that 

22

 

would have been allocated to each Partner if no reallocation had occurred under this Section A1.2(e). 

        (f)    Qualified Income Offset.    If a Partner receives an
adjustment, allocation or distribution described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) which creates or increases a deficit balance (taking into account distributions, other than
distributions in liquidation of the Joint Venture, reasonably expected to be made) in the Partner's Capital Account (as provided in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6)), the
Managing Partner shall allocate items of income or gain (as those terms are used in Regulations Section 1.704-1(b)(2)(ii)(d)) to such Partner in an amount and manner to eliminate the Partner's Capital
Account deficit attributable to such adjustment, allocation or distribution as quickly as possible to the extent required by the "qualified income offset" provisions of such Regulations. 

        (g)    Capital Account Deficits.    For purposes of determining
whether a Partner has a deficit balance in its Capital Account in applying Sections A1.2(a), A1.2(b), A1.2(e) and A1.2(f) hereof, there shall be added to each Partner's Capital Account any amount such
Partner is obligated to restore to its Capital Account under Regulations Section 1.704-1(b)(2)(ii)(c), as well as any addition thereto pursuant to the penultimate sentences of Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5) after taking into account thereunder any changes during such fiscal year in Minimum Gain and Partner Nonrecourse Debt Minimum Gain. 

        (h)    [Intentionally left blank]    

        (i)    Definitions.    For purposes of this Agreement, the following
terms shall have the following meanings: 

        "Depreciation"
means, for each fiscal year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such
year or other period, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, Depreciation shall
be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period bears to
such beginning adjusted tax basis. 

        "Gross
Asset Value" means, with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows: (a) the initial Gross Asset Value of any asset
contributed by a Partner to the Joint Venture shall be the gross fair market value of such asset, as determined by the Partners; and (b) the Gross Asset Value of all assets whose Gross Asset Value has
been adjusted pursuant to Section A1.5(a) hereof shall be adjusted pursuant to the last sentence of Section A1.5(a) hereof. It is intended that Gross Asset Value of an asset be commensurate with its
"book value" as determined under Regulations Section 1.704-1(b). 

        "Losses"
means, for each taxable year or other period, an amount equal to the Joint Venture's items of taxable deduction and loss for such year or other period, determined in accordance
with Section 703(a) of the Code (including all items of loss or deduction required to be stated separately under Section 703(a)(1) of the Code), with the following adjustments: 

        (a)  Any
expenditures of the Joint Venture described in Section 705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) expenditures under Treasury Regulation Section
1.704-1(b)(2)(iv)(i) , and not otherwise taken into account in computing Loss, will be considered an item of Loss; 

23

 

        (b)  Loss
resulting from any disposition of Joint Venture Property with respect to which gain or loss is recognized for federal income tax purposes will be computed by
reference to the Gross Asset Value of such property, notwithstanding that the adjusted tax basis of such property may differ from its Gross Asset Value; 

        (c)  In
lieu of depreciation, amortization and other cost recovery deductions taken into account in computing taxable income or loss, there will be taken into account
Depreciation for the taxable year or other period; 

        (d)  Any
items of deduction and loss comprising Regulatory Allocations (as defined in Section A1.3) shall not be considered in determining Loss; and 

        (e)  Any
decrease to Capital Accounts as a result of any adjustment to the Gross Asset Value of Joint Venture assets pursuant to Treasury Regulation Section 1.704-1(b)(2)
(iv)(f), (g) or (m) and Section A1.5 hereof shall constitute an item of Loss. 

        "Minimum
Gain" means "partnership minimum gain" as defined in Regulations Section 1.704-2(d). 

        "Net
Loss" means, for any period, the excess of Losses over Profits, if applicable, for such period. 

        "Net
Profit" means, for any period, the excess of Profits over Losses, if applicable, for such period. 

        "Partner
Nonrecourse Debt" means "partner nonrecourse debt" as defined in Regulations Section 1.704-2(b)(4). 

        "Partner
Nonrecourse Debt Minimum Gain" means Minimum Gain attributable to Partner Nonrecourse Debt. 

        "Profits"
means, for each taxable year or other period, an amount equal to the Joint Venture's items of taxable income and gain for such year or other period, determined in accordance
with Section 703(a) of the Code (including all items of income and gain required to be stated separately under Section 703(a)(1) of the Code), with the following adjustments: 

        (a)  Any
income of the Joint Venture that is exempt from federal income tax and not otherwise taken into account in computing Profit will be added to Profit; 

        (b)  Gain
resulting from any disposition of Joint Venture Property with respect to which gain or loss is recognized for federal income tax purposes will be computed by
reference to the Gross Asset Value of
such property, notwithstanding that the adjusted tax basis of such property may differ from its Gross Asset Value; 

        (c)  Any
items of deduction and loss comprising Regulatory Allocations (as defined in Section A1.3) shall not be considered in determining Profit; and 

        (d)  Any
increase to Capital Accounts as a result of any adjustment to the Gross Asset Value of Joint Venture assets pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(f), (g) or (m) and Section A1.5(a) hereof shall constitute an item of Profit. 

        A1.3    Curative Allocations.    The allocations set forth in Sections A1.2(a), A1.2(b), A1.2(e) and A1.2(f) hereof
(the "Regulatory Allocations") are intended to comply with certain requirements of the Regulations. It is the intent of the Partners that, to the extent possible, over the life of the Joint Venture
all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Joint Venture income, gain, loss, or deduction pursuant to this
Section A1.3. Therefore, notwithstanding any other provision of this Agreement (other than the 

24

 

Regulatory Allocations), the Managing Partner shall make such offsetting special allocations of Joint Venture income, gain, loss or deduction so that, after such offsetting allocations are made, each
Partner's Capital Account balance is, to the extent possible, equal to the Capital Account balance such Partner would have had if the Regulatory Allocations were not part of the Agreement and all
Joint Venture items were allocated pursuant to Section A1.1 hereof. In making allocations under this Section A1.3, the Managing Partner shall take into account future Regulatory Allocations under
Section A1.2 that, although not yet made, are likely to offset other Regulatory Allocations previously made under Section A1.2. 

        A1.4    Code Section 704(c) Allocations.    

        (a)  Solely
for federal income tax purposes and not with respect to determining any Partner's Capital Account, distributive share of profit or losses, distributions or other
items, a Partner's distributive share of income, gain, loss or deduction with respect to any property (other than money) contributed to the Joint Venture shall be determined in accordance with Code
Section 704(c) and Regulations thereunder. 

        (b)  For
purposes of allocation of income, gain, loss, or deduction under Code Section 704(c), the Joint Venture adopts the "traditional method with curative allocations"  [NEED TO DISCUSS] as identified in
Regulations Section 1.704-3(c). 

        (c)  In
the event the Gross Asset Value of any Joint Venture property is adjusted (other than for Depreciation) subsequent allocations of income, gain, loss and deduction
with respect to such property shall take account of any variation between the adjusted basis of such property and its Gross Asset Value in the same manner as under Section 704(c) and the Regulations
thereunder. Any elections or other decisions relating to such allocation shall be made in a manner that reasonably reflects the purpose and intention of this Agreement. 

        A1.5    Other Allocation Rules.    

        (a)  The
Gross Asset Values of all Joint Venture assets may be adjusted by the Managing Partner, after consultation with the other Partner, in accordance with Regulations
Section 1.704-1(b)(2)(iv) to equal their respective gross fair market values as reasonably determined by the Managing Partner as of the following times: (i) the acquisition of an additional interest
in the Joint Venture by any new or existing Partner in exchange for more than a de minimis capital contribution; (ii) the distribution by the Joint Venture to a retiring or continuing Partner as
consideration for an interest in the Joint Venture of more than a de minimis amount of money or other Joint Venture property; and (iii) the liquidation of the Joint Venture. In such event, if the
Gross Asset Value of an asset does not equal its adjusted basis for federal income tax purposes, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect
to such asset for purposes of computing Profits and Losses. 

        (b)  The
Partners are aware of the income tax consequences of the allocations made by this section and agree to be bound by the provisions of this section in reporting their
shares of Joint Venture income and loss for income tax purposes. 

        (c)  For
purposes of determining the Profits, Losses, or any other items allocable to any period, Profits, Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the Managing Partner using any permissible method under Code Section 706 and the Regulations thereunder. 

25

 
 
 

EXHIBIT A
  CAPITAL ACCOUNT BALANCES AS OF JANUARY 1, 2001    
  

	Partner
 
	 	Capital Account as of January 1, 2001

	E	 	$	 
	C	 	$	 

26

QuickLinks

AMENDED AND RESTATED AGREEMENT OF JOINT VENTURE OF CIRCUS AND ELDORADO JOINT VENTURE

Section 1 THE JOINT VENTURE

Section 2 CAPITAL CONTRIBUTIONS

Section 3 ALLOCATIONS

Section 4 DISTRIBUTIONS

Section 5 MANAGEMENT

Section 6 INDEMNIFICATION OF PARTNERS

Section 7 REPRESENTATIONS AND WARRANTIES

Section 8 ACCOUNTING, BOOKS AND RECORDS

Section 9 AMENDMENTS

Section 10 TRANSFERS OF INTERESTS

Section 11 WITHDRAWALS; ACTION FOR PARTITION; BREACHES

Section 12 BUY-SELL

Section 13 DISSOLUTION AND WINDING UP

Section 14 BANKRUPTCY OR DISSOLUTION OF A PARTNER

Section 15 MISCELLANEOUS

Addendum ALLOCATIONS

EXHIBIT A CAPITAL ACCOUNT BALANCES AS OF JANUARY 1, 2001EXHIBIT 10.9.2

EXECUTION

 

	
   

  

 

SECOND
AMENDED AND RESTATED CREDIT AGREEMENT

 

dated
as of March 5, 2002

 

among

 

CIRCUS
AND ELDORADO JOINT VENTURE,

as
Borrower,

 

the
Lenders described herein,

 

and

 

BANK
OF AMERICA, N.A.,

as
Administrative Agent

 

BANC
OF AMERICA SECURITIES LLC

as
Sole Arranger and Book Manager

 

	
   

  

 

 

TABLE
OF CONTENTS

 

	
  SECTION 1

  	
  DEFINITIONS

  
	
  1.1

  	
  Certain
  Defined Terms

  
	
  1.2

  	
  Accounting
  Terms; Utilization of GAAP for Purposes of Calculations Under Agreement

  
	
  1.3

  	
  Other Definitional
  Provisions

  
	
   

  	
   

  
	
  SECTION 2

  	
  AMOUNTS AND
  TERMS OF COMMITMENTS AND LOANS

  
	
  2.1

  	
  Commitments;
  Making of Loans; the Register; Optional Notes

  
	
   

  	
  A.

  	
  Revolving
  Commitments

  
	
   

  	
  B.

  	
  Term Commitments

  
	
   

  	
  C.

  	
  Borrowing
  Mechanics

  
	
   

  	
  D.

  	
  Disbursement
  of Funds

  
	
   

  	
  E.

  	
  The Register

  
	
   

  	
  F.

  	
  Optional Notes

  
	
  2.2

  	
  Interest
  on the Loans

  
	
   

  	
  A.

  	
  Rate of Interest

  
	
   

  	
  B.

  	
  Interest Periods

  
	
   

  	
  C.

  	
  Interest Payments

  
	
   

  	
  D.

  	
  Conversion or Continuation

  
	
   

  	
  E.

  	
  Post-Maturity
  Interest

  
	
   

  	
  F.

  	
  Computation of
  Interest and Fees

  
	
  2.3

  	
  Fees

  
	
   

  	
  A.

  	
  Commitment Fees

  
	
   

  	
  B.

  	
  Upfront
  Fees, Arrangement Fee, Administrative Agency Fee

  
	
  2.4

  	
  Prepayments
  and Reductions in Commitments; General Provisions Regarding Payments

  
	
   

  	
  A.

  	
  Scheduled
  Reductions of Term Commitments

  
	
   

  	
  B.

  	
  Prepayments
  and Unscheduled Reductions in Commitments

  
	
   

  	
  C.

  	
  General
  Provisions Regarding Payments

  
	
  2.5

  	
  Use of Proceeds

  
	
  2.6

  	
  Special
  Provisions Governing Eurodollar Rate Loans

  
	
   

  	
  A.

  	
  Determination
  of Applicable Interest Rate

  
	
   

  	
  B.

  	
  Inability
  to Determine Applicable Interest Rate

  
	
   

  	
  C.

  	
  Illegality
  or Impracticability of Eurodollar Rate Loans

  
	
   

  	
  D.

  	
  Compensation
  For Breakage or Non-Commencement of Interest Periods

  
	
   

  	
  E.

  	
  Booking of Eurodollar
  Rate Loans

  
	
   

  	
  F.

  	
  Assumptions
  Concerning Funding of Eurodollar Rate Loans

  
	
   

  	
  G.

  	
  Eurodollar Rate
  Loans After Default

  
	
  2.7

  	
  Increased
  Costs; Taxes; Capital Adequacy

  
	
   

  	
  A.

  	
  Compensation
  for Increased Costs and Taxes

  
	
   

  	
  B.

  	
  Withholding
  of Taxes

  

 

i

 

	
   

  	
  C.

  	
  Capital Adequacy Adjustment

  
	
  2.8

  	
  Obligation
  of Lenders and Issuing Lender to Mitigate

  
	
   

  	
   

  
	
  SECTION 3

  	
  LETTERS OF CREDIT

  
	
  3.1

  	
  Issuance
  of Letters of Credit and Lenders’ Purchase of Participations Therein

  
	
   

  	
  A.

  	
  Letters of Credit

  
	
   

  	
  B.

  	
  Mechanics
  of Issuance

  
	
  3.2

  	
  Letter
  of Credit Fees

  
	
  3.3

  	
  Drawings
  and Reimbursement of Amounts Drawn Under Letters of Credit

  
	
  3.4

  	
  Obligations
  Absolute

  
	
  3.5

  	
  Indemnification;
  Nature of Issuing Lender’s Duties

  
	
   

  	
  A.

  	
  Indemnification

  
	
   

  	
  B.

  	
  Nature of Issuing
  Lender’s Duties

  
	
  3.6

  	
  Increased
  Costs and Taxes Relating to Letters of Credit

  
	
   

  	
   

  
	
  SECTION 4

  	
  CONDITIONS TO
  LOANS AND LETTERS OF CREDIT

  
	
  4.1

  	
  Conditions
  to Initial Loans and Letters of Credit

  
	
   

  	
  A.

  	
  Borrower
  Documents

  
	
   

  	
  B.

  	
  Certain
  General Partner and Guarantor Documents

  
	
   

  	
  C.

  	
  Mortgage Notes

  
	
   

  	
  D.

  	
  Opinions of Loan
  Parties’ Counsel

  
	
   

  	
  E.

  	
  Perfection of Security
  Interests

  
	
   

  	
  F.

  	
  Title Policy

  
	
   

  	
  G.

  	
  Insurance

  
	
   

  	
  H.

  	
  Necessary
  Consents

  
	
   

  	
  I.

  	
  Environmental Indemnities

  
	
   

  	
  J.

  	
  Fees

  
	
   

  	
  K.

  	
  No Material Adverse Effect

  
	
   

  	
  L.

  	
  Representations
  and Warranties; Performance of Agreements

  
	
   

  	
  M.

  	
  [Intentionally
  Reserved]

  
	
   

  	
  N.

  	
  Completion of Proceedings

  
	
  4.2

  	
  Conditions
  to All Loans and Letters of Credit

  
	
  4.3

  	
  Conditions to
  Letters of Credit

  
	
   

  	
   

  
	
  SECTION 5

  	
  REPRESENTATIONS AND
  WARRANTIES

  
	
  5.1

  	
  Organization,
  Powers, Qualification, Good Standing, Business and Subsidiaries

  
	
   

  	
  A.

  	
  Organization
  and Powers

  
	
   

  	
  B.

  	
  Qualification and Good
  Standing

  
	
   

  	
  C.

  	
  Conduct
  of Business

  
	
   

  	
  D.

  	
  Subsidiaries

  
	
  5.2

  	
  Authorization of
  Borrowing, etc

  
	
   

  	
  A.

  	
  Authorization of Borrowing

  
	
   

  	
  B.

  	
  No Conflict

  
	
   

  	
  C.

  	
  Governmental
  Consents

  
	
   

  	
  D.

  	
  Binding
  Obligation

  

 

ii

 

	
  5.3

  	
  Financial
  Condition

  
	
  5.4

  	
  No
  Material Adverse Change; No Restricted Junior Payments

  
	
  5.5

  	
  Title
  to Properties; Liens; All Collateral

  
	
  5.6

  	
  Litigation; Adverse
  Facts

  
	
  5.7

  	
  Payment of Taxes

  
	
  5.8

  	
  Performance
  of Agreements; Materially Adverse Agreements

  
	
  5.9

  	
  Governmental Regulation

  
	
  5.10

  	
  Securities
  Activities

  
	
  5.11

  	
  Employee Benefit Plans

  
	
  5.12

  	
  Environmental Protection

  
	
  5.13

  	
  Employee Matters

  
	
  5.14

  	
  Disclosure

  
	
  5.15

  	
  Compliance
  With Laws; Licenses, Permits and Authorizations

  
	
  5.16

  	
  Intangible
  Property

  
	
  5.17

  	
  Rights
  to Hotel Agreements, Permits and Licenses

  
	
   

  	
   

  
	
  SECTION 6

  	
  AFFIRMATIVE
  COVENANTS

  
	
  6.1

  	
  Financial
  Statements and Other Reports

  
	
  6.2

  	
  Borrower or
  Corporate Existence, etc

  
	
  6.3

  	
  Payment
  of Taxes and Claims; Tax Consolidation

  
	
  6.4

  	
  Maintenance
  of Properties; Insurance

  
	
  6.5

  	
  Inspection; Lender
  Meeting

  
	
  6.6

  	
  Compliance with Laws,
  etc

  
	
  6.7

  	
  Environmental
  Disclosure and Inspection

  
	
  6.8

  	
  Borrower’s
  Remedial Action Regarding Hazardous Material

  
	
  6.9

  	
  Delivery of Pledge Agreement.

  
	
   

  	
   

  
	
  SECTION 7

  	
  NEGATIVE
  COVENANTS

  
	
  7.1

  	
  Indebtedness

  
	
  7.2

  	
  Liens and Related
  Matters

  
	
  7.3

  	
  Investments

  
	
  7.4

  	
  Contingent Obligations

  
	
  7.5

  	
  Restricted Junior
  Payments

  
	
  7.6

  	
  Financial
  Covenants

  
	
  7.7

  	
  Restriction
  on Fundamental Changes; Asset Sales and Acquisitions

  
	
  7.8

  	
  Capital
  Expenditures

  
	
  7.9

  	
  Sales
  and Lease-Backs

  
	
  7.10

  	
  Sale or Discount
  of Receivables

  
	
  7.11

  	
  Transactions
  with Shareholders and Affiliates

  
	
  7.12

  	
  Conduct
  of Business

  
	
  7.13

  	
  Amendments of
  Related Documents

  
	
  7.14

  	
  Fiscal Year

  
	
  7.15

  	
  Transfer of
  Borrower Interests

  
	
  7.16

  	
  Prepayments of Mortgage
  Notes

  

 

iii

 

	
  SECTION 8

  	
  EVENTS OF
  DEFAULT

  
	
  8.1

  	
  Failure to Make
  Payments When Due

  
	
  8.3

  	
  Breach of Certain
  Covenants

  
	
  8.4

  	
  Breach of Warranty

  
	
  8.5

  	
  Other
  Defaults Under Loan Documents

  
	
  8.6

  	
  Involuntary
  Bankruptcy; Appointment of Receiver, etc

  
	
  8.7

  	
  Voluntary
  Bankruptcy; Appointment of Receiver, etc

  
	
  8.8

  	
  Judgments and
  Attachments

  
	
  8.9

  	
  Dissolution

  
	
  8.10

  	
  Employee Benefit Plans

  
	
  8.11

  	
  Material Adverse Effect

  
	
  8.12

  	
  Change in Control

  
	
  8.13

  	
  Invalidity
  of Environmental Indemnities or Guaranties

  
	
  8.14

  	
  Impairment of Collateral

  
	
  8.15

  	
  Loss of
  Governmental Authorizations

  
	
  8.16

  	
  Gaming License

  
	
  8.17

  	
  Remedies

  
	
   

  	
   

  
	
  SECTION 9

  	
  ADMINISTRATIVE
  AGENT

  
	
  9.1

  	
  Appointment

  
	
  9.2

  	
  Powers; General Immunity

  
	
  9.3

  	
  Representations
  and Warranties; No Responsibility For Appraisal of Creditworthiness

  
	
  9.4

  	
  Right to Indemnity

  
	
  9.5

  	
  Successor
  Administrative Agent

  
	
  9.6

  	
  Collateral
  Documents

  
	
   

  	
   

  
	
  SECTION 10

  	
  MISCELLANEOUS

  
	
  10.1

  	
  Assignments
  and Participations in Loans and Letters of Credit

  
	
  10.2

  	
  Expenses

  
	
  10.3

  	
  Indemnity

  
	
  10.4

  	
  Set-Off;
  Security Interest in Deposit Accounts

  
	
  10.5

  	
  Ratable Sharing

  
	
  10.6

  	
  Amendments
  and Waivers; Release of Collateral

  
	
  10.7

  	
  Independence of
  Covenants

  
	
  10.8

  	
  Notices

  
	
  10.9

  	
  Survival
  of Representations, Warranties and Agreements

  
	
  10.10

  	
  Failure
  or Indulgence Not Waiver; Remedies Cumulative

  
	
  10.11

  	
  Marshalling;
  Payments Set Aside

  
	
  10.12

  	
  Severability

  
	
  10.13

  	
  Obligations
  Several; Independent Nature of Lenders’ Rights

  
	
  10.14

  	
  Headings

  
	
  10.15

  	
  Applicable Law

  
	
  10.16

  	
  Successors and Assigns

  
	
  10.17

  	
  Consent
  to Jurisdiction and Service of Process

  

 

iv

 

	
  10.18

  	
  Waiver
  of Jury Trial

  
	
  10.19

  	
  Confidentiality

  
	
  10.20

  	
  Counterparts;
  Effectiveness

  
	
  10.21

  	
  Non-Recourse to
  General Partners

  
	
  10.22

  	
  Cooperation With
  Gaming Boards

  
	
  10.23

  	
  Principles of
  Restatement

  

 

v

 

EXHIBITS

 

	
  A

  	
   

  	
  Assignment Agreement

  
	
  B

  	
   

  	
  Certificate Re: Non-Bank
  Status

  
	
  C

  	
   

  	
  Compliance Certificate

  
	
  D

  	
   

  	
  Intercreditor Agreement

  
	
  E

  	
   

  	
  Notice of Borrowing

  
	
  F

  	
   

  	
  Notice of
  Conversion/Continuation

  
	
  G

  	
   

  	
  Notice of Issuance of
  Letter of Credit

  
	
  H

  	
   

  	
  Form of Revolving Note

  
	
  I

  	
   

  	
  Form of Term Note

  

 

SCHEDULES

 

	
  5.1

  	
   

  	
  Subsidiaries

  
	
  5.12

  	
   

  	
  Environmental Matters

  
	
  5.16

  	
   

  	
  Intellectual Property

  
	
  7.2

  	
   

  	
  Certain Existing Liens

  

 

vi

 

SECOND
AMENDED AND RESTATED CREDIT AGREEMENT

 

This SECOND AMENDED AND
RESTATED CREDIT AGREEMENT is dated as of March 5, 2002 and entered into by and
among CIRCUS AND ELDORADO JOINT VENTURE, a Nevada general partnership
(“Borrower”), the financial institutions listed on the signature pages hereof
(each individually referred to herein as a “Lender” and collectively as
“Lenders”), and BANK OF AMERICA, N.A., as Administrative Agent (“Administrative
Agent”) with reference to the following facts.

 

R
E C I T A L S

 

A.            On or about November 24, 1997, Borrower, the lenders and
Bank of America, N.A. as Administrative Agent, entered into a Amended and
Restated Credit Agreement dated as of November 24, 1997 (the “Existing Credit
Agreement”).

 

B.            The parties hereto desire to amend and restate the
Existing Credit Agreement in its entirety as set forth herein.

 

NOW, THEREFORE, in
consideration of the premises and the agreements, provisions and covenants
herein contained, the parties hereto agree to amend and restate the Existing
Credit Agreement in its entirety as follows:

 

SECTION
1

DEFINITIONS

 

1.1           Certain Defined
Terms.

 

The following terms used in
this Agreement shall have the meanings set forth below:

 

“Administrative Agent”
has the meaning assigned to that term in the introduction to this Agreement and
also means and includes any successor Administrative Agent appointed pursuant
to Section 9.5.

 

“Affected Lender” has
the meaning assigned to that term in Section 2.6C.

 

“Affected Loans” has
the meaning assigned to that term in Section 2.6C.

 

“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 

 

1

 

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.

 

“Agreement” means
this Second Amended and Restated Credit Agreement, as it may hereafter be
amended, supplemented or otherwise modified from time to time.

 

“Applicable Base Rate
Margin” means, (i) during the initial Pricing Period, 2.00% per annum, and
(ii) during each subsequent Pricing Period, the percentage per annum set forth
below opposite the Leverage Ratio as of the last day of the Fiscal Quarter
ended two months prior to the first day of such Pricing Period:

 

	
  Leverage Ratio

  	
   

  	
  Margin

  	
   

  
	
  Less than 2.50:1.00

  	
   

  	
  1.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Equal to or greater

  than 2.50:1.00 but less
  
than 3.00:1.00

  	
   

  	
  1.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Equal to or greater
  

  than 3.00:1.00 but less
  
than 3.50:1.00

  	
   

  	
  1.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Equal to or greater
  

  than 3.50:1.00 but less
  
than 4.00:1.00

  	
   

  	
  1.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Equal to or greater
  

  than 4.00:1.00

  	
   

  	
  2.00

  	
  %

  

 

“Applicable Commitment
Fee Rate” means, (i) during the initial Pricing Period, 0.50% per
annum, and (ii) during each subsequent Pricing Period, the percentage per
annum set forth below opposite the Leverage Ratio as of the last day of the
Fiscal Quarter ended two months prior to the first day of such Pricing Period:

 

	
  Leverage Ratio

  	
   

  	
  Commitment
  Fee

  	
   

  
	
  Less than 3.00:1.00

  	
   

  	
  0.375

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Equal to or greater
  

  than 3.00:1.00

  	
   

  	
  0.500

  	
  %

  

 

“Applicable Eurodollar
Rate Margin” means, (i) during the initial Pricing Period, 3.00% per annum,
and (ii) during each subsequent Pricing Period, the percentage per annum set
forth below opposite the Leverage Ratio as of the last day of the Fiscal
Quarter ended two months prior to the first day of such Pricing Period:

 

2

 

	
  Leverage Ratio

  	
   

  	
  Margin

  	
   

  
	
  Less than 2.50:1.00

  	
   

  	
  2.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Equal to or greater 

  than 2.50:1.00 but less 

  than 3.00:1.00

  	
   

  	
  2.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Equal to or greater 

  than 3.00:1.00 but less

  than 3.50:1.00 

  	
   

  	
  2.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Equal to or greater 

  than 3.50:1.00 but less 

  than 4.00:1.00 

  	
   

  	
  2.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Equal to or greater 

  than 4.00:1.00 

  	
   

  	
  3.00

  	
  %

  

 

“Asset Sale” means
the sale by Borrower or any of its Subsidiaries to any Person other than
Borrower or any of its wholly-owned Subsidiaries of (i) any of the stock
of any of Borrower’s Subsidiaries, (ii) substantially all of the assets of
any division or line of business of Borrower or any of its Subsidiaries, or
(iii) any other assets (whether tangible or intangible) of Borrower or any
of its Subsidiaries outside of the ordinary course of business (including,
without limitation, sale of the Premises); provided, in each case, that
no such sale or disposition shall be an Asset Sale for purposes of this
Agreement unless the fair market value of the assets sold or disposed exceeds
$3,000,000 for any given transaction or series of related transactions or
$6,000,000 in the aggregate in any calendar year.

 

“Assignment Agreement”
means an Assignment Agreement in substantially the form of Exhibit A.

 

“Assignment of Rents and
Revenues” means Second Amended and Restated Assignment of Rents and
Revenues dated March 1, 2002 executed by the Borrower in favor of the
Administrative Agent, as it may hereafter be amended, supplemented or otherwise
modified from time to time.

 

“Bankruptcy Code”
means Title 11 of the United States Code entitled “Bankruptcy”, as now and
hereafter in effect, or any successor statute.

 

“Base Rate” means, at
any time, the higher of (x) the Prime Rate or (y) the rate which is
1/2 of 1% in excess of the Federal Funds Effective Rate.

 

“Base Rate Loans”
means Loans bearing interest at rates determined by reference to the Base Rate
as provided in Section 2.2A.

 

“Borrower” has the
meaning assigned to that term in the introduction to this Agreement.

 

“Borrower Security
Agreement” means the Second Amended and 

 

3

 

Restated Security Agreement executed and
delivered by Borrower and Administrative Agent on the Closing Date, as it may
hereafter be amended, supplemented or otherwise modified from time to time.

 

“Business Day” means
any day excluding Saturday, Sunday and any day which is a legal holiday under
the laws of the States of Nevada, New York or California or is a day on which
banking institutions located in any such state are authorized or required by
law or other governmental action to close.

 

“Capital Expenditures”
means, for any period, the sum of (i) the aggregate of all expenditures
(whether paid in cash or other consideration or accrued as a liability and
including that portion of Capital Leases that is capitalized on the balance
sheet of Borrower and its Subsidiaries) by Borrower and its Subsidiaries during
that period that, in conformity with GAAP, are included in “additions to
property, plant or equipment” or comparable items reflected in the statement of
cash flows of Borrower and its Subsidiaries plus (ii) to the extent
not covered by clause (i) of this definition, the aggregate of all
expenditures by Borrower and its Subsidiaries during that period to acquire (by
purchase or otherwise) the business, property or fixed assets of any Person, or
the stock or other evidence of beneficial ownership of any Person that, as a
result of such acquisition, becomes a Subsidiary of Borrower.

 

“Capital Lease,” as
applied to any Person, means any lease of any property (whether real, personal
or mixed) by that Person as lessee that, in conformity with GAAP, is accounted
for as a capital lease on the balance sheet of that Person.

 

“Cash” means money,
currency or a credit balance in a Deposit Account.

 

“Cash Equivalents”
means, as at any date of determination, (i) marketable securities (a) issued
or directly and unconditionally guaranteed as to interest and principal by the
United States Government or (b) issued by any agency of the United States
the obligations of which are backed by the full faith and credit of the United
States, in each case maturing within one year after such date;
(ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after such date
and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor’s Ratings Group (“S&P”) or
Moody’s Investors Service, Inc. (“Moody’s”); (iii) commercial paper
maturing no more than one year from the date of creation thereof and having, at
the time of the acquisition thereof, a rating of at least A-1 from S&P or
at least P-1 from Moody’s; (iv) certificates of deposit or bankers’
acceptances maturing within one year after such date and issued or accepted by
any Lender or by any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia that, at the
time of the acquisition of such certificates or acceptances (a) is at
least “adequately capitalized” (as defined in the regulations of its primary
Federal banking regulator) and (b) has Tier 1 capital (as defined in such
regulations) of not less than $100,000,000; (v) shares of any money market
mutual fund that (a) has at least 95% of its assets invested continuously 

 

4

 

in the types of investments referred to in
clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either
S&P or Moody’s, and (vi) overnight repurchase agreements executed with
Lenders; provided that the terms of such repurchase agreements require
physical delivery of securities (which must be “Cash Equivalents” as described
in clauses (i) - (iv) above), except in the case of treasury obligations
delivered through the Federal Reserve book entry system.

 

“Cash Interest Expense”
means Interest Expense paid or payable in cash.

 

“Certificate re Non-Bank
Status” means a certificate substantially in the form of Exhibit B
delivered by a Lender to Administrative Agent pursuant to
Section 2.7B(iii).

 

“Circus Bridge” means
the elevated building structure that spans Fifth Street and connects the
Improvements with the buildings located on the adjacent real property owned by
Circus Circus Casinos, Inc., a Nevada corporation which is a wholly owned
Subsidiary of Mandalay.

 

“Closing Date” means
the date upon which each of the conditions precedent specified in Section 4.1
are satisfied or waived and this Agreement becomes effective.

 

“Collateral” means
all the real, personal and mixed property made subject to a Lien pursuant to
the Collateral Documents.

 

“Collateral Account
Agreement” means the Collateral Account Agreement executed and delivered by
Borrower in favor of the Administrative Agent on the Closing Date, as the same
may hereafter be amended, supplemented or otherwise modified from time to time.

 

“Collateral Documents”
means the Borrower Security Agreement, the Guarantor Security Agreement, the
Collateral Account Agreement, the Deed of Trust, the Assignment of Rents and
Revenues, the Deposit Account Agreement, the Pledge Agreement and all other
instruments or documents now or hereafter granting Liens on property of
Borrower or its Subsidiaries to Administrative Agent for benefit of Lenders.

 

“Commitments” means,
collectively, the Revolving Commitments and the Term Commitments.

 

“Compliance Certificate”
means a certificate substantially in the form of Exhibit C delivered to
Administrative Agent and Lenders by Borrower pursuant to Section 6.1(iv).

 

“Contingent Obligation,”
as applied to any Person, means any direct or indirect liability, contingent or
otherwise, of that Person (i) with respect to any Indebtedness, lease,
dividend or other obligation of another if the primary purpose or intent
thereof by the Person incurring the Contingent Obligation is to provide
assurance to the obligee of such obligation of another that such obligation of
another will be paid or discharged, or that any agreements relating thereto
will be complied with, or that the holders of such obligation will be protected
(in whole or in 

 

5

 

part) against loss in respect thereof,
(ii) with respect to any letter of credit issued for the account of that Person
or as to which that Person is otherwise liable for reimbursement of drawings,
or (iii) under Interest Rate Agreements. 
Contingent Obligations shall include, without limitation, (a) the
direct or indirect guaranty, endorsement (other than for collection or deposit
in the ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the obligation of another, (b) the
obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (X) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment
or discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (Y) to maintain the
solvency or any balance sheet item, level of income or financial condition of
another if, in the case of any agreement described under subclauses (X) or (Y)
of this sentence, the primary purpose or intent thereof is as described in the
preceding sentence.  For purposes of
this definition, the amount of any Contingent Obligation at any time of
determination shall be computed as the amount that, in light of all the facts
and circumstances existing at such time represents the amount that reasonably
can be expected at such time of determination to become an actual or matured
liability.

 

“Contractual Obligation,”
as applied to any Person, means any provision of any Security issued by that
Person or of any material indenture, mortgage, deed of trust, contract,
undertaking, agreement or other instrument (which other instrument is for the
payment of money) to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.

 

“Deed of Trust” means
the Second Amended and Restated Construction Deed of Trust, Fixture Filing With
Security Agreement and Assignment of Rents dated as of March 1, 2002 executed
by the Borrower in favor of the Administrative Agent, as it may hereafter be
amended, supplemented or otherwise modified from time to time.

 

“Default” means a
condition or event that, after notice or lapse of time or both, would
constitute an Event of Default.

 

“Deposit Account”
means a demand, time, savings, passbook or like account with a bank, savings
and loan association, credit union or like organization, other than an account
evidenced by a negotiable certificate of deposit.

 

“Deposit Account
Agreement” means the deposit account agreement, executed and delivered by
Borrower, Administrative Agent and Bank of America, N.A. on the Closing Date,
as the same may hereafter be amended, supplemented or otherwise modified from
time to time.

 

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

 

“EBITDA” means, for
any period, Net Income for such period plus, to the extent such items
were subtracted in the determination of Net 

 

6

 

Income, the sum of the amounts for such
period of (i) Interest Expense, (ii) provisions for taxes based on income,
(iii) total depreciation expense, (iv) total amortization expense, (v)
Pre-Opening Expenses, (vi) non-recurring or extraordinary losses and
(vii) other non-cash items reducing Net Income less, to the extent
such items were added in the determination of Net Income, the sum of the
amounts for such period of (x) non-recurring or extraordinary gains and (y)
non-cash items increasing Net Income, all of the foregoing as determined for
Borrower and its Subsidiaries in conformity with GAAP.

 

“Eldorado Bridge”
means the elevated building structure that spans Fourth Street and connects the
Improvements with the buildings located on the adjacent real property owned by
Eldorado Resorts.

 

“Eldorado LLC” means
Eldorado Limited Liability Company, a Nevada limited liability company.

 

“Eldorado Resorts”
means Eldorado Resorts, LLC, a Nevada limited liability company, and a member
of Eldorado LLC.

 

“Eligible Assignee”
means, as to each Lender (a) another Lender, (b) any Affiliate of that Lender,
(c) any commercial bank having a combined capital and surplus of $100,000,000
or more which is (i) organized under the laws of the United States or any
state thereof, or (ii) the domestic branch or agency of any such
commercial bank organized under the laws of a country which is a member of the
Organization for Economic Cooperation and Development, (d) any (i) savings
bank, savings and loan association or similar financial institution or (ii)
insurance company engaged in the business of writing insurance which, in either
case (A) has a net worth of $200,000,000 or more, (B) is engaged in the
business of lending money and extending credit under credit facilities
substantially similar to those extended under this Agreement and (C) is
operationally and procedurally able to meet the obligations of a Lender
hereunder to the same degree as a commercial bank and (e) any other financial
institution (including a mutual fund or other fund) having total assets
of $250,000,000 or more which meets the requirements set forth in subclauses
(B) and (C) of clause (d) above; provided that each Eligible Assignee
must either (a) be organized under the Laws of the United States of America,
any State thereof or the District of Columbia or (b) be organized under the
Laws of the Cayman Islands or any country which is a member of the Organization
for Economic Cooperation and Development, or a political subdivision of such a
country, and (i) act hereunder through a branch, agency or funding office
located in the United States of America and (ii) otherwise be exempt from
withholding of tax on interest and delivers the documents required by Section
2.7B(iii) at the time of any assignment pursuant to Section 10.1.

 

“Employee Benefit Plan”
means any “employee benefit plan” as defined in Section 3(3) of ERISA
which is, or was at any time, maintained or contributed to by Borrower or any
of its ERISA Affiliates.

 

“Environmental Claim”
means any accusation, allegation, notice of violation, claim, demand, abatement
order, cleanup order, removal order, or other order or direction (conditional
or otherwise) by any governmental authority or any Person for any injury, loss
or damage, including, without limitation, personal injury (including sickness,
disease or death), 

 

7

 

tangible or intangible property damage,
contribution, indemnity, indirect or consequential damages, damage to the
environment, nuisance, pollution, contamination or other adverse effects on the
environment, or for fines, penalties or restrictions or to compel cleanup or
remediation, in each case relating to, resulting from or in connection with any
Hazardous Material and relating to Borrower, any of its Subsidiaries or any
Facility.

 

“Environmental
Indemnities”  means the
Environmental Indemnities from Borrower and Silver Legacy Capital Corp.
executed on the Closing Date in favor of the Administrative Agent, as amended,
supplemented or otherwise modified from time to time.

 

“Environmental Laws”
means all statutes, ordinances, orders, rules, regulations, plans, policies,
decrees, permits, guidance documents, and any other requirements of
Governmental Authorities relating to (i) environmental matters, including,
without limitation, those relating to fines, injunctions, penalties, damages,
contribution, cost recovery compensation, losses or injuries resulting from the
Release or threatened Release of Hazardous Material, (ii) the presence,
generation, use, storage, transportation or disposal of Hazardous Material, or
(iii) occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal health or welfare, in any manner
applicable to Borrower or any of its Subsidiaries or any of their respective
properties, including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. § 9601 et  seq.),
the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et  seq.),
the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et  seq.),
the Federal Water Pollution Control Act ( 33 U.S.C. § 1251 et  seq.),
the Clean Air Act (42 U.S.C. § 7401 et  seq.), the Toxic Substances
Control Act (15 U.S.C. § 2601 et  seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. §136 et  seq.),
the Occupational Safety and Health Act (29 U.S.C. § 651 et  seq.)
and the Emergency Planning and Community Right-to-Know Act (42 U.S.C.
§ 11001 et  seq.), each as amended or supplemented, and any
analogous future or present local, state and federal statutes, ordinances and
other laws, and rules and regulations promulgated pursuant thereto, each as in
effect as of the date of determination.

 

“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time,
and any successor statute.

 

“ERISA Affiliate”, as
applied to any Person, means (i) any Person that is, or was at any time, a
member of a controlled group of Persons within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is, or
was at any time, a member; (ii) any trade or business (whether or not
incorporated) which is, or was at any time, a member of a group of trades or businesses
under common control within the meaning of Section 414(c) of the Internal
Revenue Code of which that Person is, or was at any time, a member; and
(iii) any member of an affiliated service group within the meaning of
Section 414(m) or (o) of the Internal Revenue Code of which that Person,
any Person described in clause (i) above or any trade or business
described in clause (ii) above is, or was at any time, a member.

 

“ERISA Event” means
(i) a “reportable event” within the meaning of Section 4043 of ERISA
and the regulations issued thereunder with respect to any Pension Plan
(excluding those for which the provision for 30-day 

 

8

 

notice to the PBGC has been waived by
regulation); (ii) the failure to meet the minimum funding standard of
Section 412 of the Internal Revenue Code with respect to any Pension Plan
(whether or not waived in accordance with Section 412(d) of the Internal
Revenue Code) or the failure to make by its due date a required installment
under Section 412(m) of the Internal Revenue Code with respect to any
Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any
Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent
to terminate such plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the withdrawal by Borrower or any of
its ERISA Affiliates from any Pension Plan with two or more contributing
sponsors or the termination of any such Pension Plan resulting in liability
pursuant to Sections 4063 or 4064 of ERISA; (v) the institution by
the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any
event or condition which might constitute grounds under ERISA for the
termination of, or the appointment of a trustee to administer, any Pension
Plan; (vi) the imposition of liability on Borrower or any of its ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of
the application of Section 4212(c) of ERISA; (vii) the withdrawal by
Borrower or any of its ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any
Multiemployer Plan if there is any potential liability therefor, or the receipt
by Borrower or any of its ERISA Affiliates of notice from any Multiemployer
Plan that it is in reorganization or insolvency pursuant to Section 4241
or 4245 of ERISA, or that it intends to terminate or has terminated under
Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or
omission which could give rise to the imposition on Borrower or any of its
ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43
of the Internal Revenue Code or under Section 409 or 502(c), (i) or (l) or
4071 of ERISA in respect of any Employee Benefit Plan; (ix) the assertion
of a material claim (other than routine claims for benefits) against any
Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or
against Borrower or any of its ERISA Affiliates in connection with any such
Employee Benefit Plan; (x) receipt from the Internal Revenue Service of
notice of the failure of any Pension Plan (or any other Employee Benefit Plan
intended to be qualified under Section 401(a) of the Internal Revenue
Code) to qualify under Section 401(a) of the Internal Revenue Code, or the
failure of any trust forming part of any Pension Plan to qualify for exemption
from taxation under Section 501(a) of the Internal Revenue Code; or
(xi) the imposition of a Lien pursuant to Section 401(a)(29) or
412(n) of the Internal Revenue Code or pursuant to ERISA with respect to any
Pension Plan.

 

“Eurodollar Business Days”
means any Business Day on which dealings in Dollar deposits are conducted by
and among banks in the Eurodollar Market.

 

“Eurodollar Rate”
means, with respect to any Eurodollar Rate Loan, the interest rate per annum
(rounded upward, if necessary, to the next 1/100th of 1%) at which deposits in
Dollars are offered by Bank of America to prime banks in the Eurodollar Market
at or about 11:00 a.m. local time in the Eurodollar Market two Eurodollar
Business Days before the first day of the applicable Interest Period for such
Eurodollar Rate Loan in an aggregate amount approximately equal to the
principal amount of such Eurodollar Rate Loan and for a period of time
comparable to the number of days in the applicable Interest Period.

 

9

 

“Eurodollar Market”
means a regularly established market located outside the United States of
America by and among banks for the solicitation, offer and acceptance of Dollar
deposits in such banks.

 

“Eurodollar Rate Loans”
means Loans bearing interest at rates determined by reference to the Eurodollar
Rate as provided in Section 2.2A.

 

“Event of Default”
means each of the events set forth in Section 8.

 

“Exchange Act” means
the Securities Exchange Act of 1934, as amended from time to time, and any
successor statute.

 

“Executive Committee”
means the executive committee of Borrower organized in accordance with
Section 5.7 of the Joint Venture Agreement.

 

“Executive Committee
Signatories” means the individuals from time to time serving as Borrower’s
Director of Finance and Administration and General Manager each of whom shall
have been authorized to sign on behalf of the Executive Committee and Borrower
pursuant to a resolution of the Executive Committee.

 

“Existing Credit
Agreement” means the Amended and Restated Credit Agreement dated as of
November 24, 1997 referred to in the recitals to this Agreement, as heretofore
amended.

 

“Facility” and “Facilities”
mean any and all real property (including, without limitation, all buildings,
fixtures or other improvements located thereon) now, hereafter or heretofore
owned, leased, operated or used by Borrower or any of its Subsidiaries.

 

“Federal Funds Effective
Rate” means, for any period, a fluctuating interest rate equal for each day
during such period to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Administrative Agent from three Federal funds brokers of recognized
standing selected by Administrative Agent.

 

“Fee Letter” means
that certain letter agreement of even date herewith between Borrower and
Administrative Agent.

 

“Fiscal Quarter”
means a fiscal quarter of Borrower ending on any March 31, June 30, September
30 or December 31.

 

“Fiscal Year” means a
fiscal year of Borrower ending on each December 31.

 

“Fixed Charge Coverage
Ratio” means, as of the last day of each Fiscal Quarter, the ratio of :

 

10

 

(a)           EBITDA for the period of four
consecutive Fiscal Quarters ending on that date; to

 

(b)           the sum, without duplication, of all
scheduled reductions to the Term Commitments required to be made during that
period, plus all scheduled principal payments required to be made in
respect of other Indebtedness of Borrower during that period, plus Cash
Interest Expense for that period, plus Tax Distributions made during
that period (other than those made on the Closing Date pursuant to
Section 7.5(i), plus Partner Distributions made during that period
(other than those made on or prior to the Closing Date pursuant to Section
7.5(i), plus Maintenance Capital Expenditures made during that period.

 

“Funding and Payment
Office” means the office of Administrative Agent located at the address set
forth on the signature pages hereof.

 

“Funding Date” means,
with respect to any particular Loan, the date of the funding of that Loan.

 

“GAAP” means, subject
to the limitations on the application thereof set forth in Section 1.2,
generally accepted accounting principles set forth in opinions and
pronouncements of the Accounting Principles Board of 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 approved by a significant segment of the accounting profession
(including, without limitation, in the AICPA Audit and Accounting Guide: Audits
of Casinos), in each case as the same are applicable to the circumstances as of
the date of determination.

 

“Gaming Board” means,
collectively, (a) the Nevada Gaming Commission, (b) the Nevada State
Gaming Control Board, and (c) any other Governmental Authority that holds
regulatory, licensing or permit authority over gambling, gaming or casino
activities conducted by Borrower and its Subsidiaries within its jurisdiction.

 

“Gaming Laws” means
all statutes, rules, regulations, ordinances, codes and administrative or
judicial precedents (including, without limitation, the Nevada Gaming Control
Act (N.R.S. Ch. 463)) pursuant to which any Gaming Board possesses regulatory,
licensing or permit authority over gambling, gaming or casino activities
conducted by Borrower and its Subsidiaries within its jurisdiction.

 

“General Partners”
means, at any time, Galleon, Inc., a Nevada corporation and a wholly-owned
Subsidiary of Mandalay, and Eldorado LLC, a Nevada limited liability company,
each a general partner of Borrower, and their respective successors and assigns
at such time.

 

“Governmental Authority”
means any of the United States government, the government of the State of
Nevada or any other state and any political subdivision, agency, department,
commission, court, board, bureau or instrumentality of any of them, including
any local authorities.

 

“Governmental
Authorization” means any permit, license, 

 

11

 

authorization, plan, directive, consent order
or consent decree of or from any Governmental Authority.

 

“Guarantor Security
Agreement” means the Guarantor Security Agreement executed on the date
hereof by Silver Legacy Capital Corp., a Nevada corporation, to secure the
Guaranty, either as originally executed or as the same may from time to time be
supplanted, modified, amended, extended or supplanted.

 

“Guaranty” means the
guaranty of the Obligations under the Commitments executed by Silver Legacy
Capital Corp. on the date hereof, either as originally executed or as the same
may from time to time be supplemented, modified, amended, extended or
supplanted.

 

“Hazardous Material”
means (i) any chemical, material or substance at any time defined as or
included in the definition of “hazardous substances”, “hazardous wastes”,
“hazardous materials”, “extremely hazardous waste”, “restricted hazardous
waste”, “infectious waste”, “toxic substances” or any other formulations
intended to define, list or classify substances by reason of deleterious
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, “TCLP toxicity” or “EP toxicity” or words of
similar import under any applicable Environmental Law or publication
promulgated pursuant thereto; (ii) any oil, petroleum, petroleum fraction
or petroleum derived substance; (iii) any drilling fluid, produced water
and other waste associated with the exploration, development or production of
crude oil, natural gas or geothermal resources; (iv) any flammable
substance or explosive; (v) any radioactive material; (vi) asbestos
in any form; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or dielectric fluid
containing polychlorinated biphenyls; (ix) any pesticide; and (x) any
other chemical, material or substance, exposure to which is prohibited, limited
or regulated by any governmental authority or which may or could pose a hazard
to human health and safety or the environment if released into the workplace or
the environment.

 

“Hotel” means the
Silver Legacy Hotel and Casino in Reno, Nevada, including, without limitation,
the Premises; the Improvements (including, without limitation, the Silver
Legacy Bridge and the Tunnel); the Skyways, all street work; drainage;
plantings; signalization; and other installations, equipment and facilities
located on or off of the Premises and required of Borrower by Governmental
Authorities in connection with development of the Premises.

 

“Hotel-Casino Management”
means Hotel-Casino Management, Inc., a Nevada corporation and a member of both
Eldorado LLC and Eldorado Resorts, and its successors and permitted assigns.

 

“Improvements” means
all buildings, structures, facilities and other improvements of every kind and
description now or hereafter located on the Premises, including all parking
areas, roads, driveways, walks, fences, walls, beams, recreation facilities,
drainage facilities, lighting facilities and other site improvements, all
water, sanitary and storm sewer, drainage, electricity, steam, gas, telephone
and other utility equipment and facilities, all plumbing, lighting, heating,
ventilating, air-conditioning, refrigerating, incinerating, compacting, fire
protection 

 

12

 

and sprinkler, surveillance and security,
vacuum cleaning, public address and communications equipment and systems, all
screens, awnings, floor coverings, partitions, elevators, escalators, motors,
machinery, pipes, fittings and other items of equipment and personal property
of every kind and description now or hereafter located on the Premises or
attached to the improvements (excluding the Skyways but including any support
structures attached to the improvements with respect to the Skyways and
including the Silver Legacy Bridge and the Tunnel) that by the nature of their
location thereon or attachment thereto are real property under applicable law.

 

“Indebtedness” as
applied to any Person, means, without duplication, (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to
Capital Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed
money, (iv) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations incurred
under ERISA), which purchase price is (a) due more than six months from
the date of incurrence of the obligation in respect thereof or
(b) evidenced by a note or similar written instrument, (excluding, as an
example, any trade payables payable in the ordinary course of business that are
not so due or so evidenced) and (v) all indebtedness secured by any
Lien on any property or asset owned or held by that Person regardless of
whether the indebtedness secured thereby shall have been assumed by that Person
or is nonrecourse to the credit of that Person.  Obligations under Interest Rate Agreements shall be deemed to
constitute Contingent Obligations and not Indebtedness unless and until the
counterparties thereto have demanded payment thereunder or the related Interest
Rate Agreement has been terminated.

 

“Indemnitee” has the
meaning assigned to that term in Section 10.3.

 

“Indenture” means the
Indenture dated as of March 5, 2002 among the Borrower, Silver Legacy
Capital Corp., and The Bank of New York, as Trustee, as amended at any time.

 

“Intellectual Property”
means all patents, trademarks, tradenames, customer lists, copyrights,
technology, know-how and processes (i) used in or necessary for the
conduct of the business of Borrower and its Subsidiaries as currently conducted
and as proposed to be conducted and (ii) that are material to the
condition (financial or otherwise), business or operations of Borrower and its
Subsidiaries, taken as a whole.

 

“Intercreditor Agreement”
means the Intercreditor Agreement dated as of the Closing Date among the
Administrative Agent on behalf of the Lenders and The Bank of New York, as
Trustee for the holders of the Mortgage Notes, substantially in the form of
Exhibit D, as at any time amended.

 

“Interest Expense”
means, for any period, total interest expense (including that portion
attributable to Capital Leases in accordance with GAAP and capitalized
interest) of Borrower and its Subsidiaries with respect to all outstanding
Indebtedness of Borrower and its Subsidiaries, including, without limitation,
all commissions, discounts and 

 

13

 

other fees and charges owed with respect to
letters of credit and bankers’ acceptance financing and net costs under
Interest Rate Agreements.

 

“Interest Payment Date”
means (i) with respect to any Base Rate Loan, the last day of each month
of each year, commencing on the first such date to occur after the Closing
Date, and (ii) with respect to any Eurodollar Rate Loan, the last day of
each Interest Period applicable to such Loan; provided that in the case
of each Interest Period of longer than three months “Interest Payment Date”
shall also include each date that is three months, or an integral multiple
thereof, after the commencement of such Interest Period.

 

“Interest Period” has
the meaning assigned to that term in Section 2.2B.

 

“Interest Rate Agreement”
means any interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement or other similar agreement or arrangement designed to protect
Borrower or any of its Subsidiaries against fluctuations in interest rates.

 

“Interest Rate
Determination Date” means, with respect to any Interest Period, the second
Business Day prior to the first day of such Interest Period.

 

“Internal Revenue Code”
means the Internal Revenue Code of 1986, as amended to the date hereof and from
time to time hereafter.

 

“Investment” means
(i) any direct or indirect purchase or other acquisition by Borrower or
any of its Subsidiaries of, or of a beneficial interest in, any Securities of
any other Person, (ii) any direct or indirect redemption, retirement,
purchase or other acquisition for value, by Borrower or any Subsidiary of
Borrower from any Person other than Borrower or any of its Subsidiaries, of any
equity Securities of such Subsidiary, or (iii) any direct or indirect
loan, advance (other than advances to employees for moving, entertainment and
travel expenses, drawing accounts and similar expenditures in the ordinary
course of business) or capital contribution by Borrower or any of its
Subsidiaries to any other Person, other than any indebtedness or account
receivable or both from that other Person that is a current asset or arose from
sales to that other Person in the ordinary course of business. The amount of any
Investment shall be the original cost of such Investment plus the cost of all
additions thereto, without any adjustments for increases or decreases in value,
or write-ups, write-downs or write-offs with respect to such Investment.

 

“Issuing Lender” means
Administrative Agent.

 

“Joint Venture” means
a joint venture, partnership or other similar arrangement, whether in
corporate, partnership or other legal form; provided that in no event
shall any corporate Subsidiary of any Person be considered to be a Joint
Venture to which such Person is a party.

 

“Joint Venture Agreement”
means the Amended and Restated Agreement of Joint Venture, dated as of January
1, 2002, between the General Partners, as amended, supplemented or otherwise
modified from time 

 

14

 

to time in accordance with the terms of
Section 7.14B.

 

“Lender” and
“Lenders” means the persons identified as “Lenders” and listed on the signature
pages of this Agreement, together with their successors and permitted assigns
pursuant to Section 10.1.  The term
“Lenders” when used without a modifier or when modified only by “the” means
Requisite Lenders.

 

“Letter of Credit” or
“Letters of Credit” means Standby Letters of Credit issued or to be issued by
Issuing Lender for the account of Borrower pursuant to Section 3.1.

 

“Letter of Credit Usage”
means, as at any date of determination, the sum of (i) the maximum
aggregate amount that is or at any time thereafter may become available for
drawing under all Letters of Credit then outstanding plus (ii) the
aggregate amount of all drawings under Letters of Credit honored by Issuing
Lender and not theretofore reimbursed by Borrower (reimbursement out of the
proceeds of Loans pursuant to Section 3.3B shall be considered
reimbursement by Borrower for purposes hereof).

 

“Leverage Ratio”
means, as of the last day of any Fiscal Quarter, the ratio of
(i) Total Debt as of the date as of which the determination is being made
to (ii) EBITDA for the four consecutive Fiscal Quarter period ending on the
date as of which the determination is being made.

 

“License Revocation”
means the revocation, failure to renew (other than with respect to particular
types of gambling or gaming activities (e.g., Keno or Pai Cow) that
Borrower has elected no longer to pursue) or suspension of, or the appointment
of a receiver, supervisor or similar official with respect to, any casino,
gambling or gaming license issued by any Gaming Board covering any casino or
gaming facility of Borrower or any of its Subsidiaries.

 

“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, any agreement to give any security interest
and any mechanic’s liens) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing.

 

“Loan” means any
Revolving Loan or Term Loan, each of which may also be a Base Rate Loan or a
Eurodollar Rate Loan.

 

“Loan Documents”
means this Agreement, the Notes, the Letters of Credit (and any applications
for, or reimbursement agreements or other documents or certificates executed by
Borrower in favor of an Issuing Lender relating to, the Letters of Credit), the
Collateral Documents, the Guaranty, the Environmental Indemnities, each
Interest Rate Agreement entered into between Borrower and any Lender (provided
that each such Interest Rate Agreement shall be entitled to the benefits of the
Collateral Documents to the extent set forth in Section 9.7) and each
reaffirmation thereof.

 

15

 

“Loan Exposure”
means, with respect to any Lender as of any date of determination
(i) prior to the termination of the Commitments, that Lender’s Revolving
Commitment and Term Commitment and (ii) after the termination of the
Commitments, the sum of (a) the aggregate outstanding principal amount of
the Loans of that Lender plus (b) in the event that Lender is an
Issuing Lender, the aggregate Letter of Credit Usage in respect of all Letters
of Credit issued by that Lender (in each case net of any participations
purchased by other Lenders in such Letters of Credit or any unreimbursed
drawings thereunder) plus (c) the aggregate amount of all
participations purchased by that Lender in any drawings under Letters of Credit
honored by Issuing Lender and not theretofore reimbursed by Borrower.

 

“Loan Party” means
any of Borrower, Borrower’s Subsidiaries and General Partners and “Loan Parties”
means Borrower, Borrower’s Subsidiaries and General Partners, collectively.

 

“Maintenance Capital
Expenditures” means any Capital Expenditure for the maintenance, repair,
restoration or refurbishment of the Hotel and its existing amenities, but not
any Capital Expenditure which adds to or further improves the Hotel.

 

“Manager” means the
Person elected to manage the affairs of a limited liability company.

 

“Managing Partner”
means, at any time, Galleon, Inc., a Nevada corporation and a wholly-owned subsidiary
of Mandalay, or its successors or assigns, in the capacity of managing partner
of Borrower under the Joint Venture Agreement, at such time.

 

“Mandalay” means
Mandalay Resort Group., a Nevada corporation, its successors and permitted
assigns.

 

“Margin Stock” has
the meaning assigned to that term in Regulation U of the Board of Governors of
the Federal Reserve System as in effect from time to time.

 

“Material Adverse Effect”
means (i) a material adverse effect upon (a) the business,
operations, properties, assets, condition (financial or otherwise) or prospects
of any Loan Party and its Subsidiaries taken as a whole, (b) the validity,
priority or enforceability of any of the Loan Documents or any Lien created or
intended to be created thereby, or (c) the use, occupancy or operation of
all or any material part of the Hotel or (ii) the impairment of the
ability of any Loan Party materially to perform, or of Administrative Agent or
Lenders to enforce, the Obligations.

 

“Maturity Date” means
March 31, 2007.

 

“Mortgage Notes”
means the $160,000,000 in 10  % Mortgage
Notes due 2012 being issued concurrently herewith by Borrower and Silver Legacy
Capital Corp., a Nevada corporation, pursuant to the Indenture.

 

“Multiemployer Plan”
means a “multiemployer plan”, as defined in Section 3(37) of ERISA, to
which Borrower or any of its ERISA Affiliates is contributing, or ever has
contributed, or to which Borrower or any of

 

16

 

its ERISA Affiliates has, or ever has had, an
obligation to contribute.

 

“Net Income” means,
for any period, the net income (or loss) of Borrower and its Subsidiaries for
such period taken as a single accounting period determined in conformity with
GAAP; provided that there shall be excluded (i) the income (or
loss) of any Person (other than a Subsidiary of Borrower) in which any other
Person (other than Borrower or any of its Subsidiaries) has a joint interest,
except to the extent of the amount of dividends or other distributions actually
paid to Borrower or any of its Subsidiaries by such Person during such period,
(ii) the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary of Borrower or is merged into or consolidated with
Borrower or any of its Subsidiaries or that Person’s assets are acquired by
Borrower or any of its Subsidiaries, (iii) the income of any Subsidiary of
Borrower to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary and (iv) any after-tax gains or losses attributable to Asset
Sales or returned surplus assets of any Pension Plan.

 

“Notes” means,
collectively, the Revolving Notes and the Term Notes.

 

“Notice of Borrowing”
means a notice substantially in the form of Exhibit E delivered by Borrower to
Administrative Agent pursuant to Section 2.1C with respect to a proposed
borrowing.

 

“Notice of
Conversion/Continuation” means a notice substantially in the form of
Exhibit F delivered by Borrower to Administrative Agent pursuant to
Section 2.2D with respect to a proposed conversion or continuation of the applicable
basis for determining the interest rate with respect to the Loans specified
therein.

 

“Notice of Issuance of
Letter of Credit” means a notice substantially in the form of Exhibit G
delivered by Borrower to Administrative Agent pursuant to Section 3.1B(i)
with respect to the proposed issuance of a Letter of Credit.

 

“Obligations” means
all obligations of every nature of any Loan Party, from time to time owed to
Administrative Agent, Lenders or any of them under the Loan Documents, whether
for principal, interest, reimbursement of amounts drawn under Letters of
Credit, fees, expenses, indemnification or otherwise and whether or not the
obligation is allowed as a claim in any proceeding referred to in
Section 8.6 or 8.7.

 

“Officers’ Certificate”
means, as applied to any Person a certificate executed by that Person or on
behalf of that Person by an authorized Person; provided that every
Officers’ Certificate with respect to the compliance with a condition precedent
to the making of any Loans hereunder shall include (i) a statement that
the officer or officers making or giving such Officers’ Certificate have read
such condition and any definitions or other provisions contained in this
Agreement relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is 

 

17

 

necessary to enable them to express an
informed opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers, such
condition has been complied with.

 

“Operating Lease”
means, as applied to any Person, any lease (including, without limitation,
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) that is not a Capital Lease other than any
such lease under which that Person is the lessor.

 

“Partner Distributions”
means distributions to the General Partners pursuant to the terms of the Joint
Venture Agreement other than Tax Distributions.

 

“PBGC” means the
Pension Benefit Guaranty Corporation (or any successor thereto).

 

“Pension Plan” means
any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to
Section 412 of the Internal Revenue Code or Section 302 of ERISA.

 

“Percentage Interests”
has the meaning assigned to that term in the Joint Venture Agreement.

 

“Permitted Encumbrances”
means the following types of Liens (other than any such Lien imposed pursuant
to Section 401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA):

 

(i)            Liens for taxes, assessments or
governmental charges or claims the payment of which is not, at the time,
required to be paid pursuant to Section 6.3;

 

(ii)           statutory Liens of landlords and Liens
of carriers, warehousemen, mechanics and materialmen and other Liens imposed by
law incurred in the ordinary course of business for sums not yet delinquent or
being contested in good faith, if such reserve or other appropriate provision,
if any, as shall be required by GAAP shall have been made therefor;

 

(iii)          easements, rights of tenants,
reservations, covenants, rights-of-way, restrictions, minor defects, minor
encroachments or minor irregularities in title and other similar immaterial
charges or encumbrances that (i) arise prior to the Closing Date and are
approved in writing by the Administrative Agent or (ii) arise after the
Closing Date and would not, individually or in the aggregate, result in a
Material Adverse Effect; and

 

(iv)          Liens arising solely from filing UCC
financing statements relating solely to leases permitted by this Agreement.

 

“Person” means and
includes natural persons, corporations, limited partnerships, general
partnerships, joint stock companies, Joint Ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts, limited liability
companies or other organizations, whether or not legal entities, and
governments and agencies and political subdivisions thereof.

 

18

 

“Pledge Agreement”
means the Pledge Agreement to be executed and delivered by the General Partners
with respect to their partnership interests in Borrower in favor of the
Administrative Agent in accordance with Section 6.9 hereof, which agreement
shall be substantially in the form of the draft thereof dated February 28,
2002, with such changes as the Gaming Board shall require, as it may hereafter
be amended, supplemented or otherwise modified from time to time.

 

“Pre-Opening Expenses”
means, with respect to any fiscal period, the amount of expenses (other than
Interest Expense) incurred with respect to capital projects and properly
deferred and charged to expense as of commencement of operations, which are
classified as “pre-opening expenses” on the applicable financial statements of
Borrower and its Subsidiaries for such period, prepared in accordance with
GAAP.

 

“Premises” means the
real property situated in Reno, Nevada, and more particularly described in the
Deed of Trust.

 

“Pricing Period”
means each period of three consecutive calendar months beginning on March 1,
June 1, September 1 and December 1 of each year.

 

“Prime Rate” means
the rate of interest publicly announced from time to time by Bank of America,
as its “Prime Rate” or the similar prime rate or reference rate announced by
any successor Administrative Agent.  The
Prime Rate is a rate set by Bank of America based upon various factors
including Bank of America’s costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate.  Any change in the Prime Rate announced by
Bank of America or any successor Administrative Agent shall take effect at the
opening of business on the day specified in the public announcement of such
change.

 

“Pro Rata Share”
means, as to each of the Commitments and Loans and with respect to each Lender,
the percentage of the Loans (and of any the Letters of Credit) held by that
Lender with respect to each of the Revolving Commitments or the Term
Commitments, or if no Commitments are outstanding, the principal amount of all
Loans made pursuant to the expired Commitments.  The records of the Administrative Agent shall be presumed to
correctly reflect the Pro Rata Share of the Lenders from time to time party to
this Agreement.

 

“Quarterly Payment Date”
means the last business day of each Fiscal Quarter.

 

“Register” has the
meaning assigned to that term in Section 2.1E.

 

“Regulation D”
means Regulation D of the Board of Governors of the Federal Reserve System, as
in effect from time to time.

 

“Reimbursement Date”
has the meaning assigned to that term in Section 3.3B.

 

19

 

“Release” means any
release, spill, emission, leaking, pumping, pouring, injection, escaping,
deposit, disposal, discharge, dispersal, dumping, leaching or migration of
Hazardous Material into the indoor or outdoor environment (including, without
limitation, the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Material), or into or out of any
Facility, including the movement of any Hazardous Material through the air,
soil, surface water, groundwater or property.

 

“Requisite Lenders”
means (a) at such times as the Commitments are in effect, Lenders having
51% or more of the Commitments, and (b) following any termination of the
Commitments, Lenders having 51% or more of the aggregate Loan Exposure of all
Lenders provided, that in each case, if there are two or more Lenders
having outstanding Commitments or Loan Exposure, at least two Lenders shall be
required to constitute Requisite Lenders.

 

“Restricted Junior
Payment” means (i) any distribution of cash or property or other distribution,
direct or indirect, on account of any partnership interest in Borrower now or
hereafter outstanding, except a distribution payable solely in interests of
that class of partnership interest to the holders of that class, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any interests of any class of
partnership interest in Borrower now or hereafter outstanding, (iii) any
payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire any interests of any class of
partnership interests in Borrower now or hereafter outstanding, and
(iv) any payment or prepayment of principal of, premium, if any, or
interest on, or redemption, purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment with respect
to, any Subordinated Indebtedness other than the Mortgage Notes or any
refinancings thereof permitted hereunder.

 

“Revolving Commitment”
means the commitment of any Lender to make Revolving Loans to the Borrower, and
“Revolving Commitments” means such commitments of all Lenders in the aggregate
at the time of reference.  Initially,
the aggregate principal amount of the Revolving Commitments is $20,000,000, but
it may hereafter be reduced in the manner provided for in Section 2.4.

 

“Revolving Loan”
means any loan made by a Lender to Borrower under its Revolving Commitment
pursuant to Section 2.1

 

“Revolving Notes”
means any promissory notes of Borrower issued pursuant to Section 2.1F to
evidence the Loans made by Lenders under the Revolving Commitments,
substantially in the form of Exhibit H, with appropriate insertions, as they
may be amended, supplemented or otherwise modified from time to time.

 

“Revolving Usage”
means, as at any date of determination, the sum of (i) the aggregate
principal amount of all outstanding Revolving Loans (other than Loans made for
the purpose of reimbursing the Issuing Lender for any amount drawn under any
Letter of Credit but not yet so

 

20

applied) plus (ii) the Letter of Credit
Usage.

 

“Securities” means
any stock, shares, partnership interests, voting trust certificates,
certificates of interest or participation in any profit-sharing agreement or
arrangement, options, warrants, bonds, debentures, notes, or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or otherwise, or
in general any instruments commonly known as “securities” or any certificates
of interest, shares or participations in temporary or interim certificates for
the purchase or acquisition of, or any right to subscribe to, purchase or
acquire, any of the foregoing.

 

“Senior Officer”
means, with respect to any Person, any Chief Executive Officer, President,
Executive Vice President, Vice President, Chief Financial Officer, Treasurer or
Controller of such Person, or any individual holding an equivalent position
with such Person or any partner or member of such Person, including, without
limitation, in the case of Borrower, the General Manager of Silver Legacy Hotel
and Casino and the Director of Finance and Administration of the Silver Legacy
Hotel and Casino.

 

“Silver Legacy Bridge”
means the elevated building structure that connects the hotel portion of the
Hotel with the casino portion of the Hotel.

 

“Skyway Easements”
means those two certain Bridge Easements recorded in the Official Records of
Washoe County, Nevada, one by and between Borrower and Eldorado Resorts and the
other by and between Borrower and Circus Circus Casinos, Inc., pursuant to
which, among other things, Borrower was granted perpetual easements for
pedestrian access to and from the Improvements via the Eldorado Bridge and the
Circus Bridge, respectively.

 

“Skyways” means the
Circus Bridge and the Eldorado Bridge; the Skyways are owned by Mandalay and
Eldorado Resorts, respectively, and are subject to the terms and provisions of
the Skyway Easements.  The Skyways do
not include the Silver Legacy Bridge.

 

“Sole Arranger and Book
Manager” means Banc of America Securities LLC

 

“Standby Letter of Credit”
means any standby letter of credit or similar instrument issued for the purpose
of supporting (i) Indebtedness of Borrower or any of its Subsidiaries in
respect of industrial revenue or development bonds or financings,
(ii) workers’ compensation liabilities of Borrower or any of its
Subsidiaries, (iii) the obligations of third party insurers of Borrower or
any of its Subsidiaries arising by virtue of the laws of any jurisdiction
requiring third party insurers, and (iv) performance, payment, deposit or
surety obligations of Borrower or any of its Subsidiaries, in any case if
required by law or governmental rule or regulation or in accordance with custom
and practice in the industry; provided that Standby Letters of Credit
may not be issued for the purpose of supporting (a) trade payables,
(b) any Indebtedness constituting “antecedent debt” (as that term is used
in Section 547 of the Bankruptcy Code), or (c) any Indebtedness or
Contingent Obligation of Borrower or any 

 

21

 

of its Subsidiaries if such Indebtedness or
Contingent Obligation is secured by real property of Borrower or such
Subsidiary located in the State of California.

 

“Subordinated
Indebtedness” means any Indebtedness of Borrower subordinated in right of
payment to the Obligations pursuant to documentation containing maturities,
amortization schedules, covenants, defaults, remedies, subordination provisions
and other material terms in form and substance satisfactory to Administrative
Agent and Lenders.

 

“Subsidiary” means,
with respect to any Person, any corporation, partnership, association, joint
venture or other business entity of which more than 50% of the total voting
power of shares of stock or other ownership interests entitled (without regard
to the occurrence of any contingency) to vote in the election of the Person or
Persons (whether directors, managers, trustees or other Persons performing
similar functions) having the power to direct or cause the direction of the
management and policies thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof.

 

“Tax” or “Taxes”
means any present or future tax, levy, impost, duty, charge, fee, deduction or
withholding of any nature and whatever called, by whomsoever, on whomsoever and
wherever imposed, levied, collected, withheld or assessed; provided that
“Tax on the overall net income” of a Person shall be construed as a reference
to a tax imposed by the jurisdiction in which that Person’s principal office
(and/or, in the case of a Lender, its lending office) is located or in which
that Person is deemed to be doing business on all or part of the net income,
profits or gains of that Person (whether worldwide, or only insofar as such
income, profits or gains are considered to arise in or to relate to a
particular jurisdiction, or otherwise).

 

“Tax Distributions”
means distributions to the General Partners of cash or property pursuant to
Section 4.1(a) of the Joint Venture Agreement as in effect on the Closing
Date made in order to satisfy the General Partners’ federal tax liability
accruing in the Fiscal Year with respect to which such distributions are made
assuming each General Partner’s tax liabilities accrue at the maximum marginal
federal income tax rate that applies to such General Partner as set forth in
Section 4.2 of the Joint Venture Agreement as in effect on the Closing
Date.

 

“Term Commitment”
means the commitment of any Lender to make Term Loans to the Borrower, and
“Term Commitments” means such commitments of all Lenders in the aggregate at
the time of reference. Initially, the aggregate principal amount of the Term
Commitments is $20,000,000, but it may hereafter be reduced in the manner
provided for in Section 2.4.

 

“Term Loan” means any
loan made by a Lender to Borrower under its Term Commitment pursuant to Section
2.1

 

“Term Notes” means any
promissory notes of Borrower issued pursuant to Section 2.1F to evidence
the Loans made by Lenders under the Term Commitment, substantially in the form
of Exhibit I, with appropriate insertions, as they may be amended, supplemented
or otherwise modified from time to time.

 

22

 

“Title Policy” means
the American Land Title Association extended coverage mortgagee title insurance
policy issued to the Administrative Agent pursuant to Section 4.1F.

 

“Total Debt” means,
as at any date of determination, the sum, without duplication, of all
obligations of Borrower and its Subsidiaries with respect to interest bearing
indebtedness, notes payable, capital leases, letters of credit, guarantees and
other Contingent Obligations.

 

“Tunnel” means the
tunnel beneath Sierra Street that connects the casino portion of the Hotel to
the hotel portion of the Hotel.

 

1.2           Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement.

 

Except as otherwise expressly
provided in this Agreement, all accounting terms not otherwise defined herein
shall have the meanings assigned to them in conformity with GAAP.  Financial statements and other information
required to be delivered by Borrower to Lenders pursuant to clauses (i), (ii),
(iii) and (xiii) of Section 6.1 shall be prepared in accordance with GAAP
as in effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in Section 6.1(v)).  Calculations in connection with the
definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with GAAP as in effect at the
time such calculations are made.

 

1.3           Other Definitional Provisions.

 

References to “Sections,”
and “Exhibits” shall be to Sections of and Exhibits to this Agreement unless
otherwise specifically provided.  Any of
the terms defined in Section 1.1 may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.

 

23

 

SECTION 2

AMOUNTS
AND TERMS OF COMMITMENTS AND LOANS

 

2.1           Commitments; Making of Loans; the Register; Optional
Notes

 

1.             Revolving
Commitments.  Subject to the
terms and conditions of this Agreement and in reliance upon the representations
and warranties of the Loan Parties set forth in the Loan Documents, each Lender
hereby severally agrees to lend to Borrower from time to time during the period
from the Closing Date to but excluding the Maturity Date an aggregate amount
not exceeding its Pro Rata Share of the aggregate amount of the Revolving
Commitments, provided that, notwithstanding any other provision of this
Agreement, the Revolving Usage shall not at any time exceed the Revolving
Commitments then in effect.  The
Revolving Commitments of Lenders shall be adjusted to give effect to any
assignments of the Commitments pursuant to Section 10.1.  The amount of the Revolving Commitments
shall be reduced from time to time by the amount of any reductions thereto made
pursuant to Sections 2.4A, 2.4C(ii) and 2.4C(iii) or terminated as set
forth in Section 8.  Each Lender’s
Revolving Commitment shall expire on the Maturity Date and all Revolving Loans
and all other amounts owed hereunder with respect to the Revolving Loans and
the Revolving Commitments shall be paid in full no later than that date.   Amounts borrowed under this
Section 2.1A may be repaid and reborrowed at any time prior to the
Maturity Date.

 

2.             Term
Commitments.  Subject to the
terms and conditions of this Agreement and in reliance upon the representations
and warranties of the Loan Parties set forth in the Loan Documents, each Lender
hereby severally agrees to lend to Borrower on the Closing Date the full amount
of its Pro Rata Share of the aggregate amount of the Term Commitments.  The Term Commitments of Lenders shall be
adjusted to give effect to any assignments of the Commitments pursuant to
Section 10.1.  The amount of the
Term Commitments shall be reduced from time to time by the amount of any
reductions thereto made pursuant to Sections 2.4B, 2.4C(ii) and 2.4C(iii)
or terminated as set forth in Section 8. 
Each Lender’s Term Commitment shall expire on the Maturity Date and all
Term Loans and all other amounts owed hereunder with respect to the Term Loans
and the Term Commitments shall be paid in full no later than that date.   Amounts borrowed under this
Section 2.1B may be repaid but may not be reborrowed at any time, but may
be refinanced with the proceeds of other Term Loans.

 

3.             Borrowing
Mechanics.  The Loans made on
each Funding Date (other than Loans made pursuant to Section 3.3B for the
purpose of reimbursing Issuing Lender for the amount of a drawing under a
Letter of Credit issued by it) shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $100,000 in excess of that amount; provided
that each Eurodollar Rate Loan shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $100,000 in excess of that amount.  Subject to the next following paragraph,
whenever Borrower desires that Lenders make Loans it shall deliver to
Administrative Agent a Notice of Borrowing no later than 9:00 A.M. (Pacific
time) at least three Business Days in advance of the proposed Funding Date (in
the case of a Eurodollar Rate Loan) or at least one Business Day in advance of
the proposed Funding Date (in the case of a Base Rate Loan).  The Notice of Borrowing shall specify
(i) the proposed Funding Date (which shall be a Business Day), 

 

24

 

(ii) the amount of Loans requested, (iii) whether such Loans
shall be Base Rate Loans or Eurodollar Rate Loans, and (iv) in the case of
a Eurodollar Rate Loan, the initial Interest Period requested therefor.  Loans may be continued as or converted into
Base Rate Loans and Eurodollar Rate Loans in the manner provided in
Section 2.2D.

 

Unless Administrative Agent,
in its sole and absolute discretion, has notified Borrower to the contrary, a
Loan may be requested by telephone by a duly authorized officer or other Person
authorized to borrow on behalf of Borrower, in which case Borrower shall
confirm such request by delivering promptly a Notice of Borrowing with respect
to such Loan in person or by telecopier to Administrative Agent.  Neither Administrative Agent nor any Lender
shall incur any liability to any Loan Party in acting upon any such telephonic
notice that Administrative Agent believes in good faith to have been given by a
duly authorized officer or other person authorized to borrow on behalf of
Borrower or for otherwise acting in good faith under this Section 2.1C,
and upon funding of Loans by Lenders in accordance with this Agreement pursuant
to any such telephonic notice Borrower shall have effected Loans hereunder.

 

Borrower shall notify
Administrative Agent prior to the funding of any Loans in the event that any of
the matters to which Borrower is required to certify in the applicable Notice
of Borrowing is no longer true and correct as of the applicable Funding Date,
and the acceptance by Borrower of the proceeds of any Loans shall constitute a
re-certification by Borrower, as of the applicable Funding Date, as to the
matters to which Borrower is required to certify in the applicable Notice of
Borrowing.

 

Except as otherwise provided
in Sections 2.6B, 2.6C and 2.6G, a Notice of Borrowing for a Eurodollar
Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Borrower shall be bound
to make a borrowing in accordance therewith.

 

4.             Disbursement
of Funds.  All Loans under this
Agreement shall be made by Lenders severally and simultaneously and in
proportion to their respective Pro Rata Shares, it being understood that no
Lender shall be responsible for any default by any other Lender in that other
Lender’s obligation to make a Loan requested hereunder nor shall the Commitment
of any Lender be increased or decreased as a result of a default by any other
Lender in that other Lender’s obligation to make a Loan requested
hereunder.  Promptly after receipt by
Administrative Agent of a Notice of Borrowing pursuant to Section 2.1B (or
telephonic notice in lieu thereof), Administrative Agent shall notify each
Lender of the proposed borrowing.  Each
Lender shall make the amount of its Loan available to Administrative Agent, in
same day funds in Dollars, at the Funding and Payment Office, not later than
1:00 P.M. (Pacific time) on the applicable Funding Date.  Except as provided in Section 3.3B with
respect to Loans used to reimburse Issuing Lender for the amount of a drawing
under a Letter of Credit issued by it, upon satisfaction or waiver of the
conditions precedent specified in Sections 4.1 (in the case of the initial
Loans made hereunder) and 4.2 (in the case of all Loans), Administrative Agent
shall make the proceeds of such Loans available to Borrower on the applicable
Funding Date by causing an amount of same day funds in Dollars equal to the
proceeds of all such Loans received by Administrative Agent from Lenders to be
credited to the account of Borrower at the Funding and Payment Office.

 

25

 

Unless Administrative Agent
shall have been notified by any Lender prior to the Funding Date for any Loans
that such Lender does not intend to make available to Administrative Agent the
amount of such Lender’s Loan requested on such Funding Date, Administrative
Agent may assume that such Lender has made such amount available to
Administrative Agent on such Funding Date and Administrative Agent may, in its
sole discretion, but shall not be obligated to, make available to Borrower a
corresponding amount on such Funding Date. 
If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Funding Date until the date such
amount is paid to Administrative Agent, at the Federal Funds Effective Rate for
three Business Days and thereafter at the Base Rate.  If such Lender does not pay such corresponding amount forthwith
upon Administrative Agent’s demand therefor, Administrative Agent shall promptly
notify Borrower and Borrower shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans.  Nothing in this Section 2.1D shall be
deemed to relieve any Lender from its obligation to fulfill its Commitments
hereunder or to prejudice any rights that Borrower may have against any Lender
as a result of any default by such Lender hereunder.

 

5.             The Register.

 

(1)           Administrative
Agent shall maintain, at its address referred to in Section 10.8, a
register for the recordation of the names and addresses of Lenders and the
Revolving Commitment and Term Commitment and Loans of each Lender from time to
time (the “Register”).  The Register
shall be available for inspection by Borrower, any Lender or any Gaming Board
and their respective agents at any reasonable time and from time to time upon
reasonable prior notice.

 

(2)           Administrative
Agent shall record in the Register the Revolving Commitment and Term Commitment
and the Loans from time to time of each Lender and each repayment or prepayment
in respect of the principal amount of the Loans of each Lender.  Any such recordation shall be presumed to be
correct; provided that failure to make any such recordation, or any
error in such recordation, shall not affect Borrower’s Obligations in respect
of the applicable Loans.

 

(3)           Each
Lender shall record on its internal records (including, without limitation, any
Note held by such Lender) the amount of each Loan made by it and each payment
in respect thereof.  Any such
recordation shall be presumed to be correct; provided that failure to
make any such recordation, or any error in such recordation, shall not affect
Borrower’s Obligations in respect of the applicable Loans; and provided,
further that in the event of any inconsistency between the Register and
any Lender’s records, the recordations in the Register shall govern.

 

(4)           Borrower,
Administrative Agent and Lenders shall deem and 

 

26

 

treat the Persons listed as Lenders in the Register as the holders and
owners of the corresponding Revolving Commitments and Term Commitments and
Loans listed therein for all purposes hereof, and no assignment or transfer of
any such Commitments or Loans shall be effective, in each case unless and until
an Assignment Agreement effecting the assignment or transfer thereof shall have
been accepted by Administrative Agent and recorded in the Register as provided
in Section 10.1B(ii).  Prior to
such recordation, all amounts owed with respect to the applicable Commitments
or Loans shall be owed to the Lender listed in the Register as the owner thereof,
and any request, authority or consent of any Person who, at the time of making
such request or giving such authority or consent, is listed in the Register as
a Lender shall be conclusive and binding on any subsequent holder, assignee or
transferee of the corresponding Commitments or Loans.

 

(5)           Borrower
hereby designates Administrative Agent to serve as Borrower’s agent solely for
purposes of maintaining the Register as provided in this Section 2.1E, and
Borrower hereby agrees that, to the extent Administrative Agent serves in such
capacity, Administrative Agent and its officers, directors, employees, agents
and affiliates shall constitute Indemnitees for all purposes under
Section 10.3.

 

6.             Optional
Notes.  If so requested by any
Lender, Borrower shall execute and deliver a Note to such Lender.

 

2.2           Interest on the
Loans.

 

1.             Rate of
Interest.  Subject to the
provisions of Sections 2.6 and 2.7, each Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate
or the Eurodollar Rate, as the case may be. 
The applicable basis for determining the rate of interest with respect
to any Loan shall be selected by Borrower initially at the time a Notice of
Borrowing is given with respect to such Loan pursuant to Section 2.1B. The
basis for determining the interest rate with respect to any Loan may be changed
from time to time pursuant to Section 2.2D. If on any day a Loan is
outstanding with respect to which notice has not been delivered to
Administrative Agent in accordance with the terms of this Agreement specifying
the applicable basis for determining the rate of interest, then for that day
that Loan shall bear interest determined by reference to the Base Rate.

 

Subject to the provisions of
Sections 2.2E and 2.6, the Loans shall bear interest through maturity as
follows:

 

(i)            if a Eurodollar Rate Loan, then at the sum of the
Eurodollar Rate plus the Applicable Eurodollar Rate Margin.

 

(ii)           if a Base Rate Loan, then at the sum of the Base Rate plus
the Applicable Base Rate Margin.

 

2.             Interest
Periods.  In connection with
each Eurodollar Rate Loan, Borrower may, pursuant to the applicable Notice of
Borrowing or 

 

27

 

Notice of Conversion/Continuation, as the case may be, select an
interest period (each an “Interest Period”) to be applicable to such Loan,
which Interest Period shall be, at Borrower’s option, either a one, two, three
or six month period; provided that:

 

(1)           the
initial Interest Period for any Eurodollar Rate Loan shall commence on the
Funding Date in respect of such Loan, in the case of a Loan initially made as a
Eurodollar Rate Loan, or on the date specified in the applicable Notice of
Conversion/Continuation, in the case of a Loan converted to a Eurodollar Rate
Loan;

 

(2)           in
the case of immediately successive Interest Periods applicable to a Eurodollar
Rate Loan continued as such pursuant to a Notice of Conversion/Continuation,
each successive Interest Period shall commence on the day on which the
immediately preceding Interest Period expires;

 

(3)           if
an Interest Period would otherwise expire on a day that is not a Business Day,
such Interest Period shall expire on the next succeeding Business Day; provided
that, if any Interest Period would otherwise expire on a day that is not a
Business Day but is a day of the month after which no further Business Day
occurs in such month, such Interest Period shall expire on the next preceding
Business Day;

 

(4)           any
Interest Period that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall, subject to clause (v) of this
Section 2.2B, end on the last Business Day of a calendar month;

 

(5)           no
Interest Period with respect to any portion of the Loans shall extend beyond
the Maturity Date;

 

(6)           no
Interest Period with respect to any portion of the Loans shall extend beyond
the date on which a permanent reduction of the Revolving Commitments is
scheduled to occur unless the sum of (a) the aggregate principal amount of
Loans that are Base Rate Loans plus (b) the aggregate principal
amount of Loans that are Eurodollar Rate Loans with Interest Periods expiring
on or before such date plus (c) the excess of the Revolving
Commitments then in effect over the Revolving Usage as of such date equals or
exceeds the permanent reduction of the Revolving Commitments that is scheduled
to occur on such date;

 

(7)           there
shall be no more than ten Interest Periods outstanding at any time; and

 

(8)           in
the event Borrower fails to specify an Interest Period for any Eurodollar Rate
Loan in the applicable Notice of Borrowing or Notice of
Conversion/Continuation, Borrower shall be deemed to have selected an Interest
Period of one month.

 

3.             Interest
Payments.  Subject to the
provisions of Section 2.2E, interest on each Loan shall be payable in
arrears on and to each Interest 

 

28

 

Payment Date applicable to that Loan, upon any prepayment of that Loan
(to the extent accrued on the amount being prepaid) and at maturity (including
final maturity); provided that in the event any Loans that are Base Rate
Loans are prepaid pursuant to Section 2.4C(i), interest accrued on such
Loans through the date of such prepayment shall be payable on the next
succeeding Interest Payment Date applicable to Base Rate Loans (or, if earlier,
at final maturity).

 

4.             Conversion
or Continuation.  Subject to the
provisions of Section 2.6, Borrower shall have the option at any time
(i) to convert all or any part of its outstanding Loans equal to
$1,000,000 and integral multiples of $100,000 in excess of that amount from
Loans bearing interest at a rate determined by reference to one basis to Loans
bearing interest at a rate determined by reference to an alternative basis or
(ii) upon the expiration of any Interest Period applicable to a Eurodollar
Rate Loan, to continue all or any portion of such Loan equal to $1,000,000 and integral
multiples of $100,000 in excess of that amount as a Eurodollar Rate Loan; provided,
however, that a Eurodollar Rate Loan may only be converted into a Base
Rate Loan on the expiration date of an Interest Period applicable thereto.

 

Subject to the next following
paragraph, Borrower shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 9:00 A.M. (Pacific time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). 
A Notice of Conversion/Continuation shall specify (i) the proposed
conversion/continuation date (which shall be a Business Day), (ii) the
amount and type of the Loan to be converted/continued, (iii) the nature of
the proposed conversion/continuation, (iv) in the case of a conversion to,
or a continuation of, a Eurodollar Rate Loan, the requested Interest Period,
and (v) in the case of a conversion to, or a continuation of, a Eurodollar
Rate Loan, that no Default or Event of Default has occurred and is continuing.

 

Unless Administrative Agent,
in its sole and absolute discretion, has notified Borrower to the contrary, a
Loan may be requested by telephone by a duly authorized officer or other Person
authorized to borrow on behalf of Borrower, in which case Borrower shall
confirm such request by delivering promptly a Notice of Borrowing with respect
to such Loan in person or by telecopier to Administrative Agent.  Borrower and Lenders may enter a memorandum
of understanding that sets forth specific procedures for such telephonic
requests; if Lenders comply with the procedures set forth in such memorandum
(or if no such memorandum is entered), neither Administrative Agent nor any
Lender shall incur any liability to Borrower in acting upon any such telephonic
notice that Administrative Agent believes in good faith to have been given by a
duly authorized officer or other person authorized to act on behalf of Borrower
or for otherwise acting in good faith under this Section 2.2D, and upon
conversion or continuation of the applicable basis for determining the interest
rate with respect to any Loans in accordance with this Agreement pursuant to
any such telephonic notice Borrower shall have effected a conversion or
continuation, as the case may be, hereunder.

 

29

 

Except as otherwise provided
in Sections 2.6B, 2.6C and 2.6G, a Notice of Conversion/Continuation for
conversion to, or continuation of, a Eurodollar Rate Loan (or telephonic notice
in lieu thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Borrower shall be bound to effect a conversion or
continuation in accordance therewith.

 

5.             Post-Maturity Interest.  Any
principal payments on the Loans not paid when due and, to the extent permitted
by applicable law, any interest payments on the Loans or any fees or other
amounts owed hereunder not paid when due, in each case whether at stated
maturity, by notice of prepayment (which may be revoked by Borrower to the
extent such revocation will not result in the incurrence of costs by
Administrative Agent or any Lender or, if incurred, such costs are reimbursed
by Borrower), by acceleration or otherwise, shall thereafter bear interest
(including post-petition interest in any proceeding under the Bankruptcy Code
or other applicable bankruptcy laws) payable on demand at a rate which is 2%
per annum in excess of the interest rate otherwise payable under this Agreement
with respect to the applicable Loans (or, in the case of any such fees and
other amounts, at a rate which is 2% per annum in excess of the interest rate
otherwise payable under this Agreement for Base Rate Loans); provided
that, in the case of Eurodollar Rate Loans, upon the expiration of the Interest
Period in effect at the time any such increase in interest rate is effective
such Eurodollar Rate Loans shall thereupon become Base Rate Loans and shall
thereafter bear interest payable upon demand at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base
Rate Loans.  Payment or acceptance of
the increased rates of interest provided for in this Section 2.2E is not a
permitted alternative to timely payment and shall not constitute a waiver of
any Event of Default or otherwise prejudice or limit any rights or remedies of
Administrative Agent or any Lender.

 

6.             Computation of Interest and Fees.  Interest on the Loans shall be computed (i)
in the case of Base Rate Loans, on the basis of a 365-day or 366-day year, as
the case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of
a 360-day year, in each case for the actual number of days elapsed in the
period during which it accrues.  Fees
payable by Borrower under this Agreement shall be computed on the basis of a
360-day year for the actual number of days during which the fee accrues.  In computing interest on any Loan, the date
of the making of such Loan or the first day of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted from a
Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan to such
Base Rate Loan, as the case may be, shall be included, and the date of payment
of such Loan or the expiration date of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted to a Eurodollar Rate
Loan, the date of conversion of such Base Rate Loan to such Eurodollar Rate
Loan, as the case may be, shall be excluded; provided that if a Loan is
repaid on the same day on which it is made, one day’s interest shall be paid on
that Loan.

 

2.3           Fees

 

1.             Commitment
Fees.  Borrower agrees to pay to
Administrative Agent, for distribution to each Lender in proportion to that
Lender’s Pro 

 

30

 

Rata Share, commitment fees for the period from and including the
Closing Date to and excluding the Maturity Date equal to: the average of the
daily excess of the Revolving Commitments over the Revolving Usage multiplied
by the Applicable Commitment Fee Rate. 
These commitment fees shall be payable quarterly in arrears on each
Quarterly Payment Date and on the Maturity Date.

 

2.             Upfront Fees, Arrangement Fee,
Administrative Agency Fee.  On
the Closing Date, the Borrower shall pay to the Lenders through the
Administrative Agent upfront fees in the amounts set forth in a fee letter with
the Administrative Agent.  Borrower also
agrees to pay to Administrative Agent a non-refundable arrangement fee and a
non-refundable administrative agency fee, payable in amounts and on the dates
set forth in the Fee Letter.

 

2.4           Prepayments and Reductions in Commitments; General
Provisions Regarding Payments.

 

1.             Scheduled Reductions of Term
Commitments.  Borrower shall
repay the outstanding Term Loans on each Quarterly Payment Date commencing with
March 31, 2003 (and the Term Commitments shall be permanently reduced) in the
amounts set forth below:

 

	
  Quarterly
  Payment Dates

  	
   

  	
  Amount

  	
   

  
	
  March 31, 2003 through 

  December 31, 2004

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2005 through 

  December 31, 2005

  	
   

  	
  $

  	
  1,250,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2006 through 

  December 31, 2006

  	
   

  	
  $

  	
  1,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  1,000,000

  	
   

  

 

provided each required payment set forth above shall
be (i) reduced in connection with any voluntary or mandatory reductions of
the Term Commitments in accordance with Section 2.4B(iii) and
(ii) accelerated to the extent acceleration of the Loans occurs pursuant
to Section 8.20B.

 

2.             Prepayments and Unscheduled
Reductions in Commitments.

 

(1)           Voluntary
Prepayments.  Borrower may, upon not
less than one Business Day’s prior written or telephonic notice, in the case of
Base Rate Loans, and three Business Days’ prior written or telephonic notice,
in the case of Eurodollar Rate Loans, in each case given to Administrative
Agent by 9:00 A.M. (Pacific time) on the date required and, if given by
telephone, promptly confirmed in writing to Administrative Agent (which
original written or telephonic notice Administrative Agent will promptly
transmit by telefacsimile or telephone to each Lender), at any time and from
time to time prepay any Loans on any Business Day in whole or in part in an
aggregate minimum amount of $1,000,000 and integral multiples of $100,000 in
excess of that amount; provided, however, that the payment of any

 

31

 

Eurodollar Rate Loan on a date other than the last
day of the related Interest Period shall be subject to Section 2.6D.  Notice of prepayment having been given as
aforesaid, the principal amount of the Loans specified in such notice shall
become due and payable on the prepayment date specified therein; provided
that such notice may be revoked by Borrower to the extent such revocation will
not result in the incurrence of costs by Administrative Agent or any Lender or,
if incurred, such costs are reimbursed by Borrower.  Any such voluntary prepayment shall be applied as specified in
Section 2.4C(iv).

 

(2)           Voluntary
Reductions of Commitments.  Borrower
may, upon not less than three Business Days’ prior written or telephonic notice
confirmed in writing to Administrative Agent (which original written or telephonic
notice Administrative Agent will promptly transmit by telefacsimile or
telephone to each Lender), at any time and from time to time terminate in whole
or permanently reduce in part, without premium or penalty, the Commitments, provided
that:

 

(1)           Borrower
shall not voluntarily terminate any portion of the Revolving Commitment at any
time when any portion of the Term Commitments remain in effect,

 

(2)           Each
reduction shall in an amount of $1,000,000 and integral multiples of $100,000
in excess of that amount; and

 

(3)           No
reduction shall result in a Commitment being in an amount which is less than
the usage of Loans and Letters of Credit under that Commitment.

 

Borrower’s notice to
Administrative Agent shall designate the date (which shall be a Business Day)
of such termination or reduction and the amount of any partial reduction, and
such termination or reduction of the Commitments shall be effective on the date
specified in Borrower’s notice and shall reduce the relevant Commitment of each
Lender proportionately to its Pro Rata Share. 
Any such voluntary reduction of the Commitments shall be applied as
specified in Section 2.4C(iv).

 

(3)           Mandatory
Prepayments and Mandatory Reductions of Commitments. Borrower shall prepay
the Revolving Loans to the extent necessary so that the Revolving Usage shall
not at any time exceed the Revolving Commitments then in effect.  Borrower shall prepay the Term Loans to the
extent necessary so that the aggregate principal amount outstanding under the
Term Commitments shall not at any time exceed the Term Commitments then in
effect.  Any such mandatory prepayments
shall be applied as specified in Section 2.4B(iv).

 

(4)           Application
of Prepayments to Base Rate Loans and Eurodollar Rate Loans.  Any prepayment of the Loans shall be applied
first to Base Rate Loans to the full extent thereof before application to
Eurodollar Rate Loans, in each case in a manner which minimizes the amount of
any payments required to be made by Borrower pursuant to Section 2.6D.

 

32

 

3.             General Provisions Regarding
Payments.

 

(1)           Manner
and Time of Payment.  All payments
by Borrower of principal, interest, fees and other Obligations hereunder and
under the Notes shall be made in Dollars in same day funds, without defense,
set-off or counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 11:00 A.M. (Pacific time) on the date due
at the Funding and Payment Office for the account of Lenders; funds received by
Administrative Agent after that time on such due date shall be deemed to have
been paid by Borrower on the next succeeding Business Day.  Borrower hereby authorizes Administrative
Agent to charge its accounts with Administrative Agent upon the occurrence and
during the continuance of an Event of Default, in order to cause timely payment
to be made to Administrative Agent of all principal, interest, fees and
expenses due hereunder (subject to sufficient funds being available in its
accounts for that purpose) and after such a charge is made on sufficient funds
available, payment of principal, interest and fees under this Section 2.4C
shall be deemed to have been made; provided however that until such
occurrence and continuance of an Event of Default, Administrative Agent shall
not charge Borrower’s accounts with Administrative Agent until receipt by
Administrative Agent of written authorization from Borrower in accordance with
the provisions of Section 10.8.

 

(2)           Application
of Payments to Principal and Interest. 
All payments in respect of the principal amount of any Loan shall
include payment of accrued interest on the principal amount being repaid or
prepaid, and all such payments shall be applied to the payment of interest
before application to principal.

 

(3)           Apportionment
of Payments.  Aggregate principal
and interest payments shall be apportioned among all outstanding Loans to which
such payments relate, in each case proportionately to Lenders’ respective Pro
Rata Shares.  Administrative Agent shall
promptly distribute to each Lender, at its primary address set forth below its
name on the appropriate signature page hereof or at such other address as such
Lender may request, its Pro Rata Share of all such payments received by
Administrative Agent and the commitment fees of such Lender when received by
Administrative Agent pursuant to Section 2.3.  Notwithstanding the foregoing provisions of this
Section 2.4C(iii), if, pursuant to the provisions of Section 2.6C,
any Notice of Conversion/Continuation is withdrawn as to any Affected Lender or
if any Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of
any Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.

 

(4)           Payments
on Business Days.  Whenever any
payment to be made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding Business Day
and such extension of time shall be included in the computation of the payment
of interest hereunder or of the commitment fees hereunder, as the case may be.

 

(5)           Notation
of Payment.  Each Lender agrees that
before 

 

33

 

disposing of any Note held by it, or any part thereof (other than by
granting participations therein), that Lender will make a notation thereon of
all Loans evidenced by that Note and all principal payments previously made
thereon and of the date to which interest thereon has been paid; provided
that the failure to make (or any error in the making of) a notation of any Loan
made under such Note shall not limit or otherwise affect the obligations of any
Loan Party hereunder or under such Note with respect to any Loan or any
payments of principal or interest on such Note.

 

2.5           Use of Proceeds.

 

1.             The proceeds of the
Loans, together with other funds available to Borrower, shall be applied by
Borrower (i) on the Closing Date, to refinance the obligations under the
Existing Credit Agreement and to make the distributions to the General Partners
contemplated by Section 7.5(i), and (ii) thereafter, to fund distributions
permitted under Section 7.5 to the General Partners, for working capital and
other general business purposes.

 

2.             Margin
Regulations.  No portion of the
proceeds of any borrowing under this Agreement shall be used by Borrower or any
of its Subsidiaries in any manner that might cause the borrowing or the
application of such proceeds to violate Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System or
any other regulation of such Board or to violate the Exchange Act, in each case
as in effect on the date or dates of such borrowing and such use of proceeds.

 

2.6           Special Provisions Governing Eurodollar Rate Loans.

 

Notwithstanding any other
provision of this Agreement to the contrary, the following provisions shall
govern with respect to Eurodollar Rate Loans as to the matters covered:

 

1.             Determination of Applicable
Interest Rate.  As soon as
practicable after 9:00 A.M. (Pacific time) on each Interest Rate Determination
Date, Administrative Agent shall determine (which determination shall, absent
manifest error, be final, conclusive and binding upon all parties) the interest
rate that shall apply to the Eurodollar Rate Loans for which an interest rate
is then being determined for the applicable Interest Period and shall promptly
give notice thereof (in writing or by telephone confirmed in writing) to
Borrower and each Lender.

 

2.             Inability to Determine Applicable
Interest Rate.  In the event
that Administrative Agent shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market adequate and fair means
do not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Eurodollar Rate, Administrative Agent
shall on such date give notice (by telefacsimile or by telephone confirmed in
writing) to Borrower and each Lender of such determination, whereupon
(i) no Loans may be made as, or converted to, Eurodollar Rate Loans until
such time as Administrative Agent notifies Borrower and Lenders that the
circumstances giving rise to such 

 

34

 

notice no longer exist and (ii) any Notice of Borrowing or Notice
of Conversion/Continuation given by Borrower with respect to the Loans in
respect of which such determination was made shall be deemed to be rescinded by
Borrower.

 

3.             Illegality or Impracticability of
Eurodollar Rate Loans.  In the
event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Borrower and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has
become unlawful as a result of compliance by such Lender in good faith with any
law, treaty, governmental rule, central bank directive, regulation, guideline
or order (or would conflict with any such treaty, governmental rule,
regulation, guideline or order not having the force of law even though the
failure to comply therewith would not be unlawful) or (ii) has become
impracticable, or would cause such Lender material hardship, as a result of
contingencies occurring after the date of this Agreement which materially and
adversely affect the interbank Eurodollar market or the position of such Lender
in that market, then, and in any such event, such Lender shall be an “Affected
Lender” and it shall on that day give notice (by telefacsimile or by telephone
confirmed in writing) to Borrower and Administrative Agent of such
determination (which notice Administrative Agent shall promptly transmit to
each other Lender).  Thereafter
(a) the obligation of the Affected Lender to make Loans as, or to convert
Loans to, Eurodollar Rate Loans shall be suspended until such notice shall be
withdrawn by the Affected Lender, (b) to the extent such determination by
the Affected Lender relates to a Eurodollar Rate Loan then being requested by
Borrower pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or
convert such Loan to, as the case may be) a Base Rate Loan, (c) the
Affected Lender’s obligation to maintain its outstanding Eurodollar Rate Loans
(the “Affected Loans”) shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.  Notwithstanding the foregoing, to the extent
a determination by an Affected Lender as described above relates to a
Eurodollar Rate Loan then being requested by Borrower pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, Borrower shall have the
option, subject to the provisions of Section 2.6D, to rescind such Notice
of Borrowing or Notice of Conversion/Continuation as to all Lenders by giving
notice (by telefacsimile or by telephone confirmed in writing) to
Administrative Agent of such rescission on the date on which the Affected
Lender gives notice of its determination as described above (which notice of
rescission Administrative Agent shall promptly transmit to each other
Lender).  Except as provided in the
immediately preceding sentence, nothing in this Section 2.6C shall affect
the obligation of any Lender other than an Affected Lender to make or maintain
Loans as, or to convert Loans to, Eurodollar Rate Loans in accordance with the
terms of this Agreement.

 

4.             Compensation For Breakage or
Non-Commencement of Interest Periods. 
Borrower shall compensate each Lender, upon written request by that
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including, without
limitation, any interest paid by that Lender to lenders of funds 

 

35

 

borrowed by it to make or carry its Eurodollar Rate Loans and any loss,
expense or liability sustained by that Lender in connection with the
liquidation or re-employment of such funds) which that Lender may sustain:
(i) if for any reason (other than a default by that Lender) a borrowing of
any Eurodollar Rate Loan does not occur on a date specified therefor in a
Notice of Borrowing or a telephonic request for borrowing, or a conversion to
or continuation of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Conversion/Continuation or a telephonic request for
conversion or continuation, (ii) if any prepayment or other principal payment
or any conversion of any of its Eurodollar Rate Loans occurs on a date prior to
the last day of an Interest Period applicable to that Loan, (iii) if any
prepayment of any of its Eurodollar Rate Loans is not made on any date
specified in a notice of prepayment given by Borrower, or (iv) as a
consequence of any other default by Borrower in the repayment of its Eurodollar
Rate Loans when required by the terms of this Agreement.

 

5.             Booking of Eurodollar Rate Loans.  Any Lender may make, carry or transfer
Eurodollar Rate Loans at, to, or for the account of any of its branch offices
or the office of an Affiliate of that Lender.

 

6.             Assumptions Concerning Funding of
Eurodollar Rate Loans. 
Calculation of all amounts payable to a Lender under this
Section 2.6 and under Section 2.7A shall be made as though that
Lender had actually funded each of its relevant Eurodollar Rate Loans through
the purchase of a Eurodollar deposit bearing interest at the rate obtained
pursuant to the definition of Eurodollar Rate in an amount equal to the amount
of such Eurodollar Rate Loan and having a maturity comparable to the relevant
Interest Period and through the transfer of such Eurodollar deposit from an
offshore office of that Lender to a domestic office of that Lender in the
United States of America; provided, however, that each Lender may
fund each of its Eurodollar Rate Loans in any manner it sees fit and the
foregoing assumptions shall be utilized only for the purposes of calculating
amounts payable under this Section 2.6 and under Section 2.7A.

 

7.             Eurodollar Rate Loans After Default.  After the occurrence of and during the
continuation of a Default or an Event of Default, (i) Borrower may not
elect to have a Loan be made or maintained as, or converted to, a Eurodollar
Rate Loan after the expiration of any Interest Period then in effect for that
Loan and (ii) subject to the provisions of Section 2.6D, any Notice
of Borrowing or Notice of Conversion/Continuation given by Borrower with
respect to a requested borrowing or conversion/continuation that has not yet
occurred shall be deemed to be rescinded by Borrower.

 

2.7           Increased Costs; Taxes; Capital Adequacy.

 

1.             Compensation for Increased Costs
and Taxes.  Subject to the
provisions of Section 2.7B, in the event that any Lender shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after
the date hereof, or compliance by such Lender with 

 

36

 

any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-governmental
authority (whether or not having the force of law):

 

(1)           subjects
such Lender (or its applicable lending office) to any additional Tax (other
than any Tax on the overall net income of such Lender) with respect to this
Agreement or any of its obligations hereunder or any payments to such Lender
(or its applicable lending office) of principal, interest, fees or any other
amount payable hereunder;

 

(2)           imposes,
modifies or holds applicable any reserve (including without limitation any
marginal, emergency, supplemental, special or other reserve), special deposit,
compulsory loan, FDIC insurance or similar requirement against assets held by,
or deposits or other liabilities in or for the account of, or advances or loans
by, or other credit extended by, or any other acquisition of funds by, any
office of such Lender (other than any such reserve or other requirements with
respect to Eurodollar Rate Loans that are reflected in the definition of
Eurodollar Rate); or

 

(3)           imposes
any other condition (other than with respect to a Tax matter) on or affecting
such Lender (or its applicable lending office) or its obligations hereunder or
the interbank Eurodollar market;

 

and the result of any of the foregoing is to
increase the cost to such Lender of agreeing to make, making or maintaining
Loans hereunder or to reduce any amount received or receivable by such Lender
(or its applicable lending office) with respect thereto; then, in any such
case, Borrower shall promptly pay to such Lender, upon receipt of the statement
referred to in the next sentence, such additional amount or amounts (in the
form of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its sole discretion shall determine) as may be
necessary to compensate such Lender for any such increased cost or reduction in
amounts received or receivable hereunder. 
Such Lender shall deliver to Borrower (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this Section 2.7A,
which statement shall be conclusive and binding upon all parties hereto absent
manifest error.

 

2.             Withholding
of Taxes.

 

(1)           Payments
to Be Free and Clear.  All sums
payable by Borrower under this Agreement and the other Loan Documents shall be
paid free and clear of and (except to the extent required by law) without any
deduction or withholding on account of any Tax (other than a Tax on the overall
net income of any Lender) imposed, levied, collected, withheld or assessed by
or within the United States of America or any political subdivision in or of
the United States of America or any other jurisdiction from or to which a
payment is made by or on behalf of Borrower or by any federation or
organization of which the United States of America or any such jurisdiction is
a member at the time of payment.

 

37

 

(2)           Grossing-up
of Payments.  If Borrower or any
other Person is required by law to make any deduction or withholding on account
of any such Tax (other than a Tax on the overall net income of any Lender) from
any sum paid or payable by Borrower to Administrative Agent or any Lender under
any of the Loan Documents:

 

(1)           Borrower shall
notify Administrative Agent of any such requirement or any change in any such
requirement as soon as Borrower becomes aware of it;

 

(2)           Borrower shall pay
any such Tax (other than a Tax on the overall net income of any Lender) before
the date on which penalties attach thereto, such payment to be made (if the
liability to pay is imposed on Borrower) for its own account or (if that
liability is imposed on Administrative Agent or such Lender, as the case may
be) on behalf of and in the name of Administrative Agent or such Lender;

 

(3)           the sum payable by
Borrower in respect of which the relevant deduction, withholding or payment is
required shall be increased to the extent necessary to ensure that, after the
making of that deduction, withholding or payment, Administrative Agent or such
Lender, as the case may be, receives on the due date a net sum equal to what it
would have received had no such deduction, withholding or payment been required
or made; and

 

(4)           within 30 days after
paying any sum from which it is required by law to make any deduction or
withholding, and within 30 days after the due date of payment of any Tax which
it is required by clause (b) above to pay, Borrower shall deliver to
Administrative Agent evidence satisfactory to the other affected parties of
such deduction, withholding or payment and of the remittance thereof to the
relevant taxing or other authority;

 

(3)           Evidence
of Exemption from U.S. Withholding Tax.

 

(1)           Each Lender that is
organized under the laws of any jurisdiction other than the United States or
any state or other political subdivision thereof (for purposes of this
Section 2.7B(iii), a “Non-US Lender”) shall deliver to Administrative
Agent for transmission to Borrower, on or prior to the Closing Date (in the
case of each Lender listed on the signature pages hereof) or on the date of the
Assignment Agreement pursuant to which it becomes a Lender (in the case of each
other Lender), and at such other times as may be necessary in the determination
of Borrower or Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue Service Form W-8,
properly completed and duly executed by such Lender, together with any other
certificate or statement of exemption required under the Internal Revenue Code
or the regulations issued 

 

38

 

thereunder to establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to any payments to
such Lender of principal, interest, fees or other amounts payable under any of
the Loan Documents or (2) if such Lender is not a “bank” or other Person
described in Section 881(c)(3) of the Internal Revenue Code and cannot
deliver either Internal Revenue Service Form W-8 pursuant to clause (1)
above, a Certificate re Non-Bank Status together with two original copies of
Internal Revenue Service Form W-8 (or any successor form), properly completed
and duly executed by such Lender, together with any other certificate or
statement of exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is not subject to
deduction or withholding of United States federal income tax with respect to
any payments to such Lender of interest payable under any of the Loan
Documents.

 

(2)           Each Lender required
to deliver any forms, certificates or other evidence with respect to United
States federal income tax withholding matters pursuant to
Section 2.7B(iii)(a) hereby agrees, from time to time after the initial
delivery by such Lender of such forms, certificates or other evidence, whenever
a lapse in time or change in circumstances renders such forms, certificates or
other evidence obsolete or inaccurate in any material respect, such Lender
shall deliver to Administrative Agent for transmission to Borrower such
certificates or statements of exemption required in order to confirm or
establish that such Lender is not subject to deduction or withholding of United
States federal income tax with respect to payments to such Lender under the
Loan Documents or (2) immediately notify Administrative Agent and Borrower
of its inability to deliver any such forms, certificates or other evidence.

 

(3)           Borrower
shall not be required to pay any additional amount to any Non-US Lender under
clause (c) of Section 2.7B(ii) if such Lender shall have failed to
satisfy the requirements of Section 2.7B(iii)(a); provided that if
such Lender shall have satisfied such requirements on the Closing Date (in the
case of each Lender listed on the signature pages hereof) or on the date of the
Assignment Agreement pursuant to which it became a Lender (in the case of each
other Lender), nothing in this Section 2.7B(iii)(c) shall relieve Borrower
of its obligation to pay any additional amounts pursuant to clause (c) of
Section 2.7B(ii) in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or order, or any change
in the interpretation, administration or application thereof, such Lender is no
longer properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such

 

39

 

Lender is not subject to withholding as described in
Section 2.7B(iii)(a).

 

3.             Capital
Adequacy Adjustment.  If any
Lender shall have determined that the adoption, effectiveness, phase-in or
applicability after the date hereof of any law, rule or regulation (or any
provision thereof) regarding capital adequacy, or any change therein or 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 (or its applicable lending office) with
any guideline, request or directive regarding capital adequacy (whether or not
having the force of law) of any such governmental authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the capital of such Lender or any corporation controlling such Lender as a
consequence of, or with reference to, such Lender’s Loans or Commitments or
Letters of Credit or participations therein or other obligations hereunder with
respect to the Loans or the Letters of Credit to a level below that which such
Lender or such controlling corporation could have achieved but for such
adoption, effectiveness, phase-in, applicability, change or compliance (taking
into consideration the policies of such Lender or such controlling corporation
with regard to capital adequacy), then from time to time, within five Business
Days after receipt by Borrower from such Lender of the statement referred to in
the next sentence, Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction. Such Lender shall deliver to Borrower (with
a copy to Administrative Agent) a written statement, setting forth in
reasonable detail the basis of the calculation of such additional amounts,
which statement shall be conclusive and binding upon all parties hereto absent
manifest error.

 

2.8           Obligation of Lenders and Issuing Lender to Mitigate.

 

Each Lender and Issuing
Lender agrees that, as promptly as practicable after the officer of such Lender
or Issuing Lender responsible for administering the Loans or Letters of Credit
of such Lender or Issuing Lender, as the case may be, becomes aware of the
occurrence of an event or the existence of a condition that would cause such
Lender to become an Affected Lender or that would entitle such Lender or
Issuing Lender to receive payments under Section 2.7 or Section 3.6,
it will, to the extent not inconsistent with the internal policies of such
Lender or Issuing Lender and any applicable legal or regulatory restrictions,
use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such
Lender or Issuing Lender may deem reasonable, if as a result thereof the
circumstances which would cause such Lender to be an Affected Lender would
cease to exist or the additional amounts which would otherwise be required to
be paid to such Lender or Issuing Lender pursuant to Section 2.7 or
Section 3.6 would be materially reduced and if, as determined by such
Lender or Issuing Lender in its sole discretion, the making, issuing, funding
or maintaining of such Commitments or Loans or Letters of Credit through such
other lending or letter of credit office or in accordance with such other
measures, as the case may be, would not otherwise materially adversely affect
such 

 

40

 

Commitments or Loans or Letters of Credit or
the interests of such Lender or Issuing Lender; provided that such
Lender or Issuing Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this Section 2.8 unless Borrower
agrees to pay all incremental expenses incurred by such Lender or Issuing
Lender as a result of utilizing such other lending or letter of credit office
as described in clause (i) above. 
A certificate as to the amount of any such expenses payable by Borrower
pursuant to this Section 2.8 (setting forth in reasonable detail the basis
for requesting such amount) submitted by such Lender or Issuing Lender to
Borrower (with a copy to Administrative Agent) shall be conclusive absent
manifest error.

 

41

 

SECTION 1

LETTERS OF CREDIT

 

2.9           Issuance of Letters of Credit and Lenders’ Purchase of
Participations Therein.

 

1.             Letters
of Credit.  In addition to
Borrower requesting that Lenders make Loans pursuant to Section 2.1A,
Borrower may request, in accordance with the provisions of this
Section 3.1, from time to time during the period from the Closing Date to
but excluding the Maturity Date, that Issuing Lender issue Letters of Credit
for the account of Borrower for the purposes specified in the definition of
Standby Letters of Credit.  Subject to
the terms and conditions of this Agreement and in reliance upon the
representations and warranties of the Loan Parties set forth in the Loan
Documents, Issuing Lender shall be obligated, as provided in
Section 3.1B(ii), to issue such Letters of Credit in accordance with the
provisions of this Section 3.1; provided that Borrower shall not
request that Issuing Lender issue (and Issuing Lender shall not issue):

 

(1)           any
Letter of Credit if, after giving effect to such issuance, the Revolving Usage
would exceed the Revolving Commitments then in effect;

 

(2)           any
Letter of Credit if, after giving effect to such issuance, the Letter of Credit
Usage would exceed $2,000,000;

 

(3)           any
Standby Letter of Credit having an expiration date later than the earlier of
(a) the Maturity Date and (b) the date that is one year from the date
of issuance of such Standby Letter of Credit; provided that the
immediately preceding clause (b) shall not prevent Issuing Lender
from agreeing that a Standby Letter of Credit will automatically be extended
for one or more successive periods not to exceed one year each unless Issuing
Lender elects not to extend for any such additional period; provided, further
that Issuing Lender shall deliver a written notice to Administrative Agent
setting forth the last day on which Issuing Lender may give notice that it will
not extend such Standby Letter of Credit (the “Notification Date” with respect
to such Standby Letter of Credit) at least ten Business Days prior to such
Notification Date; and provided, further that, unless Lenders
otherwise consent, Issuing Lender shall give notice that it will not extend
such Standby Letter of Credit if it has knowledge that an Event of Default has
occurred and is continuing on such Notification Date; or

 

(4)           any
Letter of Credit denominated in a currency other than Dollars.

 

2.             Mechanics
of Issuance.

 

(1)           Notice
of Issuance.  Whenever Borrower
desires the issuance of a Letter of Credit, it shall deliver to Administrative
Agent a Notice of Issuance of Letter of Credit no later than 10:00 A.M.
(Pacific time) at least 5 Business Days, or such shorter period as may be
agreed to by the Issuing Lender in any particular instance, in advance of the
proposed date of issuance.  The Notice
of Issuance 

 

42

 

of Letter of Credit shall specify (a) the proposed date of
issuance (which shall be a Business Day), (b) the face amount of the
Letter of Credit, (c) the expiration date of the Letter of Credit,
(d) the name and address of the beneficiary, and (e) the verbatim
text of the proposed Letter of Credit or the proposed terms and conditions
thereof, including a precise description of any documents and the verbatim text
of any certificates to be presented by the beneficiary that, if presented by
the beneficiary prior to the expiration date of the Letter of Credit, would
require the Issuing Lender to make payment under the Letter of Credit; provided
that the Issuing Lender, in its reasonable discretion, may require changes in
the text of the proposed Letter of Credit or any such documents or
certificates; and provided, further that no Letter of Credit
shall require payment against a conforming draft to be made thereunder on the
same business day (under the laws of the jurisdiction in which the office of
the Issuing Lender to which such draft is required to be presented is located)
that such draft is presented if such presentation is made after 10:00 A.M. (Pacific
time) on such business day.

 

Borrower
shall notify the Issuing Lender prior to the issuance of any Letter of Credit
in the event that any of the matters to which Borrower is required to certify
in the applicable Notice of Issuance of Letter of Credit is no longer true and
correct as of the proposed date of issuance of such Letter of Credit, and upon
the issuance of any Letter of Credit, Borrower shall be deemed to have
re-certified, as of the date of such issuance, as to the matters to which Borrower
is required to certify in the applicable Notice of Issuance of Letter of
Credit.

 

(2)           Issuing
Lender.  Subject to the terms and
conditions hereof, upon receipt by Administrative Agent of a Notice of Issuance
of Letter of Credit pursuant to Section 3.1B(i) requesting the issuance of
a Letter of Credit, Administrative Agent shall be the Issuing Lender with
respect thereto.  Administrative Agent
shall be obligated to issue such Letter of Credit and shall be the Issuing
Lender with respect thereto, notwithstanding the fact that the Letter of Credit
Usage with respect to such Letter of Credit and with respect to all other
Letters of Credit issued by Administrative Agent, when aggregated with
Administrative Agent’s outstanding Revolving Loans, may exceed Administrative
Agent’s Revolving Commitment then in effect.

 

(3)           Issuance
of Letter of Credit.  Upon
satisfaction or waiver (in accordance with Section 10.6) of the conditions
set forth in Section 4.3, the Issuing Lender shall issue the requested
Letter of Credit in accordance with the Issuing Lender’s standard operating
procedures.

 

(4)           Notification
to Lenders.  Upon the issuance of
any Letter of Credit the Issuing Lender shall promptly notify each other Lender
of such issuance, which notice shall be accompanied by a copy of such Letter of
Credit.  Promptly after receipt of such
notice, Administrative Agent shall notify each Lender of the amount of such
Lender’s respective participation in such Letter of Credit, determined in
accordance with Section 3.1C.

 

43

 

(5)           Reports
to Lenders.  Within 15 days after
the end of each calendar quarter ending after the Closing Date, so long as any
Letter of Credit shall have been outstanding during such calendar quarter,
Issuing Lender shall deliver to each other Lender a report setting forth the
average for such calendar quarter of the daily maximum amount available to be
drawn under the Letters of Credit issued by Issuing Lender that were
outstanding during calendar quarter.

 

3.             Lenders’
Purchase of Participations in Letters of Credit.  Immediately upon the issuance of each Letter of Credit, each
Lender (including the Lender that acts as Issuing Lender) shall be deemed to,
and hereby agrees to, have irrevocably purchased from the Issuing Lender a
participation in such Letter of Credit and drawings thereunder in an amount
equal to such Lender’s Pro Rata Share of the maximum amount which is or at any
time may become available to be drawn thereunder.

 

2.10         Letter of Credit
Fees.

 

Borrower agrees to pay the
following amounts to Issuing Lender with respect to Letters of Credit issued by
it:

 

(1)           with
respect to each Standby Letter of Credit, a letter of credit fee in an amount
equal to the greater of (i) the product of the maximum aggregate amount
that is, or at any time, may become available for drawing with respect to such
Letter of Credit multiplied by the Applicable Eurodollar Rate Margin and
(ii) $1500; which amount shall be payable in advance upon issuance for the
term of such Letter of Credit.

 

(2)           a
letter of credit issuance fee to the Issuing Lender for its sole account in the
amount set forth in a letter agreement of even date herewith with the Issuing
Lender,  together with such issuance,
amendment, renewal, negotiation, and other fees as are then charged by the
Issuing Lender, with respect to letters of credit in accordance with its
standard schedule of fees for such services, with respect to the issuance,
amendment or transfer of each Letter of Credit and each drawing made thereunder
(in addition to the fees payable under clause (i) above), documentary
and processing charges in accordance with Issuing Lender’s standard schedule
for such charges in effect at the time of such issuance, amendment, transfer or
drawing, as the case may be.

 

Promptly upon receipt by Issuing Lender of
any amount described in clause (A) of this Section 3.2, Issuing
Lender shall distribute to each other Lender its Pro Rata Share of such amount.

 

2.11         Drawings and Reimbursement of Amounts Drawn Under Letters
of Credit.

 

1.             Responsibility
of Issuing Lender With Respect to Drawings.  In determining whether to honor any drawing under any Letter of
Credit by the beneficiary thereof, the Issuing Lender shall be responsible only
to determine that the documents and certificates required to be delivered under
such Letter of Credit have been delivered and that they comply on their face
with the requirements of such Letter of Credit.

 

44

 

2.             Reimbursement by
Borrower of Amounts Drawn Under Letters of Credit.  In the event Issuing Lender has determined
to honor a drawing under a Letter of Credit issued by it, Issuing Lender shall
immediately notify Borrower and Administrative Agent, and Borrower shall
reimburse Issuing Lender on or before the Business Day immediately following
the date on which such drawing is honored (the “Reimbursement Date”) in an
amount in Dollars and in same day funds equal to the amount of such drawing; provided
that, anything contained in this Agreement to the contrary notwithstanding,
(i) unless Borrower shall have notified Administrative Agent and Issuing
Lender prior to 8:30 A.M. (Pacific time) on the date of such drawing that
Borrower intends to reimburse Issuing Lender for the amount of such drawing
with funds other than the proceeds of Loans, Borrower shall be deemed to have
given a timely Notice of Borrowing to Administrative Agent requesting Lenders
to make Loans that are Base Rate Loans on the Reimbursement Date in an amount
in Dollars equal to the amount of such drawing and (ii) subject only to
satisfaction or waiver of the conditions specified in Section 4.5B,
Lenders shall, on the Reimbursement Date, make Loans that are Base Rate Loans
in the amount of such drawing, the proceeds of which shall be applied directly
by Administrative Agent to reimburse Issuing Lender for the amount of such
drawing; and provided, further that if for any reason proceeds of
Loans are not received by Issuing Lender on the Reimbursement Date in an amount
equal to the amount of such drawing, Borrower shall reimburse Issuing Lender,
on demand, in an amount in same day funds equal to the excess of the amount of
such drawing over the aggregate amount of such Loans, if any, that are so
received.  Nothing in this Section 3.3B
shall be deemed to relieve any Lender from its obligation to make Loans on the
terms and conditions set forth in this Agreement, and Borrower shall retain any
and all rights it may have against any Lender resulting from the failure of
such Lender to make such Loans under this Section 3.3B.

 

3.             Payment by
Lenders of Unreimbursed Drawings Under Letters of Credit.

 

(1)           Payment
by Lenders.  In the event that
Borrower shall fail for any reason to reimburse Issuing Lender as provided in
Section 3.3B in an amount equal to the amount of any drawing honored by
Issuing Lender under a Letter of Credit issued by it, Issuing Lender shall
promptly notify each other Lender of the unreimbursed amount of such drawing
and of such other Lender’s respective participation therein based on such
Lender’s Pro Rata Share.  Each Lender
shall make available to Issuing Lender an amount equal to its respective pro
rata participation, in Dollars and in same day funds, at the office of Issuing
Lender specified in such notice, not later than 1:30 P.M. (Pacific time) on the
first business day (under the laws of the jurisdiction in which such office of
Issuing Lender is located) after the date notified by Issuing Lender.  In the event that any Lender fails to make
available to Issuing Lender on such business day the amount of such Lender’s
participation in  such Letter of Credit
as provided in this Section 3.3C, Issuing Lender shall be entitled to
recover such amount on demand from such Lender together with interest thereon
at the Federal Funds Effective Rate for three Business Days and thereafter at
the Base Rate.  Nothing in this
Section 3.3C shall be deemed to prejudice the right of any Lender to
recover from Issuing Lender any amounts made available by 

 

45

 

such Lender to Issuing Lender pursuant to this Section 3.3C in the
event that it is determined by the final judgment of a court of competent
jurisdiction that the payment with respect to a Letter of Credit by Issuing
Lender in respect of which payment was made by such Lender constituted gross
negligence or willful misconduct on the part of Issuing Lender.

 

(2)           Distribution
to Lenders of Reimbursements Received From Borrower.  In the event Issuing Lender shall have been
reimbursed by other Lenders pursuant to Section 3.3C(i) for all or any
portion of any drawing honored by Issuing Lender under a Letter of Credit
issued by it, Issuing Lender shall distribute to each other Lender which has
paid all amounts payable by it under Section 3.3C(i) with respect to such
drawing such other Lender’s Pro Rata Share of all payments subsequently
received by Issuing Lender from Borrower in reimbursement of such drawing
within five (5) Business Days of the date when such payments are received by
Issuing Lender.  Any such distribution
shall be made to a Lender at its primary address set forth below its name on
the appropriate signature page hereof or at such other address as such Lender
may request.

 

4.             Interest on
Amounts Drawn Under Letters of Credit.

 

(1)           Payment
of Interest by Borrower.  Borrower
agrees to pay to Issuing Lender, with respect to drawings made under any
Letters of Credit issued by it, interest on the amount paid by Issuing Lender
in respect of each such drawing from and including the date of such drawing to
but excluding the date such amount is reimbursed by Borrower (including any
such reimbursement out of the proceeds of Loans pursuant to Section 3.3B)
at a rate equal to (a) for the period from the date of such drawing to but
excluding the Reimbursement Date, the rate then in effect under this Agreement
with respect to Loans that are Base Rate Loans and (b) thereafter, a rate
which is 2% per annum in excess of the rate of interest otherwise payable under
this Agreement with respect to Loans that are Base Rate Loans; provided
that in no event shall interest accrue for two days when a drawing and the
reimbursement of amounts paid in respect of such drawing occur on consecutive
days.  Interest payable pursuant to this
Section 3.3D(i) shall be payable on demand or, if no demand is made, on
the date on which the related drawing under a Letter of Credit is reimbursed in
full.

 

(2)           Distribution
of Interest Payments by Issuing Lender. 
Promptly upon receipt by Issuing Lender of any payment of interest
pursuant to Section 3.3D(i) with respect to a drawing under a Letter of
Credit issued by it, in the event Issuing Lender shall have been reimbursed by
other Lenders pursuant to Section 3.3C(i) for all or any portion of such
drawing, Issuing Lender shall distribute to each other Lender which has paid
all amounts payable by it under Section 3.3C(i) with respect to such
drawing such other Lender’s proportionate share (based on the amount reimbursed
to the Issuing Lender pursuant to Section 3.3C(i)) of any interest
received by Issuing Lender in respect of that portion of such drawing so
reimbursed by other Lenders for the period from the date on which Issuing
Lender was so reimbursed by other Lenders to and including 

 

46

 

the date on which such portion of such drawing is reimbursed by
Borrower.  Any such distribution shall
be made by Issuing Lender within five (5) Business Days of its receipt of such
payment from Borrower to a Lender at its primary address set forth below its
name on the appropriate signature page hereof or at such other address as such
Lender may request.

 

2.12         Obligations
Absolute.

 

The obligation of Borrower
to reimburse Issuing Lender for drawings made under the Letters of Credit
issued by it and to repay any Loans made by Lenders pursuant to
Section 3.3B and the obligations of Lenders under Section 3.3C(i)
shall be unconditional and irrevocable and shall be paid strictly in accordance
with the terms of this Agreement under all circumstances including, without
limitation, the following circumstances:

 

(1)           any
lack of validity or enforceability of any Letter of Credit;

 

(2)           the
existence of any claim, set-off, defense or other right which Borrower or any
Lender may have at any time against a beneficiary or any transferee of any
Letter of Credit (or any Persons for whom any such transferee may be acting),
Issuing Lender or other Lender or any other Person or, in the case of a Lender,
against Borrower, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any underlying
transaction between Borrower or one of its Subsidiaries and the beneficiary for
which any Letter of Credit was procured);

 

(3)           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;

 

(4)           payment
by the Issuing Lender under any Letter of Credit against presentation of a
demand, draft or certificate or other document which does not comply with the
terms of such Letter of Credit;

 

(5)           any
adverse change in the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Borrower or any of its Subsidiaries;

 

(6)           any
breach of this Agreement or any other Loan Document by any party thereto;

 

(7)           any
other circumstance or happening whatsoever, whether or not similar to any of
the foregoing; or

 

(8)           the
fact that an Event of Default or a Default shall have occurred and be
continuing;

 

provided, in each case, that payment by the Issuing
Lender under the applicable Letter of Credit shall not have constituted gross
negligence or 

 

47

 

willful misconduct of Issuing Lender under
the circumstances in question (as determined by a final judgment of a court of
competent jurisdiction).

 

2.13         Indemnification; Nature of Issuing Lender’s Duties.

 

1.             Indemnification.  In addition to amounts payable as provided
in Section 3.6, Borrower hereby agrees to protect, indemnify, pay and save
harmless Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by Issuing
Lender, other than as a result of (a) the gross negligence or willful
misconduct of Issuing Lender as determined by a final judgment of a court of
competent jurisdiction or (b) subject to the following clause (ii),
the wrongful dishonor by Issuing Lender of a proper demand for payment made
under any Letter of Credit issued by it or (ii) the failure of Issuing
Lender to honor a drawing under any such Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present or future de jure
or de facto government or governmental authority (all such acts or omissions
herein called “Governmental Acts”).

 

2.             Nature of Issuing Lender’s Duties.  As between Borrower and Issuing Lender,
Borrower assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by Issuing Lender by, the respective beneficiaries of
such Letters of Credit.  In furtherance
and not in limitation of the foregoing, but subject to the last paragraph of
this Section 3.5, Issuing Lender shall not be responsible for:  (i) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any such Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any document required in order to
make a drawing under any such Letter of Credit or of the proceeds thereof;
(vii) the misapplication by the beneficiary of any such Letter of Credit
of the proceeds of any drawing under such Letter of Credit; or (viii) any
consequences arising from causes beyond the control of Issuing Lender,
including without limitation any Governmental Acts, and none of the above shall
affect or impair, or prevent the vesting of, any of Issuing Lender’s rights or
powers hereunder.

 

In furtherance and extension
and not in limitation of the specific provisions set forth in the first
paragraph of this Section 3.5B, any action taken or omitted by Issuing
Lender under or in connection with the Letters of Credit issued by it or any
documents and certificates delivered thereunder, if taken or omitted in good
faith, shall not put 

 

48

 

Issuing Lender under any resulting liability
to Borrower.

 

Notwithstanding anything to
the contrary contained in this Section 3.5, Borrower shall retain any and
all rights it may have against Issuing Lender for any liability arising solely
out of the gross negligence or willful misconduct of Issuing Lender, as
determined by a final judgment of a court of competent jurisdiction.

 

2.14         Increased Costs and Taxes Relating to Letters of Credit.

 

In the event that Issuing
Lender or any Lender shall determine (which determination shall be presumed to
be correct) that any law, treaty or governmental rule, regulation or order, or
any change therein or in the interpretation, administration or application
thereof (including the introduction of any new law, treaty or governmental
rule, regulation or order), or any determination of a court or governmental
authority, in each case that becomes effective after the date hereof, or
compliance by Issuing Lender or any Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
governmental or quasi-governmental authority (whether or not having the force
of law):

 

(1)           subjects
such Issuing Lender or Lender (or its applicable lending or letter of credit
office) to any additional Tax (other than any Tax on the overall net income of
such Issuing Lender or Lender) with respect to the issuing or maintaining of
any Letters of Credit or the purchasing or maintaining of any participations
therein or any other obligations under this Section 3, whether directly or
by such being imposed on or suffered by Issuing Lender;

 

(2)           imposes,
modifies or holds applicable any reserve (including without limitation any
marginal, emergency, supplemental, special or other reserve), special deposit,
compulsory loan, FDIC insurance or similar requirement in respect of any
Letters of Credit issued by Issuing Lender or participations therein purchased
by any Lender; or

 

(3)           imposes
any other condition (other than with respect to a Tax matter) on or affecting
such Issuing Lender or Lender (or its applicable lending or letter of credit
office) regarding this Section 3 or any Letter of Credit or any
participation therein;

 

and the result of any of the foregoing is to
increase the cost to such Issuing Lender or Lender of agreeing to issue,
issuing or maintaining any Letter of Credit or agreeing to purchase, purchasing
or maintaining any participation therein or to reduce any amount received or
receivable by such Issuing Lender or Lender (or its applicable lending or
letter of credit office) with respect thereto; then, in any case, Borrower
shall promptly pay to such Issuing Lender or Lender, upon receipt of the
statement referred to in the next sentence, such additional amount or amounts
as may be necessary to compensate such Issuing Lender or Lender for any such
increased cost or reduction in amounts received or receivable hereunder.  Such Issuing Lender or Lender shall deliver
to Borrower a written statement, setting forth in reasonable detail the basis
for calculating the additional amounts owed to such Issuing Lender or Lender
under this Section 3.6, which statement shall be conclusive and binding
upon all parties hereto absent manifest error.

 

49

 

SECTION 2

CONDITIONS
TO LOANS AND LETTERS OF CREDIT

 

The obligations of Lenders
to make Loans and the issuance of Letters of Credit hereunder are subject to
the satisfaction of the following conditions.

 

2.15         Conditions to Initial Loans and Letters of Credit.

 

The obligations of Lenders
to make the Loans to be made on the Closing Date and the obligation of the
Issuing Lender to provide the initial Letters of Credit hereunder, in addition
to satisfaction of the conditions precedent specified in Section 4.2, are
subject to prior or concurrent satisfaction of the following conditions:

 

1.             Borrower
Documents.  On or before the
Closing Date, Borrower shall deliver or cause to be delivered to Lenders (or
one originally executed copy to Administrative Agent and, in the case of the
Credit Agreement, sufficient originally executed copies for each Lender to
Administrative Agent) the following, each, unless otherwise noted, dated the
Closing Date and in form reasonably satisfactory to the Lenders:

 

(1)           Copies
of the Joint Venture Agreement certified by an Executive Committee Signatory;

 

(2)           Resolutions
of the Board of Directors of each General Partner, in each case, in its
capacity as a general partner of Borrower, and of the Executive Committee, each
approving and authorizing the execution, delivery and performance of this
Agreement and the other Loan Documents to which Borrower is a party;

 

(3)           Executed originals of this Agreement, Notes
in favor of each Lender in the amount of its Commitments, the Guaranty, the
Borrower Security Agreement, the Guarantor Security Agreement, the Deposit
Account Agreement, the Deed of Trust, the Assignment of Rents and Revenues, the
Collateral Account Agreement, the Intercreditor Agreement and any other Loan
Documents to which Borrower is a party;

 

(4)           Copies
of the Indenture certified by an Executive Committee Signatory; and

 

(5)           Such
other documents as Administrative Agent may reasonably request.

 

2.             Certain General Partner and
Guarantor Documents.  On or
before the Closing Date, each of Silver Legacy Capital Corp. and General
Partners shall deliver or cause to be delivered to Lenders (or to
Administrative Agent for Lenders) the following, each, unless otherwise noted,
dated the Closing Date:

 

(1)           Certificates
as to the absence of any changes in the certified copies of its Articles of
Incorporation or Organization or charter documents previously delivered to the Lenders,
together with, as applicable, a good standing certificate from the Secretary of
State of the state of its incorporation or organization, each dated a 

 

50

 

recent date prior to the
Closing Date;

 

(2)           Certificates as to the absence of any changes
in the certified copies of its Bylaws or Operating Agreement, certified as of
the Closing Date by its or its managing general partner’s secretary or an
assistant secretary; and

 

(3)           Resolutions
of its or its managing general partner’s Board of Directors, approving and
authorizing the execution, delivery and performance of each Loan Document to
which it is a party, certified as of the Closing Date by its or its managing
general partner’s secretary or an assistant secretary as being in full force
and effect without modification or amendment.

 

3.             Mortgage
Notes.  The Mortgage Notes shall
have been issued and funded pursuant to the terms of the Indenture.

 

4.             Opinions of Loan Parties’ Counsel.  Lenders and their respective counsel shall
have received (i) originally executed copies of one or more favorable
written opinions of Wolf, Block, Schorr & Solis-Cohen LLP, special counsel
for Borrower and Silver Legacy Capital Corp., and McDonald Carano Wilson McCune
Bergin Frankovich & Hicks, LLP, Nevada counsel for Borrower and Silver
Legacy Capital Corp., dated as of the Closing Date as to such matters as
Administrative Agent acting on behalf of Lenders may reasonably request and
(ii) evidence satisfactory to Administrative Agent that Borrower has
requested such counsel to deliver such opinions to Lenders.

 

5.             Perfection of Security Interests.  Borrower shall have taken or caused to be
taken such actions in such a manner so that Administrative Agent, for the benefit
of Lenders, has a valid and perfected first priority security interest in all
Collateral in which a Lien is purported to be granted by the Collateral
Documents or any of them, executed as of the Closing Date.  Such actions shall include, without limitation:  (i) the delivery to Administrative
Agent of Uniform Commercial Code financing statements, executed by Borrower as
to the Collateral granted by Borrower for all jurisdictions as may be necessary
or desirable to perfect Administrative Agent’s security interest in such
collateral; (ii) evidence that counterparts of the Deed of Trust and
Assignment of Rents and Revenues were recorded in all locations to the extent
necessary or desirable, in the reasonable judgment of Administrative Agent,
effectively to create a valid and enforceable first priority Lien (subject only
to Permitted Encumbrances) on the Premises in favor of Administrative Agent for
the benefit of Lenders and (iii) evidence reasonably satisfactory to
Administrative Agent that all other filings, recordings and other actions
Administrative Agent deems necessary or advisable to establish, preserve and
perfect the first priority Liens (subject to the Liens permitted under
Section 7.2) granted to Administrative Agent, for the benefit of Lenders,
in the Collateral shall have been made.

 

6.             Title Policy.  Administrative Agent and Lenders shall have
the Title Policy assuring the continued priority and perfection of the Deed of
Trust to secure the Obligations in form and substance acceptable to the Administrative
Agent.

 

7.             Insurance.  Administrative Agent shall have received
evidence, 

 

51

 

satisfactory
to Administrative Agent, of insurance required to be procured and maintained
pursuant to Section 6.4 hereof and Section 8 of the Borrower Security
Agreement and Section 6 of the Deed of Trust indicating that, with respect
to casualty insurance, such policies of insurance have been endorsed to name
Administrative Agent, on behalf of Lenders, as loss payee pursuant to a
standard mortgagee clause and, with respect to liability insurance, such
policies of insurance name Administrative Agent, on behalf of Lenders, as an
additional insured.

 

8.             Necessary
Consents.  On or before the
Closing Date, each Loan Party shall have obtained all consents to the
transactions contemplated under this Agreement and the other Loan Documents, of
any Person required under any Contractual Obligation of any Loan Party,
including, without limitation, approval of the terms of the Loans by the
Executive Committee pursuant to Section 5.9(c) of the Joint Venture
Agreement and by the General Partners, all of the foregoing in form and
substance satisfactory to Administrative Agent.

 

9.             Environmental
Indemnities.  Lenders shall have
received the Environmental Indemnities in form, scope and substance
satisfactory to Lenders.

 

10.           Fees.  Borrower shall have paid to Administrative
Agent, for distribution (as appropriate) to Administrative Agent and Lenders,
the fees payable on the Closing Date referred to in Section 2.3.

 

11.           No
Material Adverse Effect.  Since
December 31, 2001, no Material Adverse Effect (in the sole discretion of
Administrative Agent and Lenders) shall have occurred and be continuing.

 

12.           Representations and Warranties;
Performance of Agreements. 
Borrower shall have delivered to Administrative Agent an Officers’
Certificate from each General Partner and Executive Committee Signatories, in
form and substance satisfactory to Administrative Agent, to the effect that the
representations and warranties in Section 5 hereof are true, correct and
complete on and as of the Closing Date to the same extent as though made on and
as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such representations and
warranties shall have been true, correct and complete in all material respects
on and as of such earlier date, and that Borrower shall have performed all
agreements and satisfied all conditions which this Agreement provides shall be
performed or satisfied by it on or before the Closing Date except as otherwise
disclosed to and agreed to in writing by Administrative Agent and Lenders.

 

13.           [Intentionally
Reserved]

 

14.           Completion
of Proceedings.  All corporate
and other proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent, acting on behalf of Lenders, and its
counsel shall be satisfactory in form and substance to Administrative Agent and
such counsel, and Administrative Agent and such counsel shall have received all
such counterpart originals or certified copies of such documents as
Administrative Agent may reasonably request.

 

52

 

2.16         Conditions to All Loans and Letters of Credit.

 

The obligations of Lenders
to make Loans on each Funding Date and the issuance of each Letter of Credit
are each subject to the following further conditions precedent:

 

1.             Administrative
Agent shall have received before that Funding Date, in accordance with the
provisions of Section 2.1B, an originally executed Notice of Borrowing, in
each case signed by the Director of Finance and Administration or the General
Manager of Borrower, or the chief executive officer, the chief financial
officer or the treasurer of Borrower or by any executive officer of Borrower
designated in writing by the Executive Committee or by two Executive Committee
Signatories.

 

2.             As of that Funding
Date:

 

(1)           The
representations and warranties contained herein and in the other Loan Documents
shall be true, correct and complete in all material respects on and as of that
Funding Date to the same extent as though made on and as of that date, except
to the extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties shall have been
true, correct and complete in all material respects on and as of such earlier
date;

 

(2)           No
event shall have occurred and be continuing or would result from the
consummation of the borrowing contemplated by such Notice of Borrowing that
would constitute an Event of Default or a Default;

 

(3)           Each
Loan Party shall have performed in all material respects all agreements and
satisfied all conditions which this Agreement provides shall be performed or
satisfied by it on or before that Funding Date;

 

(4)           No
order, judgment or decree of any court, arbitrator or governmental authority
shall purport to enjoin or restrain any Lender from making the Loans to be made
by it on that Funding Date;

 

(5)           The
making of the Loans requested on such Funding Date shall not violate any law
including, without limitation, Regulation G, Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal
Reserve System; and

 

(6)           There
shall not be pending or, to the knowledge of any Senior Officer of Borrower or
Executive Committee Signatory, threatened, any action, suit, proceeding,
governmental investigation or arbitration against or affecting any Loan Party
or any of its Subsidiaries or any property of any Loan Party or any of its
Subsidiaries that is required to be disclosed but has not been disclosed by
Borrower in writing pursuant to Section 5.6 or 6.1(x) prior to the making
of the last preceding Loans (or, in the case of the initial Loans, prior to the
execution of this Agreement), and there shall have occurred no development in
any such action, suit, 

 

53

 

proceeding, governmental investigation or arbitration so disclosed by
Borrower in writing pursuant to Section 5.6 or 6.1(x) prior to the making
of the last preceding Loans (or in the case of the initial Loans, prior to the
execution of this Agreement), that, in either event, in the opinion of such
Senior Officer or Executive Committee Signatory could reasonably be expected to
have a Material Adverse Effect; and no injunction or other restraining order
shall have been issued and no hearing to cause an injunction or other
restraining order to be issued shall be pending or noticed with respect to any
action, suit or proceeding seeking to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of, the
transactions contemplated by this Agreement or the making of Loans hereunder.

 

3.             Since
December 31, 2001, no Material Adverse Effect (as determined in the
reasonable discretion of Administrative Agent and Lenders) shall have occurred
and be continuing.

 

2.17         Conditions to Letters of Credit.

 

The issuance of any Letter
of Credit hereunder (whether or not the Issuing Lender is obligated to issue
such Letter of Credit) is subject to the following conditions precedent:

 

1.             On or before the
date of issuance of the initial Letter of Credit pursuant to this Agreement,
the initial Loans shall have been made.

 

2.             On or before the
date of issuance of such Letter of Credit, Administrative Agent shall have
received, in accordance with the provisions of Section 3.1B(i), an
originally executed Notice of Issuance of Letter of Credit, in each case signed
by the chief executive officer, the chief financial officer or the treasurer of
Borrower or by any executive officer of Borrower designated by any of the
above-described officers or by two Executive Committee Signatories in a writing
delivered to Administrative Agent, together with all other information
specified in Section 3.1B(i) and such other documents or information as
the Issuing Lender may reasonably require in connection with the issuance of
such Letter of Credit.

 

3.             Since
December 31, 2001, no Material Adverse Effect (as determined in the
reasonable discretion of Administrative Agent and Lenders) shall have occurred
and be continuing.

 

4.             On the date of
issuance of such Letter of Credit, all conditions precedent described in
Section 4.2B shall be satisfied to the same extent as if the issuance of
such Letter of Credit were the making of a Loan and the date of issuance of
such Letter of Credit were a Funding Date.

 

54

 

SECTION 3

REPRESENTATIONS AND
WARRANTIES

 

In order to induce Lenders
to enter into this Agreement and to make the Loans, to induce Issuing Lender to
issue Letters of Credit and to induce other Lenders to purchase participations
therein, Borrower represents and warrants to each Lender, on the date of this
Agreement, on each Funding Date and on the date of issuance of each Letter of
Credit, that the following statements are true, correct and complete:

 

2.18         Organization, Powers, Qualification, Good Standing,
Business and Subsidiaries.

 

1.             Organization
and Powers.  Borrower is a
general partnership duly organized, validly existing under the laws of the
State of Nevada.  Borrower has all
requisite partnership power and authority to own and operate its properties, to
carry on its business as now conducted and as proposed to be conducted, to
enter into the Loan Documents and to carry out the transactions contemplated
thereby.

 

2.             Qualification and Good Standing.  Borrower is qualified to do business in
every jurisdiction where its assets are located and wherever necessary to carry
out its business and operations, except in jurisdictions where the failure to
be so qualified or in good standing has not had and will not have a Material Adverse
Effect.

 

3.             Conduct
of Business.  Borrower and its
Subsidiaries are engaged only in the businesses permitted to be engaged in
pursuant to Section 7.13.

 

4.             Subsidiaries.  All of the Subsidiaries of Borrower are
identified in Schedule 5.1, as said Schedule 5.1 may be supplemented from
time to time pursuant to the provisions of Section 6.1(xvii).  The capital stock of each of the
Subsidiaries of Borrower identified in Schedule 5.1 (as so supplemented)
is duly authorized, validly issued, fully paid and nonassessable and none of
such capital stock constitutes Margin Stock. 
Each of the Subsidiaries of Borrower identified in Schedule 5.1 (as
so supplemented) is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation set
forth therein, has all requisite corporate power and authority to own and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted, and is qualified to do business and in good standing
in every jurisdiction where its assets are located and wherever necessary to
carry out its business and operations, in each case except where failure to be
so qualified or in good standing or a lack of such corporate power and
authority has not had and will not have a Material Adverse Effect.  Schedule 5.1 (as so supplemented)
correctly sets forth the ownership interest of Borrower and each of its
Subsidiaries in each of the Subsidiaries of Borrower identified therein.

 

2.19         Authorization of Borrowing, etc.

 

1.             Authorization
of Borrowing.  The execution,
delivery and performance of the Loan Documents have been duly authorized by all
necessary partnership action on the part of Borrower.

 

55

 

2.             No Conflict.  The execution, delivery and performance by
Borrower of the Loan Documents to which it is a party and the consummation of
the transactions contemplated hereby and thereby do not and will not
(i) violate any provision of any law or any governmental rule or
regulation applicable to Borrower or any of its Subsidiaries which violation or
violations, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect, (ii) violate the Certificate or Articles of
Incorporation or charter documents or Bylaws or partnership agreement of
Borrower or any of its Subsidiaries or any order, judgment or decree of any
court or other agency of government binding on Borrower or any of its
Subsidiaries, (iii) conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default under any Contractual
Obligation of Borrower or any of its Subsidiaries, (iv) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of Borrower or any of its Subsidiaries (other than any Liens created
under any of the Loan Documents in favor of Administrative Agent on behalf of
Lenders), or (v) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of Borrower or any of
its Subsidiaries, except for such approvals or consents which will be obtained
on or before the Closing Date and disclosed in writing to Lenders.

 

3.             Governmental
Consents.  The execution,
delivery and performance by Borrower of the Loan Documents to which it is a
party and the consummation of the transactions contemplated hereby and thereby
do not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body except (i) those that have been
obtained and copies of which have been delivered to Administrative Agent
pursuant to Section 4.1H or the absence of which Administrative Agent has
deemed satisfactory pursuant to Section 4.1H, (ii) those notices or
informational filings or both that will be required to be given to the
Securities and Exchange Commission or any Gaming Board but that are not yet due
and (iii) any right of any Gaming Board to object to any Lender or participant
in the Loans at any future date.

 

4.             Binding
Obligation.  Each of the Loan
Documents and to which it is a party has been duly executed and delivered by
Borrower and General Partners, assuming due execution and delivery by the other
parties thereto, and is the legally valid and binding obligation of Borrower,
enforceable against Borrower in accordance with its respective terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors’ rights generally or by equitable
principles relating to enforceability.

 

2.20         Financial
Condition.

 

Borrower has heretofore
delivered to Lenders audited financial statements of Borrower as of
December 31, 2001, which have been prepared in conformity with GAAP and
fairly present the financial position of Borrower as of such dates and for the
periods then ended.  Borrower does not
(and will not as a result of the funding of the initial Loans) have any
Contingent Obligation, contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is not reflected in the
foregoing balance sheet and which in any such case is material in 

 

56

 

relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Borrower
and its Subsidiaries, taken as a whole.

 

2.21         No Material Adverse Change; No Restricted Junior Payments.

 

Since December 31,
2001, no event or change has occurred that has caused or evidences, either in
any case or in the aggregate, a Material Adverse Effect.  Neither Borrower nor any of its Subsidiaries
has directly or indirectly declared, ordered, paid or made, or set apart any
sum or property for, any Restricted Junior Payment or agreed to do so except as
permitted by Section 7.5.

 

2.22         Title to Properties; Liens; All Collateral.

 

Borrower and its
Subsidiaries have (i) good, sufficient and legal title to all of their
respective properties and assets reflected in the financial statements referred
to in Section 5.3 or in the most recent financial statements delivered
pursuant to Section 6.1, in each case except for assets disposed of since the
date of such financial statements in the ordinary course of business or as otherwise
permitted under Section 7.7.  Except as
permitted or required by this Agreement, all such properties and assets are
free and clear of Liens.  The Collateral
constitutes all of the assets of Borrower related to those portions of the
Hotel owned by Borrower.

 

2.23         Litigation;
Adverse Facts.

 

There are no actions, suits,
proceedings, arbitrations or governmental investigations (whether or not
purportedly on behalf of Borrower or any of its Subsidiaries) at law or in
equity or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, pending or, to the knowledge of any Senior Officer of Borrower,
threatened against or affecting Borrower or any of its Subsidiaries or any
property of Borrower or any of its Subsidiaries that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect.  Neither Borrower nor any of its
Subsidiaries is (i) in violation of any applicable laws that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect or (ii) subject to or in default with respect to any final
judgments, writs, injunctions, decrees, rules or regulations of any court or
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.

 

2.24         Payment of Taxes.

 

Except to the extent
permitted by Section 6.3, all tax returns and reports of Borrower and its
Subsidiaries required to be filed by any of them have been timely filed, and
all taxes, assessments, fees and other governmental charges upon Borrower and
its Subsidiaries and upon their respective properties, assets, income,
businesses and franchises which are due and payable have been paid when due and
payable.  Borrower knows of no 

 

57

 

proposed tax assessment against Borrower or
any of its Subsidiaries which is not being actively contested by Borrower or
such Subsidiary in good faith and by appropriate proceedings; provided
that such reserves or other appropriate provisions, if any, as shall be
required in conformity with GAAP shall have been made or provided therefor.

 

2.25         Performance of Agreements; Materially Adverse Agreements.

 

1.             Neither Borrower
nor any of its Subsidiaries is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
of its Contractual Obligations, and no condition exists that, with the giving
of notice or the lapse of time or both, would constitute such a default, except
where the consequences, direct or indirect, of such default or defaults, if
any, would not have a Material Adverse Effect.

 

2.             Neither Borrower
nor any of its Subsidiaries is a party to or is otherwise subject to any
agreements or instruments or any charter or other internal restrictions which,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.

 

2.26         Governmental
Regulation.

 

Neither Borrower nor any of
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act or the
Investment Company Act of 1940 or under any other federal or state statute or
regulation which may limit its ability to incur Indebtedness (other than Gaming
Laws) or which may otherwise render all or any portion of the Obligations
unenforceable.

 

2.27         Securities
Activities.

 

Neither Borrower nor any of
its Subsidiaries is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
any Margin Stock, and none of the proceeds of the Loans will be used to
purchase or carry Margin Stock in violation of Regulations T, U or X of the
Board of Governors of the Federal Reserve System.

 

2.28         Employee Benefit
Plans.

 

1.             Borrower and each
of its ERISA Affiliates are in compliance with all applicable provisions and
requirements of ERISA and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their obligations under each Employee Benefit Plan.

 

2.             No ERISA Event has
occurred or is reasonably expected to occur with respect to Borrower or any or
its ERISA Affiliates.

 

3.             Except to the
extent required under Section 4980B of the Internal Revenue Code, no
Employee Benefit Plan provides health or welfare benefits (through the purchase
of insurance or otherwise) for any retired or former employees of Borrower or
any of its ERISA Affiliates.

 

58

 

4.             As of the most
recent valuation date for any Pension Plan, the amount of unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA), individually or
in the aggregate for all Pension Plans (excluding for purposes of such
computation any Pension Plans with respect to which assets exceed benefit
liabilities), does not exceed $5,000,000.

 

2.29         Environmental
Protection.

 

Except as set forth in
Schedule 5.12, in each particular instance, with respect to the particular
clause of this Section 5.12 to which such exception is taken:

 

(1)           to
the best knowledge of Borrower, the operations of Borrower and of each of its
Subsidiaries (including, without limitation, all operations and conditions at
or in the Facilities) related to the Hotel or Facilities comply in all material
respects with all Environmental Laws;

 

(2)           to
the best knowledge of Borrower, each of Borrower and its Subsidiaries has
obtained all Governmental Authorizations under Environmental Laws necessary to
its operations related to the Hotel or Facilities, and all such Governmental
Authorizations are in good standing, and Borrower and each of its Subsidiaries
are in compliance with all material terms and conditions of such Governmental
Authorizations;

 

(3)           neither
Borrower nor any of its Subsidiaries has received (a) any notice or claim
to the effect that it is or may be liable to any Person as a result of or in
connection with any Hazardous Material related to the Hotel or Facilities or
(b) any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act (42
U.S.C. § 9604) or comparable state laws, with respect to that portion of
the Hotel or Facilities which are owned or controlled by Borrower and, to the
best of Borrower’s Senior Officers’ knowledge, none of the operations of
Borrower or any of its Subsidiaries is the subject of any federal or state
investigation relating to or in connection with any Hazardous Material at any
Facility or any Hazardous Material in any other manner related to the Hotel;

 

(4)           neither
of Borrower or any of its Subsidiaries is a party to any judicial or
administrative proceeding alleging the violation of or liability under any
Environmental Laws which if adversely determined could reasonably be expected
to have a Material Adverse Effect;

 

(5)           neither
Borrower nor any of its Subsidiaries is subject to any outstanding written
order or agreement with any governmental authority or private party relating to
(a) any Environmental Laws or (b) any Environmental Claims;

 

(6)           to
the best knowledge of Borrower, neither Borrower nor any of its Subsidiaries
has any contingent liability in connection with any Release of any Hazardous
Material related to the Hotel or Facilities which could reasonably be expected
to have a Material Adverse Effect;

 

59

 

(7)           none
of Borrower or any of its Subsidiaries, and, to the best knowledge of Senior
Officers of Borrower none of their respective predecessors, has filed any
notice under any Environmental Law indicating past or present treatment or
Release of Hazardous Material at any Facility and none of Borrower’s or any of
its Subsidiaries’ operations involves the generation, transportation,
treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts
260-270 or any state equivalent;

 

(8)           no
Hazardous Material exists on, under or about any Facility in a manner that has
a reasonable possibility of giving rise to an Environmental Claim having a
Material Adverse Effect, and neither Borrower nor any of its Subsidiaries has
filed any notice or report of a Release of any Hazardous Material that has a
reasonable possibility of giving rise to an Environmental Claim having a
Material Adverse Effect;

 

(9)           to
the best knowledge of Borrower, none of Borrower, any of its Subsidiaries and,
to the best knowledge of Senior Officers of Borrower, any of their respective
predecessors has disposed of any Hazardous Material in a manner that has a
reasonable possibility of giving rise to an Environmental Claim having a Material
Adverse Effect;

 

(10)         to
the best knowledge of Borrower, no underground storage tanks or surface
impoundments are on or at any Facility; and

 

(11)         no
Lien in favor of any Person relating to or in connection with any Environmental
Claim has been filed or has been attached to any Facility.

 

2.30         Employee Matters.

 

There is no strike or work
stoppage in existence or, to the best knowledge of Senior Officers of Borrower,
threatened involving Borrower or any of its Subsidiaries that could reasonably
be expected to have a Material Adverse Effect.

 

2.31         Disclosure.

 

No representation or
warranty of Borrower or any of its Subsidiaries contained in any Loan Document
or in any other document, certificate or written statement furnished to Lenders
by or on behalf of Borrower or any of its Subsidiaries for use in connection
with the transactions contemplated by this Agreement contains any untrue
statement of a material fact or omits to state a material fact (known to
Borrower, in the case of any document not furnished by it) necessary in order
to make the statements contained herein or therein not misleading in light of
the circumstances in which the same were made. 
Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Borrower to be reasonable at the time made, it being recognized by Lenders that
such projections as to future events are not to be viewed as facts and that
actual results during the

 

60

 

period or periods covered by any such
projections may differ from the projected results.

 

2.32         Compliance With Laws; Licenses, Permits and
Authorizations.

 

Each of Borrower and its
Subsidiaries is in compliance with the requirements of all applicable laws,
rules, regulations, ordinances and orders 
(including, without limitation, Gaming Laws), noncompliance with which
would, individually or in the aggregate, materially adversely affect the ability
of any such party to complete or operate those portions of the Hotel owned by
or under the control of Borrower or would, individually or in the aggregate,
materially adversely affect the ability of any of Borrower and its Subsidiaries
to perform its obligations under the Loan Documents to which it is a
party.  The planned use of those
portions of the Hotel owned by or under the control of Borrower complies with
applicable zoning ordinances, regulations and restrictive covenants affecting
the Premises as well as all ecological, landmark, and other applicable laws and
regulations (including, without limitation, Gaming Laws), noncompliance with
which would, individually or in the aggregate, materially adversely affect the
ability of any of Borrower and its Subsidiaries to operate those portions of the
Hotel owned by or under the control of Borrower or would, individually or in
the aggregate, materially adversely affect the ability of any of Borrower and
its Subsidiaries to perform its obligations under the Loan Documents to which
it is a party; and all requirements for such use have been satisfied.  Those portions of the Hotel owned by or
under the control of Borrower are in compliance and will comply with all
applicable laws, ordinances, regulations, restrictive covenants and agreements
and requirements of Governmental Authorities (including, without limitation,
Gaming Laws, zoning laws and environmental regulations), noncompliance with
which would, individually or in the aggregate, materially adversely affect the
ability of any of Borrower and its Subsidiaries to complete or operate those
portions of the Hotel owned by or under the control of Borrower or would,
individually or in the aggregate, materially adversely affect the ability of
any of Borrower and its Subsidiaries to perform its obligations under the Loan
Documents to which it is a party.  All
authorizations, plot plan approval, subdivision approval, sewer permits and
zoning variances, if any, building and other material permits and Governmental
Authorizations required by any Governmental Authority for the use, occupancy
and operation of the Premises and/or those portions of the Hotel owned by or
under the control of Borrower for the purposes contemplated herein have been
obtained; and all requirements for such use have been satisfied.  There are no violations of any permits,
approvals, licenses or other requirements of 

 

61

 

any Governmental Authority with respect to
(a) those portions of the Hotel owned by or under the control of Borrower or (b)
the Premises, in each case to the extent that any such violation could be
reasonably likely to result in a Material Adverse Effect.

 

2.33         Intangible
Property.

 

Each of Borrower and its
Subsidiaries is the sole and exclusive owner or licensee, or has the right to
use in the conduct of its business as presently conducted, all trade names,
unregistered trademarks and service marks, brand names, patents, registered and
unregistered copyrights, registered trademarks and service marks, and all
applications for any of the foregoing, and all permits, grants and licenses or
other rights with respect thereto, the absence of which would materially
adversely affect its business, operations, properties or financial condition or
the use, occupancy or operation of those portions of the Hotel owned by or
under the control of Borrower.  Neither
Borrower nor its Subsidiaries owns, or has applied for, any service marks and
registered trademarks except as set forth on Schedule 5.16.  None of Borrower and its Subsidiaries has been
charged with any material infringement of any intangible property of the
character described above or been notified or advised of any material claim of
any other Person relating to any of the intangible property.

 

2.34         Rights to Hotel Agreements, Permits and Licenses.

 

Borrower is the owner of all
rights in and to all existing agreements, permits and licenses relating to the
Hotel (other than rights of third parties under leases and agreements permitted
hereunder), and will be the true owner of all rights in and to all future
agreements, permits and licenses relating to the Hotel (other than rights of
third parties under leases and agreements permitted hereunder).  Borrower’s interest in all such agreements,
permits, and licenses is not subject to any matured claim (other than under the
Loan Documents), setoff or deduction other than in the ordinary course of
business.

 

62

 

SECTION 4

AFFIRMATIVE COVENANTS

 

Borrower covenants and
agrees that, so long as the Commitments hereunder shall remain in effect and
until payment in full of all of the Loans and other Obligations and the
cancellation or expiration of all Letters of Credit, unless Lenders shall
otherwise give prior written consent, Borrower shall perform, and shall cause
each of its Subsidiaries to perform, all covenants in this Section 6.

 

2.35         Financial Statements and Other Reports.

 

Borrower will maintain, and
cause each of its Subsidiaries to maintain, a system of accounting established
and administered in accordance with sound business practices to permit
preparation of financial statements in conformity with GAAP.  Borrower will deliver to Administrative
Agent and Lenders:

 

(1)           Monthly
Financials:  as soon as available
and in any event within 45 days after the end of each month ending after the
Closing Date, (a) the balance sheet of Borrower as at the end of such
month and the related statements of income, partners’ equity and cash flows of
Borrower for such month and for the period from the beginning of the then
current Fiscal Year to the end of such month, setting forth in each case in
comparative form the corresponding figures for the corresponding periods of the
previous Fiscal Year and the corresponding figures from the plan and financial
forecast for the current Fiscal Year delivered pursuant to
Section 6.1(xiii), to the extent prepared on a monthly basis, all in
reasonable detail and certified by the chief financial officer of the Borrower
that they fairly present the financial condition of Borrower as at the dates
indicated and the results of its operations and its cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments, and (b) a narrative report, if any is prepared for
presentation to senior management, describing the operations of Borrower in the
form so prepared for such month and for the period from the beginning of the
then current Fiscal Year to the end of such month;

 

(2)           Quarterly
Financials:  as soon as available
and in any event within 60 days after the end of each of the first three Fiscal
Quarters of each Fiscal Year and, with respect to the fourth Fiscal Quarter of
each Fiscal Year, concurrently with the delivery of financial statements
pursuant to subdivision (iii) below, (a) the balance sheet of Borrower as
at the end of such Fiscal Quarter and the related statements of income,
partners’ equity and cash flows of Borrower for such Fiscal Quarter and for the
period from the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal Year
and the corresponding figures from the plan and financial forecast for the
current Fiscal Year delivered pursuant to Section 6.1(xiii), all in
reasonable detail and certified by the chief financial officer of Borrower that
they fairly present the financial condition of Borrower as at the dates
indicated and the 

 

63

 

results of its operations and its cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments, and
(b) a narrative report, if any is prepared for presentation to senior
management, describing the operations of Borrower in the form so prepared for
such Fiscal Quarter and for the period from the beginning of the then current
Fiscal Year to the end of such Fiscal Quarter;

 

(3)           Year-End
Financials:  as soon as available
and in any event within 100 days after the end of each Fiscal Year,
(a) the balance sheet of Borrower as at the end of such Fiscal Year and
the related statements of income, partners’ equity and cash flows of Borrower
for such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and, when available, the
corresponding figures from the plan and financial forecast delivered pursuant
to Section 6.1(xiii) for the Fiscal Year covered by such financial
statements, all in reasonable detail and certified by the chief financial
officer of Borrower that they fairly present the financial condition of
Borrower as at the dates indicated and the results of its operations and its
cash flows for the periods indicated, (b) a narrative report, if any is
prepared for presentation to senior management, describing the operations of
Borrower in the form so prepared for such Fiscal Year, and (c) in the case
of such financial statements, a report thereon of Arthur Andersen LLP or other
independent certified public accountants of recognized national standing
selected by Borrower and satisfactory to Administrative Agent, which report
shall be without qualification as to the scope of the audit, shall express no
doubts about the ability of Borrower to continue as a going concern, and shall
state that financial statements fairly present the financial position of
Borrower as at the dates indicated and the results of its operations and its
cash flows for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed in such financial
statements) and that the examination by such accountants in connection with
such financial statements has been made in accordance with generally accepted
auditing standards;

 

(4)           Officers’
and Compliance Certificates: 
(a) together with each delivery of financial statements of Borrower
pursuant to subdivisions (ii) and (iii) above, an Officers’
Certificate of Borrower stating that the signers have reviewed the terms of
this Agreement and have made, or caused to be made under their supervision, a
review in reasonable detail of the transactions and condition of Borrower
during the accounting period covered by such financial statements and that such
review has not disclosed the existence during or at the end of such accounting
period, and that the signers do not have knowledge of the existence as at the
date of such Officers’ Certificate, of any condition or event that constitutes
an Event of Default or Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what action
Borrower has taken, is taking and proposes to take with respect thereto; and
(b) together with each delivery of financial statements of Borrower pursuant
to subdivision (ii) above, a Compliance Certificate demonstrating in reasonable
detail compliance during and at the end of the applicable accounting 

 

64

 

periods with the
restrictions contained in Sections 7.6 and 7.8;

 

(5)           Reconciliation
Statements:  if, as a result of any
change in accounting principles and policies from those used in the preparation
of the audited financial statements referred to in Section 5.3, the
financial statements of Borrower delivered pursuant to subdivisions (i), (ii),
(iii) or (xiii) of this Section 6.1 will differ in any material respect
from the financial statements that would have been delivered pursuant to such
subdivisions had no such change in accounting principles and policies been
made, then (a) together with the first delivery of financial statements
pursuant to subdivision (i), (ii), (iii) or (xiii) of this Section 6.1
following such change, financial statements of Borrower for (y) the
current Fiscal Year to the effective date of such change and (z) the two
full Fiscal Years immediately preceding the Fiscal Year in which such change is
made, in each case prepared on a pro forma basis as if such change had been in
effect during such periods, and (b) together with each delivery of
financial statements pursuant to subdivision (i), (ii), (iii) or (xiii) of this
Section 6.1 following such change, a written statement of the chief
accounting officer or chief financial officer of Borrower setting forth the
differences which would have resulted if such financial statements had been
prepared without giving effect to such change;

 

(6)           Accountants’
Certification:  together with each
delivery of financial statements of Borrower pursuant to subdivision (iii)
above, a written statement by the independent certified public accountants
giving the report thereon (a) stating that their audit has included a
review of the terms of this Agreement and the other Loan Documents as they
relate to accounting matters, (b) stating whether, in connection with
their audit, any condition or event that constitutes an Event of Default or
Default has come to their attention and, if such a condition or event has come
to their attention, specifying the nature and period of existence thereof; provided
that such accountants shall not be liable by reason of any failure to obtain
knowledge of any such Event of Default or Default that would not be disclosed
in the course of their audit and their report may state that their audit was
not directed toward obtaining such knowledge, and (c) stating that based
on their audit nothing has come to their attention that causes them to believe
either or both that the information contained in the certificates delivered
therewith pursuant to subdivision (iv) above is not correct or that the matters
set forth in the Compliance Certificates delivered therewith pursuant to
clause (b) of subdivision (iv) above for the applicable Fiscal Year
are not stated in accordance with the terms of this Agreement;

 

(7)           Accountants’
Reports:  promptly upon receipt
thereof, but in no case later than concurrently with each delivery of financial
statements of Borrower pursuant to subdivisions (ii) and (iii) above (unless
restricted by applicable professional standards), copies of all reports
submitted to Borrower by independent certified public accountants in connection
with each annual, interim or special audit of the financial statements of
Borrower made by such accountants, including, without limitation, any comment
letter submitted by such 

 

65

 

accountants to management in
connection with their annual audit;

 

(8)           SEC
Filings and Press Releases: 
promptly upon their becoming available, and, with respect to
(a) and (b) below, at and after the time Borrower or a Subsidiary of
Borrower becomes subject to the reporting requirements under Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, copies of
(a) all financial statements, reports, notices and proxy statements sent
or made available generally by Borrower to its security holders or by any
Subsidiary of Borrower to its security holders other than Borrower or another
Subsidiary of Borrower, (b) all regular and periodic reports and all
registration statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by Borrower or any of Borrower’s Subsidiaries with
any securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (c) all press releases
and other statements made available generally by or on behalf of Borrower or
any of Borrower’s Subsidiaries to the public concerning material developments
in the business of Borrower or any of Borrower’s Subsidiaries;

 

(9)           Events
of Default, etc.:  promptly upon any
Senior Officer of any General Partner or any Executive Committee member
obtaining knowledge, but in no case later than concurrently with each delivery
of financial statements of Borrower pursuant to subdivisions (ii) and (iii)
above, (a) of any condition or event that constitutes an Event of Default
or Default, or becoming aware that any Lender has given any notice (other than
to Administrative Agent) or taken any other action with respect to a claimed
Event of Default or Default, (b) that any Person has given any notice to
Borrower or any of its Subsidiaries or taken any other action with respect to a
claimed default or event or condition of the type referred to in
Section 8.2, (c) of the occurrence of any event or change that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect, or (d) that any Gaming Board has indicated its intent to consider
or act upon a License Revocation or a fine or penalty of $1,000,000 or more
with respect to Borrower or any of its Subsidiaries, an Officers’ Certificate
specifying the nature and period of existence of such condition, event or
change, or specifying the notice given or action taken by any such Person and
the nature of such claimed Event of Default, Default, default, event or condition,
and what action Borrower has taken, is taking and proposes to take with respect
thereto;

 

(10)         Litigation
or Other Proceedings: 
(a) promptly upon any officer of Borrower obtaining knowledge of,
but in no case later than concurrently with each delivery of financial
statements of Borrower pursuant to subdivisions (ii) and (iii) above,
(X) the institution of any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Borrower or any of its Subsidiaries or any
property of Borrower or any of its Subsidiaries (collectively, “Proceedings”)
not previously disclosed in writing by Borrower to Lenders or (Y) any
material development in any Proceeding that, in any case:

 

(1)           if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or

 

66

 

(2)           seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the transactions
contemplated hereby;

 

written notice thereof
together with such other information as may be reasonably available to Borrower
to enable Lenders and their counsel to evaluate such matters; and
(b) together with each delivery of financial statements pursuant to
subdivision (ii) above, a schedule of all Proceedings involving an alleged
liability of, or claims against or affecting, Borrower or any of its
Subsidiaries equal to or greater than $5,000,000, and promptly after request by
Administrative Agent such other information as may be reasonably requested by
Administrative Agent to enable Administrative Agent and its counsel to evaluate
any of such Proceedings;

 

(11)         ERISA
Events:  promptly upon becoming
aware of the occurrence of or forthcoming occurrence of any ERISA Event with
respect to Borrower or any of its ERISA Affiliates, but in no case later than
concurrently with each delivery of financial statements of Borrower pursuant to
subdivisions (ii) and (iii) above, a written notice specifying the nature
thereof, what action Borrower or any of its ERISA Affiliates has taken, is
taking or proposes to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereto;

 

(12)         ERISA
Notices:  together with each
delivery of financial statements of Borrower pursuant to subdivision (ii)
above, copies of (a) each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) filed by Borrower or any of its ERISA Affiliates with
the Internal Revenue Service with respect to each Pension Plan since the last
such delivery of financial statements; (b) all notices received by
Borrower or any of its ERISA Affiliates from a Multiemployer Plan sponsor
concerning an ERISA Event since the last such delivery of financial statements;
and (c) such other documents or governmental reports or filings relating
to any Employee Benefit Plan as Administrative Agent shall reasonably request;

 

(13)         Financial
Plans:  concurrent with delivery
thereof pursuant to Section 5.2 (or any successor provision) of the Joint
Venture Agreement, and in any event no later than 90 days after the end of each
Fiscal Year, a copy of the “Annual Business Plan” (as such term is defined in
Section 5.2 (or any successor provision) of the Joint Venture Agreement)
as approved by the Executive Committee pursuant to such Section 5.2;

 

(14)         Insurance:  as soon as practicable and in any event no
later than 90 days after the end of each Fiscal Year, a report in form and
substance satisfactory to Administrative Agent outlining all material insurance
coverage maintained as of the date of such report by Borrower and its
Subsidiaries and all material insurance coverage planned to be maintained by Borrower
and its Subsidiaries in the immediately succeeding Fiscal Year to the extent
not included in the information delivered pursuant to Section 6.1(xiii);

 

67

 

(15)         Environmental
Audits and Reports:  promptly upon
receipt thereof, but in no case later than concurrently with each delivery of
financial statements of Borrower pursuant to subdivisions (ii) and (iii) above,
copies of all environmental audits and reports, whether prepared by personnel
of Borrower or its Subsidiaries or by independent consultants, with respect to
significant environmental matters at any Facility, that could result in a
Material Adverse Effect;

 

(16)         Certain
Changes Within Borrower; Events of Bankruptcy:  with reasonable promptness, but in no case later than
concurrently with each delivery of financial statements of Borrower pursuant to
Subdivision (ii) and (iii) above, written notice of (a) any change or
proposed change in Managing Partner or any change in “General Manager” (as such
term is used in the Joint Venture Agreement) or (b) the occurrence of any
event or action that, with the passage of time, would become an “Event of
Bankruptcy” (as such term is defined in Section 14.1 of the Joint Venture
Agreement as in effect as of the Closing Date);

 

(17)         Formation
of Subsidiary.  together with each
delivery of financial statements of Borrower pursuant to subdivision (ii) and
(iii) above, (a) a written notice with respect to any Person that has
become a Subsidiary of Borrower since the last such delivery of financial
statements, setting forth (1) the date on which such Person became a
Subsidiary of Borrower and (2) all of the data required to be set forth in
Schedule 5.1 with respect to all Subsidiaries of Borrower (it being understood that
such written notice shall be deemed to supplement Schedule 5.1 for all purposes
of this Agreement);

 

(18)         Other
Information:  with reasonable
promptness, such other information and data with respect to Borrower or any of
its Subsidiaries as from time to time may be reasonably requested by any
Lender; and

 

(19)         Regulation
6.090 Reports:  Promptly after the
same are available, but in no case later than concurrently with each delivery
of the financial statements of Borrower pursuant to subdivisions (ii) and (iii)
above, copies of the Nevada “Regulation 6.090 Report” and “6-A Report” and
copies of any written communication to Borrower or any of its Subsidiaries from
any Gaming Board advising it of a violation of or non-compliance with, any
Gaming Law by Borrower or any of its Subsidiaries.

 

2.36         Borrower or Corporate Existence, etc.

 

Except as permitted under
Section 7.7, Borrower will, and will cause each of its Subsidiaries to, at
all times preserve and keep in full force and effect its partnership or corporate
existence, as applicable, and all rights and franchises material to its
business.

 

68

 

2.37         Payment of Taxes and Claims; Tax Consolidation.

 

1.             Borrower will, and
will cause each of its Subsidiaries to, pay all taxes, assessments and other
governmental charges imposed upon it or any of its properties or assets or in
respect of any of its income, businesses or franchises before any penalty
accrues thereon, and all claims (including, without limitation, claims for
labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its properties or
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto; provided that no such charge or claim need be paid if being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and if such reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall have been made
therefor.

 

2.             Borrower will not,
nor will it permit any of its Subsidiaries to, file or consent to the filing of
any consolidated income tax return with any Person (other than Borrower or any
of its Subsidiaries).

 

2.38         Maintenance of Properties; Insurance.

 

Borrower will, and will
cause each of its Subsidiaries to, maintain or cause to be maintained in good
repair, working order and condition, ordinary wear and tear excepted, all
material properties used or owned by Borrower and useful in the business of
Borrower and its Subsidiaries (including, without limitation, maintenance of
Intellectual Property) and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof and will comply fully
with the terms and conditions of the Section 4 of the Deed of Trust.  Borrower will maintain or cause to be
maintained, with financially sound and reputable insurers, insurance with
respect to its properties and business and the properties and businesses of its
Subsidiaries against loss or damage of the kinds customarily carried or
maintained under similar circumstances by Persons of established reputation
engaged in similar businesses in similar locations and will otherwise comply
fully with the terms and conditions of Section 6 of the Deed of
Trust.  Each such policy of insurance
shall name Administrative Agent for the benefit of Lenders as the loss payee
thereunder for amounts in excess of $1,000,000 and shall provide for at least
30 days prior written notice to Administrative Agent of any modification or
cancellation of such policy.

 

2.39         Inspection; Lender
Meeting.

 

To the extent not prohibited
by applicable law, Borrower shall, and shall cause each of its Subsidiaries to,
permit any authorized representatives designated by any Lender to visit and
inspect any of the properties of Borrower or any of its Subsidiaries, including
its and their financial and accounting records, and to make copies and take
extracts therefrom, and to discuss its and their affairs, finances and accounts
with its and their officers and independent public accountants (provided that
Borrower may, if it so chooses, be present at or participate in any such
discussion), all upon reasonable notice and at such reasonable times during normal
business hours and as often as may be reasonably requested.  Without in any way limiting the foregoing,
Borrower will, upon the request of Administrative Agent or Lenders, participate
in a meeting of Administrative Agent and Lenders once during each Fiscal Year
to be held at Borrower’s principal offices (or such other location as may be
agreed to by Borrower 

 

69

 

and Administrative Agent) at such time as may
be agreed to by Borrower and Administrative Agent.

 

2.40         Compliance with
Laws, etc.

 

Borrower shall, and shall
cause each of its Subsidiaries to, comply with the requirements of all
applicable laws, rules, regulations and orders of any governmental authority,
including, without limitation, all Gaming Laws, and to obtain and keep in full
force and effect each permit, license, consent, or approval required to permit
the operation of the Hotel, except where the failure to be in compliance or to
obtain and keep in full force and effect could not reasonably be expected to
cause a Material Adverse Effect. 
Borrower shall and shall cause each of its Subsidiaries to comply with
the requirements of all Gaming Laws applicable to such Person.

 

2.41         Environmental Disclosure and Inspection.

 

1.             Borrower shall, and
shall cause each of its Subsidiaries to, exercise due diligence in order to
comply and use its best efforts to cause (i) all tenants under any leases
or occupancy agreements affecting any portion of the Facilities and
(ii) all other Persons on or occupying such property, to comply with all
Environmental Laws.

 

2.             Borrower agrees
that Administrative Agent may, from time to time and in its sole and absolute
discretion, retain, at Borrower’s expense, an independent professional
consultant to review any report relating to Hazardous Material prepared by or
for Borrower and, whether or not any such report exists, upon reasonable notice
to Borrower, to conduct its own investigation of any Facility currently or
previously owned, leased, operated or used by Borrower or any of its
Subsidiaries, and Borrower agrees to use its best efforts to obtain permission
for Administrative Agent’s professional consultant to conduct its own
investigation of any Facility previously owned, leased, operated or used by
Borrower or any of its Subsidiaries. 
Borrower hereby grants to Administrative Agent and its Administrative
Agents, employees, consultants and contractors the right to enter into or on to
the Facilities currently owned, leased, operated or used by Borrower or any of
its Subsidiaries to perform such tests on such property as are reasonably
necessary to conduct such a review and/or investigation.  Any such investigation of any Facility shall
be conducted, unless otherwise agreed to by Borrower and Administrative Agent,
during normal business hours and, to the extent reasonably practicable, shall
be conducted with prior notice and so as not to interfere with the ongoing
operations at any such Facility or to cause any damage or loss to any property
at such Facility.  Borrower and
Administrative Agent hereby acknowledge and agree that any report of any
investigation conducted at the request of Administrative Agent pursuant to this
Section 6.7B will be obtained and shall be used by Administrative Agent
and Lenders for the purposes of Lenders’ internal credit decisions, to monitor
and police the Loans and to protect Lenders’ security interests, if any,
created by the Loan Documents. 
Administrative Agent agrees to deliver a copy of any such report to
Borrower promptly after its completion, and Borrower acknowledges and agrees
that (i) it will indemnify and hold harmless Administrative Agent and each
Lender from any costs, losses or liabilities relating to Borrower’s use of or
reliance on any such report, (ii) neither Administrative Agent nor any
Lender makes any representation or warranty with respect to any such 

 

70

 

report, and (iii) by delivering such report to Borrower, neither
Administrative Agent nor any Lender is requiring or recommending the
implementation of any suggestions or recommendations contained in any such
report; provided, however, that Administrative Agent shall not be
required by this Section 6.7B to deliver any such report to Borrower that
is protected by the attorney-client privilege or other privilege if and to the
extent that to do so could reasonably be expected to result in the waiver or
loss of that privilege.

 

3.             Borrower shall
promptly advise Lenders in writing and in reasonable detail of (i) any
Release of any Hazardous Material required to be reported to any federal, state
or local governmental or regulatory agency under any applicable Environmental
Laws, (ii) any and all written communications with respect to any
Environmental Claims that have a reasonable possibility of giving rise to a
Material Adverse Effect or with respect to any Release of Hazardous Material
required to be reported to any federal, state or local governmental or
regulatory agency, (provided, however, that Borrower shall not be required by
this Section 6.7C to advise Lenders of the contents of any written
communication that is protected by the attorney-client or other privilege if
and to the extent that to do so could reasonably be expected to result in the
waiver or loss of that privilege), (iii) any remedial action taken by
Borrower or any other Person in response to (x) any Hazardous Material on,
under or about any Facility, the existence of which has a reasonable
possibility of resulting in an Environmental Claim having a Material Adverse
Effect, or (y) any Environmental Claim that reasonably could have a
Material Adverse Effect, (iv) Borrower’s discovery of any occurrence or
condition on any real property adjoining or in the vicinity of any Facility
that reasonably could cause such Facility or any part thereof to be subject to
(x) any restrictions on the ownership or transferability thereof or
(y) any material restriction on the occupancy or use thereof under any
Environmental Laws which restriction on occupancy or use could reasonably be
expected to result in a Material Adverse Effect, and (v) any request for
information from any governmental agency that indicates such agency is
investigating whether Borrower or any of its Subsidiaries may be potentially
responsible for a Release of Hazardous Material.

 

4.             Borrower shall
promptly notify Lenders of (i) any proposed acquisition of stock, assets,
or property by Borrower or any of its Subsidiaries that could reasonably be
expected to expose Borrower or any of its Subsidiaries to, or result in,
Environmental Claims that could have a Material Adverse Effect or that could
reasonably be expected to have a material adverse effect on any Governmental
Authorization then held by Borrower or any of its Subsidiaries and
(ii) any action that Borrower or any of its Subsidiaries proposes to take
to commence manufacturing, industrial or other operations that reasonably could
be expected to subject Borrower or any of its Subsidiaries to laws, rules or
regulations (including, without limitation, laws, rules and regulations
requiring additional environmental permits or licenses) not theretofore
applicable to the Hotel, Facilities or operations of Borrower or any of its
Subsidiaries.

 

5.             Borrower shall, at
its own expense, provide copies of such documents or information as
Administrative Agent may reasonably request in relation to any matters
disclosed pursuant to this Section 6.7 (provided, 

 

71

 

however, that Borrower shall not be required by the provisions of this
Section 6.7E to provide documents or information that is protected by the
attorney-client or other privilege if and to the extent that to do so could
reasonably be expected to result in the waiver or loss of that privilege).

 

2.42         Borrower’s Remedial Action Regarding Hazardous Material.

 

Borrower shall promptly
take, and shall cause each of its Subsidiaries promptly to take, any and all
necessary remedial action in connection with the presence, storage, use,
disposal, transportation or Release of any Hazardous Material on, under or
about any Facility in order to comply with all applicable Environmental Laws
and Governmental Authorizations.  In the
event Borrower or any of its Subsidiaries undertakes any remedial action with
respect to any Hazardous Material on, under or about any Facility, Borrower or
such Subsidiary shall conduct and complete such remedial action in compliance
with all applicable Environmental Laws and other applicable legal requirements
(including lawful policies, orders and directives of federal, state and local
governmental authorities).

 

2.43         Delivery of Pledge
Agreement.

 

Borrower shall, and shall
cause each of the General Partners, to diligently pursue any approvals of
Governmental Authorities, including without limitation, any Gaming Boards under
applicable Gaming Laws, necessary to execute and deliver the Pledge Agreement
and to pledge the partnership interests of Borrower to the Administrative Agent
for the benefit of Lenders.  Borrower
shall cause each of the General Partners to execute and deliver the Pledge
Agreement and to take all required actions to perfect the pledge of such
partnership interests promptly upon receipt of such approvals and, in any
event, prior to the pledge of such partnership interests to the trustee for the
benefit of holders of the Mortgage Notes.

 

72

 

SECTION 5

NEGATIVE COVENANTS

 

Borrower covenants and
agrees that, so long as the Commitments remain in effect and until payment in
full of all of the Loans and other Obligations and the cancellation or
expiration of all Letters of Credit, unless Lenders shall otherwise give prior
written consent, Borrower shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 7.

 

2.44         Indebtedness.

 

Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, create,
incur, assume or guaranty, or otherwise become or remain directly or indirectly
liable with respect to, any Indebtedness, except that Borrower may become and
remain liable with respect to:

 

(1)           the
Obligations;

 

(2)           Indebtedness
under the Mortgage Notes in an aggregate outstanding principal amount not to
exceed, as of any date $160,000,000 minus the amount of any principal
repayments made in respect thereof as of such date, and refinancings of the
Mortgage Notes which do not increase the principal amount outstanding
thereunder;

 

(3)           purchase
money Indebtedness and Indebtedness in respect of Capital Leases which are in
an aggregate principal amount not to exceed $5,000,000 at any one time
outstanding;

 

(4)           Indebtedness
to any of its wholly-owned Subsidiaries, and any wholly-owned Subsidiary of
Borrower may become and remain liable with respect to Indebtedness to Borrower
incurred in the ordinary course of the business of Borrower and that
Subsidiary; provided that (a) all such intercompany Indebtedness
shall be evidenced by promissory notes delivered in pledge to the
Administrative Agent, (b) all such intercompany Indebtedness owed by
Borrower to any of its Subsidiaries shall be subordinated in right of payment
to the payment in full of the Obligations pursuant to the terms of the
applicable promissory notes or an intercompany subordination agreement, and
(c) any payment by any Subsidiary of Borrower under any guaranty of the
Obligations shall result in a pro  tanto reduction of the amount
of any intercompany Indebtedness owed by such Subsidiary to Borrower or to any
of its Subsidiaries for whose benefit such payment is made;

 

(5)           Contingent
Obligations permitted by Section 7.4 and, upon any matured obligations
actually arising pursuant thereto, the Indebtedness corresponding to the
Contingent Obligations so extinguished.

 

2.45         Liens and Related
Matters.

 

1.             Prohibition on
Liens.  Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, create,
incur, assume 

 

73

 

or permit to exist any Lien on or with respect to any property or asset
of any kind (including any document or instrument in respect of goods or
accounts receivable) of Borrower or any of its Subsidiaries, 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 such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:

 

(1)           Permitted
Encumbrances;

 

(2)           Liens
described in Schedule 7.2;

 

(3)           Liens
granted pursuant to the Collateral Documents;

 

(4)           Liens
securing the Indebtedness under the Mortgage Notes permitted by Section
7.1(ii), and refinancings of the Mortgage Notes which do not increase the
principal amount of outstandings thereunder, which are subordinated to the
Liens in favor of the Administrative Agent and the Lenders in the manner
contemplated by the Intercreditor Agreement in property which is subject to the
Liens of the Collateral Documents;

 

(5)          
Liens securing Indebtedness permitted under Section 7.1(iii); provided
that such Liens relate solely to the property financed with such Indebtedness
and proceeds thereof; and

 

(6)           Liens
created by or resulting from litigation or a legal proceeding against Borrower
or any of its Subsidiaries or both in the ordinary course of business which
litigation or legal proceeding currently is being contested in good faith by
appropriate proceedings and which litigation or legal proceeding does not
result in an Event of Default under Section 8.8; provided that such
Lien shall be bonded or foreclosure of such Lien stayed by order of a court of
competent jurisdiction and; provided further, that any such Lien shall
cease to be a permitted exception to this Section 7.2 if any attempt to
foreclose thereon could reasonably be expected to occur within the next 60
days.

 

2.             Equitable Lien
in Favor of Lenders.  If Borrower or
any of its Subsidiaries shall create or assume any Lien upon any of its
properties or assets, whether now owned or hereafter acquired, other than Liens
excepted by the provisions of Section 7.2A, it shall make or cause to be
made effective provision whereby the Obligations will be secured by such Lien
equally and ratably with any and all other Indebtedness secured thereby as long
as any such Indebtedness shall be so secured (or, in the case of any such Lien
securing the Mortgage Notes, in priority thereto); provided that,
notwithstanding the foregoing, this covenant shall not be construed as a
consent by Lenders to the creation or assumption of any such Lien not permitted
by the provisions of Section 7.2A.

 

3.             No Further
Negative Pledges.  Except with
respect to (i) specific property encumbered pursuant to
Section 7.2A(iii) to secure payment of particular Indebtedness,
(ii) specific property to be sold pursuant to an executed agreement with
respect to an Asset Sale, (iii) the 

 

74

 

covenant set forth in Section 4.12 of the Indenture (as in effect
on the date hereof), an (iv) a Lien created in favor of Administrative Agent
pursuant to the Collateral Documents, neither Borrower nor any of its
Subsidiaries shall enter into any agreement prohibiting the creation or
assumption of any Lien upon any of its respective properties or assets, whether
now owned or hereafter acquired.

 

4.             No Restrictions
on Subsidiary Distributions to Borrower or Other Subsidiaries.  Except as provided herein or in the
Indenture, Borrower will not, and will not permit any of its Subsidiaries to,
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such Subsidiary to
(i) pay dividends or make any other distributions on any of such
Subsidiary’s capital stock owned by Borrower or any other Subsidiary of
Borrower, (ii) repay or prepay any Indebtedness owed by such Subsidiary to
Borrower or any other Subsidiary of Borrower, (iii) make loans or advances
to Borrower or any other Subsidiary of Borrower, or (iv) transfer any of
its property or assets to Borrower or any other Subsidiary of Borrower.

 

2.46         Investments.

 

Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, make or
own any Investment in any Person, including any Joint Venture, except:

 

(1)           Borrower
and its Subsidiaries may make and own Investments in Cash Equivalents;

 

(2)           Borrower
and its wholly-owned Subsidiaries may create, and make and own Investments in,
wholly-owned Subsidiaries engaged in operations reasonably necessary for the
business of Borrower with respect to the Hotel; provided, however,
that (a) the aggregate of all such Investments (without duplication in the
case of Investments through multiple tiers of Subsidiaries) may not exceed
$5,000,000, (b) no such Subsidiary may (1) create, incur, assume or
guarantee, or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness (other than Indebtedness permitted under
clause (iii) of Section 7.1), (2) create, incur, assume or
permit to exist any Lien on or with respect to any property or asset of any
kind of such Subsidiary (other than Permitted Encumbrances and Liens granted
pursuant to the Collateral Documents), or (3) create or become or remain
liable with respect to any Contingent Obligation (other than Contingent
Obligations under any guarantee of the Obligations);

 

(3)           Borrower
and its Subsidiaries may make Capital Expenditures permitted by
Section 7.8; and

 

(4)           Borrower
and its Subsidiaries may make advances to customers in the ordinary course of
business substantially consistent with the practice of other gaming
institutions in connection with their gaming operations in the State of Nevada.

 

75

 

2.47         Contingent
Obligations.

 

Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, create or
become or remain liable with respect to any Contingent Obligation, except that
Borrower may become and remain liable with respect to:

 

(1)           Contingent
Obligations in respect of Letters of Credit;

 

(2)           Interest
Rate Agreements with respect to outstanding Indebtedness for borrowed money of
the Borrower;

 

(3)           Contingent
Obligations pursuant to indemnity obligations with respect to taxes of
Borrower, the Environmental Indemnity, workers compensation for Borrower’s
employees, a title policy and other indemnity obligations incurred in the
ordinary course of business.

 

2.48         Restricted Junior
Payments.

 

Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, declare,
order or pay any sum for any Restricted Junior Payment; provided that so
long as no Event of Default or Default shall have occurred and be continuing or
occurs as a result thereof Borrower may make the following Restricted Junior
Payments:

 

(1)           Distributions
made to the General Partners consisting of 
$5,200,000 in Tax Distributions and $2,102,649 in general distributions
to the General Partners made prior to the Closing Date and $30,000,000 in
general distributions to the General Partners to be made on the Closing Date;

 

(2)           Tax
Distributions made following the Closing Date to the General Partners in
proportion to their Percentage Interests; and

 

(3)           In
addition to the foregoing, Partner Distributions which do not exceed in any fiscal
period the aggregate amount of the payments permitted by Section 4.07(c) of the
Indenture (as it exists on the date hereof) for such fiscal period.

 

Neither Borrower nor any of its Subsidiaries
may directly or indirectly declare, order, pay or make, or set apart any sum or
property for, any Restricted Junior Payment or agree to do so except as
permitted by this Section 7.5.

 

2.49         Financial
Covenants.

 

1.             Minimum Fixed
Charge Coverage Ratio.  Borrower
shall not permit the Fixed Charge Coverage Ratio as of the last day of any
Fiscal Quarter to be less than 1.10:1.00.

 

76

 

2.             Maximum Leverage
Ratio.  Borrower shall not permit
the Leverage Ratio as of the last day of any Fiscal Quarter ending during a
period described below to exceed the ratio set forth opposite that period:

 

	
  Quarters
  Ending

  	
   

  	
  Maximum
  Total 

  Leverage Ratio

  	
   

  
	
  Closing Date through

  September 30, 2002

  	
   

  	
  4.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2002 

  through  

  September 30, 2003

  	
   

  	
  4.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2003 and
  

  thereafter

  	
   

  	
  4.00:1.00.

  	
   

  

 

2.50         Restriction on Fundamental Changes; Asset Sales and
Acquisitions.

 

Borrower shall not alter the
partnership structure of Borrower or enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, sublease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or
any part of its business, property or fixed assets, whether now owned or hereafter
acquired, or acquire by purchase or otherwise all or substantially all the
business, property or fixed assets of, or stock or other evidence of beneficial
ownership of, any Person or any division or line of business of any Person,
except:

 

(1)           any
Subsidiary of Borrower may be merged with or into Borrower or any wholly-owned
Subsidiary of Borrower, or be liquidated, wound up or dissolved, or all or any
part of its business, property or assets may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or a series of
transactions, to Borrower or any wholly-owned Subsidiary of Borrower; provided
that, in the case of such a merger, Borrower or such wholly-owned Subsidiary
shall be the continuing or surviving Person;

 

(2)           Borrower
and its Subsidiaries may make Capital Expenditures permitted under
Section 7.8;

 

(3)           Borrower
and its Subsidiaries may sell or otherwise dispose of assets in transactions
that do not constitute Asset Sales; provided that the consideration
received for such assets shall be in an amount at least equal to the fair
market value thereof;

 

(4)           Borrower
and its Subsidiaries may, in the ordinary course of business, sell for cash,
equipment that is obsolete or in need of replacement and no longer used or useful
in its business;

 

(5)           Borrower
may dispose of personal property to customers or potential customers in
connection with promotions in the ordinary 

 

77

 

course of business substantially consistent with the practice of other
gaming institutions in connection with their gaming operations in the State of
Nevada; and

 

(6)           Borrower
and its wholly-owned Subsidiaries may make Investments permitted by
Section 7.3(ii).

 

2.51         Capital
Expenditures.

 

Borrower shall not, and
shall not permit its Subsidiaries to, make or incur Capital Expenditures in any
calendar year in an aggregate amount which is in excess of $10,000,000.

 

2.52         Sales and
Lease-Backs.

 

Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, become or
remain liable as lessee or as a guarantor or other surety with respect to any
lease, whether an Operating Lease or a Capital Lease, of any property (whether
real, personal or mixed), whether now owned or hereafter acquired,
(i) which Borrower or any of its Subsidiaries has sold or transferred or
is to sell or transfer to any other Person (other than Borrower or any of its
Subsidiaries) or (ii) which Borrower or any of its Subsidiaries intends to
use for substantially the same purpose as any other property which has been or
is to be sold or transferred by Borrower or any of its Subsidiaries to any
Person (other than Borrower or any of its Subsidiaries) in connection with such
lease, other than as contemplated by Section 7.1(iii).

 

2.53         Sale or Discount of Receivables.

 

Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, sell with
recourse, or discount or otherwise sell for less than the face value thereof,
any of its notes or accounts receivable (other than settlements in the ordinary
course of business and substantially consistent with the practice at other
gaming institutions in connection with their gaming operations in the State of
Nevada with payors of such notes or accounts receivable reached to facilitate
collection from such payor of such notes or accounts receivable).

 

2.54         Transactions with Shareholders and Affiliates.

 

Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, enter into
or permit to exist any transaction (including, without limitation, the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Borrower or with any Affiliate of Borrower or of any such holder; provided
that the foregoing restriction shall not apply to (i) any transaction
between Borrower and any of its wholly-owned Subsidiaries or between any of its
wholly-owned Subsidiaries, (ii) reasonable and customary management fees
and reimbursements of expenses paid to Managing Partner pursuant to the terms
of the Joint Venture Agreement, (iii) other payments permitted by the
Joint Venture Agreement as in effect at the Closing Date and not otherwise
prohibited or restricted by the terms of this Agreement, or 

 

78

 

(iv) transactions between Borrower and its
Affiliates in the ordinary course of business consistent with past practices of
Borrower that the Executive Committee has determined in good faith are
commercially reasonable to the Borrower and its relevant Subsidiaries.

 

2.55         Conduct of
Business.

 

From and after the Closing
Date, Borrower shall not, and shall not permit any of its Subsidiaries to,
engage in any business other than the operation of the hotel and casino
business of the Hotel and other businesses reasonably incidental thereto and
located on or adjacent to the Premises.

 

2.56         Amendments of Related Documents.

 

1.             Borrower shall not,
and shall not permit any of its Subsidiaries to, amend or otherwise change the
Indenture, the terms of any Subordinated Indebtedness, or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on the Mortgage Notes or
such Subordinated Indebtedness, change (to earlier dates) any dates upon which
payments of principal or interest are due thereon, change any event of default
or condition to an event of default with respect thereto (other than to eliminate
any such event of default), change the redemption, prepayment or defeasance
provisions thereof, change the subordination provisions thereof (or of any
guaranty thereof), or change any collateral therefor (other than to release
such collateral), or if the effect of such amendment or change, together with
all other amendments or changes made, is to increase materially the obligations
of the obligor thereunder or to confer any additional rights on the holders of
such Subordinated Indebtedness (or a trustee or other representative on their
behalf) which would be materially adverse to Borrower or adverse to Lenders.

 

2.             Borrower shall not
amend or otherwise change the terms of the Joint Venture Agreement if the
effect of such amendment or change, together with all other amendments or
changes made, is to increase the obligations of Borrower thereunder or to
confer any additional rights on the other parties thereto that in either case
would be materially adverse to Borrower or adverse to Lenders.

 

2.57         Fiscal Year.

 

Borrower shall not change
its Fiscal Year-end from December 31 without giving notice to
Administrative Agent at least 30 days in advance of such change.

 

2.58         Transfer of Borrower Interests.

 

No General Partner shall
transfer all or any portion of its interest in Borrower or any rights therein
except as permitted pursuant to Section 12.4 of the Joint Venture
Agreement as in effect as of the Closing Date; provided that the
provisions of this Section shall not limit the operation of
Section 8.12.

 

2.59         Prepayments of Mortgage Notes. 
Borrower shall not make any payment of principal or interest in respect
of the Mortgage Notes prior to the date when due.

79

 

SECTION 6

EVENTS OF DEFAULT

 

If any of the following conditions
or events (“Events of Default”) shall occur:

 

2.60         Failure to Make Payments When Due.

 

(a)           Failure by Borrower to pay any installment of principal of
any Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment (unless such notice is revoked by Borrower and would not
result in the incurrence of any costs by Administrative Agent or any Lender or,
if incurred, such costs are reimbursed by Borrower) by mandatory prepayment or
otherwise;

 

(b)           Failure by Borrower to pay when due any amount payable to
an Issuing Lender in reimbursement of any drawing under a Letter of Credit; or

 

(c)           Failure by Borrower to pay any interest on any Loan or any
fee or any other amount due under this Agreement or the other Loan Documents
within five days after the date due; or

 

2.61         Default in Other Agreements.  Failure of Borrower or any of its
Subsidiaries to pay when due (a) any principal of or interest on any Indebtedness (other than
Indebtedness referred to in Section 8.1) in an individual principal amount
of $2,500,000 or more or any items of Indebtedness with an aggregate principal
amount of $5,000,000 or more or (b) any Contingent Obligation in an
individual principal amount of $2,500,000 or more or any Contingent Obligations
with an aggregate principal amount of $5,000,000 or more, in each case beyond
the end of any grace period provided therefor; or (ii) breach or default
by Borrower or any of its Subsidiaries with respect to any other material term
of (a) any evidence of any Indebtedness in an individual principal amount
of $2,500,000 or more or any items of Indebtedness with an aggregate principal
amount of $5,000,000 or more or any Contingent Obligation in an individual
principal amount of $2,500,000 or more or any Contingent Obligations with an
aggregate amount of $5,000,000 or more or (b) any loan agreement,
mortgage, indenture or other agreement relating to such Indebtedness or
Contingent Obligations, if the effect of such breach or default is to cause, or
to permit the holder or holders of that Indebtedness or Contingent Obligations
(or a trustee on behalf of such holder or holders) to cause, that Indebtedness
or Contingent Obligations to become or be declared due and payable prior to its
stated maturity or the stated maturity or any underlying obligation, as the
case may be (upon the giving or receiving of notice, lapse of time, both, or
otherwise)

 

2.62         Breach of Certain
Covenants.

 

Failure of Borrower or its
Subsidiaries to perform or comply with any term or condition contained in
Section 2.4A, 2.4B, 2.4C(i), 2.5, 6.1(ix), 6.2, 6.6 or Section 7 of
this Agreement; or

 

80

 

2.63         Breach of Warranty.

 

Any representation,
warranty, certification or other statement made by any Loan Party  in any Loan Document or in any statement or
certificate at any time given by any of them in writing pursuant hereto or
thereto or in connection herewith or therewith shall be false in any material
respect on the date as of which made; or

 

2.64         Other Defaults Under Loan Documents.

 

Any Loan Party shall default
in the performance of or compliance with any term contained in this Agreement
or any of the other Loan Documents to be complied with by such Person, other
than any such term referred to in any other Section of this Section 8, and
such default shall not have been remedied or waived within 15 days after
receipt by Borrower of notice from Administrative Agent or any Lender of such
default; or

 

2.65         Involuntary Bankruptcy; Appointment of Receiver, etc.

 

(1)           A
court having jurisdiction in the premises shall enter a decree or order for
relief in respect of any Loan Party in an involuntary case under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, which decree or order is not stayed; or any other similar
relief shall be granted under any applicable federal or state law; or
(ii) an involuntary case shall be commenced against any Loan Party under
the Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over
any Loan Party, or over all or a substantial part of its property, shall have
been entered; or there shall have occurred the involuntary appointment of an
interim receiver, trustee or other custodian of any Loan Party for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of any Loan Party, and any such event described in this
clause (ii) shall continue for 60 days unless dismissed, bonded or
discharged; or

 

2.66         Voluntary Bankruptcy; Appointment of Receiver, etc.

 

(1)           Any
Loan Party shall have an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or
any Loan Party shall make any assignment for the benefit of creditors; or
(ii) any Loan Party shall be unable, or shall fail generally, or shall admit
in writing its inability, to pay its debts as such debts become due; or the
Board of Directors of any Loan Party (or any committee thereof) shall adopt any
resolution or otherwise authorize any action to approve any of the actions
referred to in clause (i) above or this clause (ii); or

 

81

 

2.67         Judgments and
Attachments.

 

Any money judgment, writ or
warrant of attachment or similar process involving (i) in any individual
case an amount in excess of $2,500,000 or (ii) in the aggregate at any
time an amount in excess of $5,000,000 (in either case not adequately covered
by insurance as to which a solvent and unaffiliated insurance company has
acknowledged coverage) shall be entered or filed against any Loan Party or any
of their respective assets and shall remain undischarged, unvacated, unbonded
or unstayed for a period of 60 days (or in any event later than five days prior
to the date of any proposed sale thereunder); or

 

2.68         Dissolution.

 

(1)           Any
order, judgment or decree shall be entered against any Loan Party decreeing the
dissolution or split up of such Loan Party and such order shall remain
undischarged or unstayed for a period in excess of 30 days; or

 

(2)             the occurrence of any “Liquidating Event”
(as such term is defined in Section 13.1 (or any successor provision) of
the Joint Venture Agreement).

 

2.69         Employee Benefit
Plans.

 

There shall occur one or
more ERISA Events which individually or in the aggregate results in or might
reasonably be expected to result in liability of Borrower or any of its ERISA
Affiliates in excess of $5,000,000 during the term of this Agreement; or there
shall exist an amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA), individually or in the aggregate for all
Pension Plans sponsored by Borrower or any of its ERISA Affiliates (excluding
for purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), which exceeds $5,000,000; or

 

2.70         Material Adverse
Effect.

 

Any event or change shall
occur that has caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect; or

 

2.71         Change in Control.

 

General Partners or their
Affiliates on the Closing Date shall cease to beneficially own and control all
of the partnership interests in Borrower or Mandalay and its Affiliates shall
cease to beneficially own and control at least 50% of the partnership interests
in Borrower; or

 

2.72         Invalidity of Environmental Indemnities or Guaranties.

 

Any Environmental Indemnity
or guaranty of the Obligations, other than the satisfaction in full of all
Obligations ceases to be in full force and effect or is declared to be null and
void, or any guarantor or indemnitor denies that it has any further liability,
including, without 

 

82

 

limitation, with respect to future advances
by Lenders, under any indemnity or guaranty or under any make-well agreement,
or gives notice to such effect, in each case, to the extent it relates to the
Obligations; or

 

2.73         Impairment of
Collateral.

 

(A)          A judgment creditor of any Loan Party or any of their
respective Subsidiaries shall obtain possession of any material portion of the
Collateral under the Collateral Documents by any means, including, without
limitation, levy, distraint, replevin or self-help, (B) any substantial
portion of the Collateral shall be taken by eminent domain or condemnation,
(C) any of the Collateral Documents shall cease for any reason to be in
full force and effect, or any party thereto shall purport to disavow its
obligations thereunder or shall declare that it does not have any further
obligations thereunder or shall contest the validity or enforceability thereof
or Lenders shall cease to have a valid and perfected first priority security
interest in any material Collateral therein except as permitted under the terms
of such Collateral Document, or (D) Administrative Agent’s security
interests or Liens, in each case on behalf of Lenders, on any material portion
of the Collateral under the Collateral Documents shall become otherwise
impaired or unenforceable; or

 

2.74         Loss of Governmental Authorizations.

 

Any Governmental
Authorization that is material to the ownership, use or operation of the Hotel
ceases to be valid and in full force or effect or to be held by the Person
required to hold such Governmental Authorization for more than five calendar
days; or

 

2.75         Gaming License.

 

The occurrence of a License
Revocation that continues for at least five calendar days;

 

2.76         Remedies.

 

THEN

 

at any time, (i) upon
the occurrence of any Event of Default described in Section 8.6 or 8.7,
each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be
drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or certificates
required to draw under such Letter of Credit), and (c) all other
Obligations shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which
are hereby expressly waived by Borrower, and the obligation of each Lender to
make any Loan, the obligation of Administrative Agent to issue any Letter of
Credit and the right of any Lender to issue any Letter of Credit hereunder
shall thereupon automatically terminate, and (ii) upon the occurrence and
during the continuation of any other Event of Default, Administrative Agent
shall, upon the written request or with the written consent of Requisite
Lenders, by written notice to Borrower, declare all or any portion of the
amounts 

 

83

 

described in clauses (a) through (c) above to
be, and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Letter of Credit and the right of any Lender to issue any
Letter of Credit hereunder shall thereupon terminate; provided that the
foregoing shall not affect in any way the obligations of Lenders under
Section 3.3C(i).  No remedy
conferred in this Agreement upon any Lender is intended to be exclusive of any
other remedy, and each and every such remedy shall be cumulative and shall be
in addition to every other remedy conferred herein or now or hereafter existing
at law or in equity or by statute or otherwise.

 

Any amounts described in
clause (b) of Section 8.17, when received by Administrative Agent,
shall be held by Administrative Agent pursuant to the terms of the Collateral
Account Agreement and shall be applied as therein provided.

 

84

 

SECTION 7

ADMINISTRATIVE AGENT

 

2.77         Appointment.

 

Bank of America, N.A. is
hereby appointed Administrative Agent hereunder and under the other Loan
Documents and each Lender hereby authorizes Administrative Agent to act as its
Administrative Agent in accordance with the terms of this Agreement and the
other Loan Documents.  Administrative
Agent agrees to act upon the express conditions contained in this Agreement and
the other Loan Documents, as applicable. 
The provisions of this Section 9 are solely for the benefit of
Administrative Agent and Lenders and Borrower shall have no rights as a third
party beneficiary of any of the provisions thereof.  In performing its functions and duties under this Agreement,
Administrative Agent shall act solely as an Administrative Agent of Lenders and
does not assume and shall not be deemed to have assumed any obligation towards
or relationship of agency or trust with or for Borrower or any of its
Subsidiaries, or any other special relationship, other than as set forth in
Section 2.1D(v).

 

2.78         Powers; General
Immunity.

 

1.             Duties Specified.  Each Lender irrevocably authorizes
Administrative Agent to take such action on such Lender’s behalf and to
exercise such powers hereunder and under the other Loan Documents as are
specifically delegated to Administrative Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto.  Administrative Agent shall have only those
duties and responsibilities that are expressly specified in this Agreement and
the other Loan Documents and it may perform such duties by or through its
agents or employees.  Administrative
Agent shall not have, by reason of this Agreement or any of the other Loan
Documents, a fiduciary relationship in respect of any Lender; and nothing in
this Agreement or any of the other Loan Documents, expressed or implied, is
intended to or shall be so construed as to impose upon Administrative Agent any
obligations in respect of this Agreement or any of the other Loan Documents
except as expressly set forth herein or therein.

 

2.             No
Responsibility for Certain Matters. 
Administrative Agent shall not be responsible to any Lender for the
execution, effectiveness, genuineness, validity, enforceability, collectibility
or sufficiency of this Agreement or any other Loan Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made
by Administrative Agent to Lenders or by or on behalf of Borrower to
Administrative Agent or any Lender in connection with the Loan Documents and
the transactions contemplated thereby or for the financial condition or
business affairs of Borrower or any other Person liable for the payment of any
Obligations, nor shall Administrative Agent be required to ascertain or inquire
as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or
as to the use of the proceeds of the Loans or the use of the Letters of Credit
or as to the existence or possible existence of any Event of Default or
Default.  Anything contained in this Agreement
to the 

 

85

 

contrary notwithstanding, Administrative Agent shall not have any
liability arising from confirmations of the amount of outstanding Loans or the
Letter of Credit Usage or the component amounts thereof.

 

3.             Exculpatory
Provisions.  Neither Administrative
Agent nor any of its officers, directors, employees or agents shall be liable
to Lenders for any action taken or omitted by Administrative Agent under or in
connection with any of the Loan Documents except to the extent caused by
Administrative Agent’s gross negligence or willful misconduct.  If Administrative Agent shall request
instructions from Lenders with respect to any act or action (including the
failure to take an action) in connection with this Agreement or any of the
other Loan Documents, Administrative Agent shall be entitled to refrain from
such act or taking such action unless and until Administrative Agent shall have
received instructions from Requisite Lenders or all Lenders if unanimity is
required hereunder.  Without prejudice
to the generality of the foregoing, (i) Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document reasonably believed by it to be genuine
and correct and to have been signed or sent by the proper person or persons,
and shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Borrower and its
Subsidiaries), accountants, experts and other professional advisors reasonably
selected by it; and (ii) no Lender shall have any right of action
whatsoever against Administrative Agent as a result of Administrative Agent
acting or (where so instructed) refraining from acting under this Agreement or
any of the other Loan Documents in accordance with the instructions of
Requisite Lenders or all Lenders as required or permitted by this
Agreement.  Administrative Agent shall
be entitled to refrain from exercising any power, discretion or authority
vested in it under this Agreement or any of the other Loan Documents unless and
until it has obtained the instructions of Requisite Lenders.

 

4.             Administrative
Agent Entitled to Act as Lender. 
The agency hereby created shall in no way impair or affect any of the
rights and powers of, or impose any duties or obligations upon, Administrative
Agent in its individual capacity as a Lender hereunder.  With respect to its participation in the
Loans and the Letters of Credit, Administrative Agent shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not performing the duties and functions delegated to it
hereunder, and the term “Lender” or “Lenders” or any similar term shall, unless
the context clearly otherwise indicates, include Administrative Agent in its
individual capacity.  Administrative
Agent and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of banking, trust, financial advisory or other business with
Borrower or any of its Affiliates as if it were not performing the duties
specified herein, and may accept fees and other consideration from Borrower for
services in connection with this Agreement and otherwise without having to
account for the same to Lenders.

 

2.79         Representations and Warranties; No Responsibility For
Appraisal of Creditworthiness.

 

Each Lender represents and
warrants that it has made its own independent investigation of the financial
condition and affairs of Borrower and its Subsidiaries in connection with the
making of the Loans 

 

86

 

and the issuance of Letters of Credit
hereunder and that it has made and shall continue to make its own appraisal of
the creditworthiness of Borrower and its Subsidiaries.  Administrative Agent shall not have any duty
or responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter, and Administrative Agent shall not have any responsibility
with respect to the accuracy of or the completeness of any information provided
to Lenders.

 

2.80         Right to Indemnity.

 

Each Lender, in proportion
to its Pro Rata Share, severally agrees to indemnify Administrative Agent, to
the extent that Administrative Agent shall not have been reimbursed by Borrower
or another Loan Party, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including, without limitation, counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against Administrative Agent in performing its duties
hereunder or under the other Loan Documents or otherwise in its capacity as
Administrative Agent in any way relating to or arising out of this Agreement or
the other Loan Documents; provided that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
Administrative Agent’s gross negligence or willful misconduct; provided,
further, that if Administrative Agent is subsequently reimbursed by
Borrower or any other Loan Party for any such liabilities, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements in an
amount that, together with amounts paid to Administrative Agent by Lenders
under this Section 9.4, exceeds the amount actually expended by
Administrative Agent therefor, Administrative Agent shall promptly disburse
such excess amount to those Lenders that made payments under this
Section 9.4 in proportion to their payments hereunder.  If any indemnity furnished to Administrative
Agent for any purpose shall, in the opinion of Administrative Agent, be
insufficient or become impaired, Administrative Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished.

 

2.81         Successor Administrative Agent.

 

Administrative Agent may
resign at any time by giving 30 days’ prior written notice thereof to Lenders
and Borrower, and Administrative Agent may be removed at any time with or
without cause by an instrument or concurrent instruments in writing delivered
to Borrower and Administrative Agent and signed by Requisite Lenders (determined
without giving effect to Administrative Agent’s Loan Exposure).  Upon any such notice of resignation or any
such removal, Lenders shall have the right, with the consent of Borrower (which
consent shall not be withheld unreasonably), to appoint a successor
Administrative Agent provided that such Requisite Lenders may proceed
without Borrower’s consent if Borrower refuses to consent to one of two
successive nominees for successor Administrative Agent who are Lenders on the
Closing Date.  Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor Administrative
Agent, that 

 

87

 

successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Administrative Agent and the retiring or
removed Administrative Agent shall be discharged from its duties and
obligations under this Agreement.  After
any retiring or removed Administrative Agent’s resignation or removal hereunder
as Administrative Agent, the provisions of this Section 9 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.

 

2.82         Collateral
Documents.

 

Each Lender hereby further
authorizes Administrative Agent to enter into the Collateral Documents as
secured party on behalf of and for the benefit of each Lender and agrees to be
bound by the terms of the Collateral Documents; provided that
Administrative Agent shall not enter into or consent to any amendment,
modification, termination or waiver of any provision contained in the
Collateral Documents except as set forth in Section 10.6.  Anything contained in any of the Loan
Documents to the contrary notwithstanding, each Lender agrees that no Lender
shall have any right individually to realize upon any of the collateral under
the Collateral Documents, it being understood and agreed that all rights and
remedies under the Collateral Documents may be exercised solely by
Administrative Agent for the benefit of Lenders in accordance with the terms
thereof.

 

2.83          Administrative Agent to Hold Liens
for Benefit of Lenders as Parties to Interest Rate Agreements.

 

1.             Borrower hereby
agrees that each of the liens and security interests granted to the
Administrative Agent for the benefit of the Lenders under this Agreement and
the other Loan Documents shall be deemed to also secure the obligations of
Borrower to Lenders under Interest Rate Agreements entered into with respect to
the Obligations and Indebtedness evidenced by this Agreement and the other Loan
Documents.  The obligations under any
such Interest Rate Agreements shall rank pari
passu with, and shall be entitled to the benefit of the Collateral
Documents to the same extent as, the other Obligations to the extent of the
Administrative Agent's risk assessment factor for such obligations (but shall
be subordinate and junior to the Loans, Letters of Credit and other Obligations
to the extent of any excess amounts); provided that the right of  the holders of such Interest Rate Agreements
with respect to the Collateral shall be limited to the right to receive a share
of the proceeds of the Collateral and that Lenders shall have the right to make
all determinations with respect to the exercise of remedies with respect to the
Collateral until payment in full of all of the Loans and other Obligations and
the cancellation or expiration of all Letters of Credit.  Each Interest Rate Agreement entered into by
Borrower with any Lender shall be conclusively presumed to relate to the
obligations and Indebtedness evidenced by this Agreement unless it otherwise
specifies.

 

2.             Each Lender hereby
irrevocably appoints the Administrative Agent to act as collateral agent for
that Lender with respect to the liens and security interests created by the
Loan Documents for the benefit of that Lender as a creditor under Interest Rate
Agreements of the type described in clause (A) of this Section; in such
capacity the 

 

88

 

Administrative Agent shall be entitled to the indemnity provided by
Section 9.4 of the Credit Agreement and to the other indemnities and
protections afforded to the Administrative Agent by this Agreement and the
other Loan Documents, mutatis  mutandis.

 

3.             Each Lender agrees
that the claims of the Lenders under this Agreement and the claims of each
Lender under any Interest Rate Agreement shall rank pari  passu, provided
that the right of each Lender with respect to the Collateral by reason of its
claims under such Interest Rate Agreements shall be limited to the right to
receive a share of the proceeds of the Collateral and that the Lenders (in
their capacity as Lenders under this Agreement) shall have the exclusive right
to make all determinations with respect to the exercise of remedies with
respect to the Collateral until payment in full of all of the Loans and other
Obligations and the cancellation or expiration of all Letters of Credit. No
person other than the Lenders shall be deemed to have any rights under this
clause (C).

 

SECTION 8

MISCELLANEOUS

 

2.84         Assignments and Participations in Loans and Letters of
Credit.

 

1.             General.  Each Lender shall have the right at any time
to (i) sell, assign or transfer to any Eligible Assignee, or
(ii) sell participations to any Person in, all or any part of its
Revolving Commitment or Term Commitment or any Loan or Loans made by it or its
Letters of Credit or participations therein or any other interest herein or in
any other Obligations owed to it; provided that no such sale,
assignment, transfer or participation shall, without the consent of Borrower,
require Borrower to file a registration statement with the Securities and
Exchange Commission or apply to qualify such sale, assignment, transfer or
participation under the securities laws of any state; provided, further
that no such sale, assignment or transfer described in clause (i) above
shall be effective unless and until an Assignment Agreement effecting such
sale, assignment or transfer shall have been accepted by Administrative Agent
and recorded in the Register as provided in Section 10.1B(ii); provided,
further that no such sale, assignment, transfer or participation of any
Letter of Credit or any participation therein may be made separately from a
sale, assignment, transfer or participation of a corresponding interest in the
Revolving Commitment or the Term Commitment and the Loans of the Lender
effecting such sale, assignment, transfer or participation; and provided further
that no such sale, assignment, transfer or participation of any Letter of
Credit or any participation therein shall be required to the extent it would be
prohibited by any Gaming Law.  Except as
otherwise provided in this Section 10.1, no Lender shall, as between
Borrower and such Lender, be relieved of any of its obligations hereunder as a
result of any sale, assignment or transfer of, or any granting of
participations in, all or any part of its Revolving Commitment or its Term
Commitment or the Loans, the Letters of Credit or participations therein, or
the other Obligations owed to such Lender.

 

2.             Assignments.

 

(1)           Amounts
and Terms of Assignments.  Each
Lender may assign its interests in either or both of its Revolving Commitment
or Term 

 

89

 

Commitment (without the requirement that  a ratable portion of each of the Commitments be assigned) and the
Loans (and, with respect to the Revolving Commitment, Letters of Credit)
thereunder, or other Obligations, provided that each such
assignment (i) shall be subject to the written consent of Borrower and the
Administrative Agent (which consents shall not be unreasonably withheld, provided
that when an Event of Default exists, no such consent will be required from
Borrower), (ii) which is not to another Lender or to an Affiliate of the
assigning Lender shall be in the case of assignments of the Term
Commitments in an amount not less than $1,000,000, and in the case of
assignments of the Revolving Commitment shall be in an amount which is not less
than $5,000,000 (in each case, or such lesser amount as shall constitute the
aggregate amount of the assigned Commitment, Loans, Letters of Credit and
participations therein, and other Obligations of the assigning Lender), and
shall be to an Eligible Assignee described in clause (A) of the
definition of “Eligible Assignee”, and (iii) shall effect a pro rata assignment
of the Loans, Letters of Credit (or participations therein) and commitment of
the assigning Lender.  The parties to
each such assignment shall execute and deliver to Administrative Agent, for its
acceptance and recording in the Register, an Assignment Agreement, together
with a processing and recordation fee of $3,500 and such forms, certificates or
other evidence, if any, with respect to United States federal income tax
withholding matters as the assignee under such Assignment Agreement may be
required to deliver to Administrative Agent pursuant to
Section 2.7B(iii)(a).  Upon such execution,
delivery, acceptance and recordation, from and after the effective date
specified in such Assignment Agreement, (y) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment Agreement, shall have the
rights and obligations of a Lender hereunder and (z) the assigning Lender
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment Agreement, relinquish its rights and
be released from its obligations under this Agreement (and, in the case of an
Assignment Agreement covering all or the remaining portion of an assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease
to be a party hereto).  The Commitments hereunder
shall be modified to reflect the Commitment of such assignee and any remaining
Commitment of such assigning Lender and, if any such assignment occurs after
the issuance of any Notes hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as practicable,
surrender its Note, if any, to Administrative Agent for cancellation, and
thereupon new Notes shall, if so requested by the assignee and/or the assigning
Lender in accordance with Section 2.1E, be issued to the assignee and/or
to the assigning Lender to reflect the new Commitments of the assignee and/or
the assigning Lender.

 

(2)           Acceptance
by Administrative Agent; Recordation in Register.  Upon its receipt of an Assignment Agreement executed by an assigning
Lender and an assignee representing that it is an Eligible Assignee, together
with the processing and recordation fee referred to in Section 10.1B(i)
and any forms, certificates or other evidence with respect to United States
federal income tax withholding matters 

 

90

 

that such assignee may be required to deliver to Administrative Agent
pursuant to Section 2.7B(iii)(a), Administrative Agent shall, if such
Assignment Agreement has been completed, (a) accept such Assignment
Agreement by executing a counterpart thereof as provided therein (which
acceptance shall evidence any required consent of Administrative Agent to such
assignment), (b) record the information contained therein in the Register,
and (c) give prompt notice thereof to Borrower.  Administrative Agent shall maintain a copy of each Assignment
Agreement delivered to and accepted by it as provided in this
Section 10.1B(ii).

 

3.             Participations.  The holder of any participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except action directly affecting (i) the extension of the scheduled final
maturity date of any Loan allocated to such participation or (ii) a
reduction of the principal amount of or the rate of interest payable on any
Loan allocated to such participation, and all amounts payable by Borrower
hereunder (including without limitation amounts payable to such Lender pursuant
to Sections 2.6D, 2.7 and 3.6) shall be determined as if such Lender had
not sold such participation.  Borrower
and each Lender hereby acknowledge and agree that, solely for purposes of
Sections 10.4 and 10.5, (a) any participation will give rise to a
direct obligation of Borrower to the participant and (b) the participant
shall be considered to be a “Lender”.

 

4.             Assignments to
Federal Reserve Banks.  In addition
to the assignments and participations permitted under the foregoing provisions
of this Section 10.1, any Lender may assign and pledge all or any portion
of its Loans, the other Obligations owed to such Lender, and its Note to any
Federal Reserve Bank as collateral security pursuant to Regulation A of
the Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank; provided that (i) no Lender
shall, as between Borrower and such Lender, be relieved of any of its
obligations hereunder as a result of any such assignment and pledge and
(ii) in no event shall such Federal Reserve Bank be considered to be a
“Lender” or be entitled to require the assigning Lender to take or omit to take
any action hereunder.

 

91

 

5.             Special Purpose
Funding Vehicles.  Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”) may
grant to one or more special purpose funding vehicles (each, an “SPC”) of such
Granting Lender, identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrower, the option to
provide to the Borrower all or any part of any Loan that such Granting Lender
would otherwise be obligated to make to the Borrower pursuant to Section 2,
provided that (i) nothing herein shall constitute a commitment to make any
Loan by any SPC and (ii) if an SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Loan, the Granting Lender
shall be obligated to make such Loan pursuant to the terms hereof.  The making of a Loan by an SPC hereunder
shall utilize the Revolving Commitment and/or the Term Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by the
Granting Lender.  Each party hereto
hereby agrees that no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
related Granting Lender).  In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that
is one year and one day after the payment in full of all outstanding senior
indebtedness of any SPC, it will not institute against, or join any other
person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or similar proceedings under
the laws of the United States or any State thereof, provided that
the Granting Lender for each SPC hereby agrees to indemnify, save, and hold
harmless each other party hereto for any loss, cost, damage and expense arising
out of  their inability to institute any
such proceeding against its SPC.  In
addition, notwithstanding anything to the contrary contained in this
Section 10.1, any SPC may (i) with notice to, but without the prior
written consent of, the Borrower or the Administrative Agent and without paying
any processing fee therefor, assign all or a portion of its interests in any
Loans to its Granting Lender or to any financial institutions providing
liquidity and/or credit facilities to or for the account of such SPC to fund
the Loans made by such SPC or to support the securities (if any) issued by such
SPC to fund such Loans (but nothing contained herein shall be construed in
derogation of the obligation of the Granting Lender to make Loans hereunder), provided that
neither the consent of the SPC or of any such assignee shall be required for
amendments or waivers of provisions of the Loan Documents except for those
actions by the Granting Lender for which, if taken by an assigning Lender,
would require the consent of holders of participations under
Section 10.1C, and (ii) disclose on a confidential basis (in the same
manner described in Section 10.19) any non-public information relating to
its Loans to any rating agency, commercial paper dealer or provider of a
surety, guarantee or credit or liquidity enhancement to such SPC.

 

6.             Information.  Each Lender may furnish any information
concerning Borrower and its Subsidiaries in the possession of that Lender from
time to time to assignees and participants (including prospective assignees and
participants), subject to Section 10.19.

 

2.85         Expenses.

 

Whether or not the
transactions contemplated hereby shall be consummated, Borrower agrees to pay
promptly (i) all the actual and 

 

92

 

reasonable costs and expenses of preparation
of the Loan Documents; (ii) all the costs of furnishing all opinions by
counsel for Borrower and any other Loan Party (including without limitation any
opinions requested by Lenders as to any legal matters arising hereunder) and of
each Loan Party’s performance of and compliance with all agreements and
conditions on its part to be performed or complied with under this Agreement
and the other Loan Documents including, without limitation, with respect to
confirming compliance with environmental and insurance requirements;
(iii) the reasonable fees, expenses and disbursements of counsel to
Administrative Agent in connection with the negotiation, preparation, execution
and administration of the Loan Documents and the Loans and any consents,
amendments, waivers or other modifications hereto or thereto and any other
documents or matters requested by Borrower or any other Loan Party;
(iv) all other actual and reasonable costs and expenses incurred by
Administrative Agent in connection with the syndication of the Commitments
prior to the Closing Date and the negotiation, preparation and execution of the
Loan Documents and the transactions contemplated hereby and thereby; and
(v) after the occurrence of an Event of Default, all costs and expenses,
including reasonable attorneys’ fees (including allocated costs of internal
counsel) and costs of settlement, incurred by Administrative Agent and Lenders
in enforcing any Obligations of or in collecting any payments due from Borrower
or any other Loan Party hereunder or under the other Loan Documents by reason
of such Event of Default or in connection with any refinancing or restructuring
of the credit arrangements provided under this Agreement in the nature of a
“work-out” or pursuant to any insolvency or bankruptcy proceedings.

 

2.86         Indemnity.

 

In addition to the payment
of expenses pursuant to Section 10.2, whether or not the transactions
contemplated hereby shall be consummated, Borrower agrees to defend, indemnify,
pay and hold harmless Administrative Agent, the Sole Arranger and Book Manager,
each Lender, and the officers, directors, employees, agents and affiliates
thereof (collectively called the “Indemnitees”) from and against any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including without limitation the reasonable fees and disbursements
of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened by any Person,
whether or not any such Indemnitee shall be designated as a party or a
potential party thereto), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or regulations
(including without limitation securities and commercial laws, statutes, rules
or regulations and Environmental Laws), on common law or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner relating to or arising out of this Agreement
or the other Loan Documents or the transactions contemplated hereby or thereby
(including without limitation Lenders’ agreement to make the Loans hereunder or
the use or intended use of the proceeds of any of the Loans or the issuance of
Letters of Credit hereunder or the use or intended use of any of the Letters of
Credit) or the statements contained in the commitment letter delivered by any
Lender to Borrower with respect thereto (collectively called the “Indemnified
Liabilities”); provided that Borrower shall not have any 

 

93

 

obligation to an Indemnitee hereunder with
respect to any Indemnified Liabilities to the extent such Indemnified
Liabilities arise solely from the gross negligence or willful misconduct of
that Indemnitee as determined by a final judgment of a court of competent
jurisdiction.  To the extent that the
undertaking to defend, indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, Borrower shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees or any
of them.

 

2.87         Set-Off; Security Interest in Deposit Accounts.

 

In addition to any rights
now or hereafter granted under applicable law and not by way of limitation of
any such rights, upon the occurrence of any Event of Default each Lender (with
the consent of Requisite Lenders) is hereby authorized by Borrower at any time
or from time to time, without notice to Borrower or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and to
apply any and all deposits (general or special, including, but not limited to,
Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other Indebtedness at any
time held or owing by that Lender to or for the credit or the account of
Borrower against and on account of the obligations and liabilities of Borrower
to that Lender under this Agreement, the Letters of Credit and participations
therein and the other Loan Documents, including, but not limited to, all claims
of any nature or description arising out of or connected with this Agreement,
the Letters of Credit and participations therein or any other Loan Document,
irrespective of whether or not (i) that Lender shall have made any demand
hereunder or (ii) the principal of or the interest on the Loans or any
amounts in respect of the Letters of Credit or any other amounts due hereunder
shall have become due and payable pursuant to Section 8 and although said
obligations and liabilities, or any of them, may be contingent or
unmatured.  Borrower hereby further
grants to Administrative Agent and each Lender a security interest in all
deposits and accounts maintained with Administrative Agent or such Lender as
security for the Obligations.

 

2.88         Ratable Sharing.

 

Lenders hereby agree among
themselves that if any of them shall, whether by voluntary payment, by
realization upon security, through the exercise of any right of set-off or
banker’s lien, by counterclaim or cross action or by the enforcement of any
right under the Loan Documents or otherwise, or as adequate protection of a
deposit treated as cash collateral under the Bankruptcy Code, receive payment
or reduction of a proportion of the aggregate amount of principal, interest,
amounts payable in respect of Letters of Credit, fees and other amounts then
due and owing to that Lender hereunder or under the other Loan Documents
(collectively, the “Aggregate Amounts Due” to such Lender) which is greater
than the proportion received by any other Lender in respect of the Aggregate
Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (i) notify Administrative Agent and
each other Lender of the receipt of such payment and (ii) apply a portion
of such payment to purchase participations (which it shall be deemed to have
purchased from 

 

94

 

each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the
Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is
thereafter recovered from such Lender upon the bankruptcy or reorganization of
Borrower or otherwise, those purchases shall be rescinded and the purchase prices
paid for such participations shall be returned to such purchasing Lender
ratably to the extent of such recovery. 
Borrower expressly consents to the foregoing arrangement and agrees that
any holder of a participation so purchased may exercise any and all rights of
banker’s lien, set-off or counterclaim with respect to any and all monies owing
by Borrower to that holder with respect thereto as fully as if that holder were
owed the amount of the participation held by that holder.

 

2.89         Amendments and Waivers; Release of Collateral.

 

1.             No amendment,
modification, termination or waiver of any provision of this Agreement, the
Notes or any other Loan Documents, or consent to any departure by Borrower
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders and Borrower; provided that any such amendment,
modification, termination, waiver or consent which: increases the amount of any
of the Commitments or reduces the principal amount of any of the Loans;
increases the maximum amount of Letters of Credit; changes any Lender’s Pro
Rata Share; changes in any manner the definition of “Lenders” or “Requisite
Lenders”; changes in any manner any provision of this Agreement which, by its
terms, expressly requires the approval or concurrence of all Lenders; postpones
the scheduled final maturity date of any of the Loans; postpones the date or
reduces the amount of any scheduled reduction of the Commitments; postpones the
date on which any interest or any fees are payable; decreases the interest rate
borne by any of the Loans (other than any waiver of any increase in the
interest rate applicable to any of the Loans pursuant to Section 2.2E) or
the amount of any fees payable hereunder; increases the maximum duration of
Interest Periods permitted hereunder; reduces the amount or postpones the due
date of any amount payable in respect of, or extends the required expiration
date of, any Letter of Credit; changes in any manner the obligations of Lenders
relating to the purchase of participations in Letters of Credit; or changes in
any manner the provisions contained in Section 8.1(a) or (b) or this
Section 10.6; or changes any of the terms of or releases the Environmental
Indemnities shall be effective only if evidenced by a writing signed by or on
behalf of all Lenders.  In addition,
(i) any material amendment, modification, termination or waiver of any of
the provisions contained in Section 4 shall be effective only if evidenced
by a writing signed by or on behalf of Administrative Agent and Requisite
Lenders, (ii) no amendment, modification, termination or waiver of any
provision of any Note shall be effective without the written concurrence of the
Lender which is the holder of that Note, and (iii) no amendment,
modification, termination or waiver of any provision of Section 3 or
Section 9 or of any other provision of this Agreement which, by its terms,
expressly requires the approval or concurrence of Administrative Agent shall be
effective without the written concurrence of Administrative Agent.  Administrative Agent may, but shall have no
obligation to, with the concurrence of any Lender, execute 

 

95

 

amendments, modifications, waivers or consents on behalf of that
Lender.  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 in any case shall entitle Borrower to any other or further notice or demand
in similar or other circumstances.  Any
amendment, modification, termination, waiver or consent effected in accordance
with this Section 10.6 shall be binding upon each Lender at the time
outstanding, each future Lender and Borrower.

 

2.             Administrative
Agent may release personal property Collateral without the consent of any
Lender to the extent sold or disposed of by Borrower in a transaction or series
of transactions that do not constitute Asset Sales.  In addition: 
(i) Administrative Agent may release personal property Collateral
subject to the Borrower Security Agreement or the Guarantor Security Agreement
having a fair market less than $100,000 with the consent of Requisite Lenders;
and (ii) Administrative Agent shall not release any personal property
Collateral having a fair market value in excess of $100,000 or any other
Collateral without the consent of all Lenders.

 

2.90         Independence of
Covenants.

 

All covenants hereunder
shall be given independent effect so that if a particular action or condition
is not permitted by any of such covenants, the fact that it would be permitted
by an exception to, or would otherwise be within the limitations of, another
covenant shall not avoid the occurrence of an Event of Default or Default if
such action is taken or condition exists.

 

2.91         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,
telexed or sent by telefacsimile or United States mail or courier service and
shall be deemed to have been given when delivered in person or by courier
service, upon receipt of telefacsimile or telex prior to 5:00 p.m. (Pacific
time) on a Business Day or three Business Days after depositing it in the
United States mail with postage prepaid and properly addressed; provided
that notices to Administrative Agent and the Lenders from Borrower shall not be
effective until received.  For the
purposes hereof, the address of each party hereto shall be as set forth under
such party’s name on the signature pages hereof or (i) as to Borrower and
Administrative Agent, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to
each other party, such other address as shall be designated by such party in a
written notice delivered to Administrative Agent.

 

2.92         Survival of Representations, Warranties and Agreements.

 

1.             All
representations, warranties and agreements made herein shall survive the
execution and delivery of this Agreement and the making of the Loans and the
issuance of the Letters of Credit hereunder.

 

2.             Notwithstanding
anything in this Agreement or implied by law to the contrary, the agreements of
Borrower set forth in Sections 2.6D, 2.7, 

 

96

 

3.5A, 3.6, 10.2 and 10.3 and the agreements of Lenders set forth in
Sections 9.2C, 9.4 and 10.5 shall survive the payment of the Loans, the
cancellation or expiration of the Letters of Credit and the reimbursement of
any amounts drawn thereunder, and the termination of this Agreement.

 

2.93         Failure or Indulgence Not Waiver; Remedies Cumulative.

 

No failure or delay on the
part of Administrative Agent or any Lender in the exercise of any power, right
or privilege hereunder or under any other Loan Document shall impair such
power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any
other power, right or privilege.  All
rights and remedies existing under this Agreement and the other Loan Documents
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

 

2.94         Marshalling; Payments Set Aside.

 

Neither Administrative Agent
nor any Lender shall be under any obligation to marshal any assets in favor of
Borrower or any other party or against or in payment of any or all of the
Obligations.  To the extent that Borrower
makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of set-off, and
such payment or payments or the proceeds of such enforcement or set-off or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law,
common law or any equitable cause, then, to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all Liens,
rights and remedies therefor or related thereto, shall be revived and continued
in full force and effect as if such payment or payments had not been made or
such enforcement or set-off had not occurred.

 

2.95         Severability.

 

In case any provision in or
obligation under this Agreement or the Notes shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

 

2.96         Obligations Several; Independent Nature of Lenders’
Rights.

 

The obligations of Lenders
hereunder are several and no Lender shall be responsible for the obligations or
Commitments of any other Lender hereunder. 
Nothing contained herein or in any other Loan Document, and no action
taken by Lenders pursuant hereto or thereto, shall be deemed to constitute
Lenders as a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.

 

97

 

2.97         Headings.

 

Section and Section
headings in this Agreement are included herein for convenience of reference
only and shall not constitute a part of this Agreement for any other purpose or
be given any substantive effect.

 

2.98         Applicable Law.

 

THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEVADA, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.

 

2.99         Successors and
Assigns.

 

This Agreement shall be
binding upon the parties hereto and their respective successors and assigns and
shall inure to the benefit of the parties hereto and the successors and assigns
of Lenders (it being understood that Lenders’ rights of assignment are subject
to Section 10.1).  Neither
Borrower’s rights or obligations hereunder nor any interest therein may be
assigned or delegated by Borrower without the prior written consent of all
Lenders.

 

2.100       Consent to Jurisdiction and Service of Process.

 

ALL JUDICIAL PROCEEDINGS
BROUGHT AGAINST BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR ANY OBLIGATION MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN THE STATE OF NEVADA, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT BORROWER ACCEPTS FOR ITSELF AND IN CONNECTION WITH
ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF
THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT, SUCH OTHER LOAN DOCUMENT OR SUCH OBLIGATION.  Borrower hereby agrees that service of all
process in any such proceeding in any such court may be made by registered or
certified mail, return receipt requested, to Borrower at its address provided
in Section 10.8, such service being hereby acknowledged by Borrower to be
sufficient for personal jurisdiction in any action against Borrower in any such
court and to be otherwise effective and binding service in every respect.  Nothing herein shall affect the right to
serve process in any other manner permitted by law.

 

2.101       Waiver of Jury
Trial.

 

EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT
MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT
RELATES HERETO.  The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty
claims and all other common law and statutory 

 

98

 

claims. 
Each party hereto acknowledges that this waiver is a material inducement
to enter into a business relationship, that each has already relied on this
waiver in entering into this Agreement, and that each will continue to rely on
this waiver in their related future dealings. 
Each party hereto further warrants and represents that it has reviewed
this waiver with its legal counsel and that it knowingly and voluntarily waives
its jury trial rights following consultation with legal counsel.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
May NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER.  In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.

 

2.102       Confidentiality.

 

Each Lender shall hold all
non-public information obtained pursuant to the requirements of this Agreement
which has been identified as confidential by Borrower in accordance with such
Lender’s customary procedures for handling confidential information of this
nature and in accordance with safe and sound banking practices, it being
understood and agreed by Borrower that in any event a Lender may make
disclosures reasonably required by any bona fide assignee, transferee or
participant in connection with the contemplated assignment or transfer by such
Lender of any Loans or any participation therein or as required or requested by
any governmental agency or representative thereof or pursuant to legal process;
provided that, unless specifically prohibited by applicable law or court
order, each Lender shall notify Borrower of any request by any governmental
agency or representative thereof (other than any such request in connection
with any examination of the financial condition of such Lender by such
governmental agency) for disclosure of any such non-public information prior to
disclosure of such information; and provided, further that in no
event shall any Lender be obligated or required to return any materials
furnished by Borrower or any of its Subsidiaries.  In addition, Borrower hereby authorizes each Lender to share any
information delivered to such Lender by Borrower and its Subsidiaries pursuant
to this Agreement or the Loan Documents to Subsidiaries and Affiliates of that
Lender in connection with the bona fide provision or
attempted provision of services by the Subsidiaries and Affiliates of that
Lender to the Borrower and its Affiliates provided that each such
Subsidiary and Affiliate shall agree to be bound by this Section.

 

2.103       Counterparts;
Effectiveness.

 

This Agreement and any
amendments, waivers, consents or supplements hereto or in connection herewith
may be executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. 
This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Borrower and
Administrative Agent of written or telephonic notification of such execution
and authorization of delivery thereof.

 

99

 

2.104       Non-Recourse to General Partners.

 

Notwithstanding any term or
provision of the Loan Documents or of applicable law to the contrary, the
holders of the Obligations shall not have recourse to the General Partners (or
either of them) for payment or performance thereof, provided that this
Section 10.21 shall not limit or impair (i) recourse to any General
Partner by the holders of the Obligations for any fraud, gross negligence, or
willful misconduct of such General Partner, (ii) any cause of action such
holders may have other than an action to collect or enforce payment or
performance of the Obligations, (iii) the exercise or enforcement of
rights and remedies in respect of any Collateral granted under the Loan Documents,
including, without limitation, any collateral rights granted to Lenders in any
claims or causes of action of Borrower against the General Partners (or either
of them), and (iv) the terms and provisions of any Subordinated
Indebtedness issued to General Partners (or either of them).

 

2.105       Cooperation With Gaming Boards.

 

Administrative Agent and
each Lender agree to cooperate with all Gaming Boards in connection with the
administration of their regulatory jurisdiction over any Loan Party, including the
provision of such documents or other information as may be requested by any
such Gaming Board relating to any Loan Party or to the Loan Documents.

 

2.106       Principles of
Restatement.  This Agreement amends and restates the
Existing Credit  Agreement referred to
in the recitals in its entirety, and constitutes the integrated agreement of
the parties hereto, provided that this Agreement shall not result in the
release of any collateral security or guarantees given in support of the
Existing Credit Agreement, the benefits of which are hereby reserved by the
Lenders and regranted by Borrower. 
Without limitation on the foregoing provisions of this Section, it is
acknowledged and agreed that the Administrative Agent and the Lenders shall
have the continuing benefit of the Assignment of General Contractor’s Contract
and all assurances provided by the Architect and the Auditors in connection
with this Agreement and the other Loan Documents.

 

100

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed and delivered by
their respective officers thereunto duly authorized as of the date first
written above.

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  CIRCUS AND ELDORADO JOINT
  VENTURE

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary L. Carano

  	
   

  
	
   

  	
   

  	
  Gary L. Carano

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
  407 North Virginia Street

  
	
   

  	
  Reno, Nevada 89501

  
	
   

  	
  Attention: Bruce Sexton

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Mandalay Resort Group

  
	
   

  	
  3950 Las Vegas Boulevard
  South

  
	
   

  	
  Las Vegas, Nevada 89119

  
	
   

  	
  Attn:

  	
  Yvette Landau, Esq.

  
	
   

  	
  Tel:

  	
  702/632-6720

  
	
   

  	
  Fax:

  	
  702/632-6723

  
	
   

  	
   

  
	
   

  	
  McDonald Carano Law Firm

  
	
   

  	
  241 Ridge Street, 4th
  Floor

  
	
   

  	
  Reno, Nevada 89501

  
	
   

  	
  Attn:

  	
  John Frankovich, Esq.

  
	
   

  	
  Tel:

  	
  775/788-2000

  
	
   

  	
  Fax:

  	
  775/788-2020

  
	
   

  	
   

  
	
   

  	
  Wolf, Block, Schorr &
  Solis-Cohen LLP

  
	
   

  	
  1650 Arch Street, 22nd
  Floor

  
	
   

  	
  Philadelphia, Pennsylvania
  19103-2097

  
	
   

  	
  Attn:

  	
  Howard J. Reeves, Esq.

  
	
   

  	
   

  
	
   

  	
  [SILVER LEGACY

  
	
   

  	
  SECOND AMENDED AND RESTATED CREDIT

  
	
   

  	
  AGREEMENT SIGNATURE PAGE]

  
					

 

 

	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Janice
  Hammond

  	
   

  
	
   

  	
   

  	
  Janice Hammond, Vice President

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
  Bank of America, N.A.

  
	
   

  	
  Portfolio Management

  
	
   

  	
  CA9-706-17-54

  
	
   

  	
  555 South Flower Street,
  17th Floor

  
	
   

  	
  Los Angeles, California
  90071

  
	
   

  	
  Attn: 

  	
  Janice Hammond, Vice
  President

  
	
   

  	
  Telecopier:  213/345-1210

  
	
   

  	
  Telephone:  213/345-1213

  
					

 

 

	
  BANK OF AMERICA, N.A.,

  	
   

  
	
  as a Lender and Issuing
  Lender

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Scott
  Faber

  	
   

  
	
   

  	
  Scott Faber, Managing Director

  	
   

  
	
   

  	
   

  
	
  Notice Address:

  	
   

  
	
   

  	
   

  
	
  Bank of America, N.A.

  	
   

  
	
  CA9-706-17-54

  	
   

  
	
  555 South Flower Street,
  17th Floor

  	
   

  
	
  Los Angeles, California
  90071

  	
   

  
	
  Attn: 

  	
  Scott Faber, Managing
  Director

  	
   

  
	
  Telecopier:  213/345-1196

  	
   

  
	
  Telephone:  213/345-1215

  	
   

  
	
   

  	
   

  
	
  with a copy to:

  	
   

  
	
   

  	
   

  
	
  Bank of America, N.A.

  	
   

  
	
  555 South Flower Street,
  17th Floor

  	
   

  
	
  Los Angeles, California
  90071

  	
   

  
	
  Attn: 

  	
  William S. Newby, Managing
  Director

  	
   

  
	
   

  	
  CA9-706-17-54

  	
   

  
	
  Telecopier:  213/345-1194

  	
   

  
	
  Telephone:  213/345-1214

  	
   

  
				

 

 

	
   

  	
  BANK OF SCOTLAND

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph Fratus

  	
   

  
	
   

  	
   

  	
  Joseph Fratus

  Vice-President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
  Bank of Scotland

  
	
   

  	
  New York Branch

  
	
   

  	
  565 Fifth Avenue

  
	
   

  	
  New York, New York 10017

  
	
   

  	
  Attention:  Joseph Fratus, Vice-President

  

 

 

	
  U.S. BANK NATIONAL
  ASSOCIATION.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Mark McVeigh

  	
   

  
	
   

  	
  Mark McVeigh,
  Vice-President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Notice Address:

  	
   

  
	
   

  	
   

  
	
  U.S. Bank National
  Association

  	
   

  
	
  1 East Liberty Street, 2nd
  Floor

  	
   

  
	
  Reno, Nevada 89501

  	
   

  
	
  Attention:  Mark McVeigh, Vice-President

  	
   

  
	
  Tel:  775-688-3511

  	
   

  
	
  Fax:  775-688-6597

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